What is a Foundation Trust?

NHS foundation trusts (FTs) were established as part of a wider NHS reform agenda, through the Health and Social Care (Community Health and Standards) Act 2003, consolidated into the National Health Service Act 2006.

Logo for the FTNFoundation trusts were established through the 2003 Health and Social Care (Community Health and Standards) Act 2003, consolidated into the National Health Service Act 2006.

Foundation trusts are part of the NHS and provide services in accordance with its core principles – free care based on need, not the ability to pay.

They are:

  • Public benefit corporations, a legal form unique to foundation trusts based on mutual traditions;
  • Led by an independent board of directors;
  • Authorised and regulated by an independent regulator, known as Monitor;
  • Accountable to local communities through a system of local ownership. The public, patients, service users, their families and carers, and staff can join the FT as members, and elect governors to represent them. Members and governors are the centrepiece of the foundation trust’s accountability and strong governance;
  • Accountable to local commissioners, who contract with them to deliver services;
  • Free from central government control and performance management, yet meeting and striving to exceed the standards that all NHS organisations must achieve, including being licensed by the Care Quality Commission;
  • Not required to break even each year, although they must be financially viable. They can borrow money within limits set by the regulator, retain surpluses and decide on service developments and innovations for their local community;
  • Accountable to Parliament, where they must lay their annual reports and accounts

It is anticipated that over the next three to five years all NHS trusts will become foundation trusts.

This information is taken from the Federation Trust Network website (foundationtrustnetwork.org).

For further information on NHS Foundation Trusts see:

This page was updated: by Andy Leppard.
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