What are NHS Foundation Trusts?

The NHS is one of the United Kingdom’s most enduring institutions - synonymous with free care at the point of delivery and services based on clinical need, not ability to pay. At the core of its delivery infrastructure are NHS Foundation Trusts (FTs), legally independent, not-for-profit organisations that provide services ranging from acute care to mental health, community, and ambulance services.

But these are not ordinary NHS bodies. NHS Foundation Trusts operate with greater autonomy, local accountability, and financial flexibility than standard NHS Trusts, yet remain firmly part of the NHS family.

In this comprehensive guide, Dr Richard Dune explores the role, structure, regulation, and future of NHS Foundation Trusts, and what this means for providers, partners, and patients in 2025 and beyond.

What is an NHS Foundation Trust?

NHS Foundation Trusts (FTs) are public benefit corporations that deliver NHS care, offering greater operational and financial freedoms compared to traditional NHS Trusts. Introduced under the Health and Social Care (Community Health and Standards) Act 2003, they are intended to shift accountability from central government to local people, making them more responsive to community needs.

As of 2025, there are 136 NHS Foundation Trusts in England. They deliver vital services in acute, community, mental health, and ambulance settings.

Key differences - NHS Foundation Trust vs NHS Trust

Below are the key differences between the NHS Foundation Trust and the NHS Trust:

Table 1 - Key differences between NHS Foundation Trust vs NHS Trust.

Ownership, members and local accountability

A defining characteristic of Foundation Trusts is their membership model. They are owned by their members, which include:

• Local residents

• Patients and carers

• Staff employed by the Trust.

These members elect representatives to a Council of Governors, which holds the Trust’s Board of Directors to account.

The role of the Council of Governors

The Council of Governors plays a vital role in:

• Approving strategic plans

• Representing the community’s voice

• Appointing (and removing) the Trust Chair and Non-Executive Directors

• Influencing future service development.

This structure gives Foundation Trusts legitimacy and democratic accountability, making them deeply rooted in local decision-making.

Financial freedoms and investment power

NHS Foundation Trusts have greater financial independence. They are allowed to:

• Retain surpluses and reinvest them into services

• Borrow money from public and private sources

• Undertake commercial ventures, within NHS rules

• Develop capital projects without central approval, within prudential borrowing limits.

This flexibility enables rapid service innovation, hospital expansion, and estate modernisation based on local priorities, not Whitehall directives.

Service design and operational independence

FTs have more control over:

• Service delivery models

• Staffing structures and employment terms

• Shift patterns and workforce incentives

• Outsourcing and partnership arrangements.

This freedom fosters innovation, such as new mental health pathways, same-day elective surgery hubs, and cross-sector discharge teams.

Importantly, FTs must consult stakeholders before making significant service changes, especially when altering protected NHS services.

Regulation and compliance

Despite their autonomy, FTs are still subject to regulation to ensure public safety and performance. Key regulators include:

Care Quality Commission (CQC)

• Rates FTs across the five key domains: Safe, Effective, Caring, Responsive, Well-led

• Conducts unannounced inspections

• Enforce actions if required.

NHS England

• Oversees performance through the NHS Single Oversight Framework

• Can trigger escalation measures for failing trusts, including the appointment of Improvement Directors or board replacement.

NHS Improvement (now part of NHS England)

• Originally created to oversee FTs

• Now functions under the NHS England umbrella.

Freedom to Speak Up/National Guardian’s Office

Monitors whistleblowing culture and staff voice mechanisms.

Foundation Trusts in Integrated Care Systems (ICSs)

Since the abolition of NHS England as an arm’s-length body in 2025, Foundation Trusts operate under the direct oversight of the Department of Health and Social Care (DHSC), serving as anchor organisations in England’s 42 ICSs.

Key ICS Contributions:

• Place-based leadership - Co-developing health strategies

• Provider collaboratives - Reducing duplication, aligning care standards

• Workforce planning - Sharing training and leadership pathways

• Population health management - Using data to tackle inequalities

• Digital transformation - Driving EPRs and virtual ward rollouts.

Their dual role, as local providers and system stewards, makes them essential to integrated, patient-centred care.

Performance expectations and national benchmarks

NHS Foundation Trusts are assessed on various indicators, including:

Access and clinical standards

• 4-hour A&E target

• 18-week Referral-to-Treatment (RTT)

• Cancer 62-day referral

• Ambulance response times.

Quality

• CQC inspection results

• Serious Incident (SI) reporting and response

• Infection control: MRSA, C. difficile.

Finance and sustainability

• Balanced budgets

• Value-for-money audits

• Green plans align with the NHS's Net Zero by 2040 goal.

Workforce

• NHS Staff Survey results

• CPD and supervision compliance

• Equality, Diversity and Inclusion (EDI) metrics.

The CQC and NHS England monitor these and are publicly accessible through dashboards.

What does this mean for independent and VCSE providers?

External organisations working with NHS Foundation Trusts, be they independent providers, social enterprises, or VCSE partners, must meet equivalent standards.

Expectations Include:

• CQC registration and compliance

• Workforce vetting and training alignment

• Safeguarding and incident protocols

• Participation in ICS governance or clinical forums

• Transparent data sharing and IG compliance (UK GDPR).

Being a reliable NHS partner requires not only delivering quality services but also demonstrating governance maturity and alignment with NHS values.

Risks of non-compliance

If a Foundation Trust fails to meet required standards, the following consequences may apply:

• Suspension or removal of contracts

• CQC enforcement

• Escalation under the NHS Oversight Framework (Level 4 or 5)

• Public loss of confidence

• Intervention by NHS England.

In extreme cases, the Independent Regulator can dissolve an FT, ensuring continuity of services for patients.

Strategic priorities for Foundation Trusts in 2025

Elective recovery

Reducing surgical and diagnostic backlogs, scaling elective hubs.

Virtual care and digital integration

Rolling out Electronic Patient Records (EPRs), shared care records, and AI decision tools.

Workforce wellbeing

Embedding the NHS Long-Term Workforce Plan, staff mental health support, and flexible career pathways.

Environmental sustainability

Delivering carbon-neutral strategies and sustainable estates.

Patient safety culture

Rolling out PSIRF (Patient Safety Incident Response Framework), promoting transparency and learning.

Mental health integration

Blending mental and physical health into primary, community, and acute services.

Benefits of NHS Foundation Trust status

• Responsive local services - Tailored to population needs

• Democratic participation - Staff and public co-governance

• Financial innovation - Faster capital investment and service redesign

• Reduced bureaucracy - Local autonomy accelerates decision-making

• Community Trust - Deep accountability to those they serve.

These advantages have made Foundation Trusts leading lights in NHS reform, with many topping national performance rankings and spearheading innovation.

Final thoughts

NHS Foundation Trusts represent the best of both worlds: the values of the NHS, free, universal, needs-based care, delivered with local accountability, strategic agility, and patient-centred governance.

For commissioners, partners, and providers, working with FTs means adapting to a culture of transparency, high standards, and continuous improvement. Whether you're planning integration, seeking contracts, or embedding care pathways, understanding Foundation Trusts is essential to navigating NHS partnerships in 2025 and beyond.

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