Dr Richard Dune

02-07-2025

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Understanding the key differences between NHS Trusts and Foundation Trusts in structure, regulation, financial freedom, and patient-centred governance

The National Health Service (NHS) is a globally recognised beacon of universal, needs‑based healthcare funded from general taxation. Central to its delivery are NHS Trusts and NHS Foundation Trusts (FTs), public organisations providing hospital, mental health, community, and ambulance services to millions across England..

In the post-COVID era of integrated care, these organisations have evolved from service deliverers into strategic system leaders with shared accountability for population health, innovation, and collaboration. Whether you’re a commissioner, independent partner, regulator, or frontline provider, grasping the differences between NHS Trusts and Foundation Trusts is essential to thriving within the modern health and social care ecosystem.

In this comprehensive blog, Dr Richard Dune explores the nature, structure, governance, regulation, and system roles of both Trust types, highlighting key distinctions, shared responsibilities, and their implications in 2025 and beyond.

What is an NHS Trust?

An NHS Trust is a statutory public body that delivers health services under the NHS in England. Around 212 Trusts operate today across four main types:

• Acute Trusts - Manage general hospitals and specialist centres, providing emergency, surgical, maternity and diagnostic services.
• Mental Health Trusts - Deliver inpatient psychiatric care, community mental health teams, crisis services and talking therapies.
• Community Health Trusts - Offer district nursing, health visiting, community hospital care, rehabilitation and associated community-based care.
• Ambulance Trusts - Provide emergency response, patient transport and out-of-hours urgent care.

Core features of NHS Trusts

• Legal and financial framework - Established as public bodies via the NHS Act, they receive centrally controlled budgets and are accountable to NHS England, and since the 2025 reforms, directly to the Department of Health and Social Care (DHSC).
• Governance structure - Governed by a Board of Directors (Executive and Non‑Executive Directors), with Chairs and Non‑Executives appointed centrally.
• Regulation and oversight - Direct oversight by NHS England, along with inspection and quality monitoring via the Care Quality Commission (CQC) under the Single Assessment Framework (SAF).
• Accountability - Centralised model, national regulation, accountable up to the Secretary of State via NHS England.
• Autonomy and service control - Limited; Trusts cannot retain surpluses beyond planned margins, have minimal borrowing capacity, and must follow centrally approved service plans.

Their primary role is to deliver safe, high-quality services as commissioned locally, while complying with national performance targets and regulations.

What is an NHS Foundation Trust (FT)?

Introduced under the Health and Social Care (Community Health and Standards) Act 2003, Foundation Trusts combine NHS values with greater local freedom, public involvement, and financial flexibility.

As of 2025, 173 NHS Foundation Trusts are delivering acute, community, mental health, and ambulance services.

Key features of Foundation Trusts

The key features of Foundations Trusts include:

• Legal status - Incorporated as public benefit corporations, not direct government bodies, allowing more autonomy and accountability to local members.
• Membership model - Open to residents, patients, carers, staff and public. Members elect a Council of Governors, which holds the Board to account and ensures local representation.
• Governance - In addition to the Board of Directors, FTs must maintain a Council of Governors, who:

• Appoints (and can remove) the Chair and Non‑Executive Directors
• Approves the FT’s strategic plan
• Voices community perspectives on service changes and priorities.

• Appoints (and can remove) the Chair and Non‑Executive Directors
• Approves the FT’s strategic plan
• Voices community perspectives on service changes and priorities.

• Appoints (and can remove) the Chair and Non‑Executive Directors
• Approves the FT’s strategic plan
• Voices community perspectives on service changes and priorities.

• Regulation and oversight - Regulated by NHS England and the CQC under the Single Assessment Framework (SAF). Foundation Trusts also enjoy enhanced oversight by NHS Improvement (now part of NHSE).
• Local accountability - Prioritise public, patient and staff involvement through elected members and governors.
• Autonomy:

• Can retain surpluses and reinvest in service improvement
• Borrow prudentially for capital projects
• Engage in commercial activities aligned with NHS rules
• Design services and staffing models based on local needs, while consulting stakeholders on significant changes.

• Can retain surpluses and reinvest in service improvement
• Borrow prudentially for capital projects
• Engage in commercial activities aligned with NHS rules
• Design services and staffing models based on local needs, while consulting stakeholders on significant changes.

• Can retain surpluses and reinvest in service improvement
• Borrow prudentially for capital projects
• Engage in commercial activities aligned with NHS rules
• Design services and staffing models based on local needs, while consulting stakeholders on significant changes.

Comparative snapshot - NHS Trusts vs Foundation Trusts

Table 1 - Difference between NHS Trusts and Foundation Trusts for Comparative snapshot: NHS Trusts vs Foundation Trusts.

Governance, accountability, and community voice

Different NHS organisations have distinct structures that shape how decisions are made, who holds power, and how the public can get involved. Here’s how governance and accountability compare:

NHS Trusts

• Run by a Board of Directors (Exec & Non-Exec) appointed via NHS England
• Chair and Non-Execs selected centrally
• Minimal direct public influence.

Foundation Trusts

• Board + Council of Governors structure
• Members elect governors, ensuring democracy
• Governors participate in:

• Approving strategy
• Board appointments
• Local oversight of service change.

An FT’s membership model means its operations and development reflect local priorities, delivering services rooted in community needs.

Regulation, oversight and escalation

All Trusts, including standard and Foundation Trusts, are held to national standards.

Shared regulators

1. CQC:

• Ratings based on the SAF domains (Safe, Effective, Caring, Responsive, Well-Led)
• Can issue enforcement notices, curtail services or impose restrictions.

2. NHS England/NHS Improvement:

• Monitors financial performance, quality, and constitutional compliance
• Escalates failed performance via the NHS Oversight Framework (Levels 4/5)
• Can instigate leadership changes or improvement plans.

3. Freedom to Speak Up/National Guardian Office:

• Supports patient and staff voice, transparency and culture change.

4. Professional Regulators (e.g. GMC, NMC):

• Oversee the standards of practising staff.

5. HSE & ICO:

• Ensure safety in non-clinical duties and data protection standards.

Additional FT oversight

• NHS Improvement (now part of NHSE) monitors FT governance and financial robustness
• FT governance structure brings enhanced public and patient scrutiny.

Place in Integrated Care Systems (ICSs)

Following the 2025 reforms, Trusts now operate under direct DHSC oversight, but still contribute within Integrated Care Systems:

Core roles

• Place-based leadership - Co-designing ICS strategies alongside ICBs, councils, and VCSE partners.
• Provider Collaboratives - Working jointly across Trusts to reduce duplication and improve service coherence.
• Workforce Strategy - Collaborating on recruitment, retention, training and leadership development.
• Population Health - Using data and community partnerships to address inequalities.
• Digital Transformation - Leading initiatives like EPRs, shared records, and virtual wards.

Both Trust types now balance organisational responsibilities with system-level stewardship.

FT-specific contributions

Foundation Trusts, with their local governance and financial flexibility, often lead innovation in community services, prevention programmes, and collaborative partnerships.

Performance expectations and compliance

Trusts are held to strict national benchmarks:

Clinical and access targets

Benchmarks for clinical and access targets are:

• A&E - 4-hour window
• RTT - 18 weeks
• Cancer - 62-day pathway
• Ambulance response times.

Quality standards

The quality standards include:

• CQC ratings
• Serious incident response
• Infection control (MRSA, C. diff)
• Staff safety and experience
• EDI metrics.

Financial standards

The financial standards include

• Balanced budgets
• Audit and value-for-money compliance
• Green NHS plans (Net Zero by 2040).

Staffing and culture

Staffing and culture include:

• Staff surveys
• CPD completion
• Safeguarding audits.

This performance data informs contract awards, improvement plans, and oversight status.

Implications for providers

Working with Trusts means meeting rigorous expectations:

• CQC registration
• Shared IG and safeguarding systems
• MDT participation
• Serious incident reporting
• Adherence to NHS culture and quality standards.

Risks of non-compliance

Failing to meet standards carries serious consequences:

• Contract termination by NHS commissioners
• Regulatory action by CQC
• Escalation for Trusts under the NHS Oversight Framework, leading to leadership changes or enforced reconfiguration
• Public scrutiny via poor ratings, FOI exposure
• Legal risk for patient harm or workforce misconduct
• Governance intervention by Councils for Foundation Trusts, raising accountability.

Strategic priorities in 2025 and beyond

Across the NHS landscape, both Trust types are focusing on:

• Elective backlog reduction and virtual care - Supporting remote monitoring, same-day hubs and surgical recovery.
• Digital transformation - Implementing EPRs, shared care records, and AI pilots.
• Workforce wellbeing - Supporting staff mental health, retention, and flexible career paths.
• Patient safety - Embedding PSIRF and learning from the deaths initiatives.
• Sustainability - Achieving net-zero targets, greening estates, and reducing waste.
• Integrated mental and physical health - Blending services into community and primary settings.

Foundation Trusts often lead many of these initiatives, utilising their financial autonomy and governance model to pilot and scale innovations.

Final thoughts

Whether you engage with standard NHS Trusts or Foundation Trusts, understanding their structures is crucial. NHS Trusts remain vital public providers, while Foundation Trusts combine service delivery with local connectedness, financial freedom, and democratic oversight. Both are integral to meeting population health needs and delivering resilient, integrated care.

For providers and partners

• Align your governance, data and training systems with Trust demands
• Engage with Governors and local influencers
• Understand Trust strategic plans, especially FTs with elective, community, and virtual care ambitions.
• Demonstrate quality, flexibility, and collaboration.

Systems

Trusts and FTs should leverage strengths, such as FT governance and autonomy, to pilot innovation, share learning, and accelerate redesign.

In a healthier, more integrated NHS, both models must work in harmony, balancing national standards with local voice, leadership with performance, and service with community trust.

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