happens to foundations trusts when they become insolvent has
finally been resolved following an extended lobbying campaign by
the Finance & Leasing Association (FLA).
Under the new proposals revealed to Leasing Life last
month, if a foundation trust is terminated – whether through
financial collapse or because of a fundamental failure of clinical
performance – the relevant hospital or group of hospitals will
initially revert to the status of an NHS trust under central
government administration.
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“A legal savings provision will preserve any arrangements the
foundation trust has entered into with third parties,” a Department
of Health (DoH) spokesman said.
When foundation trusts were first established, it was envisaged
that any that failed would be subject to a commercial type of
insolvency regime. However, that idea has now been dropped.
Meanwhile, despite a decision about the future of foundation
trusts having been made, the DoH issued a consultation document on
11 September 2008 with a response date of 3 December 2008.
Julian Rose, head of asset finance at the FLA, commented when
asked about the decision: “These proposals seem appropriate, though
we shall be seeking clarification on some legal points.”
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By GlobalDataAndy Thompson
