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What commissioners need to know about the new Monitor licence

Amid the sea of health reforms, CCGs could be forgiven for thinking Monitor's new provider licence was one area they did not have to worry about. But decisions CCGs take about the licence will have a huge impact on the providers they work with.


The licence will be Monitor's key tool  to regulate providers of NHS services. At present, the plan is that it will come into force for foundation trusts in April 2013, with other types of provider following in 2014.  In practice, this means that from next April, foundation trusts will have to conform to requirements ranging from providing information to Monitor about the cost of services to help with price setting, to agreeing not to practise anti-competitive behaviour.


At the heart of the licence is the Continuity of Services framework, designed to ensure that in the event that a provider fails financially, pre-identified essential services will continue . And this is where clinical commissioners come in. These services will be known as ‘commissioner requested services' (CRSs), and CCGs will need to agree with provider organisations which services should receive CRS status.


Once a service has this status, the organisation providing it faces further restrictions: it cannot cease to provide the service without the agreement of the commissioners and Monitor; it cannot dispose of any assets used to provide the service without Monitor's consent; it must pay into a risk pool that will fund services in the event of financial failure; it must have a Monitor risk rating; and it must agree to allow Monitor appointees to enter its premises, in the event that it falls into financial distress.


Clearly, if a large number of services within a foundation trust (FT) were made CRSs, the FT would find its ability to make decisions about the way it provides services seriously restricted.


The Foundation Trust Network is concerned that having an inappropriately large number of services with extra restrictions could make innovation and quality improvement very difficult for providers; ultimately, restricting  foundation trusts' ability to make decisions about how they run their organisations, and  could even affect their long-term viability as successful organisations.


CRS status should only be used sparingly, where, should the provider in question fail it would be genuinely difficult to find another provider to step in as an interim measure at short notice. Obviously this will vary from place to place, and decisions about awarding CRS status will differ between urban areas with many hospitals and rural areas, where neighbouring hospitals are few and far between.


The immediate difficulty faced by clinical commissioners is that as the proposals stand, on day one of the new licence, all services provided by FTs that are currently known as "mandatory services" will automatically become commissioner requested services. This means that for many FTs, the majority of their services will be subject to the Continuity of Services framework, with all its restrictions.


Monitor is consulting on the licence regime before issuing guidance to commissioners on how to identify a genuine commissioner requested service.We all want to see thriving providers working alongside effective commissioners, So given the short time before April 2013, when the licence is likely to come into force, we would encourage commissioners and FTs to discuss commissioner requested services sooner rather than later to give the new arrangements the best chance of success.


Saffron Cordery is director of strategy for the Foundation Trust Network