25/11/2025
Join us on our article series Advanced Academy, delving into what NHS England’s new announcements on Advanced Foundation Trusts means for NHS Trusts and NHS Foundation Trusts.
This month NHS England has released the “Advanced Foundation Trust Programme – guide for applicants” for consultation. This consultation is open from 12 November 2025 to 11 January 2026 and can be accessed here. Following consultation, the updated policy and guide for applicants will be published and implemented in 2026. Described as the “reinvention of the Foundation Trust model for modern time”, the proposed establishment of the Advanced Foundation Trust comes as the first major innovation to the NHS Trust and Foundation Trust regime since Foundation Trusts were established over 20 years ago. This innovation undoubtably signals one pathway for NHS England to address the three shifts from government’s 10 Year Health Plan for England: from hospital to community; from analogue to digital; and from sickness to prevention.
Achieving Advanced Foundation Trust status promises benefits and additional freedoms currently unavailable to NHS Trusts and Foundation Trusts. But to ensure that such freedom is truly a reward for good behaviour, rather than an opportunity for unwanted behaviours to go uncorrected, NHS Trusts and Foundation Trusts must pass (and continue to comply) with a rigorous assessment process. In this first article of our series, we set out what these freedoms are and what the initial eligibility criteria within the assessment process is for NHS Trusts and Foundation Trusts.
The freedoms granted to Advanced Foundation Trusts are autonomy from the removal of “oversight” barriers and the additional power to invest in capital development
The Advanced Foundation Trust status rewards high performance with freedom. Removing oversight barriers marks the transition to centring the health and care needs of the community as the priority stakeholder, with NHS England playing a supporting role to ensure NHS hospitals continue to provide high quality services. The freedoms promised as a part of the status have been packaged into the following three core concepts:
- Strategic and operational autonomy for annual planning: NHS England will be less involved in the performance management of an Advanced Foundation Trust. NHS England will continue to monitor the Advanced Foundation Trust, through the eligibility criteria, and will only intervene where signification issues appear or there is significant deviation from the annual plan.
- A consistent capability-based regulatory approach: Trusts who demonstrate strong leadership and a track record of delivery will be rewarded with greater time and flexibility to address issues that arise before intervention. The capability-based regulatory approach is also reflected in NHS England’s choice of Advanced Foundation Trust eligibility criteria. The eligibility criteria are comprised of existing core national metrics to have a consistency of approach with other trusts and with ICB contractual requirements. NHS England will also clarify the triggers of capability concerns and the process for how NHS England will escalate those concerns.
- Greater financial flexibility: Advanced Foundation Trusts will be able to retain and reinvest aggregate revenue department expenditure limit (RDEL) surplus (excluding any Deficit Support Funding) accumulated since 2024/2025 in future capital projects. As Advanced Foundation Trusts will be NHS Oversight Framework segment 1 and 2 Trusts, they do not require business case approval for up £100m capital department expenditure limit (CDEL) spend, where trusts are using their own operational capital, and/or capital flexibility. The Advanced Foundation Trusts will also be granted with revenue flexibilities limited to non-recurrent spending to support implementation costs linked to capital investment and transformation. As with capital, this will allow the reinvestment of aggregate RDEL surpluses, excluding deficit support, accumulated since 2024/25, subject to the provider having corresponding cash reserves.
In addition to these three core freedoms, the highest performing Advanced Foundation Trusts may be eligible for local and national leadership roles to support the improvement of all health and care organisations within a community. NHS England’s tangible example of a possible leadership role is appointing an Advanced Foundation Trust as an integrated health organisation (IHO) contract holder – a concept first introduced in the 10 Year Health Plan for England. Becoming an IHO contract holder could mean overseeing the health budget for a defined population to provide whole health management.
IHOs will have a budget which is likely to switch from a paid-per-service model to a capitated budget estimating the total amount of patient care required in the community annually. Therefore, it will be important to consider how these different budget types could affect the various Advanced Foundation Trusts use of their greater financial flexibility. One budget incentivises performing more services while the other incentivises performing less.
Any NHS Trust or Foundation Trust can be eligible for assessment and the eligibility criteria relies on existing KPIs from the NHS Oversight Framework, Care Quality Commission, and Provider Capability Assessment
The Advanced Foundation Trust assessment process may begin once the relevant NHS Trust or Foundation Trust meets the eligibility criteria. The eligibility criteria means that only the highest performers will join the first wave of applicants for Advanced Foundation Trust status. To be eligible, providers will need to show they meet the following three key metrics from within existing core requirements for all providers:
- Be in the top 2 segments of the NHS Oversight Framework for 2 consecutive quarters, as an indicator that the Trust is delivering the public’s priorities and value for money.
- Received a “good” or “outstanding” Care Quality Commission (CQC) rating from the Trust’s most recent CQC Well Led assessment, with no site or service rated inadequate by CQC, as an indicator that the Trust is providing high quality care to patients.
- Have a provider capability score of at least amber-green, as an indicator that the Trust has excellent leadership.
Once proven eligible, the true Advanced Foundation Trust assessment process begins. NHE England has specified that applicants will be assessed against the three fundamental questions:
- Is the trust well led, collaborating with system partners to improve population health and tackle inequalities, and responsive to local communities?
- Does the trust provide high-quality services with robust quality governance in place?
- Is the trust financially sustainable, with a focus on productivity improvement?
Any NHS Trust or Foundation Trust that meets the eligibility criteria can apply to become an Advanced Foundation Trust. An NHS Trust is not expected to apply first to become a Foundation Trust before it becomes eligible for Advanced Foundation Trust status. However, any NHS Trust that NHS England successfully approves as an Advanced Foundation Trust will need to subsequently apply to formally convert to a Foundation Trust before the Advanced Foundation Trust status is granted. As there are proposed changes to the requirement for Foundation Trusts to have a council of governors, the relevant applications will not be approved until this change is formally made or rejected. This will prevent new Foundation Trusts from appointing a council of governors only for that requirement to be abolished.
NHS England considers that, for the first wave of successful applicants, the status of Advanced Foundation Trusts will be the “marker of excellence used by high-performing foundation trusts and NHS trusts”. But the plan is for this status to become market standard. NHS England intends for all NHS Foundation Trusts and NHS trusts to have successfully transitioned to Advanced Foundation Trusts by 2035. Achieving such this market shift will by no means be simple, as the status of Advanced Foundation Trust is not static. NHS England will continue to monitor Advanced Foundation Trusts against the eligibility criteria and will formally assess the status each Advanced Foundation Trust every 5 years. NHS England retains the right to strip the Advanced status of any NHS Trust or Foundation Trust where standards of capability drop. Whether or not this right is exercised will be one to watch. The same right of status removal exists for NHS Foundation Trusts yet, since the Foundation Trust status was established in 2003, no Foundation Trust has ever been stripped of its Foundation Trust status.
In the next addition to our in our Advanced Academy series, we will delve deeper into the specifics of the full assessment process that NHS England will use to assess whether an eligible NHS Trust or Foundation Trust should be awarded Advanced Foundation Trust status.
Sign up to our mailing list to be notified of the next article in our Advanced Academy series. For more insights from across the health and care sector, you can also follow our dedicated LinkedIn page.
