Assessing financial risk in NHS foundation trusts
Financial risk ratings are allocated using a scorecard which compares key financial information across all foundation trusts. A rating of 5 reflects the lowest level of financial risk and a rating of 1 the greatest.
When assessing financial risk, Monitor will assign quarterly and annual risk ratings using a system which looks at four criteria:
- Achievement of plan;
- Underlying performance;
- Financial efficiency; and
- Liquidity.
The risk rating is forward-looking and is intended to reflect the likelihood of an actual or potential financial breach of the foundation trust’s terms of authorisation.
