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Extra powers for Monitor and the case for greater freedoms for foundation trusts (FTs) are set out in Regulating healthcare providers, one of the four papers supporting the NHS White Paper. In its wider role as NHS economic regulator, Monitor will also regulate healthcare prices and protect choice and competition.

For FTs the paper proposes:

• removing the statutory private income cap to give trusts opportunities to expand the services they offer to patients
• removing statutory borrowing limits
• making it easier for FTs to merge or take over another trust
• changing the requirements on public involvement for smaller FTs

Monitor will:

• licence providers of NHS services in an integrated regime with the Care Quality Commission (CQC)
• set tariff prices
• promote competition and ensure a level playing field for providers
• support commissioners in ensuring services continue when providers fail

The report confirms that it will not be an option for organisation to remain as NHS trusts. From April 2013, Monitor will take responsibility for regulating all providers of NHS care, irrespective of their status.

The DH makes it clear that in terms of managing investment risks Monitor should avoid giving FTs preferential treatment, compared with other groups of providers. Monitor's role should also be developed to cover all of health and adult social care in England.

The general licence conditions for providers are likely to include the need to give Monitor details of the NHS services provided, and any proposed changes to services, and to report information. The economic regulator will be able to set special licence conditions because a provider enjoys a position of market power in a local area or because there is a need for additional regulation to protect service continuity. It will have the power to fine providers and revoke licences. There will be rights of appeal to Monitor and to the Competition Commission.

Monitor will be setting 'efficient' or 'maximum' prices for NHS-funded services, and will work with the NHS Commissioning Board on deciding which services should be subject to national tariffs. In rare cases Monitor will the power to modify tariff prices.

In terms of its duty to promote competition, the regulator will have powers to impose sanctions to address restrictions on competition, through its licensing regime, and through concurrent powers with the Office of Fair Trading to enforce aspects of competition law.

Additional roles include market studies to investigate where competition does not appear to be functioning properly and the investigation of complaints about commissioning after referral to the NHS Commissioning Board.

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