NHSE Proposes New Financial Freedom for Top Trusts Through ‘Advanced Foundation Trust’ Status

A proposed policy from NHS England would allow the highest-performing hospital trusts to retain and reinvest their own revenue surpluses into capital projects. The change, currently out for consultation, introduces a new designation called Advanced Foundation Trusts. These trusts would have greater flexibility over how they fund long term improvements such as estates upgrades, major equipment and digital infrastructure.

The proposal represents a shift in how the NHS manages capital spending. For more than a decade, national controls have limited the ability of Foundation Trusts to use their own generated surpluses because of restrictions created by the Capital Departmental Expenditure Limit. This approach has required trusts to rely heavily on centrally controlled capital allocations, which are often oversubscribed and slow to move.

A Response to Persistent Capital Constraints

Allowing Advanced Foundation Trusts to convert revenue surpluses into capital spending is intended to overcome these barriers. It creates a route for trusts with strong financial management and stable performance to invest in infrastructure without waiting for annual national bidding rounds. Many trusts have accumulated surpluses they are unable to use for improvements, leaving ageing buildings, equipment and digital systems in need of investment.

Incentivising High Performance

The new status is designed to reward trusts that consistently meet quality, operational and financial standards. NHS England intends to link the additional financial freedoms to indicators such as patient outcomes, productivity and governance. Trusts that meet the criteria could use their own resources to develop services, expand capacity and improve patient environments.

Draft guidance for the programme was published on 12 November 2025, with a consultation period running until 11 January 2026. NHS England will refine the policy following feedback from trusts, integrated care boards and other stakeholders.

If implemented, the programme would give selected trusts more autonomy over their investment decisions while maintaining national oversight of overall capital spending. Supporters argue it would unlock dormant resources in the system and enable faster modernisation. The consultation will determine how widely the designation is applied and what safeguards are put in place to ensure accountability and equity across the NHS.