Robert Francis QC has proposed absorbing Monitor into the Care Quality Commission but the health secretary Jeremy Hunt has indicated this will not take place.

‘The government doesn’t like to shut down organisations in which it has committed a lot of money’

Mr Francis’ recommendation can hardly have come as a surprise − the “one regulator is better than two” argument has frequently been aired during discussions about what happened at Mid Staffordshire.

So might it be too naive to assume ministers gave Monitor an indication of their likely response to just such a proposal in advance of its most recent airing?

Maybe. But we can at least try and read the runes in Monitor’s financial arrangements − after all, we know that the government does not like to shut down organisations in which it has committed a lot of money.

Unfortunately for Monitor, it has no private finance initiative commitments, ensuring it a simultaneously unstable and durable existence. Instead it has a civil service memorandum of terms of occupation agreement to move into one-and-a-half floors of the Department of Health’s Wellington House building, near Waterloo station, later this year.

The money trail

Monitor tells me that agreement − costing £0.6m a year with an end date currently set at March 2015 − will eventually be doubled to cover three floors, costing around £1.3m a year, and will allow an expanded Monitor to move all its 400-450 envisaged future staff into the same building.

But what if the Wellington House agreement stayed stuck at just one and a half floors? That would still imply an expanded Monitor − office space for around 200-225 employees, compared to the regulator’s current 150 full time equivalent, temp-enhanced headcount. All systems go then?

But the money trail does not all point in that direction. In 2011-12, the DH gave Monitor an extra £11m to fund a “transition programme” towards the all-new and expanded Monitor. Prudent types as they are, Monitor did not manage to spend it all in that year − leaving £3m unspent.

That cash is nominally still with Monitor − it is on its March 2012 balance sheet as a “pre-payment” from the DH. But the department docked the regulator’s 2012-13 core funding by the same amount − a familiar move which many would define as a clawback.

Sally Gainsbury is a news reporter for the Financial Times, sally.gainsbury@ft.com

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