Monitor has tightened up its assessment of hospitals bidding for flagship status following the Bradford experience.

In its own confidential November report called 'Bradford - Key Learnings' released to the T&A under the Freedom of Information Act, it admits Bradford was an exception to a number of the checks which are now standard practise when assessing a hospital's suitability for Foundation status.

The regulator admitted it needed to review and challenge the basis of opinions provided in independent audits of hospitals' finances and meet and form a view on the effectiveness of the non-executive directors of each Trust.

In the case of Bradford, the Monitor board met only the chairman, chief executive and chief finance officer of the Trust.

A Monitor spokesman said: "Bradford was only the second board we met. We said we would like to meet members of the board and see who comes along. Now we would want to meet everybody.

"We recognise now in terms of the assessments done by ourselves, PricewaterhouseCooper, and the Trust, we could have pushed a little bit harder. In the future we need to probe all applicants harder just to challenge the assumptions they make."

John Ryan, who was sacked by Monitor as chairman of the board, said Monitor would have known at the time that the Trust faced problems: "The Trust received financial status in April. You cannot tell me Monitor did not have an understanding of the issues we faced at that time. The PwC report listed all the risks they saw at the time for Foundation hospitals.

"We cannot say what happened after April was a surprise to anybody. The only surprise to us was the extent of the deficit. Until April we were a successful organisation. The only thing that changed has been Foundation status. The main problems were the Government's failure to fund its own initiatives properly and Payment by Results."

If Bradford Teaching Hospitals had not taken action it was facing insolvency this month but a series of measures, including extending its overdraft, have ensured it has remained solvent.

A Trust spokesman said today the A&M report of December 1, 2004, had been overtaken by events, and significant progress had been made by the Trust in partnership with the wider Bradford health community.

He added: "Having an established track record of meeting all our financial targets for more than a decade, it has been widely recognised that the beginning of the new financial year presented us with unprecedented and unforeseen cost pressures - pressures that we are fully committed to resolving."

He said A&M's work does not reflect the current position or progress made.

"As has been widely and openly reported since then, the momentum to strengthen Bradford Teaching Hospitals' financial position, improve working relationships, and bring clarity to the new and complex payments system pioneered in the district has continued to gather pace."