Stafford Hospital inquiry told of trust's finance issue
Mid Staffordshire NHS Trust's application for foundation status was "unsupportable" six months prior to being granted, an inquiry has heard.
The inquiry is looking into the role of NHS regulatory bodies after a higher-than-expected number of deaths at Stafford Hospital between 2005 and 2008.
Mike Gill, formerly of Monitor regulatory health body, said the state of the trust's finances in May 2007 made it unsuitable for flagship status.
Foundation status was approved in 2008.
NHS foundation trusts are not-for-profit, public benefit corporations that are free from government control to decide their own strategy and the way to run their services.
Monitor assesses which NHS trusts can be given foundation status according to strict criteria, including how financially viable it is and how well governed it is.
During the public inquiry on Monday Mr Gill was asked about the "long list" of financial concerns he had expressed in his foundation trust report.
The chairman of the inquiry said no mention had been made by Mr Gill of any clinical assessment of the trust, when considering its foundation application.
"There wasn't working next door to you, metaphorically speaking, or somewhere else someone working in parallel with you on clinical matters?" he said.
"No. My understanding was, you know, it was happening at SHA [Strategic Health Authority] level and Healthcare Commission level," Mr Gill said.
The inquiry heard that West Midlands Strategic Health Authority had recommended Mid Staffordshire NHS Trust for foundation status which was given by the secretary of state in February 2008.
A public inquiry was started in November 2010.
The inquiry continues.