Jo Webber, deputy director of policy at the NHS Confederation said:

"It is encouraging to see that Monitor has really listened to the health service and taken on board a number of the issues we raised on behalf of our members about its initial proposals. As a result it has made some really significant amendments. Its updated consultation acknowledges our concerns that some of its proposals looked potentially unworkable. In particular, it is good to see the idea of a credit rating system has been scrapped, and the proposals for the fit and proper persons test have been relaxed.

"We will need to look at the finer detail of this consultation, but broadly it looks like the provider licence is heading in the right direction.

"We recognise that these proposals are complex and will take time to bed in. But it is important that this new system does not add unnecessary bureaucratic burdens on NHS organisations that are already grappling with a raft of changes in the new system.

"We do have concerns about the proposals for Commissioner Requested Services. We believe the suggestion that all FT mandatory services should become Commissioner Requested Services, would potentially ossify some services and prevent innovation and new entrants to the system. This is a very complex issue and we will need to look in further detail as to how it would best work.

"At a time when the NHS needs to do all it can do deliver new ways of care with restrained finances it is essential this licence regime does not hinder changes to services which are in the best interests of patients and the local community.

"We look forward to providing more detail to Monitor on its proposals throughout the duration of this consultation."