Functions

167 Goods and services

(1) In section 43 of the National Health Service Act 2006 (authorised services), for
subsections (1) and (2) substitute—

“(1) 5The principal purpose of an NHS foundation trust is the provision of
goods and services for the purposes of the health service in England.

(2) The NHS foundation trust may provide goods and services for any
purposes related to—

(a) the provision of services provided to individuals for or in
10connection with the prevention, diagnosis or treatment of
illness, and

(b) the promotion and protection of public health.”

(2) In subsection (3) of that section (power to carry on other activities in order to
generate additional income)—

(a) 15for “subsection (1)” substitute “subsection (2)”, and

(b) omit “, subject to any restrictions in the authorisation,”.

(3) Omit subsections (4) to (7) of that section (goods and services that may be
authorised, etc.).

(4) For the title to that section substitute “Provision of goods and services”.

(5) 20In paragraph 2 of Schedule 7 to that Act (constitution), the existing text of
which becomes sub-paragraph (1), after that sub-paragraph insert—

“(2) If the corporation is an NHS foundation trust, the constitution must
specify its principal purpose (as to which, see section 43(1)).”

168 Private health care

(1) 25In section 44 of the National Health Service Act 2006 (private health care),
omit—

(a) subsection (1) (restriction on provision of private health services),

(b) subsection (2) (cap on private income),

(c) subsection (2A) (special provision for mental health foundation trusts),
30and

(d) subsections (3) to (5) (interpretation etc.).

(2) For the title to that section substitute “Power to charge for accommodation
etc.”.

(3) In consequence of subsection (1)(b) and (c), omit section 33 of the Health Act
352009.

169 Information

For section 48 of the National Health Service Act 2006 (information)

substitute—

“48 Information

(1) The Secretary of State may require an NHS foundation trust to provide
the Secretary of State with such information as the Secretary of State
5considers it necessary to have for the purposes of the functions of the
Secretary of State in relation to the health service.

(2) The information must be provided in such form, and at such time or
within such period, as the Secretary of State may require.”

170 Significant transactions

51A Significant transactions

(1) An NHS foundation trust may enter into a significant transaction only
if more than half of the members of the council of governors of the trust
voting approve entering into the transaction.

(2) 15“Significant transaction” means a transaction or arrangement of such
description as may be specified in the trust’s constitution.

(3) If an NHS foundation trust does not wish to specify any descriptions of
transaction or arrangement for the purposes of subsection (2), the
constitution of the trust must specify that it contains no such
20descriptions.”

Mergers, acquisitions, separations and dissolution

171 Mergers

(1) In section 56 of the National Health Service Act 2006 (mergers), in subsection
(1), for the words from “authorisation” to the end substitute “the dissolution of
25the trusts and the establishment of a new NHS foundation trust.”

(2) After that subsection insert—

“(1A) An application under this section may be made only with the approval
of more than half of the members of the council of governors of each
applicant (that is an NHS foundation trust).”

(3) 30In subsection (2) of that section, omit—

(a) paragraph (c) (but not the “and” following it), and

(b) the words from “and must give” to the end.

(4) Omit subsection (3) of that section.

(5) For subsection (4) of that section substitute—

“(4) 35The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trusts and the
establishment of the proposed new trust have been taken.”

(6) Omit subsections (5) to (10) of that section.

(7) In subsection (11) of that section, for “On an authorisation being given under
this section” substitute “On the grant of the application”.

172 Acquisitions

After section 56 of the National Health Service Act 2006 insert—

“56A 5Acquisitions

(1) An application may be made jointly by—

(a) an NHS foundation trust (A), and

(b) another NHS foundation trust or an NHS trust (B),

to the regulator for the acquisition by A of B.

(2) 10An application under this section may be made only with the approval
of more than half of the members of the council of governors of each
applicant (that is an NHS foundation trust).

(3) The application must—

(a) be supported by the Secretary of State if B is an NHS trust, and

(b) 15be accompanied by a copy of the proposed constitution of A,
amended on the assumption that A acquires B.

(4) The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the acquisition have been taken.

(5) On the grant of the application, the proposed constitution has effect,
20but where a person who is specified as a director of A in the
constitution has yet to be appointed as such, the directors of A may
exercise that person’s functions under the constitution.”

173 Separations

After section 56A of the National Health Service Act 2006 insert—

“56B 25Separations

(1) An application may be made to the regulator by an NHS foundation
trust for the dissolution of the trust and the establishment of two or
more new NHS foundation trusts.

(2) An application under this section may be made only with the approval
30of more than half of the members of the council of governors of the
applicant.

(3) The application must, by reference to each of the proposed new trusts—

(a) specify the property and liabilities proposed to be transferred
to it;

(b) 35be accompanied by a copy of its proposed constitution.

(4) The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trust and the
establishment of each of the proposed new trusts have been taken.

(5) On the grant of the application, the proposed constitution of each of the
40new trusts has effect but, in the case of each of the new trusts, the
proposed directors may exercise the functions of the trust on its behalf

until a board of directors is appointed in accordance with the
constitution.”

174 Dissolution

After section 57 of the National Health Service Act 2006 insert—

“57A 5Dissolution

(1) An application may be made by an NHS foundation trust to the
regulator for dissolution.

(2) An application under this section may be made only with the approval
of more than half of the members of the council of governors of the
10applicant.

(3) The regulator must grant the application if it is satisfied that—

(a) the trust has no liabilities, and

(b) such steps as are necessary to prepare for the dissolution have
been taken.

(4) 15Where an application under this section is granted, the regulator must
make an order—

(a) dissolving the trust in question, and

(b) transferring, or providing for the transfer of, the property of the
trust (if any) to the Secretary of State.”

175 20Supplementary

(1) In section 57 of the National Health Service Act 2006 (mergers:
supplementary), in subsection (1)—

(a) for “an authorisation is given under section 56” substitute “an
application is granted under section 56 or 56B”, and

(b) 25at the end insert “or trusts”.

(2) In subsection (2) of that section—

(a) for “such an authorisation is given, the Secretary of State” substitute
“such an application is granted, the regulator”, and

(b) in paragraph (a), after “dissolving the” insert “trust or”, and

(c) 30in paragraph (b), at the end insert “or trusts”.

(3) After that subsection insert—

“(2A) An order under section 56 or 56B is conclusive evidence of
incorporation and conclusive evidence that the corporation is an NHS
foundation trust.”

(4) 35In subsection (3)(a) of that section, for “section 54(3)” substitute “section 54(4)”.

(5) In subsection (4) of that section—

(a) for “section 56(1) and (2)” substitute “sections 56(2) and 56B(3)”, and

(b) for “section 54(4)(a) to (c)” substitute “section 54(4)(a) or (c)”.

(6) In subsection (5) of that section, after “section 56” insert “or 56A”.

(7) 40Omit subsection (6) of that section.

(8) For the title to that section substitute “Sections 56 to 56B: supplementary”.

(9) For the cross-heading preceding section 56 of that Act substitute “Mergers,
acquisitions and separations”.

(10) In section 64 of that Act (orders and regulations under Chapter 5 of Part 2 of
5that Act), in subsection (4)—

(a) omit the “or” following paragraph (b), and

(b) after paragraph (c), insert “, or

(d) section 57A.”

(11) After that subsection insert—

“(4A) 10The Statutory Instruments Act 1946 applies in relation to the power of
the regulator to make an order under section 57 or 57A as if the
regulator were a Minister of the Crown.”

Failure

176 Repeal of de-authorisation provisions

(1) 15Omit section 52C of the National Health Service Act 2006 (guidance etc. on de-
authorisation notices).

(2) In section 53 of that Act (voluntary arrangements), in subsection (4A), for
“sections 52B to 52E and Chapter 5A do” substitute “Chapter 5A does”.

(3) Omit section 65E of that Act (NHS foundation trusts: de-authorisation and
20appointment of administrator).

(4) Omit Schedule 8A to that Act (de-authorised NHS trusts and NHS foundation
trusts).

(5) Omit section 15 of the Health Act 2009 (which inserts sections 52A to 52E and
Schedule 8A in the National Health Service Act 2006).

(6) 25In section 272 of the National Health Service Act 2006 (orders, regulations,
rules and directions)—

(a) in subsection (5), omit paragraph (aa), and

(b) in subsection (6A), omit “52D(1), 52E(6),”.

(7) In section 275(1) of that Act (interpretation), in the definition of “NHS trust”—

(a) 30omit “, subject to Schedule 8A,”, and

(b) omit “52D(1) or”.

(8) In section 206(1) of the National Health Service (Wales) Act 2006, in the
definition of “NHS trust”, omit “52D(1) or”.

177 Trust special administrators

(1) 35In section 65A of the National Health Service Act 2006 (bodies to which trust
special administration regime applies)—

(a) in subsection (1), for paragraphs (b) and (c) substitute—

“(b) any NHS foundation trust.”, and

(b) omit subsection (2).

(2) 40In section 65D of that Act (NHS foundation trusts: regulator’s notice), for

subsections (1) to (3) substitute—

“(1) This section applies if the regulator is satisfied that an NHS foundation
trust is, or is likely to become, unable to pay its debts.

(2) The regulator may make an order authorising the appointment of a
5trust special administrator to exercise the functions of the governors,
chairman and directors of the trust.”

(3) In subsection (4) of that section—

(a) for “giving a notice” substitute “making an order”,

(b) after paragraph (a) insert—

“(aa) 10the National Health Service Commissioning Board,”,
and”

(c) omit paragraph (b) (but not the “and” following it).

(4) After that subsection insert—

“(5) An order under subsection (2) must specify the date when the
15appointment is to take effect, which must be within the period of 5
working days beginning with the day on which the order is made.

(6) The regulator must lay before Parliament (with the statutory
instrument containing the order) a report stating the reasons for
making the order.

(7) 20If the regulator makes an order under subsection (2), it must—

(a) appoint a person as the trust special administrator with effect
from the day specified in the order, and

(b) publish the name of the person appointed.

(8) A person appointed as a trust special administrator under this section
25holds and vacates office in accordance with the terms of the
appointment.

(9) When the appointment of a trust special administrator under this
section takes effect, the trust’s governors, chairman and executive and
non-executive directors are suspended from office; and Chapter 5 of
30this Part, in its application to the trust, is to be read accordingly.

(10) But subsection (9) does not affect the employment of the executive
directors or their membership of any committee or sub-committee of
the trust.

(11) The Secretary of State may indemnify a trust special administrator
35appointed under this section in respect of such matters as the Secretary
of State may determine.”

(5) For the title to that section substitute “NHS foundation trusts: appointment of
trust special administrator”.

(6) Omit the cross-heading preceding that section.

178 40Procedure etc.

(1) In section 65F of the National Health Service Act 2006 (administrator’s draft
report), in subsection (2), for paragraph (a) substitute—

“(a) the Board,”.

(2) At the end of that section insert—

“(4) For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

(3) 5In section 65H of that Act (consultation requirements), in subsection (7), for
paragraph (a) substitute—

“(a) the Board;”.

(4) In subsection (8) of that section, for paragraphs (a) to (d) substitute—

“(a) any local authority which arranges for the provision of services
10by the trust or to which the trust provides services;”.

(5) At the end of that section insert—

“(12) For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

(6) 15At the end of section 65I of that Act (administrator’s final report) insert—

“(4) For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

(7) At the end of section 65J of that Act (power to extend time limits for preparing
20reports and carrying out consultation) insert—

“(5) For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

179 Action following final report

(1) 25At the end of section 65K of the National Health Service Act 2006 (Secretary of
State’s decision on what action to take) insert—

“(3) For the purposes of subsections (1) and (2) in their application to the
case of an NHS foundation trust, the references to the Secretary of State
are to be read as references to the regulator.

(4) 30The regulator may, in the case of an NHS foundation trust, make an
order—

(a) dissolving the trust, and

(b) transferring, or providing for the transfer of, the property and
liabilities of the trust—

(i) 35to another NHS foundation trust or the Secretary of
State, or

(ii) between another NHS foundation trust and the
Secretary of State.

(5) Before making an order under subsection (4), the regulator must obtain
40the consent of the Secretary of State.

(6) Where the Secretary of State refuses consent, the regulator must within
the period of 20 working days beginning with the day on which the

regulator receives written notification of the Secretary of State’s refusal,
decide on alternative action to take in relation to the trust.

(7) The liabilities that may be transferred by virtue of subsection (4)(b)(i)
include criminal liabilities.

(8) 5An order under subsection (4) may include provisions corresponding
to those in Schedule 9.”

(2) In section 65L of that Act (trusts coming out of administration), after subsection
(2) insert—

“(2A) For the purposes of subsections (1) and (2) in their application to the
10case of an NHS foundation trust—

(a) the references to the Secretary of State are to be read as
references to the regulator, and

(b) the reference to the chairman and directors of the trust is to be
read as including a reference to the governors.”

(3) 15Omit subsections (3) to (5) of that section.

(4) At the end of that section insert—

“(6) Subsection (7) applies in the case of an NHS foundation trust.

(7) If it appears to the regulator to be necessary in order to comply with
Schedule 7, the regulator may by order—

(a) 20terminate the office of any governor or of any executive or non-
executive director of the trust;

(b) appoint a person to be a governor or an executive or non-
executive director of the trust.”

180 Sections 177 to 179: supplementary

(1) 25At the end of section 65M of the National Health Service Act 2006 (replacement
of trust special administrator) insert—

“(3) For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

(2) 30At the end of section 65N of that Act (power to issue guidance) insert—

“(4) For the purposes of this section in its application to cases of NHS
foundation trusts, the reference in subsection (1) to the Secretary of
State is to be read as a reference to the regulator.”

(3) In section 65O of that Act (interpretation of Chapter 5A), in the definition of
35“trust special administrator”, after “65B(6)(a)” insert “, section 65D(2)”.

(4) In section 39 of that Act (register of NHS foundation trusts), in subsection (2),
at the end insert “,

(g) a copy of any order made under section 65D, 65J, 65K or 65L,

(h) a copy of any report laid under section 65D,

(i) 40a copy of any draft report published under section 65F,

(j) a copy of any statement under section 65G,

(k) a copy of any notice published under section 65H, 65J or 65K,

(l) a copy of any final report published under section 65I,

(m) a copy of any statement published under section 65J,

(n) a copy of any information published under section 65M.”

(5) In section 272 of that Act (orders etc.), in subsection (5), in paragraph (ab)—

(a) after “65B(1),” insert “65D(2),”,

(b) 5omit “65E(1),”,

(c) after “65J(2),” insert “65K(4),”, and

(d) for “(5)” substitute “(7)”.

(6) After subsection (6) insert—

“(6ZA) The Statutory Instruments Act 1946 applies in relation to the power of
10the regulator to make an order under Chapter 5A as if the regulator
were a Minister of the Crown.”

(7) In subsection (6A) of that section—

(a) after “65B(1),” insert “65D(2),”,

(b) omit “65E(1),”,

(c) 15after “65J(2),” insert “65K(4),”, and

(d) for “(4)” substitute “(7)”.

(8) In section 275(1) of that Act (interpretation), in the definition of “NHS trust”,
omit the words from “and” to the end.

(9) In paragraph 22(1) of Schedule 7 to that Act (documents which must be made
20available to the public free of charge), at the end insert “,

(g) a copy of any order made under section 65D, 65J, 65K or 65L,

(h) a copy of any report laid under section 65D,

(i) a copy of any draft report published under section 65F,

(j) a copy of any statement under section 65G,

(k) 25a copy of any notice published under section 65H, 65J or 65K,

(l) a copy of any final report published under section 65I,

(m) a copy of any statement published under section 65J,

(n) a copy of any information published under section 65M.”

(10) In section 206(1) of the National Health Service (Wales) Act 2006, in the
30definition of “NHS trust”, omit the words from “(including” to the end.

181 Repeal of Chapter 5A of Part 2 of the National Health Service Act 2006

(1) Chapter 5A of Part 2 of the National Health Service Act 2006 is repealed on—

(a) the commencement of the first regulations under section 55A of that
Act and the first regulations under section 133 of this Act that make
35provision for cases involving NHS foundation trusts, or

(b) where the regulations come into force on different days, on whichever
commencement occurs first.

(2) In consequence of subsection (1), the following are also repealed on the
commencement of the repeal of Chapter 5A of Part 2 of that Act—

(a) 40section 39(2)(g) to (n) of that Act,

(b) section 272(5)(ab), (6ZA) and (6A) of that Act,

(c) in paragraph 28(3) of Schedule 4 to that Act, the words from “or where”
to “65I(3)”,

(d) paragraph 22(1)(g) to (n) of Schedule 7 to that Act,

(e) in the definition of “NHS trust” in section 206(1) of the National Health
Service (Wales) Act 2006, the words from “(including” to the end,

(f) section 18(9), (10) and (12) of the Health Act 2009, and

(g) sections 177 to 180 and 185(5) of this Act.

5Abolition of NHS trusts

182 Abolition of NHS trusts in England

(1) The NHS trusts established under section 25 of the National Health Service Act
2006 are abolished.

(2) Chapter 3 of Part 2 of that Act (NHS trusts) is repealed.

(3) 10Where arrangements (“franchise arrangements”) under which a person
exercises (or is to exercise) the main functions of an NHS trust on behalf of the
trust are in force immediately before the commencement of this section, the
trust is to continue after that commencement to be constituted as an NHS trust
until—

(a) 15it is dissolved or becomes, merges with or is acquired by an NHS
foundation trust,

(b) where none of those events occurs before the end of the period of three
years beginning with the day on which the franchise arrangements
come to an end, the end of that period, or

(c) 20where other franchise arrangements come into force before the end of
that period, the end of the period of three years beginning with the day
on which those other franchise arrangements or any subsequent
franchise arrangements come to an end.

(4) In subsection (3)(c), the reference to subsequent franchise arrangements is a
25reference to franchise arrangements which come into force before the end of
the period of three years beginning with the day on which the preceding
franchise arrangements come to an end.

(5) For the purposes of subsection (3)—

(a) Chapter 3 of Part 2 of the National Health Service Act 2006 is, despite
30subsection (2), to continue to have effect,

(b) Chapter 5A of that Part is, despite section 180(1), to continue to have
effect,

(c) the repeals made by section 181(1) are not to have effect,

(d) the amendments made by Schedule 14 are not to have effect (and
35subsection (6) is to be read accordingly), and

(e) the amendments made by paragraph 9 of Schedule 22 are not to have
effect (and section 296 is to be read accordingly).

(6) Schedule 14 (which contains consequential amendments) has effect.

183 Repeal of provisions on authorisation for NHS foundation trusts

(1) 40Omit section 33 of the National Health Service Act 2006 (application by NHS
trust for authorisation).

(2) Omit section 35 of that Act (authorisation of NHS foundation trust).