Section 22(2)

SCHEDULE 2 Commissioning consortia

Sections 14B(6), 14D(2) and 14I(4)

“Schedule 1 Commissioning consortia

5Part 1 Constitution of commissioning consortia

General

1 A commissioning consortium must have a constitution.

2 (1) The constitution must specify—

(a) 10the name of the consortium,

(b) the members of the consortium, and

(c) the area of the consortium.

(2) The name of the consortium must comply with such requirements
as may be prescribed.

3 (1) 15The constitution must specify the arrangements made by the
commissioning consortium for the discharge of its functions
(including its functions in determining the terms and conditions of
its employees).

(2) The arrangements may include provision—

(a) 20for the appointment of committees or sub-committees of
the commissioning consortium, and

(b) for any such committees to consist of or include persons
other than members or employees of the commissioning
consortium.

(3) 25The arrangements may include provision for any functions of the
commissioning consortium to be exercised on its behalf by—

(a) any of its members or employees,

(b) its governing body, or

(c) a committee or sub-committee of the consortium.

4 (1) 30The constitution must specify the procedure to be followed by the
commissioning consortium in making decisions.

(2) The constitution must, in particular, make provision for dealing
with conflicts of interests of members or employees of the
commissioning consortium.

(3) 35The constitution must also specify the arrangements made by the
commissioning consortium for securing that there is transparency
about the decisions of the consortium and the manner in which
they are made.

5 The provision made by virtue of paragraphs 3 and 4 must secure
40that there is effective participation by each member of the

commissioning consortium in the exercise of the consortium’s
functions.

Governing bodies of consortia

6 (1) The constitution must specify the arrangements made by the
5commissioning consortium for the discharge of the functions of its
governing body.

(2) The arrangements—

(a) must include provision for the appointment of the audit
committee and remuneration committee of the governing
10body, and

(b) may include provision for the appointment of other
committees or sub-committees of the governing body.

(3) Arrangements under sub-paragraph (2)(a) may include provision
for the audit committee to include individuals who are not
15members of the governing body.

(4) Arrangements under sub-paragraph (2)(b) may include provision
for a committee or sub-committee to include individuals who are
not members of the governing body but are—

(a) members of the consortium, or

(b) 20individuals of a description specified in the constitution.

(5) The consortium may pay travel or other allowances to members of
any committee or sub-committee of the governing body who are
not members of the governing body.

(6) The arrangements may include provision for any functions of the
25governing body to be exercised on its behalf by—

(a) any committee or sub-committee of the governing body,

(b) a member of the governing body,

(c) a member of the consortium who is an individual (but is
not a member of the governing body), or

(d) 30an individual of a description specified in the constitution.

7 (1) The constitution must specify the procedure to be followed by the
governing body in making decisions.

(2) The constitution must, in particular, make provision for dealing
with conflicts of interests of members of the governing body.

(3) 35The constitution must also specify the arrangements made by the
commissioning consortium for securing that there is transparency
about the decisions of the governing body and the manner in
which they are made.

(4) The provision made under sub-paragraph (3) must include
40provision for meetings of governing bodies to be open to the
public, except where the consortium considers that it would not be
in the public interest to permit members of the public to attend a
meeting or part of a meeting.

Supplemental

8 In addition to the provision authorised or required to be included
under this Part of this Schedule, the constitution may make further
provision.

5Part 2 Further provision about commissioning consortia

Status

9 (1) A commissioning consortium is a body corporate.

(2) A commissioning consortium is not to be regarded as a servant or
10agent of the Crown or as enjoying any status, privilege or
immunity of the Crown.

(3) The property of a commissioning consortium is not to be regarded
as property of, or property held on behalf of, the Crown.

Staff

10 (1) 15A commissioning consortium may appoint such persons to be
employees of the consortium as it considers appropriate.

(2) A commissioning consortium must—

(a) pay its employees such remuneration as its governing
body determines under section 14L(3)(a), and

(b) 20employ them on such other terms and conditions as it may
determine.

(3) A commissioning consortium may, for or in respect of such of its
employees as it may determine, make arrangements for providing
pensions, allowances or gratuities.

(4) 25Such arrangements may include the establishment and
administration, by the consortium or otherwise, of one or more
pension schemes.

(5) The arrangements that may be made under sub-paragraph (3)
include arrangements for the provision of pensions, allowances or
30gratuities by way of compensation to or in respect of any of the
consortium’s employees who suffer loss of office or employment
or loss or diminution of emoluments.

Accountable officer

11 (1) A commissioning consortium must have an accountable officer.

(2) 35The accountable officer is to be appointed by the Board.

(3) The Board may appoint a person to be the accountable officer for
more than one consortium (and in the following provisions of this
paragraph such an appointment is referred to as a “joint
appointment”).

(4) The accountable officer may be—

(a) an individual who is a member of the consortium or of any
body that is a member of the consortium or, in the case of
a joint appointment, an individual who is a member of any
5of the consortia in question or of any body that is a member
of any of those consortia, or

(b) an employee of the consortium or of any member of the
consortium or, in the case of a joint appointment, an
employee of any of the consortia in question or of any
10member of those consortia.

(6) 15The accountable officer is responsible for ensuring that the
consortium or, in the case of a joint appointment, each of the
consortia in question—

(a) complies with its obligations under—

(i) sections 14P and 14Q,

(ii) 20sections 223H to 223J,

(iii) paragraphs 14 to 16 of this Schedule, and

(iv) any other provision of this Act specified in a
document published by the Board for the purposes
of this sub-paragraph, and

(b) 25exercises its functions in a way which provides good value
for money.

Trust funds and trustees

12 (1) The Secretary of State may by order provide for the appointment
of trustees for a commissioning consortium to hold property on
30trust—

(a) for the general or any specific purposes of the consortium,
or

(b) for any purposes relating to the health service in England.

(2) An order under sub-paragraph (1) may—

(a) 35make provision as to the persons by whom trustees must
be appointed and generally as to the method of their
appointment,

(b) make any appointment subject to such conditions as may
be specified in the order (including conditions requiring
40the consent of the Secretary of State),

(c) make provision as to the number of trustees to be
appointed, including provision under which that number
may from time to time be determined by the Secretary of
State after consultation with such persons as the Secretary
45of State considers appropriate, and

(d) make provision with respect to the term of office of any
trustee and his or her removal from office.

(3) Where trustees have been appointed by virtue of sub-paragraph
(1), the Secretary of State may by order provide for the transfer of
any trust property from the consortium to the trustees.

Externally financed development agreements

13 (1) 5The powers of a consortium include power to enter into externally
financed development agreements.

(2) For the purposes of this paragraph, an agreement is an externally
financed agreement if it is certified as such in writing by the
Secretary of State.

(3) 10The Secretary of State may give a certificate under this paragraph
if—

(a) in the Secretary of State’s opinion the purpose or main
purpose of the agreement is the provision of services or
facilities in connection with the discharge by a consortium
15of any of its functions, and

(b) a person proposes to make a loan to, or provide any other
form of finance for, another party in connection with the
agreement.

(4) If a consortium enters into an externally financed development
20agreement it may also, in connection with that agreement, enter
into an agreement with a person who falls within sub-paragraph
(3)(b) in relation to the externally financed development
agreement.

(5) In sub-paragraph (3)(b) “another party” means any party to the
25agreement other than the consortium.

(6) The fact that an agreement made by a consortium has not been
certified under this paragraph does not affect its validity.

Accounts and audits

14 (1) A commissioning consortium must keep proper accounts and
30proper records in relation to the accounts.

(2) A commissioning consortium must prepare annual accounts in
respect of each financial year.

(3) The Board may, with the approval of the Secretary of State, direct
a commissioning consortium to prepare accounts in respect of
35such period or periods as may be specified in the direction.

(4) The Board may, with the approval of the Secretary of State, give
directions to a commissioning consortium as to—

(a) the methods and principles according to which its annual
or other accounts must be prepared, and

(b) 40the form and content of such accounts.

(5) The annual accounts and, if the Board so directs, accounts
prepared by virtue of sub-paragraph (3) must be audited in
accordance with the Audit Commission Act 1998 by an auditor or

auditors appointed in accordance with arrangements made by the
Board for the purposes of this paragraph.

(6) The Comptroller and Auditor General may examine—

(a) the annual accounts and any records relating to them, and

(b) 5any report on them by the auditor or auditors.

(7) A commissioning consortium must send its audited annual
accounts, and any audited accounts prepared by it by virtue of
sub-paragraph (3), to the Board by no later than the date specified
in a direction by the Board.

(8) 10The Board may direct a commissioning consortium to send its
unaudited annual accounts, and any unaudited accounts
prepared by it by virtue of sub-paragraph (3), to the Board by no
later than the date specified in a direction by the Board.

(9) Nothing in this paragraph requires a commissioning consortium
15to keep accounts or records, or to prepare annual accounts, in
respect of anything done by it as trustee.

(10) For the purposes of this paragraph “financial year” includes the
period which begins on the day the consortium is established and
ends on the following 31 March.

20Provision of financial information to Board

15 (1) The Board may direct a commissioning consortium to supply it
with such information relating to its accounts or to its income or
expenditure, or its use of resources, as may be specified in the
direction.

(2) 25The power conferred by sub-paragraph (1) includes power to
direct a commissioning consortium to supply the Board with—

(a) estimates of its future income or expenditure or its future
use of resources;

(b) any information which the Board considers is necessary to
30enable it to verify any other information supplied to it
under sub-paragraph (1).

(3) A commissioning consortium must supply the Board with any
information specified in a direction under sub-paragraph (1)
within such period as may be specified in the direction.

(4) 35In this paragraph, a reference to the use of resources is a reference
to their expenditure, consumption or reduction in value.

Provision of information required by the Secretary of State

16 (1) The Secretary of State may require each commissioning
consortium to provide the Board with such information as the
40Secretary of State considers 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.

(3) The powers conferred by this paragraph must be exercised in the
same way in relation to each commissioning consortium.

(4) The Board must give any information obtained by it under sub-
paragraph (1) to the Secretary of State, in such form, and at such
5time or within such period, as the Secretary of State may require.

Incidental powers

17 The power conferred on a commissioning consortium by section 2
includes in particular power to—

(a) enter into agreements,

(b) 10acquire and dispose of property, and

(c) accept gifts (including property to be held on trust for the
purposes of the commissioning consortium).

Part 3 Transfer schemes

18 15The things that may be transferred under a property transfer
scheme or a staff transfer scheme under section 14I include—

(a) property, rights and liabilities that could not otherwise be
transferred;

(b) property acquired, and rights and liabilities arising, after
20the making of the scheme;

(c) criminal liabilities.

19 A property transfer scheme or a staff transfer scheme may make
supplementary, incidental, transitional and consequential
provision and may in particular—

(a) 25create rights, or impose liabilities, in relation to property or
rights transferred;

(b) make provision about the continuing effect of things done
by the transferor in respect of anything transferred;

(c) make provision about the continuation of things
30(including legal proceedings) in the process of being done
by, on behalf of or in relation to the transferor in respect of
anything transferred;

(d) make provision for references to the transferor in an
instrument or other document in respect of anything
35transferred to be treated as references to the transferee.

20 A property transfer scheme may make provision for the shared
ownership or use of property.

21 A staff transfer scheme may make provision which is the same or
similar to the Transfer of Undertakings (Protection of
40Employment) Regulations 2006 (SI 2006/246SI 2006/246).

22 A property transfer scheme or a staff transfer scheme may
provide—

(a) for the scheme to be modified by agreement after it comes
into effect, and

(b) for any such modifications to have effect from the date
when the original scheme comes into effect.”

Section 47

SCHEDULE 3 Pharmaceutical remuneration

Section 165A

5“Schedule 1 Pharmaceutical remuneration

Interpretation

1 In this Schedule—

(a) “drugs” includes medicines and listed appliances (within
10the meaning of section 126), and

(b) “pharmaceutical remuneration” means remuneration paid
by the Board to persons providing pharmaceutical services
or local pharmaceutical services.

Pharmaceutical remuneration to be apportioned among consortia

2 (1) 15The Board must determine the elements of pharmaceutical
remuneration in respect of which apportionments are to be made
in relation to a financial year in accordance with this paragraph.

(2) In this Schedule, those elements of pharmaceutical remuneration
are referred to as “designated elements”.

(3) 20The Board must notify each commissioning consortium of a
determination under sub-paragraph (1).

(4) The Board must apportion the sums paid by it in respect of each
designated element during the financial year among all
commissioning consortia, in such manner as the Board thinks
25appropriate.

(5) In apportioning sums under sub-paragraph (4), the Board may, in
particular, take into account the financial consequences of orders
for the provision of drugs that are attributable to the members of
each consortium.

(6) 30Where an amount of pharmaceutical remuneration is apportioned
to a commissioning consortium, the Board—

(a) may deduct that amount from the sums that it would
otherwise pay to the consortium under section 223G(1),
and

(b) 35if it does so, must notify the consortium accordingly.

(7) The Secretary of State may direct the Board that an element of
pharmaceutical remuneration specified in the direction is not to be
included in a determination under sub-paragraph (1).

(8) In determining the amount to be allotted to a consortium for the
purposes of section 223G, the Board must take into account the
effect of this Schedule.

(9) For the purposes of sections 223H and 223I(3) and paragraph 14 of
5Schedule 1A, any amount of which a consortium is notified under
sub-paragraph (6) is to be treated as expenditure of the consortium
which is attributable to the performance by it of its functions in the
year in question.

Other pharmaceutical remuneration

3 (1) 10This paragraph applies in relation to pharmaceutical
remuneration paid in a financial year other than—

(a) designated elements of such remuneration, and

(b) remuneration of a prescribed description.

(2) The Board may require a person to reimburse the Board for any
15pharmaceutical remuneration to which this paragraph applies if
the drugs or services to which the remuneration relates were—

(a) ordered by that person, or

(b) ordered in the course of the delivery of a service arranged
by that person.

(3) 20Any sum payable to the Board by virtue of sub-paragraph (2) may
be recovered summarily as a civil debt (but this does not affect any
other method of recovery).

Exercise of functions

4 The Board may, with the consent of the Secretary of State—

(a) 25direct a Special Health Authority to exercise any functions
of the Board under this Schedule, or

(b) arrange for any other person to exercise any of those
functions.”

Section 51(1)

SCHEDULE 4 30Amendments of the National Health Service Act 2006

Part 1 The health service in England

1 (1) For section 2 substitute—

“2 General power

35The Secretary of State, the Board or a commissioning consortium
may do anything which is calculated to facilitate, or is conducive or
incidental to, the discharge of any function conferred on that person
by this Act.”

(2) For the cross-heading preceding section 2 substitute “General power”.

2 (1) Section 6 (performance of functions outside England) is amended as follows.

(2) For subsection (1) substitute—

“(1) Where the Secretary of State has a duty or power to provide anything
under section 2A or 2B or Schedule 1, that thing may be provided
5outside England.”

(3) After subsection (1) insert—

“(1A) Where a commissioning consortium or the Board has a duty or
power to arrange for the provision of anything under sections 3, 3A,
3B or 4 or Schedule 1, it may arrange for that thing to be provided
10outside England.”

(4) In subsection (2) for “The Secretary of State’s functions” substitute “The
functions of the Secretary of State, the Board and commissioning consortia”.

3 (1) Section 6A (reimbursement of cost of services provided in another EEA
state) is amended as follows.

(2) 15In subsection (3)(b) after “Secretary of State” insert “, the Board”.

(3) In subsection (7) after “Secretary of State” insert “, the Board”.

(4) In subsection (8) in each of paragraphs (a) and (b)—

(a) after “Secretary of State” insert “, the Board”, and

(b) for “either of them” substitute “any of them”.

(5) 20In subsection (9), after “Secretary of State” (in the second place it occurs)
insert “, the Board”.

(6) In subsection (11), in the definition of “responsible authority”—

(a) omit “Strategic Health Authority or”,

(b) omit “Primary Care Trust”,

(c) 25before “responsible under” insert “a local authority or
commissioning consortium”, and

(d) for “securing” substitute “arranging for”.

4 (1) Section 6B (prior authorisation for the purposes of section 6A) is amended as
follows.

(2) 30In subsection (2)(b) after “Secretary of State” insert “, the Board”.

(3) In subsection (5), in each of paragraphs (b) and (c) after “the Secretary of
State” insert “, the Board”.

5 (1) In section 8 (Secretary of State’s directions to health service bodies), in
subsection (2)—

(a) 35omit paragraph (a), and

(b) omit paragraph (b).

(2) In the heading to that section after “to” insert “certain”.

(3) Before section 8 insert the following cross-heading “Directions to certain
NHS bodies”.

6 (1) 40Section 9 (NHS contracts) is amended as follows.

(2) In subsection (4)—