National Health Service (Amended Duties and Powers) Bill (HC Bill 18)

A

BILL

TO

Re-establish the Secretary of State‘s legal duty to provide national health
services in England, to amend the provisions of the Health and Social Care Act
2012 relating to Monitor; to repeal the Regulations made under section 75 of
that Act; to make other amendments to the provisions in that Act relating to
competition and provision of private health services; and for connected
purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Amendments to sections within part 1 of the National Health Service Act
2006, as amended by the Health and Social Care Act 2012

1 Duty on the Secretary of State to promote comprehensive health service based
5on social solidarity

For section 1 of the National Health Service Act 2006 as amended by section 1
of the Health and Social Care Act 2012 (Secretary of State‘s duty to promote
health service) substitute—

1 Secretary of State’s duty to promote comprehensive health service
10based on social solidarity

(1) The Secretary of State must continue the promotion in England of a
comprehensive health service designed to secure improvement—

(a) in the physical and mental health of the people of England, and

(b) in the prevention, diagnosis and treatment of physical and
15mental illness.

(2) For that purpose, the Secretary of State must:

(a) exercise the functions conferred by this Act so as to secure that
services are provided in accordance with this Act;

National Health Service (Amended Duties and Powers) BillPage 2

(b) ensure that the health service is a public service which delivers
services of general economic interest and operates on the basis
of social solidarity; and

(c) ensure that arrangements between commissioners and
5providers of health services require effective co-operation
between different providers under this Act and between
providers of health services and providers of community care
services.

(3) The Secretary of State retains ministerial responsibility to Parliament
10for the provision of the health service in England.

(4) The services provided as part of the health service in England must be
free of charge except in so far as the making and recovery of charges is
expressly provided for by or under any enactment, whenever passed.

2 Exercise of the Secretary of State‘s powers

15After section 2B of the National Health Service Act 2006 insert—

2C Duties and guidance in respect of cooperation and social solidarity

(1) The Secretary of State shall exercise his powers under this Act to
promote the health service as an efficient service based on mutual
cooperation and social solidarity and so as to ensure that that any
20person who is concerned in commissioning or providing health
services for the purposes of the health service—

(a) adheres to such practices in relation to procurement as the
Secretary of State identifies as being appropriate for the
purposes of the health service;

(b) 25protects and promotes the right of patients to make choices with
respect to treatment or other health care services provided for
the purposes of the health service, in as much as the exercise of
such choice is consistent with the overall interests of the health
service;

(c) 30does not engage in anti-competitive or any other behaviour
which the Secretary of State considers is against the interests of
people who use health services.

(2) The Secretary of State shall be entitled to publish guidance for health
service commissioners and providers concerning the matters set out in
35sub-section (1) above and where such guidance is published all health
service commissioners and providers shall give due regard to the
guidance when discharging any relevant function.

(3) The Secretary of State shall be entitled to seek such advice concerning
the matter set out in sub-section (1) from such persons as he considers
40fit.

(4) The Secretary of State may issue directions to any health service body
to support the discharge of the functions under sub-section (1).

(5) If any dispute arises with respect to whether any health service body or
other person providing health service services has acted in accordance
45with the matters set out in sub-section (1) or has otherwise acted in a
way that is anti-competitive or contrary to the interests of the health
service, any health service body or provider of services under the

National Health Service (Amended Duties and Powers) BillPage 3

National Health Service Act 2006 may refer a complaint to the Secretary
of State.

(6) Where a complaint is made under sub-section (5) above the Secretary of
State shall be entitled to adjudicate upon the complaint or to appoint a
5person to adjudicate upon the complaint if the Secretary of State
considers that it is appropriate to do so.

(7) Any adjudication under this section shall be final and binding for all
purposes.

3 Duty on the Secretary of State regarding provision of certain services

(1) 10For section 3 of the National Health Service Act 2006 (Secretary of State‘s duty
to promote health service) as amended by section 13 of the Health and Social
Care Act 2012 substitute—

3 Secretary of State‘s duty as to provision of certain services

(1) The Secretary of State must arrange for the provision of the following
15to such extent as he considers necessary to meet all reasonable
requirements—

(a) hospital accommodation,

(b) other accommodation for the purpose of any service provided
under this Act,

(c) 20medical, dental, ophthalmic, nursing and ambulance services,

(d) such other services or facilities for the care of pregnant women,
women who are breastfeeding and young children as he
considers are appropriate as part of the health service,

(e) such other services or facilities for the prevention of illness, the
25care of persons suffering from illness and the after-care of
persons who have suffered from illness as he considers are
appropriate as part of the health service,

(f) such other services or facilities as are required for the diagnosis
and treatment of illness.

(2) 30The Secretary of State shall be entitled to delegate all or any part of the
performance of the duty under sub-section (1) above to the Board.

(3) The Secretary of State may give directions to the Board concerning the
performance of the duty under sub-section (1).

(4) The Secretary of State shall be entitled to delegate the performance of
35the duty under sub-section (1) above to a clinical commissioning group
for—

(a) persons who are provided with primary medical services by a
member of the group,

(b) persons who usually reside in the group‘s area and are not
40provided with primary medical services by a member of any
clinical commissioning group, and

(c) any other category of persons as set out in a Direction made by
the Secretary of State.

(5) The Secretary of State may give directions to a clinical commissioning
45group concerning the performance of the duty under sub-section (1).

National Health Service (Amended Duties and Powers) BillPage 4

4 Provision of high security psychiatric services

For section 4 of the National Health Service Act 2006 as amended by section 16
of the Health and Social Care Act 2012 substitute—

4 Provision of high security psychiatric services

(1) 5The Secretary of State must arrange for the provision of hospital
accommodation and services for persons who—

(a) are liable to be detained under the Mental Health Act 1983, and

(b) in the opinion of the Secretary of State require treatment under
conditions of high security on account of their dangerous,
10violent or criminal propensities.

(2) The Secretary of State may delegate all or any part of the performance
of the duty under sub-section (1) above to the Board.

(3) The Secretary of State may give directions to the Board concerning the
performance of the duty under sub-section (1).

(4) 15The hospital accommodation and services mentioned in subsection (1)
are referred to in this section and paragraph 15 of Schedule 4 (NHS
trusts) as “high security psychiatric services”.

5 Power of Secretary of State to direct certain health service bodies

For section 8 of the National Health Service Act 2006 substitute—

8 20Secretary of State’s directions to certain health service bodies

(1) The Secretary of State may give directions to any of the bodies
mentioned in subsection (2) about its exercise of any functions

(2) The bodies are—

(a) clinical commissioning groups,

(b) 25the Board,

(c) NHS Trusts, and

(d) Special Health Authorities.

(3) Nothing in provision made by or under this or any other Act affects the
generality of subsection (1).

6 30NHS Contracts

For section 9 of the National Health Service Act 2006 substitute—

9 NHS Contracts

(1) In this Act, an NHS contract is an arrangement under which one health
service body (“the commissioner“) arranges for the provision to it by
35another health service body (“the provider“) of goods or services which
it reasonably requires for the purposes of its functions.

(2) Section 139(6) (NHS contracts and the provision of local
pharmaceutical services under pilot schemes) makes further provision
about acting as commissioner for the purposes of subsection (1).

National Health Service (Amended Duties and Powers) BillPage 5

(3) Paragraph 15 of Schedule 4 (NHS trusts and NHS contracts) makes
further provision about an NHS trust acting as provider for the
purposes of subsection (1).

(4) “Health service body” means any of the following—

(a) 5the Board,

(b) a clinical commissioning group,

(c) an NHS trust,

(d) an NHS Foundation Trust,

(e) a Special Health Authority,

(f) 10a Local Health Board,

(g) a Health Board constituted under section 2 of the National
Health Service (Scotland) Act 1978,

(h) a Special Health Board constituted under that section,

(i) a Health and Social Services Board constituted under the Health
15and Personal Social Services (Northern Ireland) Order 1972 (SI
1972/1265 (NI14)),

(j) the Common Services Agency for the Scottish Health Service,

(k) the Wales Centre for Health,

(l) the Care Quality Commission,

(m) 20National Institute for Health and Care Excellence,

(n) the Health and Social Care Information Centre,

(o) the Scottish Dental Practice Board,

(p) the Secretary of State,

(q) the Welsh Ministers,

(r) 25the Scottish Ministers,

(s) Healthcare Improvement Scotland,

(t) the Northern Ireland Central Services Agency for the Health
and Social Services established under the Health and Personal
Social Services (Northern Ireland) Order 1972,

(u) 30a special health and social services agency established under the
Health and Personal Social Services (Special Agencies)
(Northern Ireland) Order 1990 (SI 1990/247 (NI3)SI 1990/247 (NI3)),

(v) a Health and Social Services trust established under the Health
and Personal Social Services (Northern Ireland) Order 1991 (SI
351991/194 (NI1)),

(w) the Department of Health, Social Services and Public Safety,

(x) a local authority exercising functions under this Act.

(5) An arrangement for the provision of goods or services by a health
service body with a person who is not a health service body shall also
40take effect as an NHS contract if—

(a) the terms of the arrangement are reduced to writing or
evidenced in writing; and

(b) the parties to the arrangement have recorded in writing that the
arrangement shall operate as an NHS contract.

(6) 45Whether or not an arrangement which constitutes an NHS contract
would apart from this subsection be a contract in law, it must not be
regarded for any purpose as giving rise to contractual rights or
liabilities.

National Health Service (Amended Duties and Powers) BillPage 6

(7) If any dispute arises with respect to such an arrangement, either party
may refer the matter to the Secretary of State for determination under
this section.

(8) If, in the course of negotiations intending to lead to an arrangement
5which will be an NHS contract, it appears to a health service body—

(a) that the terms proposed by another health service body are
unfair by reason that the other is seeking to take advantage of
its position as the only, or the only practicable, provider of the
goods or services concerned or by reason of any other unequal
10bargaining position as between the prospective parties to the
proposed arrangement, or

(b) that for any other reason arising out of the relative bargaining
position of the prospective parties any of the terms of the
proposed arrangement cannot be agreed,

15that health service body may refer the terms of the proposed
arrangement to the Secretary of State for determination under this
section.

(9) Where a reference is made to the Secretary of State under subsection (7)
or (8), he may determine the matter himself or appoint a person to
20consider and determine it in accordance with regulations.

(10) “The appropriate person” means the Secretary of State or the person
appointed under subsection (9).

(11) By the determination of a reference under subsection (8) the
appropriate person may specify terms to be included in the proposed
25arrangement and may direct that it be proceeded with.

(12) A determination of a reference under subsection (7) may contain such
directions (including directions as to payment) as the appropriate
person considers appropriate to resolve the matter in dispute.

(13) The appropriate person may by the determination in relation to an
30NHS contract vary the terms of the arrangement or bring it to an end
(but this does not affect the generality of the power of determination
under subsection (7)).

(14) Where an arrangement is so varied or brought to an end—

(a) subject to paragraph (b), the variation or termination must be
35treated as being effected by agreement between the parties, and

(b) the directions included in the determination by virtue of
subsections (11) or (12) may contain such provisions as the
appropriate person considers appropriate in order to give effect
to the variation or to bring the arrangement to an end.

(15) 40Payments made for the purposes of this Act by a commissioner to a
provider may be designated as being a grant made by the
commissioner to the provider for the purposes of the European
Directive 2014/24/EU of the European Parliament and the Council.

(16) Where a commissioner enters or proposes to enter into an NHS contract
45under this section the commissioner shall also be entitled to provide
that the provider has an exclusive right to provide those services for a
defined period which for each such designation shall not exceed 10
years.

National Health Service (Amended Duties and Powers) BillPage 7

(17) Where a commissioner has made a designation under subsection (16)
above it shall be entitled to remove the designation at any time.

(18) Any person who is aggrieved at the award of a designation to a
provider under subsection (16) above may refer the matter to the
5Secretary of State for determination under this section.

(19) Notwithstanding the provisions of subsection (1) above, an
arrangement between a commissioner and a provider for the provision
of goods or services for the purpose of the health service shall not take
effect as an NHS contract if, but only if—

(a) 10the terms of the arrangement are reduced to writing and have
been signed by or on behalf of the commissioner and provider;

(b) the terms of the arrangement record in writing that—

(i) the parties have each proposed that the arrangement
shall not operate as an NHS contract; and

(ii) 15the arrangements will continue to remain in force
between the parties regardless as to whether the
Secretary of State makes a determination under
subsection (20) below;

(c) notice in writing of the arrangement has been given to the
20Secretary of State within 21 days of the date that the
arrangement has been made together with a statement of the
reasons why each of the commissioner and the provider wish
the arrangement not to take effect as an NHS contract.

(20) Where the Secretary of State is given notice under subsection (19) above
25the Secretary of State may determine that the arrangement shall take
effect as an NHS contract.

(21) Any determination by the Secretary of State under subsection (20) shall
be made by the Secretary of State within 3 months of the date when the
Secretary of State is given notice of the arrangement.

30Part 2 Amendments to the financial powers of NHS Foundation Trusts and NHS
Trusts, as amended by the Health and Social Care Act 2012

7 Provision of goods and services by NHS foundation trusts

For section 43 of the National Health Service Act 2006 as amended by section
35164 of the Health and Social Care Act 2012 substitute—

43 Provision of goods and services and non-health service patient income
cap

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

(2) 40An NHS foundation trust may provide goods and services for any
purposes related to—

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

(b) 45the promotion and protection of public health.

National Health Service (Amended Duties and Powers) BillPage 8

(3) An NHS foundation trust shall ensure that its total income from the
provision of goods and services for provision of services provided to
individuals for or in connection with the prevention, diagnosis or
treatment of illness otherwise than for the health services or for which
5charges are made by the trust is not greater than either—

(a) such percentage of its total income from the provision of goods
and services in connection with the prevention, diagnosis or
treatment of illness as the Secretary of State shall direct; or

(b) such higher percentage as shall be determined by the Secretary
10of State for an individual NHS foundation trust.

(4) Every NHS foundation trust that undertakes the provision of goods
and services to individuals for or in connection with the prevention,
diagnosis or treatment of illness otherwise than for the health services
or for which charges are made by the trust shall ensure that—

(a) 15the provision of such goods and services do not have any
adverse impact on the ability of the trust to carry on its principal
purpose; and

(b) health service patients who are provided with services by the
trust under this Act benefit from the trust’s provision of such
20services.

(5) The Secretary of State shall publish a statement of the principles that the
Secretary of State will apply in considering applications by NHS
foundation trusts under subsection (3)(b) above.

(6) An NHS foundation trust may also carry on activities other than those
25mentioned in subsection (2) for the purpose of making additional
income provided the NHS foundation trust is able to demonstrate to
Monitor that—

(a) such activities ensure that it is better able to carry on its
principal purpose; and

(b) 30that health service patients who are provided services by the
trust benefit from such other activities of the NHS foundation
trust.

(7) Each annual report prepared by an NHS foundation trust must include
an assessment of the impact that income received by the trust under
35sub-sections (3) and (6) has had on the provision by the trust of goods
and services for the health service and how the provisions in this
section have been satisfied by the trust.

(8) The annual report of the NHS foundation trusts must include the views
of the council of governors of the trust as to whether the provisions of
40this section have been satisfied where the trust has carried out any
activities of a kind mentioned in subsection (3) and (6) above.

(9) Each document prepared by an NHS foundation trust under paragraph
27 of Schedule 7 (forward plan) must include information about—

(a) the activities other than the provision of goods and services for
45the purposes of the health service in England that the trust
proposes to carry on,

(b) the income it expects to receive from doing so, and

(c) how the trust proposes to satisfy the conditions set out in this
section in respect of each such activity.

National Health Service (Amended Duties and Powers) BillPage 9

(10) Where a document which is being prepared under paragraph 27 of
Schedule 7 contains a proposal that an NHS foundation trust carry on
an activity of a kind mentioned in subsections (3) and (6), the council of
governors of the trust must inform Monitor of its views on whether the
5conditions set out in this section will be satisfied in relation to the
proposed activity.

8 NHS income and provision of goods and services

After paragraph 14(4) of schedule 4 to the National Health Service Act 2006
add—

(4A) 10An NHS trust shall ensure that its total income from the provision of
goods and services for provision of services provided to individuals for
or in connection with the prevention, diagnosis or treatment of illness
otherwise than for the health services or for which charges are made by
the trust is not greater than either—

(a) 15such percentage of its total income from the provision of goods
and services in connection with the prevention, diagnosis or
treatment of illness as the Secretary of State shall direct;

(b) such higher percentage as shall be determined by the Secretary
of State.

(4B) 20Every NHS trust that undertakes the provision of goods and services to
individuals for or in connection with the prevention, diagnosis or
treatment of illness otherwise than for the health services or for which
charges are made by the trust shall ensure that—

(a) the provision of such goods and services do not have any
25adverse impact on the ability of the trust to carry on its principal
purpose; and

(b) health service patients who are provided with services by the
trust under this Act benefit from the trust’s provision of such
services.

(4C) 30The Secretary of State shall publish a statement of the principles that the
Secretary of State will apply in considering applications by NHS trusts
under subsection (5)(b) above.

Part 3 Amendment of provisions in the Health and Social Care Act 2012 relating to
35competition and procurement in the health service and connected
amendments

9 NHS trusts provision of non-health services

(1) Notwithstanding the provisions in Part 3 of the Health and Social Care Act
2012, no legally enforceable procurement obligations shall be imposed on NHS
40commissioners in relation to any arrangement which is proposed to take effect
or takes effect by way of an NHS contract.

(2) Regulation 6 of the Public Contracts Regulations 2006 shall be amended by