Health and Social Care Bill (HL Bill 92)

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(5) The references in subsection (1)(d) to the activities of a licence holder or other
business include a reference to part of the activities concerned.

(6) The references in subsections (1)(d) and (5) to the activities of a business
include a reference to the activities of an NHS foundation trust in so far as its
5activities would not otherwise be the activities of a business.

(7) A condition of a licence under this Chapter may provide that it is to have effect,
or cease to have effect, at such times and in such circumstances as may be
determined by or under the conditions.

97 Conditions relating to the continuation of the provision of services etc.

(1) 10The things which a licence holder may be required to do by a condition under
section 96(1)(i)(i) include, in particular—

(a) providing information to the commissioners of services to which the
condition applies and to such other persons as Monitor may direct,

(b) allowing Monitor to enter premises owned or controlled by the licence
15holder and to inspect the premises and anything on them, and

(c) co-operating with such persons as Monitor may appoint to assist in the
management of the licence holder’s affairs, business and property.

(2) A commissioner of services to which a condition under section 96(1)(i), (j) or (k)
applies must co-operate with persons appointed under subsection (1)(c) in
20their provision of the assistance that they have been appointed to provide.

(3) Where a licence includes a condition under section 96(1)(i), (j) or (k), Monitor
must carry out an ongoing assessment of the risks to the continued provision
of services to which the condition applies.

(4) Monitor must publish guidance—

(a) 25for commissioners of a service to which a condition under section
96(1)(i), (j) or (k) applies about the exercise of their functions in
connection with the licence holders who provide the service, and

(b) for such licence holders about the conduct of their affairs, business and
property at a time at which such a condition applies.

(5) 30A commissioner of services to which a condition under section 96(1)(i), (j), or
(k) applies must have regard to guidance under subsection (4)(a).

(6) Monitor may revise guidance under subsection (4) and, if it does so, must
publish the guidance as revised.

(7) Before publishing guidance under subsection (4) or (6), Monitor must obtain
35the approval of—

(a) the Secretary of State, and

(b) the National Health Service Commissioning Board.

98 Modification of standard conditions

(1) Monitor may, subject to the requirements of this section, modify the standard
40conditions applicable to all licences under this Chapter or to licences of a
particular description.

(2) Before making any such modifications Monitor must give notice to—

(a) each relevant licence holder,

Health and Social Care BillPage 111

(b) the Secretary of State,

(c) the National Health Service Commissioning Board,

(d) every clinical commissioning group, and

(e) the Care Quality Commission and its Healthwatch England committee.

(3) 5Monitor must also publish the notice under subsection (2).

(4) The notice under subsection (2) must—

(a) state that Monitor proposes to make the modifications,

(b) set out the proposed effect of the modifications,

(c) set out Monitor’s reasons for the proposal, and

(d) 10specify the period (“the notice period”) within which representations
with respect to the proposal may be made to Monitor.

(5) The notice period must be not less than 28 days beginning with the day after
that on which the notice is published under subsection (3).

(6) Monitor may not make any modifications under this section unless—

(a) 15no relevant licence holder has made an objection to Monitor about the
proposal within the notice period, or

(b) subsection (7) applies to the case.

(7) This subsection applies where—

(a) one or more relevant licence holders make an objection to Monitor
20about the proposal within the notice period,

(b) the objection percentage is less than the percentage prescribed for the
purposes of this paragraph, and

(c) the share of supply percentage is less than the percentage prescribed for
the purposes of this paragraph.

(8) 25In subsection (7)

(a) the “objection percentage” is the proportion (expressed as a percentage)
of the relevant licence holders who objected to the proposals;

(b) the “share of supply percentage” is the proportion (expressed as a
percentage) of the relevant licence holders who objected to the
30proposals, weighted according to their share of the supply in England
of such services as may be prescribed.

(9) Regulations prescribing a percentage for the purposes of subsection (7)(c) may
include provision prescribing the method to be used for determining a licence
holder’s share of the supply in England of the services concerned.

(10) 35Where Monitor modifies the standard conditions applicable to all licences or
(as the case may be) to licences of a particular description under this section,
Monitor—

(a) may also make such incidental or consequential modifications as it
considers necessary or expedient of any other conditions of a licence
40which is affected by the modifications,

(b) must make (as nearly as may be) the same modifications of those
conditions for the purposes of their inclusion in all licences or (as the
case may be) licences of that description granted after that time, and

(c) must publish the modifications.

(11) 45In this section and section 99, “relevant licence holder”—

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(a) in relation to proposed modifications of the standard conditions
applicable to all licences, means any licence holder, and

(b) in relation to proposed modifications of the standard conditions
applicable to licences of a particular description, means a holder of a
5licence of that description.

(12) In this section, a reference to modifying a condition includes a reference to
amending, omitting or adding a condition.

99 Modification references to the Competition Commission

(1) Subsection (2) applies where—

(a) 10Monitor has given notice under section 94(2) of a proposal to include a
special condition in a licence or modify such a condition, and

(b) the applicant or (as the case may be) licence holder concerned has
refused consent to the inclusion of the condition or the making of the
modifications.

(2) 15Monitor may make a reference to the Competition Commission which is so
framed as to require the Commission to investigate and report on the
questions—

(a) whether any matters which relate to the provision, or proposed
provision, of a health care service for the purposes of the NHS by the
20applicant or (as the case may be) licence holder concerned and which
are specified in the reference, operate, or may be expected to operate,
against the public interest, and

(b) if so, whether the effects adverse to the public interest which those
matters have or may be expected to have could be remedied or
25prevented by the inclusion of a special condition in the applicant’s
licence or by modifications of a special condition of the licence holder’s
licence.

(3) Subsection (4) applies where—

(a) Monitor has given notice under section 98(2) of a proposal to make
30modifications to the standard conditions applicable to all licences
under this Chapter, or to licences of a particular description, and

(b) section 98 operates to prevent Monitor from making the modifications.

(4) Monitor may make a reference to the Competition Commission which is so
framed as to require the Commission to investigate and report on the
35questions—

(a) whether any matters which relate to the provision of health care
services for the purposes of the NHS by the relevant licence holders,
and which are specified in the reference, operate, or may be expected to
operate, against the public interest, and

(b) 40if so, whether the effects adverse to the public interest which those
matters have or may be expected to have could be remedied or
prevented by modifications of the standard conditions applicable to all
licences under this Chapter, or to licences of a particular description.

(5) Schedule 10 (which makes further provision about references to the
45Competition Commission) has effect in relation to a reference under subsection
(2) or (4); and, for that purpose, the relevant persons are—

(a) in paragraphs 3, 6(6) and 7(6)—

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(i) the applicant or licence holder concerned or (as the case may be)
relevant licence holders,

(ii) the National Health Service Commissioning Board, and

(iii) such clinical commissioning groups as are likely to be affected
5by matters to which the reference relates,

(b) in paragraph 5(6), the applicant or licence holder concerned or (as the
case may be) relevant licence holders, and

(c) in paragraph 8(10)—

(i) the applicant or licence holder concerned or (as the case may be)
10relevant licence holders,

(ii) Monitor,

(iii) the National Health Service Commissioning Board, and

(iv) such clinical commissioning groups as are likely to be affected
by the proposal concerned.

(6) 15In investigating the question under subsection (2)(a) or (4)(a) the Competition
Commission must have regard to—

(a) the matters in respect of which Monitor has duties under section 59,
and

(b) the matters to which Monitor must have regard by virtue of section 62.

(7) 20Where the standard conditions applicable to all licences or (as the case may be)
to licences of a particular description are modified pursuant to a reference
made under subsection (4), Monitor—

(a) may also make such incidental or consequential modifications as it
considers necessary or expedient of any other conditions of a licence
25which is affected by the modifications,

(b) must make (as nearly as may be) the same modifications of those
conditions for the purposes of their inclusion in all licences or (as the
case may be) licences of that description granted after that time, and

(c) must publish any modifications made under this subsection.

(8) 30In this section, a reference to modifying a condition includes a reference to
amending, omitting or adding a condition.

100 Modification of conditions by order under other enactments

(1) This section applies where the Office of Fair Trading, Competition
Commission or Secretary of State (the “relevant authority”) makes a relevant
35order.

(2) The relevant order may modify—

(a) the conditions of a particular licence, or

(b) the standard conditions applicable to all licences under this Chapter or
to licences of a particular description.

(3) 40The modifications which may be made by a relevant order are those which the
relevant authority considers necessary or expedient for the purpose of giving
effect to, or taking account of, any provision made by the order.

(4) In this section “relevant order” means—

(a) an order under section 75, 83 or 84 of, or paragraph 5, 10 or 11 of
45Schedule 7 to, the Enterprise Act 2002 where one or more of the
enterprises which have, or may have, ceased to be distinct enterprises

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were engaged in the provision of health care services for the purposes
of the NHS;

(b) an order under any of those provisions of that Act where one or more
of the enterprises which will or may cease to be distinct enterprises is
5engaged in the provision of health care services for the purposes of the
NHS;

(c) an order under section 160 or 161 of that Act where the feature, or
combination of features, of the market in the United Kingdom for
goods or services which prevents, restricts or distorts competition
10relates to—

(i) the commissioning by the National Health Service
Commissioning Board or a clinical commissioning group of
health care services for the purposes of the NHS, or

(ii) the provision of those services.

(5) 15The modification under subsection (2)(a) of part of a standard condition of a
licence does not prevent any other part of the condition from continuing to be
regarded as a standard condition for the purposes of this Chapter.

(6) Where the relevant authority modifies the standard conditions applicable to all
licences or (as the case may be) to licences of a particular description under this
20section, the relevant authority—

(a) may, after consultation with Monitor, make such incidental or
consequential modifications as the relevant authority considers
necessary or expedient of any other conditions of any licence which is
affected by the modifications,

(b) 25must also make (as nearly as may be) the same modifications of those
conditions for the purposes of their inclusion in all licences or (as the
case may be) licences of that description granted after that time, and

(c) must publish any modifications it makes under paragraph (b).

(7) Expressions used in subsection (4) and in Part 3 or (as the case may be) Part 4
30of the Enterprise Act 2002 have the same meaning in that subsection as in that
Part.

(8) A reference in this section to modifying a condition includes a reference to
amending, omitting or adding a condition.

101 Standard condition as to transparency of certain criteria

(1) 35The standard conditions applicable to any licence under this Chapter must
include a condition requiring the licence holder to—

(a) set transparent eligibility and selection criteria, and

(b) apply those criteria in a transparent way to persons who, having a
choice of persons from whom to receive health care services for the
40purposes of the NHS, choose to receive them from the licence holder.

(2) “Eligibility or selection criteria”, in relation to a licence holder, means criteria
for determining—

(a) whether a person is eligible, or is to be selected, to receive health care
services provided by the licence holder for the purposes of the NHS,
45and

(b) if the person is selected, the manner in which the services are provided
to the person.

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(3) The following powers must not be exercised so as to omit the condition
mentioned in subsection (1) from any licence under this Chapter—

(a) the powers conferred on Monitor by sections 98, 99(7) and paragraph
7(2) of Schedule 10 to modify the standard conditions applicable to all
5licences, or to licences of a particular description,

(b) the power conferred on the Competition Commission by paragraph
8(5) of that Schedule to modify those conditions, and

(c) the power conferred by section 100 on the Office of Fair Trading,
Competition Commission and Secretary of State to modify those
10conditions.

Enforcement

102 Power to require documents and information

(1) Monitor may require a person mentioned in subsection (2) to provide it with
any information, documents, records or other items which it considers it
15necessary or expedient to have for the purposes of any of its regulatory
functions.

(2) The persons are—

(a) an applicant for a licence under this Chapter,

(b) a licence holder,

(c) 20a person who has provided, or is providing, a health care service for the
purposes of the NHS in accordance with an exemption by virtue of
section 82 from the requirement to hold a licence under this Chapter,

(d) a person who has provided, or is providing, a health care service for the
purposes of the NHS in breach of that requirement,

(e) 25the National Health Service Commissioning Board, and

(f) a clinical commissioning group.

(3) The power in subsection (1) includes, in relation to information, documents or
records kept by means of a computer, power to require the provision of the
information, documents or records in legible form.

(4) 30For the purposes of subsection (1) Monitor’s regulatory functions are its
functions under—

(a) this Chapter,

(b) Chapters 4 to 6,

(c) Chapter 5 of Part 2 of the National Health Service Act 2006 (NHS
35foundation trusts), and

(d) Chapter 5A of that Part of that Act (trust special administration).

103 Discretionary requirements

(1) Monitor may impose one or more discretionary requirements on a person if
Monitor is satisfied that the person—

(a) 40has provided, or is providing, a health care service for the purposes of
the NHS in breach of the requirement to hold a licence under this
Chapter (see section 80),

(b) is a licence holder who has provided, or is providing, a health care
service for the purposes of the NHS in breach of a condition of the
45licence, or

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(c) is in breach of a requirement imposed by Monitor under section 102.

(2) In this Chapter, “discretionary requirement” means—

(a) a requirement to pay a monetary penalty to Monitor of such amount as
Monitor may determine (referred to in this Chapter as a “variable
5monetary penalty”),

(b) a requirement to take such steps within such period as Monitor may
specify, to secure that the breach in question does not continue or recur
(referred to in this Chapter as a “compliance requirement”), or

(c) a requirement to take such steps within such period as Monitor may
10specify, to secure that the position is, so far as possible, restored to what
it would have been if the breach in question was not occurring or had
not occurred (referred to in this Chapter as a “restoration
requirement”).

(3) Monitor must not impose discretionary requirements on a person on more
15than one occasion in relation to the same breach.

(4) A variable monetary penalty must not exceed 10% of the turnover in England
of the person on whom it is imposed, such amount to be calculated in the
prescribed manner.

(5) If the whole or any part of a variable monetary penalty is not paid by the time
20it is required to be paid, the unpaid balance from time to time carries interest
at the rate for the time being specified in section 17 of the Judgments Act 1838;
but the total interest must not exceed the amount of the penalty.

104 Enforcement undertakings

(1) Monitor may accept an enforcement undertaking from a person if Monitor has
25reasonable grounds to suspect that the person—

(a) has provided, or is providing, a health care service for the purposes of
the NHS in breach of the requirement to hold a licence under this
Chapter,

(b) is a licence holder who has provided, or is providing, a health care
30service for the purposes of the NHS in breach of a condition of the
licence, or

(c) is in breach of a requirement imposed by Monitor under section 102.

(2) In this Chapter, “enforcement undertaking” means an undertaking from a
person to take such action of a kind mentioned in subsection (3) as may be
35specified in the undertaking within such period as may be so specified.

(3) The specified action must be—

(a) action to secure that the breach in question does not continue or recur,

(b) action to secure that the position is, so far as possible, restored to what
it would have been if the breach in question was not occurring or had
40not occurred,

(c) action (including the payment of a sum of money) to benefit—

(i) any other licence holder affected by the breach, or

(ii) any commissioner of health care services for the purposes of the
NHS which is affected by the breach, or

(d) 45action of such a description as may be prescribed.

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(4) Where Monitor accepts an enforcement undertaking then, unless the person
from whom the undertaking is accepted has failed to comply with the
undertaking or any part of it—

(a) Monitor may not impose on that person any discretionary requirement
5which it would otherwise have power to impose by virtue of section
103 in respect of the breach to which the undertaking relates, and

(b) if the breach to which the undertaking relates falls within subsection
(1)(b), Monitor may not revoke that person’s licence under section
88(b).

(5) 10Where a person from whom Monitor has accepted an enforcement
undertaking has failed to comply fully with the undertaking but has complied
with part of it, Monitor must take the partial compliance into account in
deciding whether—

(a) to impose a discretionary requirement on the person in respect of the
15breach to which the undertaking relates, or

(b) if the breach to which the undertaking relates falls within subsection
(1)(b), to revoke the person’s licence under section 88(b).

105 Further provision about enforcement powers

Schedule 11 (Part 1 of which makes further provision about discretionary
20requirements and Part 2 of which makes further provision about enforcement
undertakings) has effect.

106 Guidance as to use of enforcement powers

(1) Monitor must publish guidance about how it intends to exercise its functions
under sections 103 and 104 and Schedule 11.

(2) 25Monitor may revise the guidance and, if it does so, must publish the guidance
as revised.

(3) Monitor must consult such persons as it considers appropriate before
publishing or revising the guidance.

(4) Guidance relating to Monitor’s functions under section 103 must include
30information about—

(a) the circumstances in which Monitor is likely to impose a discretionary
requirement,

(b) the circumstances in which Monitor may not impose a discretionary
requirement,

(c) 35the matters likely to be taken into account by Monitor in determining
the amount of any variable monetary penalty to be imposed (including,
where relevant, any discounts for voluntary reporting of breaches in
respect of which a penalty may be imposed), and

(d) rights to make representations and rights of appeal.

(5) 40Monitor must have regard to the guidance or (as the case may be) revised
guidance in exercising its functions under sections 103 and 104 and Schedule
11.

107 Publication of enforcement action

(1) Monitor must include information about the following in its annual report—

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(a) the cases in which a discretionary requirement has been imposed
during the financial year to which the report relates, and

(b) the cases in which an enforcement undertaking has been accepted
during that financial year.

(2) 5But Monitor must not include commercial information which it is satisfied
would or might significantly harm the legitimate business interests of the
person to whom it relates.

(3) The reference in subsection (1)(a) to cases in which a discretionary requirement
has been imposed does not include a reference to a case where a discretionary
10requirement has been imposed but overturned on appeal.

108 Notification of enforcement action

(1) As soon as reasonably practicable after imposing a discretionary requirement
or accepting an enforcement undertaking Monitor must notify the following of
that fact—

(a) 15the National Health Service Commissioning Board,

(b) such clinical commissioning groups as are likely to be affected by the
imposition of the requirement or the acceptance of the undertaking,
and

(c) any person exercising regulatory functions in relation to the person on
20whom the discretionary requirement was imposed or from whom the
enforcement undertaking was accepted.

(2) In subsection (1) “regulatory functions” has the same meaning as in the
Legislative and Regulatory Reform Act 2006 (see section 32 of that Act).

Transitional provision

109 25Imposition of licence conditions on NHS foundation trusts

(1) Where Monitor is satisfied that there is a significant risk that an NHS
foundation trust will fail to fulfil its principal purpose (as to which, see section
43(1) of the National Health Service Act 2006), Monitor may include in the
trust’s licence such conditions as it considers appropriate for the purpose of
30reducing that risk.

(2) A condition included under subsection (1) has effect until this section ceases,
by virtue of section 110, to have effect in relation to the trust.

(3) Monitor may modify a condition included under subsection (1).

(4) Where Monitor is satisfied that the trust has breached or is breaching a
35condition included under subsection (1), Monitor may by notice—

(a) require the trust, the directors or the council of governors to do, or not
to do, specified things or things of a specified description (or to do, or
not to do, any such things in a specified manner) within such period as
may be specified;

(b) 40remove one or more of the directors or members of the council of
governors and appoint interim directors or members of the council;

(c) suspend one or more of the directors or members of the council from
office as a director or member for a specified period;

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(d) disqualify one or more of the directors or members of the council from
holding office as a director or member for a specified period.

(5) Where Monitor is satisfied that a person has breached or is breaching a
requirement imposed under subsection (4)(a), or has otherwise failed or is
5otherwise failing to comply with a notice under that subsection, Monitor may
by notice exercise one or more of the powers specified in paragraphs (a) to (d)
of subsection (4).

(6) Subsection (4) does not prevent Monitor from exercising the powers conferred
by sections 103 and 104 (discretionary requirements and enforcement
10undertakings) in relation to conditions included under subsection (1).

(7) Where Monitor includes a condition under subsection (1), it may also make
such incidental or consequential modifications as it considers necessary or
expedient of any other condition of the licence concerned which is affected.

(8) Where Monitor includes a condition under subsection (1) by modifying a
15standard condition of the licence concerned, the modification does not prevent
any other part of the condition from continuing to be regarded as a standard
condition for the purposes of this Chapter.

(9) A reference in this section to failing to discharge functions includes a reference
to failing to discharge those functions properly.

(10) 20Omit section 52 of the National Health Service Act 2006 (failing NHS
foundation trusts); and in consequence of that, omit—

(a) section 39(2)(f) of that Act (copy of notice under section 52 of that Act
to be on register), and

(b) paragraph 22(1)(f) of Schedule 7 to that Act (copy of that notice to be
25available for public inspection).

110 Duration of transitional period

(1) Section 109 ceases to have effect in relation to an NHS foundation trust on 1
April 2016 unless—

(a) before that date, the Secretary of State provides by order for that section
30to continue to have effect in relation to the trust, or

(b) the trust was authorised after 1 April 2014.

(2) An order under this section may provide that section 109 is to continue to have
effect for such period as is specified—

(a) in relation to all NHS foundation trusts, or

(b) 35in relation only to such NHS foundation trusts as are specified.

(3) But an order under this section may not apply to a trust in relation to which
section 109 has, by virtue of a previous order under this section, ceased to have
effect.

(4) A period specified for the purposes of subsection (2)—

(a) 40must begin with the day on which section 109 would, but for the order,
cease to have effect in relation to the trusts to which the order applies,
and

(b) must not exceed two years.

(5) In the case of a trust to which an order under this section applies, and which
45was authorised on or before 1 April 2014, section 109 ceases to have effect in