Health and Social Care Bill (HL Bill 92)

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.”

164 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

165 Mergers

(1) In section 56 of the National Health Service Act 2006 (mergers), in subsection
(1)—

(a) 25in paragraph (b), after “NHS trust” insert “established under section
25”, and

(b) for the words from “authorisation” to the end substitute “the
dissolution of the trusts and the establishment of a new NHS
foundation trust.”

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

(a) 35paragraph (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) The 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) 5Omit 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”.

166 Acquisitions

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

“56A 10Acquisitions

(1) An application may be made jointly by—

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

(b) another NHS foundation trust or an NHS trust established
under section 25 (B),

15to the regulator for the acquisition by A of B.

(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 each
applicant (that is an NHS foundation trust).

(3) The application must—

(a) 20be supported by the Secretary of State if B is an NHS trust, and

(b) be 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) 25On the grant of the application, the proposed constitution has effect,
but 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.”

167 Separations

30After section 56A of the National Health Service Act 2006 insert—

“56B Separations

(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) 35An 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
applicant.

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

(a) specify the property and liabilities proposed to be transferred
40to it;

(b) be 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
5new 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.”

168 Dissolution

10After section 57 of the National Health Service Act 2006 insert—

“57A Dissolution

(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
15of more than half of the members of the council of governors of the
applicant.

(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
20been taken.

(4) Where 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
25trust (if any) to the Secretary of State.”

169 Supplementary

(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
30application is granted under section 56 or 56B”, and

(b) at 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) 35in paragraph (a), after “dissolving the” insert “trust or”, and

(c) in 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
40foundation trust.”

(4) In 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) Omit subsection (6) of that section.

(8) 5For 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
that Act), in subsection (4)—

(a) 10omit the “or” following paragraph (b), and

(b) after paragraph (c), insert “, or

(d) section 57A.”

(11) After that subsection insert—

“(4A) The Statutory Instruments Act 1946 applies in relation to the power of
15the regulator to make an order under section 57 or 57A as if the
regulator were a Minister of the Crown.”

(12) In section 271(3)(b) of that Act (territorial limit of exercise of functions under
Chapter 5), for “Part 1” substitute “Part 2”.

Failure

170 20Repeal of de-authorisation provisions

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

(2) Omit sections 53 to 55 of, and Schedule 9 to, that Act (voluntary arrangements
and dissolution); and in consequence of that—

(a) 25in section 57 of that Act (as amended by section 169 of this Act)—

(i) in subsection (3)(a), for “the persons mentioned in section 54(4)”
substitute “another NHS foundation trust, an NHS trust
established under section 25 or the Secretary of State”,

(ii) omit subsection (3)(b), and

(iii) 30in subsection (4), for “any of the bodies mentioned in section
54(4)(a) or (c)” substitute “another NHS foundation trust or an
NHS trust established under section 25”,

(b) in section 64(4) of that Act (as amended by section 169 of this Act), omit
paragraph (b) (but not the following “or”), and

(c) 35omit section 18(2) to (6) and (11) of the Health Act 2009.

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

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

(5) 40Omit section 15 of the Health Act 2009 (which inserts sections 52A to 52E and
Schedule 8A in the National Health Service Act 2006).

(6) In 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) 5In section 275(1) of that Act (interpretation), in the definition of “NHS trust”—

(a) omit “, 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”.

171 10Trust special administrators

(1) In 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) 15omit subsection (2).

(2) For the title to section 65B of that Act substitute “NHS trusts: appointment of
trust special administrator”.

(3) In section 65D of that Act (NHS foundation trusts: regulator’s notice), for
subsections (1) to (3) substitute—

“(1) 20This 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
trust special administrator to exercise the functions of the governors,
chairman and directors of the trust.

(3) 25As soon as reasonably practicable after the making of an order under
subsection (2), the Care Quality Commission must provide to the
regulator a report on the safety and quality of the services that the trust
provides under this Act.”

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

(a) 30for “giving a notice” substitute “making an order”,

(b) after paragraph (a) insert—

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

(c) omit paragraph (b),

(d) in paragraph (c), omit “goods or”,

(e) 35after paragraph (c) insert “, and

(d) the Care Quality Commission.”

(5) After that subsection insert—

“(5) An order under subsection (2) must specify the date when the
appointment is to take effect, which must be within the period of 5
40working 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) If 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) 5A person appointed as a trust special administrator under this section
holds and vacates office in accordance with the terms of the
appointment.

(9) A person appointed as a trust special administrator under this section
must manage the trust’s affairs, business and property, and exercise the
10trust special administrator’s functions, so as to achieve the objective set
out in section 65DA as quickly and as efficiently as is reasonably
practicable.

(10) When the appointment of a trust special administrator under this
section takes effect, the trust’s governors, chairman and executive and
15non-executive directors are suspended from office; and Chapter 5 of
this Part, in its application to the trust, is to be read accordingly.

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

(12) 20The regulator may indemnify a trust special administrator appointed
under this section in respect of such matters as the regulator may
determine.”

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

(7) 25Omit the cross-heading preceding that section.

172 Objective of trust special administration

After section 65D of the National Health Service Act 2006 insert—

“65DA Objective of trust special administration

(1) The objective of a trust special administration is to secure—

(a) 30the continued provision of such of the services provided for the
purposes of the NHS by the NHS foundation trust that is subject
to an order under section 65D(2), at such level, as the
commissioners of those services determine, and

(b) that it becomes unnecessary for the order to remain in force for
35that purpose.

(2) The commissioners may determine that the objective set out in
subsection (1) is to apply to a service only if they are satisfied that the
criterion in subsection (3) is met.

(3) The criterion is that ceasing to provide the service under this Act
40would, in the absence of alternative arrangements for its provision
under this Act, be likely to—

(a) have a significant adverse impact on the health of persons in
need of the service or significantly increase health inequalities,
or

(b) cause a failure to prevent or ameliorate either a significant
adverse impact on the health of such persons or a significant
increase in health inequalities.

(4) In determining whether that criterion is met, the commissioners must
5(in so far as they would not otherwise be required to do so) have regard
to—

(a) the current and future need for the provision of the service
under this Act,

(b) whether ceasing to provide the service under this Act would
10significantly reduce equality between those for whom the
commissioner arranges for the provision of services under this
Act with respect to their ability to access services so provided,
and

(c) such other matters as may be specified in relation to NHS
15foundation trusts in guidance published by the regulator.

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

(6) Before publishing guidance under subsection (4)(c) or (5), the regulator
must obtain the approval of—

(a) 20the Secretary of State;

(b) the Board.

(7) The Board must make arrangements for facilitating agreement between
commissioners in determining the services provided by the trust under
this Act to which the objective set out in subsection (1) is to apply.

(8) 25Where commissioners fail to reach agreement in pursuance of
arrangements under subsection (7), the Board may make the
determination (and the duty imposed by subsection (1)(a), so far as
applying to the commissioners concerned, is to be regarded as
discharged).

(9) 30In this section—

• “commissioners” means the persons to which the trust provides
  services under this Act, and

• “health inequalities” means the inequalities between persons with
  respect to the outcomes achieved for them by the provision of
  35services that are provided as part of the health service.”

173 Procedure etc.

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

(a) before paragraph (a) insert—

“(za) 40the Board,”, and

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

(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
45as references to the regulator.

(5) In the case of an NHS foundation trust, the administrator may not
provide the draft report to the regulator under subsection (1)—

(a) without having obtained from each commissioner a statement
that the commissioner considers that the recommendation in
5the draft report would achieve the objective set out in section
65DA, or

(b) where the administrator does not obtain a statement to that
effect from one or more commissioners (other than the Board),
without having obtained a statement to that effect from the
10Board.

(6) Where the Board decides not to provide to the administrator a
statement to that effect, the Board must—

(a) give a notice of the reasons for its decision to the administrator
and to the regulator;

(b) 15publish the notice;

(c) lay a copy of it before Parliament.

(7) In subsection (5), “commissioner” means a person to which the trust
provides services under this Act.”

(3) At the end of section 65G of that Act (consultation plan) insert—

“(4) 20In the case of an NHS foundation trust, the administrator may not make
a variation to the draft report following the consultation period—

(a) without having obtained from each commissioner a statement
that the commissioner considers that the recommendation in
the draft report as so varied would achieve the objective set out
25in section 65DA, or

(b) where the administrator does not obtain a statement to that
effect from one or more commissioners (other than the Board),
without having obtained a statement to that effect from the
Board.

(5) 30Where the Board decides not to provide to the administrator a
statement to that effect, the Board must—

(a) give a notice of the reasons for its decision to the administrator
and to the regulator;

(b) publish the notice;

(c) 35lay a copy of it before Parliament.

(6) In subsection (4), “commissioner” means a person to which the trust
provides services under this Act.”

(4) In section 65H of that Act (consultation requirements), in subsection (7)—

(a) before paragraph (a) insert—

“(za) 40the Board,”,

(b) omit paragraph (a),

(c) in paragraph (b), omit “, if required by directions given by the Secretary
of State”, and

(d) after paragraph (c) insert “;

(d) 45any other person specified in a direction given by the
Secretary of State.”

(5) In subsection (8) of that section, omit paragraphs (a) to (d).

(6) In subsection (9) of that section—

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

(b) for “(7)(a) or (b)” substitute “(7)(b), (c) or (d)”.

(7) At the end of that section insert—

“(12) 5For the purposes of this section in its application to the case of an NHS
foundation trust—

(a) in subsection (7)(b), the words “goods or” are to be ignored, and

(b) in subsections (7)(d) and (10), the references to the Secretary of
State are to be read as references to the regulator.

(13) 10In the case of an NHS foundation trust, the Secretary of State may direct
the regulator as to persons from whom it should direct the
administrator under subsection (10) to request or seek a response.”

(8) At 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
15foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

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

“(5) For the purposes of this section in its application to the case of an NHS
20foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”

174 Action following final report

(1) In section 65K of the National Health Service Act 2006 (Secretary of State’s
decision on what action to take), in subsection (1), after “a final report under
25section 65I” insert “relating to an NHS trust”; and in consequence of that, for
the title to that section substitute “Secretary of State’s decision in case of NHS
trust”.

(2) After that section insert—

“65KA Regulator’s decision in case of NHS foundation trust

(1) 30Within the period of 20 working days beginning with the day on which
the regulator receives a final report under section 65I relating to an
NHS foundation trust, the regulator must decide whether it is
satisfied—

(a) that the action recommended in the final report would achieve
35the objective set out in section 65DA, and

(b) that the trust special administrator has carried out the
administration duties.

(2) In subsection (1)(b), “administration duties” means the duties imposed
on the administrator by—

(a) 40this Chapter,

(b) a direction under this Chapter, or

(c) the administrator’s terms of appointment.

(3) If the regulator is satisfied as mentioned in subsection (1), it must as
soon as reasonably practicable provide to the Secretary of State—

(a) the final report, and

(b) the report provided to the regulator by the Care Quality
5Commission under section 65D(3).

(4) If the regulator is not satisfied as mentioned in subsection (1), it must as
soon as reasonably practicable give a notice of that decision to the
administrator.

(5) Where the regulator gives a notice under subsection (4), sections 65F to
1065J apply in relation to the trust to such extent, and with such
modifications, as the regulator may specify in the notice.

(6) The regulator must as soon as reasonably practicable after giving a
notice under subsection (4)—

(a) publish the notice;

(b) 15lay a copy of it before Parliament.

65KB Secretary of State’s response to regulator’s decision

(1) Within the period of 30 working days beginning with the day on which
the Secretary of State receives the reports referred to in section 65KA(3),
the Secretary of State must decide whether the Secretary of State is
20satisfied—

(a) that the persons to which the NHS foundation trust in question
provides services under this Act have discharged their
functions for the purposes of this Chapter,

(b) that the trust special administrator has carried out the
25administration duties (within the meaning of section
65KA(1)(b)),

(c) that the regulator has discharged its functions for the purposes
of this Chapter,

(d) that the action recommended in the final report would secure
30the continued provision of the services provided by the trust to
which the objective set out in section 65DA applies,

(e) that the recommended action would secure the provision of
services that are of sufficient safety and quality to be provided
under this Act, and

(f) 35that the recommended action would provide good value for
money.

(2) If the Secretary of State is not satisfied as mentioned in subsection (1),
the Secretary of State must as soon as reasonably practicable—

(a) give the trust special administrator a notice of the decision and
40of the reasons for it;

(b) give a copy of the notice to the regulator;

(c) publish the notice;

(d) lay a copy of it before Parliament.

65KC Action following Secretary of State’s rejection of final report

(1) 45Within the period of 20 working days beginning with the day on which
the trust special administrator receives a notice under section 65KB(2),
the administrator must provide to the regulator the final report varied