Health and Social Care Bill

Session 2010 - 12
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Health and Social Care Bill

Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
138

133
Modification of this Chapter under Enterprise Act 2002
(1)
The power to modify or apply enactments conferred on the Secretary of State
by each of the sections of the Enterprise Act 2002 mentioned in subsection (2)
includes power to make such consequential modifications of provision made
by virtue of this Chapter as the Secretary of State considers appropriate in
5
connection with any other provision made under that section.
(2)
Those sections are—
(a)
sections 248 and 277 (amendments consequential on that Act), and
(b)
section 254 (power to apply insolvency law to foreign companies).
Chapter 6
10
Financial assistance in special administration cases
Establishment of mechanisms
134
Duty to establish mechanisms for providing financial assistance
(1)
Monitor must establish, and secure the effective operation of, one or more
mechanisms for providing financial assistance in cases where a provider of
15
health care services for the purposes of the NHS (referred to in this Chapter as
a “provider”) is subject to—
(a)
a health special administration order (within the meaning of
Chapter 5), or
(b)
an order under section 65D(2) of the National Health Service Act 2006
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(trust special administration for NHS foundation trusts).
(2)
Mechanisms that Monitor may establish under this section include, in
particular—
(a)
mechanisms for raising money to make grants or loans or to make
payments in consequence of indemnities given by Monitor by virtue of
25
section 132 or under section 65D(12) of the National Health Service Act
2006;
(b)
mechanisms for securing that providers arrange, or are provided with,
insurance facilities.
(3)
Monitor may secure that a mechanism established under this section operates
30
so as to enable it to recover the costs it incurs in establishing and operating the
mechanism.
(4)
Monitor may establish different mechanisms for different providers or
providers of different descriptions.
(5)
Monitor does not require permission under any provision of the Financial
35
Services and Markets Act 2000 as respects activities carried out under this
Chapter.
(6)
An order under section 306 providing for the commencement of this Chapter
may require Monitor to comply with the duty to establish under subsection (1)
before such date as the order specifies.
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Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
139

135
Power to establish fund
(1)
Monitor may, for the purposes of section 134, establish and maintain a fund.
(2)
In order to raise money for investment in a fund it establishes under this
section, Monitor may impose requirements on providers or commissioners.
(3)
Monitor must appoint at least two managers for a fund it establishes under this
5
section.
(4)
A manager of a fund may be an individual, a firm or a body corporate.
(5)
Monitor must not appoint an individual as manager of a fund unless it is
satisfied that the individual has the appropriate knowledge and experience for
managing investments.
10
(6)
Monitor must not appoint a firm or body corporate as manager of a fund unless
it is satisfied that arrangements are in place to secure that any individual who
will exercise functions of the firm or body corporate as manager will, at the
time of doing so, have the appropriate knowledge and experience for
managing investments.
15
(7)
Monitor must not appoint an individual, firm or body corporate as manager of
a fund unless the individual, firm or body is an authorised or exempt person
within the meaning of the Financial Services and Markets Act 2000.
(8)
Monitor must secure the prudent management of any fund it establishes under
this section.
20
Applications for financial assistance
136
Applications
(1)
Monitor may, on an application by a special administrator, provide financial
assistance to the special administrator by using a mechanism established under
section 134.
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(2)
An application under this section must be in such form, and must be supported
by such evidence or other information, as Monitor may require (and a
requirement under this subsection may be imposed after the receipt, but before
the determination, of the application).
(3)
If Monitor grants an application under this section, it must notify the applicant
30
of—
(a)
the purpose for which the financial assistance is being provided, and
(b)
the other conditions to which its provision is subject.
(4)
The special administrator must secure that the financial assistance is used
only—
35
(a)
for the purpose notified under subsection (3)(a), and
(b)
in accordance with the conditions notified under subsection (3)(b).
(5)
Financial assistance under this section may be provided only in the period
during which the provider in question is in special administration.
(6)
If Monitor refuses an application under this section, it must notify the applicant
40
of the reasons for the refusal.

Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
140

(7)
Monitor must, on a request by an applicant whose application under this
section has been refused, reconsider the application; but no individual
involved in the decision to refuse the application may be involved in the
decision on the reconsideration of the application.
(8)
For the purposes of reconsidering an application, Monitor may request
5
information from the applicant.
(9)
Monitor must notify the applicant of its decision on reconsidering the
application; and—
(a)
if Monitor grants the application, it must notify the applicant of the
matters specified in subsection (3), and
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(b)
if Monitor refuses the application, it must notify the applicant of the
reasons for the refusal.
(10)
In this Chapter—
(a)
“special administrator” means—
(i)
a person appointed as a health special administrator under
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Chapter 5, or
(ii)
a person appointed as a trust special administrator under
section 65D(2) of the National Health Service Act 2006, and
(b)
references to being in special administration are to be construed
accordingly.
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137
Grants and loans
(1)
Monitor may not provide financial assistance under section 136 in the form of
a grant or loan unless it is satisfied that—
(a)
it is necessary for the provider—
(i)
to be able to continue to provide one or more of the health care
25
services that it provides for the purposes of the NHS, or
(ii)
to be able to secure a viable business in the long term, and
(b)
no other source of funding which would enable it do so and on which
it would be reasonable for it to rely is likely to become available to it.
(2)
The terms of a grant or loan must include a term that the whole or a specified
30
part of the grant or loan becomes repayable in the event of a breach by the
provider or special administrator of the terms of the grant or loan.
(3)
Subject to that, where Monitor makes a grant or loan under section 136, it may
do so in such manner and on such terms as it may determine.
(4)
Monitor may take such steps as it considers appropriate (including steps to
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adjust the amount of future payments towards the mechanism established
under section 134 to raise funds for grants or loans under section 136) to
recover overpayments in the provision of a grant or loan under that section.
(5)
The power to recover an overpayment under subsection (4) includes a power
to recover interest, at such rate as Monitor may determine, on the amount of
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the overpayment for the period beginning with the making of the overpayment
and ending with its recovery.

Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
141

Charges on commissioners
138
Power to impose charges on commissioners
(1)
The Secretary of State may by regulations confer power on Monitor to require
commissioners to pay charges relating to such of Monitor’s functions that
relate to securing the continued provision of health care services for the
5
purposes of the NHS.
(2)
The regulations must provide that the amount of a charge imposed by virtue
of this section is to be such amount—
(a)
as may be prescribed, or
(b)
as is determined by reference to such criteria, and by using such
10
method, as may be prescribed.
(3)
The regulations must—
(a)
prescribe to whom the charge is to be paid;
(b)
prescribe when the charge becomes payable;
(c)
where the amount of the charge is to be determined in accordance with
15
subsection (2)(b), require Monitor to carry out consultation in
accordance with the regulations before imposing the charge;
(d)
provide for any amount that is not paid by the time prescribed for the
purposes of paragraph (b) to carry interest at the rate for the time being
specified in section 18 of the Judgments Act 1838;
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(e)
provide for any unpaid balance and accrued interest to be recoverable
summarily as a civil debt (but for this not to affect any other method of
recovery).
(4)
Where the person that the regulations prescribe for the purposes of subsection
(3)(a) is a provider, the regulations may confer power on Monitor to require the
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provider to pay Monitor the amount of the charge in question in accordance
with the regulations.
(5)
Before making regulations under this section, the Secretary of State must
consult—
(a)
Monitor, and
30
(b)
the National Health Service Commissioning Board.
(6)
Regulations under this section may apply with modifications provision made
by sections 141 to 143 in relation to charges imposed by virtue of this section.
Levy on providers
139
Imposition of levy
35
(1)
The power under section 135(2) includes, in particular, power to impose a levy
on providers for each financial year.
(2)
Before deciding whether to impose a levy under this section for the coming
financial year, Monitor must estimate—
(a)
the amount that will be required for the purpose of providing financial
40
assistance in accordance with this Chapter,
(b)
the amount that will be collected from commissioners by way of
charges imposed by virtue of section 138 during that year, and

Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
142

(c)
the amount that will be standing to the credit of the fund at the end of
the current financial year.
(3)
Before the start of a financial year in which Monitor proposes to impose a levy
under this section, it must determine—
(a)
the factors by reference to which the rate of the levy is to be assessed,
5
(b)
the time or times by reference to which those factors are to be assessed,
and
(c)
the time or times during the year when the levy, or an instalment of it,
becomes payable.
(4)
Where the determinations under subsection (3) reflect changes made to the
10
factors by reference to which the rate of the levy is to be assessed, the notice
under section 143(1)(b) must include an explanation of those changes.
(5)
A levy under this section may be imposed at different rates for different
providers.
140
Power of Secretary of State to set limit on levy and charges
15
(1)
Before the beginning of each financial year, the Secretary of State may, with the
approval of the Treasury, specify by order—
(a)
the maximum amount that Monitor may raise from levies it imposes
under section 139 for that year, and
(b)
the maximum amount that it may raise from charges it imposes by
20
virtue of section 138 for that year.
(2)
Where the Secretary of State makes an order under this section, Monitor must
secure that the levies and charges for that year are at a level that Monitor
estimates will, in each case, raise an amount not exceeding the amount
specified for that case in the order.
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141
Consultation
(1)
This section applies where Monitor is proposing to impose a levy under section
139 for the coming financial year and—
(a)
has not imposed a levy under that section for the current financial year
or any previous year,
30
(b)
has been imposing the levy for the current financial year but proposes
to make relevant changes to it for the coming financial year, or
(c)
has been imposing the levy for the current financial year and the
financial year preceding it, but has not been required to serve a notice
under this section in respect of the levy for either of those years.
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(2)
A change to a levy is relevant for the purposes of subsection (1)(b) if it is a
change to the factors by reference to which the rate of the levy is to be assessed.
(3)
Before making the determinations under section 139(3) in respect of the levy,
Monitor must send a notice to—
(a)
the Secretary of State,
40
(b)
the National Health Service Commissioning Board,
(c)
each clinical commissioning group,
(d)
each potentially liable provider, and
(e)
such other persons as it considers appropriate.

Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
143

(4)
Monitor must publish a notice that it sends under subsection (3).
(5)
In a case within subsection (1)(a) or (c), the notice must state—
(a)
the factors by reference to which Monitor proposes to assess the rate of
the levy,
(b)
the time or times by reference to which it proposes to assess those
5
factors, and
(c)
the time or times during the coming financial year when it proposes
that the levy, or an instalment of it, will become payable.
(6)
In a case within subsection (1)(b), the notice must specify the relevant changes
Monitor proposes to make.
10
(7)
A notice under this section must specify when the consultation period in
relation to the proposals ends; and for that purpose, the consultation period is
the period of 28 days beginning with the day on which the notice is published
under subsection (4).
(8)
In this section and section 142 a “potentially liable provider” means a provider
15
on whom Monitor is proposing to impose the levy for the coming financial year
(regardless of the amount (if any) that the provider would be liable to pay as a
result of the proposal).
142
Responses to consultation
(1)
If Monitor receives objections from one or more potentially liable providers to
20
its proposals, it may not give notice under section 143(1)(b) unless—
(a)
the conditions in subsection (2) are met, or
(b)
where those conditions are not met, Monitor has made a reference to
the Competition Commission.
(2)
The conditions referred to in subsection (1)(a) are that—
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(a)
one or more potentially liable providers object to the proposals within
the consultation period, and
(b)
the objection percentage and the share of supply percentage are each
less than the prescribed percentage.
(3)
In subsection (2)—
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(a)
the “objection percentage” is the proportion (expressed as a percentage)
of the potentially liable providers who objected to the proposals, and
(b)
the “share of supply percentage” is the proportion (expressed as a
percentage) of the potentially liable providers who objected to the
proposals, weighted according to their share of the supply in England
35
of such services as may be prescribed.
(4)
A reference under subsection (1)(b) must be so framed as to require the
Competition Commission to investigate and report on the questions—
(a)
whether in making the proposals, Monitor failed to give sufficient
weight to the matters in section 66,
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(b)
if so, whether that failure operates, or may be expected to operate,
against the public interest, and
(c)
if so, whether the effects adverse to the public interest which that
failure has or may be expected to have could be remedied or prevented
by changes to the proposals.
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Health and Social Care Bill
Part 3 — Regulation of health and adult social care services
Chapter 6 — Financial assistance in special administration cases
144

(5)
Schedule 10 (which makes further provision about references to the
Competition Commission) has effect in relation to a reference under subsection
(1)(b); and for that purpose—
(a)
paragraph 1 is to be ignored,
(b)
in paragraph 5(2), the reference to six months is to be read as a reference
5
to two months,
(c)
in paragraph 5(4), the reference to six months is to be read as a reference
to one month,
(d)
in paragraph 7, sub-paragraphs (4) to (7) and (9) are to be ignored (and,
in consequence of that, in sub-paragraph (8), the words from the
10
beginning to “sub-paragraph (4)(c)” are also to be ignored), and
(e)
the references to relevant persons are to be construed in accordance
with subsection (6).
(6)
The relevant persons referred to in Schedule 10 are—
(a)
in paragraphs 3, 5(6) and 6(6)—
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(i)
the National Health Service Commissioning Board, and
(ii)
the potentially liable providers who objected to the proposals,
and
(b)
in paragraph 8(10)—
(i)
Monitor, and
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(ii)
the potentially liable providers who objected to the proposals.
(7)
In investigating the question under subsection (4)(a), the Competition
Commission must have regard to the matters in relation to which Monitor has
duties under this Chapter.
(8)
Regulations prescribing a percentage for the purposes of subsection (2)(b) may
25
include provision prescribing the method used for determining a provider’s
share of the supply in England of the services concerned.
143
Amount payable
(1)
Monitor must—
(a)
calculate the amount which each provider who is to be subject to a levy
30
under section 139 for a financial year is to be liable to pay in respect of
that year, and
(b)
notify the provider of that amount and the date or dates on which it, or
instalments of it, will become payable.
(2)
If the provider is to be subject to the levy for only part of the financial year, it
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is to be liable to pay only the amount which bears to the amount payable for
the whole financial year the same proportion as the part of the financial year
for which the provider is to be subject to the levy bears to the whole financial
year.
(3)
The amount which a provider is liable to pay may be zero.
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(4)
Subsection (5) applies if, during a financial year in which Monitor is imposing
a levy under section 139, it becomes satisfied that the risk of a provider who is
subject to the levy going into special administration has changed by reference
to what it was—
(a)
at the start of the year, or
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