Health and Social Care Bill

Session 2010 - 12
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Other Bills before Parliament

Health and Social Care Bill

Health and Social Care Bill
Part 4 — NHS foundation trusts & NHS trusts
157

160
Bodies which may apply for foundation trust status
(1)
Omit section 34 of the National Health Service Act 2006 (application for
authorisation by body other than NHS trust).
(2)
In section 35(1) of that Act (bodies which may be given authorisation), omit
paragraph (b) (public benefit corporations) and the preceding “or”.
5
(3)
Omit section 36(2) of that Act (public benefit corporation to become NHS
foundation trust on being given authorisation).
(4)
Despite subsection (1)—
(a)
section 34(1) to (4) of that Act continues to have effect in the case of an
application which, immediately before the commencement of that
10
subsection, is pending determination, and
(b)
section 34(5) to (7) of that Act continues to have effect in the case of an
existing public benefit corporation.
(5)
Despite subsection (2), section 35(1)(b) of that Act continues to have effect in
the case of an existing public benefit corporation which, immediately before
15
the commencement of that subsection, has not been given an authorisation
under section 35.
(6)
Despite subsection (3), section 36(2) of that Act continues to have effect in the
case of an existing public benefit corporation.
(7)
In subsections (4) to (6), “existing public benefit corporation” means a public
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benefit corporation—
(a)
incorporated under section 34 of that Act and in existence immediately
before the commencement of this section, or
(b)
incorporated under that section by virtue of subsection (4).
161
Amendment of constitution
25
(1)
In section 37 of the National Health Service Act 2006 (amendments of
constitution), the existing text of which becomes subsection (1), for “with the
approval of the regulator” substitute “only if—
(a)
more than half of the members of the council of governors of the
trust voting approve the amendments, and
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(b)
more than half of the members of the board of directors of the
trust voting approve the amendments.”
(2)
After that subsection insert—
“(2)
Amendments made under this section take effect as soon as the
conditions in subsection (1)(a) and (b) are satisfied.
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(3)
But an amendment is of no effect in so far as the constitution would, as
a result of the amendment, not accord with Schedule 7.
(4)
The trust must inform the regulator of amendments made under this
section; but the regulator’s functions do not include a power or duty to
determine whether or not the constitution, as a result of the
40
amendments, accords with Schedule 7.”
(3)
Subsections (1) and (2) do not apply in the case of amendments in respect of
which, immediately before the commencement of this section, Monitor has yet

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to decide whether or not to give approval under section 37 of the National
Health Service Act 2006.
162
Panel for advising governors
After section 39 of the National Health Service Act 2006 insert—
“39A
Panel for advising governors
5
(1)
The regulator may appoint a panel of persons to which a governor of
an NHS foundation trust may refer a question as to whether the trust
has failed or is failing—
(a)
to act in accordance with its constitution, or
(b)
to act in accordance with provision made by or under this
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Chapter.
(2)
A governor may refer a question to the panel only if more than half of
the members of the council of governors voting approve the referral.
(3)
The panel—
(a)
may regulate its own procedure, and
15
(b)
may establish such procedures, and make such other
arrangements, as it considers appropriate for the purpose of
determining questions referred to it under this section.
(4)
The panel may decide whether, or to what extent, to carry out an
investigation on a question referred to it under this section.
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(5)
The panel may for that purpose, or for the purpose of carrying out such
an investigation, request information or advice.
(6)
Where the panel has carried out such an investigation, it must publish
a report of its determination of the question referred to it.
(7)
If a person refuses to comply with a request made under subsection (5),
25
the report under subsection (6) may refer to the refusal.
(8)
On any proceedings before a court or tribunal relating to a question
referred to the panel under this section, the court may take the panel’s
report of its determination of the question into account.
(9)
The regulator—
30
(a)
must pay expenses properly incurred by the panel, and
(b)
must make administrative support available to the panel.
(10)
Regulations may make provision as to—
(a)
eligibility for membership of the panel;
(b)
the number of persons that may be appointed as members;
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(c)
the terms of appointment of members;
(d)
circumstances in which a person ceases to be a member or may
be suspended.”

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Part 4 — NHS foundation trusts & NHS trusts
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Finance
163
Financial powers etc.
(1)
At the end of section 40 of the National Health Service Act 2006 (power of
Secretary of State to give financial assistance to NHS foundation trusts),
insert—
5
“(5)
As soon as is practicable after the end of each financial year, the
Secretary of State must prepare a report on the exercise of the power
under subsection (1).
(6)
In relation to each exercise of the power under that subsection during
the year to which the report relates, the report must specify the amount
10
of the loan, issue of public dividend capital, grant or other payment
and—
(a)
in the case of a loan, the amount (if any) outstanding at the end
of the year and the other terms on which the loan was made,
(b)
in the case of an issue of public dividend capital, the terms on
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which it was issued (or, where a decision under section 42(3) is
made in relation to it during that year, the terms so decided as
those on which it is treated as having been issued), and
(c)
in the case of a grant or other payment, the terms on which it
was made.
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(7)
In relation to each loan made under that subsection during a previous
financial year but not repaid by the beginning of the year to which the
report relates, the report must specify—
(a)
the amount outstanding at the beginning of the year,
(b)
the amount (if any) outstanding at the end of the year, and
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(c)
the other terms on which the loan was made.
(8)
A report under subsection (5) must, in relation to each NHS foundation
trust, specify—
(a)
the amount of the public dividend capital of that trust at the end
of the year to which the report relates, and
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(b)
the conditions on which it is held.
(9)
The Secretary of State must publish a report under subsection (5).”
(2)
Omit section 41 of that Act (prudential borrowing code).
(3)
In section 42 of that Act (public dividend capital), omit subsection (4) (dividend
payable by NHS foundation trust to be same as that payable by NHS trust).
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(4)
Omit subsection (5) of that section (requirement for Secretary of State to consult
the regulator).
(5)
At the end of that section insert—
“(7)
The terms which may be decided under subsection (3) include terms to
which the exercise of any power of an NHS foundation trust to do any
40
of the following will be subject as a consequence—
(a)
providing goods or services,
(b)
borrowing or investing money,
(c)
providing financial assistance,

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(d)
acquiring or disposing of property,
(e)
entering into contracts, or making other arrangements, to do
anything referred to in paragraphs (a) to (d),
(f)
applying for dissolution (whether or not when also applying for
the establishment of one or more other trusts),
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(g)
applying to acquire another body.”
(6)
After that section insert—
“42A
Criteria for making loans etc.
(1)
The Secretary of State must publish guidance on the powers conferred
by sections 40 and 42.
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(2)
The guidance on the power to make a loan under section 40(1) must in
particular—
(a)
explain that, in exercising the power, the Secretary of State will
apply the principle that a loan should be made only where there
is a reasonable expectation that it will be repaid in accordance
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with the terms on which it is made;
(b)
include other criteria that the Secretary of State will apply when
determining whether to exercise the power and, if so, the terms
on which to make the loan.
(3)
The guidance on that power must also explain—
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(a)
the process for applying for a loan under section 40(1);
(b)
the consequences of failing to comply with terms on which a
loan is made under that provision.
(4)
The guidance on the power to decide terms under section 42(3) must, in
particular, include the criteria that the Secretary of State will apply
25
when deciding the terms.
(5)
The guidance on that power must also explain the consequences of
failing to comply with the terms decided.
(6)
In preparing guidance under this section, the Secretary of State must
have regard (among other things) to any generally accepted principles
30
used by financial institutions to determine whether to make loans to
bodies corporate and the terms on which to make loans to them.
(7)
Before publishing the guidance, the Secretary of State must consult—
(a)
the Treasury,
(b)
the regulator, and
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(c)
such other persons as the Secretary of State considers
appropriate.”
(7)
Omit section 45 of that Act (disposal of protected property).
(8)
Omit section 46(2) and (3) of that Act (limitation on power of NHS foundation
trusts to borrow money).
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(9)
For section 50 of that Act (fees) substitute—
“50
Fees
An NHS foundation trust must pay to the regulator such fee as the
regulator may determine in respect of its exercise of functions under—

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(a)
section 39;
(b)
section 39A.”
Functions
164
Goods and services
(1)
In section 43 of the National Health Service Act 2006 (authorised services), for
5
subsections (1) and (2) substitute—
“(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)
An NHS foundation trust may provide goods and services for any
purposes related to—
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(a)
the provision of services provided to individuals for or in
connection with the prevention, diagnosis or treatment of
illness, and
(b)
the promotion and protection of public health.
(2A)
An NHS foundation trust does not fulfil its principal purpose unless, in
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each financial year, its total income from the provision of goods and
services for the purposes of the health service in England is greater than
its total income from the provision of goods and services for any other
purposes.”
(2)
In subsection (3) of that section (power to carry on other activities in order to
20
generate additional income)—
(a)
for “The” substitute “An”,
(b)
for “subsection (1)” substitute “subsection (2)”, and
(c)
omit “, subject to any restrictions in the authorisation,”.
(3)
After that subsection insert—
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“(3A)
Each annual report prepared by an NHS foundation trust must give
information on the impact that income received by the trust otherwise
than from the provision of goods and services for the purposes of the
health service in England has had on the provision by the trust of goods
and services for those purposes.
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(3B)
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
the purposes of the health service in England that the trust
proposes to carry on, and
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(b)
the income it expects to receive from doing so.
(3C)
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 subsection (3B)(a), the council of
governors of the trust must—
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(a)
determine whether it is satisfied that the carrying on of the
activity will not to any significant extent interfere with the
fulfilment by the trust of its principal purpose or the
performance of its other functions, and

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(b)
notify the directors of the trust of its determination.
(3D)
An NHS foundation trust which proposes to increase by 5% or more the
proportion of its total income in any financial year attributable to
activities other than the provision of goods and services for the
purposes of the health service in England may implement the proposal
5
only if more than half of the members of the council of governors of the
trust voting approve its implementation.”
(4)
Omit subsections (4) to (7) of that section (goods and services that may be
authorised, etc.).
(5)
For the title to that section substitute “Provision of goods and services”.
10
(6)
In paragraph 2 of Schedule 7 to that Act (constitution), the existing text of
which becomes sub-paragraph (1), after that sub-paragraph insert—
    “(2)
If the corporation is an NHS foundation trust, the constitution must
specify its principal purpose (as to which, see section 43(1)).”
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Private health care
15
(1)
In section 44 of the National Health Service Act 2006 (private health care),
omit—
(a)
subsection (1) (restriction on provision of private health services),
(b)
subsection (2) (cap on private income),
(c)
subsection (2A) (special provision for mental health foundation trusts),
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and
(d)
subsections (3) to (5) (interpretation etc.).
(2)
For the title to that section substitute “Power to charge for accommodation
etc.”.
(3)
In consequence of subsection (1)(b) and (c), omit section 33 of the Health Act
25
2009.
166
Information
For section 48 of the National Health Service Act 2006 (information)
substitute—
“48
Information
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(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
considers it necessary to have for the purposes of the functions of the
Secretary of State in relation to the health service.
(2)
The information must be provided in such form, and at such time or
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within such period, as the Secretary of State may require.”