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Health and Social Care Bill (HL Bill 132)

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(b) information relating to the private affairs of an individual the
disclosure of which would, or might, significantly harm that person’s
interests.

122 Changes following determination on reference under section 120

(1) 5Where the Competition Commission remits a matter to Monitor under
subsection (6) of section 121, Monitor must make such changes to the method
to which the matter relates as it considers necessary, having regard to the
reasons specified for the purposes of subsection (8)(b) of that section.

(2) Monitor must give the Competition Commission and the National Health
10Service Commissioning Board a notice specifying—

(a) the changes it proposes to make, and

(b) its reasons for proposing to make them.

(3) Monitor must make the changes specified in the notice unless it is given a
direction under section 123 before the end of the period of 28 days beginning
15with the day after that on which it gave the notice.

(4) If Monitor is given a direction under that section before the end of that period,
it must make such of the changes as are not specified in the direction.

123 Power to veto changes proposed under section 122

(1) The Competition Commission may, within the period of 28 days beginning
20with the day after that on which it is given a notice under section 122, direct
Monitor—

(a) not to make the changes specified in the notice, or

(b) not to make such of those changes as may be specified in the direction.

(2) Monitor must comply with a direction under this section.

(3) 25The Secretary of State may, within that period and on the application of the
Commission, direct that the period for giving a direction under this section
(and, accordingly, the period referred to in section 122(3)) is to be extended by
14 days.

(4) The Competition Commission may give a direction under this section only in
30respect of such of the changes specified in the notice under section 122 as it
considers are not necessary in consequence of its determination on the
reference.

(5) If the Commission gives a direction under this section, it—

(a) must give notice specifying the changes proposed by Monitor, the
35terms of the direction and the reasons for giving it, and

(b) must itself make such changes to the method to which the reference
relates as it considers necessary in consequence of its determination on
the reference.

(6) In exercising its function under subsection (5)(b), the Commission must have
40regard to the matters to which Monitor must have regard when determining
the method to which the reference relates.

(7) Before making changes under subsection (5)(b), the Commission must give
notice to Monitor and the National Health Service Commissioning Board
specifying—

Health and Social Care BillPage 131

(a) the changes it proposes to make,

(b) its reasons for proposing to make them, and

(c) the period within which representations on the proposed changes may
be made.

(8) 5The period specified for the purposes of subsection (7)(c) must not be less than
28 days beginning with the day on which the notice is given.

124 Local modifications of prices: agreements

(1) The commissioner and the provider of a health care service may agree that the
price payable to the provider for the provision of the service for the purposes
10of the NHS in such circumstances or areas as may be determined in accordance
with the agreement is the price determined in accordance with the national
tariff for that service as modified in accordance with the agreement.

(2) An agreement under this section must specify the date on which the
modification is to take effect; and a date specified for that purpose may be
15earlier than the date of the agreement (but not earlier than the date on which
the national tariff took effect).

(3) An agreement under this section has effect only if it is approved by Monitor.

(4) An agreement submitted for approval under subsection (3) must be supported
by such evidence as Monitor may require.

(5) 20Monitor may approve an agreement under this section only if, having applied
the method specified under section 116(1)(d), it is satisfied that, without a
modification to the price determined in accordance with the national tariff for
that service, it would be uneconomic for the provider to provide the service for
the purposes of the NHS.

(6) 25Where an agreement is approved under subsection (3), Monitor must send a
notice to the Secretary of State and such clinical commissioning groups,
providers and other persons as it considers appropriate.

(7) Monitor must also publish the notice.

(8) The notice must specify—

(a) 30the modification, and

(b) the date on which it takes effect.

(9) If the Secretary of State considers that the modification gives or may give rise
(or, where it has yet to take effect, would or might give rise) to liability for
breach of an EU obligation, the Secretary of State may give a direction to that
35effect; and the modification is (or is to be) of no effect in so far as it is subject to
the direction.

125 Local modifications of prices: applications

(1) Monitor may, on an application by a provider of a health care service who has
failed to reach an agreement under section 124 with the commissioner, decide
40that the price payable to the provider for the provision of the service for the
purposes of the NHS in such circumstances or areas as Monitor may determine
is to be the price determined in accordance with the national tariff for that
service as modified in such way as Monitor may determine.

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(2) An application under this section must be supported by such evidence as
Monitor may require.

(3) Monitor may grant an application under this section only if, having applied the
method under section 116(1)(d), it is satisfied that, without a modification to
5the price determined in accordance with the national tariff for that service, it
would be uneconomic for the provider to provide the service for the purposes
of the NHS.

(4) Subsections (5) to (8) apply where Monitor grants an application under this
section.

(5) 10The decision by Monitor on the application takes effect on such date as Monitor
may determine; and a date determined for that purpose may be earlier than the
date of the decision (but not earlier than the date on which the national tariff
took effect).

(6) Monitor must send a notice of the decision to the Secretary of State and such
15clinical commissioning groups, providers and other persons as it considers
appropriate.

(7) Monitor must also publish the notice.

(8) The notice must specify—

(a) the modification, and

(b) 20the date on which it takes effect.

(9) If the Secretary of State considers that the modification gives or may give rise
(or, where it has yet to take effect, would or might give rise) to liability for
breach of an EU obligation, the Secretary of State may give a direction to that
effect; and the modification is (or is to be) of no effect in so far as it is subject to
25the direction.

126 Applications under section 125: notification of commissioners

(1) This section applies where Monitor—

(a) receives an application under section 125, and

(b) is satisfied that the continued provision for the purposes of the NHS of
30health care services to which a condition in the applicant’s licence
under section 97(1)(i), (j) or (k) applies is being put at significant risk by
the configuration of certain health care services provided for those
purposes.

(2) In subsection (1), a reference to the provision of services is a reference to their
35provision by the applicant or any other provider.

(3) Monitor must as soon as reasonably practicable notify the National Health
Service Commissioning Board and such clinical commissioning groups as
Monitor considers appropriate—

(a) of its receipt of the application, and

(b) 40of its reasons for being satisfied as mentioned in subsection (1)(b).

(4) Monitor must publish for each financial year a list of the notifications under
this section that it has given during that year; and the list must include for each
notification a summary of Monitor’s reasons for being satisfied as mentioned
in subsection (1)(b).

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(5) The Board and clinical commissioning groups, having received a notification
under this section, must have regard to it in arranging for the provision of
health care services for the purposes of the NHS.

127 Correction of mistakes

(1) 5This section applies where the national tariff contains information that does
not accord with—

(a) what Monitor and the National Health Service Commissioning Board
agreed on the matter concerned, or

(b) where the matter was determined by arbitration, what was determined.

(2) 10Monitor must send a notice to—

(a) each clinical commissioning group,

(b) each relevant provider, and

(c) such other persons as Monitor considers appropriate.

(3) Monitor must also publish the notice.

(4) 15The notice must specify—

(a) the information that does not accord with what was agreed or
determined,

(b) the correction required to make the information so accord, and

(c) the date on which the correction is to take effect.

(5) 20A date specified for the purposes of subsection (4)(c) may be earlier than the
date of the notice.

(6) In this section, “relevant provider” has the meaning given in section 118(14).

CHAPTER 5 Health special administration

128 Health special administration orders

(1) 25In this Chapter “health special administration order” means an order which—

(a) is made by the court in relation to a relevant provider, and

(b) directs that the affairs, business and property of the provider are to be
managed by one or more persons appointed by the court.

(2) An application to the court for a health special administration order may be
30made only by Monitor.

(3) A person appointed as mentioned in subsection (1)(b) is referred to in this
Chapter as a “health special administrator”.

(4) A health special administrator of a company—

(a) is an officer of the court, and

(b) 35in exercising functions in relation to the company, is the company’s
agent.

(5) A person is not to be the health special administrator of a company unless the
person is qualified to act as an insolvency practitioner in relation to the
company.

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(6) A health special administrator of a relevant provider must manage its affairs,
business and property, and exercise the health special administrator’s
functions, so as to—

(a) achieve the objective set out in section 129 as quickly and as efficiently
5as is reasonably practicable,

(b) in seeking to achieve that objective, ensure that any regulated activity
carried on in providing the services provided by the provider is carried
on in accordance with any requirements or conditions imposed in
respect of that activity by virtue of Chapter 2 of Part 1 of the Health and
10Social Care Act 2008,

(c) so far as is consistent with the objective set out in section 129, protect
the interests of the creditors of the provider as a whole, and

(d) so far as is consistent with that objective and subject to those interests,
protect the interests of the members of the provider as a whole.

(7) 15In relation to a health special administration order applying to a non-GB
company, references in this Chapter to the affairs, business and property of the
company are references only to its affairs and business so far as carried on in
Great Britain and to its property in Great Britain.

(8) In this section—

(a) 20a reference to a person qualified to act as an insolvency practitioner in
relation to a company is to be construed in accordance with Part 13 of
the Insolvency Act 1986 (insolvency practitioners and their
qualifications);

(b) “regulated activity” has the same meaning as in Part 1 of the Health and
25Social Care Act 2008 (see section 8 of that Act).

(9) In this Chapter—

  • “business” and “property” each have the same meaning as in the
    Insolvency Act 1986 (see section 436 of that Act);

  • “company” includes a company not registered under the Companies Act
    302006;

  • “court”, in relation to a company, means the court—

    (a)

    having jurisdiction to wind up the company, or

    (b)

    that would have such jurisdiction apart from section 221(2) or
    441(2) of the Insolvency Act 1986 (exclusion of winding up
    35jurisdiction in case of companies incorporated in, or having
    principal place of business in, Northern Ireland);

  • “member” is to be read in accordance with section 250 of the Insolvency
    Act 1986;

  • “non-GB company” means a company incorporated outside Great Britain;

  • 40“relevant provider” means a company which is providing services to
    which a condition included in the company’s licence under section
    97(1)(i), (j) or (k) applies;

  • “wholly-owned subsidiary” has the meaning given by section 1159 of the
    Companies Act 2006.

129 45Objective of a health special administration

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

(a) the continued provision of such of the health care services provided for
the purposes of the NHS by the company subject to the health special

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administration order, at such level, as the commissioners of those
services determine by applying criteria specified in health special
administration regulations (see section 130), and

(b) that it becomes unnecessary, by one or both of the means set out in
5subsection (2), for the health special administration order to remain in
force for that purpose.

(2) Those means are—

(a) the rescue as a going concern of the company subject to the health
special administration order, and

(b) 10one or more transfers falling within subsection (3).

(3) A transfer falls within this subsection if it is a transfer as a going concern—

(a) to another person, or

(b) as respects different parts of the undertaking of the company subject to
the health special administration order, to two or more other persons,

15of so much of that undertaking as it is appropriate to transfer for the purpose
of achieving the objective of the health special administration.

(4) The means by which a transfer falling within subsection (3) may be effected
include in particular—

(a) a transfer of the undertaking of the company subject to the health
20special administration order, or of part of its undertaking, to a wholly-
owned subsidiary of that company, and

(b) a transfer to a company of securities of a wholly-owned subsidiary to
which there has been a transfer falling within paragraph (a).

(5) The objective of a health special administration may be achieved by transfers
25to the extent only that—

(a) the rescue as a going concern of the company subject to the health
special administration order is not reasonably practicable or is not
reasonably practicable without such transfers,

(b) the rescue of the company as a going concern will not achieve that
30objective or will not do so without such transfers,

(c) such transfers would produce a result for the company’s creditors as a
whole that is better than the result that would be produced without
them, or

(d) such transfers would, without prejudicing the interests of its creditors
35as a whole, produce a result for the company’s members as a whole that
is better than the result that would be produced without them.

130 Health special administration regulations

(1) Regulations (referred to in this Chapter as “health special administration
regulations”) must make further provision about health special administration
40orders.

(2) Health special administration regulations may apply with or without
modifications—

(a) any provision of Part 2 of the Insolvency Act 1986 (administration) or
any related provision of that Act, and

(b) 45any other enactment which relates to insolvency or administration or
makes provision by reference to anything that is or may be done under
that Act.

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(3) Health special administration regulations may, in particular, provide that the
court may make a health special administration order in relation to a relevant
provider if it is satisfied, on a petition by the Secretary of State under section
124A of the Insolvency Act 1986 (petition for winding up on grounds of public
5interest), that it would be just and equitable (disregarding the objective of the
health special administration) to wind up the provider in the public interest.

(4) Health special administration regulations may make provision about—

(a) the application of procedures under the Insolvency Act 1986 in relation
to relevant providers, and

(b) 10the enforcement of security over property of relevant providers.

(5) Health special administration regulations may, in particular, make provision
about the publication and maintenance by Monitor of a list of relevant
providers.

(6) Health special administration regulations may in particular—

(a) 15require Monitor to publish guidance for commissioners about the
application of the criteria referred to in section 129(1)(a);

(b) confer power on Monitor to revise guidance published by virtue of
paragraph (a) and require it to publish guidance so revised;

(c) require Monitor, before publishing guidance by virtue of paragraph (a)
20or (b), to obtain the approval of the Secretary of State and the National
Health Service Commissioning Board;

(d) require commissioners, when applying the criteria referred to in section
129(1)(a), to have regard to such matters as Monitor may specify in
guidance published by virtue of paragraph (a) or (b);

(e) 25require the National Health Service Commissioning Board to make
arrangements for facilitating agreement between commissioners in
their exercise of their function under section 129(1)(a);

(f) confer power on the Board, where commissioners fail to reach
agreement in pursuance of arrangements made by virtue of paragraph
30(e), to exercise their function under section 129(1)(a);

(g) provide that, in consequence of the exercise of the power conferred by
virtue of paragraph (f), the function under section 129(1)(a), so far as
applying to the commissioners concerned, is to be regarded as
discharged;

(h) 35require a health special administrator to carry out in accordance with
the regulations consultation on the action which the administrator
recommends should be taken in relation to the provider concerned.

(7) Health special administration regulations may modify this Chapter or any
enactment mentioned in subsection (8) in relation to any provision made by
40virtue of this Chapter.

(8) The enactments are—

(a) the Insolvency Act 1986, and

(b) any other enactment which relates to insolvency or administration or
makes provision by reference to anything that is or may be done under
45that Act.

(9) The power to make rules under section 411 of the Insolvency Act 1986
(company insolvency rules) applies for the purpose of giving effect to
provision made by virtue of this Chapter as it applies for the purpose of giving
effect to Parts 1 to 7 of that Act.

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(10) For that purpose—

(a) the power to make rules in relation to England and Wales is exercisable
by the Lord Chancellor with the concurrence of the Secretary of State
and, in the case of rules that affect court procedure, with the
5concurrence of the Lord Chief Justice;

(b) the power to make rules in relation to Scotland is exercisable by the
Secretary of State;

(c) references in section 411 of that Act to those Parts are to be read as
including a reference to this Chapter.

(11) 10Before making health special administration regulations the Secretary of State
must consult—

(a) Monitor, and

(b) such other persons as the Secretary of State considers appropriate.

131 Transfer schemes

(1) 15Health special administration regulations may make provision about transfer
schemes to achieve the objective of a health special administration (see
section 129).

(2) Health special administration regulations may, in particular, include
provision—

(a) 20for the making of a transfer scheme to be subject to the consent of
Monitor and the person to whom the transfer is being made,

(b) for Monitor to have power to modify a transfer scheme with the consent
of parties to the transfers effected by the scheme, and

(c) for modifications made to a transfer scheme by virtue of paragraph (b)
25to have effect from such time as Monitor may specify (which may be a
time before the modifications were made).

(3) Health special administration regulations may, in particular, provide that a
transfer scheme may include provision—

(a) for the transfer of rights and liabilities under or in connection with a
30contract of employment from a company subject to a health special
administration order to another person,

(b) for the transfer of property, or rights and liabilities other than those
mentioned in paragraph (a), from a company subject to a health special
administration order to another person,

(c) 35for the transfer of property, rights and liabilities which would not
otherwise be capable of being transferred or assigned,

(d) for the transfer of property acquired, and rights and liabilities arising,
after the making of the scheme,

(e) for the creation of interests or rights, or the imposition of liabilities, and

(f) 40for the transfer, or concurrent exercise, of functions under enactments.

132 Indemnities

Health special administration regulations may make provision about the
giving by Monitor of indemnities in respect of—

(a) liabilities incurred in connection with the discharge by health special
45administrators of their functions, and

(b) loss or damage sustained in that connection.

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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
5by virtue of this Chapter as the Secretary of State considers appropriate in
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 10Financial 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
15health 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

20), or

(b) an order under section 65D(2) of the National Health Service Act 2006
(trust special administration for NHS foundation trusts).

(2) Mechanisms that Monitor may establish under this section include, in
particular—

(a) 25mechanisms for raising money to make grants or loans or to make
payments in consequence of indemnities given by Monitor by virtue of
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,
30insurance facilities.

(3) Monitor may secure that a mechanism established under this section operates
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
35providers of different descriptions.

(5) Monitor does not require permission under any provision of the Financial
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
40may require Monitor to comply with the duty to establish under subsection (1)
before such date as the order specifies.

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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) 5Monitor must appoint at least two managers for a fund it establishes under this
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
10managing investments.

(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
15managing investments.

(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
20this section.

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
25section 134.

(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) 30If Monitor grants an application under this section, it must notify the applicant
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
35only—

(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) 40If Monitor refuses an application under this section, it must notify the applicant
of the reasons for the refusal.