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(5) The Secretary of State may not give a direction under subsection (1) or
(2) unless the direction is for the purpose of complying with a limit
imposed by the Treasury.

223F Power to establish contingency fund

(1) 5The Board may use a proportion of the sums paid to it under section
223B to establish a contingency fund.

(2) The Board may make a payment out of the fund where the payment is
necessary in order to enable—

(a) the Board to discharge any of its commissioning functions, or

(b) 10a clinical commissioning group to discharge any of its
functions.

(3) The Board must publish guidance as to how it proposes to exercise its
powers to make payments out of the contingency fund.

(4) In this section, “commissioning functions” means functions in
15arranging for the provision of services as part of the health service.

Further provision about clinical commissioning groups

25 Clinical commissioning groups: establishment etc.

(1) After Chapter A1 of Part 2 of the National Health Service Act 2006 insert—

CHAPTER A2 Clinical commissioning groups
20Establishment of clinical commissioning groups
14A General duties of Board in relation to clinical commissioning groups

(1) The Board must exercise its functions under this Chapter so as to ensure
that at any time after the day specified by order of the Secretary of State
for the purposes of this section each provider of primary medical
25services is a member of a clinical commissioning group.

(2) The Board must exercise its functions under this Chapter so as to ensure
that at any time after the day so specified the areas specified in the
constitutions of clinical commissioning groups—

(a) together cover the whole of England, and

(b) 30do not coincide or overlap.

(3) For the purposes of this Chapter, “provider of primary medical
services” means a person who is a party to an arrangement mentioned
in subsection (4).

(4) The arrangements mentioned in this subsection are—

(a) 35a general medical services contract to provide primary medical
services of a prescribed description,

(b) arrangements under section 83(2) for the provision of primary
medical services of a prescribed description,

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(c) section 92 arrangements for the provision of primary medical
services of a prescribed description.

(5) Where a person who is a provider of primary medical services is a party
to more than one arrangement mentioned in subsection (4), the person
5is to be treated for the purposes of this Chapter as a separate provider
of primary medical services in respect of each of those arrangements.

(6) Where two or more individuals practising in partnership are parties to
an arrangement mentioned in subsection (4), the partnership is to be
treated for the purposes of this Chapter as a provider of primary
10medical services (and the individuals are not to be so treated).

(7) Where two or more individuals are parties to an arrangement
mentioned in subsection (4) but are not practising in partnership, those
persons collectively are to be treated for the purposes of this Chapter as
a provider of primary medical services (and the individuals are not to
15be so treated).

14B Applications for the establishment of clinical commissioning groups

(1) An application for the establishment of a clinical commissioning group
may be made to the Board.

(2) The application may be made by any two or more persons each of
20whom—

(a) is or wishes to be a provider of primary medical services, and

(b) wishes to be a member of the clinical commissioning group.

(3) The application must be accompanied by—

(a) a copy of the proposed constitution of the clinical
25commissioning group,

(b) the name of the person whom the group wishes the Board to
appoint as its accountable officer (as to which see paragraph 12
of Schedule 1A), and

(c) such other information as the Board may specify in a document
30published for the purposes of this section.

(4) At any time before the Board determines the application—

(a) a person who is or wishes to be a provider of primary medical
services (and wishes to be a member of the clinical
commissioning group) may become a party to the application,
35with the agreement of the Board and the existing applicants;

(b) any of the applicants may withdraw.

(5) At any time before the Board determines the application, the applicants
may modify the proposed constitution with the agreement of the
Board.

(6) 40Part 1 of Schedule 1A makes provision about the constitution of a
clinical commissioning group.

14C Determination of applications

(1) The Board must grant an application under section 14B if it is satisfied
as to the following matters.

(2) 45Those matters are—

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(a) that the constitution complies with the requirements of Part 1 of
Schedule 1A and is otherwise appropriate,

(b) that each of the members specified in the constitution will be a
provider of primary medical services on the date the clinical
5commissioning group is established,

(c) that the area specified in the constitution is appropriate,

(d) that it would be appropriate for the Board to appoint, as the
accountable officer of the group, the person named by the group
under section 14B(3)(b),

(e) 10that the applicants have made appropriate arrangements to
ensure that the clinical commissioning group will be able to
discharge its functions,

(f) that the applicants have made appropriate arrangements to
ensure that the group will have a governing body which
15satisfies any requirements imposed by or under this Act and is
otherwise appropriate, and

(g) such other matters as may be prescribed.

(3) Regulations may make provision—

(a) as to factors which the Board must or may take into account in
20deciding whether it is satisfied as to the matters mentioned in
subsection (2);

(b) as to the procedure for the making and determination of
applications under section 14B.

14D Effect of grant of application

(1) 25If the Board grants an application under section 14B—

(a) a clinical commissioning group is established, and

(b) the proposed constitution has effect as the clinical
commissioning group’s constitution.

(2) Part 2 of Schedule 1A makes further provision about clinical
30commissioning groups.

Variation of constitution
14E Applications for variation of constitution

(1) A clinical commissioning group may apply to the Board to vary its
constitution (including doing so by varying its area or its list of
35members).

(2) If the Board grants the application, the constitution of the clinical
commissioning group has effect subject to the variation.

(3) Regulations may make provision—

(a) as to the circumstances in which the Board must or may grant,
40or must or may refuse, applications under this section;

(b) as to factors which the Board must or may take into account in
determining whether to grant such applications;

(c) as to the procedure for the making and determination of such
applications.

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14F Variation of constitution otherwise than on application

(1) The Board may vary the area specified in the constitution of a clinical
commissioning group.

(2) The Board may—

(a) 5add any person who is a provider of primary medical services
to the list of members specified in the constitution of a clinical
commissioning group;

(b) remove any person from such a list.

(3) The power conferred by subsection (1) or (2) is exercisable if—

(a) 10the clinical commissioning group consents to the variation, or

(b) the Board considers that the variation is necessary for the
purpose of discharging any of its duties under section 14A.

(4) Before varying the constitution of a clinical commissioning group
under subsection (1) or (2), the Board must consult—

(a) 15that group, and

(b) any other clinical commissioning group that the Board thinks
might be affected by the variation.

(5) Regulations may—

(a) confer powers on the Board to vary the constitution of a clinical
20commissioning group;

(b) make provision as to the circumstances in which those powers
are exercisable and the procedure to be followed before they are
exercised.

Mergers, dissolution etc.
14G 25Mergers

(1) Two or more clinical commissioning groups may apply to the Board
for—

(a) those groups to be dissolved, and

(b) another clinical commissioning group to be established under
30this section.

(2) An application under this section must be accompanied by—

(a) a copy of the proposed constitution of the clinical
commissioning group,

(b) the name of the person whom the group wishes the Board to
35appoint as its accountable officer, and

(c) such other information as the Board may specify in a document
published for the purposes of this section.

(3) The applicants may, with the agreement of the Board, modify the
application or the proposed constitution at any time before the Board
40determines the application.

(4) Sections 14C and 14D(1) apply in relation to an application under this
section as they apply in relation to an application under section 14B.

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14H Dissolution

(1) A clinical commissioning group may apply to the Board for the group
to be dissolved.

(2) Regulations may make provision—

(a) 5as to the circumstances in which the Board must or may grant,
or must or may refuse, applications under this section;

(b) as to factors which the Board must or may take into account in
determining whether to grant such applications;

(c) as to the procedure for the making and determination of such
10applications.

Supplemental provision about applications, variation, mergers etc.
14I Transfers in connection with variation, merger, dissolution etc.

(1) The Board may make a property transfer scheme or a staff transfer
scheme in connection with—

(a) 15the variation of the constitution of a clinical commissioning
group under section 14E or 14F, or

(b) the dissolution of a clinical commissioning group under section
14G or 14H.

(2) A property transfer scheme is a scheme for the transfer from the clinical
20commissioning group of any property, rights or liabilities, other than
rights or liabilities under or in connection with a contract of
employment, to the Board or another clinical commissioning group.

(3) A staff transfer scheme is a scheme for the transfer from the clinical
commissioning group of any rights or liabilities under or in connection
25with a contract of employment to the Board or another clinical
commissioning group.

(4) Part 3 of Schedule 1A makes further provision about property transfer
schemes and staff transfer schemes.

14J Publication of constitution of clinical commissioning groups

(1) 30A clinical commissioning group must publish its constitution.

(2) If the constitution of a clinical commissioning group is varied under
section 14E or 14F, the group must publish the constitution as so varied.

14K Guidance about the establishment of clinical commissioning groups
etc.

35The Board may publish guidance as to—

(a) the making of applications under section 14B for the
establishment of a clinical commissioning group, including
guidance on the form, content or publication of the proposed
constitution;

(b) 40the making of applications under section 14E, 14G or 14H;

(c) the publication of the constitutions of clinical commissioning
groups under section 14J.

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Governing bodies of clinical commissioning groups
14L Governing bodies of clinical commissioning groups

(1) A clinical commissioning group must have a governing body.

(2) The main function of the governing body is to ensure that the group has
5made appropriate arrangements for ensuring that it complies with—

(a) its obligations under section 14Q, and

(b) such generally accepted principles of good governance as are
relevant to it.

(3) The governing body also has—

(a) 10the function of determining the remuneration, fees and
allowances payable to the employees of the clinical
commissioning group or to other persons providing services to
it,

(b) the function of determining the allowances payable under a
15pension scheme established under paragraph 11(4) of Schedule
1A, and

(c) such other functions connected with the exercise of its main
function as may be specified in the group’s constitution or by
regulations.

(4) 20Only the following may be members of the governing body—

(a) a member of the group who is an individual;

(b) an individual appointed by virtue of regulations under section
14N(2);

(c) an individual of a description specified in the constitution of the
25group.

(5) Regulations may make provision requiring a clinical commissioning
group to obtain the approval of its governing body before exercising
any functions specified in the regulations.

(6) Regulations may make provision requiring governing bodies of clinical
30commissioning groups to publish, in accordance with the regulations,
prescribed information relating to determinations made under
subsection (3)(a) or (b).

(7) The Board may publish guidance for governing bodies on the exercise
of their functions under subsection (3)(a) or (b).

14M 35Audit and remuneration committees of governing bodies

(1) The governing body of a clinical commissioning group must have an
audit committee and a remuneration committee.

(2) The audit committee has—

(a) such functions in relation to the financial duties of the clinical
40commissioning group as the governing body considers
appropriate for the purpose of assisting it in discharging its
function under section 14L(2), and

(b) such other functions connected with the governing body’s
function under section 14L(2) as may be specified in the group’s
45constitution or by regulations.

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(3) The remuneration committee has—

(a) the function of making recommendations to the governing
body as to the discharge of its functions under section 14L(3)(a)
and (b), and

(b) 5such other functions connected with the governing body’s
function under section 14L(2) as may be specified in the group’s
constitution or by regulations.

14N Regulations as to governing bodies of clinical commissioning groups

(1) Regulations may make provision specifying the minimum number of
10members of governing bodies of clinical commissioning groups.

(2) Regulations may—

(a) provide that the members of governing bodies must include the
accountable officer of the clinical commissioning group;

(b) provide that the members of governing bodies, or their audit or
15remuneration committees, must include—

(i) individuals who are health care professionals of a
prescribed description;

(ii) individuals who are lay persons;

(iii) individuals of any other description which is
20prescribed;

(c) in relation to any description of individuals mentioned in
regulations by virtue of paragraph (b), specify—

(i) the minimum number of individuals of that description
who must be appointed;

(ii) 25the maximum number of such individuals who may be
appointed;

(d) provide that the descriptions specified for the purposes of
section 14L(4)(c) may not include prescribed descriptions.

(3) Regulations may make provision as to—

(a) 30qualification and disqualification for membership of governing
bodies or their audit or remuneration committees;

(b) how members are to be appointed;

(c) the tenure of members (including the circumstances in which a
member ceases to hold office or may be removed or suspended
35from office);

(d) eligibility for re-appointment.

(4) Regulations may make provision for the appointment of chairs and
deputy chairs of governing bodies or their audit or remuneration
committees, including provision as to—

(a) 40qualification and disqualification for appointment;

(b) tenure of office (including the circumstances in which the chair
or deputy chair ceases to hold office or may be removed or
suspended from office);

(c) eligibility for re-appointment.

(5) 45Regulations may—

(a) make provision as to the matters which must be included in the
constitutions of clinical commissioning groups under
paragraph 8 of Schedule 1A;

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(b) make such other provision about the procedure of governing
bodies or their audit or remuneration committees as the
Secretary of State considers appropriate, including provision
about the frequency of meetings.

(6) 5In this section—

14O Registers of interests and management of conflicts of interest

(1) 15Each clinical commissioning group must maintain one or more
registers of the interests of—

(a) the members of the group,

(b) the members of its governing body,

(c) the members of its committees or sub-committees or of
20committees or sub-committees of its governing body, and

(d) its employees.

(2) Each clinical commissioning group must publish the registers
maintained under subsection (1) or make arrangements to ensure that
members of the public have access to the registers on request.

(3) 25Each clinical commissioning group must make arrangements to
ensure—

(a) that a person mentioned in subsection (1) declares any conflict
or potential conflict of interest that the person has in relation to
a decision to be made in the exercise of the commissioning
30functions of the group,

(b) that any such declaration is made as soon as practicable after the
person becomes aware of the conflict or potential conflict and,
in any event, within 28 days, and

(c) that any such declaration is included in the registers maintained
35under subsection (1).

(4) Each clinical commissioning group must make arrangements for
managing conflicts and potential conflicts of interest in such a way as
to ensure that they do not, and do not appear to, affect the integrity of
the group’s decision-making processes.

(5) 40The Board must publish guidance for clinical commissioning groups on
the discharge of their functions under this section.

(6) Each clinical commissioning group must have regard to guidance
published under subsection (5).

(7) For the purposes of this section, the commissioning functions of a
45clinical commissioning group are the functions of the group in
arranging for the provision of services as part of the health service.

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(2) After Schedule 1 to the National Health Service Act 2006 insert the Schedule set
out in Schedule 2 to this Act.

26 Clinical commissioning groups: general duties etc.

After section 14O of the National Health Service Act 2006 insert—

5General duties of clinical commissioning groups
14P Duty to promote NHS Constitution

(1) Each clinical commissioning group must, in the exercise of its
functions—

(a) act with a view to securing that health services are provided in
10a way which promotes the NHS Constitution, and

(b) promote awareness of the NHS Constitution among patients,
staff and members of the public.

(2) In this section, “patients” and “staff” have the same meanings as in
Chapter 1 of Part 1 of the Health Act 2009 (see section 3(7) of that Act).

14Q 15Duty as to effectiveness, efficiency etc.

Each clinical commissioning group must exercise its functions
effectively, efficiently and economically.

14R Duty as to improvement in quality of services

(1) Each clinical commissioning group must exercise its functions with a
20view to securing continuous improvement in the quality of services
provided to individuals for or in connection with the prevention,
diagnosis or treatment of illness.

(2) In discharging its duty under subsection (1), a clinical commissioning
group must, in particular, act with a view to securing continuous
25improvement in the outcomes that are achieved from the provision of
the services.

(3) The outcomes relevant for the purposes of subsection (2) include, in
particular, outcomes which show—

(a) the effectiveness of the services,

(b) 30the safety of the services, and

(c) the quality of the experience undergone by patients.

(4) In discharging its duty under subsection (1), a clinical commissioning
group must have regard to any guidance published under section 14Z8.

14S Duty in relation to quality of primary medical services

35Each clinical commissioning group must assist and support the Board
in discharging its duty under section 13E so far as relating to securing
continuous improvement in the quality of primary medical services.

14T Duties as to reducing inequalities

Each clinical commissioning group must, in the exercise of its
40functions, have regard to the need to—

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(a) reduce inequalities between patients with respect to their ability
to access health services, and

(b) reduce inequalities between patients with respect to the
outcomes achieved for them by the provision of health services.

14U 5 Duty to promote involvement of each patient

(1) Each clinical commissioning group must, in the exercise of its
functions, promote the involvement of patients, and their carers and
representatives (if any), in decisions which relate to—

(a) the prevention or diagnosis of illness in the patients, or

(b) 10their care or treatment.

(2) The Board must publish guidance for clinical commissioning groups on
the discharge of their duties under this section.

(3) A clinical commissioning group must have regard to any guidance
published by the Board under subsection (2).

14V 15Duty as to patient choice

Each clinical commissioning group must, in the exercise of its
functions, act with a view to enabling patients to make choices with
respect to aspects of health services provided to them.

14W Duty to obtain appropriate advice

(1) 20Each clinical commissioning group must obtain advice appropriate for
enabling it effectively to discharge its functions from persons who
(taken together) have a broad range of professional expertise in—

(a) the prevention, diagnosis or treatment of illness, and

(b) the protection or improvement of public health.

(2) 25The Board may publish guidance for clinical commissioning groups on
the discharge of their duties under subsection (1).

(3) A clinical commissioning group must have regard to any guidance
published by the Board under subsection (2).

14X Duty to promote innovation

30Each clinical commissioning group must, in the exercise of its
functions, promote innovation in the provision of health services
(including innovation in the arrangements made for their provision).

14Y Duty in respect of research

Each clinical commissioning group must, in the exercise of its
35functions, promote—

(a) research on matters relevant to the health service, and

(b) the use in the health service of evidence obtained from research.

14Z Duty as to promoting education and training

Each clinical commissioning group must, in exercising its functions,
40have regard to the need to promote education and training for the
persons mentioned in section 1F(1) so as to assist the Secretary of State
in the discharge of the duty under that section.

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