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These notes refer to the Health and Social Care Bill Health And Social Care Bill
EXPLANATORY NOTESINTRODUCTION1. These explanatory notes relate to the Health and Social Care Bill 2000/2001 as introduced in the House of Commons on 20 December 2000. They have been prepared by the Department of Health, with assistance from the Wales Office, in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill, so where a section or part of a section does not seem to require any explanation or comment, none is given.
SUMMARY3. In July 2000 the Government published The NHS Plan, A plan for investment, A plan for reform (Cm 4818-1) and The NHS Plan, The Government's response to the Royal Commission on Long Term Care (Cm 4818 - II). In September 2000 the Government published Pharmacy in the Future - Implementing the NHS Plan. Action has been taken to implement many of the proposals set out in these documents. In October the Scottish Executive published the Response to the Royal Commission on Long Term Care and provision is made in the Bill for one aspect of this as mentioned below.
4. This Bill will deliver the aspects of the NHS Plan and the Government's response to the Royal Commission on Long Term Care that require changes to primary legislation. Its purpose is to improve the performance of the NHS, provide better protection for patients through a faster, more effective and fair system for regulating GPs, better protection around the use of patient information, create a new system of patient involvement in the way the NHS works, modernise pharmacy and prescribing services, extend direct payments for social services users and provide a fairer system of funding for long term care including measures to reduce the need to sell one's home on entering residential care.
THE BILL5. The Bill is in five parts :
Part I makes changes to the way the NHS, including family health services, is run and funded in England and Wales. Part II deals with pharmaceutical services in England and Wales and some aspects of such services in Scotland. Part III provides for the establishment of Care Trusts. Part IV makes changes to the way long term care is funded and provided in England and Wales. Provision is also made for Scotland in relation to the ending of preserved rights.
Part V deals with the control of patient information and the extension of prescribing rights as well as various miscellaneous and supplementary provisions. 6 Part I of the Bill is mainly concerned with implementing proposals set out in the NHS Plan which require primary legislation. This part of the Bill therefore makes a number of changes to the framework of the NHS in England and Wales. Clauses 1 to 4 concern the funding of the NHS. Clause 1 enables the Secretary of State and the National Assembly for Wales to take into account the level of a Health Authority's non-cash limited allocation in determining the total allocations for health authorities. Clause 2 deals with payments to Health Authorities in respect of past performance. Clause 3 enables the Secretary of State and the National Assembly for Wales to make additional supplementary payments to support new initiatives and payments out of the NHS Performance Fund and to attach conditions to such payments. Clause 4 allows for public private partnerships in the NHS and clause 5 concerns measures to provide additional income for the NHS.
7. Clause 6 deals with the powers of the Secretary of State to direct certain NHS bodies about the terms and conditions of employment of their staff.
8. Clauses 7 to 15 establish new arrangements for public and patient involvement in the NHS. Clauses 7 and 8 provide for local authority Overview and Scrutiny Committees to scrutinise the NHS and represent local views on the development of local health services. Clause 9 places a duty on NHS organisations to have arrangements for involving patients and the public in decision making about the operation of the NHS. Clauses 10 to 13 establish statutory Patients' Forums, one for every NHS trust and Primary Care Trust. These bodies will ensure patients views are taken into account by those delivering NHS services, and a patient Forum representative on each NHS trust and Primary Care Trust Board will take patients into the heart of NHS decision making. Patients' Forums will operate within the context of the new duty for NHS bodies to consult and involve patients set out in clause 9. Clause 14 abolishes Community Health Councils (CHCs). Clause 15 provides power for the National Assembly for Wales for Wales to abolish CHCs.
9. Clause 16 allows the Secretary of State to intervene in poorly performing NHS organisations by providing targeted external assistance.
10. Clauses 17 and 18 provide for new arrangements for Health Authorities to manage the distribution of General Practitioners. Clause 20 ends the requirement that the majority of General Practitioner remuneration is directly related to the number of patients to whom a General Practitioner has undertaken to provide personal medical services. Clause 21 provides for regulations as to the approval by Health Authorities of providers of out of hours cover for medical practitioners.
11. Clauses 22 to 26 introduce new arrangements covering the regulation of family health service practitioners. All practitioners undertaking to provide family health services (general medical services, general dental services, general ophthalmic services and pharmaceutical services) must currently have their names included in a list maintained by a Health Authority. In future, Health Authorities will be required to maintain lists covering all practitioners, including deputies and locums for their area. Only practitioners included in such lists will be able to deliver family health services. The criteria to be admitted to (and to remain on) a list will include probity and positive evidence of good professional behaviour and practice. This will be done through a system of declarations, annual appraisal and participation in clinical audit. Clause 22 provides a power for Health Authorities to refuse to include a practitioner on the relevant medical, dental, optical or pharmaceutical list on the grounds of unsuitability. Clause 23 deals with dental corporations and lists. Clause 24 requires practitioners to declare the acceptance of gifts or other benefits. Clause 25 provides for Health Authorities to keep supplementary lists of deputies and assistants who provide the various family health services (including GPs, dentists and people who provide pharmaceutical and optical services). Clause 26 provides for new arrangements for Health Authorities to suspend and remove practitioners from the relevant lists on the grounds of efficiency, fraud or unsuitability. Clause 28 reconstitutes the Family Health Services Appeals Authority as an independent body and extends its functions to provide for appeals by these practitioners against Health Authority decisions. Consequently Clause 19 provides for the abolition of the NHS Tribunal.
12. Part II of the Bill concerns pharmaceutical services. Chapter I provides for new arrangements under which community pharmacy and related services may be provided on a pilot basis. The services provided under these arrangements will be known as local pharmaceutical services. Clause 29 contains introductory provisions about pilot schemes for the provision of local pharmaceutical services. Clause 30 sets out how proposals for a pilot scheme are to be made by a Health Authority and submitted to the relevant authority (the Secretary of State or National Assembly for Wales for Wales). Clause 31 provides for the designation of priority neighbourhoods or premises. Clause 32 requires the relevant authority to conduct at least one review of each pilot scheme and to comply with certain conditions in doing so. Clause 33 gives the relevant authority power to vary or terminate pilot schemes. Health authorities may vary schemes without referring the matter to the relevant authority only to the extent that they are permitted to do so in directions. Clause 34 allows potential providers of local pharmaceutical services to apply to the relevant authority to become health service bodies. One result will be that certain arrangements they make with other health service bodies will be NHS contracts. This clause also allows the courts to enforce a direction for payment given by the relevant authority in respect of obligations under such contracts.
13. Clause 35 permits regulations to be made to allow Health Authorities to make payments for preparatory work for pilot schemes, subject to certain conditions. Clause 36 enables charges corresponding to those for pharmaceutical services under Part II of the 1977 Act to be levied for local pharmaceutical services, subject to exemptions. Clause 37 specifies that the provisions of the 1977 Act, including the relevant authority's direction-making powers, apply to these functions under Part I of the Act as though they were functions under Part II of the Act. Clause 39 provides that the relevant authority may only bring permanent schemes into effect where, having regard to reviews of pilot schemes which have been conducted, they are satisfied that it is in the interests of any part of the health service. Clauses 40 and 41 insert new provisions into the 1977 Act to enable Health Authorities to make permanent schemes for the provision of local pharmaceutical services in accordance with regulations.
14. Chapter II of Part II introduces changes to the existing arrangements for the provision of pharmaceutical services. Clause 42 requires Health Authorities to make arrangements for the supply to persons in their area of those drugs, medicines and listed appliances prescribed for them by medical and other practitioners under the national health service. In particular it provides powers for the relevant authority to specify in regulations the categories of person whose prescriptions will be dispensed and any conditions in accordance with which they must prescribe. This clause also provides for the arrangements made by Health Authorities to include for the provision of these pharmaceutical services by remote means.
15. Clause 43 authorises arrangements for the provision of additional pharmaceutical services by remote means. The intention is to facilitate, and provide a means to control, the development of internet, mail order, home delivery and other arrangements which may involve dispensing across Health Authority boundaries. This will provide patients with greater flexibility in the way they can present their prescriptions and obtain the drugs or appliances which have been ordered for them.
16 Part III of the Bill creates new powers to establish Care Trusts by building on existing health and local authority powers to forge partnerships and provide integrated care. Clause 45 provides for Care Trusts to be established voluntarily. Where services are failing clause 46 provides for the Secretary of State or the National Assembly for Wales (for Wales) to establish a Care Trust, or if appropriate, to direct the local partners to enter into an alternative form of partnership arrangement.
17 Part IV of the Bill changes the way long term care is funded and provided in England and Wales. Clause 48 excludes nursing care from community care services. Clauses 49 to 51 make local authorities responsible for arranging and meeting the care needs of people who have until now had their long term care funded through preserved rights to income support and jobseekers allowance. Clauses 52 to 54 extend the powers of local authorities to place a charge on an interest in land as an alternative method of a person financing their long term care. They also provide for regulations to specify when a local authority is required to provide residential accommodation and when additional payments may be made for more expensive accommodation. Clause 55 provides new arrangements for cross border placements. It gives local authorities in England and Wales powers to place people in residential care homes and nursing homes in Scotland, Northern Ireland, the Isle of Man and the Channel Islands. Clauses 56 and 57 give regulation making powers to the Secretary of State concerning payments.
18 Part V deals with the control of patient information and the extension of prescribing rights as well as various miscellaneous and supplementary provisions. Clause 59 concerns the control of patient information. It enables the Secretary of State to require or permit patient information to be shared between organisations for medical purposes where he considers that this is in the interests of improving patient care or in the public interest. It also prevents patient information being shared. Clause 60 makes provision for the extension of prescribing rights to health professionals other than doctors, dentists and certain specified nurses, health visitors and midwives who already have prescribing rights. This part also includes a number of supplementary provisions.
19. Annex A sets out the existing legislation relating to the NHS. Annex B sets out the existing legislation relating to social care. Annex C deals with miscellaneous relevant legislation. In general, functions of the Secretary of State under the existing legislation are exercisable by the National Assembly for Wales in relation to Wales by virtue of a transfer of functions order made in 1999. The Bill follows this approach (see clause 64).
COMMENTARY ON CLAUSESPART I: NATIONAL HEALTH SERVICEHEALTH SERVICE FUNDINGClause 1: Determination of allotments to and resource limits for health authorities and primary care trusts
20. Clause 1 changes the way in which resources are allocated fairly between Health Authorities (HAs) by the Secretary of State and between Primary Care Trusts (PCTs) by HAs. Currently fair shares are only concerned with hospital and community Services, prescribing and certain elements of General Medical Services. These are all subject to annual expenditure ceilings (cash and resource limits).
21. The clause will permit the Secretary of State and the National Assembly for Wales (for HAs) and HAs (for PCTs) to extend the concept of fair shares. This will then also cover expenditure on those demand led family practitioner services that are not subject to an annual ceiling (resource and cash limit). This means that when distributing the resource and cash limited elements the Secretary of State and the National Assembly for Wales (for HAs) and HAs (for PCTs) may take into account how much is being spent on the non-resource and non-cash limited family practitioner services. Those who are spending more than their fair share on these services may get a smaller increase for their other services. Conversely if they are spending less than their fair share they can be given a larger increase. This monetary device will have the effect of supporting action taken to increase the number of GPs in under doctored areas.
22. Clause 1 provides for changes to the way in which unified allocations - which are cash limited - are made to Health Authorities and Primary Care Trusts. This provision will allow the Secretary of State and the National Assembly for Wales and Health Authorities to take account of the distribution of general Part II expenditure (non cash limited expenditure on family health services) when making decisions about unified allocations. In the first instance the intention is to take into account only the general Part II expenditure on general medical services (GMSNCL). It is envisaged that the power will be exercised so as to make larger increases in the unified allocations of areas which are " under doctored" than if GMSNCL was not taken into account; and to make smaller increases in the unified allocations of areas which are "over doctored" than if GMSNCL was not taken into account. It will also provide a financial mechanism for regulating the number of doctors in a health authority area (the abolition of the Medical Practices Committee - see clauses 17 and 18 - will mean that health authorities will become responsible for declaring GP vacancies).
23. The Department has asked the Advisory Committee on Resource Allocation to devise a new funding formula for GMSNCL expenditure. Using this new formula in conjunction with the existing formula for Health Authority and Primary Care Trust unified allocations will allow the Department to determine targets, or "fair shares" of available resources for an area covering both unified allocations and GMSNCL. But changes to funding will only be made to unified allocations. Health Authority and Primary Care Trust unified allocations will move towards this overall target level over time (eg if the Health Authority is over target it will receive lower funding growth than if it was under target). While these changes will see resources for under doctored areas grow more quickly than the resources for over doctored areas, they will not lead to the cash limiting of Part II general expenditure or change the entitlement of primary care practitioners.
24. The statutory provision dealing with the public funding of Health Authorities is section 97 of the National Health Service Act 1977 (the 1977 Act). Health Authorities are paid money in each year by the Secretary of State under section 97(1) and (3). Section 97(1) concerns the remuneration of persons providing services under Part II of the 1977 Act (for example, General Medical Practitioners). Unless such remuneration is excepted from section 97(1), it is not cash limited. The Secretary of State is under a duty to pay each Health Authority the cost of such remuneration, and cannot impose a ceiling on such expenditure (defined as "general Part II expenditure" in paragraph 1 of Schedule 12A to the 1977 Act). Section 97(3) provides that the Secretary of State must pay to each Health Authority money not exceeding the amount allotted to it by the Secretary of State. This amount is allotted towards meeting an authority's "main expenditure" (defined in paragraph 2 of Schedule 12A to the 1977 Act). In the case of a Health Authority this includes all expenditure attributable to the performance of their functions in relation to the provision of hospital-based and community health services, all their administrative costs, the costs of drugs attributed to them by the Secretary of State and certain other expenditure. The amount allotted constitutes a limit on the cash which may be spent by the authority.
25. Health Authorities are under similar obligations to provide funds to Primary Care Trusts. Each Primary Care Trust is established for an area contained within the area of a Health Authority. Under section 97C, each year the Health Authority must pay each of its Primary Care Trusts (a) the cost of general Part II expenditure incurred by the trust and (b) money not exceeding the amount allotted by the authority for that year towards meeting main expenditure. As with the allotments to Health Authorities, the amount allotted to each Primary Care Trust covers all expenditure attributable to the performance of their functions in relation to the provision of hospital-based and community health services, all their administrative costs and the costs of drugs attributed to them by the Secretary of State. The amount allotted constitutes a limit on the cash which may be spent by the authority.
26. Subsection (2) inserts a new subsection (3AA) into section 97 of the 1977 Act. This allows the Secretary of State to take account of expenditure attributable to the remuneration paid to any Part II practitioner in the Health Authority area in determining the amount to be allotted to a Health Authority. Subsection (4) inserts a new subsection (1A) into section 97C of the 1977Act. This allows a Health Authority to take account of expenditure attributable to the remuneration paid to any Part II practitioner in the Primary Care Trust's area in determining the amount to be allotted to each of its Primary Care Trusts.
27. The Government Resources and Accounts Act 2000 inserts two new sections into the 1977 Act (sections 97AA and 97E). These new sections provide for the setting of resource limits for every Health Authority and Primary Care Trust in addition to cash limits. Section 97AA concerns resource limits for Health Authorities; Section 97E concerns resource limits for Primary Care Trusts. Section 97AA(2) provides for general Part II expenditure to be excluded from the resource limit.
28. Subsection (3) inserts a new subsection (2A) into section 97AA of the 1977 Act. This allows the Secretary of State to take account of general Part II expenditure in setting the resource limits for Health Authorities, mirroring the new subsection (3AA) of section 97 which allows the Secretary of State to take account of general Part II expenditure in determining the amount to be allotted to a Health Authority.
29. Subsection (5) inserts a new subsection (2A) of section 97E into the 1977 Act. This allows a Health Authority to take account of general Part II expenditure in setting the resource limits for its Primary Care Trusts, mirroring the new subsection (1A) of section 97C which allows the Health Authority to take account of general Part II expenditure in determining the amount to be allotted to each of its Primary Care Trusts.
Clause 2: Payments relating to past performance30. Clause 2 amends the existing provisions of section 97 of the 1977 Act which enable the Secretary of State and the National Assembly for Wales to increase the initial allocation each of them makes to a Health Authority, where that Authority has satisfied certain conditions. This enables the Secretary of State to make payments to Health Authorities based on their past performance. The existing section 97(3C) provides that the Secretary of State may make such increases where a Health Authority has in any preceding year satisfied objectives which have been notified to Health Authorities in advance.
31. The new subsection (3C) enables the Secretary of State and the National Assembly for Wales to increase an Authority's allocation not only where it has satisfied objectives, but also where it has performed well against performance criteria. Although the Secretary of State must notify the Authority of such criteria in advance, he does not have to notify them of the method by which performance will be measured.
32. Under the existing section 97(3C), the Secretary of State and the National Assembly for Wales can only make increases to Health Authority allocations based on performance in preceding financial years. The new subsection (3C) enables the Secretary of State to make such increases on the basis of performance over a period which has been notified to the Authority in advance, whether it consists of, or any part of, a preceding year or any part of the current financial year.
33. Clause 2(3) amends section 97(3D), which provides that a Health Authority is notified of an objective if the objective is specified or referred to in a notice given to Health Authorities by the Secretary of State. The amendment means that the Secretary of State may specify or refer to objectives, criteria or periods in a notice given to an individual Health Authority, rather than a notice to all Authorities.
34. The NHS Performance Fund will be allocated according to a traffic light system. "Green" organisations will have access to their share of the National Performance Fund as of right. "Yellow" health authorities, NHS trusts and primary care groups/trusts will be required to agree plans, signed off by the regional office, setting out how they will use their share of the fund. "Red" organisations will have their share of the fund held by the new Modernisation Agency. They will get their fair share of extra funds but it will come with strings attached and the Agency will oversee spending.
Clause 3: Supplementary payments to NHS trusts and Primary Care Trusts35. Clause 3 enables the Secretary of State and the National Assembly for Wales to make payments to NHS trusts and Primary Care Trusts directly, or through Health Authorities, outside the existing arrangements for funding such bodies. In particular it enables payments to be made to NHS trusts other than under NHS contracts and to Primary Care Trusts other than under NHS contracts or the provisions of section 97C of the 1977 Act (Health Authority allocations to Primary Care Trusts). This will facilitate direct payments to NHS trusts and Primary Care Trusts.
36. These supplementary payments may be made through Health Authorities rather than directly to trusts. Under section 16C of the 1977 Act (as inserted by section 12 of the Health Act 1999), the Secretary of State may direct Health Authorities to exercise his powers under the new paragraph 5A of Schedule 3 to the 1990 Act (NHS trusts) and/or section 97C(5A) of the 1977 Act (Primary Care Trusts). The Secretary of State would be able to control how Health Authorities made these supplementary payments to trusts by giving directions under section 17 of the 1977 Act.
37. Under current arrangements, the Secretary of State for Health makes allocations to Health Authorities under section 97 of the 1977 Act. He can direct that particular sums must be applied for the purpose of making payments to NHS trusts, but such payments are then made under "service level agreements" (i.e. NHS contracts). In relation to Primary Care Trusts, if the Secretary of State attaches conditions as to how sums are to be spent when allocating an amount to a Health Authority, the Health Authority can attach those conditions when allocating part of that amount to a Primary Care Trust (see section 97C(5) of the 1977 Act).
38. These existing arrangements may not be appropriate for supplementary payments to NHS trusts and Primary Care Trusts, for example where the Secretary of State wishes to make payments to trusts specifically for rewarding their staff performance and/or improving facilities. The clause is intended to provide for a more efficient resource allocation route to NHS trusts and Primary Care Trusts for such supplementary payments, that will exist alongside income from NHS contracts or in the case of Primary Care Trusts, Health Authority allocations.
Clauses 4: Public Private Partnerships39. This clause will insert a new section 96C into the National Health Service Act 1977 to provide for the Secretary of State and the National Assembly for Wales to participate in public-private partnerships with companies that provide facilities or services to persons or bodies carrying out NHS functions. As with various other powers of the Secretary of State under the 1977 Act, these new powers could be delegated to Health Authorities, and through them to Primary Care Trusts, and to Special Health Authorities. The intended first use of this new power is the establishment of NHS LIFT (NHS Local Investment Finance Trust) which will be set up to invest in primary care premises.
40. Subsection (1) of the new section 96C provides for the Secretary of State to form or participate in forming companies to provide facilities or services to:
- any person providing services or any body exercising functions under the NHS Act;
- NHS trusts (who exercise functions under the NHS and Community Care Act 1990).
41. Subsection (2) provides that the Secretary of State may invest in companies providing such facilities or services or provide loans or guarantees or make other financial provision.
42. Subsection (3) provides that the powers are exercisable irrespective of whether the company also provides facilities or services to other persons or bodies or to persons or bodies, for example pharmacists, whose activities are not solely confined to the NHS.
43. Subsection (4) defines "companies" and "facilities".
44. Subsection (5) makes clear that the inclusion of section 96C is without prejudice to any other powers of the Secretary of State.
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| © Parliamentary copyright 2000 | Prepared: 21 December 2000 |