House of Commons - Explanatory Note
Health And Social Care Bill - continued          House of Commons

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Clause 5: Income Generation

45. The purpose of this clause is to enable the Secretary of State and the National Assembly for Wales and other NHS bodies exercising "income generation" powers under section 7 of the Health and Medicines Act 1988 to form, invest in and otherwise make financial provision in relation to companies. Section 7 of the 1988 Act confers powers under which the Secretary of State and the National Assembly for Wales may carry out a wide range of commercial activities, such as the supply of goods and services and the exploitation of intellectual property, in order to increase the funds available for improving the health service. This is subject to the proviso that such activities do not interfere with the performance of any duties under the Act or operate to the disadvantage of patients. The Secretary of State may authorise bodies established under the NHS Act 1977 to exercise these powers subject to any directions he might give. NHS trusts are given the same income generation powers by virtue of paragraph 15 of Schedule 2 to the NHS and Community Care Act 1990.

46. Subsection (7A) would be inserted into section 7 of the 1988 Act so as to provide for the formation of, the investment in and the making of financial provision in relation to companies where that was calculated to facilitate or be conducive to, or be incidental to, the exercise of, income generation powers.

47. Subsection (7B) defines "company" and makes clear that the inclusion of the new subsection would be without prejudice to anything else in that section or to any other powers of the Secretary of State.

Terms of employment of health service employees

Clause 6: Terms and conditions of employment by certain health service bodies

48. This section provides for the Secretary of State and the National Assembly for Wales (for Wales) to make regulations and give directions to certain health service bodies about the terms and conditions on which they employ staff and generally in connection with matters concerning the employment of staff. The NHS Plan commits to modernisation of the NHS Pay system to deliver better, fairer awards for staff. This new power is designed to ensure that NHS bodies implement changes to terms and conditions of staff approved by the Secretary of State.

49. Subsection (1) amends paragraph 10(1) of Schedule 5 to the 1977 Act to provide for Health Authorities and Special Health Authorities to pay their officers such remuneration and allowances, and employ them on such other terms and conditions, as they may determine subject to any regulations made or directions given by the Secretary of State or the National Assembly for Wales. Paragraph 10(1) is also amended to provide for regulations or directions to make provision with respect to any matter connected with the employment of the Authority's officers.

50. Subsection (2) replaces paragraphs 8 and 11(2) of Schedule 5A to the 1977 Act with provision to the effect that Primary Care Trusts may pay their officers such remuneration and allowances, and employ them on such other terms and conditions, as they think fit but subject to regulations or directions by the Secretary of State or the National Assembly for Wales about those matters or otherwise in connection with the employment of such officers. Before making any such regulations the Secretary of State or the National Assembly for Wales (for Wales) would be required to consult representatives bodies.

51. Subsection (3) makes similar provision in relation to NHS trusts.

Scrutiny of health service provision


52. The government's intention is to give patients a new role in the NHS and to enable much patients to have more influence in the management and development of NHS services and how the NHS operates. The government's proposals are set out in chapter 10 of the NHS Plan.

53. Clauses 7 -15 provide for a new system of patient and public consultation and involvement in the operation of the NHS. Patients' Forums will be established for each NHS trust and Primary Care Trust in England. The Patients Forum will ensure that patients' views are taken into account in the development and operation of local health services. Each Patients' Forum will appoint a Non Executive Member to sit on the Board of its corresponding Trust, taking patients' views into the heart of NHS decision making. Local authority Overview and Scrutiny Committees will scrutinise the NHS including decisions on NHS reorganisations and service change.

54. The new arrangements are to be supplemented by two new non-statutory arrangements, Patient Advocacy and Liaison Services (PALS) and Independent Local Advisory Forums (ILAFs). PALs will be a new trust based service able to assist and support patients. They will be able to provide information and resolve problems and difficulties. It is intended that they will be situated in or near main reception areas of hospitals and act as a welcoming point for patients and carers. The PALS service will also advise patients on how to access independent advocacy commissioned by the local Health Authority to support any formal complaints. ILAFs will be established for every Health Authority in England. They will provide independent advice to the Health Authority in determining the health priorities for the area. ILAFs will be made up of residents from the local area and will include representatives from the local Patients' Forums.

55. These new arrangements take over and add to the functions currently carried out by Community Health Councils (CHCs). CHCs in England will therefore be abolished.

Clause 7: Functions of Overview and Scrutiny Committees

56. This clause provides for local authority overview and scrutiny committees to exercise new functions in relation to the NHS and NHS bodies. In particular, it enables such a committee to review and scrutinise the operation of the health service in its area.

57. Local authority overview and scrutiny committees (OSCs) are to be established under section 21 of the Local Government Act 2000. These committees are part of the arrangements for local authorities under Part II of that Act. Under these arrangements, local authorities may establish an executive to perform particular functions and to implement the plans and policies approved by the authority. The executive may take one of three forms -

  • an elected mayor and cabinet executive consisting of 2 or more councillors;

  • a council leader and cabinet executive consisting of 2 or more councillors;

  • an elected mayor and an officer of the authority appointed as the council manager.

58. The overview and scrutiny committee is made up of councillors who are not members of the executive. The committee's functions are to review and scrutinise the decisions and other actions of the executive or the authority itself, and to make reports or recommendations to the authority or executive with respect to the discharge of functions by the executive or authority. In addition, the committee may make reports and recommendations to the authority or executive on matters which affect the authority's area or its inhabitants.

59. Subsection (1) confers on some of these committees the additional functions of reviewing and scrutinising health service matters and making reports and recommendations to NHS bodies on such matters. These functions will not be conferred on all overview and scrutiny committees; the provisions only apply to committees of county councils, county borough councils in Wales, unitary authorities and London borough councils (see subsection (2)). These are the authorities that also hold responsibility for Social Services.

60. The detail of how the committees are to operate and the matters which they may review and scrutinise are to be set out in regulations under subsection (3). It is intended that their functions will include referring contested proposals to the Secretary of State on the grounds of process and merit. HAs would be required to consult OSCs on major service changes and Chief Executives of local NHS bodies will be required to attend OSC meetings at least twice a year.

61. Subsection (4) allows for regulations to set up joint overview and scrutiny committees. A joint overview and scrutiny committee might be set up where more than one local authority covers one health authority area.

62. OSCs will scrutinise not only health services, but also social care provided or commissioned by NHS bodies exercising local authority functions under arrangements under section 31 of the Health Act 1999. OSCs may scrutinise local authority social services under the existing provisions of the Local Government Act 2000.

Clause 8: Overview and scrutiny committees: exempt information

63. As local authority committees, overview and scrutiny committees are subject to section 100A of the Local Government Act 1972, which provides that councils and their committees must be open to the public except to the extent that they must be excluded under section 100A(2) (where certain confidential information may be disclosed) or may be excluded under section 100A(4) (exclusion by resolution of the council or committee, if certain "exempt information" may be disclosed). The categories of exempt information are set out in Schedule 12A to the Act. Clause 8(2) of, and Schedule 1 to, the Bill extend the categories of exempt information, where an overview and scrutiny committee is dealing with NHS matters. As with the categories of exempt information in the Local Government Act 1972, the Secretary of State may add to, or remove provisions or otherwise amend the list by making an order (clause 8(4) and (5)).

Clause 9: Public involvement and consultation.

64. Clause 9 confers on each Health Authority, Primary Care Trust and NHS trust a new statutory duty to make arrangements with the aim of involving patients and the public in the planning and decision making processes of that body, in so far they affect the operation of the health services for which the body is responsible. In relation to Health Authorities, this would cover both the hospital and community health services for which they are responsible and the family health services provided by practitioners in their area.

Clause 10: Establishment of Patients' Forums

65. The NHS Plan set out the new arrangements for involving patients and the public in the way the NHS is run. Central to this are Patients' Forums. They will be independent bodies established for each Primary Care Trust and NHS trust in England. Their main role will be to provide direct input from patients into how local NHS services are run to NHS trusts and Primary Care Trusts.

66. Clause 10 requires the Secretary of State to establish a Patients' Forum for each trust in England and sets out their functions, which include monitoring and reviewing the services for which the trust is responsible, representing patients' views to their trust, giving advice to the trust about matters relating to their services (having regard to those patients' views) and making available to patients information about those services provided or arranged by the trust. A Forum established in relation to a Primary Care Trust also has the function of monitoring and reviewing the services provided by, or arranged by, the trust's Health Authority for the persons for whom the trust is responsible; this would include GP and other family health services. Such a Forum will give advice and make recommendations and reports to that Health Authority. Finally, the Secretary of State may by regulations confer additional functions on Forums.

67. In the case of a Care Trust (see Part III of the Bill) or other trust exercising local authority functions under arrangements with a local authority under regulations under section 31 of the Health Act, the Forum will monitor the services provided in the exercise of those functions, eg. social care services, as well as health services. (see subsection (5)).

Clause 11: Patients' Forums: entry and inspection of premises

68. Clause 11 allows Secretary of State to make regulations requiring Health Authorities, Primary Care Trusts, NHS Trusts or providers of family health services (eg. GPs, pharmacists, dentists and opticians) to allow authorised members of Patients' Forums to inspect premises owned or controlled by them. The requirement to allow access will be limited to the cases and circumstances set out in regulations and subject to any limitations or conditions specified in those regulations.

69. It is proposed that authorised members of each Forum will enter and inspect the premises where services are provided to persons for whom their trust is responsible. Access will generally be limited to areas where patients are permitted access (including consulting or treatment rooms) and to reasonable times agreed, in most cases, with the occupier. In relation to Forums for Primary Care Trusts, access will cover GP premises, as well as trust premises at or from which hospital or community health services are provided. The Forum would inspect the premises for the purpose of monitoring and reviewing services; in particular, it is proposed that they would consider matters such as the ease of physical access to premises or services, the quality of information provided to patients (eg. signs and leaflets) and the quality of the facilities provided to patients (eg. catering and toilet facilities). Forums will not be able to access confidential information such as medical records.

Clause 12: Patients' Forums: annual reports

70. Patients' Forums will be required to produce annual reports of their activities after the end of the financial year. This should then be submitted to the Forum's trust and the Secretary of State. The Forum must include a section that shows how it obtained the views of patients during the year.

Clause 13: Patients' Forums: supplementary

71. This clause enables the Secretary of State to make further provision for Forums, concerning in particular funding, membership and appointments arrangements, payments for members, and premises and staff.

72. It is proposed that regulations will provide for members of the Forum to be drawn equally from local patient and voluntary groups, and half drawn from the respondents to the trusts annual survey. Members of the public that are appointed to the forum must either have been treated by the NHS Trust/Primary Care Trust or be currently receiving care from the Trust.

73. Subsection (4) provides for a member of the Patients' Forum to be appointed to the Primary Care Trust board.

74. Subsection (5) provides for the Patients' Forums of an NHS trust to appoint one of the Non Executive Directors on the Board of the NHS trust.

Clause 14: Abolition of Community Health Councils in England

75. Subsections (1) and (2) provide for the abolition of CHCs in England. This is an NHS Plan commitment.

76. Paragraph 5 of Schedule 7 to the 1977 Act provides that the Secretary of State may by regulations provide for the establishment of a body to advise and assist CHCs. The National Health Service (Association of Community Health Councils) Regulations (S.I. 1977/874), made under that paragraph, established the Association of Community Health Councils for England and Wales ("ACHCEW"). Subsection (3) provides for the abolition of that body, but subsection (4) ensures that the National Assembly for Wales may continue to exercise the power in paragraph 5 and establish a new body to advise and assist CHCs in Wales.

77. Subsection (5) provides for the transfer of liabilities of CHCs that may fall on individual members. There may be associated rights. Unlike CHCs, ACHCEW has its own property and there is provision for this and any rights and liabilities of ACHCEW to be transferred. Any such transfer must be to a person listed in subsection (6) or, in the case of ACHCEW, to the National Assembly for Wales (for Wales). Under subsection (7), transfers from ACHCEW require consultation with the Assembly.

Clause 15: Power to abolish Community Health Councils in Wales

78. Clause 15 deals with arrangements in Wales for the abolition of CHCs.

79. Subsection (1) confers an order making power on the National Assembly for Wales enabling it to abolish CHCs in Wales by order. It gives the Assembly the option of retaining or abolishing CHCs should that be the outcome of the consultation exercise being conducted by the Assembly. In addition, under paragraph (b), the Assembly will be able to make the same provision for the transfer of liabilities of CHC members as the Secretary of State may make under clause 6(5) of the NHS Act 1977.

80. An order under subsection (2) may provide for amendments to be made to existing legislation as a consequence of the abolition of CHCs in Wales; for example the repeal of section 20 in so far as it applies to Wales.

Intervention powers

Clause 16: Intervention orders

81. Management of the NHS will move to a system of earned autonomy. Good performance will be rewarded and failure tackled swiftly and effectively. Clause 2 provides for the performance payments that will help underpin this new system. Clause 16 provides for new intervention powers to provide a sanction against the most serious and persistent failures. Early identification of poor performance through performance management and the new Traffic light system, backed up by support from the NHS Executive Regional Office and the Modernisation Agency should mean that performance can be improved in most cases without resorting to formal intervention orders.

82. The purpose of this clause is to enable the Secretary of State to intervene in an NHS body (Health Authorities, Special Health Authorities, Primary Care Trusts and NHS trusts) where he has concerns about the management of that body, its ability to perform its functions adequately (for example, to deliver health care to the required standard) or where there has been a one off catastrophe. This new power will complement the performance fund in delivering the NHS Plan commitment to drive up performance in the NHS.

83. Clause 16 inserts new sections 84A and 84B into the 1977 Act. Section 84A enables the Secretary of State to make an intervention order in respect of a Health Authority, Special Health Authority, NHS trust or Primary Care Trust. Subsection (1) sets out the test that must be satisfied before he may intervene using such an order. The test would enable the Secretary of State to intervene if he was satisfied, for example, that an NHS trust was failing to provide health services to an adequate standard. The Secretary of State would however not be restricted to intervening where there was a failure to provide adequate health services; he may also intervene where the body concerned is not being properly administered or managed. The Secretary of State must also be satisfied that the form of intervention provided for under these new provisions is appropriate; for example, he may be satisfied that replacing the board of an NHS trust, permanently or temporarily, is the appropriate way to ensure that the body's performance is substantially improved.

84. Section 84B sets out the effect of an intervention order and the different forms the intervention may take. The first form of intervention (subsections (1) to (3)) is that members of the body concerned (ie the members of Health Authorities, Special Health Authorities and Primary Care Trusts, and the directors of NHS trusts) may be suspended or removed from office, and new individuals appointed in their place. The members of a body are responsible for how that body is managed; by replacing existing members with the new members, it will enable changes to be made in the way an individual body is managed. Under these provisions, the Secretary of State has a wide range of options: he may remove all the members, or only some; he may suspend members from all their board duties, or only in respect of some duties.

85. The second form of intervention (subsection (5)) will enable the Secretary of State to require an NHS body to make arrangements for some other person or body to perform that NHS body's functions. Alternative expressions of interest will be selected from an approved list. Although the functions were performed by that other person or body, the NHS body would remain legally responsible for that functions - for example, an NHS trust would retain overall responsibility for managing its hospital and providing services. The Secretary of State may also direct how functions are to be performed so as to achieve particular objectives. These two forms of intervention may be combined (see section 84A(3)).

86. Clause 16(2) provides that intervention orders under these provisions are not statutory instruments.

Abolition of medical practices committee and NHS tribunal

Clause 17: Abolition of Medical Practices Committee (MPC)

87. Clause 17 abolishes the MPC and transfers the function of declaring GP vacancies to Health Authorities. This clause should be considered alongside clause 1, which provides for Health Authority allocations to be determined with reference to both their general allocations and Part II general expenditure in their area. This effectively provides a new resource based method of control over the distribution of GPs and will ensure that health authorities with a shortage of GPs will now be given sufficient allocations to attract more GPs. The result of this will be a more equitable distribution of GPs.

88. The MPC is constituted under sections 7 and 34 of the 1977 Act. Its main function is to distribute the general practitioner workforce in England and Wales. Essentially it controls the numbers of general medical practitioners wishing to provide GMS in Health Authority areas. This function will be taken on by Health Authorities, so clause 17 provides for the abolition of the MPC. Sections 7 and 34 of the 1977 Act are therefore repealed in Schedule 5 to the Bill.

89. Subsection (2) provides for the transfer to the Secretary of State of all property, rights and liabilities relating to the MPC including certification regarding the sale of medical practices. This includes certification relating to the sale of goodwill.

Clause 18: Vacancies for medical practitioners

90. Clause 18 provides for regulations enabling Health Authorities to determine the existence, and filling, of vacancies in their area for GPs under GMS and requiring them to undertake consultation before making their determinations.

91. Subsection (3) provides for a right of appeal against a decision of a Health Authority as to how a vacancy is to be filled to the Family Health Service Appeal Authority. The existing right of appeal is to the Secretary of State.

92. Clause 18 alongside Clause 1 provides for a new method of controlling the distribution of GPs. Health Authorities will have the power to declare vacancies under GMS, but GMS expenditure within the Health Authority area will be taken into account when determining the allocation of funds to that Health Authority. This is expected to lead to a more equitable distribution of GPs and health resources.

Clause 19: Abolition of NHS Tribunal

93. Clauses 22 to 27 introduce a new system whereby all practitioners working in family health services will be required to be on the list of a health authority and for decisions about the removal and suspension of such practitioners from these lists to be taken by Health Authorities. The aim is that this will lead to faster and more effective decisions being taken where there are doubts about the ability of practitioner to practice. Consequentially, The NHS Tribunal will therefore no longer be needed. Clause 19 provides for the NHS Tribunal to be abolished. Sections 46 to 49E and Schedule 9 to the 1977 Act (which relate to its constitution and functions) are repealed in Schedule 5 to this Bill.

General and personal medical services, general dental services, general ophthalmic services and pharmaceutical services

Clause 20: Remuneration of General Medical Practitioners

94. Clause 20 ends the requirement under 29(4) of the 1977 Act that the majority of remuneration of GPs should have reference to the number of patients the GP has undertaken to provide services under General Medical Services (GMS). The NHS Plan sets out the Government's intention to renegotiate the GMS contract to provide a greater emphasis on quality and improved outcomes for patients.

Clause 21: Out of Hours medical services

95. GPs undertake 24 hours responsibility for patients. GPs may discharge this in a number of ways: by providing the service personally; in a rota with other practices; joining a GP co-operative; by employing a commercial deputising services established for the purpose of providing an out-of-hours service for GPs; or a combination of two or more of these.

96. Clause 21 provides powers to regulate the provision of out-of-hours services. The body to be regulated is any body or organisation providing out-of-hours cover to GPs that will have to be accredited by a Health Authority. Accreditation is intended to ensure the delivery of out of hours GP patient care to consistent high quality standards. This was recommended in the independent Report Raising Standards for Patients, New Partnerships in Out of Hours Care which considered how consistent high quality services could be made available across the country. Concern had also been expressed by the Health Services Commissioner (the "Ombudsman") about the quality and responsiveness of out-of-hours services provided in some areas.

97. Regulations will prescribe the procedure for applying for accreditation and any conditions with which accredited bodies must comply. They may also provide for the withdrawal or suspension of approval by Health Authorities.

98. Once this clause has come into force, existing powers under the 1977 Act and the 1997 Act will be used to effect consequential changes to the Terms and Conditions of Service for GPs and to the Directions for the Implementation of Personal Medical Services to ensure that GPs use only accredited providers of out-of-hours services.

Clause 22: Unsuitability for inclusion in medical, dental, ophthalmic and pharmaceutical lists

99. Health Authorities are already required by Part II of the 1977 Act to maintain lists of all practitioners who provide GMS, GDS, GOS and PhS in their area. These are known respectively as the principal medical, dental, ophthalmic and pharmaceutical lists. Clause 22 provides new powers for Health Authorities to refuse a practitioner admission to the appropriate list on the grounds of unsuitability.

100. Subsection (2)(a) amends section 29B of the 1977 Act to provide for regulations giving Health Authorities discretion to grant or refuse an application from a medical practitioner to fill a vacancy if the applicant is considered to be unsuitable to work in the provision of general medical services. Subsection (2)(b) provides for a right of appeal, by re-determination, to the Family Health Service Appeal Authority (FHSAA) against such a decision by a Health Authority.

101. Subsections (3), (4), (5) and (6) provide for similar regulatory powers giving Health Authorities discretion to grant or refuse an application from practitioners for admission to the relevant dental, optical and pharmaceutical lists on the grounds of unsuitability and for the criteria governing unsuitability to be specified in regulations. A right of appeal, by re-determination, to the FHSAA is also provided.

Clause 23: Dental Corporations

102. Clause 23 enables Health Authorities to make arrangements with dental corporate bodies to provide general dental services (GDS) as well as with individual dental practitioners.

103. Subsection (2)(a) amends section 35 of the 1977 Act to make provision for Health Authorities to arrange for the provision of GDS by dental corporations as well as dental practitioners. Subsection (2)(c) introduces the definition of 'dental corporation' as a body corporate which carries on the business of dentistry within the meaning of section 40 of the Dentists Act 1984 (i.e. to receive payments for providing dental treatment).

104. Subsection (3) amends section 36 of the 1977 Act which enables regulations to be made about the delivery of GDS. Subsection (3)(a) provides for such regulations to empower Health Authorities to include dental corporations in their list of those undertaking to provide GDS. Subsection (3)(b) confers a right on dental corporations to be included in that list subject to certain conditions. Subsection (3)(d) provides for the removal of dental corporations from the Health Authority list in the event that the body never provides, or ceases to provide, GDS in that area.

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Prepared: 21 December 2000