House of Commons - Explanatory Note
National Health Service Reform And Health Care Professions Bill - continued          House of Commons

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Clause 40: Short title, interpretation, commencement and extent

183.     Clause 40 gives the short title of the Act and makes provisions for commencement and extent. It provides that all sections of the Act will be brought into force by order made by statutory instrument except clauses 36 to 40 and those conferring order or regulation-making powers on the Secretary of State which will come into force on Royal Assent. Subsections (2) and (3) also contain definitions of certain terms used in the Act.


184.     None of the provisions in this Bill will entail significantly increased public spending. The arrangements set out in the Bill on patient and public involvement in the NHS will necessitate some increase in expenditure. This will, however, in part serve to support a significant increase in volunteer input, and, over time this is forecast to bring about a reduction in costs. Separately, the transfer of functions and funding from Health Authorities will result in public money being channelled in different ways, but the levels of overall spending will remain unchanged. The new functions of CHI as a non-departmental public body will result in some increase in expenditure and manpower.

185.     The effect of the Bill on public service manpower will not be to increase or reduce it, but the changes in the structure of the NHS will result in some movement of manpower, principally from HAs to PCTs as the planning and commissioning of health care moves to a more local level.

Part 1 - the National Health Service

186.     The changes outlined in clauses 1 to 4 (Health Authorities and Primary Care Trusts) should release savings through reductions in bureaucracy. There will also be significant savings in management over time. These changes are likely to result in a movement of manpower, but not significant increases or decreases.

187.     The changes to Local Representative Committees outlined in clause 5 will not result in any changes in public sector financial or manpower costs.

188.     No adverse cost impact is foreseen as a direct consequence of the enabling legislation that will allow Local Health Boards to be established in clause 6. This will be reviewed by the National Assembly when passing the necessary subordinate legislation.

189.     The provisions in clauses 7 to 10 about the funding of Strategic Health Authorities, PCTs and LHBs and the expenditure of NHS bodies will not, of themselves, have any impact on either public finances or manpower. These changes in the methods of funding health service bodies are a direct result of the changes in structure outlined above.

190.     There will be some additional cost arising from the expansion of CHI's role (clauses 11 to 14). There will also be a slight increase in the wider public service manpower requirements, as CHI is a non-departmental public body.

191.     In clauses 15 to 20, the creation of Patients' Forums in each Strategic Health Authority will require some increase in public expenditure. This will be partly offset, however, by the funding allocated to CHCs and Patient Advocacy and Liaison Services (PALS) which totals £33 million.

192.     The provisions for joint working set out in clauses 21 and 22 will not have any financial or manpower costs.

Part 2 - Health Care Professions

193.     The creation of the Council for the Regulation of Health Care Professionals (clauses 23 to 27) will have negligible effects on manpower. There will be a small financial cost.

194.     The changes to the fitness to practise appeals procedures (clauses 28 to 32) and the extension of the Health Act 1999 section 60 powers in respect of the pharmacy profession (clause 33) will have no financial or manpower impact on the public sector.


195.     Of the measures within the National Health Service Reform and Health Care Professions Bill, it is expected that two will have a small impact on businesses and voluntary organisations. These are:

- Health and well-being strategies in Wales

- The Council for the Regulation of Health Care Professions

196.     It is difficult at this stage to quantify precisely the costs to these business, voluntary sector and charitable bodies of engagement in the development and implementation of local health and well-being strategies, as the final terms of engagement have not yet been determined. Some of the terms will be set out in National Assembly guidance after consultation, and some will be determined by partners at the local level. Costs are likely to arise from meetings and administration and the staff time, preparatory work and travel and subsistence costs associated with these activities. To some degree these costs can be off-set against the costs to these organisations of engagement in current more traditional consultation arrangements undertaken e.g. by Health Authorities on Health Improvement Programmes and local authorities on Social Care Plans.

197.     The regulation of health professions will affect the eight regulatory bodies for the health professions (see paragraph 128), and ensure that they become more accountable to the public and to the providers of health care and that their approach to regulation is justified and consistent. These measures will have a negligible cost impact on charities, voluntary organisations and businesses, including self-employed professionals. Professionals will continue to be regulated by their existing bodies but this new regulatory regime will be more transparent and accountable to the public and to the providers of health services.

198.     A full copy of the partial Regulatory Impact Assessment which accompanies the National Health Service Reform and Health Care Professions Bill and includes a more detailed analysis of the benefits and cost of the four measures above is available on the Department of Health's website:


199.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before second reading, about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). This statement has to be made before second reading. On 7 November the Secretary of State for Health made the following statement:

"In my view the provisions of the National Health Service Reform and Health Care Professions Bill are compatible with the Convention rights."


200.     Clause 40 makes standard provision for commencement. Some technical provisions of the Act and the powers to make regulations under itwill come into force on Royal Assent. The substantive provisions of the Act will come into force on such a day, or days, as the relevant authority may determine.


Outline of the existing law relating to the NHS

201.     The following paragraphs provide a brief description of the current legislative framework for the NHS. The legislative framework for the NHS in England and Wales is mostly set out in the National Health Service Act 1977 ("the 1977 Act"). This has been amended quite substantially by various enactments, notably by the National Health Service and Community Care Act 1990 ("the 1990 Act"), the Health Authorities Act 1995 ("the 1995 Act"), the National Health Service (Primary Care) Act 1997 ("the Primary Care Act"), the Health Act 1999 ("the Health Act") and the Health and Social Care Act 2001 ("the HSC Act").

202.     Under the 1977 Act, the NHS is essentially split into two different systems. There is first of all the system which consists primarily in the provision of health care in hospitals. It also covers those services described as "community health services", for example, the services provided by midwives or health visitors in clinics or individuals' homes, and the provision of medical services to pupils in state schools. This is the subject of Part I of the 1977 Act. The responsibility for securing the provision of these services to patients rests with the Secretary of State, although under his powers in section 16C (formerly section 13) of the 1977 Act he has delegated most of his functions to Health Authorities ("HAs"). HAs enter into arrangements with bodies known as NHS trusts for the provision by the trusts of hospital and community health services.

203.     The other main part of the NHS structure is what might be described as "the NHS in the High Street". This is dealt with under Part II of the 1977 Act. The professionals in question are general practitioners ("GPs")(i.e. family doctors), general dental practitioners ("GDPs"), ophthalmic opticians and ophthalmic medical practitioners, and chemists. They respectively provide what are termed general medical services (see section 29ff) ("GMS"), general dental services (see section 35ff) ("GDS"), general ophthalmic services (see section 38-40) ("GOS") and pharmaceutical services (see sections 41-43) ("PhS"). The remainder of Part II contains other provisions relevant to the provision of these High Street services, which are sometimes referred to as "family health services".

204.     The 1990 Act, the Primary Care Act, the Health Act and the HSC Act introduced a number of changes to these systems of health care although most of those in the HSC Act are not yet in force. Broadly speaking, these changes were as follows:

a)     the 1990 Act introduced what is known as the internal market; by creating a divide between the planning and purchase of Part I services, on the one hand, and the provision of those services, on the other;

b)     the Primary Care Act in effect enabled what were previously Part II services to be delivered, not under Part II, but under a more flexible system within Part I of the Act - these changes applied only to doctors and dentists, and not the other family health services practitioners; and

c)     the Health Act made a number of changes, but in particular provided for the abolition of GP fund-holding (introduced by the 1990 Act), the establishment of Primary Care Trusts (a new type of NHS body to both commission and provide NHS care) and new arrangements to improve the quality of NHS services and co-operation between NHS bodies and local authorities;

d)     the HSC Act also made a number of different changes, but in particular provided for changes to the funding of NHS bodies, Local Authority scrutiny of NHS provision, changes to the system for filling vacancies for GPs, additional lists for Part II practitioners, the abolition of the NHS tribunal, the provision of "local pharmaceutical services" (similar to the Primary Care Act arrangements for PMS/PDS), and the establishment of "Care Trusts". As at 1st October 2001, none of these provisions, except for some of those relating to the funding of NHS bodies, have been brought into force.

205.     The two systems, Part I and Part II, are very different. It should be noted that despite the changes introduced by the Primary Care Act the provision of Part I services is distinct from the provision of services under Part II. The changes proposed in this Bill will not alter this divide.

206.     What follows is a more detailed description of the two systems.

Part I system: hospital and community health services

207.     The system provided for under Part I of the 1977 Act (and Part I of the 1990 Act - discussed below) is the system under which all of the NHS, apart from family health services, is provided, including its hospitals. The core duty is laid upon the Secretary of State (1977 Act, section 1) in extremely broad terms, supplemented by the provisions of sections 2 to 5. It is these provisions which define Secretary of State's overarching responsibilities to provide health services under a comprehensive health service. They are broad powers and thus frequently the legislative source for functions which have in practice, been delegated to health service bodies such as Health Authorities.

208.     Section 3 sets out those general services which it is the Secretary of State's duty to provide to such extent as he considers necessary to meet all reasonable requirements. Most of the services which may described as hospital and community health services are included under this section.

209.     Section 5(1) and (1A) impose duties on the Secretary of State to provide medical and dental services to state school pupils. This is the basis for what is described as the school nursing service.

210.     Section 2 confers wide ranging powers for the Secretary of State to provide such services as are appropriate to discharge any duty imposed on him by the Act (including his general duty under section 1), and to do any other thing whatsoever which is calculated to facilitate, or is conducive or incidental to, the discharge of such a duty. Further miscellaneous powers relating to specific matters are conferred by section 5(2) (for example, the conduct and assistance of research and development (section 5(2)(d)).

211.     Sections 8 to 18 of the 1977 Act go on to provide for the administration of the NHS. These sections have been substantially amended since 1977, most recently by the Health Act. As amended, they provide for the setting up of HAs (section 8), Special Health Authorities ("SHAs") (section 11) and Primary Care Trusts ("PCTs") (section 16A, as inserted by section 2 of the Health Act). HAs, SHAs and PCTs are independent statutory bodies, although their membership is determined in accordance with regulations (and in the case of SHAs, the establishment order) and some of the appointments to their membership are made by the Secretary of State. HAs and PCTs are established for territorial purposes. Each HA is established for such area of England and Wales as set out in the establishment order made under section 8; the entire area of England and Wales is covered by HAs. Each PCT is established for the area specified in its establishment order under section 16A(3). Each PCT area is wholly contained within the area of a HA, but there is no requirement for total coverage. Some areas of England are covered by PCTs and the rest should be by April 2002; There are no PCTs in Wales, as the relevant provisions of the Health Act have never been brought into force in relation to Wales. SHAs are established for specific functional purposes - they are established for the purpose of performing any functions of the Secretary of State which he may direct them to perform under section 16C.

212.     Legislation allows health service functions to be exercised by health service bodies in one of two ways. Functions are either directly conferred by the primary legislation or the person on whom they are directly conferred (either Secretary of State or a health service body) is permitted to delegate them to another health service body.

213.     The Secretary of State may direct a HA or SHA to exercise his functions. He may also direct a SHA to exercise the functions of a HA or a PCT. He thus has no power to direct health service bodies other than HAs or SHAs to exercise his functions (section 16D, formerly 13, of the 1977 Act). A HA may direct a PCT established in their area to exercise its delegable functions (section 17A, inserted by section 12 to the Health Act: section 17A(3) lists the excepted or non-delegable functions). The Secretary of State may direct HAs that delegable HA functions are or are not to be exercisable by PCTs, or are to be exercisable by PCTs to any specified extent (section 17A(4)). The Secretary of State may also give directions to a HA, SHA or PCT about the exercise of any of their functions (section 17). A HA may also give directions to a PCT about the exercise of any functions which the HA has directed the PCT to exercise (section 17B). These directions may be given by regulations or by instrument in writing (section 18). There is very little further prescription in primary legislation as to what the Secretary of State must do or how he must do it in relation to the provision of that part of the NHS which is not concerned with family health services. It will be seen that this way of providing services is a great deal more flexible than the regulatory system envisaged under Part II. There are probably historical reasons for this, but those reasons are no longer relevant.

214.     HAs may, in accordance with regulations and any relevant directions, delegate their functions (whether Part I or Part II) to each other, or to committees or others: see section 16 of the 1977 Act (as substituted by paragraph 9 of Schedule 4 to the Health Act). Similar provision is made for PCTs: see section 16B of the 1977 Act (as inserted by section 2(1) of the Health Act). Regulations have been made under both provisions.

215.     HAs and SHAs are funded under the provisions of section 97, as substituted by paragraph 47 of Schedule 1 to the 1995 Act and amended by section 36 of the Primary Care Act, by sections 4 and 8 of the Health Act and prospectively by sections 1 and 2 of the HSC Act. HAs are paid money in each year under section 97(1) and section 97(3). Section 97(1) concerns the remuneration of persons providing Part II services and is not cash-limited (in other words the Secretary of State must pay whatever it has cost the HA, and he cannot impose a ceiling on the expenditure). Under section 97(3) a HA is paid money not exceeding the amount allotted to them by the Secretary of State. This amount is allotted towards meeting their "main expenditure" which includes all expenditure attributable to the performance of their Part I functions, and all their administrative costs. The money paid in respect of Part I services is therefore ultimately cash-limited. To enforce the cash-limits set by the Secretary of State, HAs have various financial duties imposed upon them by section 97A of the 1977 Act (as substituted by paragraph 48 of the 1995 Act and amended by paragraph 23 of Schedule 2 to the Primary Care Act).

216.     PCTs are funded by HAs under section 97C of the 1977 Act, as inserted by section 3 of the Health Act and amended by section 3 of the HSC Act and prospectively amended by section 1 of the HSC Act. There is a similar distinction between cash-limited and non-cash-limited funding. Section 97C was amended by section 3(3) of the HSC Act so that in addition to HA allotments, the Secretary of State may make supplementary payments direct to PCTs. PCTs are subject to a set of financial duties similar to those for HAs (see section 97D, as inserted by section 3 of the Health Act and amended by section 3 of the HSC Act).

217.     Although funding for the remuneration of Part II practitioners is largely non cash-limited ("general Part II expenditure"), section 97(3AA) of the 1977 Act, as prospectively inserted by section 1(2) of the HSC Act, provides that in determining a HA allotment the Secretary of State may take into account the level of the HA's "general Part II expenditure". Similarly, section 97C(1A), as prospectively inserted by section 1(4) of the HSC Act, provides that in determining PCT allotments, HAs may take into account the distribution within their area of their general Part II expenditure.

218.     The cash-based system provided by sections 97, 97A, 97C and 97D has now been supplemented by a "resource-based" system provided for in sections 97AA and 97E, as inserted by sections 12 and 13 of the Government Resources and Accounts Act 2000 (c.20) and prospectively amended by section 1 of the HSC Act. These provide for the Secretary of State to set an annual limit on the use of resources by each HA and for HAs to set annual limits on the resources used by each of their PCTs.

Part II system: family health services

219.     The system provided for under Part II of the Act is quite different. The broad structure of the Part II system is similar for doctors, dentists, persons providing ophthalmic services and persons providing pharmaceutical services. This Annex first describes the existing system as it applies to doctors, and then if necessary describes any differences between that system and those relating to other professional groups.

220.     Under section 29 of the 1977 Act, it is the duty of each Health Authority ("HA") in accordance with regulations to arrange as respects their area with medical practitioners to provide "personal medical services" for all persons in the area who wish to take advantage of the arrangements. These services are described as "general medical services" ("GMS"). A principal feature of this system as it operates in practice is that (apart from certain exceptional cases) it is not the HA which itself provides the GMS; instead, it enters into separate statutory arrangements with independent practitioners for the provision of those services. GPs are therefore not (save in the exceptional circumstances referred to above, and which are not currently relevant) employees of the HA; they are independent professionals who undertake to provide GMS in accordance with the body of regulations governing that activity. Those regulations are currently the National Health Service (General Medical Services) Regulations 1992 (S.I. 1992/635) as amended ("the GMS Regulations").

221.     The remainder of Section 29 sets out certain things which must or may appear in the Regulations. Section 29A (inserted by section 32 of the Primary Care Act) prevents a Health Authority making arrangements with a doctor unless he is on a medical list, and sets out certain restrictions on who is eligible to be on such a list. Further requirements for being admitted to the list have been added by section 20 of the HSC Act 2001, but are not yet in force. Section 29B gives a regulation-making power for the filling of vacancies for doctors. These Regulations are the General Medical Services Regulations. The power was also extended by section 20 of the HSC Act. Section 30 deals with the matter of applications by medical practitioners to be included in what is known as the "medical list": that is, the list kept by each HA of GPs who provide GMS in its area. Sections 31 and 32 provide for each GP on a medical list to have undergone vocational training. Section 33 provides for the system for admitting GPs to medical lists. Section 34 provides for regulations to be made relating to the Medical Practices Committee ("MPC"), which has a role in admitting GPs to the medical list. The MPC is set up under section 7 of the 1977 Act. A new power for Regulations to enable Health Authorities to conditionally include doctors in the medical list is in the new section 43ZA prospectively inserted into the 1977 Act by section 21 of the HSC Act but not yet in force. Similar provision is made for all the professions.

222.     It is the duty of each HA in accordance with regulations to administer the arrangements made for the provision of GMS (and the other services): see section 15 of the 1977 Act. The HA must also perform such other management and other functions relating to those services as may be prescribed; and some such functions (which are not relevant here) have indeed been prescribed.

223.     In contrast to the Part I system, the duty to make the arrangements for these services is conferred directly upon HAs, rather than upon the Secretary of State. Nonetheless, in exercising functions under Part II, HAs may be the subject of Secretary of State directions issued under section 17 of the 1977 Act. HAs are able to delegate their Part II functions in accordance with regulations made under section 16 of the Act.

224.     Subject to any Secretary of State directions under section 17A(4) of the 1977 Act, HAs may direct PCTs to exercise their functions in relation to GMS, but not in relation to other Part II services (see section 17A(3) of the Act). The Secretary of State has directed HAs that they may delegate only a limited range of GMS functions to PCTs.

225.     This broad structure of the Part II system is similar for dentists, opticians, and chemists, but there are significant differences, most notably relating to chemists and opticians.

226.     The provision for dentists (section 35 of the 1977 Act) is in very similar terms to that for doctors in section 29, although it will be noted that the duty upon the HA is subtly different. In the case of doctors, the HA- must arrange for sufficient GMS to be provided for everybody in the area who wishes to take advantage of the arrangements. In the case of dentists this duty is not quite the same: the duty is not to arrange the provision of GDS for every-body in the area who wishes to have GDS, but rather to arrange with dentists in the area that any person for whom those dentists have under-taken to provide GDS receive the promised GDS. There is also no equivalent of the MPC to control the entry of GDPs to dental lists; and there is no equivalent of section 29(2)(c) of the 1977 Act (which provides for the assignment of patients to doctors). However, subject to that, the systems are by no means dissimilar: there exists a dental list of GDPs who undertake to provide GDS, there is a system of dental vocational training (although it has been introduced by regulations and not by primary legislation); the relationship between the HA and the GDP is (usually) again a statutory one between a HA and an independent professional. Unlike the case of GPs, how-ever, there is in regulations provision in the case of dentists for the employment of salaried dentists at health centres: these dentists are employed by the HA, and represent one of the rare occasions when it is the HA itself which provides the services in question via its employees.

227.     So far as chemists and opticians are concerned, opticians are provided for in section 38 of the 1977 Act, again according to the same scheme where-by the HA- makes statutory arrangements with independent practitioners (who, in this case, might be individuals or bodies such as companies). However, the range of services to be provided by opticians is very much smaller. The only content now surviving of general ophthalmic services ("GOS") is sight testing for children, for persons whose resources are less than their requirements, and for other prescribed persons. Section 39 is a regulation making power in respect of ophthalmic services, which has also been prospectively extended by section 20 of the HSC Act (not yet in force).

228.     More significant is the category of pharmaceutical services ("PhS"), provided for under section 41 of the 1977 Act. Again, the arrangements are made by HAs with independent persons or bodies; the system is governed by Regulations; but the duty this time is to arrange for the provision to persons who are present in the HA's area of drugs, medicines and listed appliances which are pre-scribed for them by health service doctors, dentists, or nurses, and of such other services as may be prescribed. So far as PhS are concerned, there are detailed Regulations (introduced by sections 42 and 43) relating to entry on to a pharmaceutical list.

229.     Additional pharmaceutical services may also be provided under section 41A of the 1977 Act, as inserted by the Primary Care Act. Such services are governed by Secretary of State directions, rather than by regulations, as for PhS under section 41. A HA is only under a duty to make arrangements for such additional services where required to do so by direction.

230.     Sections 43A and 43B of the 1977 Act, as substituted by section 10 of the Health Act, provide a structure for the remuneration of persons providing Part II services. Section 10 of the Health Act has, however, yet to be brought into force. Neither have the original sections 43A and 43B inserted by the Health and Social Security Act 1984 (c.48) been commenced. In effect the original sections inserted by the 1984 Act must be complied with because of section 7 of the Act, which provides that a determination of remuneration made before the coming into force of those provisions is deemed to be validly made if regulations authorising it could have been made had that provision been in force at that time. It is therefore not open to the Secretary of State or anyone else to make a determination which is inconsistent with the provisions of sections 43A and 43B as inserted by the 1984 Act. What in fact happens is that the Secretary of State makes and publishes a determination for each of the professions, which takes the form of the separate document referred to in each of the sets of regulations governing the four professions. These determinations therefore have the force of law, although they are not subject to any further degree of formality or Parliamentary procedure. The revised version of sections 43A and 43B, substituted by section 10 of the Health Act, were intended to provide a new framework to govern the remuneration of Part II practitioners, but have yet to be brought into force.

231.     Each profession has in each HA area a local representative committee (called the Local Medical Committee, the Local Dental Committee, and so on). These represent local practitioners and are provided for under sections 44 and 45 of the 1977 Act.

232.     Practitioners may be removed or suspended from the list in which their names are included by the NHS Tribunal, which is provided for under sections 46 to 49 of the 1977 Act. These sections were extensively amended by the Nation-al Health Service (Amendment) Act 1995 (c.31), section 40 of the Health Act and, prospectively, by the HSC Act. A decision has been taken that section 40 of the Health Act will not be brought into force as it has been overtaken by the HSC Act amendments. The HSC Act repeals the provisions relating to the Tribunal. Section 25 inserts new sections 49F to 49R. These provide for Health Authorities to remove doctors on prescribed grounds, or contingently remove them i.e. provide they will be removed unless they comply with certain specified conditions. Health Authorities may also suspend doctors in certain circumstances. There is provision for review of Health Authority decisions and for appeal to a new statutory body, the FHSAA. The FHSAA is set up by section 49S of the 1977 Act, inserted by section 27 of the HSC Act. It is constituted in accordance with new Schedule 9A. This new body may turn a local removal from a particular Health Authority list into a national disqualification, that prevents any Health Authority from including them in their list. Section 27 of the HSC Act was partially commenced on 1st October 2001 for the purposes of constituting the Family Health Services Appeal Authority and for making rules or regulations in respect of it. For other purposes, it is to be commenced on 1st December 2001 (see S.I. 2001/3294). Section 25 has not yet been commenced.

233.     The remainder of Part II contains a number of miscellaneous provisions. These include some additional functions for Health Authorities introduced by the HSC Act, but not yet in force. There is power in Regulations to provide for Health Authorities to keep additional lists:

a) the supplementary list of doctors who assist in the provision of General Medical Services i.e. not GP principals (section 43D of the 1977 Act inserted by section 24 HSC Act). Similar provision is made for all the professions;

b) a list of persons who exclusively provide out of hours GP services (section 18 of the HSC Act);

c) receiving declarations from practitioners as to their financial interests, gifts and other benefits received (section 29(5A) of the 1977 Act, inserted by section 23 HSC Act).

234.     The funding of these services is effected through section 97 of the 1977 Act, as substituted by the 1995 Act, Schedule 1, paragraph 47, and amended by section 36 of the Primary Care Act and section 4(2) of the Health Act and prospectively by section 1(2) of the HSC Act. Section 97 must be read in conjunction with Schedule 12A to the 1977 Act, as inserted by section 4(1) of the Health Act. Section 97(1) and paragraph 1(1) of Schedule 12A provide for the remuneration of family health services practitioners in so far as it does not fall within paragraph 1(2) of Schedule 12A. Those paragraphs provide for:

a) the reimbursement of certain designated expenses (which also counts as "remuneration");

b) remuneration referable to the costs of drugs (i.e. that which is paid to pharmacists to reimburse them for the cost of drugs dispensed by them on the orders of GPs);

c) remuneration of chemists providing certain designated additional pharmaceutical services under section 41A of the 1977 Act;

d) designated remuneration of persons providing GMS which is determined by the HA.

235.     Paragraph 3 of Schedule 12A provides a mechanism whereby the Secretary of State may apportion among HAs the total remuneration referable to the cost of drugs which is paid by each HA. Each HA has a duty to reimburse the pharmacists in their area for the costs of the drugs which they dispense on the orders of GPs. In some cases, a GP in the area of one HA prescribes a drug which is dispensed in the area of another HA. The power in paragraph 3 is used so that the cost of the drugs prescribed by the GP in first HA area is met from that HA's allotment, even though it is the other HA which initially reimburses the pharmacist for the cost of the drug.

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Prepared: 9 November 2001