|Health And Social Care (Community Health And Standards) Bill - continued||House of Commons|
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Clause 3: General duty of regulator
66. This clause requires the Independent Regulator to exercise his functions in a manner that is consistent with the Secretary of State's general duties under the 1977 Act. Amongst other things, these sections require the Secretary of State to promote and provide a comprehensive health service in England and to provide clinical facilities to universities with medical or dental schools.
Authorisation of NHS foundation trusts
Clause 4: Applications by NHS trusts
67. This clause allows NHS trusts to make applications to become NHS foundation trusts. They may only do so with the support of the Secretary of State.
68. The clause sets out the minimum information which must be included in an application by an NHS trust for NHS foundation trust status. In addition, once an application to be an NHS foundation trust has been made, subsection (4) gives an NHS trust that has made an application the shadow powers necessary to prepare for authorisation to be an NHS foundation trust.
Clause 5: Other applications
69. This clause allows persons other than NHS trusts to apply to set up an NHS foundation trust. They may only do so with the support of the Secretary of State. This allows organisations that are not currently part of the NHS such as charities and voluntary sector organisations to become involved in the establishment of a new NHS foundation trust.
70. Subsection (2) sets out the minimum information which must be included in such an application. In conjunction with this, subsection (3) imposes a test which requires the Independent Regulator to consider certain matters before an application made under this clause may proceed, and a certificate of registration issued. Once such registration is issued, the applicants are incorporated as a public benefit corporation and are given the shadow powers necessary to prepare for authorisation to be an NHS foundation trust.
Clause 6: Authorisation of NHS foundation trusts
71. This clause provides the Independent Regulator with the power to authorise applicants under clauses 4 or 5, whom he is satisfied have met the necessary criteria set out in subsection (2) to be an NHS foundation trust. The criteria are that the constitution and governance requirements are in accordance with Schedule 1, that necessary steps to prepare for NHS foundation trust status have been taken, that the applicant will be able to provide the goods and services which it will be required to provide, and that any other requirements the Independent Regulator considers appropriate are met.
72. Subsection (4) gives the Secretary of State power to make regulations setting out consultation requirements on applicants for NHS foundation trust status. Authorisation may not be granted unless the Independent Regulator is satisfied that the applicant has complied with the regulations.
Clause 7: Effect of authorisation
73. Clause 7 sets out the legal effect of an authorisation to be an NHS foundation trust. Under the clause, where authorisation is granted to an NHS trust it ceases to be an NHS trust and becomes an NHS foundation trust. Where authorisation is granted to a public benefit corporation it becomes an NHS foundation trust.
74. Subsection (5) provides that the property, rights and liabilities of applicants continue with the NHS foundation trust.
75. Subsection (6) provides that, like NHS trusts, NHS foundation trusts are not Crown bodies: see paragraph 18 of Schedule 2 to the 1990 Act.
Clause 8: Amendments of constitution
76. This clause sets out that an NHS foundation trust's constitution may only be amended with the Independent Regulator's consent, so that he can ensure any alterations are appropriate.
Clause 9: Variation of authorisation
77. This clause allows for the Independent Regulator to vary an NHS foundation trust's terms of authorisation. In deciding whether to vary an authorisation, the Independent Regulator must take into account any report or recommendation made to him by an overview and scrutiny committee of a local authority made pursuant to the Local Government Act 2000, or by the Commission for Patient and Public Involvement in Health.
Clause 10: Register of NHS foundation trusts
78. Subsections (1) to (3) require the registrar of companies to keep a register of NHS foundation trusts, and set out the information that the register must contain.
79. Subsection (4) sets out that sections 707A(2) and (3) and 709 of the Companies Act 1985 apply to the register of NHS foundation trusts as if it were required to be kept under that Act. Amongst other things, this provides arrangements for public access to the register, and requires the registrar of companies to keep originals of documents on the register for ten years, or for two years from dissolution of an NHS foundation trust.
Clause 11: Power of Secretary of State to give financial assistance
80. This clause provides for the Secretary of State to give loans, public dividend capital, grants or other payments to NHS foundation trusts.
Clause 12: Prudential borrowing code
81. This clause provides for the Independent Regulator to set a code according to which the total borrowing limit of an NHS foundation trust will be determined. The code, and any revisions to it, must be laid before Parliament by the Independent Regulator.
82. The clause requires that, in making and revising the code, the Independent Regulator must have regard to commercial best practice for determining the amount of loans to not-for-profit sector organisations. This would include taking into account the current and future ability of NHS foundation trusts to service debt. In addition, before making the code, the Independent Regulator must consult interested parties including the Secretary of State, NHS foundation trusts and any other persons he considers appropriate. He must also consult interested parties before revising the code.
Clause 13: Public dividend capital
83. Under section 10 of the 1990 Act, each NHS trust is given an originating capital representing the excess of its assets over its liabilities when it is established. This originating capital is "public dividend capital" and the NHS trust must pay dividends on it at a set rate. It constitutes an asset of the Consolidated Fund.
84. Subsection (1) sets out that the public dividend capital of an NHS trust applicant immediately before authorisation is granted continues as public dividend capital under the same conditions for the NHS foundation trust. Under subsection (2) the capital remains an asset of the Consolidated Fund.
85. Subsection (3) provides for the Secretary of State, with the consent of Treasury, to decide the terms on which any public dividend capital of an NHS foundation trust is issued. Under subsection (4) the dividend to be paid by an NHS foundation trust is the same as that payable by NHS trusts in England under section 9(7) of the 1990 Act.
86. Subsection (5) requires the Secretary of State to consult the Independent Regulator before deciding the terms on which any public dividend capital of an NHS foundation trust is to be issued.
87. Subsection (6) requires that any repayment of public dividend capital made to the Secretary of State must be paid into the Consolidated Fund, as it is for NHS trusts.
Clause 14: Authorised services
88. This clause sets out the powers and functions of the Independent Regulator when authorising an NHS foundation trust to provide goods and services.
89. Under subsection (1) an authorisation must authorise an NHS foundation trust to provide goods and services for "the health service".
90. Subsections (2) to (5) allow the Independent Regulator to authorise the provision of goods and services for other purposes - including private health care, health care related goods and services, education and training, accommodation and health care research. Under subsection (2), however, the provision of services to the NHS must remain the primary purpose of each NHS foundation trust.
91. Subsection (3) allows the Independent Regulator, as part of an authorisation, to require an NHS foundation trust to provide particular NHS services. By exercising this power, the Independent Regulator will have the power to ensure that NHS foundation trusts are obliged to continue to provide certain goods and services to the NHS. Subsection (6) sets out the factors the Independent Regulator is to consider in deciding whether to require provision of particular services by an NHS foundation trust. Subsection (7) allows the Independent Regulator considerable flexibility in setting the terms of any such requirement.
Clause 15: Private health care
92. This clause requires the Independent Regulator to impose a cap on the total level of income derived by an NHS foundation trust from the provision of services to private patients. The cap only applies to NHS foundation trusts that were NHS trusts. In the case of an NHS foundation trust that was an NHS trust throughout the financial year ending with 31 March 2003, the cap must restrict the NHS foundation trust to the proportion of total income received from private patients in that year. In all other cases, the cap must restrict the NHS foundation trust to the proportion of total income received from private patients in its first full financial year as an NHS trust.
Clause 16: Protection of property
93. This clause provides a 'lock' on any assets of an NHS foundation trust that are needed for the provision of services required under their terms of authorisation. The clause allows the Independent Regulator to designate property as "protected" if he considers that the property is needed for the provision of the NHS services that the NHS foundation trust must provide under its authorisation. If property is designated as protected in this way, an NHS trust may not dispose of it without the Independent Regulator's approval.
Clause 17: Financial powers
94. This clause gives NHS foundation trusts powers to borrow money, subject to the prudential borrowing limit calculated according to the code set under clause 12.
95. Subsections (4) and (5) give NHS foundation trusts financial and investment powers, including powers to invest money, form subsidiaries and enter into joint ventures. In addition, subsection (6) allows NHS foundation trusts to give financial assistance to anyone in connection with their functions. The powers are however, potentially subject to any terms to the authorisation set by the Independent Regulator.
Clause 18: General powers
96. This clause gives an NHS foundation trust general powers to do anything it needs to in relation to its functions. In particular, subsection (2) sets out that this includes acquiring and disposing of property, entering into contracts, accepting gifts and employing staff.
Clause 19: Information
97. This clause sets out requirements for NHS foundation trusts and other health service bodies to provide information in certain circumstances.
98. Under subsection (1)(a), the Secretary of State is given the power to specify any information he requires from NHS foundation trusts. The provision of the information is included as a term to each NHS foundation trust's authorisation.
99. Subsection (2) gives the Independent Regulator a power to require other health service bodies - defined in clause 35 as being Strategic Health Authorities, SHAs, NHS trusts, PCTs and NHS foundation trusts - to provide him with any information he requires in fulfilling his functions.
Clause 20: Entry and inspection of premises
100. This clause provides for the Independent Regulator to include right of entry and inspection of premises as a term of authorisation for NHS foundation trusts.
Clause 21: Fees
101. This clause allows the Independent Regulator to charge NHS foundation trusts a reasonable fee as a term of their authorisation.
Clause 22: Trust funds and trustees
102. This clause provides for the Secretary of State to appoint trustees for an NHS foundation trust to manage charitable assets on its behalf. The arrangements are analogous to those set out under the 1977 Act for NHS trusts.
103. Subsection (2)(a) allows for the Secretary of State to make provision as to the persons by whom trustees are to be appointed. The appointment of trustees will be delegated to the NHS Appointments Commission.
104. Subsection (3) allows the Secretary of State to transfer property from an NHS foundation trust to the trustees of the NHS foundation trust where trustees have been appointed under this clause.
105. Subsection (4) provides that trustees of an NHS trust that becomes an NHS foundation trust are to be treated as though they were appointed under this clause.
Clause 23: Failing NHS foundation trusts
106. This clause gives the Independent Regulator broad powers where an NHS foundation trust is breaching or has breached obligations under an Act or its authorisation. Under the clause, the Independent Regulator may issue a warning notice, and may also require Directors or the Board of Governors to act, or to cease acting, in a particular way. The Independent Regulator also has the power to remove or suspend any or all of the directors and members of the Board of Governors, and appoint individual directors to act in the interim period.
Clause 24: Voluntary arrangements
107. This clause gives the Independent Regulator powers to intervene in the operation of an NHS foundation trust in cases of financial failure.
108. Under this clause, the Independent Regulator has powers to require an NHS foundation trust's directors to make a proposal for a voluntary arrangement with its creditors. In addition, the Independent Regulator also has the power to require an NHS foundation trust's directors to obtain a moratorium on its business prior to the approval of a voluntary arrangement.
109. The power to require the directors to reach such a voluntary arrangement with the NHS foundation trust's creditors, and also to obtain a moratorium over the business of the NHS foundation trust, are set out in detail in Part 1 of the Insolvency Act 1986. Subsection (2) gives the Secretary of State the powers to apply Part 1 of the Insolvency Act 1986 with modifications.
Clause 25: Dissolution etc.
110. This clause gives the Independent Regulator the power in certain specified circumstances to dissolve an NHS foundation trust by order. The power may be exercised where an NHS foundation trust fails to comply with a notice under clause 23 or 24, or where an NHS foundation trust fails to implement a voluntary arrangement under clause 24, and where the Independent Regulator considers that, despite the exercise of his powers under either of those clauses, the goods and services of the NHS foundation trust remain at risk. Before dissolving an NHS foundation trust, the Independent Regulator must however, consult those individuals specified by the Secretary of State. This provision is intended as a safeguard on use of the power. Where an NHS foundation trust is dissolved under this clause, the Independent Regulator may transfer any of its property, rights and liabilities to the persons listed in subsection (3). The transfer is made by order.
111. Subsection (4) makes provision for Schedule 3 which sets out the legal effect of any transfer of employees of a dissolved NHS foundation trust. Under the Schedule, the contract of any employee that is transferred under clause 25(3) is not terminated. Rather, it transfers to the transferee as if it were originally made between the employee and the transferee. The employee is however, given the right to object to such a transfer. Where an employee objects in this way, his contract of employment is terminated.
112. Subsection (6) of gives the Secretary of State the powers to apply Part 4 of the Insolvency Act 1986, which relates to the winding up of companies, to the dissolution of NHS foundation trusts with modifications.
113. Subsection (7) allows the Independent Regulator to exercise his powers under this clause where he refuses to give an authorisation to a public benefit corporation.
Clause 27: Co-operation between NHS bodies
114. This clause amends section 26 of the Health Act. This amendment requires NHS foundation trusts to co-operate with other NHS bodies in exercising their functions. In turn, other NHS bodies must also co-operate with NHS foundation trusts.
Patient and public involvement
Clause 28: Public involvement and consultation
115. This clause amends section 11(2) of the HSC Act. This amendment provides that, when planning service provision and considering service change, NHS foundation trusts must involve and consult patients and the public.
Clause 29: Patients' Forums
116. Subsection (2) amends section 16(4) of the 2002 Act. This amendment allows a PCT Patients' Forum to advise NHS foundation trusts about how to encourage the involvement of members of the public in decisions which might affect their health.
117. Subsection (3) amends section 17(1) of the 2002 Act. This amendment provides for Secretary of State to make regulations requiring NHS foundation trusts to allow members of a Patients' Forum authorised to do so under the regulations to enter and inspect the premises of NHS foundation trusts.
118. Subsection (4) amends section 18(2) of the 2002 Act. This amendment provides that where a Patients' Forum prepares an annual report about activities that relate to an NHS foundation trust. It must send a copy to the Independent Regulator.
Clause 30: Commission for Patient and Public Involvement in Health
119. This clause amends section 20(12) of the 2002 Act. This amendment provides for the Commission to promote the involvement of members of the public in England in decisions made by NHS foundation trusts which might affect their health.
Clause 31: Taxation
120. Subsection (1) amends section 519A of the Income and Corporation Taxes Act 1988. This amendment exempts NHS foundation trusts from income and corporation taxes.
121. Subsection (2) amends section 61(3) of the 1990 Act. This amendment exempts NHS foundation trusts from stamp duty.
122. Subsection (3) amends section 41(7) of the Value Added Tax Act 1994. This amendment provides for Value Added Tax to apply to NHS foundation trusts in the same way it applies to NHS trusts.
Clause 32: Other amendments relating to NHS foundation trusts
123. This clause makes provision for Schedule 4 which makes various minor and consequential amendments relating to NHS foundation trusts.
124. Paragraph 18 amends section 113 of the Local Government Act 1972. This amendment allows NHS foundation trusts to enter into joint staffing arrangements with local authorities.
125. Paragraph 23 amends section 22 of the 1977 Act. This amendment includes NHS foundation trusts among the list of NHS bodies required to co-operate with one another in exercising their functions.
126. Paragraph 32 amends section 91 of the 1977 Act. This amendment sets out that where property held on trust is given to an NHS foundation trust for a specified purpose, the trustees for the NHS foundation trust must apply those funds for the specified purpose.
127. Paragraph 35 amends section 96A of the 1977 Act. This amendment allows NHS foundation trusts to raise money by appeals etc. and to hold, administer and apply any property given on trust for the purpose it was given.
128. Paragraph 82 amends section 21 of the 1990 Act. This amendment provides that NHS foundation trusts may choose to participate in schemes established by the Secretary of State for meeting losses and liabilities etc. of certain health service bodies.
129. Paragraph 107 amends section 31 the Health Act. This amendment allows regulations to be made which enable NHS foundation trusts to enter into joint arrangements with local authorities.
130. Paragraph 114 amends section 7 of the HSC Act. This amendment provides for the powers of local authority oversight and scrutiny committees to apply to NHS foundation trusts as to other NHS bodies.
Clause 33: Offence
131. This clause makes it an offence for a person to vote at an election to the Board of Governors, stand for election to the Board of Governors or vote at a meeting of the Board of Governors if the person knows that they are not eligible to do so.
Clause 34: General duty of NHS foundation trusts
132. This clause requires each NHS foundation trust to exercise its functions effectively, efficiently, and economically.
Clause 35: Interpretation of Part 1
133. Subsection (2) provides that expressions used in this Part of the Bill, other than those specifically defined in subsection (1), have the same meaning as in the 1977 Act. Examples are the terms "property", which in the 1977 Act includes rights; "hospitals" which is given a detailed definition that includes a number of health care institutions; and "the health service", which means the National Health Service provided by the Secretary of State pursuant to the 1977 Act.
PART 2 -STANDARDS
CHAPTER 1 - REGULATORY BODIES
Clause 36: The Commission for Healthcare Audit and Inspection, and Clause 37: Commission for Social Care Inspection
134. The Command Paper Delivering the NHS Plan: Next steps on investment, next steps on reform 11 set out the Government's intention to create a new Commission for Healthcare Audit and Inspection ('the CHAI') which would have responsibility for inspecting NHS health care and also health care in England provided by independent providers registered under the CSCA 2000, and a new Commission for Social Care Inspection ('the CSCI') which would have responsibility for inspecting local authority social services in England and also social care in England provided by those registered under the CSA 2000.
11 For copies - website address: www.doh.gov.uk/deliveringthenhsplan/index.htm
135. The proposed role and functions of the new inspectorates were set out in The Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection - a statement of purpose 12.
12 For copies - website address: www.doh.gov.uk/statementofpurpose/index.htm
136. Schedule 5 deals with the constitution of the CHAI. Paragraph 5 concerns the appointment of staff and their remuneration. It is expected that the CHAI will develop a number of teams to undertake its various functions and each team will include staff with appropriate expertise, (such as ex-employees of CHI, the NCSC or Audit Commission). These teams may also include others, such as patients and carers, who make use of NHS and independent services.
137. Schedule 6 makes the same provision for CSCI as Schedule 5 does for CHAI with the following notable exceptions;
138. Paragraph 3 provides for the membership of the CSCI but gives no role to the Assembly in the appointment and removal from office of members. This is because the CSCI will be an England only body.
139. Paragraph 5 provides for the staffing of the CSCI. Subparagraph (2) provides that the CSCI must appoint a member of staff as a children's rights director, whose role will be prescribed in regulations. The intention is that the children's rights director should ensure that the regulatory aspect of the CSCI's work takes full account of children's rights and welfare in relation to its regulatory work under Part II of the CSA 2000.
140. Paragraph 9 allows the Secretary of State to provide funding to the CSCI and to direct the CSCI as to how it applies this funding. Again, because the CSCI is an England only body there is no role for the Assembly in this process.
|© Parliamentary copyright 2003||Prepared: 19 March 2003|