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Health and Social Care (Community Health and Standards) Bill


Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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A

Bill

[AS AMENDED IN STANDING COMMITTEE E]

To

Amend the law about the National Health Service; to make provision about

quality and standards in the provision of health and social care, including

provision establishing the Commission for Healthcare Audit and Inspection

and the Commission for Social Care Inspection; to amend the law about the

recovery of NHS costs from persons making compensation payments; to

provide for the replacement of the Welfare Food Schemes; to make provision

about appointments to health and social care bodies; and for connected

purposes.                                                                            

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and

consent of the Lords Spiritual and Temporal, and Commons, in this present

Parliament assembled, and by the authority of the same, as follows:—

Part 1

NHS foundation trusts

Introductory

 1     NHS foundation trusts

     (1)    An NHS foundation trust is a public benefit corporation which is authorised

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under this Part to provide goods and services for the purposes of the health

service in England.

     (2)    A public benefit corporation is a body corporate which, in pursuance of an

application under this Part, is constituted in accordance with Schedule 1.

 2     Independent Regulator of NHS Foundation Trusts

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     (1)    There is to be an officer known as the Independent Regulator of NHS

Foundation Trusts (referred to in this Part as “the regulator”).

 
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Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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     (2)    The Secretary of State is to appoint a person to the office of regulator.

     (3)    Schedule 2 (which makes further provision about the regulator) has effect.

 3     General duty of regulator

The regulator must exercise his functions in a manner that is consistent with

the performance by the Secretary of State of the duties under sections 1, 3 and

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51 of the National Health Service Act 1977 (c. 49) (duty as to health service and

services generally and as to university clinical teaching and research).

Authorisation

 4     Applications by NHS trusts

     (1)    An NHS trust may make an application to the regulator for authorisation to

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become an NHS foundation trust, if the application is supported by the

Secretary of State.

     (2)    The application must—

           (a)           describe the goods and services which the NHS trust proposes should

be provided by the NHS foundation trust, and

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           (b)           be accompanied by a copy of the proposed constitution of the trust;

            and must give any further information which the regulator requires the NHS

trust to give.

     (3)    The applicant may modify the application with the agreement of the regulator

at any time before authorisation is given under section 6.

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     (4)    Once an NHS trust has made the application—

           (a)           the provisions of the proposed constitution which give effect to

paragraphs 3 to 16 of Schedule 1 have effect, but only for the purpose

of electing a shadow board of governors and appointing a shadow

board of directors,

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           (b)           the NHS trust may do anything (including the things mentioned in

paragraph 16 of Schedule 2 to the National Health Service and

Community Care Act 1990 (c. 19) (general powers)) which appears to it

to be necessary or desirable for the purpose of preparing it for NHS

foundation trust status.

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 5     Other applications

     (1)    An application may be made to the regulator by persons (other than an NHS

trust) to be incorporated as a public benefit corporation and authorised to

become an NHS foundation trust, if the application is supported by the

Secretary of State.

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     (2)    The application must—

           (a)           describe the goods and services which the applicants propose should

be provided by the trust, and

           (b)           be accompanied by a copy of the proposed constitution of the trust;

            and must give any further information which the regulator requires the

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applicants to give.

     (3)    If it appears to the regulator that—

 

 

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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           (a)           provision of the goods and services described in the application is

likely to assist in the performance of the duties mentioned in section 3,

           (b)           the trust as proposed to be constituted will be able to provide those

goods and services, and

           (c)           the proposed constitution accords with Schedule 1 and is otherwise

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appropriate,

            he may issue a certificate of registration.

     (4)    The applicants may modify the application with the agreement of the regulator

at any time before the certificate is issued.

     (5)    On the issue of the certificate, the applicants are incorporated as a public

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benefit corporation.

     (6)    The certificate is conclusive evidence of incorporation.

     (7)    Once the certificate has been issued—

           (a)           the proposed constitution has effect, but the applicants may exercise

the functions of the corporation on its behalf until a board of directors

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is appointed in accordance with the constitution,

           (b)           the corporation may do anything (including the things mentioned in

section 18) which appears to it to be necessary or desirable for the

purpose of preparing it for NHS foundation trust status.

 6     Authorisation of NHS foundation trusts

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     (1)    The regulator may give an authorisation under this section—

           (a)           to an NHS trust which has applied under section 4, or

           (b)           to a public benefit corporation,

            if he is satisfied as to the following matters.

     (2)    The matters are that—

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           (a)           the applicant’s constitution will be in accordance with Schedule 1 and

will otherwise be appropriate,

           (b)           there will be a board of governors, and a board of directors, constituted

in accordance with the constitution,

           (c)           the steps necessary to prepare for NHS foundation trust status have

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been taken,

           (d)           the applicant will be able to provide the goods and services which the

authorisation is to require it to provide, and

           (e)           any other requirements which he considers appropriate are met.

     (3)    The authorisation may be given on any terms the regulator considers

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appropriate.

     (4)    If regulations require the applicant to consult prescribed persons about the

application, the regulator may not give an authorisation unless he is satisfied

that the applicant has complied with the regulations.

     (5)    The regulator must send a copy of the authorisation to the registrar of

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companies.

     (6)    The generality of the power in subsection (3) is not affected by the following

provisions of this Part.

 

 

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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 7     Effect of authorisation

     (1)    On an authorisation being given to a body corporate which is an NHS trust—

           (a)           it ceases to be an NHS trust and becomes an NHS foundation trust,

           (b)           the proposed constitution has effect.

     (2)    In consequence of subsection (1)(a), any order made under section 5(1) of the

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1990 Act (establishment of the NHS trust) is revoked.

     (3)    On an authorisation being given to a body corporate which is a public benefit

corporation, it becomes an NHS foundation trust.

     (4)    The authorisation is conclusive evidence that the body in question is an NHS

foundation trust.

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     (5)    Subsections (1) to (3) do not affect the continuity of the body or of its property

or liabilities.

     (6)    An NHS foundation trust is not to be regarded as the servant or agent of the

Crown or as enjoying any status, immunity or privilege of the Crown; and the

trust’s property is not to be regarded as property of, or property held on behalf

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of, the Crown.

 8     Amendments of constitution

     (1)    An NHS foundation trust may make amendments of its constitution with the

approval of the regulator.

     (2)    An NHS foundation trust must send a copy of its constitution, and any

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amendment of it, to the registrar of companies.

 9     Variation of authorisation

     (1)    The regulator may vary an authorisation.

     (2)    In deciding whether or not to vary an authorisation the regulator is to have

regard (among other things) to—

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           (a)           any report or recommendation made to him by virtue of section 21(2)(f)

of the Local Government Act 2000 (c. 22) (overview and scrutiny

committees),

           (b)           any report or recommendation made to him by the Commission for

Patient and Public Involvement in Health under section 20(5)(b) or (6)

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of the National Health Service Reform and Health Care Professions Act

2002 (c. 17).

     (3)    The regulator must send a copy of any variation of the authorisation to the

registrar of companies.

 10    Register of NHS foundation trusts

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     (1)    The registrar of companies must establish and maintain a register of NHS

foundation trusts.

     (2)    The register must contain in relation to each NHS foundation trust—

           (a)           a copy of the current constitution,

           (b)           a copy of the current authorisation,

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Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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           (c)           a copy of the latest annual accounts and of any report of the auditor on

them,

           (d)           a copy of the latest annual report,

           (e)           a copy of any notice given under section 23 (failing NHS foundation

trusts).

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     (3)    In relation to any time before an NHS foundation trust is first required to send

an annual report to the regulator, the register must contain a list of the persons

who, immediately after the authorisation was given to the trust, were—

           (a)           the members of the board of governors,

           (b)           the directors.

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     (4)    Sections 707A(2) and (3) and 709 of the Companies Act 1985 (c. 6) (records kept

by the registrar of companies) apply to the register as if it were required to be

kept by the registrar of companies under that Act.

     (5)    The Secretary of State is to pay any expenses incurred by the registrar of

companies by virtue of this section.

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Financial matters

 11    Power of Secretary of State to give financial assistance

     (1)    The Secretary of State may give financial assistance to any NHS foundation

trust.

     (2)    The financial assistance may be given by way of loan, public dividend capital,

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grant or other payment.

 12    Prudential borrowing code

     (1)    The regulator must make a code for determining the limit on the total amount

of the borrowing of any NHS foundation trust.

     (2)    In making the code the regulator is to have regard (among other things) to any

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generally accepted principles used by financial institutions to determine the

amounts of loans to non-profit making organisations.

     (3)    Before making the code, the regulator must consult—

           (a)           the Secretary of State,

           (b)           every NHS trust intending to make an application to become an NHS

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foundation trust,

           (c)           such other persons as the regulator considers appropriate.

     (4)    The regulator must lay a copy of the code before Parliament.

     (5)    The regulator may revise the code; and subsections (2) to (4) apply in relation

to revising the code, but the regulator must also consult every NHS foundation

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trust.

 13    Public dividend capital

     (1)    Where an NHS trust becomes an NHS foundation trust, the amount which was

the public dividend capital of the trust immediately before the giving of the

authorisation continues as public dividend capital of the NHS foundation trust

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Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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held on the same conditions (“initial public dividend capital”), but subject to

this section.

     (2)    Any amount issued to an NHS foundation trust as public dividend capital

under section 11 is (like initial public dividend capital) an asset of the

Consolidated Fund.

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     (3)    The Secretary of State may, with the consent of the Treasury, decide the terms

on which any public dividend capital of an NHS foundation trust is to be

treated as having been issued.

     (4)    But the dividend to be paid by the trust is to be the same as that payable by

NHS trusts in England in pursuance of section 9(7) of the 1990 Act (dividend

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on public dividend capital).

     (5)    Before exercising the power in subsection (3), the Secretary of State must

consult the regulator.

     (6)    Any amount paid to the Secretary of State by an NHS foundation trust by way

of repayment of public dividend capital is to be paid into the Consolidated

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Fund.

Functions

 14    Authorised services

     (1)    An authorisation must authorise the NHS foundation trust to provide goods

and services for purposes related to the provision of health care.

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     (2)    But the authorisation must secure that the principal purpose of the trust is the

provision of goods and services for the purposes of the health service in

England.

     (3)    The trust may also carry on activities other than those mentioned in subsection

(1), subject to any restrictions in the authorisation, for the purpose of making

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additional income available in order to carry on its principal purpose better.

     (4)    The authorisation may require the provision, wholly or partly for the purposes

of the health service in England, of goods and services by the trust.

     (5)    References in this Part to goods and services include, in particular—

           (a)           education and training,

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           (b)           accommodation and other facilities.

     (6)    The authorisation must authorise and may require the trust—

           (a)           to carry out research in connection with the provision of health care,

           (b)           to make facilities and staff available for the purposes of education,

training or research carried on by others.

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     (7)    In deciding whether or not to require the trust to provide, wholly or partly for

the purposes of the health service in England, any goods or services the

regulator is to have regard (among other things) to—

           (a)           the need for the provision of goods or services in the area in question,

           (b)           any provision of goods or services by other health service bodies in the

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area in question,

           (c)           any other provision by the trust with which the provision of the goods

or services is connected,

 

 

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts

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           (d)           any agreement or arrangement to which the body corporate which is

the trust is or was a party.

     (8)    Such a requirement as is mentioned in subsection (4) may be framed by

reference (among other things) to—

           (a)           goods or services in general or of a particular description,

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           (b)           goods or services required to meet the needs of health service bodies in

general or those of a particular description,

           (c)           goods or services required to meet the needs of other persons of a

particular description,

           (d)           the volume of goods or services provided,

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           (e)           the place where goods or services are provided,

           (f)           the period within which goods or services are provided.

 15    Private health care

     (1)    An authorisation may restrict the provision, for purposes other than those of

the health service in England, of goods and services by an NHS foundation

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trust which was an NHS trust.

     (2)    The power is to be exercised, in particular, with a view to securing that the

proportion of the total income of the NHS foundation trust in any financial

year derived from private charges is not greater than the proportion of the total

income of the NHS trust derived from such charges in the base financial year.

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     (3)    The base financial year means the first financial year throughout which the

body corporate was an NHS trust or, if it was an NHS trust throughout the

financial year ending with 31st March 2003, that year.

     (4)    Private charges means charges imposed in respect of goods and services

provided to patients other than patients being provided with goods and

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services for the purposes of the health service.

     (5)    Section 14(8) applies for the purposes of this section.

 16    Protection of property

     (1)    An NHS foundation trust may not dispose of any protected property without

the approval of the regulator.

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              Disposing of property includes disposing of part of it or granting an interest

in it.

     (2)    Protected property is property of the trust designated as protected in its

authorisation.

     (3)    The regulator may designate property as protected if he considers it is needed

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for the purposes of any goods or services which the authorisation requires the

trust to provide wholly or partly for the purposes of the health service in

England.

     (4)    The regulator may give approval under subsection (1) on any terms he

considers appropriate.

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     (5)    An NHS foundation trust may not create a floating charge on its property.

 

 

 
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