National Health Service Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

National Health Service Bill [HL]

National Health Service Bill [HL]
Part 11 — Property and finance
Chapter 6 — Finance
135

226
Financial duties of Strategic Health Authorities and Special Health
Authorities
(1)
Each Strategic Health Authority must, in respect of each financial year,
perform its functions so as to secure that its expenditure which is attributable
to the performance by it of its functions in that year does not exceed the
5
aggregate of—
(a)
the amount allotted to it for that year under section 224(1),
(b)
any sums received by it in that year under any provision of this Act
(other than sums received by it under that subsection), and
(c)
any sums received by it in that year otherwise than under this Act for
10
the purpose of enabling it to defray any such expenditure.
(2)
Each Special Health Authority must, in respect of each financial year, perform
its functions so as to secure that its expenditure which is attributable to the
performance by it of its functions in that year does not exceed the aggregate
of—
15
(a)
the amount allotted to it for that year under section 225(1),
(b)
any sums received by it in that year under any provision of this Act
(other than sums received by it under that subsection), and
(c)
any sums received by it in that year otherwise than under this Act for
the purpose of enabling it to defray any such expenditure.
20
(3)
The Secretary of State may give such directions to a Strategic Health Authority
or Special Health Authority as appear to be requisite to secure that the
Authority complies with the duty under subsection (1) or (2).
(4)
To the extent to which—
(a)
any expenditure is defrayed by a Strategic Health Authority or Special
25
Health Authority as trustee or on behalf of a Strategic Health Authority
or Special Health Authority by special trustees, or
(b)
any sums are received by a Strategic Health Authority or Special Health
Authority as trustee or under section 222,

that expenditure and, subject to subsection (6), those sums, must be
30
disregarded for the purposes of this section.
(5)
For the purposes of this section sums which, in the hands of a Strategic Health
Authority or Special Health Authority, cease to be trust funds and become
applicable by the Authority otherwise than as trustee must be treated, on their
becoming so applicable, as having been received by the Authority otherwise
35
than as trustee.
(6)
Of the sums received by a Strategic Health Authority or Special Health
Authority under section 222, so much only as accrues to the Authority after
defraying any expenses incurred in obtaining them must be disregarded under
subsection (4).
40
(7)
Subject to subsection (4), the Secretary of State may by directions determine—
(a)
whether specified sums must, or must not, be treated for the purposes
of this section as received under this Act by a specified Strategic Health
Authority or specified Special Health Authority,
(b)
whether specified expenditure must, or must not, be treated for those
45
purposes as—
(i)
expenditure within subsection (1) of a specified Strategic Health
Authority, or

National Health Service Bill [HL]
Part 11 — Property and finance
Chapter 6 — Finance
136

(ii)
expenditure within subsection (2) of a specified Special Health
Authority, or
(c)
the extent to which, and the circumstances in which, sums received—
(i)
by a Strategic Health Authority under section 224, or
(ii)
by a Special Health Authority under section 225,
5

but not yet spent must be treated for the purposes of this section as part
of the expenditure of the Strategic Health Authority or Special Health
Authority and to which financial year’s expenditure they must be
attributed.
(8)
“Specified” means of a description specified in the directions.
10
227
Resource limits for Strategic Health Authorities and Special Health
Authorities
(1)
Each Strategic Health Authority and each Special Health Authority must
ensure that the use of its resources in a financial year does not exceed the
amount specified for it in relation to that year by the Secretary of State.
15
(2)
For the purpose of subsection (1) the Secretary of State may give directions—
(a)
specifying uses of resources which must, or must not, be taken into
account,
(b)
making provision for determining to which Strategic Health
Authority or Special Health Authority certain uses of resources must be
20
attributed,
(c)
specifying descriptions of resources which must, or must not, be taken
into account.
(3)
The Secretary of State may give such directions to a Strategic Health Authority
or Special Health Authority as appear to be requisite to secure that the
25
Authority complies with the duty under subsection (1).
(4)
Subsections (4) to (6) of section 226 apply in relation to the duty under
subsection (1) of this section as they apply in relation to the duties under
subsections (1) and (2) of that section; and for that purpose references to the
defraying of expenditure and the receipt of sums are references to the incurring
30
of liabilities and the acquisition of assets.
(5)
Where the Secretary of State has specified an amount under this section in
respect of a financial year, he may vary the amount by a later specification.
(6)
In this section a reference to the use of resources is a reference to their
expenditure, consumption or reduction in value.
35
Primary Care Trusts
228
Public funding of Primary Care Trusts
(1)
The Secretary of State must, in respect of each financial year, pay to each
Primary Care Trust—
(a)
sums equal to its pharmaceutical services expenditure, and
40
(b)
sums not exceeding the amount allotted by the Secretary of State to the
Primary Care Trust for that year towards meeting the Primary Care
Trust’s main expenditure in that year.

National Health Service Bill [HL]
Part 11 — Property and finance
Chapter 6 — Finance
137

(2)
In determining the amount to be allotted for any year to a Primary Care Trust
under subsection (1)(b) (or in varying the amount under subsection (9)), the
Secretary of State may take into account, in whatever way he considers
appropriate—
(a)
the Primary Care Trust’s pharmaceutical services expenditure, and
5
(b)
expenditure which would have been the Primary Care Trust’s
pharmaceutical services expenditure but for an order under section
234(2) (special arrangements as to payment of remuneration),

during any period he considers appropriate (or such elements of that
expenditure as he considers appropriate).
10
(3)
Where the Secretary of State has made an initial determination of the amount
(“the initial amount”) to be allotted for any year to a Primary Care Trust under
subsection (1)(b), he may increase the initial amount by a further sum if it
appears to him that over a period notified to the Primary Care Trust—
(a)
it satisfied any objectives notified to it as objectives to be met in
15
performing its functions, or
(b)
it performed well against any criteria notified to it as criteria relevant to
the satisfactory performance of its functions (whether or not the
method of measuring its performance against those criteria was also
notified to it).
20
(4)
“Notified” means specified or referred to in a notice given to the Primary Care
Trust by the Secretary of State.
(5)
In making any increase under subsection (3), the Secretary of State may
(whether by directions under subsection (10) or otherwise) impose any
conditions he considers appropriate on the application or retention by the
25
Primary Care Trust of the sum in question.
(6)
Subsection (7) applies where—
(a)
the Secretary of State has, under subsection (3), increased by any sum
the amount to be allotted for any year to a Primary Care Trust,
(b)
the Secretary of State has notified the Primary Care Trust of the
30
allotment, and
(c)
it subsequently appears to the Secretary of State that the Primary Care
Trust has failed (wholly or in part) to satisfy any conditions imposed in
making that increase.
(7)
Where this subsection applies, the Secretary of State may reduce—
35
(a)
the allotment made to the Primary Care Trust for that year, or
(b)
when he has made an initial determination of the amount (“the initial
amount”) to be allotted for any subsequent year to the Primary Care
Trust under subsection (1)(b), the initial amount,

by an amount not exceeding the sum mentioned in subsection (6)(a).
40
(8)
An amount is allotted to a Primary Care Trust for a year under this section
when the Primary Care Trust is notified by the Secretary of State that the
amount is allotted to it for that year.
(9)
The Secretary of State may make an allotment under this section increasing or
reducing (subject to subsection (7)) an allotment previously so made; and the
45
reference to a determination in subsection (3) includes a determination made
with a view to increasing or reducing an allotment previously so made.

National Health Service Bill [HL]
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138

(10)
The Secretary of State may give directions to a Primary Care Trust with respect
to—
(a)
the application of sums paid to it under this section, or
(b)
the payment of sums by it to the Secretary of State in respect of charges
or other sums referable to the valuation or disposal of assets.
5
(11)
Sums falling to be paid to Primary Care Trusts under this section are payable
subject to such conditions as to records, certificates or otherwise as the
Secretary of State may determine.
(12)
“Pharmaceutical services expenditure” and “main expenditure” are defined in
Schedule 14.
10
229
Financial duties of Primary Care Trusts
(1)
Each Primary Care Trust must, in respect of each financial year, perform its
functions so as to secure that its expenditure which is attributable to the
performance by it of its functions in that year (not including its pharmaceutical
services expenditure) does not exceed the aggregate of—
15
(a)
the amount allotted to it for that year under section 228(1)(b),
(b)
any sums received by it in that year under any provision of this Act
(other than sums received by it under that section), and
(c)
any sums received by it in that year otherwise than under this Act for
the purpose of enabling it to defray any such expenditure.
20
(2)
The Secretary of State may give such directions to a Primary Care Trust as
appear to be requisite to secure that it complies with the duty under subsection
(1).
(3)
To the extent to which—
(a)
any expenditure is defrayed by a Primary Care Trust as trustee or on
25
behalf of a Primary Care Trust by special trustees, or
(b)
any sums are received by a Primary Care Trust as trustee or under
section 222,

that expenditure and, subject to subsection (5) those sums, must be
disregarded for the purposes of this section.
30
(4)
For the purposes of this section sums which, in the hands of a Primary Care
Trust, cease to be trust funds and become applicable by the Primary Care Trust
otherwise than as trustee must be treated, on their becoming so applicable, as
having been received by the Primary Care Trust otherwise than as trustee.
(5)
Of the sums received by a Primary Care Trust under section 222 so much only
35
as accrues to the Primary Care Trust after defraying any expenses incurred in
obtaining them must be disregarded under subsection (3).
(6)
Subject to subsection (3), the Secretary of State may by directions determine—
(a)
whether specified sums must, or must not, be treated for the purposes
of this section as received under this Act by a specified Primary Care
40
Trust,
(b)
whether specified expenditure must, or must not, be treated for those
purposes as expenditure within subsection (1) of a specified Primary
Care Trust, or
(c)
the extent to which, and the circumstances in which, sums received
45
by a Primary Care Trust under section 228 but not yet spent must be

National Health Service Bill [HL]
Part 11 — Property and finance
Chapter 6 — Finance
139

treated for the purposes of this section as part of the expenditure of the
Primary Care Trust and to which financial year’s expenditure they
must be attributed.
(7)
“Specified” means of a description specified in the directions.
230
Resource limits for Primary Care Trusts
5
(1)
Each Primary Care Trust must ensure that the use of its resources in a financial
year does not exceed the amount specified for it in relation to that year by the
Secretary of State.
(2)
For the purpose of subsection (1) no account may be taken of any use of
resources for the purpose of a Primary Care Trust’s pharmaceutical services
10
expenditure.
(3)
But in specifying an amount for a Primary Care Trust under subsection (1) (or
in varying the amount under subsection (5)), the Secretary of State may take
into account (in whatever way he considers appropriate)—
(a)
any such use of resources, and
15
(b)
the use of any resources which would have been for the purpose of
the Primary Care Trust’s pharmaceutical services expenditure but for
an order under section 234(2) (special arrangements as to payment of
remuneration),

during any period he considers appropriate (or such elements of such uses of
20
resources as he considers appropriate).
(4)
For the purpose of subsection (1) the Secretary of State may give directions—
(a)
specifying uses of resources which must, or must not, be taken into
account,
(b)
making provision for determining to which Primary Care Trust certain
25
uses of resources must be attributed,
(c)
specifying descriptions of resources which must, or must not, be taken
into account.
(5)
Where the Secretary of State has specified an amount under this section in
respect of a financial year, he may vary the amount by a later specification.
30
(6)
Subsections (3) to (5) of section 229 apply in relation to the duty under
subsection (1) of this section as they apply in relation to the duty under
subsection (1) of that section; and for that purpose references to the defraying
of expenditure and the receipt of sums are references to the incurring of
liabilities and the acquisition of assets.
35
(7)
The Secretary of State may give such directions to a Primary Care Trust as
appear to be requisite to secure that it complies with the duty under subsection
(1).
(8)
In this section a reference to the use of resources is a reference to their
expenditure, consumption or reduction in value.
40
231
Further provision about the expenditure of Primary Care Trusts
Schedule 14 makes further provision about the expenditure of Primary Care
Trusts.