National Health Service Bill [HL]

House of Commons

Session 2005 - 06
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National Health Service Bill [HL]

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
195

Schedule 4
Section 25

NHS trusts established under section 25
Part 1
Constitution, establishment, etc
Status
5
1
Each NHS trust is a body corporate.
2     (1)
An NHS trust must not be regarded as the servant or agent of the Crown or
as enjoying any status, immunity or privilege of the Crown.
      (2)
An NHS trust’s property must not be regarded as property of, or property
held on behalf of, the Crown.
10
Board of directors
3     (1)
Each NHS trust has a board of directors consisting of—
(a)
a chairman appointed by the Secretary of State, and
(b)
executive and non-executive directors.
      (2)
Sub-paragraph (1)(b) is subject to paragraph 7(2).
15
      (3)
An executive director is a director who is an employee of the NHS trust, and
a non-executive director is a director who is not an employee of the NHS
trust.
      (4)
Sub-paragraph (3) is subject to any provision made by regulations under
paragraph 4(1)(d).
20
Regulations
4     (1)
The Secretary of State may by regulations make provision with respect to—
(a)
the qualifications for and the tenure of office of the chairman and
directors of an NHS trust (including the circumstances in which they
cease to hold, or may be removed from, office or may be suspended
25
from performing the functions of the office),
(b)
the persons by whom the directors and any of the officers must be
appointed and the manner of their appointment,
(c)
the maximum and minimum numbers of the directors,
(d)
the circumstances in which a person who is not an employee of the
30
NHS trust is nevertheless, on appointment as a director, to be
regarded as an executive rather than a non-executive director,
(e)
the proceedings of the NHS trust (including the validation of
proceedings in the event of a vacancy or defect in appointment), and
(f)
the appointment, constitution and exercise of functions by
35
committees and sub-committees of the NHS trust (whether or not
consisting of or including any members of the board).
      (2)
Regulations under sub-paragraph (1) may, in particular, make provision to
deal with cases where the post of any officer of an NHS trust is held jointly
by two or more persons or where the functions of such an officer are in any
40
other way performed by more than one person.

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
196

Provision to be made by first NHS trust order
5     (1)
The first NHS trust order made in relation to any NHS trust must specify—
(a)
the name of the NHS trust,
(b)
the functions of the NHS trust,
(c)
the number of executive directors and non-executive directors,
5
(d)
where the NHS trust has a significant teaching commitment, a
provision to secure the inclusion in the non-executive directors
referred to in paragraph (c) of a person appointed from a university
with a medical or dental school specified in the order,
(e)
the operational date of the NHS trust, and
10
(f)
if a scheme is to be made under paragraph 8, the Primary Care
Trusts, Special Health Authority or Local Health Board which is to
make the scheme.
      (2)
The functions which may be specified in an NHS trust order include a duty
to provide goods or services so specified at or from a hospital or other
15
establishment or facility so specified.
      (3)
For the purposes of sub-paragraph (1)(d), an NHS trust has a significant
teaching commitment in the following cases—
(a)
if the NHS trust is established to provide services at a hospital or
other establishment or facility which, in the opinion of the Secretary
20
of State, has a significant teaching and research commitment, and
(b)
in any other case, if the Secretary of State so provides in the order.
      (4)
In a case where the order contains a provision made by virtue of sub-
paragraph (1)(d) and a person who is being considered for appointment by
virtue of that provision—
25
(a)
is employed by the university in question, and
(b)
would also, apart from this sub-paragraph, be regarded as employed
by the NHS trust,

his employment by the NHS trust must be disregarded in determining
whether, if appointed, he will be a non-executive director of the NHS trust.
30
      (5)
The operational date of the NHS trust is the date on which it will begin to
undertake the whole of the functions conferred on it.
      (6)
An NHS trust order must specify the accounting date of the NHS trust.
Temporary availability of staff etc.
6     (1)
An NHS trust order may require a Strategic Health Authority, Special
35
Health Authority, Primary Care Trust or Local Health Board to make staff,
premises and other facilities available to an NHS trust pending the transfer
or appointment of staff to or by the NHS trust and the transfer of premises
or other facilities to the NHS trust.
      (2)
An NHS trust order making provision under this paragraph may make
40
provision with respect to the time when the functions of the Strategic Health
Authority, Special Health Authority, Primary Care Trust or Local Health
Board under the provision are to come to an end.

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
197

Establishment of NHS trust prior to operational date
7     (1)
An NHS trust order may provide for the establishment of an NHS trust with
effect from a date earlier than the operational date of the NHS trust and,
during the period between that earlier date and the operational date, the
NHS trust has such limited functions for the purpose of enabling it to begin
5
to operate satisfactorily with effect from the operational date as may be
specified in the order.
      (2)
If an NHS trust order makes the provision referred to in sub-paragraph (1),
then, at any time during the period referred to in that sub-paragraph, the
NHS trust must be regarded as properly constituted (and may carry out its
10
limited functions accordingly) notwithstanding that, at that time, all or any
of the executive directors have not yet been appointed.
      (3)
If an NHS trust order makes the provision referred to in sub-paragraph (1),
the order may require a Strategic Health Authority, Special Health
Authority or Local Health Board to discharge such liabilities of the NHS
15
trust as—
(a)
may be incurred during the period referred to in that sub-paragraph,
and
(b)
are of a description specified in the order.
Transfer of staff to NHS trusts
20
8     (1)
This paragraph applies to any person who, immediately before an NHS
trust’s operational date—
(a)
is employed by a Special Health Authority, Primary Care Trust or
Local Health Board to work solely at, or for the purposes of, a
hospital or other establishment or facility which will become the
25
responsibility of the NHS trust, or
(b)
is employed by a Special Health Authority, Primary Care Trust or
Local Health Board to work at, or for the purposes of, such a hospital,
establishment or facility and is designated for the purposes of this
paragraph by a scheme made by the Special Health Authority,
30
Primary Care Trust or Local Health Board specified as mentioned in
paragraph 5(1)(f).
      (2)
Sub-paragraph (1) is subject to sub-paragraph (6).
      (3)
A scheme under this paragraph does not have effect unless approved by the
Secretary of State.
35
      (4)
Subject to sub-paragraphs (9) to (11), the contract of employment between a
person to whom this paragraph applies and the Special Health Authority,
Primary Care Trust or Local Health Board by whom he is employed has
effect from the operational date as if originally made between him and the
NHS trust.
40
      (5)
In particular—
(a)
all the rights, powers, duties and liabilities of the Special Health
Authority, Primary Care Trust or Local Health Board under or in
connection with a contract to which sub-paragraph (4) applies are by
virtue of this paragraph transferred to the NHS trust on its
45
operational date, and

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
198

(b)
anything done before that date by or in relation to the Special Health
Authority, Primary Care Trust or Local Health Board in respect of
that contract or the employee is deemed from that date to have been
done by or in relation to the NHS trust.
      (6)
In any case where—
5
(a)
an NHS trust order provides for the establishment of an NHS trust
with effect from a date earlier than the operational date of the NHS
trust,
(b)
on or after that earlier date but before its operational date the NHS
trust makes an offer of employment by the NHS trust to a person
10
who at that time is employed by a Special Health Authority, Primary
Care Trust or Local Health Board to work (whether solely or
otherwise) at, or for the purposes of, the hospital or other
establishment or facility which will become the responsibility of the
NHS trust, and
15
(c)
as a result of the acceptance of the offer, the person to whom it was
made becomes an employee of the NHS trust,

sub-paragraphs (4) and (5) have effect in relation to that person’s contract of
employment as if he were a person to whom this paragraph applies and as
if any reference in those sub-paragraphs to the operational date of the NHS
20
trust were a reference to the date on which he takes up employment with the
NHS trust.
      (7)
Sub-paragraphs (4) and (5) do not affect any right of an employee to
terminate his contract of employment if a substantial change is made to his
detriment in his working conditions; but no such right arises by reason only
25
of the change in employer effected by this paragraph.
      (8)
A scheme under this paragraph may designate a person either individually
or as a member of a class or description of employees.
      (9)
In the case of a person who falls within sub-paragraph (1)(b), a scheme
under this paragraph may provide that, with effect from the NHS trust’s
30
operational date, his contract of employment (his “original contract”) must
be treated, in accordance with the scheme, as divided so as to constitute—
(a)
a contract of employment with the NHS trust, and
(b)
a contract of employment with the Special Health Authority,
Primary Care Trust or Local Health Board by whom he was
35
employed before that date (the “transferor authority”).
     (10)
Where a scheme makes provision as mentioned in sub-paragraph (9)—
(a)
the scheme must secure that the benefits to the employee under the
two contracts referred to in that sub-paragraph, when taken
together, are not less favourable than the benefits under his original
40
contract,
(b)
this paragraph applies in relation to the contract referred to in sub-
paragraph (9)(a) as if it were a contract transferred under this
paragraph from the transferor authority to the NHS trust, and
(c)
so far as necessary to preserve any rights and obligations, the
45
contract referred to in sub-paragraph (9)(b) must be regarded as a
continuation of the employee’s original contract.
     (11)
Where, as a result of the provisions of this paragraph, by virtue of his
employment during any period after the operational date of the NHS trust—

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
199

(a)
an employee has contractual rights against an NHS trust to benefits
in the event of his redundancy, and
(b)
he also has statutory rights against the trust under Part 11 of the
Employment Rights Act 1996 (c. 18) (redundancy payments),

any benefits provided to him by virtue of the contractual rights referred to
5
in paragraph (a) must be taken as satisfying his entitlement to benefits under
that Part of that Act.
Transfer of property and liabilities to NHS trusts
9     (1)
The Secretary of State may by order transfer, or provide for the transfer of,
any of the property and liabilities of a Strategic Health Authority, a Primary
10
Care Trust, a Special Health Authority, a Local Health Board or the Secretary
of State, to an NHS trust, with effect from any date as may be specified in the
order.
      (2)
An order under this paragraph may create or impose such new rights or
liabilities in respect of what is transferred or what is retained as appear to the
15
Secretary of State to be necessary or expedient.
      (3)
Nothing in this paragraph affects the power of the Secretary of State or any
power of a Strategic Health Authority, Primary Care Trust, Special Health
Authority or Local Health Board to transfer property or liabilities to an NHS
trust otherwise than under sub-paragraph (1).
20
      (4)
Stamp duty is not chargeable in respect of any transfer to an NHS trust
effected by or by virtue of an order under this paragraph.
      (5)
Where an order under this paragraph provides for the transfer—
(a)
of land held on lease from a third party, or
(b)
of any other asset leased or hired from a third party or in which a
25
third party has an interest,

the transfer is binding on the third party notwithstanding that, apart from
this sub-paragraph, it would have required his consent or concurrence.
      (6)
“Third party” means a person other than the Secretary of State, a Strategic
Health Authority, a Primary Care Trust, a Special Health Authority or a
30
Local Health Board.
      (7)
Any property and liabilities which—
(a)
belong to, or are used or managed by, a Strategic Health Authority,
Special Health Authority or Local Health Board or belong to a
Primary Care Trust, and
35
(b)
will be transferred to an NHS trust by or by virtue of an order
under this paragraph,

must be identified by agreement between the Strategic Health Authority,
Primary Care Trust, Special Health Authority or Local Health Board and the
NHS trust or, in default of agreement, by direction of the Secretary of State.
40
      (8)
Where, for the purpose of a transfer pursuant to an order under this
paragraph, it becomes necessary to apportion any property or liabilities, the
order may contain such provisions as appear to the Secretary of State to be
appropriate for the purpose.
      (9)
Where any such property or rights fall within sub-paragraph (5), the order
45
must contain such provisions as appear to the Secretary of State to be

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 1 — Constitution, establishment, etc
200

appropriate to safeguard the interests of third parties, including, where
appropriate, provision for the payment of compensation of an amount to be
determined in accordance with the order.
     (10)
In the case of any transfer made by or pursuant to an order under this
paragraph, a certificate issued by the Secretary of State that any property
5
specified in the certificate or any such interest in or right over any such
property as may be so specified, or any right or liability so specified, is
vested in the NHS trust specified in the order is conclusive evidence of that
fact for all purposes.
     (11)
An order under this paragraph may include provision for matters to be
10
settled by arbitration by a person determined in accordance with the order.
     (12)
Sub-paragraph (11) does not affect section 272(8).
Trust funds and trustees
10    (1)
The Secretary of State may by order provide for the appointment of trustees
for an NHS trust to hold property on trust—
15
(a)
for the general or any specific purposes of the NHS trust (including
the purposes of any specific hospital or other establishment or
facility at or from which services are provided by the NHS trust), or
(b)
for any purposes relating to the health service.
      (2)
An order under sub-paragraph (1) may—
20
(a)
make provision as to the persons by whom trustees must be
appointed and generally as to the method of their appointment,
(b)
make any appointment subject to such conditions as may be
specified in the order (including conditions requiring the consent of
the Secretary of State),
25
(c)
make provision as to the number of trustees to be appointed,
including provision under which that number may from time to time
be determined by the Secretary of State after consultation with such
persons as he considers appropriate, and
(d)
make provision with respect to the term of office of any trustee and
30
his removal from office.
      (3)
Where under sub-paragraph (1) trustees have been appointed for an NHS
trust, the Secretary of State may by order provide for the transfer of any trust
property from the NHS trust to the trustees.
Pay and allowances
35
11    (1)
An NHS trust must pay—
(a)
to the chairman and any non-executive director of the NHS trust
remuneration of an amount determined by the Secretary of State, not
exceeding such amount as may be approved by the Treasury,
(b)
to the chairman and any non-executive director of the NHS trust
40
such travelling and other allowances as may be determined by the
Secretary of State with the approval of the Treasury,
(c)
to any member of a committee or sub-committee of the NHS trust
who is not also a director such travelling and other allowances as
may be so determined.
45

National Health Service Bill [HL]
Schedule 4 — NHS trusts established under section 25
Part 2 — Powers and duties
201

      (2)
If an NHS trust so determines in the case of a person who is or has been a
chairman of the NHS trust, the NHS trust must pay such pension,
allowances or gratuities to or in respect of him as may be determined by the
Secretary of State with the approval of the Treasury.
      (3)
Different determinations may be made under sub-paragraph (1) or sub-
5
paragraph (2) in relation to different cases or descriptions of cases.
Reports and other information
12    (1)
For each accounting year an NHS trust must prepare and send to the
Secretary of State an annual report in such form as may be determined by the
Secretary of State.
10
      (2)
At such time or times as may be prescribed, an NHS trust must hold a public
meeting at which must be presented—
(a)
its audited accounts and annual report, and
(b)
any report on the accounts made pursuant to section 8 of the Audit
Commission Act 1998 (c. 18) or paragraph 19 of Schedule 8 to the
15
Government of Wales Act 2006 (c. 32).
      (3)
In such circumstances and at such time or times as may be prescribed, an
NHS trust must hold a public meeting at which such documents as may be
prescribed must be presented.
13
An NHS trust must furnish to the Secretary of State such reports, returns and
20
other information, including information as to its forward planning, as, and
in such form as, he may require.
Part 2
Powers and duties
General
25
14    (1)
An NHS trust may do anything which appears to it to be necessary or
expedient for the purposes of or in connection with its functions.
      (2)
In particular it may—
(a)
acquire and dispose of property,
(b)
enter into contracts, and
30
(c)
accept gifts of property (including property to be held on trust, either
for the general or any specific purposes of the NHS trust or for any
purposes relating to the health service).
      (3)
The reference in sub-paragraph (2)(c) to specific purposes of the NHS trust
includes a reference to the purposes of a specific hospital or other
35
establishment or facility at or from which services are provided by the NHS
trust.
NHS contracts
15    (1)
In addition to carrying out its other functions, an NHS trust may, as the
provider, enter into NHS contracts.
40
      (2)
An NHS trust may not, as the provider, enter into an NHS contract for the
provision of high security psychiatric services (within the meaning of