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Clause 36: Power to make transitional and consequential provisions etc

334.     Subsection (1)(a) confers on the Secretary of State the power to make transitional or transitory provisions or savings in connection with the coming into force of any provision of the Bill. However, subsection (1)(a) is limited by the exclusions in subsection (2). Subsection (3) provides for appropriate transitional arrangements or savings to be made by the Welsh Ministers. Subsection (4) provides for appropriate transitional arrangements or savings to be made by DHSSPSNI. Subsection (5) provides that an order under the section may amend any enactment, and subsection (12) defines enactment as an enactment in or in an instrument made under a Measure or Act of the National Assembly for Wales or Northern Ireland legislation as well as an Act of Parliament. Subsection (6) provides for modifications by order of a provision brought into force to have effect until another provision comes into force.

335.     Transitional arrangements are likely to be necessary in relation to commencement of various provisions of the Bill, including the provisions for suspension and in relation to tobacco and pharmaceutical services. Through transitional arrangements it will be possible to modify the application of the Bill to existing situations and to ensure transition from the old law and procedures to the new.

336.     Subsection (1)(b) also confers on the Secretary of State power by order to make such supplementary, incidental, or consequential provision as he considers appropriate for the purposes of, in consequence of, or for giving full effect to, any provision of the Bill. This would, for example, enable amendments to be made to references in legislation to NHS trusts to take into account the possibility created by provisions of the Bill of there being a new kind of NHS trust, a de-authorised NHS foundation trust.

337.     By subsections (5) and (9)(a) orders of the Secretary of State may amend, repeal, revoke or otherwise modify any enactment contained in an Act of Parliament in which case they would be subject to approval by each House of Parliament under the affirmative resolution procedure. By subsection (5) and (9)(b) such orders of the Secretary of State, whether they amend any other legislation or not would be subject to the negative resolution procedure. The powers are additional to any other provision of the Bill.

Clause 37: Repeals and revocations

338.     Clause 37 introduces and gives effect to Schedule 6, which contains repeals and revocations.

Clause 38: Extent

339.     Clause 38 makes provision as to the extent of the provisions of the Bill. For further information on extent please refer to the Territorial Extent section of these notes.

Clause 39: Commencement

340.     Clause 39 provides for the coming into force of the provisions of the Bill. Subsection (1) provides that the Bill when enacted, with certain exceptions, will come into force on a day appointed in an order made by the Secretary of State by statutory instrument. By subsection (4) different days can be appointed for different purposes or different areas.

341.     The first exception is that, on the day on which the Bill receives Royal Assent, various provisions come into force by virtue of subsection (5). The provisions are the repeal of section 16(1A) of the 2002 Act (see paragraph 9(2) and (4) of Schedule 4) together with the associated repeals and revocations made by the Bill, and clause 39 itself, together with clauses 36 (power to make transitional and consequential provision etc), 38 (extent) and 40 (short title).

342.     Secondly, for the purposes of making regulations, the following regulation-making powers also come into force by virtue of subsection (6) on the day on which the Bill receives Royal Assent: the power at clause 8 for the Secretary of State to make regulations to disapply the duty to publish quality accounts, those for regulations providing that no offence is committed in relation to a tobacco advertisement by specialist tobacconists in certain circumstances as inserted into the 2002 Act by clause 20, for making provision in relation to tobacco displays as inserted into the 2002 Act by clause 21, for prohibiting or imposing requirements in relation to sales of tobacco products from vending machines as inserted into the 1991 Act by clause 22, or for restricting sales from vending machines in Northern Ireland as inserted into the 1991 (NI) Order by clause 23 and the provisions at paragraphs 11 and 12 of Schedule 4.

343.     The third exception is in relation to some of the minor and consequential amendments made in relation to the tobacco provisions in Schedule 4 which are identified at subsection (7). These come into force at the end of the period of two months beginning on the day on which the Bill receives Royal Assent.

344.     Subsection (8) provides for the section that introduces a provision of a Schedule mentioned in subsection (5), (6) or (7) to come into force for the purposes of the particular provision only.

345.     The Welsh Ministers have power by order made by statutory instrument to bring into force on a day appointed by them provisions of the Bill which relate to Wales and are identified at subsection (2). Similarly DHSSPSNI has power by order made by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12) to bring into force on a day appointed by DHSSPSNI provisions of the Bill which relate to Northern Ireland and are identified at subsection (3). These powers at subsections (2) and (3) each benefit from the flexibilities provided by subsection (4) and respectively constitute further exceptions to the power at subsection (1).

346.     Where amendments made by Schedule 3 (introduced by clause 19) relate to bodies operating in Wales, Scotland or Northern Ireland as well as in England, the Secretary of State is obliged to consult the Welsh Ministers, the Scottish Ministers or DHSSPSNI as appropriate before making an order bringing the amendments into force (see subsections (9), (10) (11) and (12)).

347.     Insofar as the provisions of Schedule 3 relate to amendments to the NHS (Wales) Act, the Welsh Ministers are obliged to consult the Secretary of State before making an order bringing the amendments into force by virtue of subsection (13).

Clause 40: Short title

348.     The Bill is to be known as the Health Act 2009.


349.     The Government’s view is that the Bill will have little overall effect on public sector manpower and financial cost to public expenditure. Further details on the financial implications of the provisions contained in the Bill are outlined below and under the heading Summary of Impact Assessments.

350.     The provisions that will have a limited impact on public finance and/or public service manpower are those in relation to quality accounts, innovation prizes, TSAs for NHS bodies, the prohibition of display of tobacco products, changes to local pharmaceutical services (LPS) contracts and LGO’s investigation into complaints about privately arranged or funded adult social care.

Quality accounts

351.     The Government anticipates that the cost and public sector manpower impact of data collection for quality accounts will be zero, as the data collection should already be carried out as part of separate work on developing clinical quality metrics as part of the NHS Next Stage Review Quality Framework. The manpower involved in producing the quality account, after the data has been collected, will be variable and will depend on the size of the organisation and number and type of services provided. The Government estimates that a member of staff could take a total of between half a week to five weeks to analyse the data and produce the quality account.

Innovation prizes

352.     For indicative purposes, the Government estimates that a total of up to £5million annually (from 2010/11) will be made available for the innovation prizes. to The Government has set aside up to £1million for the administration of this scheme, which will also include related publicity and the hosting of an annual awards ceremony.

Trust special administrators for NHS bodies

353.     The TSA regime will require support for the Secretary of State for Health. The government expects that the regime will be administered by the NHS Chief Executive and senior managers in the NHS Finance, Performance and Operations directorate within the Department of Health, resulting in an expected 96 hours in total being spent on each episode.


354.     Monitoring and enforcing the prohibition on the display of tobacco products and any regulations governing the sale of tobacco from vending machines will be responsibility of local authorities, via trading standards. Trading standards currently ensure that retailers of tobacco products comply with existing legislation, including restrictions on tobacco advertising and age of sale restrictions for both sale from retailers and vending machines. The provisions in the Bill will change the compliance test used by trading standards when checking compliance with restrictions on the sale of tobacco, but the provisions will not increase the existing burden on trading standards on a continuing basis. There may be a small increase in cost for local authorities in the first year of implementation due to the need to educate and support retailers and trading standards on the changes in law.

Pharmaceutical Services (in England and Wales)

355.     The exact costs resulting from proposals to create a duty on PCTs to prepare and to publish statements of pharmaceutical needs and to use these to assess applications to provide pharmaceutical services are not yet known, because the detailed regulations that will be brought forward to implement these proposals have not yet been prepared. However, the final Impact Assessment indicates an average cost to the NHS (excluding minimal one-off costs) of £1.8 million in the first year, £1 million in subsequent years and a further 5% reduction from the adoption of good practice in reviewing and refining such assessments. The Government assumes that there would initially be a 10% reduction in appeals, with a further 5% reduction after assessments of pharmaceutical needs are refined, and therefore reduced costs for PCTs and for the NHS Litigation Authority. The Government expects that existing PCT staff will spend more time on the preparation of statements of pharmaceutical needs. This is estimated at three months for a senior manager and one month for administrative support. Senior PCT board members will also need to sign-off the final statement prior to publication.

356.     In respect of then applying these assessments to determine contractors’ applications to provide pharmaceutical services, The Government intends that PCTs’ decisions, by virtue of being related to pre-existing statements of needs, become more transparent and consistent and that this may, in time, lead to some reduction in the time spent dealing administratively with such applications. However, it is not possible to estimate the exact effects at this stage, as these will depend on the detail contained in the regulations that will be needed to implement the proposal.

357.     The exact costs resulting from proposals to introduce powers to enable PCTs in relation to England, and LHBs in relation to Wales, to take appropriate action against contractors on the grounds of inadequate performance or quality are not yet known, because the detailed regulations that will be brought forward to implement these proposals have not yet been prepared. However, the final Impact Assessment relating to the changes to pharmaceutical services in England models an illustrative scenario in which the NHS in England incurs an average cost of £600,000 each year.

358.     Existing PCT and LHB staff will need to familiarise themselves with all new requirements. Where PCTs, in relation to England only, take action to remove a contractor, an illustrative scenario has been evaluated in which additional PCT staff time to the value of 25 days or £6,000 per appealed case will be incurred.

359.     No additional implications for NHS staff have been identified in respect of appeals concerning remedial notices or withholding payments from contractors as it is anticipated that PCTs in relation to England, and LHBs in relation to Wales, would rarely use such measures against contractors and only where the grounds for action were serious and without ambiguity. An assessment in relation to England only has estimated that, with an expected 10% reduction in appeals to the NHS Litigation Authority concerning decisions on applications based on pharmaceutical needs assessments (see above), no implications for their staffing have so far been identified, although there may be some increase in workloads if contractors wish to test the boundaries of the new regime.

360.     In respect of the proposed changes to local pharmaceutical services (LPS) legislation, it is difficult to estimate the financial implications for PCTs in relation to England, and LHBs in relation to Wales, as local pharmaceutical service providers, especially where such contracts are only entered into in limited circumstances. Generally, PCT and LHB allocations should provide sufficient funding to cover the provision of pharmaceutical services in normal circumstances but in emergencies such as, for example, a flu pandemic, all PCT and LHB costs would be distorted and there may be extra minimal costs to, and staff demands on, PCTs and LHBs to meet such a need where there is no other suitable provider.

Adult social care

361.     Establishing a complaints procedure for privately arranged or funded adult social care is likely to increase the workload of the LGO, who will be the body responsible for investigating such complaints. The Government estimates that the LGO would need to consider 800 to 1000 additional cases per year. Estimates for the set up costs for the LGO in 2009/10 are in the region of £500,000 to £770,000 and full year running costs from 2010/11 are estimated at approximately £1.3 million to £1.45 million.


362.     A separate Impact Assessment (IA) has been produced to accompany the Bill. The IA can be found on the Department of Health website at the following address— Copies can be obtained from the Vote Office in the House of Commons.

NHS Constitution

363.     The NHS Constitution, published on 21st January 2009, sets out the principles and values of the NHS in England. It sets out the rights to which patients, public and staff are entitled, the pledges which the NHS is committed to deliver, and the responsibilities which the public, patients and staff owe to each other to ensure the NHS operates fairly and effectively.

364.     The Constitution itself will not be in primary legislation (the rights contained already exist in law.) However, the Bill will create a duty on NHS bodies, primary medical services and private and voluntary sector providers supplying NHS services in England to have regard to the Constitution. It will also place duties on the Secretary of State to review the Constitution at least every ten years, to review and to republish the Handbook at least every 3 years, and to report on its impact.

365.     The Impact Assessment was published alongside the final Constitution, on 21st January 2009 - after the introduction of the Health Bill in the House of Lords.

366.     The proposed legislative duties reinforce the benefits of the Constitution, reducing the likelihood that these benefits will be eroded over time. Consideration of the Constitution by bodies providing NHS care in England may involve changes in planning and commissioning and an increased emphasis by bodies providing NHS care, public and staff to know their rights, pledges and responsibilities and appropriate redress. These may have both costs and benefits; there is currently insufficient data to make a realistic estimate.

367.     The main direct costs associated with the legal duties to make available, to review, and to revise the NHS Constitution and Explanatory Guide are publication and staff costs. Reviewing the NHS Constitution will incur a cost every 10 years, and reviewing the Handbook will incur a cost at least every three years, in line with the legislative intent. Benefits are difficult to quantify, but putting a duty to review these documents will allow them to be kept up to date with legal and policy changes, to remain prominent in decision-making by NHS staff, and will provide an opportunity to assess whether the benefits of the constitution and of its different elements exceed the costs.

368.     Further information on the duty on the Secretary of State to report on the NHS Constitution will be made available at a later date.

Quality Accounts

369.     Provision of easily accessible information to all patients, the public, and others will allow for providers of NHS healthcare to be held to account for the quality of services they provide. This is expected to bring about benefits from improvements to the quality of those services, as providers react to public scrutiny and accountability.

370.     The detail of the content of the accounts will be specified in secondary legislation. The main cost is expected to be that of staff costs for producing the account each year, alongside the potential costs of using a flexibility to determine local content, and costs associated with voluntary external validation of the reports. Any data mandated for inclusion in the accounts is likely already to be collected for other purposes, so no further data collection costs are anticipated. The IA recognises risks of perverse incentives in the publication of such information, and highlights that this will be considered when regulations are made specifying the content of the accounts.

Direct Payments for Health Care

371.     The Impact Assessment describes the experience of personal budgets, including direct payments, in social care in England and in health and social care in other countries. The benefits derive from improved service user wellbeing through greater self-direction, leading to increased satisfaction and feeling of being in control, and lower costs through more planned care and a greater focus on prevention. Pilots will explore the potential to use personal health budgets to give more autonomy and choice to more deprived patients, thus reducing health inequalities. Personal health budgets may incur additional costs as the care planning process becomes more personalised, and oversight is necessary to ensure choices are safe and prudent, from the perspective both of patient and of the funding authority. These costs are expected to be justified by the benefits, but piloting is proposed in view of risks and uncertainties regarding how personal health budgets, including direct payments, can best be developed for different groups of people. The specific costs of piloting are justified by the information that will gathered as to how the policy should best proceed and how it should be applied to different groups of people, thereby mitigating a large part of the uncertainty. The Impact Assessment presents direct payments within the broader scope of the personal health budgets policy, as one potential mechanism for delivery.

Innovation Prizes

372.     The main costs are in relation to Innovation prizes are likely to be the cost incurred by those competing for the prizes, together with the funding of the prizes themselves, and administration costs including the establishment of an expert panel to set the prizes. Social benefits are expected to be realised from the benefits of the solution to problems. It will be for the expert panel to devise challenges that are on the one hand likely to be solved and on the other hand promise social benefits that justify the effort that they are likely to induce.

Trust Special Administrators for NHS Bodies

373.     Benefits can be anticipated both in terms of improving the quality of care for patients in the affected area, and improving the efficiency at which that care is provided. There is also a potential benefit from incentivising underperforming providers to respond more actively to prior performance interventions due to the greater certainty of action if they fail to improve. The largest cost of the regime is likely to arise from administration costs of using external management to take on the board functions of the organisation, produce a plan for resolution, and, potentially, to implement that plan; such costs are outweighed by the potential cost-saving and patient benefits from achieving speedier resolution of quality and financial problems.

Suspension of NHS and other Health Appointments

374.     The Impact Assessment indicates the largest benefit to be the potential to avoid future untoward incidents. Under the status quo, where there is information that gives cause for concern about an individual continuing to hold office, there are risks of untoward incidents associated with leaving an unfit person in post, and risks of legal costs associated with removing a person from post inappropriately. Both these risks are mitigated by the introduction of the provisions in the Bill. Costs will be incurred in cases where a replacement is needed to cover the period of suspension.


375.     The two main provisions relating to tobacco are described in separate IAs. The large monetised benefits described in the two IAs arise from life years gained by reducing the future take-up of smoking amongst young people; the benefits are presented as a range. They also take into account the fact that some of the averted smokers would have quit anyway at some point.

376.     The main one-off cost associated with the provisions on display of tobacco products arises from the need to adjust shops so that tobacco is no longer visible, and the IA notes that the legislation will allow for some very low cost compliance options. The main ongoing costs include time costs to retailers through potential increased serving times and the need to maintain a price list, and the opportunity cost to the exchequer from lost duty revenue.

377.     The provisions relating to vending machines will be implemented via secondary legislation, but the IA shows that the main one-off costs would arise from fitting age-restriction devices to vending machines. Ongoing costs will centre around the time taken for staff to undertake age checks, and the opportunity cost to the exchequer from lost duty revenue. Both policies are likely to see a marginal increase in enforcement costs during the initial years of implementation.

378.     The Impact Assessments demonstrate that even on cautious assumptions the value of the health benefits that would be secured by the proposals would greatly exceed the costs incurred.

Pharmacy services in England

379.     The market entry Impact Assessment projects improved health outcomes for patients as commissioning of services better reflects the needs of the local population. This is illustrated on the assumption that PCTs will wish to commission increased provision of smoking cessation services. Greater clarity in the contracting process will facilitate business planning and reduce the likelihood of legal challenge of PCT decisions. There will be costs to the PCT of conducting the pharmaceutical needs assessments required. If PCTs discover and address service needs they were previously unaware of, costs could also increase.

380.     The provisions relating to remedial notices and withholding of payments give PCTs powers to address poor or inadequate performance. The bulk of the changes will be brought about in secondary legislation under existing powers; the Impact Assessment presents an illustrative scenario of the potential costs and benefits arising from a reduction in the incidence of prescription errors. The new proposals are thus expected to bring benefits to service users by tackling poor quality and strengthening incentives for all providers to raise quality standards. The associated costs are likely to arise from PCTs acting against lower quality providers, and any associated legal costs for both PCT and provider. Contractors are expected to incur costs in gathering and providing the information required by PCTs to assess the quality of their service

381.     The provisions that allow PCTs to provide local pharmaceutical services themselves in situations of emergency or where a suitable alternative is lacking are likely to be implemented very rarely. PCT allocations should provide sufficient funding to cover the provision of pharmaceutical services in normal circumstances, but in emergencies such as, for example, an influenza pandemic, all PCT costs would be distorted and there may be extra costs to PCTs to meet such need. At this stage, the Department has not identified a significant impact arising from these proposals, as the use by PCTs of these new provisions would be expected to be of limited duration and only in exceptional circumstances. For this reason, an Impact Assessment has not been prepared. However, it is expected that the proposal will bring about benefits such that PCTs are able to take action, when appropriate and in the absence of any other suitable provider, to help secure continued access to medicines and other pharmaceutical services for their population in defined circumstances. In such circumstances, PCTs would be expected to have due regard for the cost-effectiveness of their actions.

Adult Social Care

382.     General improvement in complaints handling is expected, as well as resultant service improvements experienced by service-users. There are expected to be ongoing costs for independent sector care providers that do not currently have adequate complaints handling procedures. There will be costs to care providers who are the subject of a complaint referred to the LGO by a self-funding service user. There are expected to be ongoing costs to central government in respect of the cost to the LGO of handling a larger number of complaints.

Disclosure of Information

383.     The data disclosure provision does not represent a change in policy, but rather a change to the legal basis of a policy that has existed for many years. Impact Assessments are only required for those provisions in the Bill that change Government policy and are thus likely to increase or decrease costs to the public, private, or third sectors. Similarly, Equality Impact Assessment screening has also been undertaken for this policy. It was concluded that a full Equality Impact Assessment was not required as no policy, function, or process is being changed.

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