Health and Social Care Bill

House of Commons

Session 2010 - 11
Internet Publications
Other Bills before Parliament

Health and Social Care Bill

Health and Social Care Bill
Part 4 — NHS Foundation trusts & NHS trusts
129

152
Significant transactions
After section 51 of the National Health Service Act 2006 insert—
“51A
Significant transactions
(1)
An NHS foundation trust may enter into a significant transaction only
if more than half of the members of the council of governors of the trust
5
voting approve entering into the transaction.
(2)
“Significant transaction” means a transaction or arrangement of such
description as may be specified in the trust’s constitution.
(3)
If an NHS foundation trust does not wish to specify any descriptions of
transaction or arrangement for the purposes of subsection (2), the
10
constitution of the trust must specify that it contains no such
descriptions.”
Mergers, acquisitions, separations and dissolution
153
Mergers
(1)
In section 56 of the National Health Service Act 2006 (mergers), in subsection
15
(1), for the words from “authorisation” to the end substitute “the dissolution of
the trusts and the establishment of a new NHS foundation trust.”
(2)
After that subsection insert—
“(1A)
An application under this section may be made only with the approval
of more than half of the members of the council of governors of each
20
applicant.”
(3)
In subsection (2) of that section, omit—
(a)
paragraph (a),
(b)
paragraph (c) (but not the “and” following it), and
(c)
the words from “and must give” to the end.
25
(4)
Omit subsection (3) of that section.
(5)
For subsection (4) of that section substitute—
“(4)
The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trusts and the
establishment of the proposed new trust have been taken.”
30
(6)
Omit subsections (5) to (10) of that section.
(7)
In subsection (11) of that section, for “On an authorisation being given under
this section” substitute “On the grant of the application”.
154
Acquisitions
After section 56 of the National Health Service Act 2006 insert—
35
“56A
Acquisitions
(1)
An application may be made jointly by—
(a)
an NHS foundation trust (A), and

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(b)
another NHS foundation trust or an NHS trust (B),

to the regulator for the acquisition by A of B.
(2)
An application under this section may be made only with the approval
of more than half of the members of the council of governors of each
applicant.
5
(3)
The application must be accompanied by a copy of the proposed
constitution of A, amended on the assumption that A acquires B.
(4)
The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the acquisition have been taken.
(5)
On the grant of the application, the proposed constitution has effect,
10
but where a person who is specified as a director of A in the
constitution has yet to be appointed as such, the directors of A may
exercise that person’s functions under the constitution.”
155
Separations
After section 56A of the National Health Service Act 2006 insert—
15
“56B
Separations
(1)
An application may be made to the regulator by an NHS foundation
trust for the dissolution of the trust and the establishment of two or
more new NHS foundation trusts.
(2)
An application under this section may be made only with the approval
20
of more than half of the members of the council of governors of the
applicant.
(3)
The application must, by reference to each of the proposed new trusts—
(a)
specify the property and liabilities proposed to be transferred
to it;
25
(b)
be accompanied by a copy of its proposed constitution.
(4)
The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trust and the
establishment of each of the proposed new trusts have been taken.
(5)
On the grant of the application, the proposed constitution of each of the
30
new trusts has effect but, in the case of each of the new trusts, the
proposed directors may exercise the functions of the trust on its behalf
until a board of directors is appointed in accordance with the
constitution.”
156
Dissolution
35
After section 57 of the National Health Service Act 2006 insert—
“57A
Dissolution
(1)
An application may be made by an NHS foundation trust to the
regulator for dissolution.
(2)
The regulator must grant the application if it is satisfied that—
40
(a)
the trust has no liabilities, and

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(b)
such steps as are necessary to prepare for the dissolution have
been taken.
(3)
Where an application under this section is granted, the regulator must
make an order—
(a)
dissolving the trust in question, and
5
(b)
transferring, or providing for the transfer of, the property of the
trust (if any) to the Secretary of State.”
157
Supplementary
(1)
In section 57 of the National Health Service Act 2006 (mergers:
supplementary), in subsection (1)—
10
(a)
for “an authorisation is given under section 56” substitute “an
application is granted under section 56 or 56B”, and
(b)
at the end insert “or trusts”.
(2)
In subsection (2) of that section—
(a)
for “such an authorisation is given, the Secretary of State” substitute
15
“such an application is granted, the regulator”, and
(b)
in paragraph (a), after “dissolving the” insert “trust or”.
(3)
After that subsection insert—
“(2A)
An order under section 56 or 56B is conclusive evidence of
incorporation and conclusive evidence that the corporation is an NHS
20
foundation trust.”
(4)
In subsection (3)(a) of that section, for “section 54(3)” substitute “section 54(4)”.
(5)
In subsection (4) of that section—
(a)
for “section 56(1) and (2)” substitute “sections 56(2) and 56B(3)”, and
(b)
for “section 54(4)(a) to (c)” substitute “section 54(4)(a) or (c)”.
25
(6)
In subsection (5) of that section, after “section 56” insert “or 56A”.
(7)
Omit subsection (6) of that section.
(8)
For the title to that section substitute “Sections 56 to 56B: supplementary”.
(9)
For the cross-heading preceding section 56 of that Act substitute “Mergers,
acquisitions and separations”.
30
(10)
In section 64 of that Act (orders and regulations under Chapter 5 of Part 2 of
that Act), in subsection (4)—
(a)
omit the “or” immediately after paragraph (b), and
(b)
after paragraph (c), insert “, or
“(d)
section 57A.”
35
(11)
After that subsection insert—
“(4A)
The Statutory Instruments Act 1946 applies in relation to the power of
the regulator to make an order under section 57 or 57A as if the
regulator were a Minister of the Crown.”

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Failure
158
Repeal of de-authorisation provisions
(1)
Omit section 52C of the National Health Service Act 2006 (guidance etc. on de-
authorisation notices).
(2)
In section 53 of that Act (voluntary arrangements), in subsection (4A), for
5
“sections 52B to 52E and Chapter 5A do” substitute “Chapter 5A does”.
(3)
Omit section 65E of that Act (NHS foundation trusts: de-authorisation and
appointment of administrator).
(4)
Omit Schedule 8A to that Act (de-authorised NHS trusts and NHS foundation
trusts).
10
(5)
Omit section 15 of the Health Act 2009 (which inserts sections 52A to 52E and
Schedule 8A in the National Health Service Act 2006).
(6)
In section 272 of the National Health Service Act 2006 (orders, regulations,
rules and directions)—
(a)
in subsection (5), omit paragraph (aa), and
15
(b)
in subsection (6A), omit “52D(1), 52E(6),”.
(7)
In section 275(1) of that Act (interpretation), in the definition of “NHS trust”—
(a)
omit “, subject to Schedule 8A,”, and
(b)
omit “52D(1) or”.
(8)
In section 206(1) of the National Health Service (Wales) Act 2006, in the
20
definition of “NHS trust”, omit “52D(1) or”.
159
Trust special administrators
(1)
In section 65A of the National Health Service Act 2006 (bodies to which trust
special administration regime applies)—
(a)
in subsection (1), for paragraphs (b) and (c) substitute—
25
“(b)
any NHS foundation trust.”, and
(b)
omit subsection (2).
(2)
In section 65D of that Act (NHS foundation trusts: regulator’s notice), for
subsections (1) to (3) substitute—
“(1)
This section applies if the regulator is satisfied that an NHS foundation
30
trust is, or is likely to become, unable to pay its debts.
(2)
The regulator may make an order authorising the appointment of a
trust special administrator to exercise the functions of the governors,
chairman and directors of the trust.”
(3)
In subsection (4) of that section—
35
(a)
for “giving a notice” substitute “making an order”,
(b)
after paragraph (a) insert—
“(aa)
the National Health Service Commissioning Board,”,
and
(c)
omit paragraph (b) (but not the “and” following it).
40

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(4)
After that subsection insert—
“(5)
An order under subsection (2) must specify the date when the
appointment is to take effect, which must be within the period of 5
working days beginning with the day on which the order is made.
(6)
The regulator must lay before Parliament (with the statutory
5
instrument containing the order) a report stating the reasons for
making the order.
(7)
If the regulator makes an order under subsection (2), it must—
(a)
appoint a person as the trust special administrator with effect
from the day specified in the order, and
10
(b)
publish the name of the person appointed.
(8)
A person appointed as a trust special administrator under this section
holds and vacates office in accordance with the terms of the
appointment.
(9)
When the appointment of a trust special administrator under this
15
section takes effect, the trust’s governors, chairman and executive and
non-executive directors are suspended from office; and Chapter 5 of
this Part, in its application to the trust, is to be read accordingly.
(10)
But subsection (9) does not affect the employment of the executive
directors or their membership of any committee or sub-committee of
20
the trust.
(11)
The Secretary of State may indemnify a trust special administrator
appointed under this section in respect of such matters as the Secretary
of State may determine.”
(5)
For the title to that section substitute “NHS foundation trusts: appointment of
25
trust special administrator”.
(6)
Omit the cross-heading preceding that section.
160
Procedure etc.
(1)
In section 65F of the National Health Service Act 2006 (administrator’s draft
report), in subsection (2), for paragraph (a) substitute—
30
“(a)
the Board,”.
(2)
At the end of that section insert—
“(4)
For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”
35
(3)
In section 65H of that Act (consultation requirements), in subsection (7), for
paragraph (a) substitute—
“(a)
the Board,”.
(4)
In subsection (8) of that section, for paragraphs (a) to (d) substitute—
“(a)
any local authority which arranges for the provision of services
40
by the trust or to which the trust provides services,”.

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(5)
At the end of that section insert—
“(12)
For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”
(6)
At the end of section 65I of that Act (administrator’s final report) insert—
5
“(4)
For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”
(7)
At the end of section 65J of that Act (power to extend time limits for preparing
reports and carrying out consultation) insert—
10
“(5)
For the purposes of this section in its application to the case of an NHS
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”
161
Action following final report
(1)
At the end of section 65K of the National Health Service Act 2006 (Secretary of
15
State’s decision on what action to take) insert—
“(3)
For the purposes of subsections (1) and (2) in their application to the
case of an NHS foundation trust, the references to the Secretary of State
are to be read as references to the regulator.
(4)
The regulator may, in the case of an NHS foundation trust, make an
20
order—
(a)
dissolving the trust, and
(b)
transferring, or providing for the transfer of, the property and
liabilities of the trust to—
(i)
another NHS foundation trust, or
25
(ii)
the Secretary of State.
(5)
Before making an order under subsection (4), the regulator must obtain
the consent of the Secretary of State.
(6)
Where the Secretary of State refuses consent, the regulator must within
the period of 20 working days beginning with the day on which the
30
regulator receives written notification of the Secretary of State’s refusal,
decide on alternative action to take in relation to the trust.
(7)
The liabilities that may be transferred by virtue of subsection (4)(b)(i)
include criminal liabilities.
(8)
An order under subsection (4) may include provisions corresponding
35
to those in Schedule 9.”
(2)
In section 65L of that Act (trusts coming out of administration), after subsection
(2) insert—
“(2A)
For the purposes of subsections (1) and (2) in their application to the
case of an NHS foundation trust—
40
(a)
the references to the Secretary of State are to be read as
references to the regulator, and

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(b)
the reference to the chairman and directors of the trust is to be
read as including a reference to the governors.”
(3)
Omit subsections (3) to (5) of that section.
(4)
At the end of that section insert—
“(6)
Subsection (7) applies in the case of an NHS foundation trust.
5
(7)
If it appears to the regulator to be necessary in order to comply with
Schedule 7, the regulator may by order—
(a)
terminate the office of any governor or of any executive or non-
executive director of the trust;
(b)
appoint a person to be a governor or an executive or non-
10
executive director of the trust.”
162
Sections 159 to 161: supplementary
(1)
At the end of section 65M of the National Health Service Act 2006 (replacement
of trust special administrator) insert—
“(3)
For the purposes of this section in its application to the case of an NHS
15
foundation trust, the references to the Secretary of State are to be read
as references to the regulator.”
(2)
At the end of section 65N of that Act (power to issue guidance) insert—
“(4)
For the purposes of this section in its application to cases of NHS
foundation trusts, the reference in subsection (1) to the Secretary of
20
State is to be read as a reference to the regulator.”
(3)
In section 65O of that Act (interpretation of Chapter 5A), in the definition of
“trust special administrator”, after “65B(6)(a)” insert “, section 65D(2)”.
(4)
In section 39 of that Act (register of NHS foundation trusts), in subsection (2),
at the end insert “,
25
(g)
a copy of any order made under section 65D, 65J, 65K or 65L,
(h)
a copy of any report laid under section 65D,
(i)
a copy of any draft report published under section 65F,
(j)
a copy of any statement under section 65G,
(k)
a copy of any notice published under section 65H, 65J or 65K,
30
(l)
a copy of any final report published under section 65I,
(m)
a copy of any statement published under section 65J,
(n)
a copy of any information published under section 65M.”
(5)
In section 272 of that Act (orders etc.), in subsection (5), in paragraph (ab)—
(a)
after “65B(1),” insert “65D(2),”,
35
(b)
omit “65E(1),”,
(c)
after “65J(2),” insert “65K(4),”, and
(d)
for “or (5)” substitute “, (5) or (7)”.
(6)
After that subsection insert—
“(6ZA)
The Statutory Instruments Act 1946 applies in relation to the power of
40
the regulator to make an order under Chapter 5A as if the regulator
were a Minister of the Crown.”