Session 2010-11
Health and Social Care BillThese notes refer to the Health and Social Care Bill as introduced in the House of Commons on 19 January 2011 Explanatory NotesIntroduction1. These explanatory notes relate to the Health and Social Care Bill as introduced in the House of Commons on 19 January 2011. They have been prepared by the Department of Health in order to assist the reader of the Bill and help inform debate on it. 2. These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. Therefore, where a clause or part of a clause does not seem to require any explanation or comment, none is given. 3. A glossary of terms and abbreviations used in these explanatory notes is provided at the end of these notes. background and summary4. The Bill contains provisions on a range of policies. It contains 12 Parts and 22 Schedules. The Bill makes changes to a number of existing Acts, most notably the National Health Service Act 2006 (the ‘NHS Act’). 5. The Bill is intended to give effect to the policies requiring primary legislation that were set out in the White Paper Equity and Excellence: Liberating the NHS , (available in the Library of the House of Commons , and at www.dh.gov.uk ) which was published in July 2010.
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overview of the structurePart 1 – The health service in England7. Part 1 sets out a framework in which functions in relation to the health service are conferred directly on the organisations responsible for exercising them and the Secretary of State retains only those controls necessary to discharge core functions. The Secretary of State will continue to be under a duty to promote the comprehensive health service, but the focus of the role of the Secretary of State will shift to public health, and there will be a responsibility (with local authorities) to protect and improve public health. 8. Part 1 also establishes a new non-departmental public body to be known as the NHS Commissioning Board, accountable to the Secretary of State. The NHS Commissioning Board will have broad overarching duties to promote the comprehensive health service (other than in relation to public health) and to exercise its functions with a view to securing the provision of services for the purposes of that service. 9. Part 1 also makes provision for the constitution of commissioning consortia, which would be corporate statutory bodies, authorised to act by the NHS Commissioning Board. These bodies will be responsible for commissioning the majority of health services. 10. This part also contains related miscellaneous measures including the abolition of Strategic Health Authorities (SHAs) and Primary Care T rusts (PCTs), amendments to the Mental Health Act 1983 and pharmaceutical services expenditure. Part 2 – Further provision about public health11. Part 2 deals with a number of provisions relating to the public health service including the abolition of the Health Protection Agency, functions in relation to biological substances and radiation protection, the repeal of the AIDS (Control) Act 1987 and co-operation with bodies exercising functions in relation to public health. Part 3 – Economic regulation of h ealth and adult social care services12. Chapter 1 makes provision for Monitor, the Independent Regulator of NHS F oundation T rusts to continue in existence, but to be known in legislation as "Monitor". It outlines Monitor’s overarching duties and constitution. 13. Chapter 2 provides Monitor with powers to ensure that competition and patient choice operate effectively. Monitor would also be able to set or introduce new licence conditions for NHS healthcare providers 14. Chapter 3 allows for the protection of core health services through a process of defining designated services. 15. Chapter 4 provides Monitor with the necessary powers to run a system of licensing that will enable it to carry out the majority of its regulatory functions. 16. Chapter 5 sets out the proposed arrangements for Monitor to set prices for NHS services in conjunction with the NHS Commissioning Board. 17. Chapter 6 provides Monitor with powers to introduce failure arrangements in the health sector that will apply both to companies and NHS foundation trusts. Powers are also being taken to apply normal corporate insolvency procedures to foundation trusts. 18. Chapter 7 makes provision to ensure the continuity of designated services in the event that a provider fails, through either rescuing the provider as a going concern or by the transfer of designated and other services to another health provider or a number of different providers. 19. Chapter 8 deals with miscellaneous matters concerning Part 3 including the service of documents, electronic communications, interpretation and consequential amendments. Part 4 – NHS foundation trusts and NHS trusts20. Part 4 makes various changes to the provisions governing NHS foundation trusts. It removes various restrictions on foundation trusts that reflect changes to the role of Monitor introduced by Part 3 of the Bill. It provides for changes to foundation trusts’ internal governance arrangements and to the powers of governors. It repeals NHS trust legislation, and Monitor’s power to authorise new foundation trusts, from 1 April 2014. It also makes some amendments to the finance and accounting arrangements for foundation trusts and removes the cap on income from private patients. In addition, it makes some interim provisions specific to foundation trusts to cover the transitional period. Part 5 – Public involvement and local government21. Chapter 1 makes provision for the creation of a new national body, Healthwatch England, to be established as a statutory committee within the Care Quality Commission. It also provides for th e establishment of local Healthwatch organisations in each local authority area. 22. Chapter 2 deals with the health scrutiny functions of local authorities and makes provision for the establishment of health and wellbeing boards in each upper tier local authority area. It sets out their role in preparing the joint strategic needs assessment, the joint health and wellbeing strategy and in promoting integrated working between NHS, public health and social care commissioners. This chapter also contains provisions to make it p ossible for foundation t rusts and commissioning consortia to be designated as Care Trusts. 23. Chapter 3 removes the current restrictions on those to whom the Health Service Commissioner (more commonly known as the Health Service Ombudsman) can send investigation reports and statements of reasons. Part 6 – Primary care services24. Part 6 makes changes to the NHS Act that are mainly required to revise, but not substantially change, the existing provisions with relation to medical, dental, ophthalmic and pharmaceutical services . This is as a consequence of the structural changes elsewhere in this Bill that creat e the NHS Commissioning Board, commissioning c onsortia and the public health service , and abolish PCTs and SHAs . Part 7 – Regulation of health and social care workers25. Part 7 makes various changes to the regulation of health and social care workers. It provides for the abolition of the General Social Care Council and the transfer of some of its functions to the Health Professions Council, which will be renamed the Health and Care Professionals Council to reflect its wider remit across health and social care. 26. It also makes changes to the funding and functions of the Council for Healthcare Regulatory Excellence (CHRE), which is to be renamed the Professional Standards Authority for Health and Social Care. 27. Provision is also made in this Part for the abolition of the Office of the Health Professions Adjudicator. Part 8 – The National Institute for Health and Care Excellence28. Part 8 re-establishes the National Institute for Health and Clinical Excellence ( NICE ) Special Health Authority as a non-departmental public body. It will also be re-named as the National Institute for Health and Care Excellence. 29. This Part also sets out how NICE will develop quality standards, give advice, guidance or provide information, and make recommendations on areas including medicines and treatment. Part 9 – The Health and Social Care Information Centre30. Chapter 1 sets out how the Secretary of State or the NHS Commissioning Board may prepare and publish information standards. 31. Chapter 2 re-establishes the Health and Social Care Information Centre Special Health Authority as a non-departmental public body. Its functions will relate to the collection, analysis and publication and or other dissemination of information relevant to the health service or adult social care at a national level. 32. Chapter 2 also sets out powers for the Information Centre to require information to be provided by health or social care bodies, and makes provision for the organisation to minimise the burden of central information collection. Part 10 – Abolition of certain public bodies33. Part 10 contains provisions that abolish the Alcohol Education and Research Council, the Appointments Commission, the National Information Governance Board for Health and Social Care, the National Patient Safety Agency and the NHS Institute for Innovation and Improvement. Section 250 of the NHS Act will be repealed, with a saving provision for the continuation of the Joint Committee on Vaccination and Immunisation as a statutory body. Part 11 - Miscellaneous34. Part 11 contains a number of miscellaneous provisions, including duties for bodies to co-operate, arrangements with devolved authorities, supervised community treatment and transfer schemes. Part 12 – Final provisions35. Part 12 deals with various technical matters such as consequential amendments, orders and regulations, financial provision, commencement, extent and the short title of the Bill. Territorial extent ANd Application36. Clause 280 sets out the territorial extent of the Bill. 37. Most of the provisions contained in the Bill extend to England and Wales only, but apply only to England. Some provisions apply only to Wales, others extend to the whole of the UK. Clauses covering the arrangements between the NHS Commissioning Board and Northern Ireland Ministers and Scottish Ministers extend to England, Wales and Northern Ireland or England, Wales and Scotland respectively. 38. Any amendment, repeal or reversal of legislation that is provided for in this Bill has the same extent as the original legislation. Territorial application: Northern Ireland 39. Certain provisions of the Bill extend to Northern Ireland, in addition to England and Wales and, in most cases, Scotland. 40. Provisions in Part 2 that extend to Northern Ireland (as well as England, Wales and Scotland);
41. Clauses 114 to 119 in Chapter 6 of Part 3, concerning special administration, extend to Northern Ireland (as well as England and Wales and Scotland) given that a relevant provider may include a company registered in Northern Ireland . 42. Clauses 198 (1), 206 (1) and clause 215 in Part 7, concerning regulation of health and social care workers, extend and apply to Northern Ireland (as well as England and Wales and Scotland), as they relate to bodies with functions in relation to Northern Ireland. 43. Clause 233 and Schedule 16 in Part 8, regarding changes to the National Institute for Health and Care Excellence ( NICE ), include consequential amendments to legislation that extends to Northern Ireland, in addition to England and Wales and Scotland. 44. Part 11 contains provision for the NHS Commissioning Board and the Northern Ireland Ministers to make arrangements with the NHS Commissioning Board to arrange for the provision of certain services, such as specialised services, for purposes of the Northern Ireland health service (clause 269). This provision extends to England and Wales and Northern Ireland. 45. Clause 271 and Schedule 20 in Part 11 amend legislation relating to the health service in Northern Ireland to make consequential and other amendments, including provision for arrangements between Northern Ireland health bodies and health bodies in England. 46. Some of these provisions require the consent of the Northern Ireland Assembly through a legislative consent motion. Westminster will not normally legislate with regard to devolved matters in Northern Ireland without the consent of the Northern Ireland Assembly. As there are provisions in this Bill relating to such matters, the consent of the Northern Ireland Assembly is being sought for them through a legislative consent motion. Territorial application: Scotland 47. Certain provisions of the Bill extend to Scotland, in addition to England and Wales and, in most cases, Northern Ireland. 48. Provisions in Part 2 that extend to Scotland (as well as England and Wales and Northern Ireland); 49. Clauses 114 to 119 in Chapter 6 of Part 3, concerning special administration extends to Scotland (as well as England and Wales and Northern Ireland), given that the law of insolvency is generally a reserved matter. 50. Clauses 198 (1), 206 (1) and clause 215 in Part 7, concerning regulation of health and social care workers extend and apply to Scotland (as well as England and Wales and Northern Ireland) as they relate to bodies with functions in relation to Scotland. 51. Clause 233 and Schedule 16 in Part 8, regarding changes to the National Institute for Health and Care Excellence ( NICE ), include minor and consequential amendments to legislation that extends to Scotland (as well as England and Wales and Northern Ireland). 52. Provision in Part 11 enables the NHS Commissioning Board to enter in to arrangements with Scottish health bodies that will enable the Board to arrange for the provision of certain services, such as specialised services, as part of the Scottish health service (clause 270). This provision extends to England and Wales and Scotland. 53. Clause 271 and Schedule 20 in Part 11 amend legislation relating to the health service in Scotland, (the National Health Service (Scotland) Act 1978) to make consequential and other amendments, including provision for arrangements between health bodies in Scotland and health bodies in England. 54. Some of these provisions fall within the terms of the Sewel Convention and therefore require a legislative consent motion by the Scottish Parliament. The effect of the Sewel Convention is that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament. As there are provisions in this Bill relating to matters that trigger the Convention, the consent of the Scottish Parliament is being sought for them through a legislative consent motion. Territorial application: Wales 55. A number of the provisions in the Bill apply in Wales as well as England, or apply in Wales only. The Welsh Assembly Government have been consulted on these provisions and have provided their consent where necessary. 56. Provisions in Part 1 of the Bill amend several sections of the Mental Health Act 1983 that extend and apply to England and Wales, as does the provision in Part 11 concerning supervised community treatment. 57. Provisions in Part 2 that extend and apply to England and Wales;
58. Clauses 114 to 119 in Chapter 6 of Part 3, concerning special administration apply to a company in Wales which provides services to the health service in England. 59. Clauses 198 (1), 206 (1) and clause 215 in Part 7, concerning regulation of health and social care workers extend and apply to England and Wales (as well as Northern Ireland and Scotland) as they relate to bodies with functions in relation to Wales. 60. Provisions in Parts 8 and 10, regarding changes to the Department of Health’s Arm’s Length Bodies, extend and apply to England and Wales. The dissolution of the predecessor body to the National Institute for Health and Clinical Excellence applies to Wales, as that is established for England and Wales (clause 232), and related , minor and consequential amendments to legislation in Schedule 16 apply to Wales. In Part 10, the abolition of the Appointments Commission applies to Wales. 61. Clause 271 and Schedule 20 in Part 11 amend legislation relating to the health service in Wales, (the National Health Service (Wales) Act 2006) to make consequential and other amendments, including provision for arrangements between health bodies in Wales and health bodies in England. commentary on clauses62. This section provides explanation and comment, where necessary, clause-by-clause. The Bill largely amends the NHS Act, although, as explained below, it does also contain some freestanding provisions. Part 1 – The Health Service in EnglandProvision of Health ServicesClause 1 - The Secretary of State and the comprehensive health service63. This clause amends section 1 of the NHS Act, which contains the Secretary of State’s duty to promote a comprehensive health service designed to secure improvement in the physical and mental health of the people of England, and in the prevention, diagnosis and treatment of illness. The amendments to section 1 made by this clause would leave intact this duty of the Secretary of State. 64. However, the clause removes the current duty on the Secretary of State in subsection (2) of section 1 to provide or secure the provision of services for the purposes of the health service. Instead, new subsection (2) imposes new duties on the Secretary of State for the purpose of the promotion of the comprehensive health service: a) to carry out his public health functions ; and b) to act with a view to securing the provision of services when exercising functions in relation to the NHS Commissioning Board ("the Board"), commissioning consortia (consortia) and local authorities (for example, when the Secretary of State sets the annual mandate for the Board under clause 19 or makes standing rules for the Board and consortia under clause 16). 65. The Bill thus draws a distinction between the Secretary of State’s public health functions and his role in relation to the securing of services for the purposes of the NHS. 66. Currently, the Secretary of State is directly responsible for providing or securing the provision of all health services as set out in the NHS Act, a function which is largely delegated to Strategic Health Authorities and Primary Care Trusts (PCTs) under section 7 of the NHS Act. However, the new commissioning structure proposed by the Bill means that this would no longer be the case. Instead, the Secretary of State would have the duties described above. Direct responsibility for securing the provision of these services would be conferred on the Board and commissioning consortia by new section 1D of the NHS Act, inserted by clause 5 and new section 1E, inserted by clause 6 of the Bill. 67. The Secretary of State would however remain directly responsible, along with local authorities, for securing the provision of public health services. Subsection (2) (a) sets out that the Secretary of State has a number of public health functions, and as subsection (3) indicates, these are set out in more detail in new section 2A, inserted by clause 7, new section 2B inserted by clause 8 and Schedule 1 to the NHS Act. The Secretary of State’s public health functions include securing the provision of certain services (such as immunisation and screening), providing information regarding dangers to health, and advancing knowledge and understanding. This clause also contains a definition of the public health functions of local authorities, which are the functions under new section 2B of, and Schedule 1 to, the NHS Act. 68. Subsection (4) makes a consequential change to section 1(3) of the NHS Act, which is the provision which states that services provided or secured by the Secretary of State for the purposes of the health service must be free of charge, except where legislation expressly allows for charges to be made (for example, prescription charging). The amendment reflects the fact that the Secretary of State would no longer be responsible for the provision of services, so section 1(4) as amended will state that services provided as part of the health service in England must be free of charge (subject to the exception mentioned earlier). This consequential change does not signify any change to existing arrangements and services provided as part of the health service would remain free of charge, unless existing legislation allows otherwise. Clause 2 - The Secretary of State’s duty as to improvement in quality of services69. This clause inserts new section 1A into the NHS Act. This new section creates a duty on the Secretary of State to act with a view to securing continuous improvement in the quality of individuals’ healthcare. 70. Subsection (1) of new 1A details the duty on the Secretary of State to exercise the functions conferred on him/her by this Bill in a way that would secure continuous improvements in the quality of services provided as part of the health service. This includes both his/her public health functions (the prevention of illness, the protection or improvement in public health), and those functions that he exercises in relation to the NHS with the NHS Commissioning Board and commissioning consortia (the diagnosis and treatment of illness). Any service, for example screening, that is associated with both public health and the NHS, also comes within the ambit of this duty. The duty is therefore comprehensive. In discharging this duty, the Secretary of State must have regard to the NICE quality standard. 71. Subsection (2) of new 1A specifies that, in discharging this duty, the Secretary of State must focus on securing continuous improvement in the quality of outcomes achieved from health services. Clause 19 inserts new section 13D, which imposes a similar duty on the NHS Commissioning Board in relation to quality. In keeping with the policy set out in the White Paper Equity and Excellence: Liberating the NHS 1 , the outcomes are to focus particularly on the effectiveness, safety and patient experience aspects of healthcare (Subsection (3) of new 1A). 1 Copies are available in the Library, and from the DH website at http://www.dh.gov.uk/en/Healthcare/LiberatingtheNHS/index.htm Clause 3 - The Secretary of State’s duty as to reducing inequalities 72. This clause proposes to insert new section 1B (Duty as to reducing inequalities) into the NHS Act. This section outlines a further duty by which the Secretary of State must abide in exercising his functions under the Act. 73. This clause imposes a duty on the Secretary of State to consider the need to reduce inequalities in respect of the benefits that may be obtained from the health service, when exercising functions in relation to the health service in England. In other words, the Secretary of State must consider the need to reduce inequalities in the access to health services, and the outcomes achieved, when carrying out his functions. This includes the Secretary of State’s functions in relation to the NHS and public health. Clause 4 - The Secretary of State’s duty as to promoting autonomy 74. This clause seeks to establish an overarching principle that the Secretary of State should act with a view to promoting autonomy in the health service. It identifies two constituent elements of autonomy: freedom for bodies/persons in the health service (such as commissioning consortia or Monitor) to exercise their functions in a manner they consider most appropriate (1C(a)), and not imposing unnecessary burdens from those bodies/persons (1C(b)). The clause requires the Secretary of State to act with a view to securing these aspects of autonomy in exercising his functions in relation to the health service, so far as is consistent with the interests of the health service. 75. This duty would therefore require the Secretary of State, when considering whether to place requirements on the NHS, to make a judgement as to whether these were in the interests of the health service. If challenged, the Secretary of State would have to be able to justify why these requirements were necessary. 76. The duty covers the arm’s length body sector and commissioners and providers of NHS services. Although the Secretary of State would not have the same direct relationship with providers of NHS services as he currently has with NHS trusts, he would still have certain functions which impact on providers. For example, he would be able to require certain terms to be included in contracts entered into by the NHS Commissioning Board and consortia for the provision of NHS services by virtue of regulations made under clause 16.
77.
1 Copies are available in the House library, and from the DH website at http://www.dh.gov.uk/en/Healthcare/LiberatingtheNHS/index.htm "enshrine the principle of autonomy at the heart of the NHS" [ by ] "maximising the autonomy of individual commissioners and providers and minimising the obligations placed upon them, in a way that is consistent with the effective operation of a comprehensive health service" Clause 5 - The NHS Commissioning Board78. This clause inserts a new section 1D into the NHS Act, which establishes a new body to be known as the NHS Commissioning Board (new section 1D, subsection (1)). The Board would be an independent body, which would hold commissioning consortia to account for the quality of services they commission, the outcomes they achieve for patients and for their financial performance. The Board would have the power to intervene where there is evidence that consortia are failing or are likely to fail to fulfil their functions. The specific functions of the Board, such as commissioning specialised services, are conferred elsewhere in the Bill. 79. Like the Secretary of State, the Board would be subject to the duty to promote the comprehensive health service (in subsection 1(1) of the NHS Act), except in relation to those services falling within the public health functions of the Secretary of State or local authorities (new section 1A, subsection (2)). 80. In order to fulfil this general duty, the Board would have two specific duties (new section 1D, subsection (3)): a) Firstly, it must commission services in accordance with the NHS Act (new section 1D(3)(a)). The services which the Board may be required to commission are described in new section 3B (inserted by clause 11) and these include services which can be more effectively commissioned at national level, such as specialised services, high secure services, prison health services and health services for the armed forces for example. The Board will also be responsible for commissioning primary care. b) Secondly, when exercising functions in relation to commissioning consortia (for example, when issuing commissioning guidance under new section 14V inserted by clause 22, the Board must act with a view to securing the provision of services (new section 1D(3)(b)). 81. Subsection (4) introduces Schedule 1.
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Act |
Amendment |
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National Assistance Act 1948 (c.29) , section 24 |
This amends the definition of "NHS accommodation" in light of amendments to section 117 of the Mental Health Act 1983, removing references to Primary Care Trusts. |
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Mental Health Act 1983 (c.20) , sections 19, 23, 32, 39, 134, 139 and 145 |
Amendments to sections 19, 23 and 32 remove references to Primary Care Trusts. The amendment to section 39 removes references to Primary Care Trusts and inserts references to commissioning consortia and the NHS Commissioning Board for the purposes of requiring them to provide information under section 39. The NHS Commissioning Board will only be required to provide information in relation to services or facilities the provision of which the Board arranges. The amendments to sections 134, 139 and 145 remove references to Strategic Health Authorities and Primary Care Trusts and inserts references (where appropriate) to commissioning consortia and the NHS Commissioning Board. |
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Disabled Persons (Services, Consultation and Representation) Act 1986 (c.33) sections 7 and 11. |
The amendment to section 7 removes the reference to a Primary Care Trust and inserts a reference to commissioning consortia. The amendment to section 11 removes the duty on the Secretary of State to lay reports before Parliament on the development of health and social care services for persons with mental illness and for persons with learning disabilities. |
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Freedom of Information Act 2000 (c.36) Part 3 of schedule 1 |
The amendment inserts references to commissioning consortia and the NHS Commissioning Board as ‘public authorities’ for the purposes of the Act. |
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Health and Social Care (Community Health and Standards) Act 2003 (c.43) section 45 |
The amendment removes the reference to regulations under section 12A(4) of the NHS Act , reflecting the changes to section 117 of the Mental Health Act 1983. |
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Mental Capacity Act 2005 (c.9 , sections 35, 64 and Schedule A1 |
The amendment to section 35 makes local authorities, instead of the Secretary of State, responsible for making arrangements to enable independent mental capacity advocates to represent and support specified persons. The amendment to Schedule A1 removes references to Primary Care Trusts and Strategic Health Authorities and inserts references to a local authority as the supervisory body if the relevant person is ordinarily resident in England. There are also minor changes to the situation in Wales as regards the determination of who is a supervisory body. The reference to the Welsh Ministers, in contrast to the references in the Act to the National Assembly for Wales, is necessitated by devolution. |
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Safeguarding Vulnerable Groups Act 2006 (c.47) sections 6, 17, 21 and 59 |
The amendment removes references to Strategic Health Authorities and Primary Care Trusts and inserts references to commissioning consortia and the NHS Commissioning Board in section 17. The amendment also removes references to section 12A(4) of the NHS Act , reflecting the changes to section 117 of the Mental Health Act 1983. |
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Health and Social Care Act 2008 (c.14) sections 30, 39, 46, 48, 49, 54, 59, 64, 70, 72, 97, 153 |
The amendment removes references to Strategic Health Authorities and Primary Care Trusts and where appropriate , inserts references to commissioning consortia and the NHS Commissioning Board. The amendment to sections 30 and 39 requires the Care Quality Commission (‘CQC’) to give notice to certain NHS bodies if it takes action against a registered provider. The amendment to section 54 inserts a reference to the NHS Commissioning Board and commissioning consortia so that they are not included in the definition of ‘English NHS Body’ for the purpose of section 54(1) which relates to the CQC’s power to undertake studies designed to enable it to make recommendations for improving the management of an English NHS body. The amendment to section 59 means that the Secretary of State will not have the power to confer additional functions on the CQC relating to improving the economy, efficiency and effectiveness and the financial or other management or operations of certain NHS bodies. |
Schedule 6
466. This Schedule is concerned with the transitional arrangements for the establishment of commissioning consortia and the exercise of functions by consortia during the ‘initial period’. The initial period is defined in paragraph 1(2) as the period beginning with the commencement of section 21 and ending on a day specified by the Secretary of State for the purposes of section 14A of the 2006 Act (the date from which the Board must ensure every provider of primary medical services is a member of a consortium and that the areas specified in the constitutions of consortia cover the whole of England). It is envisaged that this ‘initial period’ will run from 1 April 2012 to 31 March 2013. Initial applications are applications made during the initial period.
467. During the initial period, the Secretary of State may (under paragraph 2) direct the Board to exercise any of the functions of the Secretary of State that relate to Primary Care Trusts, but not including the Secretary of State’s powers or duties to make orders or regulations. This will, for instance, enable the Secretary of State to arrange for the Board to hold Primary Care Trusts to account for their performance during 2012/13.
468. Paragraph 3 of the Schedule makes provision for the conditional establishment of consortia during the initial period in any cases where the Board is not fully satisfied as to the matters set out in new section 14C, in other words the matters as to which it would normally have to satisfy itself before granting an application for establishment. Regulations may be made authorising the Board in these circumstances to grant initial applications, but allowing the Board to give a direction that the consortium exercise some of its functions in a certain way or to direct the consortium not to exercise specified functions. If the regulations authorise the Board to give such a direction they may also authorise or require the Board to exercise any functions specified on behalf of the consortium, or arrange for another consortium to exercise those functions. Regulations may also make provision requiring the Board to keep any conditions or directions under review and make provision about how the Board varies or removes any conditions or directions imposed.
469. Paragraph 3(6) enables regulations to be made making modifications to the 2006 Act as far as it applies to consortia established on the grant of an initial application. These regulations may provide that the Board’s power to dissolve a consortium (in new section 14Z6) applies where a consortium established with conditions fails to comply with those conditions. The regulations may also make provision about the factors that the Board must or may take into account when exercising these powers, and the procedures to be followed. Paragraph 3(12) provides that, where a conditionally established consortium ceases to be subject to any conditions or directions, it is deemed to have been established on an application granted under new section 14C.
470. Paragraph 4 of the Schedule provides that, where a consortium is established, the Board may direct it to exercise only some of its functions during the initial period. PCTs will retain commissioning responsibilities until 31 March 2013. This power of direction is necessary to avoid consortia having concurrent statutory responsibility for commissioning functions that remain with PCTs during the initial period. This means that, where consortia commission services for patients during the initial period, they will be doing so on behalf of PCTs (see paragraph 6 of the Schedule) rather than through exercising the consortium’s own statutory functions
471. Paragraph 5 of the Schedule provides that a consortium may in the initial period, while it is carrying out limited functions, undertake preparatory work to help it prepare to exercise its functions after the end of the initial period (even if that consortium has had conditions imposed on it by a direction from the Board).
472. Paragraph 6 provides that, during the initial period, a Primary Care Trust can make arrangements with a consortium under which the consortium carries out functions of the PCT on the PCT’s behalf. This will allow consortia to carry out, on behalf of PCTs, commissioning functions very similar to those for which they will be responsible in their own right from April 2013 onwards. These arrangements are intended to support a smooth transition from PCT commissioning to consortia commissioning. However the legal responsibility for the commissioning will remain with the PCT.
Part 2 – Further provision about public health
Clause 46 – Abolition of the Health Protection Agency
473. This clause abolishes the Health Protection Agency (HPA) and repeals the Health Protection Agency Act 2004. Abolishing the HPA is part of the Government’s policy of creating a new system for the protection and improvement of public health.
Clause 47 - Functions in relation to biological substances
474. This clause confers new UK-wide functions in relation to biological substances (see subsection (7) for the definition of ‘biological substances’). These are functions currently carried out by the Health Protection Agency. Functions relating to biological substances include standardising and controlling biological medicines like vaccines or blood products to ensure their safety and effectiveness.
475. Subsection (1) imposes a number of specific duties on the Secretary of State and the Department of Health, Social Services and Public Safety in Northern Ireland (DHSSPS) acting jointly in relation to biological substances. Subsection (7) provides the definition of ‘appropriate authority’.
476. Subsection (2) provides the Secretary of State and the DHSSPS with general powers by which their functions in relation to biological substances may be discharged.
477. Subsections (3) to (5) provides for a reciprocal duty of co-operation between the Secretary of State and DHSSPS on the one hand and any person or body exercising biological substances functions similar to those of the Secretary of State and the DHSSPS on the other. The duty of co-operation applies irrespective of whether those functions are exercised in relation to the UK or overseas.
478. Subsection (6) allows the Secretary of State and the DHSSPS to charge for their activity in relation to biological substances, including on a commercial basis.
Clause 48 – Radiation protection functions
479. This clause confers func tions in relation to protecting the public from radiation. These are functions currently carried out by the Health Protection Agency.
480. This clause applies in relation to Wales, Scotland and Northern Ireland. It does not apply in relation to England (see subsection (10))). Provision for protecting the public in England from radiation is made at new section 2A of the NHS Act (Secretary of State’s duty as to protection of public health) as inserted by clause 7.
481. Subsection (1) imposes a general duty in relation to protecting the public from radiation on the ‘appropriate authority’. Under subsections (8) and (9) the appropriate authority in relation to Wales is the Secretary of State; the appropriate authority in relation to Scotland is the Secretary of State where the matter is not devolved and the Scottish Ministers where it is; and the appropriate authority in relation to Northern Ireland is the Secretary of State where the matter is not devolved and the Department of Health, Social Services and Public Safety in Northern Ireland where it is.
482. Subsection (2) lists some of the steps the appropriate authorities may take to protect the public against radiation.
483. Subsection (3) provides the appropriate authority with a general power to do things which it considers appropriate to facilitate the discharge of the duty under subsection (1) or is incidental or conducive to it, including providing technical services for measuring and assessing levels or amounts of radiation.
484. Subsection (4) enables the appropriate authority to charge for their activity in relation to radiation protection, including on a commercial basis.
485. Subsections (5) and (6) require the appropriate authority to consult the Health and Safety Executive or the Health and Safety Executive for Northern Ireland and have regard to its policies when taking steps in relation to a radiation matter in respect of which the HSE also has a function.
Clause 49 –Repeal of the AIDS (Control) Act 1987
486. This clause repeal s the AIDS (Control) Act. The Act allows the collection of information about numbers of HIV cases and deaths, but for some time laboratories and clinics have voluntarily reported more accurate and relevant data than the Act calls for. As a result, the Department of Health has not used the Act for several years and now regards it as redundant.
487. For consistency, the AIDS (Control) (Northern Ireland) Order 1987 will also be revoked.
Clause 50 - Co-operation with bodies exercising functions in relation to public health
488. This clause requires co-operation between the Secretary of State and other people or organisations engaged in public health protection activity. This could include circumstances when the Secretary of State’s activity takes place overseas and co-operation between the Secretary of State and other organisations is required to help control the spread of infectious disease or the release of harmful chemicals into the environment. The intention is to make sure that the system works in a co-ordinated and coherent way to deal with threats to public health.
489. The clause inserts a new section 247A into the NHS Act . New section 247A imposes a reciprocal duty of co-operation on all individuals or organisations, including the Secretary of State, who carry out health protection functions similar those of the Secretary of State under new section 2A of the NHS Act .
490. Under subsections (3) to (5) , the Secretary of State and individuals or organisations would be able to charge for the costs of their co-operation, on a costs recovery basis, when it is requested.
Part 3 - Economic Regulation of Health and Adult Social Care Services
Chapter 1 – Monitor
491. Monitor is currently the independent regulator of foundation trusts. It is responsible for determining whether NHS trusts are ready to become foundation trusts, ensuring foundation trusts comply with the conditions of their authorisations, and supporting their development. This Bill turns Monitor into an economic regulator for all NHS-funded health services. As an economic regulator, Monitor’s overarching duty would be to protect and promote the interests of people who use health care services, by promoting competition where appropriate and through regulation where necessary. It would have three core functions: promoting competition where appropriate; setting or regulating prices; and supporting the continuity of services. To support its functions, Monitor would have the power to licence providers of NHS-funded care. These clauses draw upon precedents from the utilities, rail and telecoms industries, tailoring them to the particular circumstances of the health sector.
492. The Department of Health, working with the Department for Communities and Local Government, is considering the proposed role for Monitor in regulating adult social care services with respect to potential anti-competitive behaviour or provider failure, ensuring that such a role does not duplicate existing functions. The Bill allows for Monitor’s remit to be extended to include adult social care should this work identify a case for regulation.
493. Schedule 7 outlines the structure and governance of Monitor, which would remain as a non-departmental public body. The provisions are designed to ensure consistency with the other non-Departmental public bodies in the health sector, such as the National Institute for Health and Care Excellence. There are some exceptions, where the particular nature of Monitor’s role requires a different approach. These exceptions are explained in the commentary below.
Clause 51 - Monitor
494. This clause provides that Monitor continues to exist, but ceases to be known as the Independent Regulator of NHS Foundation Trusts. Instead, the formal name would be ‘Monitor’, and the organisation would carry out the duties and functions of an economic regulator for the NHS-funded health sector, as specified in later clauses. The clause also gives effect to the Schedule explained below.
Schedule 7 - Monitor
495. This Schedule provides details of the membership of Monitor and the process for appointments, including the appointment of the chief executive. These governance arrangements are designed to be consistent with those proposed for the other health non-Departmental public bodies such as the National Institute for Health and Care Excellence.
496. Paragraphs 1 and 2 detail the membership and appointment of the chair, chief executive and other members of Monitor. The chief executive and other executive members would be appointed by the non-executive members, with the consent of the Secretary of State. The number of non-executive members would have to be equal to or exceed the number of executive members. The non-executive members could not appoint more than five executive members without the consent of the Secretary of State. This is intended to keep Monitor’s Board at an appropriate size and to ensure that any additional members would be appropriately justified.
497. Paragraph 3 details how long non-executives may hold office. It provides that the Secretary of State can suspend or remove a non-executive member from office, on the grounds of incapacity, misbehaviour, or failure to carry out duties.
498. Paragraph 4 provides for what is to happen when a non-executive member is suspended from office. The suspension must be for an initial period of not more than six months. It requires the Secretary of State to provide the individual with notice of the suspension, and states the process for review.
499. Paragraph 5 states the arrangements for appointing an interim chair when a chair is suspended. The Secretary of State would have the power to do this.
500. Paragraph 6 requires that Monitor must pay to non-executive members such remuneration and allowances as the Secretary of State may determine. It also provides for Monitor to make arrangements for pensions, allowances and gratuities to be paid to non-executive members or former non-executive members. These arrangements would be for Monitor to determine with the approval of the Secretary of State.
501. Paragraph 7 provides Monitor with powers to employ staff on such pay, terms and conditions as it may determine, following approval of the Secretary of State as to its policy on the remuneration, pensions etc of employees.
502. Paragraph 8(2) applies where a person appointed as chair of Monitor is a member of a public sector pension scheme under section 1 of the Superannuation Act 1972. It provides that the Minister for the Civil Service can decide whether time as chair of Monitor can count as years of service for that pension scheme. Paragraph 8(3) provides that employment with Monitor is among the kinds of employment to which such a pension scheme can apply.
503. Paragraph 9 gives Monitor the power to appoint committees and sub-committees, and to pay remuneration and allowances to their members if they are not members or employees of Monitor.
504. Paragraph 10 allows Monitor to regulate its own procedure and states that any vacancy amongst the members would not affect the validity of its actions.
505. Paragraph 11 requires Monitor to act effectively, efficiently and economically in exercising its functions and provides power to arrange for any of its functions to be exercised on its behalf by certain persons.
506. Paragraph 12 enables Monitor to engage and pay individuals to contribute to particular cases or types of cases. For example, Monitor could employ someone with specialist skills needed only for a short period.
507. Paragraph 13 gives Monitor the power to temporarily borrow money by overdraft (with the consent of the Secretary of State). Other than this arrangement and powers to borrow money in relation to financial mechanisms to support continuity of services, Monitor would not be allowed to borrow money.
508. Paragraph 14 allows Monitor to obtain and compile information in order to be able to take informed decisions in exercising its functions. This could include the commissioning or supporting of research.
509. Paragraph 15 gives Monitor the power to do anything it needs to in order to exercise its functions.
510. Paragraph 16 allows the Secretary of State to fund Monitor’s activities to the extent that he considers necessary.
511. Paragraph 17(1) requires Monitor to prepare a set of accounts in each financial year which consolidates the annual accounts of all foundation trusts. Paragraph 17(2) enables the Secretary of State to direct Monitor to prepare a set of interim accounts which consolidates any interim accounts prepared by foundation trusts. Overall, this paragraph sets out the arrangements necessary to ensure that the Secretary of State would receive whatever information in respect of foundation trusts he required to permit him to fulfil his statutory duties in respect of the Department’s own consolidated Resource Accounts.
512. Paragraphs 17(3) and (4) give the Secretary of State the power, subject to HM Treasury approval, to specify the form and content of the consolidated annual and interim accounts; to specify the accounting methods to be used in preparing those accounts; and to set the timescales in which the accounts must be prepared.
513. Paragraph 17(7) provides that any consolidated accounts (both annual and interim) prepared by Monitor under this paragraph, should be audited by the Comptroller and Auditor General. Monitor is also required to act with a view to securing that foundation trusts comply promptly with requests from it or from the Secretary of State relating to accounts, and facilitate the preparation of accounts by the Secretary of State.
514. Paragraph 17(9) provides that from a date to be specified by the Secretary of State under Part 4 (accounts: variations to initial arrangements), when all the responsibilities imposed on Monitor by this paragraph (i.e. the preparation of consolidated interim and annual accounts) will be transferred to the Secretary of State, this paragraph is not to apply.
515. Paragraph 18 requires Monitor, in its capacity as a non-Departmental public body, to prepare its own annual accounts in the form and with the content, and using methods and principles, determined by the Secretary of State with HM Treasury’s approval.
516. Paragraph 19 provides that Monitor must prepare annual accounts in respect of each financial year, and then sets out arrangements for the audit of Monitor’s annual accounts by the Comptroller and Auditor General.
517. Paragraph 20 enables the Secretary of State to require Monitor to produce interim accounts in addition to its annual accounts, and to have these audited by the Comptroller and Auditor General. The Secretary of State could require copies of these accounts to be laid before Parliament.
518. Paragraph 21 provides that Monitor must publish an annual report on how it has exercised its functions, and in particular how it has promoted economy, efficiency and effectiveness. Monitor would need to lay a copy before Parliament and send a copy to the Secretary of State. Monitor would also be required to provide further information to the Secretary of State as he requires.
519. Paragraph 22 requires Monitor to respond to recommendations made by the Parliamentary Committees about the exercise of its functions.
520. Paragraphs 23 and 24 are standard provisions that replicate those currently in the NHS Act, covering the use of Monitor’s seal and its non-Crown status.
Clause 52 - General duties
521. This clause provides for Monitor’s principal overarching duty and certain other general duties. Its main duty is to exercise its functions so as to protect and promote the interests of people who use health care services, by promoting competition where appropriate and through regulation where necessary. It is intended that ‘protect’ be interpreted as ensuring that the interests of people who use health services are not diminished; whilst ‘promote’ is intended to mean furthering their interests.
522. Subsection (2) provides that Monitor, in carrying out this duty, must consider the likely future demand for health services.
523. Under subsection (3) Monitor, in performing its functions would have to promote the economic, efficient and effective provision of NHS services.
524. The Secretary of State has a duty in section 1(1) of the NHS Act to promote a comprehensive health service, and subsection (4) requires Monitor to exercise its functions in a manner consistent with this. This means that Monitor should not take any action that is not consistent with the promotion of the comprehensive health service.
525. Subsection (5) provides that Monitor’s duties do not cover the supply of goods to providers of health care services where those goods are to be provided as part of the health care service. This would mean, for example, that Monitor’s duties would not include the supply of pharmaceuticals and medical devices by a manufacturer or supplier to a provider of health care services, but they would include the supply of those pharmaceuticals or medical devices by such provider in the course of providing health care services.
526. The definition of health care in subsection (7) is the same as that used in the Health and Social Care Act 2008 (section 9). Health care services provided for the purposes of the NHS exclude public health services provided by the Secretary of State or local authorities.
Clause 53 - Power to give Monitor functions relating to adult social care services
527. This clause allows the extension of Monitor’s duties to include adult social care to be achieved through regulations. The clause also defines adult social care, to exclude children’s services. Subject to the outcome of the joint review by the Department of Health and the Department for Communities and Local Government, the Government anticipates that these regulations would be limited to potential anti-competitive practice and/or provider failure.
Clause 54 - Matters to have regard to in exercise of functions
528. This clause provides a list of the considerations to which Monitor must have regard when carrying out its specific functions. These matters are key priorities for the health sector, with some applying only to NHS-funded services, and others relevant across the sector. These matters are to ensure that Monitor would exercise its functions in a way that is consistent with these priorities.
529. Subsection (1) (a) to (e) requires that Monitor gives regard to patient safety, continuous improvement in quality and efficiency in NHS services, and access to those services.
530. The desirability of securing continuous improvement in the quality of NHS-funded services is included to ensure that Monitor’s actions would not inadvertently impede the duties of other bodies in the system to act with a view to improving quality (namely the Secretary of State and the NHS Commissioning Board). When taking any action, Monitor would need to take into account the importance of improving quality.
531. Subsection (1)(f) to (i) concerns the best use of resources, promoting investment by providers of health care, the need to promote research, and education and training.
532. Subsection (1)(j) to (l) states that Monitor must also have regard to various functions that the Secretary of State and the NHS Commissioning Board will exercise. Specifically, this subsection requires that Monitor must take account of the duty of the NHS Commissioning Board to secure the provision of NHS services, and the duty of both the NHS Commissioning Board and the Secretary of State to secure improvements in the quality of healthcare.
Clause 55 - Conflicts between functions
533. This clause places requirements of transparency upon Monitor in the case of conflict between its general duties. Under subsection (1) , Monitor would be required to take steps to secure that such conflicts are resolved in the manner it considers best.
534. Subsection (2) is designed to ensure that, whilst retaining certain foundation trust-specific functions during the transition to the new regulatory system, Monitor would make appropriate arrangements to mitigate and manage potential conflicts of interest between those functions and the new functions given to it as economic regulator of health care services for the purposes of the NHS, so that it was able to treat all providers equally.
535. Subsection (3) of this clause states that in exercising its functions around competition, licensing - in relation to securing the continuity of designated services - and in respect of pricing, Monitor must ignore its functions in respect of imposing transitional licence conditions on certain foundation trusts under Chapter 4 of this Part.
536. There are additional requirements for cases of particular significance. Subsection (5) states the types of cases which would be subject to these extra requirements: those involving a major change to Monitor’s activities, or likely to have a significant impact upon patients, for example. In these cases Monitor would have to publish a statement about the particular conflict that arose, and how it decided to resolve it. The clause also requires Monitor to do this for any other such conflict that it considers ‘of unusual importance’.
537. Every year, Monitor would have to include in its annual report a summary of how it has resolved any conflicts between its general duties.
Clause 56 - Duty to review regulatory burdens
538. This clause requires Monitor to keep its exercise of functions under review to ensure that it does not impose or maintain unnecessary burdens, having regard to best regulatory practice. It is based on section 72 of the Regulatory Enforcement and Sanctions Act 2008. The purpose of subsection (1) is to ensure that Monitor would only impose regulation that was necessary and proportionate, and that this would be reviewed over time. This means that where developments over time rendered a particular regulatory burden no longer necessary, that it would be removed. For example, as more providers entered the market and more efficient competition developed, regulatory burdens could be lessened for certain services or providers.
539. The remainder of this clause stipulates the manner in which Monitor is required to publish a statement, reporting upon its actions over the year and setting out its plans for the following year. Monitor would then be required to have regard to its statement when carrying out its functions. Monitor would be able to revise the statement, but would have to publish revisions as soon as practicable.
Clause 57 - Duty to carry out impact assessments
540. This clause stipulates that Monitor must either carry out an impact assessment, or publish a statement explaining why it is not necessary to do so, before it implements a proposal. This only applies to particularly significant proposals, which are set out in subsection (1) (a) to (e). For example, an impact assessment would be likely to be necessary for proposals involving a major change to Monitor’s activities, or proposals likely to have a significant impact on patients.
541. Subsections (2) and (3) state that this action is not required in certain circumstances – firstly, where Monitor carries out competition functions concurrently with the Office of Fair Trading, and secondly, where Monitor feels the situation is too urgent to delay intervention.
542. Subsections (5) to (7) state what the impact assessment must consist of and how it must be published. It would have to explain why an additional intervention by the regulator was necessary, rather than Monitor using its competition powers under the Competition Act 1998 and the Enterprise Act 2002, under Chapter 2 of this Bill. It would also have to describe how the proposed action would secure the discharge of Monitor’s duties. Beyond these requirements, Monitor would be able to decide what else the assessment should include, whilst taking account of general guidance on impact assessments as appropriate.
543. Subsection (8) restricts Monitor to implementing the proposal only when it has considered any representations made by anyone affected by it (if any are made). Monitor would also be prevented from using the requirements of this clause to replace any other obligations it had to consult about a particular issue.
544. Subsection (10) stipulates the way in which Monitor would be required to report upon the assessments it had carried out in each financial year.
545. The duty to carry out impact assessments is modelled on that of OFCOM.
Clause 58 - Information
546. This clause stipulates that Monitor may use any of the information it collects from providers to support any of its regulatory functions.
Clause 59 - Failure to perform functions
547. This clause gives power to the Secretary of State to direct Monitor when he considers that it is failing, or has failed, to perform its functions. It is intended that this would only be used in exceptional circumstances. Similar powers of intervention would exist for other non-Departmental bodies including the Care Quality Commission and the NHS Commissioning Board.
Chapter 2 – Competition
548. This Chapter provides Monitor with powers intended to ensure that competition operates effectively in the market for health care services. Monitor is given concurrent powers with the Office of Fair Trading ("the OFT") to apply the Competition Act 1998, which would allow Monitor to investigate practices by individual organisations or groups of organisations that might restrict competition, such as actions to exclude competitors from providing services or agreements to restrict patient choice. It also provides for Monitor to have concurrent functions with the OFT under Part 4 of the Enterprise Act 2002 as they relate to health care services provided in England. This Chapter also makes provision about requirements as to good procurement practice for commissioners, mergers involving NHS foundation trusts, reviews by the Competition Commission and the cooperation of Monitor and the OFT.
Clause 60 - Functions under the Competition Act 1998
549. This clause provides Monitor with concurrent functions with the OFT under Part 1 of the Competition Act 1998 ("the 1998 Act") in relation to the provision of health care services in England. The 1998 Act is generally applied and enforced by the OFT but in a number of regulated industries, such as telecommunications, gas, electricity, water and sewerage and railway services, concurrent powers with the OFT are in place for sectoral regulators, such as the Office of Communications which regulates the telecommunications sector (see section 371 of the Communications Act 2003).
550. Chapter 1 of Part 1 of the 1998 Act prohibits undertakings from reaching certain agreements and decisions and carrying out concerted practices that prevent, restrict or distort competition. For example, it prohibits organisations from reaching agreements to fix prices; limit or control production, or share markets except where an exemption applies. Chapter 2 prohibits undertakings from abusing a dominant position in a market. For example, it prohibits organisations with a dominant position from imposing unfair purchase or selling prices or other unfair trading conditions, limiting production, markets or technical development to the prejudice of consumers, or applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage.
551. The Chapter 1 and Chapter 2 prohibitions are modelled on Articles 101 and 102 of the Treaty on the Functioning of the European Union which prohibit agreements that prevent, restrict or distort competition, and abuse of a dominant market position.
552. Monitor would have concurrent powers with the OFT to conduct investigations where it had reasonable grounds for suspecting that either of these two prohibitions – under either UK or EU law – had been infringed in the provision of health services in England.
553. Monitor would also have concurrent powers to impose remedies for breaches of the prohibitions, as stipulated in sections 32 to 41 of Part 1 of the 1998 Act. Under sections 32 and 33 of that Act, Monitor would be able to issue directions to undertakings to bring an infringement to an end. For example, Monitor might direct an undertaking to change its conduct, for example to cease particular sales or pricing practices which restricted competition. Under section 36, Monitor would have the power to issue fines following an infringement.
554. There are some functions of the OFT under the 1998 Act which Monitor would not share. The OFT is responsible for issuing guidance on appropriate levels of penalties for infringements of the prohibitions in the 1998 Act and for making procedural rules to be followed under that Act. This is because the OFT is responsible for issuing this type of guidance and making regulations on the application of the 1998 Act for the economy as a whole, which is designed to secure consistent application of that Act.
Clause 61 - Functions under Part 4 of the Enterprise Act 2002
555. This clause gives Monitor concurrent functions with the OFT under Part 4 of the Enterprise Act 2002 ("the 2002 Act"), in respect of the provision of health care services in England. These powers would enable Monitor to make market references to the Competition Commission. Similar provisions have been made in relation to the other sectoral regulators, such as the Office of Communications (see section 370 of the Communications Act 2003).
556. The clause enables Monitor to make market references to the Competition Commission if it has reasonable grounds for suspecting that any features of a market prevent, restrict or distort competition. For example, Monitor might refer a market to the Competition Commission if there were barriers to competition which required more detailed investigation or problems which it could not address using its licensing and other powers.
557. Under section 134 of the 2002 Act, after receiving a market reference the Competition Commission must investigate it and publish a report within two years. If it decides that there is an adverse effect on competition, it also decides upon the action to be taken to remedy this.
558. Subsections (4) and (5) of this clause also include provision requiring Monitor and the OFT to consult each other before exercising these functions under the 2002 Act and are designed to avoid duplication by prohibiting both Monitor and the OFT from exercising these functions if the other has already done so in relation to a particular matter.
559. This clause also applies section 117 of the 2002 Act so that Monitor is included (so far as relating to functions exercisable by it by virtue of this clause), in the list of persons and bodies set out in subsections (1)(a) and (2), to whom it is an offence to knowingly or recklessly supply false or misleading information. Sanctions available to the courts in respect of this offence are set out in section 117 of that Act.
560. Functions of the OFT in sections 166 and 171 of the 2002 Act are not to be exercised concurrently with Monitor. Section 166 requires the OFT to keep a register of undertakings. Sectoral regulators are required to notify the OFT of any undertakings to be included in the register and so need not keep a register themselves. Clause 171 requires the OFT to publish guidance about market investigation references. This duty is to remain with the OFT so that guidance is consistent across different sectors.
Clause 62 - Competition functions: supplementary
561. This clause makes a number of supplementary provisions relating to how Monitor should apply its competition functions.
562. Subsection (1) states that the concurrent nature of Monitor’s powers means that there could be no valid objection that its actions under these powers should have been carried out by the OFT.
563. Subsections (2) and (3) make provision about the relationship between Monitor’s competition functions and its general duties. Chapter 1 of this Part makes provision about Monitor’s general functions and matters to which Monitor would have to have regard in exercising its functions. Those functions do not apply where Monitor is carrying out its concurrent competition functions under this Chapter unless they are functions to which the OFT is also entitled to have regard.
564. Subsection (4) adds Monitor to the list of regulators in the Company Directors Disqualification Act 1986 with powers to apply to a court to make a company director disqualification order, when the director’s organisation had committed a breach of Part 1 of the Competition Act 1998. The Company Directors Disqualification Act 1986 specifies the issues courts should consider when assessing whether to issue a disqualification order against a director following a breach of competition law. These include whether the person’s conduct contributed to the breach, and whether he or she had reasonable grounds to suspect the breach and took no steps to prevent it.
565. The OFT already has the power to apply to a court to disqualify directors in healthcare and other industries following a breach of the Competition Act 1998. The sectoral regulators with concurrent powers (including the Office of Communications, the Office of Gas and Electricity Markets and the Office of Water Services) also have this power. This power enables Monitor to apply competition law and appropriate sanctions in health care alongside the OFT.
566. Subsections (5) to (7) make modifications to the Competition Act 1998 and the Enterprise Act 2002 to include Monitor in provisions of that Act which are relevant to Monitor’s concurrent powers and which apply to other sectoral regulators with concurrent powers.
Clause 63 - Requirements as to good procurement practice, etc.
567. This clause enables the Secretary of State to make regulations imposing requirements on the NHS Commissioning Board and commissioning consortia in order to ensure good procurement practice and to protect choice and competition with regard to health care services. Where a contract is for goods and services, subsection (2) provides that the regulations will only apply where the value of the part of the contract for services is greater than the value of the goods. This is intended to ensure that the regulations would only capture contracts that are primarily for services rather than goods.
568. Subsection (3) provides that the regulations may include specific procedural requirements to ensure that commissioners carry out fair and transparent practices. The regulations could also address conflicts of interest where a commissioning consortium was responsible for commissioning a service that its practices had an interest in delivering. Subsection (4) allows for regulations to provide for exemptions in relation to particular arrangements.
Clause 64 - Powers in relation to requirements imposed under section 63
569. This clause makes provision for what may be included in regulations made under the previous clause about Monitor’s powers to investigate and remedy breaches of the regulations. Monitor may be given the power to investigate following a complaint by an interested party. It may also be given powers to require commissioners to provide information during an investigation, including requiring commissioners to provide explanations for documents.
570. Under subsection (3) the regulations could confer on Monitor powers to declare, in specified circumstances, that an arrangement for the provision of services was ineffective and to direct the Board, or a consortium, to put the provision of services out to tender. Subsection (4) provides that those powers would only be exercisable in circumstances where there has been a sufficiently serious breach of the regulations.
571. Where Monitor deems a particular arrangement for service provision to be ineffective, it is void. But this would not affect any right acquired or liability incurred under the existing arrangement for service provision.
572. Subsection (6) provides that regulations may give Monitor a further power to direct the NHS Commissioning Board or a commissioning consortium to take steps to prevent failures to comply with the regulations under the previous clause, or to remedy any breaches of the regulations. This includes the power to require a commissioner to remedy a failure to comply, or modify a tendering process.
573. Subsections (7) and (8) make provision about actions brought for a failure to comply with the regulations. In the event of loss or damage caused by a failure to comply with a requirement imposed by the regulations, a person affected would be able to bring an action, unless the regulations restricted this. Regulations may also provide for a specified defence to such an action.
574. There are circumstances in which it may be possible for a person to bring an action under both the regulations made under the previous clause and the Public Contracts Regulations 2006 (S.I. 2006/5). In those circumstances, any person bringing an action under the Public Contracts Regulations 2006 is precluded from bringing an action under regulations made under the previous clause in relation to the same matter.
Clause 65 - Mergers involving NHS foundation trusts
575. This clause applies Part 3 of the Enterprise Act 2002, which sets out the general merger control regime for enterprises in the UK, to certain foundation trusts. This clause provides that the merger control regime in Part 3 of the Enterprise Act 2002 would apply to foundation trusts which are not enterprises for the purposes of that regime in relation to mergers between foundation trusts or between NHS foundation trusts and other organisations. This means that the OFT and the Competition Commission would be responsible for reviewing mergers involving all foundation trusts whether or not they are enterprises.
Clause 66 - Reviews by the Competition Commission
576. This clause stipulates that the Competition Commission must review the development of competition in relation to NHS service provision, and the way in which Monitor carries out its functions in this area.
577. Before conducting a review, the Commission would have to publish a notice giving details of what was to be considered in the review. The Commission would have to publish a completed report of the review within 12 months of that notice and send a copy to the Secretary of State, Monitor and the NHS Commissioning Board.
578. The Commission must consider whether one or more matters under review has adversely affected or might be expected to adversely affect the public interest. Where the Commission concludes that it has or may, the report would have to include recommendations to the Secretary of State, Monitor and the Board as to how the situation could be remedied. Each of the three parties would be required to respond to the Commission in light of the recommendations, and to do so within six months of the date of publication of the report.
579. Subsection (8) requires that during the review process Monitor provides the Commission with certain information and assistance.
580. For the purposes of the law of defamation, absolute privilege would attach to a report under this clause.
581. Subsections (9) and (10) make provision about when the reviews must be carried out. The first review would have to begin in 2019 and each subsequent review would have to take place within 7 years of the previous review.
582. Subsection (12) makes consequential changes to paragraph 19A of Schedule 7 to the Competition Act 1998 which makes provision about the procedural rules about the Commission’s general functions which are relevant to reviews.
Clause 67 - Reviews under section 66: considerations relevant to publication
583. This clause requires that in the production of a report, the Commission must have regard to the need to avoid publishing, as far as practicable and bearing in mind how necessary the information is for the purposes of the report, information that it believes would be contrary to the public interest or commercial or personal information that it believes might significantly harm legitimate business interests or an individual’s interests.
Clause 68 - Co-operation with the Office of Fair Trading
584. This clause requires that Monitor and the OFT co-operate in their functions under the Competition Act 1998 and the Enterprise Act 2002. Specifically, they would have to share relevant information that would enable and assist the other to exercise its functions and provide such other assistance as the other may require.
Chapter 3 – Designated Services
585. One of Mo nitor’s new core functions under this Bill would be to support commissioner’s duties with regards to the continuity of certain specified services, for the purposes of the NHS, in the event of provider failure, by means of a special administration regime. These services would be known as "designated services". Local commissioners would lead the process of defining which services would be designated for each provider.
Clause 69 - Designation of services
586. This clause provides for commissioners (commissioning consortia, the NHS Commissioning Board or the Secretary of State where he exercises his power under section 13V of new Chapter A1 of the NHS Act) to make an application to Mo nitor for services to be designated and therefore subject to the special administration regime in the case of provider failure and to additional regulation to ensure their continued provision. This is intended to be similar to other engagement processes run by other regulators in other sectors (such as the energy sector).
587. Subsection (2) provides that a commissioner may only apply for a service to be designated if a consultation of the relevant persons has been carried out and if the criterion in subsection (3) has been met. That criterion is that there would be likely to be a significant adverse impact on the health of those for whom the commissioner is responsible for arranging services if the service was no longer provided, or that this would be likely to cause a failure to prevent or ameliorate such adverse impact. The relevant persons a commissioner would be required to consult are specified in subsections (9), (10) and (11) . Relevant persons differ depending on who the commissioner is and include any person who the commissioner considers appropriate, which might include potential providers of NHS services.
588. The determination as to whether the criterion would be met for a service should in practice be based on an assessment of evidence of patient needs and local provision, and therefore done principally by local professionals with local knowledge. Commissioners would be expected to demonstrate this evidence to Mo nitor when applying for a service to be designated and would be required to provide copies of consultation responses they had received regarding the question of whether to designate the service. As provided for later in this Chapter, Monitor would have to provide guidance on the tests to be used when designating services.
589. In addition to commissioners’ overarching duties on effectiveness, efficiency and continuous quality improvement under Part 1, subsection (4) of this clause requires commissioners, in designating services, to have regard also to (i) the current and future need for the provision of the service, (ii) whether the removal of the service would significantly reduce equality of access to the service and (iii) any other matter that may be specified in Mo nitor’s guidance.
590. Subsection (6) requires Mo nitor to grant an application for designation if it is satisfied that the criterion in subsection (3) is met and if the commissioner has consulted as required under subsection (2). Under subsection (7) Mo nitor must then give notice of the designation of the service to the commissioner and every relevant person, and explain the right of appeal.
Clause 70 - Appeals to the Tribunal
591. This clause allows a provider of a service to make an appeal to the First-tier Tribunal against a decision by Mo nitor to designate that service. Under subsection (4) the First-tier Tribunal may confirm or overturn the decision.
592. Subsection (2) states that an appeal can only be made if the provider has already made a complaint under the following clause about the designation and received notification from Mo nitor of its decision on the complaint. Subsection (3) specifies the grounds on which an appeal can be made.
Clause 71 - Reviews and removals of designations
593. This clause requires commissioners to review their designated services to ensure that they continue to meet the criterion for designation. Reviews would have to take place within a period of between one and ten years after either designation or each subsequent review. Monitor would be required to give guidance, as provided for later in this Chapter, on the carrying out of such reviews. This may include guidance on when, within the one to ten year period, they should be carried out.
594. This clause also allows a commissioner to apply to Mo nitor for the removal of the designation, whether or not as a result of a review. Subsection (4) provides that the commissioner may only make that application if it has consulted the relevant persons and it is satisfied that the criterion for designation no longer applies. The relevant persons are the same as those specified for the purposes of the clause on designation of services and might include potential providers of NHS services.
595. Subsection (6) requires Mo nitor to grant the commissioner’s application if satisfied both that the criterion for designation no longer applied and that the commissioner had consulted the relevant persons. Subsection (7) requires Mo nitor to give notice to the commissioner and the relevant persons if the application is granted.
596. Subsection (8) provides that Mo nitor may also remove the designation following a complaint by a provider of the designated service, if satisfied that the criterion for designation no longer applied and if Monitor has consulted the commissioner that made the application for designation. Such complaints provide the gateway to appeals to the First-tier Tribunal, under the previous clause. Subsection (9) specifies the period during which such a complaint could be made. Subsection (10) requires Mo nitor to notify the provider, the commissioner and the relevant persons of a removal of a designation.
Clause 72 - Designations affecting more than one commissioner
597. This clause places a requirement on the NHS Commissioning Board to make arrangements for facilitating agreement between commissioning consortia about whether to apply for designation of a service and about which consortium is to apply for designation. Subsection (2) provides that where commissioning consortia fail to reach such an agreement, the NHS Commissioning Board may intervene to determine the matter. Subsection (3) confers a power on the Secretary of State to make regulations to make provision about such a determination.
Clause 73 - Guidance
598. This clause requires Mo nitor to publish guidance on applications for designation of services, on reviews of designations, and on removal of designations. Guidance may develop the principles for designation further, for instance setting out how the designation process will work and giving examples of the types of service or cases when it might be expected that a service would be designated. Subsection (2) requires Mo nitor to consult certain relevant persons, as specified in subsection (3) and to agree the guidance with the NHS Commissioning Board before publishing it.
599. Subsection (5) allows Mo nitor to revise the guidance and requires it to re-publish where it has done so (before publishing it would have to go through the consultation and Board approval process under subsection (2)). This would enable Mo nitor to develop the guidance based on experience of how previous designation processes have operated or the outcomes of any national reviews of designated services.
Chapter 4 – Licensing
600. These clauses provide Monitor with the necessary powers to run a licensing regime. The licence would be the mechanism which would enable Monitor to carry out the majority of its regulatory functions, giving it the ability to collect information, set prices, promote competition and support the continuity of designated services. Monitor would determine the licence conditions that it would be necessary to impose on providers to enable effective regulation of NHS health care services, and would have a set of enforcement powers so that providers complied with the requirements of the licence.
601. The Care Quality Commission currently registers providers of health and adult social care services to provide assurance that they meet essential levels of quality and safety. It will continue to exercise this role. Monitor on the other hand would need to license providers of NHS services as a mechanism for delivering its economic regulatory functions such as setting prices, promoting competition and supporting continuity of services.
602. Monitor and the Care Quality Commission would need to work closely together on some issues. However, their remits would be distinct: the intention is that Monitor would carry out economic regulation while the Care Quality Commission is responsible for assuring essential standards of quality and safety. The two organisations would be under a duty to co-operate, with an equal duty to share information and provide for a joint licensing process.
Licensing requirement
Clause 74 - Requirement for health service providers to be licensed
603. It is common in regulated sectors (for example, electricity supply and gas distribution) to require providers to hold licences, and to deliver regulatory control via a licensing process. The scope of Care Quality Commission registration remains unchanged from the Health and Social Care Act 2008. This clause specifies which providers would be required to hold a licence issued by Mo nitor.
604. Subsection (1) stipulates that providers of health care services for the purposes of the NHS would have to hold a licence. This would not include services provided for public health purposes.
605. Subsection (2) also provides a mechanism for a case where two or more legal persons are involved, in different capacities, in providing a service. It provides that, in this situation, regulations may set out who will be treated as the service provider for the purposes of licensing. It is intended that this would be the person responsible for ensuring the service complies with the licensing requirements laid out in this (and any other relevant) legislation. This is based on section 10(2) of the Health and Social Care Act 2008, where the same provision is made for the purposes of registration with the Care Quality Commission.
Clause 75 - Deemed breach of requirement to be licensed
606. The effect of this clause would be that a licence holder would be in breach of the requirement to hold a licence if it had not also registered with the Care Quality Commission where necessary. The intention is that providers who need to be registered with both regulators would be able to apply via a joint licensing application process overseen by both Mo nitor and the Care Quality Commission. However, current providers would only have to apply for something that they did not already have – for instance, providers who were already registered with the Care Quality Commission would not have to re-register as part of the joint licensing process. Specific provision is made later in this Chapter about the requirements and processes that would apply to existing foundation trusts, which at present are already authorised by Mo nitor under current legislation.
Clause 76 - Exemption regulations
607. This clause provides the power for the Secretary of State to make regulations subject to the negative resolution procedure, exempting providers of NHS services from the requirement to hold a licence. Exemptions are designed to target licensing at those parts of the health sector where the sort of regulation that can be delivered via a licence is necessary (for example, where regulation of competition, pricing or to support continuity of services is necessary). The intention is to ensure that regulatory burden would not be imposed where it was not needed, keeping the system targeted and proportionate. For example, GPs providing only traditional primary care ‘gatekeeper’ services might be exempted as, initially at least, they might not require sector-specific competition regulation or additional regulation to support the continuity of services. This approach is consistent with that adopted in other regulated sectors, such as electricity. Exemptions could be granted to individuals, groups of providers, or for certain types of health services.
608. It would be for the Secretary of State to grant an exemption under such regulations. Subsection (4) provides that before making exemption regulations, the Secretary of State would have to give notice to Monitor, the NHS Commissioning Board, the Care Quality Commission and Healthwatch England (established in Chapter 1 of Part 5 ). It is common practice in other regulated sectors for the Secretary of State to have the ability to define classes of exemptions, and to make exemptions by order. That established model has been followed closely in this clause. However, the clause does stipulate broad parameters for the way in which the exemptions can be set. For example, subsection (2) provides that the regulations may specify that a particular exemption could apply generally (for example to a whole group of providers) or more specifically (for example to a subset of that group) and that it could apply indefinitely or subject to such period as specified in either the regulations or by the exemption.
609. Exemptions could also be granted subject to specific conditions which could include those listed in subsection (3) . For example a provider may have to inform the regulator if it planned to substantially expand or change the nature of the services that it offered, so that the regulator could determine whether the grant of the exemption to that provider was still appropriate.
Clause 77 - Exemption regulations: supplementary
610. This clause provides a mechanism for the Secretary of State to revoke or withdraw licensing exemptions. The exemption regulations themselves could be revoked or amended under subsections (1) and (2) , in relation either to an individual provider or a whole group of providers, to withdraw an exemption. Exemptions could be withdrawn in accordance with the relevant exemption regulations or if the Secretary of State considered it inappropriate for the exemption to continue. Under subsection (1) exemptions could also be withdrawn at the request of an individual provider to whom the exemption was granted.
611. Under subsection (3) , an exemption could be withdrawn by a direction made by the Secretary of State for a particular provider within a group, whilst the exemption remained in place for the rest of that group. Exemptions could be withdrawn where a person made a request, in accordance with the relevant exemption regulations, or if the Secretary of State considered it inappropriate for the exemption to continue.
612. When the exemption revocation or withdrawal was not for an individual provider at their request, the Secretary of State would have to consult Mo nitor, the NHS Commissioning Board, the Car e Quality Commission and Healthwatch England about the proposed withdrawal, and give notice of the proposal in accordance with subsections (5) and (6) . The notice would have to state the Secretary of State’s proposal and reasons for it, and specify a period during which representations can be made. The clause also specifies how the notice would have to be delivered in different circumstances: either by giving a copy to an individual provider, or by publishing the notice to bring it to the attention of an affected group of providers.
Licensing procedure
613. These clauses provide for the procedure for applying for a licence, and for Monitor in granting, refusing or revoking a licence.
Clause 78 - Application for licence
614. This clause states that providers seeking a licence must apply to Mo nitor, who could require such information from them as required and may specify the form in which any such application must be made.
Clause 79 - Licensing criteria
615. This clause requires Monitor to set and publish the criteria that a provider must meet in order to be granted a licence. Subsection (3) requires that these criteria would have to be approved by the Secretary of State. Subsection (2) provides that Mo nitor could revise these criteria, but would have to publish the revised version. This is intended to enable Mo nitor to adapt the licence as the market developed over time. The core licensing provisions made in this clause and the previous clause are based on provisions in the Electricity Act 1989. However, to ensure that the licensing process in the health sector would, from its outset, be as robust as it could be, the additional step of requiring the Secretary of State’s approval of the initial set of criteria for granting licenses has been added.
Clause 80 - Grant or refusal of licence
616. This clause stipulates the process once an application for a licence has been made to Mo nitor. Where Mo nitor was satisfied that the provider had met the published criteria, it would have to approve the provider’s application and, in accordance with subsection (3) , would have to issue the licence to the applicant. If it was not satisfied that the criteria were met, the application would have to be refused.
617. Subsection (4) provides that licences would be subject to both standard licence conditions and any special licence conditions. Further details about these conditions are found in later clauses. Subsection (4) also allows Mo nitor to set transitional licence conditions for foundation trusts designated as subject to transitional intervention measures (see "transitional provision" under this Chapter).
Clause 81 - Application and grant: NHS foundation trusts
618. Under this section an existing foundation trust would be automatically granted a licence by Mo nitor without needing to make an application. This is because these organisations have already been through a robust authorisation process in order to gain foundation trust status under Chapter 5 of Part 2 of the NHS Act, and have been granted Terms of Authorisation. This provision for the automatic granting of licenses is designed to limit the regulatory burden on foundation trusts.
Clause 82 - Revocation of licence
619. This clause provides Mo nitor with the powers to revoke a licence, either because the licence holder has requested this, or because the provider has failed to comply with a licence condition. A revocation provision is common to regulatory regimes that rely on a licence to deliver regulatory functions. It is intended that Mo nitor would only revoke a licence on the application of a provider of designated services if it were satisfied that it was appropriate to do so having regard to the obligations on the licence holder to provide those services. It is also intended that before revoking a licence for failure to comply with a condition of it, Monitor would first consider whether it could address the situation using its licence enforcement powers.
Clauses 83, 84, 85 - Representations, notice and appeals
620. The first of this group of clauses requires Mo nitor to give the relevant provider advance notice when it proposes to either refuse or revoke a licence and to state the reasons for its intended course of action. This notice would also have to specify the period within which the provider could make written representations to Mo nitor, allowing them the opportunity to make a case against Mo nitor’s proposal if they wished to. This period would have to be at least 28 days.
621. The second of these clauses specifies that once Mo nitor had reached a decision to either refuse or revoke a licence, it would have to notify the relevant provider of the right of appeal. The clause also stipulates when Mo nitor’s decision to revoke a licence becomes final. This would be: if an appeal is brought, when the appeal is concluded or abandoned; when the provider declares its intention not to appeal; or, the day after the day that the period for bringing an appeal ended.
622. The third of these clauses provides the process for appeals to the First-tier Tribunal against a decision of Mo nitor to refuse a licence application or revoke a licence. The Tribunal is the leading appeals Tribunal in the UK, run by the Tribunals Service and established by Parliament under the Tribunals, Courts and Enforcement Act 2007. It has been chosen because it is also used for Care Quality Commission registration appeals and for other appeals relating to care standards and mental health issues (and as such has expertise in health and social care) and because it is also used for appeals against decisions by other regulators including the Office of Fair Trading and the Environment Agency. Subsection (2) specifies the possible grounds for appeal as an error of fact, a legal error, or unreasonableness. The Tribunal might either confirm Mo nitor’s decision, direct that Mo nitor’s decision is not to have effect, or send the case back to Mo nitor for reconsideration.
Clause 86 - Register of licence holders
623. Mo nitor is required by this clause to keep and publish a register of licence holders, as the Care Quality Commission is required to do under the 2008 Act. The register should contain such information as Mo nitor thinks necessary to keep the public informed about licence holders, including details of every licence granted or revoked. These provisions are intended to create transparency so the information would be available to the public for inspection at Mo nitor’s offices or available on request. However, there might be occasions on which it was not appropriate to release certain information to the public. The clause therefore allows regulations to be made setting out what information should not be accessible. This follows the procedure for the register kept by the Care Quality Commission (see section 38 of the Health and Social Care Act 2008).
Licence conditions
624. These clauses specify the different licence conditions that Mo nitor can set. Standard conditions would apply to all providers, or to all providers of a certain type (either those providing a particular service, or those in a particular geographic area). Special conditions are intended to meet unique requirements for individual providers. Creating different types of conditions means that providers would have some certainty over what a licence would entail (standard conditions) whilst Mo nitor retained sufficient flexibility to tailor licences as appropriate (special conditions).
Clause 87 - Standard conditions
625. This clause requires Mo nitor to set and publish the standard licence conditions. Standard conditions might include basic requirements necessary to support the regulator in exercising its functions, such as submitting the information about service provision that Mo nitor would need to set prices effectively.
626. Before determining the first set of standard conditions, Mo nitor would have to publish its draft standard conditions and consult the persons listed in subsection (8) , which include the Secretary of State and the NHS Commissioning Board.
627. Subsections (2) to (6) allow Mo nitor to set different standard conditions for different types of licences by reference to the nature of the provider, the services provided or the area in which services are provided. The intention is to seek to achieve a level playing field for providers by giving Mo nitor sufficient flexibility to set different licence conditions in these circumstances so as to establish a consistent regulatory framework for different types of provider, be they foundation trusts, PLCs, charities, Community Interest Companies or other provider types. Subsections (4) to (6) also impose appropriate constraints on Mo nitor’s ability to set differential licence conditions relating to the nature of the provider. In particular, different conditions might be necessary so that the burdens to which different licence holders were subject as a result of holding a licence were broadly consistent.
628. The Secretary of State is given the power in subsection (10) to reject Mo nitor’s proposed first set of standard conditions, as a whole rather than as individual conditions.
Clause 88 - Special conditions
629. The power to include special licence conditions under subsection (1) is designed to address specific concerns and is intended for use in exceptional situations, where the degree of differentiation possible in the standard conditions is not sufficient. For example, where a licence condition might only need to apply to a specific provider due to it having an exceptional service, or where a condition might be needed to address a specific financial or governance issue particular to a provider.
630. Mo nitor would be able to include a special condition (or modify an existing one) if the applicant or licence holder consented. If that party did not agree and Mo nitor still wanted the special condition or modification to be included in the licence, it would need to make a reference to the Competition Commission for an investigation by it, in a similar way as occurs in relation to special licence conditions in the gas, electricity and water sectors.
631. Before including a special condition, or modifying one, Mo nitor would have to comply with the notice requirements in subsections (2) to (5) .
Clause 89 - Limits on Mo nitor’s functions to set or modify licence conditions
632. This clause specifies the purposes for which Mo nitor is empowered to set or modify licence conditions. Mo nitor would only be able to set licence conditions for the purposes of its regulatory functions specified in subsection (2) .
Clause 90 - Conditions: supplementary
633. Subsection (1) provides, by way of example, a list of conditions that Mo nitor might include in licences. These include a requirement for licence holders to pay to Monitor such fees as Monitor may determine in respect of the exercise of its licensing functions and a requirement to charge for services in accordance with the national tariff (see Chapter 5). Subsection (7) gives Monitor the power to apply time restrictions to conditions, either by indicating when a condition should take effect or when it should end.
634. Subsections (3) and (4) make further provision about conditions under subsection (1)(c), which gives one provider access to another provider’s services (defined by clause 135 to include facilities). It is intended that this would be used to give new entrants to the market access to existing infrastructure or equipment that it would be uneconomic to re-provide. There is precedent for this in other regulated sectors – for instance similar access provisions have been introduced in relation to access to postal facilities and telephone exchanges, as well as in the water and electricity sectors. In these circumstances, Mo nitor would have to have regard to the practicability of a comparable service being installed and of requiring this access, the investment made by the provider in the service, and the need to promote competition.
Clause 91 - Mo dification of standard conditions
635. Provision is made in this clause for modification of standard licence conditions in all providers’ licences or in licences of a particular description. Before making such a modification, Mo nitor would have to comply with the notice requirements set out in subsections (2) to (5) which require Mo nitor to notify its intention to modify standard licence conditions and offers the opportunity for relevant licence holders to object.
636. Under subsection (6) (a) Monitor could make the modification if it received no objections from relevant licence holders.
637. In order for Mo nitor to be able to make the modification where it did receive such objections, the proportion of licence holders objecting would have to be less than proportions specified by the Secretary of State in regulations - which would be subject to the affirmative resolution procedure - made under subsections (7) and (9) . Two proportions would be specified: a proportion of affected providers who were objecting (the "objection percentage"), and a proportion of affected providers who were objecting, weighted according to their share of supply (the "share of supply percentage"). This process is designed to balance the desirability of providers having a say in the design of the licence with Mo nitor’s need to be able to modify standard conditions. This approach has been adopted in other sectors, most notably gas and electricity.
638. Other provisions of this clause deal with the situation where Mo nitor modified the standard licence conditions. Subsection (10) provides that, firstly, Mo nitor would have to publish the modifications. Secondly, Mo nitor would be given the power to make modifications to other conditions in a licence that might be required as a consequence. Thirdly, Mo nitor would also be required to make the same modifications to future licences. The latter two requirements are intended to ensure consistency across licences.
Clause 92 – Mo dification references to the Competition Commission
639. Under subsection (2) Mo nitor could make a reference to the Competition Commission when the applicant or licence holder refused to accept a proposal to include or modify a special licence condition. Under subsection (4) a reference could also be made where Mo nitor was unable to modify the standard licence conditions because too many licence holders objected to the conditions. This is the case in other regulated sectors such as the water, electricity and gas sectors.
640. A reference to the Competition Commission would require it to investigate whether there was an issue that needed addressing because it was operating, or was expected to operate, against the public interest. The Commission would be required to consider whether a special condition or standard condition could remedy or prevent the problem. Under subsection (6) the Commission would be required to take into consideration Mo nitor’s general duties and the matters to which it must have regard under Chapter 1 of this Part.
641. If one part of a standard licence condition were modified under this procedure, subsection (7) provides that the remainder of the condition would still be valid as a standard licence condition.
642. Subsection (5) of this clause also gives effect to Schedule 8 and defines who are the "relevant persons" for the purposes of notices under specified provisions of that Schedule.
Schedule 8 - References by Monitor to the Competition Commission
643. This Schedule is based on sections 12 to 14A of the Electricity Act 1989.
Variation of reference
644. Under paragraph 1, where Mo nitor has made a reference to the Competition Commission it would be able to change what is included in that reference by giving notice to the Commission. The Commission would be obliged to accept the variation.
Monitor’s opinion of public interest etc
645. Paragraph 2 is intended to enable Mo nitor to assist the Competition Commission by identifying in a reference or variation of a reference, any aspects of the referred matter that might have an adverse effect on the public interest, and by suggesting any alterations to licence conditions to avoid or remedy these effects.
Publication etc of reference
646. As soon as practical after making a reference or varying a reference, a copy would have to be sent to relevant persons and published by Mo nitor.
Information
647. This paragraph requires Monitor to provide relevant information and assistance to the Commission whenever the Commission investigated a reference. The Commission would be required to take the information supplied into account.
Time limits
648. Under this paragraph, a reference to the Competition Commission would have to give a specific notice period – not longer that six months from the date of the reference – within which the Commission would have to report on the reference. The Commission’s report would only have effect if made before the period stated in the reference or at the end of an extended period where special reasons existed for extending the period. An extension could be for no more than a month and could only be made once. Mo nitor would have to send notice of the extension to the relevant persons, and publish the notice.
Reports on references
649. When reporting on a reference, the Commission would have to present its conclusions, including details of any aspects it concludes might have negative impacts on the public interest. There should also be explanations as to how the adverse effects that had been identified could be remedied or prevented by changes to the licence conditions.
650. This paragraph requires that a conclusion in a report would have to have the agreement of at least two thirds of the group assigned to the investigation. Should a member of the group disagree with a conclusion, a statement would have to be included in the report if that person so wished, explaining why that person disagreed. Mo nitor would have to receive a copy of a report on a reference and, in turn, send a copy to the Secretary of State, the NHS Commissioning Board and a copy to the relevant persons within 14 days.
Changes following report
651. This paragraph concerns any report of the Commission on a reference that contains conclusions indicating that one or more matters are unfavourable to the public interest, that they could be prevented or minimised and suggesting changes to achieve this. Where this was the case, Mo nitor would have to make the necessary changes to resolve the matter. Before doing so, Mo nitor would have to publicise the proposed changes to the relevant persons, explaining why it is taking such action and giving the period – of at least 28 days from the date of publication - within which comments on the changes could be made. Once Mo nitor had considered the responses, it would have to notify the Commission, specifying the changes that were to be made.
Competition Commission’s power to veto changes
652. There would then be a four week period from the date of Monitor’s notice to the Commission during which the Commission could veto the changes. If the Commission did not veto the changes, Mo nitor would have to make them. During this period, the Commission could direct Mo nitor not to make the changes set out in the notice, or not to make some of the changes. The Commission would have to give notice of the changes Mo nitor proposed and its reasons for directing Mo nitor not to make them, allowing time for representations to be made on the proposed changes. In this situation, the Commission would itself have to make such changes to the relevant matters as it thought necessary to remedy the expected adverse effects on the public interest.
653. In undertaking this task, the Commission would have to take into account the matters to which Mo nitor must have regard.
654. Once the changes had been made, the Commission would have to publish the fact that the changes had been made and why it had made them.
Disclosure
655. This paragraph requires the Commission, before making a report or giving notice in relation to its power to veto Monitor’s proposed changes, to ensure that no information harmful to the public interest is included in the report or notice. Likewise, no sensitive commercial information, or personal information related to any person concerned in the matter, should be included. All information disclosed would have to be necessary for the purposes of the report.
Powers of investigation
656. A number of investigative and enforcement powers under specified sections of Part 3 of the Enterprise Act 2002 would apply for the purposes of references by Monitor to the Commission.
Clause 93 - Mo dification of conditions by order under other enactments
657. This clause provides that the Office of Fair Trading, the Competition Commission and the Secretary of State, as relevant authorities, can modify standard conditions or conditions of a particular licence, by an order made under various specified provisions of the Enterprise Act 2002. This provision is designed to ensure that the licensing regime would be consistent with competition law and enforcement powers in that Act and to enable the relevant authorities to modify conditions to remedy or prevent adverse effects on competition. The inclusion of a provision of this type is consistent with other regulatory regimes. These provisions mean that the modifications could be made if:
- where one or more enterprises was or may have ceased to be a distinct enterprise, one of them was a provider of licensable services;
- where one or more enterprises would or might cease to be a distinct enterprise, one of them was a provider of licensable services; or
- a feature of a market which relates to the commissioning or provision of services for the purposes of the NHS, prevents, restricts or distorts competition.
- a monetary penalty of such amount as Monitor may determine, up to 10% of turnover of the person in England (‘variable monetary penalty’);
- action to stop the breach in question, or make sure it did not happen again (‘compliance requirement’). An example of this might be a requirement that a provider cease plans to dispose of an asset that was needed for the provision of a designated service;
- action to restore the position to what it was before the breach occurred (‘restoration requirement’). For example, Mo nitor could require that a provider re-open a designated service that it had closed inappropriately or without regulatory approval.
- action to stop the activity in breach of the licence, or make sure it does not happen again;
- action to restore the position to what it would have been before the breach occurred, so far as is possible;
- action to benefit any licence holder or commissioner affected by the breach, which could be payment of money; or
- other action as may be specified in regulations.
- that the decision was based on a factual error;
- that the decision was wrong in law;
- that the amount of a variable monetary penalty was unreasonable;
- that action required by Monitor was unreasonable (in the case of either compliance requirements or restoration requirements);
- that the decision was unreasonable for any other reason.
- specify the range of health care services to which it will apply;
- specify the methodology that had been employed by Mo nitor to produce price levels;
- specify the resultant price levels for those services;
- provide rules for determining prices for services not specified as being covered by a national tariff;
- provide for rules under which providers and commissioners could make modifications to the national tariff prices; and
- include guidance as to the application rules included in the national tariff.
- services for which the national tariff would apply;
- the rules governing local modification of national prices;
- the pricing methodology;
- the prices themselves; and
- the rules on setting prices not covered by the national tariff.
- a rescue was not reasonably practicable at all or without the transfer of some services,
- a rescue would not achieve the objective of health special administration or would not do so unless services were transferred,
- transfers would produce a better result for creditors as a whole, or
- in the case of a company, transfers would produce a better result for members so long as this does not prejudice the interest of creditors.
- providers and commissioners of designated services being required to contribute to a collective insurance scheme or ‘risk pool’; or
- providers being required to purchase their own insurance to cover such liabilities on failure as are specified by Mo nitor,
- in the case of an individual, that the individual had the appropriate knowledge and experience for managing the investments and is not disqualified under the Financial Services and Markets Act 2000, or
- in the case of a firm, that arrangements were in place to ensure that any individual who would exercise the firm’s fund manager functions would, at the time of doing so, have the appropriate knowledge and experience for managing the investments.
- the amount of funds needed to cover the risk of failure of provider s of designated services in the forthcoming financial year;
- the amount to be collected from providers and commissioners in each financial year; and
- any surplus funds remaining at the end of that financial year.
- achievement of financial metrics, such as debt service cover, to give confidence of a foundation trust’s ongoing ability to service debt;
- limits on additional indebtedness or preferring other creditors;
- restrictions on the use of assets to secure debt;
- restrictions on the disposal of assets;
- restrictions on material structural changes, for example, mergers, separations and acquisitions;
- restrictions on material change of business; and
- restrictions on investments or giving of guarantees.
- Change the test Monitor must meet to trigger the trust special administration regime to a technical insolvency test, since the original test is based on Section 52 of the NHS Act , which will not be in place during the intended life-span of these transitional failure arrangements.
- Replicate for Monitor the powers the Secretary of State has in section 65B of the NHS Act to appoint a trust special administrator to a foundation trust without de-authorising that foundation trust, and to take control of the body for a temporary period, during which the trust special administrator would be responsible for ensuring that the body continued to exercise its functions (for example, in the case of an NHS trust, that it continued to provide services in accordance with its NHS contracts).
- Replicate the trust special administrator’s powers in relation to NHS trusts for foundation trusts by enabling the trust special administrator to carry out the functions of the council of governors and the board of directors, who would be suspended whilst the trust special administrator is in post.
- respond to requests for information from Local Healthwatch organisations
- respond to reports or recommendations made by Local Healthwatch organisations
- allow Local Healthwatch organisations to enter and view premises (if all criteria are met and exclusions do not apply).
- ‘the Council’ refers to the body currently known as the Health Professions Council which will be renamed the Health and Care Professions Council by the Bill;
- ‘the Authority’ refers to the Professional Standards Authority for Health and Social Care (which will be the new name of the Council for Healthcare Regulatory Excellence);
- ‘the 2001 Order’ refers to the Health Professions Order 2001, which will be renamed the Health and Social Work Professions Order 2001 by the Bill;
- ‘the 2002 Act’ refers to the National Health Service Reform and Health Care Professions Act 2002;
- ‘the 1999 Act’ refers to the Health Act 1999; and
- ‘the 1983 Act’ refers to the Mental Health Act 1983.
- the chair of the Authority is appointed by the Privy Council,
- three non-executive members are appointed by the Secretary of State, and
- one non-executive member is appointed by each of the Scottish Ministers, the Welsh Ministers and the Department of Health, Social Services and Public Safety in Northern Ireland.
- t he power to make regulations about appointments to the Authority and the appointment of, constitution of, and exercise of functions by its committees and sub-committees. These regulations will be subject to the negative resolution procedure;
- the power to determine the form of accounts which must be kept by the Authority;
- the power to determine the form of the annual accounts which must be prepared by the Authority; and
- the power to determine the period after the end of the financial year within which the Authority must send a copy of its annual accounts to the Comptroller and Auditor General.
- to promote the interests of users of health care in the UK, users of social care in England, users of social work services in England, and other members of the public in relation to the maintenance or operation of accredited voluntary registers;
- to promote best practice in the maintenance and operation of accredited voluntary registers; and
- to develop principles of good governance for voluntary registers and encourage keepers of voluntary registers to follow these.
Enforcement
658. These clauses provide Monitor with the necessary powers to enforce its licensing requirements. Whilst the joint licensing regime would be overseen by both Monitor and the Care Quality Commission, the two organisations would have separate responsibilities regarding enforcement, although they would be obliged to share information about relevant enforcement actions taken. Monitor’s enforcement powers are modelled on the set of civil sanctions for regulatory regimes laid down in Part 3 of the Regulatory Enforcement and Sanctions Act 2008.
Clause 94 - Power to require documents and information
659. Subsection (1) provides Mo nitor with a power to require persons listed in subsection (2) to provide to Monitor any information that it needs to carry out its regulatory functions, which are specified in subsection (4) . This is the broadest of the enforcement powers because it applies to commissioners, applicants for licences, licensees, providers exempted from holding a licence or providers operating without a licence when they should have one. It is intended to allow Mo nitor to obtain the information it needs to operate effectively and fulfil its functions. For example, Mo nitor could require a provider to submit information about its financial situation to support regulatory work to protect continuity of services, or about its prices to support tariff calculation.
660. Information might also be needed from providers who are currently exempted from licensing – for example, if Monitor and the NHS Commissioning Board decided to extend the scope of tariff pricing to a new service, and needed information on the prices of these services to do so.
Clause 95 - Discretionary requirements
661. ‘Discretionary requirements’ are obligations which Mo nitor could place upon a provider of NHS services in response to it breaching a licence condition, or failing to hold a licence when it is required to, and upon any person for failure to provide information to Mo nitor under the previous clause. They would act as both an incentive to a person to comply, as well as a means of rectifying any problems that arose as a result of a person’s action or failure.
662. The types of discretionary requirements that Mo nitor could impose are outlined in subsection (2) . They are:
663. The Secretary of State is given power by regulations to prescribe how turnover would be calculated for the purposes of the limit on variable monetary penalties (subsection (4) ).
664. Subsection (3) provides that Mo nitor would not be able to impose discretionary requirements on a provider in relation to the same breach on more than one occasion.
665. Subsection (5) provides that a penalty imposed under this section that was not paid in full would accrue interest, but the total amount of interest charged could not exceed the amount of the penalty itself.
Clause 96 - Enforcement undertakings
666. ‘Enforcement undertakings’ are not sanctions imposed by Mo nitor but are settlements offered by a provider to rectify a breach (being a breach of licence conditions, providing services without holding a licence where a licence is required, or failing to provider Mo nitor with information).
667. Mo nitor could choose whether to accept the offered settlement, based on whether it was likely to constitute an appropriate remedy. Enforcement undertakings could be used in the same circumstances as discretionary requirements (see above). Having scope in the system for enforcement undertakings offers a positive behavioural incentive as it encourages providers to take responsibility for proposing solutions to problems, and thus to be proactive about remedying licence breaches.
668. Various types of enforcement undertaking are specified in subsection (3) :
669. Once Mo nitor had accepted an enforcement undertaking, it could only impose a discretionary requirement or revoke a licence if the licensee failed to comply with the undertaking, or any part of it. Subsection (5) provides that where a provider had partially complied with an undertaking, Mo nitor would have to take these actions into account when deciding whether to take further enforcement action.
Clause 97 - Further provision about enforcement powers
670. This clause gives effect to Schedule 9, which provides further detail about both discretionary requirements and enforcement undertakings.
Schedule 9 - Further provision about enforcement powers
Part 1 - Discretionary requirements
Procedure
671. The procedure for discretionary requirements follows that laid down in section 43 of the Regulatory Enforcement and Sanctions Act 2008.
672. This paragraph requires Mo nitor to give notice to a person of its intention to impose a discretionary requirement upon them. The notice would have to provide certain details stipulated at paragraphs (a) to (d), including the grounds for the proposal to impose the requirement, and the notice period within which written representations may be made by the provider, which must be at least 28 days.
673. Mo nitor would be able to shorten the notice period (to a minimum of five days) for a compliance or restoration requirement. This would only be possible where Monitor considered a shorter period was necessary to avoid or minimise further breaches of licence conditions. For example, a shorter period might be necessary to require a provider of designated services, who had stopped providing those services, to restore provision of them.
674. Having given notice, where Mo nitor decided to impose a requirement, a second and final notice would have to be given to the provider. It would have to include information about why the requirement was being imposed, the implications of failure to comply with the requirement, details of how any monetary penalty is to be paid, and explain the rights of appeal.
675. The notice would have to be given within five years of the breach occurring if Monitor wished to impose a fine.
676. Appeals about the imposition of a discretionary requirement could be made to the First-tier Tribunal. During an appeal, the duty to fulfil the discretionary requirement(s) being appealed would be suspended. There would be a number of grounds for appeals:
677. There are a number of actions that the First-tier Tribunal could take following the appeal, including confirmation or rejection of the requirement in question, or a variation of it. It could also take steps that Mo nitor could take in relation to a breach or remit the decision to Mo nitor.
Non-compliance penalties
678. These paragraphs give Mo nitor the power to impose a monetary penalty (a "non-compliance penalty") on a person who fails to comply with a compliance or restoration requirement, and to determine the amount of the monetary penalty. When proposing to impose such a penalty, Mo nitor would have to serve a "non-compliance notice" on the person concerned. This would have to include details of the monetary penalty and how and when it was to be paid, the grounds for imposing the penalty, the consequences of failing to pay the penalty and the appeals process.
679. The period for payment could not be less than 28 days from the day after the date that the notice was received. If the person on whom the notice was served complied with the compliance requirement within that period the payment would cease to be due. If the payment remained due and was not paid within the specified payment period, Mo nitor could increase the penalty by no more than 50%.
680. The grounds on which a person served with a non-compliance penalty could appeal to the First-tier tribunal are set out in paragraph 5(2). Penalties would be suspended whilst an appeal was in progress. The Tribunal could confirm, change or withdraw a non-compliance penalty, or remit the decision to Mo nitor for reconsideration.
Recovery of financial penalties and payments of penalties etc. into Consolidated Fund
681. Both variable monetary penalties and non-compliance penalties would be recoverable summarily as a civil debt. In addition, Mo nitor would have to pay money it received from penalties into the Consolidated Fund.
Part 2 – Enforcement undertakings
Procedure
682. These paragraphs stipulate that Mo nitor must consult upon and then publish a procedure for entering into enforcement undertakings. It would be able to revise that procedure but it would have to publish any revision. Monitor would also have to publish details of each enforcement undertaking it accepted.
Variation of terms
683. The terms of an enforcement undertaking could be modified when both Mo nitor and the person giving it agreed to do so. This is intended to provide the flexibility to alter the agreement if necessary, for example if for legitimate reasons accepted by the regulator a provider took longer to carry out a remedial measure than was originally planned and agreed.
Compliance certificates
684. Mo nitor would have to issue a compliance certificate when it was satisfied that a person has complied with an enforcement undertaking given by them. Certificates could be applied for at any time by persons who had given an enforcement undertaking.
685. An appeal to the First-tier Tribunal could be made against a decision of Monitor to refuse an application for a compliance certificate, on the grounds that the decision was based on an error in fact, was wrong in law, or was unfair or unreasonable. The Tribunal could confirm Mo nitor’s decision or decide that it did not have effect.
Inaccurate, incomplete or misleading information
686. If Monitor is satisfied that information supplied by a person in relation to an enforcement undertaking was inaccurate, misleading or incomplete, the person is treated as having failed to comply with the undertaking and Monitor must revoke any compliance certificate given to that person.
Clause 98 - Guidance as to use of enforcement powers
687. This clause requires Mo nitor to consult on and publish guidance about the way in which it will exercise its powers to impose discretionary requirements and to accept enforcement undertakings (subsection (1) ). Subsection (5) provides that Monitor would then have to have regard to the published guidance in exercising those powers. Guidance is intended to provide licensees with certainty as to the enforcement action Mo nitor would take in particular circumstances.
688. Subsection (4) provides that the guidance must include details of when Mo nitor was likely to impose a discretionary requirement and when it may not impose one, how it would decide the amount of variable monetary penalties, and how decisions could be appealed.
Clause 99 - Publication of enforcement action
689. Subsection (1) provides that Mo nitor must include information in its annual report on discretionary requirements imposed and enforcement undertakings accepted that it has taken during the financial year that the report covers. Under subsection (2) Monitor would not be able to include information if it was satisfied that publication of it would or might significantly harm the legitimate business interests of the licence holder concerned.
690. Subsection (3) provides that Mo nitor is not to include in the report information about discretionary requirements that were imposed but then overturned on appeal.
Clause 100 - Notification of enforcement action
691. This clause provides that Mo nitor must notify the NHS Commissioning Board, affected commissioning consortia and other relevant regulators of discretionary requirements imposed by it and of enforcement undertakings accepted by it. This is designed to ensure that information about provider performance, which may be relevant to the duties and functions of commissioners and other regulators, would be shared appropriately.
Transitional provision
Clause 101 - Designation of NHS foundation trusts during transitional period
692. This clause empowers Monitor to designate foundation trusts on whom it would be able to impose additional licence conditions for a limited period. Subsection (1) provides that in order to identify such trusts, Monitor would first set and publish criteria, after consultation with a number of specified parties (subsection (2) ). It would then assess each foundation trust against these criteria and submit to the Secretary of State a notice as to which trusts should be designated for these purposes. Subsection (3) provides that the designation of a foundation trust authorised before the commencement of this Chapter may not come into effect until the Secretary of State has given his approval, which must be within 28 days of receiving the notice from Monitor.
693. Where an NHS Trust was authorised to become a foundation trust after the commencement of this Chapter, Monitor would be able to designate it without the approval of the Secretary of State (subsection (6) ).
694. In each case, a designated foundation trust would be subject to any transitional licence conditions imposed on it under the next clause for two years from the date of its designation, unless Monitor removed its designation before the end of that period because it was satisfied that the published criteria no longer applied (subsection (9) ). Once Monitor removed a designation it would not be able to re-impose it. Subsection (10) provides for the Secretary of State to extend this two-year period by an order which is subject to the affirmative resolution procedure.
Clause 102 - Imposition of licence conditions on designated NHS foundation trusts
695. Subsection (2) allows Monitor to impose transitional licence conditions on a foundation trust designated under the previous clause, where it is satisfied that such conditions are appropriate for reducing a significant risk that the trust will fail to fulfil its principal purpose (see section 43(1) of the NHS Act ). Subsection (3) provides that any such conditions would remain in place until the trust’s designation expired, although Monitor would be able to modify them under subsection (4) .
696. Subsection (5) provides Monitor with compliance powers that it can use if satisfied that a designated foundation trust is in breach of a transitional licence condition during the period of its designation (subsection (7) ). For example, Monitor could place requirements on the trust to do or not to do specified things, or remove or suspend one or more directors or governors of the trust.
697. Subsection (8) provides that subsection (5) does not prevent Monitor from imposing discretionary requirements or accepting enforcement undertakings in relation to transitional licence conditions imposed under subsection (2).
698. Subsection (12) repeals section 52 of the NHS Act (failing NHS foundation trusts).
Chapter 5 – Pricing
699. These clauses provide Mo nitor with powers to set prices for NHS services, subject to the agreement of the NHS Commissioning Board, in order to promote competition and maximise productivity.
Clause 103 - Price payable by commissioners for NHS services
700. This clause sets out how prices would be specified and used for the payment of health care services provided for the NHS. In relation to services covered by the national tariff (see the next clause) it allows for those services to provided at a standard price or a maximum price, with flexibility to negotiate below that price.
701. In relation to services not covered by the national tariff and, as such, not subject to standard or maximum prices, the price payable would be determined by rules set out in the national tariff to cover such circumstances.
702. The commissioners who would have an interest in pricing are those that are responsible for arranging provision of health care services for the purpose of the NHS. This would include the NHS Commissioning Board, commissioning consortia, and the Secretary of State where section 13V of the NHS Act (inserted under Part 1 of this Bill) applies.
Clause 104 - The national tariff
703. This clause requires Mo nitor to publish "the national tariff", a document that makes provision about pricing of health care services. That document would have to:
704. The national tariff would be able to specify different prices according to whether a service was a designated service (under Chapter 3 of this Part) or in relation to different types of provider. Prices specified in the national tariff would not be able to include prices for public health services.
705. The national tariff would have effect for such period as specified in the tariff or until a new edition of the tariff took effect.
706. Mo nitor would have to have regard to the mandate set by the Secretary of State (published under section 13A of the NHS Act, inserted under Part 1 of this Bill) when setting its national tariffs.
Clause 105 - Consultation on proposals for the national tariff
707. This clause requires that agreement must be reached between Mo nitor and the NHS Commissioning Board regarding:
708. If agreement could not be reached, independent arbitration would be used to facilitate agreement.
709. Before publication of the national tariff, Mo nitor would have to notify all commissioners, license holders and others it considered appropriate – for example providers in the market not currently providing NHS services - of the proposed national tariff document. The notice would also have to be published and would specify the consultation period within which objections could be made (which may not be less than 28 days after publication).
710. At the time of publication of the first national tariff, licence holders may not yet exist. Therefore those who provide health care services for the NHS would be treated as if they were licence holders.
Clause 106 - Responses to consultation
711. This clause sets out the process for commissioners and licence holders to challenge the methodology used to set prices. Where an objection were made, the tariff could only be published where either the conditions in subsection (2) of this clause were met or, if they were not met, where Mo nitor had made a reference to the Competition Commission.
712. The conditions in subsection (2) are that the percentage of commissioners or licence holders who objected to the pricing methodology ("the objection percentage") and the percentage of licence holders, weighted by their share of supply, who objected to the pricing methodology ("the share of supply percentage") were both less than percentages prescribed by the Secretary of State in regulations..
713. This clause also gives effect to a Schedule which makes provision about the procedure for these types of references which is different from the procedures applicable to the Competition Commission under the Competition Act 1998 in relation to other types of reference.
Schedule 10 - Procedure on references under section 106
714. This Schedule outlines the procedure for the Competition Commission in relation to references made by Mo nitor regarding the national tariff.
715. In making a reference to the Competition Commission, Mo nitor would have to outline its reasons for the proposed pricing methodology. After the reference had been made an objector to the methodology would be subject to certain time limits in making representations on that reference. Mo nitor would be able to reply to these representations but would also be subject to specified time limits.
716. The Chairman of the Commission would have to select a group to carry out its functions to consider any such reference, make a determination and give directions to Mo nitor in relation to it. Paragraph 3(1) to (6) makes provision about the constitution of the group. Sub-paragraph (7) provides that a decision of the group would only be effective if all members were present when the decision was made and two of the three members were in favour of the decision.
717. Paragraph 4 makes provision about the timetable for references. The group would have to make a determination within 30 working days of the last date on which a reply to representations on the reference could be made by Mo nitor. Under certain circumstances this deadline could be extended by the group (by not more than 20 working days and not more than once). The extension would need to be notified to Mo nitor, the NHS Commissioning Board and the objectors.
718. Paragraph 5 provides that the Commission could also disregard representations of commissioners where those matters were not raised during the consultation period or matters raised by Mo nitor in response to objections that it did not include in the reference, if it felt this was necessary in order to reach a determination.
719. Paragraphs 6 to 8 make provision to enable the Commission to require information in order to help it make its determination. The information could take the form of documents, evidence at oral hearings or written statements. Paragraphs 10 and 11 make provision relating to evidence, including provision about default. A failure to provide information or the provision of false information could result in the provider of the information being found in contempt of court. However, no person could be compelled to provide information that it would not be forced to under civil proceedings in the High Court.
720. The Competition Commission could also make rules on the procedure to be followed in making determinations on references under the clause on consultation responses. In particular, this could include time limits applied to the oral evidence.
721. The costs of making a determination on a reference under this Part would have to be paid, in accordance with an order made by the group, by the unsuccessful party. If the pricing methodology needed to be changed, Mo nitor would pay the costs incurred by the Commission. If the Commission determined that the methodology could be implemented without changes objectors would have to pay the costs incurred by the Commission (those costs could be apportioned where there was more than one objector).
Clause 107 - Determination on reference under section 106
722. This clause makes provision about the Competition Commission’s role following a reference. After a reference following objections to the pricing methodology, the Competition Commission would have to make a determination as to whether the pricing methodology was appropriate, having regard to the matters to which Mo nitor must have regard in relation to pricing methodology, and taking into account both any representations made by licence holders and anything that Mo nitor did not consider when proposing the methodology (although only where Monitor would have been entitled to consider it but was unable to at the time).
723. If the Commission determined that Mo nitor had set the pricing methodology appropriately, Mo nitor would be able to use that method for the purpose of the national tariff.
724. The Commission would be able to determine that Mo nitor had not set the pricing methodology appropriately only in the circumstances set out in subsection (4) . Those circumstances are where Mo nitor had failed to have regard to matters relating to pricing methodology to which it was required to have regard or where the decision had been based on an error of fact or was wrong in law. In those circumstances the Commission would have to refer the methodology back to Mo nitor with the reasons for its decision.
725. The adjudication process that would be used by the Competition Commission in making its determination is based on the process used in the energy sector for code modification appeals under section 173 of the Energy Act 2004.
Clause 108 - Changes following determination on reference under section 106
726. When the Commission had referred the matter back to Mo nitor, Mo nitor would have to make the necessary changes to deal with all the issues raised in the determination. Mo nitor would then be able to implement the revised methodology unless the Competition Commission exercised its power of veto.
Clause 109 - Power to veto changes proposed under section 108
727. Within 28 days of receiving the revised pricing methodology from Mo nitor, the Commission would be able to direct Mo nitor not to implement the proposed changes or not to implement changes specified in the direction. The Commission would have to inform Mo nitor and the NHS Commissioning Board of this decision and make the necessary changes to the pricing methodology itself. The power of veto is intended to give the Commission the opportunity to prevent Mo nitor from making changes that do not adequately deal with the Commission’s determination on a reference.
Clause 110 - Local modifications of prices of designated services: agreements
728. This clause specifies the process for a provider of a designated service and the commissioner to agree modification of price levels in the national tariff if the standard or maximum price did not allow it to cover costs even with an efficient service. This is intended, for example, to allow providers to negotiate an exceptional subsidy to the tariff price where pricing levels do not cover costs.
729. Where the provider and commissioner agreed locally, the local provider would have had to present an evidence-based case that the modification was needed. When agreement on the need for a subsidy had been reached, Mo nitor would have to approve the agreement only if it was satisfied that it would be uneconomic for the provider to continue to provide services without it.
730. Where an agreement is made, Monitor would have to give notice in accordance with subsections (6) to (8) .
Clause 111 - Local modifications of prices of designated services: applications
731. This clause deals with situations in which agreement to a local modification between the commissioner and provider has not been reached. In such circumstances, the provider in question would be able to apply to Mo nitor for a local modification. This application would have to include evidence on why the modification was needed. Mo nitor would then make a decision on whether it would be uneconomic for the provider to continue to provide the service without the modification. Mo nitor would then be able to grant the application and determine the price of the designated services. Monitor would have to give notice of any such decision in accordance with subsections (6) to (8) .
732. If the NHS Commissioning Board did not agree with the decision of a subsidy, it could consult on whether the service concerned should be de-designated, and the process for de-designation of services (specified in Chapter 3 of this Part) would apply. The modified price would apply until the service is de-designated.
Clause 112 - Correction of mistakes
733. If a mistake were found in the national tariff so that the tariff did not reflect what was agreed between Mo nitor and the NHS Commissioning Board or what was determined by arbitration, corrections could be made. Mo nitor would have to notify all commissioners, licence holders and other persons as it considered appropriate of the mistake and the correction and specify the date on which the correction would take effect (which could be before the notification).
Chapter 6 – Insolvency and health special administration regime
734. These clauses make provision for regulations to establish a special administration regime for health as an alternative to ordinary insolvency procedures under the Insolvency Act 1986. The intention is that where a provider of designated services fails, a special administration regime would provide for continuity of those services. In other sectors of the economy delivering essential public services (for example, the transport and utilities sectors) special administration regimes are in place, as an alternative to normal corporate insolvency procedures, to ensure the continuity of those services where a provider fails.
735. Foundation trusts are outside of the scope of the Insolvency Act 1986. This Chapter therefore also makes provision for the application of normal corporate insolvency procedures, by regulations, to foundation trusts.
Clause 113 - Application of insolvency law to NHS foundation trusts
736. This clause removes the existing (and non-operational) failure arrangements set out in sections 53 to 55 of the NHS Act and obliges the Secretary of State to make secondary legislation as soon as is practical to apply existing corporate insolvency procedures to foundation trusts. Those procedures are company voluntary arrangements, administration and winding up as set out in Parts 1, 2 and 4 of the Insolvency Act 1986 respectively, and schemes of arrangement and reconstruction set out in Part 26 of the Companies Act 2006.
737. This would assist in ensuring a level playing field between foundation trusts and other providers, and the procedures could facilitate the rescue of a failed foundation trust (for example, through administration or a voluntary arrangement with creditors) or enable the affairs of a trust to be wound up in the best interests of its creditors (for example, through voluntary or compulsory liquidation). Introducing an effective failure regime would allow for orderly market exit. It would also mean that trust directors would be under similar obligations to company directors since offences that may be prosecuted under the insolvency legislation would be applied through regulations and disqualification proceedings could be taken against directors who were held responsible for misconduct.
738. Health special administration, provided for in the rest of this Chapter, would provide an alternative insolvency resolution process to ensure the continuity of designated services if a foundation trust (or any other provider of designated services) were to fail. Normal insolvency processes would therefore only be appropriate to deal with the failure of a foundation trust that was providing wholly non-designated services.
739. Introducing these procedures would also facilitate the commencement of health special administration in appropriate cases (for example, where steps are taken by a creditor to initiate ordinary insolvency and Monitor intervenes to seek a health special administration order from the court) and, in keeping with existing insolvency law and practice, these procedures may also provide appropriate exit routes from health special administration.
740. Subsection (2) inserts a new section 55A to the NHS Act. This new section specifies that the procedures which would be applied by the regulations are company voluntary arrangements, administration, winding up and other provisions as set out in Parts 1, 2, 4 and 6 of the Insolvency Act 1986 respectively, and schemes of arrangement and reconstruction and related provisions as set out in Part 26 of the Companies Act 2006.
741. The new section also provides that these corporate insolvency procedures may be applied to foundation trusts with any necessary changes, for example to reflect the unique legal status, structure and constitution of those bodies as public benefit corporations.
742. Given the technical nature of insolvency law and the public interest in dealing with the failure of a foundation trust, subsection (6) of the new section requires the Secretary of State to consult before making regulations. Regulations made under these provisions would be subject to the affirmative resolution procedure in Parliament.
743. Subsections (3) and (4) of the new section provides that insolvency rules would be made in the normal way under section 411 of the Insolvency Act 1986 to support the regulations and make them workable in practice.
Clause 114 - Health special administration orders
744. This clause specifies what is meant by a health special administration order, which is the order that Mo nitor would be able to seek from the court if a foundation trust or company providing designated services (which may include those in the independent sector) failed.
745. An application for a health special administration order could only be made by Mo nitor and would only apply to providers of designated services. Where the court made such an order, a health special administrator would be appointed and would be required to exercise his functions as specified in subsection (4) .
746. Under subsection (4), the health special administrator would be obliged to manage the affairs, business and property of the provider to achieve the objective of health special administration (see next clause) as quickly and efficiently as reasonably practical. In doing so, the administrator would have to ensure that the provider continued to comply with the requirements and conditions of the Care Quality Commission’s provider registration regime (provided for in Part 1, Chapter 2 of the Health and Social Care Act 2008). The health special administrator would also be required to act in a manner which, insofar as it was consistent with the objectives of a health special administration, protected the interests of the creditors of the provider as a whole, and, subject to those interests, the interests of members (where the provider was a company).
747. Subsection (5) establishes that a health special administration order would only apply to the affairs and business of a non-GB company (that is, a company incorporated outside Great Britain) which are carried on in Great Britain and to its property in Great Britain. This is consistent with a number of existing special administration regimes (for example, those in rail and energy).
Clause 115 - Objective of a health special administration
748. This clause specifies the objective of health special administration, which is to ensure the continuity of the provision of designated services.
749. That objective may be achieved by either rescuing the provider as a going concern (for example, a provider could exit health special administration in a viable commercial form) and/or the transfer of all or some of the designated services (the designated services and related assets are transferred to one or more other providers).
750. Similar to special administration regimes in other sectors, the clause provides for a hierarchy in these two possible outcomes. The health special administrator would be required to work towards a rescue as a going concern and, as specified in subsection (5) , would only be able to make transfers to the extent that:
Clause 116 - Health special administration regulations
751. This clause requires the Secretary of State to make regulations setting out the detail of the health special administration regime. The regulations are to be known as "health special administration regulations" and would be subject to the affirmative resolution procedure. These provisions are designed so that health special administration can be based on existing insolvency law and practice. The regulations may apply, with modifications, the administration procedure set out in Part 2 of the Insolvency Act 1986. Mo difications would be likely to be needed to make provision for the continuity of designated services and in the application of that procedure to foundation trusts.
752. Subsection (3) enables the regulations to provide that a special health administration order may also be made where the Secretary of State presents to the court a public interest winding-up application against a provider. This is consistent with existing special administration regimes, for example that provided for in the Energy Act 2004.
753. Subsections (5) and (6) provide that the regulations may also modify this Chapter, the Insolvency Act 1986 or any other enactment relating to that Act and section 242 of the NHS Act, which makes provision about involvement and consultation duties in relation to foundation trusts.
754. Subsection (7) provides that the power to make rules under section 411 of the Insolvency Act 1986 applies for the purpose of giving effect to the special health administration regime. This is consistent with other insolvency regimes where the rules make provision to make the scheme workable in practice.
755. Subsection (9) specifies that the regulations would be subject to consultation.
Clause 117 - Transfer schemes
756. This clause allows for the health special administration regulations to make provision about transfers in relation to designated services. A transfer scheme would allow designated services and related assets to be transferred to one or more other providers to ensure the continuity of those services in order to achieve the objective of health special administration.
757. Subsection (2) states that the health special administration regulations could in particular require a transfer scheme to be agreed by Mo nitor and the provider who would take over the provision of the delegated services, and allow Mo nitor to modify a transfer scheme with the consent of the affected parties.
758. Further detail about what may be included in a transfer scheme under the regulations is given in subsection (3) .
Clause 118 - Indemnities
759. This clause enables the health special administration regulations to make provision about Mo nitor’s power to provide appropriate indemnities from the risk pool to the health special administrator and other persons in respect of liabilities incurred or loss or damage sustained in connection with the exercise of the health special administrator’s functions. Such indemnities are a feature of existing special administration regimes (for example those in the utilities and transport sectors).
Clause 119 - Modification of this Chapter under the Enterprise Act 2002
760. This is a technical provision that would allow the Secretary of State to make consequential amendments under specified sections of the Enterprise Act 2002 to the provisions of this Chapter. This is designed to allow for future changes to the health special administration regime to ensure that it was in line with changes in the insolvency legislation.
Chapter 7 – Financial Assistance in Special Administration Cases
761. These clauses require Mo nitor to set up effective mechanisms for providing financial assistance to health special administrators, appointed to protect the continued provision of designated services in the event of the failure of a provider of designated services. The intention is that this financial assistance would be funded by the providers and commissioners of designated services rather than current failure arrangements that rely on funding from the Secretary of State.
762. It is intended that the financial assistance could be used by a health special administrator to cover operating costs during health special administration associated with ensuring the continuity of designated services. This could include (i) any indemnities for the health special administrator and other relevant persons in respect to liabilities incurred, or loss or damage sustained in connection with the exercise of the health special administrator’s powers and duties; (ii) continuing costs of operating designated services; and (iii) costs of restructuring the provider to ensure a sustainable future organisation. These restructuring costs could include, but are not limited to, staff redundancy, renegotiation of service contracts, restructuring of debts or payments made to a new operator to establish a viable provider.
763. The proposed financial mechanisms are not intended to provide funding for organisations experiencing temporary liquidity issues, nor are they intended to provide funding for providers of designated services which are unprofitable due to market factors or special service requirements. Funding for these issues should take the form of commercial loans or be provided through adjustments made to tariff and non-tariff income respectively. Neither should the financial mechanisms set up under this clause provide cover in relation to non-designated services, as such services should be dealt with through a normal administration process.
Establishment of mechanisms
Clause 120 - Duty to establish mechanisms for providing financial assistance
764. This clause would place Mo nitor under a duty to establish effective financial mechanisms to support the operation of the health special administration regime provided for in the previous Chapter.
765. Mo nitor would have the power to decide which financial mechanisms would best fit the risks of failure and to establish such financial mechanisms and would be able to provide different mechanisms for different providers or different types of providers. As specified by subsection (2) , these mechanisms could include, but not be limited to:
and could provide for Mo nitor to recover the costs of setting up and running any such mechanism.
766. The financial mechanisms would be exempt from any provisions of the Financial Services and Markets Act 2000.
767. An order commencing this provision would be able to provide for Mo nitor to comply with this duty by a specified date. This is intended to ensure that the financial mechanisms would be in place in time for the commencement of the health special administration regime.
Clause 121 - Power to establish fund
768. This clause allows Mo nitor to establish and maintain a fund for the purposes of providing financial assistance to health special administrators and would require Mo nitor to secure the prudential management of such a fund.
769. The clause specifies certain requirements relating to the management of the fund. Mo nitor would be required to appoint at least two fund managers (which could be individuals or firms). Mo nitor would not be able to appoint an individual or firm as a fund manager unless it was satisfied:
Applications for financial assistance
Clause 122 - Applications
770. This clause provides the process by which a health special administrator would be able to make an application for financial assistance from Mo nitor.
771. The clause allows Mo nitor to specify the form of the application and the supporting evidence required. Monitor would then be required to either grant or refuse the application.
772. Subsection (3) requires that Mo nitor notifies a successful applicant of the purpose for which the financial assistance must be used, and the conditions attached, and subsection (4) requires that the health special administrator may not use the assistance for any other purpose and must observe the conditions.
773. Subsection (6) obliges Mo nitor to notify an unsuccessful applicant of its reasons for refusing an application.
774. The health special administrator would be able to request a re-consideration of any refusal and Mo nitor would be able to request information from the applicant for those purposes. The reconsideration of the application would need to be carried out by individuals other than those who made the original decision to refuse the application.
775. Following reconsideration of an application, Mo nitor would have to notify the applicant of its decision. Mo nitor would then have to follow the process provided in subsection (3) in notifying a successful applicant and the notice requirements in subsection (6) where the applicant was unsuccessful.
776. Financial assistance would only be granted for the period during which a provider is in special administration but could be granted for shorter periods.
Clause 123 - Grants and loans
777. This clause prescribes the circumstances in which Mo nitor would be able to give financial assistance in the form of loans or grants in response to an application from a health special administrator. Subsection (1) provides that Mo nitor may only grant financial assistance if it is necessary to enable a provider to continue to provide designated services or to secure viable business to secure a provider’s long term future where there is no other source of funding available.
778. Subsection (3) provides that Mo nitor would be able to make any such grant or loan in whatever manner, and on whatever terms, it considered appropriate, subject to subsection (2) , which provides that those terms would have to include a term requiring the whole or a part of the grant to be repaid to Mo nitor if there were a contravention of the other terms.
Charges on commissioners
Clause 124 – Power to impose charges on commissioners
779. This clause gives the Secretary of State the power to make regulations that would allow Mo nitor to require commissioners to pay charges for the protection of designated services.
780. Subsections (2) and (3) specify what would have to be included in the regulations, which includes provision about how the charge would be calculated. The charge could be fixed in the regulations or determined by reference to criteria set in the regulations. The regulations would also have to set out to whom the charge was to be paid and when. Where a charge would be set using criteria, the regulations would have to require Mo nitor to consult before imposing the charge. Where a charge were not paid when it was due, regulations would have to provide for interest to be payable on that amount and allow for any unpaid balance, including interest to be recoverable as a civil debt.
781. Where the charge was payable to a provider, Mo nitor would be able to require the provider to pay that amount in accordance with the regulations.
782. Subsection (5) requires that the Secretary of State must consult Mo nitor and the NHS Commissioning Board before making the regulations.
783. Subsection (6) states that the regulations under this section may apply, with modifications, the provisions on consultation later in this Chapter. This would provide for a consultation on the commissioner charge and require Mo nitor to calculate the amount each commissioner is to pay under the charge and to notify commissioners of that amount and when it will become payable for each financial year the service is designated.
Levy on providers
Clause 125 - Imposition of levy
784. Under this Chapter Monitor would have the power to impose levies on providers of designated services in order to raise money for financial assistance to health special administrators.
785. Subsection (2) requires that before the beginning of each financial year and before determining the levies to be imposed for the financial year, Mo nitor would have to estimate:
786. Subsection (3) requires Mo nitor, before the imposition of any levy, to determine (i) the methodology for establishing the rate of the levy; (ii) the time period the levy would cover; and (iii) when the levy would be payable. Where a determination concerned the methodology for establishing the rate, notice would have to be given including an explanation of the charges.
Clause 126 - Power of Secretary of State to set limit on levy and charges
787. This clause allows the Secretary of State, subject to the approval of HM Treasury, to limit the amount raised by Mo nitor through a provider levy and commissioner charge. This power would be exercised by order. The intention is that this power would be used in exceptional circumstances, if the size of the financial mechanisms were excessively large.
788. The Secretary of State would be obliged to lay the order before Parliament, in order to inform Parliament of the intervention.
Clause 127 - Consultation
789. This clause requires Mo nitor to consult on the methodology by which the provider levy and commissioner charge would be determined. The clause specifies details about the consultation process, such as the persons to whom Mo nitor would have to send a notice of its proposals on the levy, and the length of the consultation period.
Clause 128 - Responses to consultation (and Schedule 8)
790. This clause details how Mo nitor would be required to handle objections to the methodology raised in response to the consultation. Where an objection was made Mo nitor would not be able to give notice about amounts payable unless the conditions in subsection (2) of this clause were met or, where they were not met, Mo nitor had made a reference to the Competition Commission.
791. The conditions in subsection (2) under which Monitor would be able to go ahead and give notice about amounts payable are that the percentage of providers objecting to the methodology (the "objection percentage") and the percentage of providers objecting to the methodology, weighted by their share of supply (the "share of supply percentage") are both less than the percentages prescribed by the Secretary of State in regulations.
792. A reference to the Competition Commission would have to be designed to require the Competition Commission to investigate and report on certain matters, specified in subsection (4) . Those matters are whether Mo nitor had failed to give sufficient weight to the matters it would be required to have regard to under Chapter 1 of this Part, and if so whether that failure did or might operate against the public interest and whether that could have been remedied or prevented by changes to the proposals.
793. Schedule 8 applies, subject to the modifications set out in subsection (5) , to references made under this section. The Schedule sets out the requirements and processes surrounding the reference to the Competition Commission and the Competition Commission’s determination of any appeal. The Schedule is explained in greater detail under Chapter 4 of this Part, since it also provides the process for references to the Competition Commission about licence conditions.
Clause 129 - Amount payable
794. This clause requires Mo nitor to calculate the amount each provider is to pay under the levy and to notify the provider of that amount and when it will become payable for each financial year the levy is imposed. The amount payable could be apportioned where the provider’s liability was only for part of the year. That amount could also be zero.
795. Subsections (4) and (5) allow Mo nitor to adjust the amount payable by a provider if Mo nitor judges that the risk of the provider going into health special administration has changed since the start of the financial year or since it last adjusted the amount. Before making an adjustment, Mo nitor would have to give notice in accordance with subsection (6) .
796. Subsections (8) and (9) require Mo nitor to recalculate the amount payable where a provider to request a recalculation because it reasonably believes that the amount has been miscalculated (as long as the request relates to the current financial year).
797. Subsection (10) specifies how Mo nitor would be able to recover unpaid levies. It would also allow Mo nitor to claim interest on the unpaid levies as a civil debt through section 17 of the Judgements Act 1838.
Supplementary
Clause 130 - Investment principles and reviews
798. This clause requires Mo nitor to publish a statement on the principles governing the decisions about investments for the purposes of providing financial assistance to the health special administration regime (subsection (1) ). Under subsection (2) Mo nitor would have to review that statement annually, revising it if necessary. If Mo nitor revised the statement, it would have to re-publish it.
799. Subsection (3) provide that Mo nitor must publish a review of the operation of the health special administration procedure and the financial mechanisms supporting it.
800. Subsections (4) to (6) specify the purposes of the review, what it would be required to cover and what information, such as commercially sensitive information, must be left out. For example, subsection (4) requires that the statement would cover a review of the performance of the financial mechanisms in the previous year and an assessment of how Mo nitor would ensure that the mechanisms would be effectively managed over the following years in order to undertake its statutory function.
Clause 131 - Borrowing
801. This clause allows Mo nitor to take out loans or arrange overdrafts in order to exercise its functions to provide financial assistance.
802. Subsection (2) provides that Mo nitor would not be able to borrow beyond a borrowing limit specified by the Secretary of State by order (such an order would be subject to the negative resolution procedure).
Clause 132 - Shortfall or excess of available funds, etc.
803. This clause allows the Secretary of State to provide financial assistance to Mo nitor, if satisfied that the financial mechanism established by Mo nitor to provide funds to health special administrators is not generating sufficient funds and this is preventing the mechanism from operating effectively. What this would mean in practice is that in exceptional circumstances the Secretary of State would be able to top up the financial mechanisms to ensure the continuity of designated services.
804. The clause also provides that the Secretary of State would be able to direct Mo nitor to transfer funds to the Secretary of State if satisfied that the funds generated by a financial mechanism exceeded the level necessary or if the financial mechanism had been dormant or wound up. The intention of this power is to ensure that excess funds do not go unused.
Chapter 8 – General
Clause 133 - Service of documents
805. Details are provided in this clause of how notices required under this Part should be delivered, including details of when a notice is to be treated as having been delivered.
Clause 134 - Electronic communications
806. This clause provides that Mo nitor may send notices in electronic form, if the person to be notified has given permission to receive notices electronically and has provided an email address. Monitor would be able to impose requirements about how notices are to be sent electronically; and it would have to publish whatever requirements it imposed.
Clause 135 - Interpretation and consequential amendments
Schedule 11 – Part 3: minor and consequential amendments
807. This clause gives effect to the Schedule, which contains consequential amendments, most of which reflect the change of Monitor’s statutory name.
Part 4 – NHS Foundation Trusts and NHS Trusts
808. This Part amends Chapter 5 of Part 2 of the NHS Act , which makes provision for NHS foundation trusts.
809. It removes various restrictions on foundation trusts and regulation specific to them and makes changes to the authorisation of foundation trusts, in light of the proposals in Part 3 for Monitor to become an economic regulator and to license all providers of NHS services. It repeals NHS trust legislation, and Monitor’s power to authorise new foundation trusts, from 1 April 2014, as the Government intends all NHS trusts to become foundation trusts. It clarifies the duties on governors and directors and introduces new powers for governors. It makes amendments to the financing and accounting arrangements of foundation trusts. In addition, it makes amendments to the process of foundation trust mergers and enables acquisitions, separations and dissolution of foundation trusts. It repeals provision about de-authorisation, preventing foundation trusts being returned to NHS trust status, and allows Monitor to operate the failure arrangements for foundation trusts, ahead of their replacement by the new failure arrangements set out in Part 3 of the Bill. In the longer-term, when most of Monitor’s specific functions in relation to foundation trusts will be repealed, there will be a specific role for Monitor in maintaining an adapted register of foundation trusts, and also allows Monitor to establish a panel to advise foundation trust governors.
Governance and management
Clause 136 – Governors
810. This clause makes changes to the powers of foundation trust governors as specified in Schedule 7 to the NHS Act and clarifies the collective duties on them. It is intended to strengthen foundation trusts’ internal governance given that the Bill would reduce specific oversight of foundation trusts by Monitor, with future controls operating through regulatory licensing and clinically-led NHS commissioning on all providers.
811. Subsections (1) and (8) rename the board of governors the "council of governors" in order to avoid confusion between it and the board of directors. The term is already used in practice by some foundation trusts.
812. The Bill retains minimum requirements on the composition of the council of governors, including the existing requirement for there to be a majority of elected governors. Subsection (2) removes the existing requirement for the council of governors to include a member appointed by a Primary Care Trust, reflecting the abolition of Primary Care Trusts elsewhere in the Bill. Subsection (3) provides that a foundation trust can specify in its constitution any other organisation that is entitled to appoint a member or members of the council of governors. This would enable foundation trusts to tailor their governance to local circumstances.
813. Subsection (4) sets out the duties of the council of governors, making explicit the duties on governors that are implicit in the NHS Act through their election and existing powers. Subsection (5) provides that foundation trusts will be required to take steps to ensure that governors are equipped with the skills and knowledge they require. Subsection (6) gives governors an additional power to hold directors of the trust to account by enabling them to require directors to attend a meeting for the purposes of obtaining information about the performance of the trust or its directors, and to vote on issues concerning their performance. Subsection (7) requires the trust to include in its annual report details of any such meetings.
Clause 137 – Directors
814. This clause specifies some of the duties on directors of foundation trusts. Subsection (1) places a general duty on the directors of foundation trusts to promote the success of the trust.
815. Subsections (2) and (3) set out the specific ways in which duties to avoid conflicts of interest, to declare any interest in a proposed transaction and not to accept benefits from third parties apply in relation to foundation trust directors. By virtue of their office in public sector organisations, foundation trust directors are subject to certain duties that reflect administrative law principles. These are similar to specific duties on directors of other organisations, such as those on company directors which are set out in the Companies Act 2006. These general duties include, among others, a duty to act within powers, a duty only to exercise powers for the purposes of which they are conferred, a duty to exercise reasonable care, skill and diligence and a duty to act in accordance with the constitution of the organisation. However, in relation to conflicts of interest and accepting benefits, the Bill specifies the ways in which these duties apply to foundation trust directors, creating certain exceptions to administrative law principles, for example by permitting a conflict of interest if sanctioned in accordance with the trust’s constitution.
816. In order that governors of foundation trusts have the information they require to discharge their duties, subsection (4) requires directors to send their governors agendas for, and minutes of, their meetings.
Clause 138 – Members
817. This clause requires a foundation trust to take steps to ensure that the membership of any public and patient constituencies is representative of those eligible for membership of the trust because, under subsequent clauses, Monitor would lose the power to ensure this through terms of authorisation. Paragraph 3(1)(a) of Schedule 7 to the NHS Act defines a public constituency as comprising "individuals who live in any area specified in the constitution as the area for a public constituency" while paragraph 3(1)(c) of that Schedule provides that the patient constituency, which is optional for foundation trusts, includes "individuals who have attended any of the corporation’s hospitals either as a patient or the carer of a patient within a period specified in the constitution".
818. Subsection (2) requires a foundation trust to have regard to the population it serves in deciding on the geographic areas to be eligible for its public constituency and any patient constituency. For example, if a foundation trust serves patients from a wide area – if for instance it is a regional centre of expertise or a tertiary referral centre – the effect would be to require the trust to give consideration to creating a patient constituency if it decided against including the whole area in its public constituency.
Clause 139 – Accounts: initial arrangements
819. This clause, and the following clause on variations to initial arrangements, make changes to the accounting requirements of foundation trusts. These clauses link with paragraphs in Schedule 7 to the NHS Act and specify Monitor’s responsibilities in relation to the production of foundation trust accounts. They reflect changes to government accounting rules, allow the Secretary of State to fulfil his functions and remove an aspect of Monitor’s role which is specific to foundation trusts.
820. This clause specifies the initial arrangements for foundation trust accounts, amending the existing provisions in paragraphs 24 and 25 of Schedule 7 to the NHS Act under which Monitor has powers to direct foundation trusts on form, content and other matters relating to foundation trust accounts.
821. The clause requires Monitor to seek the approval of the Secretary of State, rather than of HM Treasury, on foundation trust accounting matters. This would enable the Secretary of State to ensure that the accounting directions issued by Monitor were in line with the accounting framework that the Department of Health must follow in preparing its accounts, set out by HM Treasury in their Financial Reporting and Accounting Manual.
822. From 2011/12 foundation trusts will move within the Department’s accounting boundary under the cross-Government "clear line of sight" initiative (following the Constitutional Reform and Governance Act 2010) and will be fully consolidated into the Department’s resource account. Therefore, foundation trust accounts will, in future, need to be produced to the same standards and timescales as those of the Department and other organisations in the Department’s "group". As the Department must produce its accounts in accordance with HM Treasury guidance, subject to any agreed divergence, foundation trust accounts would also continue to be consistent with HM Treasury accounting guidance.
823. The clause creates a power for Monitor to direct foundation trusts to produce accounts for periods other than a financial year, such as in-year accounts that may be required by the Department or Government.
824. The clause also gives Monitor powers to ensure that accounts are produced on a timely basis, early enough to be consolidated into the Department’s resource account to meet wider Government reporting deadlines.
825. These powers would apply for a transitional period during which Monitor would be responsible for setting foundation trust accounting policy, subject to the Department’s agreement and in providing a consolidation of foundation trust accounts to the Department.
826. Subsection (6) removes the requirement for foundation trusts to lay accounts before Parliament independently. As with other NHS bodies that are consolidated into the Department’s resource account, the route of accountability for the spending of these organisations will be through the Department’s resource account.
Clause 140 – Accounts: variations to initial arrangements
827. This clause provides that after a transitional period, the powers and duties relating to the production of foundation trust accounts would transfer to the Secretary of State. The proposed change to Monitor’s role to become economic regulator for all providers (the subject of Part 3 of the Bill) means that it would not be appropriate for Monitor to have an ongoing and specific role in foundation trust accounts when this would not be the case for other providers.
828. The enactment of this clause, by order of the Secretary of State, would bring the interim accounting arrangements to an end, as stated in subsection (7) .
829. This clause amends paragraphs 24 and 25 of Schedule 7 to the NHS Act (as previously amended by the previous clause on accounts: initial arrangements) to substitute the Secretary of State for the regulator in respect of those powers and duties relating to the form, content, timing and other matters concerning the accounts of foundation trusts. The clause requires the Secretary of State to seek the approval of HM Treasury in those cases where the regulator had been required to seek the approval of the Secretary of State.
Clause 141 – Annual report and forward plan
830. This clause specifies new requirements relating to Monitor’s existing power to determine the content of foundation trusts’ annual reports and allows the transfer of powers over annual reports and forward plans to the Secretary of State.
831. Subsection (1) requires foundation trusts to include in their annual reports information on the pay and remuneration of directors and expenses of governors and directors, in line with the requirements on other public sector organisations and those already set out in Monitor’s current code of governance. Subsection (3) requires Monitor to consult before imposing significant new requirements regarding the contents of annual reports.
832. Subsection (3) provides that in future, the power to determine the content of foundation trusts’ annual reports could move from Monitor to the Secretary of State, who would need to set out such requirements in secondary legislation, mirroring the existing requirements on charities. The timing of this change would be for the Secretary of State to decide, but it is anticipated that this would be at a time at which the requirements on the content of foundation trust annual reports had stabilised.
833. Subsection (4) provides that foundation trusts would have a duty to send their forward plans to the Secretary of State, rather than to Monitor as they do at present. Alongside provisions on accounts, this is to ensure the Department of Health has the information it needs to manage against its financial controls, since the spending of foundation trusts counts towards the Department’s spending. Subsection (6) provides that foundation trusts’ forward plans would no longer be included on the register of foundation trusts, but the public would retain the existing right to request, free of charge, a copy of the latest information as to the forward planning of a trust from the organisation concerned, as is provided for in paragraph 22(1)(e) of Schedule 7 to the NHS Act .
Clause 142 – Meetings
834. This clause requires foundation trusts to hold annual meetings of the trust’s membership, similar to the existing requirements on other types of organisations and on foundation trusts to hold, in public, general meetings of the council of governors. Subsection (1) , which inserts a new paragraph 27A into Schedule 7, gives the membership of a foundation trust a role in relation to considering the organisation’s annual report and accounts . This is intended to increase the accountability of governors and directors to the members and to promote transparency about the trust’s performance.
835. Subsection (1) provides that the membership of the trust, at the annual meeting, must be able to vote on constitutional amendments affecting the role of governors, similar to the scrutiny of other changes by governors.
836. Subsection (2) clarifies that the existing requirement on the council of governors to hold a general meeting to consider the trust’s annual accounts and report in no way prevents the governors holding a general meeting more than once a year if they wish to do so. Subsection (3) , inserting a new paragraph 28A, enables the trust, if it wishes, to combine the annual meeting of the membership with a general meeting council of governors.
Clause 143 – Voting
837. This clause inserts a new paragraph into Schedule 7 to the NHS Act . This would give the Secretary of State, in light of new decision-making powers for foundation trusts in subsequent clauses, a regulation-making power to alter the associated voting arrangements for directors, governors and members of foundation trusts provided for in this Bill.
838. Existing voting provisions unaffected by this Bill, such as the majority of governors required to remove a non-executive director, would be beyond the scope of this power. In general, beyond provisions on the appointment of non-executive directors by governors, specific voting arrangements for foundation trusts have not been provided for in detail in primary legislation and this clause is intended to ensure that the new voting provisions can be modified if necessary. Under this clause, the Secretary of State could, for example, change the size of a majority required for approving mergers or for making changes to the constitution of a foundation trust, or specify that such a majority should be of those eligible to vote as opposed to those actually voting.
839. Subsection (2) provides that any regulations made under this clause would be subject to the affirmative resolution procedure.
Foundation trust status
Clause 144 – Authorisation
840. This clause changes the nature of foundation trust authorisation to a one-off test, ahead of the repeal of provisions on authorisation under a later clause. Under current legislation, Monitor sets terms of authorisation when authorising an NHS Trust to become a foundation trust, and these terms form the basis of Monitor’s foundation trust-specific regulatory regime. Under Part 3 of this Bill, Monitor would in future issue licences to providers with conditions attached, and all providers would be regulated on the basis of such conditions. An NHS trust wanting to become a foundation trust after implementation of Monitor’s licensing regime (proposed for 1 April 2012) would still need to meet the standards necessary to be authorised by Monitor as a foundation trust, but rather than receiving ongoing terms of authorisation, would undergo a one-off test to gain authorisation.
841. This clause therefore amends the NHS Act to change the application process for NHS trusts wishing to become foundation trusts and to remove ongoing terms of authorisation. Subsection (4) removes Monitor’s discretion to give an authorisation on particular terms, and subsection (5) removes Monitor’s ability to vary those terms of authorisation. Subsections (6) and (8) make consequential changes which would remove the requirement for a copy of the authorisation to be on the register and available for public inspection as this would no longer be a live document.
842. Subsection (2) repeals the requirement in section 33(2)(a) of the NHS Act to describe the goods and services to be provided in an application for foundation trust status and for Monitor to be satisfied that an applicant can provide them. This information is currently required to set the terms of authorisation. In future, Monitor as the economic regulator would be able to use its licensing regime to require a provider to provide a particular service. The existing powers under which Monitor can use terms of authorisation to ensure the provision of a particular service would therefore no longer be required. Monitor’s existing foundation trust-specific powers to enter and inspect a foundation trust’s premises would also no longer be required given its proposed new functions as economic regulator of all providers of NHS services, so subsection (7) repeals section 49 of the NHS Act which enabled it to exercise such a power.
Clause 145 – Bodies which may apply for foundation trust status
843. This clause removes the ability for organisations other than NHS trusts to apply for foundation trust status using section 34 of the NHS Act . There is little prospect of any organisation other than an NHS trust applying to become a foundation trust (no other type of organisation has ever applied using Section 34) and Section 34 is therefore considered unnecessary. Section 34 would be repealed when the licensing regime is implemented (proposed for 1 April 2012). The clause also makes consequential amendments to the NHS Act , for example removing powers for Monitor to authorise such trusts. If an organisation were to submit an application prior to the repeal of section 34, subsections (4) to (7) would enable Monitor to consider the application and authorise the organisation as a foundation trust.
Clause 146 – Amendment of constitution
844. This clause gives foundation trusts powers to amend their constitutions without seeking external permission. The Bill retains the existing requirement on foundation trusts to have a constitution and continues to require trusts’ constitutions to include certain information. However, as Monitor in its proposed new role as economic regulator would no longer give additional supervision to foundation trusts, this clause transfers responsibility for approving changes to a foundation trust’s constitution from Monitor to the council of governors and board of directors of the foundation trust. Subsection (2) , among other things, requires that foundation trusts inform Monitor of any amendments they decide to make to their constitutions, since Monitor would continue to act as the registrar of foundation trusts, so would be responsible for maintaining on the foundation trust register the constitutions of such organisations.
Clause 147 – Panel for advising governors
845. This clause gives Monitor the power to establish a panel to consider questions brought by governors about the appropriateness of actions taken by their foundation trust. The panel is intended to provide a source of independent advice to governors which, at present, they receive informally from Monitor. Its purpose in providing advice is to help governors to fulfil their role of holding non-executive directors to account for the performance of the board. Subsection (2) provides that questions can only be referred to the panel if a majority of the council of governors agree. Decisions of the panel would not be binding on the trust, but a court or tribunal could take the panel’s determination into account if considering a question previously considered by the panel. Subsections (3) and (4) enable the panel to regulate its own procedures in order to ensure its independence from Monitor. However, the Secretary of State would have the power, under subsection (10) , to make regulations about the membership of the panel in the event that the arrangements made by the panel proved problematic in practice or to ensure the panel’s independence from Monitor. For example, if the panel decided to appoint members for life, this power would allow the Secretary of State to introduce term limits.
Finance
Clause 148 – Financial powers etc.
846. This clause amends powers relating to the financial matters of foundation trusts.
847. The changes are in two broad areas. Firstly, the Secretary of State’s powers to give financial assistance to foundation trusts would be restricted and would be governed by guidance required under legislation. Secondly, the taxpayer investment in foundation trusts would no longer be managed through foundation trust-specific statutory controls but instead through conditions to be applied to loans, public dividend capital and guarantees of payments under externally financed development agreements. This would enable the management of the taxpayer investment, through the application of these conditions, by an operationally independent banking function to be established by the Department of Health. This is intended to protect the taxpayer investment in foundation trusts from material increases in risk that may arise as a result of such events as deteriorating financial performance or significant structural changes. As the conditions would be set to trigger only in exceptional circumstances they would not affect the operational freedoms of foundation trust.
848. Subsections (1) and (2) remove the Secretary of State’s powers to give financial assistance to foundation trusts in the form of public dividend capital, grants or other payments. This would restrict the Department to providing financial assistance to foundation trusts in the form of loans and to providing a guarantee of payments under an externally financed development agreement. The Government intends these will come into effect only after the establishment of mechanisms to provide financial assistance to ensure continuity of services under special administration in Part 3. Subsection (3) requires the publication of an annual report detailing all loans outstanding, loan transactions during the year and the terms under which those loans were let.
849. As part of the move away from statutory controls on foundation trusts, the prudential borrowing code currently produced by the regulator and the borrowing limits that are calculated using that code would no longer be required. Subsection (4) therefore removes the powers for the regulator to revise the prudential borrowing code and subsection (10) removes the limit imposed on foundation trust borrowing by the code.
850. Subsection (8) requires the Secretary of State to produce guidance on his powers to issue loans and set terms for public dividend capital conferred under sections 40 and 42 of the NHS Act , as amended by this Bill. The guidance would set out criteria to be applied when setting the terms and conditions of financing issued under section 40 and those which would be applied to existing public dividend capital under section 42(3) of the NHS Act .
851. The guidance would cover terms and conditions for loans, public dividend capital and guarantees of payment that fall into two categories. Firstly, it would cover those terms and conditions that relate directly to the financing itself, for example the interest or dividend payable by foundation trusts on the financing, or the requirement to repay public dividend capital. Secondly, it would cover those conditions that do not directly apply to the financing, which would be designed to highlight material changes in the risks to the taxpayer investment and would be consistent with the terms that any lender would apply to financing. These may include the following and similar conditions:
852. Subsection (7) of this clause sets out those powers of foundation trusts which would be subject to such terms as above. These terms may be applied to existing or new public dividend capital under subsection (3) of section 42 of the NHS Act .
853. Subsection (9) repeals a provision that relates to Monitor’s existing foundation trust-specific role. As economic regulator, Monitor would have powers under Part 3 that would allow it to protect property required for the delivery of designated services.
854. Subsection (11) amends section 50 of the NHS Act to require foundation trusts to pay to Monitor fees associated with Monitor’s two continuing foundation trust-specific functions, namely maintaining the foundation trust register and establishing an advice panel (its fee charging powers in respect of its functions as economic regulator are addressed in the explanatory notes on the economic regulator).
Functions
Clause 149 – Goods and services
855. This clause amends section 43 of the NHS Act on authorised services to remove mentions of ongoing terms of authorisation, since terms of authorisation would no longer exist under changes proposed by the earlier clause on foundation trust authorisation.
856. Subsection (1) retains the current position that the principal purpose of a foundation trust is to provide goods and services for the health service in England and that a foundation trust may provide goods and services for any purposes related to the provision of health care. To make the principal purpose clear to governors and directors, subsection (5) requires a foundation trust to include the principal purpose in its constitution.
Clause 150 – Private health care
857. This clause repeals the restriction on the amount of income a foundation trust can earn from private charges, otherwise known as the "private patient income cap".
858. The cap, which was introduced in 2003, has the effect that a foundation trust cannot earn in any financial year a higher proportion of its total income from private charges than it derived from private charges in the financial year 2002-03 (the year before the first foundation trusts were authorised). For example, as no mental health foundation trust derived income from private charges in 2002-03, their cap was 0%. This was increased to 1.5% by section 33 of the Health Act 2009. The Bill does not repeal the provisions of section 44 of the NHS Act which allow foundation trusts to make charges to NHS patients for the provision of accommodation, such as a private room, and additional services, such as an ancillary service like the provision of a television.
Clause 151 - Information
859. This clause transfers from Monitor to the Secretary of State the power to require information from foundation trusts necessary for the Secretary of State to exercise his functions effectively. Whilst foundation trusts sit within the Department of Health accounting and budgeting boundaries the Department will need information from foundation trusts in order to carry out its functions. These functions include financial management against Parliamentary estimates, Departmental Expenditure Limits and other controls, financial reporting to HM Treasury and those wider reporting requirements made of all Government Departments for both financial and non-financial matters.
860. This information is currently collected and provided to the Department by Monitor under the terms of authorisation of foundation trusts. Given the proposed change to Monitor’s remit, it would no longer be consistent with its new role for it to continue to collect information on behalf of the Department when it would not have a similar role for other healthcare providers. Therefore, this clause requires foundation trusts to provide the required information directly to the Department.
Clause 152 – Significant transactions
861. This clause provides that a foundation trust may designate in its constitution certain transactions as "significant transactions" which cannot proceed unless a majority of governors agree to them. Foundation trusts would be able to decide which transactions they want to designate as significant, strategically or financially: for example, they could provide that this included any contract valued over a certain amount or over a particular percentage of the trust’s turnover. As the definition of a "significant transaction" would need to be specified in the constitution of the trust, it would have to be agreed by a majority of the council of governors and of the board of directors. Trusts could choose not to specify any transactions as "significant transactions", but this would need to be stated in the constitution, ensuring the agreement of the governors.
Mergers, acquisitions, separations and dissolution
Clause 153 – Mergers
862. This clause, and the subsequent ones enabling other types of organisational change, brings the legislation for foundation trusts more in line with legislation on other types of organisations. The clause amends the process specified in the NHS Act for foundation trusts to merge with each other or with NHS trusts. The amendments remove the specific discretion that Monitor currently has in relation to mergers involving foundation trusts and some of the information requirements needed alongside an application. Monitor’s licensing powers under Part 3 would allow it to set license conditions giving it a role in organisational changes, which impacted on the provision of designated services.
863. Subsection (2) introduces a new requirement for the approval of the majority of the governors of the foundation trusts for such an application to be made.
864. An application for such a merger would still have to be made to Monitor, but subsection (5) provides that Monitor’s foundation trust-specific role in relation to such mergers would be limited to granting the application that would effect the change, which it would be required to do if it were satisfied that the necessary preparatory steps had been taken.
Clause 154 – Acquisitions
865. This clause makes explicit provision for a foundation trust to acquire another foundation trust or an NHS trust. The clause enables an acquisition of a foundation trust to occur without the acquiring foundation trust being required to dissolve.
866. A joint application, by the acquiring and target organisations, would have to be made to Monitor, who would be required to grant the application if it were satisfied that the necessary preparatory steps had been taken. Subsection (2) requires that such an application could only be made with the approval of the majority of the governors of each of the foundation trusts involved.
867. The provision for a foundation trust to acquire an NHS trust would be removed when the NHS trust legislation was repealed.
Clause 155 – Separations
868. This clause makes explicit provision for a foundation trust to separate into two or more foundation trusts.
869. An application would have to be made by the foundation trust to Monitor for the separation, who would be required to grant the application effecting the change if it was satisfied that the necessary preparatory steps had been taken. Subsection (2) requires that such an application could only be made with the approval of the majority of the governors of the foundation trust.
Clause 156 – Dissolution
870. This clause makes provision for a foundation trust, with no remaining liabilities, to dissolve .
871. An application would have to be made by the foundation trust to Monitor who would be required to grant the application, and make the order to effect the administration of the dissolution, if it were satisfied that the foundation trust had no liabilities and that the necessary preparatory steps had been taken.
Clause 157 – Supplementary
872. This clause extends the supplementary provisions in the NHS Act in relation to mergers involving foundation trusts, so that it now covers mergers, acquisitions, separations and dissolutions.
873. The clause makes provision for Monitor to make an order to dissolve a foundation trust and to effect mergers and separations in which a new foundation trust is (or trusts are) created. The clause requires that such orders would have to specify the properties and liabilities to be transferred, and to where.
Failure
Clause 158 – Repeal of de-authorisation provisions
874. This clause removes sections 52A to 52E and Schedule 8A of the NHS Act (inserted by the Health Act 2009), which provide for the de-authorisation of foundation trusts. The effect of de-authorisation would be to revert a foundation trust to being an NHS trust, which would no longer be appropriate given the intention that all NHS Trusts are to become foundation trusts and the associated repeal of the NHS Trust model. The clause also removes references to sections 52A to 52E, in force only for certain purposes, and Schedule 8A from other parts of the NHS Act .
Clause 159 – Trust special administrators
875. This clause and subsequent clauses amend existing provisions on foundation trust failure (in Part 2, Chapter 1 of the Health Act 2009) which have not yet been used. They would adapt the failure regime for foundation trusts to create a transitional failure regime which is consistent with the end-state special health administration regime proposed by Chapter 6 of Part 3 of this Bill and which can operate until that end-state regime is in place.
876. This clause amends the trust special administration provisions (sections 65A to 65O of the NHS Act as amended by the Health Act 2009) to allow a foundation trust to have a trust special administrator appointed without the need for de-authorisation, and to replace the Secretary of State’s role in appointing trust special administrators with a role for Monitor. These amendments make the transitional foundation trust failure regime consistent with the proposed end-state special health administration regime which would be operated independently of the Secretary of State.
877. This clause amends section 65D of the NHS Act (as amended by the Health Act 2009) to:
Clause 160 – Procedure etc.
878. This clause amends the process of trust special administration in relation to foundation trusts in order to give Monitor the role in the regime that the Secretary of State has had for NHS trusts in sections 65F (producing a draft report), 65H (consultation requirements), 65I (producing the final report) and 65J (the power to extend the deadline) of the NHS Act .
879. Subsection (2) amends section 65F of the NHS Act (inserted by the Health Act 2009) so that during the period of appointment, the trust special administrator would be required to produce a report stating the action which he recommends Monitor (rather than the Secretary of State) should take in relation to the foundation trust.
880. Subsections (3), (4), (5) and (7) amend sections 65H and 65J of the NHS Act to replicate the Secretary of State role for NHS trusts with a Monitor role for foundation trusts. The amendments will allow Monitor to direct the trust special administrator to obtain a written consultation response or to hold a meeting with any person (section 65H) and to allow Monitor to extend the deadlines in producing the draft report, the consultation stage or producing the final report (section 65J).
881. Subsection (6) amends section 65I of the NHS Act so that it would be Monitor rather than the Secretary of State that received the trust special administrator’s final report on a Foundation Trust.
Clause 161 – Action following final report
882. This clause amends section 65K of the NHS Act so that for foundation trusts only, it would be Monitor rather than the Secretary of State that would make a decision as to what action to take in the light of the final report. New subsections (4), (5) and (6) of section 65K specify Monitor’s powers to dissolve a foundation trust and transfer any liabilities to the Secretary of State or another foundation trust at the outcome of the failure regime. What would happen in practice would be that should Monitor decide to dissolve a foundation trust, it would need to first gain the approval of the Secretary of State. If the Secretary of State approved the dissolution, Monitor could issue an order under subsection (4) to dissolve the foundation trust. However, if the Secretary of State were to refuse Monitor’s application, then Monitor would need to decide on an alternative action to take in relation to the foundation trust within 20 working days from receiving written notification of the Secretary of State’s refusal.
883. The clause also amends section 65L of the NHS Act so that for foundation trusts only, it would be Monitor, rather than the Secretary of State, that was able to bring a foundation trust out of administration. In addition, the clause removes subsections (3) to (5) of that section, as they refer to NHS trusts created by the de-authorisation of a foundation trust, which would no longer be possible.
884. This clause would also enable Monitor to appoint or remove any governor or director in order to ensure that the foundation trust coming out of administration had the correct number as set out in Schedule 7 to the NHS Act . This mirrors the power the Secretary of State had in the original legislation in relation to NHS trusts created through the de-authorisation of a foundation trust.
Clause 162 – Sections 159 to 161: supplementary provision
885. This clause amends sections 65M and 65N so that for foundation trusts only, it would be Monitor, rather than the Secretary of State, that would be able to replace a trust special administrator and issue guidance to the trust special administrator on how the regime applies to foundation trusts.
886. This clause requires Monitor in its foundation trust registrar role to file all relevant orders, notices and publications in relation to this regime with the papers relating to the foundation trust in administration.
887. This clause also includes a number of consequential amendments to references to these provisions in other legislation
Clause 163 – Repeal of Chapter 5A of Part 2 of the NHS Act
888. This clause provides for the repeal of the trust special administrator provisions once the health special administration regulations are commenced (Part 3, Chapter 6 of this Bill).
Abolition of NHS trusts
Clause 164 – Abolition of NHS trusts in England
889. This clause makes provision to abolish NHS trusts in England and the legislative framework that provides for them on 1 April 2014. This reflects the Government’s intention, set out in Liberating the NHS: Legislative Framework and Next Steps , to support all NHS trusts to become foundation trusts within three years. Given the expectation that there will be no NHS trusts on 1st April 2014, subsection (1) abolish es the NHS trusts established under section 25 of the NHS Act and subsection (2) repeals Chapter 3 of Part 2 of the NHS Act .
890. Subsection (4) provides that the Secretary of State may by Order change the date on which the NHS trust legislation is repealed, in the event that he considers there will still be NHS trusts in existence on 1st April 2014.
891. There is one exceptional circumstance under which the Government intends that an organisation could remain as an NHS trust after the NHS trust legislation is repealed. Under what is described as a franchise agreement, an independent sector franchisee assumes many of the risks and rewards of ownership, and is required to deliver agreed outcomes in return for a share of the trust’s surpluses. There is one known proposed franchise agreement at an advanced stage where the arrangement is incompatible with the NHS trust becoming a foundation trust before April 2014. The Department of Health is planning to avoid further such cases. Subsection (5) therefore provides the legislative basis that would enable an NHS trust whose functions are exercised under a franchise agreement to remain an NHS trust after the repeal of the NHS trust legislation in exceptional circumstances.
892. Schedule 12 to the Bill makes the necessary consequential amendments to the NHS Act , and other relevant Acts.
Clause 165 – Repeal of provisions on authorisation for NHS foundation trusts
893. This clause repeals sections 33 and 35 of the NHS Act (which enables an NHS trust to apply to become, and be authorised as, a foundation trust) which will no longer be needed once all NHS trusts have become foundation trusts. It also makes associated changes.
894. Subsection (2) repeals the provision enabling applications by NHS trusts to become foundation trusts. Subsection (3) repeals Monitor’s power under section 36 of the NHS Act to authorise an NHS trust to be a foundation trust, as the powers would not be needed when all NHS trusts are foundation trusts. The clause also amends the title of section 36 from "effect of authorisation" to "Status etc of NHS foundation trusts", recognising that organisations would not be authorised as new foundation trusts following the repeal of section 33. Subsection (7) retains the powers necessary to enable NHS trusts in franchise agreements to apply for foundation trust status after April 2014.
Part 5 – Public involvement and local government
Chapter 1 – Public involvement
Healthwatch England
Clause 166 - Healthw atch England
895. This clause amends Schedule 1 to the Health and Social Care Act 2008 ("the 2008 Act") and establishes Healthwatch England as a statutory committee of the Care Quality Commission (CQC); and makes provision about Healthwatch England’s purpose, its exercise of functions and other related matters. The system for making appointments to the Healthwatch England committee will be set out in regulations. Healthwatch England will be a national body representing the views of users of health and social care services, other members of the public and Local Healthwatch organisations.
896. Subsection (4) inserts new sections 45A and 45B into Chapter 3 of Part 1 of the Health and Social Care Act 2008. New section 45A (1) to (4) provide the functions to be performed by Healthwatch England. Healthwatch England will advise and provide information to Local Healthwatch organisations on their functions. Healthwatch England will also advise the Secretary of State, NHS Commissioning Board, Monitor, the English local authorities and the Care Quality Commission on views of users of health and social care services and their experience of such services. Healthwatch England will also advise these persons and provide information to them on the views of Local Healthwatch organisations and other persons on the standards of services and whether or how they could or should be improved.
897. The function under new Section 45A(3) could include informing the NHS Commissioning Board of concerns Healthwatch England has identified from feedback from Local Healthwatch organisations about problems with the commissioning of maternity services across England. Section 45A(5) requires the Secretary of State, NHS Commissioning Board, Monitor, and the English local authorities to inform Healthwatch England how they have responded, or intend to respond, to advice given by Healthwatch England. The Care Quality Commission is required by section 45A(7) to publish details of how it has arranged for Healthwatch England to perform its functions. Healthwatch England is also required by section 45A(8) to have regard to such aspects of government policy as directed by the Secretary of State.
898. New section 45B(1) requires Healthwatch England to report to the Care Quality Commission on the views of users of health and social care services and their experiences of such services and on the views of Local Healthwatch organisations and other persons on the standard of services and whether or how they could or should be improved. It also requires Healthwatch England to publish a report on how it has discharged its functions during the year. Section 45B(2) requires Healthwatch England to lay before Parliament its report on how it has discharged its functions and send a copy to the Secretary of State. Section 45B(3) allows Healthwatch England to publish other reports at other times about matters relating to health and social care as it sees fit. When writing a report on how it has discharged its functions Healthwatch England must exclude, as far as it is practical, information that relates to an individual’s private affairs that, if published, could seriously and prejudicially affect that individual’s interests.
899. Subsections (5) to (7) of this clause enable the Secretary of State to direct Healthwatch England if it fails to fulfil the functions as set out in 45A. If Healthwatch England fails to comply with the direction, the subsections enable the Secretary of State to carry out the function to which the direction relates or arrange for someone else to carry out the function.
900. Subsections (8) and (9) of this clause insert new subsections (1A) and (2A) in section 83 of the 2008 Act. New subsection (1A) has the effect that the duty on the Care Quality Commission to make a report on the way it has exercised its functions does not apply in relation to the functions exercised by Healthwatch England under section 45A. New subsection (2A) has the effect that the Care Quality Commission’s report must separately set out Healthwatch England’s report made to it on the matters mentioned in 45A(3).
Local Healthwatch organisations
Clause 167 – Establishment and constitution
901. This clause provides for the establishment and form of Local Healthwatch organisations. Local Involvement Networks will cease to exist. Local Healthwatch organisations will continue the functions of Local Involvement Networks as well as gaining additional functions.
902. Local Healthwatch organisations (LHW) will be based in local authority areas and funded by local authorities.
903. Subsection (4) inserts new Schedule 16A in the Local Government and Public Involvement in Health Act 2007 (the 2007 Act), which in turn makes further provisions as to the form and functions of a Local Healthwatch organisation. The clause introduces Schedule 13.
Schedule 13 - Local Healthwatch organisations
904. This schedule inserts Schedule 16A – Local Healthwatch organisations. It gives details of further provision about Local Healthwatch organisations such as about its organisational structure including status, membership and accounts.
905. Paragraph 1 of new Schedule 16A, creates Local Healthwatch organisations as bodies corporate, making provision for matter such as the organisational structure which includes status, membership and accounts. It also states that Local Healthwatch organisations will not be regarded as agents of the Crown.
906. Paragraph 2 of new Schedule 16A enables the Secretary of State to make regulations about the membership of Local Healthwatch organisations.
907. Paragraph 3 of new Schedule 16A enables Local Healthwatch organisations to appoint employees, and to determine the terms and conditions of those staff.
908. Paragraph 4 of new Schedule 16A grants Local Healthwatch organisations general powers in connection with their exercise of functions, including entering agreements, co-operating with other English public authorities and providing training. It requires them to exercise functions in an effective, efficient and economic manner.
909. Paragraph 5 of new Schedule 16A enables Local Healthwatch organisations to appoint committees and sub-committees, with members sitting on them who are not members of the Local Healthwatch organisations. For example, if a Local Healthwatch organisation is looking into local maternity services, it could form a sub-committee with this as its focus. Subparagraph (3) allows Local Healthwatch organisation to pay such members remuneration and allowances.
910. Paragraph 6 enables a Local Healthwatch organisation to arrange for a member, employee, committee or sub-committee, or other person to perform its functions on its behalf. This also allows Local Healthwatch organisations to make a payment of remuneration or other amounts for performing these functions.
911. Paragraph 7 of new Schedule 16A provides the accounting process for Local Healthwatch organisations. It requires them to keep accounts and prepare annual accounts. These are to be produced every financial year. Local Healthwatch organisations must send copies of their annual accounts to the Secretary of State and the Comptroller and Auditor General. This paragraph also imposes a duty on the Comptroller and Auditor General to examine, certify and report on the annual accounts and to lay copies before Parliament.
912. Subsections (5) and (6) of this clause make consequential amendments to section 65H of the NHS Act and to section 4 of the Health and Social Care Act 2008. The amendments ensure that in the consultation requirements for de-authorisation of NHS foundation trusts, the trust’s special administrator must request a written response from Local Healthwatch organisations, if directed by the Secretary of State. Additionally, the amendments ensure that the Care Quality Commission in performing its functions must have regard to views expressed by Local Healthwatch organisations, as opposed to those expressed by Local Involvement Networks, about the provision of health and social care services in their areas.
Clause 168 – Activities relating to local care services
913. This clause amends section 221 of the 2007 Act to ensure that, as Local Involvement Networks are replaced by Local Healthwatch organisations, the duty is retained on local authorities to make contractual arrangements for the involvement of the public in the commissioning, provision and scrutiny of health and social care services.
914. Subsection (3) adds to the list of activities mentioned in section 221(2) which are to be performed by Local Healthwatch organisations by virtue of section 222(2) for which a local authority must contract. This includes reaching views on certain matters, making those views known to the Healthwatch England committee of the Care Quality Commission, and giving advice and information to users of local health and social care services.
Clause 169 – Local authority arrangements
915. This clause sets out the arrangements that a local authority must make with a Local Healthwatch organisation.
916. Subsection (2) inserts a new section 222(2) into the 2007 Act to ensure that Local Healthwatch organisations carry out the activities previously undertaken by Local Involvement Networks, as currently specified in section 221(2) of that Act.
917. Subsection (3) amends section 222(3) of the 2007 Act allowing a local authority to directly contract with a Local Healthwatch organisation, or to retain the current arrangements of contracting with a host organisation to make the arrangements under section 221.
918. Subsection (5) substitutes section 222(5) of the 2007 Act allowing for section 221 arrangements to make provisions for Local Healthwatch organisations to cooperate with one another across boundaries.
919. Subsection (6) inserts new subsections (7A) and (7B) into section 222 of the 2007 Act. New section (7A) places a duty on local authorities to ensure that their Local Healthwatch arrangements are operating effectively and are providing value for money. Subsection (7B) requires the local authority to publish a report of its findings in seeking to meet these two objectives.
920. Subsections (8) to (11) make consequential amendments to section 223 of the 2007 Act under which the Secretary of State has the duty to make regulations requiring section 221 arrangements to include particular provision or to require particular provision to be included in the Local Involvement Network arrangements. The amendments ensure that the duty applies in relations to Local Healthwatch organisation arrangements instead.
Clause 170 - Independent advocacy services
921. This clause requires local authorities to make arrangements for the provision of independent advocacy services for complaints relating to the provision of health services, transferring this duty from the Secretary of State.
922. Subsection (1) inserts new section 223A into 2007 Act to require local authorities to make arrangements for the provision of independent advocacy services. Local authorities may commission either a Local Healthwatch organisation or other provider to deliver such services. The categories of NHS complaints in respect of which such services must be provided are mentioned in subsection (2) of new section 223A. Subsection (5) of new section 223A provides that local authorities must have regard to the principle that, as far as practically possible the provision of services should be independent of any person who is the subject of a complaint, or involved in investigating or adjudicating on such a complaint.
923. Subsection (7) of this clause enables the Secretary of State to make regulations to require a provider of independent complaints advocacy services to have in place insurance cover against any claims that could be made against the provider for negligence whilst providing those services.
Clause 171 - Requests, rights of entry and referrals
924. Subsections (1) to (8) amend sections 224 and 225 of the 2007 Act the effect of which is to allow the Secretary of State to make regulations to impose a duty on health and social care services-providers to:
925. Subsections (9) to (12) amend section 226 of the 2007 Act, which imposes duties on local authority overview and scrutiny committees, including the acknowledgement of receipt of a referral by a Local Involvement Network of organisation on a matter relating to social care services. The effect would be that those duties apply in relation to referrals by Local Healthwatch organisations instead.
Clause 172 – Dissolution and transfer schemes
926. This clause provides for the dissolution of Local Healthwatch organisations and for transfer schemes to be made if needed by inserting new section 226A into the 2007 Act. This gives the Secretary of State the power to dissolve a Local Healthwatch organisation on his own initiative or if both the Local Authority and Healthwatch England make an application to this effect, if the Secretary of State is satisfied that the circumstances require it. Furthermore, new section 226A (3) allows the Secretary of State on dissolution to make a scheme to transfer property rights and liabilities to the new Local Healthwatch organisation established in the place of the previous organisation.
Clause 173 – Annual reports
927. This clause makes consequential amendments to the 2007 Act. The effect of these amendments would be to require Local Healthwatch organisations to produce annual reports each financial year. This includes the requirement for the report to be prepared by 30 June following the end of each financial year and copies of it to be made publicly available. There must also be a requirement for the person preparing the report, in deciding the manner in which it is appropriate for the report is to be made publicly available, to have regard to any guidance issued by the Secretary of State.
928. Subsection (5) adds the Healthwatch England committee of the Care Quality Commission (CQC) to the list of bodies, mentioned in 227(4) of the 2007 Act, that the report must be sent to as specified in 227(2) of the 2007 Act .
Clause 174 – Transitional arrangements
929. This clause enables local authorities to begin the transfer of arrangements to Local Healthwatch organisations, where local authorities wish to directly contract with these organisations, upon commencement of the amendments made to the 2007 Act. The Secretary of State under subsection (2) may make a scheme to transfer property, rights and liabilities from the current persons with whom arrangements under section 221 have been made to the new Local Healthwatch organisations. Subsection (4) enables the Secretary of State’s scheme to require a local authority to pay compensation to the persons from whom property, rights and liabilities are being transferred and enables the scheme to enable the Secretary of State to determine the amount or require the local authority to do so.
Chapter 2 – Local Government
Scrutiny functions of local authorities
Clause 175 - Scrutiny functions of local authorities
930. This clause amends section 244 of the NHS Act . The amendments have the effect that the existing regulation-making powers in section 244 apply in relation to local authorities rather than in relation to local authority health overview and scrutiny committees. The amendments enable regulations under section 244 to authorise the local authority to arrange for an overview and scrutiny committee to discharge the health scrutiny functions.
931. Subsection (2) of this clause amends subsection (2) of section 244 of the NHS Act so that the regulation-making power it confers applies in relation to a local authority instead of an overview and scrutiny committee of a local authority. Local authorities will no longer be required to have health overview and scrutiny committees, but will continue to have oversight and scrutiny powers, which they may discharge how they see fit. For example, local authorities may choose to continue to operate their existing overview and scrutiny committees, or may choose to put in place other arrangements such as appointing committees involving members of the public. The regulation making powers will continue to enable provision to be made on the matters on which an NHS body is required to consult the local authority. Current scrutiny powers enable local authorities to request NHS bodies to attend before them to answer questions and to provide information. The amendments to subsection (2) will enable the regulations under subsection (2) to be extended to cover GP consortia, the NHS commissioning board and all providers of NHS funded services, including independent sector providers.
932. Subsection (3) inserts new subsections (2ZA), (2ZB), (2ZC) and (2ZD) into section 244 of the NHS Act . This enables regulations under subsection (2) to set out the circumstances in which certain matters can be referred to the Secretary of State, Monitor, or the NHS Commissioning Board.
933. New subsection (2ZA) sets out the additional provision which may be made where regulations by virtue of subsection (2)(c) of section 244 make provision as to matters on which local NHS bodies must consult the local authority. This includes the conferring of powers on the Secretary of State to give directions to the NHS Commissioning Board and on the NHS Commissioning Board to give directions to a commissioning consortium.
934. New subsection (2ZB) sets out details of the powers of directions that may be conferred under new section (2ZA). New subsection (2ZC) enables regulations under new section (2ZA) to either disapply any provision of section 101 of the local Government Act 1972 to the local authority’s discharge of the function of making referrals, or apply such provision with modification as necessary to the discharge of such function. For example, this would allow the regulations to prevent the local authority from appointing a committee to discharge the functions of making such referrals (under section (2ZA)).
935. New subsection (2ZD) enables regulations under the amended section 244 to authorise a local authority to arrange for its functions, under the regulations, to be discharged by an overview and scrutiny committee.
936. Subsection (4) inserts a definition of "NHS body" and "relevant NHS provider" into section 244. Subsection (5) inserts a definition of member in relation to NHS foundation trusts.
937. Subsection (8) amends section 9F of the Local Government Act 2000 to remove the requirement on local authorities to have health overview and scrutiny committees and to make clear that the prohibition on overview and scrutiny committees discharging particular functions does not extend to functions conferred by virtue of regulations under new subsection (2ZD). This would allow local authorities to arrange for overview and scrutiny committees to take on the scrutiny functions under section 244.
Joint strategic needs assessments and strategies
Clause 176 – Joint strategic needs assessments
938. This clause amends section 116 of the Local Government and Public Involvement in Health Act 2007, so that a local authority and commissioning consortia that have a boundary within or overlapping or coinciding with that local authority’s have a duty to prepare a joint strategic needs assessment. The joint strategic needs assessment is :
"a process to identify the current and future health and wellbeing needs of a population in a local authority area." 1
1 Joint Strategic Needs Assessment Guidance (Department of Health 2007 http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_081097
939. It may also address needs around wider determinants of health, such as housing or leisure services, though this would be a local decision.
940. Subsection (2) amends subsection (4) of section 116 of the 2007 Act so that the duty to prepare an assessment of relevant needs is transferred from each partner PCT to each partner commissioning consortium of the local authority.
941. Subsection (3) amends subsection (6) of section 116 of the 2007 Act which sets out when there is a relevant need for the purposes of section 116. The amendments replace references to a partner PCT with references to partner commissioning consortia. They also widen the scope of the joint strategic needs assessment to require it to cover both the current and future needs of the local population, and not only current needs.
942. Subsection (4) amends subsection (7) of section 116 of the 2007 Act to replace references to "the partner PCT" with references to the "partner commissioning consortium".
943. Subsection (5) amends subsection (8) of section 116 of the 2007 Act so that the duty to co-operate transfers from each partner PCT to each partner commissioning consortia of the local authority.
944. Subsection (6) inserts a new subsection (8A) into section 116 of the 2007 Act to enable the local authority and commissioning consortium to consult externally when preparing the joint strategic needs assessment.
945. Subsection (7) substitutes a definition of "partner PCT" with a definition of "partner commissioning consortium" and makes consequential amendments to the definition of "relevant district council".
Clause 177 – Joint health and wellbeing strategies
946. This clause inserts new sections 116A and 116B into the Local Government and Public Involvement in Health Act 2007. New section 116A imposes a duty on local authorities and commissioning consortia to produce a joint health and well-being strategy to meet the needs identified in the joint strategic needs assessment.
947. New section 116B imposes a duty on consortia, the local authority and the NHS Commissioning Board (in relation to its local commissioning responsibilities) to have regard to the joint strategic needs assessment and joint health and wellbeing strategy when carrying out their commissioning functions.
948. The clauses do not specify the form the joint health and wellbeing strategy should take. They require it to address the needs identified in the joint strategic needs assessment, and require the local authority and partner consortia to have regard to the Secretary of State’s mandate under section 13A of the NHS Act when preparing the strategy. For example, the strategy could be high level and strategic, focusing on the interface between the NHS, social care and public health commissioning, rather than being a detailed study of all the commissioning across health and social care in the local authority area. The joint health and wellbeing strategy is not limited in its scope and could potentially include wider health determinants such as housing, if the Health and Wellbeing Board wishes to consider this.
949. Subsections (1) and (2) of new section 116A have the effect that where an assessment of relevant needs is prepared under section 116, the local authority and each partner commissioning consortia must prepare a strategy for meeting those needs.
950. Subsection (3) requires the local authority and its partner commissioning consortia to consider how the needs in the joint strategic needs assessment could more effectively be met through the use of flexibilities available under section 75 of the NHS Act , such as pooled budgets, when preparing the joint health and well-being strategy.
951. Subsection (5) requires the local authority to publish the joint health and well-being strategy.
952. Subsection (6) enables the local authority and partner commissioning consortia to include in the strategy their views on how arrangements for the provision of health-related services could be more closely integrated with arrangements for the provision of health services and social care services in the area.
953. Subsection (1) of section 116B places a duty on a local authority, and each partner commissioning consortia to have regard to the most recent needs assessment and strategy when exercising relevant functions. Subsection (2) defines a relevant function for the purposes of subsection (1). Subsection (3) places a duty on the NHS Commissioning Board to have regard to the most recent needs assessment and strategy in discharging their local commissioning functions.
Health and Well-being Boards: establishment
Clause 178 – Establishment of Health and Wellbeing Boards
954. This clause requires each upper tier local authority to establish a Health and Wellbeing Board in its area ( subsection (1) ).
955. The clause also sets out their minimum membership ( subsection (2) ). This includes the director of children’s services, the director of adult social services and the director of public health. There must be at least one elected representative, which may be the elected mayor or leader of the council, or a councillor nominated by them ( subsections (3) and (4) ). The Local Healthwatch organisation and a relevant commissioning consortium of the local authority must also appoint representatives ( subsections (5) and (6) ). A commissioning consortium may, with the consent of the Health and Wellbeing Board, be represented by the representative of another commissioning consortium within the local authority area (subsection (7)).
956. Subsection (8) enables the board to appoint additional persons as members. The local authority will also be able to invite other people, or appropriate persons to become members, for example local voluntary groups or service providers (subsection (1)(g)). Subsection (9) requires the local authority to consult the health and wellbeing board before appointing additional persons after the board has been established. Subsection (10) requires each relevant commissioning consortium to cooperate with the health and wellbeing board in the exercise of the board’s functions.
957. Subsection (11) provides that the Health and Wellbeing Board is a committee of the local authority and is to be treated as if it were appointed under section 102 of the Local Government Act 1972.
958. Subsection (12) enables regulations to be made to disapply legislation which applies in relation to committees appointed under section 102 of the Local Government Act 1972 or to provide for such legislation to apply with modifications in relation to Health and Wellbeing Boards. This could be used to govern the arrangements which the health and wellbeing boards could make to discharge their functions, including the establishment of joint committees, or application of maximum terms for board members.
Health and Well-being Boards: functions
Clause 179 –Duty to encourage integrated working
959. This clause imposes a duty on the Health and Wellbeing Board to encourage integrated working between commissioners of NHS, public health and social care services for the benefit of the health and wellbeing of the local population. The Health and Wellbeing Board must provide advice, assistance or other support to commissioners of NHS, public health and social care in order to encourage the developing of agreements to pool budgets or make lead commissioning arrangements under section 75 of the NHS Act .
960. Subsection (1) requires the Health and Wellbeing Board to encourage persons who arrange for the provision of health and social care services in its area to work in an integrated manner to secure and advance the health and wellbeing of the people in the area.
961. Subsection (2) requires the Health and Wellbeing Board (in particular) to provide advice, assistance or other support for the purpose of encouraging arrangements under section 75 of the NHS Act . These are arrangements under which NHS bodies and local authorities agree to exercise specified functions of each other.
962. Subsection (3) enables the Health and Wellbeing Board to encourage persons who arrange for the provision of services related to wider determinants of health ("health-related services"), such as housing, to work closely with the Board; while subsection (4) allows the Board to encourage such persons to work closely with the commissioners of health and social care services. Subsection (6) defines health services, health-related services and social care services for the purposes of this clause.
Clause 180 – Other functions of Health and Wellbeing Boards
963. This clause makes provision about the functions of Health and Wellbeing Boards.
964. Subsection (1) requires the functions of commissioning consortia and local authorities of preparing joint strategic needs assessments and joint health and wellbeing strategies to be discharged by the Health and Wellbeing Board.
965. Subsection (2) enables the local authority to delegate any of its functions to the Health and Wellbeing Board. This will provide the flexibility to enable the Health and Wellbeing Board to discharge a local authority’s function of joining up with other local authority commissioners, for example to consider wider determinants of health, such as housing, that affect the health and wellbeing of the population.
966. Subsection (3) enables a Health and Wellbeing Board to inform the local authority of its views on whether the authority is discharging its duty to have regard to the joint strategic needs assessment and joint health and well-being strategy in discharging relevant functions.
967. Subsection (4) prevents the local authority from delegating its scrutiny function (under section 244 of the NHS Act ) to the Health and Wellbeing Board.
Health and Well-being Boards: supplementary
Clause 181 - Participation of the NHS Commissioning Board
968. This clause provides for participation of the NHS Commissioning Board in the Health and Wellbeing Board’s activities. The NHS Commissioning Board will be required to send a representative to participate in the preparation of the joint strategic needs assessment and joint health and wellbeing strategy. It will also be required, upon request of the health and wellbeing board, to send a representative for the purpose of discussing a matter in relation to its local commissioning responsibilities – for example primary medical services commissioning. This could also involve taking part in discussions to improve joint working.
969. Subsections (1) and (2) have the effect that where a Health and Wellbeing Board is preparing an assessment of relevant needs under section 116 of the Local Government and Public Involvement in Health Act 2007 or a strategy under section 116A of that Act, the NHS Commissioning Board must appoint a representative to participate in the preparation of the assessment or strategy.
970. Subsections (3) and (4) have the effect where a Health and Wellbeing Board is considering a matter that relates to the NHS Commissioning Board’s exercise or proposed exercise of commissioning functions in relation to the Health and Wellbeing Board’s area, then if the Health and Wellbeing Board so requests, the NHS Commissioning Board must appoint a representative to participate in the consideration of that matter.
971. Subsection (5) enables the NHS Commissioning Board to appoint as its representative someone other than a member or employee of the Board, subject to the agreement of the Health and Wellbeing Board.
972. Subsection (6) defines "commissioning functions" in relation to the NHS Commissioning Board.
Clause 182 - Discharge of functions of Health and Wellbeing Board
973. This clause makes further provision about how the functions of Health and Wellbeing Boards could be discharged across local authority boundaries by enabling them to arrange for their functions to be exercised jointly.
Clause 183 – Supply of information to Health and Wellbeing Boards
974. This clause allows a Health and Wellbeing Board to require the provision of information from certain persons, for example, the Local Healthwatch organisation represented on the Board and the commissioning consortia so represented. For example, this could be used to support the analysis within the joint strategic needs assessment or the development of the joint health and wellbeing strategy. Subsection (3) requires the information supplied to be used only for the purpose of to enabling or helping the Health and Wellbeing Board to exercise its functions.
Care Trusts
Clause 184 – Care Trusts
975. This clause amends Section 77 of the NHS Act to make it possible for NHS foundation trusts or commissioning consortia and local authorities to form Care Trusts, if they decided locally that this was the best way to meet the needs of their local populations. The clause also makes amendments that abolish the direct role of the Secretary of State in the process of forming or disbanding a Care Trust.
976. Care Trusts provide opportunities for close integrated working across health and social care services, provision for which is made in Section 77 of the NHS Act.
977. Subsections (1), (11) and (12) make changes to subsections (1), (10) and (12) of Section 77 of the NHS Act to make it possible for foundation trusts and commissioning consortia to be designated as Care Trusts. Current legislation makes no provision for Care Trusts to be formed with any NHS partners other th an Primary Care Trusts and NHS t rusts. Provisions in other parts of this Bill for the abolition of Prima ry Care Trusts and for all NHS t rusts to become NHS foundation trusts would mean that Care Trusts, in their current form, would cease to exist without these changes. Inclusion of NHS foundation trusts and commissioning consortia in subsection (10) of Section 77 would ensure that forming the Care Trust would not affect any of their core functions, rights or responsibilities. In addition, new subsection (5D) enables the parties to agree to act separately or jointly in respect of duties imposed by Section 77 on the NHS body and local authorities.
978. Subsections (1) , (2) and (5) to (7) make amendments to subsections (1) and (5) of Section 77 of the NHS Act. Subsections (2) and (5) in particular introduce new subsections (1A) and (5A), (5B), (5C) and (5D). These changes end the direct involvement of the Secretary of State in the process of forming or disbanding a Care Trust arrangement. This would include removing the Secretary of State from any direct involvement in specifying the area in question. The decision to form or disband a Care Trust would be for local bodies and they would make the designation themselves. Subsection (4) makes amendments to subsection (4) of Section 77 which enables the designated NHS body to also be able to perform the health related functions of the local authority in agreed areas of that local authority even though it may not exercise NHS functions in that area. In future the 'area' served by the Care Trust will be agreed by the NHS body and local authority in the Care Trust arrangement rather than by Secretary of State and this will be influenced by the scope of their partnership agreement and the areas which the NHS body and local authority cover.
979. Repealing subsections (2) and (3) of section 77 of the NHS Act removes the requirement to make a joint application to the Secretary of State for designation as a Care Trust. Subsection (1)(c) to (f) provides that the NHS body and the local authority wishing to form a Care Trust must satisfy themselves that the Care Trust arrangement would lead to an improvement in the health or care outcomes for their local populations. Subsection (2) requires them to publish and consult on their reasoning and the proposed Care Trust governance arrangements. Regulations would prescribe the manner and form of the consultation, when a consultation must commence, how long the consultation period must be and what actions must happen after consultation. This could include publishing the date on which the Care Trust designation would begin (or end in the case that it were disbanded) and the names of the bodies involved in the Care Trust.
980. Subsections (2) and (5) (in particular, new subsections (1B) and (5B)) provide that having decided to form or disband a Care Trust, the NHS body and the local authority would have to notify interested parties. The prescribed persons to be notified would include the NHS Commissioning Board, Monitor, lead elected member of the local authority and the Care Quality Commission. In addition, if local Health and Wellbeing boards are established, notification would be extended to cover those organisations.
981. The intention is that the NHS and health related functions of the local authority should be exercised together as far as possible in order to provide or commission integrated services. The policy to split commissioning and provision within Primary Care Trusts by March 2011 will mean that existing Care Trusts that have a commissioning and provision function will need to change their functions locally - becoming either commissioning or provider organisations, but not both.
982. Subsections (13) to (15) are saving provisions. Subsection (13) ensures that that the requirement to consult (see new subsection 1A) before being designated as a Care Trust would not apply to Care Trusts that have already gone through the process under the current legislative requirements. Care Trusts that have already met the current requirements would not have to fulfil any additional requirements to enable them to remain as Care Trusts.
983. Subsections (14) and (15) ensure that an NHS Trust or Primary Care Trust which became a Care Trust prior to the commencement of the new provisions but then decided to cancel the arrangement after commencement, would still need to notify the Secretary of State, who will amend its establishment order to remove the words ‘Care Trust’ from its title. These provisions would remain in force until the point when Primary Care Trusts are abolished and NHS trusts became NHS foundation trusts. This is because the name of a Primary Care Trust or NHS trust is set out in its establishment order and can only be amended by an order made by the Secretary of State. In future, the intention is to remove the requirement (by repealing subsection (6) of Section 77) that the NHS body must include the words "Care Trust" in its title or branding in order to form a Care Trust.
Chapter 3 – The Health Service Commissioner for England
Clause 185 – Disclosure of reports etc. by the Health Service Commissioner
984. This clause amends section 14 of the Health Service Commissioners Act 1993 to allow the Health Service Commissioner for England, more commonly known as the Health Service Ombudsman, to share her complaints investigation reports and statements of reasons with such persons as she thinks appropriate. The recipients of such reports and statements of reasons would, in practice, largely be part of the NHS in England.
Part 6 – Primary Care Services
Clause 186 - General medical services: minor amendments
985. This clause makes some minor changes to sections 86 (Persons eligible to enter into General Medical Services (GMS) contracts), 89 (GMS contracts: other required terms) and 93 (Persons with whom agreements may be made under section 92) of the NHS Act to improve consistency and as an aid to interpretation.
Clause 187 - Persons eligible to enter into general dental services contracts
986. This clause amends section 102 of the NHS Act to provide for amendments to the organisational types and the background of persons who are permitted to enter into a general dental services (GDS) contract. The clause extends slightly the range of organisational arrangements whilst continuing to provide for the professional dental nature of GDS providers through new rules on what constitutes acceptable control of a contracting body.
987. Subsections (1) and (2) amend section 102(1) and (2) to provide that, whilst a GDS contractor must always include a dental practitioner, in future any person would be able to be part of a limited liability partnership (LLP) or a company limited by shares providing GDS.
988. Subsections (3), (4) and (5) permit those entering into a GDS contract to arrange their affairs as an LLP, provided that at least one member is a dental practitioner, or falls within a defined group of people within the NHS. This extends the existing provisions which allow dental bodies corporate to enter into a GDS contract, as well as individual dentists and dental partnerships.
Clause 188 - Arrangements under section 107 of the NHS Act
989. This clause amends section 108 of the NHS Act to provide amendments which relate to the organisational types and the background of persons who are permitted to enter into a section 107 arrangement (a PDS agreement). This paragraph removes certain restrictions in relation to the people and organisations that can be party to a PDS agreement.
990. Subsections (2) and (3) amend section 108(1), adopting the approach used in the amendment to section 102(1), to allow the Board to make section 107 ( PDS ) agreements with a company limited by shares or a limited liability partnership, provided that at least one member is a dental practitioner, or falls within a defined group of people within the N HS, and that such a person has the power to ensure that the partnership’s affairs are conducted in accordance with wishes.
991. Subsection (5) omits current section 108(2) as the section is no longer required as a consequence of the amendment to section 108(1).
992. Subsection (6) omits the definition of qualifying bodies, following the adoption of the nomenclature "company limited by shares" and inserts a definition of "dental corporation".
Clause 189 - Payments in respect of costs of sight tests
993. This clause amends section 180(3) of the NHS Act (payments in respect of costs of optical appliances).
994. Subsection (2) amends subsection (3) of section 180 by inserting a new paragraph (za) which introduces a new reference to the Board and clarifies the existing payment powers that underlie current practice.
995. Subsection (3) inserts new subsection (3A) into section 180 to clarify the level of repayments which may be made. The clarification is in line with existing practice.
Clause 190 - Pharmaceutical needs assessments
996. This clause makes amendments to the arrangements for preparing pharmaceutical needs assessments (PNAs).
997. Subsection (1) amends section 128A of the NHS Act to provide that the responsibility for developing, updating and publishing local PNAs is transferred from PCTs to Health and Well-being Boards (HWBs) in local authorities.
998. Subsections (2) to (5) amend sections 24, 24A, 242 and 242A to put it beyond doubt that, pending the abolition of PCTs, PCT duties in relation to their plans for improving health and consultation as effects pharmaceutical services are treated as having been discharged by compliance with the requirements in section 128A for consultation on their assessment of needs for pharmaceutical services.
Clause 191 - Control of entry on pharmaceutical lists
999. This clause amends the control of entry provisions in section 129 of the NHS Act which govern the right to be included on the pharmaceutical list in order to provide pharmaceutical services.
1000. Subsection (2) amends subsection (2)(c) of section 129 of the NHS Act to provide that the Board is to be responsible for determining applications for market entry in England (inclusion in the pharmaceutical list or additional premises) in line with the relevant pharmaceutical needs assessment ("PNA") as prescribed in regulations.
1001. Subsection (3) inserts a new subsection (2ZA) into section 129 of the NHS Act which provides that the Secretary of State and such other persons as may be prescribed in regulations are not to be included in a pharmaceutical list.
1002. Subsection (4) amends subsection (2A) of section 129 of the NHS Act consequential to the establishment of the Board and the requirement to have regard to a PNA prepared in respect of a particular area before granting an application.
1003. Subsection (5) substitutes subsection (2B) of section 129 of the NHS Act so as to define the relevant area by reference to the area to which an application relates. The intention is that regulations will make provision for the relevant area to be linked to the area of the PNA as currently published and updated by PCTs and in future by HWBs.
1004. Subsections (6) and (7) amend section 129 of the NHS Act consequential to the amendments at subsections (4) and (5).
1005. Subsection (8) makes amendments to subsection (6)(g) of section 129 of the NHS Act to put it beyond doubt that regulations under section 129 may provide for the removal of a person from the pharmaceutical list for reasons that are not connected to a person’s fitness to practise, and are not the grounds specified in subsection (6)(d), but rather are other grounds prescribed in regulations. The intention is that, for consistency with the amendments made to section 130 of the NHS Act, any appeals against decisions to remove a person from a list on other prescribed grounds are to be made to the Secretary of State (that is, in practice, to the National Health Service Litigation Authority).
1006. Subsections (9), (11) and (12) amend subsection (10B) of section 129 and section 136 of, and Schedule 12 to, the NHS Act consequential to the responsibility for PNAs transferring to HWBs and as a consequence of PNAs being carried out by reference to "relevant areas" as defined in section 129 of the NHS Act.
1007. Subsection (10) amends section 130 of the NHS Act so as to ensure that appeals against the Board’s determination of an application for inclusion in the pharmaceutical list are heard by the First Tier Tribunal only if they are on fitness to practise grounds. The amendments also provide that if the First Tier Tribunal does allow an appeal, it would not have to re-determine the application but can remit the matter back to the Board. Appeals on other grounds are to be made to the Secretary of State. It is intended that the current position whereby the Secretary of State’s functions relating to hearing appeals on pharmaceutical list matters are delegated to the National Health Service Litigation Authority will be maintained.
Clause 192 - Lists of performers of pharmaceutical services and assistants etc.
1008. This clause makes provision for the Board to establish lists of Local Pharmaceutical Service (LPS) performers and those who assist pharmaceutical contractors in the provision of pharmaceutical services.
1009. Subsection (1) omits sections 146, 149 and 150 of the NHS Act which make provision for the compilation and publication of lists of LPS performers and those who assist pharmaceutical contractors in the provision of services.
1010. Subsection (2) inserts new sections 147A and 147B into the NHS Act which introduce composite regulation making powers in respect of, among other things, the compilation and publication of lists of LPS performers and those who assist pharmaceutical contractors in the provision of pharmaceutical services.
New Section 147A
1011. Subsection (1) of section 147A provides that the Board is to maintain and publish one or more lists of those who assist pharmaceutical contractors or who are LPS performers.
1012. Subsection (2) of section 147A enables regulations to make provision for persons of a prescribed description (such as pharmacist managers and employees or pharmacy technicians) not to assist in the provision of pharmaceutical services which the Board arranges nor to perform local pharmaceutical services unless the person is included in a list prepared by virtue of regulations made under subsection (1).
1013. Subsection (3) of section 147A makes detailed provisions carried forward from sections 146 and 149 in respect of other matters that may be included in the regulations about such lists. These matters include how such lists are to be published and maintained, the criteria for inclusion in a list, how applications are to be made and the supporting information that is required, the grounds for admittance, refusal, or suspension from the list and corresponding appeal rights.
1014. Subsection (4) of section 147A enables regulations to be made to cater for the situation where a person who is entered on a contractual pharmaceutical list under section 129 may also be required to be entered on a performers’ list. For example, a partner in a limited liability partnership who is entered in the contractual pharmaceutical list may also be a LPS performer and therefore may be required to apply to be entered on the relevant LPS list. The regulations may also provide that approval for the purposes of entry to a LPS performer’s list may similarly be treated as approval for the purposes of entry to a pharmaceutical assistants’ list and vice versa.
1015. Subsections (5) and (6) of section 147A enable regulations to make provision in respect of conditional entry to a pharmaceutical performers’ or assistants’ list and to specify the purposes for which such conditions may be imposed.
1016. Subsections (7) to (9) of section 147A enable further provision to be made in respect of regulations relating to the suspension or removal of a person from a list and for appeals against decisions to suspend or remove a person from a list or to impose conditions.
1017. Subsection (10) of section 147A enables regulations to be made which authorise the disclosure of information to the Board in cases where regulations are made relating to the grounds on which a person may be suspended or removed from a list and the procedure to be followed in such cases.
New Section 147B
1018. Section 147B of the Act makes further provision about regulations under section 147A.
1019. Subsection (1) of section 147B enables regulations to make provision for persons of a description prescribed in regulations to not employ or engage a person to assist in the provision of pharmaceutical services unless that person is included in a list mentioned in subsection (2).
1020. Subsection (2) of section 147B sets out the lists in which a person would need to be included. These include the lists in section 147A and also medical, dental or ophthalmic lists.
1021. Subsection (3) of section 147B enables regulations to require that persons providing pharmaceutical services and those assisting in the provision of pharmaceutical services must both be included in lists prepared by the Board.
Other matters
1022. Subsection (3) of this clause amends the heading of Chapter 5 of the Act.
1023. Subsection (4) of this clause amends section 159 of the NHS Act consequential to the amendments of this paragraph of Schedule 4.
1024. Subsection (5) of this clause provides for transitional arrangements to preserve the effect of any regulations made under section 146 or 149 of the NHS Act despite the repeal of those sections.
Part 7 – Regulation of Health and Social Care Workers
1025. Part 7 contains provisions relating to three distinct changes:
a) the abolition of the General Social Care Council and the transfer of some functions to the Health Professions Council;
b) reforms to the governance and functions of the Council for Healthcare Regulatory Excellence, which is to be given new powers to accredit voluntary registers; and,
c) the abolition of the Office of the Healthcare Professions Adjudicator.
1026. Schedule 14 makes further provision in these areas. Unless otherwise stated, the following terms used in this Part have the meaning set out below:
1027. Abolition of the General Social Care Council and transfer of its functions . The following clauses deal with the abolition of the General Social Care Council and the transfer of its functions in relation to the regulation of social workers and the education and training of approved mental health professionals in England to the Health Professions Council. The Health Professions Council will be renamed the Health and Care Professions Council to reflect its wider remit in regulating social workers in England as well as health professionals in the UK. The Council has confirmed to the Government that the name ‘Health and Care Professions Council’ will be supported by a strapline which will clarify the professions which the Council will regulate, including social workers in England.
Orders under section 60 of the Health Act 1999
Clause 193 – Power to regulate social workers etc. in England
1028. This clause amends the existing power under section 60 of the 1999 Act to provide a power for Her Majesty by Order in Council to regulate (and modify the regulation of) social workers, and social care workers, in England through secondary legislation. The power enables primary legislation to be amended by means of that secondary legislation. This power replaces the Secretary of State’s current power under section 124 of the Care Standards Act 2000 to regulate social workers, and social care workers, in England using secondary legislation. The definitions in subsections (5) and (6) are based on those in section 55 of the Care Standards Act 2000.
1029. The existing power under section 60 enables Her Majesty by Order in Council, amongst other things, to modify the regulation of certain specified health professions and to regulate any other profession which appears to Her to be concerned with the physical or mental health of individuals.
1030. Subsections (11), (12) and (13) amend section 60A of the 1999 Act to provide that proceedings before a regulatory body relating to social, or social care, workers in England should be subject to the civil standard of proof. This represents no change from the standard of proof used by the General Social Care Council.
1031. Schedule 14, paragraph 40 dis ap p lies section 124 of the Health and Social Care Act 2008 in relation to England. Previously, section 124 of the Health and Social Care Act 2008 enabled the Secretary of State, by way of regulations, to regulate or modify the regulation of social workers and social care workers in England.
Clause 194 - Training etc. of approved mental health professionals in England
1032. This clause further amends section 60 of the 1999 Act to enable section 60 orders to modify the new functions of the Council in relation to the education and training of approved mental health professionals. Those functions are transferred to the Council from the General Social Care Council by clause 201.
1033. The extension of the power in section 60 replaces the power of the Secretary of State in section 126 of the Health and Social Care Act 2008 to make regulations modifying the General Social Care Council’s functions in relation to approved mental health professionals’ education and training.
1034. This amendment goes with some other changes to the 1999 Act made in other clauses. Clause 193 adds a new subsection (2ZE) to section 60 making clear that acting as an approved mental health professional does not fall within the definition of social work for the purposes of section 60 if the approved mental health professional is not a social worker. This is to ensure that healthcare professionals acting as approved mental health professionals are not required to register as social workers as well as members of the profession to which they belong.
1035. Similarly , clause 195 adds a new paragraph 1B to Schedule 3 to the 1999 Act to say that a section 60 Order may deal with the standards of conduct and performance expected of professionals and social care workers when acting as approved mental health professionals. That is particularly intended to avoid any suggestion that the normal standards of professional conduct and performance set by the Council (or another regulatory body) cannot apply to members of the profession concerned when acting as approved mental health professionals.
Clause 195 – Orders regulating social care workers in England: further provision
1036. This clause amends Schedule 3 to the 1999 Act in relation to the making of orders regulating (or modifying the regulation) of social care workers in England. The amendments broadly mirror the further provisions regarding regulations made under section 124 of the Care Standards Act 2000 to regulate or modify the regulation of social care workers.
1037. Subsection (2) gives examples of the matters which a section 60 order could deal with when making provision about the regulation of social care workers in England. These provisions are subject to the limitations set out in subsection (5). This prevents section 60 orders from being used to transfer to any other person certain functions in relation to social care workers in England which have been conferred on the Council or another regulatory body by an enactment.
1038. Subsection (6) amends paragraph 9 of Schedule 3 so that the Secretary of State’s duty to consult before laying a draft section 60 order before Parliament equally applies in relation to section 60 orders dealing with social care workers in England.
1039. Subsection (8) sets out that section 60 orders may also make provision in relation to those who are not currently registered as social care workers in England but are seeking to be, or have previously been, so registered; and in relation to those who engage in work which is connected to social care work in England (for example housing support workers).
The General Social Care Council
Clause 196 – Abolition of the General Social Care Council
1040. This clause abolishes the General Social Care Council by means of amending section 54 of the Care Standards Act 2000, which established the General Social Care Council and the Care Council for Wales.
1041. The Care Council for Wales will continue in existence and will continue to regulate social workers and social care workers in Wales. Its legislative framework will be unchanged except for amendments consequential on the abolition of the General Social Care Council.
The Health and Care Professions Council
Clause 197 – Regulation of social workers in England
1042. This clause amends the 2001 Order to provide for the Health and Care Professions Council to regulate social workers in England. The 2001 Order establishes, and provides the legislative framework for, the Council.
1043. Subsection (2) amends Schedule 3 to the 2001 Order to include social workers in England as a ‘relevant profession’. This amendment is the means by which the Council will be required to regulate social workers in England.
1044. The membership of the Council is made up of registrant and lay members. As social workers in England will now be regulated by the Council, social workers should no longer be able to be lay members. Subsection (5) amends the definition of a lay member accordingly to exclude persons who are, or have been, registered as social workers with the General Social Care Council or the Care Councils of Wales, Scotland or Northern Ireland.
1045. Subsection (6) renames the 2001 Order as the ‘Health and Social Work Professions Order 2001’.
Clause 198 – The Health and Care Professions Council
1046. This clause provides that the Health Professions Council is to remain in existence and renames it the Health and Care Professions Council.
Clause 199 – Functions of the Council in relation to social work in England
1047. This clause amends the 2001 Order to make provision for the Council to regulate social workers in England.
1048. Subsection (2) amends article 3(5)(b) of the 2001 Order to extend the Council’s duty to co-operate with certain specified bodies. The bodies to which the duty is extended are public bodies or other persons concerned with the regulation of social work in England and the provision, supervision or management of the services of persons engaged in social work in England. Subsection (3) specifies that this duty includes, in particular, the Care Councils of Scotland, Wales and Northern Ireland.
1049. Subsection (4) amends article 3 of the 2001 Order to extend the existing power of the Council to make recommendations to the Secretary of State about healthcare professions which it believes should be regulated to also cover social care workers in England. The Council may also give guidance (to those with an interest) on what criteria should be considered in deciding whether social care workers in England should be regulated.
1050. Subsections (5), (6), (10) and (13) extend to social workers the current provisions in the 2001 Order which relate to visiting health professionals from relevant European states.
1051. Subsections (7) and (8) amend article 12 of the 2001 Order to enable the Council to recognise training undertaken in Scotland, Wales and Northern Ireland as sufficient for admission to its register as a social worker. Related to this, the Council is also given the power to assess training or professional experience in social work gained outside England but within the UK, and to compare this with the standard of proficiency it requires for admission to its register as a social worker.
1052. Subsection (9) inserts a new section 13B into the 2001 Order which places a new duty on persons to register with the Council as a social worker in order to practise as a social worker in England. The duty will not apply to persons who are registered with one of the Care Councils of Scotland, Wales and Northern Ireland and who are practising in England on a temporary basis.
1053. Subsection (11) provides that powers of the National Assembly for Wales under article 20 of the Order do not extend to the regulation of social workers in England.
1054. Subsection (12) amends article 39 of the 2001 Order. As a result of the changes to social work regulation, the offences under article 39 will apply in relation to social workers in England in the same way as they apply in relation to the other professions regulated by the Council. However, given that the relevant part of the Council’s register will be titled "social worker" rather than "social worker in England" a further amendment is necessary to ensure that a person who uses the title "social worker" as a result of being registered as a social worker with one of the Care Councils of Scotland, Wales and Northern Ireland will not commit an offence under article 39(1)(b).
Clause 200 – Appeals in cases involving social workers in England
1055. This clause amends articles 37 and 38 of the 2001 Order which relate to appeals against decisions of the Council (and its committees).
1056. Subsection (2) amends the definition of lay member in article 37 to exclude persons who are, or have been, registered as social workers with the General Social Care Council or one of the Care Councils of Wales, Scotland or Northern Ireland from the definition of lay member. This means that such a person may not be a lay member on a panel of the Council which is considering an appeal from a decision of the Council’s Education and Training Committee. Subsections (3) and (4) provide that an appeal against a decision of the Education and Training Committee of the Council relating to a social worker in England must be heard in England.
1057. Subsections (5) to (7) amend article 38 to provide that all appeals from a decision of the Council to a court relating to a social worker in England are to be heard by either a county court or the High Court of Justice in England and Wales.
Clauses 201 - Approval of courses for approved mental health professionals
1058. This clause concerns the transfer to the Council of the General Social Care Council’s power under section 114A of the Mental Health Act 1983 to approve training courses for people who are, or who wish to become, approved mental health professionals in England.
1059. Approved mental health professionals are professionals with particular expertise in mental health who are approved by local social services authorities to carry out certain important functions under the 1983 Act. It is, for example, approved mental health professionals who make the large majority of applications under the 1983 Act for people to be detained in hospital for assessment or treatment of their mental disorder. Most current approved mental health professionals are social workers, but The Mental Health (Approved Mental Health Professionals) (Approval) (England) Regulations 2008 1 say that local social services authorities in England may also approve mental health and learning disability nurses, occupational therapists and practitioner psychologists. Those regulations also say those authorities may not approve new approved mental health professionals unless they have completed a training course approved by the General Social Care Council (or the Care Council for Wales).
1 Statutory Instrument: 2008 No. 1206
1060. The clause inserts a new section 114ZA into the 1983 Act giving the Council the power to approve courses for people who are, or wish to become, approved mental health professionals in England. The new section also requires the Council to publish details of current and past approved courses
1061. In practice, courses would actually be approved by the Council’s Education and Training Committee, which is already responsible for approving training and education for the professions regulated by the Council. The Committee would also be able to arrange for other people to approve courses on the Council’s behalf. It can already do this in relation to the Council’s existing powers to approve education and training, although, in practice, it has not made any such arrangements.
1062. The rest of this clause amends section 114A of the 1983 Act to remove the General Social Care Council’s power to approve approved mental health professional courses. None of these changes affect the power of the Care Council for Wales to approve courses for people who are, or wish to become, approved mental health professionals in Wales. That power remains in section 114A.
Clauses 202 - Exercise of function of approving courses, etc
1063. This clause amends the 2001 Order to reflect the Council’s new role in approving approved mental health professional courses.
1064. The clause amends article 3 of the 2001 Order to acknowledge the Council’s new function and to say how the general duties set out in paragraph (5) of that article apply in relation to those approved mental health professionals who belong to a profession which is not regulated by the Council. The Council’s general duties include having regard to the interests of people using the services of registrants, considering the differing interests of different categories of registrant, and co-operating with employers, training providers and other regulatory bodies. The effect of subsection (3) is that those general duties apply to non-registrant approved mental health professionals as if they were registrants.
1065. The clause also amends the 2001 Order to deal with the process for approving approved mental health professional courses. The process is modelled closely on the existing provisions in articles 15 to 18 of the 2001 Order, which deal with the approval of education and training for the Council’s registrants.
1066. The clause inserts a new article 15B into the 2001 Order, requiring the Council to set and publish the criteria to be applied when endorsing approved mental health professional courses. However, it also inserts a new article 15A saying that it is the Council’s Education and Training Committee, rather than the Council itself, which is to approve courses in accordance with those criteria. As explained above, the Education and Training Committee would be able, if it wished, to arrange for other people to approve courses on the Council’s behalf.
1067. Between them, the new articles 15A and 15B then say that the Education and Training Committee must ensure that universities and other bodies in the UK involved in providing approved mental health professional courses are told of the approval criteria. It must also take steps to satisfy itself that the approved mental health professional courses that universities and other bodies are providing meet the criteria. In doing so, the Education and Training Committee would be able to approve (or arrange for someone else to approve) UK institutions which it believes are properly organised and equipped to run these courses. Courses run by such approved institutions are the only approved mental health professional courses outside the UK which the Education and Training Committee would be able to approve.
1068. The new article 15B(5), together with other minor amendments made by this clause, means that articles 16 to 18 of the 2001 Order apply to approved mental health professional courses in largely the same way as they apply to other education and training approved by the Council. As a result, article 16 would allow visitors appointed by the Council to visit institutions running, or proposing to run, approved mental health professional courses, and to report their findings to the Education and Training Committee. Article 17 would allow the Education and Training Committee or the Council to require information from such institutions. Article 18 would allow the Education and Training Committee to refuse or withdraw approval for an approved mental health professional course.
1069. The clause also amends article 21 of the 2001 Order to make clear that the Council’s standards of conduct, performance and ethics for its registrants (and would be registrants) must also cover the standards expected of them when acting as approved mental health professionals. Finally, the clause extends the Secretary of State’s powers under article 45 to provide financial assistance to the Council so that it can include grants or loans in connection with the approval of approved mental health professional courses.
Clause 203 - Arrangements with other health or social care regulators
1070. This clause amends the 2001 Order to enable the Council to make arrangements for the provision of administrative and other services to others who maintain a register of health or social work professionals, or health or social care workers.
1071. This would enable the Council to provide assistance to holders of any registers of health or social care workers or professionals either within or outside the UK. The Council would therefore be able to support other persons and bodies in exercising control over the standards and performance of such professionals and workers to assist with the goal of protecting service users and the public.
1072. This clause is to be commenced on Royal Assent to enable the Council to provide assistance, if such assistance is considered necessary and suitable arrangements are entered into, to the General Social Care Council prior to its abolition.
Clause 204 - References in enactments to registered health professionals, etc
1073. This clause makes amendments to various Acts to exclude social workers and social care workers in England from the definition of ‘registered health care professional’ and similar terms. This avoids the unintended consequence of social workers and social care workers in England falling within such definitions by virtue of them falling to be regulated by the Council and coming within the remit of a section 60 order.
Role of the Secretary of State
Clause 205 – Functions of the Secretary of State in relation to social care workers
1074. This clause amends section 67 of the Care Standards Act 2000 (the 2000 Act) to change certain functions of the Secretary of State.
1075. Section 67 sets out the functions of the Secretary of State in relation to the training of social workers and social care workers in England. These functions include ascertaining what training is required by those who are, or who wish to become, social workers or social care workers and drawing up occupational standards for them.
1076. Following the transfer of the regulation of social workers in England to the Council, it will become the Council’s responsibility to carry out similar functions. As such, subsection (1) provides that these Secretary of State functions do not extend to social workers registered by the Council.
1077. This clause amends subsection (2) of section 67 of the 2000 Act to give the Secretary of State the function of encouraging persons to take part in courses approved by the Council for the purposes of being registered as a social worker in England.
1078. Subsection (3) provides that the Secretary of State may make arrangements with the Council for the latter to undertake the functions of the General Social Care Council in the period from Royal Assent of the Bill to the abolition of the General Social Care Council.
The Professional Standards Authority for Health and Social Care
1079. The following clauses concern changes to the Council for Healthcare Regulatory Excellence, which will become the Professional Standards Authority for Health and Social Care.
Clause 206 - The Professional Standards Authority for Health and Social Care
1080. This clause changes the name of the Council for Healthcare Regulatory Excellence to the Professional Standards Authority for Health and Social Care, and makes amendments to the National Health Service Reform and Health Care Professions Act 2002 required as a result of the change of name.
1081. The name change reflects its new functions in overseeing the Health and Care Professions Council, and its new power to accredit voluntary registers of unregulated health professionals and unregulated health care workers in the UK, and unregulated social care workers in England.
1082. The Council for Healthcare Regulatory Excellence was established by section 25 of the 2002 Act and its functions are set out in sections 25 to 29 of that Act. It is currently responsible for the scrutiny and quality assurance of the nine health professional regulatory bodies in the UK, namely the General Medical Council, the General Dental Council, the General Optical Council, the General Osteopathic Council, the General Chiropractic Council, the General Pharmaceutical Council, the Pharmaceutical Society of Northern Ireland, the Nursing and Midwifery Council and the Health Professions Council (which will be renamed the Health and Care Professions Council in this Bill).
Clause 207 - Functions of the Authority
1083. This clause makes amendments to the 2002 Act to make changes to the functions of the Authority.
1084. Given that the Health and Care Professions Council will take on the regulation of social workers in England, the regulatory bodies which the Authority will have functions in relation to will include a regulatory body that regulates social workers in England. This necessitates a number of changes to the Authority’s functions in the 2002 Act.
1085. Subsections (1), (2), (5) and (8) amend sections 25 and 26B of, and paragraph 16 of Schedule 7 to, the 2002 Act to provide for those functions of the Authority which relate to the interests of patients or the health, safety and well-being of patients to instead relate to the interests, or the health, safety and well-being, of users of health care, users of social care in England and users of social work services in England.
1086. Subsection (3) inserts a new subsection into section 26A of the 2002 Act to empower the Secretary of State to request advice from the Authority on matters connected with the social work profession, or social care workers, in England and requires the Authority to comply with the request. Section 26A already empowers the Secretary of State, the Welsh Ministers, the Scottish Ministers and the Department of Health, Social Services and Public Safety in Northern Ireland to ask the Authority for advice on any matter connected with a health care profession and to require the Authority to investigate and report on any matter in relation to which it has functions. Subsection (4) imposes a new duty on the Secretary of State, the Welsh Ministers, the Scottish Ministers and the Department of Health, Social Services and Public Safety in Northern Ireland to pay a fee, determined by the Authority, for any advice requested, or investigations or reports commissioned, under section 26A.
1087. Under section 29 of the 2002 Act, the Authority has the power to refer to court final fitness to practise decisions taken in relation to registered professionals by the regulatory bodies, where it considers that a decision is unduly lenient or should not have been made, and where it considers that a referral would be desirable for the protection of the public. As the regulation of social workers in England is being transferred to the Health and Care Professions Council, the Authority’s powers under section 29 will extend to decisions taken in relation to social workers in England. Subsection (7) amends section 29 to provide that, when the Authority refers a decision about a social worker in England to a court, it must be referred to the High Court of Justice in England and Wales. This is to prevent decisions about social workers in England being referred to the Court of Session in Scotland or the High Court of Justice in Northern Ireland, which would not be appropriate.
Clause 208 - Funding of the Authority
1088. This clause inserts a new section 25A into the 2002 Act, which provides for changes to the way in which the Authority is funded.
1089. This section places a duty on the Privy Council to make regulations requiring each regulatory body listed in section 25(3) of the 2002 Act to pay periodic fees in respect of such of the functions of the Authority as are specified in the regulations (with the exception of those functions relating to the provision of advice, investigations and reports under section 26A and its functions in relation to voluntary registration under new sections 25G to 25I).
1090. The regulations will be subject to consultation with the Authority , the regulatory bodies and such other persons as the Privy Council considers appropriate. The regulations will be subject to Parliamentary scrutiny under the negative resolution procedure in the Westminster Parliament and, where they contain matters which fall within the legislative competence of the Scottish Parliament, the Scottish Parliament.
1091. The amount of the fees to be paid by the regulatory bodies will be determined by the Privy Council in accordance with these regulations. The section sets out the process and consultation that the Privy Council must undertake in determining the fees which must be paid by the regulatory bodies, and makes further specific provision about the matters that may be dealt with in the regulations.
1092. Subsection (4) of this clause gives the Authority a new power to borrow money for the purposes of, or in connection with, its functions from persons other than the Secretary of State, the National Assembly for Wales, the Scottish Ministers or the Department of Health, Social Services and Public Safety in Northern Ireland .
Clause 209 - Power to advise regulatory bodies, investigate complaints etc.
1093. This clause inserts a new section 25B into the 2002 Act. It empowers the Authority to provide advice or auditing services to the regulatory bodies, or to bodies with functions that correspond to those of the regulatory bodies, whether or not these relate to health or social care.
1094. A compulsory fee, determined by the Authority , will be paid by the bodies to which it provides advice. However, the Authority may only provide advice or auditing services under this section if doing so would assist it in the performance of its functions, apart from its function of providing advice, reports or investigations to the Secretary of State or the devolved administrations under section 26A.
1095. Subsections (2) and (3) amend the power under section 28 of the 2002 Act which enables the Secretary of State to make regulations about the investigation by the Authority of complaints made to it about the regulatory bodies. The Secretary of State's power to make regulations will be conferred on the Privy Council instead. These regulations, as now, will be subject to the affirmative resolution procedure.
Clause 210 - Accountability and governance
1096. This clause amends Schedule 7 to the 2002 Act to make changes to the way in which members of the Authority are appointed, to its constitution, and to its accountability and governance provisions.
1097. At present:
1098. Subsection (2) of this clause provides that the three Secretary of State appointments will be made Privy Council appointments. The number of executive members will also be reduced from two to one.
1099. Subsection (4) amends paragraph 10 of Schedule 7 to the 2002 Act to confer on the Authority the power to determine the remuneration and allowances of its members and committee or sub-committee members, to determine the pensions of the chair and other members of the Authority , and to determine whether any compensation should be payable to an ex-chair of the Authority.
1100. Subsections (3) and (6) amend paragraphs 6 and 15 of Schedule 7 to the 2002 Act to provide for the following of the Secretary of State’s current powers to be conferred instead on the Privy Council:
1101. The Authority will no longer be required to send copies of its annual accounts to the Secretary of State.
1102. Subsection (7) places a new duty on the Authority to publish a strategic plan for the coming financial year (and for such subsequent years as it may determine) by a date determined by the Privy Council. The Authority must also lay its strategic reports before the four UK parliaments and assemblies as soon as possible after the end of the financial year.
Clause 211 - Appointments to regulatory bodies
1103. This clause inserts a new section 25C into the 2002 Act which makes provision in relation to Privy Council appointments to the regulatory bodies and Privy Council and other appointments to the Authority. .
1104. The Privy Council is given the power to appoint members of the regulatory bodies (with the exception of the Pharmaceutical Society of Northern Ireland) under their various governing enactments, and to appoint the chair and three non-executive members of the Authority. At present, the Privy Council’s appointments functions in relation to members of the regulatory bodies and the chair of the Authority are delegated to the Appointments Commission by means of directions made under powers in the Health Act 2006. Given that the Appointments Commission will be abolished in this Bill, it will no longer be able to carry out such appointments on the Privy Council’s behalf, and a new approach to the making of Privy Council appointments to the regulatory bodies and the Authority is needed.
1105. Therefore, new section 25C empowers the Privy Council and a regulatory body to make arrangements for the regulatory body in question (or a third party, such as a recruitment agency) to assist the Privy Council to make appointments to that regulatory body. It empowers the Authority to assist the Privy Council to make appointments to both the Authority and to the regulatory bodies. It also empowers the Privy Council to make arrangements with any other person to assist it to make appointments to the Authority or the regulatory bodies. In each case, however, the function of making the appointment rests with the Privy Council.
1106. The Scottish Ministers, the Welsh Ministers and the Department of Health, Social Services and Public Safety in Northern Ireland each have the power to appoint one non-executive member of the Authority and, in subsections (4) to (6) of new section 2 5C the Authority is given the power to make arrangements with the Scottish Ministers, the Welsh Ministers and the Department of Health, Social Services and Public Safety in Northern Ireland for the Authority to assist them in making these appointments.
Clause 212 – Establishment of voluntary registers
1107. This clause inserts new sections 25D, 25E and 25F into the 2002 Act.
1108. Section 25D empowers the regulatory bodies to establish and maintain voluntary registers of persons who are or have been unregulated health professionals and unregulated health care workers in the UK, and unregulated social care workers in England. With the exception of the Health and Care Professions Council, this power is limited to establishing and maintaining voluntary registers of groups whose work supports or relates to the work of the profession which the body regulates. The terms "voluntary register", "unregulated health professional", "unregulated health care worker" and "unregulated social care worker in England" are defined in section 25E.
1109. Section 25E defines ‘voluntary register’ for the purposes of section 25D. A voluntary register is a register of persons who are not required by any enactment to be on that register in order to use a title, practise a profession, engage in health care work in the UK or social care work in England or undertake certain studies. It is defined in such a way that, should one or more of the administrations in England, Scotland, Wales or Northern Ireland decide to make it compulsory for persons in that part of the UK to be on a particular register in order to do one or more of these things, that register would still be regarded as a voluntary register in so far as it registers persons in other parts of the UK (in relation to which no requirement to be on that register exists). It is also defined in such a way that if an enactment makes it compulsory for a person to be on a particular register in order to carry out work or practice of a particular kind but only for a specific purpose, that register will remain a voluntary register. An example would be if a statutory instrument required a person to be on a particular register in order to work as a health care support assistant in the NHS in England (but not in order to work as a health care support assistant outside the NHS in England).
1110. Under section 25D, regulatory bodies may also establish and maintain voluntary registers of certain students. This power, for each regulatory body, is limited to establishing and maintaining voluntary registers of persons studying to become a member of a profession regulated by that body or in relation to which that body maintains a voluntary register, or studying to engage in work as an unregulated health care worker or unregulated social care worker in England in relation to which that body maintains a voluntary register.
1111. All of the regulatory bodies have a UK-wide scope, with the exception of the General Pharmaceutical Council, which is the regulator of pharmacists, pharmacy technicians and pharmacy premises in Great Britain, and the Pharmaceutical Society of Northern Ireland, which is the regulator of pharmacists and pharmacy premises in Northern Ireland. The General Pharmaceutical Council may only establish and maintain voluntary registers under section 25D for persons who are, or have been, engaged in work or participating in studies in Great Britain, and the Pharmaceutical Society of Northern Ireland may only establish and maintain voluntary registers for persons who are, or have been, engaged in work or participating in studies in Northern Ireland. The exception to this is where the General Pharmaceutical Council and Pharmaceutical Society of Northern Ireland jointly establish a voluntary register, which can have UK-wide scope.
1112. Section 25D also provides a power for the regulatory bodies to establish and maintain a voluntary register jointly with another regulatory body. Where voluntary registers are joint, the regulatory bodies maintaining that register will remain subject to the same limits on the types of register which can be maintained, and their geographical scope, as would apply to each regulatory body maintaining a register individually (with the limited exception described above in relation to a joint register maintained by the General Pharmaceutical Council and the Pharmaceutical Society of Northern Ireland).
1113. Subsection (12) of section 25D provides that persons requesting registration, or the renewal of registration , on a voluntary register maintained by a regulatory body must pay a fee determined by the regulatory body.
1114. Section 25F imposes a duty on each regulatory body to carry out an impact assessment prior to establishing a voluntary register under section 25D. It provides that the regulatory body must have regard to any appropriate guidance in carrying out the assessment; must consider, in particular, the likely impact on potential registrants, employers of potential registrants and users of health care and English social care and social work services; must publish its impact assessment; and must have regard to the impact assessment in deciding whether to establish a voluntary register. The regulatory body must also consult such persons as it considers appropriate before establishing a voluntary register.
Clause 213 - Accreditation of voluntary registers
1115. This clause inserts new sections 25G, 25H and 25I into the 2002 Act , and makes other amendments to the 2002 Act which relate to the Authority’s new functions under these new sections.
1116. Section 25G empowers the Authority to accredit voluntary registers. Accreditation refers to formal recognition by the Authority that a voluntary register meets certain specified criteria that it sets relating to the operation and governance of voluntary registers.
1117. More specifically , the Authority is given the power to, on an application by a regulatory body or other person who maintains a voluntary register, to take any steps it considers to be appropriate in order to establish whether the register meets its accreditation criteria. The Authority’s accreditation criteria will be set from time to time and subsection (2) of section 25G sets out a number of particular matters which the Authority may include in its accreditation criteria.
1118. The Authority must publish its accreditation criteria, and it has the power to publish a list of accredited registers.
1119. The Authority may review accredited registers to determine whether they continue to meet the accreditation criteria, and may remove, suspend or impose conditions on the accreditation of a register if it is not satisfied that the criteria continue to be met.
1120. The Authority may determine the fee to be paid by persons or bodies maintaining voluntary registers for accreditation, and may refuse, or remove accreditation if the fee is not paid.
1121. Section 25H imposes a duty on the Authority to carry out an impact assessment prior to accrediting a voluntary register under section 25G. It provides that the Authority must have regard to any appropriate guidance in carrying out the assessment; must consider , in particular, the likely impact on registrants and potential registrants, employers of registrants and potential registrants, and users of health care and English social care and social work services; may request information from the person or body who maintains the voluntary register in order to carry out the assessment (and may refuse to accredit the register in the case of non-compliance with this request); may publish its impact assessment; and must have regard to the impact assessment in deciding whether to accredit a voluntary register. It must also consult such persons as it considers appropriate prior to accrediting a register.
1122. Section 25I confers three new functions on the Authority. These are:
1123. Subsections (2) to (5) of this clause amend section 26 of the 2002 Act to provide that the Authority’s powers under section 26(2) (as limited by section 26(3)) extend to any person who maintains an accredited voluntary register, not just to regulatory bodies.
1124. Subsection (6) amends section 26A of the 2002 Act to