Health and Social Care Bill

Session 2010 - 11
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Other Bills before Parliament

Health and Social Care Bill

Health and Social Care Bill
Part 4 — NHS foundation trusts & NHS trusts
136

(a)
to hold the non-executive directors individually and
collectively to account for the performance of the board of
directors, and
(b)
to represent the interests of the members of the corporation as
a whole and the interests of the public.”
5
(5)
After paragraph 10A of that Schedule insert—
“10B
A public benefit corporation must take steps to secure that the
governors are equipped with the skills and knowledge they require
in their capacity as such.”
(6)
After paragraph 10B of that Schedule insert—
10
“10C
For the purpose of obtaining information about the corporation’s
performance of its functions or the directors’ performance of their
duties (and deciding whether to propose a vote on the corporation’s
or directors’ performance), the council of governors may require one
or more of the directors to attend a meeting.”
15
(7)
In paragraph 23(4) of that Schedule (persons eligible for appointment as
auditor by governors), in sub-paragraph (c), for “the regulator” substitute “the
Secretary of State”.
(8)
In paragraph 26(2) of that Schedule (information that must be given in annual
reports etc.), after paragraph (a) insert—
20
“(aa)
information on any occasions in the period to which the
report relates on which the council of governors exercised its
power under paragraph 10C,”.
(9)
In consequence of subsection (1)—
(a)
in sections 33(4)(a) (in each place it appears), 35(2)(c) and (5)(c), 39(3)(a),
25
59(1), (2)(b) and (5) and 60(1), for “board of governors” substitute
“council of governors”,
(b)
in section 60(2) and (3) and paragraphs 8 to 14, 17, 18, 20, 21, 23, 27 and
28 of Schedule 7, for “the board”, in each place it appears, substitute
“the council”,
30
(c)
for the cross-heading preceding paragraph 7 of that Schedule substitute
“Council of Governors”,
(d)
in the cross-heading preceding paragraph 28 of that Schedule, for
“board” substitute “council”, and
(e)
in paragraphs 4(2) and 5(1) of Schedule 10, for “board of governors”
35
substitute “council of governors”.
149
Directors
(1)
After paragraph 18 of Schedule 7 to the National Health Service Act 2006
insert—
“18A
The general duty of the board of directors, and of each director
40
individually, is to act with a view to promoting the success of the
corporation so as to maximise the benefits for the members of the
corporation as a whole and for the public.”

Health and Social Care Bill
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(2)
After paragraph 18A of that Schedule insert—
“18B  (1)
The duties that a director of a public benefit corporation has by virtue
of being a director include in particular—
(a)
a duty to avoid a situation in which the director has (or can
have) a direct or indirect interest that conflicts (or possibly
5
may conflict) with the interests of the corporation;
(b)
a duty not to accept a benefit from a third party by reason of
being a director or doing (or not doing) anything in that
capacity.
      (2)
The duty referred to in sub-paragraph (1)(a) is not infringed if—
10
(a)
the situation cannot reasonably be regarded as likely to give
rise to a conflict of interest, or
(b)
the matter has been authorised in accordance with the
constitution.
      (3)
The duty referred to in sub-paragraph (1)(b) is not infringed if
15
acceptance of the benefit cannot reasonably be regarded as likely to
give rise to a conflict of interest.
      (4)
In sub-paragraph (1)(b), “third party” means a person other than—
(a)
the corporation, or
(b)
a person acting on its behalf.”
20
(3)
After paragraph 18B of that Schedule insert—
“18C  (1)
If a director of a public benefit corporation has in any way a direct or
indirect interest in a proposed transaction or arrangement with the
corporation, the director must declare the nature and extent of that
interest to the other directors.
25
      (2)
If a declaration under this paragraph proves to be, or becomes,
inaccurate or incomplete, a further declaration must be made.
      (3)
Any declaration required by this paragraph must be made before the
corporation enters into the transaction or arrangement.
      (4)
This paragraph does not require a declaration of an interest of which
30
the director is not aware or where the director is not aware of the
transaction or arrangement in question.
      (5)
A director need not declare an interest—
(a)
if it cannot reasonably be regarded as likely to give rise to a
conflict of interest;
35
(b)
if, or to the extent that, the directors are already aware of it;
(c)
if, or to the extent that, it concerns terms of the director’s
appointment that have been or are to be considered—
(i)
by a meeting of the board of directors, or
(ii)
by a committee of the directors appointed for the
40
purpose under the constitution.”
(4)
After paragraph 18C of that Schedule insert—
“18D  (1)
Before holding a meeting, the board of directors must send a copy of
the agenda of the meeting to the council of governors.

Health and Social Care Bill
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      (2)
As soon as practicable after holding a meeting, the board of directors
must send a copy of the minutes of the meeting to the council of
governors.”
150
Members
(1)
In section 61 of the National Health Service Act 2006 (representative
5
membership), the existing text becomes subsection (1) and, in that subsection,
for “An authorisation may require an NHS foundation trust to” substitute “An
NHS foundation trust must”.
(2)
After that subsection insert—
“(2)
In deciding which areas are to be areas for public constituencies, or in
10
deciding whether there is to be a patients’ constituency, an NHS
foundation trust must have regard to the need for those eligible for
such membership to be representative of those to whom the trust
provides services.”
151
Accounts: initial arrangements
15
(1)
In paragraph 24 of Schedule 7 to the National Health Service Act 2006
(accounts: general), for sub-paragraph (1) substitute—
    “(1)
A public benefit corporation must keep proper accounts and proper
records in relation to the accounts.
     (1A)
The regulator may with the approval of the Secretary of State give
20
directions to the corporation as to the content and form of its
accounts.”
(2)
In paragraph 25 (annual accounts) of that Schedule, in sub-paragraph (1), for
“the Treasury” substitute “the Secretary of State”.
(3)
After sub-paragraph (1) of that paragraph insert—
25
   “(1A)
The regulator may with the approval of the Secretary of State direct
a public benefit corporation—
(a)
to prepare accounts in respect of such period or periods as
may be specified in the direction;
(b)
that any accounts prepared by it by virtue of paragraph (a)
30
are to be audited in accordance with such requirements as
may be specified in the direction.”
(4)
In sub-paragraph (2) of that paragraph—
(a)
after “annual accounts” insert “or in preparing any accounts by virtue
of sub-paragraph (1A)(a)”,
35
(b)
for “the Treasury” substitute “the Secretary of State”, and
(c)
for “information to be given in” substitute “content and form of”.
(5)
In sub-paragraph (3) of that paragraph, after “annual accounts” insert “, or of
any accounts to be prepared by it by virtue of sub-paragraph (1A)(a),”.
(6)
In sub-paragraph (4) of that paragraph, in paragraph (b)—
40
(a)
omit “once it has done so,”, and
(b)
at the end insert “within such period as the regulator may direct”.

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(7)
After that sub-paragraph insert—
   “(4A)
The corporation must send to the regulator within such period as the
regulator may direct—
(a)
a copy of any accounts prepared by the corporation by virtue
of sub-paragraph (1A)(a), and
5
(b)
a copy of any report of an auditor on them prepared by virtue
of sub-paragraph (1A)(b).”
152
Accounts: variations to initial arrangements
(1)
In paragraph 24 of Schedule 7 to the National Health Service Act 2006
(accounts: general), in sub-paragraph (1A), for “The regulator may with the
10
approval of the Secretary of State” substitute “The Secretary of State may with
the approval of the Treasury”.
(2)
In sub-paragraph (5) of that paragraph, for “the regulator” substitute “the
Secretary of State”.
(3)
In paragraph 25 (annual accounts), in sub-paragraph (1), for “the regulator
15
may with the approval of the Secretary of State” substitute “the Secretary of
State may with the approval of the Treasury”.
(4)
In sub-paragraph (1A) of that paragraph, for “The regulator may with the
approval of the Secretary of State” substitute “The Secretary of State may with
the approval of the Treasury”.
20
(5)
In sub-paragraph (2) of that paragraph, for “the regulator with the approval of
the Secretary of State” substitute “the Secretary of State with the approval of
the Treasury”.
(6)
In sub-paragraphs (3), (4) and (4A) of that paragraph, for “the regulator”, in
each place it appears, substitute “the Secretary of State”.
25
(7)
This section applies to such financial year as is specified in the order under
section 297 that brings the preceding provisions of this section into force (and
to the subsequent financial years); accordingly, this section does not affect the
application of paragraphs 24 and 25 of Schedule 7 to the National Health
Service Act 2006 (as amended by section 151) to the financial years preceding
30
the specified financial year.
(8)
In subsection (7), “financial year” has the meaning given in section 275(1) of the
National Health Service Act 2006.
153
Annual report and forward plan
(1)
In sub-paragraph (2) of paragraph 26 of Schedule 7 to the National Health
35
Service Act 2006 (information that must be included in annual report), after
paragraph (aa) (inserted by section 148(7)) insert—
“(ab)
information on the corporation’s policy on pay and on the
work of the committee established under paragraph 18(2)
and such other procedures as the corporation has on pay,
40
(ac)
information on the remuneration of the directors and on the
expenses of the governors and the directors,”.

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(2)
After that sub-paragraph insert—
   “(2A)
Before imposing a requirement under sub-paragraph (2)(b) that the
regulator considers is sufficiently significant to justify consultation,
the regulator must consult such persons as it considers appropriate.”
(3)
The Secretary of State may by order—
5
(a)
amend sub-paragraph (2) of paragraph 26 of that Schedule so as to
substitute for paragraph (b) the following—
“(b)
such other information as may be prescribed.”, and
(b)
repeal sub-paragraph (2A) of that paragraph.
(4)
In paragraph 27(1) of that Schedule (duty to send forward plan to regulator),
10
for “the regulator” substitute “the Secretary of State”.
(5)
Omit section 39(2)(e) of that Act (requirement for copy of forward plan to be on
register).
154
Meetings
(1)
After paragraph 27 of Schedule 7 to the National Health Service Act 2006
15
insert—
“Annual meeting of members
27A   (1)
A public benefit corporation must hold an annual meeting of its
members.
      (2)
The meeting must be open to members of the public.
20
      (3)
At least one member of the board of directors of the corporation must
attend the meeting and present the following documents to the
members at the meeting—
(a)
the annual accounts,
(b)
any report of the auditor on them,
25
(c)
the annual report.
      (4)
Where an amendment is made to the constitution in relation to the
powers or duties of the council of governors of a public benefit
corporation (or otherwise with respect to the role that the council has
as part of the corporation)—
30
(a)
at least one member of the council of governors must attend
the next meeting to be held under this paragraph and present
the amendment, and
(b)
the corporation must give the members an opportunity to
vote on whether they approve the amendment.
35
      (5)
If more than half of the members voting approve the amendment, the
amendment continues to have effect; otherwise, it ceases to have
effect and the corporation must take such steps as are necessary as a
result.”
(2)
In paragraph 28 of that Schedule (meeting of council of governors to consider
40
annual accounts and reports), the existing text of which becomes sub-

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paragraph (1), after that sub-paragraph insert—
    “(2)
Nothing in sub-paragraph (1) prevents the council of governors from
holding a general meeting more than once a year.”.
(3)
After that paragraph insert—
“Combined meetings of members and governors
5
28A
A public benefit corporation may hold a meeting which combines a
meeting under paragraph 27A with a meeting under paragraph 28.”
155
Voting
(1)
After paragraph 29 of Schedule 7 to the National Health Service Act 2006
insert—
10
“Power to make provision about voting
30    (1)
Regulations may amend this Chapter so as to add, vary or omit
provision relating to voting by members of the council of governors
of a public benefit corporation that is an NHS foundation trust, by its
directors or by its members.
15
      (2)
The power under sub-paragraph (1) is exercisable only in relation to
provision in this Chapter that was inserted, or otherwise provided
for, by Part 4 of the Health and Social Care Act 2011.”
(2)
In section 64(3) of that Act (regulations under Chapter 5 of Part 2 of that Act
that are subject to affirmative procedure), after paragraph (a) (but before the
20
“or” following it) insert—
“(aa)
regulations under paragraph 30(1) of Schedule 7,”.
Foundation trust status
156
Authorisation
(1)
In section 30(1) of the National Health Service Act 2006 (definition of NHS
25
foundation trust), for “which is authorised under this Chapter to provide”
substitute “the function of which is to provide in accordance with this
Chapter”.
(2)
Omit section 33(2)(a) of that Act (requirement for application for authorisation
to describe goods and services to be provided).
30
(3)
In section 35(2) of that Act (matters as to which the regulator must be satisfied
before giving authorisation), for paragraph (e) substitute—
“(e)
the applicant will be able to provide goods and services for the
purposes of the health service in England,”.
(4)
Omit section 35(4) and (7) of that Act (power to give authorisation on terms the
35
regulator considers appropriate).
(5)
Omit section 38 of that Act (variation of authorisation).
(6)
Omit section 39(2)(b) of that Act (requirement for copy of authorisation to be
on register).

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(7)
Omit section 49 of that Act (authorisation to require trust to allow regulator to
enter and inspect trust’s premises).
(8)
Omit paragraph 22(1)(b) of Schedule 7 to that Act (requirement for copy of
authorisation to be available for public inspection).
157
Bodies which may apply for foundation trust status
5
(1)
Omit section 34 of the National Health Service Act 2006 (application for
authorisation by body other than NHS trust).
(2)
In section 35(1) of that Act (bodies which may be given authorisation), omit
paragraph (b) (public benefit corporations) and the preceding “or”.
(3)
Omit section 36(2) of that Act (public benefit corporation to become NHS
10
foundation trust on being given authorisation).
(4)
Despite subsection (1)—
(a)
section 34(1) to (4) of that Act continues to have effect in the case of an
application which, immediately before the commencement of that
subsection, is pending determination, and
15
(b)
section 34(5) to (7) of that Act continues to have effect in the case of an
existing public benefit corporation.
(5)
Despite subsection (2), section 35(1)(b) of that Act continues to have effect in
the case of an existing public benefit corporation which, immediately before
the commencement of that subsection, has not been given an authorisation
20
under section 35.
(6)
Despite subsection (3), section 36(2) of that Act continues to have effect in the
case of an existing public benefit corporation.
(7)
In subsections (4) to (7), “existing public benefit corporation” means a public
benefit corporation—
25
(a)
incorporated under section 34 of that Act and in existence immediately
before the commencement of this section, or
(b)
incorporated under that section by virtue of subsection (4).
158
Amendment of constitution
(1)
In section 37 of the National Health Service Act 2006 (amendments of
30
constitution), the existing text of which becomes subsection (1), for “with the
approval of the regulator” substitute “only if—
(a)
more than half of the members of the council of governors of the
trust voting approve the amendments, and
(b)
more than half of the members of the board of directors of the
35
trust voting approve the amendments.”
(2)
After that subsection insert—
“(2)
Amendments made under this section take effect as soon as the
conditions in subsection (1)(a) and (b) are satisfied.
(3)
But an amendment is of no effect in so far as the constitution would, as
40
a result of the amendment, not accord with Schedule 7.