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
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(4)
The trust must inform the regulator of amendments made under this
section; but the regulator’s functions do not include a power or duty to
determine whether or not the constitution, as a result of the
amendments, accords with Schedule 7.”
(3)
Subsections (1) and (2) do not apply in the case of amendments in respect of
5
which, immediately before the commencement of this section, Monitor has yet
to decide whether or not to give approval under section 37 of the National
Health Service Act 2006.
159
Panel for advising governors
After section 39 of the National Health Service Act 2006 insert—
10
“39A
Panel for advising governors
(1)
The regulator may appoint a panel of persons to which a governor of
an NHS foundation trust may refer a question as to whether the trust
has failed or is failing—
(a)
to act in accordance with its constitution, or
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(b)
to act in accordance with provision made by or under this
Chapter.
(2)
A governor may refer a question to the panel only if more than half of
the members of the council of governors voting approve the referral.
(3)
The panel—
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(a)
may regulate its own procedure, and
(b)
may establish such procedures, and make such other
arrangements, as it considers appropriate for the purpose of
determining questions referred to it under this section.
(4)
The panel may decide whether, or to what extent, to carry out an
25
investigation on a question referred to it under this section.
(5)
The panel may for that purpose, or for the purpose of carrying out such
an investigation, request information or advice.
(6)
Where the panel has carried out such an investigation, it must publish
a report of its determination of the question referred to it.
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(7)
If a person refuses to comply with a request made under subsection (5),
the report under subsection (6) may refer to the refusal.
(8)
On any proceedings before a court or tribunal relating to a question
referred to the panel under this section, the court may take the panel’s
report of its determination of the question into account.
35
(9)
The regulator—
(a)
must pay expenses properly incurred by the panel, and
(b)
must make administrative support available to the panel.
(10)
Regulations may make provision as to—
(a)
eligibility for membership of the panel;
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(b)
the number of persons that may be appointed as members;
(c)
the terms of appointment of members;

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(d)
circumstances in which a person ceases to be a member or may
be suspended.
Finance
160
Financial powers etc.
(1)
In section 40 of the National Health Service Act 2006 (power of Secretary of
5
State to give financial assistance to NHS foundation trusts), in subsection (1),
for “give financial assistance” substitute “make loans”.
(2)
Omit subsection (2) of that section (financial assistance to include public
dividend capital, grants, etc.).
(3)
At the end of that section insert—
10
“(5)
As soon as is practicable after the end of each financial year, the
Secretary of State must prepare a report on the exercise of the power
under subsection (1).
(6)
In relation to each loan made under that subsection during the year to
which the report relates, the report must specify—
15
(a)
the amount of the loan,
(b)
the amount (if any) outstanding at the end of the year, and
(c)
the other terms on which the loan was made.
(7)
In relation to each loan made under that subsection during a previous
financial year but not repaid by the beginning of the year to which the
20
report relates, the report must specify—
(a)
the amount outstanding at the beginning of the year,
(b)
the amount (if any) outstanding at the end of the year, and
(c)
the other terms on which the loan was made.
(8)
The Secretary of State must publish a report under subsection (5).”
25
(4)
Omit section 41 of that Act (prudential borrowing code).
(5)
In section 42 of that Act (public dividend capital)—
(a)
in subsection (2), at the end insert “; and the reference to section 40 is a
reference to that section as it had effect until the commencement of
section 160(2) of the Health and Social Care Act 2011 (which repealed
30
subsection (2) of that section)”, and
(b)
omit subsection (4) (dividend payable by NHS foundation trust to be
same as that payable by NHS trust).
(6)
Omit subsection (5) of that section (requirement for Secretary of State to consult
the regulator).
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(7)
At the end of that section insert—
“(7)
The terms which may be decided under subsection (3) include terms to
which the exercise of any power of an NHS foundation trust to do any
of the following will be subject as a consequence—
(a)
providing goods or services,
40
(b)
borrowing or investing money,
(c)
providing financial assistance,

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(d)
acquiring or disposing of property,
(e)
entering into contracts, or making other arrangements, to do
anything referred to in paragraphs (a) to (d),
(f)
applying for dissolution (whether or not when also applying for
the establishment of one or more other trusts),
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(g)
applying to acquire another body.”
(8)
After that section insert—
“42A
Criteria for making loans etc.
(1)
The Secretary of State must publish guidance on the powers conferred
by sections 40 and 42.
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(2)
The guidance on the power to make a loan under section 40(1) must in
particular—
(a)
explain that, in exercising the power, the Secretary of State will
apply the principle that a loan should be made only where there
is a reasonable expectation that it will be repaid in accordance
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with the terms on which it is made;
(b)
include other criteria that the Secretary of State will apply when
determining whether to exercise the power and, if so, the terms
on which to make the loan.
(3)
The guidance on that power must also explain—
20
(a)
the process for applying for a loan under section 40(1);
(b)
the consequences of failing to comply with terms on which a
loan is made under that provision.
(4)
The guidance on the power to decide terms under section 42(3) must in
particular include the criteria that the Secretary of State will apply
25
when deciding the terms.
(5)
The guidance on that power must also explain the consequences of
failing to comply with the terms decided.
(6)
In preparing guidance under this section, the Secretary of State must
have regard (among other things) to any generally accepted principles
30
used by financial institutions to determine whether to make loans to
bodies corporate and the terms on which to make loans to them.
(7)
Before publishing the guidance, the Secretary of State must consult—
(a)
the Treasury,
(b)
the regulator, and
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(c)
such other persons as the Secretary of State considers
appropriate.”
(9)
Omit section 45 of that Act (disposal of protected property).
(10)
Omit section 46(2) and (3) of that Act (limitation on power of NHS foundation
trusts to borrow money).
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(11)
For section 50 of that Act (fees) substitute—
“50
Fees
An NHS foundation trust must pay to the regulator such fee as the
regulator may determine in respect of its exercise of functions under—

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(a)
section 39;
(b)
section 39A.”
Functions
161
Goods and services
(1)
In section 43 of the National Health Service Act 2006 (authorised services), for
5
subsections (1) and (2) substitute—
“(1)
The principal purpose of an NHS foundation trust is the provision of
goods and services for the purposes of the health service in England.
(2)
The NHS foundation trust may provide goods and services for any
purposes related to—
10
(a)
the provision of services provided to individuals for or in
connection with the prevention, diagnosis or treatment of
illness, and
(b)
the promotion and protection of public health.”
(2)
In subsection (3) of that section (power to carry on other activities in order to
15
generate additional income)—
(a)
for “subsection (1)” substitute “subsection (2)”, and
(b)
omit “, subject to any restrictions in the authorisation,”.
(3)
Omit subsections (4) to (7) of that section (goods and services that may be
authorised, etc.).
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(4)
For the title to that section substitute “Provision of goods and services”.
(5)
In paragraph 2 of Schedule 7 to that Act (constitution), the existing text
becomes sub-paragraph (1), after that sub-paragraph insert—
    “(2)
If the corporation is an NHS foundation trust, the constitution must
specify its principal purpose (as to which, see section 43(1)).”
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162
Private health care
(1)
In section 44 of the National Health Service Act 2006 (private health care),
omit—
(a)
subsection (1) (restriction on provision of private health services),
(b)
subsection (2) (cap on private income),
30
(c)
subsection (2A) (special provision for mental health foundation trusts),
and
(d)
subsections (3) to (5) (interpretation etc.).
(2)
For the title to that section substitute “Power to charge for accommodation
etc.”.
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(3)
In consequence of subsection (1)(b) and (c), omit section 33 of the Health Act
2009.
163
Information
For section 48 of the National Health Service Act 2006 (information)

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substitute—
“48
Information
(1)
The Secretary of State may require an NHS foundation trust to provide
the Secretary of State with such information as the Secretary of State
considers it necessary to have for the purposes of the functions of the
5
Secretary of State in relation to the health service.
(2)
The information must be provided in such form, and at such time or
within such period, as the Secretary of State may require.”
164
Significant transactions
After section 51 of the National Health Service Act 2006 insert—
10
“51A
Significant transactions
(1)
An NHS foundation trust may enter into a significant transaction only
if more than half of the members of the council of governors of the trust
voting approve entering into the transaction.
(2)
“Significant transaction” means a transaction or arrangement of such
15
description as may be specified in the trust’s constitution.
(3)
If an NHS foundation trust does not wish to specify any descriptions of
transaction or arrangement for the purposes of subsection (2), the
constitution of the trust must specify that it contains no such
descriptions.”
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Mergers, acquisitions, separations and dissolution
165
Mergers
(1)
In section 56 of the National Health Service Act 2006 (mergers), in subsection
(1), for the words from “authorisation” to the end substitute “the dissolution of
the trusts and the establishment of a new NHS foundation trust.”
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(2)
After that subsection insert—
“(1A)
An application under this section may be made only with the approval
of more than half of the members of the council of governors of each
applicant.”
(3)
In subsection (2) of that section, omit—
30
(a)
paragraph (a),
(b)
paragraph (c) (but not the “and” following it), and
(c)
the words from “and must give” to the end.
(4)
Omit subsection (3) of that section.
(5)
For subsection (4) of that section substitute—
35
“(4)
The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trusts and the
establishment of the proposed new trust have been taken.”
(6)
Omit subsections (5) to (10) of that section.

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(7)
In subsection (11) of that section, for “On an authorisation being given under
this section” substitute “On the grant of the application”.
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Acquisitions
After section 56 of the National Health Service Act 2006 insert—
“56A
Acquisitions
5
(1)
An application may be made jointly by—
(a)
an NHS foundation trust (A), and
(b)
another NHS foundation trust or an NHS trust (B),

to the regulator for the acquisition by A of B.
(2)
An application under this section may be made only with the approval
10
of more than half of the members of the council of governors of each
applicant.
(3)
The application must be accompanied by a copy of the proposed
constitution of A, amended on the assumption that A acquires B.
(4)
The regulator must grant the application if it is satisfied that such steps
15
as are necessary to prepare for the acquisition have been taken.
(5)
On the grant of the application, the proposed constitution has effect,
but where a person who is specified as a director of A in the
constitution has yet to be appointed as such, the directors of A may
exercise that person’s functions under the constitution.”
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167
Separations
After section 56A of the National Health Service Act 2006 insert—
“56B
Separations
(1)
An application may be made to the regulator by an NHS foundation
trust for the dissolution of the trust and the establishment of two or
25
more new NHS foundation trusts.
(2)
An application under this section may be made only with the approval
of more than half of the members of the council of governors of the
applicant.
(3)
The application must, by reference to each of the proposed new trusts—
30
(a)
specify the property and liabilities proposed to be transferred
to it;
(b)
be accompanied by a copy of its proposed constitution.
(4)
The regulator must grant the application if it is satisfied that such steps
as are necessary to prepare for the dissolution of the trust and the
35
establishment of each of the proposed new trusts have been taken.
(5)
On the grant of the application, the proposed constitution of each of the
new trusts has effect but, in the case of each of the new trusts, the
proposed directors may exercise the functions of the trust on its behalf
until a board of directors is appointed in accordance with the
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constitution.”