House of Lords - Explanatory Note
Health Bill [H.L.] [H.L.] - continued          House of Lords

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Clause 16: Obtaining information etc.

162. This clause makes provision for regulations which will set out the Commission's powers to obtain entry to NHS premises and access to information and documents held by the bodies under review or investigation.

163. Subsection (1)(a) provides that regulations may confer a right on persons authorised by the Commission (e.g. its employees or other members of the review or investigation team) to enter and inspect premises for the purposes of carrying out its functions. They may also provide that such persons are able to inspect and take copies of records held on those premises. Persons authorised by the Commission will only be able to enter and inspect premises owned or controlled by Health Authorities, Special Health Authorities, NHS trusts and Primary Care Trusts.

164. Subsections (1)(b) and (c) allow regulations to be made concerning access to information and documents, and the giving of explanations about matters relating to the exercise of the Commission's functions. Regulations will set out the circumstances in which such information or documents may be obtained or explanations required, and the persons who must provide such information, documents or explanations.

165. Subsection (2) ensures that the Commission will be able to obtain confidential information about individuals, in particular patient information, only in the limited circumstances set out in paragraphs (a) to (d).

166. Subsection (3) provides that it would not be able to obtain information the disclosure of which is prohibited by another Act, regulations or directions (such as information covered by section 33 of the Human Fertilisation and Embryology Act 1990 (c.37)). If however the prohibition operates because the document or information would identify an individual, then regulations will provide that the Commission may require that document or information to be produced in such a way that prevents the individual being identified.

Clause 17: Restrictions on disclosure of information

167. Clause 17 prevents the disclosure of confidential information relating to individuals, except in certain circumstances. If a Commission member, employee, or a person assisting the Commission, knowingly or recklessly discloses information contrary to this clause, subsection (2) provides that they would be guilty of a criminal offence.

168. Subsection (5) sets out the circumstances in which disclosure of confidential information relating to an individual is permitted. The Commission would be able to disclose this information if, for example, the individual to whom the information relates had consented, if the disclosure was for the purpose of an investigation by the Health Service Commissioner, was in accordance with any Act of Parliament or court order, or was for the purposes of criminal proceedings.

Clause 18: Dissolution of Clinical Standards Advisory Group

169. The Clinical Standards Advisory Group (CSAG) was established under section 62 of the 1990 Act. Its function is to advise as requested on standards of clinical care in the NHS and on access to and availability of services to NHS patients. This function will be taken on by the new Commission for Health Improvement, so clause 18 provides for the abolition of CSAG. As CSAG may not have completed its current work programme by the time the Commission is established, the Secretary of State will be able to determine the date on which this clause would come into effect.

170. Clause 53(3) provides that the abolition of CSAG extends to Northern Ireland. In Northern Ireland the application to the integrated health and social services of a quality framework similar to that being established in England and Wales is under consideration.

Clauses 19 and 20: Co-operation between NHS bodies and local authorities

171. Clauses 19 and 20 give effect to the intention, set out in The new NHS and in Putting Patients First, to extend the duty of partnership set out in section 22 of the 1977 Act.

172. Clause 19 introduces for the first time an explicit duty of co-operation between bodies within the NHS, making clear the intention that Health Authorities, NHS trusts and Primary Care Trusts are expected to work together.

173. Clause 20 extends the duty of partnership in section 22 of the 1977 Act between the NHS and local authorities to secure and advance the health and welfare of the people of England and Wales, to cover Primary Care Trusts and NHS trusts as well as Health Authorities and Special Health Authorities. This recognises the need to work in partnership in commissioning and delivering care, as well as at the strategic planning level. Welfare is used in its wide general sense and is designed to cover functions relating to social services, education, housing and the environment.

Clause 21: Plans for improving health etc.

174. This clause makes provision for the preparation of local plans for improving the health of and the provision of health care to the local population. It gives statutory underpinning to the development of Health Improvement Programmes as set out in The new NHS and Putting Patients First.

175. Subsection (1) lays a statutory requirement on Health Authorities to prepare plans to improve the health of and provision of health care to their populations, and subsections (3) and (4) lay a duty on Primary Care Trusts, NHS trusts, and local authorities to participate in their preparation. Subsection (7) provides that all the parties are required to have regard to their local plan in exercising their functions.

176. The Health Improvement Programme process is intended to engage local communities and voluntary bodies, employers, educational establishments and others. Accordingly, subsection (5)(b) provides for this, while subsection (5)(a) enables the Secretary of State if necessary to direct that particular parties are involved. The Bill does not prescribe in detail the processes for developing Health Improvement Programmes, so that local partners can develop individual local arrangements. The Secretary of State's powers of direction under subsections (5)(a) and (6) mean however that it will be possible to prescribe particular aspects of the process if necessary. For example, should there be difficulty in securing proper involvement of voluntary organisations in the Health Improvement Programme process, the direction-making power offers a safeguard.

Clauses 22 and 23 - Payments from NHS bodies to local authorities and from local authorities to NHS bodies

177. Section 28A of the 1977 Act gives Health Authorities powers to transfer money to local authorities for social services functions, and for education, housing and accommodation for disabled people. Directions under section 28A(5) provide that such payments may only be made where better value would be achieved than by equivalent expenditure within the NHS.

178. This power was originally introduced to assist with the provision of replacement services in the community as NHS long-stay hospitals closed. It also encourages alternative and more appropriate models of care for people who might otherwise have to rely on the health service. The emphasis thus far has been on social care and related services.

179. The new provisions are intended to promote partnership between the NHS and local authorities with the aim of improving the health of the community. The measures also aim to ensure that health and local authorities are able to make the most flexible use of the resources they have available to them.

180. Clause 22 amends the current Section 28A provisions by extending the ability of health authorities to make payments to a local authority beyond social services functions (and certain other functions) to allow payments to be made in respect of any local authority function that is health-related. It also allows Primary Care Trusts to make similar payments to local authorities.

181. Clause 23 introduces a new reciprocal power for local authorities to make payments to Health Authorities or Primary Care Trusts. It gives the Secretary of State powers to set conditions as to local authority payments to these health bodies and to set conditions for repayment of the money. It is intended that the conditions will provide that payments may only be made if doing so will improve the health of the people in the local authority's area. The Secretary of State already has such powers in respect of payments from Health Authorities to local authorities.

Clause 24: Arrangements between NHS bodies and local authorities

182. This clause allows the NHS and local authorities to work together in new ways by enabling them to pool their resources, delegate functions and resources from one party to another and enable a single provider to provide both health and local authority services.

183. The discussion documents Partnership in Action and Partnership for Improvement set out the Government's intentions regarding these new operational flexibilities. Broadly, they remove some of the legal barriers to joint working which exist at the moment. The measures set out in this clause are intended to allow health and local authorities to agree jointly who is best placed to carry out their functions and how resources might be used more efficiently. These proposals have been developed in greatest depth as regards the interface between health and social care, as the discussion documents made clear. However, the Government believes the potential for cross-boundary working extends beyond this. Accordingly, clause 24 creates scope to bring these new flexibilities into play across any point on the interface between NHS functions and local authority functions that are health-related.

184. Clause 24 remove some of these barriers by allowing:

  • authorities to pool resources so that they lose their health and local authority identity; and allowing staff from either agency to develop packages of care suited to particular individuals irrespective of whether health or local authority money is used;

  • Health Authorities or Primary Care Trust and local authority departments to delegate functions to one another. In the case of health and social care, this will allow, for example, one of the partner bodies to commission all mental health or learning disability services locally. It is expected that this will also reduce the costs associated with having two authorities commissioning services for the same group of people;

  • the provision of health and local authority services (for example, at the health and social services boundary, support involving both domiciliary and community nursing care) from a single managed provider. Currently it is not possible for NHS trusts to offer this except to a limited extent and it is not possible for social services authority in-house providers to do this at all.

185. These flexibilities will not necessarily be appropriate in all areas, or for all client groups. What works for services for people with learning difficulties will not necessarily work for frail elderly people. The powers are therefore not mandatory. If authorities wish to apply for a new flexibility the intention is that need for it should be highlighted in the Health Improvement Programme (see clause 21).

186. Subsection (1) provides the powers for the Secretary of State for Health to make regulations setting out the circumstances in which NHS bodies and local authorities can use the flexibilities. The flexibilities may only be used if doing so leads to an improvement in the way the functions are exercised, which includes better outcomes for service users.

187. Subsection (2) sets out examples of the new operational flexibilities.

188. Subsection (2)(a) enables the creation of pooled budgets made up of contributions from the NHS and local authorities. The resources contributed by each authority will lose their identity as health or local authority money. The pool will be able to fund both health and local authority activity as set out in regulations.

189. Subsections (2)(b) and (c) allow both NHS bodies and local authorities to delegate some of their functions to the other partner. These functions will be prescribed in regulations. In the case of the NHS and social care boundary, the effect of these subsections is to

  • enable NHS commissioning bodies (Health Authorities and Primary Care Trusts) to delegate their commissioning functions to social services and social services to delegate their commissioning functions to Health Authorities and Primary Care Trusts. This allows the creation of lead commissioner arrangements; and

  • enable NHS trusts (and Primary Care Trusts with a provider role) to delegate their service provider functions to social services and vice versa, thus creating integrated provider arrangements.

190. Subsections (3) and (4) allow the Secretary of State to set out detailed provisions regarding the operational flexibilities in regulations. These provisions may include the circumstances in which the operational flexibilities can be used (for example, which client groups or types of services can be subject to the arrangements) and which health or local authority functions can be subject to the new arrangements. The regulations may also set out how the new arrangements should be managed. This is provided for in more detail in subsection (4).

191. It is intended that use of the new arrangements will be subject, initially, to approval by the Secretary of State. Regulations may set out what criteria must be met in order for the operational flexibilities to be used: for example, who should be consulted on proposals and to what timescale; in what circumstances approval could be refused or withdrawn; and what the arrangements might be for varying the terms of the approval (for example, if local partners wish to extend the range of services to be covered by the arrangement or increase or reduce the size of a pooled budget).

192. Subsection (5) makes clear that, where a NHS body or local authority delegates its functions under the arrangements in this section, that body will remain liable for the exercise of those functions. It also provides that the provisions do not affect local authorities' powers or duties to charge for services.

Clause 25: Joint consultative committees

193. Joint Consultative Committees (JCCs) were established by section 22(2) of the NHS Act 1977. Membership of a JCC comprises representatives of the local Health Authority and their associated local authorities. Voluntary sector organisations from the area covered by the JCC are entitled to three seats on the JCC. Such arrangements are no longer necessary in the light of the new provisions for consultation set out in clauses 21 to 24. Clause 25 therefore removes the statutory requirement for JCCs from section 22 of the 1977 Act. The intention is that this provision will be brought into effect on 31 March 2000.

Clauses 26 to 31: Control of prices of medicines and profits

194. Pharmaceutical companies' profits from the sale of branded prescription medicines to the NHS are at present controlled by the Pharmaceutical Price Regulation Scheme (PPRS). The current PPRS is a voluntary, non-statutory agreement between the Government, represented by the Department of Health, and the industry represented by the Association of the British Pharmaceutical Industry (ABPI). It has operated in various forms since 1957. The current agreement commenced on 1st October 1993 and will continue until one side gives six months notice. Not all companies comply fully with the current scheme. Negotiations are taking place between the Government and ABPI with the objective of agreeing a successor agreement.

195. Section 57 of the 1977 Act enables the Secretary of State by order to control maximum prices for medical supplies. The provision does not provide power to regulate profits. Accordingly it cannot be used to ensure compliance by companies with all elements of the current PPRS or a similar successor scheme. In addition, breach of any Order which sets a maximum price or change thereto is a criminal offence.

196. Branded medicines are specialised products, the development of which incurs considerable research and development costs. The products have limited inter-changeability in many circumstances, and new medicines are subject to patent protection. This gives companies a period of market exclusivity. In this context, the Government is taking powers to ensure that prices are fair and reasonable to the NHS and to companies.

197. Clause 26 enables the Secretary of State, after making a scheme with the industry body (in practice the ABPI), to make regulations or issue directions to secure compliance with certain key elements of that scheme. This scheme (with additions or modifications agreed in individual cases) would apply only to those companies who consent (subsection (2)). Subsection (3) read with clause 31 gives the Secretary of State power by regulations or direction to require any manufacturer or supplier to record and keep information, and to provide information to the Secretary of State.

198. Clause 26(4) read with clause 31 enables the Secretary of State by regulations or directions to prohibit any manufacturer or supplier to whom the scheme applies from increasing the prices of medicines provided to the health service without the Secretary of State's approval and, where this is breached, provides for payment of any excesses representing the increase to the Secretary of State within a specified period.

199. In addition to powers to secure compliance with a voluntary scheme, the Bill provides powers to control maximum prices of health service medicines in other circumstances and to provide for a statutory scheme.

200. Clause 27 read with clause 31 provides for the Secretary of State, after consultation with the industry body, by regulations or direction, to limit any price which may be charged by any manufacturer or supplier and for payment of the excess to the Secretary of State within a specified period. This clause replaces section 57 of the NHS Act 1977 with respect to controlling the maximum price of health service medicines. Clause 31(5) therefore provides that section 57 shall cease to have effect in relation to health service medicines but this does not affect any other powers of the Secretary of State to control profits or prices.

201. Clause 28 read with clause 31 enables the Secretary of State, after consultation with the industry body, by regulations or direction to make a statutory scheme for the purpose of limiting prices or profits of manufacturers or suppliers of health service medicines. Clause 28(3) provides that such a scheme may in particular require any manufacturer or supplier to whom it applies to record and keep information and provide information to the Secretary of State. Clause 28(5) provides for payment to the Secretary of State of profits in excess of the limits determined under the scheme. Clause 28(6) enables the Secretary of State to prohibit any manufacturer to whom the scheme applies from increasing prices without his approval and to require a sum representing the amount of that excess to be paid to him.

202. Clause 29 read with clause 31 gives the Secretary of State power after consultation with the industry body to make supplementary regulations or directions enabling or facilitating the introduction of a statutory scheme.

203. Clause 30 provides for enforcement. Clause 30(1) enables the Secretary of State to make regulations providing for the payment of penalties by a person who contravenes any provision of regulations or directions made under sections 26 to 29. Clause 30(2) provides that the maximum single penalty for which provision can be made is £100,000 and the maximum daily penalty is £10,000. Clause 30(3) provides that amounts payable to the Secretary of State in respect of excessive prices can be increased by up to 50%. Clause 30(6) provides for the maxima set out in clause 30(2) to be increased by order. Clause 30(4) enables the Secretary of State to provide for interest at a rate specified or referred to in the regulations. Sums payable to the Secretary of State are recoverable through the civil courts.

204. Clause 31 deals with supplementary matters. In particular clause 31(1) provides how the powers in sections 26(2)(a), (3) to (5) and 27 to 29 may be exercised, namely by regulations or, in the case of a particular manufacturer or supplier, by directions, and that regulations may give power to give directions in such particular cases. Clause 31 provides that prices and profits may be limited only to those which would be fair and reasonable in all the circumstances.

Clause 32: Evasion of charges etc.

205. The Government published a strategy document entitled Countering Fraud in the NHS in December 1998 upon which the provisions in the Bill are based.

206. Clause 32 creates a criminal offence of doing certain things with a view to the evasion or reduction of an NHS charge (such as a prescription charge or dental charge) or obtaining a payment or advantage (such as an NHS spectacle voucher, a free NHS sight test, or a certificate of help with NHS charges under the NHS low income scheme). The acts which will give rise to criminal liability are:

  • knowingly making a false statement or representation (or arranging for another person to do so); and

  • tendering a document or information which the person doing so knows to be false in a material particular (or arranging for another person to do so).

207. Such behaviour is already a criminal offence under section 15(1) of the Theft Act 1968, but, to date, no prosecutions relating to the evasion of NHS charges have been brought under that provision. The reason for this appears to be the generally small amounts of money involved compared to the likely cost of such a prosecution. The costs of a prosecution under the Theft Act tend to be high given that offences under that Act can be prosecuted "either way", meaning that an accused can opt for trial either in the Crown Court (a jury trial) or the Magistrates Court. The former is more costly and is the option that defendants would be more likely to choose.

208. The new offence will be a summary offence only and will be heard in the Magistrates Court. Where a prosecution is brought by the Secretary of State, subsection (4) provides that any person authorised by the Secretary of State may conduct proceedings without being legally qualified. It is anticipated that the costs of such prosecutions will be much lower than under the existing Theft Act provision, with a consequent increase in the likelihood of prosecution, and thereby in the deterrent effect of the provisions.

Clause 33: Disqualification etc. of Part II practitioners

209. This clause substitutes new sections 46, 46A, 46B, 46C and 47 in place of sections 46 and 47 of the 1977 Act as amended by the National Health Service (Amendment) Act 1995. It gives a new power to the NHS Tribunal to disqualify practitioners in the family health services who have been engaged in fraudulent activity which causes or risks detriment to the NHS.

210. The NHS Tribunal is an independent statutory body with strictly defined duties and powers. Schedule 9 to the 1977 Act sets out the constitution of the Tribunal. Detailed provisions concerning the procedure for Tribunal inquiries are set out in the National Health Service (Service Committees and Tribunal) Regulations 1992 (S.I. 1992/664) (as amended).

211. The Tribunal's present purpose (described as "efficiency cases" in the new section 46A(3)(a)) is to protect NHS family health services by removing, where necessary, practitioners who prejudice their efficiency. The Tribunal receives representations, usually from Health Authorities, that independent practitioners providing general medical services, general dental services, general ophthalmic services, or pharmaceutical services should be removed from the appropriate Health Authority list. These independent practitioners have to be on a health authority list to provide such services in that area.

212. The Report of an Efficiency Scrutiny on Prescription Fraud, published in June 1997, recommended that Health Authorities should have discretion to refuse to enter into arrangements with practitioners found to be guilty of serious financial irregularity. This clause enables Health Authorities to make representations about fraudulent practitioners to the NHS Tribunal and extends the Tribunal's powers to deal with such cases.

213. New section 46 gives the NHS Tribunal new powers (described as "fraud cases" in the new section 46A(3)(b)) to inquire into cases where it is alleged that practitioners have acted fraudulently in a way detrimental to any NHS service and to impose a sanction where it finds that such an irregularity has occurred (new section 46B(2)).

214. New section 46B sets out for both efficiency and fraud cases the sanctions the Tribunal currently has in efficiency cases:

  • to disqualify him/her from the list or lists in respect of which the representations have been made;

  • to disqualify him/her from the corresponding lists of other Health Authorities in England and Wales;

  • to make a declaration that the disqualified practitioner should not be engaged in any capacity connected with the provision of general medical services, general dental services, general ophthalmic services or pharmaceutical services.

215. In fraud cases, representations also may be made to the Tribunal in respect of a practitioner who is seeking to be added to a Health Authority's list, as well as a practitioner already on such a list (new section 46(2)(b)).

216. New section 46C contains a new power enabling the Tribunal to make a conditional disqualification in efficiency cases or fraud cases. It can make an order for disqualification which does not come into effect unless the practitioner breaches conditions which are also specified by the Tribunal. Where necessary the Tribunal may vary the terms of service of the practitioner and confer functions on the Health Authority to give effect to the conditions.

217. Under the new section 47 the Tribunal may review where it considers appropriate any declaration or disqualification, including the conditions attached to a conditional disqualification. It may also review them at the request of the disqualified practitioner or review conditions attached to a conditional disqualification at the request of a Health Authority. It can then remove a disqualification, make it conditional, or in the case of a conditional disqualification, vary the conditions (e.g., where circumstances have changed) or make it unconditional (e.g., where the conditions have been breached).

Clause 34: High security psychiatric services

218. This clause enables hospitals providing high security psychiatric services to be run by NHS trusts. The aim is to address the problems of isolation of the special hospitals by allowing greater integration of secure provision.

219. High security psychiatric services for patients detained under the Mental Health Act 1983 are currently provided by three special hospitals (Ashworth, Broadmoor and Rampton) which are established as Special Health Authorities to perform functions under section 4 of the 1977 Act. Hospitals managed by NHS trusts cannot provide section 4 services because the functions of the managers of the hospital under the Mental Health Act 1983, which in the case of a special hospital means the Secretary of State, cannot be delegated to an NHS trust.

220. Subsection (1) of clause 34 replaces the duty of the Secretary of State to provide and maintain special hospitals with a general duty to provide high security psychiatric services for the persons referred to in this subsection. This will enable such services to be provided by other hospitals as well as by the existing special hospitals. High security psychiatric services are to be provided in hospitals, or buildings within a hospital site, which are separate from other hospital facilities and which are not used for the provision of other hospital services.

221. The Secretary of State intends only to commission high security psychiatric services from the existing special hospitals and NHS trusts that are approved by him. Should the function of commissioning high security psychiatric services be delegated to Health Authorities in the future, such delegation would be by regulations.

222. Subsection (3) of clause 34 provides for the Secretary of State to approve NHS trusts for the purpose of providing high security psychiatric services, and prevents them from entering into contracts for provision of high security psychiatric services unless they have been approved for this purpose.

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Prepared: 2 february 1999