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

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Clause 35: Provision of information by Registrar General

223. The Registrar General has a duty to collect information relating to births and deaths under the Births and Deaths Registration Act 1953. Each week registrars supply the Registrar General with details of all the births and deaths registered during the preceding week. He also receives data about births and deaths outside the UK under various statutory provisions. These are used to update the NHS Central Register.

224. The main function of the NHS Central Register is to support the work of Health Authorities in England and Wales by maintaining a central record of all patients registered for NHS purposes. Primarily it assists in the transfer of patient case notes between GPs, by informing Health Authorities of patients moving out of their area, and supports the maintenance of accurate GP lists by informing Health Authorities of deaths, emigrations and enlistment in the Forces. It holds a basic set of data on registered patients (name, date of birth, sex, NHS number and Health Authority registration).

225. The above arrangements for the weekly transmission of data collected by registrars to the NHS Central Register were introduced at the beginning of the Second World War. The arrangements in respect of certain births and deaths outside the UK were introduced at about the same time. There is no specific power to provide any of this information to the Secretary of State for Health.

226. The purpose of this clause is to amend the 1977 Act to bring about the formal, legal, regularisation of the supply of registration data to the Secretary of State for Health for health purposes only.


Clause 36: Repeal of law about fund-holding practices

227. Sections 87A to 87C of the 1978 Act (inserted by the 1990 Act) provided for the establishment of fund-holding practices in Scotland (see the commentary on clause 1 for fuller background on fund-holding). As set out in the White Paper Designed to Care, GP fund-holding in Scotland will be abolished and Local Healthcare Co-operatives will be set up. These will be voluntary networks of GPs and other primary care professionals working together to plan and provide primary and community health services and provide support for general practice. Local Health Care Co-operatives will be established from April 1999 as part of the management structure of primary care NHS trusts (see clauses 37 to 40) and will draw their powers and functions from these trusts. They do not therefore require separate legislative provision. (For the purposes of these Explanatory Notes only, in order to avoid confusion with the Primary Care Trusts being introduced in England and Wales, these bodies are referred to as "primary care NHS trusts". In everyday usage they will be called "Primary Care Trusts", in accordance with the terminology employed in Designed to Care.)

228. The repeal of sections 87A to 87C by clause 36 will abolish the fund-holding system. The transitional arrangements for winding up the fund-holding scheme will be made under the powers conferred by clause 49. The transitional provisions will cover arrangements for closing the fund-holding accounts of residual fund-holders; the transfer of those assets, rights and liabilities that need to be transferred to Health Boards or primary care NHS trusts; and any provision for those that are to remain with the former fund-holders.

Clauses 37 to 40: NHS trusts

229. These clauses enable the establishment of primary care NHS trusts in Scotland which will bring together community health services, primary care and mental health within a single organisation. They also provide NHS trusts with greater powers in dealing with their estates. This is intended to improve integration and co-ordination of primary and community health services and the provision of organisational support for GPs and other primary care providers. Through the establishment of Local Health Care Co-operatives (see commentary on clause 36) the new organisations will also enable GPs and other primary care staff to become involved in the development and management of services. The new organisations will be governed by the existing legislative provisions relating to NHS trusts (as amended by the Bill). In general there will be one primary care NHS trust in each Health Board area.

230. Clause 37 mirrors clause 8, achieving the same result for Scotland as clause 8 does for England and Wales regarding the establishment of NHS trusts (see the commentary on clause 8 for background detail).

231. Subsection (1) provides NHS trusts with new powers in managing their property, and allows the Secretary of State for Scotland to establish NHS trusts to provide goods and services for the purpose of the health service. In addition, the Secretary of State will be able to confer, in an NHS trust's establishment order, a duty to provide particular goods or services, at or from particular hospitals or facilities. This includes responsibility for services under Part II of the 1978 Act. These Part II services, also known as family health services, are: general medical services; general dental services; general pharmaceutical services; and general ophthalmic services. Primary care NHS trusts will be able take on the responsibility for a range of functions currently carried out by Health Boards including: making arrangements with suitably qualified Part II practitioners to supply services in their area; ensuring that patients have access to family health services; associated functions relating to the remuneration and discipline of practitioners and the development of primary care services. The intention is that primary care NHS trusts with responsibility for these functions, will be able to develop community and primary care health services in an integrated way.

232. Although it is intended to delegate to primary care NHS trusts the day to day operational functions relating to Part II services, Health Boards will continue to have a responsibility for the overall planning of primary care services. This will be achieved, as now, through Health Boards exercising on behalf of the Secretary of State the duty in section 18 of the 1978 Act to secure the provision of Part II services.

233. Clause 38 inserts a new section 12AA in the 1978 Act which provides for the delegation of Part II services, currently the responsibility of Health Boards, to NHS trusts. For each Board, functions will be delegated to the NHS trust designated by direction of the Secretary of State. This will be the relevant primary care NHS trust established to provide services in the Board's geographic area. In most cases there will be only one primary care NHS trust in each Health Board area, but where there is more than one (as is proposed for Argyll & Clyde and Lothian Health Boards), the Secretary of State will be able to designate which trust will have responsibility for Part II services in which particular area. Where there is no primary care NHS trust (as in Shetland, Orkney and Western Isles Health Boards), Part II services will continue to be the responsibility of the Health Board.

234. The White Paper Designed to Care signalled the intention to modify the existing arrangements for NHS trust boards as part of the new proposals. Provisions for the broad composition of NHS trust boards are set out in section 12A(3) of the 1978 Act. This provides that an NHS trust board is a body corporate with a board of directors consisting of a chairman appointed by the Secretary of State, and executive and non-executive directors. Clause 39 amends section 12A(3)(a) of the 1978 Act to provide that in future non-executive directors will be known as "trustees". Regulations made under section 12A(5) allow the Secretary of State to specify the maximum and minimum numbers of members of the trust board. The power is likely to be used to specify that an NHS trust board must have not more than 5 executive directors (who are employees of the trust) and not more than 5 non-executive trustees. In the case of NHS trusts which are teaching hospitals, however, an extra trustee will be appointed to represent the relevant university. The overall intention is to broaden the range of those who can be appointed to act as trustees.

235. The current direction-giving powers in respect of NHS trusts are conferred by paragraph 6 of Schedule 7A to the 1978 Act and relate to a limited number of very specific matters. Clause 40 replaces these powers of direction with a general power, in line with that relating to Health Boards, which enables directions to be given in relation to the full range of NHS trusts' functions. The Government intends to use this power to meet the commitment in the White Paper Designed to Care to ensure that the NHS trusts manage their estate in ways which are consistent with local strategic plans.

Clause 41: Quality of Care

236. In the White Paper Designed to Care announced the intention to amend the statutory duties of NHS trusts to make explicit their responsibility for quality of care. Under the terms of the 1978 Act, NHS Trusts have a duty to meet such financial objectives as are set by the Secretary of State. Clause 41 adds a new duty relating to the quality of health care provided to patients.

237. Under clause 41, NHS Trusts, the Island Health Boards (which have responsibility for directly managed units) and the State Hospital will be required to draw up arrangements which will enable them to monitor and improve the quality of health care for which they have responsibility. A fundamental component of those arrangements will be implementation of the clinical governance arrangements set out in the Scottish Office publication MEL(1998)75, issued in November 1998.

Clause 42: Expenditure of Health Boards

238. Section 85 of the 1978 Act currently provides for two streams of funding from the Secretary of State to Health Boards to allow them to perform their functions as required by that Act. The section draws a clear distinction between resources for functions covered by Part I of the 1978 Act (hospital and community health services) and functions under Part II of the Act. Funding for the Part II functions includes provision for the pay and expenses of GPs, dentists, pharmacists and optometrists. In particular, this includes the reimbursement of costs incurred by pharmacists (and other dispensing contractors) in dispensing prescriptions issued by GPs, known as "prescribing costs".

239. The allocations to Health Boards for Part I functions are cash limited whereas the majority of the Part II functions are funded from non-cash limited resources. With the exception of certain general medical services expenditure, it is not possible under the present section 85 of the 1978 Act to include any of the Part II functions in the cash limited stream of funding where so desired. Clause 42 inserts a new section 85AA in the 1978 Act to provide for certain Part II expenditure to be funded from within cash limited resources. This underpins the introduction of a single stream of cash limited funding to Health Boards to collectively cover expenditure on hospital and community health services and GPs' prescribing costs. This will give Boards and, in turn, primary care NHS trusts increased financial flexibility in the use of their resources.

240. The new section 85AA retains the Secretary of State's power, currently at section 85(1), to issue cash limited allocations (for "main expenditure") and to provide, as per the current section 85(2)(b), non-cash limited resources (for "general Part II expenditure") to Health Boards. Subsections (4)(a) and (b) provide for certain defined elements of Part II expenditure to be brought within cash limited allocations. Subsection (4)(d) makes the same provision for certain elements of GMS remuneration designated by the Secretary of State.

241. The new section 85AA also retains the Secretary of State's power of direction, currently at section 85(2A), on the application of sums paid to Health Boards for Part I functions, and extends that power to Part II sums.

242. Clause 42 also inserts a new section 85 into the 1978 Act, consequential on the changes described above, which retains the current funding regimes of the other health agencies listed in section 85(1).

Clauses 43 to 45: NHS trust financial provisions

243. These clauses together with paragraph 42 of Schedule 4 effect changes in the current NHS trust financial regime. The provisions reflect the same changes being made to the equivalent English and Welsh provisions, which are explained fully in the commentary on clauses 10 to 12. In summary they provide for the following:

  • NHS trusts' originating capital debt will be comprised wholly of public dividend capital - this removes interest bearing debt and the administrative arrangements for its ongoing recovery;

  • additional borrowing by NHS trusts other than from the Secretary of State will be at his direction and subject to conditions he may determine - the aim is to ensure that, in the main, NHS trusts borrow only from the Government, although there will be exceptions to this notably in the area of PFI schemes;

  • investment of temporary surpluses by NHS trusts will be at the direction of the Secretary of State - in practice this will largely be restricted to Paymaster Accounts with the effect of reducing overall Exchequer borrowing.

Clause 46: Disqualification of practitioners for fraud etc.

244. Clause 46 substitutes new sections 29, 29A, 29B, 29C, 30 and 32A to 32E in place of sections 29, 30 and 32A to 32E of the 1978 Act, as amended by the NHS (Amendment) Act 1995, mirroring changes being made to the equivalent English and Welsh provisions. 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 any NHS service, as defined in new section 29A(1).

245. The NHS Tribunal is an independent statutory body with strictly defined duties and powers. Its existing role is to decide whether the continued presence of a practitioner on the list of family health service contractors (either nationally or locally) would prejudice FHS efficiency and, where proven, to remove such practitioners from the list and, if it chooses, prevent them from being employed by other FHS practitioners. Such cases are defined as "efficiency cases" in new section 29A(3)(a). The Tribunal is also able to suspend practitioners pending inquiries in order to protect patients.

246. Practitioners must join family health service lists to offer general medical, dental, ophthalmic or pharmaceutical services and representations to the Tribunal about removal from such lists are usually made by Health Boards. Clause 46 gives effect to the recommendation in the Report of an Efficiency Scrutiny on Prescription Fraud, published in June 1997, that Health Authorities (and therefore, in Scotland, Health Boards) should have discretion to refuse to accept onto family health service lists practitioners found guilty of serious financial irregularity. The Government believe that it would be appropriate for such cases (defined as "fraud cases" at new section 29A(3)(b)) to be the subject of representations by Boards to the NHS Tribunal. There is no clear sanction for fraud under the Tribunal's current rules.

247. New section 29 gives the NHS Tribunal new powers to inquire into fraud cases where Health Board representations have been made and to impose a sanction where it finds that irregularities have occurred (new section 29B(2)).

248. New section 29B sets out, for both efficiency and fraud cases, the sanctions already available to the Tribunal in efficiency cases:

  • to disqualify the practitioner from the list(s) in respect of which representations have been made;

  • to disqualify the practitioner from the corresponding lists of other Health Boards;

  • to make a declaration that the disqualified practitioner should not be engaged in any capacity connected with provision of family health services.

249. In fraud cases the Tribunal will be able to consider within prescribed time limits representations about applicants to family health service lists as well as those already on such lists (new section 29(2)(b).

250. New section 29C contains a new power enabling the Tribunal to make a conditional disqualification in efficiency 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 practitioner's terms of service and confer functions on the Health Board to give effect to the conditions.

251. New section 30 empowers the Tribunal to 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 Board. It can then remove a disqualification, make it conditional, or in the case of conditional disqualification, vary the conditions (e.g. where circumstances have changed) or make it unconditional (e.g. where the conditions have been breached).


Clause 47 and Schedule 3: Regulation of health care and associated professions

252. Parliament has intervened in the regulation of health care professions for nearly 150 years. The purpose of professional regulation is to establish a countrywide, professionally set, independent standard of training, conduct and competence for each profession for the protection of the public and the guidance of employers. This is underpinned by personal accountability of practitioners for maintaining safe and effective practice, wherever they are employed and to include effective measures to deal with individuals whose continuing practice presents an unacceptable risk to the public or otherwise renders them unfit to be a registered member of the profession. For the most part there are separate enactments for each health care profession (doctors; dentists; nurses, midwives and health visitors; opticians; pharmacists; osteopaths; chiropractors; and the nine professions coming within the remit of the Council for Professions Supplementary to Medicine).

253. These Acts make provisions which, with very few exceptions, may only be changed by means of primary legislation, and it has hitherto not proved possible to make amendments as promptly as the professions would like. The Bill provides for a procedure that will enable the Acts to be amended and new professions to be regulated, without the need for an Act of Parliament each time.

254. Clause 47 provides for Her Majesty by Order in Council to modify the regulation of pharmacists, doctors, dentists, opticians, osteopaths, chiropractors and nurses, midwives and health visitors; and to regulate any other health care profession including those regulated on 1 July 1999 by the Professions Supplementary to Medicine Act 1960 (repealed by clause 47(4)). This would cover health care professions not already brought within statutory regulation. An order may repeal or revoke any enactment, amend it, or replace it (though a section 47(1)(a) regulatory body could not be abolished).

255. Subsection (4) makes provision for the repeal of the Professions Supplementary to Medicine Act 1960. The independent review of the Professions Supplementary to Medicine Act, which reported in July 1996, concluded that completely new legislation is needed to streamline existing arrangements. The Government broadly accepted the key recommendations of the review. It is intended that this subsection will be brought into effect when the replacement Order comes into effect.

256. The professions which come within the scope of subsection (1)(a) are those regulated by: the Pharmacy Act 1954, the Medical Act 1983, the Dentists Act 1984, the Opticians Act 1989, the Osteopaths Act 1993, the Chiropractors Act 1994 and the Nurses, Midwives and Health Visitors Act 1997. However, the scope of the order-making power is not limited to those Acts. In particular, it extends to the regulation under the Medicines Act 1968 of persons who are not pharmacists carrying on a retail pharmacy business by the Statutory Committees of the Royal Pharmaceutical Society of Great Britain and the Pharmaceutical Society of Northern Ireland.

257. It is intended that Orders will be made to enable the legislative framework to be kept up to date and take account of changing public expectations of the professions and the professions' own views about the development of their regulation. New responsibilities can be given to existing bodies or new professional regulatory bodies established to carry out new or existing regulatory responsibilities.

258. Subsection (5) gives effect to Schedule 3 to the Bill.

Schedule 3

259. Paragraph 1 of the Schedule gives examples of the matters for which provision may be made by Order. Orders may make changes to any aspect of professional regulation.

260. Paragraph 2(2) has the effect of preventing the professions referred to in subsection (1)(a) of clause 47 from being regulated by an Order being made to replace the provisions of the Professions Supplementary to Medicine Act 1960. It also prevents the amendment by Order of the Medicines Act 1968, except in respect of sections 80 to 83 and such other associated amendments to Part IV of the Act.

261. Paragraph 5 will enable functions to be conferred on Ministers of the Crown, Scottish Ministers or the National Assembly for Wales. An Order could be made, for example, enabling a Minister to pay grants to a body, or setting up bodies for different parts of the United Kingdom to deal with matters in connection with professional regulation. Any conferment of functions would be subject to paragraph 8.

262. Paragraph 7 makes it clear that an existing regulatory body, or, where there is more than one, the main one, of the health care professions referred to in subsection (1)(a) of clause 47, may not be abolished by an Order.

263. Paragraph 8 provides that, where legislation provides for certain specified functions to be exercised by a professional body, an Order may not provide for anyone other than a professional body to exercise those functions. The term "professional body" is defined in paragraph 10. These functions are: the keeping of the register; the setting of standards of education for entry to the profession; provision of guidance on standards of conduct and performance expected of the profession; and the administration of procedures relating to fitness to practice.

264. It is proposed that the 1960 Act, when repealed, will be replaced by an Order setting up a health professions council with powers to recommend the bringing of further professional groups within its remit and provide for their registration, disciplinary and health procedures, protection of common title and the linkage of remaining on the register with the demonstration of continued competence.

265. Some health care professions may not wish to be regulated by a new health professions council. For example part of a profession might not provide health care services to patients. In these cases free-standing regulatory schemes can be provided for by Order including the responsibilities referred to in paragraph 1 of the Schedule.

266. Paragraph 9 provides that before an Order can be made the Secretary of State (for Health) must consult persons representing the relevant professions. The consultation will be on the basis of the draft. He must publish the proposed Order three months before it is laid before Parliament. Draft Orders will be subject to parliamentary scrutiny under affirmative procedures (see clause 48(6)).

267. Regulation of those health professions currently regulated by Act of Parliament is a matter reserved to the UK Parliament under the Scotland Act 1998 (see Schedule 5 to the Scotland Act at Head G section G2). The regulation of any other health profession, however, is not a reserved matter. An Order could be made under section 30 of the Scotland Act to provide for the reservation of other professions. If such an Order were not made, regulation of those professions would be within the legislative competence of the Scottish Parliament. In that case, paragraph 9(3) provides that any Order under clause 47 which would regulate those professions for the whole of the UK, must be laid in draft before the Scottish Parliament as well as the UK Parliament. It must also be approved by resolution of the Scottish Parliament (under clause 48(7)) before the Secretary of State can recommend to Her Majesty that the Order be made for the United Kingdom.

268. Paragraph 11 clarifies whether certain matters are within the scope of an Order under clause 47. Paragraph 12(1) recognises that the regulation of the Pharmacy profession in Northern Ireland is already covered by separate legislation for Northern Ireland. An Order will not be able to change this legislation. Orders may, however, be made on a UK-wide basis to regulate certain aspects of retail pharmacy business relating to misconduct and offences, but paragraph 12(2) ensures that the body responsible for such regulation in Northern Ireland may not be changed by Order.

Clause 49: Supplementary and consequential provision etc.

269. This clause enables the Secretary of State to make any transitional, supplementary and consequential provisions necessary to give effect to the Bill. For example, it will be used to make amendments consequent upon the introduction of Primary Care Trusts.

270. Clauses 1 and 36 will bring the GP fund-holding system to an end in England and Wales and in Scotland respectively. It is the intention to use the provisions of clause 49 to make an order or orders setting out arrangements for the transition from GP fund-holding. The transitional provisions will cover arrangements for closing the fund-holding accounts of residual fund-holders; the transfer of those assets, rights and liabilities that need to be transferred to the Health Authority (in England and Wales) or Health Board (in Scotland); and any provision for those that are to remain with the former fund-holders.

Clause 50 and Schedules 4 and 5: Amendments and repeals

271. Clause 50 introduces Schedule 4, which makes amendments to various Acts, and Schedule 5, which sets out the various repeals made by the Bill.

272. Many of the amendments in Schedule 4 are consequent upon the provisions of the Bill relating to Primary Care Trusts. Some of the other amendments have been referred to above in the context of the clauses to which they relate. The following amendments are of particular note.

273. Paragraph 4 amends section 8 of the 1977 Act, which provides for the establishment of Health Authorities. In particular the amendment provides that Health Authorities are to "be established for" their area, rather than "act for" their area. This is to make it clearer that Health Authorities may exercise certain functions in respect of patients who are not resident or present in their area. In addition, section 8 is amended so that the Secretary of State is able to change the name of a Health Authority without changing its boundaries.

274. Paragraph 60(6) repeals the provisions in Schedule 2 to the 1990 Act which provide for the re-imbursement of NHS trusts in respect of the provision of goods and services otherwise than under NHS contract. These arrangements became known as extra-contractual referrals (or ECRs). The term extra-contractual referral is also used to describe one-off contracts that arise where an NHS trust provides care for someone which is not covered by an NHS contract with the patient's Health Authority.

275. Extra-contractual referrals are to be abolished. It is intended that from April 1999 patients will always be treated under NHS contracts. A new system of comprehensive contract coverage, to be known as Out of Area Treatments, will be established through secondary legislation.

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