Select Committee on Delegated Powers and Deregulation Seventh Report

Clause by clause commentary



49.  Clause 1 contains no delegated powers. It simply repeals the provisions in the 1990 Act about GP fund-holding. The transitional arrangements will be made by orders under clause 49, and in general these will be subject to negative procedure. Orders which contain only provision about transfer of property, rights and liabilities, will be statutory instruments not subject to any Parliamentary procedure. This approach is in line with the provisions made during other changes to the way in which the health service is run, for example the abolition of Regional and District Health Authorities in the Health Authorities Act 1995. The transitional provisions will be detailed and 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, and any provision for those that are to remain with the former fund-holders.


50.  Clause 2 inserts sections 16A and 16B into the National Health Service Act 1977, which contain three delegated powers. The clause also gives effect to a number of delegated powers contained within Schedule 1, which inserts Schedule 5A into the 1977 Act.

51.  Section 16A(2) allows the Secretary of State to establish Primary Care Trusts by order. These are new NHS bodies that will exercise functions delegated to them by Health Authorities, and will in some cases take on the provision of health care services currently provided by NHS trusts. There will be a separate order for each Primary Care Trust, and the Bill provides that they will be made as statutory instruments, mirroring the approach taken for Health Authorities and NHS trusts, set out in section 8 of the 1977 Act and section 5 of the 1990 Act respectively. The Secretary of State will have discretion as to whether to establish a Primary Care Trust. It is not proposed that Primary Care Trusts will cover the entire country from commencement of the Bill provisions relating to Trusts. Individual Primary Care Trusts will be established at various different times, as thought appropriate in the light of local circumstances.

52.  Paragraphs 1 to 4 of the new Schedule 5A to the 1977 Act, inserted by Schedule 1 to the Bill, set out the matters that must or may be dealt with in such an order. The order will specify the area for which the Trust is established, and limitations on the functions it may exercise. It will also set out the name of the Trust and the date it will become operational. Although there will be a degree of commonality between orders, the exact provisions which they will contain may vary according to local circumstances and may need to be altered from time to time.

53.  Although the functions of Primary Care Trusts will be largely set out in directions (see clause 7), it is proposed that each order will set out whether the Trust is able to provide services itself, or is simply able to meet its responsibilities by arranging for another person or body to provide the necessary services (eg an NHS trust). The distinction must be set out in detail, with such modifications or exceptions as are appropriate, either generally, or in an individual case. To provide for such matters on the face of the Bill would involve a great deal of detailed provision, and may possibly impose unnecessary constraints on the activities of Primary Care Trusts, which could then only be removed by primary legislation. In addition, as well as being able to detail the particular restrictions which apply to each Primary Care Trust, the Department requires a power to lift a restriction on the provision of services where this becomes appropriate in an individual case. Other new limitations may need to be imposed, or existing ones modified. The Department considers that these factors all point to such matters being dealt with in the establishment order, rather than in primary legislation.

54.  As for the geographical areas of Primary Care Trusts, these will all be different and will be specifically tailored to what is considered appropriate for the individual case. It may be necessary to alter the area of a Primary Care Trust from time to time to align their boundaries with future changes to Health Authority or local authority boundaries, or to reflect future local re-configurations of NHS services. The Department therefore considers it inappropriate to set out Primary Care Trust areas in primary legislation.

55.  Similarly, the establishment order will contain provisions for the "preparatory period" of each Primary Care Trust. These provisions will concern matters of detail that the Department does not consider appropriate for primary legislation.

56.  The orders establishing Primary Care Trusts will be statutory instruments, but will not be subject to any Parliamentary procedure. The Department considers that it would not be practical for Parliament to scrutinise each and every order. As a statutory instrument each order will however be subject to scrutiny by the Joint Committee on Statutory Instruments. The same procedure applies to the orders establishing NHS trusts - see section 5 and paragraph 1(2) of Schedule 2 to the 1990 Act.

57.  Section 16A(5) enables the Secretary of State to make regulations containing the consultation requirements that must be complied with before a PCT order is made. Comparable arrangements for orders establishing NHS trusts are set out in section 5(2) of the 1990 Act. The regulations will need to deal with such matters as who must conduct the consultation, who must be consulted, and the details of the procedure which must be followed. The regulations will be subject to negative resolution procedures.

58.  Regulations avoid placing a large amount of procedural and administrative detail on the face of the Bill. They allow flexibility for the consultation procedures to develop and change over time. They also reflect the fact that different bodies may need to be consulted for different Primary Care Trusts, depending on the functions it is proposed they exercise.

59.  Section 16B(2) enables the Secretary of State to make regulations about the joint exercise of functions with another NHS body, or exercise of functions on the Primary Care Trust's behalf. The provisions are similar to those made for Health Authorities in section 16 of the 1977 Act. Such regulations will enable Primary Care Trusts to enter into "agency" arrangements under which another Primary Care Trust may perform its functions if that is the most efficient or convenient way for the function to be exercised, without removing the original Trust's ultimate responsibility for such exercise. In addition they will enable a Primary Care Trust to make appropriate arrangements for the internal delegation of functions to its committees or officers. The regulations may therefore deal with matters of administrative detail that would not be appropriate for primary legislation. Furthermore, these regulations provide flexibility for the provisions to change as Primary Care Trusts develop. As with those made under section 16 they will be subject to negative resolution procedure.

60.  Subsection (1) provides that the regulations under section 16B may provide for functions under the Bill, the 1977 Act, and the 1990 Act, to be exercisable on behalf of a Primary Care Trust. There may however be additional statutory functions for which it may be desirable to make similar provision. Subsection (1) therefore provides that the Secretary of State may prescribe in regulations the other statutory functions to which section 16B may apply.

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