Clause 30: Opticians

172.     Clause 30 amends section 23 of the Opticians Act 1989. Subsection (2) provides for appeals against decisions in 'fitness to practise' cases in respect of individuals or a body corporate, to be directed to the High Court or in Scotland, the Court of Session. For individual appellants the relevant court is dependent on the address which the appellant has as his registered address with the regulatory body. For a body corporate the relevant court is dependent on the registered office address.

173.     New section (1B) provides for a practitioner or body corporate to appeal against decisions to remove registration on grounds of fraud or error to a county court, or in Scotland to the sheriff.

174.     Subsection (2) also sets out the appeal court's order making powers.

Clause 31: Osteopaths

175.     Clause 31 amends the Osteopaths Act 1993. Subsection (2) provides for appeals on decisions to remove registration on grounds of fraud or error to be directed to a county court, or in Scotland, to the sheriff. This subsection also provides that time for serving notice of appeal runs from 28 days after notification of the order to remove was "served". Subsection (2) also sets out the appeal court's order making powers.

176.     Subsections (3) and (4) deal with consequential amendments to sections 22 and 23 of the Osteopaths Act.

177.     Subsection (5) amends section 29 of the Osteopaths Act to provide that appeals against refusal of registration on more general grounds are to be to a county court or in Scotland, the sheriff. This removes the previous right of the appellant to choose whether to appeal to a county court or the High Court. This subsection also extends the basis of appeals to issues of fact as well as issues of law and sets out the appeal court's order making powers.

178.     Subsection (6) provides for appeals against decisions in 'fitness to practise' cases to be directed to the High Court or Court of Session in Scotland. The relevant court is dependent on the address which the appellant has (or would have if he was registered) as his registered address with the regulatory body. If an appellant's registered address is outside the United Kingdom, the appeal will be to the High Court in England and Wales.

Clause 32: Chiropractors

179.     Clause 32 amends the Chiropractors Act 1994. Subsection (2) provides for appeals on decisions to remove registration on grounds of fraud or error to be directed to a county court, or in Scotland, to the sheriff. This subsection also provides that time for serving notice of

appeal runs from 28 days after notification of the order to remove was "served". Subsection (2) also sets out the appeal court's order making powers.

180.     Subsections (3) and (4) deal with consequential amendments to sections 22 and 23 of the Chiropractors Act.

181.     Subsection (5) amends section 29 of the Chiropractors Act to provide that appeals against refusal of registration on more general grounds are to be to a county court or in Scotland, the sheriff. This removes the previous right of the appellant to choose whether to appeal to a county court or the High Court. This subsection also extends the basis of appeals to issues of fact as well as issues of law and sets out the appeal court's order making powers.

182.     Subsection (6) provides for appeals against decisions in 'fitness to practise' cases to be directed to the High Court or Court of Session in Scotland. The relevant court is dependent on the address which the appellant has (or would have if he was registered) as his registered address with the regulatory body. If an appellant's registered address is outside the United Kingdom, the appeal will be to the High Court in England and Wales.

The pharmacy profession

Clause 33: Regulation of the profession of pharmacy

183.     Clause 33 amends Schedule 3 of the Health Act 1999, and by doing so extends the powers in section 60 of that Act for Her Majesty by Order in Council to modify the regulation of the health professions to bring their scope in respect of the pharmacy profession more into line with that for other professions.

184.     Orders under section 60 may be used to modify the statutory regulation of health care professions and to regulate other health care professions which are not yet subject to such regulation. Subject to certain limitations, an Order may repeal or revoke any enactment, amend it, or replace it. One such limitation relates to the Medicines Act 1968, which is one of two main Acts (the other being the Pharmacy Act 1954) which contain provisions relevant to the regulation of the pharmacy profession. At present, an Order may (except for certain associated purposes) only amend sections 80 to 83 of the Medicines Act. Those sections deal with the disciplinary action which may be taken against bodies corporate and certain other persons lawfully conducting retail pharmacy businesses.

185.     This clause will permit an Order to amend any other provision of the Medicines Act insofar as it relates to the regulation of the profession of pharmacy in Great Britain. This might, for example, include section 79 of the Medicines Act which restricts the use of "pharmacist" and various other titles to people with particular qualifications. Equivalent provisions for other professions are already within the scope of the order making power.

Part 3: Miscellaneous

Clause 34: Amendments of health service legislation in connection with consolidation

186.     Clause 34 enables the Secretary of State to amend legislation relating to the health service in England and Wales by order if he thinks that such amendment will assist the consolidation of that legislation. Under subsection (2) amendments made under the Order will form part of consolidating legislation. Clause 36(3) provides for such orders to be subject to affirmative resolution.

Clause 36: Regulations and orders

187.     Clause 36 makes provision about the making of orders, regulations and directions under the Act. It provides that all orders and regulations (except those under clause 20(5)) shall be exercised by statutory instrument, sets out the parliamentary procedures relating to statutory instruments and how the powers in question may be exercised. It further provides that except where otherwise stated, directions are to be given by instrument in writing.

Clause 37: Supplementary and consequential provision etc

188.     Clause 37(1) and (2) enable the Secretary of State by regulations to make such supplementary, incidental or consequential provision, or such transitory, transitional or saving provision, as he considers necessary to give full effect to the Act. This includes power to amend or repeal any enactment, instrument or document. This would enable regulations to be made to, for instance, ensure a smooth transition from Health Authorities to Strategic Health Authorities in England.

189.     Subsection (3) provides that such regulations may also be made by the National Assembly for Wales in respect of devolved matters.

Clause 38: Wales

190.     Clause 38 provides that in the National Assembly for Wales (Transfer of Functions) Order 1999 any reference to an Act amended by this Act is to be treated as a reference to that Act as amended.

Clause 39: Financial Provisions

191.     Clause 39 provides for expenditure relating to the Act to be paid out of money provided by Parliament.

Clause 40: Short title, interpretation, commencement and extent

192.     Clause 40 gives the short title of the Act and makes provisions for commencement and extent. It provides that all sections of the Act will be brought into force by order made by statutory instrument except clauses 36 to 40 and those conferring order or regulation-making powers which will come into force on Royal Assent. Subsection (2) also contains definitions of certain terms used in the Act.

Note on drafting assumptions

193.     There are a number of points at which this Bill amends provisions of the NHS Act 1977 ("the 1977 Act") which have already been amended by the Health Act 1999 or the Health and Social Care Act 2001 ("HSC Act"). Not all of the relevant amendments, however, have yet been brought into force. For the purposes of this Bill, the following method of dealing with such amended provisions has been adopted:

194.     Where it is known that the amendment will not have been brought into force before this Bill receives Royal Assent, then this Bill amends the amending provision. This applies, for example, in the case of the amendments to section 10 of the Health Act 1999 in paragraph 68 of Schedule 2 and the amendments to section 40 and Schedule 3 to the HSC Act in paragraphs 78 and 81 of Schedule 2.

195.     Where it is known that the amendment will have been brought into force before this Bill receives Royal Assent, then this Bill amends the 1977 Act as amended. This applies, for example, in the case of the amendments to section 97 of the 1977 Act (as amended by sections 1 and 2 of the HSC Act) made by clause 7 of the Bill.

196.     Where, at the time of drafting, it was not yet clear whether the amendments would have been brought into force before this Bill receives Royal Assent, then this Bill also amends the 1977 Act as amended rather than the amending provision. This applies, for example, in the case of the amendments to section 29B of the 1977 Act (as amended by section 15 of the HSC Act) made by paragraph 5 of Schedule 2 to the Bill. In these cases, where the relevant amendments have not in fact been brought into force at Royal Assent, commencement orders for the two sets of amending provisions will be arranged so that any amendments made by the earlier Act which are further amended by this Bill are brought into force before those further amendments. These further amendments should then be taken as applying to the text of the 1977 Act as it stood at the date of their commencement.

ESTIMATE OF PUBLIC SECTOR FINANCIAL EFFECTS AND PUBLIC SECTOR MANPOWER EFFECTS

197.     None of the provisions in this Bill will entail significantly increased public spending. The arrangements set out in the Bill on patient and public involvement in the NHS will necessitate some increase in expenditure. This will, however, in part serve to support a significant increase in volunteer input, and, over time this is forecast to bring about a reduction in costs. Separately, the transfer of functions and funding from Health Authorities will result in public money being channelled in different ways, but the levels of overall spending will remain unchanged. The new functions of CHI as a non-departmental public body will result in some increase in expenditure and manpower.

198.     The effect of the Bill on public service manpower will not be to increase or reduce it, but the changes in the structure of the NHS will result in some movement of manpower, principally from HAs to PCTs as the planning and commissioning of health care moves to a more local level.

Part 1 - the National Health Service

199.     The changes outlined in clauses 1 to 4 (Health Authorities and Primary Care Trusts) should release savings through reductions in bureaucracy. There will also be significant savings in management over time. These changes are likely to result in a movement of manpower, but not significant increases or decreases.

200.     The changes to Local Representative Committees outlined in clause 5 will not result in any changes in public sector financial or manpower costs.

201.     No adverse cost impact is foreseen as a direct consequence of the enabling legislation that will allow Local Health Boards to be established in clause 6. This will be reviewed by the National Assembly when passing the necessary subordinate legislation.

202.     The provisions in clauses 7 to 10 about the funding of Strategic Health Authorities, PCTs and LHBs and the expenditure of NHS bodies will not, of themselves, have any impact on either public finances or manpower. These changes in the methods of funding health service bodies are a direct result of the changes in structure outlined above.

203.     There will be some additional cost arising from the expansion of CHI's role (clauses 11 to 14). There will also be a slight increase in the wider public service manpower requirements, as CHI is a non-departmental public body.

204.     In clauses 15 to 20, the creation of Patients' Forums in each NHS trust and PCT will require some increase in public expenditure. This will be partly offset, however, by the funding allocated to CHCs and Patient Advice and Liaison Services (PALS) which totals £33 million.

205.     The provisions for joint working set out in clauses 21 and 22 will not have any financial or manpower costs.

Part 2 - Health Care Professions

206.     The creation of the Council for the Regulation of Health Care Professionals (clauses 23 to 27) will have negligible effects on manpower. There will be a small financial cost.

207.     The changes to the fitness to practise appeals procedures (clauses 28 to 32) and the extension of the Health Act 1999 section 60 powers in respect of the pharmacy profession (clause 33) will have no financial or manpower impact on the public sector.

SUMMARY OF THE REGULATORY IMPACT ASSESSMENT

208.     Of the measures within the National Health Service Reform and Health Care Professions Bill, it is expected that two will have a small impact on businesses and voluntary organisations. These are:

-     Health and well-being strategies in Wales

-     The Council for the Regulation of Health Care Professions

209.     It is difficult at this stage to quantify precisely the costs to these business, voluntary sector and charitable bodies of engagement in the development and implementation of local health and well-being strategies, as the final terms of engagement have not yet been determined. Some of the terms will be set out in National Assembly guidance after consultation, and some will be determined by partners at the local level. Costs are likely to arise from meetings and administration and the staff time, preparatory work and travel and subsistence costs associated with these activities. To some degree these costs can be off-set against the costs to these organisations of engagement in current more traditional consultation arrangements undertaken e.g. by Health Authorities on Health Improvement Programmes and local authorities on Social Care Plans.

210.     The regulation of health professions will affect the eight regulatory bodies for the health professions (see paragraph 128), and ensure that they become more accountable to the public and to the providers of health care and that their approach to regulation is justified and consistent. These measures will have a negligible cost impact on charities, voluntary organisations and businesses, including self-employed professionals. Professionals will continue to be regulated by their existing bodies but this new regulatory regime will be more transparent and accountable to the public and to the providers of health services.

211.     A full copy of the partial Regulatory Impact Assessment which accompanies the National Health Service Reform and Health Care Professions Bill and includes a more detailed analysis of the benefits and cost of the two measures above is available on the Department of Health's website: www.doh.gov.uk.

EUROPEAN CONVENTION ON HUMAN RIGHTS

212.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before second reading, about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). On 14th January, the Lord Hunt of Kings Heath made the following statement: "In my view the provisions of the National Health Service Reform and Health Care Professions Bill are compatible with the Convention rights."

213.     An identical statement was previously made by the Secretary of State for Health on 7th November 2001.

214.     In making this statement, the Minister in particular considered:

(a)     the compatibility with Article 8 (right to respect for private and family life, home and correspondence) of the powers of entry and inspection dealt with in clauses 13 and 16 and the extension of access to confidential information in clause 13. These powers are felt to be proportionate and necessary for the protection of health and are, in any event, subject to regulations which can be struck down if not compatible;

(b)     the compatibility with Article 6 (Right to a fair trial) of the power in clause 27 for the Council for the Regulation of Health Care Professionals to refer a fitness to practise decision by a regulatory body to the High Court where this seems to it to be desirable for the protection of the public. These powers are only for use in extreme cases on grounds of public protection and are, in any event, subject to court procedures. They are therefore believed to be compatible.

COMMENCEMENT

215.     Clause 40 makes standard provision for commencement. Some technical provisions of the Act and the powers to make regulations under it will come into force on Royal Assent. The substantive provisions of the Act will come into force on such a day, or days, as the relevant authority may determine.

ANNEX A

Outline of the existing law relating to the NHS

216.     The following paragraphs provide a brief description of the current legislative framework for the NHS. The legislative framework for the NHS in England and Wales is mostly set out in the National Health Service Act 1977 ("the 1977 Act"). This has been amended quite substantially by various enactments, notably by the National Health Service and Community Care Act 1990 ("the 1990 Act"), the Health Authorities Act 1995 ("the 1995 Act"), the National Health Service (Primary Care) Act 1997 ("the Primary Care Act"), the Health Act 1999 ("the Health Act") and the Health and Social Care Act 2001 ("the HSC Act").

217.     Under the 1977 Act, the NHS is essentially split into two different systems. There is first of all the system which consists primarily in the provision of health care in hospitals. It also covers those services described as "community health services", for example, the services provided by midwives or health visitors in clinics or individuals' homes, and the provision of medical services to pupils in state schools. This is the subject of Part 1 of the 1977 Act. The responsibility for securing the provision of these services to patients rests with the Secretary of State, although under his powers in section 16C (formerly section 13) of the 1977 Act he has delegated most of his functions to Health Authorities ("HAs"). HAs enter into arrangements with bodies known as NHS trusts for the provision by the trusts of hospital and community health services.

218.     The other main part of the NHS structure is what might be described as "the NHS in the High Street". This is dealt with under Part 2 of the 1977 Act. The professionals in question are general practitioners ("GPs")(i.e. family doctors), general dental practitioners ("GDPs"), ophthalmic opticians and ophthalmic medical practitioners, and chemists. They respectively provide what are termed general medical services (see section 29ff) ("GMS"), general dental services (see section 35ff) ("GDS"), general ophthalmic services (see section 38-40) ("GOS") and pharmaceutical services (see sections 41-43) ("PhS"). The remainder of Part 2 contains other provisions relevant to the provision of these High Street services, which are sometimes referred to as "family health services".

219.     The 1990 Act, the Primary Care Act, the Health Act and the HSC Act introduced a number of changes to these systems of health care although most of those in the HSC Act are not yet in force. Broadly speaking, these changes were as follows:

a)     the 1990 Act introduced what is known as the internal market; by creating a divide between the planning and purchase of Part 1 services, on the one hand, and the provision of those services, on the other;

b)     the Primary Care Act in effect enabled what were previously Part 2 services to be delivered, not under Part 2 but under a more flexible system within Part 1

of the Act - these changes applied only to doctors and dentists, and not the other family health services practitioners; and

c)     the Health Act made a number of changes, but in particular provided for the abolition of GP fund-holding (introduced by the 1990 Act), the establishment of Primary Care Trusts (a new type of NHS body to both commission and provide NHS care) and new arrangements to improve the quality of NHS services and co-operation between NHS bodies and local authorities;

d)     the HSC Act also made a number of different changes, but in particular provided for changes to the funding of NHS bodies, Local Authority scrutiny of NHS provision, changes to the system for filling vacancies for GPs, additional lists for Part 2 practitioners, the abolition of the NHS tribunal, the provision of "local pharmaceutical services" (similar to the Primary Care Act arrangements for PMS/PDS), and the establishment of "Care Trusts". As at

1st October 2001, none of these provisions, except for some of those relating to the funding of NHS bodies, have been brought into force.

220.     The two systems, Part 1 and Part 2, are very different. It should be noted that despite the changes introduced by the Primary Care Act the provision of Part 1 services is distinct from the provision of services under Part 2. The changes proposed in this Bill will not alter this divide.

221.     What follows is a more detailed description of the two systems.

Part 1 system: hospital and community health services

222.     The system provided for under Part 1 of the 1977 Act (and Part 1 of the 1990 Act - discussed below) is the system under which all of the NHS, apart from family health services, is provided, including its hospitals. The core duty is laid upon the Secretary of State (1977 Act, section 1) in extremely broad terms, supplemented by the provisions of sections 2 to 5. It is these provisions which define Secretary of State's overarching responsibilities to provide health services under a comprehensive health service. They are broad powers and thus frequently the legislative source for functions which have in practice, been delegated to health service bodies such as Health Authorities.

223.     Section 3 sets out those general services which it is the Secretary of State's duty to provide to such extent as he considers necessary to meet all reasonable requirements. Most of the services which may described as hospital and community health services are included under this section.

224.     Section 5(1) and (1A) impose duties on the Secretary of State to provide medical and dental services to state school pupils. This is the basis for what is described as the school nursing service.

225.     Section 2 confers wide ranging powers for the Secretary of State to provide such services as are appropriate to discharge any duty imposed on him by the Act (including his general duty under section 1), and to do any other thing whatsoever which is calculated to facilitate, or is conducive or incidental to, the discharge of such a duty. Further miscellaneous powers relating to specific matters are conferred by section 5(2) (for example, the conduct and assistance of research and development (section 5(2)(d)).

226.     Sections 8 to 18 of the 1977 Act go on to provide for the administration of the NHS. These sections have been substantially amended since 1977, most recently by the Health Act. As amended, they provide for the setting up of HAs (section 8), Special Health Authorities ("SHAs") (section 11) and Primary Care Trusts ("PCTs") (section 16A, as inserted by section 2 of the Health Act). HAs, SHAs and PCTs are independent statutory bodies, although their membership is determined in accordance with regulations (and in the case of SHAs, the establishment order) and some of the appointments to their membership are made by the Secretary of State. HAs and PCTs are established for territorial purposes. Each HA is established for such area of England and Wales as set out in the establishment order made under section 8; the entire area of England and Wales is covered by HAs. Each PCT is established for the area specified in its establishment order under section 16A(3). Each PCT area is wholly contained within the area of a HA, but there is no requirement for total coverage. Some areas of England are covered by PCTs and the rest should be by April 2002; There are no PCTs in Wales, as the relevant provisions of the Health Act have never been brought into force in relation to Wales. SHAs are established for specific functional purposes - they are established for the purpose of performing any functions of the Secretary of State which he may direct them to perform under section 16C.

227.     Legislation allows health service functions to be exercised by health service bodies in one of two ways. Functions are either directly conferred by the primary legislation or the person on whom they are directly conferred (either Secretary of State or a health service body) is permitted to delegate them to another health service body.

228.     The Secretary of State may direct a HA or SHA to exercise his functions. He may also direct a SHA to exercise the functions of a HA or a PCT. He thus has no power to direct health service bodies other than HAs or SHAs to exercise his functions (section 16D, formerly 13, of the 1977 Act). A HA may direct a PCT established in their area to exercise its delegable functions (section 17A, inserted by section 12 to the Health Act: section 17A(3) lists the excepted or non-delegable functions). The Secretary of State may direct HAs that delegable HA functions are or are not to be exercisable by PCTs, or are to be exercisable by PCTs to any specified extent (section 17A(4)). The Secretary of State may also give directions to a HA, SHA or PCT about the exercise of any of their functions (section 17). A

HA may also give directions to a PCT about the exercise of any functions which the HA has directed the PCT to exercise (section 17B). These directions may be given by regulations or by instrument in writing (section 18). There is very little further prescription in primary legislation as to what the Secretary of State must do or how he must do it in relation to the provision of that part of the NHS which is not concerned with family health services. It will be seen that this way of providing services is a great deal more flexible than the regulatory system envisaged under Part 2. There are probably historical reasons for this, but those reasons are no longer relevant.

229.     HAs may, in accordance with regulations and any relevant directions, delegate their functions (whether Part 1 or Part 2) to each other, or to committees or others: see section 16 of the 1977 Act (as substituted by paragraph 9 of Schedule 4 to the Health Act). Similar provision is made for PCTs: see section 16B of the 1977 Act (as inserted by section 2(1) of the Health Act). Regulations have been made under both provisions.

230.     HAs and SHAs are funded under the provisions of section 97, as substituted by paragraph 47 of Schedule 1 to the 1995 Act and amended by section 36 of the Primary Care Act, by sections 4 and 8 of the Health Act and prospectively by sections 1 and 2 of the HSC Act. HAs are paid money in each year under section 97(1) and section 97(3). Section 97(1) concerns the remuneration of persons providing Part 2 services and is not cash-limited (in other words the Secretary of State must pay whatever it has cost the HA, and he cannot impose a ceiling on the expenditure). Under section 97(3) a HA is paid money not exceeding the amount allotted to them by the Secretary of State. This amount is allotted towards meeting their "main expenditure" which includes all expenditure attributable to the performance of their Part 2 functions, and all their administrative costs. The money paid in respect of Part 1 services is therefore ultimately cash-limited. To enforce the cash-limits set by the Secretary of State, HAs have various financial duties imposed upon them by section 97A of the 1977 Act (as substituted by paragraph 48 of the 1995 Act and amended by paragraph 23 of Schedule 2 to the Primary Care Act).

231.     PCTs are funded by HAs under section 97C of the 1977 Act, as inserted by section 3 of the Health Act and amended by section 3 of the HSC Act and prospectively amended by section 1 of the HSC Act. There is a similar distinction between cash-limited and non-cash-limited funding. Section 97C was amended by section 3(3) of the HSC Act so that in addition to HA allotments, the Secretary of State may make supplementary payments direct to PCTs. PCTs are subject to a set of financial duties similar to those for HAs (see section 97D, as inserted by section 3 of the Health Act and amended by section 3 of the HSC Act).

232.     Although funding for the remuneration of Part 2 practitioners is largely non cash-limited ("general Part 2 expenditure"), section 97(3AA) of the 1977 Act, as prospectively inserted by section 1(2) of the HSC Act, provides that in determining a HA allotment the Secretary of State may take into account the level of the HA's "general Part 2 expenditure". Similarly, section 97C(1A), as prospectively inserted by section 1(4) of the HSC Act,

provides that in determining PCT allotments, HAs may take into account the distribution within their area of their general Part 2 expenditure.

233.     The cash-based system provided by sections 97, 97A, 97C and 97D has now been supplemented by a "resource-based" system provided for in sections 97AA and 97E, as inserted by sections 12 and 13 of the Government Resources and Accounts Act 2000 (c.20) and prospectively amended by section 1 of the HSC Act. These provide for the Secretary of State to set an annual limit on the use of resources by each HA and for HAs to set annual limits on the resources used by each of their PCTs.