(2) Protected property is property of the trust designated as protected in its
(3) The regulator may designate property as protected if he considers it is needed
for the purposes of any goods or services which the authorisation requires the
trust to provide wholly or partly for the purposes of the health service in
(4) The regulator may give approval under subsection (1) on any terms he
(5) An NHS foundation trust may not create a floating charge on its property.
17 Financial powers
(1) An NHS foundation trust may borrow money for the purposes of or in
connection with its functions.
(2) But the total amount of the trust’s borrowing is subject to the limit imposed by
(3) The limit must be reviewed annually by the regulator.
(4) An NHS foundation trust may invest money (other than money held by it as
trustee) for the purposes of or in connection with its functions.
(5) The investment may include investment by—
(a) forming, or participating in forming, bodies corporate,
(b) otherwise acquiring membership of bodies corporate.
(6) An NHS foundation trust may give financial assistance (whether by way of
loan, guarantee or otherwise) to any person for the purposes of or in
connection with its functions.
18 General powers
(1) An NHS foundation trust may do anything which appears to it to be necessary
or desirable for the purposes of or in connection with its functions.
(2) In particular it may—
(a) acquire and dispose of property,
(b) enter into contracts,
(c) accept gifts of property (including property to be held on trust for the
purposes of the NHS foundation trust or for any purposes relating to
the health service),
(d) employ staff.
(3) Any power of the trust to pay remuneration and allowances to any person
includes power to make arrangements for providing, or securing the provision
of, pensions or gratuities (including those payable by way of compensation for
loss of employment or loss or reduction of pay).
(1) An authorisation—
(a) must require an NHS foundation trust to disclose such information as
the Secretary of State specifies to the regulator,
(b) may require an NHS foundation trust to disclose other information to
(2) The regulator may require any other health service body to disclose any
information to him which he requires for the purposes of his functions.
20 Entry and inspection of premises
An authorisation may require an NHS foundation trust to allow the regulator
to enter and inspect premises owned or controlled by the trust.
An authorisation may require an NHS foundation trust to pay a reasonable
annual fee to the regulator.
22 Trust funds and trustees
(1) The Secretary of State may by order provide for the appointment of trustees for
an NHS foundation trust to hold property on trust—
(a) for the purposes of the NHS foundation trust, or
(b) for any purposes relating to the health service.
(2) The order may—
(a) make provision as to the persons by whom trustees are to be appointed
and generally as to the method of their appointment,
(b) make any appointment subject to such conditions as may be specified
in the order (including conditions requiring the consent of the Secretary
(c) make provision as to the number of trustees to be appointed, including
provision under which that number may from time to time be
determined by the Secretary of State after consultation with such
persons as he considers appropriate,
(d) make provision with respect to the term of office of any trustee and his
removal from office.
(3) Where trustees have been appointed for an NHS foundation trust under this
section, the Secretary of State may by order provide for the transfer of any trust
property from the NHS foundation trust to the trustees.
(4) Where an NHS trust for which trustees have been appointed under section 11
of the 1990 Act is given an authorisation, the order appointing the trustees is to
have effect as an order under this section.
23 Failing NHS foundation trusts
(1) If the regulator is satisfied—
(a) that an NHS foundation trust is contravening, or failing to comply
with, any term of its authorisation or any requirement imposed on it
under any enactment and that the contravention or failure is
(b) that an NHS foundation trust has contravened, or failed to comply
with, any such term or requirement and is likely to do so again and that
the contravention or failure was significant,
he may by a notice to the trust exercise any one or more of the powers in
subsections (3) and (4).
(2) He may also by a notice to the trust exercise any one or more of those powers
if he is satisfied that the trust has contravened or failed to comply with a
(3) The regulator may require the trust, the directors or the board of governors to
do, or not to do, specified things or things of a specified description within a
(4) The regulator may remove any or all of the directors or members of the board
of governors and appoint interim directors or members of the board.
(5) The regulator’s power to remove a director, or member of the board of
governors, of the trust includes power to suspend him from office, or to
disqualify him from holding office, as a director or member of the board of
governors of the trust for a specified period.
24 Voluntary arrangements
(1) If the regulator is satisfied that it is necessary or desirable to do so, he may by
a notice to an NHS foundation trust require the directors—
(a) to take steps to obtain a moratorium, or
(b) to make a proposal for a voluntary arrangement.
(2) An order may provide for Part 1 of the Insolvency Act 1986 (c. 45) (company
voluntary arrangements) to apply with modifications in relation to NHS
foundation trusts; and the references in this Part to a moratorium or voluntary
arrangement are to a moratorium under section 1A, or a voluntary
arrangement under Part 1, of that Act as modified by the order.
25 Dissolution etc.
(1) The powers conferred by this section are exercisable where—
(a) an NHS foundation trust contravenes or fails to comply with a notice
under section 23 or 24 or the trust’s compliance with a notice under
section 24 does not result in the implementation of a voluntary
(b) the regulator considers that further exercise of any of the powers
conferred by those sections would not be likely to secure the provision
of the goods and services which the authorisation requires the trust to
(2) Before the powers conferred by this section are exercised, the regulator must
consult prescribed persons about prescribed matters.
“Prescribed” means prescribed by an order.
(3) An order may transfer, or provide for the transfer of, any property or liabilities
of the trust to—
(a) another NHS foundation trust,
(b) a Primary Care Trust,
(c) an NHS trust,
(d) the Secretary of State.
(4) Schedule 3 (which provides for the transfer of employees) has effect.
(5) An order may provide for the dissolution of the trust.
(6) An order may apply any provision of Part 4 of the Insolvency Act 1986 (c. 45)
(winding up of companies), including any related provision of that Act, with
(7) Where the regulator refuses to give an authorisation to a public benefit
(a) the powers conferred by this section are also exercisable,
(b) references in this section and Schedule 3 to an NHS foundation trust are
to be read as references to the corporation.
26 Sections 23 to 25: supplementary
(1) This section applies for the purposes of sections 23 to 25.
(2) An order means an order made by the Secretary of State.
(3) The regulator must send a copy of any notice given under section 23 to the
registrar of companies.
(4) The regulator must give notice of any dissolution of the trust to the registrar of
(5) The modifications of the Insolvency Act 1986 that may be made by an order
include (for example)—
(a) provision for securing that the goods and services which the trust is
required by the authorisation to provide continue to be provided
(whether by the trust or another),
(b) provision for securing the protection of property needed for the
purposes of those goods and services.
(1) An application may be made jointly by—
(a) an NHS foundation trust, and
(b) another NHS foundation trust or an NHS trust,
to the regulator for authorisation of the dissolution of the trusts and the
transfer of some or all of their property and liabilities to a new NHS foundation
trust established under this section.
(2) The application must—
(a) be supported by the Secretary of State if one of the parties to it is an
(b) specify the property and liabilities proposed to be transferred to the
new NHS foundation trust,
(c) describe the goods and services which it is proposed should be
provided by the new trust, and
(d) be accompanied by a copy of the proposed constitution of the new
and must give any further information which the regulator requires the
applicants to give.
(3) The applicants may modify the application with the agreement of the regulator
at any time before authorisation is given under this section.
(4) The regulator may—
(a) issue a certificate incorporating the directors of the applicants as a
public benefit corporation, and
(b) give an authorisation under this section to the corporation to become an
NHS foundation trust,
if he is satisfied as to the following matters.
(5) The matters are that—
(a) the constitution of the new trust will be in accordance with Schedule 1
and will otherwise be appropriate,
(b) taken as a whole the actual membership of the public constituency of
the new trust will be representative of those eligible for such
(c) the new trust will be able to provide the goods and services which the
authorisation is to require it to provide, and
(d) any other requirements which he considers appropriate are met.
(6) If regulations require the applicants to consult prescribed persons about the
application, the regulator may not give an authorisation under this section
unless he is satisfied that the applicants have complied with the regulations.
(7) The certificate is conclusive evidence of incorporation; and the authorisation is
conclusive evidence that the corporation is an NHS foundation trust.
(8) On an authorisation being given under this section, the proposed constitution
of the NHS foundation trust has effect, but the directors of the applicants may
exercise the functions of the trust on its behalf until a board of directors is
appointed in accordance with the constitution.
28 Section 27: supplementary
(1) Where an authorisation is given under section 27, the regulator is to specify the
property and liabilities to be transferred to the new NHS foundation trust.
(2) Where such an authorisation is given, the Secretary of State is to make an
(a) dissolving the trusts in question, and
(b) transferring, or providing for the transfer of, the property and liabilities
specified by the regulator to the new NHS foundation trust.
(3) The order may—
(a) transfer, or provide for the transfer of, any of the remaining property or
liabilities to the persons mentioned in section 25(3),
(b) include provisions corresponding to those of Schedule 3.
(4) Where an NHS foundation trust is dissolved under this section, the regulator
must give notice of the dissolution to the registrar of companies.
(5) Where one of the parties to an application under section 27 is an NHS trust, the
powers conferred on the Secretary of State by Part 4 of Schedule 2 to the 1990
Act are not exercisable in relation to the trust.
(6) Subsections (3) and (5) of section 6 apply to an authorisation under section 27
as they do in relation to an authorisation under that section.
29 Co-operation between NHS bodies
In section 26 of the Health Act 1999 (c. 8) (co-operation between NHS bodies),
for “and NHS trusts” there is substituted “, NHS trusts and NHS foundation
Patient and public involvement
30 Public involvement and consultation
In section 11(2) of the Health and Social Care Act 2001 (c. 15) (public
involvement and consultation), at the end there is inserted—
“(d) NHS foundation trusts”.
31 Patients’ Forums
(1) The National Health Service Reform and Health Care Professions Act 2002
(c. 17) is amended as follows.
(2) In section 16 (additional functions of PCT Patients’ Forums), in subsection (4),
after paragraph (c) there is inserted—
“(ca) NHS foundation trusts which provide services to patients in the
area of the Primary Care Trust,”.
(3) In section 17 (entry and inspection of premises), in subsection (1), after
paragraph (f) there is inserted—
“(fa) NHS foundation trusts,”.
(4) In section 18 (annual reports), in subsection (2), at the end there is inserted—
“(e) where the report includes provision which relates to any NHS
foundation trust, the Independent Regulator of NHS
32 Commission for Patient and Public Involvement in Health
In section 20(12) of the National Health Service Reform and Health Care
Professions Act 2002 (Commission for Patient and Public Involvement in
Health), in the definition of “health service bodies”, for “and NHS trusts” there
is substituted “, NHS trusts and NHS foundation trusts”.