Health and Social Care (Community Health and Standards) Bill

House of Lords

Session 2002 - 03
Internet Publications
Other Bills before Parliament

Health and Social Care (Community Health and Standards) Bill

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts
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Prudential borrowing code
(1)
The regulator must make a code for determining the limit on the total amount
of the borrowing of any NHS foundation trust.
(2)
In making the code the regulator is to have regard (among other things) to any
generally accepted principles used by financial institutions to determine the
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amounts of loans to non-profit making bodies.
   A body is non-profit making if it does not carry on activities for the purpose
of making profits for distribution to its members or others.
(3)
Before making the code, the regulator must consult—
(a)
the Secretary of State,
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(b)
every NHS trust intending to make an application to become an NHS
foundation trust,
(c)
such other persons as the regulator considers appropriate.
(4)
The regulator must lay a copy of the code before Parliament.
(5)
The regulator may revise the code; and subsections (2) to (4) apply in relation
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to revising the code, but the regulator must also consult every NHS foundation
trust.
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Public dividend capital
(1)
Where an NHS trust becomes an NHS foundation trust, the amount which was
the public dividend capital of the trust immediately before the giving of the
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authorisation continues as public dividend capital of the NHS foundation trust
held on the same conditions (“initial public dividend capital”), but subject to
this section.
(2)
Any amount issued to an NHS foundation trust as public dividend capital
under section 11 is (like initial public dividend capital) an asset of the
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Consolidated Fund.
(3)
The Secretary of State may, with the consent of the Treasury, decide the terms
on which any public dividend capital of an NHS foundation trust is to be
treated as having been issued.
(4)
But the dividend to be paid by the trust is to be the same as that payable by
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NHS trusts in England in pursuance of section 9(7) of the 1990 Act (dividend
on public dividend capital).
(5)
Before exercising the power in subsection (3), the Secretary of State must
consult the regulator.
(6)
Any amount paid to the Secretary of State by an NHS foundation trust by way
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of repayment of public dividend capital is to be paid into the Consolidated
Fund.
Functions
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Authorised services
(1)
An authorisation must authorise the NHS foundation trust to provide goods
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and services for purposes related to the provision of health care.

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts
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(2)
But the authorisation must secure that the principal purpose of the trust is the
provision of goods and services for the purposes of the health service in
England.
(3)
The trust may also carry on activities other than those mentioned in subsection
(1), subject to any restrictions in the authorisation, for the purpose of making
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additional income available in order to carry on its principal purpose better.
(4)
The authorisation may require the provision, wholly or partly for the purposes
of the health service in England, of goods and services by the trust.
(5)
References in this Part to goods and services include, in particular—
(a)
education and training,
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(b)
accommodation and other facilities.
(6)
The authorisation must authorise and may require the trust—
(a)
to carry out research in connection with the provision of health care,
(b)
to make facilities and staff available for the purposes of education,
training or research carried on by others.
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(7)
In deciding whether or not to require the trust to provide, wholly or partly for
the purposes of the health service in England, any goods or services the
regulator is to have regard (among other things) to—
(a)
the need for the provision of goods or services in the area in question,
(b)
any provision of goods or services by other health service bodies in the
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area in question,
(c)
any other provision by the trust with which the provision of the goods
or services is connected,
(d)
any agreement or arrangement to which the body corporate which is
the trust is or was a party.
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(8)
Such a requirement as is mentioned in subsection (4) may be framed by
reference (among other things) to—
(a)
goods or services in general or of a particular description,
(b)
goods or services required to meet the needs of health service bodies in
general or those of a particular description,
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(c)
goods or services required to meet the needs of other persons of a
particular description,
(d)
the volume of goods or services provided,
(e)
the place where goods or services are provided,
(f)
the period within which goods or services are provided.
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Private health care
(1)
An authorisation may restrict the provision, for purposes other than those of
the health service in England, of goods and services by an NHS foundation
trust.
(2)
The power is to be exercised, in particular, with a view to securing that the
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proportion of the total income of an NHS foundation trust which was an NHS
trust in any financial year derived from private charges is not greater than the
proportion of the total income of the NHS trust derived from such charges in
the base financial year.

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts
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(3)
The base financial year means the first financial year throughout which the
body corporate was an NHS trust or, if it was an NHS trust throughout the
financial year ending with 31st March 2003, that year.
(4)
Private charges means charges imposed in respect of goods and services
provided to patients other than patients being provided with goods and
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services for the purposes of the health service.
(5)
Section 14(8) applies for the purposes of this section.
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Protection of property
(1)
An NHS foundation trust may not dispose of any protected property without
the approval of the regulator.
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  Disposing of property includes disposing of part of it or granting an interest
in it.
(2)
Protected property is property of the trust designated as protected in its
authorisation.
(3)
The regulator may designate property as protected if it considers it is needed—
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(a)
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 England, or
(b)
for the purpose of doing anything which the trust is required to do
under section 14(6).
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(4)
The regulator may give approval under subsection (1) on any terms it
considers appropriate.
(5)
An NHS foundation trust may not create a floating charge on its property.
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Financial powers
(1)
An NHS foundation trust may borrow money for the purposes of or in
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connection with its functions.
(2)
But the total amount of the trust’s borrowing is subject to the limit imposed by
its authorisation.
(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
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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
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loan, guarantee or otherwise) to any person for the purposes of or in
connection with its functions.
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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.
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Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts
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(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
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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
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loss of employment or loss or reduction of pay).
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Information
(1)
An authorisation—
(a)
must require an NHS foundation trust to disclose such information as
the Secretary of State specifies to the regulator,
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(b)
may require an NHS foundation trust to disclose other information to
the regulator.
(2)
The regulator may require any other health service body to disclose any
information which the regulator requires for the purposes of its functions.
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Entry and inspection of premises
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An authorisation may require an NHS foundation trust to allow the regulator
to enter and inspect premises owned or controlled by the trust.
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Fees
An authorisation may require an NHS foundation trust to pay a reasonable
annual fee to the regulator.
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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.
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(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
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of State),
(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,
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(d)
make provision with respect to the term of office of any trustee and his
removal from office.

Health and Social Care (Community Health and Standards) Bill
Part 1 — NHS foundation trusts
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(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
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have effect as an order under this section.
Failure
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Failing NHS foundation trusts
(1)
If the regulator is satisfied—
(a)
that an NHS foundation trust is contravening, or failing to comply
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with, any term of its authorisation or any requirement imposed on it
under any enactment and that the contravention or failure is
significant, or
(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
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the contravention or failure was significant,

the regulator may by a notice to the trust exercise any one or more of the
powers in subsections (3) and (4).
(2)
The regulator may also by a notice to the trust exercise any one or more of those
powers if the regulator is satisfied that the trust has contravened or failed to
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comply with a previous notice.
(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
specified period.
(4)
The regulator may remove any or all of the directors or members of the board
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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.
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Voluntary arrangements
(1)
If the regulator is satisfied that it is necessary or desirable to do so, it 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.
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(2)
An order may provide for Part 1 of the Insolvency Act 1986 (c. 45) (company
voluntary arrangements) including any related provision of that Act 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
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by the order.