Select Committee on Delegated Powers and Regulatory Reform Twenty-Sixth Report

Annex 5


Supplementary Memorandum by the Department of Health

1.  This memorandum supplements the one printed in the 24th Report of the Delegated Powers and Regulatory Reform Committee on 10 September.

2.  Amendments to clause 191 will shortly be tabled in the name of Lord Warner in relation to the procedure to be applied to orders made under clauses 22, 25 and 28 on the subject of NHS foundation trusts.

3.  In our original memorandum we said we were considering technical amendments to clause 191 to bring the delegated procedures into line with those for NHS trusts under the 1990 Act which - because they relate to operational matters - are statutory instruments which are not subject to a negative resolution procedure in Parliament. This discrepancy had not been picked up in the original drafting.

4.  In practice, only one amendment is required.

5.  For clause 22, which relates to the appointment of trustees for NHS foundation trusts and the transfer of trust property, the amendment provides that orders made under the clause should be statutory instruments that do not need to be laid before Parliament. This will bring the procedure into line with the analogous provisions in section 11 of the National Health Service and Community Care Act 1990 ("the 1990 Act"), that applies to orders for the trustees of NHS trusts.

6.  For clause 25, which deals with the event of failure of an NHS foundation trust, it is in fact proposed that orders dissolving an NHS foundation trust should remain subject to Parliamentary scrutiny, because of the significance attached to the failure of such a body. This provides for a greater level of scrutiny than the analogous procedure for NHS trusts in that paragraph 29 of Schedule 2 to the 1990 Act does not require dissolution orders for NHS trusts to be laid before Parliament.

7.  Clause 25 also provides for the possible application of Part 4 of the Insolvency Act when an NHS foundation trust fails. Again, we would want the use of this power to remain subject to Parliamentary scrutiny, because such an order would include fine detail about the application of primary legislation. There is no analogous provision that applies to NHS trusts.

8.  However, clause 25 also allows property, rights, liabilities and staff of an NHS foundation trust to be transferred by order to other health service bodies, or to the Secretary of State when an NHS foundation trust fails. The amendment provides that such orders should be statutory instruments but not subject to a Parliamentary procedure. We would not propose to involve Parliament with matters that are ancillary to a dissolution that had itself already been subject to Parliamentary scrutiny (see para 6 above). It may be noted that transfer orders relating to NHS trusts are not statutory instruments.

9.  Clause 28 relates to the possible merger of two NHS foundation trusts, or an NHS trust and an NHS foundation trust. If the Independent Regulator of NHS foundation trusts authorised such a merger, the clause would require the Secretary of State to give effect to the merger, by dissolving the existing bodies and transferring their property, rights, and liabilities to a new body. The Secretary of State would have to make the order on the terms required by the Independent Regulator, and would not have any discretion to refuse.

10.  The amendment provides that such an order be a statutory instrument that is not subject to any Parliamentary procedure. We would not propose to involve Parliament with matters which in practice relate to the internal restructurings of the health service. The Bill incorporates provisions that enable the Independent Regulator of NHS foundation trusts to ensure that such mergers are carried out properly, which we believe is the appropriate way to safeguard the process. It may be noted that the analogous procedure for mergers of NHS trusts is effected partly by statutory instrument but partly by non-statutory order.

6 October 2003

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