House of Lords - Explanatory Note
      
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Session 2000-01
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Health And Social Care Bill


 

These notes refer to the Health and Social Care Bill
as brought from the House of Commons on 15th February 2001 [HL Bill 27]

Health And Social Care Bill


EXPLANATORY NOTES

INTRODUCTION

1. These explanatory notes relate to the Health and Social Care Bill as brought from the House of Commons on 15th February 2001. They have been prepared by the Department of Health, with assistance from the Wales Office, in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2. These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill, so where a section or part of a section does not seem to require any explanation or comment, none is given.

SUMMARY

3. In July 2000 the Government published The NHS Plan, A plan for investment, A plan for reform (Cm 4818-1) and The NHS Plan, The Government's response to the Royal Commission on Long Term Care (Cm 4818 - II). In September 2000 the Government published Pharmacy in the Future - Implementing the NHS Plan. Action has been taken to implement many of the proposals set out in these documents. In October the Scottish Executive published the Response to the Royal Commission on Long Term Care and provision is made in the Bill for one aspect of this as mentioned below.

4. This Bill is intended to deliver the aspects of the NHS Plan and the Government's response to the Royal Commission on Long Term Care that require changes to primary legislation. Its purpose is to improve the performance of the NHS, provide better protection for patients through a faster, more effective and fair system for regulating practitioners, provide better protection around the use of patient information, create a new system of patient involvement in the way the NHS works, modernise pharmacy and prescribing services, extend direct payments for social services users and provide a fairer system of funding for long term care including measures to reduce the need to sell one's home on entering residential care.

THE BILL

5. The Bill is in five parts :

Part 1 makes changes to the way the NHS, including family health services, is run and funded in England and Wales.

Part 2 deals with pharmaceutical services in England and Wales and some aspects of such services in Scotland.

     Part 3 provides for the establishment of Care Trusts and for the transfer of staff in connection with partnership arrangements.

     Part 4 makes changes to the way long term care is funded and provided in England and Wales. Provision is also made for Scotland in relation to the ending of preserved rights.

Part 5 deals with the control of patient information and the extension of prescribing rights as well as various miscellaneous and supplementary provisions.

6. Part 1 of the Bill is mainly concerned with implementing proposals set out in the NHS Plan, which require primary legislation. This part of the Bill therefore makes a number of changes to the framework of the NHS in England and Wales. Clauses 1 to 5 concern the funding of the NHS. Clause 1 enables the Secretary of State and the National Assembly for Wales to take into account the level of a Health Authority's non-cash limited allocation in determining its total allocation. Clause 2 deals with payments to Health Authorities in respect of past performance. Clause 3 enables the Secretary of State and the National Assembly for Wales to make additional supplementary payments to support new initiatives and to attach conditions to such payments. Clause 4 allows for public private partnerships in the NHS and Clause 5 concerns measures to provide additional income for the NHS.

7. Clause 6 deals with the powers of the Secretary of State to direct certain NHS bodies about the terms and conditions of employment of their staff.

8. Clauses 7 to 19 establish new arrangements for public and patient involvement in the NHS. Clauses 7 to 10 provide for local authority overview and scrutiny committees to scrutinise the NHS and represent local views on the development of local health services. Clause 11 places a duty on NHS organisations to have arrangements for involving patients and the public in decision making about the operation of the NHS. Clauses 12 to 16 establish statutory Patients' Forums, one for every NHS trust and Primary Care Trust. These bodies will ensure patients' views are taken into account by those delivering NHS services, and a Patient Forum representative on each NHS trust and Primary Care Trust Board will take patients into the heart of NHS decision making. Patients' Forums will operate within the context of the new duty for NHS bodies to consult and involve patients set out in clause 11. Regulations under Clause 13 will require Patients' Forums to come together in each locality to establish Patients' Councils. These will facilitate the co-ordination of the Forums work and so help them take an overview of local health services. Clause 17 requires Independent Advocacy services to be established across the country to assist patients in making complaints about the NHS. Clause 18 only abolishes Community Health Councils (CHCs) established for districts in England. Clause 19 provides power for the National Assembly for Wales to abolish CHCs in Wales.

9. Clause 20 allows the Secretary of State to intervene in poorly performing NHS organisations.

10. Clauses 21 and 22 provide for new arrangements for Health Authorities to manage the distribution of General Practitioners. Clause 24 removes the requirement that remuneration paid to a General Practitioner must not, except in special circumstances, consist wholly or mainly by means of a salary which has no reference, to the number of patients to whom a General Practitioner has undertaken to provide general medical services. Clause 25 provides for regulations as to the approval by Health Authorities of providers of out of hours cover for medical practitioners.

11. Clauses 27 to 32 introduce new arrangements covering the regulation of family health service practitioners. All practitioners undertaking to provide family health services (general medical services, general dental services, general ophthalmic services and pharmaceutical services) must currently have their names included in a list maintained by a Health Authority. In future, Health Authorities will be required to maintain lists covering all practitioners, including deputies and locums for their area. Only practitioners included in such lists will be able to deliver family health services. It is intended that the criteria to be admitted to (and to remain on) a list will include probity and positive evidence of good professional behaviour and practice. It is intended that this will be done through a system of declarations, annual appraisal and participation in clinical audit. Clause 27 provides a power for Health Authorities to refuse to include a practitioner on the relevant medical, dental, ophthalmic or pharmaceutical list on the grounds of unsuitability. Clause 28 provides powers to make regulations providing for a persons inclusion in a Health Authority list to be subject to conditions. Clause 29 deals with dental corporations and lists. Clause 30 requires practitioners to declare financial interests and the acceptance of gifts or other benefits. Clause 31 provides for Health Authorities to keep supplementary lists of deputies and assistants who provide the various family health services (including GPs, dentists and people who provide pharmaceutical and optical services). Clause 32 provides for new arrangements for Health Authorities to suspend and remove practitioners from the relevant lists on the grounds of inefficiency, fraud or unsuitability. Clause 33 introduces new arrangements to further the Health Authority list system to include those practitioners who may perform personal medical services and personal dental services. Clause 34 creates the Family Health Services Appeals Authority as an independent body whose functions will include dealing with appeals by these practitioners against Health Authority decisions. Consequently Clause 23 provides for the abolition of the NHS Tribunal.

12. Part 2 of the Bill concerns pharmaceutical services. Chapter 1 provides for new arrangements under which community pharmacy and related services may be provided on a pilot basis. The services provided under these arrangements will be known as local pharmaceutical services. Clause 35 contains introductory provisions about pilot schemes for the provision of local pharmaceutical services. Clause 36 and Schedule 2 set out how proposals for a pilot scheme are to be made by a Health Authority and submitted to the relevant authority (the Secretary of State or National Assembly for Wales). Clause 37 provides for the designation of neighbourhoods or premises in connection with pilot schemes. Clause 38 requires the relevant authority to conduct at least one review of each pilot scheme and to comply with certain conditions in doing so. Clause 39 gives the relevant authority power to vary or terminate pilot schemes. Health authorities may vary schemes without referring the matter to the relevant authority only to the extent that they are permitted to do so in directions. Clause 40 allows potential providers of local pharmaceutical services to apply to the relevant authority to become health service bodies. One result will be that certain arrangements they make with other health service bodies will be NHS contracts. This clause also allows the courts to enforce a direction for payment given by the relevant authority in respect of obligations under such contracts.

13. Clause 41 permits regulations to be made to allow Health Authorities to make payments for preparatory work for pilot schemes, subject to certain conditions. Clause 42 enables charges corresponding to those for pharmaceutical services under Part II of the 1977 Act to be levied for local pharmaceutical services, subject to exemptions. Clause 43 specifies that the provisions of the 1977 Act, including the relevant authority's direction-making powers, apply to these functions under Part 2 of the Bill as though they were functions under Part 1 of the Act. Clause 44 permits regulations to be made preventing the provision of pilot scheme services from the same premises as pharmaceutical services under Part II of the NHS Act 1977, except as provided in the regulations. It also permits regulations to make provision about the inclusion, re-inclusion, removal and modification of entries in pharmaceutical lists held under Part II of that Act. Clause 45 permits regulations to prescribe the extent to which pilot schemes are to be taken into account when considering applications for inclusion in those lists. Clause 46 provides that the relevant authority may only bring permanent schemes into effect where, having regard to reviews of pilot schemes which have been conducted, they are satisfied that it is in the interests of any part of the health service. Clauses 47 insert new provisions into the 1977 Act to enable Health Authorities to make permanent schemes for the provision of local pharmaceutical services in accordance with regulations. Clause 48 provides a power to make further regulations about both permanent and pilot schemes, which correspond to measures in force in relation to personal medical or personal dental services.

14. Chapter 2 of Part 2 introduces changes to the existing arrangements for the provision of pharmaceutical services. Clause 49 requires Health Authorities to make arrangements for the supply to persons in their area of those drugs, medicines and listed appliances prescribed for them by medical and other practitioners under the National Health Service. In particular it provides powers for the relevant authority to specify in regulations the categories of person whose prescriptions will be dispensed and any conditions in accordance with which they must prescribe. This clause also provides for the arrangements made by Health Authorities to include arrangements for the provision of these pharmaceutical services by remote means.

15. Clause 50 authorises arrangements for the provision of additional pharmaceutical services by remote means. The intention is to facilitate, and provide a means to control, the development of internet, mail order, home delivery and other arrangements which may involve dispensing across Health Authority boundaries. This will provide patients with greater flexibility in the way they can present their prescriptions and obtain the drugs or appliances which have been ordered for them. Clause 51 makes provision for items prescribed by certain categories of prescriber to be dispensed as part of NHS community pharmaceutical services in Scotland.

16. Part 3 of the Bill creates new powers to establish Care Trusts by building on existing health and local authority powers to forge partnerships and provide integrated care. Clause 52 provides for Care Trusts to be established voluntarily. Where services are failing. Clause 53 provides for the Secretary of State or the National Assembly for Wales to establish a Care Trust or, if appropriate, to direct the local partners to enter into an alternative form of partnership arrangement. Clause 55 concerns the transfer of staff in connection with section 31 partnership arrangements.

17. Part 4 of the Bill changes the way long term care is funded and provided in England and Wales. Clause 56 excludes nursing care from community care services. Clauses 57 to 59 make local authorities responsible for arranging and meeting the care needs of people who have until now had their long term care funded through preserved rights to income support and jobseekers allowance. Clauses 60 to 62 extend the powers of local authorities to place a charge on an interest in land as an alternative method of a person financing their long term care. They also provide for regulations to specify when a local authority is required to provide residential accommodation and when additional payments may be made for more expensive accommodation. Clause 63 provides new arrangements for cross border placements. It gives local authorities in England and Wales powers to place people in residential care homes and nursing homes in Scotland, Northern Ireland, the Isle of Man and the Channel Islands. Clauses 64 and 65 give regulation making powers to the Secretary of State concerning direct payments.

18. Part 5 deals with the control of patient information and the extension of prescribing rights as well as various miscellaneous and supplementary provisions. Clause 67 concerns the control of patient information. It enables the Secretary of State to require or permit patient information to be shared for medical purposes where he considers that this is in the interests of improving patient care or in the public interest. It also enables the Secretary of State to make regulations preventing patient information being processed for commercial purposes. Clause 68 makes provision for the extension of prescribing rights to health professionals other than doctors, dentists and certain specified nurses, health visitors and midwives who already have prescribing rights. This part also includes a number of supplementary provisions.

19. Annex A contains an outline of the existing legislation relating to the NHS. Annex B contains an outline of the existing legislation relating to social care. Annex C deals with miscellaneous relevant legislation. In general, functions of the Secretary of State under the existing legislation are exercisable by the National Assembly for Wales in relation to Wales by virtue of a Transfer of Functions Order made in 1999. The Bill reflects this when amending existing legislation, i.e. functions are conferred just on the Secretary of State. Clause 73 will ensure that the functions will be exercisable for Wales by the National Assembly for Wales. Functions under the Bill are conferred on "the relevant authority", which is defined by Clause 71 to mean the Secretary of State in relation to England and the National Assembly for Wales in relation to Wales.

COMMENTARY ON CLAUSES

PART 1: NATIONAL HEALTH SERVICE

HEALTH SERVICE FUNDING

Clause 1: Determination of allotments to and resource limits for health authorities and primary care trusts

20. Clause 1 changes the way in which resources are allocated between Health Authorities (HAs) by the Secretary of State and between Primary Care Trusts (PCTs) by HAs.

21. When distributing the resource and cash limited elements the Secretary of State and the National Assembly for Wales (for HAs) and HAs (for PCTs) may take into account how much is being spent on the non-resource and non-cash limited family practitioner services. Those who are spending more than their fair share on these services may get a smaller increase for their other services. Conversely if they are spending less than their fair share they can be given a larger increase. This monetary device will have the effect of supporting action taken to increase the number of GPs in under doctored areas.

22. Clause 1 provides for changes to the way in which unified allocations - which are cash limited - are made to Health Authorities and Primary Care Trusts. This provision will allow the Secretary of State and the National Assembly for Wales and Health Authorities to take account of general Part II expenditure (non cash limited expenditure on family health services) when making decisions about unified allocations. In the first instance the intention is to take into account only the general Part II expenditure on general medical services (GMSNCL). It is envisaged that the power will be exercised so as to make larger increases in the unified allocations of areas which are " under doctored" than if GMSNCL was not taken into account; and to make smaller increases in the unified allocations of areas which are "over doctored" than if GMSNCL was not taken into account. It will also provide a financial mechanism for regulating the number of doctors in a Health Authority area (the abolition of the Medical Practices Committee - see clauses 21 and 22 - will mean that Health Authorities will become responsible for declaring GP vacancies).

23. The Department has asked the Advisory Committee on Resource Allocation to devise a new funding formula for GMSNCL expenditure. Using this new formula in conjunction with the existing formula for Health Authority and Primary Care Trust unified allocations will allow the Department to determine targets, or "fair shares" of available resources for an area covering both unified allocations and GMSNCL. But changes to funding will only be made to unified allocations. Health Authority and Primary Care Trust unified allocations will move towards this overall target level over time (e.g. if the Health Authority is over target it will receive lower funding growth than if it was under target). While these changes will see resources for under doctored areas grow more quickly than the resources for over doctored areas, they will not lead to the cash limiting of Part II general expenditure or change the entitlement of primary care practitioners.

24. The statutory provision dealing with the public funding of Health Authorities is section 97 of the National Health Service Act 1977 (the "1977 Act"). Health Authorities are paid money in each year by the Secretary of State under section 97(1) and (3). Section 97(1) concerns the remuneration of persons providing services under Part II of the 1977 Act (for example, General Medical Practitioners). Unless such remuneration is excepted from section 97(1), it is not cash limited. The Secretary of State is under a duty to pay each Health Authority the cost of such remuneration, and cannot impose a ceiling on such expenditure (defined as "general Part II expenditure" in paragraph 1 of Schedule 12A to the 1977 Act). Section 97(3) provides that the Secretary of State must pay to each Health Authority money not exceeding the amount allotted to it by the Secretary of State. This amount is allotted towards meeting an authority's "main expenditure" (defined in paragraph 2 of Schedule 12A to the 1977 Act). In the case of a Health Authority this includes all expenditure attributable to the performance of their functions in relation to the provision of hospital-based and community health services, all their administrative costs, the costs of drugs attributed to them by the Secretary of State and certain other expenditure. The amount allotted constitutes a limit on the cash which may be spent by the authority.

25. Health Authorities are under similar obligations to provide funds to Primary Care Trusts. Each Primary Care Trust is established for an area contained within the area of a Health Authority. Under section 97C, each year the Health Authority must pay each of its Primary Care Trusts (a) the cost of general Part II expenditure incurred by the trust and (b) money not exceeding the amount allotted by the authority for that year towards meeting main expenditure. As with the allotments to Health Authorities, the amount allotted to each Primary Care Trust covers all expenditure attributable to the performance of their functions in relation to the provision of hospital-based and community health services, all their administrative costs and the costs of drugs attributed to them by the Secretary of State. The amount allotted constitutes a limit on the cash which may be spent by the authority.

26. Subsection (2) inserts a new subsection (3AA) into section 97 of the 1977 Act. This allows the Secretary of State to take account of expenditure attributable to the remuneration paid to Part II practitioners in the Health Authority area in determining the amount to be allotted to the Health Authority. Subsection (4) inserts a new subsection (1A) into section 97C of the 1977 Act. This allows a Health Authority to take account of the distribution within their area of expenditure attributable to the remuneration paid to Part II practitioners in determining the amount to be allotted to each of its Primary Care Trusts.

27. The Government Resources and Accounts Act 2000 inserts two new sections into the 1977 Act (sections 97AA and 97E). These new sections provide for the setting of resource limits for every Health Authority and Primary Care Trust in addition to cash limits. Section 97AA concerns resource limits for Health Authorities; Section 97E concerns resource limits for Primary Care Trusts. Section 97AA(2) provides for general Part II expenditure to be excluded from the resource limit.

28. Subsection (3) inserts a new subsection (2A) into section 97AA of the 1977 Act. This allows the Secretary of State to take account of general Part II expenditure in setting the resource limits for Health Authorities, mirroring the new subsection (3AA) of section 97 which allows the Secretary of State to take account of general Part II expenditure in determining the amount to be allotted to a Health Authority.

29. Subsection (5) inserts a new subsection (2A) of section 97E into the 1977 Act. This allows a Health Authority to take account of the distribution within their area of general Part II expenditure in setting the resource limits for its Primary Care Trusts, mirroring the new subsection (1A) of section 97C which allows the Health Authority to take account of the distribution within their area of general Part II expenditure in determining the amount to be allotted to each of its Primary Care Trusts.

Clause 2: Payments relating to past performance

30. Clause 2 amends the existing provisions of section 97 of the 1977 Act which enable the Secretary of State and the National Assembly for Wales to increase the initial allocation each of them makes to a Health Authority, where that Authority has satisfied certain conditions. This enables the Secretary of State to make payments to Health Authorities based on their past performance. The existing section 97(3C) provides that the Secretary of State may make such increases where a Health Authority has in any preceding year satisfied objectives which have been notified to Health Authorities in advance.

31. The new subsection (3C) enables the Secretary of State and the National Assembly for Wales to increase an Authority's allocation not only where it has satisfied objectives, but also where it has performed well against performance criteria. The Secretary of State must notify the Authority of such criteria in advance, although he might not notify them in advance of the exact method by which performance will be measured. This would enable the Secretary of State to make additional payments to Health Authorities on the basis of their performance relative to other Authorities (against criteria notified to them in advance) in addition to them meeting particular objectives. For example, he may need to wait until he knows how well NHS bodies have performed against specific measures in the previous year before he is able to finalise the best method of measuring their performance in the coming year. However, the Secretary of State would need to inform Authorities in advance of the criteria against which their performance would be measured if he intended to make additional payments to Authorities on this basis.

32. Under the existing section 97(3C), the Secretary of State and the National Assembly for Wales can only make increases to Health Authority allocations based on performance in preceding financial years. The new subsection (3C) enables the Secretary of State to make such increases on the basis of performance over a period which has been notified to the Authority in advance, whether it consists of, or any part of, a preceding year or any part of the current financial year.

33. Clause 2(3) amends section 97(3D), which provides that a Health Authority is notified of an objective if the objective is specified or referred to in a notice given to Health Authorities by the Secretary of State. The amendment means that the Secretary of State may specify or refer to objectives, criteria or periods in a notice given to an individual Health Authority, rather than a notice to all Authorities.

34. It is intended that the NHS Performance Fund will be allocated according to a traffic light system to underpin a system of earned autonomy. "Green" organisations will have access to their share of the National Performance Fund as of right. "Yellow" health authorities, NHS trusts and primary care groups/trusts will be required to agree plans, signed off by the regional office, setting out how they will use their share of the fund. "Red" organisations will have their share of the fund held by the new Modernisation Agency. They will get their fair share of extra funds but the Agency will oversee spending.

Clause 3: Supplementary payments to NHS trusts and Primary Care Trusts

35. Clause 3 enables the Secretary of State and the National Assembly for Wales to make payments direct to NHS trusts and Primary Care Trusts, or through Health Authorities, outside the existing arrangements for funding such bodies. In particular it enables payments to be made to NHS trusts other than under NHS contracts and to Primary Care Trusts other than under NHS contracts or the provisions of section 97C of the 1977 Act (Health Authority allocations to Primary Care Trusts). This will facilitate direct payments to NHS trusts and Primary Care Trusts.

36. These supplementary payments may be made through Health Authorities rather than direct to trusts. Under section 16C of the 1977 Act (as inserted by section 12 of the Health Act 1999), the Secretary of State may direct Health Authorities to exercise his powers under the new paragraph 5A of Schedule 3 to the 1990 Act (NHS trusts) and/or section 97C(5A) of the 1977 Act (Primary Care Trusts). The Secretary of State would be able to control how Health Authorities made these supplementary payments to trusts by giving directions under section 17 of the 1977 Act.

37. Under current arrangements, the Secretary of State for Health makes allocations to Health Authorities under section 97 of the 1977 Act. He can direct that particular sums must be applied for the purpose of making payments to NHS trusts, but such payments are then made under "service level agreements" (i.e. NHS contracts). In relation to Primary Care Trusts, if the Secretary of State attaches conditions as to how sums are to be spent when allocating an amount to a Health Authority, the Health Authority can attach those conditions when allocating part of that amount to a Primary Care Trust (see section 97C(5) of the 1977 Act).

38. These existing arrangements may not be appropriate for supplementary payments to NHS trusts and Primary Care Trusts, for example where the Secretary of State wishes to make payments to trusts specifically for rewarding their staff performance and/or improving facilities. The clause is intended to provide for a more efficient resource allocation route to NHS trusts and Primary Care Trusts for such supplementary payments, that will exist alongside income from NHS contracts or in the case of Primary Care Trusts, Health Authority allocations.

 
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Prepared: 21 February 2001