House of Lords - Explanatory Note
      
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Session 2002 - 03
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Health And Social Care (Community Health And Standards) Bill


 

These notes refer to the Health And Social Care (Community Health And Standards) Bill
as brought from the House of Commons on 9th July 2003 [HL Bill 94]

HEALTH AND SOCIAL CARE (COMMUNITY HEALTH AND STANDARDS) BILL


EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Health and Social Care (Community Health and Standards) Bill as brought from the House of Commons on 9th July. They have been prepared by the Department of Health in order to assist the reader in understanding the Bill and to inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2.     The explanatory notes are to be read in conjunction with the Bill and are not meant to be a comprehensive description of the Bill. So where a clause or part of a clause of the Bill does not seem to require any explanation or comment, none is given.

3.     The Bill extends to England and Wales only, save as mentioned below.

SUMMARY

4.     In July 2000 the Government published The NHS Plan, A plan for investment, a plan for reform 1. In April 2002 the Government published a further document, Delivering the NHS Plan: Next steps on investment, next steps on reform 2 and this Bill gives effect to the proposals to create NHS foundation trusts and to establish an independent healthcare regulator and an equivalent for social care.

    1 For copies: - postal address: PO Box 777, London SE1 6XH. Website address: http://www.doh.gov.uk/nhsplan

    2 ISBN 0101550324 Available from The Stationery Office. Website address: http://www.tso.co.uk/

5.     The Bill provides for the establishment of NHS foundation trusts, of the new health care inspectorate and for the new inspectorate for social care, provides for the recovery of NHS charges, makes changes to the way that primary dental and medical services are delivered and provides for a replacement of the Welfare Food Scheme and other miscellaneous matters.

THE BILL

6.     The Bill is in 6 parts:

    Part 1 of the Bill establishes NHS foundation trusts - a new form of NHS organisation. The Command Paper Delivering the NHS Plan: Next steps on investment, next steps on reform 3 set out the Government's proposals to give greater freedoms to NHS organisations and details of the proposals for NHS foundation trusts were set out in A Guide to NHS foundation trusts 4.

    3 For copies - website address: www.doh.gov.uk/deliveringthenhsplan/index.htm

    4 For copies - website address: www.doh.gov.uk/nhsfoundationtrusts/index.htm

    NHS foundation trusts will not be subject to direction by the Secretary of State. Instead, an Independent Regulator will monitor their performance. NHS foundation trusts will be part of the NHS but they will have greater financial and management freedoms including freedoms to retain surpluses and to invest in delivery of new services, to flexibly manage and reward their staff and to access a wider range of options for capital funding. Each NHS foundation trust will have a Board of Governors responsible for representing the interests of the local community, staff and local partner organisations.

    The characteristics of NHS foundation trusts are set out in clause 1 and Schedule 1 and their functions are set out in clauses 14 to 22. Clauses 2 and 3 concern the appointment and general duties of the Independent Regulator of NHS foundation trusts.

    Part 2 deals with matters relating to quality and standards in health and social care.

    Chapter 1 of this part establishes two new regulatory bodies - the Commission for Healthcare Audit and Inspection (the CHAI) and the Commission for Social Care Inspection (the CSCI). The intention to set up the new inspectorates was announced in Delivering the NHS Plan 5 and the proposed role and functions of which were set out in The Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection - a statement of purpose 6. Both inspectorates will be established as executive non-departmental public bodies. Chapter 1 also abolishes the National Care Standards Commission (the NCSC) and the Commission for Health Improvement (CHI). The majority of the NCSC's functions will transfer to the CSCI, with the exception of those functions relation to the provision of independent healthcare, which will transfer to the CHAI. All of the CHI's functions will transfer to the CHAI.

    5 ISBN 0215004884 Available from The Stationery Office. Website address: http://www.tso.co.uk/

    6 For copies - website address: www.doh.gov.uk/statementofpurpose/index.htm

    Chapter 2 provides for the standards against which the CHAI will inspect health care provision.

    Chapter 3 sets out the functions of the CHAI. Whilst the CHAI will be an England and Wales body, the reviews and investigations of health care provided by or for NHS bodies in Wales will be the responsibility of the Assembly.

    Chapter 4 provides for the NHS health care functions of the National Assembly for Wales.

    Chapter 5 sets out the functions of the CSCI which will be an England only body.

    In chapter 6, the Bill confers functions on the National Assembly for Wales ('the Assembly') in relation to social care similar to those conferred upon the CSCI.

    Chapter 7 sets out the CHAI and CSCI's functions under the Care Standards Act 2000 and chapter 8 provides for other functions of the CSCI.

    Chapter 9 deals with the handling of complaints relating to the provision of NHS health care and social services.

    Finally, chapter 10 provides supplementary and general provisions in relation to the CHAI and CSCI, for example providing for joint working between both inspectorates.

    Part 3 deals with the recovery of NHS charges. This part of the Bill provides for the NHS to recover hospital treatment and/or ambulance costs where people receive compensation for injuries. This is an expansion of the current scheme for traffic accident cases as set out in the Road Traffic (NHS Charges) Act 1999. The costs would be recovered from the compensator and not the patient receiving the NHS treatment.

    Although the provisions follow very closely those of the 1999 Act, there are some changes being introduced in the way the scheme will operate. There are three of particular note. Firstly, the provision of ambulance services to the injured person as a result of the injury for which compensation is paid will be brought within the scope of the expanded cost recovery scheme. Secondly, formal findings of contributory negligence, either made by a court or endorsed through certain specified court processes, will be taken into account when calculating the amount of NHS charges recoverable. Thirdly, compensators who wish to appeal against a certificate of charges will be able to seek to have the requirement that any charges due must be paid before such an appeal can be made, waived on the grounds of exceptional financial hardship.

    Part 4 of the Bill makes new provision for primary dental and primary medical services.

    For dentistry, the Bill provides for new arrangements to be made between Primary Care Trusts ('PCTs') and general dental practitioners in line with the proposals for England which were set out in NHS Dentistry: Options for Change 7 and does likewise for Local Health Boards ('LHBs') in Wales. It repeals Part 1 of the Primary Care Act 1997 regarding pilot schemes for personal dental services. Further, it makes changes to the provisions regarding "permanent" personal dental services under the 1977 Act. The Bill replaces the charging provisions (concerning charges to dental patients) in the 1977 Act. Finally, the Bill abolishes the Dental Practice Board ('DPB').

    7 For copies: - postal address: PO Box 777, London SE1 6XH. Website address: http://www.doh.gov.uk/cdo/optionsforchange/

    For primary medical services, the clauses introduce the package of measures that are required to implement the agreement between the NHS Confederation and the General Practitioners Committee of the British Medical Association contained in the document "The New GMS Contract 2003 - Investing in General Practice". Paragraph 7.59 of that document sets out the main areas for legislation.

    Part 5 of the Bill provides for the replacement of the Welfare Food Scheme, a scheme originally set up to provide milk and vitamins to mothers and children during a time of food rationing. Changes are made to the way an Order in Council can be made for the Welfare Food Scheme provisions to be replicated for Northern Ireland.

    This part of the Bill also provides for the Secretary of State to delegate his function of making appointments to certain health and care bodies to a Special Health Authority.

    The Bill amends the list provisions in both the Protection of Children Act and the Care Standards Act 2000 (for the Protection of Vulnerable Adults list) so that the requirement to obtain a yearly list check is removed for certain groups (see explanation for clause 175).

    Finally, this Part provides for the abolition of the Public Health Laboratory Service Board ('the PHLS') and makes minor amendments to other legislation.

    Part 6 of the Bill contains a number of financial, supplementary and consequential provisions.

TERRITORIAL APPLICATION: WALES

7.     Part 1 (NHS foundation trusts) does not affect NHS trusts in Wales.

8.     In relation to health reviews and investigations functions, Part 2 contains some NHS health care Wales only provisions (in clauses 68 to 73) in addition to some provisions that apply both to England and Wales. In addition, clauses 90 to 99 provide for social care functions that apply only to the Assembly.

9.     Part 3 (recovery of NHS charges) as for the existing road traffic scheme is not devolved in respect of Wales and will be operated by the Secretary of State on behalf of both England and Wales. However, clause 191(3) requires that the Secretary of State consult the Assembly before making any regulations relating to the scheme under Part 3.

10.     The dental and medical provisions in Part 4 apply to Wales and powers to make subordinate legislation are exercisable in relation to Wales by the Assembly.

11.     The provisions for the replacement of the Welfare Food Scheme in Part 5 do not transfer all the functions in relation to Welfare Food Scheme as regards Wales. However, this Bill gives the Assembly powers to prescribe the range of foods and descriptions of advice in relation to the operation of the scheme in Wales and a power of direction over bodies administering part or all of the scheme in relation to matters relating to the operation of the scheme or part of a scheme in Wales with the consent of the Secretary of State.

12.     Part 5 provides for the amendment to the Protection of Children Act 1999 ('POCA') and Care Standards Act 2000 ('CSA 2000') and these changes will apply equally to England and Wales. In addition, the appointments provisions in Part 5 will apply to Wales as they allow for a Special Health Authority to make appointments, for which the Secretary of State has responsibility, to certain bodies which cover Wales and England. However, appointments that are the responsibility of Ministers in the devolved administrations will remain the responsibility of those Ministers. Finally, the abolition of the Public Health Laboratory Service Board in clause 186 applies to Wales.

13.     Annex C provides further detail on the provisions that affect the powers of the Assembly.

COMMENTARY ON CLAUSES

PART 1 - NHS FOUNDATION TRUSTS

Introductory

Clause 1: NHS foundation trusts

14.     Clause 1 sets out that an NHS foundation trust is a public benefit corporation which is authorised under this Part to provide goods and services for the purposes of the "health service" in England. As this term is defined in section 128 of the 1977 Act as being the health service that is provided by the Secretary of State, the effect is that every NHS foundation trust has a primary purpose of providing health care to the NHS.

15.     Under subsection (2), a public benefit corporation is defined as a body corporate. Each public benefit corporation must have a constitution that accords with Schedule 1.

16.     Schedule 1 sets out minimum statutory requirements for the constitution, governance and membership of public benefit corporations that may be authorised as NHS foundation trusts. It also sets out the audit, accounting and reporting arrangements that are to apply.

17.     Paragraph 1 requires every public benefit corporation to have a constitution that complies with the terms of the Schedule.

18.     Paragraph 2 requires the constitution of a public benefit corporation to name the corporation, and if the corporation is an NHS foundation trust, to include the words "NHS foundation trust" in its name.

19.     Paragraphs 3 to 5 set out the minimum eligibility criteria for the membership of a public benefit corporation. These membership criteria ensure that each corporation has representation from the public and staff. The membership may also include the patients of the hospitals managed by the corporation, and also their carers. Under paragraph 3, each public benefit corporation is given the power to specify membership criteria in its constitution. The members must include individuals drawn from the public who live in a specified area - "the public constituency", and individuals from its staff - "the staff constituency". The area from which members of the public constituency are drawn must be defined in terms of local government electoral areas in England. The public constituency may also include members who are eligible because they have attended any of the corporation's hospitals as a patient, or as the carer of a patient.

20.     Paragraph 3(4) allows the staff constituency of a public benefit corporation to include individuals who exercise functions for the corporation, but are not directly employed by the corporation. Examples of such individuals include agency nurses, and individuals who work on the premises of the corporation but are employed by an independent subcontractor.

21.     Paragraph 3(5) sets out a qualification to those individuals who may be members of the staff constituency. They may only include individuals with an employment contract of 12 months or longer, or without any fixed term at all; or alternatively, any person who has been continuously employed by the corporation, or exercised functions in terms of the previous subparagraph, for a 12 month period.

22.     Paragraph 5 provides that, as a condition of membership, each member must agree to pay up to £1 to the public benefit corporation. The paragraph also gives public benefit corporations wide powers to set out other eligibility requirements in the constitution, as they see fit.

23.     Paragraphs 6 to 9 require each public benefit corporation to have a Board of Governors. The Board of Governors comprises the elected representatives of the members of the public benefit corporation, and also individuals who have been appointed by the public benefit corporation to represent certain interests. Under paragraph 6, the public and staff constituencies are to elect representatives from their constituencies to the Board of Governors. Such elections, if contested, must be by way of secret ballot. Paragraph 7 disqualifies certain individuals from membership of the Board of Governors, and gives public benefit corporations the power to set out other eligibility requirements in the constitution. Under paragraph 8, representatives of the public constituency must be in the majority. There must also be at least one member from the staff constituency, one member appointed by a PCT to which the public benefit corporation provides services and one member appointed by a local authority for an area which includes all or part of the membership area specified for the purposes of the public constituency of the corporation. One member must also be appointed by a university if a hospital of the public benefit corporation includes a medical or dental school. In addition, members may be appointed to represent organisations specified in the constitution as partnership organisations.

24.     Paragraphs 11 and 12 set out some minimum requirements for meetings of the Board of Governors, including requirements relating to public access to these meetings. Under paragraph 13, each public benefit corporation is also empowered to make other provisions about the Board of Governors in its constitution, as it deems necessary.

25.     Paragraphs 14 to 17 require each public benefit corporation to have a Board of Directors. The Board of Directors is the body that is responsible for the day-to-day management of the public benefit corporation, and to this end, paragraph 14(2) requires each public benefit corporation to provide for its powers to be exercised by the Board of Directors on its behalf. The Board of Directors is made up of executive directors, one of whom is the Chief Executive, and non-executive directors, one of whom is the Chairman. The chief executive is appointed and removed by the non-executive directors. The chairman and the other non-executive directors are appointed and removed by the Board of Governors. Only members of the public constituency, and if a hospital of the public benefit corporation includes a medical or dental school provided by a university, a representative of that university, are eligible for such an appointment. Under paragraph 15(2), the disqualifications under paragraph 7(1) also apply to directors. Paragraph 17 sets out provisions for the remuneration of the Board of Directors, which must be included in each public benefit corporation's constitution.

26.     Paragraph 18 requires that each public benefit corporation must keep a register of members and their constituency, members of the Board of Governors, directors, and directors' interests. The details of each register are left to the discretion of the public benefit corporation. In addition, under paragraph 19, the constitution of a public benefit corporation must include provision for dealing with conflicts of interest of the directors. The public benefit corporation must make the register, and other documents listed in paragraph 20(1) - including its constitution, authorisation, accounts and reports - available to the public.

27.     Paragraph 21 requires each public benefit corporation to appoint an auditor. Paragraph 21(3) requires that such an auditor must be a member of the appropriate professional organisation, and paragraph 21(4) requires the establishment of an audit committee to monitor the auditor's functions.

28.     Paragraphs 22 and 23 set out the accounting arrangements for public benefit corporations. The Independent Regulator is given general power to dictate the form and content of these accounts, with the approval of Treasury. The Independent Regulator is also given powers to direct the standards, procedures and techniques for the audit of accounts. To ensure that these bodies remain accountable for their use of public funds, paragraph 23(4) requires that each public benefit corporation must lay a copy of their annual accounts before Parliament.

29.     Paragraph 24 requires each public benefit corporation to make annual reports to the Independent Regulator. These reports must include information on steps taken by the public benefit corporation to secure that the membership of its public constituency is representative of the population that is eligible for such membership, and any other information the Independent Regulator requires. The timing, and form of these reports is left to the Independent Regulator's decision.

30.     Paragraph 25 requires that each public benefit corporation must provide the Independent Regulator with annual forward business plans prepared by the directors of the public benefit corporation. The forward plan must be prepared in consultation with the Board of Governors.

31.     Paragraph 26 provides that copies of a public benefit corporation's annual accounts, auditor's reports and annual reports must be presented to the Board of Governors at a public meeting.

Clause 2: Independent Regulator of NHS foundation trusts

32.     This clause establishes the office of an Independent Regulator of NHS foundation trusts. The Independent Regulator is appointed by the Secretary of State and is responsible for setting the terms of, and granting authorisation to, NHS foundation trusts, and monitoring their compliance with the terms of authorisation and the requirements set out in Part 1.

33.     The office of the Independent Regulator of NHS foundation trusts will be established as a non-ministerial department.

34.     Subsection (3) introduces Schedule 2, which makes detailed provisions regarding the Independent Regulator. The Schedule includes provisions about the Independent Regulator's terms of appointment and remuneration, staffing of the office and their remuneration, and also funding arrangements, reporting and accounts procedures.

35.     Paragraphs 1 and 2 give the Secretary of State general powers to set the terms and conditions of the Independent Regulator's appointment.

36.     Paragraph 3 provides for the staffing of the Independent Regulator's office. The Independent Regulator is given the power to appoint staff on terms and conditions he thinks appropriate, subject to consultation with the Minister for the Civil Service. In addition, paragraph 3(2) requires the Independent Regulator to appoint a deputy who is to act in his place in the Independent Regulator's absence.

37.     Under paragraph 5, the Secretary of State may make contributions to the Independent Regulator's expenses. This provision is to be read in conjunction with clause 21 which allows the Independent Regulator to impose fees on NHS foundation trusts.

38.     Paragraph 6 sets out provisions that ensure the accountability of the Independent Regulator to the Secretary of State and to Parliament. He must make an annual report on the way he has exercised his functions, which he must lay before Parliament, and send a copy to the Secretary of State. In addition, paragraph 6(3) gives the Secretary of State the power to require any other reports and information relating to the exercise of the Independent Regulator's functions.

39.     Paragraph 7 places a requirement on the Independent Regulator to respond in writing to any recommendation relating to the exercise of his functions made by a Committee of either or both Houses of Parliament.

40.     Paragraphs 11 and 12 disqualify the Independent Regulator from membership of the House of Commons and the Northern Ireland Assembly.

Clause 3: General duty of regulator

41.     This clause requires the Independent Regulator to exercise his functions in a manner that is consistent with the Secretary of State's general duties under the 1977 Act. Amongst other things, the Secretary of State must promote and provide a comprehensive health service in England and to provide clinical facilities to universities with medical or dental schools. The Secretary of State must also secure that NHS goods and services are provided free of charge.

Authorisation

Clause 4: Applications by NHS trusts

42.     This clause allows NHS trusts to make applications to become NHS foundation trusts. They may only do so with the support of the Secretary of State.

43.     The clause sets out the minimum information which must be included in an application by an NHS trust for NHS foundation trust status. In addition, once an application to be an NHS foundation trust has been made, subsection (4) gives an NHS trust that has made an application the shadow powers necessary to prepare for authorisation to be an NHS foundation trust.

Clause 5: Other applications

44.     This clause allows persons other than NHS trusts to apply to set up an NHS foundation trust. They may only do so with the support of the Secretary of State. This allows organisations that are not currently part of the NHS such as charities and voluntary sector organisations to become involved in the establishment of a new NHS foundation trust.

45.     Subsection (2) sets out the minimum information which must be included in such an application. In conjunction with this, subsection (3) imposes a test which requires the Independent Regulator to consider certain matters before an application made under this clause may proceed, and a certificate of incorporation be issued. Once such a certificate is issued, the applicants are incorporated as a public benefit corporation and are given the shadow powers necessary to prepare for authorisation to be an NHS foundation trust.

 
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Prepared: 14 July 2003