Section 34: Other amendments relating to NHS foundation trusts

125.     This section introduces Schedule 4, which includes various minor and consequential amendments relating to NHS foundation trusts.

126.     Paragraph 18 amends section 113 of the Local Government Act 1972. This amendment allows NHS foundation trusts to enter into joint staffing arrangements with local authorities.

127.     Paragraph 20 amends Part 3 of Schedule 1 of the House of Commons Disqualification Act 1975. This amendment disqualifies Chairmen and other non-executive directors of NHS foundation trusts from membership of the House of Commons.

128.     Paragraph 25 amends section 22 of the 1977 Act. This amendment includes NHS foundation trusts among the list of NHS bodies required to co-operate with one another in exercising their functions.

129.     Paragraph 34 amends section 91 of the 1977 Act. This amendment sets out that where property held on trust is given to an NHS foundation trust for a specified purpose, the trustees for the NHS foundation trust must apply those funds for the specified purpose.

130.     Paragraph 37 amends section 96A of the 1977 Act. This amendment allows NHS foundation trusts to raise money by appeals etc. and to hold, administer and apply any property given on trust for the purpose it was given.

131.     Paragraph 84 amends section 21 of the 1990 Act. This amendment provides that NHS foundation trusts may choose to participate in schemes established by the Secretary of State for meeting losses and liabilities etc. of certain health service bodies. Paragraph 109 amends section 31 of the Health Act 1999. This amendment allows regulations to be made which enable NHS foundation trusts to enter into joint arrangements with local authorities.

132.     Paragraph 116 amends section 7 of the Health and Social Care Act 2001. This amendment provides for the powers of local authority oversight and scrutiny committees to apply to NHS foundation trusts as to other NHS bodies.

Section 35: Conduct of elections

133.     This section provides a power for the Secretary of State to make regulations about the conduct of elections for the membership of an NHS foundation trust. The regulations may include details on the nomination of candidates, systems and methods of voting, supervision of elections and the consequences of irregularities. There is also a power to create offences, punishable on summary conviction with a maximum fine not exceeding level 4 on the standard scale.

Section 36: Offence

134.     This section makes it an offence for a person to vote at an election to the Board of Governors, stand for election to the Board of Governors or vote at a meeting of the Board of Governors unless the person has made a declaration about the particulars of his qualification to be a member of the corporation. The provision does not apply to elections held for the staff constituency.

Section 37: Representative membership

135.     This section provides that an authorisation may require an NHS foundation trust to take steps to ensure that, taken as a whole, the actual membership of its public constituency (and, if there is one, of its patients' constituency) is representative of the population eligible for such membership.

Section 38: Audit

136.     This section introduces Schedule 5 which sets out provisions relating to the audit of NHS foundation trusts' accounts.

137.     Paragraph 1 of the Schedule places a number of duties on auditors of NHS foundation trusts. They include a duty that, when auditing an NHS foundation trust's accounts, the auditor must be satisfied that they are prepared in accordance with directions and any relevant enactments, and that proper practices have been observed in their compilation. The auditor must also be satisfied that the trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

138.     Paragraph 2 gives the auditor rights of access to documents and information relating to the NHS foundation trust. The provision also gives auditors the power to require such explanation as is necessary to enable an audit to be properly completed. Failure to provide information, or to give an explanation related to audit matters, is an offence.

139.     Paragraphs 3 to 5 set out some provisions relating to auditors' reports on NHS foundation trusts, including requirements for submitting reports.

140.     Paragraph 6 requires the auditor to inform the Independent Regulator if an NHS foundation trust has or is about to incur unlawful expenditure or take action that is likely to be unlawful and cause a loss or deficiency.

141.     Paragraph 8 places restrictions on when auditors may disclose information relating to an NHS foundation trust. It is an offence to contravene these restrictions.

Section 39: General duty of NHS foundation trusts

142.     This section requires each NHS foundation trust to exercise its functions effectively, efficiently, and economically.

Supplementary

Section 40: Interpretation of Part 1

143.     Subsection (2) provides that expressions used in Part 1, other than those specifically defined in subsection (1), have the same meaning as in the 1977 Act. Examples are the terms "property", which in the 1977 Act includes rights; "hospitals" which is given a detailed definition that includes a number of health care institutions; and "the health service", which means the National Health Service provided by the Secretary of State pursuant to the 1977 Act.

PART 2 -STANDARDS

CHAPTER 1 - REGULATORY BODIES

Sections 41 and 42: The Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection

144.     The Command Paper Delivering the NHS Plan: Next steps on investment, next steps on reform ⁷ set out the Government's intention to create a new Commission for Healthcare Audit and Inspection ("the CHAI") which would have responsibility for the review and inspection of providers of NHS health care and also for the registration under the CSA 2000 of independent providers of health care in England, and a new Commission for Social Care Inspection ("the CSCI") which would have responsibility for inspecting local authority social services in England and also for the registration under the CSA 2000 of providers of social care services in England.

⁷ For copies - website address: www.doh.gov.uk/deliveringthenhsplan/index.htm

145.     Schedule 6 deals with the constitution of the CHAI. In particular it provides that the appointment of the chairman and members of the CHAI will be carried out by a Special Health Authority, which is directed to do so by the Secretary of State. It is envisaged that the Special Health Authority in question will be the NHS Appointments Commission or any similar successor body. Schedule 7 makes the same provision for the CSCI as Schedule 6 does for the CHAI with the following notable exceptions.

• Paragraph 3 provides for the membership of the CSCI but gives no role to the Assembly in the appointment and removal from office of members. This is because the CSCI will be an England only body.

• Paragraph 5 provides for the staffing of the CSCI. Subparagraph (2) provides that the CSCI must appoint a member of staff as a Children's Rights Director, whose role will be prescribed in regulations. The intention is that the Children's Rights Director should ensure that the CSCI's work takes full account of children's rights and welfare.

• Paragraph 9 allows the Secretary of State to make payments to the CSCI and to make the payments subject to conditions. Again, because the CSCI is an England only body there is no role for the Assembly in this process.

Reviews of NHS health care in England and Wales - overview

146.     In relation to NHS health care in England and Wales, responsibility is divided between the CHAI and the Assembly. The Assembly remains primarily responsible for reviewing the provision of health care by and for NHS bodies in Wales (Chapter 4). CHAI has responsibility for reviewing the provision of health care by and for NHS bodies in England and cross-border Special Health Authorities (Chapter 3). However, CHAI also has some functions relating to the review of the overall provision of health care across England and Wales (see sections 49 and 51); and could in the future be given further functions relating to England and Wales (section 58).

CHAPTER 2 - NHS HEALTH CARE: INTRODUCTORY

Section 45: Quality in health care

147.     Section 45 places a duty on all NHS bodies to ensure that appropriate arrangements are in place to monitor and improve the quality of health care they provide or commission. This replaces the current duty of quality in section 18 of the Health Act 1999. Under subsection (2), "health care" includes the promotion and protection of public health, whereas in the Health Act 1999 it was limited to services for or in connection with the prevention, diagnosis or treatment of illness.

148.     Subsection (3) states that 'illness' has the same meaning as in section 128(1) of the 1977 Act, that it includes mental disorder within the meaning of the Mental Health Act 1959 and any injury or disability requiring medical or dental treatment or nursing.

Section 46: Standards set by Secretary of State

149.     Section 46 gives the Secretary of State the power to prepare and publish a statement of standards in relation to the provision of health care by and for English NHS bodies and cross-border Special Health Authorities. It is envisaged that these standards are likely to be informed by Government National Service Frameworks (NSFs) ⁸, guidance issued by the National Institute for Clinical Excellence (NICE) ⁹ and other relevant sources.

⁸ The objective of Government National Service Frameworks (NSFs) is to tackle particular health issues, for example mental health, by setting out aims to improve particular services or care provided.

⁹ NICE is a special health authority set up to give advice on best clinical practice to NHS clinicians, to those commissioning NHS services and to patients and carers.

150.     Subsection (4) makes it clear that English NHS bodies and cross-border Special Health Authorities should take these standards into account in making arrangements under section 45. Section 54(2) enables the CHAI to advise the Secretary of State or the Assembly of any changes that it considers should be made in relation to these standards.

Section 47: Standards set by the Assembly

151.     As accountability for NHS provision in Wales rests with the Assembly, section 47 provides for the Assembly to publish its own statement of standards.

152.     As with standards published by the Secretary of State, it is likely that NSF guidance and NICE guidelines will inform the Assembly standards. Subsection (4) operates in the same manner with respect to Welsh NHS bodies as subsection (4) of section 46 does in respect of English NHS bodies and cross-border Special Health Authorities. The CHAI may advise the Assembly under section 54(2) of any changes it considers should be made to the standards.

CHAPTER 3 - NHS HEALTH CARE: FUNCTIONS OF CHAI

Healthcare provided by and for NHS bodies

Section 48: Introductory

153.     Section 48 gives the CHAI the function of encouraging improvement in NHS health care by or for all NHS bodies. Under this section, the CHAI will be able to give information or advice to NHS bodies or others who provide NHS health care. It states that the CHAI, in exercising its functions under sections 49 to 56, shall be concerned in particular with the availability of and access to, the quality and effectiveness, and the economy and efficiency of health care provided by or for NHS bodies, and with the need to safeguard and promote the rights and welfare of children. CHAI shall also be concerned with the availability and quality of information provided to the public about the health care, such as generic information that is not specific to individual patients or service users, such as leaflets, hospital signage and other patient and service user information, such as information about medical conditions generally.

Section 49: National Performance Data

154.     This section enables the CHAI to publish data on the performance of NHS bodies and other persons who provide health care, across NHS bodies in England and Wales.

Section 50: Annual Reviews

155.     Section 50 gives the CHAI the function of undertaking annual reviews, taking the statement of standards (as provided for in section 46) into account, of the provision of health care by and for each English NHS body and each cross-border Special Health Authority. Following each annual review of a body, the CHAI will award a performance rating. Subsections (2) and (3) provide for the CHAI to devise and publish criteria against which these reviews will be carried out. The Secretary of State will approve such criteria.

Section 51: Reviews: England and Wales

156.     This section gives the CHAI a function of conducting reviews across England and Wales of health care generally or of particular kinds of health care, for example, national cancer services. CHAI may undertake such reviews under its own initiative or at the request of the Secretary of State, who must first consult the Assembly before making a request.

157.     Sections 51(6), 52(7), 53(9), 54(9) and 57(5) enable the Secretary of State, after consulting the CHAI, to issue regulations making provision as to any procedure that must be followed before the award of any performance rating under section 50 or publication of any report under sections 52 to 54 in order to give the reviewed body time to comment and for any comments to be considered by CHAI. Such regulations could specify, for example, the numbers of days that NHS bodies would have to respond to draft reports issued by CHAI under differing circumstances, and could in particular require the CHAI to take into account any material observations made by NHS bodies about apparent factual errors in draft reports.

Section 52: Reviews and Investigations: England

158.     Section 52 provides for the CHAI to review or investigate health care provided by or for English NHS bodies and cross-border Special Health Authorities with a view to making a report. The CHAI may also review the arrangements made by such bodies under section 45 to monitor and improve the health care they provide or commission. English NHS bodies may provide health services on behalf of Welsh NHS bodies, and where this occurs the Assembly may review and investigate such services under section 68. This also applies in respect of cross-border Special Health Authorities.

159.     The CHAI may undertake reviews either under its own initiative or at the request of the Secretary of State.

Section 53: Failings

160.     Where the CHAI considers that there are significant failings in the health care provided by or for NHS bodies, subsections (2), (4) and (6) oblige the CHAI to make a report to the Secretary of State, the Assembly or the Regulator as appropriate. Subsections (3), (5) and (7) enable the CHAI to recommend that the appropriate authority take special measures to improve the health care provided. Such measures could include calling on the CHAI to undertake a re-inspection of the body concerned or other practical assistance or organisational support.

Section 54: Functions relating to the Secretary of State and Assembly

161.     Section 54 places a duty on the CHAI to keep the Secretary of State, in relation to English or cross-border NHS bodies, and the Assembly in relation to Welsh NHS bodies, informed about health care provided by or for NHS bodies.

162.     Subsection (2) allows for the CHAI, where it considers it timely or appropriate, to give advice to the Secretary of State or the Assembly on any particular changes which it thinks should be made in order to secure improvements in the quality of NHS health care including in relation to the statement of standards referred to in sections 46 and 47.

Section 55: Reviews of data

163.     This section enables the CHAI to review the quality of any data collected by others on health care provided by and for NHS bodies and to make a report of its findings.

Section 56: Co-ordination of reviews

164.     Section 56 gives the CHAI the function of promoting the effective co-ordination of reviews or assessments by public bodies or other persons which undertakes reviews of the provision of health care by or for English NHS bodies and cross border Special Health Authorities. It is envisaged that the Assembly will perform this function in relation to Welsh NHS bodies under its powers in the 1977 Act.

Other functions

Section 57: Studies as to economy, efficiency etc

165.     This section enables the CHAI to carry out comparative or other studies for improving economy, efficiency and effectiveness in the exercise of any of the functions of English NHS bodies with the exception of Special Health Authorities (which are to be reviewed in this respect by the National Audit Office).

166.     The Audit Commission, under section 33(1) of the Audit Commission Act 1998 previously carried out such studies in relation to these bodies. Paragraphs 12(6) and (8) of Schedule 9 of the Act removes all of these bodies - apart from NHS foundation trusts, which are not currently within the scope of those provisions - from the scope of section 33(1) and (4) and 35 of the 1998 Act.

167.     Within Wales, the function of carrying out these studies remains with the Audit Commission. However, in carrying out reviews and investigations generally, the Assembly is required under section 70 to be concerned with the economy and efficiency of the provision of health care. It is envisaged that the Audit Commission will continue to work with the Assembly in relation to reviews and investigations of health care by or for Welsh NHS bodies.

Section 58: Additional functions

168.     It is envisaged that the CHAI may need to be given additional functions with respect to the provision of health care by or for NHS bodies or for the improvement of economy, efficiency and effectiveness in the exercise of the functions of English NHS bodies, in the future. This section therefore makes provision for such functions to be given by regulations.

Supplementary

Section 59: Criteria

169.     This section provides for the Secretary of State or the Assembly as appropriate to make regulations requiring the CHAI to devise and publish statements of criteria to be used by it in exercising its functions under sections 48(1), 49, 51 or 52, in relation to health care provided by and for NHS bodies.

170.     The Secretary of State may also make such regulations with respect to the exercise of the CHAI's functions under sections 52, 56, 57 and 58(1).

171.     The regulations may require the CHAI to obtain the consent of the appropriate authority before publishing any such statement. Before making any such regulations the appropriate authority must first consult the CHAI.

Section 62: Fees and section 63:Fees: Wales

172.     Section 62(1) provides a power for the CHAI to be able to make and publish provision requiring persons to pay fees in relation to the exercise of prescribed functions under this Chapter. Section 62(1)(a) provides for it to be able to charge fees to NHS bodies and cross border Special Health Authorities, and section 62(1)(b) provides for it to be able to charge fees to any person of a prescribed description who provides health care for an English NHS body or cross border Special Health Authority.

173.     Similar powers in relation to the exercise of the CHAI's functions in relation to Welsh NHS bodies are provided under section 63. Therefore, the CHAI may not charge a Welsh NHS body under the provisions of section 62(1)(b) and may not charge an English NHS body or cross border Special Health Authority under section 63(1)(b). By subsection (5) of both sections, CHAI is under a duty to consult appropriate persons before specifying any provisions.

174.     Subsection (6) of both sections confers a regulation making power on the appropriate authority to prescribe the manner in which CHAI's fees are to be made and published and to enable the appropriate authority to specify the matters that CHAI must take into account before it determines any fee.

175.     Subsection (7) of both sections will allow the appropriate authority to make provisions for an independent person or panel to review the charge levied by CHAI in a particular case, and to substitute a lesser one if they deem it appropriate.

Section 66: Right of entry

176.     This section provides that individuals authorised by the CHAI may enter and inspect premises that are owned or controlled by an NHS body or which are used or proposed to be used for any purpose connected with the provision of health care by or for NHS bodies, or the discharge of functions of those bodies.

Section 67: Right of entry: supplementary

177.     Subsection (1) allows a person (authorised to enter and inspect premises by virtue of section 66) to inspect and copy relevant documents or records. It also allows inspectors to interview any person working at the premises or any patients or persons receiving health care that consent to be interviewed. Inspectors may also require relevant records or other documents on the premises to be produced for inspection, and where they are stored on computer, for them to be produced in a legible, not encrypted, form. Subsection (4) imposes a requirement to assist an inspector and permits the inspector to take such measurements and photographs and make such recordings as he considers necessary to enable him to exercise his powers under section 66.

Section 68: Power to require documents and information

178.     Section 68 confers on the CHAI a general power to require information and documents from the bodies or persons listed in subsection (2) irrespective of whether or not the CHAI is conducting an inspection, where such information relates to the provision of health care by or for an NHS body or the discharge of functions of an NHS body and where the CHAI considers it necessary or expedient to have the information or documents for its purposes under this Chapter.

179.     Subsection (2)(c) gives the CHAI the right to require information or documents from a local authority. This will enable the CHAI to obtain information or documents kept by a local authority for its own purposes, where that information is relevant to the exercise of the CHAI's functions under this Chapter. For example, the CHAI might request information as to how quickly the local authority responds to requests by an NHS trust to assess the social services needs of persons ready to be discharged from hospital.

Section 69: Power to require explanation

180.     Under this section, regulations may make provision for the CHAI to require a prescribed person to provide it with an explanation of any documents or information it obtains under sections 66 to 68 or any matters which are the subject of the CHAI's functions under this Chapter. Subsection (2) enables these regulations to set the requirement that individuals must be present at a specified place to give an explanation. The CHAI will use this power to enable it to discuss with those responsible any matters of concern that its inspections have brought to light.

181.     Sections 67(5), 68(4) and 69(3) make it an offence for a person to obstruct the exercise of any of the CHAI's powers under these sections or to fail to comply with any requirement. The penalty on summary conviction is a fine not exceeding level 4 (£2500) on the standard scale.

CHAPTER 4 - NHS HEALTH CARE: FUNCTIONS OF NATIONAL ASSEMBLY FOR WALES

Reviews and investigations

Section 70: Reviews and investigations relating to Wales

182.     The Commission for Health Improvement undertook reviews of, and investigations into, health care provided by NHS bodies both in England and Wales. This section provides for the Assembly to exercise these functions in relation to health care by or for Welsh NHS bodies. Under section 63 of the Government of Wales Act 1998, the Assembly has the power to delegate its inspection function to its staff. It is the stated intention of the Assembly to set up an internal unit to carry out this function.

183.     In the same way that section 51 provides for particular matters to be considered by the CHAI in undertaking its review and investigation functions, subsection (4) provides that the Assembly shall be concerned with the availability of and access to, the quality and effectiveness and the economy and efficiency of health care provided by and for Welsh NHS bodies, the availability and quality of information provided to the public about the health care and the need to safeguard and promote the rights and welfare of children.