2003 Chapter 43

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These notes refer to the Health and Social Care (Community Health and Standards) Act 2003 (c.43) which received Royal Assent on 20 November 2003

HEALTH AND SOCIAL CARE (COMMUNITY HEALTH AND STANDARDS) ACT 2003

EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Health and Social Care (Community Health and Standards) Act which received Royal Assent on 20^th November 2003. They have been prepared by the Department of Health in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament.

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

3.     The majority of the Act extends to England and Wales with the exception of those provisions set out in section 202 which have a wider extent. Sections 124 and 125 allow CHAI and CSCI to carry out cross border inspections of health and social services in certain limited circumstances by arrangement with ministers. Part 3 of the Act relates to injury costs recovery extends to England, Wales and Scotland. Section 185 relates to the replacement of the Welfare Food Scheme and extends to England, Wales and Scotland. Section 186 allows similar provision to be made for Northern Ireland by means of an Order in Council. Sections 187, 188 and Schedule 12 of the Act relates to appointments to certain NHS bodies and extend to the whole of the UK as does Part 6 of the Act which contains final provisions.

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 Act 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 Act 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 in which primary dental and medical services are delivered and provides for a replacement of the Welfare Food Scheme and other miscellaneous matters.

THE ACT

6.     The Act is in 6 Parts:

Part 1 of the Act 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 manage and reward their staff flexibly 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 section 1 and Schedule 1 and their functions are set out in sections 14 to 22. Sections 2 and 3 and Schedule 2 concern appointments to 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 are established as executive non-departmental public bodies. Chapter 1 also abolished the National Care Standards Commission ("the NCSC") and the Commission for Health Improvement ("CHI"). The majority of the NCSC's functions transferred to the CSCI, with the exception of those functions relating to the provision of independent healthcare, which transferred to the CHAI. All of the CHI's functions transferred 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 imposes a duty of quality on all NHS bodies that provide or commission health care, and provides for the standards which are to be taken into account by NHS bodies in discharging the duty of quality and by the CHAI in reviewing health care provision.

Chapter 3 sets out the functions of the CHAI. Under the Chapter, the CHAI is able to carry out general reviews of health care across NHS bodies in England and Wales. However, reviews and investigations of health care provided by or for particular NHS bodies in Wales are the responsibility of the Assembly under Chapter 4.

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

In Chapter 6, the Act 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 functions under Parts 1 and 2 of the Care Standards Act 2000 ("the CSA 2000") which have transferred to the CHAI and CSCI. 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 local authority 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 Commissions.

Part 3 deals with the recovery of NHS charges. This part of the Act 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, if made by a court or endorsed through certain specified court processes or as part of a settlement of the claim through a prescribed mediation process, 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 Act makes provision for primary dental and primary medical services.

For dentistry, the Act introduces a new duty on Primary Care Trusts ("PCTs") and Local Health Boards ("LHBs") to provide or secure the provision of primary dental services. The Act also provides for PCTs, LHBs and the Assembly to carry out prescribed public dental health functions. It provides for a general dental services contract to be made between PCTs and LHBs and general dental practitioners and dental corporations. The Act also abolishes the Dental Practice Board ("DPB"). Finally, the Act replaces the charging provisions in respect of dental patients in the 1977 Act.

For medical services, the Act also introduces a new duty on PCTs and LHBs to provide or secure the provision of primary medical services. The Act provides for a general medical services contract to be entered into by PCTs and LHBs and general medical practices.

Part 4 of the Act also repeals Part 1 of the Primary Care Act 1997 regarding pilot schemes for personal medical and personal dental services. It makes changes to the provisions regarding "permanent" personal medical and dental services under sections 28C to 28EE of the 1977 Act.

Part 5 of the Act 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 Act 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 Act 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.

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 Act contains a number of financial, supplementary and consequential provisions.

TERRITORIAL APPLICATION: WALES

7.     NHS foundation trusts have the principal purpose of delivering goods and services for the purposes of the health service in England. They must, however, also be authorised to provide goods and services for "purposes relating to the provision of health care" and this includes the provision of goods and services for the purposes of the health service in Wales.

8.     By virtue of paragraph 3(2) of Schedule 1 to the Act, NHS foundation trusts may define an area for a public constituency as including electoral areas in Wales.

9.     In relation to functions concerning the review and investigation of health care, Part 2 contains some Wales only provisions (in sections 68 to 73) in addition to some provisions that apply both to England and Wales. In addition, sections 90 to 99 provide for social care functions that apply only to the Assembly.

10.     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, section 195(3) requires that the Secretary of State consult the Assembly before making any regulations relating to the scheme under Part 3.

11.     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.

12.     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 Act 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.

13.     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 section 190 applies to Wales.

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

COMMENTARY ON SECTIONS

PART 1 - NHS FOUNDATION TRUSTS

Introductory

Section 1: NHS foundation trusts

15.     Section 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 National Health Service 1977 ("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.

16.     Subsection (2) makes it clear that a public benefit corporation is a body corporate. Each public benefit corporation must have a constitution that accords with Schedule 1.

17.     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.

18.     Paragraph 1 requires every public benefit corporation to have a constitution that complies with the terms of Schedule 1. A corporation may also make further provision in its constitution that is consistent with the Schedule.

19.     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.

20.     Paragraph 3 sets 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. Each public benefit corporation is given the power to specify membership criteria in its constitution.

21.     The members must include individuals drawn from the public who live in specified areas, with members in each specified area being "a public constituency". The areas from which members of a public constituency are drawn must be defined in terms of local government electoral areas in England and Wales.

22.     The members must also include individuals from a corporation's staff, who are "the staff constituency". Paragraph 3(3) 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.

23.     The paragraph also provides that the staff constituency 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 subparagraph (1)(b), for a 12 month period. Paragraph 3(4) provides that a constitution may set out that the staff constituency may be divided into two or more classes.

24.     If a corporation chooses, its constitution may also provide for there to be members who are eligible because they have attended any of the corporation's hospitals as a patient, or as the carer of a patient, who are collectively referred to as "the patients' constituency". However, a person who is employed as a carer of a patient, or works as a carer through a voluntary organisation, is not eligible for membership.

25.     Under paragraph 3(6), if a public benefit corporation has a patients' constituency, its constitution may provide for it to be divided into three or more classes. If it chooses to do so, however, one class must comprise the carers of patients.

26.     Paragraph 3(7) gives public benefit corporations wide powers to set out other eligibility requirements in the constitution, as they see fit.

27.     Paragraph 4 makes provision about the constituencies of public benefit corporations. It includes a requirement that a member of a class or constituency cannot be a member of another class or constituency while that membership continues. There is also a requirement that a person who is eligible to be a member of the staff constituency may not be a member of any other constituency.

28.     Paragraph 5 requires the constitution of a public benefit corporation to specify a minimum number for each constituency, or where there are classes within the constituency, of each class.

29.     Paragraph 6 provides that an individual who is eligible to become a member of a public benefit corporation may do so by making an application to the corporation.

30.     The paragraph also allows the constitution of a corporation to provide that an individual who is eligible to become a member of the staff or patient constituency (otherwise than as a carer of a patient) may become a member by way of an invitation. On receiving such an invitation, the individual will become a member of the corporation without making an application under paragraph 6(1), unless he subsequently informs the corporation that he does not wish to be a member.

31.     Paragraphs 7 to 10 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 7, the public, staff and (if there is one) patients' constituencies are to elect representatives from their constituencies to the Board of Governors. Paragraph 8 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 9, representatives of the public and (if there is one) patients' constituencies must be in the majority. There must also be at least three members from the staff constituency, one member appointed by a Primary Care Trust ("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 a 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.

32.     Paragraphs 12 and 13 set out some minimum requirements for meetings of the Board of Governors, including requirements relating to public access to these meetings. Under paragraph 14, each public benefit corporation is required to make other provisions about certain matters relating to the Board of Governors in its constitution, and has the power to make further provision as it deems necessary.

33.     Paragraphs 15 to 18 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 15(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 accounting officer), and non-executive directors, one of whom is the chairman of the corporation. One of the executive directors must be a registered medical practitioner or registered dentist, Another executive director must be a registered nurse or registered midwife.

34.     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 or patients' constituencies, 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 appointment as a non-executive director. Under paragraph 16(3), the disqualifications under paragraph 8(1) also apply to directors. Paragraph 18 sets out provisions for the remuneration of the Board of Directors.

35.     Paragraph 19 makes provision about the initial directors of former NHS Trusts. It provides for the Chief Executive, Chairman and non-executive directors of the former NHS Trust, if they so wish, to become the initial Chief Executive, Chairman and non-executive directors of the corporation.

36.     Paragraph 20 requires that each public benefit corporation must keep a register of members and their constituencies, members of the Board of Governors and their interests, directors, and directors' interests. The details of each register are left to the discretion of the public benefit corporation. In addition, under paragraph 21, the constitution of a public benefit corporation must include provision for dealing with conflicts of interest of the members of the board of governors and the directors.

37.     The public benefit corporation must make the registers listed in paragraph 20 of the Schedule, and the documents listed in paragraph 22(1) - including its constitution, authorisation, accounts and reports - available to the public. However, there is a power for the Secretary of State to make regulations setting out circumstances in which registers should not be made public.

38.     Paragraph 23 requires each public benefit corporation to appoint an auditor. Paragraph 23(3) provides that an officer of the Audit Commission may be appointed as auditor if the Audit Commission agrees. Paragraph 23(4) requires that an auditor must be a member of the appropriate professional organisation, and paragraph 23(6) requires the establishment of an audit committee to perform monitoring, reviewing and other appropriate functions.

39.     Paragraphs 24 and 25 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 25(4) requires that each public benefit corporation must lay a copy of their annual accounts before Parliament.

40.     Paragraph 26 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 and (if there is one) patients' constituencies 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.

41.     Paragraph 27 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 directors must have regard to the views of the Board of Governors in preparing the forward plan.

42.     Paragraph 28 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.

Section 2: Independent Regulator of NHS foundation trusts

43.     This section establishes the Independent Regulator of NHS foundation trusts. The Independent Regulator 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.

44.     Subsection (2) introduces Schedule 2, which makes detailed provisions regarding the Independent Regulator. The Schedule includes provisions about the appointment of members and staff to the Independent Regulator and their remuneration, and also sets out the Independent Regulator's powers, funding arrangements, reporting and accounts procedures.

45.     Paragraph 1 sets out that the Independent Regulator is to consist of up to 5 members appointed by the Secretary of State, including a chairman and deputy. Paragraphs 2 and 3 give the Secretary of State general powers to set the terms and conditions of office of members of the Independent Regulator.

46.     Paragraph 4 provides for the Independent Regulator to appoint staff on terms and conditions it determines, subject to consultation with the Minister for the Civil Service.

47.     Paragraph 6 provides that the Independent Regulator is responsible for regulating its own procedure.

48.     Paragraphs 8 and 9 set out the general and specific powers of the Independent Regulator. Paragraph 8(1) gives the Independent Regulator general powers to do anything that is necessary or desirable in relation to its functions. In particular, paragraph 8(2) provides that this includes acquiring and disposing of property, entering into contracts, accepting gifts, and co-operating with other public authorities. Paragraph 9 gives the regulator the power to borrow money temporarily with the consent of the Secretary of State, and to conduct research.

49.     Under paragraph 10, the Secretary of State may make contributions to the Independent Regulator's expenses. This provision is to be read in conjunction with section 21 which allows the Independent Regulator to impose fees on NHS foundation trusts.

50.     Paragraph 11 sets out provisions that ensure the accountability of the Independent Regulator to the Secretary of State and to Parliament. The Independent Regulator must make an annual report on the way it has exercised its functions and prepare a summary of NHS foundation trusts' accounts for each financial year, both of which must be laid before Parliament, and copied to the Secretary of State. In addition, paragraph 11(6) gives the Secretary of State the power to require any other reports and information relating to the exercise of the Independent Regulator's functions.

51.     Paragraph 12 sets out the accounting requirements that that will apply to the Independent Regulator.

52.     Paragraph 13 places a requirement on the Independent Regulator to respond in writing to any recommendation relating to the exercise of its functions made by a Committee of either or both Houses of Parliament.

53.     Paragraphs 17 and 18 disqualify the members of the Independent Regulator from membership of the House of Commons and the Northern Ireland Assembly.