Editor's blog Monday 21 February 2011: DH publishes notes for Lords committee on Health And Social Care Bill
The DH has published its notes for the Lords Delegated Powers and Regulatory Reform
Committee.
Just the 232 pages.
Now, the House of Lords is where some very serious debate and discussion about the Bill proposals can take place. There are some seriously clued-up individuals - Crisp, Hunt, Thornton, Winston - with a real hinterland of knowledge.
It will offer the Earl Howe (the best member of the Tories' health team - if we exclude health select committee chair Stephen Dorrell, as we must) a considerable challenge.
Bits that merit attention
Pages 102-3
Part 10
Paragraph 106
378. Paragraph 106 amends section 213 which confers a power on the Secretary of State to transfer trust property by order between ‘relevant health service bodies’ and removes the reference to a Primary Care Trust. The power in section 213 of the NHS Act, exercised by order, continues to be conferred on the Secretary of State but the amendment ensures that the Secretary of State is also able to transfer trust property to and from trustees for the NHS Commissioning Board and commissioning consortium as relevant ‘health service bodies’.
Paragraph 107
379. Paragraph 107 amends section 214 of the NHS Act, which contains a power for the Secretary of State to transfer all trust property by order from any special trustees to certain health service bodies. The amendment does not affect the Secretary of State’s powers in section 214; instead it makes provision for the NHS Commissioning Board and commissioning consortia as bodies to whom all trust property can be transferred and removes the references to Primary Care Trusts.
Paragraph 111
380. Paragraph 111 amends the power in section 222 of the NHS Act. Section 222 contains a power for the Secretary of State to exclude, by way of directions, specified descriptions of activities that NHS Bodies (other than Local Health Boards) undertake in order to raise money.
Power conferred on: NHS Commissioning Board and Secretary of State
Power exercised by: Instrument in writing (directions)
Parliamentary procedure: None
381. The amendment takes account of the establishment and responsibilities of the new health service bodies. Paragraph 111 amends the direction-making power to enable (a) the NHS Commissioning Board to make directions excluding specified descriptions of activities in relation to a commissioning consortium and (b) the Secretary of State to make directions excluding specified descriptions of activities in relation to any other NHS body (other than Local Health Boards).
Reason for delegating the power
382. The direction-making power is extended to the NHS Commissioning Board in addition to the Secretary of State to enable the Board to specify what descriptions of activities in relation to a commissioning consortium are excluded activities for the purposes of raising money under section 222 and reflects the understanding that fundraising and related activities are varied in nature and circumstance. This allows the Secretary of State and the Board to exclude activities, by way of direction, that would otherwise be included in part (3)(f) (“other similar activities”) as and when they would deem appropriate.
Reason for the selected procedure
383. The Department considers this a minor matter on which Parliamentary debate would not be warranted.
...
Pages 105-8
Paragraph 125
394. Paragraph 125 of Schedule 4 makes changes to section 259 (Sale of Medical Practices) of the NHS Act 2006 to introduce a new delegated power.
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Negative
395. Section 259 of the NHS Act 2006 describes the persons who are prohibited from selling the goodwill in a medical practice. The section is structured to capture any medical practice that has provided primary medical care services to the NHS during its entire existence, starting with provision under the NHS Act 1946. Subsection (2) captures general medical services provision under former provisions whilst subsection (3) captures the provision of personal medical services under former provisions. Subsection (4) captures post April-2004 provision under both the NHS Act 1977 and the 2006 consolidation. New subsection (4A) captures the effect of the ending of direct provision of primary medical services by Primary Care Trusts under the provisions in this Bill. However, the ban does not apply where the person no longer provides or performs the services mentioned, and has never carried on the practice “in a relevant area”.
396. The current definition of “relevant area” is in subsection (5) and links to the area of the organisation for whom the person provided or performed services (that is, a Primary Care Trust area or an area of a former Executive Council or Health Authority). Following the move of primary medical services commissioning to the Board the logic would be that the relevant area would in future be England. However, this would substantially extend the restriction on the sale of goodwill without any proper justification. For example, if a person provided general medical services under a contract in Surrey and then moved to Cumbria and provided there NHS services that are not caught by the ban (for example, out of hours services), that person would not currently be caught by the ban as regards the Cumbrian medical practice; if on the other hand the “relevant area” was the whole of England, he would be caught and indeed anyone who had ever provided services to a registered list of patients pursuant to a GMS contract or a PMS agreement with the Board would be caught.
397. The Department wishes to discuss this with those who represent general practitioners and these discussions need to consider what might be a suitable definition of “relevant area” for the purposes of section 259. The discussions might consider whether a local authority area would be appropriate. Paragraph 112(4) provides the space for these considerations by inserting a regulation making power in respect of this aspect of the definition of “relevant area”.
Reason for delegating the power
398. Defining the areas that need to be covered in the definition of “relevant area” in a way
that provides a historical audit trail of organisations is made more complex by the removal of specific local geographical areas defined by reference to local NHS bodies. There is no wish to extend the extent of the “relevant area” that applies to a particular contractor but until the final shape of the new NHS architecture is in place it is not possible to determine how best to maintain the localism associated with this provision of section 259. There will be a number of issues to discuss with the representatives of general practice as the new NHS architecture proposed in the Bill is implemented and this issue is best left to those discussions. This requires a delegated power to implement the outcome of those consultations.
Reason for the selected procedure
399. As the current definition is on the face of primary legislation it is appropriate that the delegated power has a level of Parliamentary scrutiny. Given the technical nature of the consequent provisions, the Department considers that the negative resolution procedure is appropriate. This is consistent with the existing delegated power in section 259(4) and with the wider delegated regulatory powers that apply in Part 4 (Medical Services) of the NHS Act 2006.
Paragraph 129
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Negative
400. This paragraph makes a consequential amendment to section 75 of the NHS Act 2006, which amends the meaning of "NHS body" in section 75(8) to include the NHS Commissioning Board and each commissioning consortium.
401. The Secretary of State has the power under section 75 to make regulations to make provision for, or in connection with, enabling NHS bodies and local authorities to enter into arrangements in relation to the exercise of prescribed functions if the arrangements are likely to lead to an improvement in the way in which those functions are exercised. For example, this clause would allow NHS commissioning consortia and local authorities to establish pooled budgets to allow joint commissioning of services.
Reason for delegating the power
402. The amendment does not create a new delegated power but updates an existing one to take account of the changed arrangements for NHS commissioning.
Reason for the selected procedure
403. The existing powers are subject to the negative resolution procedure and this would continue. This is a consequential amendment, and there is nothing in the amendments to those powers which necessitates additional scrutiny from Parliament.
...
Page 108
Schedule 5: Part 1: Amendments of other enactments
404. This Schedule includes the following changes to delegated powers.
Paragraph 2: Health Services and Public Health Act 1968
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Negative
405. Under the Health Services and Public Health Act 1968, the Secretary of State has power to provide, or make arrangements for the provision of, such instructions as appear conducive for persons employed or contemplating employment in hospital authorities or certain activities connected with health and welfare. Section 63(5A) of the Act enables the Secretary of State to make regulations providing for these functions to be exercisable jointly between
relevant health service bodies. This paragraph of the Schedule removes references to Strategic Health Authorities and Primary Care Trusts. These references are not replaced with references to commissioning consortia or the NHS Commissioning Board.
...
Pages 128-130
Clauses 76 and 77: Exemption regulations
Power conferred on: Secretary of State
Power exercised by: Regulations / direction
Parliamentary procedure: Negative
474. Subsection (1) provides that the Secretary of State may make regulations specifying exemptions from the requirement to hold a licence. All providers of health care services for the English NHS would be required to hold an economic licence, unless they or the service they provide have been exempted from such requirement by regulations made by the Secretary of State.
475. There are broad parameters for the way in which the exemptions can be set. For example, the Secretary of State can specify that a particular exemption can apply generally, e.g. to a whole group of providers, or more specifically, e.g. to a subsection of that group. Provision can also be made for exemptions to be granted subject to conditions, which can include a requirement to comply with any direction given by Monitor about matters specified in the exemption.
476. Exemptions would be designed to target licensing at those parts of the health sector where it is necessary, e.g. large providers of designated services. They should also ensure that regulatory burden is not imposed where it is not needed, keeping the system targeted and proportionate.
477. The Secretary of State also has the power to revoke exemption regulations. Regulations can be made under subsection (1) and (2) of clause 77 to revoke exemptions in relation to either an individual provider or a whole group of providers. Under subsection (3), an exemption can be withdrawn by a direction from the Secretary of State for a particular provider within a group, whilst the exemption remains in place for the rest of that group. When the exemption withdrawal is not for an individual provider at their request, the Secretary of State must consult Monitor, the NHS Commissioning Board, the CQC and Healthwatch England about the proposed withdrawal, and give notice of the proposal.
Reason for delegating the power
478. The exemption regime would be likely to develop over time, as new regulatory approaches become necessary in order to deal with changes in particular health markets, e.g. the introduction of a national tariff that applies to services offered by a previously exempted provider type, necessitating the introduction of a licence requirement for those providers.
479. Given this potential need for adjustment, it seems prudent to allow the exemption regime to be defined and adapted in regulations rather than using the less flexible approach of prescription in primary legislation. This approach is consistent with that adopted in other regulated sectors, such as electricity.
Reason for the selected procedure
480. This is a power to grant exemptions from the general requirement to hold a licence and the negative resolution procedure therefore seems appropriate. It is the same procedure which applies to the granting of exemptions under section 5 (exemptions from prohibition on unlicensed supply etc. of electricity) of the Electricity Act 1989 (c.29), which demonstrates consistency across different sectors (see section 106(2) (regulations and orders) of that Act).
Clause 86: Register of licence holders
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure Negative
481. The information contained in the register of licence holders will be available to the public at Monitor’s offices for inspection or by asking for a copy. However, this clause gives the Secretary of State power to prescribe in regulations any circumstances or pieces of information that should not be available to the public in this way.
Reason for delegating the power
482. These regulations will deal with administrative details relating to information kept on the register and it is therefore appropriate to leave this to secondary legislation.
Reason for the selected procedure
483. The negative resolution is appropriate because this is a power clearly dealing with administrative details.
...
Pages 138-140
CHAPTER 5: PRICING
Clause 104: The national tariff
Power conferred on: Monitor
Power exercised by: publishing the national tariff
513. This clause enables Monitor to publish, in “the national tariff” document:
• the range of services provided for the purposes of the NHS in England (in line with the structure agreed with the NHS Commissioning Board) for which prices will apply;
• the methodology that has been employed by Monitor to produce the specified prices, or maximum prices level;
• the resultant prices, or maximum prices; and
• guidance on the process for determining local prices for services not specified as being covered by the national tariff.
514. The national tariff document would also include rules under which providers and commissioners can make local modifications to the national prices.
Reason for delegating the power
515. The elements of the tariff document will require regular updates, for example if the NHS Commissioning Board and Monitor agree to extend the tariff to other services or to take into account efficiencies achieved in the provision of services. The necessity of flexibility to produce new editions of the document make this unsuitable for primary legislation.
Reason for the selected procedure
516. The national tariff will set prices payable for the provision of NHS services and will be published nationally. It does not seem necessary to subject it to any Parliamentary procedure.
Clause 106: Responses to consultation
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Affirmative
517. Subsection (7) provides for the Secretary of State to prescribe, through regulations, an “objection percentage” for commissioners and licence holders and a “share of supply percentage” for licence holders in relation to the methodologies used for setting prices for the purposes of the national tariff. A different percentage may be prescribed in relation to commissioners and licence holders.
518. Monitor would be responsible for setting and publishing a national tariff for NHS services, but before publishing the tariff, Monitor would need to send a notice to each commissioning consortium, each licence holder and such other persons as it considers appropriate, so that they have an opportunity to object. If both the objection percentage of commissioners and the objection percentage and the share of supply percentage of relevant licence holders who have given notice of objection is less than the percentages prescribed by the Secretary of State, then Monitor would be able to proceed and publish the national tariff.
519. In addition, subsection (8) provides that the Secretary of State would also be able to prescribe in regulations the method used for determining the share of supply of a licence holder.
520. The “objection percentage” is the proportion of commissioners or affected licence holders who are objecting. When this proportion is weighted according to the share of supply of those licence holders, it is known as the “share of supply percentage”. This process is designed to balance the desirability of commissioners and providers having a say in the design of the tariff with Monitor’s role to ensure that appropriate tariff prices are adopted.
Reason for delegating the power
521. Delegating the power gives the Secretary of State flexibility to adjust the prescribed prescriptions in the future. This is important as it is difficult to ascertain at this stage what the optimal percentage will be as the commissioner and provider landscape changes.
Reason for the selected procedure
522. The use of affirmative resolution in prescribing the percentages necessary for a reference to be made is consistent with other regulated industries. Requiring affirmative resolution would ensure that the issues, including the best interests of the taxpayer, could be considered before the percentages were prescribed.
...
Pages 141-5
CHAPTER 6: INSOLVENCY AND HEALTH SPECIAL ADMINISTRATION
Clause 113: Application of insolvency law to NHS foundation trusts
Power conferred on: Secretary of State
Power exercised by: Regulation
Parliamentary procedure: Affirmative
526. The Bill would insert a new section 55A into the National Health Service Act 2006 which would oblige the Secretary of State to introduce regulations to apply existing corporate insolvency procedures to NHS foundation trusts. Those procedures are company voluntary arrangements, administration and winding up as set out in Parts 1, 2 and 4 of the Insolvency Act 1986; and schemes of arrangement and reconstruction set out in Part 26 of the Companies Act 2006. Those procedures may be applied to foundation trusts with any necessary changes. The clause obliges the Secretary of State to consult before making any regulations under these provisions.
527. Those regulations would need to be supported by further secondary legislation (rules) to make the insolvency regime for foundation trusts workable in practice. That approach would be consistent with the general insolvency framework in England. Those rules would be made in the normal way that is set out in sections 411 and 413 of the Insolvency Act 1986.
Reason for delegating the power
528. The reasons for delegating the power are to enable the technical provisions of the Insolvency Act 1986 and Companies Act 2006 to be modified so that they are applied appropriately to foundation trusts, without the need for extensive primary legislation and to allow time for detailed and technical consultation with interested parties, insolvency experts and other government departments before any regulations are made.
Reason for the selected procedure
529. Corporate insolvency procedures are set out in primary legislation (the Insolvency Act 1986) and using the affirmative procedure is a necessary safeguard.
Clause 116: Health special administration regulations
Power to make regulations about health administration orders
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Affirmative
530. Clause 116 requires the Secretary of State to make regulations, referred to as “health special administration regulations” to make further provision about health administration orders.
531. The health special administration regulations may apply any provisions of Part 2 of the Insolvency Act 1986 (administration) with or without modifications and any other relevant enactment that relates to administration or insolvency under that Act. The purpose is to allow the application of the provisions of that Act to create a health special administration regime. The objective of that regime (as set out in clause 115) is to secure the continued provision of designated services in the event that the company or NHS foundation trust providing those services should become insolvent.
532. Clause 116 also makes provision for the health special administration regulations to modify Chapter 6 of the Bill, the Insolvency Act 1986 or any other relevant enactment that relates to administration or insolvency under that Act. This is a “Henry VIII” power which enables the Secretary of State to make provision for an enactment about insolvency to apply to or amend or modify an enactment about insolvency in consequence or in connection with the health special administration procedure.
Reason for delegating the power
533. These powers are necessary in order to specify technical detail and to allow for consultation on the regulations.
534. The Bill sets out the meaning of a health administration order and the broad objective of health administration. The regulations would set out the detail of the special administration regime for providers of designated services, and would include provisions enabling the transfer of those services to another provider (or a number of providers) (clause 117) and for indemnities to be given to insolvency practitioners (clause 118). That regime would be based on the process of administration set out in Part 2 of the Insolvency Act 1986 and existing special administration regimes, for example in the utilities and transport sectors.
535. The regime would also require provisions that are specific to the health sector in order to ensure the continued provision of designated services if a provider fails, and to reflect the legal status of foundation trusts as public benefit corporations.
536. Delegating this power will allow time for detailed consultation in order to ensure that the technical detail of the regime is fit for purpose.
537. The “Henry VIII” power is considered necessary because insolvency legislation is inherently complex and a special health administration regime is new. It is anticipated that unforeseen complexities may arise from the consultation and from the development of the new system of health care. Also, the law relating to insolvency is constantly evolving. It is important to include this power to ensure that the health administration regime can be appropriately applied in future. Comparable powers were taken in the Banking Act 2009 in relation to bank insolvency and bank administration.
Reason for the selected procedure
538. In view of the significance of creating a special administration regime for health, the regulation making power is to be subject to the affirmative procedure. This procedure also applies to power to make regulations about special insolvency procedures for investment banks in section 233 (insolvency regulations) of the Banking Act 2009 (see section 235 of that Act).
539. Any regulations made under the “Henry VIII” power are likely to be technical. As this power may be exercised to amend the primary legislation it is appropriate that any regulations made under this power be subject to the affirmative procedure. Comparable powers were taken in the Banking Act 2009 in relation to bank insolvency and bank administration which were also subject to the affirmative resolution procedure.
Power to make insolvency rules
540. In addition subsection (7) of clause 116 provides the following power.
Power conferred on: Lord Chancellor with the concurrence of the Secretary of State, and in
the case of rules affecting court procedure the Lord Chief Justice
Power exercised by: Rules
Parliamentary procedure: Negative
541. Clause 116 also expressly provides for insolvency rules to be made under section 411 of the Insolvency Act 1986 for the purpose of giving effect to the health special administration regime.
Reason for delegating the power
542. It is necessary to delegate the power in order to specify technical detail. In the same way that the Insolvency Rules 1986 give effect to the insolvency processes set out in the Insolvency Act 1986, the special administration rules would set out procedural matters to make the special administration regime workable in practice.
Reason for the selected procedure
543. Insolvency rules are made using the negative procedure under the provisions of section 411(5) of the Insolvency Act 1986 since they are technical rules dealing largely with procedural matters which make primary legislation workable in practice. It is anticipated that most rules made under this power will concern detailed provision about the day to day operation of the insolvency procedure.
544. The Insolvency Rules Committee (section 413 of the Insolvency Act 1986) must be consulted prior to the making of rules. The Committee is made up of insolvency experts from the judiciary and the insolvency profession.
...
Pages 157-9
Clause 143: Voting
Power conferred on: Secretary of State.
Power exercised by: Regulations
Parliamentary procedure: Affirmative
598. This clause gives the Secretary of State the power to alter the new voting arrangements
for directors, governors and members of foundation trusts which are provided for in this Bill.
The Department envisages that the power would be used if the voting arrangements provided for in the Bill needed to be modified, to mitigate unintended consequences. The scope of this power would include the new provisions introduced by the Bill on voting by governors on proposed mergers, acquisitions, and separations; voting by governors on “significant transactions”; voting by governors and directors on changes to the trust’s constitution; and voting by the membership on changes to the constitution that affect the powers or duties of directors. Under this power, the Secretary of State could, for example, change the size of a majority required for approving mergers or for making changes to a trust’s constitution from a simple majority to a two-thirds majority, or to require that a majority is of those eligible to vote as opposed to those actually voting.
599. Existing provisions on voting which are unaffected by this Bill, such as the majority of
governors required to remove a non-executive director set out in paragraph 17(2) of Schedule 7 to the NHS Act 2006, would be beyond the scope of this power as such provisions are already well established. Given that local accountability for these decisions is new, and that provisions for voting in existing foundation trust constitutions vary, these voting thresholds are new and untested, so a power to amend them if needed in practice is proposed. Consistent with the Government’s wish to ensure transparency and Parliamentary accountability in its dealings with foundation trusts, the exercise of this power would be subject to the affirmative resolution procedure in both Houses of Parliament.
Reason for delegating the power
600. The Bill introduces a range of new provisions on voting by directors, governors and
members in foundation trusts in addition to those in the NHS Act 2006. As Monitor would
relinquish its direct supervision of foundation trusts, the Bill proposes to give foundation trusts a corresponding ability to take their own decisions. For example, whereas at present Monitor must approve any changes to a foundation trust’s constitution, the Bill proposes to give foundation trusts the ability to amend their constitutions without Monitor’s approval provided the governors and directors agree to the amendment. Likewise, the Bill allows foundation trusts to enter into transactions such as mergers, acquisitions and separations with the agreement of the trust’s governors. In addition, the Bill gives the membership of foundation trusts the right to vote on constitutional amendments that affect the role of the governors. The Bill makes specific provisions about the majorities required in each case. For example, for amendments to constitutions, a majority of the governors and directors voting must approve the amendment in order for it to take effect. A simple majority is also required for a trust to undertake a merger, acquisition or separation, as is the case for votes by the membership on constitutional amendments affecting the role of governors. Given that these voting thresholds are new and untested, the Bill proposes to allow the Secretary of State to vary these arrangements if modifications are needed in practice.
601. The proposal to give the Secretary of State such a power is consistent with the existing provisions of section 59 of the NHS Act 2006, which allow the Secretary of State to set out regulations to make provisions about the conduct of elections for the membership of the board of governors of foundation trusts. Section 59 already gives the Secretary of State, among other things, the power to set out regulations which provide for the nomination of candidates, systems and methods of voting, and the allocation of places on the board of governors. The new power proposed by this Bill would allow the Secretary of State to make similar provisions to ensure that new voting arrangements for foundation trusts are workable and effective in practice.
Reason for the selected procedure
602. In principle, the requirements on voting thresholds for the new decisions could be set in the Bill itself or in regulations or even directions made under it. The Department believes it is more consistent with the autonomy it wants foundation trusts to have for the requirements to be in primary legislation. That, together with the proposed affirmative resolution procedure, reinforces the point that the Department does not intend to get involved with foundation trusts’ functioning on a day-to-day basis.
603. The Department believes that these new voting requirements would work well, and does not expect that there would need to be changes to them. However, the Department recognises that, in practice, there may be a need to change them, in the event that they prove inappropriate. For that reason, the Department proposes to take a power to change primary legislation. Regulations made under this power would require affirmative resolution by both Houses of Parliament.
...
Pages 226-8
Clause 247: Power to establish accreditation scheme
Power conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Negative
837. Clause 247(1) would enable the Secretary of State in regulations to establish an accreditation scheme that might be run by the Information Centre or by another specified body. The scheme would relate to information intermediaries who take available information about NHS, public health and/or adult social care services and process that information to add value.
Subsections 247(3) and (4) set out the expected scope of the regulations, in particular that they should require the operator to publish details of the scheme including the accreditation criteria and an appeals procedure for reconsideration of decisions. The operator should also provide advice to applicants on how to meet the criteria. The accreditation scheme would essentially act as a kite mark indicating that the resulting products are of a high quality and enable those seeking the services of an information intermediary to select one that has demonstrated that it meets quality standards. The operator of the scheme would determine the accreditation criteria and would be permitted to charge a reasonable fee in respect of an
application.
Reason for delegating the power
838. The accreditation scheme requirements would be technical and require more detail than would usually be included in primary legislation.
Reason for the selected procedure
839. An accreditation scheme for information intermediaries analysing and presenting aggregated health and adult social care information should not be controversial.
Nevertheless, the negative resolution procedure would ensure Parliamentary scrutiny of any scheme established under this provision.
Editor's note - for some reason, this is making me think of Dr Foster Intelligence.
...
Pages 231-3
PART 11: MISCELLANEOUS
853. Under this Part of the Bill, the Secretary of State would have the power to make
schemes to transfer staff or property, rights and liabilities from one body to another as a result of bodies being abolished or created by this Bill. Schemes might make transfers of staff or property to a range of bodies, including for example local authorities, commissioning consortia, the NHS Commissioning Board, any public authority providing health services or a qualifying company .
(A qualifying company is a company wholly or partly owned by the Secretary of State and formed under section 223 of the National Health Service Act 2006, for the purpose of providing facilities or services to the NHS. Such a company could be used, for example, as an intermediate solution to hold Primary Care Trust property before it is transferred to either local authorities, providers or consortia. Section 223 is an existing provision and has been used by Secretary of State in the past to set up a number of companies to offer services to the NHS, such as NHS Professionals Limited, Bio Products Laboratory Limited and Community Health Partnerships Limited (the LIFT delivery company).)
854. Schemes would be made by the Secretary of State, or by the National Health Service Commissioning Board or a qualifying company directed to do so by the Secretary of State. A qualifying company would be formed under section 223 of the National Health Service Act for the purpose of holding property transferred to it by a transfer scheme and would be wholly owned by the Secretary of State.
Transfer schemes
Clause 274: Transfer schemes
Power conferred on: Secretary of State
Power exercised by: Direction
Parliamentary procedure: None
855. This clause allows the Secretary of State to make staff or property transfer schemes for the transfer of staff or property from one body to another. The transfer schemes may also make supplementary, incidental, transitional and consequential provision; for example, requiring that the property transferred continues to be used for health purposes.
856. The Secretary of State may delegate this function of making transfer schemes in connection with the abolition of Strategic Health Authorities and Primary Care Trusts to the National Health Service Commissioning Board or a ‘qualifying company’, and direct them how to exercise that function.
Reason for delegating the power
857. The details of how transfer schemes will operate is technical, and would require more detailed consideration of the property and staff to be transferred than would usually be included in primary legislation. Moreover, the detail of what property and which staff will transfer to where will need to be determined on a case by case basis
858. The clause also allows the Secretary of State to delegate the power to prepare property or staff transfer schemes in connection with the abolition of Primary Care Trusts and Strategic Health Authorities either to the NHS Commissioning Board or to a “qualifying company”. The Secretary of State may consider that these bodies are, in practice, better placed to prepare the transfer schemes and decide where PCT and SHA staff and property should be transferred after abolition; the ability for the Secretary of State to delegate this power would allow these bodies to establish schemes to undertake these transfers.
859. In circumstances where the Secretary of State has delegated this function, the Secretary of State would be able to retain the power to make directions relating to how the function will be undertaken. This power could be used to establish general rules for transfer schemes, for example setting out where certain types of property should be transferred, while allowing the commissioning board or qualifying company the flexibility to apply these on a case by case basis to specific properties.
Reason for the selected procedure
860. The transfer schemes are likely to include more technical detail than is normally included on the face of a bill. Furthermore, transfer schemes would be made in connection with the abolition or establishment of bodies provided for in primary legislation. We therefore do not believe that it is necessary to subject the resulting transfer schemes to any parliamentary procedure.