National Health Service Act 2006 (c. 41)

(The document as of February, 2008)

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(3) Where any sum is issued for fulfilling a guarantee so given, the Secretary of State must lay before each House of Parliament a statement relating to that sum as soon as possible after the end of each financial year beginning with that in which the sum is issued and ending with that in which all liability in respect of the principal of the sum and in respect of interest on it is finally discharged.

(4) If any sums are issued in fulfilment of a guarantee given under this paragraph, the NHS trust concerned must make to the Secretary of State, at such times and in such manner as the Secretary of State may from time to time direct--

(a) payments of such amounts as the Secretary of State with the consent of the Treasury so directs in or towards repayment of the sums so issued, and

(b) payments of interest, at such rates as the Secretary of State with the consent of the Treasury so directs, on what is outstanding for the time being in respect of sums so issued.

Limits on indebtedness

5 The aggregate of all sums borrowed by NHS trusts which are required to provide or manage services at or from hospitals or other establishments or facilities which are situated in England must not exceed £5,000 million or such other sum not exceeding £10,000 million as may be specified by order made by the Secretary of State with the consent of the Treasury.

Additional public dividend capital

6 The Secretary of State may, with the consent of the Treasury, instead of making a loan to an NHS trust under paragraph 3, pay an amount to the NHS trust as public dividend capital.

Supplementary payments

7 (1) The Secretary of State may make a payment to an NHS trust.

(2) The payment may be subject to such conditions as he considers appropriate, including conditions as to repayment.

Surplus funds

8 If it appears to the Secretary of State that any sum held by an NHS trust otherwise than as trustee is surplus to its foreseeable requirements, the trust must, if the Secretary of State with the approval of the Treasury and after consultation with the trust so directs, pay that sum into the Consolidated Fund.

Investment

9 (1) An NHS trust has power to invest money held by it in any investments, including investments which do not produce income, specified in directions under section 8.

(2) Sub-paragraph (1) does not apply in relation to money held by an NHS trust as trustee.

10 Any direction under section 8 with respect to--

(a) the power conferred on an NHS trust by paragraph 3, or

(b) the maximum amount which an NHS trust may invest in any investments or class of investments,

may be given only with the consent of the Treasury.

Section 28

SCHEDULE 6 Special Health Authorities established under section 28

Corporate status

1 Each Special Health Authority is a body corporate.

Pay and allowances

2 (1) The Secretary of State may pay to--

(a) the chairman of a Special Health Authority, and

(b) any member of a Special Health Authority who is appointed by the Secretary of State,

such remuneration as he may determine with the approval of the Treasury.

(2) The Secretary of State may provide as he may determine with the approval of the Treasury for the payment of a pension, allowance or gratuity to or in respect of the chairman of a Special Health Authority.

(3) Where a person ceases to be chairman of a Special Health Authority, and it appears to the Secretary of State that there are special circumstances which make it right for that person to receive compensation, the Secretary of State may make him a payment of such amount as the Secretary of State may determine with the approval of the Treasury.

(4) The Secretary of State may pay to a member of a Special Health Authority, or of a committee or sub-committee of, or joint committee or joint sub-committee including, a Special Health Authority, such travelling and other allowances (including attendance allowance or compensation for the loss of remunerative time) as he may determine with the approval of the Treasury.

(5) Allowances may not be paid under sub-paragraph (4) except in connection with the exercise, in such circumstances as the Secretary of State may determine with the approval of the Treasury, of such functions as he may so determine.

(6) Payments under this paragraph must be made at such times, and in such manner and subject to such conditions, as the Secretary of State may determine with the approval of the Treasury.

Staff

3 (1) A Special Health Authority may employ such officers as it may determine.

(2) A Special Health Authority may--

(a) pay its officers such remuneration and allowances, and

(b) employ them on such other terms and conditions,

as it may determine.

(3) A Special Health Authority must, in exercising its powers under sub-paragraph (1) or (2), act in accordance with regulations and any directions given by the Secretary of State.

(4) Regulations and directions under sub-paragraph (3) may make provision with respect to any matter connected with the employment by a Special Health Authority of its officers, including in particular provision--

(a) with respect to the qualifications of persons who may be employed as officers of a Special Health Authority,

(b) requiring a Special Health Authority to employ a chief officer and officers of such other descriptions as may be prescribed and to employ, for the purpose of performing prescribed functions of the Special Health Authority or any other body, officers having prescribed qualifications or experience, and

(5) A direction under sub-paragraph (3) may relate to a particular officer or class of officer specified in the direction.

(6) Regulations and directions under sub-paragraph (3) may provide for approvals or determinations to have effect from a date specified in them.

(7) The date may be before or after the date of giving the approvals or making the determinations but may not be before if it would be to the detriment of the officers to whom the approvals or determinations relate.

(8) Regulations may provide for the transfer of officers from one Special Health Authority to another Special Health Authority or to a Strategic Health Authority, and for arrangements under which the services of an officer of a Special Health Authority are placed at the disposal of another Special Health Authority, a Strategic Health Authority or a local authority.

(9) Sub-paragraph (11) applies where the registration of a dental practitioner in the dentists register is suspended--

(a) by an interim suspension order under section 32 of the Dentists Act 1984 (c. 24) (interim orders), or

(b) by a direction or an order of the Health Committee, the Professional Performance Committee or the Professional Conduct Committee of the General Dental Council under any of sections 27B, 27C or 30 of that Act following a relevant determination that that practitioner's fitness to practise is impaired.

(10) For the purposes of sub-paragraph (9), a "relevant determination" that a practitioner's fitness to practice is impaired is a determination which is based solely on--

(a) the ground mentioned in paragraph (b) of subsection (2) of section 27 of the Dentists Act 1984 (deficient professional performance),

(b) the ground mentioned in paragraph (c) of that subsection (adverse physical or mental health), or

(11) The suspension does not terminate any contract of employment made between the dental practitioner and a Special Health Authority, but a person whose registration is so suspended must not perform any duties under a contract made between him and a Special Health Authority which involves the practice of dentistry within the meaning of the Dentists Act 1984.

(12) Directions may be given--

(a) by the Secretary of State to a Special Health Authority to place the services of any of its officers at the disposal of another Special Health Authority or of a Strategic Health Authority,

(b) by the Secretary of State to any Special Health Authority to employ as an officer of the Special Health Authority any person who is or was employed by another Special Health Authority or by a Strategic Health Authority and is specified in the direction.

(13) Regulations made in pursuance of this paragraph may not require that all consultants employed by a Special Health Authority must be so employed whole-time.

4 (1) The Secretary of State must, before he makes regulations under paragraph 3, consult such bodies as he may recognise as representing persons who, in his opinion, are likely to be affected by the regulations.

(2) The Secretary of State must, before he gives directions to a Special Health Authority under paragraph 3(12) in respect of any officer of a Special Health Authority--

(a) consult the officer about the directions,

(b) satisfy himself that the Special Health Authority of which he is an officer has consulted the officer about the placing or employment in question, or

(c) in the case of a direction under paragraph 3(12)(a), consult with respect to the directions such body as he may recognise as representing the officer.

(3) But if the Secretary of State--

(a) considers it necessary to give directions under paragraph 3(12)(a) for the purpose of dealing temporarily with an emergency, and

(b) has previously consulted bodies recognised by him as representing the relevant officers about the giving of directions for that purpose,

the Secretary of State may disregard sub-paragraph (2) in relation to the directions.

Miscellaneous

5 Provision may be made by regulations as to--

(a) the appointment and tenure of office of the chairman, vice-chairman and members of a Special Health Authority,

(b) the appointment and tenure of office of any members of a committee or sub-committee of a Special Health Authority who are not members of the Special Health Authority,

(c) the appointment and tenure of office of any members of a joint committee or joint sub-committee including a Special Health Authority who are not members of the Special Health Authority,

(d) the circumstances in which a member of a Special Health Authority who is (or must be regarded as) an officer of the Special Health Authority may be suspended from performing his functions as a member,

(e) the appointment and constitution of committees and sub-committees (and joint committees and joint sub-committees) of (or including) a Special Health Authority (including any such committees consisting wholly or partly of persons who are not members of the Special Health Authority in question), and

(f) the procedure of a Special Health Authority and of such committees and sub-committees as are mentioned in paragraph (e).

6 Regulations made under this Schedule may make provision (including provision modifying this Schedule) to deal with cases where the post of chief officer or any other officer of a Special Health Authority is held jointly by two or more persons or where the functions of such an officer are in any other way performed by more than one person.

7 A Special Health Authority may pay subscriptions, of such amounts as the Secretary of State may approve, to the funds of such bodies as he may approve.

8 A Special Health Authority has power to accept gifts of property (including property to be held on trust, either for the general or any specific purposes of the Special Health Authority or for any purposes relating to the health service).

9 (1) The Secretary of State may by order provide for the appointment of trustees for a Special Health Authority to hold property on trust--

(a) for the general or any specific purposes of the Special Health Authority (including the purposes of any specific hospital or other establishment or facility at or from which services are provided by the Special Health Authority), or

(b) for any purposes relating to the health service.

(2) An order under sub-paragraph (1) may--

(a) make provision as to the persons by whom trustees must be appointed and generally as to the method of their appointment,

(b) make any appointment subject to such conditions as may be specified in the order (including conditions requiring the consent of the Secretary of State),

(c) make provision as to the number of trustees to be appointed, including provision under which that number may from time to time be determined by the Secretary of State after consultation with such persons as he considers appropriate, and

(d) make provision with respect to the term of office of any trustee and his removal from office.

(3) Where under sub-paragraph (1) trustees have been appointed for a Special Health Authority, the Secretary of State may by order provide for the transfer of any trust property from the Special Health Authority to the trustees.

10 The proceedings of a Special Health Authority are not invalidated by any vacancy in its membership or by any defect in a member's appointment.

11 (1) A Special Health Authority may--

(a) make available at a hospital for which it has responsibility accommodation or services for patients who give undertakings (or for whom undertakings are given) to pay any charges imposed by the Special Health Authority in respect of the accommodation or services, and

(b) make and recover charges in respect of such accommodation or services and calculate them on any basis that it considers to be the appropriate commercial basis.

(2) A Special Health Authority may exercise the power conferred by sub-paragraph (1) only if it is satisfied that its exercise--

(a) does not to any significant extent interfere with the performance by the Special Health Authority of any function conferred on it under this Act to provide accommodation or services of any kind, and

(b) does not to a significant extent operate to the disadvantage of persons seeking or afforded admission or access to accommodation or services at health service hospitals (whether as resident or non-resident patients) otherwise than under this section.

(3) Before a Special Health Authority decides to make accommodation or services available under sub-paragraph (1), it must consult organisations representative of the interests of persons likely to be affected by the decision.

(4) A Special Health Authority may allow accommodation or services which are made available under sub-paragraph (1) to be so made available in connection with treatment in pursuance of arrangements--

(a) made by a medical practitioner or dental practitioner serving (whether in an honorary or paid capacity) on the staff of a health service hospital,

(b) for the treatment of private patients of that practitioner.

(5) References in this paragraph to a health service hospital include references to such a hospital within the meaning of section 206 of the National Health Service (Wales) Act 2006 (c. 42), but do not include references to a hospital vested in an NHS trust or an NHS foundation trust.

12 (1) Any rights acquired, or liabilities (including liabilities in tort) incurred, in respect of the exercise by a Special Health Authority of any function exercisable by it by virtue of section 7 or section 29 are enforceable by or against that Special Health Authority (and no other body).

(2) This paragraph does not apply in relation to the joint exercise of any functions by a Special Health Authority with another body under section 29(1)(b).

13 Provision may be made by regulations with respect to the recording of information by a Special Health Authority, and the furnishing of information by a Special Health Authority to the Secretary of State, another Special Health Authority or a Strategic Health Authority.

Section 30

SCHEDULE 7 Constitution of public benefit corporations

Requirement for a constitution

1 (1) A public benefit corporation must have a constitution.

(2) As well as any provision authorised or required to be made by this Schedule, the constitution may make further provision (other than provision as to the powers of the corporation) consistent with this Schedule.

2 The constitution must name the corporation and, if the corporation is an NHS foundation trust, its name must include the words "NHS foundation trust".

Eligibility for membership

3 (1) The persons who may become or continue as members of a public benefit corporation are--

(a) individuals who live in any area specified in the constitution as the area for a public constituency,

(b) individuals employed by the corporation under a contract of employment and, if the constitution so provides, individuals who exercise functions for the purposes of the corporation otherwise than under a contract of employment with the corporation,

(c) if the constitution so provides, individuals who have attended any of the corporation's hospitals as either a patient or the carer of a patient within a period specified in the constitution.

(2) The constitution may specify one or more areas as areas for public constituencies, each of which must be an electoral area for the purposes of local government elections in England and Wales or an area consisting of two or more such electoral areas.

(3) A person may become or continue as a member of the corporation by virtue of sub-paragraph (1)(b) only if--

(a) he is employed by the corporation under a contract of employment which has no fixed term or has a fixed term of at least 12 months, or

(b) he has been continuously employed by the corporation for at least 12 months or, where he exercises functions for the purposes of the corporation as mentioned in that sub-paragraph, he has done so continuously for such a period.

(4) Chapter 1 of Part 14 of the Employment Rights Act 1996 (c. 18) applies for the purpose of determining whether an individual has been continuously employed by the corporation, or has continuously exercised functions for the purposes of the corporation, as it applies for the purposes of that Act.

(5) The constitution may divide those who come within sub-paragraph (1)(b) into two or more descriptions of individuals.

(6) An individual providing care in pursuance of a contract (including a contract of employment), or as a volunteer for a voluntary organisation, does not come within sub-paragraph (1)(c).

(7) The constitution may divide those who come within sub-paragraph (1)(c) into three or more descriptions of individuals, one of which must comprise the carers of patients.

(8) The constitution may make further provision as to the circumstances in which a person may not become or continue as a member.

Constituencies

4 (1) Members of a public benefit corporation are referred to as follows.

(2) Those who live in an area specified in the constitution as an area for any public constituency are referred to collectively as a public constituency.

(3) Those who come within paragraph 3(1)(b) are referred to collectively as the staff constituency and, if the power in paragraph 3(5) is exercised, each description of members is referred to as a class within that constituency.

(4) Those who come within paragraph 3(1)(c) are referred to collectively as the patient's constituency and, if the power in paragraph 3(7) is exercised, each description of members is referred to as a class within that constituency.

(5) A person who is a member of a constituency, or of a class within a constituency, may not while that membership continues be a member of any other constituency or class.

(6) A person who comes within paragraph 3(1)(b) may not become or continue as a member of any constituency other than the staff constituency.

5 The constitution must require a minimum number of members of each constituency or, where there are classes within the constituency, of each class.

Becoming a member

6 (1) An individual who is eligible to become a member of a public benefit corporation may do so on an application made to the corporation.

(2) The constitution may provide for any individual who is--

(a) eligible to become a member of the staff constituency, and

(b) invited by the corporation to become a member of that constituency (and, where there are classes within the constituency, a member of the appropriate class),

to become a member of the corporation as a member of that constituency (and class) without an application being made, unless he informs the corporation that he does not wish to do so.

(3) The constitution may provide for any individual who is--

(a) eligible to become a member of the patients' constituency (otherwise than as the carer of a patient), and

(b) invited by the corporation to become a member of a specified constituency (and where there are classes within the constituency, a member of the specified class),

to become a member of the corporation as a member of that constituency (and class) without an application being made, unless he informs the corporation that he does not wish to do so.

(4) The constituency and, where applicable, class to be specified--

(a) if he is eligible to be a member of any public constituency, is that constituency,

(b) otherwise, is the patients' constituency and, where applicable, the class of which he is eligible to become a member.

Board of Governors

7 (1) A public benefit corporation has a board of governors.

(2) Only members of the corporation and persons appointed under the following provisions may become or continue as members of the board.

(3) The members of the board other than the appointed members must be chosen by election.

(4) Members of a constituency or, where there are classes within it, members of each class may elect any of their number to be a member of the board.

8 (1) The following may not become or continue as members of the board of governors--

(a) a person who has been adjudged bankrupt or whose estate has been sequestrated and (in either case) has not been discharged,

(b) a person who has made a composition or arrangement with, or granted a trust deed for, his creditors and has not been discharged in respect of it,

(c) a person who within the preceding five years has been convicted in the British Islands of any offence if a sentence of imprisonment (whether suspended or not) for a period of not less than three months (without the option of a fine) was imposed on him.

(2) The constitution may make further provision as to the circumstances in which a person may not become or continue as a member of the board.

9 (1) More than half of the members of the board of governors must be elected by members of the corporation other than those who come within paragraph 3(1)(b).

(2) At least three members of the board must be elected by the staff constituency or, where there are classes within it, at least one member of the board must be elected by each class and at least three members must be elected altogether.

(3) At least one member of the board must be appointed by a Primary Care Trust for which the corporation provides goods or services.

(4) At least one member of the board must be appointed by one or more qualifying local authorities.

(5) A qualifying local authority is a local authority for an area which includes the whole or part of an area specified in the constitution as the area for a public constituency.

(6) If any of the corporation's hospitals includes a medical or dental school provided by a university, at least one member of the board must be appointed by that university.

(7) An organisation specified in the constitution as a partnership organisation may appoint a member of the board.

10 (1) An elected member of the board of governors may hold office for a period of three years.

(2) Such a member is eligible for re-election at the end of that period.

(3) But such a member ceases to hold office if he ceases to be a member of the corporation.

11 The corporation may pay travelling and other expenses to members of the board of governors at rates decided by the corporation.

12 The constitution must provide for the chairman of the corporation or (in his absence) another person to preside at meetings of the board of governors.

13 (1) The constitution must provide for meetings of the board of governors to be open to members of the public.

(2) But the constitution may provide for members of the public to be excluded from a meeting for special reasons.

14 (1) The constitution must make provision as to--

(a) the conduct of elections for membership of the board,

(b) the appointment of persons to membership,

(d) the removal of a member from office.

(2) The constitution may make further provision about the board.

Directors

15 (1) A public benefit corporation has a board of directors.

(2) The constitution must provide for all the powers of the corporation to be exercisable by the board of directors on its behalf.

(3) But the constitution may provide for any of those powers to be delegated to a committee of directors or to an executive director.

16 (1) The board consists of--

(a) executive directors, one of whom is the chief executive (and accounting officer) and another the finance director,

(b) non-executive directors, one of whom is the chairman.

(2) One of the executive directors must be a registered medical practitioner or a registered dentist (within the meaning of the Dentists Act 1984 (c 24)); and another must be a registered nurse or a registered midwife.

(3) A person may not be appointed as an executive director if he is within paragraph 8(1).

(4) A person may be appointed as a non-executive director only if--

(a) he is a member of a public constituency or the patients' constituency, or

(b) where any of the corporation's hospitals includes a medical or dental school provided by a university, he exercises functions for the purposes of that university,

and he is not within paragraph 8(1).

17 (1) It is for the board of governors at a general meeting to appoint or remove the chairman and the other non-executive directors.

(2) Removal of a non-executive director under sub-paragraph (1) requires the approval of three-quarters of the members of the board.

(3) It is for the non-executive directors to appoint or remove the chief executive.

(4) It is for a committee consisting of the chairman, the chief executive and the other non-executive directors to appoint or remove the executive directors.

(5) The appointment of a chief executive requires the approval of the board of governors.

18 (1) It is for the board of governors at a general meeting to decide the remuneration and allowances, and the other terms and conditions of office, of the non-executive directors.

(2) The corporation must establish a committee of non-executive directors to decide the remuneration and allowances, and the other terms and conditions of office, of the executive directors; but the constitution may make provision for those matters to be decided pending the establishment of such a committee.

Initial directors of former NHS trusts

19 (1) This paragraph applies, where the application for authorisation is made under section 33, to the exercise of the powers mentioned in paragraph 17 to appoint the initial non-executive directors and the initial chief executive.

(2) The power to appoint the initial chairman of the corporation must be exercised by appointing the chairman of the NHS trust, if he wishes to be appointed.

(3) The power to appoint the other initial non-executive directors of the corporation must be exercised, so far as possible, by appointing any of the non-executive directors of the NHS trust (other than the chairman) who wish to be appointed.

(4) A person appointed in accordance with sub-paragraph (2) or (3) must be appointed for the unexpired period of his term of office as chairman or non-executive director of the NHS trust; but if, on any such appointment, that period is less than 12 months, he must be appointed for 12 months.

(5) The power to appoint the initial chief executive of the corporation must be exercised by appointing the chief officer of the NHS trust, if he wishes to be appointed.

(6) Sub-paragraphs (a) and (b) of paragraph 16(4) do not apply to the appointment of any initial non-executive director in pursuance of this paragraph; and paragraph 17(5) does not apply to the appointment of the initial chief executive of the corporation in pursuance of sub-paragraph (5).

Register of members etc

20 (1) A public benefit corporation must have--

(a) a register of members showing, in respect of each member, the constituency to which he belongs and, where there are classes within it, the class to which he belongs,

(b) a register of members of the board of governors,

(d) a register of directors,

(e) a register of interests of the directors.

(2) The constitution may make further provision about the registers including, in particular, admission to, and removal from, the registers.

21 The constitution must make provision for dealing with conflicts of interest of members of the board of governors and of the directors.

22 (1) A public benefit corporation must make the following documents available for inspection by members of the public free of charge at all reasonable times--

(a) a copy of the current constitution,

(b) a copy of the current authorisation,

(d) a copy of the latest annual report,

(e) a copy of the latest information as to its forward planning,

(f) a copy of any notice given under section 52.

(2) Any person who requests it must be provided with a copy of or extract from any of the above documents.

(3) The corporation is also to make the registers mentioned in paragraph 20 available for inspection by members of the public, except in circumstances prescribed; and, so far as the registers are required to be available--

(a) they must be available free of charge at all reasonable times,

(b) a person who requests it must be provided with a copy of or extract from them.

(4) If the person requesting a copy or extract under this paragraph is not a member of the corporation, the corporation may impose a reasonable charge for doing so.

Auditor

23 (1) A public benefit corporation must have an auditor.

(2) It is for the board of governors to appoint or remove the auditor at a general meeting of the board.

(3) An officer of the Audit Commission may be the auditor if he is appointed by the board with the agreement of the Commission.

(4) But a person may not be appointed as auditor unless he (or, in the case of a firm, each of its members) is a member of one or more of the following bodies--

(a) the bodies mentioned in section 3(7)(a) to (e) of the Audit Commission Act 1998 (c. 18),

(b) any other body of accountants established in the United Kingdom and approved by the regulator for the purposes of this paragraph.

(5) Where an officer of the Audit Commission is appointed as auditor, the Commission must charge the public benefit corporation such fees for his services as will cover the full cost of providing them.

(6) The corporation must establish a committee of non-executive directors as an audit committee to perform such monitoring, reviewing and other functions as are appropriate.

(7) In this paragraph "the Audit Commission" means the Audit Commission for Local Authorities and the National Health Service in England and Wales.

Accounts

24 (1) A public benefit corporation must keep accounts in such form as the regulator may with the approval of the Treasury direct.

(2) The accounts must be audited by the corporation's auditor.

(3) But the Comptroller and Auditor General may examine--

(a) the accounts,

(b) any records relating to them, and

(4) If trustees are appointed under section 51, the Comptroller and Auditor General may also examine--

(a) the accounts kept by the trustees,

(b) any records relating to them, and

(5) In auditing the accounts the auditor must comply with any directions given by the regulator as to the standards, procedures and techniques to be adopted.

25 (1) A public benefit corporation must prepare in respect of each financial year annual accounts in such form as the regulator may with the approval of the Treasury direct.

(2) In preparing its annual accounts, the corporation must comply with any directions given by the regulator with the approval of the Treasury as to--

(a) the methods and principles according to which the accounts must be prepared,

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