National Health Service Act 2006

FailureE+W

52Failing NHS foundation trustsE+W

(1)If the regulator is satisfied—

(a)that an NHS foundation trust is contravening, or failing to comply with, any term of its authorisation or any requirement imposed on it under any enactment and that the contravention or failure is significant, or

(b)that an NHS foundation trust has contravened, or failed to comply with, any such term or requirement and is likely to do so again and that the contravention or failure was significant,

the regulator may by a notice to the trust exercise one or more of the powers in subsections (3) and (4).

(2)The regulator may also by a notice to the trust exercise one or more of those powers if the regulator is satisfied that the trust has contravened or failed to comply with a previous notice.

(3)The regulator may require the trust, the directors or the board of governors to do, or not to do, specified things or things of a specified description within a specified period.

(4)The regulator may remove any or all of the directors or members of the board of governors and appoint interim directors or members of the board.

(5)The regulator's power to remove a director, or member of the board of governors, of the trust includes power to suspend him from office, or to disqualify him from holding office, as a director or member of the board of governors of the trust for a specified period.

[F152AApplication of sections 52B to 52EE+W

(1)Sections 52B to 52E apply to—

(a)an NHS foundation trust authorised under section 35 on an application under section 33;

(b)an NHS foundation trust established under section 56 to which subsection (2) applies.

(2)This subsection applies to an NHS foundation trust if—

(a)at least one of the trusts on whose application the NHS foundation trust was established was an NHS foundation trust within subsection (1)(a), or was an NHS trust all or most of whose hospitals, establishments and facilities were in England, or

(b)the NHS foundation trust is the result of a succession of mergers under section 56, any of which involved an NHS foundation trust within subsection (1)(a) or an NHS trust all or most of whose hospitals, establishments and facilities were in England.

52BDe-authorisation: regulator's noticeE+W

(1)The regulator may give the Secretary of State a notice under this section if it is satisfied that—

(a)an NHS foundation trust to which this section applies is contravening or failing to comply with, or has contravened or failed to comply with, any term of its authorisation or any requirement imposed on it under any enactment, and

(b)the seriousness of the contravention or failure, or, if there has been more than one, of any of them taken together, is such that it would justify the Secretary of State making an order under section 52D.

(2)The notice must be in writing.

(3)With the notice the regulator must give the Secretary of State a report stating the reasons why it is satisfied as mentioned in subsection (1).

(4)Before giving a notice under this section, the regulator must consult first the Secretary of State (unless the notice follows a request by the Secretary of State under section 52E) and then—

(a)the trust,

(b)any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities, and

(c)any other person to which the trust provides goods or services under this Act and which the regulator considers it appropriate to consult.

52CGrounds for de-authorisation noticeE+W

(1)In determining under section 52B(1)(b) whether the making of an order would be justified, and in determining whether to give a notice under that section, the regulator must consider these matters (among others)—

(a)the health and safety of patients;

(b)the quality of the provision by the trust of goods and services;

(c)the financial position of the trust;

(d)the way it is being run.

(2)The regulator must publish guidance as to the matters (including those mentioned in subsection (1)) that it proposes to consider in making those determinations.

(3)Before publishing any guidance under this section, including any revised guidance, the regulator must consult—

(a)the Secretary of State,

(b)each NHS foundation trust to which this section applies,

(c)each NHS trust intending to make an application to become an NHS foundation trust, and

(d)such other persons as the regulator considers appropriate.

52DDe-authorisationE+W

(1)If the regulator gives notice under section 52B in relation to a trust, the Secretary of State must make an order for it to cease to be an NHS foundation trust.

(2)An order made under subsection (1) must specify the date when it is to take effect, which must be within the period of 5 working days beginning with the day on which it is made.

(3)On an order under subsection (1) taking effect in relation to a body, it ceases to be an NHS foundation trust and a public benefit corporation and becomes a National Health Service trust.

(4)The order must specify, in relation to the trust, the matters mentioned in paragraph 5(1)(a) to (c) of Schedule 4 and, where the trust has a significant teaching commitment, the matters mentioned in paragraph 5(1)(d).

(5)The order may provide for any provision under subsection (4) specifying the number of executive directors and non-executive directors to take effect at the end of a period specified in the order.

(6)Schedule 8A makes further provision about trusts in respect of which an order is made under subsection (1).

(7)If it appears to the Secretary of State to be necessary in order to comply with provision made under subsection (4), or made by regulations under paragraph 4 of Schedule 4, the Secretary of State may by order—

(a)terminate the office of any executive or non-executive director of the trust;

(b)appoint a person to be an executive or non-executive director of the trust.

(8)Within seven days after the day on which the Secretary of State makes an order under subsection (1) the regulator must publish its report under section 52B(3).

(9)In this section “working day” means any day which is not Saturday, Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971.

52ESecretary of State's requestE+W

(1)If it appears to the Secretary of State that there are grounds for the regulator to be satisfied as mentioned in section 52B(1), the Secretary of State may request the regulator in writing to consider exercising its power to give a notice under that section.

(2)A request under this section must—

(a)specify the NHS foundation trust to which it relates, and

(b)state the grounds relied on by the Secretary of State.

(3)The Secretary of State must lay before Parliament any request under this section.

(4)If within the required period the regulator does not give a notice under section 52B in response to a request under this section, it must, within that period, publish its reasons for not doing so with a statement as to how it has complied with section 52C(1).

(5)The required period is—

(a)14 days beginning with the day after the regulator receives the request, or

(b)any longer period specified in the request.

(6)The Secretary of State may by order extend or further extend the required period.]

53Voluntary arrangementsE+W

(1)If the regulator is satisfied that it is necessary or expedient to do so, it may by a notice to an NHS foundation trust [F2to which this section applies] require the directors—

(a)to take steps to obtain a moratorium, or

(b)to make a proposal for a voluntary arrangement.

(2)An order may provide for Part 1 of the Insolvency Act 1986 (c. 45) (company voluntary arrangements), including any related provision of that Act, to apply with modifications in relation to NHS foundation trusts [F3to which this section applies] .

(3)References in this Chapter to a moratorium are to a moratorium under section 1A of that Act as modified by the order.

(4)References in this Chapter to a voluntary arrangement are to a voluntary arrangement under Part 1 of that Act as modified by the order.

[F4(4A)This section applies to an NHS foundation trust to which sections 52B to 52E and Chapter 5A do not apply.]

54Dissolution etcE+W

(1)The powers conferred by this section are exercisable where—

(a)an NHS foundation trust [F5to which section 53 applies] contravenes or fails to comply with a notice under section 52 or 53 or the trust's compliance with a notice under section 53 does not result in the implementation of a voluntary arrangement, and

(b)the regulator considers that further exercise of any of the powers conferred by those sections would not be likely to secure the provision of the goods and services which the authorisation requires the trust to provide.

(2)Before the powers conferred by this section are exercised, the regulator must consult specified persons about specified matters.

(3)“Specified” means specified in an order.

(4)An order may transfer, or provide for the transfer of, any property or liabilities of the trust to—

(a)another NHS foundation trust,

(b)a Primary Care Trust,

(c)an NHS trust,

(d)the Secretary of State.

(5)The liabilities which may be transferred by virtue of subsection (4) to any of the bodies mentioned in paragraphs (a) to (c) of that subsection include criminal liabilities.

(6)Schedule 9 makes provision for the transfer of employees.

(7)An order may provide for the dissolution of the trust.

(8)An order may apply any provision of Part 4 of the Insolvency Act 1986 (c. 45) (winding up of companies), including any related provision of that Act, with modifications.

(9)Where the regulator refuses to give an authorisation to a public benefit corporation—

(a)the powers conferred by this section are also exercisable, and

(b)references in this section and Schedule 9 to an NHS foundation trust are references to the corporation.

55Sections 53 and 54: supplementaryE+W

(1)In sections 53 and 54, an order means an order made by the Secretary of State.

(2)The modifications of the Insolvency Act 1986 that may be made by an order include—

(a)provision for securing that the goods and services which the trust is required by the authorisation to provide continue to be provided (whether by the trust or another),

(b)provision for securing the protection of property needed for the purposes of those goods and services.

(3)The power conferred by section 54(3) must be exercised with a view to securing the provision of the goods and services which the authorisation requires the trust to provide.

(4)That power must also be exercised (together, if required, with the power conferred by section 40(2)) with a view to securing that any transfer of property in pursuance of the exercise of the power does not result in a net loss of value to the trust; and the question whether a transfer would result in a net loss of value must be determined in accordance with regulations.

(5)The Insolvency Act 1986 may not be modified under section 54(8) so as to alter the priority of debts or the ranking of debts between themselves.