Transitional provision
Section 111 - Imposition of licence conditions on NHS foundation trusts
850.This and the following three sections provide Monitor with transitional intervention powers over all NHS foundation trusts.
851.Subsections (1) and (2) provide transitional powers for Monitor to impose such requirements on a foundation trust (in the form of additional licence conditions), as Monitor considers appropriate, to address a governance failing. Monitor can impose such requirements where it is satisfied that this is necessary to prevent or remedy a breach of a foundation trust’s licence. Subsection (1) allows Monitor to impose licence conditions relating to governance on a foundation trust where it is satisfied that the governance of the trust will cause it to fail to comply with its licence conditions to provide NHS services. Subsection (2) specifies that the circumstances in which these powers may be used include those where the trust’s directors, governors, or both, are failing to comply with conditions in the trust’s licence, or are failing to reduce the risk of a breach of licence conditions. Monitor’s transitional powers are intended to provide an additional safeguard to protect patients’ interests by ensuring that foundation trusts are well-governed and exercise their functions consistently with their duty to do so effectively, efficiently and economically, in the early years of the new regulatory regime, when some foundation trust governors may be inexperienced and when some foundation trusts may be newly authorised.
852.Subsection (3) provides that any additional licence conditions imposed by Monitor under subsection (1) could continue in force until Monitor’s transitional powers were repealed by Parliament by virtue of section 112.
853.Subsections (5) and (6) provide Monitor with further powers to take action where a foundation trust fails to comply with Monitor’s requirements under subsection (1). Specifically, Monitor could intervene to require the trust to remove, replace on an interim basis, suspend or disqualify one or more directors or governors of the trust. If the trust failed to do so, Monitor could take such action itself.
854.Subsection (7) provides that Monitor’s exercise of its transitional powers in subsection (5) is without prejudice to its ability to exercise powers to set and enforce requirements on foundation trusts, including requirements relating to governance, or requirements to ensure a foundation trust’s continued ability to provide services for the purpose of the NHS. This clarifies that the transitional powers are in addition to Monitor’s continuing non-transitional powers to intervene where a licence holder is in breach of licence conditions, for example, a requirement to maintain continuity of NHS services.
855.Subsection (11) repeals section 52 of the NHS Act (failing NHS foundation trusts) because Monitor will have permanent powers to protect the continuity of services through the modified regime for unsustainable foundation trusts. It also makes related consequential amendments.
Section 112 – Duration of transitional period
856.This section makes all foundation trusts subject to Monitor’s transitional powers until the Secretary of State makes an order to release either some or all trusts from the powers. The first such order may not be made before 1 April 2016, or, in the case of a foundation trust authorised after 1 April 2014, before two years after the date of authorisation. The order would be subject to Parliamentary scrutiny under the negative resolution procedure, since those trusts being considered for release would have effective governance and would therefore be at low risk of needing intervention.
857.Subsection (5) provides for the section to be repealed when there are no longer any foundation trusts or NHS trusts which might become foundation trusts to which the powers might apply.
Section 113 – Orders under section 112: criteria for deciding applicable trusts
858.This section sets out the process to be followed when the Secretary of State decides to make an order to release foundation trusts from Monitor’s transitional intervention powers. Subsection (1) provides that the Secretary of State must notify Monitor where he proposes to make an order releasing trusts from the powers in this way.
859.Subsection (2) provides that, where Monitor receives a notification under subsection (1), it must develop criteria to decide which foundation trusts should be released from its transitional intervention powers. Subsection (3) requires Monitor to consult the Care Quality Commission and other appropriate persons and to obtain the Secretary of State’s approval for the criteria before applying them.
860.Subsection (4) requires that, following approval by the Secretary of State, Monitor must publish the criteria. Monitor must apply the criteria to decide which foundation trusts should be released from the transitional intervention powers. Monitor must notify the Secretary of State about which foundation trusts it has determined should be released from the transitional powers and publish a list of those trusts.
861.Subsection (5) provides for a situation where the Secretary of State did not approve the criteria developed by Monitor under subsection (2). Monitor would have to propose revised criteria to the Secretary of State and repeat the process in subsections (3) and (4).
862.Subsection (6) requires the Secretary of State, on receiving notification from Monitor under subsection (4), to review Monitor’s determination about the trusts to be released.
Section 114 - Repeal of sections 112 and 113
863.This section repeals the previous two sections when section 111 (Imposition of licence conditions on NHS foundation trusts) on transitional intervention powers is repealed. That section is repealed when it no longer has any effect in relation to any foundation trusts and there are no NHS trusts left in existence.
