Health and Social Care Act 2012

PART 3U.K.Regulation of health and adult social care services

CHAPTER 1E+WMonitor

F161MonitorE+W

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F162General dutiesE+W

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F163Secretary of State's guidance on duty under section 62(9)E+W

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F164General duties: supplementaryE+W

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F165Power to give Monitor functions relating to adult social care servicesE+W

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F166Matters to have regard to in exercise of functionsE+W

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F167Conflicts between functionsE+W

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F168Duty to review regulatory burdensE+W

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F169Duty to carry out impact assessmentsE+W

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F170InformationE+W

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F171Failure to perform functionsE+W

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CHAPTER 2E+WCompetition

F272Functions under the Competition Act 1998E+W

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F373Functions under Part 4 of the Enterprise Act 2002E+W

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74Competition functions: supplementaryE+W

F4(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)In section 168 of that Act (regulated markets)—

(a)in subsection (3) (meaning of “relevant action”), after paragraph (o) insert—

“(p)modifying the conditions of a licence issued under section 87 of the Health and Social Care Act 2012.”,

(b)in subsection (4) (meaning of “relevant statutory functions”), after paragraph (q) insert—

“(r)in relation to any licence issued under section 87 of the Health and Social Care Act 2012, the duties of Monitor under sections 62 and 66 of that Act.”, and

(c)in subsection (5) (meaning of “sectoral regulator”), after paragraph (i) insert—

“(ia)Monitor;”.

F575Requirements as to procurement, patient choice and competitionE+W

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F576Requirements under section 75: investigations, declarations and directionsE+W

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F577Requirements under section 75: undertakingsE+W

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F578GuidanceE+W

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F679Mergers involving NHS foundation trustsE+W

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F880Co-operation with the [F7CMA]E+W

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CHAPTER 3E+WLicensing

Licensing requirementE+W

81Requirement for health service providers to be licensedE+W

(1)Any person who provides a health care service for the purposes of the NHS must hold a licence under this Chapter.

(2)Regulations may make provision for the purposes of this Chapter for determining, in relation to a service provided by two or more persons acting in different capacities, which of those persons is to be regarded as the person who provides the service.

82Deemed breach of requirement to be licensedE+W

(1)This section applies where a licence holder—

(a)in providing a health care service for the purposes of the NHS, carries on a regulated activity (within the meaning of Part 1 of the Health and Social Care Act 2008), but

(b)is not registered under Chapter 2 of Part 1 of that Act in respect of the carrying on of that activity.

(2)The licence holder is to be regarded as providing the service in breach of the requirement under section 81 to hold a licence.

83Exemption regulationsE+W

(1)Regulations (referred to in this section and section 84 as “exemption regulations”) may provide for the grant of exemptions from the requirement under section 81 in respect of—

(a)a prescribed person or persons of a prescribed description;

(b)the provision of a prescribed health care service or a health care service of a prescribed description.

(2)Exemption regulations may grant an exemption—

(a)either generally or to the extent prescribed;

(b)either unconditionally or subject to prescribed conditions;

(c)indefinitely, for a prescribed period or for a period determined by or under the exemption.

(3)Conditions subject to which an exemption may be granted include, in particular, conditions requiring any person providing a service pursuant to the exemption—

(a)to comply with any direction given by [F9NHS England] about such matters as are specified in the exemption or are of a description so specified,

(b)except to the extent that [F10NHS England] otherwise approves, to do, or not to do, such things as are specified in the exemption or are of a description so specified (or to do, or not to do, such things in a specified manner), and

(c)to refer for determination by [F11NHS England] such questions arising under the exemption as are specified in the exemption or are of a description so specified.

(4)Before making exemption regulations the Secretary of State must give notice to—

F12(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)[F13NHS England], and

(c)the Care Quality Commission and its Healthwatch England committee.

(5)The Secretary of State must also publish a notice under subsection (4).

(6)A notice under subsection (4) must—

(a)state that the Secretary of State proposes to make exemption regulations and set out their proposed effect,

(b)set out the Secretary of State's reasons for the proposal, and

(c)specify the period (“the notice period”) within which representations with respect to the proposal may be made.

(7)The notice period must be not less than 28 days beginning with the day after that on which the notice is published under subsection (5).

(8)Where an exemption is granted the Secretary of State—

(a)if the exemption is granted to a prescribed person, must give notice of it to that person, and

(b)must publish the exemption.

84Exemption regulations: supplementaryE+W

(1)Regulations may revoke exemption regulations by which an exemption was granted to a person, or amend such regulations by which more than one exemption was so granted so as to withdraw any of the exemptions—

(a)at the person's request,

(b)in accordance with any provision of the exemption regulations by which the exemption was granted, or

(c)if the Secretary of State considers it to be inappropriate for the exemption to continue to have effect.

(2)Regulations may revoke exemption regulations by which an exemption was granted to persons of a prescribed description, or amend such regulations by which more than one exemption was so granted so as to withdraw any of the exemptions—

(a)in accordance with any provision of the exemption regulations by which the exemption was granted, or

(b)if the Secretary of State considers it to be inappropriate for the exemption to continue to have effect.

(3)The Secretary of State may by direction withdraw an exemption granted to persons of a description prescribed in exemption regulations for any person of that description—

(a)at the person's request,

(b)in accordance with any provision of the exemption regulations by which the exemption was granted, or

(c)if the Secretary of State considers it to be inappropriate for the exemption to continue to have effect in the case of the person.

(4)Subsection (5) applies where the Secretary of State proposes to—

(a)make regulations under subsection (1)(b) or (c) or (2), or

(b)give a direction under subsection (3)(b) or (c).

(5)The Secretary of State must—

(a)consult the following about the proposal—

F14(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)[F15NHS England];

(iii)the Care Quality Commission and its Healthwatch England committee;

(b)where the Secretary of State is proposing to make regulations under subsection (1)(b) or (c), give notice of the proposal to the person to whom the exemption was granted;

(c)where the Secretary of State is proposing to make regulations under subsection (2), publish the notice;

(d)where the Secretary of State is proposing to give a direction under subsection (3)(b) or (c), give notice of the proposal to the person from whom the Secretary of State proposes to withdraw the exemption.

(6)The notice must—

(a)state that the Secretary of State proposes to make the regulations or give the direction (as the case may be),

(b)set out the Secretary of State's reasons for the proposal, and

(c)specify the period within which representations with respect to the proposal may be made.

(7)The period so specified must be not less than 28 days beginning with the day after that on which the notice is received or (as the case may be) published.

Licensing procedureE+W

85Application for licenceE+W

(1)A person seeking to hold a licence under this Chapter must make an application to [F16NHS England].

(2)The application must be made in such form, and contain or be accompanied by such information, as [F17NHS England] requires.

86Licensing criteriaE+W

(1)[F18NHS England] must set and publish the criteria which must be met by a person in order for that person to be granted a licence under this Chapter.

(2)[F18NHS England] may revise the criteria and, if it does so, must publish them as revised.

(3)[F18NHS England] may not set or revise the criteria unless the Secretary of State has by order approved the criteria or (as the case may be) revised criteria.

87Grant or refusal of licenceE+W

(1)This section applies where an application for a licence has been made under section 85.

(2)If [F19NHS England] is satisfied that the applicant meets the criteria for holding a licence for the time being published under section 86 it must as soon as reasonably practicable grant the application; otherwise it must refuse it.

(3)On granting the application, [F20NHS England] must issue a licence to the applicant.

(4)A licence issued under this section is subject to—

(a)such of the standard conditions (see section 94) as are applicable to the licence, [F21and]

(b)such other conditions included in the licence by virtue of section 95 (referred to in this Chapter as “the special conditions”), [F22and]

(c)[F22any conditions included in the licence by virtue of section 111 (imposition of licence conditions on NHS foundation trusts during transitional period).]

[F2387AApplication and grant: NHS trustsE+W

(1)An NHS trust established under section 25 of the National Health Service Act 2006 is to be treated, on its establishment, as—

(a)having made an application for a licence under section 85, and

(b)having met the criteria for holding a licence for the time being published under section 86.

(2)An NHS trust established under section 25 of the National Health Service Act 2006 before the day on which section 51(1) of the Health and Care Act 2022 comes into force is to be treated, for the purposes of subsection (1), as having been established on that day.]

88Application and grant: NHS foundation trustsE+W

[F24(1)This section applies where—

(a)an NHS trust becomes an NHS foundation trust in pursuance of section 36 of the National Health Service Act 2006 (effect of authorisation of NHS foundation trust), or

(b)an NHS foundation trust is established under sections 56 or 56B of that Act (mergers and separations).]

(2)The NHS foundation trust is to be treated by [F25NHS England] as having—

(a)duly made an application for a licence under section 85, and

(b)met the criteria for holding a licence for the time being published under section 86.

(3)An NHS foundation trust in existence on the day on which this section comes into force is to be treated for the purposes of this section as having become an NHS foundation trust pursuant to section 36 of the National Health Service Act 2006 on that day.

89Revocation of licenceE+W

[F26NHS England] may at any time revoke a licence under this Chapter—

(a)on the application of the licence holder, or

(b)if [F26NHS England] is satisfied that the licence holder has failed to comply with a condition of the licence.

90Right to make representationsE+W

(1)[F27NHS England] must give notice—

(a)to an applicant for a licence under this Chapter of a proposal to refuse the application;

(b)to the licence holder of a proposal to revoke a licence under section 89(b).

(2)A notice under this section must—

(a)set out [F28NHS England’s] reasons for its proposal;

(b)specify the period within which representations with respect to the proposal may be made to [F29NHS England].

(3)The period so specified must be not less than 28 days beginning with the day after that on which the notice is received.

91Notice of decisionsE+W

(1)This section applies if [F30NHS England] decides to—

(a)refuse an application for a licence under section 87, or

(b)revoke a licence under section 89(b).

(2)[F31NHS England] must give notice of its decision to the applicant or the licence holder (as the case may be).

(3)A notice under this section must explain the right of appeal conferred by section 92.

(4)A decision of [F32NHS England] to revoke a licence under section 89(b) takes effect on such day as may be specified by [F32NHS England], being a day no earlier than—

(a)if an appeal is brought under section 92, the day on which the decision on appeal is confirmed or the appeal is abandoned,

(b)where the licence holder notifies [F32NHS England] before the end of the period for bringing an appeal under section 92 that the licence holder does not intend to appeal, the day on which [F32NHS England] receives the notification, or

(c)the day after that period.

92Appeals to the TribunalE+W

(1)An appeal lies to the First-tier Tribunal against a decision of [F33NHS England] to—

(a)refuse an application for a licence under section 87, or

(b)revoke a licence under section 89(b).

(2)The grounds for an appeal under this section are that the decision was—

(a)based on an error of fact,

(b)wrong in law, or

(c)unreasonable.

(3)On an appeal under this section, the First-tier Tribunal may—

(a)confirm [F34NHS England’s] decision,

(b)direct that the decision is not to have effect, or

(c)remit the decision to [F35NHS England].

93Register of licence holdersE+W

(1)[F36NHS England] must maintain and publish a register of licence holders.

(2)The register may contain such information as [F36NHS England] considers appropriate for the purpose of keeping members of the public informed about licence holders including, in particular, information about the revocation of any licence under this Chapter.

(3)[F36NHS England] must secure that copies of the register are available at its offices for inspection at all reasonable times by any person.

(4)Any person who asks [F36NHS England] for a copy of, or an extract from, the register is entitled to have one.

(5)Regulations may provide that subsections (3) and (4) do not apply—

(a)in such circumstances as may be prescribed, or

(b)to such parts of the register as may be prescribed.

(6)A fee determined by [F37NHS England] is payable for the copy or extract except—

(a)in such circumstances as may be prescribed, or

(b)in any case where [F37NHS England] considers it appropriate to provide the copy or extract free of charge.

Licence conditionsE+W

94Standard conditionsE+W

(1)[F38NHS England] must determine and publish the conditions to be included in each licence under this Chapter (referred to in this Chapter as “the standard conditions”).

(2)Different standard conditions may be determined for different descriptions of licences.

(3)For the purposes of subsection (2) a description of licences may, in particular, be framed wholly or partly by reference to—

(a)the nature of the licence holder,

(b)the services provided under the licence, or

(c)the areas in which those services are provided.

(4)But different standard conditions must not be determined for different descriptions of licences to the extent that the description is framed by reference to the nature of the licence holder unless [F39NHS England] considers that at least one of requirements 1 and 2 is met.

(5)Requirement 1 is that—

(a)the standard conditions in question relate to the governance of licence holders, and

(b)it is necessary to determine different standard conditions in order to take account of differences in the status of different licence holders.

(6)Requirement 2 is that it is necessary to determine different standard conditions for the purpose of ensuring that the burdens to which different licence holders are subject as a result of holding a licence are broadly consistent.

F40(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95Special conditionsE+W

(1)[F41NHS England] may—

(a)F42... include a special condition in a licence under this Chapter, and

(b)F43... modify a special condition of a licence.

(2)Before including a special condition or making such modifications [F44NHS England] must give notice to—

(a)the applicant or the licence holder (as the case may be),

(b)the Secretary of State,

F45(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)such [F46integrated care boards] as are likely to be affected by the proposed inclusion or modifications, and

(e)the Care Quality Commission and its Healthwatch England committee.

(3)[F47NHS England] must also publish the notice under subsection (2).

(4)The notice under subsection (2) must—

(a)state that [F48NHS England] proposes to include the special condition or make the modifications and set out its or their proposed effect,

(b)set out [F49NHS England’s] reasons for the proposal, and

(c)specify the period (“the notice period”) within which representations with respect to the proposal may be made to [F50NHS England].

(5)The notice period must be not less than 28 days beginning with the day after that on which the notice is published under subsection (3).

(6)In this section, a reference to modifying a condition includes a reference to amending, omitting or adding a condition.

96Limits on [F51NHS England’s] functions to set or modify licence conditionsE+W

(1)This section applies to the following functions of [F52NHS England] —

(a)the duty to determine the standard conditions to be included in each licence under this Chapter or in licences of a particular description (see section 94);

(b)the powers to include a special condition in a licence and to modify such a condition (see section 95);

(c)the power to modify the standard conditions applicable to all licences, or to licences of a particular description (see section 100).

(2)[F53NHS England] may only exercise a function to which this section applies—

(a)for the purpose of regulating the price payable for the provision of health care services for the purposes of the NHS;

(b)for the purpose of preventing anti-competitive behaviour in the provision of health care services for those purposes which is against the interests of people who use such services;

(c)for the purpose of protecting and promoting the right of patients to make choices with respect to treatment or other health care services provided for the purposes of the NHS;

(d)for the purpose of ensuring the continued provision of health care services for the purposes of the NHS;

[F54(da)for the purpose of ensuring that decisions relating to the provision of health care services for the purposes of the NHS are made with regard to all their likely effects in relation to the matters referred to in subsection (2A);]

(e)for the purpose of enabling health care services provided for the purposes of the NHS to be provided in an integrated way where [F55NHS England] considers that this would achieve one or more of the objectives referred to in subsection (3);

(f)for the purpose of enabling the provision of health care services provided for the purposes of the NHS to be integrated with the provision of health-related services or social care services where [F56NHS England] considers that this would achieve one or more of the objectives referred to in subsection (3);

[F57(g)for the purpose of enabling, promoting or securing co-operation between providers of health care services for the purposes of the NHS, or between such providers and—

(i)NHS bodies, within the meaning of section 72 of the National Health Service Act 2006, or

(ii)local authorities in England (and for this purpose “local authority” has the meaning given by section 275(1) of the National Health Service Act 2006);]

(h)for purposes connected with the governance of persons providing health care services for the purposes of the NHS;

(i)for purposes connected with [F58NHS England’s] functions in relation to the register of NHS foundation trusts required to be maintained under section 39 of the National Health Service Act 2006;

(j)for purposes connected with the operation of the licensing regime established by this Chapter;

[F59(k)for such other purposes as may be prescribed.]

[F60(2A)The matters referred to in subsection (2)(da) are—

(a)the health and well-being of the people of England;

(b)the quality of services provided to individuals—

(i)by relevant bodies, or

(ii)in pursuance of arrangements made by relevant bodies,

for or in connection with the prevention, diagnosis or treatment of illness, as part of the health service in England;

(c)efficiency and sustainability in relation to the use of resources by relevant bodies for the purposes of the health service in England.

(2B)For the purposes of subsection (2)(da) (as read with subsection (2A))—

(a)a reference to the effects of decisions in relation to the health and well-being of the people of England includes a reference to the effects of the decisions in relation to inequalities between the people of England with respect to their health and well-being;

(b)a reference to effects of decisions in relation to the quality of services provided to individuals includes a reference to the effects of the decisions in relation to inequalities between individuals with respect to the benefits that they can obtain from those services.

(2C)In subsection (2A) “relevant bodies” means—

(a)NHS England,

(b)integrated care boards,

(c)NHS trusts established under section 25, and

(d)NHS foundation trusts.]

(3)The objectives referred to in subsection (2)(e), [F61and (f)] are—

(a)improving the quality of health care services provided for the purposes of the NHS (including the outcomes that are achieved from their provision) or the efficiency of their provision,

(b)reducing inequalities between persons with respect to their ability to access those services, and

(c)reducing inequalities between persons with respect to the outcomes achieved for them by the provision of those services.

(4)[F62NHS England] must not exercise a function to which this section applies in a way which it considers would result in a particular licence holder or holders of licences of a particular description being put at an unfair advantage or disadvantage in competing with others in the provision of health care services for the purposes of the NHS as a result of—

(a)being in the public or (as the case may be) private sector, or

(b)some other aspect of its or their status.

(5)In subsection (2)(f), “health-related services” and “social care services” each have the meaning given in section 62(11).

97Conditions: supplementaryE+W

(1)The standard or special conditions of a licence under this Chapter may, in particular, include conditions—

(a)requiring the licence holder to pay to [F63NHS England] such fees of such amounts as [F63NHS England] may determine in respect of the exercise by [F63NHS England] of its functions under this Chapter,

(b)requiring the licence holder to comply with any requirement imposed on it by [F64NHS England] under Chapter 6 (financial assistance in special administration cases),

(c)requiring the licence holder to do, or not to do, specified things or things of a specified description (or to do, or not to do, any such things in a specified manner) within such period as may be specified in order to prevent anti-competitive behaviour in the provision of health care services for the purposes of the NHS which is against the interests of people who use such services,

(d)requiring the licence holder to give notice to the [F65CMA] before entering into an arrangement under which, or a transaction in consequence of which, the licence holder's activities, and the activities of one or more other businesses, cease to be distinct activities,

(e)requiring the licence holder to provide [F66NHS England] with such information as [F66NHS England] considers necessary for the purposes of the exercise of its functions under this Part,

(f)requiring the licence holder to publish such information as may be specified or as [F67NHS England] may direct,

(g)requiring the licence holder to charge for the provision of health care services for the purposes of the NHS in accordance with [F68the NHS payment scheme (see section 114A)],

(h)requiring the licence holder to comply with other rules published by [F69NHS England] about the charging for the provision of health care services for the purposes of the NHS,

(i)requiring the licence holder—

(i)to do, or not to do, specified things or things of a specified description (or to do, or not to do, any such things in a specified manner) within such period as may be specified in order to ensure the continued provision of one or more of the health care services that the licence holder provides for the purposes of the NHS,

(ii)to give [F70NHS England] notice (of such period as may be determined by or under the licence) of the licence holder's intention to cease providing a health care service for the purposes of the NHS, and

(iii)if [F71NHS England] so directs, to continue providing that service for a period determined by [F71NHS England],

(j)about the use or disposal by the licence holder of assets used in the provision of health care services for the purposes of the NHS in order to ensure the continued provision of one or more of the health care services that the licence holder provides for those purposes, and

(k)about the making by the licence holder of investment in relation to the provision of health care services for the purposes of the NHS in order to ensure the continued provision of one or more of the health care services that the licence holder provides for those purposes.

(2)In subsection (1) “specified” means specified in a condition.

(3)[F72NHS England] must not include a condition under subsection (1)(c) that requires the licence holder (A) to provide another licence holder with access to facilities of A.

(4)A condition under subsection (1)(d)—

(a)may be included only in the licence of an NHS foundation trust or a body which (or part of which) used to be an NHS trust established under section 25 of the National Health Service Act 2006, and

(b)ceases to have effect at the end of the period of five years beginning with the day on which it is included in the licence.

(5)The references in subsection (1)(d) to the activities of a licence holder or other business include a reference to part of the activities concerned.

(6)The references in subsections (1)(d) and (5) to the activities of a business include a reference to the activities of an NHS foundation trust in so far as its activities would not otherwise be the activities of a business.

(7)A condition of a licence under this Chapter may provide that it is to have effect, or cease to have effect, at such times and in such circumstances as may be determined by or under the conditions.

98Conditions relating to the continuation of the provision of services etc.E+W

(1)The things which a licence holder may be required to do by a condition under section 97(1)(i)(i) include, in particular—

(a)providing information to the commissioners of services to which the condition applies and to such other persons as [F73NHS England] may direct,

(b)allowing [F74NHS England] to enter premises owned or controlled by the licence holder and to inspect the premises and anything on them, and

(c)co-operating with such persons as [F75NHS England] may appoint to assist in the management of the licence holder's affairs, business and property.

(2)A commissioner of services to which a condition under section 97(1)(i), (j) or (k) applies must co-operate with persons appointed under subsection (1)(c) in their provision of the assistance that they have been appointed to provide.

(3)Where a licence includes a condition under section 97(1)(i), (j) or (k), [F76NHS England] must carry out an ongoing assessment of the risks to the continued provision of services to which the condition applies.

(4)[F77NHS England] must publish guidance—

(a)for commissioners of a service to which a condition under section 97(1)(i), (j) or (k) applies about the exercise of their functions in connection with the licence holders who provide the service, and

(b)for such licence holders about the conduct of their affairs, business and property at a time at which such a condition applies.

(5)A commissioner of services to which a condition under section 97(1)(i), (j), or (k) applies must have regard to guidance under subsection (4)(a).

[F78(5A)In subsections (4)(a) and (5) “commissioner” does not include NHS England.]

(6)[F79NHS England] may revise guidance under subsection (4) and, if it does so, must publish the guidance as revised.

(7)Before publishing guidance under subsection (4) or (6), [F80NHS England] must obtain the approval of—

(a)the Secretary of State, F81...

F81(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99Notification of commissioners where continuation of services at riskE+W

(1)This section applies where [F82NHS England]—

(a)takes action in the case of a licence holder in reliance on a condition in the licence under section 97(1)(i), (j) or (k), and

(b)does so because it is satisfied that the continued provision for the purposes of the NHS of health care services to which that condition applies is being put at significant risk by the configuration of certain health care services provided for those purposes.

(2)In subsection (1), a reference to the provision of services is a reference to their provision by the licence holder or any other provider.

[F83(3)NHS England must as soon as reasonably practicable notify such integrated care boards as NHS England considers appropriate—

(a)of the action it has taken, and

(b)of its reasons for being satisfied as mentioned in subsection (1)(b).]

(4)[F84NHS England] must publish for each financial year a list of the notifications under this section that it has given during that year; and the list must include for each notification a summary of [F85NHS England’s] reasons for being satisfied as mentioned in subsection (1)(b).

(5)F86... [F87Integrated care boards], having received a notification under this section, must have regard to it in arranging for the provision of health care services for the purposes of the NHS.

100Modification of standard conditionsE+W

(1)[F88NHS England] may, subject to the requirements of this section, modify the standard conditions applicable to all licences under this Chapter or to licences of a particular description.

[F89(1A)Before making modifications under subsection (1) that NHS England consider to be a major change, NHS England must—

(a)carry out an assessment of the likely impact of the modifications, or

(b)publish a statement setting out its reasons for concluding that such assessment is not needed.]

(2)Before making any [F90modifications under subsection (1)] [F91NHS England] must give notice to—

(a)each relevant licence holder,

(b)the Secretary of State,

F92(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)every [F93integrated care board], and

(e)the Care Quality Commission and its Healthwatch England committee.

(3)[F94NHS England] must also publish the notice under subsection (2).

(4)The notice under subsection (2) must—

(a)state that [F95NHS England] proposes to make the modifications,

(b)set out the proposed effect of the modifications,

[F96(ba)set out any impact assessment carried out by NHS England under subsection (1A)(a),]

(c)set out [F97NHS England’s] reasons for the proposal, and

(d)specify the period (“the notice period”) within which representations with respect to the proposal may be made to [F98NHS England].

(5)The notice period must be not less than 28 days beginning with the day after that on which the notice is published under subsection (3).

F99(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F99(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F99(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F99(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)Where [F100NHS England] modifies the standard conditions applicable to all licences or (as the case may be) to licences of a particular description under this section, [F100NHS England]—

(a)may also make such incidental or consequential modifications as it considers necessary or expedient of any other conditions of a licence which is affected by the modifications,

(b)must make (as nearly as may be) the same modifications of those conditions for the purposes of their inclusion in all licences or (as the case may be) licences of that description granted after that time, and

(c)must publish the modifications.

(11)In this sectionF101..., “relevant licence holder”—

(a)in relation to proposed modifications of the standard conditions applicable to all licences, means any licence holder, and

(b)in relation to proposed modifications of the standard conditions applicable to licences of a particular description, means a holder of a licence of that description.

(12)In this section, a reference to modifying a condition includes a reference to amending, omitting or adding a condition.

F103101Modification references to the [F102CMA] E+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102Modification of conditions by order under other enactmentsE+W

(1)This section applies where the [F104CMA] or Secretary of State (the “relevant authority”) makes a relevant order.

(2)A relevant order may modify—

(a)the conditions of a particular licence, or

(b)the standard conditions applicable to all licences under this Chapter or to licences of a particular description.

(3)The modifications which may be made by a relevant order are those which the relevant authority considers necessary or expedient for the purpose of giving effect to, or taking account of, any provision made by the order.

(4)In this section “relevant order” means—

(a)an order under section 75, 83 or 84 of, or paragraph 5, 10 or 11 of Schedule 7 to, the Enterprise Act 2002 where one or more of the enterprises which have, or may have, ceased to be distinct enterprises were engaged in the provision of health care services for the purposes of the NHS;

(b)an order under any of those provisions of that Act where one or more of the enterprises which will or may cease to be distinct enterprises is engaged in the provision of health care services for the purposes of the NHS;

(c)an order under section 160 or 161 of that Act where the feature, or combination of features, of the market [F105or markets] in the United Kingdom for goods or services which prevents, restricts or distorts competition relates to—

(i)the commissioning by [F106NHS England] or [F107an integrated care board] of health care services for the purposes of the NHS, or

(ii)the provision of those services.

(5)The modification under subsection (2)(a) of part of a standard condition of a licence does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.

(6)Where the relevant authority modifies the standard conditions applicable to all licences or (as the case may be) to licences of a particular description under this section, the relevant authority—

(a)may, after consultation with [F108NHS England], make such incidental or consequential modifications as the relevant authority considers necessary or expedient of any other conditions of any licence which is affected by the modifications,

(b)must also make (as nearly as may be) the same modifications of those conditions for the purposes of their inclusion in all licences or (as the case may be) licences of that description granted after that time, and

(c)must publish any modifications it makes under paragraph (b).

(7)Expressions used in subsection (4) and in Part 3 or (as the case may be) Part 4 of the Enterprise Act 2002 have the same meaning in that subsection as in that Part.

(8)In this section, a reference to modifying a condition includes a reference to amending, omitting or adding a condition.

103Standard condition as to transparency of certain criteriaE+W

(1)The standard conditions applicable to any licence under this Chapter must include a condition requiring the licence holder to—

(a)set transparent eligibility and selection criteria, and

(b)apply those criteria in a transparent way to persons who, having a choice of persons from whom to receive health care services for the purposes of the NHS, choose to receive them from the licence holder.

(2)“Eligibility and selection criteria”, in relation to a licence holder, means criteria for determining—

(a)whether a person is eligible, or is to be selected, to receive health care services provided by the licence holder for the purposes of the NHS, and

(b)if the person is selected, the manner in which the services are provided to the person.

(3)The following powers must not be exercised so as to omit the condition mentioned in subsection (1) from any licence under this Chapter—

(a)[F109the power conferred on NHS England by section 100] to modify the standard conditions applicable to all licences, or to licences of a particular description,

F110(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

(c)the powers conferred by section 102 on the [F111CMA] and Secretary of State to modify those conditions or the conditions of a particular licence.

EnforcementE+W

104Power to require documents and informationE+W

(1)[F112NHS England] may require a person mentioned in subsection (2) to provide it with any information, documents, records or other items which it considers it necessary or expedient to have for the purposes of any of its regulatory functions.

(2)The persons are—

(a)an applicant for a licence under this Chapter,

(b)a licence holder,

(c)a person who has provided, or is providing, a health care service for the purposes of the NHS in accordance with an exemption by virtue of section 83 from the requirement to hold a licence under this Chapter,

(d)a person who has provided, or is providing, a health care service for the purposes of the NHS in breach of that requirement,

F113(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

[F114(f)an integrated care board.]

(3)The power in subsection (1) includes, in relation to information, documents or records kept by means of a computer, power to require the provision of the information, documents or records in legible form.

[F115(4)In this section “regulatory functions”, in relation to NHS England, has the meaning given by section 13SB(2) of the National Health Service Act 2006.]

105Discretionary requirementsE+W

(1)[F116NHS England] may impose one or more discretionary requirements on a person if [F116NHS England] is satisfied that the person—

(a)has provided, or is providing, a health care service for the purposes of the NHS in breach of the requirement to hold a licence under this Chapter (see section 81),

(b)is a licence holder who has provided, or is providing, a health care service for the purposes of the NHS in breach of a condition of the licence, or

(c)is in breach of a requirement imposed by [F116NHS England] under section 104.

(2)In this Chapter, “discretionary requirement” means—

(a)a requirement to pay a monetary penalty to [F117NHS England] of such amount as [F117NHS England] may determine (referred to in this Chapter as a “variable monetary penalty”),

(b)a requirement to take such steps within such period as [F118NHS England] may specify, to secure that the breach in question does not continue or recur (referred to in this Chapter as a “compliance requirement”), or

(c)a requirement to take such steps within such period as [F119NHS England] may specify, to secure that the position is, so far as possible, restored to what it would have been if the breach in question was not occurring or had not occurred (referred to in this Chapter as a “restoration requirement”).

(3)[F120NHS England] must not impose discretionary requirements on a person on more than one occasion in relation to the same breach.

(4)A variable monetary penalty must not exceed 10% of the turnover in England of the person on whom it is imposed, such amount to be calculated in the prescribed manner.

(5)If the whole or any part of a variable monetary penalty is not paid by the time it is required to be paid, the unpaid balance from time to time carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838; but the total interest must not exceed the amount of the penalty.

106Enforcement undertakingsE+W

(1)[F121NHS England] may accept an enforcement undertaking from a person if [F121NHS England] has reasonable grounds to suspect that the person—

(a)has provided, or is providing, a health care service for the purposes of the NHS in breach of the requirement to hold a licence under this Chapter,

(b)is a licence holder who has provided, or is providing, a health care service for the purposes of the NHS in breach of a condition of the licence, or

(c)is in breach of a requirement imposed by [F121NHS England] under section 104.

(2)In this Chapter, “enforcement undertaking” means an undertaking from a person to take such action of a kind mentioned in subsection (3) as may be specified in the undertaking within such period as may be so specified.

(3)The specified action must be—

(a)action to secure that the breach in question does not continue or recur,

(b)action to secure that the position is, so far as possible, restored to what it would have been if the breach in question was not occurring or had not occurred,

(c)action (including the payment of a sum of money) to benefit—

(i)any other licence holder affected by the breach, or

(ii)any commissioner of health care services for the purposes of the NHS which is affected by the breach, or

(d)action of such a description as may be prescribed.

(4)Where [F122NHS England] accepts an enforcement undertaking then, unless the person from whom the undertaking is accepted has failed to comply with the undertaking or any part of it—

(a)[F122NHS England] may not impose on that person any discretionary requirement which it would otherwise have power to impose by virtue of section 105 in respect of the breach to which the undertaking relates, and

(b)if the breach to which the undertaking relates falls within subsection (1)(b), [F122NHS England] may not revoke that person's licence under section 89(b).

(5)Where a person from whom [F123NHS England] has accepted an enforcement undertaking has failed to comply fully with the undertaking but has complied with part of it, [F123NHS England] must take the partial compliance into account in deciding whether—

(a)to impose a discretionary requirement on the person in respect of the breach to which the undertaking relates, or

(b)if the breach to which the undertaking relates falls within subsection (1)(b), to revoke the person's licence under section 89(b).

107Further provision about enforcement powersE+W

Schedule 11 (Part 1 of which makes further provision about discretionary requirements and Part 2 of which makes further provision about enforcement undertakings) has effect.

108Guidance as to use of enforcement powersE+W

(1)[F124NHS England] must publish guidance about how it intends to exercise its functions under sections 105 and 106 and Schedule 11.

(2)[F124NHS England] may revise the guidance and, if it does so, must publish the guidance as revised.

(3)[F124NHS England] must consult such persons as it considers appropriate before publishing or revising the guidance.

(4)Guidance relating to [F125NHS England’s] functions under section 105 must include information about—

(a)the circumstances in which [F126NHS England] is likely to impose a discretionary requirement,

(b)the circumstances in which [F127NHS England] may not impose a discretionary requirement,

(c)the matters likely to be taken into account by [F128NHS England] in determining the amount of any variable monetary penalty to be imposed (including, where relevant, any discounts for voluntary reporting of breaches in respect of which a penalty may be imposed), and

(d)rights to make representations and rights of appeal.

(5)[F129NHS England] must have regard to the guidance or (as the case may be) revised guidance in exercising its functions under sections 105 and 106 and Schedule 11.

109Publication of enforcement actionE+W

(1)[F130NHS England] must include information about the following in its annual report—

(a)the cases in which a discretionary requirement has been imposed during the financial year to which the report relates, and

(b)the cases in which an enforcement undertaking has been accepted during that financial year.

(2)But [F131NHS England] must not include information which it is satisfied is—

(a)commercial information the disclosure of which would, or might, significantly harm the legitimate business interests of the person to whom it relates;

(b)information relating to the private affairs of an individual the disclosure of which would, or might, significantly harm that person's interests.

(3)The reference in subsection (1)(a) to cases in which a discretionary requirement has been imposed does not include a reference to a case where a discretionary requirement has been imposed but overturned on appeal.

110Notification of enforcement actionE+W

(1)As soon as reasonably practicable after imposing a discretionary requirement or accepting an enforcement undertaking [F132NHS England] must notify the following of that fact—

F133(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)such [F134integrated care boards] as are likely to be affected by the imposition of the requirement or the acceptance of the undertaking, and

(c)any person exercising regulatory functions in relation to the person on whom the discretionary requirement was imposed or from whom the enforcement undertaking was accepted.

(2)In subsection (1) “regulatory functions” has the same meaning as in the Legislative and Regulatory Reform Act 2006 (see section 32 of that Act).

Transitional provisionE+W

[F135111Imposition of licence conditions on NHS foundation trustsE+W

(1)Where [F136NHS England] is satisfied that the governance of an NHS foundation trust is such that the trust will fail to comply with the conditions of its licence, [F136NHS England] may include in the licence such conditions relating to governance as it considers appropriate for the purpose of reducing that risk.

(2)The circumstances in which [F136NHS England] may be satisfied as mentioned in subsection (1) include circumstances where it is satisfied that the council of governors, the board of directors or the council of governors and board of directors taken together are failing—

(a)to secure compliance with conditions in the trust’s licence, or

(b)to take steps to reduce the risk of a breach of a condition in the trust’s licence.

[F137(2A)Where a warning notice under section 29A of the Health and Social Care Act 2008 is given to an NHS foundation trust, [F136NHS England] may include in the trust's licence such conditions as it considers appropriate in connection with the matters to which the notice relates.]

(3)A condition included under subsection (1) [F138or (2A)] has effect until this section ceases, by virtue of section 112, to have effect in relation to the trust.

(4)[F139NHS England] may modify a condition included under subsection (1) [F138or (2A)].

(5)Where [F139NHS England] is satisfied that the trust has breached or is breaching a condition included under subsection (1) [F138or (2A)], [F139NHS England] may by notice require the trust to—

(a)remove one or more of the directors or members of the council of governors and appoint interim directors or members of the council;

(b)suspend one or more of the directors or members of the council from office as a director or member for a specified period;

(c)disqualify one or more of the directors or members of the council from holding office as a director or member for a specified period.

(6)Where [F139NHS England] is satisfied that a person has failed or is failing to comply with a notice under subsection (5), [F139NHS England] may do one or more of the things which it may require the trust to do under that subsection.

(7)Subsection (5) does not prevent [F139NHS England] from exercising in relation to a condition included in a licence under subsection (1) [F140or (2A)] the powers conferred by sections 105 and 106 (breach of licence condition etc: enforcement powers which apply during and after period in which this section and sections 112 to 114 have effect).

(8)Where [F139NHS England] includes a condition under subsection (1) [F140or (2A)], it may also make such incidental or consequential modifications as it considers necessary or expedient of any other condition of the licence concerned which is affected.

(9)Where [F139NHS England] includes a condition under subsection (1) [F140or (2A)] by modifying a standard condition of the licence concerned, the modification does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.

(10)In this section, a reference to failing to discharge functions includes a reference to failing to discharge those functions properly.

(11)Omit section 52 of the National Health Service Act 2006 (failing NHS foundation trusts); and in consequence of that, omit—

(a)section 39(2)(f) of that Act (copy of notice under section 52 of that Act to be on register), and

(b)paragraph 22(1)(f) of Schedule 7 to that Act (copy of that notice to be available for public inspection).]

[F141112Duration of transitional periodE+W

(1)Section 111 ceases to have effect in relation to an NHS foundation trust on such day as the Secretary of State may by order specify.

(2)Different days may be appointed in relation to different NHS foundation trusts.

(3)A day specified under subsection (1) must not—

(a)in the case of an NHS foundation trust authorised on or before 1 April 2014, be before 1 April 2016;

(b)in the case of an NHS foundation trust authorised after 1 April 2014, be before the end of the period of two years beginning with the day on which the trust was authorised.

(4)In this section, a reference to being authorised is a reference to being given an authorisation under section 35 of the National Health Service Act 2006.

(5)Section 111 is repealed as soon as there are—

(a)no NHS foundation trusts in relation to which it has effect, and

(b)no NHS trusts in existence F142....]

[F143113Orders under section 112: criteria for deciding applicable trustsE+W

(1)Where the Secretary of State proposes to make an order under section 112, the Secretary of State must notify [F144NHS England].

(2)[F144NHS England], having received a notification under subsection (1), must set the criteria that are to be applied for the purpose of determining to which NHS foundation trusts the order should apply.

(3)Before setting criteria under subsection (2), [F144NHS England] must—

(a)consult the Care Quality Commission and such other persons as [F144NHS England] considers appropriate, and

(b)obtain the approval of the Secretary of State.

(4)If the Secretary of State approves the proposed criteria, [F144NHS England] must—

(a)publish the criteria,

(b)determine, by applying the criteria, to which trusts the order should apply,

(c)notify the Secretary of State of its determination, and

(d)publish a list of the trusts concerned.

(5)If the Secretary of State does not approve the proposed criteria, [F144NHS England] must propose revised criteria; and subsections (3)(b) and (4) apply in relation to the proposed revised criteria as they apply in relation to the criteria previously proposed.

(6)The Secretary of State, having received a notification under subsection (4)(c), must review [F145NHS England’s] determination under subsection (4)(b).]

[F146114Repeal of sections 112 and 113E+W

(1)Sections 112 and 113 are repealed immediately after section 111 is repealed; and in consequence of that—

(a)in section 67(2)(a), omit “or under sections 111 and 113 of this Act (imposition of licence conditions on NHS foundation trusts during transitional period)”,

(b)omit section 67(3),

(c)in section 87(4), after paragraph (a) insert “and”, and

(d)in section 87(4), omit paragraph (c) and the preceding “and”.

(2)This section is repealed immediately after sections 112 and 113 are repealed.]

[F147CHAPTER 4E+WThe NHS payment scheme

114AThe NHS payment schemeE+W

(1)NHS England must publish a document, to be known as “the NHS payment scheme”, containing rules for determining the price that is to be payable by a commissioner—

(a)for the provision of health care services for the purposes of the NHS;

(b)for the provision of services in pursuance of arrangements made by NHS England or an integrated care board in the exercise of any public health functions of the Secretary of State, within the meaning of the National Health Service Act 2006, by virtue of any provision of that Act.

(2)The commissioner and the provider of services mentioned in subsection (1) must comply with rules under that subsection.

(3)Rules under subsection (1) may, in particular—

(a)specify prices;

(b)specify amounts, formulae or other matters on the basis of which prices are to be determined;

(c)provide for prices to be determined for, or by reference to, components of services or groups of services;

(d)make different provision for different services or provision for some services but not others;

(e)make different provision for the same service by reference to different circumstances or areas, different descriptions of provider, or other factors relevant to the provision of the service or the arrangements for its provision;

(f)confer a discretion on the commissioner of a service or on NHS England.

(4)Rules under subsection (1) may allow or require a price to be agreed between the commissioner and the provider of a service.

(5)Rules made by virtue of subsection (4) may—

(a)make provision about how the price is to be agreed;

(b)allow the agreement to make any provision that could be made by rules by virtue of subsection (3);

(c)provide for the publication by the commissioner, the provider or NHS England of information relevant to the agreement.

(6)For the purpose of securing that the prices payable for the provision of services mentioned in subsection (1)(a) or (b) result in a fair level of pay for providers of those services, NHS England must, in exercising functions under subsection (1), have regard to—

(a)differences in the costs incurred in providing those services to persons of different descriptions, and

(b)differences between providers with respect to the range of those services that they provide.

(7)The NHS payment scheme may contain rules relating to the making of payments to the provider of a service for the provision of that service.

(8)The NHS payment scheme may contain guidance as to the application of rules under subsection (1).

(9)A commissioner of a service mentioned in subsection (1) must have regard to any such guidance.

(10)The NHS payment scheme has effect for the period specified in the NHS payment scheme or, where a new edition of the NHS payment scheme takes effect before the end of that period, until that new edition takes effect.

114BThe NHS payment scheme: enforcementE+W

Where the commissioner of a service fails to comply with rules contained in the NHS payment scheme, NHS England may direct the commissioner to take steps specified in the direction, within a period specified in the direction—

(a)to secure that the failure does not continue or recur, or

(b)to secure that the position is (so far as practicable) restored to what it would have been if the failure was not occurring or had not occurred.

114CThe NHS payment scheme: impact assessment and consultationE+W

(1)Before publishing the NHS payment scheme, NHS England must—

(a)carry out an assessment of the likely impact of the proposed scheme, or

(b)publish a statement setting out its reasons for concluding that such assessment is not needed.

(2)Before publishing the NHS payment scheme, NHS England must consult the following—

(a)each integrated care board;

(b)each relevant provider;

(c)such other persons as NHS England considers appropriate.

(3)NHS England must give those persons a notice—

(a)describing the proposed NHS payment scheme,

(b)setting out any impact assessment carried out under subsection (1)(a), and

(c)specifying when the period within which representations may be made about the proposed NHS payment scheme (“the consultation period”) will come to an end.

(4)The consultation period is the period of 28 days beginning with the day after that on which the notice is published.

(5)NHS England must publish the notice given under subsection (2).

(6)If, having consulted under this section—

(a)NHS England decides to make amendments of the proposed NHS payment scheme that are, in its opinion, significant, and

(b)it would, in NHS England’s opinion, be unfair to make the amendments without further consultation,

NHS England must consult again under this section.

(7)Subsection (6) does not apply where section 114D applies.

(8)In this section “relevant provider” means—

(a)a licence holder, or

(b)another person, of a prescribed description, that provides—

(i)health care services for the purposes of the NHS, or

(ii)services in pursuance of arrangements made by NHS England or an integrated care board by virtue of section 7A or 7B of the National Health Service Act 2006 (Secretary of State’s public health functions).

114DObjections to proposed NHS payment schemeE+W

(1)This section applies where—

(a)within the consultation period under section 114C, NHS England receives objections to the proposed NHS payment scheme from one or more integrated care boards or relevant providers, and

(b)either or both of the following apply—

(i)the objection percentage for integrated care boards exceeds the prescribed percentage;

(ii)the objection percentage for relevant providers exceeds the prescribed percentage.

(2)In subsection (1)(b) the “objection percentage” is the proportion (expressed as a percentage) of integrated care boards or (as the case may be) relevant providers that objected.

(3)NHS England must consult such persons as appear to NHS England to be representative of the integrated care boards or relevant providers from whom objections were received.

(4)If, having complied with subsection (3)—

(a)NHS England decides to make amendments of the proposed NHS payment scheme that are, in its opinion, significant, and

(b)it would, in NHS England’s opinion, be unfair to make the amendments without further consultation,

NHS England must consult again under section 114C.

(5)If, having complied with subsection (3), NHS England decides not to amend the proposed NHS payment scheme, it may publish the scheme but, before doing so, must—

(a)publish a notice stating that decision and setting out the reasons for it, and

(b)send a copy of the notice to—

(i)the persons consulted under subsection (3), and

(ii)the integrated care boards or relevant providers from whom objections were received.

114EAmendments of the NHS payment schemeE+W

(1)NHS England may amend the NHS payment scheme during the period for which it has effect, provided that, in the opinion of NHS England, the amendments are not so significant as to require publication of a new edition of the NHS payment scheme.

(2)In deciding whether the amendments are so significant as to require the publication of a new edition of the NHS payment scheme, NHS England must have regard to—

(a)the proportion of integrated care boards that would be affected by the proposed amendments;

(b)the proportion of relevant providers that would be affected by the proposed amendments;

(c)the impact that the proposed amendments would have on integrated care boards and relevant providers that would be affected by them;

(d)whether any integrated care boards or relevant providers would be disproportionately affected by the proposed amendments;

(e)the amount of any increase or decrease in prices that would result from the proposed amendments.

(3)If NHS England amends the NHS payment scheme, it must publish the NHS payment scheme as amended.

(4)Before amending the NHS payment scheme, NHS England must, in accordance with subsections (5) to (7), consult the following about the proposed amendments—

(a)any integrated care boards that would be affected by the proposed amendments;

(b)any relevant providers that would be affected by the proposed amendments;

(c)such other persons as NHS England considers appropriate.

(5)NHS England must publish a notice specifying—

(a)the proposed amendments, and

(b)when the period within which representations may be made about the proposed amendments (“the consultation period”) will come to an end.

(6)The consultation period is the period of 28 days beginning with the day after that on which the notice is published.

(7)NHS England must send a copy of the notice to each of the persons to be consulted under subsection (4).

114FInterpretationE+W

In this Chapter—

• “commissioner”, in relation to a service, means the person who arranges for the provision of the service;

• “the NHS payment scheme” means the document published under section 114A(1);

• “relevant provider” has the meaning given by section 114C(8).]

F147115Price payable by commissioners for NHS servicesE+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F147116The national tariffE+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F147117The national tariff: further provisionE+W

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F147118Consultation on proposals for the national tariffE+W

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F147119Consultation: further provisionE+W

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F147120Responses to consultationE+W

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F147121Determination on reference under section 120E+W

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F147122Changes following determination on reference under section 120E+W

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F147123Power to veto changes proposed under section 122E+W

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F147124Local modifications of prices: agreementsE+W

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F147125Local modifications of prices: applicationsE+W

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F147126Applications under section 125: notification of commissionersE+W

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F147127Correction of mistakesE+W

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CHAPTER 5E+W+SHealth special administration

130Health special administration regulationsE+W+S

(1)Regulations (referred to in this Chapter as “health special administration regulations”) must make further provision about health special administration orders.

(2)Health special administration regulations may apply with or without modifications—

(a)any provision of Part 2 of the Insolvency Act 1986 (administration) or any related provision of that Act, and

(b)any other enactment which relates to insolvency or administration or makes provision by reference to anything that is or may be done under that Act.

(3)Health special administration regulations may, in particular, provide that the court may make a health special administration order in relation to a relevant provider if it is satisfied, on a petition by the Secretary of State under section 124A of the Insolvency Act 1986 (petition for winding up on grounds of public interest), that it would be just and equitable (disregarding the objective of the health special administration) to wind up the provider in the public interest.

(4)Health special administration regulations may make provision about—

(a)the application of procedures under the Insolvency Act 1986 in relation to relevant providers, and

(b)the enforcement of security over property of relevant providers.

(5)Health special administration regulations may, in particular, make provision about the publication and maintenance by [F149NHS England] of a list of relevant providers.

(6)Health special administration regulations may in particular—

(a)require [F150NHS England] to publish guidance for commissioners about the application of the criteria referred to in section 129(1)(a);

(b)confer power on [F151NHS England] to revise guidance published by virtue of paragraph (a) and require it to publish guidance so revised;

(c)require [F152NHS England], before publishing guidance by virtue of paragraph (a) or (b), to obtain the approval of the Secretary of State F153...;

(d)require commissioners, when applying the criteria referred to in section 129(1)(a), to have regard to such matters as [F154NHS England] may specify in guidance published by virtue of paragraph (a) or (b);

(e)require [F155NHS England] to make arrangements for facilitating agreement between commissioners in their exercise of their function under section 129(1)(a);

(f)confer power on [F155NHS England], where commissioners fail to reach agreement in pursuance of arrangements made by virtue of paragraph (e), to exercise their function under section 129(1)(a);

(g)provide that, in consequence of the exercise of the power conferred by virtue of paragraph (f), the function under section 129(1)(a), so far as applying to the commissioners concerned, is to be regarded as discharged;

(h)require a health special administrator to carry out in accordance with the regulations consultation on the action which the administrator recommends should be taken in relation to the provider concerned.

(7)Health special administration regulations may modify this Chapter or any enactment mentioned in subsection (8) in relation to any provision made by virtue of this Chapter.

(8)The enactments are—

(a)the Insolvency Act 1986, and

(b)any other enactment which relates to insolvency or administration or makes provision by reference to anything that is or may be done under that Act.

(9)The power to make rules under section 411 of the Insolvency Act 1986 (company insolvency rules) applies for the purpose of giving effect to provision made by virtue of this Chapter as it applies for the purpose of giving effect to Parts 1 to 7 of that Act.

(10)For that purpose—

(a)the power to make rules in relation to England and Wales is exercisable by the Lord Chancellor with the concurrence of the Secretary of State and, in the case of rules that affect court procedure, with the concurrence of the Lord Chief Justice;

(b)the power to make rules in relation to Scotland is exercisable by the Secretary of State;

(c)references in section 411 of that Act to those Parts are to be read as including a reference to this Chapter.

(11)Before making health special administration regulations the Secretary of State must consult [F156such persons as the Secretary of State considers appropriate].

131Transfer schemesE+W+S

(1)Health special administration regulations may make provision about transfer schemes to achieve the objective of a health special administration (see section 129).

(2)Health special administration regulations may, in particular, include provision—

(a)for the making of a transfer scheme to be subject to the consent of [F157NHS England] and the person to whom the transfer is being made,

(b)for [F158NHS England] to have power to modify a transfer scheme with the consent of parties to the transfers effected by the scheme, and

(c)for modifications made to a transfer scheme by virtue of paragraph (b) to have effect from such time as [F159NHS England] may specify (which may be a time before the modifications were made).

(3)Health special administration regulations may, in particular, provide that a transfer scheme may include provision—

(a)for the transfer of rights and liabilities under or in connection with a contract of employment from a company subject to a health special administration order to another person,

(b)for the transfer of property, or rights and liabilities other than those mentioned in paragraph (a), from a company subject to a health special administration order to another person,

(c)for the transfer of property, rights and liabilities which would not otherwise be capable of being transferred or assigned,

(d)for the transfer of property acquired, and rights and liabilities arising, after the making of the scheme,

(e)for the creation of interests or rights, or the imposition of liabilities, and

(f)for the transfer, or concurrent exercise, of functions under enactments.

132IndemnitiesE+W+S

Health special administration regulations may make provision about the giving by [F160NHS England] of indemnities in respect of—

(a)liabilities incurred in connection with the discharge by health special administrators of their functions, and

(b)loss or damage sustained in that connection.

133Modification of this Chapter under Enterprise Act 2002E+W+S

(1)The power to modify or apply enactments conferred on the Secretary of State by each of the sections of the Enterprise Act 2002 mentioned in subsection (2) includes power to make such consequential modifications of provision made by virtue of this Chapter as the Secretary of State considers appropriate in connection with any other provision made under that section.

(2)Those sections are—

(a)sections 248 and 277 (amendments consequential on that Act), and

(b)section 254 (power to apply insolvency law to foreign companies).

CHAPTER 6E+WFinancial assistance in special administration cases

Establishment of mechanismsE+W

134Duty to establish mechanisms for providing financial assistanceE+W

(1)[F161NHS England] must establish, and secure the effective operation of, one or more mechanisms for providing financial assistance in cases where a provider of health care services for the purposes of the NHS (referred to in this Chapter as a “provider”) is subject to—

(a)a health special administration order (within the meaning of Chapter 5), or

(b)an order under section 65D(2) of the National Health Service Act 2006 (trust special administration for NHS foundation trusts).

(2)Mechanisms that [F161NHS England] may establish under this section include, in particular—

(a)mechanisms for raising money to make grants or loans or to make payments in consequence of indemnities given by [F161NHS England] by virtue of section 132 or under section 65D(12) of the National Health Service Act 2006;

(b)mechanisms for securing that providers arrange, or are provided with, insurance facilities.

(3)[F161NHS England] may secure that a mechanism established under this section operates so as to enable it to recover the costs it incurs in establishing and operating the mechanism.

(4)[F161NHS England] may establish different mechanisms for different providers or providers of different descriptions.

(5)[F161NHS England] does not require permission under any provision of the Financial Services and Markets Act 2000 as respects activities carried out under this Chapter.

(6)An order under section 306 providing for the commencement of this Chapter may require [F161NHS England] to comply with the duty to establish under subsection (1) before such date as the order specifies.