bulletin
Special measures - what does this mean for Foundation Trusts?
6 June 2009
The Health Bill, currently in draft form before Parliament, has
been considered by the House of Lords, and has now been returned to
the Commons with final amendments (12 May 2009). Part of the Bill,
once enacted, will be to insert new provisions into the NHS Act
2006 to enable Foundation Trusts to be put into ‘special measures’,
including the appointment of a Special Administrator, where the
Secretary of State feels it is appropriate in the interests of the
health service.
What are ‘Special Measures’?
If Monitor is satisfied that, following the issue of a Notice, a
Foundation Trust is failing to comply with, or has contravened any
term of its authorisation, and is failing to comply with that
Notice, a Notice for de-authorisation of a Foundation Trust may be
issued to the Secretary of State by Monitor. This would be subject
to consultation with the strategic health authority (SHA) and the
Trust and any other person Monitor deems appropriate.
Following an issue of a de-authorisation Notice to the Secretary
of State, the Secretary of State must make an order for the Trust
to cease to be a Foundation Trust. This order, together with the
de-authorisation notice, will have the following implications:
- The Foundation Trust constitution ceases to have effect
- The role of the members and board of governors ceases, upon the
making of an order by the Secretary of State
- The name of the Foundation Trust reverts to NHS Trust
- The board of directors and the executive team become those of
the NHS Trust
- The NHS Trust remains a party to any contracts entered into by
the Foundation Trust and similarly, continues to hold property held
by the Foundation Trust
The Health Bill sets out that when the appointment of the
Special Administrator takes effect, the Chairman, Executive
Directors and Non-Executive Directors of the Foundation Trust will
be suspended from office, but this will not effect the employment
of the Executive Directors, or their membership of any
sub-committees within the Trust.
The Special Administrator will undertake various reporting and
consultation duties and will then make recommendations to the
Secretary of State as to any action that may be necessary
(including the dissolution of the Foundation Trust). Guidance in
relation to the functions of Special Administrators is yet to be
published but there will clearly be implications for all staff
within Foundation Trusts in relation to this development.
What happens when ‘Special Measures’ come to and
end?
In circumstances where a Foundation Trust can come out of
administration, the Secretary of State will publish the details in
relation to this, including the date on which the suspension of the
Chairman etc will come to and end. The Bill, however, is silent on
the status of Trusts which had been granted Foundation Trusts prior
to the commencement of ‘special measures’ - do they return to
Foundation Trust status? It would seem that they do not, but at
this stage, it is not clear whether a full re-application process
will be necessary.
Avoidance
It is assumed that de-authorisation is at the very end of an
escalation process beginning with the intervention of Monitor under
Section 52 of the NHS Act 2006 (“intervention powers”) and clearly
it is essential that Foundation Trusts have appropriate systems and
governance arrangements in place so as to ensure that they are
working:
- Within the Terms of their Authorisation
- In accordance with their Constitution and the associated
documents
- Providing a safe, effective and appropriate service to the
patients across the patch
- Have systems and processes to de-escalate any intervention
process so that they can implement Monitor’s requirements in an
effective and timely manner
- Are prepared to be robust in managing any weakness at a board
level which is self-evident from the intervention
We can help!
Our specialist team has advised Foundation Trusts since ‘Wave 1’
and are experienced in dealing with this complex and ever-changing
regulatory environment. We would be pleased to assist you with any
issues or queries you may have in relation to Foundation Trust
status, including the application process and the implications of
authorisation, to the implementation and management of transactions
that now fall within the remit of the Transactions Manual, from
joint venture arrangements, to the acquisition of other Trusts and
Provider Arms.
talk to us
save to PDF
The content of this bulletin is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.