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[Part II]

Part of Health and Social Care (Community Health and Standards) Bill – in a Public Bill Committee at 6:15 pm on 20th May 2003.

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Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health) 6:15 pm, 20th May 2003

The amendment led me to look again at the provisions to ensure that they were operating in the way that we intended. They do, and I shall explain why. The hon. Gentleman has misunderstood the distinction between an NHS trust that is applying to be established as a foundation trust and an application from a non-NHS trust. He is right in that once an NHS trust has made an application to the regulator for foundation trust status under clause 4(4), it is given powers to set up shadow governance arrangements and to do anything necessary to prepare for NHS foundation trust status. However, that is all that it is allowed to do.

The regime for non-NHS trusts applying for foundation trust status is necessarily different. Clause 5(7)(a), to which the hon. Gentleman referred, allows an exception to the constitution in relation to a public benefit corporation. That is necessary, as the new organisation—the application from the non-NHS body to be established as a public benefit corporation—would not be able to exercise any function at all until its new governance arrangements were in place, unless it had the dispensation in clause 5(7)(a). That would be inappropriate. It would mean paralysis for the organisation and it would not be able to take any further steps in preparing for foundation trust status.

We do not need that exception in relation to NHS trust applicants. They already have statutory functions; they are statutory bodies. All that they require are powers to set up shadow governance arrangements. It is not appropriate that an NHS trust should have all the functions of a public benefit corporation before it has been approved and authorised by the regulator and before the constitutional and governance arrangements are in place.

I am sure that the amendment is well intentioned. The hon. Gentleman felt that he had spotted a gap or lacuna in the Bill. However, the exception in clause 5(7)(a) is strictly necessary because, without it, the non-NHS application would be in limbo. It would have been approved as a public benefit corporation, but it would not be authorised to take any action or decisions. That would not be advisable.