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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

If the process was fundamentally undermined and the independent regulator did not approve the application, it would have to come to a stop. However, how do we want things to proceed? It makes sense for there to be a shadow period ahead of the final organisation during which the NHS trust can get on with establishing its constitution and membership base, and choosing its board of governors. If and when the authorisation comes through from the regulator, the trust can immediately begin to function. If things were done any other way, there would be a delay at the end of the process.

The hon. Gentleman is right that there is a theoretical risk that even though the shadow governance arrangements have been established and the exercise has been completed, the foundation trust application might fail at the end of the day. However, that is almost inevitable if the process is to be as smooth as it can be. The governance arrangements for a trust must at some point be established and it is better that that be done at the beginning rather than at the end. Otherwise, there will be another period during which the foundation trusts will not be able to operate in which we envisage. Let us get that arrangement over with at the beginning of the process by establishing the shadow governance arrangements.

The only reason for the exception to that principle in clause 5(7)(a) is because unless we allow an application from a non-NHS body to function effectively as a public benefit corporation ahead of the establishment of governance arrangements it would not be able to take any decisions at all. There

would then be the ludicrous situation whereby there that body would have been approved, but unable to take any decisions. Having had its establishment authorised by the regulator, that public benefit corporation would not be able to make progress and would be stuck in a legal minefield. That is the explanation for the difference between subsection (4)(a) and clause 5(7)(a). I hope that the hon. Gentleman appreciates that. I am happy to write to him further if he has a particular concern, but I also hope that we can make progress.