Clause 25 - Dissolution etc.

Health and Social Care (Community Health and Standards) Bill – in a Public Bill Committee at 6:45 pm on 3rd June 2003.

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Photo of Simon Burns Simon Burns Shadow Spokesperson (Health) 6:45 pm, 3rd June 2003

I beg to move amendment No. 409, in

clause 25, page 10, line 21, leave out subsection (2).

Again, this is very much a probing amendment to elicit more information. Subsection (2) states:

''Before the powers conferred by this section are exercised, the regulator must consult prescribed persons about prescribed matters.''

It then explains that

'''Prescribed' means prescribed by an order.''

That order will presumably be issued by the regulator and I should be grateful if the Minister would give the Committee a little more background information so that it has a greater understanding of exactly which prescribed persons will be consulted about what sort of prescribed matters.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Again, I am grateful to the hon. Gentleman because I presume that this is a probing amendment. As he said, the Bill provides for secondary legislation to prescribe the process for dissolution, including requirements on the regulator to consult when making his decision about the future of an NHS foundation trust. It is expected that the consultation requirements will cover a range of interests, including bodies with responsibility for NHS services: the strategic health authority obviously, primary care trust commissioners, patient forums, the oversight and scrutiny committee of a local authority, staff representatives, the Secretary of State, significant creditors, the governors if not removed under clause 23(4), and members of the NHS foundation trust. It is right that the independent regulator should consult those groups so that they have the relevant evidence required in coming to such an important decision about the future of the trust and that is why the amendment would not materially benefit the Bill, although I understand the intention behind it. I hope that the hon. Gentleman is satisfied with my assurance about the breadth and depth of the consultation.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

In the light of the Minister's response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I beg to move amendment No. 410, in

clause 25, page 10, leave out line 29.

Again, this is a probing amendment, which would remove line 29 so that an order made for dissolution of a foundation trust and the transfer of property or liabilities to a number of named groups or individuals would not include the Secretary of State. I assure the Minister that this is not a vendetta against the Secretary of State. The reason for probing is that the

Bill outlines the measures to be taken to deal with a foundation trust that is failing or when it is necessary to go to the extreme of dissolving a foundation trust, and I am wondering why those properties or liabilities should be transferred to the Secretary of State. It may be logical to transfer them to another foundation trust, a PCT or NHS trust because, presumably, they would then be able to move forward and rectify the failings that led to the dissolution. However, what exactly would the Secretary of State do if those properties or liabilities were transferred to him? When the Minister replies, will he also tell us whether there are any restrictions on what a Secretary of State could do in what I suspect would be extremely rare circumstances, if they ever occurred?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

In the event that an NHS foundation trust was dissolved, our intention is that the process should be managed in a way that ensures as little disruption of services to patients as possible. The specific arrangements in individual cases would depend on the circumstances of the failed NHS foundation trust and it is important that the Secretary of State has the flexibility to make any arrangements necessary to secure NHS services. That might include transfer to the Secretary of State when no suitable alternative could be identified and it is desirable to include flexibility in the arrangements. I am sure that my right hon. Friend will be glad to know that the hon. Gentleman is not pursuing a vendetta against him. It is possible that the Secretary of State will make arrangements for the foundation trust to be managed by one of the other bodies identified in the clause.

Photo of Gary Streeter Gary Streeter Shadow Minister (Foreign and Commonwealth Affairs)

I have been puzzling about this. If a foundation trust fails, there is a dissolution—I hope that that will never happen—there are unmet liabilities and the assets are transferred as anticipated in the clause, who will pick up the tab for the unmet liabilities? Would the Government do that? Would it fall on the members, or would the creditors simply go unpaid?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I hope that we might have an opportunity to discuss some of those issues when we come to clause 24 and the failure regime that would need to be—[Interruption.] Yes, clause 24. Oh dear, we have passed clause 24. The hon. Gentleman was not paying attention.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

No, I knew precisely what was going on. The issue would be addressed in discussions on clause 24. Given that we have passed that clause, it might help the hon. Gentleman if I write to him and other members of the Committee setting out those arrangements.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I beg to move amendment No. 411, in

clause 25, page 10, line 35, leave out subsection (7).

Again, this is a probing amendment through which I seek guidance on exactly what subsection (7) is designed to do. I am not a lawyer and so may have misunderstood it, but I understand that the clause basically deals with the dissolution of a foundation trust. Subsection (7), however, says:

''Where the regulator refuses to give an authorisation to a public benefit corporation''.

Unless I have completely misunderstood it, which may well be the case, it seems to deal with the situation before a foundation trust is up and running as a foundation trust. If that is the correct interpretation, why does the regulator have any powers? Presumably, it is still an NHS trust that has been refused authorisation to become a foundation trust for whatever reason. Surely that is the end of the matter. I presume that the NHS trust then carries on in its original guise. Will the Minister correct me in my misunderstanding, or give an explanation of the thinking behind the subsection?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Essentially, we are dealing with a situation in which the public benefit corporation has not been authorised as an NHS foundation trust, so it has not started to deliver NHS services. Following the incorporation of a public benefit corporation, the regulator may not be satisfied that it could provide NHS services. That is constituted in accordance with schedule 1 to the Bill. In such cases, the regulator will not give an authorisation to the corporation to become an NHS foundation trust. In those circumstances, the clause means that the public benefit corporation would then be dissolved, although the regulator would not initiate that without proper discussion with the corporation.

We have identified that there should be a mechanism for the dissolution of public benefit corporations that will not be authorised to become NHS foundation trusts. Without the clause, they would exist in perpetuity, which would not be helpful given that they could not do anything. This is simply a technical measure designed to ensure that a public benefit corporation that is not authorised can be wound up expeditiously.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I am grateful for the Minister's clarification. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 ordered to stand part of the Bill.

Schedule 3 agreed to.