Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Schedule 4.

Clauses 32 to 34 stand part.

I will address clauses 31 to 34 and schedule 4 together. Clause 31 ensures that NHS foundation trusts are subject to the same robust, transparent audit regimes as other NHS bodies. Together with schedule 4, clause 31 makes provision about the audit of NHS foundation trust accounts, which is needed as a consequence of the abolition of NHS England and the removal of the requirement for NHS foundation trusts to have councils of governors and members. Schedule 4 does that by removing the current bespoke provisions related to the auditing arrangements for the accounts of foundation trusts and amends the Local Audit and Accountability Act 2014 so that foundation trusts are subject to the auditing regime under that Act. This means that foundation trusts will in future be subject to the same auditing requirements as trusts and integrated care boards, ensuring a clear, consistent and transparent framework for local audit across NHS provider organisations. Taken together, these measures strengthen consistency in financial reporting and audit assurance across the NHS provider sector, while preserving the independence of the local audit process.

Clause 32 repeals provisions of the NHS Act 2006, requiring NHS England to maintain a register of NHS foundation trusts and a power to charge fees related to maintaining the register. The register formed a repository of documents that related to how foundation trusts were governed and regulated. However, removing the requirements does not mean there will be no transparency. NHS foundation trusts are already required to publish the information provided on this register, and where a foundation trust is placed into special administration the administrator is required to publish its report. As a result, the additional requirement to maintain a register is unnecessary, burdensome and duplicative, providing the public with no new information. For those reasons we are removing that bureaucratic duty in the Bill.

On clause 33 stand part, the Department of Health and Social Care, like all Departments of State, has a responsibility to diligently and responsibly steward taxpayer’s money in delivering services to the public. Clause 33 updates and strengthens existing legislation to make sure we have the statutory tools we need in order to effectively manage and oversee the finances of the NHS. It does that by updating sections 42B and 42C of the NHS Act 2006 so that the existing last-resort statutory capital spending limit for foundation trusts can also apply to revenue expenditure for a given year.

Foundation trusts account for a substantial proportion of NHS revenue spending, at around 40%, and continue to benefit from significant operational autonomy, including the freedom to retain and reinvest surpluses. We remain committed to seeing those freedoms expanded further through our advanced foundation trust programme. However, this strengthened power ensures we have a financial framework that makes it easier to consider additional freedoms. The Department must therefore ensure it has in place robust tools to oversee the finances of the health service, to reassure taxpayers and Parliament that public money is being managed effectively and to ensure that the Department can meet its financial obligations.

The power will remain subject to strong safeguards, including a mandatory consultation period with the foundation trust before any order is made, the requirement for any order made to be published, and detailed statutory guidance setting out the circumstances in which the power would be used and how limits would be determined. Crucially, this is a last-resort measure. This power would be used only in exceptional circumstances—for example, when the Secretary State thinks there is a risk of breaching a departmental delegated expenditure limit. I should note that the existing capital backstop on which it builds has never been used. The purpose here is not routine financial management, but assurance. By ensuring that foundation trust freedoms operate within a viable and sustainable framework, the clause helps protect those freedoms rather than undermine them.

Finally, clause 34 makes straightforward but important provision about financial accountability when NHS organisations change legal form. It requires an NHS foundation trust that has been newly authorised, or that has recently acquired an NHS trust or another NHS foundation trust, to prepare the final accounts for its predecessor organisation. As the Committee will appreciate, organisational change, whether through authorisation to foundation trust status or through acquisition, can bring real benefits for local services, but it can also create a practical issue at financial year end. The predecessor body will have ceased to exist in its previous form and so will not be in a position to complete and sign off its final set of accounts. Clause 34 addresses that gap by making clear where responsibility sits—

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.