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National Health Service and Community Care Act 1990 (c. 19)

(The document as of February, 2008)

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National Health Service and Community Care Act 1990 (c. 19)

1990 CHAPTER 19

ARRANGEMENT OF SECTIONS

Content
  1. Part I

    The National Health Service: England and Wales

    1. Local management

      1. 1. Regional and District Health Authorities.

      2. 2. Family Health Services Authorities.

      3. 3. Primary and other functions of health authorities etc. and exercise of functions.

      4. 4. NHS contracts.

    2. National Health Service trusts

      1. 5. NHS trusts.

      2. 6. Transfer of staff to NHS trusts.

      3. 7. Supplementary provisions as to transfer of staff.

      4. 8. Transfer of property, rights and liabilities to NHS trust.

      5. 9. Originating capital debt of, and other financial provisions relating to NHS trusts.

      6. 10. Financial obligations of NHS trusts.

      7. 11. Trust-funds and trustees for NHS trusts.

    3. Family Health Services Authorities

      1. 12. Functions of Family Health Services Authorities.

      2. 13. Financial duties in relation to Family Health Services Authorities.

    4. Fund-holding practices

      1. 14. Recognition of fund-holding practices of doctors.

      2. 15. Payments to recognised fund-holding practices.

      3. 16. Renunciation and removal of recognition as a fund-holding practice and withholding of funds.

      4. 17. Transfer of functions relating to recognised fund-holding practices.

    5. Indicative amounts

      1. 18. Indicative amounts for doctors' practices.

    6. Funding, audit and liabilities

      1. 19. Amendments relating to funding of health authorities etc.

      2. 20. Extension of functions etc. of Audit Commission to cover the health service.

      3. 21. Schemes for meeting losses and liabilities etc. of certain health service bodies.

    7. Further amendments of the principal Act

      1. 22. The Medical Practices Committee.

      2. 23. Distribution of general medical services.

      3. 24. Limitations on right to be included on list of dental practitioners.

      4. 25. Transfer to DHA of certain functions relating to private patien

  2. Part II

    The National Health Service: Scotland

    1. Health Boards and other bodies

      1. 27. Health Boards, the Common Services Agency and state hospitals.

      2. 28. Special Health Boards.

      3. 29. Scottish advisory bodies.

      4. 30. NHS contracts.

    2. National Health Service trusts

      1. 31. National Health Service trusts.

      2. 32. Further provision relating to NHS trusts.

      3. 33. Trust property of NHS trusts.

    3. Fund-holding practices

      1. 34. Fund-holding practices.

    4. Indicative amounts

      1. 35. Indicative amounts for doctors' practices.

    5. Audit

      1. 36. Accounts and audit of NHS trusts and fund-holding practices.

    6. Miscellaneous

      1. 37. Relationship of Health Boards and medical practitioners.

      2. 38. Scottish Medical Practices Committee.

      3. 39. Distribution of general medical services.

      4. 40. Limitations on right to be included on list of dental practitioners.

      5. 41. Schemes for meeting losses and liabilities etc. of certain health service bodies.

  3. Part III

    Community Care: England and Wales

    1. Provision of accommodation and welfare services

      1. 42. Provision of accommodation and welfare services: agency arrangements.

      2. 43. Exclusion of powers to provide accommodation in certain cases.

      3. 44. Charges for accommodation provided by local authorities.

      4. 45. Recovery of charges due to local authorities for accommodation.

    2. General provisions concerning community care services

      1. 46. Local authority plans for community care services.

      2. 47. Assessment of needs for community care services.

      3. 48. Inspection of premises used for provision of community care services.

      4. 49. Transfer of staff from health service to local authorities.

      5. 50. Powers of the Secretary of State as respects social services functions of local authorities.

  4. Part IV

    Community Care: Scotland

    1. 51. Power of Secretary of State to give directions.

    2. 52. Local authority plans for, and complaints in relation to, community care services in Scotland.

    3. 53. Inspection of premises providing accommodation.

    4. 54. Inquiries.

    5. 55. Duty of local authority to make assessment of needs.

    6. 56. Residential accommodation with nursing and provision of care and after-care.

    7. 57. Exclusion of powers to provide accommodation in certain cases.

    8. 58. Power of Secretary of State to make grants.

  5. Part V

    Miscellaneous and General

    1. 59. Parliamentary disqualification.

    2. 60. Removal of Crown immunities.

    3. 61. Health service bodies: taxation.

    4. 62. Clinical Standards Advisory Group.

    5. 63. Repeal of remaining provisions of Health Services Act 1976.

    6. 64. Financial provisions.

    7. 65. Regulations, orders and directions.

    8. 66. Amendments and repeals.

    9. 67. Short title, commencement and extent.

    1. Schedule 1

      Health Authorities and Family Health Services Authorities.

      1. Part I

        Membership of Regional and District Health Authorities.

      2. Part II

        Membership of Family Health Services Authorities.

      3. Part III

        Amendments of Part III of Schedule 5 to the Principal Act.

    2. Schedule 2

      National Health Service trusts.

      1. Part I

        Orders Under Section 5(1).

      2. Part II

        Duties, Powers and Status.

      3. Part III

        Supplementary provisions.

      4. Part IV

        Dissolution.

    3. Schedule 3

      Financial Provisions relating to NHS Trusts.

    4. Schedule 4

      Amendments of Part III of the Local Government Finance Act 1982.

    5. Schedule 5

      Health Boards, the Common Services Agency and State Hospitals.

    6. Schedule 6

      Schedules to be inserted after Schedule 7 to the National Health Service (Scotland) Act 1978.

    7. Schedule 7

      Amendments relating to Audit of Accounts of Scottish Health Service Bodies.

    8. Schedule 8

      Provisions arising out of Removal of Crown Immunities from Health Service Bodies.

      1. Part I

        Amendments Continuing Certain Statutory Exemptions.

      2. Part II

        Consequential Amendments.

      3. Part III

        Transitional Provisions.

    9. Schedule 9

      Minor and Consequential Amendments.

    10. Schedule 10

      Enactments Repealed.

An Act to make further provision about health authorities and other bodies constituted in accordance with the National Health Service Act 1977; to provide for the establishment of National Health Service trusts; to make further provision about the financing of the practices of medical practitioners; to amend Part VII of the Local Government (Scotland) Act 1973 and Part III of the Local Government Finance Act 1982; to amend the National Health Service Act 1977 and the National Health Service (Scotland) Act 1978; to amend Part VIII of the Mental Health (Scotland) Act 1984; to make further provision concerning the provision of accommodation and other welfare services by local authorities and the powers of the Secretary of State as respects the social services functions of such authorities; to make provision for and in connection with the establishment of a Clinical Standards Advisory Group; to repeal the Health Services Act 1976; and for connected purposes.

[29th June 1990]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part I The National Health Service: England and Wales

Local management

1 Regional and District Health Authorities

(1) In the [1977 c. 49.] National Health Service Act 1977 (in this Part of this Act referred to as "the principal Act"), in section 8 (Regional and District Health Authorities etc.)--

(a) in subsection (1) for the words "Schedule 5 to this Act" there shall be substituted "Schedule 1 to the National Health Service and Community Care Act 1990";

(b) any reference to an area or an Area Health Authority shall be omitted; and

(c) subsection (5) (consultation before making orders under subsection (2)) shall be omitted.

(2) Part I of Schedule 1 to this Act shall have effect in place of Part I of Schedule 5 to the principal Act (membership of health authorities etc.).

(3) Part III of Schedule 5 to the principal Act (supplementary provisions as to authorities) shall be amended in accordance with Part III of Schedule 1 to this Act.

(4) Subject to subsection (5) below, at the end of the day appointed for the coming into force of this subsection,--

(a) any person who became a member of a Regional or District Health Authority under Part I of Schedule 5 to the principal Act shall cease to be such a member; and

(b) any person who, by virtue of an order under section 11 of the principal Act, became a member of a special health authority which is a relevant authority for the purposes of paragraph 9(1) of Schedule 5 to that Act (as amended by Part III of Schedule 1 to this Act) shall cease to be such a member.

(5) Subsection (4) above does not apply to a person holding office as chairman of a Regional, District or Special Health Authority.

2 Family Health Services Authorities

(1) On and after the day appointed for the coming into force of this subsection--

(a) each existing Family Practitioner Committee shall be known as a Family Health Services Authority; and

(b) any reference in any enactment to a Family Practitioner Committee shall be construed as a reference to a Family Health Services Authority;

and the generality of this subsection is not affected by any express amendment made by this Act.

(2) In subsection (1) above "enactment" means--

(a) an enactment passed before the day appointed for the coming into force of subsection (1) above; and

(b) an enactment comprised in subordinate legislation made before that day.

(3) In section 10 of the principal Act (Family Health Services Authorities)--

(a) for the words "Schedule 5 to this Act" there shall be substituted "Schedule 1 to the National Health Service and Community Care Act 1990"; and

(b) subsection (7) (consultation before making orders under subsection (4)) shall be omitted.

(4) Part II of Schedule 1 to this Act shall have effect in place of Part II of Schedule 5 to the principal Act (membership of Family Practitioner Committees).

(5) At the end of the day appointed for the coming into force of this subsection, any person who became a member of a Family Practitioner Committee under Part II of Schedule 5 to the principal Act (including a person holding office as chairman of such a committee) shall cease to be a member and, accordingly, in the case of a chairman, shall also cease to be chairman.

(6) Nothing in this section shall cause a Family Health Services Authority to be included in the expression "health authority", as defined in the principal Act.

3 Primary and other functions of health authorities etc. and exercise of functions

(1) Any reference in this Act to the primary functions of a Regional, District or Special Health Authority is a reference to those functions for the time being exercisable by the authority by virtue of directions under section 11, section 13 or section 14 of the principal Act; and any reference in this Act to the primary functions of a Family Health Services Authority is a reference to the functions for the time being exercisable by the authority by virtue of this Act or section 15 of the principal Act.

(2) In addition to carrying out its primary functions, a Regional, District or Special Health Authority or a Family Health Services Authority may, as the provider, enter into an NHS contract (as defined in section 4 below) under which the goods or services to be provided are of the same description as goods or services which the authority already provides or could provide for the purposes of carrying out its primary functions.

(3) In section 16 of the principal Act (exercise of functions), in subsection (1) for the words from "an Area", in the first place where they occur, to "Health Authority" in the second place where those words occur, there shall be substituted "a Regional or District Health Authority, or exercisable by a Regional or District Health Authority by virtue of any prescribed provision of this or any other Act, or exercisable by a Family Health Services Authority under Part I of the National Health Service and Community Care Act 1990".

(4) In section 17 of the principal Act (directions as to exercise of functions), in subsection (1) after the words "sections 13 to 16 above" there shall be inserted "and may also give directions with respect to the exercise by health authorities or Family Health Services Authorities of functions under the National Health Service and Community Care Act 1990".

(5) Nothing in this section or in the principal Act affects the power of a Regional, District or Special Health Authority at any time to provide goods or services under the principal Act for the benefit of an individual where--

(a) the provision of those goods or services is neither within the primary functions of the authority nor carried out pursuant to an NHS contract; but

(b) the condition of the individual is such that he needs those goods or services and, having regard to his condition, it is not practicable before providing them to enter into an NHS contract for their provision.

(6) In any case where--

(a) a Regional, District or Special Health Authority provides goods or services for the benefit of an individual as mentioned in subsection (5) above, and

(b) the provision of those goods or services is within the primary functions of another health authority or is a function of a health board,

the authority providing the goods or services shall be remunerated in respect of that provision by that other health authority or health board.

(7) The rate of any remuneration payable by virtue of subsection (6) above shall be calculated in such manner or on such basis as may be determined by the Secretary of State.

(8) In any case where--

(a) a Regional, District or Special Health Authority provides goods or services for the benefit of an individual, and

(b) the provision of those goods or services is not pursuant to an NHS contract, and

(c) the individual is resident outside the United Kingdom and is of a description (being a description associating the individual with another country) specified for the purposes of this subsection by a direction made by the Secretary of State,

the authority shall be remunerated by the Secretary of State in respect of the provision of the goods or services in question at such rate or rates as he considers appropriate.

4 NHS contracts

(1) In this Act the expression "NHS contract" means an arrangement under which one health service body ("the acquirer") arranges for the provision to it by another health service body ("the provider") of goods or services which it reasonably requires for the purposes of its functions.

(2) In this section "health service body" means any of the following, namely,--

(a) a health authority;

(b) a health board;

(c) the Common Services Agency for the Scottish Health Service;

(d) a Family Health Services Authority;

(e) an NHS trust;

(f) a recognised fund-holding practice;

(g) the Dental Practice Board or the Scottish Dental Practice Board;

(h) the Public Health Laboratory Service Board; and

(i) the Secretary of State.

(3) Whether or not an arrangement which constitutes an NHS contract would, apart from this subsection, be a contract in law, it shall not be regarded for any purpose as giving rise to contractual rights or liabilities, but if any dispute arises with respect to such an arrangement, either party may refer the matter to the Secretary of State for determination under the following provisions of this section.

(4) If, in the course of negotiations intending to lead to an arrangement which will be an NHS contract, it appears to a health service body--

(a) that the terms proposed by another health service body are unfair by reason that the other is seeking to take advantage of its position as the only, or the only practicable, provider of the goods or services concerned or by reason of any other unequal bargaining position as between the prospective parties to the proposed arrangement, or

(b) that for any other reason arising out of the relative bargaining position of the prospective parties any of the terms of the proposed arrangement cannot be agreed,

that health service body may refer the terms of the proposed arrangement to the Secretary of State for determination under the following provisions of this section.

(5) Where a reference is made to the Secretary of State under subsection (3) or subsection (4) above, the Secretary of State may determine the matter himself or, if he considers it appropriate, appoint a person to consider and determine it in accordance with regulations.

(6) By his determination of a reference under subsection (4) above, the Secretary of State or, as the case may be, the person appointed under subsection (5) above may specify terms to be included in the proposed arrangement and may direct that it be proceeded with; and it shall be the duty of the prospective parties to the proposed arrangement to comply with any such directions.

(7) A determination of a reference under subsection (3) above may contain such directions (including directions as to payment) as the Secretary of State or, as the case may be, the person appointed under subsection (5) above considers appropriate to resolve the matter in dispute; and it shall be the duty of the parties to the NHS contract in question to comply with any such directions.

(8) Without prejudice to the generality of his powers on a reference under subsection (3) above, the Secretary of State or, as the case may be, the person appointed under subsection (5) above may by his determination in relation to an arrangement constituting an NHS contract vary the terms of the arrangement or bring it to an end; and where an arrangement is so varied or brought to an end--

(a) subject to paragraph (b) below, the variation or termination shall be treated as being effected by agreement between the parties; and

(b) the directions included in the determination by virtue of subsection (7) above may contain such provisions as the Secretary of State or, as the case may be, the person appointed under subsection (5) above considers appropriate in order satisfactorily to give effect to the variation or to bring the arrangement to an end.

(9) In subsection (2) above "NHS trust" includes--

(a) such a trust established under the [1978 c. 29.] National Health Service (Scotland) Act 1978; and

(b) a body established in Northern Ireland and specified by an order made by statutory instrument by the Secretary of State as equivalent to an NHS trust established under this Part of this Act.



National Health Service trusts

5 NHS trusts

(1) Subject to subsection (2) or, as the case may be, subsection (3) below the Secretary of State may by order establish bodies, to be known as National Health Service trusts (in this Act referred to as NHS trusts),--

(a) to assume responsibility, in accordance with this Act, for the ownership and management of hospitals or other establishments or facilities which were previously managed or provided by Regional, District or Special Health Authorities; or

(b) to provide and manage hospitals or other establishments or facilities.

(2) In any case where the Secretary of State is considering whether to make an order under subsection (1) above establishing an NHS trust and the hospital, establishment or facility concerned is or is to be situated in England, he shall direct the relevant Regional Health Authority to consult, with respect to the proposal to establish the trust,--

(a) the relevant Community Health Council and such other persons or bodies as may be specified in the direction; and

(b) such other persons or bodies as the Authority considers appropriate;

and, within such period (if any) as the Secretary of State may determine, the relevant Regional Health Authority shall report the results of those consultations to the Secretary of State.

(3) In any case where the Secretary of State is considering whether to make an order under subsection (1) above establishing an NHS trust and the hospital, establishment or facility concerned is or is to be situated in Wales, he shall consult the relevant Community Health Council and such other persons and bodies as he considers appropriate.

(4) In subsections (2) and (3) above--

(a) any reference to the relevant Regional Health Authority is a reference to that Authority in whose region the hospital, establishment or other facility concerned is, or is to be, situated; and

(b) any reference to the relevant Community Health Council is a reference to the Council for the district, or part of the district, in which that hospital, establishment or other facility is, or is to be, situated.

(5) Every NHS trust--

(a) shall be a body corporate having a board of directors consisting of a chairman appointed by the Secretary of State and, subject to paragraph 5(2) of Schedule 2 to this Act, executive and non-executive directors (that is to say, directors who, subject to subsection (7) below, respectively are and are not employees of the trust); and

(b) shall have the functions conferred on it by an order under subsection (1) above and by Schedule 2 to this Act.

(6) The functions specified in an order under subsection (1) above shall include such functions as the Secretary of State considers appropriate in relation to the provision of services by the trust for one or more health authorities.

(7) The Secretary of State may by regulations make general provision with respect to--

(a) the qualifications for and the tenure of office of the chairman and directors of an NHS trust (including the circumstances in which they shall cease to hold, or may be removed from, office or may be suspended from performing the functions of the office);

(b) the persons by whom the directors and any of the officers are to be appointed and the manner of their appointment;

(c) the maximum and minimum numbers of the directors;

(d) the circumstances in which a person who is not an employee of the trust is nevertheless, on appointment as a director, to be regarded as an executive rather than a non-executive director;

(e) the proceedings of the trust (including the validation of proceedings in the event of a vacancy or defect in appointment); and

(f) the appointment, constitution and exercise of functions by committees and sub-committees of the trust (whether or not consisting of or including any members of the board) and, without prejudice to the generality of the power, any such regulations, may make provision to deal with cases where the post of any officer of an NHS trust is held jointly by two or more persons or where the functions of such an officer are in any other way performed by more than one person.

(8) Part I of Schedule 2 to this Act shall have effect with respect to orders under subsection (1) above; Part II of that Schedule shall have effect, subject to subsection (9) below, with respect to the general duties and the powers and status of NHS trusts; the supplementary provisions of Part III of that Schedule shall have effect; and Part IV of that Schedule shall have effect with respect to the dissolution of NHS trusts.

(9) The specific powers conferred by paragraphs 14 and 15 in Part II of Schedule 2 to this Act may be exercised only to the extent that--

(a) the exercise will not interfere with the duties of the trust to comply with directions under paragraph 6 of that Schedule; and

(b) the exercise will not to any significant extent interfere with the performance by the trust of its obligations under any NHS contract or any obligations imposed by an order under subsection (1) above.

(10) The Secretary of State may by order made by statutory instrument confer on NHS trusts specific powers additional to those contained in paragraphs 10 to 15 of Schedule 2 to this Act.

6 Transfer of staff to NHS trusts

(1) Subject to subsection (5) below, this section applies to any person who, immediately before an NHS trust's operational date--

(a) is employed by a health authority to work solely at, or for the purposes of, a hospital or other establishment or facility which is to become the responsibility of the trust; or

(b) is employed by a health authority to work at, or for the purposes of, such a hospital, establishment or facility and is designated for the purposes of this section by a scheme made by the health authority specified as mentioned in paragraph 3(1)(f) of Schedule 2 to this Act.

(2) A scheme under this section shall not have effect unless approved by the Secretary of State.

(3) Subject to section 7 below, the contract of employment between a person to whom this section applies and the health authority by whom he is employed shall have effect from the operational date as if originally made between him and the NHS trust.

(4) Without prejudice to subsection (3) above--

(a) all the health authority's rights, powers, duties and liabilities under or in connection with a contract to which that subsection applies shall by virtue of this section be transferred to the NHS trust on its operational date; and

(b) anything done before that date by or in relation to the health authority in respect of that contract or the employee shall be deemed from that date to have been done by or in relation to the NHS trust.

(5) In any case where--

(a) an order under section 5(1) above provides for the establishment of an NHS trust with effect from a date earlier than the operational date of the trust, and

(b) on or after that earlier date but before its operational date the NHS trust makes an offer of employment by the trust to a person who at that time is employed by a health authority to work (whether solely or otherwise) at, or for the purposes of, the hospital or other establishment or facility which is to become the responsibility of the trust, and

(c) as a result of the acceptance of the offer, the person to whom it was made becomes an employee of the NHS trust,

subsections (3) and (4) above shall have effect in relation to that person's contract of employment as if he were a person to whom this section applies and any reference in those subsections to the operational date of the trust were a reference to the date on which he takes up employment with the trust.

(6) Subsections (3) and (4) above are without prejudice to any right of an employee to terminate his contract of employment if a substantial change is made to his detriment in his working conditions; but no such right shall arise by reason only of the change in employer effected by this section.

(7) A scheme under this section may designate a person either individually or as a member of a class or description of employees.

7 Supplementary provisions as to transfer of staff

(1) In the case of a person who falls within section 6(1)(b) above, a scheme under that section may provide that, with effect from the NHS trust's operational date, his contract of employment (in this section referred to as "his original contract") shall be treated in accordance with the scheme as divided so as to constitute--

(a) a contract of employment with the NHS trust; and

(b) a contract of employment with the health authority by whom he was employed before that date (in this section referred to as "the transferor authority").

(2) Where a scheme makes provision as mentioned in subsection (1) above,--

(a) the scheme shall secure that the benefits to the employee under the two contracts referred to in that subsection, when taken together, are not less favourable than the benefits under his original contract;

(b) section 6 above shall apply in relation to the contract referred to in subsection (1)(a) above as if it were a contract transferred under that section from the transferor authority to the NHS trust;

(c) so far as necessary to preserve any rights and obligations, the contract referred to in subsection (1)(b) above shall be regarded as a continuation of the employee's original contract; and

(d) for the purposes of section 146 of and Schedule 13 to the [1978 c. 44.] Employment Protection (Consolidation) Act 1978, the number of hours normally worked, or, as the case may be, the hours for which the employee is employed in any week under either of those contracts shall be taken to be the total of the hours normally worked or, as the case may be, for which he is employed under the two contracts taken together.

(3) Where, as a result of the provisions of section 6 above, by virtue of his employment during any period after the operational date of the NHS trust,--

(a) an employee has contractual rights against an NHS trust to benefits in the event of his redundancy, and

(b) he also has statutory rights against the trust under Part VI of the Employment Protection (Consolidation) Act 1978 (redundancy payments),

any benefits provided to him by virtue of the contractual rights referred to in paragraph (a) above shall be taken as satisfying his entitlement to benefits under the said Part VI.

8 Transfer of property, rights and liabilities to NHS trust

(1) The Secretary of State may by order transfer or provide for the transfer to an NHS trust, with effect from such date as may be specified in the order, of such of the property, rights and liabilities of a health authority or of the Secretary of State as, in his opinion, need to be transferred to the trust for the purpose of enabling it to carry out its functions.

(2) An order under this section may create or impose such new rights or liabilities in respect of what is transferred or what is retained by a health authority or the Secretary of State as appear to him to be necessary or expedient.

(3) Nothing in this section affects the power of the Secretary of State or any power of a health authority to transfer property, rights or liabilities to an NHS trust otherwise than under subsection (1) above.

(4) Stamp duty shall not be chargeable in respect of any transfer to an NHS trust effected by or by virtue of an order under this section.

(5) Where an order under this section provides for the transfer--

(a) of land held on lease from a third party, that is to say, a person other than the Secretary of State or a health authority, or

(b) of any other asset leased or hired from a third party or in which a third party has an interest,

the transfer shall be binding on the third party notwithstanding that, apart from this subsection, it would have required his consent or concurrence.

(6) Any property, rights and liabilities which are to be transferred to an NHS trust shall be identified by agreement between the trust and a health authority or, in default of agreement, by direction of the Secretary of State.

(7) Where, for the purpose of a transfer pursuant to an order under this section, it becomes necessary to apportion any property, rights or liabilities, the order may contain such provisions as appear to the Secretary of State to be appropriate for the purpose; and where any such property or rights fall within subsection (5) above, the order shall contain such provisions as appear to the Secretary of State to be appropriate to safeguard the interests of third parties, including, where appropriate, provision for the payment of compensation of an amount to be determined in accordance with the order.

(8) In the case of any transfer made by or pursuant to an order under this section, a certificate issued by the Secretary of State that any property specified in the certificate or any such interest in or right over any such property as may be so specified, or any right or liability so specified, is vested in the NHS trust specified in the order shall be conclusive evidence of that fact for all purposes.

(9) Without prejudice to subsection (4) of section 126 of the principal Act, an order under this section may include provision for matters to be settled by arbitration by a person determined in accordance with the order.

9 Originating capital debt of, and other financial provisions relating to NHS trusts

(1) Each NHS trust shall have an originating capital debt of an amount specified in an order made by the Secretary of State, being an amount representing, subject to subsection (2) below, the excess of the valuation of the assets which, on or in connection with the establishment of the trust, are or are to be transferred to it (whether before, on or after its operational date) over the amounts of the liabilities which are or are to be so transferred.

(2) In determining the originating capital debt of an NHS trust, there shall be left out of account such assets or, as the case may be, liabilities as are, or are of a class, determined for the purposes of this section by the Secretary of State, with the consent of the Treasury.

(3) An NHS trust's originating capital debt shall be deemed to have been issued out of moneys provided by Parliament and shall constitute an asset of the Consolidated Fund.

(4) In accordance with an order under subsection (1) above, an NHS trust's originating capital debt shall be divided between--

(a) a loan on which interest shall be paid at such variable or fixed rates and at such times as the Treasury may determine; and

(b) public dividend capital.

(5) The loan specified in subsection (4)(a) above is in this Part of this Act referred to as an NHS trust's "initial loan" and a rate of interest on the initial loan shall be determined as if section 5 of the [1968. c. 13.] National Loans Act 1968 had effect in respect of it and subsections (5) to (5B) of that section shall apply accordingly.

(6) Subject to subsections (4)(a) and (5) above, the terms of the initial loan shall be such as the Secretary of State, with the consent of the Treasury, may determine; and, in the event of the early repayment of the initial loan, the terms may require the payment of a premium or allow a discount.

(7) With the consent of the Treasury, the Secretary of State may determine the terms on which any public dividend capital forming part of an NHS trust's originating capital debt is to be treated as having been issued, and, in particular, may determine the dividend which is to be payable at any time on any public dividend capital.

(8) An order under subsection (1) above shall be made--

(a) with the consent of the Treasury; and

(b) by statutory instrument.

(9) Schedule 3 to this Act shall have effect with respect to--

(a) borrowing by NHS trusts;

(b) the limits on their indebtedness;

(c) the payment of additional public dividend capital to them; and

(d) the application of any surplus funds of NHS trusts.

10 Financial obligations of NHS trusts

(1) Every NHS trust shall ensure that its revenue is not less than sufficient, taking one financial year with another, to meet outgoings properly chargeable to revenue account.

(2) It shall be the duty of every NHS trust to achieve such financial objectives as may from time to time be set by the Secretary of State with the consent of the Treasury and as are applicable to it; and any such objectives may be made applicable to NHS trusts generally, or to a particular NHS trust or to NHS trusts of a particular description.

11 Trust funds and trustees for NHS trusts

(1) The Secretary of State may by order made by statutory instrument provide for the appointment of trustees for an NHS trust; and any trustees so appointed shall have power to accept, hold and administer any property on trust for the general or any specific purposes of the NHS trust (including the purposes of any specific hospital or other establishment or facility which is owned and managed by the trust) or for all or any purposes relating to the health service.

(2) An order under subsection (1) above may--

(a) make provision as to the persons by whom trustees are to be appointed and generally as to the method of their appointment;

(b) make any appointment subject to such conditions as may be specified in the order (including conditions requiring the consent of the Secretary of State);

(c) make provision as to the number of trustees to be appointed, including provision under which that number may from time to time be determined by the Secretary of State after consultation with such persons as he considers appropriate; and

(d) make provision with respect to the term of office of any trustee and his removal from office.

(3) Where, under subsection (1) above, trustees have been appointed for an NHS trust, the Secretary of State may by order made by statutory instrument provide for the transfer of any trust property from the NHS trust to the trustees so appointed.

(4) In section 91 of the principal Act (private trusts for hospitals) in subsection (3) (definition of "the appropriate hospital authority") after paragraph (a) there shall be inserted the following paragraphs--

" (aa) where the hospital is owned and managed by an NHS trust and trustees have been appointed for the NHS trust, those trustees;

(ab) where the hospital is owned and managed by an NHS trust and neither paragraph (a) nor paragraph (aa) above applies, the NHS trust; " .

(5) In section 92 of the principal Act (further transfers of trust property)--

(a) in subsection (1) after the word "hospital" there shall be inserted "or other establishment or facility" and for the words "or special trustees", in each place where they occur, there shall be substituted "NHS trust, special trustees or trustees for an NHS trust";

(b) in subsections (2) to (4), after the word "authorities", in each place where it occurs, there shall be inserted "or NHS trusts";

(c) in subsection (2) after the word "authority", there shall be inserted "or NHS trust"; and

(d) at the end of the section there shall be added the following subsection--

" (6) If it appears to the Secretary of State at any time that--

(a) the functions of any special trustees should be discharged by the trustees for an NHS trust, or

(b) the functions of the trustees for an NHS trust should be discharged by special trustees,

then, whether or not there has been any such change as is mentioned in subsection (1) above, he may, after consulting the special trustees and the trustees for the NHS trust, by order provide for the transfer of all trust property from or to the special trustees to or from the trustees for the NHS trust. "

(6) In section 96 of the principal Act (trusts: supplementary provisions)--

(a) any reference to sections 90 to 95 of the principal Act includes a reference to subsections (1) to (3) above; and

(b) after subsection (1) there shall be inserted the following subsection--

" (1A) Where any transfer of property by virtue of those sections is of, or includes,--

(a) land held on lease from a third party, that is to say, a person other than the Secretary of State or a health authority, or

(b) any other asset leased or hired from a third party or in which a third party has an interest,

the transfer shall be binding on the third party notwithstanding that, apart from this subsection, it would have required his consent or concurrence. "

(7) In section 98(1) of the principal Act (accounts and audit) after paragraph (d) there shall be inserted--

" (dd) any trustees for an NHS trust appointed in pursuance of section 11 of the National Health Service and Community Care Act 1990; and " .



Family Health Services Authorities

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12 Functions of Family Health Services Authorities

(1) In section 15 of the principal Act (duty of Family Health Services Authority)--

(a) in subsection (1), after the word "regulations" there shall be inserted "and subject to any directions from the relevant Regional Health Authority";

(b) in paragraph (b) of that subsection, after the words "perform such" there shall be inserted "management and"; and

(c) at the end of that subsection there shall be inserted the following subsections--

" (1A) In relation to a Family Health Services Authority for a locality in England, any reference in this Act or the National Health Service and Community Care Act 1990 to the relevant Regional Health Authority is a reference to that Authority in whose region lies the whole or the greater part of the Authority's locality.

(1B) In relation to a medical practitioner, any reference in this Act or the National Health Service and Community Care Act 1990 to the relevant Family Health Services Authority shall be construed as follows,--

(a) if he practices in partnership with other medical practitioners, the relevant Authority is that Authority on whose medical list the members of the practice are included and, if some are included on one Authority's medical list and some on another's or if any of the members is included in the medical lists of two or more Authorities, the relevant Authority is that Authority in whose locality resides the largest number of individuals who are on the lists of patients of the members of the practice; and

(b) in any other case, the relevant Authority is that Authority on whose medical list he is included and, if there is more than one, that one of them in whose locality resides the largest number of individuals who are on his list of patients. "

(2) In section 17 of the principal Act (directions as to exercise of functions), in subsection (1) before the words "by a District Health Authority", there shall be inserted "(a)" and at the end of the subsection there shall be added " and

(b) by a Family Health Services Authority in relation to which it is the relevant Regional Health Authority, of any functions exercisable by the Family Health Services Authority by virtue of section 15 above or the National Health Service and Community Care Act 1990. "

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