Part 2Health service bodies
F1Chapter 5ATrust special administrators: NHS trusts and NHS foundation trusts
Application
65AApplication
1
This Chapter applies to—
a
an NHS trust all or most of whose hospitals, establishments and facilities are in England;
b
an NHS foundation trust authorised under section 35 on an application under section 33;
c
an NHS foundation trust established under section 56 to which subsection (2) applies.
2
This subsection applies to an NHS foundation trust if—
a
at least one of the trusts on whose application the NHS foundation trust was established was an NHS trust within subsection (1)(a) or an NHS foundation trust within subsection (1)(b), or
b
the NHS foundation trust is the result of a succession of mergers under section 56, any of which involved an NHS trust within subsection (1)(a) or an NHS foundation trust within subsection (1)(b).
Appointment
65BAppointment of trust special administrator
1
The Secretary of State may make an order authorising the appointment of a trust special administrator to exercise the functions of the chairman and directors of an NHS trust to which this Chapter applies.
2
An order may be made under subsection (1) only if the Secretary of State considers it appropriate in the interests of the health service.
3
The order must specify the date when the appointment is to take effect, which must be within the period of 5 working days beginning with the day on which the order is made.
4
Before making the order the Secretary of State must consult—
a
the trust,
b
any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities, and
c
any other person to which the trust provides goods or services under this Act and which the Secretary of State considers it appropriate to consult.
5
The Secretary of State must lay before Parliament (with the statutory instrument containing the order) a report stating the reasons for making the order.
6
If an order is made under subsection (1), the Secretary of State must—
a
appoint a person as the trust special administrator with effect from the day specified in the order, and
b
publish the name of the person appointed.
7
A person appointed as a trust special administrator holds and vacates office in accordance with the terms of the appointment.
8
The Secretary of State may pay remuneration and expenses to a trust special administrator.
65CSuspension of directors
1
When the appointment of a trust special administrator takes effect, the trust's chairman and executive and non-executive directors are suspended from office.
2
Subsection (1) does not affect the employment of the executive directors or their membership of any committee or sub-committee of the trust.
De-authorisation of NHS foundation trusts
65DNHS foundation trusts: regulator's notice
1
The regulator may give the Secretary of State a notice under this section if it is satisfied that—
a
an NHS foundation trust to which this Chapter applies is failing to comply with a notice under section 52, and
b
further exercise of the powers conferred by section 52 would not be likely to secure the provision of the goods and services which the trust's authorisation requires it to provide.
2
The notice must be in writing.
3
With the notice the regulator must give the Secretary of State a report stating the reasons why it is satisfied as mentioned in subsection (1).
4
Before giving a notice under this section, the regulator must consult first the Secretary of State and then—
a
the trust,
b
any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities, and
c
any other person to which the trust provides goods or services under this Act and which the regulator considers it appropriate to consult.
65ENHS foundation trusts: de-authorisation and appointment of trust special administrator
1
If the regulator gives notice under section 65D in relation to a trust, the Secretary of State must make an order for it to cease to be an NHS foundation trust.
2
An order made under subsection (1) must specify the date when it is to take effect, which must be within the period of 5 working days beginning with the day on which it is made.
3
The Secretary of State must lay before Parliament (with the statutory instrument containing the order) the regulator's report under section 65D(3).
4
On an order under subsection (1) taking effect in relation to a body, it ceases to be an NHS foundation trust and a public benefit corporation and becomes a National Health Service trust.
5
Schedule 8A makes further provision about trusts in respect of which an order is made under subsection (1).
6
Where an order is made under subsection (1) in relation to a trust, the Secretary of State must also make an order under section 65B(1) authorising the appointment of a trust special administrator in relation to the trust.
7
The order under section 65B(1) must provide for the appointment to take effect at the same time as the order under this section.
8
Section 65B(2), (4) and (5) do not apply in relation to the order under section 65B(1).
Consultation and report
65FDraft report
1
Within the period of 45 working days beginning with the day on which a trust special administrator's appointment takes effect, the administrator must provide to the Secretary of State and publish a draft report stating the action which the administrator recommends the Secretary of State should take in relation to the trust.
2
When preparing the draft report, the administrator must consult—
F11za
the Board,
a
F10any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities, and
b
any other person to which the trust provides goods or services under this Act and which the Secretary of State directs the administrator to consult.
3
After receiving the draft report, the Secretary of State must lay it before Parliament.
F124
For the purposes of this section in its application to the case of an NHS foundation trust, the references to the Secretary of State are to be read as references to the regulator.
5
In the case of an NHS foundation trust, the administrator may not provide the draft report to the regulator under subsection (1)—
a
without having obtained from each commissioner a statement that the commissioner considers that the recommendation in the draft report would achieve the objective set out in section 65DA, or
b
where the administrator does not obtain a statement to that effect from one or more commissioners (other than the Board), without having obtained a statement to that effect from the Board.
6
Where the Board decides not to provide to the administrator a statement to that effect, the Board must—
a
give a notice of the reasons for its decision to the administrator and to the regulator;
b
publish the notice;
c
lay a copy of it before Parliament.
7
In subsection (5), “commissioner” means a person to which the trust provides services under this Act.
65GConsultation plan
1
At the same time as publishing a draft report under section 65F, a trust special administrator must publish a statement setting out the means by which the administrator will seek responses to the draft report.
2
The statement must specify a period of 30 working days within which the administrator seeks responses (the “consultation period”).
3
The first day of the consultation period must be within the period of 5 working days beginning with the day on which the draft report is published.
F194
In the case of an NHS foundation trust, the administrator may not make a variation to the draft report following the consultation period—
a
without having obtained from each commissioner a statement that the commissioner considers that the recommendation in the draft report as so varied would achieve the objective set out in section 65DA, or
b
where the administrator does not obtain a statement to that effect from one or more commissioners (other than the Board), without having obtained a statement to that effect from the Board.
5
Where the Board decides not to provide to the administrator a statement to that effect, the Board must—
a
give a notice of the reasons for its decision to the administrator and to the regulator;
b
publish the notice;
c
lay a copy of it before Parliament.
6
In subsection (4), “commissioner” means a person to which the trust provides services under this Act.
65HConsultation requirements
1
The following duties apply during the consultation period.
2
The trust special administrator must publish a notice stating that the administrator is seeking responses to the draft report and describing how people can give their responses.
3
A notice under subsection (2) must include details of how responses can be given in writing.
4
The trust special administrator must hold at least one meeting to seek responses from staff of the trust and from such persons as the trust special administrator may recognise as representing staff of the trust.
5
The trust special administrator must hold at least one other meeting to seek responses from any person who wishes to attend, after publishing notice of the date, time and place of the meeting.
6
Notices under subsections (2) and (5) must be published at least once in the first 5 working days of the consultation period.
7
The trust special administrator must request a written response from—
F4za
the Board,
a
F3any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities;
b
any other person to which the trust provides goods or services under this Act F6, if required by directions given by the Secretary of State;
c
any person within subsection (8), if required by directions given by the Secretary of State F5;
d
any other person specified in a direction given by the Secretary of State.
8
The persons within this subsection are—
a
F9an overview and scrutiny committee of any authority to which section 244 applies;
b
F9a committee of a local authority operating alternative arrangements under Part 2 of the Local Government Act 2000 which exercises functions corresponding to those of an overview and scrutiny committee under section 21(2)(f) of that Act;
c
F9a joint overview and scrutiny committee;
d
F9a committee established under section 247(1);
e
a person carrying on, in pursuance of arrangements made by any local authority under subsection (1) of section 221 of the Local Government and Public Involvement in Health Act 2007, activities specified in subsection (2) of that section (local involvement networks);
f
the member of Parliament for any constituency.
9
10
The Secretary of State may direct an administrator to—
a
request a written response from any person;
b
hold a meeting to seek a response from any person.
11
In subsection (4) “staff of the trust” means persons employed by the trust or otherwise working for the trust (whether as or on behalf of a contractor, as a volunteer or otherwise).
F212
For the purposes of this section in its application to the case of an NHS foundation trust—
a
in subsection (7)(b), the words “goods or” are to be ignored, and
b
in subsections (7)(c) and (d) and (10), the references to the Secretary of State are to be read as references to the regulator.
13
In the case of an NHS foundation trust, the Secretary of State may direct the regulator as to persons from whom it should direct the administrator under subsection (10) to request or seek a response.
65IFinal report
1
Within the period of 15 working days beginning with the end of the consultation period, the trust special administrator must provide to the Secretary of State a final report stating the action which the administrator recommends that the Secretary of State should take in relation to the trust.
2
The administrator must attach to the final report a summary of all responses to the draft report which were received by the administrator in the period beginning with the publication of the draft report and ending with the last day of the consultation period.
3
After receiving the administrator's final report, the Secretary of State must publish it and lay it before Parliament.
F204
For the purposes of this section in its application to the case of an NHS foundation trust, the references to the Secretary of State are to be read as references to the regulator.
65JPower to extend time
1
This section applies to—
a
the duty of a trust special administrator to provide a draft report within the period specified in section 65F(1);
b
the duty of a trust special administrator to consult in the consultation period specified under section 65G(2);
c
the duty of a trust special administrator to provide a final report within the period specified in section 65I(1).
2
If the Secretary of State thinks it is not reasonable in the circumstances for the administrator to be required to carry out the duty within the specified period, the Secretary of State may by order extend the period.
3
If an order is made extending the period mentioned in subsection (1)(a) or (c) the trust special administrator must publish a notice stating the new date on which the period will expire.
4
If an order is made extending the period mentioned in subsection (1)(b) the trust special administrator must—
a
publish a notice stating the new date on which the period will expire, and
b
publish a statement setting out the means by which the administrator will seek responses to the draft report during the extended consultation period.
F235
For the purposes of this section in its application to the case of an NHS foundation trust, the references to the Secretary of State are to be read as references to the regulator.
F18Action by the Secretary of State and the regulator
S. 65K cross-heading substituted (27.3.2012 for specified purposes, 1.11.2012 in so far as not already in force) by Health and Social Care Act 2012 (c. 7), ss. 177(7), 306(1)(d)(4); S.I. 2012/2657, art. 2(2)
65KF17Secretary of State's decisionF17Secretary of State's decision in case of NHS trust
1
Within the period of 20 working days beginning with the day on which the Secretary of State receives a final report under section 65I F16relating to an NHS trust, the Secretary of State must decide what action to take in relation to the trust.
2
The Secretary of State must as soon as reasonably practicable—
a
publish a notice of the decision and of the reasons for it;
b
lay a copy of the notice before Parliament.
65KAF21Regulator's decision in case of NHS foundation trust
1
Within the period of 20 working days beginning with the day on which the regulator receives a final report under section 65I relating to an NHS foundation trust, the regulator must decide whether it is satisfied—
a
that the action recommended in the final report would achieve the objective set out in section 65DA, and
b
that the trust special administrator has carried out the administration duties.
2
In subsection (1)(b), “administration duties” means the duties imposed on the administrator by—
a
this Chapter,
b
a direction under this Chapter, or
c
the administrator's terms of appointment.
3
If the regulator is satisfied as mentioned in subsection (1), it must as soon as reasonably practicable provide to the Secretary of State—
a
the final report, and
b
the report provided to the regulator by the Care Quality Commission under section 65D(3).
4
If the regulator is not satisfied as mentioned in subsection (1), it must as soon as reasonably practicable give a notice of that decision to the administrator.
5
Where the regulator gives a notice under subsection (4), sections 65F to 65J apply in relation to the trust to such extent, and with such modifications, as the regulator may specify in the notice.
6
The regulator must as soon as reasonably practicable after giving a notice under subsection (4)—
a
publish the notice;
b
lay a copy of it before Parliament.
65KBSecretary of State's response to regulator's decision
1
Within the period of 30 working days beginning with the day on which the Secretary of State receives the reports referred to in section 65KA(3), the Secretary of State must decide whether the Secretary of State is satisfied—
a
that the persons to which the NHS foundation trust in question provides services under this Act have discharged their functions for the purposes of this Chapter,
b
that the trust special administrator has carried out the administration duties (within the meaning of section 65KA(1)(b)),
c
that the regulator has discharged its functions for the purposes of this Chapter,
d
that the action recommended in the final report would secure the continued provision of the services provided by the trust to which the objective set out in section 65DA applies,
e
that the recommended action would secure the provision of services that are of sufficient safety and quality to be provided under this Act, and
f
that the recommended action would provide good value for money.
2
If the Secretary of State is not satisfied as mentioned in subsection (1), the Secretary of State must as soon as reasonably practicable—
a
give the trust special administrator a notice of the decision and of the reasons for it;
b
give a copy of the notice to the regulator;
c
publish the notice;
d
lay a copy of it before Parliament.
65KCAction following Secretary of State's rejection of final report
1
Within the period of 20 working days beginning with the day on which the trust special administrator receives a notice under section 65KB(2), the administrator must provide to the regulator the final report varied so far as the administrator considers necessary to secure that the Secretary of State is satisfied as mentioned in section 65KB(1).
2
Where the administrator provides to the regulator a final report under subsection (1), section 65KA applies in relation to the report as it applies in relation to a final report under section 65I; and for that purpose, that section has effect as if—
a
in subsection (1), for “20 working days” there were substituted “10 working days”, and
b
subsection (3)(b) were omitted.
3
If the Secretary of State thinks that, in the circumstances, it is not reasonable for the administrator to be required to carry out the duty under subsection (1) within the period mentioned in that subsection, the Secretary of State may by order extend the period.
4
If an order is made under subsection (3), the administrator must—
a
publish a notice stating the date on which the period will expire, and
b
where the administrator is proposing to carry out consultation in response to the notice under section 65KB(2), publish a statement setting out the means by which the administrator will consult during the extended period.
65KDSecretary of State's response to re-submitted final report
1
Within the period of 30 working days beginning with the day on which the Secretary of State receives a final report under section 65KA(3) as applied by section 65KC(2), the Secretary of State must decide whether the Secretary of State is, in relation to the report, satisfied as to the matters in section 65KB(1)(a) to (f).
2
If the Secretary of State is not satisfied as mentioned in subsection (1), the Secretary of State must as soon as reasonably practicable—
a
publish a notice of the decision and the reasons for it;
b
lay a copy of the notice before Parliament.
3
Where the Secretary of State publishes a notice under subsection (2)(a), subsections (4) to (8) apply.
4
If the notice states that the Board has failed to discharge a function—
a
the Board is to be treated for the purposes of this Act as having failed to discharge the function, and
b
the failure is to be treated for those purposes as significant (and section 13Z2 applies accordingly).
5
If the notice states that a clinical commissioning group has failed to discharge a function—
a
the group is to be treated for the purposes of this Act as having failed to discharge the function,
b
the Secretary of State may exercise the functions of the Board under section 14Z21(2), (3)(a) and (8)(a), and
c
the Board may not exercise any of its functions under section 14Z21.
6
Where, by virtue of subsection (5)(b), the Secretary of State exercises the function of the Board under subsection (3)(a) of section 14Z21, subsection (9)(a) of that section applies but with the substitution for the references to the Board of references to the Secretary of State.
7
If the notice states that the trust special administrator has failed to discharge the administration duties (within the meaning of section 65KA(1)(b))—
a
the administration duties are to be treated for the purposes of this Act as functions of the regulator,
b
the regulator is to be treated for the purposes of this Act as having failed to discharge those functions, and
c
the failure is to be treated for those purposes as significant (and section 71 of the Health and Social Care Act 2012 applies accordingly, but with the omission of subsection (3)).
8
If the notice states that the regulator has failed to discharge a function—
a
the regulator is to be treated for the purposes of this Act as having failed to discharge the function, and
b
the failure is to be treated for those purposes as significant (and section 71 of the Health and Social Care Act 2012 applies accordingly, but with the omission of subsection (3)).
9
Within the period of 60 working days beginning with the day on which the Secretary of State publishes a notice under subsection (2)(a), the Secretary of State must decide what action to take in relation to the trust.
10
The Secretary of State must as soon as reasonably practicable—
a
publish a notice of the decision and the reasons for it;
b
lay a copy of the notice before Parliament.
65LTrusts coming out of administration
1
This section applies if the Secretary of State decides under section 65K not to dissolve the trust.
2
The Secretary of State must make an order specifying a date when the appointment of the trust special administrator and the suspension of the chairman and directors of the trust come to an end.
F132A
For the purposes of subsection (1) in its application to the case of an NHS foundation trust, the reference to section 65K is to be read as a reference to section 65KD(9); and this section also applies in the case of an NHS foundation trust if—
a
the Secretary of State is satisfied as mentioned in section 65KB(1) or 65KD(1) in relation to the trust, and
b
the action recommended in the final report is to do something other than dissolve the trust.
2B
For the purposes of subsection (2) in its application to the case of an NHS foundation trust—
a
the reference to the Secretary of State is to be read as a reference to the regulator, and
b
the reference to the chairman and directors of the trust is to be read as including a reference to the governors.
3
F15Subsections (4) and (5) apply in the case of a trust which is an NHS trust by virtue of an order made under section 65E(1).
4
F15The Secretary of State must make an order specifying, in relation to the trust, the matters mentioned in paragraph 5(1)(a) to (c) of Schedule 4 and, where the trust has a significant teaching commitment, the matters mentioned in paragraph 5(1)(d).
5
F15If it appears to the Secretary of State to be necessary in order to comply with provision made under subsection (4), or made by regulations under paragraph 4 of Schedule 4, the Secretary of State may by order—
a
terminate the office of any executive or non-executive director of the trust;
b
appoint a person to be an executive or non-executive director of the trust.
F146
Subsection (7) applies in the case of an NHS foundation trust.
7
If it appears to the regulator to be necessary in order to comply with Schedule 7, the regulator may by order—
a
terminate the office of any governor or of any executive or non-executive director of the trust;
b
appoint a person to be a governor or an executive or non-executive director of the trust.
65LAF22Trusts to be dissolved
1
This section applies if—
a
the Secretary of State is satisfied as mentioned in section 65KB(1) or 65KD(1), and
b
the action recommended in the final report is to dissolve the NHS foundation trust in question.
2
This section also applies if the Secretary of State decides under section 65KD(9) to dissolve the NHS foundation trust in question.
3
The regulator may make an order—
a
dissolving the trust, and
b
transferring, or providing for the transfer of, the property and liabilities of the trust—
i
to another NHS foundation trust or the Secretary of State, or
ii
between another NHS foundation trust and the Secretary of State.
4
An order under subsection (3) may include provision for the transfer of employees of the trust.
5
The liabilities that may be transferred to an NHS foundation trust by virtue of subsection (3)(b) include criminal liabilities.
Supplementary
65MReplacement of trust special administrator
1
If a trust special administrator ceases to hold office for any reason before the Secretary of State has made either an order under section 65L(2) or an order dissolving the trust, the Secretary of State must—
a
appoint another person as the trust special administrator, and
b
publish the name of the person appointed.
2
Where a person is appointed under subsection (1) in relation to a trust, anything done by or in relation to a previous trust special administrator has effect as if done by or in relation to that person, unless the Secretary of State directs otherwise.
65NGuidance
1
The Secretary of State must publish guidance for trust special administrators.
2
It must include guidance about the publication of notices under sections 65H and 65J.
3
It must include guidance about the preparation of draft reports, as to—
a
persons to be consulted;
b
factors to be taken into account;
c
relevant publications.
65OInterpretation of this Chapter
In this Chapter—
“trust special administrator” means a person appointed under section 65B(6)(a) or section 65M(1)(a);
“working day” means any day which is not Saturday, Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971.
Pt. 2 Ch. 5A inserted (15.2.2010) by Health Act 2009 (c. 21), ss. 16, 40(1); S.I. 2010/30, art. 3(a)