Tuesday 30th June 2026
(2 days, 21 hours ago)
Public Bill CommitteesHealth Bill 2026-27 View all Health Bill 2026-27 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 30 June 2026 - (30 Jun 2026)
The Committee divided: - Ayes: 9 / Noes: 6 - Question accordingly agreed to.
The Minister for Secondary Care (Karin Smyth)
The clause updates the National Health Service Act 2006 to abolish the requirement for integrated care boards and their partner NHS trusts to prepare and publish a joint forward plan and a joint capital resource use plan. The 10-year health plan aims to simplify local healthcare planning, and the Bill delivers that objective by removing legal requirements for integrated care partnerships, integrated care strategies, joint forward plans and joint capital resource use plans. Planning will now begin with the joint strategic needs assessment, developed by health and wellbeing boards. The assessment will inform a new neighbourhood health plan, replacing the joint local health and wellbeing strategy. ICBs will produce population health improvement plans, aligning multiple joint strategic needs assessments, neighbourhood health plans and local priorities across their wider populations. As a result, the planning process will be streamlined and less bureaucratic, and will deliver healthcare for local people based on local planning and strategy. I commend the clause to the Committee.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
As the Minister said, the clause removes the need for ICBs and their partner trusts to produce a joint forward plan. The existing legislation requires ICBs and their partner trusts to prepare a plan setting out how they propose to exercise their functions over five years, which is reviewed and/or revised each financial year.
Joint forward plans address objectives in the Government mandate regarding the ambitions in the NHS long-term plan and planning guidance. Section 14Z52 of the 2006 Act sets out that an ICB and its partner trusts have to prepare such a plan before the start of each financial year and specifies what the plan must give regard to, including the ICB’s discharge of its duties—general duties and financial duties—under other sections of the Act. The plan must also cover steps that will be taken to implement the local health and wellbeing strategy, the particular needs of young people, and the particular needs of victims of abuse. ICBs and their partner trusts must publish the plan and give it to a set of specified authorities, and NHS England may give directions for that. Section 14Z54 sets out that an ICB and its partner trusts must consult people when developing such plans and that health and wellbeing boards must be involved. Section 14Z55 sets out that the relevant health and wellbeing board may give an opinion, and that when it does so, it must provide it to the ICB and its partner trusts.
Section 14Z56 sets out that an ICB and its partner trusts must prepare a joint capital resource use plan before the start of each financial year, and that the period may be determined by direction from the Secretary of State. Section 14Z57 sets out that an ICB and its partner trusts may revise the joint capital resource use plan, but if it is revised significantly, it must be published and given to the list of specified authorities.
Section 14Z58 sets out that an ICB must produce an annual report on how it has discharged its functions. It must explain how it has discharged its duties under other specified sections of the Act, review the extent to which it has exercised its functions in accordance with the forward plan and its capital resource use plan, review the extent to which it has exercised its functions consistently with NHS England’s views, and review steps it has taken to implement any joint local health and wellbeing strategy. The report must include details of expenditure and be given to NHS England by a specified date and then published.
In essence, the clause deletes sections 14Z52 to 14Z57. In some respects, it is legislative plumbing, to remove plans that are no longer necessary. The Government’s impact assessment notes that
“there is some duplication across planning documents. For example, the Joint Forward Plan covered the integration of services, which the Better Care Fund plan also considers, as does the Joint Local Health and Wellbeing Strategy.”
It goes on to note that duplication delivers an administrative burden, as staff
“complete parallel planning returns and fulfil competing data requests,”
so that is a positive aspect of the clause.
Will the Minister please address the following points? Section 14Z52 contains specific requirements to address the particular needs of young people and of victims of abuse. Where do they fall now? The NHS has a large maintenance backlog. What is the new mechanism for transparency of capital prioritisation decisions between the ICBs and the trusts? Can the Minister remind me and the Committee of other areas in which local democracy will be able to input into ICB planning once these planning documents are no longer required?
Under the Government’s strategic commissioning framework, ICBs have to develop population health improvement plans. Essex ICB published a document that is 148 pages long, with a particular focus on inequality. Is the Minister concerned about the length of some of the plans, the time it takes to produce them and the amount of bureaucracy involved, or does she think this is an improvement? What is the key objective in delivering these plans? Do the Government plan to introduce population health improvement plans through legislation? If they do not, Parliament will have scrutiny of the bureaucracy being removed but not of the bureaucracy that the Government replace it with. As the Minister once said:
“Local taxpayers deserve to know how their money is being spent.”—[Official Report, 13 June 2023; Vol. 734, c. 122WH.]
Karin Smyth
I thank the shadow Minister for her comments. I largely agree about legislative plumbing—that is a nice phrase. As she rightly highlights, and as is clear in the explanatory notes and so on, the duplication and administrative burden on all these bodies is considerable. On her question about objectives, we certainly want to streamline that so that ultimately, as well as organisations knowing the objectives they are pursuing, the local population—importantly to her concluding point—can readily see and address that, follow it through and hold people to account. I do think that 150-page documents are not always the easiest to see.
Young people will obviously be part of the joint strategic needs assessment, and ICBs will be mindful of the Government’s wider policy objectives, as we have discussed previously. With regard to maintenance and prioritisation of capital schemes, since coming into office we have already done a huge amount of work to streamline the relationship between NHS England and the Department of Health and Social Care—and, indeed, our friends over at His Majesty’s Treasury—in respect of the approvals process, making better use of capital and making that more transparent at local level so that individual organisations are involved in the prioritisation that comes forward to the ICBs.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Abolition of integrated care partnerships and strategies
Question proposed, That the clause stand part of the Bill.
Karin Smyth
The clause abolishes the requirement for ICBs and their partner local authorities to form an integrated care partnership. It also abolishes the related requirement for that partnership to prepare and publish an integrated care strategy.
These abolitions address the policy objectives of the 10-year health plan by streamlining the number of plans that must be created by local health systems and supporting key local stakeholders to work together more flexibly and effectively. The changes recognise that in many areas, integrated care partnerships have not had a positive impact on local health outcomes and have come with significant opportunity costs. Alternative planning approaches proposed elsewhere in the Bill and more broadly will enable local health bodies to plan for their patients in a way that is tailored to their strengths. However, I can reassure the Committee that where existing arrangements are working well, nothing in the Bill will prevent local areas from coming together to consider how best to integrate services and plan their approach to tackling the challenges they face. I commend the clause to the Committee.
Dr Johnson
In essence, the clause abolishes integrated care partnerships and strategies, which are where ICBs come together with local authorities to discuss how they can make their services more integrated. We know that many of the challenges facing the NHS are caused by difficulties in social care provision and some of the difficulties in social care provision are caused by issues with health provision, and that if those commissioning services in those two areas work together, we can see an improvement in both.
The Local Government and Public Involvement in Health Act 2007 made changes to local government structures and enhanced public involvement in health services. Section 116 requires local authorities to produce joint strategic needs assessments for the local authority and its partner ICB. When preparing the assessment, the local authority and its partner ICB must
“co-operate with one another…have regard to any guidance issued by the Secretary of State…involve the Local Healthwatch organisation”,
and involve local people and the relevant district councils. I note that later in the Bill we will also come to the abolition of Healthwatch.
Section 116 of the 2007 Act has been modified by the Health and Social Care Act 2012 and the Health and Care Act 2022 to ensure that references match the current NHS structure. For instance, in 2008 there were primary care trusts, rather than ICBs. Section 116ZA of the 2007 Act requires ICBs and local authorities whose areas coincide or overlap to create integrated care partnerships, which consist of a member appointed by the ICB, one from each responsible local authority and any other members that they choose to add; to some extent, they can determine their own procedures.
Section 116ZB of the 2007 Act requires ICBs to prepare an integrated care strategy
“setting out how the assessed needs in relation to its area are to be met by the exercise of functions of…the integrated care board…NHS England, or…the responsible local authorities”.
When developing that integrated care strategy, the integrated care partnerships must have regard to NHS England’s mandate and any guidance issued by the Secretary of State. Clearly, that would now apply only to guidance issued by the Secretary of the State, because NHS England is also being abolished. An integrated care partnership must publish its integrated care strategy and give it to each local authority and partner ICB. Integrated care partnerships must reconsider and, where necessary, revise the strategy each time they receive a new needs assessment.
Clause 23 deletes section 116(5A) of the Local Government and Public Involvement in Health Act 2007. That subsection required the local authorities to give a copy of the needs assessments to the ICBs, which is of course no longer necessary because they are being abolished. Clause 23 also deletes sections 116ZA and 116ZB of the same Act, which established ICBs and defined integrated care strategies respectively.
As Conservatives, we believe that streamlining bureaucracy is sensible, and I am sure that this is a well-intentioned reform. However, a survey conducted by the NHS Alliance in November indicated that a quarter of integrated care system leaders are likely to keep the integrated care partnerships anyway on a non-statutory basis, and 40% plan to fold them into health and wellbeing boards and working partnerships with the authorities. It is not really a ringing endorsement of the policy if a sizeable number of people intend to keep it anyway.
Like many other elements of the Bill, these changes are uncosted—if we read the impact assessment, it says “N/A” for the cost. Clearly, there will be a cost incurred by the abolition of the process, but there will also be an opportunity cost to services if ICBs and commissioners are not working together in the provision of social care as effectively as they were before. That will cost people in social care, and it will cost people in healthcare.
As recognised by the impact assessment that the Government have produced themselves, there is a risk of reduced focus on the wider determinants of health at system level. Committee members on both sides of the House have already stressed the impact that other health determinants can have on the health service and social care, and we have previously considered amendments to that effect.
Overall, it is regrettable that local government does not have the direct feed into ICBs that the design of those integrated care partnerships provided. Whether or not I agree, I can follow the theory or principle behind making the area covered more local, in line with the strategic authority. However, if the Government wanted to do that, I do not understand why they did not decide the mayoral areas first. At the moment, we do not know where the mayors will be, and where they are now is not where the ICBs are. The Government have decided to cut ICB budgets and force mergers before they have decided where the mayoral authorities will be in some cases. Even where there are mayoral authorities already, the Government have not mandated that the ICBs be coherent with them, and, therefore, in many cases, they are not. We have a very confusing pattern emerging, which may require further reorganisation of ICBs to line them up, with a further cost down the line.
Joe Robertson
It is a pleasure to serve under your chairmanship, Sir Jeremy. There is a consensus—not just in this room, but within Parliament and going back several decades—that we want more integration and partnership working, particularly to bring together health and social care services, but this clause drives a coach and horses through that, and does so in a way that weakens rather than strengthens the Government’s plans to replace the system.
Local authorities bear responsibility for social care and public health in their areas, but they will no longer have a direct voice when it comes to integrated care boards. What we have seen to date is not an ideal system, or even a system that works particularly well, so I understand that the Government want to strengthen it, but we should not do that by removing the local government voice or making it indirect via a mayor who does not have the direct responsibility for delivering social care locally. Mayors may have some strategic oversight, but that is different.
Just last week, the Minister of State for Care appeared before the Health and Social Care Committee and was questioned on this very issue by me and others. His view was that the mayoral strategic partnership would be more than sufficient to make up for the local authorities losing their seat, but he faced particular scrutiny from the hon. Member for Chelsea and Fulham (Ben Coleman), who made some excellent points, which I will not repeat or paraphrase as they are on public record.
The gist of his argument was that local authorities have been ignored for too long when it comes to joining up health and social care services. This measure puts local authorities in an even weaker position and threatens what the Government are trying to achieve with social care, particularly for areas such as mine that have an older population and a relatively small unitary authority with so much responsibility to deliver on.
As my hon. Friend the Member for Farnham and Bordon has already said, the combined area of Hampshire and the Isle of Wight—or the Solent, as the Government like to call the Isle of Wight, despite the fact that fish cannot vote—is not set to get a mayor for a couple of years, but it will be at the vanguard of the Government’s plans. What about those areas for which there is no date, or even no plan for a mayor at all? It seems extraordinary that the Government would do away with the current set-up, imperfect as it is, and replace it with something that does not yet exist.
The Government have time deal with this problem. I am sure they quietly understand that there could be a problem. It is now on their shoulders to deal with it. I welcome the Minister’s reflections.
Karin Smyth
There has been a wide-ranging discussion on this clause. I remind Members that the abolition of ICPs is about reducing that complex legal framework, allowing for local decisions and putting partnership work in place in the most effective way. That is what the measure seeks to do. I do not think anyone has disagreed with the notion that the landscape is complex, and that people are producing a lot of reports. In future, health and wellbeing boards will be the focal point for the collaboration between ICBs and local authorities. They are statutory committees that bring together the NHS, local government and relevant community partners; set the strategic direction for health and care services; and oversee joint working in their area, which we are of course committed to making work in local areas. I do not think many people will disagree with that; I hope that is clear.
There is also an enhanced role, not only for the health and wellbeing boards—as I said last week, I think they have been underutilised in most areas; again, I do not think people generally disagree with that point—but for health scrutiny. Again, across the country, that has not been pursued to the greatest extent to create links with elected councillors in local areas.
We are clear that the role of local authorities is crucial at a local level—as the name describes—and particularly in working on our commitment for neighbourhood partnerships and developing the neighbourhood plan; most of that was covered in our sittings last week. I accept that there are a number of concerns about how that will work in different geographies. I think the Opposition said last week that a survey suggested a quarter of areas will keep those partnerships, which is absolutely fine. That is up to them.
On the one hand, the Opposition say that there is centralisation and a power grab in this Bill; on the other, they complain—I should not say complain, because it is their right and their job to do so—about the move to devolution and the freedom to allow, or indeed encourage, local leaders to work together across authorities on behalf of the populations they serve, even where some of them are politically divided, because the populations they serve voted for different people. It is incumbent on all of us as individual elected politicians to work with people—whoever the population around us voted for. These provisions provide for that.
Edward Argar
Can the Minister set out how she envisages health scrutiny committees having genuine teeth? Our cross-party health scrutiny committee in Leicestershire universally condemned a decision by the ICB—totally disagreed with it—and the ICB basically said, “Thank you; noted,” and carried on anyway.
Karin Smyth
We all have examples of decisions that are made in our constituencies that we do not like. Again, that is part of the democratic process, but I go back to my earlier point: either there is a centralised unaccountable body like NHS England making decisions, or the Secretary of State devolves those responsibilities.
It is incumbent on people and elected leaders locally, and the ICB, which is not elected, to work with local leaders on these decisions. ICBs will be held accountable through mechanisms in the Department of Health and Social Care. There will be decisions that people do not like—that is a consequence of some of these things—but the clause simplifies the landscape.
Karin Smyth
I will not; we need to move on from this point. Of course, if people want to keep the partnerships, they are totally able to do so. That will be up to local leaders to decide.
Question put, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 70—Duty to engage primary care providers in integrated care boards—
“(1) An integrated care board must take all reasonable steps to secure the meaningful involvement of primary care providers in the exercise of its functions relating to—
(a) service redesign,
(b) integration of health services,
(c) development of neighbourhood health services, and
(d) population health planning.
(2) In this section, ‘primary care providers’ includes—
(a) providers of primary medical services,
(b) community pharmacy contractors,
(c) providers of primary dental services, and
(d) providers of ophthalmic services.
(3) Under subsection (1), ‘meaningful involvement’ includes—
(a) involvement at an early stage in the development of ICB proposals,
(b) provision of sufficient information to enable informed participation of primary care providers in ICB functions,
(c) opportunities for primary care providers to influence ICB decision-making, and
(d) opportunities for primary care providers to deliver feedback on how their views have been taken into account in the delivery of ICB functions.
(4) An integrated care board must publish an annual statement describing—
(a) how it has complied with this section, and
(b) the impact of primary care providers’ involvement on decisions taken by the ICB.
(5) The Secretary of State may issue guidance about the application of this section to which integrated care boards must have regard.”
This new clause ensures a certain range of primary care providers are consulted by integrated care boards in the development of their healthcare plans.
Karin Smyth
Clause 24 abolishes the requirement for health and wellbeing boards to prepare and publish a joint local health and wellbeing strategy. Instead ICBs, local authorities and their partners must work together through the health and wellbeing board to develop a neighbourhood health plan, in line with this Government’s commitment in the 10-year health plan. The neighbourhood health plan should be updated regularly to reflect the needs of the local population, unless all partners consider the existing plan is sufficient.
In developing their neighbourhood health plans, responsible local authorities and partner ICBs must involve the people who live or work in the area of the responsible local authority. The neighbourhood health plan will cover most of the topics previously considered by joint local health and wellbeing strategies, but will also encourage a deep focus on tackling the challenges facing individual neighbourhoods. That may mean applying different geographical focuses to different elements of the plan, to ensure that planners are addressing the real and different needs of the diverse communities they serve.
These plans will outline how the NHS, local government and local partners intend to improve the health of people in their locality and reduce health inequalities through a joined-up neighbourhood health approach. The plans will consider how local services can help realise national NHS priorities, further public service reforms, and improve performance against the adult social care outcomes framework and the local outcomes framework metrics. To support this work, the Government also intend to provide local areas with guidance and we will work with systems to ensure this addresses the needs of local planners and local communities.
Dr Johnson
Clause 24 puts neighbourhood health plans on a statutory basis. Currently, section 116A of the Local Government and Public Involvement in Health Act 2007 requires local authorities and partner ICBs to prepare a joint local health and wellbeing strategy once they have received their integrated care strategy. Essentially, that means that the ICBs and local authorities produce their overall strategy, then it devolves down, and then the joint health and wellbeing strategy looks at how it will be delivered. The local authority and its partners must give regard to the integrated care strategy, the NHS England mandate and any guidance issued by the Secretary of State. The strategy must be published and local people and the local Healthwatch must be involved in its development.
Section 116B of the 2007 Act places a duty on local authorities and partner ICBs to have regard to various strategies when exercising their function, specifically, a joint strategic needs assessment, an integrated care strategy and a joint local health and wellbeing strategy. NHS England also has regard to these when providing healthcare for a specific area.
Clause 24 changes the JLHWS to a neighbourhood health plan. In many ways, that aligns with the shift in the Government’s 10-year health plan from hospital to community. As they have described it, more care in the neighbourhood will allow hospitals to focus on the more specialist care that may be needed, so more people can be cared for closer to home, which seems a reasonable aim.
However, if local authorities and partner ICBs have to give regard to what the centre is doing when developing neighbourhood health plans, to what extent does the Minister envisage that being directed? Local authorities and partner ICBs giving regard to the centre could mean there being a very loose requirement from the centre to provide for the local population, and then they get on with it; it could also be very prescriptive—my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) has talked about the pros and cons of having targets—with a whole litany of targets in the plans. Whether that squares with the Government’s claim to be devolving power, or whether it strikes as a centralising power, depends on how that is done and to what extent the Secretary of State plans to direct it. I would appreciate it if the Minister could talk about that.
As has been said, Sir Andrew Dilnot told the Committee that
“we cannot really address many of the fundamental problems facing the NHS if we do not sort out social care.”––[Official Report, Health Public Bill Committee, 16 June 2026; c. 84, Q131.]
The Government have asked Baroness Casey to review social care, but they have developed this measure in the meantime. Is that because they have been talking to her and know that it is the sort of thing that she will recommend—or are they putting the cart before the horse, as my hon. Friend the Member for Farnham and Bordon suggested?
Later in the Committee’s considerations, we will come to Healthwatch, its benefits and the concerns that I and, I am sure, many other Committee members have about its abolition. What mechanisms does the Minister envisage there being for local people—local patients—to contribute to the neighbourhood health plans? A local Healthwatch currently contributes to the equivalent, the joint local health and wellbeing strategy, as a way of ensuring that it captures patient and community voices. How will that be done otherwise?
Some 80% of the Government’s new neighbourhood health centres that will deliver these plans are expected to be funded through public-private partnerships. Does the Minister have any comments on that, particularly in the light of the expensive private finance initiative that the last Labour Government entered into and left us stuck with?
In March 2026, the Government produced a neighbourhood health framework policy paper, which identified the goal of reducing non-elective admissions for those with severe frailty. Given that goal, why are the Government not on track to deliver the fracture liaison service improvements that they promised?
The policy paper also commits to what it calls
“a diversion rate of at least 25% by March 2027 for at least 10 high volume specialties”.
What is a “diversion rate”? It essentially requires more GP referrals to be rejected, so let us be clear about what that means. When someone, either hon. Members or constituents, goes to see their GP, they are referred to a consultant for care; I should declare an interest as a consultant in the NHS. The consultant will then review that referral and decide whether they think it is clinically appropriate to see the patient, whether a different specialty may be more appropriate, or whether they can give advice or make suggestions about treatment that could be given in primary care instead.
When a patient is given an appointment in secondary care, it essentially means that the GP has decided that they clinically need it, and the consultant has decided that they clinically need it too. If the Government want a diversion rate of at least 25% by March 2027 for at least 10 high volume specialties, are they suggesting that patients who the GP and consultant agree clinically need an appointment should not get one? If so, why?
Gregory Stafford
We can go back to the record in Hansard, but I do not remember mentioning anything to do with hospitals in what I just said; I may have had some sort of amnesia at that point. If the hon. Member is referring to the plan of the last Government, which was fully costed, for 40 new hospitals, then I am afraid I did not mention that. On his wider point, Conservative Members want to understand how local authorities and deliverers of primary care—dental services and so on—will be included and can have influence over the plans and strategies that ICBs draw up. I fully support that ambition; I just feel that, if we are to have that ambition, we need to table amendments and new clauses that the Minister might actually accept, so that we can go forward.
Karin Smyth
I thank hon. Members for their comments. I accept those made by the hon. Members for Winchester and for North Shropshire. I offer the Liberal Democrats the assurance that the Government fully appreciate the important role that primary care plays in informing ICB decisions, which is why we have retained the requirement that ICBs engage with their system partners, including primary care services, in the exercise of their planning and commissioning activities.
It is universally recognised that full engagement with providers, including primary care, is fundamental to good commissioning, and this is reflected in the strategic commissioning framework. The neighbourhood health framework sets out how neighbourhood health plans should be developed through health and wellbeing boards and with the involvement of system partners. We expect primary care to be fully involved in the process.
In addition, ICBs will continue to engage local representative primary care committees, such as the local medical committees. ICBs must comply with their duty to obtain appropriate advice from persons who have broad professional expertise in prevention, diagnosis or treatment of illness and the protection or improvement of public health. Primary care practitioners will remain key sources of such advice. Although I agree that experience of general practice is fundamental—as a commissioner, I worked very closely with general practitioners, who deal with 90% of patient contacts—I do not believe that placing an additional requirement on ICBs to engage specifically with primary care providers is necessary.
I will take this opportunity to clarify matters. We are moving between the roles of ICBs and local authority health and wellbeing boards. I know this is a subject of great interest and will continue to be debated in relation to those bodies’ commissioning and providing functions. The planning structure will be improved under clause 24, reflecting our commitment to neighbourhood health and making it a reality.
Planning begins with a joint strategic needs assessment developed by health and wellbeing boards; that assessment informs the new neighbourhood health plan, replacing the joint local health and wellbeing strategy. Meanwhile, ICBs will produce population health improvement plans, aligning multiple joint strategic needs assessments, neighbourhood health plans and local priorities. Patient and local voices must, of course, be embedded in ICB decision making and in the planning process. ICBs are being supported to do that. The strategic commissioning framework published on 4 November 2025 clearly set out that user involvement is key to strategic commissioning.
Having proper plans that address the needs of neighbourhoods will help the NHS to deliver for every community in our country. That is where the patient focus is and where people experience healthcare the most, and it is why we have made these commitments in neighbourhood health plans. I commend clause 24 to the Committee as the means to make that a reality.
Question put and agreed to.
Clause 24 accordingly ordered to stand part of the Bill.
Clause 25
NHS trust accounts
Question proposed, That the clause stand part of the Bill.
Karin Smyth
Clause 25 makes focused but important changes to the accounting and audit arrangements for NHS trusts by amending schedule 4 to the National Health Service Act 2006. It does not put additional burdens on NHS trusts; instead, the aim of the clause is to align the requirements for trusts with the updated accounting arrangements for foundation trusts made elsewhere in the Bill. The changes are needed as a consequence of the abolition of NHS England and the removal of the requirement for foundation trusts to have councils of governors and members.
The amendments the clause makes replicate trusts’ existing duties to keep proper accounts and records about those accounts, and to prepare annual accounts for each financial year. The clause also replicates the Secretary of State’s current power to direct an NHS trust regarding the form of its annual accounts, but extends that power of direction so the Secretary of State may also direct a trust to prepare accounts for a specified period—for example, when part-period accounts are needed. That will help to ensure a consistent approach to financial reporting while retaining the flexibility to keep requirements up to date.
The clause also sets out and strengthens how the audit arrangements for NHS trusts should operate, mirroring the approach for foundation trusts and integrated care boards. It provides that NHS trust annual accounts are audited under the Local Audit and Accountability Act 2014, as is the case currently, but it also provides that part-period accounts may be audited in accordance with that Act where the Secretary of State so directs.
The clause also enables the Comptroller and Auditor General to examine the accounts and related auditor reports, as is currently the case. To reflect the fact that the Secretary of State will have oversight of providers once NHS England is abolished, it requires the accounts and audit reports to be sent to the Secretary of State.
Taken together, these measures support transparency, consistency and robust financial assurance. They will help to reduce unnecessary divergence in accounting requirements across different types of NHS provider, while maintaining clear oversight of public funds. That is consistent with the Bill’s broader intent to support effective governance and clear accountability for providers.
Clause 26 makes minor technical amendments to ensure that the statute book remains clear and coherent as the Bill aligns the approach to audit and accounts across NHS trusts and foundation trusts. It sits alongside the provisions in the Bill that update the arrangements for the audit of foundation trusts following the abolition of NHS England and the removal of the requirement for NHS foundation trusts to have councils of governors and members.
The clause does that by amending or removing outdated transitory provisions relating to the audit of NHS trust accounts in two places: the NHS Act 2006 and the Local Audit and Accountability Act 2014. Clause 26 therefore supports the effective implementation of the wider measures in this part of the Bill by ensuring that the legislation is up to date, accurate and internally consistent. I commend clauses 25 and 26 to the Committee.
Dr Johnson
As has been said, clause 25 specifies how NHS trusts should handle their accounting. Paragraph 11A of schedule 4 to the NHS Act 2006 sets out the current obligations, which are that the trust must keep proper accounts, that the Secretary of State may give directions about how the accounts are held, and that the accounts must be prepared annually, may be examined by the Comptroller and Auditor General, and must be submitted to NHS England.
Clause 25 replaces paragraph 11A entirely. Under the new provisions, the reporting goes to the Secretary of State, instead of NHS England—which seems sensible, because the Government are abolishing NHS England—and the Secretary of State may give directions about “methods and principles”, as well as the “form and content”. The Secretary of State may also give directions about specified periods in which accounts are to be prepared.
Will the Minister explain why those provisions are felt to be necessary? There will be suspicion among some more cynical people that the power to specify periods could be used to be more flattering for the Government, or that methods and principles could be used to change the perception of the position. Can the Minister give an example of where she thinks such periods would be useful, and also say why she thinks it is necessary to enable the Secretary of State to give directions about methods and principles, and form and content, in a way that is not done at the moment?
The exception for charitable trusts of which the NHS is a trustee is being removed. Will the Minister explain why she thinks that is important, and in what situation she thinks that power would be used? Finally, will she say whether the financial directors of NHS trusts have been consulted about these changes? If so, what was their feedback?
Clause 26 tidies up relevant provisions in two pieces of legislation, as the Minister has described.
Karin Smyth
If there are specific examples that are helpful, I will write to the hon. Lady—I am not entirely sure I got the point about charities, but we will pick that up in Hansard.
As I outlined in my opening remarks, these clauses are about standardising the key requirements across the NHS provider landscape in relation to annual and other accounts and records in relation to those, and audit and reporting requirements, including keeping those up to date and having a consistent approach across all NHS provider types. Of course, we worked closely with NHS England colleagues and directors of finance in seeking to bring forward those provisions.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Clause 26 ordered to stand part of the Bill.
Clause 27
Special Health Authorities: establishment and exercise of functions
Karin Smyth
Clauses 27 and 28 make amendments to the legal framework around special health authorities to give the Secretary of State the flexibility to best manage the reliable delivery of healthcare for patients and the public. As the Committee knows, special health authorities are independent bodies established by the Secretary of State, by order, to perform specific functions. They play a key national role in the health system, carrying out specific functions on behalf of the Secretary of State.
Clause 27 does two key things to the special health authority legal framework. First, it amends section 28 of the NHS Act 2006 to increase the scope of functions that a special health authority could be established to deliver. Currently, the Secretary of State can create a special health authority only for the purpose of exercising functions under the 2006 Act. The clause allows a special health authority to be established to exercise functions under any other Act as well.
Secondly, the clause amends section 29 of the 2006 Act, which currently enables regulations to provide for the functions of a special health authority to be carried out flexibly, by another special health authority or jointly with one or more other special health authorities. That applies only to functions that the Secretary of State has directed the special health authority to exercise under section 7 of the 2006 Act. The clause removes that limitation, so that those arrangements can be made for any functions of the special health authority, not just those that it is directed to carry out under section 7.
These changes are needed because the health and care system is underpinned by a range of statutory functions that do not sit exclusively within the 2006 Act. The Secretary of State needs to be able to establish special health authorities to carry out those wider functions, and to give those functions to existing special health authorities. The clause ensures that the Secretary of State has the modern, adaptable tools required to place specialist functions in the right national body, with the appropriate governance and accountability. Equally, special health authorities need to be able to work with other special health authorities across all their functions in a way that best serves the needs of the wider health and care system.
On occasion, it is necessary for Ministers to merge, alter or abolish special health authorities, either because of changing circumstances or to ensure the smooth and effective running of the system. Clause 28 provides the flexibility to transfer and redeploy staff. It allows regulations to be made to enable staff to be transferred to an integrated care board or another special health authority. These changes ensure that staff can be transferred where they may be needed most, allowing for flexibility to direct resources in the health system.
The clause also allows for arrangements to be made for a special health authority’s staff to be made available to another special health authority, a local authority, the Secretary of State or an integrated care board. That may be necessary during an emergency or to provide specialist support to help an organisation achieve a particular outcome. The clause also allows the Secretary of State to give directions to a special health authority to make staff available to another special health authority or integrated care board or the Secretary of State.
Clause 28 also amends the existing power to make regulations about the sharing of information with other bodies, to allow information to be shared with integrated care boards in addition to the Secretary of State and other special health authorities. That allows for information to be shared across the system so that national and local functions can be successfully fulfilled and supports a more joined-up health system.
Clauses 27 and 28 provide for future-facing updates that will support effective administration and ensure the more reliable delivery of healthcare for patients and the public. I commend them to the Committee.
Dr Johnson
Special health authorities are, in essence, specialist health authorities set up by the Secretary of State, usually to provide an England-wide service of some form. Examples include NHS Blood and Transplant, and the NHS Business Services Authority, which provides NHS pensions—I should declare that I have an NHS pension—admin for prescription exemptions and other such business-type functions. We also have NHS Resolution, which deals with clinical negligence claims, and the NHS Counter Fraud Authority.
In principle, special health authorities are useful in some cases, but they are effectively a form of quango. Can the Minister explain when she thinks the Government might want to set up a special health authority, rather than using a department within the DHSC to deliver the same thing? There are plenty of other nationally delivered services, and although the Government have suggested that some services, such as screening, will become localised as part of the Bill, some things will remain national. Can the Minister give some examples of what the new provision will be used for?
I can see there is provision for flexibility, but the special health authorities would require setting up, and there are set-up costs and costs associated with branding and those sorts of things. How does the Minister envisage those costs being provided for, and when will it be necessary for the Government to use them rather than just using the Department?
Special health authorities have been created, reconfigured and shelved many times. For example, the National Treatment Agency for Substance Misuse became part of Public Health England in 2013, and the NHS Institute for Innovation and Improvement was closed in the same year. The functions of the National Patient Safety Agency went to the NHS Commissioning Board Special Health Authority, later known as NHS England, in 2012 and then to NHS Improvement in 2016. Widening the scope could leave us with more quangos than are necessary.
Which specific functions do the Government plan to move into special health authorities under this widened power? Have the Government just decided that they need this power and are increasing the scope because they are abolishing NHS England without a proper plan? Is this power just to cover themselves in the event that, as they start to make a plan, they find out they need it?
Clause 28 enables the Secretary of State to make regulations for the transfer of staff from one special health authority to another, or to an ICB. Paragraph 3(8) of schedule 6 to the National Health Service Act 2006 states:
“Regulations may provide for the transfer of officers from one Special Health Authority to another”,
or to NHS England,
“and for arrangements under which the services of an officer…are placed at the disposal of another Special Health Authority”,
or NHS England, or a local authority. Paragraph 3(12)(a) states that the Secretary of State may give directions
“to place the services of any of its officers at the disposal of another Special Health Authority”,
or NHS England. Paragraph 13 states:
“Provision may be made by regulations with respect to the recording of information by a Special Health Authority, and the furnishing of information by a Special Health Authority to the Secretary of State, another Special Health Authority”,
or NHS England.
Clause 28 modifies that paragraph such that regulations can now provide for the transfer of an officer to an ICB—that is a new power—as well as a special health authority and a local health authority, but no longer to NHS England because NHS England is being abolished. Regulations can now provide for an officer’s services to be placed at the disposal of the ICB and the Secretary of State, which is a new power, as well as the special health authority or local authority, but no longer NHS England. The clause modifies paragraph 3(12)(a) of schedule 6, so that directions may be given about placing the services of officers at the disposal of the special health authority and, newly, the Secretary of State or an ICB, but not NHS England. As the Minister said, the clause also modifies paragraph 13 of schedule 6, so that a special health authority can be required by regulations to pass information to integrated care boards, which is a new power, but no longer to NHS England.
NHS England is to be abolished, so it is sensible to say that staff can no longer be placed there—that seems an entirely reasonable exercise—but the legislation providing for special health authorities essentially contains open-ended spending power. Remuneration of the special health authority chairman and staff can be determined by the Secretary of State, with the approval of the Treasury. Does the Minister foresee an upper limit to those sorts of salaries?
People will essentially be able to transfer from one special health authority to another, or to an ICB—or be placed at the disposal of another special health authority, an ICB, a local authority or the Secretary of State. Will the Minister talk about the location, pension and salary of those individuals? We heard yesterday that the future Prime Minister, the right hon. Member for Makerfield (Andy Burnham), may want to move a whole load of civil servants from London up to Manchester. That will clearly be within his gift if he becomes Prime Minister, but for individuals who work in one location to be asked to move to another is disruptive to their family and social lives, and involves significant relocation costs. If people are moved in the way that clause 28 describes, particularly by transfer, what choice will they have? What will happen to their pension, salary and other terms and conditions, and will they have a choice of location or not?
Gregory Stafford
Very briefly, on clauses 27 and 28, I am sure the Committee is aware that special health authorities were initially established under the National Health Service Act 1977. Since then the number of special health authorities has expanded and contracted a number of times over the years to leave us with, currently, NHS Blood and Transplant, and the Business Services Authority, which covers pensions, as my hon. Friend the Member for Sleaford and North Hykeham mentioned—I should declare that I have an NHS pension, albeit a very small one—as well as the NHS Litigation Authority, also known as NHS Resolution, and the NHS Counter Fraud Authority.
The mood music and the direction of travel, certainly since 2006, has been to reduce the number of special health authorities. On my reading, clauses 27 and 28 suggest that the Government are potentially looking to expand the number of special health authorities, given the Secretary of State’s direction under clause 27 and the practical steps for staff transfers in clause 28. Is the Minister looking at, for example, a special health authority to deal with artificial intelligence? Clearly that is something the NHS will have to embrace—or deal with, depending on which end of the AI argument one is on—rapidly over the coming years. Is that a potential area for a special health authority? Perhaps the Minister could outline where she sees the special health authorities acting and what their remits might be.
Karin Smyth
To be clear, in response to the comments of the Opposition spokesperson, the hon. Member for Sleaford and North Hykeham, it is not currently our intention to set up any new special authorities to deliver any specific functions. We are taking this opportunity to update the legislative framework and ensure that in future the functions that a special health authority could carry out are less limited. The current legislative framework limits the remit of such authorities to their functions under the NHS Act 2006, which is outdated and does not reflect changes since that time. There are functions of the Secretary of State under the Health and Social Care Act 2012 that we may want special authorities to carry out in future. I agree with the Opposition spokesperson that the situation is complex. We have had a lot of changes over many years, as both she and the hon. Member for Farnham and Bordon said. I agree that we need flexibility for future provision, and that is what the clauses provide.
We have no immediate intention to delegate specific functions of the Secretary of State. However, following the abolition of NHS England, a range of functions may need to be established, as the hon. Member for Farnham and Bordon outlined. Those functions could, as an example, include the data and information functions in part 9 of the Health and Social Care Act 2012, which currently sit with the Secretary of State.
I assure the Committee that the clauses do not change the existing processes or scrutiny that exist around setting up a special health authority. They are, as I think the Opposition spokesperson said, about future-proofing. I commend the clauses to the Committee.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28 ordered to stand part of the Bill.
Clause 29
Constitution of NHS foundation trusts
The Chair
We now come to group 24, and amendment 73 to clause 29 tabled by Charlie Maynard. Does any Member wish to move amendment 73? With that not being so, the question becomes that clause 29 stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 74, in schedule 3, page 80, leave out paragraphs 5 to 8.
This amendment would retain the requirement for NHS Trusts to have a Council of Governors.
Amendment 75, in schedule 3, page 80, leave out paragraph 14.
This amendment would retain the requirement for NHS Trusts to have a Council of Governors.
Government amendment 19.
Amendment 36, in schedule 3, page 82, line 3, at end insert—
“(1A) The function under sub-paragraph (1) must be exercised by a person employed in the civil service of the State, and a Minister of the Crown or a special adviser must not be involved in any decision relating to such an appointment, suspension or removal.”
This amendment would ensure that civil servants are responsible for the decision making and appointment processes for trust and ICB leaders, rather than Ministers or Special Advisers.
Schedule 3.
Clause 30 stand part.
New clause 59—Independence of appointments—
“The Secretary of State must make provision to ensure that operational decisions regarding the appointment, suspension or removal of—
(a) chairs and directors of NHS trusts and NHS foundation trusts, and
(b) chief executives of integrated care boards,
are made exclusively by persons employed in the civil service.”
Karin Smyth
Amendment 19 reinstates in primary legislation the requirement in schedule 7 to the National Health Service Act 2006 for an NHS foundation trust board to include one executive director who is a medical or dental practitioner, and another who is a registered nurse or midwife.
I want to be clear to the Committee from the outset that there was never any intention to change the policy on the clinical membership of NHS foundation trust boards. Foundation trusts would still have been expected to have appropriate clinical leadership on their boards, but we had heard from ambulance foundation trusts that the current framing of the requirement for clinicians is not always helpful, and greater flexibility was therefore required. However, we also heard from important stakeholders, including the Royal College of Nursing, that removing the requirement from primary legislation has been perceived as deprioritising clinicians, which is absolutely not the case. We have therefore tabled amendment 19 to remove any doubt.
These roles provide valuable clinical oversight of board governance in decision making in foundation trusts, and are essential to ensuring the safety and quality of patient-facing services in the NHS. At the same time, some providers may need different clinical expertise at board level. For example, in ambulance trusts, an experienced paramedic may be better placed to provide the relevant clinical guidance and oversight. The amendment therefore gives the Secretary of State a regulation-making power to create exceptions to the requirement following engagement with relevant stakeholders. That preserves the current position in primary legislation while allowing for targeted flexibility for ambulance or patient transport-focused foundation trusts where appropriate. I commend amendment 19 to the Committee.
Clause 29 introduces schedule 3, which makes changes to the governance and constitution of NHS foundation trusts. It removes the various statutory roles of foundation trust members and councils of governors, and repeals the requirement for FTs to have them. Amendment 73 to 75 look to oppose that, but I do not think that we are discussing those.
The Chair
Order. Forgive me; let me interrupt to explain. I asked if anyone wished to move amendment 73, and no one did. We will come to amendments 74 and 75, so the Minister is welcome to speak to those amendments now or at the end of the debate if she wants to. Other members of the Committee may wish to move those amendments subsequently.
Karin Smyth
Thank you for the clarification, Sir Jeremy. I will come to amendment 75 at the end of the debate.
The Bill’s removal of councils of governors from NHS foundation trusts is part of delivering the 10-year health plan goal of hospitals putting patient experiences and outcomes at the heart of their decision making. That is not because we want to rid the system of local voices in democratic accountability—far from it. Although governors have provided helpful advice and oversight for some foundation trusts, we expect the next generation of NHS foundation trusts to put in place more responsive and flexible arrangements for drawing on patient, staff and stakeholder insight.
Rather than a one-size-fits-all model, providers should develop engagement arrangements that reflect their local populations, geographies and healthcare needs. Foundation trusts will have the option to retain aspects of their engagement model where it is working well, but can take a different approach if needed. Following Royal Assent, foundation trusts will be expected to have those arrangements in place and will be assessed as part of the non-statutory advanced foundation trust process.
Schedule 3 makes related changes to governance and decision making, in line with the Government’s policy to streamline oversight of providers and reduce duplication in the system. For example, the legal powers to appoint chairs and non-executive directors of foundation trusts and NHS trusts will, in future, both sit with the Secretary of State while supporting the effective use of talent across the NHS. Other functions of the council of governors, such as reviewing plans and major transactions, currently duplicate existing NHS England responsibilities, which will transfer to the Secretary of State through this Bill. Removing those requirements will therefore reduce duplication in the system.
Schedule 3 will also give the Secretary of State responsibility for approving changes to foundation trust constitutions and material changes to private patient income, and deciding chair and non-executive remuneration. The Secretary of State will take on the oversight role currently exercised by NHS England, and previously Monitor, including monitoring foundation trust performance, use of resources and governance. That will support system alignment and ensure that appropriate accountability arrangements are in place. Can I seek clarification, Sir Jeremy, that I can speak to clause 30 at this point?
The Chair
Yes, we are debating all the provisions in this group together, so the Minister is welcome to speak to clause 30 now or later, when she winds up.
Karin Smyth
Thank you, Sir Jeremy. Clause 30 clarifies how NHS foundation trust status will be applied for and granted following the abolition of NHS England and the removal of the council of governors model. The Government are committed to reinvigorating the foundation trust sector by granting high-performing providers greater freedoms and autonomy. The power to authorise foundation trusts originally sat with Monitor and passed to NHS England in 2022. The clause, alongside schedules 3 and 11, sets out how that power will operate when it transfers to the Secretary of State. It also makes consequential amendments to the authorisation process, including removing requirements linked to recruiting members and electing governors. The Secretary of State will also set the criteria for becoming a foundation trust. I commend the clauses and the schedule to the Committee.
Gregory Stafford
My hon. Friend is right that there will be a gap in local decision making on these issues. It goes back to that tension I described some moments ago: the Government’s stated intention is to devolve powers locally, but they seem to be pulling so much power up to the Secretary of State that we will lose the ability to make local decisions for the benefit of local populations where appropriate. We have a stated ambition for neighbourhood health, but those neighbourhoods are rapidly expanding in this legislation to become areas of millions of people. Local people who are interested in their local health delivery or local hospital trust would not see that as local decision making, and there is the gap that my hon. Friend describes.
I do not think that amendments 74 and 75 have been moved, so I will not talk about them. Government amendment 19 will require
“NHS foundation trusts to have at least one executive director who is a registered medical practitioner or a registered dentist and another who is a registered nurse or a registered midwife.”
As also stated in the explanatory note, and as the Minister mentioned, regulations may create exception—for example, for ambulance trusts. That is the right decision, and it is important that we have medical experience on foundation trust boards. I am interested in understanding from the Minister, first, why she has chosen a medical practitioner or registered dentist. Does she see some equivalence in their expertise that could be substituted? I have great respect for doctors and for dentists, but they have potentially different clinical expertise. If a foundation trust does no oral healthcare or maxillofacial reconstruction, and does no dentistry or allied specialties, would it really satisfy requirements to have a dentist on the board? Likewise, given that the amendment also refers to a registered nurse or midwife, if a trust has no maternity services, would having a midwife on the board really satisfy the requirement of that trust to have nursing care input? I ask those questions, and I would be interested in the answers.
Likewise, there is the exemption for ambulance trusts. Like my hon. Friend the Member for Sleaford and North Hykeham, I would be interested to understand from the Minister why she thinks ambulance trusts do not need a medical practitioner on their boards, given that they are doing medicine. Plenty of consultants work alongside paramedics and in ambulances, so again I am not quite sure why she is making that exemption. I would be interested to hear from her on that.
I understand the intention behind Liberal Democrat amendment 36. Once again, it is trying to soften the Secretary of State’s power grab over decision making—like the hon. Member for North Shropshire, I am not saying anything against the current Secretary of State, but a future Secretary of State could be different. The aim is to try to temper that in some way. Unfortunately for the hon. Member—I have sympathy for the amendment—the stated intention of the Bill is to pull more power to the Secretary of State. The Minister may surprise me, but I fear that the amendment will not find favour with the Government, because the whole Bill is about pulling more power to the centre, certainly when it comes to appointments, and to the Secretary of State.
However, the Minister should think about how future Secretaries of State may have to go through some process whereby their decisions are checked and justified, especially at local level. If we want local people to have influence and say over their local health systems and trusts, there needs to be some sort of bridging legislation or bridging process to ensure that whatever a Secretary of State decides, it has the confidence and support of local people and local service providers.
Karin Smyth
I think I am almost going to agree with the hon. Gentleman on his final point. It is important that local people have confidence in how their local systems are run and managed and, clearly, in the outcomes.
I will come first to the issue of governors and boards and then move to the amendments. I think we have all had emails, as is quite right, from local board members. Let me say, as I did earlier, that that is with good intent; they are very good people, who have given public service to be part of their local health system. As I said, this provision is no judgment on them; it is, as we heard, about effectively making the really important patient voice and patient experience central to the functions of the organisations delivering our healthcare. As I said in previous sittings, a debate will continue to be had about where we most effectively have that, but our intention throughout the 10-year health plan and this Bill is about devolution to providers and to ICBs and about making boards, as I also said in a previous sitting, responsible and accountable for the outcomes.
Let me outline broadly, because I think this is of interest to people, the impact on governance and the role that governors had. Just to be clear, since the creation of foundation trusts in 2004, NHS England—and, before it, NHS Improvement and Monitor—has had a statutory role to oversee the governance of NHS foundation trusts, including holding the whole board to account and taking steps where it identifies weaknesses in how foundation trusts are being run. The regulatory function is underpinned by the NHS provider licence, which will continue when NHS England’s functions pass to the Secretary of State. That is why we do not consider that the removal of the council of governors will have a negative impact on the governance of FTs, as some hon. Members have suggested.
Karin Smyth
I will move on, if I may. I think my response will the cover the issues raised in the debate.
On amendment 36 and new clause 59, I note the concern that the Secretary of State could act inappropriately when making appointments to the boards of ICBs and NHS trusts and foundation trusts. We discussed democratic accountability in a previous sitting, and at the end of the day it is up to the British public whom they elect to Parliament and as the governing party.
Transparency and democratic accountability are at the heart of our reforms. It would not be right for the civil service to be given sole legislative responsibility for appointments to NHS trusts, foundation trusts or integrated care boards. Ministers are democratically accountable to Parliament, and civil servants act on their behalf under the Carltona principle. Civil servants serve and advise the Government, and act on behalf of Ministers, but it is for Ministers to take decisions and to be held accountable to Parliament for the performance of the NHS. The civil service will run fair, open and equitable campaigns to fulfil these roles and will recommend appropriate candidates to Ministers.
Ministers are under a duty to comply with public law principles and to act reasonably, and will adhere to the Nolan principles, including objectivity, transparency and integrity, in discharging this function. The practical arrangements for appointments are being developed as part of the transition planning for the integration of NHS England’s functions into the Department, and will be based on these principles. It would therefore be inappropriate to exclude Ministers entirely from the appointments process. I urge hon. Members not to push the amendments to a vote.
The Chair
With this it will be convenient to discuss the following:
Schedule 4.
Clauses 32 to 34 stand part.
Karin Smyth
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—