Royal Arms Explanatory Notes to National Health Service Reform And Health Care Professions Act 2002

2002 Chapter 17

 

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These notes refer to the National Health Service Reform and Health Care Professions Act 2002 (c.17) which received Royal Assent on 25 June 2002

NATIONAL HEALTH SERVICE REFORM AND HEALTH CARE PROFESSIONS ACT 2002

EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the National Health Service Reform and Health Care Professions Act 2002 1 which received Royal Assent on 25 June 2002. They have been prepared by the Department of Health in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament.

    1 For copies: - postal address: PO Box 29, Norwich, NR3 1GN. Website: http://www.legislation.hmso.gov.uk/acts/acts2002/20020017.htm

2.     The notes are to be read in conjunction with the Act. They are not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section does not seem to require any explanation or comment, none is given.

SUMMARY

3.     In July 2000 the Government published The NHS Plan: A plan for investment, A plan for reform 2, in which was set out a ten-year plan for the reform of the health service in England. Action has since been taken to implement many of the proposals set out in that document. Many of the legislative proposals were given effect through the Health and Social Care Act 2001 ("the HSC Act").

    2 For copies: - postal address: PO Box 777, London SE1 6XH. Website address: http://www.doh.gov.uk/nhsplan/default.htm

4.     In summer 2001, the Government elaborated on key proposals from the NHS Plan in published documents: Shifting the Balance of Power within the NHS - Securing Delivery 3 and Involving Patients and the Public in Healthcare 4. This Act takes forward those of the proposals which required primary legislation.

    3 For copies: - postal address: PO Box 777, London SE1 6XH. Website address: http://www.doh.gov.uk/shiftingthebalance/index.htm

    4 For copies: - postal address: PO Box 777, London SE1 6XH. Website: http://www.doh.gov.uk/involvingpatients/index.htm

5.     In July 2001, the Report of the Bristol Royal Infirmary Inquiry 5 was published. It made a number of recommendations including some requiring legislation. A full Government Response to the Report 6 was published on 17 January 2002. This Act provides for change in relation to two of the areas covered in the Report: the role of the Commission for Health Improvement ("CHI"), and the regulation of the health care professions. Regarding the latter, the Government's proposals were published in August 2001 in the consultation document Modernising Regulation in the Health Professions 7.

    5 For copies: - postal address: PO Box 29, Norwich, NR3 1GN. Telephone: 0845 7 023474

    6 For copies: - postal address: PO Box 29, Norwich, NR3 1GN. Telephone: 0845 7 023474. Website address: http://www.doh.gov.uk/bristolinquiryresponse/index.htm

    7 For copies: - postal address: PO Box 777, London SE1 6XH. Website address: http://www.doh.gov.uk/modernisingregulation/index.htm

6.     The document Improving Health in Wales 8, published by the National Assembly for Wales ("the Assembly") in February 2001, signalled the intention to abolish the existing five Health Authorities ("HAs") in Wales on 31st March 2003 and extend and develop the role of the existing Local Health Groups which were established in April 1999 as sub-committees of the HAs to implement health improvement and local action plans through effective partnership working with local organisations and the public. The document envisaged the creation of Local Health Boards ("LHBs") to which the Assembly could delegate the functions of HAs in Wales once they had been abolished.

    8 For copies: - telephone: 029 2080 1032. Website address: http://www.wales.nhs.uk/publications/NHSStrategydoc.pdf

7.     The Act provides for amendment of the structural framework of the health service in England and separately in Wales (see below). It provides, in relation to England, for HAs to be renamed as Strategic Health Authorities. It also provides for most of the functions of HAs to be conferred instead on Primary Care Trusts ("PCTs"), and for health service resources to be allocated directly to PCTs by the Secretary of State. Service planning will in future be undertaken by PCTs, with Strategic Health Authorities providing the performance management function for the health services provided within their boundaries.

8.     In relation to Wales, the Act provides for the creation, functions and funding of LHBs, in effect extending the current role of Local Health Groups. The Act places a duty on each LHB and each Local Authority in Wales to formulate and implement a 'health and well-being strategy' for the population in the area, and to have regard to the strategy in exercising their functions. The Act also empowers the Assembly to make regulations imposing a duty on LHBs and Local Authorities to co-operate with other persons and organisations in formulating their strategy. These other bodies may include NHS trusts, Community Health Councils ("CHCs"), voluntary bodies and local businesses.

9.     The Act provides for new arrangements to strengthen CHI and its independence. CHI was established by the Health Act 1999 ("the Health Act") to carry out independent reviews of the arrangements for monitoring and improving the quality of health care by NHS bodies and other NHS service providers. The Act makes it clear that the definition of 'health care' extends to the patient environment. It provides for CHI to inspect and report on NHS services, and that CHI may recommend to the Secretary of State that special measures should be taken where services are of unacceptably poor quality or there are significant failings in the way a body providing NHS services is being run. The Act enables CHI to discharge certain of its functions in relation to the collection and analysis of data and performance assessment through what will be known as the Office for Information on Health Care Performance. The Act provides for CHI to appoint its own chief executive and requires CHI to make an annual report on the quality of NHS services, which the Secretary of State must lay before Parliament.

10.     The Act provides for the creation of an independent 'Patients' Forum' for every NHS trust and PCT in England, to perform an inspection, monitoring and representation role on behalf of patients and the public. Patients' Forums established in respect of PCTs ("PCT Patients' Forums") will have additional functions to provide information and advice to members of the public, to engender and promote the involvement of the public in local decisions that affect their health, and to advise other local bodies on how to involve the public. PCT Patients' Forums will also commission and provide Independent Advocacy Services. The Act establishes the Commission for Patient and Public Involvement in Health ("CPPIH") to report to the Secretary of State on how public and patient involvement mechanisms are working, and to conduct annual reviews of key issues arising from the work of Patients' Forums. CPPIH will set quality standards for and performance manage Patients' Forums and Independent Advocacy Services. The Act also provides for the abolition of CHCs in England and the Association of Community Health Councils for England and Wales ("ACHCEW").

11.     In addition, the Act establishes a duty of partnership between NHS bodies and - through the Home Secretary - the prison service, to work together in carrying out their functions as they relate to health services for prisoners. It also makes provision to enable the NHS and the prison service to work together to fulfil their functions more effectively, mirroring the joint working arrangements that already exist, under section 31 of the Health Act, between NHS bodies and Local Authorities. Under these provisions, prisons and their local NHS partners will - subject to approval by the Secretary of State - be able to pool funding for health services for prisoners, and prisons will be able to make arrangements to delegate health care functions to NHS bodies (and vice versa).

12.     The Act creates a Council for the Regulation of Health Care Professionals ("the Council") to oversee the activities of the various regulatory bodies of the health care professions. It provides for the Council to co-ordinate good practice guidelines and other aspects of the regulatory bodies' work, and for it to encourage the regulatory bodies to act in the interests of patients. Specifically, the Council will oversee the General Medical Council; the General Dental Council; the General Optical Council; the General Osteopathic Council; the General Chiropractic Council; the Royal Pharmaceutical Society of Great Britain; the Pharmaceutical Society of Northern Ireland; the Nursing and Midwifery Council and the Health Professions Council 9. The Act provides for the Council to have the right of appeal in cases determining a practitioner's fitness to practise or examining whether there has been an instance of professional misconduct where it would be desirable for the protection of members of the public.

    9 The Nursing and Midwifery Council and the Health Professions Council are bodies set up by orders made in the Health Act and succeed the UK Central Council for Nursing, Midwifery and Health Visiting and the Council for Professions Supplementary to Medicine

13.     The Act also deals with other aspects of the regulation of health care professionals. It provides for appeal cases in relation to 'fitness to practise' issues to be transferred from the Judicial Committee of the Privy Council to the High Court (and its Scottish and Northern Irish equivalents) in respect of those professions where this is not already the case. This will bring consistency in these procedures across all the professions. A further provision extends the powers conferred by section 60 of the Health Act (which deals with the modification of legislation governing the regulation of health care professions) to bring those powers in respect of the pharmacy profession more into line with the other health care professions.

THE ACT

14.     The Act is in three parts:

Part 1 makes changes to the way the National Health Service (NHS) is managed and funded, including the renaming of HAs as Strategic Health Authorities, the distribution and allocation of functions between Strategic Health Authorities and PCTs and the allocation of funding in England. For Wales, it deals with the establishment and funding of LHBs and a duty to devise health and well-being strategies. Part 1 also extends the role of CHI, reforms the structures for patient and public involvement in the NHS, and provides for joint working between NHS bodies and the prison service.

Part 2 covers the regulation of the health care professions: the establishment and functions of the Council for the Regulation of Health Care Professionals; the transfer of some 'fitness to practise' appeals from the Privy Council to the High Court; and a modification of the powers conferred by section 60 of the Health Act as it affects the regulation of the pharmacy profession.

Part 3 deals with various miscellaneous and supplementary provisions.

15.     Part 1 is concerned with the NHS. It changes the structure of the health service in both England and Wales and the way in which it is funded. It changes the ways in which patients and the public are involved in the management of the NHS in England and the ways in which the NHS works with the prison service. It extends the role of CHI. Sections 1 to 5 relate to the structural change in England. Section 1 changes the name of HAs in England to Strategic Health Authorities. Many functions of HAs will, as part of these changes, be re-allocated to PCTs who will become the lead NHS organisation in assessing need, planning and securing all health services and improving health. Provision is made to give the Secretary of State power to make regulations containing requirements to carry out consultation before making an order relating to Strategic Health Authorities. Section 2 places upon the Secretary of State a duty to create PCTs for all areas of England, and makes provision to allow for PCTs which straddle Strategic Health Authority boundaries. Section 2 also removes the existing option for the Assembly to establish PCTs in Wales which has never been exercised and which is to be replaced in this Act by a power to establish LHBs (see section 6). Section 3 makes further provision to underpin this changed role by creating a power for the Secretary of State to delegate his own health functions directly to PCTs.

16.     Section 4 contains amendments relating to Personal Medical Services ("PMS"); Personal Dental Services ("PDS") and Local Pharmaceutical Services ("LPS") to take account of the replacement of HAs by Strategic Health Authorities and also the transfer of certain PMS, PDS and LPS functions from HAs to PCTs.

17.     Section 5 addresses a further consequence of the devolution of functions to PCTs by providing for the responsibility of recognising Local Representative Committees ("LRCs") in England to become a PCT function.

18.     Section 6 allows for the establishment of LHBs in Wales to exercise health functions as directed by the Assembly.

19.     Sections 7 to 10 change the way in which NHS bodies are funded, as a consequence of the devolution of functions from HAs to PCTs in England and the creation of LHBs in Wales. Section 7 provides for the funding of Strategic Health Authorities and section 8 provides for PCTs to be funded directly by the Secretary of State rather than by HAs. It also gives power to make payments based on performance direct to PCTs rather than through the HA. Section 9 provides for the funding of LHBs. Section 10 makes further provision relating to the expenditure of NHS organisations.

20.     Sections 11 to 14 clarify the extent of the duty of quality on NHS bodies and extend the role of CHI. As a result of the Act's provisions, CHI will be able to inspect NHS bodies, service providers, and bodies providing NHS services on their behalf and recommend to the Secretary of State that special measures are taken where services are of unacceptably poor quality or there are significant failings in the way a body providing NHS services is being run. The Act enables certain of CHI's functions to be carried out by what will be known as the Office for Information on Health Care Performance.

21.     Sections 15 to 22 complete the new arrangements to reform public and patient involvement in the NHS started in the HSC Act. Sections 15 to 19 establish statutory Patients' Forums, one for every PCT and every NHS trust in England, and set out provisions for their functions and operation. These bodies are intended to ensure that patients' views are taken into account by those delivering NHS services. PCT Patients' Forums will, in addition, promote wider community involvement in local health decisions and commission and provide Independent Advocacy Services. Section 20 establishes CPPIH which will have a role at national level in terms of issuing guidance and training on involvement issues, and advising the Secretary of State and other bodies, facilitating the co-ordination of Patients' Forum activities and setting and monitoring quality standards for Patients' Forums and providers of Independent Advocacy Services. Section 21 provides for a referral process by overview and scrutiny committees to the Secretary of State for Health and to the Assembly. In the light of these new provisions section 22 abolishes CHCs in England only, but not in Wales. It also abolishes ACHCEW, and ensures that the Assembly may continue to exercise the power to establish a new body to advise and assist CHCs in Wales.

22.     Section 23 mirrors for the prison service the arrangements set out in section 31 of the Health Act for the NHS to work jointly with other bodies.

23.     Section 24 introduces a duty on each LHB, once created, and each Local Authority in Wales to formulate health and well-being strategies in Wales.

24.     Part 2 of the Act concerns the regulation of the health care professions. Sections 25 to 29 deal with the establishment of the Council and set out its duties and functions. The purpose of the Council is to co-ordinate the work of the regulatory bodies, formulate principles of good regulation, encourage regulatory bodies to conform to these principles and act in the interests of patients and the public.

25.     Sections 30 to 34 make changes to some 'fitness to practise' appeals procedures, moving them from the Judicial Committee of the Privy Council to the High Court (or its Scottish and Northern Irish equivalents). They also bring greater consistency to the route taken by appeals against registration decisions. The professions affected by the changes in these sections are medical practitioners; dentists; opticians; osteopaths and chiropractors.

26.     Section 35 extends the powers conferred by section 60 of the Health Act (which deals with the modification of legislation governing the regulation of health care professions) to bring those powers in respect of pharmacy more into line with those for other professions.

27.     Part 3 of this Act includes a number of miscellaneous and supplementary provisions.

28.     Annex A to this document sets out the existing legal framework for the NHS prior to implementation of this Act. Annex B sets out the effects of the Act in relation to Wales only.

COMMENTARY ON SECTIONS

Part 1 - National Health Service, etc.

NHS bodies and their functions: England

Section 1: English Health Authorities: change of name

29.     Section 1 renames HAs in England as Strategic Health Authorities and places a duty on the Secretary of State to create, for the whole of England, Strategic Health Authorities.

30.     The section retains the existing duty to create HAs to cover Wales. As a result of devolution arrangements, this latter duty is a function of the Assembly. For the sake of consistency with the National Health Service Act 1977 ("the 1977 Act") and to avoid confusion, the reference to the Secretary of State is preserved in respect of Wales instead of adding express reference to the Assembly.

31.     Subsection (2) substitutes a new section 8 of the 1977 Act (which currently provides for the establishment of HAs for the whole of England and Wales) to take account of the renaming of HAs in England as Strategic Health Authorities. Provision is made in subsection (5) of the new section 8 to give the Secretary of State power to make regulations containing requirements as to consultation that must be complied with before he makes an order under this section which relates to a Strategic Health Authority. Consultation requirements contained in regulations under section 8(5) are in addition to any other consultation requirements that apply.

32.     Subsection (3) introduces Schedule 1 which makes a series of further amendments to existing legislation to take account of the change of name of English HAs.

Section 2: Primary Care Trusts

33.     Section 2 replaces the existing power of the Secretary of State to establish PCTs in section 16A of the 1977 Act with a duty on him to establish PCTs to cover all areas of England. At present, many areas of England are covered by PCTs. However, in order for the new role of PCTs envisaged under the Act to be effective, it is essential that there is comprehensive coverage across the whole of England. The section also removes the existing option of creating PCTs for Wales, where alternative arrangements for LHBs are being developed - see section 6.

34.     Following consultation, it became clear that in a small number of cases PCT areas would cross the boundaries of the new Strategic Health Authorities. Although previous legislation did not specifically prohibit this, there was an underlying assumption that all PCTs would in fact fall within the area of a single HA (or in future, Strategic Health Authorities). Subsection (4) provides for PCTs which cross the boundaries of Strategic Health Authorities and amends Schedule 5A of the 1977 Act

    i)     to allow any Strategic Health Authority in whose area the PCT is established to meet preparatory costs

    ii)     to allow any Strategic Health Authority to make available premises and other facilities during the preparatory period

    iii)     to provide for the PCTs annual financial and other reports to be sent to all Strategic Health Authorities in whose area the PCT is established.

35.     Subsection (5) introduces Schedule 2, which contains amendments to NHS and other legislation to re-allocate certain functions of HAs to PCTs. Under present arrangements, PCTs provide or secure the provision of a limited range of services, including primary, community care and social care services. HAs are responsible for medical lists and other family health services such as dentists, pharmacists and opticians. The main effect of Schedule 2 will be to confer directly on PCTs responsibility for all family health services such as dentists, pharmacists and opticians, currently conferred on HAs. The Schedule also contains other miscellaneous amendments relating to the reallocation of functions.

Section 3: Directions: distribution of functions

36.     Section 3 amends section 16D of the 1977 Act to enable the Secretary of State to delegate directly to PCTs the exercise of any functions which are conferred on him by health legislation, for example, the duty to provide hospital accommodation under section 3 of the 1977 Act. These delegated functions are in addition to those directly conferred under Schedule 2. Under the existing section 16D, the Secretary of State can only delegate his functions directly to HAs and Special Health Authorities 10. Further delegation to PCTs has to be carried out by HAs under section 17A of the 1977 Act and is limited to certain functions (described in section 17A(2) as "delegable"). Certain other functions - described in section 17A(3) as "excepted" - cannot currently be delegated beyond HA level. Section 3 simplifies this system.

    10 See Annex A, paragraphs 204-209 for more information about Special Health Authorities

37.     Subsection (3) removes the concepts of "delegable" and "excepted" functions in the existing section 17A of the 1977 Act and inserts a new section 17A. This allows Strategic Health Authorities to direct PCTs, any part of whose area falls within their area, to exercise specified functions of theirs (except, in certain circumstances, functions relating to PMS or PDS where there is a need to maintain a distinction between commissioners and providers). The Secretary of State may direct Strategic Health Authorities to delegate specified functions to PCTs to be exercised by them alone or jointly with either other PCTs or the Strategic Health Authority.

38.     Subsection (4) enables a Strategic Health Authority to direct a PCT about the exercise of any of its functions whether delegated to it by the Strategic Health Authority or not. Subsection (5) makes amendments to section 18 of the 1977 Act consequential on the new section 17A inserted by subsection (3).

Section 4: Personal medical services, personal dental services and local pharmaceutical services

39.     Section 4 contains amendments relating to PMS, PDS and LPS to take account of the replacement of HAs by Strategic Health Authorities and also the transfer of certain PMS, PDS and LPS functions from HAs to PCTs.

40.     Subsection (1) amends section 9 of the National Health Service (Primary Care) Act 1997 (the Primary Care Act) to remove the restriction on the Secretary of State in England from directing a Strategic Health Authority or Special Health Authority to exercise functions relating to PMS and PDS pilot schemes on his behalf. Subsection (2) amends section 36 of the HSC Act to remove the same restrictions as regards functions relating to LPS pilot schemes.

41.     Subsection (3) introduces Schedule 3 which makes amendments to the Primary Care Act and other primary legislation related to the provision of PMS and PDS. These amendments are to take account of the creation of Strategic Health Authorities and the transfer of certain PMS and PDS functions to PCTs.

42.     The Government's intention is to devolve PMS and PDS functions from the Secretary of State and HAs to PCTs wherever this is practicable. Where the PCT is providing PMS or PDS, rather than commissioning it, it is not considered possible to devolve certain functions to the PCT. This is because the Primary Care Act requires a distinction to be maintained between commissioner and provider.

43.     For this reason, PMS and PDS functions currently undertaken by the HA under the 1997 Act will be transferred to Strategic Health Authorities. Where the PCT is the commissioner, the HA's functions will be devolved to the PCT through secondary legislation. Where the PCT is the provider, Strategic Health Authorities will retain the legal exercise of these functions and their accountability, but in practice much of the work will be carried out by PCTs acting as agents on behalf of Strategic Health Authorities. This will be made clear in guidance.

44.     Paragraph 2 of Schedule 3 therefore provides for all functions in relation to both PMS and PDS pilot schemes in England to be carried out by Strategic Health Authorities. This would include, for example, developing and consulting on proposals and implementing schemes approved by the Secretary of State, but exclude those functions associated with the preparation and maintenance of PMS and PDS 'services lists' (see below).

45.     Paragraph 3 amends section 8ZA of the Primary Care Act (inserted by section 26(2) of the HSC Act) so that responsibility for 'services lists', comprising practitioners who may perform PMS or PDS under pilot schemes, will be transferred from HAs to PCTs. In future, PCTs will be responsible for the preparation and maintenance of these lists, including making decisions, for example, on a doctor's or dentist's application for inclusion in the list and whether there are grounds for removal from it. (PCTs will also be responsible for the preparation and maintenance of the main medical and supplementary lists.)

46.     Paragraph 4 amends section 8A of the Primary Care Act (inserted by section 6(1) of the Health Act) which prevents a HA from delegating certain functions to the PCT where the PCT itself is providing, rather than commissioning, PMS or PDS by applying the same restriction on Strategic Health Authorities. This is because the Primary Care Act requires a distinction to be maintained between the commissioner and provider.

47.     Paragraphs 5, 6, 9 and 10 make amendments to the Primary Care Act to take account of responsibility for the preparation and maintenance of General Medical Services medical lists (the medical and supplementary lists) being transferred to PCTs. Sections 12 and 13 of and Schedule 1 to the Primary Care Act make provision for the removal from and subsequent readmission to the GMS medical list of a GMS doctor moving to or returning from working under PMS pilot arrangements.

48.     Paragraphs 7, 8 and 16 make similar provision in relation to such schemes under any permanent arrangements for PMS and PDS which are made following the pilot schemes.

49.     Paragraphs 11, 12, 13 and 17 make amendments to a range of primary legislation to take account of and provide consistency with the provisions of this Schedule that transfer PMS and PDS functions from HAs to Strategic Health Authorities.

50.     Paragraph 14 removes the restriction on the delegation by a HA to a PCT of certain functions relating to the permanent arrangements for PMS/PDS contained in section 28EE(1) of the 1977 Act (as inserted by section 6(2) of the Health Act).



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