Scottish Statutory Instrument 1999 No. 56

The Health Act 1999 (Fund-Holding Practices) (Transfer of Assets, Savings, Rights and Liabilities and Transitional Provisions) (Scotland) Order 1999

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"the 1978 Act" means the National Health Service (Scotland) Act 1978[2];

"the 1997 Regulations" means the National Health Service (Fund-Holding Practices) (Scotland) Regulations 1997[3];

"allotted sum" means any sum payable by a Board under section 87B of the 1978 Act[4];

"former members of a fund-holding practice" means those who were involved in one of the regulated fund-holding schemes at any time from 1st April 1991 to 31st March 1999;

"former members of a residual fund-holding practice" means those who were former members of a fund-holding practice and who joined the residual fund-holding scheme on 1st April 1999;

"fund-holding account" means a bank account maintained by the former members of a fund-holding practice or of a residual fund-holding practice for the purpose of receiving an allotted sum or any part of it;

"part financial year 1999-2000" means the period of the financial year 1999-2000 from 1st April 1999 until 30th September 1999 inclusive.

    (2) In this Order, any reference to a Board is a reference to the relevant Health Board, as defined in section 19(8) of the 1978 Act.

    (3) Any reference in this Order to a numbered article is a reference to the article bearing that number in this Order.

Transfer of allotted sums
     3.  - (1) Any allotted sum, or any remaining part of it, for the part financial year 1999-2000 or any previous year, whether held by the former members of a residual fund-holding practice or by the Board on behalf of the former members of a fund-holding practice, shall on 1st October 1999 be transferred to the Board.

    (2) On 1st October 1999 the Board shall be substituted as the account holder of the fund-holding account.

    (3) The Board shall deal with an allotted sum transferred under paragraph (2) in accordance with articles 5 and 6.

Transfer of rights and liabilities
     4.  - (1) Subject to the following paragraphs of this article - 

(a) any rights to which the former members of a residual fund-holding practice were entitled, or which were enforceable by them, immediately before 1st October 1999; and

(b) any liabilities to which such former members were subject, or which were enforceable against them immediately before that date,

and which were acquired or incurred in connection with the application of an allotted sum, shall on that date be transferred to or, as the case may be, shall on and after that date be enforceable by or against, the Board.

    (2) Paragraph (1) shall not apply to any rights or liabilities incurred in connection with - 

(a) the spending of savings in accordance with regulation 22 of the 1997 Regulations as that regulation had effect on the day the savings were spent; or

(b) the application of the allotted sum for the purpose of - 


(i) the purchase of goods and materials for the use of the former fund-holding practice, including support and maintenance contracts relating to computers or office equipment;

(ii) payments under leasing and hire purchase agreements for the purchase of goods and materials, including equipment.

    (3) Paragraph (1) shall not apply to rights or liabilities relating to any contract of employment.

    (4) Nothing in this article shall affect the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981[5].

Use of transferred sum
     5.  - (1) The Board shall apply the sum transferred in accordance with article 3 for the following purposes - 

(a) to meet the reasonable costs incurred either by the Board or by the former members of a residual fund-holding practice in preparing the annual accounts of that practice for the part financial year 1999-2000, in accordance with article 7;

(b) to discharge any liabilities transferred to it in accordance with article 4; and

(c) to meet the costs of exercising any rights or discharging any liabilities transferred to it in accordance with article 4.

    (2) Where the sum referred to in paragraph (1) is insufficient to cover all of the purposes specified in that paragraph, it is to be applied in the order there set out, and the Board shall be responsible for fulfilling any liabilities that remain outstanding thereafter.

    (3) Any sum remaining after the Board has complied with the preceding provisions of this article shall be applied in accordance with article 6.

Final balance
     6.  - (1) When the Board is satisfied that the requirements of paragraph (1) of article 5 have been satisfied, it shall determine the amount, if any, which remains of the sum transferred under article 3, and that amount shall be known as the final balance.

    (2) The Board's determination under paragraph (1) shall be conclusive.

    (3) Subject, in the case of former members of a fund-holding practice, to paragraph (4) and, in the case of former members of a residual fund-holding practice, to paragraph (5), the Board shall, in agreement with the former members in question, apply the final balance for any of the purposes specified in regulation 20(1) or 22 of the 1997 Regulations.

    (4) Any part of the final balance relating to former members of a fund-holding practice which has not been applied or in relation to which agreement has not been reached in accordance with paragraph (3) by 31st March 2001 shall belong to the Board.

    (5) Any part of the final balance relating to former members of a residual fund-holding practice - 

(a) which was in existence by 31st March 1999 but has not been applied or in relation to which agreement has not been reached in accordance with paragraph (3) by 31st March 2001; or

(b) pertaining to the part financial year 1999-2000 which has not been applied or in relation to which agreement has not been reached in accordance with paragraph (3) by 30th September 2001,

shall belong to the Board.

Liability to account
     7.  - (1) Notwithstanding the repeal of section 86(1A) and (1C) of the 1978 Act[6], the duty in those subsections shall continue to apply to the Board and to former members of a residual fund-holding practice with respect to the part financial year 1999-2000 and to preceding financial years.

    (2) Where during the part financial year 1999-2000 recognition has been removed from the former members of a residual fund-holding practice in accordance with regulations 12 and 13 or 14 of the 1997 Regulations, the duty imposed under section 86(1A)(a) shall be performed by the Board.

    (3) Final accounts shall be completed by 12th November 1999.

Recovery of misapplied sums
     8.  - (1) Notwithstanding the repeal of sections 87A to 87C of the 1978 Act, the Board may on or after 1st October 1999 apply the procedure in regulation 23 of the 1997 Regulations to determine whether any part of the allotted sum has been misapplied by the former members of a fund-holding practice and in accordance with that regulation may recover any sum found to have been misapplied, and regulation 23 of the 1997 Regulations shall apply to such determinations and recoveries as though the said sections had not been repealed.

    (2) Paragraph (1) shall apply whether or not the procedures to determine whether a sum had been misapplied or to recover such a sum had begun before 1st October 1999.


SUSAN C DEACON
A member of the Scottish Executive

St Andrew's House Edinburgh
8th September 1999

[2] 1978 c.29.back

[3] S.I.1997/1014, amended by S.I.1998/658 and 1999/365.back

[4] Section 87B was inserted by the National Health Service and Community Care Act 1990 (c.19), section 34 and amended by the National Health Service (Primary Care) Act 1997 (c.46), Schedule 2, paragraph 54, and is repealed by section 45 of the 1999 Act.back

[5] S.I.1981/1794.back

[6] Section 86(1A) was inserted by the National Health Service and Community Care Act 1990 (c.19) ("the 1990 Act"), section 36(4) and amended by section 36(1) of, and paragraph 14(2) of Schedule 7 to, that Act; section 86(1C) was inserted by section 36(1) of, and paragraph 14(3) of Schedule 7 to, the 1990 Act; section 86(1A) and (1C) are repealed by paragraph 57 of Schedule 4 to the 1999 Act.back

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