Law

National Health Service Act 2006

United Kingdom · statute

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In force since 2026-10-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 516 provisions

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No one has proposed a change to this act yet.

516 provisions

38 Variation of authorisation

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39 Register of NHS foundation trusts

(1) NHS England must continue to maintain a register of NHS foundation trusts. (2) The register must contain in relation to each NHS foundation trust— (a) a copy of the current constitution, (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) a copy of the latest annual accounts and of any report of the auditor on them, (d) a copy of the latest annual report, (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) a copy of any order made under section 65D, 65J, 65KC, 65L or 65LA, (h) a copy of any report laid under section 65D, (i) a copy of any information published under section 65D, (j) a copy of any draft report published under section 65F, (k) a copy of any statement provided under section 65F, (l) a copy of any notice published under section 65F, 65G, 65H, 65J, 65KA, 65KB, 65KC or 65KD, (m) a copy of any statement published or provided under section 65G, (n) a copy of any final report published under section 65I, (o) a copy of any statement published under section 65J or 65KC, (p) a copy of any information published under section 65M. (3) In relation to any time before an NHS foundation trust is first required to send an annual report to NHS England, the register must contain a list of the persons who were first elected or appointed as— (a) the members of the council of governors, (b) the directors. (4) Members of the public may inspect the register at any reasonable time. (5) Any person who requests it must be provided with a copy of, or extract from, any document contained in the register on payment of a reasonable charge.

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39A Panel for advising governors

(1) NHS England may appoint a panel of persons to which a governor of an NHS foundation trust may refer a question as to whether the trust has failed or is failing— (a) to act in accordance with its constitution, or (b) to act in accordance with provision made by or under this Chapter. (2) A governor may refer a question to the panel only if more than half of the members of the council of governors voting approve the referral. (3) The panel— (a) may regulate its own procedure, and (b) may establish such procedures, and make such other arrangements, as it considers appropriate for the purpose of determining questions referred to it under this section. (4) The panel may decide whether, or to what extent, to carry out an investigation on a question referred to it under this section. (5) The panel may for that purpose, or for the purpose of carrying out such an investigation, request information or advice. (6) Where the panel has carried out such an investigation, it must publish a report of its determination of the question referred to it. (7) If a person refuses to comply with a request made under subsection (5), the report under subsection (6) may refer to the refusal. (8) On any proceedings before a court or tribunal relating to a question referred to the panel under this section, the court may take the panel's report of its determination of the question into account. (9) NHS England— (a) must pay expenses properly incurred by the panel, and (b) must make administrative support available to the panel. (10) Regulations may make provision as to— (a) eligibility for membership of the panel; (b) the number of persons that may be appointed as members; (c) the terms of appointment of members; (d) circumstances in which a person ceases to be a member or may be suspended.

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40 Power of Secretary of State to give financial assistance

(1) The Secretary of State may give financial assistance to any NHS foundation trust. (2) The financial assistance may be given by way of loan, public dividend capital, grant or other payment. (3) The Secretary of State may guarantee the payment of any amount payable by an NHS foundation trust under an externally financed development agreement. (4) “Externally financed development agreement” has the same meaning as in paragraph 23 of Schedule 4, reading references in sub-paragraphs (3) and (5) of that paragraph to the NHS trust as references to the NHS foundation trust. (5) As soon as is practicable after the end of each financial year, the Secretary of State must prepare a report on the exercise of the power under subsection (1). (6) In relation to each exercise of the power under that subsection during the year to which the report relates, the report must specify the amount of the loan, issue of public dividend capital, grant or other payment and— (a) in the case of a loan, the amount (if any) outstanding at the end of the year and the other terms on which the loan was made, (b) in the case of an issue of public dividend capital, the terms on which it was issued (or, where a decision under section 42(3) is made in relation to it during that year, the terms so decided as those on which it is treated as having been issued), and (c) in the case of a grant or other payment, the terms on which it was made. (7) In relation to each loan made under that subsection during a previous financial year but not repaid by the beginning of the year to which the report relates, the report must specify— (a) the amount outstanding at the beginning of the year, (b) the amount (if any) outstanding at the end of the year, and (c) the other terms on which the loan was made. (8) A report under subsection (5) must, in relation to each NHS foundation trust, specify— (a) the amount of the public dividend capital of that trust at the end of the year to which the report relates, and (b) the conditions on which it is held. (9) The Secretary of State must publish a report under subsection (5).

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41 Prudential borrowing code

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42 Public dividend capital

(1) Where an NHS trust becomes an NHS foundation trust, the amount which was the public dividend capital of the NHS trust immediately before the giving of the authorisation continues as public dividend capital of the NHS foundation trust held on the same conditions (“initial public dividend capital”), but subject to this section. (2) Any amount issued to an NHS foundation trust as public dividend capital under section 40 is (like initial public dividend capital) an asset of the Consolidated Fund. (3) The Secretary of State may, with the consent of the Treasury, decide the terms on which any public dividend capital of an NHS foundation trust must be treated as having been issued. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) Any amount paid to the Secretary of State by an NHS foundation trust by way of repayment of public dividend capital must be paid into the Consolidated Fund. (7) The terms which may be decided under subsection (3) include terms to which the exercise of any power of an NHS foundation trust to do any of the following will be subject as a consequence— (a) providing goods or services, (b) borrowing or investing money, (c) providing financial assistance, (d) acquiring or disposing of property, (e) entering into contracts, or making other arrangements, to do anything referred to in paragraphs (a) to (d), (f) applying for dissolution (whether or not when also applying for the establishment of one or more other trusts), (g) applying to acquire another body.

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42A Criteria for making loans etc.

(1) The Secretary of State must publish guidance on the powers conferred by sections 40 and 42. (2) The guidance on the power to make a loan under section 40(1) must in particular— (a) explain that, in exercising the power, the Secretary of State will apply the principle that a loan should be made only where there is a reasonable expectation that it will be repaid in accordance with the terms on which it is made; (b) include other criteria that the Secretary of State will apply when determining whether to exercise the power and, if so, the terms on which to make the loan. (3) The guidance on that power must also explain— (a) the process for applying for a loan under section 40(1); (b) the consequences of failing to comply with terms on which a loan is made under that provision. (4) The guidance on the power to decide terms under section 42(3) must, in particular, include the criteria that the Secretary of State will apply when deciding the terms. (5) The guidance on that power must also explain the consequences of failing to comply with the terms decided. (6) In preparing guidance under this section, the Secretary of State must have regard (among other things) to any generally accepted principles used by financial institutions to determine whether to make loans to bodies corporate and the terms on which to make loans to them. (7) Before publishing the guidance, the Secretary of State must consult— (a) the Treasury, (b) NHS England, and (c) such other persons as the Secretary of State considers appropriate.

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42B Limits on capital expenditure

(1) NHS England may make an order imposing a limit on the capital expenditure of an NHS foundation trust in respect of a single financial year. (2) The order must specify— (a) the trust, (b) the capital expenditure limit, and (c) the financial year to which the limit relates. (3) NHS England must consult the trust before making the order. (4) NHS England must publish each order under this section. (5) An order under this section may be made at any time during or before the financial year to which it relates. (6) A trust that is the subject of an order under this section must not exceed the capital expenditure limit imposed by the order during the financial year to which it relates. (7) In this section “capital expenditure”, in relation to an NHS foundation trust, means expenditure of the trust which falls to be capitalised in its annual accounts.

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42C Guidance in relation to orders under section 42B

(1) NHS England must publish guidance about the exercise of its power to make orders under section 42B, including guidance about— (a) the circumstances in which it is likely to make an order, and (b) the method it will use to determine the capital expenditure limit. (2) NHS England must consult the Secretary of State before it publishes guidance, or revised guidance, under this section. (3) NHS England must have regard to the guidance in exercising its power to make orders under section 42B.

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43 Provision of goods and services

(1) The principal purpose of an NHS foundation trust is the provision of goods and services for the purposes of the health service in England. (2) An NHS foundation trust may provide goods and services for any purposes related to— (a) the provision of services provided to individuals for or in connection with the prevention, diagnosis or treatment of illness, and (b) the promotion and protection of public health. (2A) An NHS foundation trust does not fulfil its principal purpose unless, in each financial year, its total income from the provision of goods and services for the purposes of the health service in England is greater than its total income from the provision of goods and services for any other purposes. (3) An NHS foundation trust may also carry on activities other than those mentioned in subsection (2) ... for the purpose of making additional income available in order better to carry on its principal purpose. (3A) Each annual report prepared by an NHS foundation trust must give information on the impact that income received by the trust otherwise than from the provision of goods and services for the purposes of the health service in England has had on the provision by the trust of goods and services for those purposes. (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3D) An NHS foundation trust which proposes to increase by 5% or more the proportion of its total income in any financial year attributable to activities other than the provision of goods and services for the purposes of the health service in England may implement the proposal only if more than half of the members of the council of governors of the trust voting approve its implementation. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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44 Power to charge for accommodation etc.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) According to the nature of its functions, an NHS foundation trust may, in the case of patients being provided with goods and services for the purposes of the health service, make accommodation or further services available for patients who give undertakings (or for whom undertakings are given) to pay any charges imposed by the NHS foundation trust in respect of the accommodation or services. (7) An NHS foundation trust may exercise the power conferred by subsection (6) only to the extent that its exercise does not to any significant extent interfere with the performance by the NHS foundation trust of its functions.

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45 Protection of property

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46 Financial powers

(1) An NHS foundation trust may borrow money for the purposes of or in connection with its functions. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) An NHS foundation trust may invest money (other than money held by it as trustee) for the purposes of or in connection with its functions. (5) The investment may include investment by— (a) forming, or participating in forming, bodies corporate, (b) otherwise acquiring membership of bodies corporate. (6) An NHS foundation trust may give financial assistance (whether by way of loan, guarantee or otherwise) to any person for the purposes of or in connection with its functions.

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47 General powers

(1) An NHS foundation trust may do anything which appears to it to be necessary or expedient for the purpose of or in connection with its functions. (2) In particular it may— (a) acquire and dispose of property, (b) enter into contracts, (c) accept gifts of property (including property to be held on trust for the purposes of the NHS foundation trust or for any purposes relating to the health service), (d) employ staff. (3) Any power of the NHS foundation trust to pay remuneration and allowances to any person includes power to make arrangements for providing, or securing the provision of, pensions or gratuities (including those payable by way of compensation for loss of employment or loss or reduction of pay). (4) “The purposes of the NHS foundation trust” means the general or any specific purposes of the trust (including the purposes of any specific hospital at or from which services are provided by the trust).

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47A Joint exercise of functions

An NHS foundation trust may enter into arrangements for the carrying out, on such terms as the NHS foundation trust considers appropriate, of any of its functions jointly with any other person.

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48 Information

(1) The Secretary of State may require an NHS foundation trust to provide the Secretary of State with such information as the Secretary of State considers it necessary to have for the purposes of the functions of the Secretary of State in relation to the health service. (1A) An integrated care board may require any of its partner NHS foundation trusts to provide it with any information that it requires. (2) Information required under this section must be provided in such form, and at such time or within such period, as may be specified by the person imposing the requirement.

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49 Entry and inspection of premises

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50 Fees

An NHS foundation trust must pay to NHS England such fee as NHS England may determine in respect of its exercise of functions under— (a) section 39; (b) section 39A.

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51 Trust funds and trustees

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51A Significant transactions

(1) An NHS foundation trust may enter into a significant transaction only if more than half of the members of the council of governors of the trust voting approve entering into the transaction. (2) “Significant transaction” means a transaction or arrangement of such description as may be specified in the trust's constitution. (3) If an NHS foundation trust does not wish to specify any descriptions of transaction or arrangement for the purposes of subsection (2), the constitution of the trust must specify that it contains no such descriptions.

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52 Failing NHS foundation trusts

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52A Application of sections 52B to 52E

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52B De-authorisation: regulator's notice

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52C Grounds for de-authorisation notice

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52D De-authorisation

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52E Secretary of State's request

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53 Voluntary arrangements

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54 Dissolution etc

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55 Sections 53 and 54: supplementary

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56 Mergers

(1) An application may be made jointly by— (a) an NHS foundation trust, and (b) another NHS foundation trust or an NHS trust established under section 25, to NHS England for the dissolution of the trusts and the establishment of a new NHS foundation trust. (1A) An application under this section may be made only with the approval of more than half of the members of the council of governors of each applicant (that is an NHS foundation trust). (2) The application must— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) specify the property and liabilities proposed to be transferred to the new NHS foundation trust, (c) ...and (d) be accompanied by a copy of the proposed constitution of the new trust, ... (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) NHS England must grant the application if— (a) it is satisfied that such steps as are necessary to prepare for the dissolution of the trusts and the establishment of the new trust have been taken, and (b) the Secretary of State approves the grant of the application, and must otherwise refuse the application. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) On the grant of the application, the proposed constitution of the NHS foundation trust has effect, but the directors of the applicants may exercise the functions of the trust on its behalf until a board of directors is appointed in accordance with the constitution.

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56A Acquisitions

(1) An application may be made jointly by— (a) an NHS foundation trust (A), and (b) another NHS foundation trust or an NHS trust established under section 25 (B), to NHS England for the acquisition by A of B. (2) An application under this section may be made only with the approval of more than half of the members of the council of governors of each applicant (that is an NHS foundation trust). (3) The application must— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) be accompanied by a copy of the proposed constitution of A, amended on the assumption that A acquires B. (4) NHS England must grant the application if— (a) it is satisfied that such steps as are necessary to prepare for the acquisition have been taken, and (b) the Secretary of State approves the grant of the application, and must otherwise refuse the application. (4A) Where NHS England proposes to grant the application, it may by order make provision for the transfer of employees of B to A on the grant of the application. (5) On the grant of the application, the proposed constitution has effect, but where a person who is specified as a director of A in the constitution has yet to be appointed as such, the directors of A may exercise that person's functions under the constitution.

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56AA Acquisitions under section 56A: supplementary

(1) On the grant of an application under section 56A— (a) any order made by NHS England under section 56A(4A) takes effect, (b) the property and liabilities of the acquired NHS foundation trust or NHS trust are transferred to the acquiring NHS foundation trust (other than rights and liabilities which may be dealt with by order under section 56A(4A)), (c) the acquired NHS foundation trust or NHS trust is dissolved, and (d) where the acquired trust is an NHS trust, the NHS trust order establishing it is revoked. (2) So far as may be necessary for the purposes of subsection (1)(b)— (a) anything done before the grant of the application by or in relation to the acquired trust is to be treated (on and after the grant) as having been done by or in relation to the acquiring trust; (b) any reference in a document to the acquired trust is to be read as a reference to the acquiring trust. (3) Anything (including legal proceedings) that, immediately before the grant of the application, is in the process of being done by or in relation to the acquired trust may continue to be done afterwards by or in relation to the acquiring trust. (4) In subsection (1)— (a) “liabilities” includes criminal liabilities; (b) “property” includes trust property.

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56B Separations

(1) An application may be made to NHS England by an NHS foundation trust for the dissolution of the trust and the establishment of two or more new NHS foundation trusts. (2) An application under this section may be made only with the approval of more than half of the members of the council of governors of the applicant. (3) The application must, by reference to each of the proposed new trusts— (a) specify the property and liabilities proposed to be transferred to it; (b) be accompanied by a copy of its proposed constitution. (4) NHS England must grant the application if— (a) it is satisfied that such steps as are necessary to prepare for the dissolution of the trust and the establishment of each of the proposed new trusts have been taken, and (b) the Secretary of State approves the grant of the application, and must otherwise refuse the application. (5) On the grant of the application, the proposed constitution of each of the new trusts has effect but, in the case of each of the new trusts, the proposed directors may exercise the functions of the trust on its behalf until a board of directors is appointed in accordance with the constitution.

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57 Sections 56 to 56B: supplementary

(1) Where an application is granted under section 56 or 56B, NHS England must specify the property and liabilities to be transferred to the new NHS foundation trust or trusts. (2) Where such an application is granted, NHS England must make an order— (a) dissolving the trust or trusts in question, and (b) transferring, or providing for the transfer of, the property and liabilities specified by NHS England to the new NHS foundation trust or trusts. (2A) An order under section 56 or 56B is conclusive evidence of incorporation and conclusive evidence that the corporation is an NHS foundation trust. (3) The order may— (a) transfer, or provide for the transfer of, any of the remaining property or liabilities to another NHS foundation trust, an NHS trust established under section 25 or the Secretary of State, (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3A) The order may include provision for the transfer of employees of the trust or trusts dissolved by the order. (4) In sections 56(2) and 56B(3), and subsections (1) and (2) of this section, “liabilities” includes criminal liabilities; and an order under subsection (3) of this section may transfer any remaining criminal liabilities to another NHS foundation trust or an NHS trust established under section 25. (5) Where one of the parties to an application under section 56 or 56A is an NHS trust, the powers conferred on the Secretary of State or NHS England by Part 3 of Schedule 4 are not exercisable in relation to the trust. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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57A Dissolution

(1) An application may be made by an NHS foundation trust to NHS England for dissolution. (2) An application under this section may be made only with the approval of more than half of the members of the council of governors of the applicant. (3) NHS England must grant the application if it is satisfied that— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) such steps as are necessary to prepare for the dissolution have been taken. (4) Where an application under this section is granted, NHS England must make an order— (a) dissolving the trust in question, and (b) transferring, or providing for the transfer of, the property and liabilities (including criminal liabilities) to another NHS foundation trust, an NHS trust established under section 25 or the Secretary of State. (5) The order must include provision for the transfer of any employees of the NHS foundation trust that is dissolved.

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58 Taxation

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59 Conduct of elections

(1) Regulations may make provision as to the conduct of elections for membership of the council of governors of an NHS foundation trust. (2) The regulations may in particular provide for— (a) nomination of candidates and obligations to declare their interests, (b) systems and methods of voting, and the allocation of places on the council of governors, at contested elections, (c) filling of vacancies, (d) supervision of elections, (e) elections expenses and publicity, (f) questioning of elections and the consequences of irregularities. (3) Regulations under this section may create offences punishable on summary conviction with a maximum fine not exceeding level 4 on the standard scale. (4) An NHS foundation trust must secure that its constitution is in accordance with regulations under this section. (5) Pending the coming into force of regulations under this section, elections for membership of the council of governors of an NHS foundation trust, if contested, must be by secret ballot.

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60 Voting and standing for election

(1) A person may not vote at an election for the council of governors of an NHS foundation trust unless, within the specified period, he has made a declaration in the specified form of the particulars of his qualification to vote as a member of the constituency, or class within a constituency, for which the election is being held. (2) A person may not stand for election to the council unless— (a) he has within the specified period made a declaration in the specified form of the particulars of his qualification to vote as a member of the constituency, or class within a constituency, for which the election is being held, and (b) he is not prevented from being a member of the council by paragraph 8 of Schedule 7. (3) A person elected to the council may not vote at a meeting of the council unless— (a) he has within the specified period made a declaration in the specified form of the particulars of his qualification to vote as a member of the trust, and (b) he is not prevented from being a member of the council by paragraph 8 of Schedule 7. (4) This section does not apply to an election held for the staff constituency. (5) “Specified” means specified in the trust's constitution. (6) A person is guilty of an offence if he— (a) makes a declaration under this section which he knows to be false in a material particular, or (b) recklessly makes such a declaration which is false in a material particular. (7) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 4 on the standard scale.

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61 Representative membership

(1) An NHS foundation trust must take steps to secure that (taken as a whole) the actual membership of any public constituency and (if there is one) of the patients' constituency is representative of those eligible for such membership. (2) In deciding which areas are to be areas for public constituencies, or in deciding whether there is to be a patients' constituency, an NHS foundation trust must have regard to the need for those eligible for such membership to be representative of those to whom the trust provides services.

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62 Audit

Schedule 10 makes provision in relation to the audit of accounts of NHS foundation trusts.

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