(1) Regulations (referred to in this Chapter as “health special administration regulations”) must make further provision about health special administration orders. (2) Health special administration regulations may apply with or without modifications— (a) any provision of Part 2 of the Insolvency Act 1986 (administration) or any related provision of that Act, and (b) any other enactment which relates to insolvency or administration or makes provision by reference to anything that is or may be done under that Act. (3) Health special administration regulations may, in particular, provide that the court may make a health special administration order in relation to a relevant provider if it is satisfied, on a petition by the Secretary of State under section 124A of the Insolvency Act 1986 (petition for winding up on grounds of public interest), that it would be just and equitable (disregarding the objective of the health special administration) to wind up the provider in the public interest. (4) Health special administration regulations may make provision about— (a) the application of procedures under the Insolvency Act 1986 in relation to relevant providers, and (b) the enforcement of security over property of relevant providers. (5) Health special administration regulations may, in particular, make provision about the publication and maintenance by NHS England of a list of relevant providers. (6) Health special administration regulations may in particular— (a) require NHS England to publish guidance for commissioners about the application of the criteria referred to in section 129(1)(a); (b) confer power on NHS England to revise guidance published by virtue of paragraph (a) and require it to publish guidance so revised; (c) require NHS England, before publishing guidance by virtue of paragraph (a) or (b), to obtain the approval of the Secretary of State ...; (d) require commissioners, when applying the criteria referred to in section 129(1)(a), to have regard to such matters as NHS England may specify in guidance published by virtue of paragraph (a) or (b); (e) require NHS England to make arrangements for facilitating agreement between commissioners in their exercise of their function under section 129(1)(a); (f) confer power on NHS England, where commissioners fail to reach agreement in pursuance of arrangements made by virtue of paragraph (e), to exercise their function under section 129(1)(a); (g) provide that, in consequence of the exercise of the power conferred by virtue of paragraph (f), the function under section 129(1)(a), so far as applying to the commissioners concerned, is to be regarded as discharged; (h) require a health special administrator to carry out in accordance with the regulations consultation on the action which the administrator recommends should be taken in relation to the provider concerned. (7) Health special administration regulations may modify this Chapter or any enactment mentioned in subsection (8) in relation to any provision made by virtue of this Chapter. (8) The enactments are— (a) the Insolvency Act 1986, and (b) any other enactment which relates to insolvency or administration or makes provision by reference to anything that is or may be done under that Act. (9) The power to make rules under section 411 of the Insolvency Act 1986 (company insolvency rules) applies for the purpose of giving effect to provision made by virtue of this Chapter as it applies for the purpose of giving effect to Parts 1 to 7 of that Act. (10) For that purpose— (a) the power to make rules in relation to England and Wales is exercisable by the Lord Chancellor with the concurrence of the Secretary of State and, in the case of rules that affect court procedure, with the concurrence of the Lord Chief Justice; (b) the power to make rules in relation to Scotland is exercisable by the Secretary of State; (c) references in section 411 of that Act to those Parts are to be read as including a reference to this Chapter. (11) Before making health special administration regulations the Secretary of State must consult such persons as the Secretary of State considers appropriate.

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131 Transfer schemes

(1) Health special administration regulations may make provision about transfer schemes to achieve the objective of a health special administration (see section 129). (2) Health special administration regulations may, in particular, include provision— (a) for the making of a transfer scheme to be subject to the consent of NHS England and the person to whom the transfer is being made, (b) for NHS England to have power to modify a transfer scheme with the consent of parties to the transfers effected by the scheme, and (c) for modifications made to a transfer scheme by virtue of paragraph (b) to have effect from such time as NHS England may specify (which may be a time before the modifications were made). (3) Health special administration regulations may, in particular, provide that a transfer scheme may include provision— (a) for the transfer of rights and liabilities under or in connection with a contract of employment from a company subject to a health special administration order to another person, (b) for the transfer of property, or rights and liabilities other than those mentioned in paragraph (a), from a company subject to a health special administration order to another person, (c) for the transfer of property, rights and liabilities which would not otherwise be capable of being transferred or assigned, (d) for the transfer of property acquired, and rights and liabilities arising, after the making of the scheme, (e) for the creation of interests or rights, or the imposition of liabilities, and (f) for the transfer, or concurrent exercise, of functions under enactments.

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132 Indemnities

Health special administration regulations may make provision about the giving by NHS England of indemnities in respect of— (a) liabilities incurred in connection with the discharge by health special administrators of their functions, and (b) loss or damage sustained in that connection.

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133 Modification of this Chapter under Enterprise Act 2002

(1) The power to modify or apply enactments conferred on the Secretary of State by each of the sections of the Enterprise Act 2002 mentioned in subsection (2) includes power to make such consequential modifications of provision made by virtue of this Chapter as the Secretary of State considers appropriate in connection with any other provision made under that section. (2) Those sections are— (a) sections 248 and 277 (amendments consequential on that Act), and (b) section 254 (power to apply insolvency law to foreign companies).

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134 Duty to establish mechanisms for providing financial assistance

(1) NHS England must establish, and secure the effective operation of, one or more mechanisms for providing financial assistance in cases where a provider of health care services for the purposes of the NHS (referred to in this Chapter as a “provider”) is subject to— (a) a health special administration order (within the meaning of Chapter 5), or (b) an order under section 65D(2) of the National Health Service Act 2006 (trust special administration for NHS foundation trusts). (2) Mechanisms that NHS England may establish under this section include, in particular— (a) mechanisms for raising money to make grants or loans or to make payments in consequence of indemnities given by NHS England by virtue of section 132 or under section 65D(12) of the National Health Service Act 2006; (b) mechanisms for securing that providers arrange, or are provided with, insurance facilities. (3) NHS England may secure that a mechanism established under this section operates so as to enable it to recover the costs it incurs in establishing and operating the mechanism. (4) NHS England may establish different mechanisms for different providers or providers of different descriptions. (5) NHS England does not require permission under any provision of the Financial Services and Markets Act 2000 as respects activities carried out under this Chapter. (6) An order under section 306 providing for the commencement of this Chapter may require NHS England to comply with the duty to establish under subsection (1) before such date as the order specifies.

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138 Power to impose charges on commissioners

(1) The Secretary of State may by regulations confer power on NHS England to require integrated care boards to pay charges relating to such of NHS England’s regulatory functions as relate to securing the continued provision of health care services for the purposes of the NHS. (1A) In subsection (1) “regulatory functions”, in relation to NHS England, has the meaning given by section 13SB(2) of the National Health Service Act 2006. (2) The regulations must provide that the amount of a charge imposed by virtue of this section is to be such amount— (a) as may be prescribed, or (b) as is determined by reference to such criteria, and by using such method, as may be prescribed. (3) The regulations must— (a) prescribe to whom the charge is to be paid; (b) prescribe when the charge becomes payable; (c) where the amount of the charge is to be determined in accordance with subsection (2)(b), require NHS England to carry out consultation in accordance with the regulations before imposing the charge; (d) provide for any amount that is not paid by the time prescribed for the purposes of paragraph (b) to carry interest at the rate for the time being specified in section 18 of the Judgments Act 1838; (e) provide for any unpaid balance and accrued interest to be recoverable summarily as a civil debt (but for this not to affect any other method of recovery). (4) Where the person that the regulations prescribe for the purposes of subsection (3)(a) is a provider, the regulations may confer power on NHS England to require the provider to pay NHS England the amount of the charge in question in accordance with the regulations. (5) Before making regulations under this section, the Secretary of State must consult NHS England. (6) Regulations under this section may apply with modifications provision made by sections 141 to 143 in relation to charges imposed by virtue of this section.

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140 Power of Secretary of State to set limit on levy and charges

(1) Before the beginning of each financial year, the Secretary of State may, with the approval of the Treasury, specify by order— (a) the maximum amount that NHS England may raise from levies it imposes under section 139 for that year, and (b) the maximum amount that it may raise from charges it imposes by virtue of section 138 for that year. (2) Where the Secretary of State makes an order under this section, NHS England must secure that the levies and charges for that year are at a level that NHS England estimates will, in each case, raise an amount not exceeding the amount specified for that case in the order.

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142 Responses to consultation

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144 Investment principles and reviews

(1) NHS England must prepare and publish a statement of the principles that govern its decisions, or decisions made on its behalf, about making investments for the purposes of this Chapter. (2) NHS England must— (a) in each financial year, review the statement, (b) if it considers necessary in light of the review, revise the statement, and (c) if it revises the statement, publish the revised statement. (3) As soon as reasonably practicable after the end of each financial year, NHS England must undertake and publish a review of the operation during that year of— (a) the procedure for health special administration under Chapter 5, (b) the procedure for trust special administration for NHS foundation trusts under Chapter 5A of Part 2 of the National Health Service Act 2006, and (c) such mechanisms as have been established under section 134. (4) The purposes of the review under subsection (3)(c) are— (a) to assess the operation of the mechanisms concerned, (b) to assess the accuracy of the estimates given by NHS England in relation to the operation of the mechanisms, (c) to assess what improvements can be made to the process for making estimates in relation to the operation of the mechanisms, and (d) to review the extent of the protection which the mechanisms are required to provide. (5) Where a fund established under section 135 has been in operation for the whole or part of the year concerned, the review published under this section must specify— (a) the income of the fund during that year, and (b) the expenditure from the fund during that year. (6) NHS England must exclude from a review published under this section information which it is satisfied is— (a) commercial information the disclosure of which would, or might, significantly harm the legitimate business interests of an undertaking to which it relates; (b) information relating to the private affairs of an individual the disclosure of which would, or might, significantly harm that person's interests.

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145 Borrowing

(1) NHS England may— (a) borrow from a deposit-taker such sums as it may from time to time require for exercising its functions under this Chapter; (b) give security for sums that it borrows. (2) But NHS England may not borrow if the effect would be— (a) to take the aggregate amount outstanding in respect of the principal of sums borrowed by it over such limit as the Secretary of State may by order specify, or (b) to increase the amount by which the aggregate amount so outstanding exceeds that limit. (3) In this section, “deposit-taker” means— (a) a person who has permission under Part 4A of the Financial Services and Markets Act 2000, ... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) The definition of “deposit-taker” in subsection (3) must be read with— (a) section 22 of the Financial Services and Markets Act 2000, (b) any relevant order under that section, and (c) Schedule 2 to that Act.

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146 Shortfall or excess of available funds, etc.

(1) The Secretary of State may provide financial assistance to NHS England if the Secretary of State is satisfied that— (a) there are insufficient funds available from a mechanism established under section 134, or (b) the mechanism is otherwise unable to operate effectively. (2) If the Secretary of State is satisfied that the level of funds available from a mechanism established under section 134 exceeds the level that is necessary, the Secretary of State may direct NHS England to transfer the excess to the Secretary of State. (3) If the Secretary of State is satisfied that a mechanism established under section 134 has become dormant, or if a mechanism so established is being wound up, the Secretary of State may direct NHS England to transfer to the Secretary of State such funds as are available from the mechanism.

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147 Secretary of State's duty as respects variation in provision of health services

After section 12D of the National Health Service Act 2006 insert— Miscellaneous Secretary of State's duty as respects variation in provision of health services 12E (1) The Secretary of State must not exercise the functions mentioned in subsection (2) for the purpose of causing a variation in the proportion of services provided as part of the health service that is provided by persons of a particular description if that description is by reference to— (a) whether the persons in question are in the public or (as the case may be) private sector, or (b) some other aspect of their status. (2) The functions mentioned in this subsection are the functions of the Secretary of State under— (a) sections 6E and 13A, and (b) section 75 of the Health and Social Care Act 2012 (requirements as to procurement, patient choice and competition).

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148 Service of documents

(1) A notice required under this Part to be given or sent to or served on a person (“R”) may be given or sent to or served on R— (a) by being delivered personally to R, (b) by being sent to R— (i) by a registered post service, as defined by section 125(1) of the Postal Services Act 2000, or (ii) by a postal service which provides for the delivery of the document to be recorded, or (c) subject to section 149, by being sent to R by an electronic communication. (2) Where a notice is sent as mentioned in subsection (1)(b), it is, unless the contrary is proved, to be taken to have been received on the third day after the day on which it is sent. (3) Where a notice is sent as mentioned in subsection (1)(c) in accordance with section 149, it is, unless the contrary is proved, to be taken to have been received on the next working day after the day on which it is transmitted. (4) In subsection (3) “working day” means a day other than— (a) a Saturday or a Sunday; (b) Christmas Day or Good Friday; or (c) a day which is a bank holiday in England under the Banking and Financial Dealings Act 1971. (5) A notice required under this Part to be given or sent to or served on a body corporate or a firm is duly given, sent or served if it is given or sent to or served on the secretary or clerk of that body or a partner of that firm. (6) For the purposes of section 7 of the Interpretation Act 1978 in its application to this section, the proper address of a person is— (a) in the case of a person who holds a licence under Chapter 3 who has notified NHS England of an address for service, that address, and (b) in any other case, the address determined in accordance with subsection (7). (7) That address is— (a) in the case of a secretary or clerk of a body corporate, the address of the registered or principal office of the body, (b) in the case of a partner of a firm, the address of the principal office of the firm, and (c) in any other case, the last known address of the person. (8) In this section and in section 149— “electronic communication” has the same meaning as in the Electronic Communications Act 2000; “notice” includes any other document. (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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149 Electronic communications

(1) If a notice required or authorised by this Part to be given or sent by or to a person or to be served on a person is sent by an electronic communication, it is to be treated as given, sent or served only if the requirements of subsection (2) or (3) are met. (2) If the person required or authorised to give, send or serve the notice is NHS England or the CMA— (a) the person to whom the notice is given or sent or on whom it is served must have indicated to NHS England or (as the case may be) the CMA the person's willingness to receive notices by an electronic communication and provided an address suitable for that purpose, and (b) the notice must be sent to or given or served at the address so provided. (3) If the person required or authorised to give, send or serve the notice is not NHS England or the CMA, the notice must be given, sent or served in such manner as NHS England may require. (4) An indication given for the purposes of subsection (2) may be given generally for the purposes of notices required or authorised to be given, sent or served by NHS England or (as the case may be) the CMA under this Part or may be limited to notices of a particular description. (5) NHS England must publish such requirements as it imposes under subsection (3).

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150 Interpretation, transitional provision and consequential amendments

(1) In this Part— “anti-competitive behaviour” means behaviour which would (or would be likely to) prevent, restrict or distort competition and a reference to preventing anti-competitive behaviour includes a reference to eliminating or reducing the effects (or potential effects) of the behaviour; “the CMA” means the Competition and Markets Authority; “commissioner”, in relation to a health care service, means the person who arranges for the provision of the service (and “commission” is to be construed accordingly); “enactment” includes an enactment contained in subordinate legislation (within the meaning of the Interpretation Act 1978); “facilities” has the same meaning as in the National Health Service Act 2006 (see section 275 of that Act); “financial year” means a period of 12 months ending with 31 March; “health care” means all forms of health care provided for individuals, whether relating to physical or mental health, with a reference in this Part to “health care services” being read accordingly; and for the purposes of this Part it does not matter if a health care service is also an adult social care service; “the NHS” means the comprehensive health service continued under section 1(1) of the National Health Service Act 2006, except the part of it that is provided in pursuance of the public health functions (within the meaning of that Act) of the Secretary of State or local authorities; “prescribed” means prescribed in regulations; “service” includes facility. (1A) A reference in this Part to the provision of health care services for the purposes of the NHS is a reference to their provision for those purposes in accordance with the National Health Service Act 2006. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Until section 181 comes into force, the following provisions in this Part are to be read as if the words “and its Healthwatch England committee” were omitted— (a) section 83(4)(c); (b) section 84(5)(a)(iii); (c) section 95(2)(e); (d) section 100(2)(e). (5) Schedule 13 (which contains minor and consequential amendments) has effect.

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151 Governors

(1) In paragraph 7 of Schedule 7 to the National Health Service Act 2006 (public benefit corporation to have governors)— (a) in sub-paragraph (1), for “a board of governors” substitute “a council of governors”, and (b) in sub-paragraphs (2), (3) and (4), for “the board” substitute “the council”. (2) Omit paragraph 9(3) of that Schedule (requirement for at least one member of council of governors to be appointed by PCT). (3) For paragraph 9(7) of that Schedule (partnership organisations) substitute— (7) Any organisation specified in the constitution for the purposes of this sub-paragraph may appoint one or more members of the council (but no more than the number specified for those purposes in the constitution). (4) After paragraph 10 of that Schedule insert— 10A The general duties of the council of governors are— (a) to hold the non-executive directors individually and collectively to account for the performance of the board of directors, and (b) to represent the interests of the members of the corporation as a whole and the interests of the public. (5) After paragraph 10A of that Schedule insert— 10B A public benefit corporation must take steps to secure that the governors are equipped with the skills and knowledge they require in their capacity as such. (6) After paragraph 10B of that Schedule insert— 10C For the purpose of obtaining information about the corporation's performance of its functions or the directors' performance of their duties (and deciding whether to propose a vote on the corporation's or directors' performance), the council of governors may require one or more of the directors to attend a meeting. (7) In paragraph 23(4) of that Schedule (persons eligible for appointment as auditor by governors), in sub-paragraph (c), for “the regulator” substitute “the Secretary of State”. (8) In paragraph 26(2) of that Schedule (information that must be given in annual reports etc.), after paragraph (a) insert— (aa) information on any occasions in the period to which the report relates on which the council of governors exercised its power under paragraph 10C, . (9) In consequence of subsection (1)— (a) in sections 33(4)(a) (in each place it appears), 35(2)(c) and (5)(c), 39(3)(a), 59(1), (2)(b) and (5) and 60(1) of that Act, for “board of governors” substitute “council of governors”, (b) in section 60(2) and (3) and paragraphs 8 to 14, 17, 18, 20, 21, 23, 27 and 28 of Schedule 7 to that Act, for “the board” (in each place it appears) substitute “the council”, (c) for the cross-heading preceding paragraph 7 of that Schedule substitute “Council of Governors”, (d) in the cross-heading preceding paragraph 28 of that Schedule, for “board” substitute “council”, and (e) in paragraphs 4(2) and 5(1) of Schedule 10 to that Act, for “board of governors” substitute “council of governors”.

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152 Directors

(1) After paragraph 18 of Schedule 7 to the National Health Service Act 2006 insert— 18A The general duty of the board of directors, and of each director individually, is to act with a view to promoting the success of the corporation so as to maximise the benefits for the members of the corporation as a whole and for the public. (2) After paragraph 18A of that Schedule insert— 18B (1) The duties that a director of a public benefit corporation has by virtue of being a director include in particular— (a) a duty to avoid a situation in which the director has (or can have) a direct or indirect interest that conflicts (or possibly may conflict) with the interests of the corporation; (b) a duty not to accept a benefit from a third party by reason of being a director or doing (or not doing) anything in that capacity. (2) The duty referred to in sub-paragraph (1)(a) is not infringed if— (a) the situation cannot reasonably be regarded as likely to give rise to a conflict of interest, or (b) the matter has been authorised in accordance with the constitution. (3) The duty referred to in sub-paragraph (1)(b) is not infringed if acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest. (4) In sub-paragraph (1)(b), “third party” means a person other than— (a) the corporation, or (b) a person acting on its behalf. (3) After paragraph 18B of that Schedule insert— 18C (1) If a director of a public benefit corporation has in any way a direct or indirect interest in a proposed transaction or arrangement with the corporation, the director must declare the nature and extent of that interest to the other directors. (2) If a declaration under this paragraph proves to be, or becomes, inaccurate or incomplete, a further declaration must be made. (3) Any declaration required by this paragraph must be made before the corporation enters into the transaction or arrangement. (4) This paragraph does not require a declaration of an interest of which the director is not aware or where the director is not aware of the transaction or arrangement in question. (5) A director need not declare an interest— (a) if it cannot reasonably be regarded as likely to give rise to a conflict of interest; (b) if, or to the extent that, the directors are already aware of it; (c) if, or to the extent that, it concerns terms of the director's appointment that have been or are to be considered— (i) by a meeting of the board of directors, or (ii) by a committee of the directors appointed for the purpose under the constitution. (4) After paragraph 18C of that Schedule insert— 18D (1) Before holding a meeting, the board of directors must send a copy of the agenda of the meeting to the council of governors. (2) As soon as practicable after holding a meeting, the board of directors must send a copy of the minutes of the meeting to the council of governors. (5) After paragraph 18D of that Schedule insert— 18E (1) The constitution must provide for meetings of the board of directors to be open to members of the public. (2) But the constitution may provide for members of the public to be excluded from a meeting for special reasons.

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153 Members

(1) In section 61 of the National Health Service Act 2006 (representative membership), the existing text becomes subsection (1) and, in that subsection, for “An authorisation may require an NHS foundation trust to” substitute “An NHS foundation trust must”. (2) After that subsection insert— (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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154 Accounts: initial arrangements

(1) In paragraph 24 of Schedule 7 to the National Health Service Act 2006 (accounts: general), for sub-paragraph (1) substitute— (1) A public benefit corporation must keep proper accounts and proper records in relation to the accounts. (1A) The regulator may with the approval of the Secretary of State give directions to the corporation as to the content and form of its accounts. (2) In sub-paragraph (3) of that paragraph, in paragraph (b) for “any records” substitute “the records”. (3) In paragraph 25 of that Schedule (annual accounts), in sub-paragraph (1), for “the Treasury” substitute “the Secretary of State”. (4) After sub-paragraph (1) of that paragraph insert— (1A) The regulator may with the approval of the Secretary of State direct a public benefit corporation— (a) to prepare accounts in respect of such period or periods as may be specified in the direction; (b) that any accounts prepared by it by virtue of paragraph (a) are to be audited in accordance with such requirements as may be specified in the direction. (5) In sub-paragraph (2) of that paragraph— (a) after “annual accounts” insert “or in preparing any accounts by virtue of sub-paragraph (1A)(a)”, (b) for “the Treasury” substitute “the Secretary of State”, and (c) for “information to be given in” substitute “content and form of”. (6) In sub-paragraph (3) of that paragraph, after “annual accounts” insert “, or of any accounts to be prepared by it by virtue of sub-paragraph (1A)(a),”. (7) In sub-paragraph (4) of that paragraph, in paragraph (b)— (a) omit “once it has done so,”, and (b) at the end insert “within such period as the regulator may direct”. (8) After that sub-paragraph insert— (4A) The corporation must send to the regulator within such period as the regulator may direct— (a) a copy of any accounts prepared by the corporation by virtue of sub-paragraph (1A)(a), and (b) a copy of any report of an auditor on them prepared by virtue of sub-paragraph (1A)(b).

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156 Annual report and forward plan

(1) In sub-paragraph (2) of paragraph 26 of Schedule 7 to the National Health Service Act 2006 (information that must be included in annual report), after paragraph (aa) (inserted by section 151(8)) insert— (ab) information on the corporation's policy on pay and on the work of the committee established under paragraph 18(2) and such other procedures as the corporation has on pay, (ac) information on the remuneration of the directors and on the expenses of the governors and the directors, . (2) After that sub-paragraph insert— (2A) Before imposing a requirement under sub-paragraph (2)(b) that the regulator considers is sufficiently significant to justify consultation, the regulator must consult such persons as it considers appropriate. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Omit section 39(2)(e) of that Act (requirement for copy of forward plan to be on register). (6) In paragraph 22(1) of Schedule 7, omit paragraph (e) (duty to make forward plan available to the public).

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157 Meetings

(1) After paragraph 27 of Schedule 7 to the National Health Service Act 2006 insert— Annual meeting of members 27A (1) A public benefit corporation must hold an annual meeting of its members. (2) The meeting must be open to members of the public. (3) At least one member of the board of directors of the corporation must attend the meeting and present the following documents to the members at the meeting— (a) the annual accounts, (b) any report of the auditor on them, (c) the annual report. (4) Where an amendment is made to the constitution in relation to the powers or duties of the council of governors of a public benefit corporation (or otherwise with respect to the role that the council has as part of the corporation)— (a) at least one member of the council of governors must attend the next meeting to be held under this paragraph and present the amendment, and (b) the corporation must give the members an opportunity to vote on whether they approve the amendment. (5) If more than half of the members voting approve the amendment, the amendment continues to have effect; otherwise, it ceases to have effect and the corporation must take such steps as are necessary as a result. (2) In paragraph 28 of that Schedule (meeting of council of governors to consider annual accounts and reports), the existing text of which becomes sub-paragraph (1), after that sub-paragraph insert— (2) Nothing in sub-paragraph (1) prevents the council of governors from holding a general meeting more than once a year. (3) After that paragraph insert— Combined meetings of members and governors 28A A public benefit corporation may hold a meeting which combines a meeting under paragraph 27A with a meeting under paragraph 28.

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158 Voting

(1) After paragraph 29 of Schedule 7 to the National Health Service Act 2006 insert— Power to make provision about voting 30 (1) Regulations may amend this Chapter so as to add, vary or omit provision relating to voting by members of the council of governors of a public benefit corporation that is an NHS foundation trust, by its directors or by its members. (2) The power under sub-paragraph (1) is exercisable only in relation to provision in this Chapter that was inserted, or otherwise provided for, by Part 4 of the Health and Social Care Act 2012. (2) In section 64(3) of that Act (regulations under Chapter 5 of Part 2 of that Act that are subject to affirmative procedure), after paragraph (a) (but before the “or” following it) insert— (aa) regulations under paragraph 30(1) of Schedule 7, .

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159 Authorisation

(1) In section 30(1) of the National Health Service Act 2006 (definition of NHS foundation trust), for “which is authorised under this Chapter to provide” substitute “the function of which is to provide in accordance with this Chapter”. (2) Omit section 33(2)(a) of that Act (requirement for application for authorisation to describe goods and services to be provided). (3) In section 35(2) of that Act (matters as to which the regulator must be satisfied before giving authorisation), for paragraph (e) substitute— (e) the applicant will be able to provide goods and services for the purposes of the health service in England, . (4) After section 35(3) of that Act (things the regulator must consider before deciding whether it is satisfied as to the matters in section 35(2)) insert— (3A) The regulator must not give an authorisation unless it is notified by the Care Quality Commission that it is satisfied that the applicant is complying with (so far as applicable) the requirements mentioned in section 12(2) of the Health and Social Care Act 2008 in relation to the regulated activity or activities the applicant carries on. (3B) In subsection (3A), “regulated activity” has the same meaning as in section 8 of the Health and Social Care Act 2008. (5) Omit section 35(4) and (7) of that Act (power to give authorisation on terms the regulator considers appropriate). (6) Omit section 38 of that Act (variation of authorisation). (7) Omit section 39(2)(b) of that Act (requirement for copy of authorisation to be on register). (8) Omit section 49 of that Act (authorisation to require trust to allow regulator to enter and inspect trust's premises). (9) Omit paragraph 22(1)(b) of Schedule 7 to that Act (requirement for copy of authorisation to be available for public inspection).

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160 Bodies which may apply for foundation trust status

(1) Omit section 34 of the National Health Service Act 2006 (application for authorisation by body other than NHS trust). (2) In section 35(1) of that Act (bodies which may be given authorisation), omit paragraph (b) (public benefit corporations) and the preceding “or”. (3) Omit section 36(2) of that Act (public benefit corporation to become NHS foundation trust on being given authorisation). (4) Despite subsection (1)— (a) section 34(1) to (4) of that Act continues to have effect in the case of an application which, immediately before the commencement of that subsection, is pending determination, and (b) section 34(5) to (7) of that Act continues to have effect in the case of an existing public benefit corporation. (5) Despite subsection (2), section 35(1)(b) of that Act continues to have effect in the case of an existing public benefit corporation which, immediately before the commencement of that subsection, has not been given an authorisation under section 35. (6) Despite subsection (3), section 36(2) of that Act continues to have effect in the case of an existing public benefit corporation. (7) In subsections (4) to (6), “existing public benefit corporation” means a public benefit corporation— (a) incorporated under section 34 of that Act and in existence immediately before the commencement of this section, or (b) incorporated under that section by virtue of subsection (4).

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161 Amendment of constitution

(1) In section 37 of the National Health Service Act 2006 (amendments of constitution), the existing text of which becomes subsection (1), for “with the approval of the regulator” substitute only if— (a) more than half of the members of the council of governors of the trust voting approve the amendments, and (b) more than half of the members of the board of directors of the trust voting approve the amendments. (2) After that subsection insert— (2) Amendments made under this section take effect as soon as the conditions in subsection (1)(a) and (b) are satisfied. (3) But an amendment is of no effect in so far as the constitution would, as a result of the amendment, not accord with Schedule 7. (4) The trust must inform the regulator of amendments made under this section; but the regulator's functions do not include a power or duty to determine whether or not the constitution, as a result of the amendments, accords with Schedule 7. (3) Subsections (1) and (2) do not apply in the case of amendments in respect of which, immediately before the commencement of this section, Monitor has yet to decide whether or not to give approval under section 37 of the National Health Service Act 2006.

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162 Panel for advising governors

After section 39 of the National Health Service Act 2006 insert— Panel for advising governors 39A (1) The regulator 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) The regulator— (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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163 Financial powers etc.

(1) At the end of section 40 of the National Health Service Act 2006 (power of Secretary of State to give financial assistance to NHS foundation trusts), insert— (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). (2) Omit section 41 of that Act (prudential borrowing code). (3) In section 42 of that Act (public dividend capital), omit subsection (4) (dividend payable by NHS foundation trust to be same as that payable by NHS trust). (4) Omit subsection (5) of that section (requirement for Secretary of State to consult the regulator). (5) At the end of that section insert— (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. (6) After that section insert— Criteria for making loans etc. 42A (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) the regulator, and (c) such other persons as the Secretary of State considers appropriate. (7) Omit section 45 of that Act (disposal of protected property). (8) Omit section 46(2) and (3) of that Act (limitation on power of NHS foundation trusts to borrow money). (9) For section 50 of that Act (fees) substitute— Fees 50 An NHS foundation trust must pay to the regulator such fee as the regulator may determine in respect of its exercise of functions under— (a) section 39; (b) section 39A.

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