Health and Social Care Act 2001

The Health and Social Care Act 2001 received royal assent in May 2001 and created the legislation to underpin the proposals outlined in The NHS plan: a plan for investment, a plan for reform.

The plan had proposed the creation of care trusts: organisations which would commission and hold responsibility for local authority health-related functions. These were formally established by the Health and Social Care Act and were intended to promote greater integration between health and local authority services.

The Act provided for primary care trusts (PCTs) and NHS trusts to be designated as care trusts in cases where they had local authority health-related functions delegated to them by agreement. Care trusts would commission and/or provide integrated services covering health, social services and other health-related functions of a local authority. It was voluntary for local areas to establish care trusts. However, where joint working and services were failing, the Secretary of State for Health could direct local areas into partnership arrangements.

The Act established a number of provisions that would support the government's drive towards rewarding good performance with earned autonomy. Section 2 of the Act enabled the secretary of state to increase a health authority's financial allocation where it had demonstrated achievement against objectives and performed well against performance criteria.

Section 13 of the Act provided the secretary of state with new intervention powers to deal with cases of persistent failure. The Act enabled the secretary of state to intervene in an NHS body where there were concerns about its management, its ability to perform its functions or where there had been an isolated catastrophe.

Section 49 excluded the provision of nursing care by a registered nurse from local authorities' community care functions. This was intended to strengthen the incentives for the NHS to ensure effective rehabilitation after acute illness or injury. The NHS was still able to delegate the commissioning of nursing care through pooled budgets and joint commissioning arrangements provided by the Health Act 1999.

Local authorities were empowered to operate deferred payment schemes (where people could defer payment for care) under section 55 and were given powers to make a loan to a resident and recover the money from the person's estate by putting a charge on their property. This allowed people in residential care to defer paying their charges until they were able to sell their house, but often meant that the costs of care were only recouped from house sales after a person's death.

Section 57 of the Act made it mandatory for local authorities to offer direct payments to those people who were eligible.

Later developments

With the abolition of PCTs in 2012, care trusts ceased to exist in their previous form. However, the Health and Social Care Act 2012 provided for foundation trusts and clinical commissioning groups (in addition to NHS trusts) to be designated as care trusts, allowing these organisations to continue without affecting their core functions, rights or responsibilities.


Department of Health.
The NHS plan: a plan for investment, a plan for reform.
HMSO; 2000.

House of Commons.
Health and Social Care Act 2001.; 2001.

Brittain P.
Care trusts: background briefing.
Department of Health; 2002.