The Health Act 2009 received royal assent on 12 November 2009. The act made provisions for those aspects of the Next stage review, which required legislative changes. These changes included:
- a requirement for providers and commissioners of NHS services to have regard to the new NHS constitution
- the introduction of direct payments for health services. Primary care trusts (PCTs) were previously able to offer personal health budgets, but could not give money directly to individuals. The legislation allowed selected sites to pilot direct payments.
Part 2 of the act created established new powers for the de-authorisation of NHS foundation trusts and the establishment of a special administration process.
Trust special administrators
Under the existing provisions of the NHS Act 2006, there were various mechanisms for addressing poor performance of NHS trusts and NHS primary care trusts (PCTs). Strategic health authorities (SHAs) were responsible for the performance management of PCTs and NHS trusts. The secretary of state was able to give directions to NHS trusts and PCTs about the exercise of functions and could remove chairs and non-executive directors. In more extreme circumstances, the secretary of state was able to make an intervention order or dissolve a PCT or NHS trust. NHS foundation trusts were regulated by Monitor, with the secretary of state having ultimate power to dissolve a foundation trust if previous intervention by Monitor had been unsuccessful.
The act introduced a special administration regime and enabled the secretary of state to appoint a Trust Special Administrator (TSA) to take control of a ‘failing’ NHS organisation. The TSA would take on responsibility for service provision, and during the period of appointment, the TSA was required to produce a report with recommended actions. In the case of foundation trusts, it would be the responsibility of Monitor to initiate the regime by giving notice to the secretary of state. On receiving such a notice, the secretary of state would be obliged to de-authorise the foundation trust and to appoint a TSA.
With regard to NHS trusts, the secretary of state was able to initiate the TSA process as long as it was ‘in the interests of the health service’.
The process for de-authorising NHS foundation trusts
Prior to the act, Monitor had powers to require failing foundation trusts to take specific action, including the removal of directors. In the event that a trust had failed to take action, the secretary of state could make an order to dissolve the trust and transfer property or other assets to other NHS bodies. The act established a new process for de-authorising a foundation trust, returning it to a NHS trust. There was provision for the secretary of state to de-authorise a foundation trust without the appointment of a TSA where the regulator had to be satisfied that the trust was contravening or failing to comply with its authorisation and the severity of the failing justified secretary of state intervention.
The act also provided for a de-authorisation process in parallel with the trust administration process. Where Monitor was satisfied that a trust was failing to comply with a requirement to take action and that further regulatory action would be unlikely to secure the provision of services required under the trust’s authorisation, the secretary of state could make a de-authorisation order in parallel with the appointment of a special administrator.