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Health Act 1999

Section 1: Repeal of law about fund-holding practices

42.Sections 14 to 17 of the 1990 Act provide for the establishment of fund-holding practices as part of the NHS internal market. These practices consist of one or more general medical practitioners (GPs) who provide either general medical services (under the 1977 Act) or personal medical services (under the Primary Care Act), but who are also given an additional sum of money (known as an allotted sum) to purchase certain goods or services for their patients.

43.The 1990 Act provided for regulations to be made which set out the procedures for application and recognition as a fund-holding practice, the purposes for which the allotted sum may be used, and renunciation or removal of recognition. The details of the fund-holding scheme can be found in the National Health Service (Fund-holding Practices) Regulations 1996 (SI 1996/706) as amended.

44.The White Papers The new NHS and Putting Patients First set out the Government’s proposals to replace the NHS internal market. As part of these changes fund-holding will be abolished, Primary Care Groups (Local Health Groups in Wales) have been set up and Primary Care Trusts will be established. The NHS (Fund-holding Practices) Amendment Regulations 1999 (SI 1999/261), made on 8 February, provided for the replacement of the existing fund-holding schemes by a single residual scheme from 1 April 1999. Primary Care Groups and Local Health Groups have been established from 1 April 1999 under existing powers as Health Authority committees (c.f. section 16 and paragraph 12 of Schedule 5 to the 1977 Act). Primary Care Groups and Local Health Groups may in time become Primary Care Trusts, which will be established under the powers conferred by the Act (see sections 2 to 7, 12 and Schedule 1).

45.All GPs are covered by a Primary Care Group (Local Health Group in Wales) or will be covered by a Primary Care Trust if one is established in their area. Primary Care Groups and Local Health Groups also involve, as Primary Care Trusts will involve, other health professionals, social services and members of the local community. Primary Care Groups and Local Health Groups are responsible for improving the health of their local community, commissioning services, developing primary and community care and exercising functions delegated to them by Health Authorities. Primary Care Trusts will have similar responsibilities (see the commentary on section 2 below).

46.The repeal of sections 14 to 17 of the 1990 Act by section 1 will abolish the fund-holding system. The transitional arrangements for winding up the fund-holding scheme will be made under the powers conferred by section 63. The transitional provisions will cover arrangements for closing the fund-holding accounts of residual fund-holders; the transfer of those assets, rights and liabilities that need to be transferred to the Health Authority; and any provision for those that are to remain with the former fund-holders.

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