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National Health Service Act 2006

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This is the original version (as it was originally enacted).

Failure

52Failing NHS foundation trusts

(1)If the regulator is satisfied—

(a)that an NHS foundation trust is contravening, or failing to comply with, any term of its authorisation or any requirement imposed on it under any enactment and that the contravention or failure is significant, or

(b)that an NHS foundation trust has contravened, or failed to comply with, any such term or requirement and is likely to do so again and that the contravention or failure was significant,

the regulator may by a notice to the trust exercise one or more of the powers in subsections (3) and (4).

(2)The regulator may also by a notice to the trust exercise one or more of those powers if the regulator is satisfied that the trust has contravened or failed to comply with a previous notice.

(3)The regulator may require the trust, the directors or the board of governors to do, or not to do, specified things or things of a specified description within a specified period.

(4)The regulator may remove any or all of the directors or members of the board of governors and appoint interim directors or members of the board.

(5)The regulator’s power to remove a director, or member of the board of governors, of the trust includes power to suspend him from office, or to disqualify him from holding office, as a director or member of the board of governors of the trust for a specified period.

53Voluntary arrangements

(1)If the regulator is satisfied that it is necessary or expedient to do so, it may by a notice to an NHS foundation trust require the directors—

(a)to take steps to obtain a moratorium, or

(b)to make a proposal for a voluntary arrangement.

(2)An order may provide for Part 1 of the Insolvency Act 1986 (c. 45) (company voluntary arrangements), including any related provision of that Act, to apply with modifications in relation to NHS foundation trusts.

(3)References in this Chapter to a moratorium are to a moratorium under section 1A of that Act as modified by the order.

(4)References in this Chapter to a voluntary arrangement are to a voluntary arrangement under Part 1 of that Act as modified by the order.

54Dissolution etc

(1)The powers conferred by this section are exercisable where—

(a)an NHS foundation trust contravenes or fails to comply with a notice under section 52 or 53 or the trust’s compliance with a notice under section 53 does not result in the implementation of a voluntary arrangement, and

(b)the regulator considers that further exercise of any of the powers conferred by those sections would not be likely to secure the provision of the goods and services which the authorisation requires the trust to provide.

(2)Before the powers conferred by this section are exercised, the regulator must consult specified persons about specified matters.

(3)“Specified” means specified in an order.

(4)An order may transfer, or provide for the transfer of, any property or liabilities of the trust to—

(a)another NHS foundation trust,

(b)a Primary Care Trust,

(c)an NHS trust,

(d)the Secretary of State.

(5)The liabilities which may be transferred by virtue of subsection (4) to any of the bodies mentioned in paragraphs (a) to (c) of that subsection include criminal liabilities.

(6)Schedule 9 makes provision for the transfer of employees.

(7)An order may provide for the dissolution of the trust.

(8)An order may apply any provision of Part 4 of the Insolvency Act 1986 (c. 45) (winding up of companies), including any related provision of that Act, with modifications.

(9)Where the regulator refuses to give an authorisation to a public benefit corporation—

(a)the powers conferred by this section are also exercisable, and

(b)references in this section and Schedule 9 to an NHS foundation trust are references to the corporation.

55Sections 53 and 54: supplementary

(1)In sections 53 and 54, an order means an order made by the Secretary of State.

(2)The modifications of the Insolvency Act 1986 that may be made by an order include—

(a)provision for securing that the goods and services which the trust is required by the authorisation to provide continue to be provided (whether by the trust or another),

(b)provision for securing the protection of property needed for the purposes of those goods and services.

(3)The power conferred by section 54(3) must be exercised with a view to securing the provision of the goods and services which the authorisation requires the trust to provide.

(4)That power must also be exercised (together, if required, with the power conferred by section 40(2)) with a view to securing that any transfer of property in pursuance of the exercise of the power does not result in a net loss of value to the trust; and the question whether a transfer would result in a net loss of value must be determined in accordance with regulations.

(5)The Insolvency Act 1986 may not be modified under section 54(8) so as to alter the priority of debts or the ranking of debts between themselves.

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