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National Health Service Act 2006

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This is the original version (as it was originally enacted).

Financial matters

40Power of Secretary of State to give financial assistance

(1)The Secretary of State may give financial assistance to any NHS foundation trust.

(2)The financial assistance may be given by way of loan, public dividend capital, grant or other payment.

(3)The Secretary of State may guarantee the payment of any amount payable by an NHS foundation trust under an externally financed development agreement.

(4)“Externally financed development agreement” has the same meaning as in paragraph 23 of Schedule 4, reading references in sub-paragraphs (3) and (5) of that paragraph to the NHS trust as references to the NHS foundation trust.

41Prudential borrowing code

(1)The regulator may revise the code made under section 12(1) of the Health and Social Care (Community Health and Standards) Act 2003 (c. 43) for determining the limit on the total amount of the borrowing of any NHS foundation trust.

(2)In revising the code the regulator must have regard (among other things) to any generally accepted principles used by financial institutions to determine the amounts of loans to non profit making bodies.

(3)A body is non profit making if it does not carry on activities for the purpose of making profits for distribution to its members or others.

(4)Before revising the code, the regulator must consult—

(a)the Secretary of State,

(b)each NHS foundation trust,

(c)each NHS trust intending to make an application to become an NHS foundation trust,

(d)such other persons as the regulator considers appropriate.

(5)The regulator must lay a copy of the revised code before Parliament.

42Public dividend capital

(1)Where an NHS trust becomes an NHS foundation trust, the amount which was the public dividend capital of the NHS trust immediately before the giving of the authorisation continues as public dividend capital of the NHS foundation trust held on the same conditions (“initial public dividend capital”), but subject to this section.

(2)Any amount issued to an NHS foundation trust as public dividend capital under section 40 is (like initial public dividend capital) an asset of the Consolidated Fund.

(3)The Secretary of State may, with the consent of the Treasury, decide the terms on which any public dividend capital of an NHS foundation trust must be treated as having been issued.

(4)But the dividend to be paid by the trust must be the same as that payable by NHS trusts in England under paragraph 1(6) of Schedule 5.

(5)Before exercising the power in subsection (3), the Secretary of State must consult the regulator.

(6)Any amount paid to the Secretary of State by an NHS foundation trust by way of repayment of public dividend capital must be paid into the Consolidated Fund.

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