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Health Act 2009

De-authorisation of NHS foundation trusts

26.NHS foundation trusts are public benefit corporations, usually former NHS trusts, authorised under Chapter 5 of Part 2 of the National Health Service Act 2006 (the NHS Act) and are regulated by the Independent Regulator of NHS Foundation Trusts (Monitor). NHS foundation trusts must comply with the terms of the authorisation given by Monitor under the NHS Act. Monitor has powers to require a failing trust to do specified things or to remove its directors (section 52 of the NHS Act) and to require it to enter into a voluntary arrangement with creditors (section 53). If a trust fails to comply and Monitor considers that the further exercise of its powers would not be likely to secure the provision of the goods or services which the authorisation required the trust to provide, the Secretary of State may make an order to dissolve the trust, transfer property or liabilities to other NHS bodies and apply the provisions of insolvency legislation relating to the winding up of companies to the trust, in order to deal with outstanding liabilities, etc (section 54). But those provisions do not give either Monitor or the Secretary of State the power to de-authorise a foundation trust, or return it to ordinary NHS trust status.

27.Section 15 deals with de-authorisation of NHS foundation trusts without the appointment of a trust special administrator. Section 16 deals with the appointment of trust special administrators in respect of NHS trusts and NHS foundation trusts. It also deals with de-authorisation of NHS foundation trusts in the context of the appointment of the trust special administrator. So in effect there are two regimes for de-authorisation of NHS foundation trusts. One without the appointment of a trust special administrator dealt with in section 15 where the regulator must be satisfied that the trust in question is contravening or failing to comply with, or has contravened or failed to comply with, any term of its authorisation or any requirement imposed on it under any enactment and the seriousness of the contravention or failure, or if there has been more than one of any taken together, is such that it would justify the Secretary of State making an order de-authorisation order (section 52B of the NHS Act).

28.The section 16 procedure on the other hand requires the regulator to trigger the regime if satisfied that an NHS foundation trust is failing to comply with a notice under section 52 of the NHS Act (failing NHS foundation trust) and further exercise of the powers conferred by section 52 of the 2006 Act would not be likely to secure the provision of the goods and services which the trust's authorisation requires to provide (section 65D(1)of the NHS Act). So in effect the test for the trigger the regime under section 16 is more stringent than that under section 15. Where the Secretary of State makes a de-authorisation order under section 16 he must also make an order authorising the appointment of a trust special administrator in relation to the trust (section 65E(6) of the NHS Act).

29.In July 2009 the Government published its consultation document on de-authorisation of foundation trusts where the Government sought views on the proposals to de-authorise NHS foundation trusts where a foundation trust had significantly contravened or failed to comply with the terms of its authorisation.(7)

30.Following publication of the consultation response in October 2009 one substantial amendment (adding section 15) and seventeen consequential amendments were made to the Bill for the Act at Commons Report Stage.


Department of Health (2009), Consultation on de-authorisation of NHS foundation trusts, Department of Health, London. Available at: [1]

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