Lessors still awaiting
clarity on future role of NHS Foundation Trusts, says Samantha
Yardley.
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At the time of writing, the
much amended Health and Social Care Bill 2011 is still making its
tortuous way through Parliament, and we have yet to see if the
current version will come through unscathed.
A thought should be spared
for banks and lessors who are attempting to formulate credit
policies for providing finance to health service providers,
particularly NHS Foundation Trusts, against a background of
ever-shifting rules and regulations.
What is clear is the
government’s goal to sweep away NHS Trusts (save for certain
franchises) remains, with the intention that all NHS Trusts
(whether individually or as a result of mergers with others) will
transform themselves into Foundation Trusts in 2013.
One consequence of this
change is, following the enactment of the Bill, Foundation Trusts
may no longer be de-authorised and revert to NHS Trust
status.
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By GlobalDataBefore September’s changes
the Bill provided for the application of corporate insolvency
proceedings to Foundation Trusts and a new special administration
regime for Foundation Trusts as an alternative to corporate
insolvency procedures in respect of certain ‘designated services’
(being, essentially, core NHS services, the absence of which would
have a significant impact on public health).
The proposed special
administration scheme and the application of corporate insolvency
procedures have been removed from the current version of the Bill,
amid objections as to the difficulties of deciding which services
should be ‘designated’. Instead, it is now up to Monitor (the
independent regulator of Foundation Trusts) to intervene before
Foundation Trusts fail completely.
Only if it becomes apparent
that the failing Foundation Trust is, or is likely to become,
clinically or financially unsustainable and unable to meets its
liabilities will a revised trust special administration scheme
apply.
The ultimate aim of a trust
special administration is to secure the continued provision of
certain services provided by the failing Foundation Trust, at such
a level as the commissioners of those services
determine.
In order to reach their
determination as to whether services should be continued, the
commissioners have to establish that loss of the relevant services
would have a serious material adverse impact on health or would
cause a significant increase in health inequalities.
The trust special
administrator then reports to Monitor, making recommendations as to
the actions required to ‘save’ the relevant services – and Monitor,
and ultimately the Secretary of State, have the opportunity to
accept or reject the report and ensure the agreed recommendations
are carried out.
It is hoped that by giving
Monitor wider powers to intervene and support Foundation Trusts
before a crisis is reached, a special administration will rarely be
required and complete failure and closure can be
avoided.
This remains to be seen… as
does the final version of the Bill.
Samantha Yardley is a
partner with Watson, Farley & Williams
