Foundation Trusts and the Health and Care Act 2022 – new duties, new opportunities

The Health and Care Act 2022 contains a number of provisions of particular importance to NHS Foundation Trusts, setting out both new duties and controls with which they must comply, and new opportunities for joint working and collaboration. We explore both of these below.

New duties and controls

Foundation Trusts will have a duty to consider the ‘wider effect’ of their decisions. This is a broad duty, requiring (in summary) Foundation Trusts to have regard to ‘all likely effects’ of a decision in relation to:

• the health and well-being of the population of England (including in respect of health inequalities);
• the quality of services provided to individuals or arrangements made by other Foundation Trusts, NHS Trusts, Integrated Care Boards and NHS England (again, including in respect of health inequalities); and
• the efficiency and sustainability in relation to the use of resources.

Foundation Trusts will also be under a duty to contribute towards the UK’s compliance with climate change legislation when exercising their functions, including the net zero emissions target under the Climate Change Act 2008, and the environmental targets under the Environment Act 2021. In addition, Foundation Trusts will be subject to a duty to adapt to ‘current and predicted’ impacts of climate change identified in the most recent report released under the 2008 Act.

These new duties will necessitate a shift in the way Foundation Trust boards take decisions, the factors they need to have regard to when taking decisions and the manner in which the impact of their decisions are assessed.

Foundation Trusts will be required to balance their existing statutory duties to maximise the benefits for their patients, the public and their members with the need to have regard to the wider impact of their decisions across the healthcare system as a whole - not just their local populations.  Moreover, boards will be required to consider how the exercise of their functions and the activities they undertake will assist (or not as the case maybe) the UK in complying with its objectives on the climate. Foundation Trust boards will therefore need to take into consideration much broader issues and have regard to the wider context within which they operate when formulating and assessing their plans, and of course taking decisions.

The Act also sets out key changes in respect of a number of controls that will impact upon the strategic and operational aspects of Foundation Trusts.  These include new controls on expenditure, with Foundation Trusts subject to caps on capital spending in particular financial years, set centrally by NHS England. Consistent with the Act’s aims on joint working, Foundation Trust Forward Plans will need to be jointly prepared with local Integrated Care Boards, and the Act sets out new requirements on what these plans must contain.  There are further new requirements in respect of the accounts of Foundation Trusts; so plenty of areas for boards and governors to contend with.

New opportunities for joint working and collaboration

The Act creates more flexibility for Foundation Trusts to enter into joint working and collaboration arrangements by permitting Foundation Trusts to carrying out, on terms that they consider appropriate, any of its functions jointly with any other person.  This is a potentially wide ranging and welcome addition to the powers of Foundation Trusts and should enable more flexible governance and decision making structures to be created to facilitate joint working and collaboration.  

Whilst the power will be subject to regulations which may disapply or limit these powers, Foundation Trusts will be able to delegate any of their functions to local authorities, combined authorities, and other ‘relevant bodies’, a list which currently includes Integrated Care Boards, NHS England, NHS Trusts and other Foundation Trusts – the Act also allows for other bodies to be added in due course. Further, where functions are to be exercised jointly between such bodies, the Act allows for the creation of joint committees and pooled funds.

This is a significant shift in the powers open to Foundation Trusts to work with other organisations. Currently, Foundation Trusts are only able to delegate their functions to committees of their Boards, or individual Executive Directors. Consequently, where in the past Foundation Trusts have been party to joint working and collaboration arrangements such as the joint delivery of services with other organisations, sophisticated and complex governance models have had to be put in place in order to remain compliant with both governing documents and the law.

The Act therefore provides an opportunity to refine and streamline existing joint working arrangements, or explore new ones with a wider range of both commissioner and provider organisations. It will also allow for the delegation of a Foundation Trust’s functions outside of the organisation with the added potential of creating pooled funds to support these aims in a concrete way.

In either case, Foundation Trusts will need to review and update their constitutional documents, including their standing orders and relevant schemes of delegation, to ensure they can take full advantage of these new powers.

Next steps and how we can help

The relevant sections of the Act that bring the above duties and powers into effect are expected to be in force soon.

Bevan Brittan can help Foundation Trusts Boards of Directors and Councils of Governors to understand and comply with the changing legislative landscape, and make the most of these new opportunities.

We can advise Foundation Trusts on their new duties under the Act. We can also support Foundation Trusts to review their existing joint working arrangements and advise on the new opportunities to delegate their functions under the Act, including reviewing and updating their constitutional documents.

Please contact Vincent Buscemi, Partner or Kevin Unwin, Solicitor for more information or to discuss your questions or how we may be able to support you.