NHS England has recently published an updated code of governance for NHS trusts and NHS foundation trusts (“the Code”).
The Code, which will be effective from 1 April 2023, contains a number of amendments since it was last updated in 2014 – we set out the context for these changes, below, as well as the approach provider trusts will need to adopt in respect of compliance with the updated Code.
Corporate governance and the current operating environment
The environment in which NHS trusts and foundation trusts operate is of course markedly different to that of 2014.
Increasing collaboration between and integration of NHS England, Monitor and the NHS Trust Development Authority has culminated in the merger of these organisations into NHS England, following the enactment of the Health and Social Care Act 2022. Local health economies now operate through Integrated Care Systems which are oriented towards collaboration, and provide for NHS organisations and local authorities to work together through Integrated Care Boards and Integrated Care Partnerships.
NHS England has emphasised that the Code, by refreshing and updating the principles of good governance, has a key role to play in supporting both NHS trusts and foundation trusts to contribute to the success of their Integrated Care Systems.
Accordingly, the Code highlights the overlap between good corporate governance and successful delivery against quality standards, for which boards are ultimately responsible. The Code aims to provide a framework for robust governance standards and leadership, and sets out how provider trusts should go about ensuring good governance within their own organisations.
The Code has for the first time been extended to NHS trusts and so demonstrated NHS England’s view that the principles of good governance apply universally to NHS provider trusts. Nevertheless, the Code identifies specific provisions that apply to NHS trust and foundation trusts to reflect the differences in the way they are constituted and established under the NHS regulatory framework.
Compliance with the Code
Despite the significant changes to the Code to reflect the above, it retains a ‘comply or explain’ approach, i.e. provider trusts must comply with applicable provisions of the Code, or explain why they have departed from it. Whilst compliance with the Code is not mandatory, and deviation from it would not be a breach of the provider licence, the Code states that non-compliance may ‘form part of a wider regulatory assessment on adherence to the provider licence.’
Demonstration of compliance with the Code uses a variety of methods. Depending on the provision in question, it may require issuing a statement or including appropriate information in a trust’s annual report, or providing certain information publically (in the case of NHS trusts) or to governors or members (in the case of NHS foundation trusts).
An ‘explanation’ of non-compliance must be supported by sound reasons. Provider trusts will be required to explain how their practices are nevertheless consistent with the principles set out in the Code, and to provide a clear rationale for the departure together with a description of the mitigating actions they are taking to address any risks of non-compliance. Trusts will also need to explain how they are ‘maintaining conformity with the relevant principle’, in spite of the specific instance(s) of non-compliance with Code provisions.
To assist with compliance, the Code sets outs what provider trusts need to do to comply, and how to demonstrate this, in respect of each provision.
Next steps and how we can help
Bevan Brittan can help provider trusts ensure that they comply with the Code, and we can work through the reporting and ‘comply or explain’ requirements it sets out with trusts that may have queries about the Code’s application and any modifications that may need to your internal governance systems or processes.
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.