With the current hiatus and pause there is uncertainty around what the Bill will finally look like but in the meantime we wanted to put straight something we had stated in our Health Legal Update special edition earlier this year. We would like to apologise for erroneously stating that Community Health Partnerships Limited (CHP) was not a “qualifying company” for the purposes of Schedule 23 (Property Transfer Schemes) of the Bill as confirmed in the explanatory memorandum to the Bill. CHP are to be regarded as a qualifying company and consequently both a potential recipient of estate to be transferred pursuant to the Bill as well as an entity which the Secretary of State may direct to make property transfer schemes upon the abolition of PCTs and strategic health authorities.
It may well be the intention that LiftCos will also be within the “qualifying companies” category but in our view there are a couple of questions to be addressed.
- Whilst there is no doubt that LiftCos “provide facilities” and “services” and satisfy that part of the “qualifying company” definition what is not so clear is whether the LiftCos’ ownership arrangement satisfies that part of the definition. The “owners” of LiftCo (ie the shareholders) are the private sector partner entity, local stakeholders (usually the PCT or PCTs whose area the LiftCo covers) and CHP. CHP is owned by the Secretary of State for Health but is established as a company in its own right. PCTs too are bodies corporate (ie, separate legal entities). In this case the explanatory memorandum does not shed any light and a guide to precisely what “ownership” means and does not seem to appear in the Bill or elsewhere. If it is the intention to include LiftCos in this category then an amendment can be made by inserting the words “directly or indirectly”. Alternatively, LiftCos could be put into the list of potential recipients of PCT and strategic health authority estate as a category in their own right.
- This takes us onto the second question which is whether LiftCos are intended to be recipients of the Secretary of State’s delegated powers to make property transfer schemes to qualifying companies (currently section 292(4) of the Bill). It would be helpful to have clarification on this as we would query whether the implications of the delegation of such power were contemplated when they were procured and established.
We await the Government’s response to the listening period as well as further guidance on the direction for the residual primary estate, PFI and LIFT interests so we can consider further the best models for operation and ownership of healthcare facilities post reform.