47.Section 2 provides that the Secretary of State may establish new NHS bodies to be known as Primary Care Trusts. Primary Care Trusts will take on the function of arranging the provision (or “commissioning”) of health services, currently exercised by Health Authorities and GP fund-holders. In addition, they may also become providers of services under Part I of the 1977 Act, a function currently performed by NHS trusts. Furthermore, they will be able to exercise some functions in relation to general medical services, for example deploying cash-limited funds to improve general practice infrastructure and support practice staff costs. They will also be able to provide personal medical and dental services under the Primary Care Act 1997. It is envisaged that, at least initially, provider Primary Care Trusts will provide only community health services, or personal medical and dental services. However, section 12 provides the potential to broaden the range of Part I services that they may provide in future.
48.Primary Care Trusts will be established as corporate bodies with their own budget for local health care. The population coverage of a Primary Care Trust is likely to vary from place to place but typically, in England, a Trust is likely to serve a population of at least 100,000 and have a budget of around £60 million or more. They will be accountable to the local Health Authority and subject, like other NHS bodies, to directions given by the Secretary of State (see section 12). Their membership will include local health professionals and managers, with the Chairman and lay members appointed by the Secretary of State.
49.Section 2(1) inserts two new sections into the NHS Act 1977: sections 16A and 16B.
50.The new section 16A gives the Secretary of State the power to establish Primary Care Trusts. Subsection (1) provides that Primary Care Trusts will be established with a view, in particular, to their undertaking the following activities:
	providing or commissioning Part I services (i.e. hospital and community health services)
	exercising functions in relation to general medical services
	providing personal medical services or personal dental services under arrangements made under the Primary Care Act (“pilot schemes”) or section 28C of the 1977 Act (“the permanent regime” – see paragraph 39 above).
51.Primary Care Trusts will be established by orders, which will specify the area for which the Trust will be established and certain limitations on the functions it may exercise. The PCT order will also set out the name of the Trust and the date it will become operational (paragraph 1 of the new Schedule 5A to the 1977 Act, as inserted by Schedule 1 to the Act).
52.It is envisaged that proposals to establish a Primary Care Trust will be generated locally. The views of Primary Care Groups, NHS trusts, local health care professionals and local communities will be taken into account in considering such proposals. The Secretary of State will direct Health Authorities under the new sections 16D and 17 of the 1977 Act (see section 12 of the Act) to make preliminary selections on his behalf of those proposals which will go forward to consultation and those which will not. It is the Government’s intention that the directions will provide that Health Authorities must select a proposal if it has been made or endorsed by either a Primary Care Group or an NHS trust providing community services locally, and if it meets certain requirements as to the form and content of the proposals. In addition Health Authorities will also be able to initiate their own proposals.
53.Once a proposal to establish a Primary Care Trust has been selected or initiated by a Health Authority, it will be the subject of a consultation conducted in accordance with the regulations made under subsection (5). These regulations will provide that the consultation must be conducted by the Health Authority and that the result must be reported to the Secretary of State. It is envisaged that they will also make provision for matters such as who must be consulted, the information that must be provided for consultation, the period in which consultation must be conducted and for reporting to the Secretary of State the results of consultation, including the form such a report must take.
54.Regulations will also require consultation to be carried out before the Secretary of State can dissolve a Primary Care Trust, or amend an order to establish a Primary Care Trust, except where the change to the order is a minor change. The requirement to consult will not apply, however, where it appears to the Secretary of State necessary to dissolve the Primary Care Trust as a matter of urgency. A similar power exists in connection with NHS trusts (paragraph 29(3) of Schedule 2 to the 1990 Act). It is designed as a safeguard of last resort if, for example, patient safety is at risk.
55.It is intended that there will be a clear distinction between Primary Care Trusts that are able to commission services, and those which may also provide services directly to patients. Progression from a “commissioning-only” Primary Care Trust to a “commissioning-and-providing” Primary Care Trust will be subject to consultation and the approval of the Secretary of State, in the same way as when a Primary Care Trust is first established. The new section 16A sets the framework for this in two ways. First, subsection (3) allows the Secretary of State to specify in the PCT order whether the Primary Care Trust is prohibited from providing services directly. A Primary Care Trust that is subject to such a prohibition will therefore not be allowed to provide services directly until its order is amended. Second, the Secretary of State will be able to amend a PCT order only after any consultation requirements, set out in regulations made under subsection (5), have been met. (See commentary on section 12 for further discussion of Primary Care Trust functions.)
56.The provisions for delegation and joint exercise of functions in the new section 16B will be similar to those made for Health Authorities in section 16 of the NHS Act 1977. They will enable Primary Care Trusts to choose how they arrange for the performance of their functions. For example, it will be possible for Primary Care Trusts to pool administrative support services such as IT, estate and payroll management with other NHS bodies. It will also be possible for committees and staff members of a Primary Care Trust to perform functions on behalf of the Trust and for Primary Care Trusts to enter joint commissioning arrangements with Health Authorities and other Primary Care Trusts.
57.Subsection (2) of section 2 gives effect to Schedule 1 to the Act, which inserts a new Schedule 5A in the 1977 Act. The new Schedule makes additional, detailed provisions in respect of Primary Care Trusts. In particular it includes provisions in respect of PCT orders, constitution, membership, staff and property.
Commentary on Sections Part I - the National Health Service Section 2 and Schedule 1: Primary Care Trusts