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Recent legislative changes


Health and Social Care Act 2012

The main aims of the Act are to change how NHS care is commissioned through the greater involvement of clinicians and a new NHS Commissioning Board; to improve accountability and patient voice; to give NHS providers new freedoms to improve quality of care; and to establish a sector regulator to promote economic, efficient and effective provision (Monitor).

In addition, the Act will underpin the creation of Public Health England, and take forward measures to reform health public bodies.

The Act received Royal Assent on 27 March 2012. Most of the provisions of the Act will come into force on the day specified by the Secretary of State in an order. The Act gives the CC a new role in regulation of public health. The Act provides that:

  • The Office of Fair Trading (OFT) will be able to refer mergers involving NHS foundation trusts, to the CC to investigate under the Enterprise Act 2002.
  • If it has reasonable grounds for suspecting that any features of the health care market prevent, restrict or distort competition, Monitor will be able to refer matters to the CC for in-depth investigation using its Enterprise Act 2002 powers.
  • Monitor may refer to the CC proposals to modify licence conditions if an applicant or licence holder refuses to accept a proposal to include or modify a special licence condition, or if sufficient licence holders object to a proposal to modify a standard licence condition. If the CC concludes that the proposed licence condition or modification operates, or may be expected to operate, against the public interest, it may specify changes to the licence conditions to remedy or prevent these effects.
  • Monitor may refer to the CC the methodology used to set prices for NHS services if there are objections from sufficient clinical commissioning groups or licence holders. If the CC determines that the methodology is not appropriate it must refer the matter back to Monitor for reconsideration and decision.
  • Monitor may refer to the CC proposals to impose a levy on licence holders if sufficient licence holders object to the proposal. The CC must decide whether Monitor has failed to have sufficient regard to its duties in producing the proposals. If the CC concludes that this failure operates, or may be expected to operate, against the public interest, it may specify changes to the proposals to remedy or prevent these effects.

Many details of the new system will be put in place through secondary legislation. This includes specifying the thresholds for Monitor to refer disputes to the CC about licence modifications, the pricing methodology and levy methodology.

Amendments to the Gas Act 1986 and Electricity Act 1989

The two Acts were amended by Statutory Instrument (the Electricity & Gas (Internal Markets) Regulations 2011) to transpose EU Directives on Gas and Electricity. The changes came into effect on 10 November 2011.

The Statutory Instrument altered the procedure for modifying conditions of electricity and gas licences and created a new appeal mechanism in respect of such licence modifications. This appeals mechanism replaces the previous one (which was never used) where licence modifications could be referred by Ofgem to the CC if there were objections from sufficient licence holders.
 
The relevant licence holder, certain materially affected persons and the National Consumer Council now have a right to appeal to the CC against a decision of Ofgem to modify a condition of a gas or electricity licence. These persons can also apply to the CC for the suspension of the relevant licence conditions, prior to the CC determining the appeal.
 
Where the CC allows the appeal, it can quash all or part of Ofgem’s decision and refer the matter back to Ofgem for reconsideration and decision in accordance with any directions given by the CC. If the matter on appeal relates to a price control decision of Ofgem, the CC can also substitute its own decision for that of Ofgem. 

The CC has published rules and a guide which describe how it will handle these appeals.

Postal Services Act 2011

The main purposes of the Act are to provide for:

  • An unrestricted sale of shares in Royal Mail, including provisions for an employee share scheme.
  • The transfer of Royal Mail’s historic pension deficit to Government.
  • A new regulatory regime for the postal services sector, including transferring regulatory responsibility from Postcomm to Ofcom (which occurred on 1 October 2011), with the primary duty of Ofcom in relation to postal services being to maintain the universal service.
  • A special administration regime to protect the continuation of the universal postal service should the universal service provider be at risk of entering insolvency proceedings.

In relation to the CC, the Act provides a right of appeal to the CC against a price control decision made by Ofcom. This appeal mechanism came into effect from 1 October 2011 and replaces the previous one (which was never used) where licence modifications could be referred by Postcomm to the CC if the licence holder did not consent to the modification. Where the CC allows the appeal, it can substitute its own decision for that of Ofcom or quash all or part of the relevant price control decision and refer the matter back to Ofcom, for reconsideration and decision in accordance with any directions given by the CC. 

The CC has published rules and a guide which describe how it will handle these appeals.