Debating the 
hospital closure clause

Clause 119 (formerly clause 118) is a section of the Care Bill which, once passed, will allow trust special administrators to close down or downgrade any hospital or A&E within 40 days if a neighbouring trust is in financial trouble.
The controversial clause, branded by some as the ‘hospital closure clause’ has sparked a huge amount of debate, with MP Andy Burnham criticising the bill for increasing the scope to close down good hospitals and removing decision‑making from local communities.

A developing legal field
The development of hospital closure legislation Clause 119 has emerged from the development of the Trust Special Administration (TSA) process. The TSA process was introduced in 2009 as a method of preserving the continuity of NHS services where an NHS trust faced insolvency. The scope of the process was extended to NHS Foundation Trusts by the Health and Social Care Act 2012.
The TSA was first used in relation to South London Healthcare NHS Trust (SLHT). Although many of the Trust Special Administrators’ recommendations were adopted with minimum fuss, when proposals for downgrading the A&E department at Lewisham Hospital were introduced, they were met with vociferous opposition – mainly from the local population.  
Local pressure groups were successful in challenging the powers of the Secretary of State to close the Lewisham A&E department. The success of this well-orchestrated local campaign was significant. In adopting the TSA process in relation to the SLHT, the government hoped to be able to demonstrate that it was able to deal effectively and speedily with failure in the NHS. The successful judicial review judgement (supported subsequently by the Court of Appeal) attracted unwelcome headlines and highlighted that, in its current form, there were clearly gaps in the TSA process.

Shortcomings of the process
Although the TSA process was applied to SLHT, the difficulty arose because Lewisham A&E belonged to another trust which was not subject to the TSA:  Lewisham Healthcare NHS Trust.

The TSA requires a consultation process to be undertaken, to allow discussion around the Trust Special Administrator’s draft recommendations. However, this prescribed consultation is shorter and more closely defined than would normally be the case under the ‘consultation and involvement’ requirements.
The objector’s case was founded on the unlawful extension of the TSA process to the Lewisham A&E department, which meant that there had been an absence of what they claimed was ‘proper’ consultation.

Closing the gap
The Government has sought to include provisions in the Care and Support Bill which seek to close the legal gap highlighted by the Courts. In essence, Clause 119 extends the scope of the recommendations emanating from the TSA process to trusts which are not themselves subject to the TSA process and removes the requirement for a broader consultation. Had Clause 119 been in force at the time of the SLHT  process,  the Lewisham objectors would have found it much more difficult to challenge the proposals about their A&E department.

The implications
In an organisation that has thus far gone to considerable lengths to emphasise the significance of transparency and local involvement in decision-making, there is no doubt that the use of Clause 119 represents a significant change in approach. Existing statutory guidance published by the Department of Health, which continues to apply in non-TSA cases (together with other guidance published by the Cabinet Office) highlights the importance of proper consultation, especially in the context of major decisions. In addition, it also makes it plain that the way in which the consultation takes place needs to take account of a wide variety of different factors so that a process can be structured which takes these factors into account.
This is because it is intended to cater for a very broad range of possibilities, ranging from the re-siting of a chiropody service to the closure of an A&E facility (or even a hospital). As such, the question as to whether any solution adopted under the engagement obligation was sufficient (in terms of scope, information and time) would be influenced by the subject matter and gravity of the plan, proposal or decision. 
As a result of Clause 119, users of services which neighbour financially failing trusts could find themselves being affected by the recommendations of the Trust Special Administrator and will find themselves subject only to a ‘consultation-lite’ process. In particular the TSA process is a much blunter instrument when compared to the flexibility that is allowed for in the case of non-TSA consultations. It is prescriptive in terms of what is required, how long the process should take, who should be consulted and how it ought to be carried out. As such, the TSA process adopts much more of a ‘one size fits all’ approach, which is contrary to the engagement principal and reflected in the guidance that would, but for Clause 119, apply to decisions affecting non-TSA trusts.
One size fits all
Although certain aspects of the TSA consultation process are capable of being adjusted to fit the circumstances, it is much more rigid in terms of what is required and how it should be carried out. This is at odds with the statutory engagement principal, which caters for a broad range of possibilities within the nature of the process – in terms of scope, information and time – being influenced by the subject matter and gravity of the plan, proposal or decision. As such, depending on the nature of the recommendations in the draft report and the consultation carried out, the TSA consultation process may not be sufficient to allow local populations to feel that they have had adequate involvement in important decisions which affect them and to provide important and often complex information.  
Clause 119 removes the ability for objectors to prevent TSA changes in the same way that the Lewisham objectors did by eliminating the requirement for full public consultation. Although the consultation period on the draft proposals has been extended from 45 working days to 65 working days, this is still quite a brief period of time to facilitate an informed dialogue on often complicated proposals which could have far-reaching effects on local populations.

The use of Clause 119 is, in effect, an acknowledgement that problems affecting unsustainable trusts go beyond the walls of the TSA trust itself. Although the TSA process has been used only sparingly, the hostility to the Clause 119 proposal is borne out of the number of trusts which are currently in financial difficulty. As such, there is concern that the TSA process will become more widely used and that important decisions will be made in the absence of the level of scrutiny and debate which people have come to expect from the NHS.
In its defence, Government would point out that the TSA process is very much a last resort and is a vital tool to help resolve issues which require speedy resolution in the interests of patients. However, in many cases the complexity of issues facing a trust requires a much broader negotiation and consensus to achieve a complete resolution than just the TSA process alone. Although guidance for administrators makes it clear that TSA is not a method of ‘achieving service reconfiguration by the back door’, there is considerable scope to doing this as a result of the use of Clause 119.
The public are notoriously protective of local NHS services. The use of a curtailed consultation process is unlikely to reduce the level of objections or challenge. However, it will mean that objectors will have to be more creative over the grounds on which they launch judicial review actions.

The big picture
One of the main reasons that Clause 119 was introduced was to facilitate speedier resolution of fundamental issues affecting a sector in which change is difficult to achieve quickly. Although the debate around Clause 119 has focused on its impact on transparency and local democracy, there is perhaps a more fundamental question that should be asked. How is it possible that a key service like health could be allowed to find itself in a position where the various elements of it are allowed to function almost independently of one another?
Although a degree of independence is helpful to ensure that local needs are properly taken into account, it also fosters the development of self-interest within organisations and the ability to veto important change which may be required in order to deliver sustainability across a health economy. The development of hospital chains is helpful in encouraging collaborative approaches between organisations. However, not everyone is currently acting in this way.
Therefore the restoration of the strategic role previously played by Strategic Health Authorities needs to be revisited so that a broader and longer-term view of the local landscape can be taken with the ability to require change to be implemented. The current structure does not even lend itself to the delivery of incremental change. This means that we are now faced with the necessity of fundamental change through the blunt instrument of Clause 119.

Further information