Remedy
Start free

Section 42A: Criteria for making loans etc.

National Health Service Act 2006 · 2006 c. 41View on legislation.gov.uk

Part 2: Health service bodies — Chapter 5: NHS foundation trusts

The Secretary of State must publish guidance on the powers conferred by sections 40 and 42.

The guidance on the power to make a loan under section 40(1) must in particular—

explain that, in exercising the power, the Secretary of State will apply the principle that a loan should be made only where there is a reasonable expectation that it will be repaid in accordance with the terms on which it is made;
include other criteria that the Secretary of State will apply when determining whether to exercise the power and, if so, the terms on which to make the loan.

The guidance on that power must also explain—

the process for applying for a loan under section 40(1);
the consequences of failing to comply with terms on which a loan is made under that provision.

The guidance on the power to decide terms under section 42(3) must, in particular, include the criteria that the Secretary of State will apply when deciding the terms.

The guidance on that power must also explain the consequences of failing to comply with the terms decided.

In preparing guidance under this section, the Secretary of State must have regard (among other things) to any generally accepted principles used by financial institutions to determine whether to make loans to bodies corporate and the terms on which to make loans to them.

Before publishing the guidance, the Secretary of State must consult—

the Treasury,
NHS England, and
such other persons as the Secretary of State considers appropriate.

About this text

This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.