Building Safety Bill (Third sitting)
(3 years, 3 months ago)
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The Chair
Before we begin, I have a couple of preliminary announcements. I encourage Members to wear masks when they are not speaking, in line with Government guidance and that of the House of Commons Commission, and to give each other and members of staff space when seated and when entering and leaving the room. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@ parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.
We will now hear oral evidence from Sarah Albon, chief executive officer of the Health and Safety Executive; Peter Baker, chief inspector of buildings at the Health and Safety Executive; and Graham Russell, chief executive officer at the Office for Product Safety and Standards. Before I call the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings in the programme motion that the Committee has agreed. For this session, we have until 10.15 am. May I start by asking the witnesses to introduce themselves for the record?
Peter Baker: Good morning, everyone. I am Peter Baker, chief inspector of buildings at the Health and Safety Executive.
Sarah Albon: Good morning, everyone. I am Sarah Albon, chief executive of the Health and Safety Executive.
Graham Russell: Good morning, everyone. I am Graham Russell, chief executive of the Office for Product Safety and Standards within the Department for Business, Energy and Industrial Strategy. I am responsible for building the construction products regulator.
Mike Amesbury (Weaver Vale) (Lab)
Q
Sarah Albon: That is a very broad question. I will bring Peter in on some of the technical aspects of scope. It gives us a real opportunity to take a holistic approach to the management of safety in buildings, from the very beginning of the design phase, through building and into occupation. It is important to recognise that although there is rightly a lot of focus on the taller buildings that are in scope for the special gateway process and the safety case process that will go on once buildings are in occupation, there are many other aspects in the Bill around improving the competence of those who work in the various aspects of the industry and in oversight of that, and around the wider built environment, that will apply to all buildings and all professionals working across the industry. It gives the foundation for a real sea change in the improvement of safety in the built environment in this country.
Peter Baker: To add to that, if you take a step back and look at the findings from Dame Judith Hackitt’s review about poor culture, attitude and behaviour of the industry, the lack of accountability of individuals, the lack of resident engagement, and all the things that were found to be wrong with the system as it stands, the Bill covers off all those points and, in fact, goes further in a number of areas. I am fairly confident that the Bill, as currently structured, addresses all the key points that Dame Judith raised in her report.
Graham Russell: If I may add to that, the products that go into those buildings are the foundation, if you will, of the safety approach, culture and regulation that we have just heard described. It is our responsibility to make sure that those products are what they say they are and that they are properly labelled and traceable, and the Bill makes provision for that through the schedule and then through statutory instruments.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q
Sarah Albon: I think there is always a balance between what industry needs to do and what the overarching regulatory regime seeks to do. From my perspective, it is important, in addressing the cultural issues, that we recognise that, ultimately, it is not the regulator or Government who will lead to a sea change in behaviour, but industry. It is therefore important that the responsibility for driving improvements, and for ensuring that people have the right kind of competence and do the right thing, rests squarely with industry, as well as the ownership of safety within individual buildings resting squarely with the owners of the buildings who are responsible for safety within them. They are the only people on the ground who can, day in, day out, ensure that things are being managed properly and that people are competent and are appropriately fulfilling their duties and obligations under the law.
Peter Baker: I would add that it will be set out in the legislation that a building safety manager is required. As Sarah said, the key thing for me—we have seen this with other workplace health and safety requirements—is that, although the building safety manager will have an important role on a day-to-day basis in effecting the safety, engaging with residents and so on, the accountability for the accountable person who is ultimately responsible for that building is not inadvertently delegated to the building safety manager, so that the BSM effectively takes on the ownership of the risk. That should be firmly with the accountable person, because they are the individual or the company that has the resources and the capability to really manage the risk.
Graham Russell: This is not an area for me.
Ms Rimmer
Q
Peter Baker: Having a competency framework is really quite important for a lot of the safety-critical roles in the regime, for a number of reasons. One is to make sure that there is a consistent level of competence, performance and behaviour among the individuals who undertake a lot of those important roles. That is not just the building safety manager but the client representative, the contractors and everyone involved in the lifecycle of a building.
A framework is key to ensure that the important things are part of a person’s training and induction. You would never be able to set a series of requirements to cover every aspect of a job, so a framework is an important first step, but it also provides flexibility for duty holders to have a whole range of other roles associated with that building safety function.
Ms Rimmer
Q
Sarah Albon: There are a number of new roles, as well as a requirement for increased competency and a range of other existing roles, that thread right the way through the Bill. It is inevitable that there will be a significant focus on the need to get new people to join various professions and to have training and experience available to people. It would be unrealistic to suggest that it will be without problem in terms of training and getting new people. Having said that, there has been a lot of notice that the new functions are coming, and there has been a lot of focus already in the industry on the need to improve the overall safety of buildings and the regime.
There is no reason why owners of buildings and senior people working in the industry need to wait for the Bill to be finished before they start driving up the skills and competence of the people working for them. Fundamentally, this piece of legislation will put in a new framework that requires people to meet certain standards, but they can be working on that already. Certainly, in the engagement that Peter and other colleagues from the HSE and the Department have had with the industry, we have encouraged and pushed them to get on with it and start ensuring that they have the right degree of skills available to them, and they are thinking now about who they need to train and how they need to support their staff with a view to the Bill coming in.
Peter Baker: One thing I would add is that a lot of organisations in the social and the private sectors already have individuals and companies that help them support the management of their buildings. I do not necessarily see the BSM role as something very new and necessarily too daunting. It can be part of a transition from what currently happens. If organisations are managing the risks in their buildings well through their existing arrangements, it could be quite an easy transition to the building safety manager role. I would stress, as I said, that it is key for the BSM not to be seen as the duty holder and to own the risk—that should firmly be with the accountable person to ensure the buildings are safe.
Ms Rimmer
Q
Peter Baker: Absolutely. Dame Judith recognised the need for cultural shift, particularly in the design, build and refurbishment of new builds. There are a number of provisions in the Bill around the gateways and the design and build, and there is a strong emphasis on improving competence right across the built environment. It is important to remember that the Building Safety Regulator will not just regulate high-rise buildings but will have other functions of stimulating and encouraging competence right across the built environment, which is one element of improving the culture of the construction industry and the landlord and housing provider industry.
Graham Russell: I think your point about culture goes right across the sector. What we have seen in evidence given to the public inquiry on Grenfell Tower and in other contexts reveals that a cultural shift is required. The points that colleagues have made about responsibility having to sit with the industry applies as much to the industry of creating the construction products as it does to the building industry—it is one system and one sector. It is clear to me that we must address those cultural issues. Regulation is important as it provides a framework and a set of expectations, but it is behaviours that have to change. In that sense, what we are embarking on through the Bill, and the work that we are doing with our colleagues, is addressing that culture.
Ian Byrne (Liverpool, West Derby) (Lab)
Q
Sarah Albon: I will try to answer on those different aspects. The first question was whether HSE is the right home for the new regulator. Whenever the Government consider setting a new regulatory framework, they need to consider whether it would be appropriate to set up an entirely new body or if an existing body has the requisite skills and competence to deliver. When thinking about that, a number of different aspects will be in officials’ and Ministers’ heads: they will need to think about the landscape of the existing bodies, the work that the existing bodies have on and any impact of taking on new responsibilities. There is often an advantage to be had in terms of speed of set-up if an existing body is used, as well as efficiencies in some of basic support services, such as not needing a second HR function or finance team.
In the HSE, we have a lot of experience in dealing with hazards and helping duty holders to really think through and manage the risks that are present in their environment, always with the onus being on the owners of the risk to manage it. That will fit well with the ethos of this new legislation—the real ownership of risk needs to sit with the owners of the buildings and they need to be held to account to ensure that they keep their buildings safe at all stages, from design all the way through to occupancy.
In the HSE, we have a lot of competence in dealing with that and with holding duty holders to account, as well as many years of working closely with the building industry through our role as a workplace regulator and thinking about the risky environment for people who work in the construction trades. We already have a lot of relationships, and the organisation has had success in significantly improving the safety of workers in the construction industry. For all of those reasons, it is entirely understandable that the Government look to HSE to set up this new regulatory function, and it is a decision that has the strong support of my board and senior executive team.
On resourcing, it is a new function and we will look for new resources. All public sector organisations are about to go through a spending round. We are aware that there may be real constraints, but my experience so far in working with the Ministry of Housing, Communities and Local Government has been that it has been able to prioritise this both in terms of the number of officials working on the Bill and directly. That is relevant to HSE in giving us the money that we need to establish the function and start working on it. It has been clear to me through the conversations that we have had with MHCLG officials about funding that this is a significant priority for Ministers and officials.
Do we have all of the competence that we need right now? We definitely need to build up more competence in fire risk assessment. We have started to do that: we have already recruited some people to assist us as gateway 1 went live, and we will continue to build on that level of expertise and recruit and train as the Bill goes through and we move into implementation.
Ian Byrne
Graham?
Graham Russell: It is not for me to comment on your question, apart from to say that I have worked with the HSE in various guises for 30 years and have the highest regard for its competency and abilities. Beyond that, I think the key question for me is the distinction between regulating products and regulating building safety. That was a decision that Dame Judith Hackitt gave advice on. She suggested separating that in the way that the Bill does, and that then leaves us with a responsibility. We are a product regulator—we regulate consumer products, machinery products and so on—so in that sense it brings our expertise to bear. We have the same challenges in building new competency in new areas, and we are working hard on that.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Sarah Albon: I will probably bring Peter in to talk in a bit more detail. I think the broad answer is yes. I suppose that we intend to use the enforcement tools in the same way that we would want to use, and do use, the enforcement tools that we currently have. The best form of regulation is changing the behaviour of the duty holder so that they are doing the right thing in the first place. Clearly, it is important that you can and do take action when there has been a failure, but enforcement is necessarily always cleaning up after somebody has done something wrong. Our absolute focus and emphasis on workplace health and safety—it will be the same in this new regime—is to try to get duty holders to do the right thing in the first place so that residents and, currently, workers, are not put at risk awaiting enforcement requirements. Peter, do you want to say a bit more about the tools that will be available to you?
Peter Baker: We will have a mixture of both civil and criminal tools. We have been working very closely with MHCLG on the preparation of the Bill and the legislative package from our perspective, to make sure that a lot of the tools that we will have under the Bill reflect the sorts of enforcement tools that we have under the Health and Safety at Work etc. Act 1974, which are well tried and tested.
It is also important to remember that one of the step changes or real differences about the Bill in terms of regulation is the gateways. Unlike now, a duty holder will need to demonstrate at the pre-construction phase that they have all the wherewithal to build a safe building, and to demonstrate how they are going to comply with building regulations. The Building Safety Regulator will be able to say yes or no at that point and, potentially, prevent a development from going ahead unless all the necessary steps, safety management systems, and checks and balances are in place. It is not just a case of being able to serve enforcement notices, although they will be available to us; this is very much a permissioning regime similar to high hazard industries where the regulator can say yes or no at critical stages in the build and occupation of a building.
Brendan Clarke-Smith
Q
Peter Baker: We clearly will not know for certain until the Bill emerges from the parliamentary process but, as I say, we see this as a key step change in the regulatory regime, particularly in the occupation phase. It applies very clear responsibilities to the accountable person to manage the risk, and it leans very heavily on other major hazard industries and safety case regimes. In principle, the responsibility will be on the accountable person—the landlord, the building owner—to demonstrate to the regulator and other stakeholders, as part of a licensing and certification process, that they have identified the critical fire spread and structural risks in a building, that they have all the management systems that they need to manage those risks, and that, where they have identified gaps, they have a plan to fill them.
I also stress that this process is not just to satisfy the regulator and then to be put on a shelf. The safety case is going to be quite a fundamental part of a duty holder’s management system and of managing the risks associated with their building.
Shaun Bailey (West Bromwich West) (Con)
Q
Sarah Albon: If I can come to the second of those questions first, I guess that ensuring that the transition is as smooth as possible is about planning, but it is also about recognising that there are various aspects to the Building Safety Regulator, and we can bring on board those different aspects at different stages. We are already ramping up the engagement that we have with industry, for example. We are starting to do some key work reaching out to residents and resident groups, so that we have greater engagement with them and really understand the range of issues and concerns that they have, and so that those relationships are well built before the Bill goes live. Of course, the planning gateway 1 process has already gone live, so we are able to create the team around that and learn from it.
We have done various structural things within HSE, leaning heavily on our existing construction team, which has years of experience of working with the construction industry, influencing the importance of change not just day to day on different building sites but at a senior key level across the industry, and engaging with key players to ensure that that happens.
I confess that I have completely forgotten the first part of your question, so could remind me what it was?
Shaun Bailey
Q
Sarah Albon: As with anything else, there will obviously be some key measures of success on service delivery to those people who are trying to build and occupy buildings. You will be familiar with some of those from any other public service. That will be about the quality of the work we do and the speed at which we can turn things around, ensuring that we are not slowing things down, that people are still able to build high-quality buildings and to occupy them, and that we are giving the right kind of service.
Beyond those important day-to-day metrics, it will also be about looking back in a few years’ time and seeing that culture of safety in buildings as being as integral and as important to HSE as the culture of workplace safety that we have built over the years. Together with the board, we have already started to think about how we can ensure that there is as much emphasis on that aspect of the work as there is and has been for the past many decades on workplace health and safety.
Shaun Bailey
Does anyone else have anything to add to that comprehensive response?
Peter Baker: On the softer side of things, a measure of success for me, having had experience of introducing and improving our workplace health and safety regimes, is that engagement with the duty holders is absolutely key. They need to feel as though this is not being done to them but that they are engaged in and part of how this system is going to operate from day one. That is important. It is also crucial that residents feel that they are part of how this system is being developed and that we have engagement strategies associated with residents. We really need to build the confidence of residents in this system, and we have to see signs of that from a very early stage.
Daisy Cooper (St Albans) (LD)
Q
Sarah Albon: I think that some of our comfortable nature is probably from the way we have worked so closely with the Department as the thinking on the Bill has developed. We in HSE have certainly had considerable input and worked very closely with officials in the Department to help to frame the legislation and meet some of the challenges. I guess that part of our comfort is therefore from having worked on it now for a considerable time.
Inevitably, there are various other stakeholders who will have read the legislation for the first time relatively recently and will still be working through how it works. One key thing that we want to do as the legislation goes through and as we ramp up towards taking this role on is working with the stakeholder groups out there and helping them to understand how the legislation is intended to work and will work, how we will work as a regulator and what they need to do to make sure that the various roles within their organisation are appropriately filled and appropriately managed.
As Peter said, we are very clear that the overall responsibility has to sit with the accountable person. There are some other key appointments within the system, and they will need to make sure that they have the right people working for them, working directly in buildings and within their organisation. For us, the key success factor is that the accountable person needs to be the person who genuinely feels accountability for ensuring that the people who live in the buildings for which they are responsible are safe. They need to be able to take action to do that.
Daisy Cooper
Q
Peter Baker: As a regulator, having absolute clarity over who the duty holders are is key; clearly that is something that you have identified and need to explore through the parliamentary process. In terms of an outcome, it is right that the Bill needs to assign roles and responsibilities absolutely clearly. That is an outcome that I would expect, because at the end of the day I am going to be responsible for enforcing the legislative package.
Having said that, as this is starting to stray into all sorts of areas of building ownership and leasehold law, which is incredibly complex, I can understand—having been involved with MHCLG in developing the package—how difficult the challenge must be for the Bill writers to get this absolutely right. All I can say from my interactions with MHCLG is that it really has wrestled with all the issues and tried to make the duties and responsibilities as clear as it possibly can, but clearly that is something that your Committee will need to explore.
Daisy Cooper
Q
Peter Baker: My view is that MHCLG has done what it can to make the roles absolutely clear, as the Bill stands. The challenge is making sure, through guidance, support and engagement with all the stakeholders who will be touched by the Bill, that they understand the intention behind it all and the outcomes that we are trying to achieve.
The Chair
I think Graham Russell wants to come in.
Graham Russell: I was going to return to the very first part of Ms Cooper’s question, which was about the level of comfort we feel about the arrangements and the situation more generally. I do not think that “comfort” is a word that we have been using very much in either of our organisations about a situation in which, clearly, people have suffered enormously and the regulatory system has not protected people. That is why we are part of the mechanism that will deliver the Bill.
I think that it is incumbent on all of us to make significant change. We need a more robust regulatory system, better checks and a better testing environment, and we need to build the confidence that Peter has spoken about—confidence for residents, but also confidence for the industry that it is doing the right thing. We face a major challenge and the Bill is really important, but it is a framework.
In terms of the complexity of governance, obviously you have probed one particular part of that, but because this is a system that delivers safer outcomes, every part of that system must work. It is incumbent on us to make sure that it works, so we need to fit the different aspects together. From my point of view, that particularly includes local authorities and their ability to work closely on the ground with local suppliers, and the proof of that will be whether we can create and deliver a system and then give people confidence that that system is providing what has not been there in the past.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Q
Peter Baker: The Building Safety Regulator will have an important role of encouraging competence right across the built environment, not just to do with high-rise residential buildings, although clearly the focus of the regulatory activity of the BSR will be on that area. We have already started work setting up an interim competence committee, ready for the statutory competence committee when the Bill receives Royal Assent and is implemented. We as the BSR will have an important role in holding the ring on all of the competence development work that the industry has been leading since Grenfell, and making sure that that is all absolutely proportionate—that it is targeted at the right activity and at the right people. We will have quite a key role in making sure that that whole system of competency across the built environment is appropriate.
When it comes to support, I can only talk from my own experience of competencies in other high hazard regimes. In the past, organisations such as the Construction Industry Training Board and sector skills councils have also played a really crucial role, both through supporting the regulator and supporting their industry sectors in developing the detail and the systems for ensuring those levels of competencies, as well as providing some suitable checks and balances so that the competence frameworks are absolutely targeted at the right thing and people do not waste time, effort and money improving competence in areas that are not necessary. It is a dual role for everybody associated with the built environment to really lean into improving the competence right across the sector, and that is not just for high-rise residential buildings: the same applies in the workplace, in terms of workplace safety and making sure that people are competent in that area.
Ruth Cadbury
Q
Sarah Albon: At the end of the day, as you say, we just have to accept the complexity in this country—and, I suppose, most developed countries. You could wish that everything was simple; for us as a regulator, and no doubt everybody else trying to regulate in that space, it would be so much easier to do that if the world were different, but the reality is that mixed use of buildings is probably more common than not, particularly in urban areas, and particularly in these larger buildings. It is not uncommon at all to see a mixture of commercial premises—some of which may be relatively hazardous in themselves, such as petrol stations—with residential and office premises. We must just accept that complexity, accept the facts and ensure that those who are responsible in those buildings know that that changes the hazard present and the risk profile in the building. It becomes even more important that people who have responsibilities in that space take them seriously and ensure that what they are doing is bespoke to their circumstances.
One of the reasons HSE is so keen on the safety case regime, which, as Peter said, we have operated successfully in various other high-hazard environments, is that it drives people’s responsibility for taking an approach that is not about saying, “Have I complied with a whole list of things I should comply with?”, but rather saying, “Have I thought seriously about safety in my environment and the things I am responsible for? For sure, if there is a list of things I need to comply with, that might be part of it, but have I really thought about what could go wrong? What are the factors that could create some kind of additional hazard? How am I managing those things, and how do I ensure that, every day, I am properly and proactively thinking about and taking care of the people for whose lives and wellbeing I am responsible?”.
Safety and safety management is not something you do once and then stick it in a file until you are reviewed; it is something you should be thinking about every day, all the time, because the hazards present and the behaviour of people in an environment are constantly changing. You need to manage safety in that environment of constant change, where different behaviours or threats could constantly come in.
Ruth Cadbury
Q
Sarah Albon: Judith Hackitt’s report showed that height is a reasonable proxy for there being additional risks that people need to think about. At the end of the day, a regime such as this needs to start somewhere, and we as the regulator need a manageable and understandable pool of the riskiest buildings, where our work can start. Also, we have been talking about the importance of duty holders understanding what they are obliged to do, whether they are inside or outside a regime. For all those reasons, height is a well understood and clean starting point, but the Bill envisages that over time it may be appropriate for Parliament to return to the question of what is within scope of the higher risk regime, and to think about changing the boundaries if new evidence comes to light.
Peter Baker: Other legislative provisions will still apply to a number of those buildings, particularly workplaces such as hospitals and hotels. The Regulatory Reform (Fire Safety) Order 2005, which is about to be amended by the Fire Safety Act 2021, will still apply, so the fire risk issues will already be dealt with through that provision. The Government have also extended the new regulatory regime to hospitals and care homes during the design and construction phase, to ensure that the buildings that emerge from new build and large-scale refurbishment processes are built to standard and are safe.
Graham Russell: The provisions for the construction products apply across all buildings. For example, on cladding, in terms of safety, it would not matter which building it was going on to.
The Chair
We have six minutes to go, and I have two people I still want to get in. That is just to alert you.
Siobhan Baillie (Stroud) (Con)
Q
Graham Russell: Hitherto, the broad product safety regime has not applied to construction products unless those construction products are also sold to consumers. The Bill seeks to address that, and to apply to construction projects the same principles and approach that apply to product safety, which, although they are not without problems, are building a good rate of success. I think that is right.
On the second part of your question, there is good practice in areas such as medicines and healthcare products. The great thing we see there is a risk-based approach in which we recognise that different products create different levels of risk, and we therefore regulate them differently and put in place additional requirements. In the construction products area, there has not been an effective underpinning of that system. Although the designated standards approach has sought to deal with the highest-risk products, we have not had an essential safety requirement that means that every product must be safe. The Bill provides for that, which is really important.
When we try to diagnose what has gone wrong in the past, we can sometimes see a latticework through which things are thought to have fallen. Whether that is right or wrong, if you have an essential safety requirement approach, you give people that opportunity. By having that requirement, you ensure that people cannot run to that place—every product must be sound. There are additional provisions for high-hazard and high-risk products, but you have that underpinning, and that is what the Bill provides.
Kate Osborne (Jarrow) (Lab)
Q
Sarah Albon: As Peter and I have both briefly said, we absolutely recognise the importance of residents’ voices. We have already started working with a small panel that can help us engage appropriately with residents. We will be reaching out much more formally in the coming weeks and months to a much wider group of residents, to fully understand what they need from us as the new regulator, and to understand how they want to work with us, how they need us to behave and how we can design the new regulatory regime in a way that has residents and their voices and needs at its heart. We absolutely recognise that that has been one of the failings in the past.
For us, that starts with listening, and making sure that, in as many different formats and locations as possible, we go to residents and hear what they think. We recognise that means we need to think about the different languages that are spoken and the accessibility issues.
It is very easy these days to assume that everybody is online and wants to email you, but we know that is not true. We are planning events in community locations, and are going to the residents. We recognise that one size does not fit all, because the resident community is as diverse as the population of the United Kingdom. We need to respect that and not impose our preferred ways of working and engaging on that group, but should rather let them come to us and shape how we work and engage, so that we hear from as many different voices as possible.
We have tried to do that over the years with workers, with a degree of success. That would be the analogy. When HSE goes to any business premises, it of course wants to speak to the managers and those who have responsibility for ensuring safety, but we also always try to engage directly with the workforce, so that we hear from them at first hand what it is like to be part of that work environment and can triangulate—can see if what we are being told by the duty holder matches up with the experience of the workers. That will be really important.
There is not just the business-to-business relationship of us talking to duty holders. We need to listen to the needs of residents and be responsive to them. Crucially, we need to take on board their feedback on their day-to-day experience of their duty holders, the way that their buildings are managed, and how they are kept safe in their homes.
Kate Osborne
Thank you. That is really helpful.
Peter Baker: The residents will be hardwired into our governance. We will have a residents panel under the Bill.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Richard Silva and Kieran Walker gave evidence.
The Chair
We will now hear oral evidence from Richard Silva, executive director of Long Harbour, and from Kieran Walker, technical director of the Home Builders Federation. We have until 10.45 am for this session. I ask the witnesses to introduce themselves for the record.
Kieran Walker: Good morning, I am Kieran Walker, technical director for the Home Builders Federation. I have worked in the house building industry, most notably for public limited company house builders, for the last 17 years. I joined the HBF in the last two and a half years.
Richard Silva: Good morning. I am Richard Silva, the executive director of Long Harbour and our associated company, Home Ground. We invest in and manage 190,000 leasehold interests across England and Wales.
Daisy Cooper
Q
“We all know that these problems have been caused by historic regulatory failures, dating back decades. We need to be careful that the solution doesn’t simply absolve the Government of its responsibilities and pass them on to consumers, whether that’s existing or future residents.”
If that is not the solution, then what do you think the solution should be?
Richard Silva: Thank you for the question. It goes to the heart of our role in this sector. As a freeholder, we do not develop, build, design or sign off on these buildings. We effectively, under the new regime, take ownership of them post gateway 3, when they are fit for occupation. The Bill, in many respects, is an excellent starting point and provides a good framework for looking forward. The problem is, what are we going to do about the existing stock that is in a mess? Our view is, simply, that there are three areas where this should be addressed.
The Government should be commended for trying to fix a problem that successive Governments have caused through a defective regulatory regime, whether that is from a construction perspective, or by signing off on materials and building systems. In that context, I think the Government should underwrite the process of fixing the existing stock.
That is not to say that taxpayers should foot the bill for everything. The Government should take responsibility —they are starting to do that through the presentation of this Bill—and then look at recourse from those who created the mess. The Government’s culpability lies in the regulatory regime and the failure there, although there are bad actors in the construction industry and the product manufacturing industry, and the Government should go after them to recoup as much of the investment as needed to bring existing stock up to standard.
There is a final and third point that will be less popular from a leaseholder perspective, but it is important to articulate. When investigations are made into an unsafe cladding system in a defective building, and the cladding is taken off, other historical problems will be identified. Not all of those are caused by shoddy workmanship or defective materials; they may be due to a lack of investment in the life cycle and maintenance of those buildings. We advocate a mandatory reserve regime—a bit like in the States—in which a periodic assessment is carried out independently, not by the managing agent or building owner, which in this context could be a commonhold association, a residents’ management company or right-to-manage company, or a freeholder, but by an independent assessor, who looks at short, medium and long-term requirements for reserve funding and regular life cycle maintenance for that building. The leaseholders then contribute to that over the super-long term, based on various apportionments under the service charge regime.
This is a long-winded answer, but it is an important point. For example, every 25 years, a block of flats will need a new roof; it is not a building safety issue, but a maintenance issue. If someone lives in that block for 20 years and then sells, but no provision has been made, is it fair for the buyer to be hit with a massive bill a few years later, when they have not enjoyed the life cycle of living there? Anyone who owns a property should make that provision, and it should be mandated as opposed to voluntary.
Mike Amesbury
Q
Richard Silva: If you are referring to whether building owners should pay to fix the existing stock, a distinction should be drawn between the responsibility for maintaining the existing stock and the liability to pay; I covered the liability to pay in my previous answer. The responsibility should absolutely lie with the accountable person, under the new regime. Historically, the accountable person has been either the freeholder, where there is a two party lease, or, where the building is resident-controlled—as roughly two thirds of our portfolio is—the RMC or the RTM. In the future, when the Law Commission’s proposals are brought into legislation, it could be the commonhold association. They are responsible, with emphasis on the word “responsibility”, for the maintenance and repair of buildings. It is a complicated answer, but it does go to the Building Safety Bill, and the question of who will be accountable in the future.
It is an interesting debate. We have to ask ourselves whether members of an RMC or a commonhold association have time, expertise and willingness to do that work. Certainly, our research suggests that people do not want to do it, for a whole bunch of reasons. Forget criminal and civil liability—it is about having the time. People have other things to do. In the context of the Bill, among the wider Government reforms on leasehold, we need to focus on the fact that the role of the freeholder will become redundant. That is unambiguous from the leasehold reform agenda proposed. That means that the work done by my building safety team—it includes chartered fire engineers and surveyors—for the leaseholders and at no cost to them, save a modest ground rent, will become redundant. So this part of the Bill needs to be really carefully looked at. Who wants to do this role, absent the professional landlord?
Kieran Walker: I would be inclined to agree with Richard on the accountable persons piece, moving forward. If I understood the question correctly, you are really asking whether costs are fair and proportionate for historical issues and for historical defective buildings. It is very difficult to answer, if I am honest with you. As has been mentioned already this morning, you have some really good practice going on in the industry in terms of the developers and construction companies, and you have some culprits in there as well. We know that as a trade body and as an industry. Similarly, the manufacturing process and the manufacturing companies also have some culprits.
It is difficult, therefore, to nail down whether costs are fair and proportionate. Obviously, as of next year, our industry will feel the impact of the residential property developer tax, as well as the building safety levy. Time will tell whether that is fair and proportionate. Obviously, the building safety levy is subject to consultation at the moment. I think that closes in mid-October and we are busily compiling responses to it. Within that scenario, some companies, responsible persons and organisations will pay part of, some of or none of the building safety levy, while others will pay the full residential property developer tax as well.
Time will tell whether costs are fair and proportionate, but I certainly think that things are moving in the right direction in respect of the Bill itself and in terms of levying costs.
Ms Rimmer
Q
Richard Silva: It is a very good point. We engage with a lot of the managing agents who manage our blocks on a day-to-day basis and I think that there needs to be clarity on this point in the Bill. A separate regime for levying a charge to residents living in a block comes with cost and complexity; people need to understand what it is for.
It is a difficult one. There is service charge legislation in existence. There is a regime for it, with all of the reasonableness tests, information, budgeting, finalising of accounts and so on. I think that is probably quite a neat place for the building safety charge to become a specific sub-item within the overall service charge budget. Then, you are not really giving residents extra information—they are not understanding what the extra charge is really for—and it also helps to mask any chasm that might be in place between life-cycle maintenance and building safety maintenance, and where there is a crossover. It can become a bit ambiguous.
So long as the regime is clear, understood and, frankly, does not increase the financial burden on people living in their own homes, that is where the focus should be.
Ms Rimmer
Q
Richard Silva: The way that I read the Bill, the historical costs are, to be frank, left firmly at the door of the leaseholders, so it does not protect them at all. Again, this goes back to my first answer to Daisy Cooper: there are probably more equitable ways of trying to get the existing stock up to scratch.
Once all of the stock is where it should be, with a full suite of goals and a set of further information, with a clear and unambiguous accountable person and a building safety manager appointed—let us assume that it will take 10 or 15 years to get all of that infrastructure in place for existing stock—I think that the regulator’s role will cover all stock, whether existing or new build. But the transition period is really important—there is not enough clarity in the Bill, frankly.
Ms Rimmer
Q
Richard Silva: There is lack of detail at this stage. Clearly, the service charge legislation gives residents that means of redress and the ability to query and question stuff. If that is replicated in the building safety charge regime, wherever that sits ultimately, whether in this Bill or other existing legislation, hopefully that will be fit for purpose.
Theo Clarke (Stafford) (Con)
Q
Richard Silva: The Bill is an excellent framework in lots of different areas, but it is a framework. As Justin Bates said in his evidence last week, it is a good and admirable starting point but there are lots of areas, lots of limbs within the Bill, that, quite understandably, because we cannot foresee every situation, will need to be dealt with as specific areas are developed and understood, consultations undertaken, experts work with MHCLG officials, and so on, to bring precise details of policy forward. I am not an expert in the certification and qualifications arena, but you have heard from the previous panel and you had fire experts last week.
What I do know is that, in our business, meaningfully and more explicitly post Grenfell, but for longer than that— in our resident engagements, we interact with 90,000 residents every year at some level—we have put in place a specific and dedicated fire life safety team in HomeGround. In that team, there are chartered fire surveyors, ex-London Fire Brigade officers, building surveyors and a small legal team. Their role, in collaboration with our estates management team, is to work closely together.
Our estates management team will basically audit all the managing agents who are responsible for the day-to-day running of our blocks around the country. Where there are clearly some deficiencies in, for example, fire risk assessments or, frankly, poor stewardship by the managing agent—that happens in all industries—our fire life safety team will go in and work with the managing agent to put special measures in place to get that building fit for purpose. That comes at a cost. Some of these things, by the way, are just bad life-cycle maintenance stuff—things that should have been replaced five years ago. That is a legitimate cost for the residents who live there.
That team has been inundated over the past 18 months. We have been trying to secure funding from the building safety fund and the ACM cladding remediation fund, which are very welcome funding pools, to get the bigger picture and to get the higher-risk buildings fixed. We have gone out and hired the best people we can find—by the way, it is a tough market out there, because not a lot of people are qualified to do a lot of this stuff—but until there are more specific guidelines from the regulator and the regulatory regime on what the qualifications need to be, I do not know whether they are fully qualified or not.
Kieran Walker: I would reinforce the point that Richard has just made. As we have seen with the communal wall service—the EWS1 form and the cladding external wall system—and its evolution since July 2019, it has been difficult to get hold not only of people but of people who can then be insured to carry out things like EWS1 surveys or fire assessments in the first place. There is a real shortage of people out there who are able to undertake that. Again, to reinforce Richard’s point, it is quite ambiguous as to exactly what qualifications are needed/accepted if we are going to undertake the assessments.
Theo Clarke
Q
Kieran Walker: For me, our membership and our industry, it would be the gateway 2 side. The Bill proposes that all information for gateway 2—meaning, in effect, post-planning, post-reconstruction and moving to detailed design—be submitted early doors, at the initial stage. Historically, the industry works with a number of contractors, suppliers and designers, and tenders information on a live basis. In order to get all that information delivered up front as developers enter gateway 2, quite a bit of information will have to be designed and procured at risk during that transition between gateway 1 approval and going to gateway 2. Within that, given the subcontractor market and potential changes in materials due to imports, exports and price fluctuations, you could end up having to revisit change management and the gateway 2 process and to go almost in a circular manner back to the regulator to seek change and improvements.
We would like to see—as we currently see, to a certain extent—a number of approved inspectors in the industry where we have a staged planned submission and staged planned approval process based on your sub-structure, superstructure, finishing trades, mechanical, electrical, finishes and cladding.
Ian Byrne
Q
Kieran Walker: I will answer the first question first, if I may. I certainly think that the Bill will change the culture of the industry and make clearer the key stages— the milestones—for people in the process of building the buildings in scope or tall buildings. In the past, quite ambiguous information has been submitted and responded to in the planning stage, which does not necessarily regulate, mandate or cover key items such as vehicle access tracking or incumbent water pressures in the proximity of those buildings.
Within gateway 2, I think we will see a lot more stringent approaches to material information and detail design being submitted to the regulator. That is a positive thing. In terms of duty holders and clear lines of responsibility, I definitely think that that is positive. As an industry, we support that clarity and those clear and mandated lines of responsibility and communication. I think we will see an improvement in the industry as a whole, and the key to that is the fact that we have this clear framework.
It is difficult to answer your question about special purpose vehicles, to be honest. I am not trying to avoid an answer, but we do not necessarily have much information on special purpose vehicles. How they are regulated and administered is quite varied. We have worked with a number of special purpose vehicles in the past, but going back to my first point, I think that the Bill will make lines of responsibility and regulation a lot clearer for them, to avoid the potential and opportunity for them to disappear as soon as the keys are handed over to the final property in the block.
Ian Byrne
Q
Richard Silva: On the second point about the special purpose vehicles, whoever incorporates an SPV to develop a higher-risk project that the Bill is aimed at, ultimately the regulator will say yes or no. It is the regulator and the regulatory regimes for gateways 1, 2 and probably 3 —fit for occupation—that will ultimately say, “Yes, this process has worked. That SPV is fit for purpose and will deliver a solid product.”
The problem is what happens in the future if, God forbid, something slips through the net of the regulatory regime or fails. When these things do fail, you know about it only over time. The Bill extends the provisions of the Defective Premises Act 1972 so that you have 15 years to go after developers, as opposed to six. That is all well and good, but in the real world it will have limited or minimal impact—it will be the same—for anybody who needs to take advantage of that new provision.
The Bill’s proposed regulatory regime is robust—details will follow, obviously—but ultimately, the regulator can have sanctions on it. If a large plc housebuilder that has, historically, built mixed-used, large-scale developments—high-risk buildings, in the context of the Bill—through a series of SPVs, the regulator will have to have an opinion on that, I am afraid.
Selaine Saxby (North Devon) (Con)
Q
Kieran Walker: I think the key lessons are really about getting information and clear lines of communication as quickly as possible. The introduction of the Bill is, as I have mentioned, welcomed by our members and the industry as a whole, because it gives clear a framework and responsibility for duty holders, as well as a process that I do not think we have had in the past. I do not think that is necessarily the fault of industry. In the past, it has almost been an assumption that A will follow B will follow C—that is part of the lessons learned. Mistakes have been made in the past, not just in the house building industry but across the piece, to be honest. The main lesson learned is that we should perhaps have had that framework sooner, but hindsight is a wonderful thing—we are where we are in that respect. Would you mind repeating the second part of the question, please?
Selaine Saxby
Q
Kieran Walker: I think resource and expertise are a big part of this, as is generally having clear and defined methods and processes in perpetuity for the handover of buildings. In the past, we have seen quite loose arrangements in that respect, from developers to management agents. I also think that expertise and training the skills in the sector are important, not just in the latter ends of the building management side, but within local planning authorities, so that planning officers and planning departments understand better the implications of tall buildings, whether from an access perspective, an evacuation perspective or any other matter.
In the detailed design phase, as we will see moving forward, we will need to upskill very rapidly the expertise and resource within the regulator itself, because it is a very complex niche of the market—tall buildings, fire and structure are not just a black-and-white area; it can be quite grey. The upskilling of the workforce, from professionals right down to skilled trades, is one lesson that I think we can all learn.
Kate Osborne
Q
Kieran Walker: There could be more—I would be keen to see more and our industry would be keen to see more. There is probably more to come through secondary legislation on the duties of key roles and responsibilities, as well as on the golden thread. I agree that we could see more there.
Kate Osborne
Q
Kieran Walker: Subject to resource and expertise being there from the regulator’s perspective, I think the industry is ready. Gateway 1—the planning stage gateway—was introduced on 1 August. Developers that are now constructing or going through planning submissions, or that are in the planning process, will be complying with gateway 1 as we understand it. I am not seeing that developers are suddenly baulking at the issues. A lot of the information in gateway 1—
The Chair
Order. Kieran, I am sorry to cut across you, but I am afraid that that brings us to the end of the time allocated for the Committee to ask questions. I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Councillor Jayne McCoy and Andrew Bulmer gave evidence.
The Chair
We will now hear oral evidence from Councillor Jayne McCoy, deputy leader of Sutton Council and chair of the Housing, Economy and Business Committee of London Councils, and from Andrew Bulmer, chief executive of the Institute of Residential Property Management. For this session, we have until 11.25 am. Please will the witnesses introduce themselves for the record, starting with Andrew, remotely?
Andrew Bulmer: Andrew Bulmer, chief executive of the Institute of Residential Property Management. The IRPM is a professional body of 5,000 members who are qualified to various levels from level 2 to level 4. They manage big scary residential buildings, both leasehold and in the build-to-rent sector. We do not have firms as members. Our membership is confined to individual professionals.
Councillor McCoy: Good morning, I am Jayne McCoy. I am here representing London Councils.
Daisy Cooper
Q
Daisy Cooper
Jayne first, please.
Councillor McCoy: London Councils feels that the scope of the Bill needs to be expanded. We think that the focus on height is a rather rough approximation of risk. As we know from experiences in Bolton, in Samuel Garside House in Barking and Dagenham, and in my ward, Worcester Park, we have had fires in buildings under 18 metres that would have resulted in loss of life if it had not been for luck—it was a matter of minutes. We know that there are fire safety risks in buildings under 18 metres. We think that height should not be the only approximation for risk.
We think all new buildings—so all heights—should be covered by the Bill. For remediation purposes, we think a risk assessment tool should be applied to look at the holistic assessment of a building. I think a tool is being developed in response to the Fire Safety Act that could be adapted and used for this measure.
Andrew Bulmer: In conjunction with the Fire Safety Act and noting that this Bill now extends its tentacles to below 18 metres for some limited functions—fire risk assessments and identification of a responsible person—the scope of the Bill is wider than it was and I feel it is a good place to start.
Mike Amesbury
Q
Councillor McCoy: A lot of additional clarification is needed regarding the accountable person, the building safety manager and their responsibilities. A lot of detail is required. We need that detail and clarification because the industry, including councils in particular, needs to gear up to meet those responsibilities. Until they know what those responsibilities are, they cannot effectively gear up and commit the resources.
In particular, I would talk about the skills within building safety management. There is a lack of skills out there at the moment. There is a lack of resource out there at the moment. We cannot recruit as a council. My council cannot recruit to building control at the moment because people are not out there. Until we have clarification about what the skills are, and a framework for that, we cannot build up the capacity and skills needed. I would also flag that councils need the resources to be able to do that, because an awful lot of burdens are falling on councils.
Andrew Bulmer: I concur with the councillor. There is a lot of detail in the regulations, especially when it comes to the role of the building safety manager. We would like to see the regulations brought forward. They can either go in the Bill or be introduced promptly. Until then, we are operating a little one-handed. We are anxious to prepare and gear up for this, but without that information we are struggling.
That is one thing that is missing from the Bill; the other is protection for leaseholders from historical building safety defect costs. We understand that the Bill has to be written in a way that allows the reasonable costs of safety maintenance going forward to be recovered. That is fair and reasonable, but at the moment there is no protection for leaseholders from existing building safety failures that they did not cause.
Ms Rimmer
Q
Councillor McCoy: We have some concerns. You are right that timeliness is key. It reflects the points that I made earlier about having time for industry to gear up. There needs to be a proper, informed transition period. That is London Councils’ view. There needs to be a transition period that allows time for the capacity to be built. It needs to be fully funded, and there needs to be prioritisation within it. Obviously, we are very keen to see the safety measures implemented as soon as possible, but there needs to be a prioritisation of high-risk buildings in the meantime. That goes back to a holistic assessment of those buildings. We think that we need a transition period of about five years, and we need that clarity as soon as possible.
Andrew Bulmer: I am relatively unexercised about whether it is done through enabling legislation or written in from day one; what I am exercised about is getting the regulations delivered quickly. We are trying to prepare for the future regime. Dame Judith Hackitt called for a culture change and we, as an organisation, are driving that hard into our membership. They are receptive, and wish to adapt and move to the new regime as quickly as they can. It is difficult to prepare without the information, so I am less concerned about the mechanism; I am just concerned that we need to see the rules.
Ruth Cadbury
Q
Andrew Bulmer: I will lead with that one, Chair. I think that question was directed at me. I will come back to what needs to be in the Bill. The commentary behind this is that there is a clear and understandable push through the Law Commission and through the work being done by Government to vest the freehold or commonhold interest or the management of the development in the hands of the residents themselves, who thereby have democratic control over their development, and we find the logic of that compelling. The challenge is that it means those residents will be in charge of their own affairs. We can see in the example of Miami—the building that collapsed there—that the residents association was challenged in terms of its competence to manage the building safely. That does not mean that we abandon the adventure. I think we progress with it, but we progress with our eyes open and that means we have to support those directors.
I would like to see a support mechanism for directors who wish to actively manage their own affairs, so they can feel supported and get guidance where they need it. There would also need to be support for those directors in terms of quality assurance of their suppliers. For building safety managers, for example, it is important there is some form of a register of quality assurance. We would like to see the managing agents they will depend on being regulated as per Lord Best’s RoPA report.
In the Bill, there would need to be the option for directors to decide if they choose—purely optional—to appoint an external director to take on the role of the AP or principal accountable person. The danger is that lay directors will look at the risks involved, and they will all step back and not take up directorships. That is already happening and is already a significant problem.
Every property manager will tell you that it is difficult to get directors to come forward these days as the responsibilities become clear. When the responsibilities of the Building Safety Bill are made clear to those directors, we expect it will be difficult to get people to take up those responsibilities voluntarily, unpaid and without the necessary expertise or competence to fulfil them. The ability to appoint an external director would be likely to mean overriding the articles of association of the development and implying covenants into the leases to enable the external director to be paid for. It would require protections for leaseholders from a director who went rogue. These provisions would need to be in the Bill to enable leaseholders to outsource their responsibilities to a professional if they chose to do so.
Daisy Cooper
Q
Councillor McCoy: Yes, London Councils and the Local Government Association have worked with MHCLG all through the process since the Grenfell Tower tragedy to help shape the legislation. Obviously, a lot of the time we are responding to things, but we are trying to feed in and push. I would flag up at this point that London Councils would like to see a wholesale review of the building regulation framework.
At the moment, the Bill addresses and improves the existing regulation. We have been pushing quite hard for a wholesale review across all the legislation, which is a bit more in line with the Dame Judith Hackitt report. However, we have been working closely throughout to assist and get the best out of this, and, yes, we have been working with the Health and Safety Executive. We are quite pleased with our progress so far and the way it has been coming across to the HSE.
We would like to see a requirement that the HSE works with the local authority’s building control regulator, local councils and the fire authority in the first instance—that they call on their expertise—because that helps us as London Councils to build our capacity and resources. That is important, as are the resources to go with it, and I do not think we have had any firm commitments to those resources. We keep making the case that we are going to need to bring those resources forward. I would just emphasise that making this Bill deliverable and achieving its aims of improving building safety cannot be done without the staff and skills required, and we cannot upskill without the funding to do that. To make it practically deliverable, it needs to be fully funded.
Ruth Cadbury
Q
Andrew Bulmer: The wider comment on the PI insurance market is that it is in serious difficulty, and has been for some time. Any professional who is giving advice on building safety, especially fire safety matters, is having their premiums either severely increased, cover withdrawn entirely, or significant restrictions placed upon them, so accessing any professional on a fire safety matter at the moment is problematic. You used the phrase “duty holder”: if that were to refer to an RMC, for example, I cannot comment on PI insurance for RMCs. I think that is something that requires further investigation.
Ruth Cadbury
Q
Andrew Bulmer: I see problems arising in so far as it is complex, and I can see litigation taking place as to who is the principal accountable person. That said, I am struggling to see what a better model could be. We may have to live with the complexity.
Mike Amesbury
Q
Councillor McCoy: Yes, particularly in relation to the scope of buildings within the gateway scheme. At the moment, buildings that followed a permitted development are not covered by that, so we particularly want to make sure that all buildings are covered by the gateway process, otherwise a raft of buildings are out of that scope. It also needs to align with any future legislation: the planning reform White Paper contains some serious concerns for us, because it effectively puts swathes of large areas into permitted development and takes them out of the regime. The gateways have to apply to all buildings, or all new buildings.
Rachel Hopkins (Luton South) (Lab)
Q
Andrew Bulmer: The building safety charge is problematic. The fact that payment can be demanded within only 28 days will make it difficult for a leaseholder to investigate and mount a challenge. You should not challenge until you have sought further understanding. Then, if you are not happy with the information that you have, you need to mount a challenge, but 28 days is not long, so there is a problem with that.
The building safety charge itself is a flawed concept and we would like to see it gone. Running a separate service charge regime means that there will be additional tasks, which means additional costs, and it will be the leaseholders that end up paying for that. Introducing a new regime also introduces a lawyers’ charter. The existing service charge regime is decades old. For many decades we have found ourselves testing the meaning of words in different circumstances, and much of service charge law is case law. If we introduce a new regime, we restart the clock.
Also, we have an existing service charge regime, which I know is not perfect—far from it—but health and safety matters will be included in that, so we will be in a situation where the resident will receive two different bills: the building safety charge for health and safety, fire safety and structural, and then another bill for a whole service charge, which will include other health and safety works, as well as any remediation that the building safety charge regime has brought up. The consumer will be nothing but confused while paying for a more expansive and complex regime. What I would prefer to see in the Bill is the existing service charge regime finessed in a way that brings more standardisation and clarity to the consumer about what the Bill includes.
Ian Byrne
Q
Andrew Bulmer: If you have a professional third-party landlord, it would be reasonable; that is their job. If you are a lay director of an RMC and you are the principal accountable person, you may be a highly intelligent and thoughtful individual—perhaps a surgeon or the lead violinist at the London Philharmonic Orchestra—but you are not a property expert. It takes two to three years to qualify as an IRPM member just to level 4, and it is a complex thing. I do not see how the majority of lay directors will truly have the knowledge and competence to be able to discharge their responsibilities. They will be heavily dependent on advisers. If we are going to be democratic and empower our people to be masters of their own destiny, which I support, we need to make sure that they are protected. I would like to see a quality assurance regime for the building safety manager and for property managing agents, who will be the go-to people for recommendations and for all matters property. I would like to see them regulated.
Ian Byrne
Q
Councillor McCoy: It is essential that there is an accountable person. Trying to find somebody to hold to account for some of the failings that have gone on has been problematic. There needs to be clarification about whether that will be an individual person. It can be an organisation or a representative of the organisation, particularly where councils are landlords, but we need to know who that person will be. Will it be the chief executive or the housing portfolio holder? We need clarification about who that should be. Obviously, they will need to be supported with expertise and skills, and I would expect them to rely on external sources for that expertise; it is important. There are also issues with special purpose vehicles, which have quite complex ownership. To ensure that the work is done and someone is held responsible for getting it done and for ensuring the building is safe, there needs to be a clear line of accountability.
Kate Osborne
Q
Councillor McCoy: That is a key concern of London Councils. We welcome the additional powers that have been put in here, but we do not think they go far enough, especially given that, when you are trying to deal with safety issues, you want to deal with them quickly. At the moment, if people are not co-operative, you have to take people to court and get the access that way. It places some responsibilities on residents, but for an accountable person to be fully accountable for the safety of the building, it has to cover all areas.
We have a problem currently. A leaseholder of a flat in a large building could have all sorts of problems within the flat that, in theory, compromise the safety of the whole building. No one can be accountable for that if they cannot even access the property, so we think that needs to be looked at and worked on with the industry in order to figure out how to address that problem. Without those powers, a person cannot really be held accountable.
Andrew Bulmer: We take a similar view. Ultimately, you are balancing safety against somebody’s right to deny access to their home, and Ministers must decide whether you have to have a court order to go in. That is how it is written now. Getting a court order can be slow, expensive and obstructive, but perhaps that is the right approach if we are to respect people’s rights to the privacy of their own home. From a property manager’s point of view, being purely selfish, it would be much easier if the Bill were written so that we could just go in, but we must recognise that that is potentially an infringement of liberty, and that is for Ministers to decide.
Shaun Bailey
Q
Councillor McCoy: Embedding a culture of the tenant’s or resident’s voice being heard is important. That is the key thing, and it is probably not addressed sufficiently in the Bill. We have heard feedback about ensuring that the tenant’s voice is there. The Government giving a strong line that the tenant’s voice should be heard is what the industry needs in order to listen. We think councils are reasonably good at doing that, although not all are perfect, but we want to protect and talk to our residents and tenants, and engagement is a key part of that. My view is that there should be a clear ambition and steer in the Bill that the tenant’s voice should be heard, so that any issues of fire safety raised are taken seriously, maybe with a formal process involved.
Shaun Bailey
Q
Andrew Bulmer: You use the word maximise; I would use the word optimise. We are working with HSE on the customer engagement piece, and it is quite interesting. We have voices that say, “We want as much communication as possible,” and others that say, “Actually, we don’t want to be communicated with all the time. Just go and do your job.” Different audiences and different individuals will want communicating with in different ways, so I think the challenge for the industry is how we communicate in a way that meets the various needs of our customers.
If you look back at property management through the ages—I am going back many decades—a property manager was a servant of the landlord. The culture shift towards consumerism within the leasehold sector is now all but complete. Long since now, property managers very much understand that it is service charge payers who are paying for the service, and that they are the customers. That is a culture that is well embedded now in the majority of the industry. While we have seen examples of poor practice—like you, I have seen them myself—the direction of travel toward good practice is encouraging. I can certainly say that our members will be keen to understand the outcomes of the HSE project on customer engagement.
The Chair
If there are no further questions, I thank the witnesses for their evidence. The Committee will meet again at 2pm this afternoon, back in the Boothroyd Room, to continue taking oral evidence.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Health and Care Bill (Fifth sitting)
Tuesday 14th September 2021
(3 years, 3 months ago)
Public Bill CommitteesRead Full debate Health and Care Act 2022 View all Health and Care Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 September 2021 - (14 Sep 2021)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is permitted during sittings of the Committee, except for the water provided. I encourage Members to wear masks when they are not speaking, in line with the current Government guidance and that of the House of Commons Commission. Please also give each other and members of staff space when sitting and when entering and leaving the room. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. That shows how the selected amendments have been grouped together for today. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments take place not in the order they are debated but in the order they appear on the amendment paper. The selection and grouping list shows the order of debate. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses of the Bill. Members wishing to press a grouped amendment or a new clause to a Division should indicate when speaking to it that they wish to do so.
Clause 1
NHS Commissioning Board renamed NHS England
Justin Madders (Ellesmere Port and Neston) (Lab)
I beg to move amendment 18, in clause 1, page 1, line 5, at end insert—
“(1A) The Board of NHS England shall be made up of—
(a) a Chair appointed by the Secretary of State,
(b) five other members so appointed of which—
(i) one shall be appointed to represent Directors of Public Health,
(ii) one shall be appointed to represent the Local Government Association,
(iii) one shall be appointed to represent the interest of patients,
(iv) one shall be appointed to represent the staff employed in the NHS, and
(v) one shall be appointed to represent the Integrated Care Partnership.
(c) one further member shall be appointed by the Secretary of State after being recommended by the Health Committee as a person with appropriate knowledge and experience,
(d) executive members as set out in Schedule 1 of the Health and Social Care Act 2012.
(1B) In making the appointments in (1A) (a) and (b) above the Secretary of State must have due regard to—
(a) the need to ensure diversity and equality of opportunity and must publish a list of at least 5 persons considered for each appointment and the reasons why the particular individual appointment was made, and
(b) that no person who could be perceived to have a conflict of interest by virtue of their current or recent employment or investment holding in any organisation with any role in the delivery of services to the NHS may be considered for appointment.”
This amendment changes the makeup of the Board to acknowledge its new role in the integrated NHS and bringing representatives as non-executive members on the Board as with integrated care boards.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
That schedule 1 be the First schedule to the Bill.
Justin Madders
It is a pleasure to serve under your chairmanship today, Mrs Murray, and to serve on the Bill Committee.
The amendment was moved in my name and that of my hon. Friends. The Minister whom I shadow is helpful—we will see how helpful during the course of proceedings—and we start in a spirit of optimism. I am grateful for the support of my colleagues on the Opposition Benches who, between them, contribute some relevant and highly knowledgeable experience. They are all passionate, as we all are, about the national health service and the care system, which are the subject of the legislation.
With your indulgence, Mrs Murray, I take this opportunity to make a few short points about the general context of the legislation. First, this is an important Bill. It could easily have been two or three pieces of separate legislation, so it requires proper consideration. We have a concern about whether enough time has been allocated to deal with everything in the detail that we would like, but we will do our best to get through it. We intend to make our contributions short but relevant and, we hope, persuasive.
Secondly, we share the apparent desire of the Government to repeal the worst aspects of the disastrous Lansley Act. Many of our amendments will be directed at trying to ensure that, in doing so, the baby is not thrown out with the bathwater. Thirdly and finally, as stated by the chair of the British Medical Association in the evidence sessions last week, we remain of the view that the Bill is the wrong Bill at the wrong time.
The amendment seeks to define the composition of the board of NHS England to align better with what we see as the new requirements set out elsewhere in the Bill. In looking at the issue of who should be on the board, we all ought to agree that it should not be open only to the friends and relatives of Ministers. Board members in our view should be subject to more independent assessment of their value and must pass at least some fit and proper test to avoid obvious conflicts of interest.
The amendment would ensure that the key influences on the board come from public health, local government, the patients themselves and the staff, without whom the NHS does not exist. At this point, I take the opportunity to place on the record, as I often do, Labour Members’ thanks to those in the NHS who have been so magnificent, not just over the past couple of years but over many years. They deliver a service that is rightly a source of great national pride. They deserve a seat at the table, as do patients. The Bill does not do enough to amplify the patients’ voice. We will be discussing a number of amendments over the coming weeks by which we will hope to change that.
We also need to look at what NHS England mark 4 will be required to do if the Bill becomes an Act. Other parts of the Bill deal with the powers and duties of this new version of NHS England, originally the NHS Commissioning Board. It is, in many ways, the pinnacle of the reversal of the Lansley position. The new NHS England does not bear much resemblance to what was envisaged under the Health and Social Care Act 2012. That is a good start, but one aspect of the Lansley view—that the NHS requires some degree of operational independence—has been shown to have some merit. Every clock is right at least twice a day, and we have found the one piece of the 2012 Act that proved to be correct. We will discuss some amendments later on to limit the power of Ministers to interfere with those who we believe should be operationally independent.
The new NHS England is pretty much in place anyway, as a result of the actions of those managing the NHS over the last few years. They desperately and very innovatively at times tried to find ways to circumvent the edicts of the 2012 Act, while Ministers looked on passively. It has been an unusual and interesting passage of time in the history of the NHS. We have seen legislation simply ignored and Ministers have allowed that to happen. It is little wonder, given the experiences of the 2012 Act, that many of the NHS witnesses we heard from said they wanted as little prescription as possible. They have had their fill of prescription. We would differ, I think, on the level of prescription necessary in the Bill.
New NHS England will be an amalgamation of the old NHS England, Monitor and the NHS Trust Development Authority. It will commission some specialist services. It will be the regulator, regulating a market that no longer exists. It will performance manage both commissioning by the integrated care boards, which, for the purpose of brevity, we will refer to as ICBs, and the provision of services by trusts and foundation trusts. I am afraid that how that wide range of responsibilities sits with the role of the Department is as vague as ever. The ability of Ministers and others to interfere and micromanage depends on whether the rest of the Bill survives in its current form.
Above all, the board oversees the operational running of the NHS, shaped by the mandate, which gives the direction of travel. Perhaps the most crucial policy change is that new NHS England sits at the top of the system, based on the integrated care boards as the major commissioner of services. That means who sits on the board is highly relevant.
The explanatory notes and the Government pronouncements about the new integrated bodies strongly assert that the role is to drive the reintegration of the NHS, repairing the worst of the fragmentation caused by Lansley and, I hope, once and for all, ending the obsession with marketisation, which has been shown to be a failure. We need board members on NHS England who might be seen to be more in tune with the new philosophy of partnerships and collaboration—not markets and competition, not business leaders, hedge fund managers, marketing experts.
In the new world, we want the NHS to be bound by its core principles—comprehensive, universal, free and funded from general taxation. That is a topic that we may touch on later; it may also be discussed in other business of the House today. What should be valued in board members is that they have some record of commitment to those principles. They should have some claim to be aligned to the new values, which favour a stronger role for patients; the public to have influence; a view that the NHS is contributing to reducing inequalities, as well as improving wellbeing; and the greater alignment of NHS services with local government.
The current make-up of the board is, put simply, the chair plus five other non-executives, all appointed by the Secretary of State, and then of course the appropriate executive directors. This amendment deals only with the non-executive directors. Given the huge importance of the NHS, it is appropriate that the chair and at least some of the non-executive directors are appointed by the Secretary of State. We will concede that. In another world, perhaps they could be elected in their own right, but we will not be travelling down that road on this occasion. However, we cannot ignore some of the headlines over the last 18 months and the huge media coverage of quite blatant abuse of patronage in appointments in the NHS more generally in recent years. Cronyism, I am afraid to say, has become a default position, and we think that has to be challenged.
To be fair to past Ministers, the NHS itself can also appoint people for the wrong reasons, moving out disgraced leaders if they go quietly, only for them to re-emerge somewhere else in the system. If the NHS is an organisation—it is a stretch to use that term after the mess created by the 2012 Act—appointments should accord with the highest standards of fairness, and inclusion is notably absent, so let us change the approach. Let us set the tone from the very top and enshrine in law the kind of people whom we as a Parliament would like to see—not, of course, specifying individuals but setting out in general terms some of the main interest groups that contribute towards the NHS and that we think should be at the very top table.
The amendment therefore seeks to give some direction to the Secretary of State in making these appointments and to ensure that at least one non-executive director is put on the board through a genuinely independent process and is not simply placed there by the Secretary of State. The kind of representative appointments that we set out in the amendment should, in our opinion, really be the standard. We would hope to see a similar standard adopted for the ICBs. We should appoint people who can really contribute to the future, with direct experience across the board in terms of the integration that the Bill seeks to achieve. The amendment also sets out how the Secretary of State must appoint suitable people and be able to justify their appointments against some sort of standards.
I hope that the Minister will at least acknowledge that some of the recent questionable behaviour around appointments needs to be addressed. No doubt he will refute the allegation of cronyism, but he cannot deny that there is at least a very strong perception that that is what has happened with some appointments.
In conclusion, I draw attention to how the NHS has already, effectively, blatantly put up two fingers to this Committee and anything we might decide, because it has already decided for itself how it will appoint people to roles within the new integrated care boards and has appointed some already, with the remaining positions, as we have seen from newspaper headlines, up for advertisement. That does not actually do us any favours, because Parliament has not decided that that is what we want to do, but we will see whether we get to that point later. That is all I have to say on the amendment.
The Minister for Health (Edward Argar)
It is a pleasure, once again, to serve under your chairmanship, Mrs Murray. I fear—predict—that there will be occasions when the shadow Minister, the hon. Member for Ellesmere Port and Neston, and I may not be entirely of the same mind, but it is a pleasure, as always, to serve opposite him on this Committee, because I know that even where we may disagree, the debate will be measured and reasonable. I will address the amendment tabled by the shadow Minister and, in the same speech, clause 1 and schedule 1 stand part if that is appropriate and in order.
As has been the practice on numerous occasions in these Committees, I will start by expressing a view shared by all members of this Committee. It has already been expressed by the hon. Member for Ellesmere Port and Neston, and we join with him in expressing our gratitude to those who work in our NHS and in care services and—as he and I have often said in this place—all those, including in local government, who work in this space and have done amazing work over the past year and a half particularly.
As ever, the hon. Gentleman picked his example carefully in citing some of the witnesses whom we heard in oral evidence. As he will know, the overwhelming majority—possibly with only two exceptions—stated that this was the right Bill at the right time, albeit they may have picked up on particular clauses or elements. They did state that this was the right time for this legislation.
As the shadow Minister has set out, amendment 18 in his name and those of his hon. Friends seeks to make changes to the make-up of the board of NHS England, the provisions for which are currently set out in schedule A1 of the National Health Service Act 2006. It also outlines conditions that should be met in relation to the appointment process. I share his view that it is vital that robust governance arrangements are in place for overseeing public appointments. It will not surprise him that I refute his assertion that in the case of NHS England board appointments there is a so-called cronyism or a suggestion that any of those people are appointed on anything other than merit. However, I believe that those strong and robust governance arrangements are already in place for managing appointments to the board of NHS England. Those appointed already are deemed to be fit and proper people to hold those appointments.
The existing provisions, which the shadow Minister alluded to, setting out the membership of the NHS England board in the National Health Service Act 2006, provide the flexibility required for the fully merged NHS England to lead our more integrated health and care system. The clauses we will be addressing this morning in this part of the Bill reflect the evolution of NHS England and NHS Improvement and what has happened on the ground since they were originally formed. With this, we seek to create a legislative framework that catches up with where they are and is permissive, rather than prescriptive. That is something else the hon. Gentleman and other members of the Committee will have seen from the evidence sessions. Witnesses were clear that the Bill struck the right balance between permissive and prescriptive.
As we look to continue the fight against the covid-19 pandemic and, in parallel, prepare for the recovery of our health and care system, it is imperative that the most suitably experienced and knowledgeable candidates are appointed to the Board. I know the shadow Minister will share that sentiment. Unlike appointments to integrated care boards, the appointment of the chair and non-executive members of NHS England are rightfully public appointments made by the Secretary of State and managed in line with the governance code for public appointments and regulated already by the Commissioner for Public Appointments. The appointments are made on merit in a fair, open and transparent manner and in line with that governance code. They also require due regard to ensuring they properly reflect the populations they serve, including a balance of skills and backgrounds, supporting the Government agenda of promoting more diverse public sector organisations and board appointments.
The role of non-executives on public bodies includes helping set the strategic direction for the organisation, ensuring the organisation meets the highest standards of good governance and holding the executive to account for day-to-day business delivery. They come from a variety of backgrounds and bring a valuable range of skills and experience to a board position. It is important to note that they are not routinely or normally appointed to be representative of a particular sector or group. They are on the board in their own right and their independence in that context is paramount.
All public appointees are expected to uphold the standards of conduct set out in the Committee on Standards in Public Life’s seven principles of public life, as included in the code of conduct for board members of public bodies, and they must adhere to that. The code sets out clearly and openly the standards expected from those who serve on the boards of UK public bodies and includes a clear process for managing any conflicts of interest. The Commissioner for Public Appointments regulates those appointments to ensure they are upholding the values of that Government code and works with Government to encourage candidates from a diverse range of backgrounds to consider applying for such public appointments.
Finally, while I share the shadow Minister’s view that it is hugely important to have diverse representation on the board of NHS England and to ensure that diverse voices and viewpoints are reflected, the duty under section 13H of the 2006 Act already requires NHS England to actively
“promote the involvement of patients, and their carers and representatives”
without the specific need for a named non-executive patient representative. It is clear that comprehensive processes and codes are already in place to regulate public appointments such as those we are discussing in the context of clause 1 and amendment 18, as well as schedule 1, including on diversity, conflicts of interest and conduct in office. I emphasise once again that the role of non-executive members is not that of representing a specific or particular sector, which could be at odds with the independent and broad approach they are required to bring to the role.
I now move specifically and briefly to clause 1, which changes the legal name of the NHS Commissioning Board to NHS England, and also to schedule 1, which contains consequential amendments where the changes will take effect in another Act. Since 2013, the NHS Commissioning Board has been operating under the name NHS England, and I think it is fair to say that that is how all of us in this room, and the public, know it, rather than by the slightly clumsy name of NHS Commissioning Board. This move reflects what the public already regard as the body’s name. The organisation, including the new functions provided to it by the Bill, will continue to operate under the name NHS England; this clause aligns the legal and technical name with the operational and publicly used name for clarity, and updates associated primary legislation.
Justin Madders
I am grateful for the Minister’s response, although disappointed that he does not agree with my amendment; I fear that may be a regular experience over the next few weeks, but we will carry on in hope rather than expectation.
As a final response, I would like to reflect on the kind of people we currently have on the board of NHS England. This is not meant to be a criticism of them at all—they are all very experienced and talented people—but their experience is not in healthcare; it is mainly in things such as retail or finance. They clearly have great qualities, but if hon. Members look at what is in our amendment and the kind of people we say ought to be at the top table, it is clear from the past 18 months how critical a role those people play.
Take, for example, the directors of public health. They have been the unsung heroes of the pandemic. I certainly know my local director of public health much better now than I did at the start of 2020, and he has been absolutely magnificent. He has always been available and, along with just about everyone else in the public sector, the amount of work that he has put in is phenomenal. That breadth of knowledge and experience deserves a seat at the top table.
Similarly, there should be a representative of the Local Government Association. Obviously there is some overlap with directors of public health, but local government has been magnificent, as the Minister noted, during the pandemic. We know that the vaccine roll-out, for example, and the ability to dispense tests quickly have been down to the agility of local authorities working in partnership with the NHS and the voluntary community sector.
There should also be a representative for patients; it seems a little odd that their voice is not at the top table, and I say the same about a representative for the staff. We talk a lot in here about how much we value the efforts of the staff, but we should put that into practice by acknowledging that they deserve a voice at the top table.
Clearly, the Minister will not accept the amendment, so I will seek to withdraw it, but I think we have made our point clearly about the kind of people we think should have a say in how NHS England is run. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 2
Power to require commissioning of specialised services
Justin Madders
I beg to move amendment 36, in clause 2, page 1, line 9, at end insert—
“(1A) In subsection (1), leave out “it” and insert “the Secretary of State”.”
This amendment, with Amendment 37, NC20 and NC21, restores the duty on the Secretary of State to provide or secure the provision of services to that in the National Health Service Act 2006.
The Chair
With this it will be convenient to discuss the following:
Amendment 37, in clause 15, page 13, line 18, leave out “it” and insert “the Secretary of State”.
This amendment, with Amendment 36, NC20 and NC21, restores the duty on the Secretary of State to provide or secure the provision of services to that in the National Health Service Act 2006.
New clause 20—Secretary of State’s duty to promote health service—
“(1) The National Health Service Act 2006 is amended as follows.
(2) For section 1 (Secretary of State’s duty to promote comprehensive health service) substitute the following—
“Secretary of State’s duty to promote health service
(1) The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement—
(a) in the physical and mental health of the people of England, and
(b) in the prevention, diagnosis and treatment of illness.
(2) The Secretary of State must for that purpose provide or secure the provision of services in accordance with this Act.
(3) The services so provided must be free of charge except in so far as the making and recovery of charges is expressly provided for by or under any enactment, whenever passed.””
This new clause would restore the wording of section 1 of the NHS Act 2006, concerning the duties of the Secretary of State regarding the promotion of the health service, to its original form, before it was amended by section 1 of the Health and Social Care Act 2012.
New clause 21—Duties on the Secretary of State to provide services—
“(1) The Secretary of State must provide, in England, to such extent as he considers necessary to meet all reasonable requirements—
(a) hospital accommodation,
(b) other accommodation for the purpose of any service provided under this Act,
(c) medical, dental, ophthalmic, nursing and ambulance services,
(d) such other services or facilities for the care of pregnant women, women who are breastfeeding and young children as he considers are appropriate as part of the health service,
(e) such other services or facilities for the prevention of illness, the care of persons suffering from illness and the after-care of persons who have suffered from illness as he considers are appropriate as part of the health service,
(f) such other services or facilities as are required for the diagnosis and treatment of illness.
(2) For the purposes of the duty in subsection (1), services provided under—
(a) section 82A (primary medical services), section 98C (primary dental services) or section 114C (primary ophthalmic services), of the NHS Act 2006, and
(b) a general medical services contract, a general dental services contract or a general ophthalmic services contract,
must be regarded as provided by the Secretary of State.”
Justin Madders
These amendments and new clauses are significant because, if accepted, they will put an end to the seemingly endless arguments that we saw during the passage of the 2011 Health and Social Care Bill. There is a whole shelf of books pointing out the changes in wording in what became the Health and Social Care Act 2012, and how they marked the end of the NHS as we previously knew and understood it. Allegedly expert barristers—although I have never met a barrister who did not claim to be an expert in something—wrote articles about how that new wording changed everything. On the other hand, the Government explained that they had changed nothing, and had simply put the reality on the ground into words.
David Lock QC, a genuine expert on NHS law, said that this technical change attracted considerable and possibly misguided criticism, but it did not involve any substantial change in practice. However, as reported by the noble Lords, it caused considerable confusion and suspicion. This confusion revolves around what is included in the NHS; what defines the comprehensive NHS; and how services required for the NHS are to be provided. Over time, the NHS has had many different structural solutions for providing these services, and indeed we are on yet another iteration of such a solution—we will see how long this one lasts.
The debate on that change of wording took up days of the Public Bill Committee’s time—or, should I say, the first of those Committees, as they had two goes at it on the last occasion. Let us hope we do not suffer a similar fate. Following that, there were hours of debate in the other place. The issue was then considered by the Constitution Committee, and some sort of compromise emerged, with insertion into the 2012 Act of what became, in the end, section 1(3) of the National Health Service Act 2006, as amended, which said:
“The Secretary of State retains ministerial responsibility to Parliament for the provision of the health service in England”—
we hope that that is always the political reality, no matter the wording used in the legislation.
The extra wording proposed in new clause 20 sits within section 1 of the 2006 Act, and states:
“The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement—
(a) in the physical and mental health of the people of England, and
(b) in the prevention, diagnosis and treatment of illness.”
I will not read out the whole amendment, but I want to compare that section of the wording with that of the founding National Health Service Act 1946, which says:
“it shall be the duty of the Minister of Health to promote the establishment of a comprehensive health service designed to secure improvement in the physical and mental health of the people…and the prevention, diagnosis and treatment of illness, and for that purpose to provide or secure the effective provision of services”.
We have this curious word “promote”. To my mind, promoting puts a positive onus on the Secretary of State, but if he has a duty to promote a comprehensive NHS, how exactly should he do that? In 1948, did Nye Bevan drive up and down the street with a megaphone, urging people to go and see their doctor? Today, it would probably mean the Secretary of State sending out a tweet to do the same—although, given what we hear about GPs’ workloads, they would not thank the Secretary of State for that. Or does this duty mean that when we are in the Chamber, and some rogue Member claims that we should abandon the NHS and move to some kind of insurance-based model, the Secretary of State should leap up and promote away?
Over the past few years, even before covid, we have seen more and more people going for private treatment because waiting lists are so long. We know that whatever is decided in the legislation in the main Chamber today, those waiting lists are not going to reduce significantly for some considerable time. Is it in fact the case that the Secretary of State is not complying with his duty to promote the NHS by allowing these waiting lists to grow and grow, thereby forcing people to secure alternative provision? The word “promote” can have multiple meanings, and I can think of a few Secretaries of State who have lamentably failed to promote the NHS, and should probably not have been promoted in the first place.
The contentious bit of this issue is really about what makes up the NHS. It was claimed about the Lansley Bill, and has been claimed about this Bill, that the change in wording implies that people would be denied access to treatment from the NHS because, for example, an ICB decides to exclude a particular service, and there is no duty on the Secretary of State to stop that happening. A few points are clear enough: the Secretary of State promotes the comprehensive NHS, but does not provide it. The boundaries of what the NHS actually is change over time, as we all know. Social care is now outside the NHS, although that will probably alter slightly over the next few years. The National Institute for Health and Care Excellence can redefine the boundaries; primary care trusts and clinical commissioning groups could exclude treatments on a whole range of different criteria that, while they may not have admitted it, did amount to an exclusion; and of course, advances in medical science mean that many things that were not available in 1946 and, indeed, could not possibly have been conceived of during the original Act, are available now on the NHS. Those boundaries are never entirely clear, and it is often up to the courts to draw out a decision about what healthcare amounts to.
However, in the 2006 Act, there was at least a bit of definition in clause 3:
“The Secretary of State must provide throughout England, to such extent as he considers necessary to meet all reasonable requirements—
(a) hospital accommodation,
(b) other accommodation for the purpose of any service provided under this Act,
(c) medical, dental, ophthalmic, nursing and ambulance services,
(d) such other services or facilities for the care of pregnant women, women who are breastfeeding and young children as he considers are appropriate as part of the health service,
(e) such other services or facilities for the prevention of illness, the care of persons suffering from illness and the after-care of persons who have suffered from illness as he considers are appropriate as part of the health service,
(f) such other services or facilities as are required for the diagnosis and treatment of illness.”
I could go on, but I hope Members will take my word for it that this is very similar language to that of all the previous NHS Acts, going back to 1946. That is essentially what new clause 21 seeks to reassert and confirm for the purposes of clarity, so that where there are subordinate bodies such as PCTs, CCGs or even NHS England, those duties are very clearly set out at the top and can then percolate down.
Under the current Bill, the ICBs have a responsibility to provide services for a defined population that is phrased much like the above definition, but there is no duty on the Secretary of State to provide throughout England; in other words, there is nothing specific to say that the duty on the Secretary of State should be delegated to ICBs, which we say there should be. Our intention is to restore the position that the duty is placed on the Secretary of State, which he then delegates down to NHS England, ICBs and so on. We could spend a lot of time on this, as our predecessors have, but I do not think that will be the best use of our time, so we have attempted to avoid going down that particular rabbit hole with a straightforward amendment, with what I hope has been a straightforward explanation.
The Lansley changes were made to align with the NHS structures that the then Secretary of State introduced, which were essentially market structures, distancing the Secretary of State in the sense that they were unlike anything the NHS had done previously, which was part of the reason why there was so much debate about them. That is why in 2015, 2017 and 2019, we made it clear in my party’s manifesto that we would reinstate the duty to promote and deliver the NHS, so there would be no doubt that it was a public service and could be restored to that footing. Our argument is that for simplicity, we should restore the duties to those of the pre-Lansley era, to reflect that the Lansley experiment has failed and we are in a new world—a new world with the old wording, which we wish to reinstate. Let us keep it simple, save everyone a lot of work and go back to the old wording, so that there is no doubt about where the duties and responsibilities lie.
Karin Smyth (Bristol South) (Lab)
I support the words of my hon. Friend the Member for Ellesmere Port and Neston. The Government would be wise to take note of the proposal. As my hon. Friend said, many hours, days and weeks have been spent by not only Members of Parliament, but expensive lawyers and lots of concerned constituents across the country, arguing—as I have often thought myself at times—a slightly nuanced point, which is lost on people. I have absolutely been persuaded, however, that it is important to restore that duty. If the Government are rightly binning the Lansley Act, the amendment is an obvious one to consider and accept, as it puts the duty absolutely beyond doubt.
Running throughout the Bill, as we will discuss over the next few days and weeks, is a real problem of clarity and accountability. We should not let the Bill out of this place while it leaves that lack of clarity on duties, responsibilities and accountability for the NHS to decide, along with local government. There is a balance between permissiveness and diktat, and starting with clear duties on the Secretary of State would help. Later, we will discuss how the Government seem to want to give the Secretary of State enormous power to interfere in the most minute aspects of healthcare in our constituencies, something that concerns a great many people, organisations and the NHS itself.
If the Government are serious about rehabilitating themselves as the supporter of the NHS following the Lansley Act, an amendment to clarify that absolutely central role would be a wise thing to accept.
Edward Argar
Amendments 36 and 37 and new clauses 20 and 21 are in the name of the shadow Minister and his colleagues. I do not believe that what is being proposed reflects the reality of the role of the Secretary of State or what it should be, which is a strategic oversight role with the ability to intervene when necessary to ensure accountability. The hon. Gentleman might correct me, but I think he cited Mr Lock, who said that there was no substantial change in practice. That goes to the heart of why I am unpersuaded by the amendments.
As the hon. Gentleman knows, the idea that the Secretary of State himself provides services has not reflected the reality of the structure of the NHS for many years, not least since 2003-04 with the introduction by the Labour party when in government of foundation trusts as independent entities in the health system. That purchaser-provider split, long established in the NHS and retained in the Bill, allows some of the health services in England to be provided by those such as NHS foundation trusts, which are legally distinct from the Secretary of State.
In the years since those changes, and as the many vigorous debates in Parliament since and during the passage of the 2012 legislation have demonstrated, there has rightly been no loss in the strong sense of governmental accountability for the NHS felt by Governments of all parties and by parliamentarians. As the proposers of this group of amendments have themselves been among the most eloquent and capable colleagues in holding Ministers and Government to account for the NHS, I find it slightly strange that they feel that their amendment is necessary.
At the time of the 2012 Act, as the shadow Minister alluded to, there was a great deal of debate in the other place on the value or otherwise of this wording. Eventually, the noble Lords concluded that it was better for the law to reflect the reality of the modern NHS. However, it remains the case that the Secretary of State has a firm duty to continue the promotion in England of a comprehensive health service in practice. He does this through setting the strategic direction and his oversight of NHS England and the other national bodies of the NHS, and in the future, subject to debates in this place—I do not want to prejudge what the Committee and the House may determine on those clauses—through the extra lever of the proposed power of direction. At all times, he remains responsible to Parliament for the provision of the health service in England.
NHS England also has a duty to arrange for the provision of services for the purpose of the health service in England and a concurrent duty to promote a comprehensive health service. Integrated care boards will, subject to parliamentary approval of the Bill, also have functions in relation to arranging the provision of services.
I understand the point that Opposition Members are seeking to make with the amendment, but it is entirely unnecessary as law. The Secretary of State has the duty to promote the competence of the health service in practice. He is accountable to Parliament for the comprehensive health service, and I believe that local NHS leaders and NHS England are best placed to know what is needed to serve individual communities.
This goes to the heart of what I suspect will come up a number of times in our debates in this Committee, which is the extent to which the legislation should be prescriptive, or permissive and flexible. I suspect the shadow Minister and I will disagree on where the balance should lie, in a number of areas. We believe that the Bill strikes an appropriate balance.
The shadow Minister talked about flexibility in redefining the boundaries of what the NHS does. Throughout the history of the NHS, there have been tweaks along those lines. The Labour party introduced charges for glasses and dentures; the Conservative party introduced charges for prescriptions shortly afterwards; the Labour party abolished them, and then reintroduced them two years later. I use those examples because I think we should be wary about being overly prescriptive in primary legislation.
Clause 2 makes a number of amendments to the power allowing the Secretary of State to require NHS England to commission certain prescribed services. It ensures that the Secretary of State can still require NHS England to commission specialised services and facilities, but recognises that aspects of the commissioning might be carried out by other NHS bodies through joint or delegated working arrangements or by directing integrated care boards to provide those services.
Specialist services are commissioned to support people with a range of complex and rare conditions. Those services could involve the treatment of patients with rare cancers, genetic disorders, and complex medical or surgical conditions, for example. As such, it is right that NHS England has overall responsibility for the services and can decide whether they might be better delivered through joint or delegated working arrangements or through directions to ICBs—I am happy to adopt the shadow Minister’s suggested shorthand, otherwise we will be taking a very long time repeating the same words on multiple occasions.
The clause also removes the requirement of the Secretary of State to consider the financial implications for CCGs—to be replaced with ICBs—when requiring NHS England to commission certain services. The change focuses the decision about categorisation of specialised services on the complexity and impact of the service and the ability of ICBs to support commissioning services for their populations, reflecting the fact that ICBs are significantly larger than CCGs and, correspondingly, so are their financial resources. In some circumstances, NHS England may request that a service is no longer nominated as a specialised service or facility—that could be used, for example, as the technology improves and it becomes more appropriate for it to be commissioned by an ICB instead. The clause inserts a new provision in the NHS Act 2006 which requires the Secretary of State to provide reasons for any refusal to requests from NHS England to revoke provisions requiring NHS England to commission specialised services.
I therefore encourage the shadow Minister not to press his amendment to a vote.
Justin Madders
I am grateful for the Minister’s comments, not least the promotion he inadvertently gave me by referring to me as shadow Secretary of State. We should have a Division on that, should we not? I understand what the Minister is saying, but our aim with this amendment is to reflect the new reality. No one has really got to the bottom of why the wording came out in 2012, but we are clearly moving back into a pre-Lansley era and the end of the marketisation, so we should go back to the previous wording. In terms of the services and duties in our new clause 21, I do not think the Minister said he disagreed that any of them should be provided. I am trying to do him a favour here and help him to avoid the Bill being bogged down in the Lords. If it comes back in ping-pong, we will quote the relevant new clause and say, “This is something that could have been avoided.”
I understand that the Minister does not want to be too prescriptive. He is right that the Bill will centre largely on the right balance between permissiveness and prescriptiveness, and we will no doubt have disagreements on that. I have tried to be helpful to him, but he does not want to accept that assistance on this occasion, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3
NHS England mandate
Justin Madders
I beg to move amendment 19, in clause 3, page 2, line 12, leave out paragraph (e) and insert—
“(e) after subsection (6) insert—
‘(6A) The Secretary of State may revise the mandate should urgent or other unforeseen circumstances arise.
(6B) If the Secretary of State revises the mandate, the Secretary of State must publish and lay before Parliament the mandate as revised with a written explanation of the urgent or other unforeseen circumstances that justify the revision and an impact assessment of the proposed change.’”
The Chair
With this it will be convenient to discuss amendment 20, in clause 3, page 2, line 30, at end insert—
“(6) No mandate may be laid before Parliament unless the Secretary of State has supplied a statement on how the mandate will be funded.”
Justin Madders
These amendments to clause 3 deal with the mandate to NHS England. The mandate was part of the changes that were introduced to attempt to distance the role of Government and Ministers from the sound of the bedpans dropping. We can talk about how much the Secretary of State should be involved in that, but we will focus our comments on the mandate today.
What we saw was, in effect, an artificial distinction—one that, like so much else in the last piece of legislation, has largely been subverted or ignored. Despite the intentions, Ministers still try to micromanage and sometimes interfere, for what we would describe as political reasons, and the mandate has rumbled on. During the tortuous passage of the Lansley Bill, the Government had to concede that the Secretary of State remained politically responsible to Parliament for the NHS, which, as we have just discussed, has always been the reality.
It would be brave, however, for someone to suggest that the mandate has had the same level of parliamentary scrutiny. The mandate is presented to Parliament each year, but is that anything other than a ritual? I do not think Hansard records energetic and fierce debates about the mandate, although I am happy to be corrected by the Minister, if he can point me to a particular section.
The idea of the mandate is not entirely without merit. It is good that the NHS knows what is expected of it, and we all agree that it should be free from sudden announcements or other surprises—such as the Secretary of State announcing that the following week all NHS staff would have to wear face coverings before informing them that that was what was required. That is just one example from an extreme situation, but the point is that we all crave certainty. The mandate is an attempt to provide that; and without it, it is unclear how accountability works.
As was clearly articulated in last Thursday’s evidence session, the NHS welcomes the mandate’s ability, in theory at least, to give it stability and enable it, if possible, to plan for the medium and long term. I am sure we could have a debate on whether that is indeed what has happened; it is pretty clear in recent times that, for genuine reasons, that has not been possible. However, most experts would suggest that the NHS would benefit from stability and the ability to plan over at least a three or five-year period without lurches in policy and—crucially and pertinently given today’s business in the Chamber—with a degree of funding certainty to match the requirements.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I wish to make one simple point, following what the right hon. Member for Ellesmere Port and Neston has said, which is that the annual funding of any health system based on the tax year—I can speak to this, having spent more than three decades on the frontline—means that clinicians will inevitably be contacted in January or February and asked, “What equipment do you need? You have to obtain it by 31 March.” Providers of medical equipment will happily admit that prices go up in the first quarter of the year and then drop, so this hand-to-mouth method actually costs all health services massive amounts of money. Simply being able to smooth that out so that we know what is coming several years ahead would save millions of pounds on procurement and allow that money to be directed to clinical care.
Karin Smyth
I echo the comments of my hon. Friend the Member for Ellesmere Port and Neston. The mandate is important. It is awaited by clinicians and managers in the health service as it affects how they are to operate in the forthcoming year. Often guidance arrives the week before Christmas, as I remember from my time in the NHS, so we were starting to plan for the very short term, which really is unhelpful. It is a regular statement intent, and it is a way in which the public can see what is happening or is due to happen to their services.
My hon. Friend the Member for Ellesmere Port and Neston quoted from the King’s Fund’s written evidence, which mentioned the
“multiple plans and strategies in each ICS”
and the need for a “more ‘local’ place level”. As we heard in our evidence sessions, this is already a very confused picture, and one that we are going to try to navigate our way through. Although I do think that there should be greater permissiveness, so long as it is accountable at local level, the mandate gives us a degree of accountability at national level, on the Government’s intent, published in their stated aims, and that gives the general public and taxpayer confidence.
On our amendment about 18 weeks, that target was often criticised as not being clinically referenced. It was brought in after the then Conservative Government talked about an 18-month target being highly ambitious for people waiting to be seen clinically—some of us are old enough to remember those dreadful days, to which we have returned. Now, we could argue whether 18 weeks was the right number, but it was something that drove up standards of care, and it meant that the NHS said to the taxpayer, “We accept that you deserve a better standard of care and treatment, and it is completely unacceptable to be on a waiting list for 18 months to two years”—it was often longer. It focused minds, drove service redesign and made clinicians go back over their lists, because if someone has come on to a list two and a half years earlier, many things would have happened and, sadly, in many instances that person would have died.
By supporting our amendment, the Government would show that they are ambitious for the NHS and the people it serves. If the Minister is not prepared to support that 18-week commitment, what is acceptable to the Government? We and all our constituents know that waiting lists were rising out of control before the pandemic, and that the target had not been met for several years. Clearly the pandemic has exacerbated the situation, but let us be clear that targets not being met was a pre-pandemic problem.
We hear utterances from the Government in the newspapers about what they think about the targets—“nonsensical” is what the Secretary of State said at the weekend. The targets were put in place to give people confidence that their taxes were funding a service that they could hold to account in some degree, and it drove some positive behaviour. It will take a massive effort to get waiting lists down, so what discussions has the Minister had with clinicians and managers about the loss of targets? Why would he not support putting that target back in the Bill? The long waiting lists are miserable for everyone concerned. They need to be published. We need to let people know what they can expect from our service. I strongly urge the Minister to accept the amendment, or at least its intent. If he is not prepared to do so, what does he think is an acceptable length of time for people to be on a waiting list?
Edward Argar
The hon. Member for Ellesmere Port and Neston is having a good day; I promoted him to shadow Secretary of State and I think the hon. Member for Central Ayrshire made him a member of the Privy Council, so he is doing well this morning. Although we may resist many of his amendments, I take the point that he did not table them from a partisan perspective but genuinely approached them with sincerity. He mentioned that on a previous occasion the Bill Committee had to be run twice. Fond of him as I am, I think both of us would prefer not to have to do this twice together.
Justin Madders
I thank the hon. Member for Central Ayrshire for promoting me to the Privy Council. At this rate I will be Prime Minister by lunchtime and supreme leader of the universe by the end of today’s sitting, in which case the Bill will no longer be required.
The hon. Lady made an important point about the effect of annual budgets and, frankly, the opportunism that follows from those providing services. We know that happens in all sorts of sectors, but the amendment sets out very clearly why a longer-term footing is needed. What the hon. Lady referred to was a boom-and-bust approach, but we will leave such terms to history.
My hon. Friend the Member for Bristol South articulated clearly some of the challenges as well. She made the point about accountability, which really does matter. As she said, there is a theme throughout the Bill that accountability is somewhat missing. I am grateful for the Minister’s explanation of the impact assessment—better late than never. The White Paper was issued in January and the Bill had its Second Reading in July, so there has been plenty of time to get everything sorted.
The amendments seek to stop the Government’s propensity to announce policy by headline and then work out the detail later on. The Minister has helpfully said—he will correct me if I am wrong—that the mandate will be fully funded, and we will make sure that he commits to that. We probably do not need to press amendment 20, but we will press amendment 19 to a vote. We think the Government intend to move towards a longer-term plan for the mandate on an annual cycle, but the legislation as it currently stands does not prevent it from becoming stop-start, and there will be circumstances when it will be necessary to change within year. It is important, for reasons of accountability, that that comes with some conditions attached.
The Minister said that we are trying to take away flexibility from the Secretary of State, but we are not. We are trying to encourage accountability alongside flexibility. We accept that there will be circumstances in which the mandate will need to be changed in urgent situations and we would not want to impinge on that, but if the Secretary of State has the power to move things forward in that manner, he should be accountable to Parliament when he does. Again, we are trying to be helpful and assist him. We hope he does not have to do it very often, but if he does issue a mandate in urgent circumstances he will want to know what the impact will be on the NHS. He will want to know that the funding is there and that the NHS has the capacity to deliver the demands placed on it. Those are questions that any member of the Department will ask, so we hope to put in the Bill what ought to happen in practice. It is important enough to press the matter to a Division.
Question put, That the amendment be made.
Alex Norris (Nottingham North) (Lab/Co-op)
I beg to move amendment 21, in clause 4, page 3, line 5, at end insert—
“(d) health inequalities.”
This amendment would modify the triple aim to explicitly require NHS England to take account of health inequalities when making decisions.
The Chair
With this it will be convenient to discuss the following:
Amendment 22, in clause 4, page 3, line 5, at end insert—
“(1A) In making a decision about the exercise of its functions, the health and well-being of the people of England must be NHS England’s primary consideration.”
This amendment would assert that duties to patients come above any other (e.g. organisational) considerations.
Amendment 23, in clause 19, page 18, line 13, at end insert—
“(d) health inequalities.”
This amendment would modify the triple aim explicitly to require integrated care boards to take account of health inequalities when making decisions.
Amendment 24, in clause 19, page 18, line 13, at end insert—
“(1A) In making a decision about the exercise of its functions, the health and well-being of the people it serves must be the primary consideration of an integrated care board.”
This amendment would assert that duties to patients come above any other (e.g. organisational) considerations.
Amendment 25, in clause 43, page 47, line 32, at end insert—
“(d) health inequalities.”
This amendment would modify the triple aim to explicitly require NHS trusts to take account of health inequalities when making decisions.
Amendment 26, in clause 43, page 47, line 32, at end insert—
“(1A) In making a decision about the exercise of its functions, the health and well-being of the people it serves must be the primary consideration of an NHS trust.”
This amendment would assert that duties to patients come above any other (e.g. organisational) considerations.
New clause 13—Secretary of State’s duty to set targets on population health and reduction of inequalities—
“(1) The Secretary of State must, at least every five years, publish a report setting targets on—
(a) the improvement of the physical and mental health of the population, and
(b) the reduction of health inequalities.
(2) The Secretary of State must publish an annual report recording progress against the targets in subsection (1).”
Alex Norris
It is a pleasure to serve with you in the Chair, Mrs Murray, and to make my first contribution to the proceedings. It will perhaps give my hon. Friend the Member for Ellesmere Port and Neston a chance to bask in his new-found responsibilities, while I pick up the cudgel with the Minister. I am afraid I do not have such luxury as he does.
This group of amendments relates to health inequalities and to the priority that we give to the health of the nation, rather than the structures that serve the health of the nation. I will go through each amendment in turn, but I want to talk about a couple of themes that cover them all.
I strongly believe that addressing health inequalities ought to be a foundational priority of any Government of the day. What could be crueller than having such a significant element of a person’s future—how long they will live, how long they will live in good health and what diseases they are likely to acquire—preordained at birth? That has always seemed cruel to me.
Government are not a passive part of that process. The decisions that are taken in this place play an active part in those inequalities. For example, the decisions taken later today and on universal credit will widen them. We should seek to use this Bill as a turning point in our battle against health inequalities in this country. This should be the Bill in which we say that the national health service, and those who need it locally, must be central to addressing health inequalities in this country and that the Government will resource them properly to do so.
It is not a moment too soon to do this. The legacy of this decade of austerity, which my hon. Friend the Member for Ellesmere Port and Neston talked about, is that for the first time in a century the increase in life expectancy has stalled. What does it say about us, the most technologically advanced generation in history, that the increase in life expectancy stalls on our watch?
Within that there is a yawning gap in healthy life expectancy between those who live in the best-off and the worst-off communities. On the basic life expectancy measure the gap is 10 years, but on healthy life expectancy, measured by the age at which people have their first disability, the gap is 18 years between communities like mine and the communities that are best off in this country. How sad that is; how sad is what it says about us.
As the 2020 Marmot review concluded,
“health is getting worse for people living in more deprived districts and regions, health inequalities are increasing and, for the population as a whole, health is declining…the country has been moving in the wrong direction.”
Again, we heard evidence about that in the evidence sessions of this Committee. We ought to use this Bill as a moment to do something about it.
These inequalities are not just about socioeconomic status; they are about race as well. Research by the King’s Fund shows that
“people from the Gypsy or Irish Traveller, Bangladeshi and Pakistani communities have the poorest health outcomes across a range of indicators.”
Covid has shone a light on both race and socioeconomic background as drivers of inequalities. We entered the pandemic thinking it would be a great leveller and that the virus would not know people’s postcode, job or ethnicity. Actually, we quickly learned that that was not the case and that someone was twice as likely to die from covid if they lived in the most deprived communities. A man from a black African background is nearly four times as likely to die of covid as I am. Those inequalities, and how they played out, whether in housing, in occupation or pre-existing health, offered a breeding ground for the virus. That is devastating for individuals, but it is worse for all of us, because it has spread and strengthened the virus. Those health inequalities are bad for everybody.
Just before I turn to my amendments, I should also say that it is strange, given that half of all health inequalities are driven by smoking, to see a Health and Care Bill that does not talk about smoking at all. I hope that when we get to part 5, where some of the public health elements are found, we might collectively do better there.
Amendment 21 seeks to address the point about inequalities by adding to the triple aim for NHS England as set out in clause 4. The triple aim for the national health service is a good thing. It shows the system and those who work in it and lead it, whatever their role, what we want them to prioritise. The three strands of that triple aim are noble: the health and wellbeing of the people of England, the quality of service provided and the efficiency and sustainability of resources. However, that is not robust enough to ensure not just due regard for health inequalities but strong action.
I will not prejudge what the Minister will say, but I suspect he may say that promoting the health and wellbeing of people in England is the aim that covers inequalities. That is an important pursuit, but it is not explicit enough. It is just about general improvement. For example, we hope the Government would expect to see a resumption in the increase in life expectancy. That would be a general improvement in the health and wellbeing of the people of England. The problem with that is that it would not address the point about healthy life expectancy. There would be general and maybe even aggregate improvements for possibly a great deal of the population, but not enough to deal with the extraordinary and growing gaps for others. I think we ought to want to do something about that.
Accepting the amendment would mean the Government would send a signal to NHS England that tackling health inequalities ought to be at the centre of its mission. A quadruple aim may not be as elegant as a triple aim, but it is important that tackling health inequalities is recognised in the Bill. I know that the Minister wants the legislation to stand the test of time. He suggested I said something from a sedentary position about multiple pieces of legislation, which I genuinely believe I did not, but we ought to say that we are here because the 2012 Act was so bad. That there have been nine years since that Act is not a strength on the Government’s part; it is a weakness that they have defended something that has not worked for a long period of time. If we want the Bill to stand the test of time, then we ought to say what we want the health service to do. By putting that in the Bill, we would do that.
Amendment 22 also addresses the triple aim and creates a hierarchy within. High-quality and sustainable services are important, but when commissioning decisions are being made at a national level, as happens with NHS England, and those decisions affect our constituents, we do not want equal weight being given to organisational considerations. The whole point of the Bill as explained on Second Reading is to move to an integrated system that is built around the health and care needs of the population, rather than around organisational boundaries. We all recognise where that butts up in our casework and the frustration that that causes for us and, more importantly, for our constituents—those who have to make multiple calls to arrange care for loved ones and so on. If that is our purpose here, we want health and wellbeing to come first. The amendment seeks to do that and says that the primary aim of the three is the health and wellbeing of the population. If that means that there is a knock-on effect on political decisions on funding, as discussed in the previous set of amendments, so be it. It will be for the Government of the day to ensure that NHS England has the resources to do that well.
I draw the Minister’s attention to the very recent precedent in the Medicines and Medical Devices Act 2021, the Bill Committee for which took place in this room or an identical one. I was a member of that Committee, as were the hon. Member for Bury St Edmunds, who is not in her place at the moment, and the hon. Member for Erewash. When we discussed the triple aim of that Bill, I moved an amendment to prioritise patient safety over all other considerations, because I thought that was an uppermost consideration. It was originally rejected in Committee, but the Government brought it back in later stages, which was the right thing to do. Rather than waiting to bring this back later, we could address it today. I would be very interested to hear the Minister’s comments on that.
Amendment 23 is a counterpart to amendment 21, but it operates at local level. Whereas amendment 21 applied to NHS England, amendment 23 applies to local integrated care boards—to say that, as part of their responsibilities, they must take inequalities into account. Of course, all the arguments that I have made for NHS England also apply here, so I will not repeat them, but this is quite a profound case at local level. From the written evidence, the hearings and the contributions from hon. Members throughout the Bill’s stages and elsewhere in this place, we can see that there is considerable anxiety that we will end up devolving fixed financial settlements down to the integrated care system level. That suits Ministers, because it means that they can devolve financial responsibility so that the Treasury can know what it is spending on a certain function, but all the tough decisions that get us to that point have to be taken at local level. I do not think that is a dystopian scenario, because that is literally what we do with social care already in local government.
The Government know that they do not resource local authorities sufficiently. As a result, social care is squeezed. What happens in those circumstances is that the systems start to worry about running out of money. The hon. Member for Central Ayrshire made a point about end-of-year capital that I recognise from my time in local government, but it works in reverse—when Christmas comes about, there is a spending freeze on everything, and the chief executive of every council in the country ends up reviewing every purchase of more than about a fiver. That is the reality for the systems, and local commissioners will be pressured to think in the interest of resourcing their system, rather than tackling health inequalities. That runs straight into the argument for amendment 24, which is a counterpart to amendment 22 and which says that the hierarchy within the triple aim ought to apply at an integrated care system footprint.
In paragraph 44 on page 18 of the explanatory notes, the Government have told us that the purpose of the triple aim duty is to
“require organisations to think about the interests of the wider system”.
I get that, but I do not think it is quite right, because the primary responsibility is to think about the interests of the wider population. It flows from there that the best way to address the health needs of the population is a system-based approach, which is the Minister’s central argument for this entire piece of legislation—so organisations have to think about each other. However, the primacy is the need of the population.
Perhaps the Minister will say it is axiomatic that health systems will prioritise the wellbeing of their community above everything else, but I do not think it is inconceivable at all that at some point in any given year—never mind at some point in the future—system leaders in one of those footprints will feel distressed about their finances and may take the wrong message, or perhaps the wrong bit of cover on a commissioning decision, about putting population wellbeing in the same tier as system sustainability, as if those two things could be co-equals and, if in tension, could be resolved either way. I do not think that is right, and I would be interested to hear the Minister’s view on that.
Amendment 25 requires health trusts to pay regard to “health inequalities”. Again, it is a counterpart to amendments 23 and 21, and it is for the same reasons as for NHS England and integrated care boards, so I will not repeat those arguments.
Amendment 26 is a counterpart to amendments 24 and 22, requiring the prioritisation of population health and wellbeing at trust level, for the same reasons that I have just mentioned. Again, I will not repeat those arguments.
Dr Whitford
I rise to support these measures. The longer those of us who work in the NHS spend on the frontline, in particular as a breast cancer surgeon in a specialist area, the more we realise that we are constantly catching someone who falls, instead of building a handrail to stop them falling in the first place. Anyone who works in health or social care recognises that health inequalities are a major issue, going right back to the Marmot report of 2010, the Black report and, indeed, many decades. Therefore, they should be a priority at every single level.
The public have a real appetite to see a different approach after covid, because they are aware that covid was not a leveller. It absolutely hit the weakest, most vulnerable and poorest communities. To change the prioritisation to health and wellbeing is also critical. More money is spent picking up the pieces than investing in health in the first place. That is often the health of children; we should try to tackle child poverty and the issues that come from that.
I took part in a report in 2016 that heard from the UK Faculty of Public Health that the UK loses 1,400 children a year before the age of 15, as a direct result of poverty and deprivation. It is clear that the aim of the Bill is not just to take away the appalling section 75. It is to drive integration and the health of the local population. That should be set as a key priority, if the aim is to come out with an approach of putting health in all policies, within local government, the ICS boards and the NHS.
Karin Smyth
I concur with the comments of the hon. Member for Central Ayrshire and my hon. Friend the Member for Nottingham North. The hon. Lady referenced the Black report, which first got me interested in working in the health service. I was shocked that, after all those years, the NHS had not improved the dreadful health inequalities that much of the population, including my own constituents, suffered. Here we are 40 years later, and we still have some really quite shocking health inequalities, even in the wealthy city of Bristol.
This is a really important point. We learned a lot in the pandemic, and hon. Members spoke about meeting their directors of public health recently. I have known my director of public health in Bristol for some 20 years because we have worked together over that period. I supported the movement of DPHs into local authorities. I think that was the right move, although the lack of funding that followed has made their job really difficult, and we have not made the improvements we should have made, as my hon. Friend the Member for Nottingham North outlined.
There is real enthusiasm among clinical and financial leaders for some of the movement in the Bill to bring organisations together in integrated care partnerships or ICSs—wherever we think the power will be—to look at population health. Financial directors I have talked to have said, “This is the direction we need to be going in. We need not to be looking just at our own institutions.” There is a will with the Government, but not including health inequalities is a major mistake. I appreciate that when they drafted this legislation, they were perhaps not thinking in that form, but a number of organisations have asked for that addition to be made.
The pandemic required us to talk closely to our clinical leaders, and it really educated people in individual specialties, who are not terribly knowledgeable about health inequalities—perhaps we think they should be. Even in terms of our understanding of where vaccines have been successful and unsuccessful, and how different communities receive information and engage with local health and care services, the pandemic has been a wake-up call and a good education for many of those leaders. We need to capitalise on that.
I know that drafters do not like to change things, but if we were to put addressing health inequalities in the Bill, as we seek to do, it would focus the Government’s drive on place-based commissioning and service delivery, and send a message to the powerful acute trusts—which at the end of the day run the money, and still will—that addressing health inequalities and looking at where and how their services are delivered to the most vulnerable will be a really positive outcome for the entire system. I therefore support the pursuance of the amendments.
Hywel Williams (Arfon) (PC)
To encourage the Minister to accept the amendment, I point out that addressing health inequalities would coincide with the Government’s stated aim of levelling up, so there is a happy coincidence there that might persuade him. Health inequalities are reflected geographically, and large parts of the country clearly suffer from them more than others. That pertains to England, but were I standing in the Senedd in Cardiff, I would say the same about Wales. That is slightly off the point, but there we are.
Edward Argar
I am grateful to the shadow Minister and all other hon. Members who have spoken for the expertise that they bring to this debate. It is one of the quirks of this House that lawyers are hon. and learned Members and members of the armed forces are hon. and gallant Members, but we do not have an equivalent for those who serve in the medical profession. Perhaps we should think about that.
I am very grateful to hon. Members for bringing this debate to the Committee by tabling these amendments, which relate to the important issue of health inequalities, in the context of the new triple aim duty set out in the Bill. Even though we may not reach the same conclusions about the best way to do it, it is right that we debate this crucial issue in Committee.
With your consent, Mrs Murray, and that of the Committee, I will start in reverse order with new clause 13, and then work my way through the amendments of the hon. Member for Nottingham North. The new clause would place an additional duty on the Secretary of State to produce a report setting targets on the improvement of the physical and mental health of the population and the reduction of health inequalities.
I appreciate and understand the intention behind the hon. Gentleman’s new clause. He is right: health is the nation’s greatest asset. Preventing ill health, improving people’s health and wellbeing, and tackling long-standing inequalities are all fundamental to the economic and social strength of our country. However, the creation of a new statutory duty to set the type of target identified in the new clause is not necessary, in the light of the existing duties on the Secretary of State around improving public health and seeking to reduce health inequalities, as provided for in the 2006 Act. I may not agree with everything in it, but I pay tribute, where it is due, to the Labour party. Labour Members will hear a number of references to what is in that Act and to the retention of what is in that Act in many areas.
Of course, ICBs, too, have duties to have regard to the need to reduce health inequalities whenever they are exercising their functions, to promote integration where it would reduce health inequalities and to set out how they will tackle health inequalities in their plans.
I hope I can reassure members of the Committee that the Government are already taking strong action in these areas and that there are already a number of targets relating to improving the population’s health that cannot be met without addressing those underlying inequalities. For example—I know that this is something that the hon. Member for Nottingham North feels very strongly about—we cannot achieve our existing commitment to a smoke-free generation by 2030 if we do not address as a priority the needs of those people and populations with the greatest levels of need and help people to give up smoking. He is right, and this involves the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Bury St Edmunds. I suspect that when we reach the latter parts of this legislation that are about public health more specifically, this issue may feature, rightly, in the Committee’s discussions again.
To support our strategy to improve the population’s health and reduce health inequalities, at the beginning of October we will launch the Office for Health Improvement and Disparities within the Department. We have also announced that we will create a cross-Government ministerial group with a remit specifically to identify and tackle the wider determinants of poor health. Our broader focus on levelling up, to which the hon. Gentleman alluded, recognises the wide range of factors such as good jobs, homes and local environments in which we can take pride, alongside a range of other factors, that all support and interact with our physical and mental health.
In contrast, I fear that the new clause, although I can see its intent, could make it more difficult for us to swiftly focus on ensuring that such inequalities are identified and acted on. Had we a fixed, five yearly set of targets to work towards, I fear that it would introduce more rigidity, rather than the agility and flexibility that we seek in meeting the changing assessments of what underlying health inequalities must be tackled as a priority. I hope that I can persuade members of the Committee, although perhaps not all of them, that a five-year fixed plan is potentially inflexible and is not necessary in the context of this legislation.
I turn now to the amendments that relate to the duty known as the triple aim. Amendments 21, 23 and 25 would add a fourth limb of tackling health inequalities for NHS England, ICBs and NHS trusts. As I have stressed, we do recognise the importance of tackling health inequalities, but again, we do not feel that the amendments, however well intentioned, are necessary. As we have discussed, there are existing statutory duties on bodies in this area, many of which relate specifically to health inequalities. NHS England and ICBs will have to have regard to such duties alongside the limbs of the triple aim. NHS England will also have to consider such duties when it produces the guidance on the triple aim.
The triple aim is compatible with and conducive to addressing health inequalities and furthering the delivery of these duties. Indeed, tackling health inequalities is a theme that runs throughout the duties. Having organisations consider the wider effects of their decisions will, we believe, encourage greater collaboration and engagement with communities on how best to meet their needs, which in turn will assist with tackling health inequalities nationally, but also flexibly at a local level.
The triple aim duty requires consideration of the health and wellbeing of the people of England. As the shadow Minister alluded to, that would also include consideration of the health and wellbeing of those who are not accessing health services. Similarly, it is a key element of the second limb of the triple aim—the improvement of the quality of services—to consider those areas where services are in most need of improvement. We expect guidance from NHS England to make clear how bodies can discharge the triple aim duty in a way that is fully commensurate with the reduction of health inequalities.
Alex Norris
Turning briefly to the points made by colleagues, the hon. Member for Central Ayrshire made the same arguments I did about patient safety and the Medicines and Medical Devices Act 2021. She made very good points about the health and wellbeing amendments, and I thought she was right to say that there is a real public appetite, now in particular, to tackle inequality. I do not think the public would be surprised to see the Government enter this space.
The hon. Member for Arfon made a similar point about whether levelling up is a political slogan or a public policy programme. It is very hard at the moment to find evidence for the latter, but this would be a really good piece of evidence for it. It is not just a north and midlands versus south issue. As my hon. Friend the Member for Bristol South said, there are some constituencies, like my own, where every single super output area would be in the hardest pressed decile in the country. However, there are many more where there is a greater range—they have some of the poorest parts of the country, but they also have some of the best off. This is something that ought to be at the top of the priority list for every integrated care system in every constituency.
On new clause 13, the Minister said that five years is too rigid. He almost suggested that the Government might outperform. I will believe it when I see it, but there is no evidence from the last 11 years to suggest that that is in any way a risk. Nevertheless, if he brings this back with a two, three or four-year time period rather than five, I will be the first to join him in the Division Lobby to support it.
On amendments 21, 23 and 25, the idea of a “fourth limb” made it work conceptually—I quite like that. What I did not give much succour to was the idea that inequalities lie somewhere else on the statute book, in a way that health and wellbeing and organisational sustainability do not, and therefore it would not need that co-equivalence because it already exists. I did not agree with that point at all.
On the point about inequalities being part of the guidance, I suspect that that will not be the last time that is said in this Committee. Guidance is guidance; legislation is legislation. One of those is an awful lot more powerful and eminent than the other. My view is that if we want to send a clear signal about something, we do not take it out and stick it in the guidance.
I do not give much succour to the point about elevating one of the triple aims either. The Minister said that that would undermine the triple aims. He talked again about the interest of the wider system, but I think all of us are more interested in the wider population. One of those clearly comes before the other. The needs of the one flow into how to organise the system. To organise a system that is supposed to come together in the interests of population health, I would really like to think that population health is more important than the system. I am not sure about the idea that, as a result, worse decisions would be made, and I would be interested in hearing an example. I have to say that that point did not resonate with me.
I am conscious of the reply from the Minister and, indeed, of the time, so I will not press new clause 13 and amendments 22 to 26. However, I do wish to push amendment 21, because if we are talking about NHS England—that totem of healthcare in our country—I really think we ought to send the signal that health inequality should be one of its priorities.
Question put, That the amendment be made.
Edward Argar
The clause places a new requirement on NHS England to consult and involve carers and representatives of those individuals to whom health services are provided when exercising its commissioning functions. NHS England is currently required to involve and consult individuals to whom healthcare is provided when carrying out its commissioning functions; the clause extends that existing requirement to consulting with their carers and representatives as well. We want to ensure that we have a health and care system that is accountable and responsive to the people who rely on it.
The clause recognises the immensely important role that carers and representatives play in supporting our health and care system, and ensures that our legislation remains in step with current practice within that system. I therefore commend the clause to the Committee and hope that all Members feel able to support it.
Justin Madders
I am sure we are all excited to get this one passed—I am certainly not going to oppose it. However, I have a couple of questions of clarification.
Health and Care Bill (Sixth sitting)
Tuesday 14th September 2021
(3 years, 3 months ago)
Public Bill CommitteesRead Full debate Health and Care Act 2022 View all Health and Care Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 September 2021 - (14 Sep 2021)
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair this afternoon, Ms Elliott.
We were left on a cliffhanger before lunch. I was about to ask the Minister some questions. He might have preferred the advantage of having two and a half hours in between to think of an answer, but I am sure he will cope. Actually, it is a fairly straightforward question, so I hope for a fairly straightforward answer.
The clause refers to carers and their representatives. Will the Minister clarify who that is? Is that carers’ groups or, for example, someone who might hold power of attorney? That is really the only comment I wanted to make on clause 5.
The Minister for Health (Edward Argar)
It is a pleasure to serve under your chairmanship, Ms Elliott, I think for the first time in Committee.
To answer the shadow Minister briefly, I certainly envisage that the clause encompasses those with power of attorney, because in effect and in law they are the legal representatives of individuals who do not always have capacity to speak for themselves. In that context, I also hope that we will see carers’ organisations, as well as others who do not necessarily have power of attorney but act as advocates or representatives for individuals, having their views heard and taken into consideration. I hope that gives the hon. Gentleman some reassurance.
Question put and agreed to.
Clause 5 ordered to stand part of the Bill.
Clause 6
Support and assistance by NHS England
Question proposed, That the clause stand part of the Bill.
Edward Argar
The clause confers a power to provide assistance and support to NHS foundation trusts, NHS trusts and other persons providing services as part of the health service in England to work to secure continuous improvement in the quality of the provision of such health services and their financial sustainability. That new power replaces a range of existing support functions sitting with NHS England and the NHS Trust Development Authority. In particular, it replaces the function of the NHS Trust Development Authority to take steps to assist health service providers as conferred by directions. It also replaces the existing power of NHS England to support clinical commissioning groups and primary care providers, which enables NHS England to provide direct financial support to integrated care boards and providers within the scope of the provisions, and to provide other support and assistance to all those bodies exercising functions within or part of the health service.
The clause is an example of the positive improvement that the merger of NHS England, Monitor and the NHS Trust Development Authority will bring to the health service. It will allow NHS England to take such steps as it sees as necessary to identify and address areas of concern early, while also providing support to leadership and guidance where required to shape the services that are delivered for the greatest benefit of patients. I therefore commend the clause to the Committee.
Justin Madders
The Opposition will not oppose the clause, but I have one or two queries that we hope the Minister will be able to answer. Obviously, it is a broad power. I assume that the reference in proposed new section 13YA(1)(a) to “person” relates not just to individuals. Perhaps the Minister will expand on what that is meant to cover.
Also, specifically, at proposed new subsection (3), on integrated care boards and the provision of financial assistance, as we remember from the evidence sessions, there was not a great deal of clarity about the costs that NHS England anticipated might be incurred as a result of the legislation. Will the Minister assist us by providing some estimates of that, as well as whether the powers under clause 6, including the financial assistance, are subject to any limits or reporting requirements back to the Secretary of State, and whether Parliament would have a role in that at any point?
Proposed new subsection (2) talks about providing
“employees or any other resources of NHS England.”
The Minister said that “employees” could include secondees. I think it is clear from the guidance that certain roles on the ICB should not have any, for want of a better description, conflicts of interest or hold any other roles within the wider NHS. I want to make sure that the Minister is clear that that requirement is not going to cause us any difficulties.
Edward Argar
I am grateful, as ever, to the shadow Minister for his succinct questions. I will try to address them all in turn. He referenced the term “person” in proposed new subsection (1). It is a legal definition. In the context of the services provided—I mentioned primary care—it could be a GP practice. Having gone through the drafting with officials, my understanding is that it is a legal term and does not alter what is currently possible.
I may take the questions slightly out of order, and I hope he will forgive me. On proposed new subsection (2), I think he was referring to subsequent new clauses and amendments he has tabled around ICBs, who the suitable persons to sit on them are and the management of conflicts of interest. I suggest to him that, given the amendments he has tabled, the most appropriate time to discuss those issues would be in the context of how we do or do not further refine the definitions around memberships of ICBs. The Committee will reach that on Thursday, I suspect. On reporting and transparency, I entirely share his view and reassure him that I expect transparency to play a key role when public moneys are spent this way.
Finally, on proposed new subsection (3) and the cost to the NHS and the Exchequer, no specific limits are stated in the legislation, but, obviously, any assistance provided would need to meet the purpose set out in the Bill and be transparently awarded. I hope that gives him some reassurance, but I am always happy to revert to him if he wishes to follow up on any detail—either now or in writing.
Question put and agreed to.
Clause 6 accordingly agreed to stand part of the Bill.
Clause 7
Exercise of functions relating to provision of services
Question proposed, That the clause stand part of the Bill.
Edward Argar
I am getting my exercise today in bouncing up and down in my seat. Clause 7 enables NHS England to direct one or more integrated care boards to exercise certain NHS England functions and to fund the exercise of those functions. This relates to NHS England functions such as the commissioning of specialised services, health services in justice settings and armed forces settings, primary medical services, dental services, primary ophthalmic services, pharmaceutical services, and any of the Secretary of State’s public health functions that are exercisable by NHS England on his behalf. In future the intention is that ICBs be responsible for the majority of health service commissioning in England. This approach will ensure that decisions about services are made closer to the patient and in line with local population needs, enabling greater integration in the way that services are arranged and delivered.
Clause 7 ensures that NHS England has the appropriate powers to make sure we achieve our policy objective, by allowing flexibility for ICBs to take on these additional commissioning responsibilities as delegated functions from NHS England. We intend that this can be used by NHS England to delegate primary care functions while ICBs mature, before we transfer them fully to ICBs at the appropriate time using clause 16 and schedule 3, which we will debate in due course. This will allow NHS England to keep a closer watch on how ICBs are discharging these functions, and managing the transition, before they are fully delegated to and embedded in ICBs.
The Secretary of State will have the ability to make regulations under this clause, meaning that, where appropriate, certain conditions or limitations can be placed on NHS England’s power to direct ICBs, including the ability to prescribe functions that the power does not apply to at all. Any directions issued by NHS England under this clause must be published. I know that the transparency point is one that the shadow Minister has raised on a number of occasions, so I reassure him that they must be published ensuring that such directions are made transparently, and that responsibilities between NHS England and ICBs are clearly set out.
This clause is essential to give NHS England the flexibility, and the appropriate mechanisms, to delegate the commissioning of these services when the time is right to do so. Therefore, I commend it to the Committee.
Justin Madders
We will not be opposing this clause. Clearly, as the Minister has set out, it is necessary to enable the functioning of the health service.
I have one question about the powers under proposed new subsection 13YB(4), which are effectively prohibitions on the ICBs from delegating arrangements further. Will the Minister set out what circumstances are envisaged, if any, where this power may be necessary? There will obviously be delegations, not only to the services listed there, but to place-based organisations. In that situation, what does the Minister see the role of the ICBs as? Will it be the ICB itself that delivers those functions, or will it be another body?
Karin Smyth (Bristol South) (Lab)
Further to those points about clarity around the exercising of powers, the move to give NHS England that power is entirely sensible. The medical, dental, ophthalmic and pharmaceutical services have had a lower profile in our constituencies over the last few years, as I think we would all agree. It is important to give them the profile they need to be integrated into the system, because they have certainly not been so far.
The evolution of delegating that power to CCGs came late in the day, and remains muddled around the commissioning of primary care services. Therefore, while allowing the delegation of function is entirely sensible, it is not clear, as my hon. Friend the Member for Ellesmere Port and Neston has said, when or how that delegation will be sought. I think the Minister was referring to the involvement of the Secretary of State, but I am not sure in what circumstances the Secretary of State would be doing that, and why this would not be when NHS England, or NHS England regions, decides that the ICB is of a maturity to accept commissioning responsibilities.
One assumes that NHS England believes that at the moment some of those putative organisations are mature enough already; will some of them start doing that on day one, six months in or a year in? How will we know and how will they be resourced to do it? Is it a transfer of power? How NHS England and the local ICB, without representatives of medical, dental, ophthalmic and pharmaceutical bodies, will be taking that on board is all very opaque.
Alex Norris (Nottingham North) (Lab/Co-op)
My hon. Friend has a local Mayor, but my community does not. If someone lives in Greater Manchester there is a Mayor, but in other places there may not be. We have a very asymmetric model of local devolution. Does she agree that an asymmetric model of devolution, where some ICBs had certain powers and others did not, would be undesirable and may create more confusion than it solves?
Karin Smyth
My hon. Friend makes an interesting point about asymmetrical power and who does what. I may differ slightly, in that I think that that may suit local circumstances, but the judgment about what a mature ICB is, and which powers it should be responsible for, has been made behind closed doors and according to criteria about which we know nothing. The professionals in those services certainly deserve to know better.
Edward Argar
The hon. Lady is absolutely right about the importance of trying to join up different primary care services and the commissioning arrangements. There has been, under Governments of all complexions, a fragmentation in that, with some services commissioned nationally and others locally, and the Bill gives us an opportunity to create a more coherent, place-based commissioning approach.
On the specific point the shadow Minister asked about proposed new subsection (4) and the
“direction under subsection (1) to include provision prohibiting or restricting the integrated care board from making delegation arrangements in relation to a function that is exercisable by it by virtue of the direction”,
my understanding is that it is a pragmatic clause, basically limiting the ability to sub-delegate further. We would envisage this being a consensual and collaborative approach between us and NHS England in the region, and of course the Government would be guided by NHS England.
In the nature of having to make regulations in this House to do it, the wording reflects the fact that it will be the Government laying those regulations, but we would envisage that being guided and led by the NHS. As the hon. Member for Bristol South rightly said, the NHS region will often be the best place to advise on the readiness or otherwise of different ICBs at different stages in the process.
Karin Smyth
Would somebody be able to appeal to the Secretary of State if they disagreed with that delegation, for example?
Edward Argar
My understanding is that there is no formal right of appeal in this context. I suspect that dispute resolution and formal rights of appeal is something we will come back to in other contexts.
Clause 7 ordered to stand part of the Bill.
Clause 8
Preparation of consolidated accounts for providers
Question proposed, That the clause stand part of the Bill.
Edward Argar
Clause 8 places a duty on NHS England to prepare, in respect of each financial year, a set of accounts that consolidate the annual accounts of English NHS trusts and foundation trusts. The transparency of financial reporting across NHS providers will be diminished without this provision, as the consolidated provider accounts collate the financial reporting of all NHS trusts and foundation trusts to give an NHS provider position that is laid before Parliament, and has been since the 2017-18 financial year.
In addition, NHS England has a duty to provide a copy of the consolidated accounts to the Secretary of State and the Comptroller and Auditor General, and a duty to lay copies of the consolidated accounts and the related report before Parliament. To ensure adequate financial scrutiny, the Secretary of State has the power to give directions to NHS England on the principles and methods to be applied in preparing the accounts and their content and form, and can direct that the accounts must be accompanied by any reports or information deemed necessary. The Comptroller and Auditor General must, as their responsibilities stand currently, examine, certify and report on the consolidated accounts and send copies of the report to the Secretary of State and to NHS England.
The provisions set out in this clause not only provide continuity to the system but place in law strong levels of oversight relating to both NHS trusts and foundation trusts. That ensures the transparency that we would all wish to see and the robustness of the process and procedures governing financial health at a local level. This clause is an important way of ensuring NHS England discharges its responsibilities as system regulator in delivering appropriate and adequate stewardship of the health system and, ultimately, public money.
Justin Madders
Again, we will not oppose the clause, but I have a query about the powers under proposed new section 65Z4(4), particularly in the context of what the Secretary of State said at the weekend about targets being a lot of form-filling and nonsense. It seems rather odd to give himself powers to direct trusts to provide any reports or information that he requires when, clearly, the Secretary of State gets all sorts of information and reports from the NHS at the moment. Could the Minister say what he is not receiving at the moment that he thinks the powers will allow him to ask for?
Edward Argar
I consider proposed new subsection (4) to be purely pragmatic, as there will be circumstances with individual trusts and situations where clarifications to accounts or data may be required. Therefore, it is prudent to give the Secretary of State the power to ask for further clarification. He will be accountable to Parliament for how the money is spent, so it is entirely appropriate that he has explicit power, given by Parliament, to ask for information over and above the de minimis specified in the Bill, to ensure he can be completely transparent with Members and the public more broadly.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Clause 9
Funding for service integration
Question proposed, That the clause stand part of the Bill.
Edward Argar
Currently, one of the objectives of the Government’s mandate to NHS England—a process we discussed in Committee this morning—is that an amount of the annual sum paid to NHS England must be used for service integration. In practice, that must be contributed to the better care fund. The better care fund is the national policy driving forward the integration of health and social care in England. However, as we have discussed, other provisions set out in clause 3 will remove the requirement for a mandate to be published every year. As a result, the mandate will no longer be an appropriate vehicle for setting an annual ring fence for service integration. Therefore, the clause will put in place a new power to allow the Secretary of State to direct NHS England to ring-fence an amount of its annual allotment for health and social care integration through the better care fund, to continue the work of that fund and to direct it on how that amount should be used.
The change will have no impact on the operational policy intent of the better care fund; the provision will simply ensure the better care fund can continue to be set annually, notwithstanding changes to the mandate, which will not be made annually in the future, should this legislation be passed. The better care fund has enabled and improved co-operation between health and social care partners at local level. It is therefore important for it to continue. This clause ensures that that will happen, regardless of proposed changes to the mandate.
Further minor amendments are made to NHS England’s corresponding power to enable it to require that an amount of the sum paid each year to an integrated care board be used for service integration. That power exists currently in relation to clinical commissioning groups, and the amendment seeks to ensure that the better care fund continues to operate effectively once ICBs are established.
Justin Madders
Again, I will not detain the Committee for long: I just have a question for the Minister. The more we get into the Bill, the less permissive it appears to be. I have no doubt that will still be used by the Minister in defence against various amendments we will move later today. Given that we have been told that the role of ICBs is to direct health systems in their local areas, it is not at all clear what the situation is if the powers under this clause require them to set aside a certain amount of money for service integration, but doing so would mean a reduction in service elsewhere in the system. How would that dispute be resolved? Who would have the final say?
Edward Argar
As I made clear in my remarks, the clause does not so much direct ICBs specifically; it is primarily about setting aside an amount of the annual sum paid to NHS England to go to the better care fund, which is then allocated. This technical change will have no impact on the operation or policy intention of the BCF, and it should not have an impact on ICBs’ ability to operate. The intention is simply to make sure that as we move away from an annual mandate with an annual financial settlement for the BCF, we can still set an annual amount to go to the BCF so that it can continue its work, and for that to then be allocated to systems.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Payments in respect of quality
Question proposed, That the clause stand part of the Bill.
Edward Argar
The clause removes the Secretary of State’s powers to make regulations about payments by NHS England to CCGs in respect of quality. We are not abolishing quality payments, but in future they will be made to integrated care boards rather than CCGs—hence the change. However, the current clause conflicts with clause 37—General power to direct NHS England—which provides the Secretary of State with broad powers to give directions to NHS England. Clause 10 removes the power to make regulations setting out the principles or other matters that NHS England must consider in assessing any facts in relation to payments to a clinical commissioning group. However, clause 37 will allow the Secretary of State to use the general power to direct NHS England if required, including in relation to quality account. That will give additional flexibility to shape quality payments in order to better incentivise quality, reflecting our priorities and changing circumstances.
I reassure the Committee—I am not sure whether the shadow Minister will take the reassurance, but he may do—that there is no intention to use these powers frequently, but they will ensure that we have a robust legislative framework that is flexible and responsive enough to support the health and care system in future, in the event that such powers are needed. If Ministers were to direct NHS England in this area, they would be required to do so in writing, ensuring that the direction is in the public interest, and to publish that direction. That will ensure transparency, so that Ministers can be held to account. I suspect that we might return more broadly to that underpinning principle when we come to debate further clauses relating to it in the coming days. I commend the clause to the Committee.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Secondments to NHS England
Question proposed, That the clause stand part of the Bill.
Edward Argar
I have only a couple more of these clauses before the shadow Minister will have his turn with a few amendments.
Secondments can be an extremely useful way of bringing key expertise and resource into an organisation at short notice. We have seen the benefits of such a flexible approach in a number of organisations, including NHS England, and particularly during the pandemic. The clause builds on the practical importance of secondments and makes it clear how they can be used by NHS England, by amending schedule A1 of the National Health Service Act 2006, which sets out the constitution and membership of NHS England.
The Bill has given us an opportunity to provide NHS England with powers to appoint secondees across the organisation and use them in the same way as its own employees, and it allows secondees from specified NHS bodies and health arm’s length bodies to be appointed to NHS England’s board. The power to allow employees from specified NHS bodies to be seconded to NHS England and appointed to its board will allow those individuals to exercise NHS England’s functions on the board’s behalf, in the same way as other board members.
As we continue the fight against the covid-19 pandemic and, in parallel, prepare for the recovery of our health and care system, it is imperative that NHS England has access to the most suitably experienced and knowledgeable candidates for executive roles, and that those holding the roles be part of the important decisions that the system will face. The clause will assist NHS England in doing just that.
The clause also includes a regulation-making power, allowing the Secretary of State to make it clear that a reference to an employee of NHS England in the context of the National Health Service Act 2006 should include people seconded to NHS England, should that be considered appropriate in future. That power will ensure that the legislation assesses the continued effect of operation of secondment arrangements throughout NHS England. Any regulations—again, I hope that this offers some reassurance to the Opposition Front Bench—made under that power would be subject to the affirmative procedure in the House, so I commend the clause to the Committee.
Justin Madders
I will not repeat my earlier comments about secondees and ICBs, because we will pick that up later. In our evidence sessions, the role of the healthcare safety investigation body and its independence from NHS England was raised. Is the Minister comfortable that that role will not be compromised in any way by the requirements of the clause?
Edward Argar
I assume—and the hon. Gentleman will probably shake or nod his head—that in this context he is referring both to the Care Quality Commission and HSIB—[Interruption.] Yes, I am reassured and confident that the provisions in clause 11 will not impact negatively in any way on the ability of either safety organisation to conduct inspections and do the work that we envisage them doing. In the case of HSIB, we may return to that when we discuss the relevant clauses. I believe that what is proposed remains consistent with their specific roles, responsibilities and obligations and what we are seeking to achieve for patient safety.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Role of integrated care boards
Question proposed, That the clause stand part of the Bill.
Edward Argar
The clause replaces section 1l of the National Health Service Act 2006, which sets out the general function of clinical commissioning groups, with new section 1l, which sets out the general function of integrated care boards. It provides, in a similar way to CCGs, that ICBs have the function of arranging for the provision of services for the purposes of the health service in England. As a result, ICBs will now be the new commissioner responsible for the majority of health service commissioning in England. Later clauses will set out the details of the services that ICBs are responsible for commissioning, but we intend that they should include those currently commissioned by CCGs and some that are commissioned by NHS England, as we discussed in relation to a previous clause, such as primary care, dentistry, pharmacy and optometry services.
The clause is crucial to establish ICBs as the new key commissioners for the NHS in England in future. Our proposals bring together leadership across the health and care system, and without the clause ICBs will simply not have a clear purpose. It seeks to manage effectively in legislation the smooth transition from CCGs to ICBs, and I commend it to the Committee.
Justin Madders
Obviously, we will spend time this afternoon discussing ICBs, so I will not discuss this clause in particular. I will draw attention to proposed new section 14Z26, especially the proposals in subsections (2) and (3) for integrated care boards, which effectively allow clinical commissioning groups to determine their own processes to consult on ICBs. We do not think that the consultation process has been adequate—indeed, it has been non-existent in some situations—but we will probably return to the question of ICB geography later in this sitting.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Establishment of integrated care boards
Justin Madders
I beg to move amendment 49, in clause 13, page 8, line 34, after “board”, insert
“NHS trust, NHS foundation trust, trade union, patient representatives and local authority”.
This amendment would ensure that trusts and local authorities are consulted before any changes are made to the number, shape and size of ICSs.
There are two big themes on integrated care and the White Paper in the Bill and associated documents. Our points are aligned with those of local authorities, using the integrated care partnership as the vehicle to bring the planning of services, such as social care and housing, into the wider framework. It is also the development of the concept of place.
Local government, as we know, does place; the NHS probably does not do it in quite the same way. The clue is in the name. The “local” in local government means that it has always done community engagement; it already has to integrate multiple public services around the needs of a defined population. It is fair to say that the NHS has operated in a very different way in the past and can appear to have a different geography for every service that is accessed.
The Bill settles on 42 as the magic number of areas that the NHS is divided into, which could be influenced by “The Hitchhiker’s Guide to the Galaxy” and the ultimate question about life, the universe and everything. That might make more sense than what has been put forward so far as the optimal configuration for the integration of services. The view of many of those who we have spoken to is that 42 is too many for the commissioning of most acute and tertiary services, and too big for the commissioning of primary and community services and social care. Like a lot of things, it is a compromise. It is a fudge. It is an accommodation between competing interests and views.
There is very little explanation in the Bill—in fact, we have zero explanation—about how place will work. We need to understand more about that from the Minister. How will place fit into the commissioning framework? I hope we can have some further guidance in the Minister’s responses. For us, the concept of place is just that—a concept. It is not really pinned down or articulated clearly in the legislation.
As Members will be aware, the NHS has had local government as its key partner in healthcare from the outset. That is recognised by various bodies. For a long time, boundaries were not an issue. We sometimes forget just how intimately involved the NHS and local authorities were at the outset of the NHS. That has obviously changed over the years. It would be fair to say that the current integrated care system boundaries are really a product of the NHS and the way that they have been imposed implies a great weakness in the whole Bill. It is supposed to be about integration between local authorities and the NHS, but it is almost all about what the NHS wants and what it thinks is the best outcome. It should have been co-produced with local government, not presented as a fait accompli. Is the Minister able to tell us how much local authorities and mayoralties were involved and consulted in the design of ICS boundaries?
There is a dilemma here. In our view, starting this way, with boundaries that do not always reflect the natural communities that they are meant to serve, will store up problems. We are less than impressed by what has happened to date, and while we might well be stuck with the 42 configuration that we have now, that does not mean that we agree with the process. I use the term “process” in the loosest possible way. We do not believe it should be a template for the future. Amendment 49 seeks that, in future, any changes in ICS boundaries should be decided in consultation and conjunction with trade unions, local authorities and trusts, and that they are consulted before any further changes to the shape or size of ICSs are made.
The problem we see is how the big acute trusts fit into the system. It has been a problem faced in places such as Scotland and Norway, which are further down the integration pathway. As would be expected, the big trusts dominate, but while they might take 80% of the budget, the vast majority of interactions for the patient are in primary and community care and, of course, in social care. All of those sit far more comfortably in the local authority footprint, as the National Health Service Act 1946 accepted. It is even simpler to consider place in terms of districts and wards or even super-output areas. Those terms are all very familiar to local government, and local authorities already take them into account when they consider how to deliver their services. When the Pandora’s box is opened, we assume place is aligned with something that has already been defined, and we do not try to invent yet another new geography, as has been attempted with ICSs.
I would like to hear from the Minister what the impact might be of further revisions to the boundaries. I understand that Ministers have looked at that and they have apparently changed some but not others, without publishing any real rationale. I note that there have been some cosy fireside chats, after which various changes have emerged. That reminds me of how the Conservative party used to anoint its leader, but it is hardly a transparent or open way to do things.
Let us do the job properly, transparently and openly. No ICS should have a boundary that has not been agreed with all the relevant local authorities. I have had some information from the Minister in reply to a written question about discussions that he has had with hon. and right hon. Members, and I am grateful for that. However, I am still waiting to see all the evidence and civil servants’ recommendations that he had to hand when he made his decisions. One of the main themes during the evidence sessions was the concern that the Secretary of State and Ministers could make decisions for party political, or other less than noble, reasons. Of course, I do not accuse the Minister of doing that, but when decisions of this magnitude are taken in this manner, such questions will be asked.
Whenever we have changed the boundaries of parliamentary constituencies, there has been an extremely lengthy process. When my own local authority, Cheshire West and Chester, came into existence, I recall that regulations were approved by Parliament. I know that because I lived through the trauma of that change; for the record, I should state that my wife is a member of that local authority. The point is that the contrast between what happens with that sort administrative border change and what has happened here is stark. I should also make it clear that I have another hat on. As the Minister will know, there have been many discussions about the ICS area in Cheshire and Merseyside, and, as I understand it, the configuration will be reviewed within the next two years. I am sure that the hon. Member for Eddisbury agrees with me that any decision on that should be made with more transparency than we have seen to date, not less.
As an aside, it is probably worth saying that if we pretend that everything can be resolved on a single footprint, we fail to acknowledge that there are regional arms of what is pretty much a national ambulance service, some trusts operate multiple services across clinical commissioning groups, and even tertiary services are commissioned by NHS England for large population areas. Acute care will not be commissioned at place or even ICS level, so we need to think about a simple place-based model for the rest. In terms of transaction volumes, the vast majority of care services, and indeed wider public services such as education and housing, are already provided on a local authority footprint.
At this point, I will mention our proposals for elected chairs, which I will come to shortly. With the right boundaries, it would be a lot easier to enact that. Proper co-location brings healthcare into line with the rest of the public services—local authorities, police and fire. It makes no sense at all for ICS boundaries not to be coterminous, and I do not think the Minister should disagree with me on that. The boundaries need to match those of combined authorities and mayoralties, and they should be set by local authorities and their partners, not just by the NHS. In terms of transactional volume, the vast majority of patient care interactions are in primary, community and social care, and for the patient they are all classed as local.
This veers into a bigger debate about devolution, mayoralties and combined authorities. The trend is one way. If we start with a blank sheet of paper, the answer is obvious: align along existing populations and boundaries. This matter should have been discussed well before the switch from sustainability and transformation partnerships to ICSs; indeed, that should have been done when the STPs were formed. That was the time to develop a proper and open process and deal with concerns. That is history now, but at least with this amendment we may be able to avoid repeating those mistakes.
Edward Timpson (Eddisbury) (Con)
It is a pleasure to serve under your chairmanship on this Bill Committee, Ms Elliott. I rise to speak on the amendment, not to support it, I am afraid, but I do want to show some sympathy with the arguments the Opposition have raised about the way ICSs have come into being and particularly about their size and population.
As was hinted at by the shadow Minister, the hon. Member for Ellesmere Port and Neston, this is where we have a shared experience of the shadow integrated care system in Cheshire and Merseyside, which has, I think, been through four different leadership teams in the last five years. Concerns have been raised with us, by local government but also by many working in the health service in and around Cheshire and Merseyside, about how the construct of this ICS will impact on their ability to deliver local place-based healthcare.
On size, the majority of the evidence we have had in the sessions to date has suggested that the formulation of ICSs needs to have a level of flexibility and permissiveness. However, we also need to be cognisant of the fact that there are populations that will need to be served differently, based on past experiences of borders that already exist. Cheshire and Merseyside will to cover 2.6 million people—that is over eight times the size of some ICSs. It will incorporate 9 CCGs—more CCGs than that, but in Cheshire itself it has moved from four to one as recently as April 2020. There will be 19 NHS provider trusts and 51 primary care groups. It is going to be an almighty body trying to make sure we deliver healthcare at the very local level as best we can.
If that is not done well and there is not the right level of scrutiny, transparency and accountability, the number of bodies on the Cheshire and Merseyside board, for example, could end up being 63 if every body that falls within that geography and that has asked to be on it has a place at the table.
We contrast that with the example of Gloucestershire. We had evidence from Dame Gill Morgan, who is the chair of that ICS, which is one of the much smaller ICSs. In one of our evidence sessions, she was very clear from the experience that she had had:
“If you have a really large ICS and you are trying to do it all, you are so distant from patients, citizens and clinicians that you will never have the contact. Place, in those bigger systems, has to be where you begin to pull those things together, by getting the right people to engage and developing the right level of trust.”––[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 129, Q177.]
Where that will be vital in an area such as Cheshire and Merseyside is on my second point, around population. The ICS will incorporate a huge and diverse population across the Liverpool city region and Cheshire. Those who have only a cursory knowledge of that part of the world will not be surprised to hear that, within it, there are very different health populations, needs and inequalities. The concern that has been raised with myself and other local representatives is that, over time, there is a risk that that might have an impact on some of the priorities, and where they sit within that large area, as well as on what allocations that might bring to deliver the right level of healthcare.
In one of the unitary authorities in Cheshire—Cheshire East Council—somewhere between 55% and 70% of its overall budget is spent on social care. It is so important that these bodies have an integral role in making sure that the place-based services match what they know is needed within their own budget.
There has been some amelioration of that issue, by virtue of the local authority representation on the integrated care board—I think it has two representatives. I was pleased to see in my hon. Friend the Minister’s written statement on 22 July that as part of the boundary review of the ICSs, which has been referred to, Cheshire and Merseyside will have a period of two years where the current arrangements will be reviewed. I seek assurance from the Minister that that review will have veracity and deep-rooted scrutiny of the performance of the ICS during that period, to ensure that it does not fall into the trap that some of the larger ICSs could do unless we have the balance right between the role of local government and local healthcare providers, alongside this larger organisation, which will have to encompass a huge range of demands and pressures on its time and resources.
I have every confidence that my hon. Friend will ensure that the exercise is fruitful, that in Cheshire and Merseyside—particularly in Eddisbury and in Ellesmere Port and Neston—we end up with a better system than we have, and that our patients and residents will be able to get the healthcare that they need when they need it, irrespective of where they live.
Dr Philippa Whitford (Central Ayrshire) (SNP)
It is important to recognise the changes that the NHS in England has been through over the past 20 years, moving from about 100 strategic health authorities to primary care trusts, too more than 200 CCGs, to STPs and now to this. Witnesses in the ICS session said that although some were making great progress, it was those with boundary difficulties that were falling behind. The Bill talks about population health and wellbeing, but local government drives a lot of those things: housing, active transport, social care or what the town centre looks like. It is therefore important to get the boundaries right, or in a few years’ time there will be yet another upheaval.
In Scotland we got rid of trusts and went to health boards in 2004, and we have had 17 years of stability since then. If people keep moving around who they are connected with, the Government are breaking relationships and expecting people to form new ones. This is not a minor thing. I would like the Minister to explain what the basis was for deciding the number, the size and the geography of the boards. Was some formula used? Trying to get that right will be a major influencer of the outcome of the whole policy.
Karin Smyth
Ms Elliott, you were not with us last week when I bored the Committee about how many different jobs I had done in the NHS over the 20 years to which the hon. Member for Central Ayrshire referred. I feel as if I have lived and breathed that journey from the health authorities’ commissioning function through to primary care groups and primary care trusts. Much like the hon. Lady, I was prompted to come into this place by the Lansley Act—the Health and Social Care Act 2012. We all knew on the ground that, as was warned of and as has now been shown, it was completely nonsensical. It was never going to work, and it was hugely detrimental to the progress of securing better health in an efficient and effective way—more so than anyone could have imagined. I came here in 2015 for a bit of a quieter life—that has gone well for me!
Locally, I objected to the geographical footprint—we do not want to get into the footprints, but they are important to local people. The Bristol, North Somerset and South Gloucestershire footprint makes no sense to anyone apart from the chief executives of the local trust, because it is about acute sector flows and absolutely nothing else. That is why it is disappointing that we have not, for example, added health inequalities to the triple aim, because that would force such bodies to look at something more than the bottom line of those large acute sector trusts.
Dr Whitford
On that issue, when one of the amendments was turned down earlier, the Minister suggested that there was already a responsibility to deal with health inequalities that sits within the NHS. Yet, after 70 or 80 years, we have failed to do that, so do we not need not such priorities in the Bill? They need to be taken into account in shaping the ICSs.
Karin Smyth
I completely agree and, as I said, in that sense it has been refreshing to talk to financial directors locally. People who go to be finance directors in NHS organisations have healthcare in their hearts—they want to see only good healthcare and good outcomes—and some of this forcing together of clinicians, finance directors and other managers to look at population health is welcome. They recognise that the way in which the current funding model works—we will come on to the tariff—often stops them doing that, so adding in health inequalities would help. For the moment, we have lost that argument in Committee, but we will see how we get on in future.
In essence, where we have got to now is large CCGs coming together. That is what they are: they are rebranded CCGs. The wording in the Bill has been cut and pasted from 2012. I have other words for describing them: they are an NHS cartel. The CCGs commission and the big providers in that group all decide locally how the NHS cake should be cut—we will come back to that in future amendments. They are accountable neither nationally nor locally. That is deeply problematic. Even the partnership bit, as I think we established last week, is a committee of the ICB, although the Minister may want to clarify that. Sir Robert Francis did question whether that was the case. That goes to show that the architecture is really unclear.
The ICBs are creatures of the NHS, and well done to it for getting that on the statute book—almost—but this is essentially the same model. Therefore, as the hon. Member for Central Ayrshire alluded to in talking about the past 70-odd years, we need something better. The danger is that, as before, these bodies have no real discretion over spending; mostly, they are just the conduit for payments to existing providers. There is no real clout or sight of where we develop new services. They have very few levers to pull to drive innovation or service improvement.
All Members should be concerned about how we get that innovation and how we drive service improvement into the system. We need the ICBs to be better. They need to attract and retain the highest quality management or they will fail. They need to be perceived by the public as relevant and they need visibility. They must be the place where ambitious managers seek to work. They have to be the powerhouses, because they are the controllers of the money. They need good managers if they are to have an impact. They need to have local relevance—we will come back to that in future amendments. I am keen to support the amendment tabled by my hon. Friend the Member for Ellesmere Port and Neston about elected chairs and non-executive directors. Being held to account by the NHS region is very unhelpful.
In relation to Healthwatch, Sir Robert Francis—we should certainly take note of someone of his stature—told us the other day:
“All organisations currently in the NHS have directors of engagement and communication. I suspect that, with the best will in the world, most of them see it as their job to defend the organisation. This is not about defending an organisation; it is about welcoming constructive comment from the public and responding to the needs that people communicate to them.”––[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 150, Q212.]
We can disagree on how that happens, but some of our amendments are designed to help that happen. This cartel is deeply problematic for all hon. Members locally.
As commissioner organisations, accountability does matter. No one is going to walk down the street saying, “Save my CCG” or “Save my ICB” while carrying a banner to save their local hospital. But CCGs control over £75 billion of taxpayers’ money, and they will continue to spend that sort of money. In my area, it is upwards of £1.5 billion or £2 billion. That dwarfs the council’s budget; it totally dwarfs the police’s budgets, yet we allow it to be done in this way. Even as a Member of Parliament with 20-odd years in the health service, I have sometimes found it almost impossible to find out who is accountable when a constituent comes to me with a particular issue. That is why I have focused on accountability and good governance.
In the proposed new organisations, who will be hauled up when something goes wrong? Who reports to the Public Accounts Committee? If the budget is inadequate, who decides what is cut and what is closed? If the boards are making those kinds of decisions, we need to know who appoints them. How do we know that they are independent? How can we remove them if they do not perform? If big decisions are planned, how do we know? What restrictions, if any, should constrain our right to know? The Bill should spell out those things. All our witnesses, and reams of written evidence, are grappling with that issue.
Politically we might disagree with the centralisation of the NHS and the diktat as opposed to the permissiveness. I am definitely on the more localised, permissive side. I think we need good managers and good clinicians to lead and develop our health services and to be accountable for that money. They must be really accountable.
I hope that in his reply, the Minister will take the opportunity to push back on some of the negative language about administrators and managers in the health service. There is a very good article in The Spectator. I commend it to him, if he has not read it. Why would we have doctors and senior consultants on the phone to these 5 million patients, trying to reschedule their appointments? Who is going to go and fix the boiler? The list goes on and on. We need to make these organisations the beacon of good quality management.
Edward Argar
I am grateful to hon. Members for their contributions on the amendment. I may disappoint the shadow Minister—I will not accept it. I hope he will let me address why and deal with some of the questions that have been raised.
The amendment would place a requirement on NHS England to consult relevant NHS trusts, foundation trusts, trade unions, patient representatives and local authorities before revoking or varying an ICB’s establishment order. We consider it unnecessary, because under clause 13, proposed new section 14Z25, NHS England is already required to consult any integrated care board that is likely to be affected before varying or revoking an integrated care board’s establishment order. Given that each ICB will have a strategic view of the health service and population needs in its area, and given that ICBs will have members from different NHS trusts and local authorities, we consider that they remain the best-placed bodies to bring those views together to reflect opinion on what is an appropriate boundary or establishment area.
Section 13Q of the NHS Act 2006 already places a duty on NHS England to involve and consult the public in the planning of commissioning arrangements, including in respect of any planned changes to commissioning arrangements. That includes, for example, if NHS England plans to change the range of health services available to the public or the manner in which they are delivered. That ensures the voices of residents and patients—those who access care and support—as well as their carers are properly embedded in decision making.
I draw the Committee’s attention to the requirement in clause 13, proposed new section 14Z26, for CCGs to consult any person they consider as appropriate on the first ICB constitution. That constitution will also be required to set out the process for making further amendments to the constitution.
Turning to the points raised by the shadow Minister and other hon. Members, the boundaries on which we are seeing the footprint put forward at the moment effectively reflect the evolution of STP and ICS boundaries to this point. They reflect local authority boundaries. By and large, the majority of ICS boundaries reflect one or more upper-tier local authorities. That was the criteria set by the Secretary of State. There are some exceptions, which I will turn to in a moment. I will also turn to the comments from my hon. Friend the Member for Eddisbury.
As the shadow Minister will be aware, the previous Secretary of State set out a process where he wanted a presumption in favour of coterminosity—the shadow Minister appeared to be supportive of that—unless there were exceptional circumstances in a particular area that justified an exception being made. The principle of coterminosity is something that was argued against, in some cases, by Opposition Members—not Front Bench spokespeople, as far as I am aware, but Back-Bench Members of Parliament—and by some Government Members, in respect of where there should be specific exceptions.
The process, which was touched on, was entirely consultative. Local authorities were fully involved in those discussions. The local NHS was fully involved in the discussions. There were also what could be referred to as cosy fireside meetings, involving Members from across the House, reflecting their right as Members of Parliament representing their communities to write to and engage with Ministers, to reflect their views. There was a multi-layered approach, with the local NHS and local authorities working together to come up with recommendations, and then Members of Parliament having the right, as all Members do, to lobby Ministers and put forward their perspective on behalf of their constituents. The approach was transparent, as my hon. Friend the Member for Eddisbury alluded to. We published a written ministerial statement, setting out for the House what had been decided, and we showed the flexibility and pragmatism that I think those consulted would wish to see.
In the areas where exceptions were made—the east of England areas and Frimley—contrary to what the hon. Member for Bristol South said, these are some of the most exceptionally high-performing ICS areas. That is one of the reasons why we decided not to go for coterminosity, because those systems are working well, with established relationships with local authorities, acute trusts and primary care. We took the view that we should not disrupt something that is working well—if it ain’t broke, don’t fix it. That will not stop it being reviewed in future, should the local system feel that that would be appropriate. That was a pragmatic approach to the issue.
My hon. Friend the Member for Eddisbury raised the issue of Cheshire and Merseyside ICS—I know that this will also be of interest to the hon. Member for Ellesmere Port and Neston, given the geography of his constituency. The ICS did meet the coterminosity test of one or more upper-tier authorities being coterminous, but I know that hon. Members on both sides of the House have raised concerns about its size and about the differences between Cheshire and Merseyside proper, and between different parts of the area, and suggested whether it should more appropriately be split into a larger number of smaller coterminous ICSs.
In a sense, the reason that split did not take place goes exactly to the heart of what the shadow Minister was saying, which is our determination to engage widely, consult local authorities and the local NHS, and come up with a set of rigorously tested proposals. This was—for want of a better way of putting it—a late addition to the work being done earlier this year, because it was already coterminous and the commission was to look at things that were non-coterminous. However, in the light of representations made by my hon. Friend the Member for Eddisbury and others, the Secretary of State was clear that it should be reviewed.
Two years was deemed an appropriate time in which to do that review, to allow that consultation with Members and others, and so that it did not straddle—subject to the passage of this legislation—the establishment of ICSs just at the time they were coming into being, and we could do that preparatory work properly. I can give my hon. Friend the Member for Eddisbury the assurance that this is a genuine and rigorous review process. When I emerge from this Committee room, perhaps I may, with Members on both sides of the Committee, discuss further what that looks like and how that might most effectively be carried out.
What that process has shown up, however, is that there is rarely a 100% consensus from all local authority partners and the local NHS on exactly what the right solution is where there is not coterminosity and we are moving towards it. That is why I am cautious about some of the language that has been used thus far, which essentially appeared to imply that we would have to have consensus, and that one part or other of the system would have, if not a veto, a right to put the brakes on changes. Were we to go down that route, I fear that, given different perspectives in different local authorities and areas, we would run the risk of paralysing any possibility of change. I think the right balance needs to be struck.
Karin Smyth
I hear what the Minister is saying, but on that basis—I think this is fundamental to all of this—why would we have local authorities or unitary authorities making any sorts of decisions? That is how local people exercise their democratic will. Bringing forward proposals in order to persuade sometimes results in a bit of stasis, but ultimately someone has to decide and break the deadlock, and the concern, as we come to some of the other amendments, is about how one does that. Local people should be able to have that in a transparent way.
Edward Argar
The approach that we have adopted thus far, which I believe is appropriate, is that we have that with local authorities and the NHS, but ultimately it is the Secretary of State who balances those in the case of these boundaries, and he is accountable to this House, so that strikes an appropriate balance. In the case of the East of England areas, certainly, we did have a very strong divergence of views as to what the right boundaries would be. It would be wrong if either local authorities or the NHS had the right to say, “No, it’s this.” That is where we have to have those views put forward together so that they can be considered in the round.
On the final point that the hon. Member for Bristol South made—I may have missed some points, but this is an important one that I want to put on the record—she is absolutely right to highlight the value of the work done by managers and administrators, or whatever title is used to describe them, sometimes pejoratively by some commenting on this matter. She is absolutely right about the value of their work. There is an analogy that I use all the time, with a much-hackneyed quote that Members will know: John F. Kennedy going to NASA, shaking the hand of the janitor and saying, “Thank you for putting a man on the moon.” What sits behind that goes to the heart of what the hon. Lady was saying. The NHS is a team. Without effective managers, people who can engage, and people who can manage budgets and ensure financial transparency and accountability, and without planning and people who make sure that patients are called and appointments are rescheduled, those on the clinical front line, if she will allow me to put it this way, would not be as effective at doing their job. It is not an effective use of a clinician’s time to ring up a patient to rearrange an appointment. Similarly, it would not be an appropriate use of the time of a highly skilled manager or administrator to be performing some other task. We have got to make sure that we have the right people in the right places, with the right skills.
The final point I would like to make again goes back to a point that the hon. Member for Bristol South made, about accountability. I think it was Amanda Pritchard, chief executive of the NHS—forgive me if it was Mark Cubbon, the chief operating officer—who highlighted, in asking who was accountable, that the ICB is an NHS body, working in partnership with the local authority, that is accountable for the funds it spends, which are voted on by Parliament. That is why it has an NHS official and there are routes of accountability up through the NHS to NHS England, and ultimately to the Secretary of State and this House. That is the structure of the NHS that has evolved over the past 70-plus years. I think that the hon. Lady sought—quite rightly—to press and challenge me on whether we think that evolution is the right approach, or whether we need to take a step back and challenge some of those assumptions. She is right to do that, but in this context, which involves the management of public money, the structures and accountabilities are correct.
I am sorry to disappoint the shadow Minister, as I fear that we will not be able to support his amendment. I hope he will not press it to a vote and that I have gone some way towards addressing the points made, particularly with regard to ICS boundaries and processes followed.
Justin Madders
We have had a fairly wide-ranging and useful debate. A number of issues have arisen that we will return to as the Committee makes progress. I am disappointed that the hon. Member for Eddisbury could not come on board; perhaps I should not have made my little dig about barristers this morning, otherwise he might have been more inclined to support us. I noted the sympathy he expressed and I think he articulated very well his knowledge of the geography of the area and why there are concerns locally about proper accountability in such a large area.
The irony of the whole debate, of course, is that we are discussing the Bill today, but before we have even got to the end, we know that the Cheshire and Merseyside ICS may not survive two years. Before the Bill has even become an Act, some of its constituent parts may be reorganised in future. We will see what happens on that, and I look forward to engaging with the Minister in that process.
Let us not forget that the genesis of what is before us was the STPs. How were they put together? I think local NHS leaders were sent a missive about three days before Christmas to say, “Can you give us an idea of what you think the most optimal design of your local NHS would be? By the way, we would like the response back by the end of January.” As we know, the NHS is traditionally extremely busy at that time of year, and Christmas is hardly a good time to be engaging with the wider public sector or indeed the community, but that was where the genesis was, and that is where the Cheshire and Merseyside STP and now ICS came from. It would be interesting to know how many of the 42 areas have changed since that original geography back in, I think, 2017—perhaps even 2016. It was clearly then, as it still is, a creature of the NHS, not the communities it represents.
Dr Whitford
Does the shadow Minister think that the fact we have heard today that Cheshire and Merseyside could be reviewed as quickly as in two years’ time might undermine some of the commitment on the ground? If people feel that it will all change again in two years, the engagement may be weakened.
Justin Madders
I thank the SNP spokesperson for her intervention. That is undoubtedly a risk. It is possible we end up with two or three areas out of that review. I hate to think it would get any bigger.
In terms of what people think is their relevant community, Merseyside has a metro Mayor now with very clearly defined geography, and Cheshire is a different area. As my hon. Friend the Member for Bristol South said, people do not take to the streets with banners saying, “Save our CCG!” I suspect the majority of people do not even know what a CCG is or the area that it is meant to cover. I suspect even fewer people know what an ICS is and what area it covers. That will definitely have to change if we are to have a truly integrated health and social care system.
The point made by my hon. Friend the Member for Bristol South about the defensive culture at times, alluded to by Sir Robert Francis, is a valid one. We may touch on that in the HSSIB elements of the Bill later on. She was asking the right questions—how can the board be challenged, and who is it accountable to? Those are points we will have to come back to, because there is, to our mind, a clear democratic deficit in the way these bodies have been structured.
Finally, the Minister referred to his guiding principle of coterminosity except in exceptional circumstances. Cheshire and Merseyside is coterminous, it is just coterminous for more than one local authority—and some pretty big ones at that—so I do not necessarily think that coterminosity is the answer.
The Minister referred to proposed new sections 14Z25 and 26 in regard to the duties to consult with members of the ICB. Some of the people named in amendment 49 might not actually be on the ICB, because they are not included in the legislation at the moment. We will come to our amendment on that in due course, and we might be able to change that. In proposed new sections 14Z26, CCGs must
“consult any persons they consider it appropriate to consult”.
That could be everyone and no one. I do not intend to press this to a vote, but I hope the Minister has taken on board several points that will lead to an improved process in the future. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Edward Argar
I beg to move amendment 10, in clause 13, page 9, line 44, leave out from beginning to end of line 12 on page 10 and insert—
“(1) NHS England may, in connection with the abolition of a clinical commissioning group under section 14Z27, make a scheme for the transfer of the group’s property, rights or liabilities to NHS England or an integrated care board.
(2) NHS England may, in connection with the establishment of an integrated care board, make a scheme for the transfer of property, rights or liabilities to the board from—
(a) NHS England,
(b) an NHS trust established under section 25, an NHS foundation trust, or
(c) a Special Health Authority established under section 28.
(2A) NHS England may, in connection with the variation of the constitution of an integrated care board or the abolition of an integrated care board, make a scheme for the transfer of the board’s property, rights or liabilities to NHS England or an integrated care board.
(2B) The reference in subsection (2A) to the variation of the constitution of an integrated care board is to its variation by order under section 14Z25 or under provision included in its constitution by virtue of paragraph 14 of Schedule 1B.”
This amendment adds a power for NHS England to transfer property, rights and liabilities (including rights and liabilities relating to a contract of employment) from certain NHS bodies to an integrated care board on its establishment: see new subsection (2). In consequence, new subsections (1), (2A) and (2B) restructure material currently in subsections (1) and (2).
Edward Argar
Both the amendments are technical ones. Amendment 10 amends proposed new section 14Z28 of the National Health Service Act 2006, which provides NHS England with the power to make transfer schemes to transfer property, rights and liabilities in connection with the establishment of, abolition of or change in the constitution of ICBs or the abolition of CCGs. The amendment widens the power to make transfer schemes when establishing integrated care boards, so that transfer schemes may include transfers from NHS England, English NHS trusts or foundation trusts, or English special health authorities.
We are widening the scope of those schemes to reflect further work done by NHS England, which has noted that a small number of people currently working in those bodies may need to transfer into ICBs. It is of practical importance for NHS England to be able to make transfer schemes that will ensure a smooth transition when ICBs are established, and for all the staff who may be transferring to newly established ICBs to be fully protected by such schemes.
For all but the most senior staff transferred from elsewhere in the NHS, I assure the Committee that NHS England’s employment commitment to continuity of terms and conditions, even if not required by law, will apply fully. That commitment is designed to provide stability and remove uncertainty during the transition. It is also possible for NHS England to use the schemes to transfer property and liabilities currently held by those bodies to ICBs on their establishment, although again we expect that to be rare in practice.
Proposed new subsections (1), (2A) and (2B) in the amendment restructure material in proposed new subsections (1) and (2) of the clause as drafted. That simply reflects the technical legal redrafting. The amendment therefore does not change the bodies that can be covered in transfer schemes relating to the abolition of CCGs or ICBs, or the variation of the constitution of an ICB. Those bodies continue to be CCGs, ICBs and NHS England.
Amendment 11 is consequential upon amendment 10 and is also simply a technical change. They are technical, but important amendments to ensure—and to be clear—that staff rights, liabilities and properties are in the right places in the NHS when we introduce ICBs into the system, and that the right protections are in place.
Amendment 10 agreed to.
Amendment made: 11, in clause 13, page 10, line 13, after “(1)” insert “or (2A)”.—(Edward Argar.)
This amendment is consequential on Amendment 10.
Justin Madders
I beg to move amendment 38, in clause 13, page 11, line 10, at end insert—
“Accountability
14Z28A Reporting: duties on integrated care boards and the Secretary of State
(1) Integrated care boards must report annually to the Secretary of State on their actions and policies and the outcomes for patients of the services they commission.
(2) The Secretary of State must prepare and publish a report each year on the actions and policies of integrated care boards and the outcomes for patients of the services they commission and must lay a copy of the report before Parliament.
(3) A Minister of the Crown must, not later than one month after the report has been laid before Parliament, make a motion in the House of Commons in relation to the report.”
It is a pleasure to move the amendment in my name and that of my hon. Friends. The heading is “Accountability” and, as I am sure the Minister will have picked up by now, we think that accountability needs to be turbo-charged in the Bill. The new commissioning bodies, the ICBs, are directly accountable to NHS England and therefore on to the Secretary of State. That was explained by Amanda Pritchard when she gave evidence last week. Each year, the ICB has to prepare a report on how it has discharged its functions and specialist duties under the various headings—improvements in quality, public involvement and so on. It has to report under lots of headings. One has to wonder how it will be able to pick priorities from all that, but that is a matter for the ICB.
ICBs must also publish their plans. The NHS, in the form of NHS England, will then assess the performance of each ICB against how it discharges its functions. Presumably, that will be at least in part with reference to those plans.
The amendment, in essence, would add the accountability of the Secretary of State to what we would describe as a fairly cumbersome but necessary regime of performance management. The slant of the reporting in the amendment is less steeped in the kind of bureaucratic tick-boxing that we understand that the Secretary of State is not a fan of, and what has to be reported is outcomes to patients--perhaps, the thing that matters most.
In the recent comparative survey by the Commonwealth Fund, the NHS lost its top slot and went down to No. 4. It was close, but not close enough. Despite usually coming top, it does badly on one of the key metrics that goes into the assessment—patient outcomes. We do well on ease of access but not so well on outcomes, which is a sad reflection. The amendment makes outcomes a priority over other factors. While the ICBs may have much to say on the day-to-day running of the NHS in the area, the ultimate responsibility for the whole system lies with the Secretary of State, even though on a day-to-day basis it may be NHS England that does the real leg work of performance management. In its new integrated form, NHS England performance manages various trusts and foundation trusts. It also runs the failure regimes for them if needed.
Ways of managing providers are well developed, but most of the skills necessary to monitor whole system performance have been lost to some extent, as management capacity in commissioners has been nibbled away. That brings me to the current weakness in holding providers to account on outcomes. Payment by results was a euphemism, as the results did not matter: the process was the determining factor. Reports on outcomes, as with on patient satisfaction, are absolutely necessary. If any system is to be taken seriously, it must seek to improve. ICBs should not see this as added bureaucracy: they should see it as reporting vital elements of healthcare. I draw particular attention to the reference in proposed new subsection (1), which refers to outcomes specifically, because we do not believe that gets as much prominence as it should.
Leaving aside the desire to produce the right reports for the Secretary of State, there is also an issue about how to make ICBs more accountable to their communities—we will touch on that later. Giving them sight of a nice glossy annual NHS report will not be very enlightening, and it will not help communities understand what has been done on their behalf, even if they recognise the NHS as part of their community.
Dr Whitford
Is the hon. Gentleman talking about clinical outcomes? One of the issues is having national clinical standards against which every unit and every area should be able to benchmark itself. In Scotland, we have standards for 19 of the commonest cancers, which are continuously audited. I was directly involved in developing the breast cancer ones in 2000. We have data that goes back over two decades, which means we can see improvement. It is clinical outcomes that need to be the focus, and they need to be agreed nationally: it should not be for every local ICS to decide what it measures and how. Otherwise we cannot say, “We are getting rid of variability, we are saying that a patient with this disease in Newcastle will get as good treatment as they would in Liverpool or Wolverhampton.”
Justin Madders
The hon. Lady is right; we still have a national health service and we should have national standards, and they should be tagged to clinical outcomes. Of course, it would be down to the individual ICBs to deliver against those outcomes, but it is right that those performance measures should be comparable across different areas.
A robust system of reporting is easier to understand and is probably the most important thing from a patient’s perspective. It is so important that it should land on the Secretary of State’s desk. We will talk later about how ICBs can be more accountable to their communities, but this is very much about how ICBs can be accountable to this place. I hope the Minister will accept the amendment.
Karin Smyth
I rise to support the amendment, particularly in relation to outcomes. The Government do not accept having reducing health inequalities as an aim. In my round-up of 20 years of CCGs and all the rest of it, the driver over the past 15 years has been to put primary care at the centre of those organisations, recognising that 90% of patient contacts are within primary and community services.
We heard from representatives of GPs last week, and I have spoken to my local medical committee as well. They are very fearful—we can dispute whether the evidence exists for whether clinical outcomes are better as a result of these organisations’ being supposedly primary care-focused rather than dominated by the acute trusts, and whether that actually worked, but as a policy intent the Government are very firmly moving away from that position—and wondering what their real outcomes would be.
Were the Government to move along the lines suggested by my hon. Friend the Member for Ellesmere Port and Neston, a regular review of and look at outcomes in our local areas would perhaps help with that particular problem and highlight the driver that we need from community and primary care, as well as just looking at the financial dominance of the large acute trusts.
Edward Argar
It is a pleasure to rise to respond. The shadow Minister, the hon. Member for Ellesmere Port and Neston, is now having to do a lot of bobbing up and down with his amendments, and I am grateful to him for tabling this one. I fear he will not be entirely surprised that we cannot accept it, but I will try to explain to him at least why, and why I urge him not to push it to a vote, although obviously he will be the judge of that.
The amendment, as the shadow Minister has set out, would place new requirements on integrated care boards to report annually directly to the Secretary of State on their actions, and a duty on the Secretary of State to prepare and publish an annual report for Parliament specifically on the actions of the ICBs. It would also require a Minister of the Crown to propose a motion in the House of Commons in relation to the report no later than one month following its being laid in Parliament.
We entirely agree with the shadow Minister that there should be strong lines of democratic accountability from ICBs to Parliament. I hope I can give him at least some reassurance that the Bill already provides for much of the transparency and accountability that he is understandably seeking. The provisions in the Bill will create clear lines of accountability for ICBs to NHS England; they will be accountable through NHS England to national Government and ultimately, therefore, to both Houses of Parliament.
Proposed new section 14Z26 of the National Health Service Act 2006 already places a duty on ICBs to prepare an annual report explaining how the ICB has discharged its duties, particularly in relation to its activities to improve the quality of services, reduce health inequalities and have regard to the effect of its decisions on, and its involvement with, the public.
The report must also explain how the ICB has exercised its functions in accordance with its proposed forward plan and capital resource plan, as well as the steps it has taken to implement any joint health and wellbeing strategy. NHS England will also have the ability to give directions to ICBs concerning the form and content of the annual report, meaning that it could stipulate further reporting requirements for ICBs as necessary where information might be lacking. The report must be provided to NHS England and must be published
I hope the Committee will agree that that is already a comprehensive reporting requirement. Further, under proposed new section 14Z57, NHS England is also required to undertake annual performance assessments to review how each individual ICB has discharged its functions, including how it has delivered on its statutory duties. The Secretary of State will have the power to issue statutory guidance concerning performance assessments, meaning that national Government will be able to influence the methods and requirements of assessment if necessary. Again, NHS England must publish the results of each performance assessment, meaning that the public will have open access to information concerning the performance of their ICBs.
I hope the Committee will agree that the Bill therefore already provides much of the transparency and accountability that the hon. Member for Ellesmere Port and Neston is asking for, and that further duplicative reporting requirements would risk creating new and unnecessary bureaucracy. In respect of the ability of the House to scrutinise, he knows, and Opposition Members know, that they have many opportunities to table debates on a wide array of subjects. He and his colleagues have held me and other Ministers to account, not only in these Committee Rooms but on the Floor of the House in recent months, on a whole array of subjects. With the information I have set out that will already be published, for not only the House but the wider public to read, absorb and consider, there is scope for the hon. Gentleman or any other hon. Member to table a debate in which such reports can be considered if they so wish. I believe that that provides for sufficient transparency and accountability, and I encourage the shadow Minister not to press the amendment.
Justin Madders
I understand what the Minister is saying. We still say there is not enough emphasis on outcomes and accountability to Parliament, but, as he has pointed out, there are other avenues that we can use to pursue those matters. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Edward Argar
The clause, as we have touched on in the various discussions on amendments already, inserts new chapter A3 into the NHS Act 2006, which contains a number of duties and functions in relation to the new integrated care boards. A new duty is conferred on NHS England to ensure that ICBs cover England and details the required process for establishing the ICBs.
The clause also makes provision for abolishing clinical commissioning groups, transferring staff, property and liabilities to ICBs, requiring the constitutions of ICBs to be published and requiring ICBs to make arrangements for managing conflict of interest effectively. The clause is essential for delivering on one of the core objectives of the Bill—creating statutory ICBs as a means to take an ambitious, collaborative approach to planning and delivering integrated health and care services in England. The clause will establish a smooth transition from CCGs to ICBs, providing clarity and consistency for patients as we move to these new arrangements, as well as creating continuity of employment for NHS staff.
Edward Argar
Yes, of course. I know the hon. Lady has a great interest in this.
Karin Smyth
I hope the Minister will address my earlier comments about the policy direction of primary and community care being front and centre in the last 15-odd years. This is a very different beast. I think that has perhaps not come out in the debate. These are very different bodies, and I wonder how he will make sure that the majority of patient contacts and the majority of the work that is done in the health service is not lost in the new organisations.
Edward Argar
I hope that I can reassure the hon. Lady. Although these organisations move beyond the CCG model to be much more collaborative, with more partnership working with local authorities and others, and the genesis of the new model is to bring those two parts together, there is no intent for, and I do not believe the practical consequence of this would be, a diminution in the voice of and the need to pay heed to primary care. She is absolutely right. For the vast majority of our constituents, the front door to the NHS is primary care services. The majority of their appointments, their consultations and their engagement is with primary care services. That voice is hugely important. I see that continuing to be front and centre.
The Bill brings together a range of other NHS system providers and the local authority. We may come back to the point when we discuss further amendments. I emphasise what we heard in the evidence sessions, which is that the membership requirements are de minimis. There can be increased numbers of voices for primary care on these boards, as Dame Gill Morgan mentioned in the way she is managing Gloucestershire. That may not fully satisfy the hon. Lady, but I hope I can reassure her that I am in the same place as her in recognising the importance of primary care and that the expertise that has grown up in understanding local communities is vital in framing a system that works effectively.
In requiring ICBs to maintain and publish registers of the interests of their members and employees—I expect we will return to this point in the future, in a different guise—the clause is an essential part of guaranteeing the integrity of each ICB’s decision-making processes. It will ensure that any potential conflicts of interest are declared promptly by individuals and managed effectively. As a result, the public will be able to trust that decisions are made in a fair, transparent manner, in the best interest of the ICB’s local population. I commend the clause to the Committee.
Question put and agreed to.
Clause 13, as amended, accordingly ordered to stand part of the Bill.
Schedule 2
Integrated care boards: constitution etc
Justin Madders
I beg to move amendment 48, in schedule 2, page 119, line 18, at end insert—
“(c) the process by which any proposed changes to the policies of the clinical commissioning groups within the area for which the integrated care board is established will be consulted upon and agreed.”
This amendment would require ICBs to be clear about how they would make changes in clinical policies and established models of care that have already been established and are applicable to patients in the area for which the integrated care board takes responsibility.
We are certainly getting a good workout this afternoon, Ms Elliott—hopefully the Minister will now be able to catch his breath.
As the hon. Member for Eddisbury suggested earlier, we have seen a rapid reduction in the number of CCGs in Cheshire and Merseyside—there are now nine, but there were more than that not so long ago—and it is one of the biggest ICSs, if not the biggest, in the country. I am not going to take the Committee through the angst on that again, but even with sensible coterminous boundaries, quite a lot of ICSs will have more than one progenitor CCG.
Under the old regime, every CCG had its own plans, policies, care pathways and models of care. For example, many had different rules about gluten-free products being available on prescription, and most Members will be acutely aware of the manifest unfairness of the postcode lottery for IVF treatment. The number of cycles people were entitled to and how old they had to be to access treatment all depended very much on where in the country they lived. It is tempting to say that, rather than having all that variation, we should just level up—the Government’s catchphrase of the day—but that of course will not always be possible, and there will be variations in CCG policy that we cannot easily equate into one optimum outcome or standard, so how do we go about moving the many into the one?
The amendment would add a requirement that, in drawing up the initial constitution CCGs, which of course should be aware of the issues, make a start on place-based approaches, but there is an important job to do on harmonisation at the outset, and that is important for patients and the public. It will be contentious. We can all imagine the outrage if something that is offered in one CCG but not another is then removed from everyone in the process of forming an ICB. These are possible changes that we will see over the next 12 to 18 months, and they will be a real test of how responsive and engaged ICBs are in their local communities. We may indeed see people holding banners with ICBs on them if things are not handled well.
In the amendment, we say that the process of harmonisation or variation should be arrived at only after proper consultation. That fits in with the duty, which we have talked about already, on harmonisation, public involvement and consultation. It also highlights a gap in the specification for the job of producing the initial constitution for each ICB, which is given to the relevant CCG. As I have pointed out, it is very much up to them to decide who they consider it appropriate to consult. We want a much stronger and clearer commitment to consultation on changes that might affect patient care on the face of the Bill.
Edward Argar
As ever, I am grateful to the shadow Minister for tabling the amendment in order to air this issue in Committee. I fear that I may have to disappoint him once again; it seems I am getting into a habit, although perhaps at some point I will suddenly surprise him.
We agree that it is right that there is appropriate consultation when making decisions about commissioning policies and care. The shadow Minister set out very clearly, as he always does, some of the reasons for that. I hope that I can give him some reassurance that the Bill already provides for much of what he is seeking in terms of outcomes. In clause 19, new section 14Z44 of the National Health Service Act 2006 already places a duty on integrated care boards to involve and consult the public in respect of the planning of commissioning arrangements, including on any planned changes. That would include, for example, plans by an ICB to change the range of health services available to the public or the manner in which they are delivered. This will ensure that the voices of residents, patients and those who access care and support, as well as their carers and representatives, are properly embedded in ICB decision making.
Schedule 2, which concerns the constitutions of integrated care boards, states that ICB constitutions must specify how the ICB plans to exercise its functions, including the duty to involve and consult the public. ICB constitutions must, moreover, specify the arrangements that the ICB will make to ensure transparency in that decision making. NHS England will ensure that they are appropriate and include the relevant provisions.
Under clause 13, and new section 14Z25 of the National Health Service Act 2006, NHS England will need to approve the constitution and make an establishment order for the ICB. In that respect, new section 14Z26 goes on to make it clear that NHS England can reject a proposed constitution if it is inappropriate. I hope that that offers some reassurance to the shadow Minister, and helps underline our commitment to ICBs being as transparent and as involving of patients and the public as possible. I encourage him not to press his amendment.
Justin Madders
In light of what the Minister has said, we will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Justin Madders
I beg to move amendment 31, in page 119, line 28, leave out from “for” to end of line 29 and insert
“an initial chair to be appointed by NHS England, with the approval of the Secretary of State, for a period of no more than 2 years and for subsequent chairs to be elected by the voters in the area for which the integrated care board is established in accordance with regulations made by the Secretary of State for that purpose.”
This amendment would require the first Chair of each Integrated Care Board to be appointed by NHS England, with the approval of the Secretary of State for a period of no more than 2 years and for subsequent chairs to be chosen through local election.
The Chair
With this it will be convenient to discuss the following:
Amendment 50, in page 119, line 29, leave out
“, with the approval of the Secretary of State”.
Amendment 51, in page 119, line 29, at end insert—
“4A The constitution must provide for all members of the integrated care board to be consulted, and for any views expressed to be taken into account, before a chair is appointed.”
Amendment 52, in page 120, line 2, at end insert—
‘(1A) The constitution must provide for all members of the integrated care board and of the integrated care partnership to be consulted, and for any views expressed to be taken into account, before a chief executive is appointed.”
This amendment would ensure the involvement of the integrated care board and the integrated care partnership in the appointment of the ICB chief executive.
Justin Madders
Amendment 31 is about the ICB having an elected chair. Amendment 50 relates to the Secretary of State’s approval to remove the chair from the ICB, amendment 51 relates to consultation on an ICB chair’s appointment and amendment 52 relates to ICB and ICP members and consultation on the ICB chief executive’s appointment. I hope there were not too many “ICB”s and “ICP”s in that statement, but I will now set out some detail on the intention behind each of the amendments.
I would like to make some general points about integrated care boards. I would also like to put some specific amendments to a vote—unless, of course, the Minister does surprise me, and concedes on some of these points. Many things have been said about ICSs, ICBs and ICPs that do not appear in the Bill. In discussing this matter, some care has to be taken in distinguishing between what is actually in the Bill as it stands and what is not. In particular, the NHS document on the ICS design framework came out in July. Is anything in that document to be regarded as interpretation of the Bill? Perhaps more pertinently, is anything in the design framework ruled out by the Bill or inconsistent with it? There is a huge contradiction in all this. Many actions have already been taken, such as fixing boundaries and appointing chairs, that presume that this Committee does not have a say—that this Committee is not going to change anything. That is almost contempt of Parliament, but we are where we are. No doubt the Minister will be able to justify why he feels it necessary to instruct the NHS to get on with these things before legislation has been passed. To be fair to him, that is what they have been doing for the past five years as they have been trying to avoid Lansley, but we are in a different world now.
For us, the most significant issues are ICB composition, ICB constitutions generally, and the vexed issue of what people on an ICB actually take responsibility for. In each of those areas, we have tabled specific amendments. As we know, ICBs are the latest in a long line of commissioning models: we have had GPs, PCGs, PCTs, larger PCTs, cluster PCTs, CCGs, merged CCGs, and now ICBs. Just maybe, if we do not get this right first time—if we have to keep reinventing the wheel—the problem here is that it is always the NHS making decisions about itself. Various retrospectives have shown that CCGs and PCTs have had virtually no impact on the design of services, or in terms of innovation or better allocation of resources based on need, and it is certainly difficult to show that they have had much impact on outputs. It is worth pointing out that in some cases, these ICBs will be allocating billions of pounds of public money—in theory, at least—so when we are talking about a multi-billion-pound venture, it has to be free of vested interests. It has to be open and transparent in a way that, I am afraid to say, has not been a hallmark of the Department in recent years.
We know that many of the NHS witnesses said in their evidence that they did not want more prescription. As we have already touched on, we are probably going to have some debate about where on the spectrum we land in terms of prescription, with one end being a totally prescriptive environment and the other being a totally permissive one. As it stands, the Bill is too close to the permissive end, in this area at least; as I have already said, we do get some prescription when it suits the Department in other areas. We consider that prescription is not an imposition: it is a vital safeguard to make sure that things are done correctly, and that there is proper accountability of roles and positions. Legislating for the removal of conflicts of interest to ensure that these bodies are more representative and accountable is not a frivolous or minor matter. These are not optional matters: they are fundamental in a democratic society. We should take this opportunity to widen public and patient involvement and end what is increasingly looking like a much more internal model than perhaps was envisaged when the White Paper came out—a pattern, I have to say, that is possibly being set from the top.
In our view, each ICB should have an elected chair so we are going to push amendment 31 to a vote, because we believe it is a really important principle that we should be exploring further. There are two justifications for that, the first of which is negative: we simply do not trust those who make these appointments. We have seen far too many family members and friends appointed within the wider NHS who, it would be fair to say, have not come with CVs that obviously lend themselves to being part of the NHS family. In fact, the NHS has already announced who the chairs will be for two thirds of these ICSs, showing a complete disregard for the work of this Committee, particularly when it was decided that councillors did not even need to apply. There are a number of former councillors on this Committee, not least myself, the shadow Minister, and the Minister himself. Perhaps we might not be the best people to judge who could go on those bodies as chairs, but I certainly think that councillors have a legitimate claim to be suitable people in a number of circumstances. We need to take control of this; we need to have a democratic system.
The positive argument for electing someone is that it signifies that there is some accountability. It also speaks to a trend that we want to see continue moving forward, improving genuine representation of the public and of patients. We have elected police and crime commissioners, and we increasingly see Mayors and other elected figureheads having growing powers over services in defined geographies. We have already touched on how ICSs may not mean much to people in the street, but if there is someone at the top who has been elected by the people of an area, that gives everyone a sense of ownership and identity—there is a tangible body there that they have some stake in.
Let us take the example of Cheshire again, as it is the one I am familiar with. The annual budget for the police authority is in the region of £200 million. We of course do not have sight of the equivalent for the ICS at the moment, but let us say it will be significantly more. Cheshire CCG’s budget is about six times that at the moment, and we have to throw in the whole of Merseyside on top. To my mind, we will have a rather unsatisfactory situation where someone is directly elected to represent our interests in police and crime, but no equivalent in health, where billions and billions more is spent.
We recognise that this is a departure from what has been worked on in the NHS to date, which is why the amendment would allow for a period of two years from the initial ICB appointment to enable the Government and probably the Minister to work through the detail of how elections would work, and the precise role and powers of a democratically elected chair.
As a country, we are being told constantly that we are taking back control. That should be put into practice. Local communities should be given a real say in who runs their health services. Throughout the evidence sessions, it was far from clear with which individual the buck stops.
Amendments 50, 51 and 52 reflect our concerns about the frankly arrogant way that the membership of ICBs has been formed to date. If we do not get our wish for a directly elected chair, we still think there is a clear need for more local accountability for the appointment and removal of ICB chairs. As the Bill stands, there is a danger that the chairs are answerable only to the Secretary of State—not to the partnership, not to the community and not to the patients.
Why does the Secretary of State need to approve the chair? Is the chair there to represent the Secretary of State or to represent the ICB? As we have already covered, there is a less than glorious record on appointments by the Secretary of State. Let us take him out of the equation and ensure, as amendment 51 would do, that members of the board are consulted and their views taken into account before any chairs are appointed. After all, we would not want them to be appointed and then not have the confidence of the other board members. One of the questions that is hanging in the air is what would happen in the situation where the chair does not have the confidence of the board. There does not seem to be any clear mechanism for dealing with that situation, which we hope would not be a regular occurrence.
We could have the absurd situation where all those who work with the chair on a daily basis simply did not think that the chair was leading the organisation as they should, but because the chair retained the confidence of the Secretary of State—someone who might meet the chair once a year, if they were lucky—they remain in post. I think we can all see that that would be a very unsatisfactory situation. What does the Minister say should happen in that scenario? What would happen if members of an ICB or ICP clearly object to the appointment of a chief executive? If the Minister does not have an answer to those questions, perhaps he could support our amendments, although I may be tempting fate in even suggesting that.
Will the Minister at least set out what role his Department will have in such situations? What does he define as failure for an ICS? In what circumstances would NHS England terminate the appointment of a chief executive? How will removing the chief executive lead to improvements if, for example, the reason for “failure” is systemic issues around workforce and funding, which we will be coming on to later on? Let us make sure that the system works properly from the outset and that the leaders in it have the confidence of all those who work within it.
Karin Smyth
I will speak mainly to amendments 31 and 50. The case for an elected chair of an ICB is very strong. As my hon. Friend said, if we accept the need for an elected police and fire commissioner, why not for health? The amounts of money we are talking about and the influence on people’s daily life dwarf those even of my local council. That is what people on the boards will be responsible for. Social care is still provided through a democratically accountable local authority, so why not healthcare?
We are moving towards the NHS budget overall accounting for up to 40% of general Government spend—that is what we are looking at for the next few years. It seems to go against the grain of everything else—elected Mayors, devolution and so on—for Conservative Members to allow that quantity of Government funding from the taxpayer to be out in communities without any kind of more local democratic control. There would also be a lot more confidence that the days of crony contracts favouring friends, families and donors had been well and truly left behind were there independent heads of the ICBs. I do not know if the Secretary of State has as many close friends as the last one, but letting him make the appointments is not something that Conservative Members will want to defend.
We should therefore be electing a local health commissioner. The amendment reasonably allows a two-year period for the organisations to get established—they have enough to do at the moment—but it would then start to take away some of the problems that the Government will get into with their proposals for the integrated care board chairs. On the make-up of the boards, too, the Bill is a good opportunity, should they wish to take it, for the Government to move away from the terrible scenarios of the past few years in particular. That argument was made cogently this morning by the Minister himself, in terms of NHS England having non-executive directors, people of independence and so on as part of its board, and it can well and truly be made about these new local bodies.
We do not need to go back to the 1990s, when trusts were first invented. Friends and families were put on to those bodies, which were stuffed with worthies, with business people favoured over local people with strong links to the community. Surely we can learn from the past 20-odd years and from the past couple of years in particular. Place is central to what the Government are trying to achieve and is the general policy direction of the Minister’s Department and many others, so it has to mean something and it has to be accountable.
We will come later to some of my amendments on a good governance commission, for which I hope to gain Government support; on having fit and proper tests for people to be scrutinised as suitable to come on to the boards; and, without wanting to throw back to the past, on bringing people in from the community to make the ICBs reflect their local community. In all seriousness, in our sad political situation, most ICBs will be headed up not by people are particularly sympathetic to Labour, so this is not a partisan point. It is, as the Minister started to say about NHS England itself this morning, about having people with the right qualifications—some clinical, some not. Let us have some clear criteria for how we want the boards to be governed and the sorts of people we want on them.
As I said earlier, the Government have got themselves into a real mess with accountability and with how much work the Secretary of State is doing, given how much is put on his desk—this sort of circular NHS accountability thing—so the amendments are trying to offer the Government a way through that follows their general policy direction. That was raised by NHS Providers in its written evidence
“to make crystal clear the relationship between trusts and ICBs, and how the statutory accountabilities of trusts, foundation trusts and ICBs align. There also needs to be clarity within the legislation on how the roles and responsibilities of the current NHS England and NHS Improvement…regions, ICBs, ICPs, trusts, foundation trusts, health and wellbeing boards…places, provider collaboratives, neighbourhoods and primary care networks…will all fit together.”
We would all like to understand how that works, even those of us who follow such things.
I am not suggesting that an all-powerful elected chair will get that, but at least that skilled person bringing together the multiplicity of organisations, groups and people for the local community would be a figurehead who needs to understand and grapple with the issues. The chairs would need to be trusted and highly skilled. In that way, there can be further accountability back up the national system, either through NHS England or the Minister. Let us take all that away from the Secretary of State’s desk—he is going to be a terribly busy man over the next few years. Let us help him out.
The Government should support this and similar amendments to try to bring local accountability much more to the fore. That, in turn, would allow local people, who are expected to spend huge quantities of their taxes on health—increasingly so over the next few years—to be very clear about what the money funds, what they get for their money and how they can hold people accountable.
Edward Argar
The shadow Minister, the hon. Member for Ellesmere Port and Neston, said that his amendments would give me two years to work through this, if necessary. I am grateful for his confidence in my longevity in this post—only time will tell.
I am grateful for the opportunity to address amendments 31, 50, 51 and 52, which were tabled by the shadow Minister. I fear that I may not surprise him on this set of amendments. Under the Bill as drafted, the chair of the integrated care board will be appointed by NHS England, as he and other Members have highlighted. It is therefore rather disingenuous to suggest that friends and cronies will be appointed. This is an NHS England appointment, with approval from the Secretary of State. I am not quite sure what is being suggested about those at NHS England, but I suspect it is rather unfair.
The chair will be appointed by NHS England, with approval from the Secretary of State. That reflects the fact that the ICB is accountable to NHS England and, through it, to the Secretary of State and, ultimately, this House. That goes to the heart of the comments made by the hon. Member for Bristol South on the balance to be struck between having local flexibility and accountability, and recognising that this is a national health service and the way in which it has evolved. The accountability mechanisms are also national to reflect that.
In answer to the hon. Lady’s questioning, the chief executive of the NHS, Amanda Pritchard, said very clearly of the ICBs:
“In the proposed future structure, they would be accountable to a combined NHS England and NHS Improvement structure. At the moment, we operate that through seven regions, and then through to the national NHSEI executive. We are, in turn, accountable to Parliament.”––[Official Report, Health and Care Public Bill Committee, 7 September 2021; c. 20, Q21.]
Amanda Pritchard was very clear that it is the integrated care board that carries that national statutory responsibility on behalf of the NHS, hence why we have structured the accountability requirements as we have.
That chain of accountability has been at the heart of the NHS since its inception. There is a difference, which I know all Members recognise, between the DNA—for want of a better way of putting it—of social care provision, which has evolved through the link to local authorities, and the NHS, which has a more vertical, national structure. That goes to the heart of the different DNA of those two complementary—vitally complementary—parts of the system. We have to remember that history.
That is reflected in the clear belief, which is shared across both sides of the House, that in various ways the Secretary of State is ultimately accountable to this House and, through that, to the public for the performance of the NHS. It is therefore only right that once NHS England has made the appointment, the Secretary of State, who is ultimately accountable, should give final approval for the appointment of the chair. It is an important role in the ICB, as I am sure all Members would agree, and it is right and proper that the Secretary of State ensures that the appointment is appropriate. That is why, I fear, we cannot accept amendment 50, which would remove that mechanism.
At this point, it might be helpful to address the shadow Minister’s point about councillors. We need to draw a distinction between their role on ICPs and on ICBs. ICBs are the NHS accountable body for the spending of public money. As is already the case, the NHS is clear that it does not approve of dual accountability, so when someone is directly accountable for the spending of NHS money, they are required to have that as their role and to not have multiple roles. That applies to the chair and the chief exec, as is consistent with current practice. I discussed that at some length with the chief executive of the NHS when she was chief operating officer. Quite rightly, given my background and the shadow Minister’s, I sought her guidance and that is the conclusion we reached.
Amendment 31 suggests that the chair of the ICB should be appointed via local elections. That brings in a new element to the accountability relationship, which, again, could give rise to the perception of conflicting accountability routes, given that the genesis of how the NHS is currently structured has been as a national health service. The amendment risks introducing a degree of tension into that relationship. Given the importance, as the hon. Member for Bristol South rightly said, of having the right, highly skilled and able people in all these roles, it is appropriate that the mechanism we propose seeks to balance local knowledge and national accountability.
The shadow Minister or perhaps the hon. Member for Bristol South—forgive me if it was—asked what happens if there is discord within an ICB or challenges to the authority, capacity or capability of an individual chair. Essentially, we come down to the constitution of the ICB. Paragraph 8 of schedule 2 sets out how that would work, and NHS England will be producing guidance. Ultimately, NHS England will have the power to remove a chair should issues arise that necessitate that, but there will be further guidance on how that would work and what thresholds there might be.
The hon. Member for Ellesmere Port and Neston raised an important point: what is the mechanism in the hopefully unlikely event that that should occur? Chairs are subject to normal recruitment processes, and NHS England’s approach to appointments has been to work with the existing ICSs, including both NHS providers and local authorities, to ensure that the chairs appointed are high quality, credible and have the confidence of their local systems. Similarly, to ensure democratic involvement, ICBs have strong duties in relation to public and patient involvement, and local authorities must appoint, by right, a representative to the ICB.
Before I turn to amendments 51 and 52, the hon. Gentleman raised some challenge about the design document, its status and whether it appeared to prejudge the House’s deliberations. I want to reassure him: the key word in terms of that document is that it is in “draft” form—it is not formalised, and it is not the final document, because he is right. However, it does allows the non-statutory ICSs to be given a degree of guidance to continue their evolution, rather than all work stopping while we deliberate. Should the House pass the legislation that means ICSs become statutory, that document would have greater force. However, we are not seeking to pre-empt or pre-judge the will of the House. In fact, even with that caveat, the hon. Gentleman will be aware that we did not publish the document in draft until after Second Reading. That recognised again that we wanted the House to have a say on the principles before we even published documents in draft form and that we are cognisant of the need to show respect to the House’s democratic processes.
Amendment 51 would mandate that NHS England consult with the board before appointing a chair, and amendment 52 would require the chair to consult with both the board and the integrated care partnership before appointing a chief executive. We fully accept the importance of both the chair and the chief executive having credibility among system leaders and the population they serve. That is why NHS England is working closely with local authorities, NHS bodies and others in the appointment process.
The Bill, at its heart—again, we will come to the question of balance—aims to strip out needless bureaucracy by removing processes that we believe add little in terms of ensuring high-quality or safe care and that could get in the way of collaborative, smooth decision making. The amendment to formally require consultation on the appointment of the chief executive would create an unnecessary formal requirement, as well as potentially duplicative work, given that we would anticipate this happening informally anyway, and having due regard to that.
We believe that the approach taken in the Bill ensures both patients and the public have a strong voice on ICBs while also ensuring that the accountability arrangements set out by the chief executive in her oral evidence are maintained upwards as well, to the House and the Secretary of State. I therefore ask the shadow Minister to consider not pressing all his amendments to a vote.
Justin Madders
We have had an interesting debate, and I think we have seen the stark differences in approach. Certainly, Labour colleagues see the proposal as an obvious thing to do. As my hon. Friend the Member for Bristol South said, the NHS will account for about 40% of all Government expenditure, so it seems obvious to want some kind of accountability for how it is spent on a local basis. The Government have decided to split the NHS up into 42 areas, so this seems an obvious thing to do, but I appreciate that the Minister comes at this from a completely different perspective. It might say something about the culture of the NHS and perhaps the insularity in how it does things.
When the Minister talked about not being here in two years’ time, he was of course referring to the inevitable promotion that he is due. Perhaps he will be promoted to the Home Office, in which case he will be dealing with police and crime commissioners. Perhaps at that point he will be persuaded of the benefit of having locally elected individuals responsible for services. Of course, we did not have police and crime commissioners until the coalition Government decided to import them from America, and although there is certainly a degree of scepticism about them, if they are a good thing for policing, I see no reason why the NHS should not embark on a similar route.
I envisage some tension between those who sit on an ICB who have some democratic mandate, perhaps from the local authority, and those who do not. Would they be seen to have greater legitimacy? Would their vote carry more weight than other ICB members, because it could be argued that, in the eyes of the public, it would? I think that we are storing up problems for further down the line. If we are to see this levelling up—this renaissance of place—in towns and cities up and down the country, we will need a focal point in all our public services, and none is more important than health and social care.
The Minister suggested that those involved in NHS England might not be appointing people in the most straightforward manner. I was certainly not implying that in my comments, because, as he conceded—this makes me wonder why he is not prepared to support amendment 50—all these appointments still require the approval of the Secretary of State. That is the bottom line. If that is not necessary and the Minister has full confidence in NHS England to make the right appointments, we do not need the Secretary of State’s approval, so the Minister can support amendment 50.
Turning back to amendment 31, which I will press to a vote, we think that a focal point of local accountability is vital. When something goes wrong, when decisions are made that people are unhappy about, or when people just want answers, they need a figurehead that they can go to. They need someone they can hold to account at the ballot box, as is our democratic tradition in this country. I do not think that they will get that with ICBs. If the Minister does not support the amendment, I really think this will be a missed opportunity, and I hope that in future years he will think again on this point.
Question put, That the amendment be made.
Alex Norris
I beg to move amendment 32, page 120, line 26, in schedule 2, at end insert—
“(d) at least one member nominated by the mental health trust or trusts that provide mental health services within the integrated care board’s area;
(e) at least one member nominated by the Directors of Public Health that serve each local authority within the integrated care board’s area;
(f) at least one member nominated jointly by any NHS trust, NHS foundation trust and local authority that provides social care services within the integrated care board’s area;
(g) at least one member nominated by the trade unions representing the health and social care workforce that serves the integrated care board’s area;
(h) at least one member appointed to represent the voice of patients in the integrated care board’s area.”
This amendment would require integrated care boards to have members nominated by Directors of Public Health, mental health trusts, social care providers and trade union representatives and a member representing patients.
The amendment seeks to enhance the prescribed members of the integrated care board. We have not been able to move the Minister on the chairing, but I hope we might be able to do a bit better on the board members.
These are exceptionally important roles. The decisions that these bodies make will shape communities and lives. As we have heard, the boards will be accountable for spending hundreds of billions of pounds of public money. We are banking on their leaders taking good care of that very profound responsibility, and taking integration from an academic concept, or something that is seen in some places, to a real-world idea across the country. That is a big ask, and we need the very best people on the boards and the best range of voices.
Prior to coming to this place, I was a system leader in my local health system. I chaired my health and wellbeing board for a number of years and led my council’s health and care functions. That dual responsibility is hard, because our every instinct is to think “system first”—certainly in local government, because we know that the best prize and the best step changes in the wellbeing of the community come when organisations work together. We know that, but we also butt up against the grinding realities of one-year budget cycles and diminishing financial resources, so we find ourselves in one meeting—a board meeting perhaps—where we are desperately trying to move forward the cause of integration, or the common cause of the shared vision in a community, but we know that when we get back we have to meet finance colleagues in local government, and there is a reality to that.
That duality is really hard. I always likened it—people rolled their eyes in my health and wellbeing boards, and they may roll their eyes in this Committee too—to playing for an international football team, because people come from their clubs, but they come together for a common purpose. They wear a different shirt. The reason that matters is that they do not forget who they were previously—none of that goes away—but in that moment, they are trying to work in a common cause and put aside any of the parochial or local differences they have. That worked best with a balanced and diverse set of voices and experiences around the table, and I do not think that the Bill supports the appointment and assembly of a balanced and diverse set of voices.
The more I have listened to the Minister, the more concerned I have become about that issue, because on two occasions he has characterised integrated care boards as essentially NHS fund-holding bodies that therefore sit within the NHS accountability structures. I absolutely agree that that is true, certainly in this schedule, but in that case, is this not just a bigger CCG with an integrated care partnership moored to it? What really is different here?
We have said throughout—and have been told that we are wrong, and perhaps overly cynical in saying so—that this is an NHS reorganisation Bill, not an integration Bill. I am afraid that the Prime Minister rather weakened Ministers’ arguments by saying that there needs to be an integration White Paper, which I thought was an extraordinary indictment of this legislation. If this is a Bill regarding integration, who is integrating with who? There do not seem to be multiple parties; there seems to be a single party, perhaps with different elements and slightly different email addresses, but still with broadly the same accountability structures. At this point, this does not feel like integration.
In the previous sitting, the Minister described the current composition of the boards as a de minimis one, and said that there could be more members. I hope there is an expectation—he might address this when he replies—that generally, there would be more than the five people currently set out. Paragraphs 3 to 7 of schedule 2 set out the minimum of five members who will form the integrated care boards: the chair and the chief executive—there must be two of them—and then one member to represent all the NHS trusts, one person to represent primary care, and one person to represent all the local authorities in the area. The first time I read about those three ordinary members, I thought, “Those poor people.” One person to represent all the trusts in an area? One to represent all the local authorities in an area? Goodness me, that is a challenge.
I understand that the Minister is not keen to be overly prescriptive beyond what is in the Bill, and that there is a desire to strike a balance between being permissive and being prescriptive—trust me, nobody gets more frustrated with people in London telling people in Nottingham what to do than I do. However, given what is in the rest of schedule 2, I think the Minister is in danger of undermining that argument.
As we have heard, paragraph 4 says that only NHS England can choose the chair; paragraph 5 says that only NHS England can remove the chair; paragraph 14(2)(a) says that NHS England can vary the constitution of a local integrated care board; and paragraph 14(2)(b) says that NHS England can stop any other amendments to that constitution. We should not give too much succour to the idea that this part of the Bill is going to be particularly permissive, and that there is not going to be prescription in there. Of course there is, because we want local communities to shape their planning and their approaches, but we also think that there are minimums—I think we could find a level of commonality relatively easily—and we want to establish them as a backstop. Obviously, we have five here, but I think we ought to go a bit further.
As such, my amendment suggests five other members, the first of whom would be a representative of a mental health trust or similar. Again, if the Minister thinks I am wrong or that I have misunderstood this, I would be keen to hear from him, but I think it is exceptionally unlikely that the ordinary member chosen to fill the role described in paragraph 7(2)(a) on behalf of NHS trusts in a particular integrated care board footprint would not be from the biggest acute trust in that patch, or at least from one of its acute trusts. Our big hospitals are the gravitational centres of a local health system. They are totemic to a local population, they are massive financially, and they are exceptionally powerful in terms of soft power in a community. That means that there is one place and that place is gone, so once again, there is nothing for mental health.
We talk so often in this place about the need for parity of esteem between mental and physical health, but this is an opportunity to demonstrate that in practice, and we are not taking it. Beyond the fact that we ought to be putting mental and physical health on an equal footing, so many of the knotty issues that we will want local health systems to tackle will be rooted in issues relating to mental ill health, so I think there needs to be a voice at that table that can give balance to the decision making.
Edward Timpson
I am grateful to the hon. Gentleman for giving way, and I understand his desire to try to push the agenda of some very important parts of our healthcare system, including mental health. Is he cognisant of the evidence that we heard from Dame Gill Morgan, who has already set up an ICS and who has perhaps done some of the testing for us on what works best? She said:
“In our case, we will have mental health and social care around the table, not because we are told to but because we could not imagine how we could do our work at a local level without having those people feeling that they are full partners and sitting around the table.”––[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 133, Q186.]
Does the hon. Gentleman think it is important that we listen and learn from the experience to date in order to ensure that—to use the hon. Gentleman’s football analogy—we do not have too many people on the pitch? The analogy falls down, because it is possible to have only 11 on a football pitch. The danger is that we end up with too many people, which is unworkable and unmanageable.
Alex Norris
I am grateful for that intervention—I am going to stop at 10. That evidence actually supports the point the I am making. When we heard that evidence, the witness said that it was automatic to them, but of course we would want someone from a mental health background and someone from a social care background. I completely agree. What I am saying is that if that is so clear and obvious, which I believe it is, why on earth would we not put it in the Bill? It was clear and obvious enough that we wanted to have someone on behalf of local authorities, and that we wanted someone on behalf of primary care. If it is clear and obvious in those cases, it is clear and obvious in these, too. That was my reasoning, and it was obviously echoed in the evidence submitted by the Royal College of Psychiatrists and the Mental Health Foundation. That is the first thing I want to say about the amendment.
The second relates to a director of public health drawn from that patch. Goodness me—as my hon. Friend the Member for Ellesmere Port and Neston said this morning, if anyone has proven themselves under fire over the last 18 months, it is our incredible DPHs. With a unique combination of knowledge, training, local insight and cross-system relationships, they have done an extraordinary job for us in pulling together our approach to the pandemic. We should be using that to pull together our approach to all sorts of big issues that we face in our local communities.
The DPHs are the human embodiment of our communities’ joint strategic needs assessment. They bring that to life, and they could bring that to the table. If we want our system leaders to go beyond their organisational concerns when they go into their integrated care board meeting, who better than the person who develops the insight into system need? The DPH is exactly the right person. They also provide an invaluable director-level connection to all the departments of the local authority that have such a profound impact on the wider determinants of health—housing, leisure and planning. What a wealth of knowledge, and what connections, they would bring to the table.
Thirdly, the amendment provides for a designated social care representative. The stated aim of the Bill is to drive integration and to foster collaboration between health and care partners. I really want that to be the case, rather than this being just a reorganisation Bill. It is a 135-clause Bill, and two of the clauses are about social care, so it is not unreasonable to say that perhaps there is an imbalance. Rather like the much-hyped social care reform and funding plan that the Government are discussing downstairs at the moment, the clauses in the Bill neither reform nor, in the main part, fund social care. Again, social care is left trailing behind. It has been battered for 11 years and, as a result, we see rationed care, dreadful terms and conditions for staff, and services that are just not fit for what they were supposed do. If the Bill really is about fostering collaboration, social care ought to be explicitly represented.
I am conscious that there is a nominated local authority representative under paragraph 7(2)(c) of schedule 2, but that person will already have quite a lot on their plate. They will have to represent the broader views of the entire local government family. Nottingham and Nottinghamshire is probably one of the simpler planning footprints in the country, but it is still 11 counties, and representing all those views at once is very difficult. It is too much—and not credible—to represent not only 11 council chief executives, but 11 directors of adult social care and children’s social care, as well as all the other functions of the local authority. A social care lead, who convenes the social care leads in the given geography, would give the ICBs the specialist knowledge and insight to create and foster the environment for a true partnership between health and care.
Fourthly and penultimately, amendment 32 would replace the staff voice through recognised trade unions. As has already been mentioned, our health and social care services are well served with amazing staff. They are our experts. They are the people who feel things on the frontline and who know, when they go, “Here we go—here’s a new initiative”, whether it is practical and rooted in real-world experience. They have that very direct experience of population health and how it is changing over time.
The staff are the ones telling us about the fractures in the health and care system that make their jobs harder—the fractures we are supposed to be dealing with. They were the ones—boy, should we have listened to them then!—who told the Government very clearly what the impact of the 2012 reforms would be on the system and about the greater fracturing of the system. They were not listened to then, but they should have been and they should be now.
Prior to coming here, I was a union organiser. I know one thing for sure: senior management always think they can speak for the staff, but I am afraid they generally cannot. That is not a criticism; their lives at work are very different. The health and care family is better served when all aspects are covered, rather than some speaking for others. If we are going to develop really significant plans at these boards, the discussion would be incredibly enriched if the voice of the frontline was there, to sense-check things, to highlight things that are working already and the workarounds that staff develop as time goes on, and to assist on planning as well. There is an awful lot they could contribute.
Finally, and crucially, let us have a representative of the patient voice. The whole reason why any of us come to this place is that we want to give communities a voice. We think that is important. The key way we do that is to listen to people. If we do not, we do not do very well for very long.
We want our communities to have brilliant health and care services, but sometimes we make it harder for them to tell us what they want. We have tremendous mechanisms for finding out. The evidence of Sir Robert Francis from Healthwatch was particularly pertinent on not just using numbers, but the wealth of qualitative information. Let us have someone who is an expert by experience and who can draw on and bring that with them, and speak for thousands of other experts by experience. We must believe that they have as much to contribute as senior leaders. Not only would they bring insight, but it would give legitimacy to decision making, which is something that we have real concerns about, as we have said on discussion on multiple groups of amendments.
Those are the extra five members we are suggesting. If anyone listening at home is keeping score, that means five members—the chair, the chief executive, the acute lead, the primary care lead and the mental health lead—who owe their employment fundamentally to the NHS, and five—the local authority lead, the DPH, the social care representative, the staff representative and the patient representative—who do not.
If the Bill is about integrating and not about a restructure and reorganisation that involves the big acutes taking on the rest of the system, that might be quite an elegant balance. Of course, local systems could seek to augment that, which would be a matter for them, but this would be a very solid foundation, which I think enriches the board. I look forward to the Minister’s response.
Dr Whitford
I, too, rise to support the amendment. This is probably one of the most important amendments so far. In the witness discussion, we came back time and again to which voices would be on the ICB and would be able to influence. I agree that, with all the talk of parity of esteem, it seems incredible that there would not be a voice representing the importance of mental health on the board. Similarly, with the talk of moving to population health and wellbeing, there is a need for directors of public health to agree policy and to feed in information about the underlying health inequalities, life expectancy and so on in the local population. Not to have a social care voice when what the Government say is that they are trying to integrate the NHS with social care seems quite bizarre.
The NHS and social care are both services delivered by people for people and having both the workforce and staff voice, and the patient voice, is therefore important. On the staff voice, the “Learning from Scotland’s NHS” report from the Nuffield Trust highlights that the success of both the Scottish patient safety programme and the Scottish quality improvement standards was driven by the fact that frontline staff were involved as drivers, champions and developers from the word go. These programmes have been able to run over years, building on experience that is then shared with other sectors and specialities. It is important to get this part of the Bill right, or else priority will not be given to integration, population health or wellbeing. Of all the things that have been discussed so far in Committee, and through the witness statements, this amendment is one of the most important.
Edward Argar
This is an important amendment because it goes to the heart of the debate we have been having about permissive versus prescriptive, and where the appropriate balance is. I suspect we slightly disagree on that—perhaps a little less than one might suppose—but I am grateful to the shadow Minister, the hon. Member for Nottingham North, for bringing this amendment forward. It gives us the opportunity to start getting into that permissive versus prescriptive debate. At the outset he raised the recent announcement by the Prime Minister about integration; it will not surprise him when I say that I believe this creates the foundations of that integration, on which we can continue to build in the coming years.
In respect of the specifics of the amendment, schedule 2 sets out minimum membership of the integrated care board. That is the key element here. It will need to include members nominated by trusts, foundation trusts, persons who provide primary medical services in the ICB area and local authorities. As we heard in the witness sessions, this is very much de minimis—it is not what will happen; it is the baseline, above which each system can go if it wishes to reflect local needs and priorities. We have heard the quote from Dame Gill Morgan about how she is approaching it, but we have also heard from Richard Murray of the King’s Fund, who said:
“You could easily criticise the degree of permissiveness; you could criticise the degree of direction in there. The question should be, ‘Can anyone come up with a better one?’ We have not been able to do so, so I think it is a balance well drawn.”––[Official Report, Health and Social Care Public Bill Committee, 09 September 2021; c. 127, Q173.]
I appreciate that shadow Ministers may take a different view because they feel they have come up with a better balance. However, I highlight that evidence before I go into my answer.
Dr Whitford
Obviously, Dame Gill Morgan is quoted as saying that no one could evenly remotely think of setting up an ICS without primary care voices—and these other voices. Are all interim ICSs that have developed so far following the same model as she is? Is this totally intuitive, and therefore to be relied on, or should it actually be laid down? The voices listed in this amendment are central.
Edward Argar
The hon. Lady and I have spoken about “Learning from Scotland’s NHS” before; as she will know, we are not dogmatic and are always happy to learn from Scotland’s NHS—as, I am sure, it is happy to learn from England’s NHS. That is to the benefit of everyone, and I am very grateful to her for inviting me on Second Reading to come and visit Scotland and see it on the ground, which I hope to do.
The reality is that the ICSs at the moment, on a non-statutory footing, are at different stages of development, different stages of evolution and reflect different approaches. One of the things we are seeking to do here is to put a non-restrictive degree of prescription around this—if that is possible—to get a degree of consistency, but not to be too prescriptive.
Dame Gill Morgan leads one of the more developed ICSs. I do not think what she is saying would be unrepresentative of the attitudes and approaches adopted by ICSs more broadly. I should say ICBs, as the hon. Member for Bristol South rightly highlighted the importance of reflecting careful use of the terminology in the evidence sessions—she caught my eye, and I have corrected myself now. I think we strike the appropriate balance here, and I suspect we will see ICBs going further in their membership, but that flexibility is able to reflect local circumstances.
Edward Timpson
I wonder whether my hon. Friend the Minister could assist the Committee with a question on the evidence given by Louise Patten from the ICS Network, who said that, on top of the five mandated board positions in the Bill,
“a further five will be in the mandated guidance from NHS England.”––[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 134, Q186.]
Is that something that the Minister has been sighted on? If so, do we know what those positions are? I fear that the hon. Member for Nottingham North might have to start to move to a substitutes bench to get enough people around the table, based on his amendment.
Edward Argar
I am pleased that I do not see any signs of the hon. Member for Nottingham North moving to the substitutes bench any time soon. However, my hon. Friend is absolutely right. I do not want to pre-empt the detail of the guidance, but, as Louise Patten said, the whole purpose of this is to provide the ability to further supplement what is on the face of the legislation with guidance that the ICBs will have regard to.
Justin Madders
Perhaps the Minister can help me. When I read the guidance, I understood that it meant that there would be at least 10 individuals on any ICB. Does the Minister think that is the correct number?
Edward Argar
The key focus for this amendment is what the legislation sets out in this clause, and that is the five positions—that is what we want to specify on the face of the legislation. I will come to the detailed guidance, but first I will go through a few of the remarks from the hon. Member for Nottingham North in support of his amendment.
At the heart of the issue is our desire for the provisions of the Bill not to be too prescriptive regarding the membership requirement, beyond that proposed statutory minimum. The guidance is a different matter from what is in the actual legislation; we want the statute to specify that de minimis. We believe that it gives the right approach and balance, having key voices and local flexibility to add voices—including those the hon. Member has proposed, but others as well—and that it reflects the evidence given by Martin Marshall, who said that the boards have to be kept to a workable size to be able to make decisions effectively. Again, that is permissive.
I come back to the point that local ICBs can appoint more members, should they wish to do so. They can go significantly beyond the legislative minimum requirements if they so choose. Therefore, we do not believe that prescribing further membership is necessary. Of course, schedule 2 states that ICBs will need to publish details of their membership in their constitutions. Under clause 13, proposed new section 14Z25 of the National Health Service Act 2006, NHS England will need to approve the constitution proposed by each ICB. Again, we come back to that approval process.
Justin Madders
Of course, the evidence from the Gloucestershire ICS was that of course those individuals—some of whom are included in our amendment—would be on the ICB. From our perspective, it is clear that all the individuals we have named are critical players in any local health system. Could the Minister set out which of those included in our list, if any, he does not think would be appropriate to sit on an ICB?
Edward Argar
I think that all add value, but equally, in some circumstances, we see different local arrangements; in some localities, some people fulfil more than one role or sit in different places.
The hon. Gentleman asked me to cover his specific point about the guidance before I conclude: the guidance will not prescribe additional roles in the same way that legislation prescribes or mandates, but it does seek to set out best practice, highlighting what would be deemed to be best practice—drawing on experiences such as Dame Gill’s, I suspect. We would expect that ICBs would pay due heed to that guidance, alongside their de minimis legal and statutory obligations.
If in time, when those ICBs are up and running, it becomes clear that that approach needs strengthening and that we need to add further requirements, regulation-making powers in schedule 2 will allow the Secretary of State to do so at a later point. We believe that it is right to start at this de minimis point in the Bill. It reflects our view, which I have articulated throughout, that we must not attempt to over-legislate at this stage on the composition of ICBs, letting them evolve as effective local entities, to reflect local needs. It may not fully reassure the hon. Gentleman, but there is a mechanism whereby further changes could be made in future, although we do not believe that will be necessary.
The amendment takes a different approach, which is essentially more prescriptive and less permissive. I do not dispute the sincerity of that approach, but it comes down to a matter of where we feel the appropriate balance should be struck. I fear that, although the shadow Minister and I are quite close to one another in our region of the east midlands, we are slightly more distant in respect of the amendment, but I am grateful to him for affording the Committee the ability to debate a key point of principle in the approach to the Bill.
Alex Norris
I am grateful to the hon. Member for Central Ayrshire for her contribution and for sponsoring our amendment. She spoke about the way staff have not only improved patient safety and the quality improvement programmes, but made them stand the test of time. We are sometimes in danger—the Bill is a good example—of building things that do not stand the test of time and keep being changed, and she went through all the various situations. If we pass any test, it should be that one. The amendment is certainly one way of improving our chances on that.
I am grateful to the Minister for his comments, too. I understand the de minimis point, but I still cannot envisage a scenario in which we would not want a mental health rep on the board. I live in undoubtedly the best place in England—in Nottingham—but we still have mental health problems and need mental health leaders. If we need mental health reps, and we certainly do, I think that everybody probably does.
The Minister’s response did not quite address the point about balance. The balance of the five members is four NHS and one non-NHS. The whole business maxim is no mergers, only takeovers. If the provision is really about integration and partners coming together on an equal footing to improve the population’s health, everything that we have heard so far does not fit with that. What we have heard so far is about organising this round with the terms of reference that NHS England wants, and if local communities and local authorities wish to be part of that and know their role within it, that is absolutely fine. I think we should aspire to do better, so I will press the amendment to a Division.
Question put, That the amendment be made.
Alex Norris
I beg to move amendment 30, in schedule 2, page 120, line 26 at end insert—
“(2A) The constitution must prohibit representatives of GP practices with active Alternative Provider Medical Services contracts from becoming members.”
This amendment would mean that the only GPs able to participate in integrated care boards would be those whose practices are on the standard General Medical Services (GMS) contract.
The Chair
With this it will be convenient to discuss the following:
Amendment 33, in schedule 2, page 120, line 26, at end insert—
“(2B) Representatives of private providers of healthcare services, other than general practitioners who hold a contract for the provision of primary medical services in the area, may not be appointed to integrated care boards.”
This amendment prevents private providers of healthcare services from becoming members of integrated care boards.
Amendment 27, in clause 20, page 29, line 9, at end insert—
“(4) Representatives of private providers of healthcare services, other than general practitioners who hold a contract for the provision of primary medical services in the area, may not be appointed to integrated care partnerships.”
This amendment prevents private providers of healthcare services from becoming members of Integrated Care Partnerships.
Alex Norris
We have not had success with chairs, and we have not had success with who should be on the board, so we move on to who should not be on the board. Let us see whether this alternative tack might prize the Minister away from not giving us his support.
The amendment would mean that representatives of GP practices with alternative provider medical services, or APMS, contracts were prohibited from participating in integrated care boards. That would mean that, under schedule 2, they could not provide that primary care representative.
Let me briefly explain the context. The vast majority of practices—nearly 70%—operate under the general medical services, or GMS, model. That is the standard contract and the most usual model of partnership whereby a CCG or NHS England contracts with a local general practice. Another quarter or so operate on personal medical services, or PMS, models. There is a little more flexibility for commissioners to tailor to local need—this is not agreed as a standard contract like the GMS at national level—and again the arrangement is with a local practice. However, these are not particularly en vogue; they are being phased out, I understand.
That leaves the remaining portion, which is on APMS. That is a much more flexible contracting model and very much a child of the previous decade. Here, commissioners can contract with organisations other than GPs or GP partnerships, and can contract, for example, with private companies.
APMS contracts—without that GP requirement and with shorter durations—offer the easiest way for large private companies to take over practices. Those are companies motivated by profits, rather than their patients, and their having a voice on the board would run contrary to what I am sure Members on both sides of the Committee seek to achieve. I would say it was contrary to the triple aim of the Bill.
However, this is a model on the march and one that could change general practice beyond recognition. My colleagues and I do not think it should exist, but we will make our case on that when we deal with clause 16 and amendments 28 and 29, so I shall have to keep the Committee in suspense. The amendment would mean that a representative from such an APMS partnership could not be part of the ICB and could not fill that place.
As my colleagues and I have made clear previously, we think it paramount that the Bill put patients front and centre. For many patients, using the health service begins and ends with their GP for big parts of their life. The GP is someone they have known for years, someone they can trust and someone who plays an active role in and knows their community.
The pandemic has created some access issues, but the care that people have received is still exceptional. The latest GP survey found that 89% of patients said that the healthcare professional they last saw was good at listening to them and giving them enough time, 88% said that that healthcare professional was good at treating them with concern, and 93% said they were involved as much as they wanted to be in decisions about their care and treatment. Our local GPs are really good and do the job really well. It is not much of a stretch to think that those are the sort of people that the public want speaking for them in these ICB structures. That would be very welcome.
We also know that, whether my supposition that the ICBs are going to be really big CCGs is right or not, CCGs had significant involvement from primary care clinicians and the ICBs will have less. That is definitely a point beyond contention, but there is still a reserved place on the board. However, this is a perfect opportunity for local GP leaders to fill that space, and with regard to APMS contracts, I do not think that those representatives will provide that same involvement.
I appreciate that the numbers will be relatively small—indeed, this might be quite unlikely to happen—but we should bear it in mind that APMS contracts do not require a GP to be a contract holder. They do not offer the same benefits to an ICB as a general or personal medical services contract holder, who is contractually required to be a GP. That is a significant difference. This position on the board should bring important perspective; it should not be wasted.
This is about two things: first, showing the best possible voice and secondly, putting a stop on creeping privatisation. Ministers have been at great pains earlier in the process, and certainly on Second Reading, to say that this is not about privatisation. Well, this is a very good chance to prove that.
Justin Madders
I would like to speak to amendment 33, which is grouped with amendment 30. I will try to address the real concerns that were so eloquently described by the British Medical Association. It said that there are huge risks and absolutely no benefits from having out and out private companies sitting on integrated care boards. Nothing in the Bill remedies that conflict to allow those companies to sit on integrated care boards at the same as allowing them to comply with their statutory duty to their shareholders in manner that anyone could feel comfortable about.
We know that spending in the private sector before the pandemic in 2019-20 was £9.7 billion. I accept that those figures before the pandemic are probably the fairest to cite, but that sum is still double what it was a decade earlier under the last Labour Government. We have seen the creep from the private sector in recent years and we need to put an end to that.
Amendment 33 is not about the amount spent on private providers but about who runs the NHS, not just who profits from it. For us, there is a complete and utter incompatibility between the aim of a private company and what we say should be the aims of the NHS and ICBs. I can do no better than refer to the evidence of Dr Chaand Nagpaul, who last week said:
“We forget at our peril the added value, the accountability, the loyalty and the good will that the NHS provides. We really do.
We only have to look back at the last year. Compare the vaccination programme run by the NHS and delivered by NHS staff to Test and Trace. Even with Test and Trace, compare the £400 million that Public Health England had to the billions that went to the private sector, and local public health teams reached 97% of contacts compared to 60% for the others. I am saying that it does matter. Your local acute trust is not there on a 10-year contract, willing to walk away after two years. It is there for your population; it cannot walk away.” ––[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 90, Q113.]
Those final words sum up our concerns perfectly. Put a company on the board and their interests last as long as their contract. Of course, their interests may not be the same as the NHS’s during that period anyway. With that clear and, we believe, unanswerable concern about conflicts of interest there must be a solution in the Bill. As it stands, there is not, and that is what amendment 33 seeks to remedy. We hope that the Minister recognises the opportunity that this presents and goes one step beyond his colleague, Lord Bethell, who said in response to a written question:
“We do not expect independent providers to have seats on the ICB.”—[Official Report, House of Lords, 18 August 2021; Vol. 814, c. 56.]
What he expects and what is actually in the legislation is not the same.
We have already seen in the south-west private providers lining themselves up to have a big say in how local NHS systems are run. If it is the Government’s position that they do not expect private companies to sit on the board, do they say that because they do not believe it will happen, or because they do not want it to happen? If they do not want that to happen, they should support the amendment. If they do not support it, and if they refuse to join us in trying to legislate to stop private companies getting involved in the running of the NHS, all the people who believed that the Government were determined to increase private sector involvement in the NHS will be entitled to say, “We must be right.”
When presented with the opportunity to put a halt to further private involvement, not only did the Government not support the proposals from Labour, but they actively voted against them. All the words about what the Government expect will count for nothing because when it comes to the crunch, the Government will have sided with the private companies, some of which, let us not forget, have actually sued the NHS when they have not got their own way. Is that the kind of collaboration and integration that we want to see in ICBs? Remember when Circle walked away from Hinchingbrooke because the contract was too tough. Was that in the spirit of joint working? No, it was not. We should be absolutely clear in this Committee and support the amendment that says that private companies should not be running or having a say in the running of ICBs.
Dr Whitford
Although this was described as an evolutionary piece of legislation that would not involve a lot of upheaval for the NHS, it actually does. It is a significant piece of legislation, but it represents a missed opportunity to go back to a unified public NHS with integrated care bodies as the main structure. They are responsible for spending billions of pounds of public money, but the system will still be a transactional one based on a purchaser-provider split and tariffs. We will talk further about how can inhibit development.
If we are to have a purchaser-provider split, we have to have a split. We cannot get away from the conflict of interest inherent in having private providers who seek contracts to deliver care sitting on the very board that makes those decisions, or on the partnership board that will develop the strategy. That is a conflict of interest. It should be resolved, and the amendment should be supported.
Edward Argar
With your indulgence, Ms Elliott, I will turn to amendment 33 first. Integrated care boards will be NHS bodies, whose membership consists, at a minimum, of individuals appointed by NHS providers, providers of GP services and local authorities that coincide with the ICB. Any perceived risk of privatisation through the ICB membership provisions is, I believe, entirely unfounded—and, I feel bound to add, potentially unfair to the many public servants in the NHS who work for ICBs. Although service provision—I emphasise the word “provision”—by the independent and voluntary sectors has been, and continues to be, an important and valuable feature of this country’s healthcare system under successive Governments of all political complexions, it was never the intention for independent providers, as corporate entities, to sit on integrated care boards, nor for an individual to be appointed there to be a representative of such an interest in any capacity.
People must therefore be assured that the work of integrated care boards is driven by health outcomes, not by profits, and I am sure that there will be a consensus on that principle across this Committee. That is why there are already safeguards in place to ensure that the interests of the public and the NHS are always put first. The ICB chair has the power to veto members of the board if they are unsuitable, and NHSE has the power to issue guidance to ICBs in relation to appointments as part of its general guidance-making power. That sits alongside the robust requirements on ICBs to manage conflicts of interests, and NHSE’s wider duty to issue guidance to ICBs.
I turn to amendment 30, which seeks to exclude individuals whose GP practice holds an alternative provider medical services contract from being made a member of an ICB. APMS contractors include some private and third-sector organisations, but also some GP partnerships. These contractors include, for example, social enterprises and partnerships that provide services to homeless people and asylum seekers. This amendment would potentially prevent some individuals from being on ICBs, on the basis of the type of NHS GP contract that their practice holds.
I do appreciate the intent behind the amendments, namely the desire to avoid the appearance, and potentially even the risk, of privatisation and conflicts of interest. However, the effect would be to limit the ability of primary medical service providers to appoint an ICB member who might best meet the requirements of the local population, by reducing the diversity of GPs who could be appointed. While I can understand the intent behind them, I fear that these amendments do not do what they seek to do, and they would have unintended consequences. I will turn to those shortly.
We recognise that the involvement of the private sector, in all its forms, in ICBs is a matter of significant concern to Members in the House, and we are keen to put the point beyond doubt. However, having taken appropriate advice, I am afraid that that these amendments would not cover a number of scenarios—for example, lobbyists for private providers, or those with a strong ideological commitment to the private sector—and they would therefore not be watertight
As it stands, these amendments may well not offer the robust assurance that perhaps hon. Members intended. Therefore—this is where I may surprise the hon. Member for Ellesmere Port and Neston—to put this matter beyond doubt, we propose to bring forward a Government amendment on Report to protect the independence of ICBs by preventing individuals with significant interests in private healthcare from sitting on them.
As hon. Members will know from their attempts to draft these amendments, avoiding unintended consequences is not a simple matter. If appropriate, I would be happy to engage with either the hon. Member for Nottingham North or the hon. Member for Ellesmere Port and Neston in advance of Report. We may not reach a consensus, but, as they both know, I am always happy to have a conversation with them.
The Government are firmly committed to the founding principles of the NHS. We recognise the importance of its values, and the public service ethos that animates it. It is by no means our intention to allow private sector providers to influence, or to make, decisions on spending on the commissioning board—the ICB—and the spending of public money. The Bill does not allow that, but we will look to see whether we can find a way to put that unfounded fear to bed once and for all with an appropriately worded amendment that does not have unintended consequences.
Although I appreciate that much the same motive underpins amendment 27, it is worth considering why the integrated care board and the integrated care partnership are different bodies. The decision to create integrated care partnerships came from discussions with a number of stakeholders who revealed a strong case for the creation of a committee to consider strategically not only the health needs but the broader social care and public health needs of a population. It is not a body like the ICP, as we have heard, which will be directly accountable for the spending of NHS monies.
We therefore do not intend to specify membership for the ICP in the Bill, as we want local areas to be able to appoint members as they think appropriate. To support that, we have recently been working with NHS England and the Local Government Association to publish an ICP engagement document setting out the role of integrated care partnerships and supporting local authorities, integrated care boards and other key stakeholders to consider what arrangements might work best in their areas.
We would expect members of the ICP to be drawn from a very wide variety of sources and backgrounds, including the health and wellbeing boards within the system; partner organisations with an interest in health and care, such as Healthwatch; and potentially voluntary and independent sector partners and social care providers at that level, as well as organisations with wider interests in local priorities, such as housing providers.
To exclude independent providers from both the ICB and the ICP would, I fear, risk severely reducing the extent to which all parts of the broader health and care ecosystem could be drawn upon in the ICP context. It would exclude valuable expertise and would, for example, prevent social care providers who provide a small amount of domiciliary care to the NHS from sitting on the ICP. Furthermore, the ICP will not make commissioning decisions or enter into contractual arrangements that are binding, or make decisions about who gets funding allocations. Those are functions conferred on the ICB, hence the distinction that I make.
I therefore believe that membership of individuals from independent providers on the ICP does not present a conflict of interest in the way that hon. Members have asserted, certainly in the context of the ICB. I suspect that we may debate that further in the coming weeks, but taken with the ICB and the comments that I have made, we believe that this provides the right balance between recognising the distinctive accountabilities and responsibilities of the NHS, local authorities and other partners, and strongly encouraging areas to go further in developing joint working.
I hope that what I have said provides some reassurance to Opposition Members, and that they will be willing—I see them nodding—to engage with me to see whether we might find a greater degree of consensus. I should also say that I will obviously speak to the Scottish National party spokesperson on this as well, as I have done throughout. I addressed my remarks to the shadow Minister, but of course I extend that offer to her. I hope that on that basis, the Opposition Front-Bench spokesman will consider withdrawing the amendment.
Alex Norris
If the Bill is about collaboration, we ought to model that here. Given that very gracious offer, I am very happy to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
We now come to amendment 33 to schedule 2, which has just been debated. Justin Madders, do you wish to move the amendment formally?
Justin Madders
In the light of the Minister’s concessions, we wait with interest to see what we can work together on to achieve the aim that appears to be shared across the Committee, so we will not move amendment 33.
Ordered, That further consideration be now adjourned.—(Maggie Throup.)
Building Safety Bill (Fourth sitting)
(3 years, 3 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Chair
We will now hear from Martin Boyd, chair of the Leasehold Knowledge Partnership, and from Dr Nigel Glen, chief executive of the Association of Residential Managing Agents. I remind colleagues that we have until 2.45 pm for this session. Would the witnesses introduce themselves for the record, starting with Martin?
Martin Boyd: Good afternoon, everyone. My name is Martin Boyd. I am chair of a charity called the Leasehold Knowledge Partnership. We also act as the secretariat for the all-party parliamentary group on leasehold and commonhold reform.
Dr Glen: Thank you very much, Chair, and thank you for the opportunity to present today. My name is Nigel Glen, the chief executive officer of the Association of Residential Managing Agents, a not-for-profit trade body with about 325 members who manage about 1.6 million leaseholds between them.
Mike Amesbury (Weaver Vale) (Lab)
Q
Martin Boyd: No. You have heard two witnesses already tell you that the National Audit Office has reached the view that it will not actually work very often. The problem is that there are limited circumstances in which you can apply the Defective Premises Act. It seems like a welcome idea, and of course it is—six years is not sufficient—but there are very few leaseholders who are going to be able to take action using that facility.
Dr Glen: I would concur with that. If you think about the practicalities of lay leaseholders taking on a plc on a block-by-block basis, just having the financial capability to do that, let alone the expertise and the time, is beyond them. It is one of those things, I hate to say, that sounds good, but in the real world will be very difficult and does not help.
Mike Amesbury
Q
Martin Boyd: No, there is very little. We were aware of one London site that began to go down that route, but the developer agreed to settle before court proceedings were served.
Dr Glen: Likewise, I concur on that.
Ian Byrne (Liverpool, West Derby) (Lab)
Q
Dr Glen: I will start off on that one, seeing as Martin started on the last one. No, if you look at it, there are many aspects of it that will not protect. Inside the impact assessment, you will see that the cost is an estimated £200 per leasehold per annum, which does not sound much, but for some people that is the difference between having food on the table and not. Also, outside of that is the cost to remediate any defects that could be found, and I believe the estimation there was £9,000, of which only a third—33%—was the external wall system. Let’s say the building safety fund covers that: that potentially still leaves £6,000.
There is also the issue of the additional layers that are being put in: a building safety manager is not going to be a cheap resource. One of the things that we would be very keen on is a consideration of this. We are absolutely for increased safety, but we have to make sure that people can afford it, and that it is proportional as well. There are quite a few aspects of this that are going to be an unpleasant surprise for many leaseholders. I am a leaseholder: it is going to be a surprise for me as well when it finally comes through.
Martin Boyd: The Government have said from the outset that leaseholders should not pay. This Bill ensures that even if there were some possibility that they might not have to pay before, they will now. It is a very regressive system. It may be okay if you own an expensive million-pound flat in London, but if you have a £120,000 flat that you bought somewhere up in the north-east or north-west, and particularly if you are a shared ownership buyer, it is going to destroy your life.
Ian Byrne
Q
Martin Boyd: Unfortunately it begins, “I wouldn’t start from here.” We have got ourselves into a very difficult position, principally because the Government did not react quickly enough in 2017, so we now have huge problems with the housing market. It is very difficult to sell flats. There is a great deal of uncertainty about what is going to happen. We thought we had just got used to the external wall system and we are now moving towards EWS being replaced by the British Standards Institution publicly available specification 9980. Any market needs confidence, and at the moment we are not doing anything to get that confidence.
What has happened in other countries, which seems to be slightly more successful, is for the Government to make decisions about which buildings they think are of higher risk and which are of medium and lower risks, and prioritise the work. In some instances here, we are remediating low-risk aluminium composite material buildings more quickly than ACM buildings that are still fully clad 51 months after Grenfell.
Daisy Cooper (St Albans) (LD)
Q
Dr Glen: It follows on from what Mr Byrne was saying about how do you think we can get around this. At ARMA, we have always said, right from probably a week after Grenfell, that time is the issue and not the money, and that we should get people safe first and worry about who pays later—but here we are four years later and we are still dithering around about exactly who should pay and who should not.
For me, because of the scale, the only way to get people safe is for Government to put the money forward to forward fund it, because other schemes might require a time delay while funds are brought in or while disputes go on. However, I do not think the Government or the taxpayer should pay in full. There is some culpability where, for example, having oversight has failed, but there are instances where the Government and the taxpayer have nothing to do with it and should not foot the bill.
Let us get people safe first by providing that funding, and then find out who should pay, perhaps people who have pushed forward products that are not fit for purpose or people who have constructed badly. There will be instances, I am afraid, where leaseholders might have to pay. If we have a 15-year-old building, we have taken the cladding down and sadly the concrete is 15 years old, it is going to need some repair work. It is nobody’s fault apart from Father Time. In that instance, maybe the leaseholders should pay for that. It is a different question if they might not be able to, in which case let us have some grants available.
I am staggered that four years on from Grenfell I am answering the same questions with the same answers. That is why we support the polluter pays Bill, because unlike some other amendments we have seen in the past that show that leaseholders should not pay, which we absolutely agree with, it provides a route to pay. One thing about leasehold service charges is that if there is no money there you cannot do anything. Finding people who should not pay does not help remediate the buildings. It just makes it more difficult, in a way.
Martin Boyd: We put forward a proposal last year for a levy scheme to introduce £12 billion into the system. It was a project that was primarily developed by a former Bank of England economist, and the proposal was that the money would be provided. and then would begin to be repaid after five years. The Government would have five years to decide who should contribute, and that would obviously be a mixture of the developers and the material providers, and possibly even the leaseholders—who knows?
Unfortunately, at the time the Government wanted to develop their own levy scheme, so we have the proposed £2-billion developer levy, but that does not get us enough; we still need to put £12 billion to £15 billion into the system. It cannot come from the magic money tree. We need to have a rational policy. Leaseholders have been screaming for ages that they want a solution. None of them thinks that the taxpayer should pay for this. Perhaps some do, but most of them are realistic in accepting that we need to find a financial solution that gets us out of the mess, because if we do not the housing market will stay in crisis for years.
Daisy Cooper
Q
Martin Boyd: On the specific “polluter pays”, we have not seen the detail yet, so we do not know. The difficulty, as has been referenced in a number of witness statements to the Committee, is that a lot of the developers have used special purpose vehicles, so we do not know yet what proportion of the market would be able to recover from this anyway. The building in which I have a flat is 20 years old. I have to accept, in reality, that even if my developer had done something wrong it is rather stretching things to think that I could go back and take action against them.
Dr Glen: It is a very complex situation. If it wasn’t, we would have found the solution a long time ago. Is it perfect? No. Is it a good start? Yes, and I am very happy with good starts.
Siobhan Baillie (Stroud) (Con)
Q
I was interested in your point about grants, Dr Glen, because ultimately we know that quite a lot of businesses have gone bust. Your proposal that we effectively get the taxpayer to foot the bills upfront, knowing that there will be a big gap potentially, is a problem. I am just playing devil’s advocate. On your point about grants, you are suggesting that the taxpayer pays. That is a point of concern for people who are not affected by this and are thinking about the overall financial purse.
Dr Glen: I understand that. The specific example that I was using for grants was that we strip a building down, take the cladding off, look at the building and say, “Oh my gosh. Something has happened to the concrete.” I completely understand why the Government should not be making every building as new. It is the practicality, because the way that service charges work means there is no profit margin in them. If there is any leftover at the end of the year, you give it back. If there is a deficit, you demand it.
This is the problem: let us say that you, Siobhan, are a leaseholder in a particular building, and I say, “Terrible news: we’ve found that there’s a bit of problem with the concrete, so we need to do some work on that. It’s not applicable for the building safety fund because it’s nothing to do with the cladding; it’s just Father Time.” If you then say, “I’d love to—I can understand where you’re coming from—but I just don’t have £2,000,” what do we do? If you do not pay, the others should not pay for you surely, so suddenly I am £2,000 short. That means that I cannot do anything as a managing agent, because I cannot place that contract. I am talking about short-term mechanisms to mean that we can get that building safe. That is why it is a complex situation with no absolute way forward.
On should the taxpayer pay—I am a taxpayer and would like not to pay—it is undeniable that, under successive Governments, there have been changes in regulation where, perhaps, a developer has said, “I would like to put this material up—it’s not cheap— can I?” and the local council has said, “Yeah, it’s fine”. That same local council and, in fact, sometimes the same person, is now saying, “Actually, you shouldn’t have done that”. Is it right that the developer or whoever in good conscience who did what they thought was right at the time should pay, or is that something where we should say, “Sadly, there are some things that taxpayers should front up for”? It is a very complex situation. I come back to it again: there is no single solution. The only one I can see is to let the Government pay now and then figure out how to get the money back later.
I would like to think a bit further than that. This will not be the last issue we have in housing over the next decades. Let us form this fund, so that when whatever it is that next comes up, whether it is something toxic that we did not know about or something else, money is in the bank so that we can start moving on these things straightaway. Let’s think forward as well.
Martin Boyd: I have a letter sitting here from officials in December 2017, after we had written to Ministers saying it is very urgent that Government intervene early on or we will end up with leaseholders going through a rather nasty experience that will drag on for years. I did not think at the time it would be so many years. The assumption was that, well, of course, the law will allow you to take your building owner, as we keep saying, to court and make them pay. It has not happened. The law was never ever going to make that happen.
The statements that we made have been made in Parliament too, and said that building owners should do the right thing. It is not what the law says they should do. They are under a fiduciary duty to represent the interests of their company. If you happen to own ground rent investment and therefore are deemed to be the building owner, which will only represent possibly 1% of the property value, or even less, how on earth are you expected to pay to remediate the cladding? It was never, ever going to happen. Grants have been the only way the system would work from the very beginning. I think it is still the only way that we have left.
Mike Amesbury
Q
“to protect leaseholders from historical remediation costs”,
and then it was “unaffordable costs”. Does this Bill do that? What key things are missing from the Bill?
Dr Glen: No, I do not think it does, because the Bill says that historical costs can be levied on the leaseholders at 28 days’ notice et cetera. I heard in an earlier session about whether that would really help. It could increase costs, because we will have two separate charges now. We might want to touch on that later. No, it does not. There are some amendments around. As we said, the polluter pays is part of the amendments, because we need to try to figure out where the money is coming from. I go back to my earlier statement: the only way I can see it happening, unless we are going to be here in four years’ time still discussing this, is something big like Government—I think the Government are the only size that can do this—to make sure that we front-fund pay. Then, absolutely, Government should figure out how to get the money back to protect the taxpayer. So I do not think it does it, in short.
Martin Boyd: I agree. I have nothing to add to that, it is just not going to do it.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q
Martin Boyd: No. Judith Hackitt said the problem is that we need a fundamental culture change in the industry, but I have to defend the industry. If you are providing into a market that says, “You have liability for a product for two years. After that two years, the liability moves over to a warranty scheme for another eight years, and then after that you walk away scot-free,” how does that encourage developers to produce high-quality products? The Bill reinforces that because, again, we have a new homes ombudsman. For two years, we are not proposing to change in any way the idea that somebody builds a building, keeps quiet for two years that they have problems with it, and then says, “I’m sorry, Mr Customer, you are not protected by the normal Consumer Protection Act rules because this is a property, not a toaster.”
Ms Rimmer
Q
Dr Glen: I do. As we discussed earlier, if you look at the Law Commission reforms on enfranchisement, right to manage and promoting commonhold, you see that a drive of Government is for self-determination of a block. Looking at future blocks, where you have lay boards trying to unpick something that happened 12 years ago with a plc developer, I do not see that as a realistic scenario, so I do not think the Bill works.
The other issue is that there are many things in the Bill and in the Hackitt reforms that are admirable in helping, protecting and improving safety for new builds going forward, but what on earth do we do with the 4.6 million-plus leaseholds that we currently have?
Martin Boyd: May I add one thing? We have a problem in this country. If you buy a leasehold flat that is new, it is never surveyed. You do not have a survey of that building. In other countries that have a commonhold system, part of the conditions of the initial purchase is that a completely independent survey is carried out that validates that the building has been created to a reasonable standard. We are proposing part of that within the Building Safety Regulator, but there does not seem to be a final sign-off that says, “Here you are, Mr Customer. We have checked the building for you as the customer.” That would make things an awful lot easier than creating yet another ombudsman, who in reality will do like most other ombudsmen do, which is reach some small decisions but find it very difficult to reach big decisions.
Shaun Bailey (West Bromwich West) (Con)
Q
Martin Boyd: A similar issue cropped up during the passage of the Water Bill, where it was argued that leasehold properties should be excluded from the protections of Flood Re because it was a commercial policy taken out by the freeholder. Everyone in the leasehold sector tried to explain to the Government at the time that that is not how it works. The bills are all being paid by the leaseholders; it is just that the landlord is deemed to pass this on.
The difficulty we have with freeholders in the leasehold system—you heard from Richard Silver this morning—is that they have no interest whatsoever in the quality of the building. It makes not a cent of difference to their profit line whether that building is falling down or is in pristine condition. The only people who are concerned about it are those who live in it. The freeholders will say, “We have a long-term interest in the estate,” which is rather interesting because Long Harbour has been in existence for less time than we have, and we have not been around for a huge amount of time. I have owned my flat for twice as long as Long Harbour has been in existence. So you have the problem that until we move to a commonhold structure, you have a conflict of interest between somebody deemed to be the building owner, who is only interested in how they make a profit from the building. and all the people who live in the building, who want to ensure that it works for them. Some will want to reduce costs, some will want to invest for the future, but they will all have an interest in the building and about the fact that it is in good condition.
Dr Glen: As I mentioned earlier, it is a very complex situation. If we look at the portfolio of ARMA members, where we know who owns the building—is it leaseholder-organised, with residential management companies and right-to-manage companies, or is it third-party landlord? —in 60% of the cases we know about, there is a leaseholder structure. So when you say the landlord should pay, in many cases that is going to be the leaseholders, because they actually own the freehold.
I remember an interesting discussion I had with a colleague of yours, Hilary Benn, about the idea of a compulsory purchase order. We took him through the economics. As Martin alluded to earlier, you see this big building and you think “Gosh, that must be worth a fortune,” whereas in fact it is really a financial instrument. The value of that to the freeholder is typically what the ground rent is over a certain period of time. If the ground rent is £200 and there are a hundred units there, that is £20,000 a year. So if you go to somebody and say, “Unless you pay £2 million to remediate this building, I will compulsory purchase order you,” and that somebody is thinking, “Well, I only get £20,000 a year,” that person will kiss you and say, “Give me market rate, CPO me, and you have now just taken on a £2 million problem.”
So although it sounds good, I do not think that is the route. The danger is that by saying “Ooh, yes, we can get the freeholders to do it,” unfortunately all that means is that it gives false hope because there is not that bucket of money there. So again, be careful, because many RMCs and RTMs are also the freeholder and we do not want to put them in the firing line either.
Shaun Bailey
Q
Martin Boyd: I have to declare an interest in this. When we started the meetings in Parliament in 2014 that looked at commonhold again, we were quite agnostic. The view was it had failed in this country, and we were quite surprised when we got to our first meeting and while the officials all told us “No, the market does not want this,” the whole sector told us that the Government had messed up the legislation; it did not work. So the initial big developments that were started in Milton Keynes had to be stopped halfway through because the law just could not cope.
I do not think that there is ever a way of joining the interest of the landlord and the tenant; very often, they have fundamentally opposing interests. I am part of the landlord of our site. We bought our site from our previous landlord for £900,000 in 2013, after several years of court battle. The site is worth about a quarter of a billion pounds. We still hold our freehold on the books at £900,000, but it is now actually worth diddly squat, to use an inappropriate phrase, because we commuted the ground rent. We therefore do not have an asset in the freehold. All the asset is held within the flats. We have a structure that copes within the leasehold system, but it would work much more effectively if it was a commonhold system.
Shaun Bailey
Q
Dr Glen: I am a bit wary about looking at the ownership structure, simply because if we waved a magic wand and all those buildings were today commonhold, everybody living in them would be in exactly in the same position. It does not solve anything. You can argue, “If it was commonhold, they could maybe sell some air space and generate a few million,” but that is sort of selling the family silver. You could do that to put new boilers in.
More generally, there are things that legislation can do. I am a big fan of mandatory, independently set reserve funds because buildings deteriorate after a time. Naturally, people say, “You want me to pay for something that won’t happen for 25 years. I’m going to be out of here in five, so I don’t want to pay towards that.” We see that when dealing with boards, which naturally look at whether they can put a sticking plaster on something rather than committing to major expenditure. Other things can be done to help.
How can you resolve the relationship between landlords and leaseholders? As Martin says, sometimes their interests are diametrically opposed, and they are within the organisation. I am painfully aware of many RMCs—my firm almost used to do nothing but RMCs—where you have a dichotomy between the buy-to-lets, who want the minimum service charge possible, and the people who live there, who want the place to be nice and cleaned every single day. You will still get that conflict. The problem is people who are not related living together in close proximity. Communal living is one of the issues. I do not have an answer for you.
Daisy Cooper
Q
Martin Boyd: Unfortunately, my view is that the residents’ voice section of the Bill and the HSE’s current work is the weakest element of the whole process. The Government have not dealt with the issue of the residents’ voice particularly well for a very long time. There is no system at all in either the social or the private sector for the proper representation of everyone’s interests.
As we said, the landlord is obviously sitting in conflict. Under the Bill, I get to sit in conflict with my leaseholders because I have become the accountable person. Under me, I have a responsible person—one of Nigel’s managing agents—who will employ the building safety manager. With my landlord’s hat on, I am liable if things go wrong, but I have no responsibility for any of the costs. All the residents have full responsibility for the costs, but no control. It is only because I am a landlord and a leaseholder that we get that common interest. In both the social and private sector, we have had landlords who have undermined effective resident engagement for decades.
Early in the Bill’s passage, we set out a proposal for a formalised system to create a residents’ group on every site, and the view at the time was that that sat outside the Bill’s purview, but there is no point in setting up a system for cosy little decisions to be made that filter down to the residents, where you hand them a nice little infographic saying, “Please don’t store petrol in your flat.” That is what has been done. The social sector best practice group has produced an infographic, and one of the diagrams says, “Don’t keep petrol in your flats.” Well, if that is our view of the intelligence of people who live in flats, we have a very, very long way to go.
We need to take a very different approach to resident engagement, and what I have said to officials is that, rather than take a top-down approach—assuming that we call the landlord the top of the system—it should start at the bottom with people who actually live in the buildings. Give them the facility to organise themselves and represent their common interests.
Dr Glen: As a managing agent, I would much rather deal with a representative committee of residents than each resident individually, because obviously time is involved in that. It would be nice to think that those residents will represent everybody—that would be nirvana—although it will not always be the case.
This is a really difficult issue. It is always a surprise that people do not realise that managing agents often do not know who the resident is. Somebody will hide the fact that they are sub-letting, for a variety of reasons. They might not want the taxman to know that they are receiving rental income. They might not want to pay a sub-letting fee, or they might not bother to get around to it.
It is difficult to engage with residents when you do not know who they are, but capturing their voice means we have to do that. We also have to filter it. I will give you an unfortunate example that I read about on LinkedIn over the weekend. A firm that specialises in out-of-hours said that they had had a complaint from a gentleman. It was about an issue that did not need instant attention, because that would cost four times as much and he could wait until Monday. The firm received 155 phone calls from that person over two days, most of which were abusive.
Something I put in my paper was that we need somehow to figure out how to filter this. The example I gave was someone saying, “It’s a bit dark in this corridor.” Is that a complaint? Is it just ruefully saying, “My eyes are getting old,” or do I, as a managing agent, have to log that, report it to the regulator, track it and bring in somebody to install new lighting at the cost of £2,000 that weekend? I do not know.
This is a difficult area to get into, but the more we, as managing agents, can get a collective response, the less admin you are doing trying to deal with absolutely everybody.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Q
Martin Boyd: The answer on whether it is fully clear—I think we would fully agree on this—is that when you get into complex sites with mixed private, social sector and commercial, you are going to have a number of accountable people, a number of responsible people and, potentially, a number of building safety managers. The potential for conflict there is enormous.
The issue I have with the Bill is this: I can accept that you want to make me accountable if I get something wrong, but the Bill, if we use the analogy of cars, is trying to make me responsible for the fact that Mercedes produced a diesel engine that broke the rules. I did not design the building. I did not build the building. I am responsible, and fully accept I should be responsible, if we do something wrong with the management, but we, effectively, are non-exec directors. At any large site, that is how it will be.
Residents do not run their own building unless it is very small; they will contract and employ a professional managing agent. In turn, there is no such thing as a building safety manager at the moment. I do not see why they are needed at all in the occupation phase, because what a professional property manager does is contract a relevant expert when they are needed. If the air conditioning system, the lift system, various plant and machinery or the fire alarms need to be updated, they will go out to a relevant expert.
The idea that we are somehow going to put that expertise in one individual and that they will make the decisions is just going to cause conflict. The property manager will be trying to budget for how they plan to look after the building for the next five years, and the building safety manager will have a different set of priorities. As far as I understand it, the building safety manager wins—so what happens if the building safety manager spends all the money and there is nothing left for the property manager to spend? The answer is that they will just have to put up their bills, so we will have one set of building safety charge bills getting bigger and bigger, and another set of normal service charges getting bigger. It will cause problems.
Dr Glen: A big worry for me about the impact of having an accountable person, particularly where there are lay boards, is, to put it succinctly: who in their right mind would agree to be a director with that level of accountability? What are we going to do in those circumstances?
We have talked about potentially bringing in professional directors—that is one possible route, if the lease allows it, and that would be a cost, again. That is going to be an issue, I believe, for anybody in their right mind taking on that level of responsibility. What this might mean is that there are no leaseholder-led boards—they might appoint a professional who then appoints and instructs the managing agent accordingly, but you might see residents’ management companies and right-to-manage companies disappearing.
Martin Boyd: I think there is a risk, because if you want to make me responsible for Mercedes, you need to put me in charge of Mercedes. I am not going to do that, so I am stuck. People who sit on the boards of RMCs usually consider the matter quite carefully. You are taking on a serious responsibility, helping to look after the lives of other people. But you are doing it as a non-exec.
I make it clear to the rest of my board on regular occasions: “You do not interfere in operational matters.” We employ professional managing agents to do that. I think that the legislation needs to be structured to allow that non-exec position to continue because if you want to say, “I am suddenly going to make you criminally liable for matters you don’t control,” Nigel is right: who is going to be stupid enough to take that role? More importantly, a representative of the Association of British Insurers will be speaking to you in a while and I think you are going to struggle to find anyone who will insure that role or those of the building safety manager and the responsible person.
The Chair
If there are no further questions, I thank the witnesses and we will move on to the next panel.
Examination of Witnesses
James Dalton, Steve Wood and Dr Sarah Colwell gave evidence.
The Chair
Q
James Dalton: Good afternoon. My name is James Dalton. I am the director of general insurance policy at the Association of British Insurers.
Steve Wood: Good afternoon. My name is Steve Wood. I am the chief executive of the National House Building Council.
Dr Colwell: Good afternoon. I am Sarah Colwell, the director of fire suppression testing and certification at BRE Global Ltd.
Daisy Cooper
Q
“Although the frequency of fires over the last 10 years has decreased, insurers have seen a significant increase in the damage and costs from fire spread”.
I do not believe we have heard that from anyone else in our evidence so far. I wondered whether you could tell us a little more about that, particularly in terms of what kind of emergency status fire remediation should have attached to it and what the impact of the increase in damage and costs has had on the insurance industry and on leaseholders.
James Dalton: The insurance industry has been calling for a significant period, including well before Grenfell, for significant reform to the building safety regulatory framework, including in terms of fire safety. Over the last decade, we have seen a reduction—with the exclusion of Grenfell, obviously—in the overall number of lives lost in fire. I think the Government statistics will bear that out. Over the same period, however, the insurance industry has seen a significant increase in the overall cost of fire claims, including but not exclusively from residential buildings.
If I include all commercial fires—in warehouses, commercial premises and residential building blocks, for example—there has been a significant increase in the cost of fire, but we suspect that one of the reasons for that is that, as we now know, fire spreads much more quickly than had previously been anticipated in the context of such things as modern methods of construction, including all the issues that you have been hearing about in the context of cladding in particular, and wider fire safety defects that we have found in the post-Grenfell world.
Daisy Cooper
Q
James Dalton: The significantly increased cost of fire is obviously passed on to all premium payers through increased premiums. For leaseholders in the post-Grenfell world, there have been very significant increases in the cost of insurance for some of the buildings that have been identified as most at risk.
I and the insurance industry particularly empathise with all leaseholders who have been affected, and we have worked hard to ensure that where buildings have not been able to access insurance, we have tried to facilitate insurance. The sad reality is that, in the absence of a quicker remediation programme, those leaseholders will continue to face increased insurance premiums.
Ruth Cadbury
Q
James Dalton: I would say that it is not just residential; it is in a number of buildings. If you think about the significant increase in online shopping, for example, which has driven the development of very large non-compartmentalised warehouses: those are very significant fire risks because they lack the structures internally. It is a problem that the insurance industry is cognisant of both here in the UK and internationally.
Ruth Cadbury
Q
James Dalton: I am not aware of issues in other jurisdictions. It is not fair to talk about the UK as a whole, because Scotland has a different regulatory framework, but I am aware that in the UK there are policy issues that we as an industry have long been calling for—for example, the mandatory installation of sprinklers in all new buildings, but particularly those that house and protect the vulnerable such as schools or care homes. Frankly, it is beyond belief that it is not mandatory to include sprinklers in those buildings when they are newly constructed. I am conscious that I am probably not answering the question, but I do not have any information and I would not want to mislead you. I can follow up in writing with research done by colleagues, if that would be useful.
Selaine Saxby (North Devon) (Con)
Q
James Dalton: I thought you might be sick of hearing from me!
Let us start with what is good about the Bill. I think there is a lot in the Bill to welcome in the context of Dame Judith Hackitt’s golden thread of information. The devil will be in the detail, so we await with interest the secondary legislation that will underpin the Act. A lot of the technical detail is going to be there, and our industry along with many others will want to analyse and scrutinise that legislation.
What is missing from the Bill? If I am honest, we do not understand why the framework does not apply to buildings under 18 metres. Fire does not affect just those in buildings over 18 metres—it affects all buildings. Some of the most egregious examples of buildings that have been covered in cladding, with woeful fire protection mechanisms, are under 18 metres. We certainly think that the Committee should carefully consider applying the provisions of the legislation to buildings under 18 metres.
Steve Wood: I would support what James said. There is a lot that is good in the Bill and the NHBC supports the principles of the Bill. In terms of what is missing, it places a single Building Safety Regulator across the whole sector, private and public, and we suggest it is important that the regulator appoints to building control bodies on the basis of competence—not whether they are from the public or private sector. That is an area we are concerned about.
We welcome the single regulator, but please appoint to building control on the basis of competence; otherwise, there could be real issues in terms of capacity and confidence in the sector, which might slow down new home building and potentially lead to less safe buildings. From the previous session, and reinforcing what James said, there is still quite a lot of detail to work through in the secondary legislation. That includes details around accountable persons. Given all the people involved in the design and construction phases of developments, particularly complex developments, we should work harder to get accountabilities clear where we can. There is more to work through on product certification as well, but someone on the panel will be more of an expert on that than I am, I suspect.
We welcome the Bill, but there are a few areas that need to be worked through to get it right. The principle should be to build right first time to avoid these issues. There are big structural challenges in the industry to do that, and that is where the focus should be.
Dr Colwell: I would agree with the previous panellists: it is a welcome Bill with a lot of good frameworks and overarching challenges within it. We would all agree that, as practitioners, the devil will be in the detail as to how that actually comes into place. Going forward, we welcome the introduction of the competency roles, and the understanding of building materials and the role they play within the structure.
Throughout this process, one of the things that has been commented on frequently is the golden thread. The one thing that we are seeing and hearing throughout these sessions is that the thread is more complex, and is potentially a network or a web. As such, the legislation that supports this—the secondary and the line part—needs to be clear that it does not end up conflicting, but rather carries the whole process through and leads us to safe buildings.
Ian Byrne
Q
James Dalton: The answer to that is probably best delivered by technical experts. From an insurance industry perspective, there is no doubt in my mind that a building in which there is a fire and in which that fire is put out much more quickly than would otherwise be the case in the absence of sprinklers would probably, first, save lives, and secondly, result in significantly less damage to the building from fire. In that context, I suspect those buildings would be cheaper to insure.
Ian Byrne
Q
James Dalton: As I said in an answer to a previous question, the insurance industry has long argued that it should be mandatory for new build buildings—in particular those that house vulnerable members of our community such as care homes and schools—to have sprinklers.
Ian Byrne
Q
Steve Wood: I support what James said. I think it should be more risk-based in terms of the approach and it should be part of the planning and sign-off on any new development. I do not think we should draw up arbitrary lines on sprinklers by height or floors. It should be risk-based.
Ian Byrne
Q
James Dalton: As we made clear in our written submission to the Committee, the professional indemnity insurance market internationally and particularly in the UK—especially in construction and building—has very significantly hardened at the moment. That is due to a range of factors.
One of the things we want to understand in more detail from the secondary legislation in the Bill is the specific regulatory requirements on those professionals involved in managing a building because that has an impact on whether, the extent to which and the price for professional indemnity insurance that could be available.
As I said in answer to a question on this in the pre-legislative scrutiny of the Bill, now is not the best time, frankly, to be introducing new requirements on new professionals in building and construction from a professional indemnity insurance perspective. The industry wants the detail and I am committed to working with my insurance company members to understand what the availability and cost of professional indemnity insurance might be once we have the detail.
Ian Byrne
Q
Dr Colwell: From BRE’s perspective as training providers in this field, we welcome the clear definition of roles within that, but the thing that goes hand in hand is to understand the scope and the levels that we are expecting within that competency to enable the insurers and end users to be able to benchmark the suitability of that training.
One of the things we look forward to in further legislation and also with the support of the regulator itself is looking at where each of those roles begins and ends. We heard it being said in the previous session how those sometimes do not necessarily join up and people make assumptions about where something begins and something ends. Also, within that, how are we going to take that training forward? How are we going to measure that training? Are we going to make them professional qualifications or managed qualifications? Is there an overarching syllabus that we would expect each of the roles to answer to or will it be left to training providers to interpret the guidance given in the legislation to deliver appropriate training around those points? That is an area that we would seek to build on.
Ian Byrne
Q
Dr Colwell: As part of the development work, we were part of the working group 8 looking at competency development. We are actively working with the regulator coming in on that and also within the Department as to where we would like that to go forward to.
Mike Amesbury
Q
James Dalton: Sure. There are two different types of insurance in play in your question. On the cost of buildings insurance, it is important to note—I think I heard this in the previous sitting—that the Bill is prospective. It is not retrospective except for the provisions that I will come to in a second. Will safer buildings be built as a result of the Bill and all the accreditation and certification, in terms of the golden thread? Buildings should be safer as a result. As I said to your colleague, safer buildings should be cheaper to insure, and that insurance should be more available.
On your question about the Defective Premises Act 1972, that issue is about liability insurance, not buildings insurance. The challenge in that space is that, without there having been consultation, the Bill retrospectively extends the period of liability from six to 15 years; some insurance policies will have excluded liability over and above six years. I do not know who is going to pay for the period between six and 15 years, when there is found to have been negligence. There may not be an insurer that is on risk to cover that liability. That is the big concern from an insurance industry perspective. Other insurance policies potentially would come on risk. Then we have a question about whether it is fair and reasonable to amend the Act retrospectively without consultation.
Kate Osborne (Jarrow) (Lab)
Q
Dr Colwell: An initial reading of the Bill in its current form suggests that the answer is no. Work will be required to ensure that we are clear on the standards being applied and how those are being used in the framework. We also need provision for going from testing to third-party certification, to ensure that we have the provenance following through on the products being used and the context in which they are being used.
The Bill lacks a little clarity. As mentioned earlier, the detail will probably have to sit in a secondary framework if we are to ensure that we get to the level of implementation that gives us a clear playing field.
Daisy Cooper
Q
James Dalton: May I comment briefly on the buildings insurance point? I should have been clearer in my answer and said, “All other things being equal.” I do not know what the insurance premium tax will be on the commission of buildings insurance, or what the wider regulatory environment will be like, tomorrow, next year or in five years’ time. All other things being equal, the Bill should, overall, decrease the cost of buildings insurance. It is a very difficult question to answer.
As I said in my previous answer, some insurance policies will be clear. There will be some insurance policies where the businesses in question that were insured no longer exist, for whatever reason. The question then becomes how those affected leaseholders and/or building owners will exercise their rights under the extension. To answer your question, in my experience insurance litigation can be complex, expensive and lengthy.
Daisy Cooper
Q
James Dalton: On the question of the extension in the Bill, in some respects the answer is: “Let’s see what happens as a result of this process and the wider parliamentary process.” At the moment, we have significant concerns about the extension of the limitation period from six to 15 years. Once Parliament decides and legislates, and once the Act becomes operational, we will need to see what the ultimate regulatory framework looks like, and what the implications are from an insurance industry perspective. This is an issue that we are actively working on. It was, shall we say, a surprise for us to see this in the legislation. As I said in my previous answer, it had not been consulted on, so we are working through the potential implications, both from a regulatory and legal perspective, and that process is ongoing. I would like to answer your question, but I think it is too early to say.
Steve Wood: One complication is that there is too much scope for different interpretations by professional people of the existing regulations. That is why there needs to be much greater clarity in the Bill—to remove or minimise that risk. For example, competent people looking at the same external wall system could draw different conclusions about compliance with the building regulations. We have to avoid that, because it creates uncertainty. It does not help confidence in the industry, and certainly not professional indemnity insurers, when you have that sort of situation, because you are not sure what risk you are exposed to as an insurance company. That is why we have to remove the ambiguity in the legislation and make it crystal clear. The challenge that the whole industry and everybody has—regulators as well—is dealing with this legacy issue while trying to build a better future.
The Chair
If there are no further questions from Members, I thank the witnesses on behalf of the Committee.
Examination of Witness
Mr Matt Wrack gave evidence.
The Chair
We will now hear from Matt Wrack, general secretary of the Fire Brigades Union. We have until 4 pm for this session. Could the witness please introduce himself for the record?
Mr Wrack: Hi, I am Matt Wrack. I am the general secretary of the Fire Brigades Union.
Rachel Hopkins (Luton South) (Lab)
Q
Mr Wrack: I think it will improve the building safety regime, and we welcome elements of it. Our assessment is that it does not go far enough. It is a welcome turn after decades of deregulation in public safety and building safety. Our union, which represents frontline firefighters, and our members who work in fire safety specialist teams have often felt like a voice crying in the wilderness on many of these issues for decades. We have objected to the growth of commercial interests in setting standards in the testing regime, and the approach to enforcement—often, regrettably, led by Ministers of different parties. We welcome the turning point in the Bill; it will help to clarify roles and responsibilities. We certainly welcome those elements.
Rachel Hopkins
Q
Mr Wrack: We have questions about the resources for the HSE. Whether it has the appropriate skills and expertise is a matter for it to discuss with the Government, and if it does not, it needs to be supported in delivering that. We have concerns about the scale of reductions in, for example, HSE inspectors; they have been reduced by something like a quarter over the past decade. The whole issue of resources runs through this debate on building safety. While we welcome the move towards regulation, that regulation has to be resourced adequately, including in the HSE. That is a key issue the Government will have to address.
Rachel Hopkins
Q
Mr Wrack: I think this will become clearer as the Bill is implemented. There is an obvious point for fire and rescue services around what is meant by the obligation to co-operate with the regulator. Again, fire and rescue services have been subject to unprecedented reductions in staffing numbers over the past decade. That will raise questions about resources when it comes to their ability to co-operate with the requests of the regulator. In the impact assessment, there are suggestions of additional funding for fire and rescue services for that function; we would question how those figures have been drawn up and whether they are adequate.
Under the proposals, if, because of resource implications, a fire and rescue service could not provide assistance, the regulator has the ability to go to another fire and rescue service—or, failing that, to the private sector. We object to the role of private sector providers in that. If we have a problem with resources in the appropriate public service, then those resources should be provided.
Ian Byrne
Q
Mr Wrack: Picking up on a point made in the previous session, we find the idea of a differential regime based on height somewhat illogical. In fact, the more I think about it, the more I think it would make sense to have a single system that is understandable to everyone, a single set of accountable people, and a single mechanism for making complaints and addressing problems.
There clearly is an issue around height in relation to building safety. As we put in our written submission, we do not agree with the 18-metre cut-off. We and others have said that if there is to be a height measure, a more logical one would be 11 metres. There are clearly differences between the fire risks in a traditional two-storey house and those in a purpose-built block of flats, where there are specific challenges. Some challenges are general across all forms of purpose-built blocks of flats; some of them apply at particular heights.
Clearly, there are additional challenges once you get to very tall buildings. They range from the ability of firefighters to fight a fire and rescue people to the importance of the internal building safety measures, such as the provision of dry rising mains, fire lifts and so on. All those things will be affected by issues such as the height of the building. As I think the National Fire Chiefs Council has said, it is a complicated issue because there are other factors, such as what has been done to the building and whether the building has been altered from its original design and construction. Lots of things need to be considered. Height in itself can be a bit arbitrary, and in our view the wrong height measure has been chosen.
Ian Byrne
Q
Mr Wrack: I was previously a firefighter in the London Fire Brigade—I have been in this position since 2005—and I think there is a problem with culture. I have lived through a decade in which the endless mantra from senior civil servants and Government Ministers of both parties has been that fire is a declining risk, and we can therefore afford to reduce our emphasis on fire safety. That was very clearly a theme that we heard for more than a decade. I think it fed through into the fire service itself, and senior managers and chief officers accepted that mantra. As I say, we were often a lone voice opposing that approach. That has allowed corners to be cut, and for deregulatory approaches to be taken. It has allowed standards to be cut. Over two decades, we lost something like 40% of fire safety inspecting teams. Then, of course, along comes Grenfell Tower, and people wake up to the fact that we have not been properly addressing risk.
To pick up a point made earlier by a representative from the insurance industry, one of the big problems in relation to fire safety and building safety in the UK is a complete lack of horizon-scanning. A question was asked about fires in the UK and elsewhere. The truth is that there have been warning signs from fires elsewhere. Clearly, you cannot necessarily draw an immediate analogy between a building in Europe or the middle east and one in Britain because the regulations may be completely different, but there were warning signs about external cladding systems, including in the UK. Regrettably, we have not had structures in place that allowed various professional voices, whether of construction specialists, building control specialists or fire safety officers, to discuss emerging risks and identify how we address them. I think a deep complacency about fire safety has emerged, particularly over the past two decades. Grenfell, hopefully, is a major turning point on that.
Mike Amesbury
Q
Mr Wrack: A single system of regulation would be better than what is proposed. I understand that there may be a need for a phased approach, but I am not sure that is what is in front of us. I think that the 18-metre cut-off point is incorrect, too. There should be a move towards an elimination of private-sector interests in building control. The idea that people can choose their own building control system is wrong, and appears wrong to many people. Finally—this relates more to the background to the Bill—resourcing is a huge issue for us in the fire service, for local authority building control, and for the HSE.
Ms Rimmer
Q
Mr Wrack: We welcome the commitment in the Bill to driving up standards. Regrettably, we in the union attend inquests, sometimes on the deaths of members of the public and sometimes on deaths of our members. There have been incidents in which our members have died and it has emerged that the fire risk assessor in the building had no qualifications. That is quite shocking. It is a sign of a deregulated sector.
We welcome the drive to improve and professionalise standards operating in a whole number of areas; if you listen to the shocking evidence to the Grenfell Tower inquiry, you find it relates to fire safety awareness among architects, to fire risk assessors, and to building control. We have from day one opposed the privatisation of local authority building control. If you listen to the evidence from Grenfell, there have been unprecedented cuts in local authority building control teams. That was reflected in the harrowing evidence given to the inquiry by an individual who reported that his team had been slashed completely. He kept a notebook by his bed because he could not keep up with the scale of work.
If we are to take building safety seriously, we need to provide adequate resources to those organisations tasked with delivering it, and that needs to improve standards. In the fire and rescue services, cost-cutting has reduced fire safety specialist teams and the provision of training. In the fire and rescue service, over the past 15 or 16 years, there have been reductions in training across the board—from the initial training that firefighters receive on joining the service to the training they receive when they enter specialist teams, such as fire safety departments—and, in our view, reductions in standards. If we are talking about driving up standards, we need to invest in the provision of adequate training and support for people to adopt those standards.
Ms Rimmer
Q
Mr Wrack: One of my roles, unfortunately, is to attend, participate in and support inquests and other inquiries. In virtually every inquest on the death of a firefighter we have ever dealt with, certain common themes emerge: command and control, resources and training. There are clear requirements under the Health and Safety at Work Act, which relates primarily to the internal workforce, and a raft of other legislation for public bodies such as the fire and rescue service to provide adequate standards in their outward-facing responsibilities to the community.
Ms Rimmer
Q
Mr Wrack: It certainly will improve, because the current state of affairs is pretty abysmal. For us, one gap in fire safety and building safety policy is the lack of the broader structures that used to exist in the British fire service, from 1947 to 2004, whereby various stakeholders came together to look at legislation, changes in the built environment, training requirements and so on, and could develop best practice in the sector. We used to have the Central Fire Brigades Advisory Council. That no longer exists and, as a result, there is a big gap in fire safety policy development in the UK.
It may be that the building advisory committee can play some of that role—precisely how that will unfold is a bit unclear, but it might play that role to some extent. But yes, the Health and Safety Executive potentially will improve things. As I mentioned, the key issue is resources.
Ms Rimmer
Q
Mr Wrack: We would oppose the approach taken that enabled desktop sign-offs to be conducted. I am not clear whether that would be enabled under the Bill once it has been implemented, but it certainly should not be.
One of the problems highlighted by Grenfell is the weakness of the testing regime. The ability of manufacturers and developers, in effect, to design their own tests goes against the normal, everyday, common-sense approach to testing that people expect. You do not design your own MOT for your car; you go to a registered MOT provider and they test it for you. You do not choose your own driving test examiner; they are appointed for you. I would argue that in areas where a lot of money is involved as well as huge issues of public safety, you should have stricter systems of regulation, not more lax ones.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Mr Wrack: I think we welcome both as steps forward. As I say, hopefully this is a turning point in the debate on public safety and building safety in Britain; however, I do not think there has been the relief on the financial pressure on fire and rescue services that I mentioned, and that runs as a theme throughout this.
I do not see how you can cut in the London Fire Brigade, for example, 25% of your fire safety inspectors and not think that that will have implications for public safety. Something like 20% to 25% of fire safety inspecting officers have gone over the past 11 years, and something like 40% over the past 20 years. That is a very significant reduction, and it clearly will have, and has had, an impact on the ability of fire and rescue services to conduct the level of inspections or audits that people would want them to undertake. We welcome that legislation and this Bill, but—you would not expect us to say any different—we think it should go further.
Shaun Bailey
Q
Mr Wrack: First, I welcome the accountable person role. I think that is a step forward, as one of the problems that we have had in terms of building safety is identifying who the relevant party is. It will create big challenges for various bodies in local government, and certainly for the fire and rescue service because there clearly are large numbers of such buildings—although they are concentrated, particularly with the 18-metre limit, in particular parts of the country.
It will create a significant challenge for the London Fire Brigade, for example, to monitor and keep adequate records of who the relevant accountable person is, and the relevant building safety manager who sits underneath them once the building is occupied. There are lots of operational challenges. Those points have been made by the National Fire Chiefs Council and others. I will keep banging on that it does raise significant resource implications, inevitably, for us.
Kate Osborne
Q
Mr Wrack: There are loads of things that come out of that. Building construction is always changing. A long time ago, as recruit firefighters, we were taught about building construction, but that was the building construction of the time—of the 1970s and ’80s. Things have changed and as I say I do not think that enough horizon-scanning goes on about the emerging risks in how we build and alter buildings, and what we put in them.
On the question of furniture, again, my union has a very proud record. We led campaigns, including here, about foam-filled furniture and requirements to provide measures to address the impact that it was having in domestic fires. However, what is emerging today is a growing concern, across the world, around the contaminants that might be involved in fire-suppressing materials within foam-filled furniture—you solve one problem, but you may create another. There is a lot of work to be done.
On research, again, I think one problem that we have in the UK is a low level of public research into fire safety matters. Over the decades, we have worked with people at the BRE and so on, but much more needs to be done on that front. The fire risks are changing; the materials that we put into and on to buildings have changed, so they affect how buildings react in a fire.
Kate Osborne
Q
Mr Wrack: There are other regulations covering office buildings. One big thing that has been highlighted by Grenfell is the difference in standards between high-rise residential blocks and an office block of an equivalent size.
In an office block, you would have far different fire safety measures, including two stairwells, regular fire safety drills and so on. Those do not exist in purpose-built blocks of flats, because those blocks were designed to deliver compartmentalisation—they were built to contain the fire within the flat of origin. What has happened in recent years is that that has broken down. I think that residential blocks are different from non-residential blocks. Whether two is the right number, I do not know.
Daisy Cooper
Q
Mr Wrack: That sort of structure is precisely what is needed. The post-war legislation effectively created the modern fire service. It introduced such a body, called the Central Fire Brigades Advisory Council. It included the Home Office, the inspectorate, chief fire officers and the trade unions. We had a very close relationship with researchers at what became the BRE, the fire service college. It was a joined-up way of thinking about the risks of fire, but was eventually criticised for supposedly being slow. Looking back, I think that criticism was very badly placed. I look at how they responded to a fire in 1958 where firefighters were killed; within weeks, guidance was issued.
I must say that it takes much longer today to get a change, and firefighters on the ground are hugely frustrated at the slow pace of change post-Grenfell. In the 1970s, we did have bodies that were looking at the emergence of high-rise blocks of flats, and their implications on fire safety and firefighting. We do not have those anymore.
Then Grenfell came along. We had warning signs. We had cladding fires in Melbourne and Europe. My own union came to the House after a fire in 1999 to warn about cladding systems, so as long ago as 1999 we were making warnings about the new systems that were being put on blocks of flats, which created the risk of the fire spreading up the outside of the building, yet in the intervening years very little has been done to address that risk; to improve the knowledge on the part of firefighters on the ground; or in any way to prepare for what that might mean for the people living in those blocks of flats.
There has been a complete lack of joined-up thinking for more than two decades on fire safety, and I appeal to people to think about how that could be put right.
The Chair
If there are no further questions, may I, on behalf of the Committee, thank the witness for his evidence? I am going to suspend the sitting for 10 minutes until we can fire up our next witness on Zoom. Thank you very much.
The Chair
Q
Eric Leenders: Certainly. My name is Eric Leenders. I am the managing director responsible for personal finance at UK Finance. I am also a non-executive director, senior independent director and chair of the risk committee at the Buckinghamshire Building Society and a non-executive director of Registry Trust Ltd. I think it would be helpful for the record to also record that one of my staff, a senior adviser in my team, is a non-executive director on the New Homes Quality Board, which of course has some relevance to and may bear on the conversation we will have in just a minute.
The Chair
Thank you. The sound is still a bit faint, so if you could make a point of speaking up, we would all be grateful. We are going to start with Shaun Bailey.
Shaun Bailey
Q
Eric Leenders: I think our primary interest, like the rationale for drafting the Bill, is to ensure adequate safety and protection for homeowners, so we all buy into that. To the extent that the Building Safety Bill gives voice to homeowners and perhaps particularly to leaseholders, we think it is very important. There are some details of the Bill we are likely to come on to discuss where other experts can support homeowners and leaseholders, particularly regarding safety standards. Our primary interest as lenders, of course, is to ensure that homeowners, particularly those who require mortgage finance, are able to afford the borrowing they take on, and that includes potential remediation costs if they are necessary for particular properties. Work in the Bill and work undertaken by the Ministry of Housing, Communities and Local Government outside the auspices of the Bill are helpful in that regard.
Mike Amesbury
Q
Eric Leenders: Experts are probably better placed to consider the dimensions of the Bill, but I did mention the work that the MHCLG has done, which looks to support those who have been classified as cladding prisoners. I understand that in working through the detail of the support for those in properties of 11 to 18 metres, it was found that there could be some complexities in the security arrangements for any lending and the allocating of responsibility for any lending to a property or an individual or leaseholder and so on. The Bill could provide a platform for some of those technicalities to be worked through so that there is a sound legislative footing.
Rachel Hopkins
Q
Eric Leenders: Yes, and I think there are also some protections for leaseholders where the amount of remediation exceeds £250. That is welcome. The 28 days is potentially challenging—I am thinking of the staff in our organisation paid on a monthly 31-day cycle—so there could be a little more time for individuals to pay. Salaried individuals in particular are predominantly likely to look in the Bill for support. Increasing that timeline might be helpful.
Ian Byrne
Q
Eric Leenders: That is quite a difficult question to answer. The first point to make is that the housing stock is of the order of 28 million to 30 million properties, and only about 9 million have mortgages; you could perhaps add another couple of million for buy-to-let properties, so about a third of the overall housing stock would be affected. The composition of the housing stock is about much more than the most at-risk properties. What the Bill looks to address, based on the input from the fire experts, is a risk-based approach that would potentially look to address higher risk properties above 18 metres—there are probably about 1,400 or 1,500 of those properties in the UK. The impact on the overall market might be relatively modest, but the chief point is that for individual homeowners and those that have mortgages—those constituents—the impact is significant and is more than financial. It also has an emotional consequence as well.
Ms Rimmer
Q
Eric Leenders: We see two sides to this. One element is the extent to which there is a discrete building safety charge; the other is the extent to which that is combined perhaps with a service charge. There are pros and cons to both approaches. The overarching issue for lenders is the extent to which the pre-existing commitments—not just the loan commitment but individual household budgets—would remain affordable if there are additional remediation costs. As I mentioned, I know that the MHCLG team has been very thoughtful about that consideration in relation to introducing loan support for properties between 11 and 18 metres. There might be some read-across in the context of the detail of the Bill.
Ms Rimmer
Q
Eric Leenders: I think it goes some way to doing that. It is quite difficult for me to give you a direct answer on that specific question, because clearly one issue is cladding external wall systems and, equally, we are aware that there could be remediation requirements around, say, fire systems and internal remediation works as well. I am unfortunately unable to give you a categoric answer on that point.
Ms Rimmer
Q
Eric Leenders: That is a very astute observation. We have found that aspect of the Bill quite complex and technical. To the extent that the intent is to avoid those retrospective costs, one dimension that we have been considering and have not necessarily been able to clarify is where a property was built prior to the enactment of the Bill but the issue was identified after its enactment. Some further scrutiny is probably required on that aspect. Our overarching view would be that it should be very clear for homeowners and leaseholders to understand where they might have a potential liability, and therefore this retrospection point is really quite important in that context.
The Chair
If there are no further questions, I thank you, Eric, on behalf of the Committee for your time and for your evidence.
Examination of Witnesses
Alison Hills and Steve Day gave evidence.
The Chair
We will now hear from Alison Hills, an affected leaseholder, and Steve Day, a campaigner on the polluter pays principle. We have until 5 pm for this session. Would the witnesses please introduce themselves for the record?
Alison Hills: My name is Alison Hills. I am a solicitor who is personally affected by the building safety crisis. I have also been very active in the campaign on behalf of a number of leaseholders, and I have spoken to a number of leaseholders across the country.
Steve Day: Hello, everyone. I am Steve Day. I am also caught up in the cladding crisis—a £30 million bill for 118 flats. We basically felt we had to fight it, and that has led to where we are today. Thanks for hearing us.
Daisy Cooper
Q
Alison Hills: Sure. The first point I would make is that the Building Safety Bill offers completely inadequate protection for leaseholders. Throughout the ping-pong process of the Bill, leaseholders across the country were repeatedly informed that protection would be forthcoming in the Bill, but it is clear that that is not the case.
Personally, I could be facing a bill of between £150,000 to £200,000 if funding is not forthcoming from either developers or the building safety fund. That could result in bankruptcy and the loss of my career as a solicitor, because my professional qualifications will be automatically revoked if I become bankrupt. I know there are a number of solicitors, accountants, and other professionals who are in the same situation.
Daisy Cooper
Q
Steve Day: Yes. I live in south-east London, in a development called Royal Artillery Quays. We had a £30 million cladding bill, have £1.7 million of internal firestopping issues, and a builder that says that we are timed out with the Defective Premises Act 1972 and the Latent Damage Act 1986 because we are 17 years old, and our 15-year hard stop in latent defects times us out. We are very angry.
My brother is here today. We are doing a start-up and do not have enough money for one salary. It is devastating to have to fight a developer that claims it has no legal liability, even though we found multiple breaches of the BBA certificate on the external wall system. I went around with a fire engineer with an endoscopic camera to see all the holes in the firestopping above every single flat. I am sickened.
I have had to help people in the development with depression. One of my neighbours had to talk someone out of suicide. I am sure my brother will not mind me saying that it has been challenging—running a small business start-up, and trying to fight a developer and come up with a statutory scheme to stop everyone else from doing this.
I urge you to recognise that full redress is not just something that we want—a “nice to have”. You will hear more evidence on it, but think about it this way: if you, as Parliament, do not intervene now, this will happen in decades to come. There is a race to the bottom in construction. I was on holiday, and after The Times article that came out last weekend backing the polluter pays Bill, I did not really want to be next to a senior member of the construction industry for my holidays. However, he was very understanding and said to me, “Well, yes, there is a race to the bottom. Yes, the cheapest contract always wins. Yes, the building control that looks the least at the defects is the one that gets the contracts.” We have to stop this. Levies and taxes is letting them get away with it. We have to step in. That is what I am asking you to do today.
Mike Amesbury
Q
Steve Day: I am glad that you have asked about SPVs, as that is obviously a point of contention for our scheme. First, we are creating a statutory scheme—we are writing the law and Parliament is intervening. We would go after the parent companies when there is a relationship there. In the case of an SPV, we would try to establish that relationship. Remember that there are two parts to polluter pays—I do not know if you have seen the diagram. One part is to get the responsible parties to pay in full if we can. If we cannot find anyone—this is your first answer—we go to the levies that we have on the construction industry and the ancillary bodies such as cladding manufacturers and so on, who have all been part of the problem, as we heard in the Grenfell inquiry.
We can do a better answer than that, though: parent company liability. You might say, “Is that possible?” The UK Competition and Markets Authority can hold parent companies liable for the anticompetitive conduct of their subsidiaries, and can hold both the parent and subsidiary company jointly and severally liable for the payment of fines resulting from the anticompetitive conduct of the subsidiary. It has been done. If you want to look further afield, in German law, Konzernrecht holds parent companies liable for obligations of controlled subsidiaries; that has been done in Germany. Some say that British companies will not be attractive for investors if we do this parent liability, but it seems to be working in Germany. Hopefully, that gives you a little more colour on why we want to do this.
Ultimately though, take a step back from the legality. I am very grateful for Daniel Greenberg’s help and his 20 years of experience as parliamentary counsel; he is operating in a private capacity pro bono, because that is how much he believes in the Bill. He is not at all worried about this liability; he thinks it can and should be done. We have a simple, cost-effective and fast mechanism; a statutory scheme that will make those responsible pay, and their parents. Is that okay, Mike?
Mike Amesbury
Q
Steve Day: Do you mean just extending the limitations in the Defective Premises Act?
Mike Amesbury
Yes.
Steve Day: First, you cannot take a parent company to court if they do not exist or you do not have the relationship. That is where we need the Government to step in with a statutory scheme, because we need to establish the ability to make that connection. Ultimately, we need the Government to step in with a statutory scheme, which they did for asbestos, so that when people do not come to the table, we fall to a statutory scheme. This is a unique situation. We need the Govt to step in because the law is failing us. Extending limitations is a problem, because people may not have the standing to take their developer to court. They might not be in the contract; they may not have the money or the time; they may have mental illness as a result of suffering we have had already.
Alison Hills: May I come in here? I am a litigation lawyer; housing is not my area of speciality but I have some insight into the litigation process. The Government seem to think that they have solved this crisis by extending the limitation periods under the Defective Premises Act. I respectfully suggest that is far from true. First, as leaseholders, we do not own the property and we have no leg to stand on to pursue any legal action. Secondly, as we heard from two very prominent lawyers last week, there are a number of problems under clause 124, which could result in extensive litigation before we even get to remediation.
Thirdly, the Bill as drafted does not help when buildings are over 15 years old, it does not help in situations where developers have become insolvent, and it does not help in my own situation, where the developers and the freeholders are part and parcel of the same legal entity, so in essence they would have to sue themselves, which is not going to happen. That is why the polluter pays Bill is the most cost-effective way forward. It is simple and clear and provides an effective solution that avoids years of litigation that leaseholders simply cannot afford.
There was a case recently of Aviva Investors and Shepherd Construction, where Aviva Investors tried to pursue action for £4.5 million relating to a block of student flats. The litigation was unsuccessful, and the judge stated in that case that
“There is no pleaded case that a duty of care was owed by Shepherd to future owners of the property”.
If huge rich companies like Aviva cannot have a successful litigation against these developers, what chance to the little leaseholders have, who have no leg to stand on and no funds to do so?
Steve Day: One final point, if that is okay?
The Chair
Fire away.
Steve Day: There is another complication of the limitations extension, and that is basically the risk of a two-tier system. We have been discussing this with the polluter pays Bill team. There are bilateral investment treaties that have settlement provisions. We are concerned that if a foreign national were to use one of those provisions for international arbitration, especially in the case of a developer not existing in the UK—and these foreign investors are investors, leaseholders in UK property—they may be able to use that international arbitration and get compensation from the UK Government, where UK nationals will not be afforded such a privilege. That would be a shame if the developers do not exist and foreign nationals can use these international arbitration treaties when UK nationals cannot.
Daisy Cooper
Q
Alison Hills: First of all, once we had our intrusive survey undertaken, we had a waking watch implemented on is, which was at a cost of £400 per leaseholder. I have to say that a whole new crisis has been created as a result of the advice note and the EWS1 process. It is ineffective, it is placing leaseholders under an unacceptable level of financial risk. Personally, I felt more unsafe while they were in the building. They were undertaking activities such as smoking underneath flammable cladding. They were falling asleep. This sounds awful but they were peeing in our car park. We have also heard stories of other leaseholders across the country where single females have been harassed by them, which is completely unacceptable. That is just the first point, which is on waking watch alone.
In addition, we have had to pay increased service charges, which amounts to an extra £200 a month each. Our insurance has absolutely skyrocketed. I have heard of a leaseholder based in a block in Runcorn where it has increased by 1,400%. People are going bankrupt as a result of these interim measures alone, and that is before we even get to the remediation costs. As we have seen already, Hayley Tillotson was a leaseholder who has gone bankrupt as a result of these extortionate costs.
Leaseholders’ finances are being completely wiped out. It is completely unacceptable to put us under this level of financial risk and burden—in the middle of a pandemic as well, one might add, which only adds to the financial and mental health distress. There have already been reported suicides as a result of this crisis. I have to say that my mental health has seriously deteriorated, to the point that I have had to move out of my flat, because I could not sleep, eat or concentrate. It was an horrific situation to be in. Those are the sorts of things that are happening, and that is before we even get to any remediation costs.
Steve Day: Our service charge has doubled because of the waking watch and insurance. It is due to lack of trust in building regulations. The insurers do not trust, the lenders do not trust. That is devastating when you are doing a start-up as well. I do not have the salary that I used to have, and I do not have the savings I used to have because they have all gone on service charge. That is a huge risk.
Let me tell you something else. It is not just about the money for waking watch. I think we forget what it is about. Can you imagine people staring at your home 24/7 because they are so concerned that there is going to be a fire? Can you imagine what that does to you? You go to sleep wondering what on earth these people are doing staring at your building, going up and down the stairs. They are doing their job but their job is very concerning. They are so scared that they might miss it that they are checking things and all the rest of it. Then, there are some who do not do their job. You are in a total stress, non-stop.
It is all to do with the root cause. This is where I come back to the simple scheme that we have come up with. Let us restore trust in building regulations. EWS1s, PAS 9980s—it is a new way of showing building regulatory compliance, because the trust has gone from the lenders and insurers. Let us restore that trust. Full redress is the only way to do it. This is a unique situation, the costs are high and we need you, Parliament, to step up and put in this scheme.
There is so much support for the scheme—you will see that because we will put it out there to you guys as much as we can over the next few weeks. It is growing: we have bishops behind it, the Earl of Lytton and the Intermediary Mortgage Lenders Association. You have heard that the Association of Residential Managing Agents backs it and we have quite a few people that I cannot remember, but I am happy to write to you.
The support is only going to grow, because as we go through the Grenfell inquiry and we see some of the things that come out, maybe in module 6, full redress will come up again and again. If you want to give out loans to people and you let the industry off with a levy, they will never forgive you, because you did not go for full redress when you could have, and that is what I urge you to do.
Yes, it is unusual to have a leaseholder here coming out with a statutory scheme, but it is not just me—there is a load of experts helping me, all for free, because they believe passionately that we cannot let a levy system and a loan system go in when we have not tried full redress. It is possible, it is simple and it is fast, and we are working hard to limit the judicial review risk to the Government. We will be sending Mr Pincher and his team a new draft from Daniel Greenberg as soon as we can and hopefully getting something in to them, and then we can update you.
Alison Hills: I alluded to this earlier, but this is a very complex issue. There is liability against a number of parties—not just the Government for poor regulation, but developers, manufacturers, people such as Kingspan who mis-sold their products, insurers, Buildmark warranty providers. There are so many people involved here, but it is glaringly obvious that this Bill contains no repercussions at all for those people. The only people who have been legally held to account are the innocent leaseholders. As I see it, the fundamental role of Government is to protect victims and hold perpetrators to account, but this Bill does the exact opposite of that, and it is unacceptable.
Ms Rimmer
Q
It seems to me that polluter pays is the only suggestion that can go forward. We are not saying that the present Government are responsible for all this, but do you know of any other way than the polluter pays mechanism? Is it New Zealand that has the public safety emergency, where the Government have addressed that? It does not seem able to be addressed. Has anyone put forward to you any other schemes or other ways of addressing this? There are hundreds of thousands of family units in these properties—I do express my sympathy; I sincerely empathise and sympathise—but this simply must be addressed.
Alison Hills: Yes, thank you. It does have to be addressed. Obviously, there are the McPartland-Smith amendments, which protect leaseholders to some degree. There are some very helpful amendments—for example, the imposition of implied terms in residential building contracts to ensure that all buildings are adequately designed, comply with building safety regulations and use materials of satisfactory quality. New clause 5 also creates accountability for future builders by importing consumer rights protection into housing law. I fully support the amendments and new clauses, and I think they should be implemented in the Bill, but in terms of how to get the most amount of money from those responsible, the polluter pays Bill is the way forward, because it ensures that the right people are held to account and building safety regulations are adhered to in future. Obviously, Steve has worked very hard on this over the last nine months, so I will pass over to him at this point.
Steve Day: I think the building safety charge is another sign of not trusting building regulation compliance. The heart of polluter pays is not just to solve the crisis now; it is to restore trust in building regulation compliance. We have a set of functional regulations. B4 requires that
“the external walls of the building shall adequately resist the spread of fire”.
It should be very possible, then, with the approved documents, to show and to prove whether someone is liable for those defects.
We are getting very confused in this crisis. We need to bring it back to the two boxes of developments. We have one where the builders just did not keep to the regulations. We do not need to worry about the quality of the regulations—they just did not keep to them, not using the right fixings. Metal should be on firebreaks but they used plastic. Some are missing firebreaks. It is very simple stuff, which is very unappealable and very easy—low-hanging fruit. That is the box of not conforming to the regulations at the time—guilty. Not guilty, for the developers and the manufacturers, is the other box where the regulations were complied with at the time, but post Grenfell those regulations have changed. It is almost a retrospective liability, changing the goalposts. That is a failure of regulation, so that is where the public money would come in.
All we want is £5.1 billion of public money. We do not want to go to the Treasury unless we have to. We want to get that pot as big as possible for all those defective buildings—it is simple stuff, remember, such as fixings, adhesive pattern, firebreaks and so on—to make that £5.1 billion go further. That is what we are doing. I hope that our proposal shows that we have thought about how this might work with existing precedents. There is some discussion on whether the Environmental Protection Act 1990 and the apportionment process could be open to judicial review, because you might say, “If you’ve got a set of percentages and you’re just giving x per cent, y per cent, and so on, that could be open to challenge.” We have listened to that and we are working with Daniel Greenberg on a different, and much simpler, approach, which we will make you aware of, that will not be open so easily for judicial review.
We also heard Mr Pincher’s comments in the Chamber on how many determinations we have to do. Remember that we are proposing that it is a public body, potentially under Homes England, and we have a de minimis limit. We do not have the reports that MHCLG has but we have a mechanism. It can set what the de minimis limit is before we have those determinations, and then basically there is a control mechanism for how this works. We have created the scheme so that in the primary legislation the scheme requirements are set out. It has to be in place six months after Royal Assent, but we do not prescribe exactly all the parts of the legislation; that will be done in subordinate legislation. We are prepared to do that work as well, because that is how much we believe in this.
I cannot answer all your questions on this today, but Daniel Greenberg has said that when the conference season is over, we will book a meeting room in Parliament and invite MPs and peers to come and hear our proposal, with the depth required so that you can scrutinise it properly. Perhaps the Earl of Lytton might come and help as well.
Siobhan Baillie
Q
I want to move you slightly off the redress issue. We have heard witness evidence today that, over two decades, multiple Governments of all colours have failed to address building safety issues. That is high rises and all sorts of things.
This Government are genuinely trying to do their best with the Bill, and we have had evidence that says that it is moving quite a few mountains and is proportionate. You are so expert in this area—although I am sure neither of you want to be such—what do you know about the accountable person part of the Bill? It is suggesting that for a block there would be somebody who would be in charge of things such as fire safety certificates and the gas certificate. They would be the point person. We have heard evidence today from the Fire Brigades Union that was really positive about such a role in terms of the person that they can contact, and similarly the management agent said it was really good to have a single person as a point of contact. We have also heard evidence that no one will take on that role—because it has so many duties and responsibilities that no one will be interested. What is your view? I fear that you two may be that role because you are so expert. Knowing your kind of neighbours, do you think somebody would take that role on if the Bill is enacted?
Alison Hills: First and foremost, there is a lot of information in the Bill about an accountable person, a responsible person, but there does not seem to be a clearly defined role for each of those roles and responsibilities. I think that needs to be done. Secondly, our management agents already have a certain amount of responsibility in terms of building safety. As leaseholders, we do not want to be in a position where we are potentially paying twice for the same service. The Bill needs to contain clear definitions of the responsible person, the accountable person, the management agent and the role of the leaseholder. In my view, each of those roles needs a clear definition.
Siobhan Baillie
That is really helpful.
Steve Day: I know that I am coming back to what I have said before, but for me it is about trust. If we are having a building safety charge, that is because we do not trust that our buildings are safe. It was fine before Grenfell, and maybe that is not a great thing to say, because the regulations and enforcement were not there. If the enforcement is there, I am really hoping that we can go back to paying a very reasonable service charge and getting a very reasonable service.
I think we really need to look at this Building Safety Bill from the point that if we put in for redress, if we had that big stick to whack all those responsible for not installing things right, can we restore trust in our building? This Building Safety Bill could then be made a little simpler and a little cheaper for those who are living in blocks, and maybe we can just reform everything. That is my view.
Siobhan Baillie
Q
Steve Day: I think there is a role for having someone responsible. A lot of these blocks have a concierge. I would say first, “Is there an onsite concierge?” If there is, maybe something could be done there. If not, a lot of blocks have a small committee of four or five people who might take on that role collectively. It seems a lot to put on one person—that’s my initial thought. If we want leasehold to survive—I am not sure where I stand on leasehold and commonhold yet, but I do not think commonhold solves the bills, and I think they will still come. If I am going to try to get someone to cover, I don’t know, say fire door replacements and so on, I have got to go and negotiate that if I am in commonhold. Let us make sure that we make leasehold as economically viable and fair as possible, and I think you can only do that by coupling that with building regulation.
Siobhan Baillie
Q
Alison Hills: Yes, I have to say that I think that would be helpful. When we found out about all the defects in our building, it was in the middle of lockdown, so we were stuck for 24 hours a day in a flat that was potentially unsafe. All these videos started coming out on Twitter about Grenfell, the fires and Kingspan. It was absolutely horrific, from a leaseholder’s perspective: people were genuinely frightened to send their children to sleep at night.
I cannot reiterate enough just how difficult that period was. That was one of the reasons that I made the decision to move out; I am lucky that I had that choice, but many others do not have it. Many are still putting their children to sleep at night in a building where they do not feel safe. Leaseholders absolutely need more support with that. They also need more mental health support, because we are just relying on each other at the moment. There is a very good cladding community, and the leaseholders have been a brilliant support—my MP Daisy, who is on the Committee, has been a brilliant support as well—but I think that the Government need to take more responsibility to support their constituents with the mental health impact. I cannot reiterate enough how difficult it has been.
Steve Day: I think that leaseholders supporting each other is one thing, but you have to remember that the building safety fund has asked us to create all these reports showing all the defects. Unless someone comes and fixes those defects, the horse has bolted. The building safety fund reports show all these missing fire barriers, cavity barriers and internal fire stopping. If you check approved document B, getting the fixings wrong has a material impact on the fire rating of the external wall system.
Unfortunately, you have turned millions of people into fire experts. We now know what ADB says, and we now know that a small difference in the render thickness of our external wall systems can have a material impact on the fire rating. We know, when we look at the safety certificate from the British Board of Agrément for 100 products across the UK, that not meeting the exact specifications contravenes the certificate; the head of the BBA confirmed that, and I am grateful to him.
We know all that and we have all that information, yet not only have we been left to pay for it all, potentially, but we have all the worry of it. You cannot put that back in the box unless this is remediated. Unfortunately, in the leasehold community, we have been exposed to an awful lot of fire safety evidence that would lead us to believe that we are not in safe homes. Until the remediation is done, I just do not think that we can put it back in the box.
Alison Hills: I have not specifically been asked a question about this, but another problem is that the building safety fund process has been very difficult. The fund only covers some defects in some buildings. We have been told that we are eligible, but we still cannot get any of the fund because there are a number of onerous contract terms. MHCLG and our managing agent have been at loggerheads over the contract terms for almost the past year, and we are in limbo with a huge potential bill of £200,000 hanging over our heads. That is just not an acceptable position to be in—we simply should not be in that position.
Ruth Cadbury
Q
Alison Hills: First of all, I do not think that there should be any height restrictions to the building safety fund. We have seen videos in which the 18-metre figure came up because the people making the decision did not have time to come up with a better figure. There does not seem to be any reason behind the 18-metre rule. The materials are still flammable in buildings under 18 metres; they can still catch fire, as we have seen.
In my view, the building safety fund needs to cover all heights of building and all defects, not just cladding. I have spoken to a shared owner in the London Olympic park who does not have any cladding on his building, but who is facing an £80,000 bill just for missing fire breaks and insulation. That is just an unacceptable position to be in. There are a number of fire safety defects that do not relate to cladding, and they should absolutely be covered.
Steve Day: I would say, “Have a look at the materials.” We all accept that ACM cladding, linked to Grenfell of course, is dangerous, but you may not have realised that the Victorian Building Authority conducted a test last year and concluded that expanded polystyrene, because of very rapid vertical fire spread, ultimately creating fire pools that go down as well as up—not the pools, but the fire—was as dangerous as ACM. Why do we have this categorisation that ACM is the only dangerous cladding when EPS has been proved by the VBA to be as dangerous? That has implications on the 8414 tests because everyone knows that the grate is at the bottom of the rig. How do you test downward fire spread if the grate is there? It will just test upward, so there are issues there.
This is why I am always talking about trust. We need to get back to trusting our materials. We need to get back to having a large stick if the cladding manufacturers mis-sell products. In the aftermath of the Grenfell fire,181 samples failed combustibility tests. We need a big stick. The building industry and the construction industry are showing that they cannot be trusted, unfortunately. That is why we need full redress.
Ruth Cadbury
Q
Alison Hills: Again, I think there needs to be clear definition in the Bill of how often access will be granted and for what reasons, how much notice will be given, and who will come into the property. There are so many unanswered questions in leaseholders’ minds at the moment, and it needs clear definition in the Bill, in my view. Otherwise, it potentially brings up privacy issues.
Steve Day: Get rid of the gas boilers as quickly as we can. They are not great on high rises.
Ian Byrne
Q
I want to touch on residents’ engagement. It is hugely important. We saw that with Grenfell, and what was missing. Earlier witnesses said that the residents’ engagement section of the Bill is potentially one of the weakest parts. How do we strengthen residents’ voices, and the imbalance of power that exists? How would you reflect what residents need within the Bill to ensure that their voices are heard?
Steve Day: We need to have very good transparency from our managing agents. Often we cannot see the reports that are about the safety of where we live. We cannot see the accounts to see that they are spending the money correctly. We are given a very high-level aggregate view that often does not check out to what we are paying, so that side of things needs to be transparent. There needs to be a lot of thought towards how residents are engaged as well. Not all residents have the inclination to get together and form a committee. How do you handle that? Do the managing agents pick on one person and say, “You’re responsible for it”? I think that could all be strengthened.
Alison Hills: Luckily, in our block, our managing agent has been very forthcoming. We have regular meetings with them every two weeks. That position is quite lucky, but it took a lot of work to get to that point. A lot of leaseholders across the country have managing agents who do not share information, fire risk assessments and even evacuation plans. We have seen, particularly for disabled leaseholders, that some blocks do not have any evacuation plans at all. I think that is completely unacceptable.
Information sharing is the key point. Residents do have a right to see this information. It affects their lives; it affects their health and safety; and it affects their mental health. They need to know what to do in the event of a fire; they need to know what the defects are; and they need to know what the next steps are. As I said, my managing agents have been good with that, but many others have not.
Daisy Cooper
Q
Alison Hills: Yes, I think that would be very useful for residents. There are residents from all walks of life in all heights of building, and it is important that all their voices get heard. We are lucky: in our particular block, we have a very active residents committee; we are a very engaged set of leaseholders. But others might not understand about their building’s defects; they might not realise the whole situation that is affecting leaseholders. There are some, even in different blocks in my development, who do not realise the repercussions of the Building Safety Bill. I think this is just about information sharing and making sure that every block has a voice and every leaseholder has a chance to have their say. That is absolutely crucial.
Steve Day: One thing that would have helped me with my investigations was the BBA certificates. It is charging hundreds of pounds to get that, and it is often very difficult. I think we have a right as residents, if we have this massively large building, to know what the safety certificate says about our external wall system, so I say: let’s put it all online. The BBA, I am sure, can get its money in other ways. Also, if we are trusting the construction industry to keep to regulations, and if a development does get judicially reviewed with our redress scheme, I would say: let’s have Parliament put the information online, perhaps in a brief form—the judgment and the fact that that developer thinks that plastic fixings are fine on firebreaks. Let’s put it online, on a parliamentary website or some form of official site, so that a development has the ability to shame the developer, the construction or the cladding manufacturer if they choose to basically say that something unsafe is safe. I think we do need something like that.
Alison Hills: One of the positive aspects of the Bill is that there is a clause about mandatory keeping of records. That is absolutely crucial. It needs to be done—absolutely. Our developer cannot find the plans, for example, for our building. And that has happened across the board. There are so many leaseholders I have spoken to where they cannot contact the developers and they have just lost all the paperwork. How do you lose the building work paperwork? It just does not make any sense. But if there is a centralised system, it cannot get lost; it is all there, in black and white. And any leaseholder who wants to see it should have that right, because it does affect them. It is their home at the end of the day, and they need to know what the building safety issues are with their flats.
The Chair
If there are no further questions, may I, on behalf of the Committee, thank the witnesses for their evidence today? That brings us to the end of today’s sittings. The Committee will meet again on Thursday, for line-by-line scrutiny of the Bill. May I ask Committee members to leave the room promptly by the exit door and while observing social distancing? Thank you very much.
Ordered, That further consideration be now adjourned. —(Scott Mann.)