NHS: Transition Risk Register
Baroness Thornton Excerpts(12 years, 10 months ago)
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Earl Howe
My Lords, this issue turns on a disagreement between ourselves and the Information Commissioner about where the balance of public interest lies. Our view is that the balance of public interest does not lie in disclosure, and his view is the opposite. It would be likely, if we gave the Information Commissioner a second opportunity to look at this, that he would come to the same conclusion as before, so we have to let due process occur.
Baroness Thornton
My Lords, the strategic health body in London was perfectly content to make the register of risks on the health Bill available, so the House needs to know, first, what the difference is—except in terms of size—in the national Department of Health making its risk register available. Secondly, I realise that in appealing the Information Commissioner’s decision the Government have said, in effect, that this decision has cross-government implications. Does the Minister accept that it also has wider implications for Parliament? In this House, our ability to scrutinise legislation effectively must be in doubt if any Government withhold important information from us, so what course of action does the Minister suggest that noble Lords in this House should take under these circumstances?
Earl Howe
My Lords, to answer the second part of the question first, a substantial number of the risks pertaining to the Bill are already in the public domain and we are considering whether there is scope to draw these sources of information together in a single place, so that noble Lords can look at them more easily. To answer the first part of the noble Baroness’s question, I made inquiries about NHS London. Its situation is very interesting and quite different from that of the Department of Health. NHS London developed its risk management strategy with a view to it being visible to stakeholders and the public, as its document says. It is therefore a reasonable assumption that officials will have worded their risks for inclusion in the register in the knowledge that that wording would be likely to form part of a document placed in the public domain, so there is a very real difference between the two situations.
Health: Pathfinders
Baroness Thornton Excerpts(12 years, 10 months ago)
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Earl Howe
My noble friend is right. We were very pleased to see the NHS Future Forum says that running right through the Health and Social Care Bill is the desire and aim to integrate services. That is certainly right. We recognise that there is a balance to be struck between allowing local ideas to spring up and people to progress their own ideas and having the necessary support from the centre to do that. We have established a national learning network for pathfinders to complement the support given to them by strategic health authorities and PCTs. Those learning networks will ensure that best practice is spread and, specifically, that pathfinders support other local groups which are less developed.
Baroness Thornton
My Lords, perhaps I may ask a question concerning clinical commissioning groups and the legal advice and support they might be receiving. Has the Minister taken advice on the impact of EU procurement law as regards the tension in commissioning and delivering integrated services and the legal requirements concerning procurement of services which are integral to the Health and Social Care Bill that is before the House? Will the Minister make any such advice available to us?
Earl Howe
My Lords, my understanding is that procurement law, which already applies in the NHS, is certainly part of the learning sets that clinical commissioning groups have been provided with. I would be delighted to supply the noble Baroness with further information but I do not have it in front of me.
Health: Breast Cancer
Baroness Thornton Excerpts(12 years, 10 months ago)
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Earl Howe
I could not disagree more with the noble Lord. He refers to the policy of “any qualified provider”. That policy gives absolute assurance to every NHS patient about the quality of the treatment that they get if they are treated by the NHS, whatever the provider setting. Therefore, the idea that this incident has any bearing on the provisions of the Health and Social Care Bill is absolutely misplaced. I cannot emphasise that more.
Baroness Thornton
The noble Lord, Lord Low, asked a legitimate question. Any qualified provider goes through a process of approval in which the CQC is responsible for regulating clinics and services. That is exactly what the CQC has done for these private clinics. They have all been given a stamp of approval to carry out these operations by the CQC. That, surely, was the point of the noble Lord’s question. Therefore, what are the implications for “any qualified provider” under the fragmentation and increased marketisation of the NHS by the Bill?
Earl Howe
The “any qualified provider” policy was instigated by the Government of the noble Baroness. There is no suggestion that these clinics have been carrying out procedures badly; the issue is around the quality of the implant, which they could not be expected to know about. Nevertheless, the CQC is conducting inspections, some of them unannounced, on cosmetic clinics to assure itself that everything is being done properly. I will not stand here and say that any of these clinics have carried out the procedures badly. We have no evidence to show that they have.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
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Baroness Thornton
My Lords, I return for the last time in 2011 to the issue of the risk register in the Health and Social Care Bill—a sort of Secret Santa for the Minister. During the course of the debate on the Motion to Regret on 7 December, several noble Lords referred to the start point of Report being timed so that the appeal on the Information Commissioner’s report would be complete and the House would know the result. The Minister himself—
Baroness Anelay of St Johns
My Lords, may I first ask Members to leave quietly so that we may hear from the noble Baroness, Lady Thornton. May we establish on what basis, on what Motion, the noble Baroness is making her point? She has not interrupted the House going into Committee. I believe that perhaps the most appropriate way forward would be for the first amendment to be called. The noble Baroness may then speak as part of her contribution to that amendment, but I believe she would be out of order to continue at this stage.
Clause 247 : Powers to publish information standards
Baroness Thornton
My Lords, I agree with the noble Baroness, Lady Williams. This question brings us right back to the Secretary of State’s powers. I also agree that the procedure in the Bill is complex and I am not sure that it will work. It is not clear at all who will be the arbiter. It seems strange that Monitor has powers to intervene on failure but there does not seem to be the same structure around co-operation and when co-operation fails. This part of the Bill feels like it does not work properly. It is too complex and probably needs another look.
Earl Howe
My Lords, I have listened with great interest to the points that have been made. I feel it would be useful if I first set out how this clause would work and the series of events that it would allow. Then I will try to explain why we believe that the powers it provides are an appropriate and constructive lever within the new system.
The method of intervention set out in Clause 285 needs to be considered as one of a range of intervention powers and levers available to the Secretary of State in order to ensure that the system operates in the best interests of patients and that he complies with his duties in relation to the health service. These include the proactive setting of objectives for the health service through the annual mandate to the board and setting requirements through the standing rules. The Secretary of State also will have a duty to keep the effectiveness of arm’s-length bodies under review.
In addition, the Secretary of State will have more extreme intervention powers such as the ability to remove the chair of an organisation, where they have failed adequately to perform their functions, and the ability, under specified circumstances, to give directions to an arm’s-length body where the Secretary of State considers it has failed to discharge those functions, or has failed to discharge them properly. Clause 285 should be viewed as an additional power alongside the others conferred on the Secretary of State by the NHS Act and this Bill. Of course, should the Secretary of State employ his powers as set out in Clause 285 and the problem persists, then where he considers that one of the bodies is failing to discharge its functions properly, he would be able to exercise his powers of direction.
The Bill places new duties to co-operate, in addition to modifying existing duties, so as to ensure that all of the arm’s-length bodies in the system, such as the Commissioning Board and Monitor, are required to co-operate with one another. We wanted to do more to encourage co-operation in the new system, partly out of recognition that the current system would benefit significantly from greater co-operation, but also because the new arrangements will create an even greater need for co-operation given the strongly autonomous and interdependent arm’s-length bodies that will be created.
The clause sets out powers for the Secretary of State to take action in response to a breach of the relevant duties of co-operation. It provides a mechanism for pressing organisations to resolve disputes in the unlikely event—we hope and trust that it will be unlikely—that two or more organisations covered by the clause fail to co-operate. If the Secretary of State believes that the duties of co-operation listed in this clause have been or are being breached, or are at significant risk of being breached, he will have a new ability to write formally and publicly to the organisation in question. If the bodies continue to breach the duty following the notice and the breach is having a detrimental effect on the performance of the health service, as the noble Baroness, Lady Finlay, pointed out, then the Secretary of State will have a further ability to lay an order, specifying that each body could take certain actions only with the approval of the other body. This measure would be subject to affirmative approval by both Houses of Parliament and could last for up to a year. That means that organisations in dispute would be strongly reminded of their interdependence as part of a national system. As a matter of last resort, if agreement could not be reached, either party would be able to invoke independent arbitration under Arbitration Act arrangements. In this way, the organisations in question will be pressed to resolve their difference without recourse to the Secretary of State and the Department of Health.
This is an important element of our policy. We want arm’s-length bodies to focus on the functions conferred on them by Parliament, the objectives set for them by Government and the relationships with other organisations that will help them to achieve their goals. We do not want them placed in a position where they are trying to secure relative advantage in the system by using the Secretary of State as a means of determining the outcome of disputes. The existence of the order-making power will both help to preserve the autonomy of organisations and encourage them to work constructively with one another.
I emphasise that this is a precautionary power and we expect it to be used only in very exceptional circumstances. It is also important to note that the powers and duties described in this clause are about co-operative behaviours. They do not in any way undermine the independence of Monitor or the CQC to make specific regulatory decisions in relation to another arm’s-length body. For example, the Secretary of State could not use the provisions to constrain Monitor from taking action against anticompetitive purchasing by the NHS Commissioning Board.
Baroness Thornton
My Lords, if these bodies are strongly autonomous, as the Minister has said, can they not just tell the Secretary of State to get lost?
Earl Howe
My Lords, that is the whole point of this clause. The Secretary of State must have levers at his disposal. Even if he does not use them, the fact that he has them will be a clear signal to bodies that they must co-operate in the way that Parliament—if the Bill is approved by Parliament—intends. As I said, we have identified gaps in the current system that need to be resolved because it is important that arm’s-length bodies that have functions directly conferred upon them take those functions seriously and do not resort constantly to arbitration by the Secretary of State or the department.
We expect that the vast majority of differences between organisations will be resolved by the organisations themselves and that this power will be used rarely, if at all. Nevertheless, it is important that the power exists. The fact that failure to co-operate could have public and highly embarrassing consequences will strengthen the incentive for organisations to co-operate effectively in the interests of patients.
We believe that this approach strikes the right balance between the need for the Secretary of State to fulfil his stewardship role within the system, being able to intervene to ensure that disputes are resolved, with the need to ensure that organisations are responsible and accountable for their own decisions and actions. These powers allow the Secretary of State to ensure that solutions to problems are found in a timely manner, without him or her stepping in to specify and micromanage what those solutions should look like.
The noble Baroness, Lady Finlay, asked me a number of specific and detailed questions. I will take up her invitation to write to her on those and copy other noble Lords in. With those assurances, I hope that she will feel able to allow the clause to stand part of the Bill.
Baroness Finlay of Llandaff
My Lords, I really am not trying to prevent Christmas starting for Members of this Committee. I feel as though most of today’s amendments have concerned me. These are probing amendments, which relate to NHS capital assets. They are designed to explore what happens to the current offices and clinical premises of an NHS body at the time of transition and afterwards. If these premises are occupied by a clinical commissioning group or a company that is advising a clinical commissioning group on its commissioning, who will become the owner of the property?
This is important because GPs are themselves independent contractors, not NHS employees. For many—not all but a significant number—the premises from which they work are owned by their practice. They, not the NHS, jointly own them, even though the building will usually have been subject to a range of capital improvement schemes from the NHS over many years. Such schemes allow a GP to purchase a practice and invest in it over the years. The capital gained then forms a significant additional pension pot for that GP.
My question for the Government concerns whether the deeds of the property will be transferred to the general practitioners of the clinical commissioning group. Will they be able to sell it for profit that would then be their personal profit? Will the profit revert to the NHS and, if so, to which pot? If property is transferred, will the new owner be liable to put capital gained into the capital part of the commissioning pot to develop service premises and equipment for the health service itself, rather than be able to take whatever capital gain there is on that property? I beg to move.
Baroness Thornton
My Lords, I just wish to add two questions of my own to the list that the noble Baroness asked. Has the Department of Health now resolved the issues around future asset ownership in respect of PCT and SHA estates? Within that, does that include LIFT schemes and PFI?
Earl Howe
My Lords, I hope I can answer the question of the noble Baroness very quickly. Clinical commissioning groups will be statutory bodies. They will be legally and operationally separate from GP practices. As such, if a clinical commissioning group occupies property that is under the ownership of that group, it will be under statutory ownership. It will not be open to GPs to sell such property at a cut price, or at any other price, to GP practices to enable such practices to pocket the profits. What the noble Baroness outlined sounded to me very much like embezzlement from the state. It will be no more possible for what she envisages to happen than for a primary care trust to sell a property and have its officers pocket the proceeds. I am a little mystified by the scenario that she has painted.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
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Lord Warner
Could I just clarify for the noble Baroness that I do not claim that my wording is perfect? I brought the National Commissioning Board in—slightly against my better judgment, I have to admit—because it has the responsibility for, in a sense, approving the commissioning arrangements and spending the money. My instincts were that it would not support this unless it had been consulted and was satisfied with the commissioning arrangements.
Baroness Thornton
My Lords, I will be very brief because my noble friend and other noble Lords have pretty much covered the territory here. This small group of amendments is rather important and significantly improves the Bill. I realise that they are probing amendments, but they do three things. The first amendment is about changing culture. It talks about the manner of the integration of services, not just an integrated manner. The second one says that we need to define integration. This must be perhaps the third or fourth debate that we have had on integration in the past however many weeks. It seems quite clear that there needs to be some definition of integration in the Bill. My noble friend Lord Warner explained that. Given that many parts of the Bill offer a list of different ways in which things can be described and done, I see no reason why the same list on integration cannot be included. The third point in the amendment to which I was pleased to be able to put my name is about encouraging co-operation across the piece. Having the national Commissioning Board mentioned in that is rather important.
Those three points about changing the culture, defining what you mean and encouraging co-operation seem to me to be the type of message that any health and well-being board will look to as it starts up its work. It will look to what is in the Bill, what is in guidance and what is in statutory instruments to help it to work out what to do. To have something that defines the kind of culture that is expected, defines integration and the way the bodies should work, lists the bodies that should work together, if not in the Bill then certainly in guidance, and explains the manner in which they are expected to work seems to me to be a very helpful way forward.
Earl Howe
My Lords, these amendments from the noble Lord, Lord Warner, are primarily concerned with strengthening the role of health and well-being boards in promoting integration between health and social care and wider aspects. I completely understand why noble Lords have felt moved to support these amendments. They are undoubtedly well intentioned, but I am afraid that I have a problem with them.
Amendment 336, which I will speak about more fully in a second, could be seen to enable changes to be made to the fundamental responsibility for functions, which we are clear would not be right. Amendments 332 and 335 would also introduce a prescriptive definition of integration. I resist that idea not just because it would be counter to the principles of localism, which we believe are very important, but because it could act as a diversion from effective integrated working between commissioners. I do not see the need for a definition beyond what the clause already says, which seems quite clear.
We have a shared intent on the importance of integration, but I cannot agree that this cause would be aided by pinning down a definition in primary legislation. I see no need for that. Apart from anything else, having a definition set in primary legislation would risk creating inflexibility as times and practices change. We should focus on removing barriers on the ground to ensure integration. That is where the Government’s response to the Future Forum’s work will, I hope, make a difference. We aim to publish our response to the Future Forum’s report before the Report stage of this Bill.
I am sure that Amendment 336 is intended to be helpful, but it might create confusion between the arrangements mentioned in the amendment and those made under Section 75 of the NHS Act, which would enable local authorities and CCGs to enter into partnership arrangements such as lead commissioning and pooled budgets. Existing provisions in the Bill are designed to encourage and enable the NHS and local government to improve patient outcomes through more effective co-ordinated working. The Bill provides the basis for better collaboration, partnership working and integration across local government and the NHS at all levels. I hope that that, in part at least, answers the question posed by the noble Lord, Lord Patel.
Indeed, health and well-being boards will have a strong role in promoting joined-up commissioning between health, public health and social care. Through their duty to promote integrated working between commissioners, they will also be in a good position to promote more integrated provision for patients, social care service users and carers. They will also be able to encourage close working between the commissioning of social care, public health and NHS services and aspects of the wider local authority agenda that also influence health and well-being, such as housing, education and the environment. Through statutory guidance on preparing the joint health and well-being strategy, and the Government’s mandate to the NHS Commissioning Board, we will be encouraging lead commissioning and integrated provision.
There are enough levers and mechanisms in the system to encourage every part of the system to look for ways of joining up services, and the commissioning of those services. I hope that I have reassured noble Lords of our intentions, and that the noble Lord feels able to withdraw his amendment.
Baroness Thornton
If a new health and well-being board got in touch with the Minister, or perhaps with the Commissioning Board, and asked whether it would please say which form of integration it should be using or how it should be doing this, would he tell it to work it out for itself?
Earl Howe
My Lords, we have to give credit to people on the ground to be the professionals that we know them to be. Integrated working can take many forms, as we have discussed quite often in Committee. I will not rehearse the various manifestations of integration. Once we have mandated the duties in the Bill and issued statutory guidance on what good practice looks like, I really think that it will be up to people on the ground to decide how best to set about fulfilling the duties and expectations placed on them.
Baroness Masham of Ilton
My Lords, I shall add a few words because a pharmacist contacted me. Pharmacists are being encouraged to take on more and more, and the drugs are extremely difficult. Some drugs are the same but have different names. It is extremely difficult for patients too, and as they often go to pharmacies for advice it is really very important there this is openness and honesty when a mistake is made. However, I would not like this amendment to open a door for more mistakes to be made.
Baroness Thornton
My Lords, I support the amendment. I would have put my name to it, had I had the opportunity. However, in Committee those on the Liberal Democrat Benches have tended to block up their own amendments and have not sought support from across the House, which is a great pity.
My experience in dealing with the many drugs that my mother takes is that in fact pharmacists are often those who spot the doctor’s mistake. Our local pharmacists do an excellent job. My wider interest in this Bill and in pharmacists is that they play the proper, important role they need to play at local level in the health and well-being boards and with the planning at a local level of both preventive medicine and their jobs at dispensing.
This is also about a level playing field in regulation, which is very important. This Bill offers probably the only opportunity that there will be in the next few years to put right this wrong. I hope, therefore, that the Minister will support this amendment—and if not this one, then one like it at a later stage in the Bill—and rectify this error.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
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Baroness Williams of Crosby
I thank my noble friend Lady Garden very much indeed for intervening. I would like to express the apologies of my noble friend Lord Marks of Henley-on-Thames for being unable to be here on this occasion. Unfortunately he has been taken ill and will probably not be in the House again before the Christmas Recess. He extends his apologies to the House and his deep regrets at being unable to be here to move this amendment. It is therefore my honour to do so on his behalf.
The first amendment amends paragraph 9(3) of Schedule 7 to the National Health Service Act 2006 to remove the requirement for a governor to be appointed by a PCT. The reason for governors being appointed by PCTs, of course, is that they were the key sub-national level of organisation under the previous National Health Service. The Act of 2006 therefore reflects that organisational structure. I submit to the House that in the new structure it is as important that the national Commissioning Board should be able to appoint at least one—and, one hopes, more—governors to the board because of the need for a clear link between the clinical commissioning groups and the boards of the foundation trusts. Our amendment requires that at least one member be appointed by the NHS Commissioning Board in the place of the PCT appointee who will no longer be able to take his place. A substantial number of NHS patients—one hopes a majority—are patients under the foundation trusts. It is therefore important that the concerns of the CCGs and of the board should be represented on foundation trust governing bodies.
I will also briefly speak to Amendments 300, 301, 302 and 303 in the same group. All relate to the decisions to be made about the mergers or dissolutions of foundation trusts. The purpose of the amendments is to add the name of the Secretary of State to those who are required to consent to either a merger or a dissolution. I shall explain very briefly why we believe this to be of great importance. Despite these amendments looking rather petty, they are not.
The Secretary of State is in a unique position to decide on the strategy of the National Health Service over the whole country. He is in an especially good position to be well-informed on the balance between demand and supply across the territory of England. If there is no requirement for him to emerge at this point as the figure who makes the ultimate decision as to whether there should be a dissolution or a merger, there is nobody else able to detect whether the needs of all patients in England are met. As the House will be aware, if a foundation trust merges and perhaps one part of that merger ceases to offer services, that may be very much in the long-term interests of the National Health Service. The noble Lord, Lord Warner, spoke eloquently on this point yesterday. Where a foundation trust is the centre of, for example, pathways in a particular chronic illness, and where it meets the hospital needs of a substantial part of an area of the country, only the Secretary of State is in a position to decide whether that foundation trust merger or dissolution will have a major impact on the health services available in that part of England.
We suggest, once again, that this is not a tactical or micromanagement issue, but a strategic one, given the significance of foundation trusts in many parts of the country. We therefore very strongly urge the Committee to agree to this amendment. We believe it is a crucial part of the strategy of running a National Health Service in England. I beg to move.
Baroness Thornton
My Lords, we have all been precipitated into this debate some 10 minutes earlier than we might have expected. I should like to speak to Amendments 296A and 298A, and to whether Clauses 176 and 177 should stand part.
Amendment 296A provides that foundation governors must,
“be notified and have the right to attend all meetings of the Board and its sub-committees and have access to all relevant documents and papers”,
under a “duty to protect confidentiality”. Amendment 298A provides that the accounts of a foundation trust or other public benefit corporation,
“must identify separately the income and expenditure which relates to any private income business, and the audit of such accounts must include assurance that all costs which relate to private income business have been properly calculated or recorded”.
I accept that the Minister has an amendment that is not totally dissimilar to this, but it does not include the words about the need to audit and have income and expenditure on the public record, which we think are rather important. Clause 176 stand part would leave out the clause that abolishes NHS trusts. Clause 177 stand part objects to the repeal of various provisions in the authorisation of foundation trusts.
We have already touched on aspects of foundation trusts. Our position is that we support the concept of foundation trusts as a model for developing a form of multi-stakeholder or community-based governance, and allowing earned autonomy for NHS providers from direct performance management. As we discussed on Tuesday, we accept the role of Monitor as a regulator of foundation trusts. We agree with my noble friend Lord Warner that the plethora of other roles that Monitor has been asked to play poses risks, and we have set out our objections to and worries about that.
We accept that the foundation trust journey is still being travelled. I suggest that it is probably time for a proper independent study of how the foundation model might be taken forward. We are where are, not where someone might have hoped we would be. We make no great claims for foundation trusts but we would agree that the more trusts that can meet the standard the better. However, some will not meet it, for many different reasons. The rush to force them into hasty mergers and takeovers will bring great risks. I point to the fact that only today the House of Commons Public Accounts Committee has issued the report Achievement of Foundation Trust Status by NHS Hospital Trusts, which I have asked the Printed Paper Office to make available. I said that it is quite possible that other noble Lords might be interested in it in the course of today’s debate.
On the point about how many trusts will make it to foundation status, I quote from the document:
“By 1 October 2011 there were 139 NHS foundation trusts, and 113 NHS trusts at various stages in the 'pipeline' towards foundation trust status. Only 14 trusts have achieved foundation status since the end of 2009 … The Department expects the majority of trusts to achieve foundation trust status by 2014, but recognises that a small number may not do so before 2016”.
The report goes on to say that there is indeed a very serious problem of hospitals not achieving foundation trust status:
“Twenty hospital trusts have declared themselves unviable in their current form”.
It suggests that more than,
“half of all trusts are not yet foundation trusts and more are likely to conclude they are unviable”,
and goes on to say:
“A particular concern is what will happen to trusts that are unable to achieve foundation status but nevertheless provide an essential service to local people”.
This report’s very timely publication needs to be acknowledged in the course of our debates on these matters.
We do not accept that every NHS provider must be a foundation trust. We agree with Sir David Nicholson that there is scope for some NHS trusts to be permitted. This also allows us to say that a foundation trust can be de-authorised in exceptional circumstances. This Committee needs to discuss the issue of the Government’s rush to say that all trusts must have foundation status. That is clearly not going to work and we have no satisfactory answers at the moment about what is intended under those circumstances.
We will discuss the issue of the private patient cap so I will not refer to it now. We do not go the whole way in deregulation and see a continuing role for Monitor, not just in authorising foundation trusts but, as we said in our earlier debate, in retaining oversight and intervention powers. We agree that the authorisation process should be rigorous and demanding, so the question there which the Minister needs to answer is: if the department is determined to push hospital trusts into foundation status, what does it mean for standards—will they be relaxed? We think that they should not be. If further lessons are needed from Mid Staffs then I suspect that this is one that the inquiry will raise.
We share the view expressed by several noble Lords on Tuesday that there may be examples where the cause of a foundation trust’s problem lies with the local health system rather than poor foundation trust management. A more effective approach to reconfiguration and a sensible pre-failure regime is absolutely necessary. We understand and hope that the Minister is looking into this and look forward to being part of those discussions. Our view is that while having a great deal of autonomy, foundation trusts remain within the NHS; they are not to be hived off as quasi-businesses. We believe that in general only the two extremes differ from our view—those who want a fully publicly owned, public-provided NHS with no split, and a small band around the current Secretary of State who want to make foundation trusts into businesses and, like a private provider, free from all scrutiny. The rest of us are probably somewhere in the middle.
I turn to the amendments. We support the idea that foundation trusts must open their governance and must meet in public—which is vital. We support the idea that to be effective in their duty to hold the board, and especially the non-executives, to account, the governors must have the right to access and observe all meetings and to see all papers. The confidentiality issues which this might involve can be resolved through appropriate codes of conduct, but if governors are to be the main lines of defence then they must be able to know what is happening. Sadly, that is not the case in some foundation trusts.
We support the need to separate properly the accounts in respect of non-NHS business. It is important to avoid smoke-and-mirrors accounting, especially on the issue of the private patient cap, which we will discuss later. Transparency on that issue is vital. The bottom line is that NHS resources should not be provided at knock-down prices. We have had an undertaking that foundation trusts will provide information showing how non-NHS income acts for the benefit of NHS patients, but in the absence of detailed regulations about how that is to be done it would be best to maintain a sceptical view.
In line with our view that foundation trusts remain part of the NHS family, we support the amendments that ensure the Secretary of State must approve major transactions such as mergers. We do not support the Government’s amendments which are a further example of layering of bureaucracy and paperwork to try to justify their failure regime, which pretty much got a hammering on Tuesday and must be thought about again.
Baroness Murphy
My Lords, I echo many of the words of the noble Lord, Lord Warner, although I wish to put a slightly different slant on the issue. It is crucial that we press on with the project to get all trusts to foundation status. There is no doubt in my mind that having this two-tier system, which we have allowed to continue for too long, has led to difficulties in foundation trust hospitals becoming more self-reliant, more seriously entrepreneurial in the way that they think about their services, and more responsive to the local agenda, and so on. They have not had to bother because they have always had Big Brother watching. The de-authorisation process, which threatens to drag them back to the Department of Health, has acted as a sort of brake on their thinking. That has been quite difficult. I seriously think that we should move trusts to foundation status. The noble Baroness, Lady Thornton, is looking puzzled, but I think that it has been a really serious problem.
Baroness Thornton
I was looking puzzled only because I wondered what evidence there was for some kind of break in the system.
Earl Howe
I understand that point. That is why we have built additional flexibility into the system. Although we have target dates for each of the NHS trusts that we plan to move to foundation trust status, we understand that nothing can be fixed in stone. There is some latitude here but at the same time it is important to have target dates; otherwise the momentum that the noble Baroness, Lady Murphy, referred to will be lost and that would be very regrettable.
That brings me to the point made by the noble Lord, Lord Warner, that there appears to be a rush to mergers. We agree with the Public Accounts Committee and the noble Lord himself that mergers are only one way of creating more sustainable providers and services. Mergers must be assessed robustly to ensure that they really will deliver the promised benefits. The Co-operation and Competition Panel does that but at present it can only make recommendations. The NHS Trust Development Authority, which we propose to establish, will play an important complementary role in avoiding what one might call silly mergers. The key has to be local ownership and accountability, not oversight by the department. I was interested to see the amendment tabled by the noble Lord, Lord Warner, about the gathering of management accounting data. I am personally a strong advocate for effective financial and management controls. I am sure we all want to see the NHS become more efficient. The problem with the amendment as drafted is that the system it proposes looks a bit clunky and bureaucratic. It goes against the grain to impose an extra layer of accounting and reporting requirements from the centre and it would clearly cut across the responsibilities of the foundation trusts’ governors and directors.
It is right for me to emphasise by way of concluding remarks that these reforms have been developed in discussion with, and informed by, the Foundation Trust Network, the Foundation Trust Governors’ Association, Monitor and individual foundation trusts. They are built on the experience of what foundation trusts know will work. I hope that in itself is a reassuring statement. I have not addressed the point by the noble Baroness, Lady Thornton, about the PAC report, which I am happy to do once she has intervened.
Baroness Thornton
In terms of discussions the noble Earl is having, are all the parties happy with the fact that if a foundation trust fails it goes into receivership instead of being de-authorised?
Baroness Thornton
“( ) After paragraph 10C of that Schedule insert—
“10D The governors shall be notified of and have the right to attend all meetings of the Board and its sub-committees and have access to all relevant documents and papers.
10E For this purpose, governors will be required to acknowledge their duty to protect confidentiality.”.”
Baroness Thornton
My Lords, I listened with interest to what the Minister had to say and I was surprised that he dismissed, in a rather cavalier fashion, our two very small and modest amendments about access and transparency for foundation trust boards. We had to force foundation trusts to meet in public. They do not have a good record for their transparency or their willingness to be accountable. That is not so across the board—some are absolute models. I looked in vain for something among all the amendments that the Minister has proposed that might address this important issue of accountability.
I am very disappointed with the answers to my Amendments 296A and 298A. They are modest amendments about accountability. I beg to move, and I would like to test the opinion of the House—
Earl Howe
If the noble Baroness would like a fuller answer, I would be happy to give her one. I am glad to give the Committee an opportunity to hear a slightly fuller answer to the noble Baroness’s amendments. I apologise that I skirted over them in the need to move on.
On Amendment 296A, the purpose clearly is to ensure that governors of foundation trusts have all the relevant information about their board’s activities and decisions to be able to hold them to account. That is not a controversial idea, but the amendment may have the opposite of the effect that the noble Baroness intends. If boards are forced to have governors present at all meetings, they may instead discuss confidential matters in private to maintain confidentiality and hold robust and frank discussions. If governors are admitted to private board meetings, the directors may be inhibited from discussing those confidential matters. The governors can best be kept informed of directors’ activities by close working relationships with them, regular performance reports, meetings with directors including the chair and chief executive, access to all directors and joint activities with directors. It does not have to be the formula that the noble Baroness has suggested.
The noble Baroness said that we had to force foundation trusts to meet in public. That is not right at all. It was we who made foundation trusts have their meetings in public; the previous Government resisted doing that for the whole of the time when they were in office, or from the whole of the time when foundation trusts were set up in 2003, so I do not think that that criticism is at all fair.
On Amendment 298A, the purpose is to require foundation trusts to account separately for NHS and private activity, to show whether that activity is making a profit or a loss. We agree with the broad principle of separate accounting, as we indicated earlier, but we are concerned that putting a requirement like this in statute would impose high costs on foundation trusts with low levels of private activity. Many foundation trusts have little, if any, private activity. We have given a commitment that to provide assurance and transparency we will require foundation trusts to produce separate accounts for NHS and private funded services where they exist. To support its new regulatory functions, Monitor will require foundation trusts to report separately within their accounts their NHS and private funded income and expenditure. That will increase transparency.
We are onside with the theme of the noble Baroness’s amendment, but we do not think that she is setting about it in the right way. It is too heavy handed, and I hope that she will withdraw it.
Lord Clement-Jones
It seems rather extreme and extraordinary to be plunged into the possibility of a vote on a matter such as this without further consideration of what the Minister has had to say, particularly with a fairly thin House at the moment, although I have some sympathy with the noble Baroness. But it is obviously up to her to make her own dispositions.
Baroness Thornton
My Lords, the problem with transparency and accountability is that the issues of confidentiality and expense are always used as excuses. I do not deny that my own Government almost certainly used them as reasons for not proceeding with issues of confidentiality and accountability. I am struggling with the idea that we should withdraw this amendment, because I feel that this is a really rather important matter. It may be a very small and minor matter, but it is actually rather important and I would like to test the opinion of the House.
Baroness Thornton
My Lords, the noble Lord, Lord Clement-Jones, has put his finger exactly on the point here. I absolutely agree that, welcome though the amendments in the Minister’s name are, they do not go far enough. Counting things after the fact will not necessarily provide the kind of protection that is required in this area.
Section 44 of the National Health Service Act 2006 currently provides for a limit on the proportion of income that an NHS foundation trust obtains from private charges. I am familiar with this; I had to deal with it in the Health and Social Care Act 2008. That was the point at which my party agreed that there needed to be a review of the private patient cap. That is absolutely the case and we would agree on that. The restriction was introduced to ensure that NHS foundation trusts continued to focus primarily on NHS patients, as the noble Baroness, Lady Williams, explained. However, as we accepted at the time, the way that the cap was based on the financial year cemented in a widely varying range of restrictions, from zero to a little more than 30 per cent, with the average being around 1.5 per cent.
Lord Warner
My Lords, I was not going to speak in the debate and I certainly do not want to speak on the subject of the cap, in case I get into too much trouble from my Front Bench. I would like to pick up the point made by the noble Baroness, Lady Noakes. We are moving into a world in which the NHS will have to look at how it uses its assets. As I have said in earlier discussions, the NHS footprint on its sites and its utilisation of buildings is relatively small given the size of the sites.
We are also moving in a direction where, across the House, we favour integration of health and social care. It would not be surprising if, in the next few years, on some sites of district general hospitals, there were nursing homes run by the private sector which had self-payers as well as state-funded payers. The way the Government are approaching this creates flexibility in how income might be generated. I hope we will not be so prescriptive in how we meet the legitimate concern that NHS trusts should concentrate on their core business, if I may put it that way, that we shoot ourselves in the foot again by having a cap that actually works against the best interests of the NHS.
Baroness Thornton
My Lords, I have never known my noble friend to show particular restraint about how he felt about his Front Bench.
This discretion has morphed into something that says that making efficient use of assets and being effective is the same as maximising private income. Of course, that is not the point here. The point is getting the balance right. The noble Baroness, Lady Noakes, made a very good point: the NHS does not exist to maximise private income profit.
Earl Howe
My Lords, this is an important issue and one that I recognise is of considerable interest to the Committee. To start at the beginning, the Government are clear that NHS providers should always focus on the provision of care to NHS patients. However, we cannot ignore the fact that the private patient income cap, which Clause 162 would remove, is damaging to the NHS and to patients’ interests. We think that there is a very strong case for removing the cap, because doing so will allow NHS patients to derive even greater benefits from foundation trusts. At the same time, we understand the sensitivities. The key to addressing those sensitivities is to have adequate safeguards to ensure that NHS patients and resources continue to be prioritised and protected. I reassure the Committee that we believe we can achieve that through the Bill and through the government amendments, and I shall explain why and how in a moment.
The words “private patient” in the cap’s title may have unfortunately given the wrong impression about the substance of the argument. My noble friend Lady Noakes was quite right in what she said. The cap’s scope goes far wider than just private patients. It captures income from activities such as innovations involving research, joint ventures and the sale of medicines and intellectual property to private healthcare providers in the UK and abroad. This means that innovative partnerships of the kind that the noble Lord, Lord Warner, indicated might happen are being hampered, and the ability of foundation trusts to earn more income to help to bring in leading-edge technology to the NHS faster—for example, for cancer treatment—is unnecessarily restricted.
Foundation trusts have told us that the cap is detrimental to care offered to NHS patients. They have welcomed our move to remove what they and we see as an outdated, unnecessary and arbitrary legal instrument that locks them into maintaining income from private charges below the levels that applied in 2002-03.
Perhaps I may remind noble Lords of the compelling reasons for removing the cap. As I am sure the Committee will agree, the rule itself is unfair. Some foundation trusts have much higher caps, and hence much more flexibility, than the majority. In 2010-11, around 75 per cent of foundation trusts were severely restricted with caps of 1.5 per cent or less. Meanwhile, the Royal Marsden benefits from a 31 per cent cap and is the country’s highest private patient income earner. It has also been consistently rated as a highly performing NHS provider.
Baroness Thornton
I have a question for the noble Earl on this. He is absolutely right that the Royal Marsden is a very effective hospital, but what independent evidence is there that the cap harms the interests of NHS patients? We know that quite a few foundation trusts have been going on about it, and I absolutely agree that the cap needs to be reviewed properly, but what independent evidence is there that it harms the interests of patients?
Earl Howe
My Lords, if the noble Baroness is calling for evidence beyond the testimony of numerous NHS trusts, I am not sure what more I can offer her. I can write to her on this but there is very considerable evidence—almost a priori evidence—that if you restrict a trust’s ability to earn income which would otherwise go to improve facilities for NHS patients, you are damaging the interests of those NHS patients. That is an argument that we have consistently put forward ever since the 2003 legislation. However, it is also an argument that I recall Ministers in the previous Administration making when we last debated this subject at any length.
I was going to point out too that NHS trusts as distinct from foundation trusts do not have a private income cap. A number of them earn private incomes well in excess of many foundation trusts. There is absolutely no evidence that these providers are ignoring NHS patients as their prime responsibility—no evidence at all. A number of noble Lords, not least my noble friend Lady Williams, have tabled amendments in this area to ensure that foundation trusts must protect the interests of NHS patients above all and that public money should not subsidise private care. I wholeheartedly agree with that. I would like reassure noble Lords of the safeguards that the Bill already contains to this end. Some of these safeguards are prospective in nature and some are retrospective.
First, foundation trusts will continue to be bound by their principal legal purpose, which is to provide goods and services for the NHS in England. I am going to move Amendment 299ZA today to state explicitly that “principal purpose” means that the majority of every foundation trust’s income must come from NHS service provision. That amendment will make it certain that the trusts are NHS providers first and foremost. I admit to my noble friend Lady Noakes that this is something of a belt and braces amendment, but I believe that it directly addresses the main concerns voiced by my noble friend Lady Williams.
The second safeguard is that the Bill would make foundation trusts more accountable and transparent to their public and NHS staff. My second amendment in this group, Amendment 299AZA, would support that by requiring every foundation trust to explain in its annual report how its non-NHS income had benefited NHS services. The Bill gives governors, who represent the public and NHS staff, greater powers to hold directors to account and this amendment would help them do so. My noble friend Lord Clement-Jones sought to place additional duties on directors. The Bill would also place an explicit duty on them to promote the success of their foundation trust with a view to maximising benefits for its members and the public. If, for example, directors were to pursue private patient activity against the interests of members and the public, the governors would be able to, and they should, use their new powers to challenge directors or they could use their existing power to remove the chair and non-executive directors.
Earl Howe
My Lords, it will be open to governors to seek information from the boards of directors on the plans that they have for the trust. They will have access to key papers. There should be no difficulty about knowing what the board has in mind for the trust in that strategic sense.
Thirdly, the NHS Commissioning Board and NHS commissioners would be responsible for securing timely care for NHS patients. They would be under a duty to exercise their functions with a view to securing continuous improvements in the quality of NHS services. That is an important provision too.
Finally, to achieve a fairer playing field, Monitor’s licensing regime would allow it to step in to prevent NHS money cross-subsidising private care. Foundation trusts would also be required separately to report to Monitor their NHS and private-funded income. My noble friend Lady Williams said that in her view it would be useful to have in the Bill that the majority of foundation trust patients have to be NHS patients. While I agree with the intent behind that thought, I cannot agree with her two arguments that support the need for an amendment. First, we do not agree that legislation should be used symbolically in this way. Foundation trusts’ principal purpose already covers the point that she raised. Secondly, even if we had such an amendment, it would not make any difference to how the courts interpret and apply EU competition law. It is the nature of the activities that they are undertaking that matter, not how many patients they treat or how much income they earn.
Perhaps I may make a specific point about my noble friend’s Amendments 297 and 299. They would duplicate unnecessarily the legal description of the NHS, which since 1946 has been described as “health service”. Use of the word “national” would be inconsistent with references to the NHS throughout existing legislation.
Just to elaborate on EU competition law, the Bill, as we discussed the other day, does not change the position on EU competition law or the applicability of the law. It remains the case that there is uncertainty on the status of NHS providers as undertakings for the purposes of competition law because no direct case law exists. In so far as foundation trusts already provide private healthcare services, they may be engaged in economic activity. Therefore competition law, both the prohibitions on anti-competitive behaviour and the prohibitions on state aid, may apply to their activities in these markets. Although the Bill would offer more flexibility to participate in these markets if the cap were lifted, it does not mean that foundation trusts are more or less likely to be considered undertakings in their provision of NHS services.
It was suggested by my noble friend Lady Williams that there might be a sort of case-by-case approach to lifting the cap. I recall that that approach was strongly rejected by the previous Government, and for very good reasons. We agree with those reasons. The disadvantages of that approach would be that it would be very difficult to set up a clear system and it would be likely to be difficult to administer and to increase bureaucracy. It would potentially lead to greater variation between foundation trusts and to claims of unfairness between different trusts, which could possibly be a source of litigation. It would maintain the problematic definitional issues around the cap itself. We are not drawn to that approach.
The noble Baroness, Lady Finlay, asked whether we could consider including in guidance to foundation trusts the need to avoid double-paying staff. I think she makes a very interesting point and I can confirm that we will give that some active consideration.
While the principles of some of the amendments tabled by noble Lords are ones that we could all agree with, we believe that the amendments are unnecessary and could be damaging. For example, a requirement for non-NHS income to support only NHS services could mean that foundation trusts would find it impossible to invest in their non-NHS activities and therefore make greater profits to support core NHS work. We want to avoid safeguards, no matter how well intentioned they may be, having a perverse legal consequence on foundation trusts’ ability to innovate.
I hope I have said enough to persuade the noble Baroness to withdraw the amendment because I am completely convinced that the necessary safeguards are there and that what we are proposing are the right things to do.
Baroness Thornton
If the Minister thinks that the safeguards are here, and if all that is true, should the governors be the ones who decide on the level of the private cap?
Earl Howe
My Lords, I think that the board of directors is best placed to decide how much private income overall a trust should receive, on the proviso that the principal purpose of the foundation trust remains adhered to. Governors should concern themselves with any threat to that status. If they perceive that the board is in danger of overstepping the mark in that sense, then of course it is their province. Otherwise, I think it is for the board of directors to judge what is in the best interests of the trust as a whole and of NHS patients. That could mean expanding the trust’s private patient work, capitalising on intellectual property, or whatever it happened to be.
Lord Clement-Jones
I want to add one further point about “prospectivity”, if there is such a word, and governors and/or directors looking at the activities of the trust. It is important that one considers that point from the social purpose point of view. One can then look at the pattern of activity of the trust and see what investments are going to be devoted to private and NHS patients. That is an important part of looking at the risk factors associated with a purpose not being a social purpose.
Baroness Thornton
I am glad that the two parties of government are in discussion with each other about these matters. However, there are Members on the Cross Benches and on these Benches who also have opinions on these issues. If it is appropriate, we would like to be involved in those discussions.
Baroness Finlay of Llandaff
I put my name to these amendments, which are incredibly important. I hope that the Government’s response will be that they are listening and prepared to change this. It is worth noting that the Government’s response to Professor Sir Ian Kennedy’s report said:
“In the past, the NHS was not always set up to put the needs of patients and the public first. Too often patients were expected to fit around services rather than services around patients. Nowhere was this more the case than for children, young people and their families … If we are to meet the needs of children, young people, families and carers, it is vital that we listen to them in designing services, gather information on their experiences and priorities, provide them with the accessible information that they need to make choices about their care, and involve them in decision making”.
That is the Government’s own response to the report.
I also draw attention to the report from the ombudsman in Wales. I know we are going to debate ombudsmen later but I will make this one point. The ombudsman upheld a complaint that Health Inspection Wales,
“failed to seek the child’s perspective on her care”.
The Royal College of Paediatrics and Child Health is very concerned that “no decision about me without me” must extend to children and should involve both children and young people. Without that we will have poorer service planning and, as a result of that, poorer health outcomes. A voice for children and young people needs to be incorporated in the decision-making process of the NHS Commissioning Board, health and well-being boards and clinical commissioning groups, and a safe conduit for this involvement may be HealthWatch and local healthwatch.
I want to briefly draw the House’s attention to the fact that we have many young carers so it is not only children as patients that we need to consider. In the 2001 census it was found that there were 175,000 young carers and no one is disputing that those numbers have gone up significantly since then. A third of those are caring for somebody with mental health problems and the average age of young carers is 12 years old. Reading their comments, society clearly does not understand the pressures that they are under. There is evidence that when they get to school late, the school does not understand. When they try to accompany their parent to out-patient or even in-patient appointments, they are not listened to even though they have been providing all the care. The facilities where their relative is looked after are not appropriate for them to stay overnight. I remind the Committee that when a young parent is dying, the children will want to stay at the bedside. They may want to sleep in the same room. They do not want to be taken away. They may want to have a break; they may want to go out; they may want to watch a video. If we are really going to invest in quality of care and health outcomes for the next generation, and meet the Marmot review’s requirement for health inequalities not to be widened but narrowed, we must address the needs of this group in our population who provide a lot of care, who are incredibly important and who will be the citizens of the future, but to whom the system does not currently give a voice. To expect adults to be a voice for them is completely unrealistic, because, when they are a young carer, there is no other adult there apart from the person whom they are caring for.
I hope that these amendments will not be dismissed with a whole lot of reasons as to why they cannot be put into practice. If we are really committed to changing healthcare services for the population, we should listen to the voice of children and young people.
Baroness Thornton
My noble friend Lady Massey is, as usual, correct about these matters. I am always happy to take my lead from her. All my experience of working with NCH and lots of children’s organisations over the years, and, more recently, of talking to YoungMinds, leads me to think that this is a matter that the Government need to take into consideration.
Lord Warner
My Lords, my name, too, is on the amendments. I support what my noble friend Lady Massey and the noble Baroness, Lady Finlay, have said. I want to refer to adolescent health services. We know that primary care services are not often very user-friendly in relation to adolescent health needs. I have come across GPs who have had special sessions and even private doors so that adolescents can come into their surgeries without being spotted by nosy neighbours. There are some real issues of privacy with young people in the adolescent years. They do not always find these services easy to use, when they often have considerable health needs and sometimes quite serious mental health needs. In my time as chair of the Youth Justice Board some time ago, we were starting to find that for many young offenders the origin of their offending was when someone significant in their family had died. It was the absence of any bereavement services that caused them to go off the rails. It is more than just symbolism to put these extra words in the Bill; it is a very important signal to the NHS that Parliament recognises the need to pay attention to the needs of children, to listen to them and to meet a set of needs which are often not being met.
National Institute for Health and Clinical Excellence
Baroness Thornton Excerpts(12 years, 11 months ago)
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Earl Howe
My Lords, the NICE implementation collaborative is a collaboration between NICE and representatives or stakeholder groups, including the chief pharmaceutical officer, the main industry bodies, the NHS Confederation, the Clinical Commissioning Coalition, the Royal Colleges and, if Parliament approves, the NHS Commissioning Board. The idea is that its members are going to work together to identify where support is needed and to identify solutions for the NHS through the development of implementation guidance—in other words, to improve the uptake of new and innovative technologies in the NHS.
Baroness Thornton
My Lords, the noble Lord, Lord Naseby, has never really liked NICE very much, so I am not surprised at his Question. A lot of the work of NICE is not about approving new medicines but about care pathways. I invite the noble Lord, Lord Naseby, to look at its last 10 press releases; they are all about how you treat COPD or HIV, the care pathways for people with mental illness and so on. Will the Minister confirm that NICE’s guidelines on care pathways will have the same effect under the new architecture as they have today?
Earl Howe
My Lords, our expectation is that the NHS will continue to use NICE clinical guidelines to inform local improvement activity. These guidelines are tremendously valued and very authoritative. The noble Baroness is quite right: they have the potential to make a big impact on the quality of care and to add value.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
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Baroness Thornton
“(c) is to continue as regulator of NHS Foundation Trusts as set out in Chapter 5 of Part 2 of the National Health Service Act 2006”
Baroness Thornton
My Lords, at last we move to Part 3. I hope the House will tolerate a longer speech from me than I normally make. I have made just a series of very short speeches so far on the Bill. There are many amendments in this part in my name and that of my noble friend Lord Beecham. I would like to take this opportunity to explain the rationale behind the suite of amendments that we have put before the Committee today. I thought the Committee might prefer one longish speech rather than 10 short ones, which will almost certainly save time.
Our amendments are largely in this group, which addresses the role and powers of Monitor, and the next two groups, which address Monitor as a licensing body and its accountability. Later today, in groups eight and nine, there are the issues of pricing and the failure regime.
On these Benches, we decided some time ago that this was the heart of the Bill. Over all the debates we have had in the last 11 days, it has become abundantly clear that the reason we have this mammoth Bill, bringing about the expensive and risky reorganisation of our NHS, is to create a regulated market in the NHS. On these Benches, we have always believed that fundamentally, this Bill was conceived and constructed, around Part 3. Even after the pause for reflection and the report from the Future Forum, that remains the case.
Version 1 of the Bill was at least honest in being the embodiment of what Andrew Lansley had promised to do to our NHS back in 2005. He is at one with his colleagues Oliver Letwin and George Osborne. Mr Lansley wants markets and is against a communally owned and publicly run public sector. Like his Conservative colleagues, he believes that competition solves every problem and is a cure-all. Indeed, Mr Lansley’s background in establishing regulated utilities in his five-year preparation as the shadow Health Secretary makes it clear that he wants to treat our healthcare just the same as gas, water and electricity. That was version 1.
That finally collapsed when people including the Liberal Democrats actually read and understood the White Paper and the Bill. I will not trouble your Lordships’ House by picking over the corpses of versions 2 and 3 of the Bill, but we now have version 4, and I suspect that we are still far from finished. This Bill is a mess. It is now a catalogue of compromises, except, it has to be said, the framework that we have on offer in Part 3, which would, over time, allow Mr Lansley’s vision to be fulfilled. He must be hanging on to that for dear life.
We believe that Monitor is being asked to fulfil too many functions and set too many priorities, and that some of these are potentially, if not actually, in conflict with each other. We hope the House will appreciate that, on these Benches, we have done the House a big favour. We have rewritten Part 3 to make it simpler and more coherent. We have taken out the nonsense parts, such as the voting system in Clauses 116 to 121, which as it were bring the X Factor system into the NHS. Why not have phone-in votes for CCG chairs, for example?
We have taken out the convoluted and bureaucratic ideas around levies and risk pooling. After all, that is part of what the NHS is for—to pool the risks. Our advice is to keep it simple. We believe that the attempt to define the rules-based system for the NHS was always doomed. The idea that, like a true regulated market, we can set out the rules in primary legislation and contracts and then let the courts decide everything is just plain daft—unless you are a lawyer, of course. They must be salivating at the business coming their way if this Bill becomes an Act in its current form. Does the presence of excessive legality and constant contracting sound familiar? It should, because essentially that is what happens in the United States healthcare system.
We have, like Monitor, suggested that instead, the principles and rules for co-operation and competition—PRCC—that we put in place when we were in government should be left as the basis for the system. We also suggest that the Co-operation and Competition Panel should retain its role of advising on complaints about any breaches of the rules, which was at one time the Government’s position, and it may still be. For us, a defining characteristic is that the pinnacle of such a system is that there is a Secretary of State who sets the framework through the PRCC.
I would like to dispel the myth that Labour is against reform. In 1997, we came in to rescue the NHS after many years of neglect. On everything worth measuring, the NHS of 2010 was far, far better than in 1997. It is only in 2011 that we have seen it start to go backwards again, as waiting times get longer and access is restricted. Our track record on reform is there. Clearly, we did not get everything right, but we learnt. The current Administration have launched the biggest reorganisation of the NHS in its history, despite the promises that they would not and despite all the evidence that reorganisations set the NHS back two to three years, and despite the costs and risks involved—except, of course, that we are not allowed to know exactly what those risks are.
Labour introduced independent regulation of quality to the NHS. We support the continued role for Monitor with regard to foundation trusts, which we put in place. We accept the idea of extending tough financial regulation over all providers in the NHS through the use of a licensing scheme. But we do not accept the handing over of economic regulation of the NHS to a quango. We wish Monitor to retain its powers to oversee foundation trusts, and, like Sir David Nicholson, we see the value in retaining the possibility of de-authorisation of a foundation trust into a safe haven to permit restructuring and reconfiguration. But more on FTs later.
We have never been against the idea of competition. Indeed, we set out the principles and rules basis on which it could operate. We have never been against using the private sector where this adds necessary capacity or provides expertise not available within the NHS. Our experience, good as well as bad, informs our response to the Bill.
There is a place for competition. It is not, and never should be, the main driving force for reform of the NHS. We are against the promotion of competition for its own sake, as this Bill originally intended. We believe the balance between co-operation and competition is a matter for the Secretary of State to determine, in the best interests of patients, not for a quango to determine in the interests of some ideological bias.
Further along in the consideration of our amendments, we set out the process by which major reconfigurations could be proposed, consulted on and determined. We set out for the first time the idea of a rules-based failure regime. We do not see failure as a desirable feature of a market system; we see it as a failure of planning and commissioning and as something to avoid, not welcome. But if all early intervention efforts are insufficient, then an orderly rules-based administration process is necessary, so we set one out.
In all these areas, we do not oppose development of the NHS or reform. We simply fundamentally disagree with the approach being used by this Administration, which is highly disruptive and expensive and takes focus away from the Nicholson challenge. Along with the Liberal Democrats of old, we oppose the change to a regulated market at the expense of democratic control. These are the wrong reforms at the wrong time and, we add, for the wrong reason. Healthcare is not another utility to be regulated and privatised. Our NHS has as its foundation the twin principles of universality and social solidarity. It is not a candidate for conversion into a fully fledged market. We introduced regulation to give the public some independent reassurance. We introduced external assessments of quality in the NHS. The role of the quality regulator, the CQC, is unchanged by the Bill. We support the CQC, but only if it is properly resourced. We set up NICE, which is acknowledged as a world leader in its field. We set up Monitor and we think it is too early to evaluate its success, as the move to an all-FT system has taken far longer than envisaged and proved more complicated than was assumed—a lesson not yet learnt by this Government.
The job is really only half done. What we do know is that there is no miracle transformation tool. The evidence is that foundation trusts do not progress any faster than non-foundation trusts. There is little, if any, evidence that foundation trusts are more innovative, more risk-taking or more competitive than their non-FT colleagues. It is a mix.
Earl Howe
My Lords, I thank all noble Lords who have contributed to what has been a first-class debate. While I will not repeat what I said earlier, the value of this summing up will be in me responding to some of the specific questions and points that have been raised by noble Lords.
The debate has demonstrated broad agreement, if I am not putting words into noble Lords’ mouths—no doubt they will tell me if I am—that competition, when used appropriately, has an important role to play in realising what we all want to see in the NHS. It should be a means of improving the quality of care and productivity in the health service, and of improving patient choice, including choice of treatment. I would like to believe, from what noble Lords have said, that there is no disagreement about that as a general principle. It is consistent with the policies of the previous Government, reflected in published statements on behalf of all the main political parties over the years.
A further area of potential consensus appears to be on the merits of sector-specific regulation that is applicable to both commissioners and providers, with the starting point being the existing principles and rules for co-operation and competition in the NHS, as the noble Baroness, Lady Thornton, made clear.
Speeches from several noble Lords demonstrated the concern that competition law should never be applied to the NHS. The noble Lord, Lord Owen, in particular, expressed that view very forcibly. However, that is not in the gift of the Bill. The Bill provides for Monitor to consider cases of potential breaches of the Competition Act 1998, to undertake market studies and to determine where and when matters should be referred to the Competition Commission for investigation under the Enterprise Act 2002. Establishing concurrent powers for Monitor would not extend the scope of competition law or its applicability to the NHS.
Baroness Thornton
If that is the case, why do 20 clauses in this part of the Bill refer explicitly to the Competition Commission and the panoply of competition law? Should they not be there?
Earl Howe
They are there because this is the first time that any Government have attempted to bring together under one umbrella the disparate parts of our existing system for regulating and controlling competition. As I said earlier, we have that system in skeletal form, but there are lots of gaps and inconsistencies. By bringing them under one umbrella, as this Bill does—I am afraid that it inevitably occupies a goodly number of clauses—we will have a coherent system of regulation for the future.
Establishing concurrent powers for Monitor would not extend the scope of competition law or its applicability to the NHS; that is an important point for noble Lords to appreciate. Why have a sector-specific regulator? For me, the reason is that, instead of such matters being reserved for the Office of Fair Trading, Monitor will be able to lead on these issues in its capacity as a regulator with statutory duties to protect and promote patients’ interests and to enable integration, and as a body with much greater knowledge and expertise of healthcare compared with the Office of Fair Trading. That would include, for example, where arrangements such as clinical networks, which may restrict competition, deliver overriding benefits to patients. Just because there is no competition, that does not mean that the behaviour in question is anti-competitive.
That view was forcibly brought out by the NHS Future Forum. As I have said, competition is just one of the tools available to the commissioner in securing access and improving services, and it will be the commissioner, not Monitor, who will decide where and how to use it. That is not new. The use of competition—for example, through competitive tendering—is already well established in the NHS. A range of providers—NHS, voluntary, and independent—are contributing to improving services for patients.
Of course I understand the passion with which the noble Lord, Lord Owen, spoke; my concern is that his amendments would remove from the Bill a protection for patients in relation to the actions of commissioners. That is very important; if the noble Lord’s amendments were accepted we would have commissioners taking decisions that were not overseen or checked in any way, which would be very dangerous. It would also be a backwards step from the existing principles and rules that apply to primary care trusts and that were introduced by the previous Government. The noble Lord, Lord Owen, said very interestingly that according to his research the French railway system is not subject to EU competition law. I defer to his knowledge of French railway legislation but, as is made clear in the OFT’s recent guidance, the issue of whether competition law applies requires an analysis of the activity in question. To insert a clause into the Bill just to say that EU competition law shall not apply to the NHS would not achieve that aim. EU competition law is a fact, so we have to ensure that the system that we put in place protects patients against breaches of the law and that when breaches do occur they are remedied effectively.
Earl Howe
My Lords, the noble Lord, not for the first time, is ahead of me. It is no accident that we have a group of amendments that deals with potential conflicts and how these are to be resolved. It might be better, if the noble Lord agrees, to wait an hour or two until we reach those amendments.
My noble friend Lord Newton indicated from his own personal experience that mergers, when they occur, are far too bureaucratic. I fully agree with him. The Department of Health, the Co-operation Competition Panel and, if it involves a foundation trust, Monitor, all currently play a role and may have conflicting views which lead to uncertainty and delay. Our proposals would create a simpler and much more streamlined process for the NHS.
My noble friend indicated his strong view that safety and quality—not competition—should be paramount. I am sure it will not have escaped his notice that improving quality is what these reforms are meant to be about. We have been clear that patients’ interests, especially their safety and the quality of the services they receive, have to be paramount. That is why Monitor’s overriding purpose is to protect and promote patients’ interests. It is why the board will have a duty to improve quality, why the CQC will underpin quality; and why competition will be used only as a means to improve quality. Where there are better ways to improve quality—and there may be—they will be used instead.
My noble friend Lord Clement-Jones, in his extremely interesting and—I do not mean to sound patronising—well-informed speech, took us through some of the intricacies of competition law. Although he did not say this, there has been a suggestion from a number of quarters that we are in a knowledge-free zone when we look at competition laws applied to the NHS. In one sense that is true because there is no case law that can guide us, but in another sense it is not true.
We can say many things with confidence. The point of competition law is to protect people from self-serving abuses like collusion or abuse of market power by restricting access to services. These self-serving abuses that harm patients are already prohibited in the NHS by the principles and rules for co-operation and competition, as introduced by the previous Government. This is not something new introduced by the Bill. Competition law applies to foundation trusts only in so far as they are acting as an undertaking, as my noble friend indicated—in other words, only where they are providing goods and services within a competitive market. Given the lack of directly applicable case law to NHS providers, there is some uncertainty about where that line is drawn.
A body can be an undertaking for some activities and not others. That is very clearly laid out in the OFT’s recent guidance, Public Bodies and Competition Law. For example, the foundation trust might be an undertaking for elective surgery, if it were provided in a competitive market, but it would be very unlikely to be an undertaking when providing NHS services in the absence of competition and while under a licensed obligation to maintain service continuity, which it could well be if Monitor chose to build that into its licence. In so far as foundation trusts may in the future be found to have abused their market power, what would then follow? It is important to understand what the consequences would be. In that situation, Monitor—
Baroness Thornton
Before the noble Earl moves on, I would like to be completely clear. Is the Minister saying that Monitor will decide which parts of the NHS are subject to competition law—and not the Secretary of State?
Earl Howe
My Lords, competition law potentially applies to the provision of services throughout the NHS. Monitor is there to protect patients from breaches of competition law, as it perceives them to be. The noble Baroness is right that it will not be the Secretary of State who makes those judgments. We are charging Monitor with that duty as a sector-specific regulator. I hope I have answered the noble Baroness’s question; if I have not, I am very happy to write to her on that.
In a situation where a foundation trust was found to have abused its market power, Monitor or the OFT would have the power to remedy the breach and impose proportionate sanctions, which might be a fine, or it might be to set aside a collusive agreement or to apply to the courts for a director disqualification. The effect would be to ensure that the anti-competitive conduct and the associated harm were addressed. That can be only a good thing. It is in the interests of patients, and it prevents the whole thing escalating further. The noble Lord, Lord Rea, indicated his doubts that there was any evidence that competition really did drive up quality. If he will allow me, rather than taking up time now, I will write to him, because there is quite a deal of evidence to indicate that it does drive up quality.
On reflecting upon the question that the noble Baroness, Lady Thornton, asked a moment ago, Monitor will not decide whether competition law applies; Monitor will apply the law as it exists. In the end, only the courts will decide the question that she put—certainly not the Secretary of State.
Baroness Thornton
In a way, that goes back to my original question: will the Secretary of State no longer decide, for example, that accident and emergency will be exempt from competition law? Will Monitor decide? Could the noble Earl please be patient with me and give me an example of what will be exempt and what will not be exempt, and who takes that decision? Is he saying that Monitor takes that decision and that if Monitor gets it wrong, the matter goes to the courts?
Earl Howe
Monitor would ask itself: is the arrangement we are looking at for, let us say, an A&E department that had no competition for miles around, anti-competitive? The answer might well be no, it is not. As I said earlier, the very fact that there is no competition to a service does not mean that it is anti-competitive. Monitor will make a judgment on whether the service is operating in the interests of patients. However, I think that we are getting into an area where it would be beneficial to have a letter from me setting out exactly how the law is applied and by whom.
Baroness Thornton
My Lords, this has been an absolutely brilliant debate and very helpful to everybody in the Committee; I hope that that includes the Government. I start where the Minister left off about intentions—it is not the Government’s intention to introduce competition red in tooth and claw. However, the Minister must by now have realised that that is not what people understand by what is actually in the Bill and how it might be applied. That is the dilemma that faces the Committee and the Government. We on these Benches will certainly take up the offer that the noble Earl made in his opening statement, which was extremely useful, of discussing how to improve and change this part of the Bill. We would like to be part of that process. There is definitely work to be done on that.
I will briefly sum up our position on this debate. I have a series of questions for the Minister and I am very happy for him to write to me about them. We are not convinced as yet by the idea that having a quango as an economic regulator is the only way to bring a clear and comprehensive legal framework into the Bill. The purpose of Monitor in the Bill is to develop competition, which is why we have the Bill. We believe, and this debate shows us, that the contents of this part of the Bill in fact open the door and invite in the issues that were raised, for instance, by the noble Lord, Lord Clement-Jones. If competition is not at the heart of the Bill, why do we need all that detail? The noble Lord, Lord Clement-Jones, made a very helpful intervention and a useful analysis. I, for one, will be rereading his speech about EU competition law.
I ask that the noble Lord, Lord Clement-Jones, and his colleagues look at our Amendment 262A, which would add a third subsection to Clause 59(1). The proposed paragraph (c) says the provision of health services should be,
“based on the principles of universality and social solidarity”.
We were not making a particularly left-wing statement with that. We were actually lifting it out of European law, which our advice tells us is one of the ways in which you keep at bay the procurement processes of European law. I strongly ask the noble Lord, Lord Clement-Jones, to look at that; I would be interested to hear his comments.
One part of the debate that I have been disturbed about was that raised by the noble Lord, Lord Owen. He also has a freedom of information request in for information that would help to inform the discussions of this House. We know that we have had our debates about the lack of access to the risk register to help us in our deliberations. Indeed, my honourable friends in another place asked if they could also have access to the legal opinions that the department had got on this part of the Bill, and were refused access to that, too. We have all had to find our lawyers to advise us about competition law. We are now all a lot better informed than we were several months ago. The noble Lord, Lord Owen, was right when he said there is no consensus about this; indeed he was right when he said that parts of this Bill are feared and hated. The Minister needs to understand that there is a lot of fear out there, about this part of the Bill in particular. The noble Lord was expressing very grave concerns.
The noble Lord, Lord Newton, made a threat to the Government about patient safety and quality being the order of the day and said that he will be returning to this on Report. He will probably have more effect than the rest of us put together in his interjection on this matter. We will be behind him if he does so, which may not do his reputation any good at all.
The noble Baroness, Lady Meacher, made a very thoughtful speech, her most important point being that we already have the tools to make the system work. There is no need to put in an economic regulator and the competition regime that this Bill suggests, because the tools are already there. That is very important.
I say to my noble friend Lord Whitty that there is absolutely nothing wrong with a bit of slash and burn to make the point about this part of the Bill. In effect my noble friend was at one with the noble Lord, Lord Clement-Jones.
The message from the noble Baroness, Lady Cumberlege, is that the NHS needs to improve. Yes, we would all agree with that and every health system in the world needs to change and improve. I would, however, refer the noble Baroness to my speech, which embraced change, embraced development and even embraced the use of managed competition. Where we part company is that the way to improve the NHS is not to treat it as a utility or a supermarket; we do not think the evidence is there to prove that. In fact, there is a lot of evidence to suggest that we should be very wary of the introduction of market forces as a way to improve our health service.
My noble friend Lady Armstrong made the important point that we agree with the Minister that there is a case for the use of competition in its place. The challenge before us is how we ensure that this Bill delivers that without threatening the whole fabric of our health service.
Baroness Cumberlege
Is the noble Baroness aware of Gaynor et al and the work they have done? I quote again from Protecting and Promoting Patients’ Interests: the Role of Sector Regulation, a research study in 2010:
“We find that the effect of competition is to save lives without raising costs. Patients discharged from hospitals located in markets where competition was more feasible were less likely to die, had shorter length of stay and were treated at the same cost”.
Baroness Thornton
All I would say in answer to the noble Baroness is that there is no known health service in the world that shows competition improves health outcomes. I challenge the noble Baroness to send me the information that shows that is the case.
Baroness Cumberlege
The noble Baroness should look at this document and at the research which is stated in it.
Baroness Thornton
We are talking about the whole system, not a small part of it. We can share our intelligence outside the Chamber; the noble Baroness makes a good point but there is no evidence that says this is the way to improve our national health system.
Lord Reid of Cardowan
Perhaps I can be helpful. The noble Baroness referred to a study of the competition element, which was introduced into the British health system by the previous Government, as far as I am aware. That was carefully circumscribed competition. It did not amount to more than 10 per cent. It was based on the insistence that competition be fair in terms of quality, standards and price; it excluded emergency; and it applied only to elective operations. The difference here is not whether competition is beneficial where appropriate. The real question is: where is it appropriate? That is the distinction between the two comments.
Baroness Thornton
My noble friend comes to my assistance in a very appropriate fashion and puts it much better than I did.
Finally, the question that we need to answer is: does the Bill increase the likely interference of competition law in the National Health Service? Does the Bill transfer power from the Secretary of State to Monitor, and is that a good thing? That is why I was pressing the Minister about who takes the decision about where competition law applies.
The Minister said at the outset that Part 3 is misunderstood. He is absolutely right. If the Government really want to put beyond doubt the issue of competition law and its place in the delivery of our National Health Service, we have to simplify, clarify and delete parts of Part 3 of the Bill. We have to take the NHS out of the danger zone of EU procurement law and competition law. That is the challenge that lies before the House when we return to consider this at a later stage in the Bill.
Earl Howe
My Lords, before the noble Baroness sits down, does she accept that European procurement law already applies? I do not think there is any dispute about that. I hope she will welcome my offer to write to cover issues relating to competition law, including giving my view on my noble friend’s suggestion of having an independent legal view. I have not taken a view about that at the moment, but I will gladly consider it.
Baroness Thornton
I accept both the invitation and comments that the Minister has made about procurement law. I refer him back to my comment about opening the door wide and inviting in the lawyers. I beg leave to withdraw the amendment.
Baroness Thornton
“(d) is to take on the further duties as set out in this Act in relation to authorising through licensing any person who provides health care services for the purposes of the NHS as set out in Chapter 3 of this Act.”
Baroness Thornton
My Lords, I promise that this will be a very much shorter speech. We now turn to the second group, which concerns Monitor’s function as a licensing provider—a part of the suite of amendments that we have put down about reconfiguring Monitor.
The Bill extends the concept of financial regulation to non-financial trusts, and we can see the logic in this. For consistency, however, we argue that all providers of services to the NHS—not just foundation trusts—should have to meet requirements around their financial position and have this subject to oversight, as well as the obvious fit and proper test that they would have to go through.
We can see the argument for a robust evaluation, for example, of capital structures, which certainly would have been helpful in the case of Southern Cross. The regulator should be allowed to make authorisation subject to this kind of probity test—something like a fit and proper persons test. For us, the key aspects of the licensing regime should be determined by the Secretary of State, not by the regulator. The job of the regulator in our view is to operate the system, not to define it. I would invite the Minister to say whether he agrees with that analysis.
With foundation trusts we set out that Monitor shall use the licence to ensure that information flows to the regulator to enable it to have effective oversight and to intervene if necessary. The licence has to extend this to other sorts of providers which may be reluctant to supply information or submit to the idea of intervention. They may claim commercial confidentiality. The Bill resolves this problem, as far as we can see, by simply having no oversight—in other words, the “nothing to do with us, guv” approach to regulation. We believe that the public would not accept this. The Mid Staffs example, where Monitor came into much criticism, or the Southern Cross example might be instructive here.
Baroness Murphy
I am sorry to interrupt. The situation at Mid Staffs arose following the approval of the Department of Health and the Healthcare Commission. It was passed to Monitor as a fit and proper hospital. The scandal emerged only three weeks after it was approved by Monitor.
Baroness Thornton
The point I am making concerns what we need to do for the future. What happened in Mid Staffs has some bearing on that and I said “instructive”.
The tests that we are suggesting should be applied to any organisation wishing to supply clinical services to the NHS around probity and can be enforced through contracts and licensing. Meeting the conditions without trying to argue commercial confidentiality is now the price of doing business with the NHS, in our view.
Finally we have reservations about the interaction between the licensing regime and the use of standard contracts. Why have both as enforcements? What would be appropriate for each? What is the role of Monitor as regards the contracts? What happens to disputes between providers and commissioners? Do they all go to court? What is the role for Monitor in the resolution of disputes? We have accepted that if you have a licensing system then you have to build a bureaucracy to support it, moving from a top-down management bureaucracy to a regulatory bureaucracy. To keep this to a minimum while remaining effective is not simple, as the CQC is finding. But the system set up in the Bill is very complicated and our amendments seek to simplify it. The nature of the operation as to whether it should be a light-touch risk-based approach or continuous direct inspection is another issue which has plagued the CQC and will have to be resolved by the new Monitor. That is a question we need to put on the table.
I now turn to our amendments. In Amendment 260EB Monitor is to take on duties in relation to authorising through licensing any person who provides healthcare services for the purposes of the NHS. Amendment 279A is to remove any potential ambiguity and stress that providers of primary medical services for the purposes of the NHS must hold a licence. Clause 82 stand part is to facilitate a discussion about who can be exempt from the requirement for health service providers to be licensed and who makes those decisions. In Amendment 282A, since this a strong power granted to Monitor to revoke a licence, we add qualifications that in the case of a foundation trust Monitor must consult the Secretary of State, and the Secretary of State may veto any revocation if it is deemed not to be in patients’ or taxpayers’ interests. In Amendment 282B the Secretary of State, not Monitor, should determine the principles or framework behind the licensing conditions and Monitor must then have regard to these. Amendment 283 specifies that the standard conditions included in each licence must set out various minimum standards such as for governance arrangements, meeting in public, employment conditions, co-operation with local-authority overview and scrutiny functions. Amendment 283A contains the issue of there being no need to have different standard conditions for different descriptions of licences.
Amendments 286ZA, 287ZA and 287ZB set limits on Monitor’s functions to set and modify the licence conditions, simplifying its role. Amendment 287BA leaves out the roles of Monitor relating to licence conditions, price and charging. Amendment 287F requires licence holders to be fully subject to the overview and scrutiny functions of local authorities. In Amendment 288ZB Monitor has the power to modify the standard conditions applicable to all licences, and in doing so there should be no need for a vote among providers but consultation and consent from the Secretary of State is required. In Clauses 99 and 100 stand part we raise the issue of minimising the bureaucracy surrounding licensing. In Clause 101 stand part we argue that the requirements for fair eligibility and transparency in selection should be covered under the PRCC. This is a probing amendment designed to strengthen the clause instead of deleting it on Report. We think that that should be a matter for discussion. Amendment 288DZA regards Monitor’s power to impose discretionary requirements, including fines, on providers and licence holders if they fail to provide required documents or information, which can only occur with the consent of the Secretary of State. Any fine must be held by the local CCG for reinvestment in services in that area. Amendment 288DA states that if any provider is in breach of a licence Monitor may take action against them, including the imposition of fines, but only with the consent of the Secretary of State. I beg to move.
Baroness Williams of Crosby
I would like to address just one of the amendments in this group, which is in my name and that of my noble friend Lord Marks of Henley-on-Thames. Unfortunately my noble friend has been taken ill and is unable to be here. He extends his profound apologies to the Committee.
This amendment is significant in strengthening the general approach towards competition under Section 3 of the Bill, by making it quite plain that the requirements that have to be met, which we will come to in Part 4, must also apply to licence holders. I am in a slight difficulty, as my noble friend Lord Howe will appreciate, as the Government have tabled amendments on aspects of foundations trusts which will arise at a later stage in the Bill, particularly under Clause 161, which are related to the amendment to which I am now speaking. I will therefore do my best to navigate around Clause 161 in so far as I can. However, I may have to make limited reference to it in order to make clear what my own amendment is about. My own amendment is essentially one that would support, and indeed further improve, the proposals put forward in this particular amendment. They should therefore be read together with Clause 161 and Amendments 299ZA and 299AZA in the name of the Government.
We want to make two requirements as a fundamental part of the requirements that licence holders have to meet. We appreciate that, in many ways, the licence-holding requirements are fundamental to the way in which the Bill operates, because it must be the case that providers are brought within the general structure of the Bill itself. Our amendment makes two particular points about that. The first is that the revenue from private patients, as a percentage of the licence holder’s total revenue, must be kept below 50 per cent. Secondly, and at least as importantly, the number of private patients in a foundation trust hospital must also be kept below that proportion.
The main point of this amendment—I think that it is an important one—is again to establish that we are looking at foundation trusts that are part of the provision under the NHS and that a minority of both income and patient numbers would be required for any provision made. We hope, as I think the noble Baroness said, that this set of requirements continues well beyond 2016 as part of the structure of the relationship of foundations trusts to the health services, and that this is therefore not standing alone but a crucial part of the whole strategy.
If the noble Lord, Lord Owen, were in his place, I would say that if this is not the rail track of the French railways, it is at least the rolling stock, and we need both to have an effective railway service. However, I wanted to say one other thing. The first part of the amendment tabled this morning by the noble Earl, Lord Howe, goes a very long way. We will talk about this in more detail later so I shall only sketch it out now, given the time. I think that the first part of the amendment, with regard to income—and indeed the requirement that income must exceed the costs of providing that income, and that it must be used for the purposes of patients within the health services—is a very full and useful advance. It is very close to the phrasing of the 2006 Act, which is a point that I am sure will come across to the noble Baroness, Lady Thornton, and her colleagues, but with the additional wording that makes it, if anything, even stronger.
The noble Earl, Lord Howe, will know from discussions which I and my colleagues have had with him that we would want to see this supplemented, if possible, by a reference to the proportion of patients in foundation trust hospitals. Quite broadly, that is something the public can understand, whereas references to quite complicated percentages of income, although equally important—if not more so—are perhaps less transparent and less apparent.
I will not pursue further the new amendments beyond welcoming them, but I want to advance this particular, although limited, amendment as thoroughly as I can, as I think it would ensure that licence holders were held to the same kind of requirements that we are imposing upon Monitor, the national Commissioning Board and the CCGs. It must be the case that this should be a common approach across the front.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Thornton
I am glad that the noble Lord, Lord Clement-Jones, asked that, because I was waiting to hear what the answer would be. I look forward to the noble Earl’s response. I fear that the noble Earl will be spending the whole of the weekend writing letters to all of us about these matters.
I am not going to say very much about this. This has been a divided debate, but many of the questions asked have been similar. The noble Baroness, Lady Williams, was quite right to raise the issue of requirements. She and her noble friend Lord Clement-Jones were right to raise the issue of transparency, which is very important here.
I am not sure that we on these Benches would agree that the checks and balances are the right ones. At this stage, we will wait for the letters from the noble Earl. I will also read his remarks again in Hansard. We may return to discuss this matter again. I beg leave to withdraw the amendment.
Baroness Thornton
“( ) The chair and the chief executive must be separate roles, and cannot be held by the same person.”
Baroness Thornton
We turn now to the very important matter of Monitor and accountability. I see that many noble Lords have amendments in this group, many of them echoing each other. The reason for that is that, given the powerful role that Monitor is to have—whether it will have this role under the regime proposed by the Minister or the alternative architecture proposed by myself earlier today—we think that accountability is very important indeed.
We propose two improvements to Monitor’s governance. We believe that its functions should be exercised in the public interest and therefore that it should meet in public, as the NHS Commissioning Board will. We should also no longer have a combined chair and chief executive post. I hardly need say to the House that this arrangement is totally against established good practice in the public or private sector. I rest that issue there and look forward to the noble Earl’s response.
When foundation trusts were set up, the idea was that they could earn freedoms from traditional NHS management and also bring an element of democratic accountability and community ownership. It must be said that much of this has not materialised. Some foundation trusts up north have made an effort to engage locally with the people they serve. Some have adopted a business model rather than a community ownership model. I am sure that all noble Lords are members of their foundation trusts—I hope that they are and that they take part when asked to do so. The target to push up membership numbers in the trusts seems to have been forgotten.
Being successful in becoming a foundation trust shows that a fairly high barrier was overcome but that represents only the position at one point in time. As with the share market, things can go up or down. Some big-name foundation trusts have had their bad patches. A few, surprising names have been at the edge of intervention. If you compare the list of foundation trusts flagged as being in difficulty by Monitor with the list of ratings from Dr Foster or, in its time, the ratings from the Healthcare Commission, there seems to be no pattern at all. Indeed, a double-excellent foundation trust came close to de-authorisation.
Every large, complex organisation can get into trouble. Past success is no guarantee of future performance nor is it necessarily even a good predictor. That is why we argue that the oversight of foundation trusts by Monitor should continue and its intervention powers should remain. We have long argued for shifting the balance of power and we fully support the idea of earned autonomy with the regulator as an independent judge. But if it is earned it can also be taken back. We shall see what transpires when one foundation trust is obviously unable to present a viable business plan. What will happen to its future?
Monitor has to continue in the role we gave it as the authoriser of foundation trusts as they earn their limited independence. In recent times, it toned down the role it took as the promoter of foundation trusts and as a trade body as a step too far. We argue that Monitor as a regulator should be neutral not a cheerleader. We can accept the principle that it is wrong to favour any type of organisation for arbitrary or political reasons, as is set out in the operating framework. We do not accept the convoluted and ultimately meaningless formulation contained in the Bill. Monitor should retain its intervention powers. We accept the case for autonomy and community ownership but in the final analysis we see foundation trusts as still part of the NHS and so, in the end, subject to the powers of the Secretary of State.
We accept that the governors should be a strong element in foundation trust governance but, as the Bill accepts, they need support and development in that role. Most foundation trusts will say that governor effectiveness takes at least five years but governors, no matter how effective under normal circumstances, may be completely ineffective in times of overwhelming crisis. It is then that the Secretary of State must have the power to intervene to ensure the overall functioning of the NHS and to protect the interests of patients and their communities. A major change here is that the Bill extends the concept of financial regulation to non-foundation trust providers—that is, the private sector. As I have said before, we can see the logic in that.
I am going to skip ahead and do what I said earlier in the Bill: you do every other page of your brief and see whether anybody notices. We have already had a lot of debates about these issues.
Finally, we come to reservations about the interaction between the licensing regime and the use of standard contracts. Actually, we have also discussed that so I will not ask those questions again. We have recently seen missives from the Department of Health and from Monitor exploring the ideas around regulation. It is slightly amazing that these are all coming out now, as helpful as they may be. The general idea, as we have said before about the Bill, is that you should consult on the legislation, allow Parliament its scrutiny role and then implement it. However, as we know, the Bill exhibits the principle of reverse engineering. When its progress was paused to allow consultation, the Government continued to roll out the implementation and the Bill is catching up with that now. We scrutinise the Bill alongside its implementation and the secondary legislation is written up in the form of documents coming out of the Department of Health.
I turn to our amendments in this group. Amendment 260EC provides that the chair and chief executive of Monitor cannot be the same person, Amendment 260GA provides that Monitor must meet in public and Amendment 267D would apply the mandate to Monitor. We think that Amendment 267D might be improved on and might even be better located in Clause 20 on the mandate itself, but the point of it is to raise the idea that the Secretary of State may be given a greater power of direction of Monitor and ultimately boost its accountability. I beg to move.
Lord Clement-Jones
My Lords, I would like to continue the train of thought started by the noble Baroness, Lady Thornton, about the specifics relating to Monitor. I shall speak to Amendments 260F, 260G, 260H, 269A, 294BA, 294BB and 294BC.
First, I may not have got Amendments 260F and 260G, relating to the first chief executive of Monitor, completely right, because Monitor is already in existence, but in principle the chief executive of Monitor should surely be appointed by the Secretary of State in the same way in which the chairman and chief executive of the national Commissioning Board are. As we go through this debate, it will become increasingly obvious that Monitor’s role is as important as that of the NHS Commissioning Board, so I would have thought that having an appointments system on all fours with the board would be imperative. Then again, we come to the question of the provision of information to the Secretary of State. Amendment 260H mirrors the powers possessed by the Secretary of State in relation to the NHS Commissioning Board. It seems sensible that that should be in place as well.
Harking back to our debate on competition and the application of EU competition law, we come on to a rather different issue. This is an interesting place for these amendments to be put. In Clause 118 it is the Competition Commission that deals with the determination of methods of setting prices under the national tariff if there is a disagreement—the Competition Commission has that referred to it by Monitor. For all the reasons that we explored in the debate on the first set of amendments today, it is inappropriate, in my view and in the view of many others, for the Competition Commission to be so heavily involved in matters relating to the NHS. Substituting the Secretary of State for the commission seems to be sensible.
The objection is sometimes raised that we need an independent body in order to set the method. That is a fair point but it is an objection to the Secretary of State doing this entirely on his own, whereas an independent panel appointed by the Secretary of State could do the job equally well. That would ensure that there was some arm’s-length relationship with the Secretary of State in these circumstances. It is quite unnecessary for the Competition Commission to do what is going to be an extremely unfamiliar job for it in assessing the methodology of setting the national tariff—far better that others who will become familiar with it should undertake that task as advisers, consultants or whatever to the Secretary of State. All these amendments make good sense.
Earl Howe
My Lords, I think that this has been a very useful debate. The Bill provides a more autonomous NHS, and it does so in order to deliver high-quality services and value for money. Monitor, as sector regulator, would establish clear standards and rules to protect patients’ interests in the provision of NHS services. Monitor would be required to lay its annual report and accounts before Parliament and have the accounts audited by the Comptroller and Auditor-General. It would also need to comply with other rules and guidance that cover central government public bodies, including the seven general principles of public life, the Treasury’s guidance document, Managing Public Money, and rules on corporate governance. Monitor would also have to respond in writing to parliamentary committees and any advice from HealthWatch England. The Secretary of State would oversee Monitor’s performance of its functions to ensure that those functions were performed well. The Secretary of State would not have control over Monitor’s day-to-day decisions, but would hold Monitor to account for discharging its duties. That point is extremely relevant in the context of a number of amendments in this group. The Secretary of State would appoint the chair of Monitor and other non-executive directors and would have to give consent to the appointment of the chief executive. I hope that point answers Amendments 260F and 260G.
Earl Howe
My Lords, I will come on to that in a moment. The Secretary of State would also have specific powers of veto; for example, over the first set of licence conditions and, in individual cases, of provider unsustainability, where he considered that Monitor was failing in its functions to support commissioners in securing continuity of services. In addition, he would be able to request information from Monitor regarding the exercise of its functions as and when he considered it necessary. I hope that this therefore allays the concerns of noble Lords who put their names to Amendment 260H.
However, Monitor needs to be free from day-to-day political and other inappropriate interference in order for it to be able to act in the best interests of patients. In order to maintain the integrity of its relationship with the Secretary of State, Monitor must be able to take independent decisions on the exercise of its functions, such as calculating prices, setting and enforcing licence conditions and resolving conflicts of interests. Making such decisions subject to approval would be inconsistent with this approach, and would conflate responsibilities. In particular, it would undermine the Secretary of State’s ability to hold Monitor to account. There would also be significant risk of decisions being politicised inappropriately. By contrast, independence in such decisions would increase transparency and help ensure that providers were treated fairly.
I understand the motives of noble Lords who added their names to Amendments 274AA, 274C, 274D and 247E, relating to the Secretary of State’s involvement in resolving conflicts of interest. The Government agree that where they occur, conflicts must be resolved, but giving the Secretary of State a role in decision-making would undermine his ability to hold Monitor to account. The Secretary of State would be obliged to keep under review Monitor’s performance in discharging its duties. He would be able to direct Monitor, where it had failed or was at risk of failing significantly, to carry out its functions. In extremis, he could arrange for a third party to perform those functions or perform functions himself. I hope that those points answer the question of the noble Baroness, Lady Thornton.
The Bill also ensures transparency and fairness, through requirements on Monitor to consult widely when discharging functions and appeal mechanisms for the major decisions it makes. Here, I am addressing Amendments 294BA, 294BB, 294BC. In this way, our proposals strike a balance between maintaining sufficient independence and ensuring that the Secretary of State has sufficient ability to hold Monitor to account for the performance of its functions. I believe there is consensus that we need to ensure that this balance is correct.
My noble friend Lord Clement-Jones asked why it should be the Competition Commission that decides on challenges to Monitor’s proposals on licence modifications, pricing methodologies or whatever. I am grateful to him for that question. It is fundamental to our proposals that Monitor would be an independent regulator and that the appropriate role for the Secretary of State is to oversee Monitor’s performance against its duties, and to intervene where he considered that Monitor was significantly failing in any of its functions. However, it is vital that the legislation provides appropriate checks and balances on Monitor without undermining its day-to-day independence from political control. That is why we proposed that Monitor must consult on the licence conditions that it proposes to impose on providers and on its draft methodology for pricing. Providers and, in the case of pricing, providers and commissioners should be able to object to Monitor’s proposals, and where a sufficient percentage objected, there should be a mechanism for independent and impartial adjudication. That is the role we propose for the Competition Commission. It would act as adjudicator on disputed licence modifications and on disputes over the pricing methodology. The basis for this adjudication would be Monitor’s overarching duty to protect and promote patients’ interests.
Baroness Thornton
Did the Government consider any bodies other than the Competition Commission as being appropriate to fulfil this role? If so, which were they and why were they not thought to be appropriate? This is a rather heavy-duty form of monitoring Monitor.
Baroness Williams of Crosby
I am puzzled by why the Government do not see the Competition Commission’s overseeing of this area of Monitor’s responsibilities as not being neutral. Would not a body such as the Office of Fair Trading be more appropriate? It has a reputation not only of being more neutral but of having shown in the past particular sensitivity and understanding of health as a service provided to the people of England.
Earl Howe
I think it is a question of specialist expertise. I do not regard it as heavy-handed to have the Competition Commission acting in this role—which, we hope, would not be a role that it would need to perform with any regularity. It is an established body. It would apply a public interest test rather than a competition test, which is important. One has to question whether the Office of Fair Trading is the right body. I will of course reflect on my noble friend's suggestion, but we believe that the Competition Commission is a good fit in this sense. If the Secretary of State were to play the role of adjudicator, that would be very detrimental. The result would effectively be the politicisation of Monitor's decisions. As I said earlier, that in itself would undermine the Secretary of State's role in holding Monitor to account for the outcomes that it achieves.
The noble Lord, Lord Warner, referred to conflicts in the role of Monitor in overseeing foundation trusts. We are quite open about the fact that there is a risk of conflict of interest here. That is why it is essential that the Bill sets out a robust way for conflicts to be resolved. In a later debate, we can discuss that at greater length. I listened with interest to the speech of my noble friend Lady Williams, and I will of course reflect further on everything she said, as I always do. I think I have covered the main issues raised by the amendments in this group.
Baroness Thornton
I think that almost the first sentence I uttered in this debate was: will Monitor meet in public; and what do the Government intend to do about joint chairmanship and chief executiveship? If the Minister answered those questions, I did not hear him and I apologise.
Baroness Thornton
My Lords, I think this has been an extremely useful debate. I can see why this Government may not trust their Secretary of State to hold Monitor to account. However, I am concerned about the idea that because we—and I do not just mean Members on this side of the House—are anxious that accountability rests in the right place in the Bill, that must therefore translate into political influence or micromanaging. I do not think that is at all the case here. Therefore, we do have an issue still to explore regarding the accountability of Monitor.
I also think we need to explore whether the Competition Commission is the right place for a public interest test to rest. The noble Baroness, Lady Williams, may have made a useful suggestion about which other bodies could possibly undertake that function. Again, we find that this quango is determining its own rules and then implementing them. That is not a satisfactory situation. However, I did take hope from the fact the Minister said yes to the question of whether the chair and chief executive of Monitor would not continue to be the same person, and that Monitor should meet in public. Is the Minister accepting Amendments 260EC and 260GA, or is that the statement of principle with a government amendment coming forward at a later stage or, indeed, a letter from the Minister, clarifying the issue? Otherwise, I beg leave to withdraw the amendment.
Lord Clement-Jones
My Lords, I think that that is inadvertent. We seem to have missed a whole group of amendments.
Baroness Thornton
Perhaps I may help. I think that the thing to do is to deal with this group of amendments and the noble Lord can then move his amendment. We will then take the group of amendments that we should have been taking out of turn. Am I right in that? I think that that is the best thing to do.
Baroness Thornton
“Duty as to continuous improvement
(1) Regulations must provide that commissioners have a duty to make arrangements to secure continuous improvement in the way in which their functions are exercised, having regard to a combination of economy, efficiency and effectiveness.
(2) Such continuous improvement is to involve—
(a) consideration of costs,(b) making the most of money spent, and(c) making sure that services meet the needs of patients, communities and the priorities agreed in any Health and Wellbeing Strategy.(3) For the purpose of deciding how to fulfill the duty, commissioners must consult the relevant Health and Wellbeing Boards, patients and public, as provided in the regulations.
(4) Commissioners must conduct reviews of the services commissioned in accordance with the regulations, and publish the results.
(5) In conducting a review a commissioner—
(a) shall aim to improve the way in which its commissioning of services is exercised, having regard to a combination of economy, efficiency and effectiveness, and(b) shall have regard to any guidance issued by the Secretary of State under this section. (6) Regulations may specify matters which commissioners must include in a review of a service under this section, and in particular may require a commissioner—
(a) to consider whether the current providers of the service were meeting all reasonable requirements;(b) to consider the extent to which competition for the provision of the service may or may not be appropriate;(c) to consider its objectives in relation to commissioning the service;(d) to assess its performance as regards the commissioning of the current provider;(e) to consider the outcome of consultation with relevant persons and bodies as specified in the regulations.(7) Regulations may specify the circumstances for use of tenders as a result of a service review in order to sustain continuous improvement.
(8) These regulations may include—
(a) single tender actions,(b) restricted tenders,(c) open market tenders.”
Baroness Thornton
My Lords, we have yet again leapt to a larger group, and I know that the noble Lord, Lord Clement-Jones, will get his turn, although possibly not until after dinner. We have moved on to a large group of amendments that concern pricing and the setting of tariffs. Many other noble Lords have tabled amendments in this group, as indeed has the Minister. I do not intend to make a long speech, but I will address the issue of pricing.
On reading the Bill you would think that having a tariff in the sense of a complete list of NHS services with all the prices and currencies set out was just around the corner, but I suggest that that is a bit of a myth. Even well developed healthcare systems that are much more market-orientated than our NHS are still a long way from such a state; we are years or perhaps decades away from that condition. For a start, for many services there are no data—not just bad or incomplete data, but none. Getting the datasets defined, collecting the data, then making the analysis, road-testing and rollout will take time. The Minister might like to tell us just how large the team in the Department of Health working on this task is, because I have to say that I heard that it is small and getting smaller as the cuts bite. But, of course, there is always KPMG or McKinsey to step in. Apart from anything else, it seems that this Bill is intent on creating a lot of jobs for lawyers and now, we see, for accountants too.
We are in the midst of a major argument about how relevant different types of currency and tariff might be, with some suggesting that returning to block payments might be better, in the interest of integration, stability and cohesion. This has been stamped on by the operating framework but that does not mean that it will not happen. Using choice and the right financial incentives to drive change in the system is the new orthodoxy. Some are trying to find out how different currencies, uses of penalties and fines and even bonus payments can reward good outcomes and deter bad. This has now extended to how to incentivise integration. These are all problems for which we would like to have answers. We are years away from a system where all these levers are available in the way that the Bill likes to suggest that they are.
In mentioning the framework, we should point out that the re-emergence of price competition shows the need for some communication between the chief executive and the Secretary of State.
Who, then, sets the prices? The arguments are well balanced. My noble friend Lord Warner argues in his book that it should be the national Commissioning Board. He is not in his place at the moment, but I have read his book. However, the national Commissioning Board is in the ludicrous position of also being the commissioner of local services. Monitor may also be compromised, as it is aligned to providers. So we return to the role of the Secretary of State. In any event it must surely be for the Secretary of State to determine the strategic approach, namely the global uplift or reduction. Our priorities for a system as determined by the Secretary of State also need translating so that the incentives are aligned to the desired outcomes, something the NHS has not always been good at. If the Secretary of State determines the approach within the strategy, then we may need genuine independent input into the detailed work of pricing and tariff. At the very least, a full list of the proposed tariffs should be published along with all the data and the analysis, so that the big brains of people at organisations like the King’s Fund and the Nuffield Foundation can tell everyone what is wrong.
Widespread consultation before any major change is a good idea, as is road testing changes before inflicting them and all the suffering of the unintended consequences that may arise. In the end, we think that the Secretary of State must make the strategic decisions in this crucial part of the economic architecture. It cannot be handed over to a quango.
The details of the amendments in my name and the name of my noble friend are as follows. Amendment 277B would insert a new clause which would place a duty on commissioners as to the continuous improvement in terms of cost, value for money and the needs of patients. It would also encourage co-operation with health and well-being boards, patients and the public. It would allow the Secretary of State to issue guidance, via regulations, including in relation to whether,
“competition for the provision of a service may or may not be appropriate”,
and in relation to,
“the circumstances for use of tenders as a result of a service review”.
Noble Lords who were here this morning—which now seems like a long time ago—may remember that, when I explained the overall purpose of our amendments to reconfigure Part 3 of the Bill, the setting of prices was part of that.
Amendments 288J and 289 are about setting a national tariff: they would make it a matter of policy for the Secretary of State, and not a matter for Monitor. Amendment 291B would ensure that regulations relating to the national tariff must state how the prices and methods were determined and how any proposed changes to the national tariff,
“will be subject to proper evaluation and testing” ,
as well as dealing with evidence of consultation between the Secretary of State and Monitor. As the national tariff should not vary in relation to different descriptions of provider, Amendment 292ZC would deal with that issue and the issue of a preferred provider. Monitor should also have no powers over commissioners—in this instance, in relation to the tariff—as commissioners are regulated by the board. We oppose the question that Clauses 116 to 121 stand part of the Bill, because we believe that the Secretary of State should set the national tariff: if the Secretary of State were to set the national tariff, then those clauses would be unnecessary. Once more, as you can see, we are reducing the size of this part through our amendments.
Amendment 294LA would insert a provision that regulations must be laid to issue “guidance on the circumstances” in which there can be local modification of prices. That decision should not be for commissioners and the providers of healthcare services alone. Amendment 294LB would provide that any local modifications of prices would occur with the approval of both Monitor and the board. Amendment 294LC also concerns local modifications of prices: it would ensure that if they were approved, Monitor would have to notify the relevant health and well-being boards. Amendment 294MA deals with situations in which a provider fails to reach an agreement with a commissioner about local variation of prices: in such circumstances it would allow Monitor to authorise such changes only,
“with the consent of the Board”.
Amendment 294MB would ensure that no modification of prices could happen,
“without the consent of the Secretary of State”.
In the area of the setting of prices we are perfectly happy to acknowledge that this may not be a perfect set of amendments. But we think that the very important matter of who sets the prices, and where the accountabilities lie, needs to be discussed. I beg to move.
Lord Butler of Brockwell
My Lords, I shall speak to Amendments 288H and 291A, in my name and the names of the noble Lords, Lord Newton of Braintree and Lord Turnberg. The amendments are related. Like other amendments in this group, they relate to the tariff—that is, the remuneration which a healthcare provider receives for a healthcare service. The amendments to which I am speaking are designed to facilitate the introduction of new treatments made possible by the development of new technology. When an innovative treatment requires a new procedure code or an updated healthcare resource group classification, a new code can take up to three years to be implemented and a new healthcare research group can take up to six years to develop. Meanwhile, NHS trusts cannot be remunerated for potentially useful and cost-effective improvements made possible by new technology.
In Germany, an intermediate step has been developed, under which providers can apply for an on-top payment while a new code is being developed. This is known in Germany as the NUB system, although I hope that noble Lords will not ask me to say what NUB stands for. These amendments provide for a similar “innovation tariff” to be provided in the United Kingdom, to allow for providers to be remunerated for an innovative procedure on a temporary basis while a new procedure code or healthcare research group is being developed.
These amendments are in line with the Government’s Strategy for UK Life Sciences, which was published last week, but are not already covered by it. I hope therefore that the Minister will give sympathetic consideration to the introduction of arrangements of this sort to facilitate the introduction of health improvements made possible by new technology.
Baroness Thornton
My Lords, I do not want to stand between noble Lords and their dinner—and indeed, on this side of the House, yet more defrosting. I would like to be able to say that the Minister had given us some comfort in this debate, as he has in one or two of the others, but I am not sure that that is the case.
I did not moan about a quango. I have mentioned only two quangos today, but they are rather large and important ones. One of them will have a budget of £20 billion, and the whole House has agreed that it is concerned that accountability to the Secretary of State for those quangos is right. We have not quite settled that and have returned to that issue consistently, almost every day throughout discussion on the Bill, but that probably now needs to be left until the new year.
I support my noble friend Lady Gould and the noble Baroness, Lady Tonge. The funding of sexual health services is one of those cases which will have potentially disastrous unintended consequences—in more ways than one, if one may put it that way. My noble friend is right to raise that, and we will support her fully if she decides that she wants to take it to the next stage of the Bill.
As ever, my noble friend Lord Davies gave an original flavour to the debate and raised some important and pertinent questions. I will read more carefully the Minister's answers. Ditto to my noble friend Lord Warner, whose amendments are very important. What underlaid what my noble friend Lord Warner and the noble Lord, Lord Clement-James, said, was that this is not a quick job. This will take a long time and it is important that we get it right. We are not convinced that the national Commissioning Board and Monitor together will not create a very bureaucratic, slow way to set the tariff. We are not convinced that that is the way forward. We need to consider an independent voice and some other way to do that. We will probably continue that discussion at another time, and I beg leave to withdraw the amendment.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 11 months ago)
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Baroness Thornton
“( ) Such criteria must include the requirement, at regular intervals, for all licensees to supply Monitor with financial information, in the interests of meeting standards of financial stability and probity.”
Baroness Thornton
My Lords, I start by congratulating noble Lords on making it through this day of debate. We are ending the day with this large group on failure, and the smaller group on pre-failure, tabled by my noble friend, in a moment or so.
In the NHS of 20 years ago, the trusts that got into problems were helped, although the help may have been brutal, with chief executives removed or moved on and nasty phone calls to trust chairs. The system gave powers of intervention from the Secretary of State through local strategic bodies, as they became. Financial help was grudgingly provided, usually for a recovery plan, sometimes delivered and sometimes not. The relationships were not defined by legal contract, and NHS contracts could not be enforced in the courts, so there was a system of arbitration within the NHS.
Those days have gone, and we now have an NHS as a network of many sub-organisations, some with linkages through real contracts. With FTs came the idea of a real contract, although in reality, of course, disputes are still sorted out long before reaching a court. We know that services, and even whole organisations, can fail as the impact of demographic, technological and behavioural changes shape our NHS. In reality, we have to deal with trusts that get into severe difficulties and may be technically insolvent, at which point a real organisation may not be allowed to trade. Then we have to accept that a whole trust might need to be shut down. Indeed, how should that be done? How should the continuity of services be maintained, how should the staff be dealt with, and how should the assets, most of which are owned by the state, be dealt with?
We know that this is the tail end of a bigger and important issue of reconfiguration. So how do we ensure that we can adapt services that show poor quality or that need to be delivered in different ways in different settings? Maybe, as with an increasing array of subspecialities, we have to accept regionalisation. Maybe we need network solutions. Is the market the way to do this? In other markets, innovations lead to changes in demand, and the organisations that cannot adapt close down. Is that what we want for our NHS?
Those who might be so inclined might like to wander through the delicate prose of Simon Burns MP in Committee in the Commons. He loves failure. The idea that you have competition is inextricably linked to having failure. It facilitates the market, brings in the innovators and drives out the inefficient. He believes that failure is a measure of market success, not failure.
It is true that in government we introduced a failure regime as we came to realise that, even after all the support and changes of management team, there may be organisations that are simply not viable. However, it is not so much that they were not viable; it is what that means, that continuing to support them is not giving value for the NHS, however much we adjust that value to include non-financial aspects. Indeed, we also wanted to bring out into the light the murky transactions used within the NHS to support organisations, through means such as brokerage loans. The tendency was for bad performers to be bailed out by the good—the opposite of a reforming system. The way NHS accounts were done also had to be changed to make this kind of smoke-and-mirrors accounting more open.
Issues around failure are more likely to operate at service level than at a whole-organisation level. To take a recent example, a well known and respected financial trust is having issues around its 18-week performance. Its general quality is good but it has signalled that it needs help, and it is indeed getting it from a Department of Health team. The question that we need to ask is: would this kind of support be available in the new world? Presumably, it would not; and even if it were, might that help be deemed anticompetitive? Would that good trust be allowed to fail? The link here to reconfiguration is inescapable.
We know and even admit in our rational moments that reconfiguration on a grand scale is what the Nicholson challenge is really about. The need to move services into community settings and to reduce dependency on the district general hospital model is widely recognised. However, we also know that reconfiguration is beset with political problems. In the run-up to the election, about one-third of constituencies had some kind of campaign to keep open a hospital, a surgery or whatever. One felt sometimes that even if there was no threat, one was invented. We had Andrew Lansley and David Cameron claiming that they would prevent any closures. I think that the Government are learning the hard way that promises made in opposition, especially during election campaigns, may turn out to be millstones when the real burden of decision-making passes to them. The examples of broken promises will continue as reconfigurations gather apace.
This is the issue to which our suspicions should be addressed. Is it part of the rationale to put the blame for nasty politically damaging decisions on others? This abdication of responsibility is characterised by the way that Ministers are trying to give away the key roles of the Secretary of State. This is in part a failure of process but is also a failure of leadership. The leadership should be accountable for delivering answers and necessary changes within a reasonable timescale. If we get reconfiguration right, the failure regime would look less necessary. This is far better for patients than the trauma of seeing their local facilities under constant threat or even being closed down. There are examples of where this has been done, and done well—and we need more of them.
In Committee in the Commons, the Conservatives in particular appeared to believe that these unpopular local changes would be less likely under the Bill—if changes in organisations are branded as failures, then those MPs would be well clear of any responsibility. In fact, we have years of evidence because every reconfiguration has to go through a clinical and management review at an early stage—so we know what works and what does not. We could use that evidence, rely on a robust process and stop opportunist politics. However, we know that the market will not bring about these changes any time soon.
In our NHS, the best interests of patients are served by good information that allows early intervention to improve failing services. CQC inspections are also of value in raising the prospect that poor services will be detected early. If you rely on competition, how long does it take for the public to react to the information that a service is bad and for them to choose to go elsewhere, or for that to impact on the finances to the extent that the service is closed down? In our view, using choice and competition to detect and close poor services takes too long and the cost for patients is indeed too high. That is what this suite of amendments aims to tackle.
The amendment sets licensing criteria to ensure that private providers meet standards around financial stability and probity. We need to supply regular financial information for the good providers. This is, in other words, a sort of Southern Cross test. Amendment 249MBA brings into effect the remaining inactivated arrangements for trust special administration from the 2009 Act, as amendments to the 2006 Act. I remember those well. Amendment 353ZZA is a commencement provision for that. Amendment 295 states that health special administrators must exercise their functions to “protect the interests of patients”. As to the Questions that Clauses 125 to 130 stand part of the Bill, this would create a regime for private companies that provide services to the NHS to have special procedures that augment the normal company provisions under the Insolvency Act. It arguably implies that we need stronger protection from the risk of private provider failure. It should be for the commissioners to factor in the risk of using private providers and contract to ensure that arrangements are in place for contingencies. The licensing regime needs to be tough enough to prevent Southern Cross-type failure through active monitoring.
Risk pooling is what the NHS does. We do not need new risk pools, with the costs that they involve. That is why we think that the clauses should be deleted. Clauses 131 to 143 inclusive allow Monitor to set up the regime to provide special administration for both private and public providers to levy charges on providers and commissioners and to manage the finances of a risk pool.
We argue that none of that is required; it just adds extra complexity and cost. Clause 170 is about FTs and failure. The clause removes the ability to deauthorise a foundation trust. We argue that that power should be retained, along with the recognition that some NHS provider trusts may need to be directly managed under the powers of the Secretary of State.
The new clause in Amendment 303ZA makes clear that the initial effort, in the context of failure, should be remedial action rather than going straight for a failure regime. My noble friend has a similar idea behind his amendment. On Amendment 303ZB, the new clause is intended to reinforce and strengthen how reconfiguration is carried out. Under Amendment 303A to Section 65A of the 2006 Act, bodies to which trusts’ special administration regimes apply should remain, so that the special administration regime applies to FTs and NHS trusts.
Again, we are shortening the Bill and making it simpler and probably taking out quite a lot of cost. I beg to move.
Baroness Finlay of Llandaff
My Lords, I have several amendments in this group. I shall start with Amendment 294N, which is a probing amendment. As far as I have understood it, social enterprise bodies which are NHS bodies in all but name are coming into existence. They have evolved from PCTs under the transforming community services programme. They will be subject to special health administration arrangements. I ask the Government to confirm whether the social enterprises that come under the health special administration arrangements are coming under arrangements based on insolvency law and that, as such, that allows assets to be transferred outside the NHS and the redundancy payments are not guaranteed.
Amendment 295CA is intended to ensure that clinical commissioning groups are consulted before the Secretary of State makes regulations that allow Monitor to impose charges on commissioners. The charge imposed can include a levy to fund Monitor’s functions that have to be invoked in the event of failures. Amendment 295CB is intended to ensure that when setting such a levy, Monitor takes into account the impact of the levy on the financial stability of the organisation, especially a financial trust that is already in distress or failing. Amendment 304A requires that the commissioners are considered when the services of a failed financial trust are considered by Monitor and should be involved in the decision as to which should be continued, and that such services must include some continuation of education and training, because in planning for the future workforce, if a whole lot of posts were suddenly lost, it would destabilise the workforce planning. That is in addition to considerations such as the service provision and issues of equity and access. That becomes particularly important because if you do not have the staff with the appropriate training, you cannot, in the long term, provide the service anyway.
Amendment 304B is intended to ensure that commissioners are involved in the board's role in agreeing arrangements to secure continued access to NHS services will be achieved. Will that include the board’s selecting which commissioner would become lead commissioner for the process during a failure?
Baroness Thornton
Perhaps I may ask for clarification. The noble Earl refers to providers all the way through. Can we be completely clear that this means all providers —that is, private sector providers, NHS providers, social enterprises and charity providers of health services? Do all these levies and fines apply to them?
Earl Howe
My Lords, when I refer to providers of NHS services, I am referring to NHS providers and non-NHS providers. It is to be determined who will contribute to the levy. That is being worked through and I am sure that the noble Baroness will have noticed from the document that we published the other day that this work is ongoing. We will make further announcements about that in due course.
On Amendment 304B, I say that the board should consult the relevant commissioners but it must make the decision itself, which is what the Bill provides for. The noble Baroness, Lady Finlay, asked whether social enterprises will be within the scope of the health special administration regime. Social enterprises are companies so they will be within the scope of health special administration. It is right that they are not treated as NHS bodies as when assets are transferred from PCTs robust rules apply, as I have set out in detail in previous debates. She asked whether the NHS Commissioning Board would nominate a lead commissioner if a provider becomes unsustainable. The answer is yes.
I hope that noble Lords will find that series of explanations helpful and I ask the noble Baroness, Lady Thornton, to withdraw the amendment.
Baroness Thornton
I thank noble Lords. I will take only a moment, but we will need to return to this. First, this was not looked at properly in the Commons and I can see that that is the case. Secondly, I recall that the chief executive David Nicholson disagrees. He said that he advocates de-authorisation. I believe that the pooling and the levy are bureaucratic and expensive and that the noble Earl does not understand that reconfigurations will not be led locally. I do not think that the Bill adequately approaches how we will manage reconfigurations. To be kind one has to say that the work is ongoing; I am not quite saying that the department and the Bill team are making this up as they go along, but it is definitely an area to which we will need to return on Report. I beg leave to withdraw the amendment.
Baroness Thornton
I have a very small piece of advice to give the Minister. I always think that it is best to give in and agree with my noble friend Lord Warner. I have almost always found that this is the best course of action. The noble Earl might recall that, when I was a Minister, on one of the occasions where I did not give in I certainly came a cropper. I urge the Minister to think very carefully and seriously about what my noble friend has had to say. It merits great attention and it merits being in the Bill.
Earl Howe
My Lords, before that intervention I was about to say that I was very pleased that the noble Lord, Lord Warner, had returned us to this issue, which I, like he, regard as extremely important. It is a thoughtful amendment and will certainly prompt further thought on my part after this debate.
I do not think that there is any difference between the noble Lord and myself in this respect. I am certainly all in favour of ensuring that wherever possible there is early intervention and proactive monitoring of organisations well in advance of failure so that failure can be averted. The main difference between us, if there is one, is that we believe that this process should be locally led and not led from the centre, which is how I read his amendment. I probably read it wrongly. When the noble Lord spoke to it, he indicated that nothing in it was intended to run counter to that locally led process. I take that on board.
Why are we so keen on a locally led process? The overall aims that we set out are to put patients, carers and local communities at the heart of the NHS, shifting decision-making as close as possible to individual patients and devolving power to professionals and providers, liberating them from top-down control. This amendment would appear to do the opposite and could lead to an increasing level of decisions being centralised and moved away from local communities and their democratic representatives. The more that one does that, the less likely one is to get local buy-in. In a patient-led NHS, if it is to be worthy of the name, any changes to services have to begin and end with what patients and local communities need.
Baroness Thornton
Does not the experience of the last few years—we can name the hospitals concerned—show exactly the opposite of what the noble Earl is now saying to us, that this has to be locally led? We have to find some mechanism which allows decisions to be taken that does not dismiss or ignore local feelings. Of course people have to be involved in those decisions but, at the end of the day, we know about Chase Farm and several hospitals I could name. In north London, we know that we have too many hospitals. They have not been closed down because it is politically too difficult to do so. If the decision remains at local level, in north London we will still have too many hospitals. I have lots of MP friends who have campaigned to keep those hospitals in place, particularly before the last general election. It seems that what the noble Earl is outlining now will not work.
Earl Howe
Contrary to popular opinion, there have been cases of very successful and rapid reconfigurations of services. Of course, the ones that come to our attention are those that have taken a long time, such as Chase Farm. There is no better or worse example than that.
In reading this amendment, we should be cautious about any process that would significantly weaken both local commissioner autonomy and public engagement. We do not want to conflict with the statutory requirement for NHS bodies to ensure appropriate and proportionate involvement of patients and the public in service changes or reduce the ability for local authority scrutiny to bring effective democratic challenge to reconfiguration plans. I certainly do not think there is a case to reduce democratic accountability in this way.
I agree with the noble Lord that, where it is not possible to reach local agreement on a service change proposal, there should be mechanisms for independent review. We are retaining powers in the Bill for local authority scrutiny functions to be able to refer reconfiguration schemes. As part of the transition, we are also exploring how the NHS Commissioning Board and Monitor can work together to support commissioners and providers. As I have said, the key to successful service change is ensuring engagement with the local community and stakeholders so as to secure as broad support as possible in what can be very difficult decisions.