Health and Social Care Bill

Lord Warner Excerpts

Monday 14th November 2011 Lords Chamber

[Lord Turnberg]

My Lords, I rise to lend my support for this amendment. I speak here as a trustee of the Wolfson Foundation, which has a programme of support for hospices and care homes and over the years has given many millions of pounds, largely for capital projects. VAT is a constant source of unhappiness to the trustees, and, in fact, they have reached the conclusion that they will no longer pay VAT for capital projects. This means, of course, that the hospices and care homes themselves will have to find that money, which is unfortunate. Therefore, I hope that the Minister will take this amendment seriously.

[Lord Warner]

My Lords, I support the amendment and I do so from a background of having been the chairman of the National Council for Voluntary Organisations and a trustee of a number of organisations that have supplied services to the NHS and local government. This is indeed a very long-running sore; it is a source of grievance. It often goes with another grievance—one which is not germane to this debate but which I might as well mention, because it explains why voluntary organisations are sometimes reluctant to provide some services for public authorities. That is a kind of meanness, almost, on the part of many public bodies about meeting the administrative costs—the management costs—of local authorities. If one takes the two together—a meanness about meeting management costs and being treated unfairly on VAT—this is a barrier to entry.

I fully support the points made by the noble Baroness, Lady Finlay. As the Minister knows, I have probably made myself a little unpopular on these Benches through my support for the idea of competition on a level playing field. I have a later amendment which raises the issue of barriers to entry. This is a barrier to entry. It is stopping voluntary organisations participating fully on the basis of a level playing field as a qualified provider. Therefore, in terms of the Government’s own philosophy in the area of competition, they would do well to listen to these arguments and remove this barrier to entry.

[Baroness Armstrong of Hill Top]

My Lords, I rise briefly to lend support to the amendment. I work with charities for the homeless and for children. If the Government’s ambition is to enable the NHS to work with the patient on the full pathway—rather than work being done in little bits by different organisations—then making the playing field level for the voluntary sector is absolutely critical to developing those pathways. In my experience, the voluntary organisation is frequently the glue in making sure that the pathway for the patient works for the patient.

I remind the Minister that when this works well there are often savings for the National Health Service. I have experienced that in homelessness, where we have been able to work with the PCT to get a community matron. That has reduced the number of expensive admissions to hospital and A&E for the most disadvantaged—the homeless. I have also seen that work well with, for example, children with disabilities and children who are very ill. They have been enabled to remain at home with the proper support instead of being frequently admitted to hospital.

It is to the advantage of the NHS that we get this right. What will the Government do to bring forward in the Bill comfort and encouragement for the voluntary sector? After the pause, that sector has been left with a rather large amount of confusion.

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Other amendments in this group deal with the important question of the future funding of education and training, and the importance of funding being ring-fenced and applied only for this purpose, rather than being put into potential jeopardy and used for other elements of the responsibility of the NHS Commissioning Board.

[Lord Warner]

My Lords, I rise to speak to Amendment 47B, which to some extent overlaps with Amendment 47A, which the noble Lord, Lord Kakkar, has moved so eloquently. I fully support the remarks that he made, particularly in relation to medical deaneries.

I want to start from the position in which we find ourselves. This Bill contains a major reorganisation, which affects 1.4 million employees. As David Nicholson has said, the size of this reorganisation can be seen from space. I can remember making these rather trite speeches as a Minister about the NHS being the largest organisation alongside Indian Railways and the Red Army. Ministers before me made the same speeches just to emphasise the sheer scale of the NHS and the number of employees working in it. Therefore, it seems extraordinary that the Government could have considered for a long time reorganising this organisation in such a way without taking into account the education and training of probably the most labour-intensive and largest workforce in the country. It is not surprising that, in these circumstances, people in the NHS are very concerned about what is going to happen to education and training in this brave new world that the Government are taking us into.

That is why some of us want to move amendments that go a good deal further than did the Government’s amendment in this area, which seemed to me not unlike those Russian dolls—once you open one doll, another is inside and a smaller doll is inside that—in its endless reference back to other bits of legislation. We need something much clearer than that if we are to reassure the people working in the NHS that education and training are going to be safeguarded and looked after in a period of major disruption to the way we run our health service.

Amendment 47B imposes a clear duty on the Secretary of State,

“to provide or secure the provision of an effective system for the planning and delivery of education and training of a workforce of sufficient size … to discharge his duties under this Act”.

That seems to me to be the focus that we should have in our discussions in this particular area. It tries to produce a clearer duty on the Secretary of State than the Government’s Amendment 43, but goes further by requiring the establishment of a new body, Health Education England, to oversee, supervise and manage the current functions and national budget relating to multidisciplinary training.

As we take the Bill through this House, it is not enough simply to say, “Oh dear, we are waiting on the Future Forum”. I am sure that the Future Forum will have something good to say, but before this Bill leaves this House as an Act we need to produce much more certainty about how this service is to be continued and how the money is to be safeguarded. The size of the budget involved is considerable—somewhere in excess of £5 billion a year. Much of that money is looked after and spent by the rather maligned strategic health authorities, which will disappear in 2013 as I understand it. That money passes through them to the end-users of the money that deliver education and training. There is great uncertainty and concern about how national and regional planning of education and training, including the medical deaneries, will actually work, how they will be funded and how the current budget will be safeguarded.

I recognise that employers need to play a full part in education and training, as the noble Lord, Lord Kakkar, has said, but I have seen the briefing by NHS Employers on this issue. That briefing makes pretty clear that there is huge uncertainty below the national level about how education and training will be managed when the strategic health authorities are abolished in 2013. People seem to be fumbling their way around, searching for a way forward when the SHAs go. We know that some activities cannot be left to local employers alone. A prime example of this is the specialist training that has to go on in securing placements for younger doctors coming through the early stages of their training and needing to have specialist postings to ensure that they can progress along the specialist route to fill the consultant posts of tomorrow.

At the national level we need to achieve greater clarity on how the Secretary of State will discharge his responsibilities in relation to education and training. The Government seem to think that this can be left to legislation in the next Session but as far as I can see they can give no assurances, other than resting on good will and the Future Forum, to say clearly what this system would encompass, what it would look like and how it would work. The more sceptical among us have doubts about whether the Government will have the appetite for another Health and Social Care Bill in the next Session. If one was Prime Minister for a day, it would not be surprising to doubt whether one would entrust another Bill in this territory to the team that gave us this Bill. That thought must have occurred to the Prime Minister at some time in his busy life.

In closing, I would like to say a few words about the third subsection in this amendment. This is in response to the concerns that have been expressed that many current functions and their budgets will be passed to the national Commissioning Board almost by default, and at the very time when the crisis on meeting the Nicholson challenge of saving £20 billion in four years will be moving to crunch time. I suppose there is a kind of poetic justice that David Nicholson should be asked to consider his own challenge and deal with it as chief executive of the national Commissioning Board, but people are concerned that temptation should not be put in his way in the form of the £5 billion or so of the budget for education and training work of the NHS. To help him resist that temptation, should it arise, this amendment includes a formula for preserving the education and training budget. It may not be the perfect formula—I am sure that noble Lords across the House would be willing to discuss a better one—but some kind of formula and ring-fencing which protect the budget for education and training is a sine qua non if we are to carry with us staff up and down the country working in the NHS whom we expect to continue to deliver a highly effective NHS at a time of great organisational change.

Of course, the Minister may be able to reassure us all and give us some guarantees, and I look forward to hearing them. These need to be guarantees about how the amount currently spent on education and training will be safeguarded. We will also want to know: what is to happen to the money when the SHAs are abolished? What division of responsibility between Health Education England and employers are the Government planning? Do the Government envisage a role in this sphere for the national Commissioning Board? I hope the Minister will not simply say that the Government are waiting for the Future Forum to report.

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Tabled by

[Lord Warner]

47B: After Clause 5, insert the following new Clause—
“Secretary of State’s duty relating to education and training
(1) The Secretary of State has a duty to provide or secure the provision of an effective system for the planning and delivery of education and training of a workforce of sufficient size and competence to discharge his duties under this Act to ensure a comprehensive health service.
(2) In discharging this duty, the Secretary of State must establish a body known as Health Education England and this body will be responsible for the oversight, supervision and management of all current functions relating to NHS multi-disciplinary education and training, including post-graduate deaneries.
(3) The budget for this body and its functions should be calculated on the basis of a formula related to the total health service expenditure and initially should be no less than the level of expenditure on education and training at the time of Royal Assent.”

[Lord Warner]

My Lords, I am grateful to everybody who has spoken in this debate. I particularly welcome the support given by the most reverend Primate and by the noble Lord, Lord Owen. I share the scepticism of the noble Lord, Lord Owen, about next-Session legislation and we would all do well to think carefully about his remarks.

I am still rather puzzled about why, if the Government are prepared to set up Health Education England as a special health authority, they cannot put it in the Bill along the lines of Amendment 47B. By all means doctor Amendment 47B. It was not the purpose of Amendment 47B to unreasonably tie the hands of the Government but I am still struggling with the question of why, if the Minister is prepared to produce a detailed paper before Report in which he agrees to set up a special health authority by next September, we cannot have a sensible cross-party discussion about setting up Health Education England in this Bill and giving the Government the necessary powers to make regulations to fill in the details.

My ears pricked up on the subject of money when the noble Earl said that there would be a “robust analysis”. I am willing to open a book on how far south of £4.9 billion the Government end up with on the robust analysis on education and training. I am available at all hours to discuss the odds a little further on this issue.

I will study the noble Earl’s remarks carefully. I listened carefully to what he said. He has moved some way. Whether he has moved sufficiently far to stop us bringing forth an amendment on Report is in doubt.

Amendment 47B not moved.

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[Lord Mawhinney]

My Lords, I too want to focus on line 27 of Clause 6:

“The Board is subject to the duty under section 1(1) concurrently with the Secretary of State”.

This raises all the issues that we have debated at length. I know that the Minister has taken away Clauses 1, 4 and 10, but, as the noble Lord, Lord Hunt, said, it would be extremely helpful to the Committee if he agreed to take away Clause 6 as part of the package on which to consult. Otherwise, those words in the Bill continue to provide a fault line that at some point will need to be addressed. I hope that my noble friend feels that it would be more productive to address this point in the spirit of co-operation and cross-party support that he has engendered for Clauses 1, 4 and 10 and include Clause 6 as well.

[Lord Warner]

My Lords, I rise to speak on this amendment, mainly because of my puzzlement over why the Government want to give the national Commissioning Board a concurrent duty with the Secretary of State under new Section 1(1), given all the other provisions in the Bill which try to shape—if I may put it that way—the relationship of the Secretary of State with the national Commissioning Board. This is especially the case with Clause 20, the mandation clause. One interpretation of this concurrency is that the Secretary of State can pick and choose how he interprets his responsibility.

My noble friend Lord Hunt has mentioned, as delicately as he could, what has happened in the Home Office recently about the sometimes rather strange boundary between policy responsibility and management responsibility and the confusions that could arise. This is not the first time that the Home Office has got into this kind of territory. Your Lordships will remember the difficulties that Michael Howard, when he was Home Secretary, had with the chief executive of the Prison Service, Derek Lewis. It boiled down to this problem of uncertainty about where the remit of Ministers ended and where responsibility began, in this case with the Prison Service, an executive agency. Equally, though, I suggest it could have been a non-departmental public body.

There is a lot of history in this area where one should be extremely wary about passing legislation in particularly high-profile areas and giving concurrency of responsibility to a Secretary of State and to a powerful arm’s-length body, in this case a non-departmental public body, the national Commissioning Board. It is fraught with difficulties. I thought that the Government were trying to clarify this with Clause 20. I think the clause has been misunderstood a little bit by the new chairman of the national Commissioning Board, but the wording as it stands gives the Secretary of State the right, before the beginning of each financial year, to set out a mandate for the board.

There are a lot of safeguards in Clause 20, on both sides of that discussion and agreement. The national Commissioning Board has a lot of safeguards. The Secretary of State cannot keep coming back and adding bits and pieces as the year progresses. The Secretary of State also has quite a lot of safeguards. He or she can expect the national Commissioning Board to stick to what has been agreed in that mandate. There is no doubt about the Secretary of State’s ability to give instruction to the board and there is no doubt about his ability to change those instructions on an annual basis after proper discussion and consultation. That is very clear. One of the strengths of Clause 20 is that it does make the relationship clear between the Secretary of State and the national Commissioning Board.

I have tabled an amendment that tries to restrict the number of requirements that the Secretary of State can place on the national Commissioning Board. I can well remember the time when the noble Lord, Lord Mawhinney, was a Minister with responsibilities for health, along with his colleague the noble Baroness, Lady Bottomley, who is not now in her place. We had somewhere in excess of 50 priorities in the NHS that we were required to deliver each year. In practice, we had no priorities, because no one could hold 50 priorities in their head, so there is an issue about how far you go on mandation. Nevertheless, the structure of Clause 20 clearly states what that relationship is, on an annual basis, between the Secretary of State and the national Commissioning Board.

We would do well to stick with that kind of relationship rather than muddy the waters with a concurrency of responsibility. I will be interested to hear what the Minister has to say on this issue.

[Earl Howe]

My Lords, as has been pointed out, this amendment returns us to the topic of the comprehensive health service. We have had a wide-ranging debate on that issue. I appreciate the concerns held by some noble Lords about the extent to which the Secretary of State will be genuinely accountable for the health service under the new arrangements introduced by the Bill. I have outlined the reasons why I believe accountability will be maintained and how accountability to Parliament and the public will be increased by our proposals. We have indicated our intention to look further at what could be done to put the Secretary of State’s ultimate accountability for the health service beyond doubt. We will do that.

However, it is a core principle of our reforms that politicians should step back from day-to-day interference in the NHS to allow clinicians to take the lead in developing services that are built around the needs of patients. That would simply not be possible if the Secretary of State retained broad powers of direction over the NHS Commissioning Board. As I have previously described, the role of the Secretary of State in future should be to set the legislative and regulatory framework; to set the strategic direction for the NHS through the mandate, as the noble Lord, Lord Warner, has rightly reminded us; and to hold the national bodies in the system to account for fulfilling their responsibilities effectively.

I also understand the argument that the Secretary of State alone should be responsible for promoting a comprehensive health service. However, I believe that there are strong arguments that, in the interests of accountability, the NHS Commissioning Board should share this duty as far as it relates to NHS services. The NHS Commissioning Board will be the body responsible for ensuring that there is a comprehensive coverage of clinical commissioning groups covering every area of the country. It will be responsible for authorising and assessing clinical commissioning groups, providing support and guidance to them, and intervening if they run into difficulties. It falls to the NHS Commissioning Board to ensure that the continuity and quality of service provision is maintained at all times.

I am afraid that the arguments of the noble Lord, Lord Hunt, expose a clear fault line between the Government and the Opposition. We believe it is important that the board should be under the same obligation as the Secretary of State to promote a comprehensive health service in so far as this relates to the health services that the board and clinical commissioning groups will be responsible for. Let me be clear: the Bill’s provisions would in no way dilute the Secretary of State’s overarching duty. Indeed, they are intended further to reinforce the promotion of a comprehensive health service rather than to undermine it. With the general desire of noble Lords to strengthen accountability in the Bill, it seems odd that the noble Lord, Lord Hunt, should want to weaken accountability in this way, for that is what his amendment would do.

I listened to the point made by my noble friend Lord Mawhinney that this is another facet of the issues that we are going to consider in relation to Clauses 1, 4 and 10. He made a good point. Therefore, I suggest that, in the light of our intention to consider together how we approach the duty on the Secretary of State and return to this on Report, the amendment should also be withdrawn and that any consequential changes to the functions of the board or clinical commissioning groups are considered as part of those deliberations.

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[Lord Hunt of Kings Heath]

My Lords, I am grateful to the noble Earl for his response. I am, of course, very happy for this to be considered in the light of the debate in relation to the other clauses around the Secretary of State’s powers. I may not have convinced the noble Earl but he has convinced me that a “train crash” will inevitably occur given the ambiguity and confusion built into the Bill on the role of the Secretary of State and the national Commissioning Board. The more the noble Earl spoke about that, the more evident the ambiguity became. As regards the mandate, my noble friend’s amendment suggests that only five functions should be given to the national Commissioning Board with five other objectives. I think that he is supported in that by other noble Lords. He has probably forgotten about the innate ability of the wonderful civil servants at the Department of Health to write very long functions which could probably embrace the world. However, I understand where he is coming from.

[Lord Warner]

I well understand the Civil Service’s ability to use the semicolon to extend a sentence for a very long period.

[Lord Hunt of Kings Heath]

My Lords, my noble friend should refine his amendment by limiting the number of grammatical devices that can be used.

I raised this matter because of what the noble Earl said. I raised the reported intervention by the Secretary of State in relation to primary care trusts and the concern that because of their financial issues they are essentially putting in some artificial barriers in relation to patient treatment such as having a rule that on non-urgent treatment you have to wait a certain length of time before you can be treated, and other such mechanisms. When I asked the noble Earl how this would work in the future, he told me that it would be put in the mandate. Clearly, what will happen—

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Moved by

[Lord Warner]

50: Clause 6, page 3, line 38, at end insert—
“( ) must include at least one member who is a registered public health specialist and who has a broad range of professional expertise in public health”

[Lord Warner]

My Lords, in the unavoidable absence of my noble friend Lord Rooker, he has asked me to move Amendment 50 standing in his name and those of a number of colleagues. This amendment is very simple in intent. It seeks to ensure that the national Commissioning Board has at least one member who is a public health specialist. Much of the work of the board and, indeed, of the clinical commissioning groups, is to commission services that arise from failures of public health, or the associated issue of the absence of clinical intervention at an early stage in a person’s condition. Later we will discuss a raft of amendments for strengthening the Bill’s provisions on public health itself. This group of amendments is concerned with the membership of the national Commissioning Board and the disclosure of information.

This amendment is intended to help the board in its deliberations. It is essential that it has ready access to public health expertise. I very much support Amendments 153ZA and 153B in this group, standing in the names of my noble friends Lord Hunt of Kings Heath and Lady Thornton, which seek to curb the administrative costs of clinical commissioning groups. I have degrouped my amendments on controlling the overheads and management costs of the board. I have also tabled amendments that try to curb clinical commissioning group management costs. I tabled these amendments because I wanted to ensure that we had a fuller discussion on the two linked issues of overheads and administrative costs at a later stage. I will not speak on that issue at length today but I want to flag up to the Minister that this is an extremely important issue in this very difficult financial climate. Rather unusually, we may need to put in a Bill establishing new bodies a curb on the extent to which they can grow their administrative budgets in the future. My noble friends are doing the House a service in giving us a chance to have a debate on this issue.

I return to Amendment 50. It may not be directed at the right place in the Bill—I leave the Minister to think about that—but its substance should be in the Bill. I hope that the Minister will reconsider the Government’s position on this issue. I beg to move.

[Baroness Finlay of Llandaff]

My Lords, I rise to speak to this amendment, which is also in my name, and to support the other amendments in this group. They have the effect of ensuring that public health considerations and public health expertise are given due weight in the new arrangements set out in the Bill.

Public health covers three main domains: health improvement; health protection; and health service delivery. Public health specialists are trained and skilled in interpreting data and information about populations, understanding health needs and securing the services required to meet those needs. That expertise is vital to having effective commissioning at every level, particularly that of the NHS Commissioning Board, which will have the overarching responsibility for commissioning health services, so as to ensure that the services are effective, appropriate, equitable, accessible and cost-effective. It therefore seems only sensible to make sure that that expertise is incorporated at board level.

The Commissioning Board exists to secure and improve the health of the population through the NHS services it commissions, and indeed through the services which are not NHS-provided, if I have understood this Bill correctly. To do this, the board would benefit from public health input. Public health specialists have an unparalleled overview of a community's need for health services and how they are best commissioned, including changing, adapting or even decommissioning services which could work better in other ways. The role of a public health specialist would also be to provide the essential expertise needed to commission preventive services, such as screening and immunisation, and to look at the evidence relating to those services. The board may need the courage to decommission some of those services as well, or to substantially alter the way that they are delivered.

It would be inappropriate to say that this is going to be too expensive, because a public health specialist should pay for themselves many times over with their presence on the board. It is only by having such an expert at board level that we can ensure their expertise is incorporated into decision-making, rather than only feeding into the process in an advisory capacity.

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[Lord Warner]

I think that the noble Baroness is experienced enough, like me, to remember the 1974 reorganisation of the NHS, where we ended up debating whether area gymnasts should be appointed. Therefore, I have every sympathy with her particular line of argument.

[Baroness Cumberlege]

My Lords, I am very grateful for that intervention. I have no experience of gymnasts and, sadly, I cannot remember that particular time. However, I have chaired very big boards. I have chaired a board of 26 and it was a nightmare. It was a nightmare because we are such a lovely nation and we always try to get consensus. Trying to do that takes time and tough and speedy decisions are not taken. In the end, the board loses the grip necessary to manage the service, the organisation or whatever it is in charge of. Therefore, I strongly support my noble friend on the issue of having 11 members on the board. When one has a very large board, a clique forms; one gets a few people who in the end run the board. They run it outside board meetings. They make the decisions before they come to the board. One gets a body of people who are responsible on the board but are actually disenfranchised—they are accountable but disenfranchised—and I think that that makes the board totally dysfunctional. Therefore, we should resist the temptation to have representatives on the board. We need a chairman with considerable leadership skills; a chief executive of proven management expertise; executives who know the business; and non-executives who bring a breadth of experience.

I have some sympathy with the arguments that have been put on the issue of the Director of Public Health but I wish to reserve my position on that, as I do on the suggestion put forward by my noble friend Lady Jolly on HealthWatch England, because it could be that the board, or whoever, might decide that there is a non-executive who has wider experience and possibly could be more effective on the board than the chairman of HealthWatch England. This needs discretion and we should leave it in the hands of the board and the Bill and not try to make it representative.

In an earlier debate the noble Lord, Lord Davies of Stamford, who is not in his place today, referred to the “fatal tendency” of the NHS to be bureaucratic and exercise producer catch-up. He said that:

“the tendency of any organisation that is in a monopolistic position [is] to be run for the convenience and in the interests of those who are providing the service, whether doctors, nurses, managers or whatever”.—[Official Report, 9/11/11; col. 251.].

We have to be very careful that we do not fall into that situation and we must try to address that “fatal tendency”, as he described it.

I wish to make one comment on the seductive amendment on limiting the numbers to be employed to 500. That again is a mistake. If we set a number, it is very likely that that number will be reached where possibly only 100 are required. It needs a great deal of scrutiny by the Secretary of State and others, through the mandate, to see what the board is doing and whether it is effective and keeping to its budget, which I am sure will be closely watched. I would like to keep the number on the board to 11.

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[Lord Greaves]

There is a great deal of truth in what the noble Lord says. Looking at this from afar, I think that the Government have had to struggle with this tension. In order for the bodies to be serious commissioning bodies, commissioning not just for their patients individually or collectively but for the health needs of their area, they have to be sufficiently large. What will happen is that the GPs who sit on these new commissioning groups almost certainly will represent the GPs in the whole of that area, and they will have to be appointed by some democratic process representing the whole area—perhaps one from each area. I do not know how they will do it but that will have to happen at a local, practical level.

In my view, one thing that has bedevilled this debate is that the word “commissioning” has been used in two quite separate senses. One has been the idea of a GP commissioning services for his particular—

[Lord Warner]

I am sorry to interrupt the noble Lord’s flow, but I would like to press him a little further to give us some clue as to his thinking on this. My noble friend Lord Hunt gave us a snippet of history, but there is quite a lot more. We have been through a process where we have come down since 2002 from 300 PCTs to 50 or so PCT clusters. We have been on that journey because we found it extremely difficult to commission services effectively when there are very large numbers of PCTs covering small geographical and population areas. There is simply not the expertise to do that. Could he give the House some clue about where he thinks this is all going to end up? At the moment, in terms of starters for 10, we have about 250 of these clinical commissioning groups. I think it would be helpful to know where the members of his party and others who have argued for this stand on where the journey may end.

[Lord Greaves]

I am extremely flattered that the noble Lord, Lord Warner, thinks that I have the slightest idea where it is going to end up. I am doing exactly what the noble Lord, Lord Warner, and other noble Lords are doing—trying to get the Minister to give us some idea of that. We will be interested to see whether he gives that. Over the political lifetime of this subject, we have had constant changes. We started with bigger area health authorities and smaller district health authorities, going down to district level, and then going back to the area level, with the regional level having a greater or lesser influence. The fact is that this is a fundamental administrative difficulty—not a philosophical difficulty—for an organisation like the health service.

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[Lord Warner]

Can I press the noble Earl a little further on that? If a chairman has been appointed for this body who has a level of experience to enable him or her to function at that level, then requiring the Secretary of State to approve the appointment of the chief executive seems to throw into doubt whether the Government have confidence in that chairman running that kind of body—they need to be able to appoint an accountable officer as their chief executive. I find this a pretty considerable vote of no confidence in the kind of people who are being appointed as chairmen.

[Earl Howe]

Not at all, my Lords. Of course we have confidence in the chairman. However, it is a little strange to hear from the noble Lord that he suddenlythinks the Secretary of State should not be involved in an area where he has a legitimate interest to make sure, on behalf of the taxpayer and indeed patients, that we have somebody who is capable of fulfilling the role of accounting officer. This is an important role for the Secretary of State to have.

Turning now to Amendments 57, 153ZA and 153B, let me assure the Committee, and especially the noble Lord, Lord Hunt, that we want to reduce the amount of NHS funding spent on back-office bureaucracy. That is why have made a commitment to reduce administration costs across the health system by one-third in real terms, saving £1.5 billion annually by 2014-15. All that money will be put back into patient care.

Clause 21 provides powers for the Secretary of State to impose certain limits on the overall expenditure and use of resources by the board and clinical commissioning groups, including in relation to administrative matters defined through parliamentary regulations, for the first time. The board has the power to set similar limits for individual CCGs. I see no reason to change this to a duty to do so, as Amendment 153B suggests. As the board will itself be responsible for overall administrative spending, I am sure it will want to use this power carefully. Within those limits, it should be for the board to determine how best to use the resources available to it, and to decide on its own structures and ways of working, and the number of staff that it needs to perform its functions effectively. It is not appropriate to set a staffing cap on an arm’s-length body.

How big will the board be? In a document called Developing the NHS Commissioning Board, Sir David Nicholson, chief executive-designate of the board, estimated that the board was likely to have 3,500 staff, carrying out the functions currently exercised by around 8,000 staff in the Department of Health, strategic health authorities, PCTs and a number of arm’s-length bodies that are being abolished, along with its own new functions. It will deliver these in a much more streamlined way.

Likewise, setting an arbitrary cap in the Bill on the number of clinical commissioning groups or on their expenditure on administration in comparison to PCTs is not, in our view, an appropriate means of controlling administrative costs. CCGs will be different from PCTs. They put local clinicians in charge and align clinical decisions with the financial and quality consequences. It is a little unfair of the noble Lord, Lord Hunt, to say that we are creating a complicated and bureaucratic system, and citing clinical senates and networks and health and well-being boards. Clinical senates and networks are not new organisations in their own right: they will be hosted by the board. Clinical networks already exist. Health and well-being boards are also not separate statutory organisations: they will be hosted by local authorities. We are abolishing a whole raft of bodies under this Bill, as I have said on previous occasions. It is important to bear that in mind.

I appreciate the concerns underlying Amendments 58 and 59. It is important that there should be transparency in all the workings of the board. This is why Schedule 5 to the Bill was amended in another place to include the board in paragraph 7 as a body to which the duty in Section 1 of the Public Bodies (Admission to Meetings) Act 1960 applies. This would include any annual meeting that the board may decide to hold. I say “may decide” because the Bill is clear, in new paragraph 12 in Schedule 1, that:

“The Board may regulate its own procedure”.

This would also apply to determining when it is quorate.

However, the Bill does include clear procedures around the publication of the board’s annual accounts and annual reports, to ensure transparency. The board must send its annual accounts to the Secretary of State and the Comptroller and Auditor-General. The latter must examine, certify and report on the accounts and then lay copies of the accounts and the report before Parliament. The Comptroller and Auditor-General is responsible for the audit of the accounts of all arm’s-length bodies. The board must publish an annual report and lay it before Parliament. The Secretary of State must then write to the board, providing an assessment of the board’s performance of its functions, publish the letter and lay it before Parliament. That gives an indication that there will be maximum transparency here.

Turning to Amendments 145A, 146A, 147ZA and 147C, I am afraid that I do not agree that it would be worth while to add the unusual burden of an explicit duty of consulting on a draft business plan. The board is already required in new Section 13P(2)(a) to involve and consult the public in planning its commissioning arrangements. Under a duty in new Section 13J, it is required to obtain appropriate advice to enable it effectively to discharge its functions, including the planning of how it will exercise its functions.

I hope I can reassure noble Lords that Amendments 147A and 147B are also not necessary. First, the duty to produce a business plan already provides for transparency by obliging the board to publish its plan. Secondly, while the Bill requires that the board’s annual report and annual accounts are laid before Parliament, that is part of specific processes for scrutiny of the board’s performance against the objectives it was set and the outcomes it has achieved. It is right and proper that the board should be held to account in such a way. Another clear recommendation by the NHS Future Forum was that the autonomy of the board needs to be respected. With this in mind, although it is right that the board should be required to produce a plan and for that plan to be published for all—including Parliament—to see, I am not convinced that it would be appropriate to have parliamentary scrutiny of the board’s plans or draft plans. The Bill places certain functions on the board, and it should be for the board to determine how it will seek to exercise these.

With regard to the questions asked by my noble friend Lord Greaves concerning the size of clinical commissioning groups, I respectfully suggest to him that we defer them to a later group of amendments, where this issue will come up and I shall be able to talk more about it. For now, I hope that the noble Lords are sufficiently reassured to be able to withdraw the amendment.

--- Later in debate ---

[Earl Howe]

I apologise to my noble friend. The national Commissioning Board will, we envisage, be tasked with commissioning a number of public health functions by Public Health England. There will be a close relationship between Public Health England and the board. Much of the work of the board will straddle both public health and the provision of NHS services. There will be an intimate symbiosis between the two bodies.

[Lord Warner]

My Lords, on Amendment 50, which I seem to have moved quite a long time ago, I will consider the noble Earl’s remarks. I am grateful to noble Lords who spoke in support of Amendment 50. Public health is a rather special case and I would want to reflect, in a later debate, on the public health amendments. In the mean time, I beg leave to withdraw the amendment.

Amendment 50 withdrawn.