NHS Commissioning Board Authority (Establishment and Constitution) Order 2011

Baroness Thornton Excerpts

Tuesday 1st November 2011 Lords Chamber

Moved By

[Baroness Thornton]

That a Humble Address be presented to Her Majesty praying that the order, laid before the House on 15 September, be annulled (SI 2011/2237).

[Baroness Thornton]

My Lords, in moving the Motion on the NHS Commissioning Board Authority (Establishment and Constitution) Order 2011, I will also speak to the NHS Commissioning Board Authority Regulations 2011.

These statutory instruments were laid before Parliament on 15 September, and the date when they expire is therefore 10 November. However, the NHS Commissioning Board Special Health Authority website says that it was,

“established on 31 October 2011”,

and plays,

“a key role in the Government’s vision to modernise the health service”.

Technically speaking, the NHS Commissioning Board has not jumped the gun by broadcasting its existence before the parliamentary process has been completed. However, given the whole way in which the change agenda for the NHS is progressing, there is an extent to which I feel our views may not count for very much at all, and may count for less as time goes on.

I would like the Minister to clarify whether there was a period of consultation before the order was laid, because I can find no evidence of it. I am aware that there was a statutory period of consultation with the staff unions during the summer under Section 28 of the National Health Service Act 2006. I am also aware that there was a consultation on the White Paper published last year. However, I am not aware that the decision to establish a shadow authority was taken or mentioned during that consultation.

The Explanatory Notes to the statutory instruments make play of the fact that the Future Forum said in its deliberations that the NHS Commissioning Board should be established as soon as possible. However, I do not regard the deliberations of the Future Forum as a substitute for a properly managed consultation involving all the bodies that have an interest in this matter. The Future Forum is a body with no official or statutory status or accountability to Parliament. Its members have not been appointed through the Nolan procedures and do not even need, for example, to register their interests. Praying them in aid of an order before Parliament is slightly odd.

The procedure for putting in motion important statutory instruments such as this should not be treated in a cavalier manner. Indeed, it is so important that there was an exchange of letters between the noble Lord, Lord Goodlad, the chair of the Merits of Statutory Instruments Committee, and the Leader of the House, the noble Lord, Lord Strathclyde, last summer when a matter of consultation was clarified. In answer to a question from the noble Lord, Lord Goodlad, about the consultation procedures, the Leader of the House said:

“The Government recognises the best practice established by the Code of Practice on Consultation and will continue to observe it wherever possible”.

I am concerned as to whether the code of practice was adhered to in this case, and if not, why not.

This order outlines how the proposed new commissioning architecture for the NHS might be delivered, so it is of huge importance. I would like some assurance from the Minister that, as we move forward with other orders pertaining to the Bill, proper consultations will take place.

Today, as the NHS Commissioning Board commences a period of shadow running before becoming fully operational, the emergent commissioning architecture has become far more complex. The paper developing the NHS Commissioning Board offers some insights as to what a very complex organisation is being developed. Between the NHS Commissioning Board at one end and the clinical commissioning groups at the other, the variety of commissioning support agencies is growing exponentially to include regional—I think I need to amend that to subnational—arms of the NHS Commissioning Board, PCT clusters, commissioning support units, clinical senates, special clinical networks, health and well-being boards and trustees of clinical commissioning groups. Public Health England, local health improvement boards, regulators such as Monitor and the Care Quality Commission, the National Institute for Health and Clinical Excellence, local GP councils, third sector suppliers, and individual practices that are enrolled as clinical commissioning group members can also be added to this list. Indeed, patients too are becoming commissioners, as they wield personal health budgets.

This is presumably the structure to be delivered by the shadow board. I do not object to being properly prepared for these huge changes—that is very wise. However, there are some very important questions to be considered about the statutory instruments before us today. Can the Minister confirm what the timetable is, subject to the passage of the Bill? My understanding is that October 2011 is the start date for the board in shadow form as a special health authority, although the word “shadow” appears nowhere that I could find on the website. Given that the board has already recruited its chair—a matter that I will return to in a moment—can the Minister tell the House how and when other board members will be recruited, and whether the Department of Health will be using the same company of head-hunters that recommended Professor Malcolm Grant? Can he confirm that another five board members will be appointed? I am asking because I am not clear from Regulation 6 of the NHS Commissioning Board Authority Regulations, on the suspension of non-officers, as to whether that includes the chairman. I can see that it deals with the situation of the suspension of the chairman, but I am unclear as to how the chairman might be suspended in the first place, and by whom.

If the shadow board is to run from October 2011 to October 2012, I gather that at that point it transmogrifies into an executive non-departmental public body responsible for planning for 2013-14. I ask the noble Earl: is that it then? Is that the status of the quango being created to run this part of the National Health Service? We know that strategic health authorities and PCTs will be disestablished in April 2013.

I have a series of questions arising from the timetable, and I am sure other noble Lords will have as well. I am going to limit myself to two main themes, accountability and cost, after which I will have a few questions about the appointment of Professor Malcolm Grant. What powers does the NHS Commissioning Board have at this point and what budget? How many people are employed by it at present, how many will be employed by it eventually and at what cost? We know that the board will be responsible for £100 billion of taxpayers’ money. When will they start disbursing that funding and what accountability measures will have been established before April 2013, or indeed before October next year? Am I right in thinking that from yesterday the board has been established as an independent statutory body with some accountability, such as the authorisation of clinical commissioning groups? If this is indeed the case, does the new board have control of the budgets that develop the clinical commissioning groups? How will it disperse that funding? Who will be responsible for the strategic health authorities and PCT boards and their continuing delivery of healthcare in their areas? Who will be responsible for the delivery of the Nicholson challenge while Sir David Nicholson is busy, presumably, with all of the above?

I turn now to the appointment of Professor Malcolm Grant, whom I know from my work with academic organisations in the past. I have the highest respect for his current position as the head of University College London, but I think he was put in an impossible position by the Department of Health. I have now read the transcript of his interview with the Health Select Committee, where he was approved only by the casting vote of the chairman. It seems clear to me that Professor Grant had been told that it was a rubber stamp exercise and that he did not expect to be cross-examined in the robust way in which the Health Select Committee proceeded to question him—a way that we all know and cherish, particularly when a Select Committee may suspect that it might be being taken for granted.

It is unfortunate that Professor Grant was unable to explain why or if he had a passion for the National Health Service. He said:

“I find it difficult to demonstrate because I am not a patient of the NHS”.

Will the Minister take this opportunity to clarify exactly what was meant by that remark? It has had negative media coverage because it has been interpreted as meaning that Professor Grant does not use the NHS at all. That is most unfortunate.

According to the record, Professor Grant instead pointed to his 37-year marriage to a central London practice GP as his experience of the NHS. I am married to a world expert on internet safety, but it has given me neither a passion for nor a particular knowledge of IT and the internet. Much as I support my husband in his work, I am not at all sure that it is good practice to use that in a job interview. However, it raises a separate question: did the department take legal advice about whether Professor Grant’s GP wife makes him a relevant person in terms of conflicts of interest? Given that GP primary care will be dealt with directly by the NHS Commissioning Board, which I understand is to have responsibility for GP contracts, will Professor Grant have to exclude himself from any discussions and decisions that might be to the advantage or disadvantage of GPs? What a curious state of affairs that would be. In fact, the whole episode is curiouser and curiouser.

I agreed with Professor Grant in his remarks to the Select Committee about the health Bill, which he thought was completely unintelligible. I suspect that the Minister may not. I look forward to the Minister’s remarks because I know that I will be wiser as a result. I beg to move.

[Lord Warner]

My Lords, I agree with everything my noble friend has said. In particular, I would like to know when the shadow becomes substance.

It is unfortunate that we are considering these statutory instruments before we have had a chance in Committee to discuss the clauses of the Bill relating to the NHS Commissioning Board. I shall try not to trespass on the ground that we will undoubtedly cover in the Bill, but there will inevitably be some overlap.

The board’s main role is to ensure a coherent and effective commissioning system as a proper counterbalance to the NHS’s historical dominance by provider interests. In considering these statutory instruments, it is important that we are clear that this is its main role. If it is to succeed in using commissioning to improve patient health outcomes, not only individually but across populations, it will be vital that the board is not sidetracked by being given other roles that Ministers cannot find other homes for. We will discuss these issues further, but can the Minister give some assurances today that we will not end up with a situation in which the board’s empire continues to grow and its membership may not be the most effective to deal with the range of circumstances and problems that it has to deal with? Can he give an idea of the scale of the board’s budget and staffing issues?

I always travel optimistically when I see a government department produce an impact statement and I always hope that there might be the odd number or two in it. However, in these statutory instruments, the numbers are conspicuous by their absence. I would therefore like to explore with the Minister what the scale of the board’s budget and staffing will be.

It is very difficult to judge whether the governance arrangements for the board in regulations such as these are satisfactory without knowing a lot more about the scale of the operations. Could the Minister give us more information about what he anticipates the budget of the board will be in its first year of operation? Again, we are less than certain precisely when that first year of operation will be, but for argument’s sake let us fix on either 2012-13 or 2013-14—I personally do not mind which. I would like to know what he thinks this body will be responsible for in cash terms and to have some idea of what he thinks its running costs will be. We will certainly be coming back to this issue as the Bill progresses in Committee, but it would be helpful to have some idea of the scale of this body’s operation before we can judge whether the provisions in the regulations on membership of the board and the way in which it is going to be run are adequate.

This request for numbers is not just a matter of idle curiosity on my part. It relates to the question of what is the most appropriate size for this board and its committee structure. From what we have learnt so far, the board seems likely to have responsibility for spending at least £80 billion a year. I have heard figures of up to 5,000 staff being bandied about as the possible number of people that the board will employ. With an annual expenditure of this size, my first question to the Minister is: is it right to be thinking about having a board with only five non-executive members? How does this compare with a FTSE 100 company with a similar turnover? With such a turnover each year, what is likely to be the scale and nature of the committee and sub-committee structure that the board requires? Is there a danger that, with only five non-executives, the board will end up with committees or sub-committees taking decisions on large sums of public money where board non-executives are in a significant minority in those decision-making committees? Certainly at first blush, the governance structure for the large sums of public money that this board will be disposing of looks potentially weak compared, for example, with a big local authority. Are the Government sticking with five non-executives or do they contemplate having a larger number of non-executives on this board?

Having made this comparison with local government, I will turn to the issue of the board and its committees meeting in public. As I understand the regulations, there is no requirement for the board or its committees to meet in public other than when the board presents its annual report. Given the sums of public money likely to be involved, this seems to me totally unsatisfactory. As someone who was a chief officer in a big local authority for six years, I thought it was good for my soul to have to argue my case in public. I think most members of elected local authorities accept that their way of having to account for large sums of public money is to talk about how it is going to be spent and to account for it in a public arena. I cannot see why this board should not be required, as a matter of course, to meet in public and conduct its discussions in a transparent way, except where perhaps personnel or commercial issues are involved. Can the Minister say why the regulations do not require this, when the Government themselves tend to make rather a song and dance about how they prefer there to be much more transparency in public bodies?

Finally, I turn to the issue of board competence and training. I was a little startled to learn of some of the answers provided to the Health Select Committee by the Government’s candidate to chair the board. Of course, there was a refreshing honesty, as my noble friend has said, about the way he described the Bill as “completely unintelligible”, and many Members of this House seem to agree with him, judging by the number of amendments that they have put down. However, more puzzling was his understanding of the board’s relationship with the Secretary of State under the terms of the mandate provisions in Clause 20 of the Bill. He seemed to believe that the Secretary of State would hand over the mandate for two or three years and then leave things to the board. Clause 20 makes it absolutely clear that the Secretary of State can issue a fresh mandate before the beginning of each financial year as well as modify it, particularly when there are exceptional circumstances. The Secretary of State also has extensive powers in Clause 17 to issue regulations that lay down standing rules on how the board conducts its affairs. Can the Minister tell us more about the arrangements for induction training of non-executives and their chair, so that there is no misunderstanding on the part of the non-executives about what the board can and cannot do?

I could go on because there were many other issues that were raised, but I will save those for Committee. In conclusion, I regard these regulations as looking somewhat feeble for a body operating on the scale that the Government seem to envisage and in such a complex environment. We will come back to some of these issues in Committee. In the mean time, I would welcome the Minister’s answers to my questions.

--- Later in debate ---

[Earl Howe]

My Lords, yes. There are clear rules surrounding conflicts of interest and the NHS Commissioning Board will be no exception to the rules that already exist for public bodies.

[Baroness Thornton]

My Lords, I thank the Minister for that very comprehensive answer to the debate. I also thank all noble Lords for their contributions to what I think was a very worthwhile discussion. I particularly thank my noble friends Lord Warner and Lord Turnberg. The questions put by my noble friend Lord Warner were, of course, as forensic as I would have expected. I did wonder about the lack of an impact assessment being attached to the order and regulations.

In response to the noble Baroness, Lady Barker, I did not object to the fact that the chair has been appointed in advance. Indeed, I completely took the point that it is happening at almost exactly the same stage in the passage of the Bill as occurred with the appointment of the chair of the CQC. However, my concern relates partly to the lack of consultation. We conducted a consultation at every single point of the CQC being set up. We carried out a statutory consultation right the way through the establishment of that body. The fact that the Government were not bound to have a consultation prior to the establishment of this authority is not an excuse for not doing so. This authority will lead to the establishment of a board which will spend £90 billion or £100 billion of taxpayers’ money. Therefore, it seems important to have a consultation at every point, partly because the more that people understand organisations, the more that helps to build support for them.

The noble Lord, Lord Willis, is quite right to raise the issue of research. These Benches certainly support that, if that is not the kiss of death.

The noble Baroness, Lady Finlay, raised a crucial point about conflicts of interest. I am not at all sure that the Minister answered my question about legal advice on the position of the wife of the new chairman of the authority being a GP but I am quite happy to let him write to me about that. On that basis, I beg leave to withdraw the Motion.

Motion withdrawn.