Abortion
Baroness Thornton Excerpts(12 years, 1 month ago)
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Baroness Thornton
To ask Her Majesty’s Government whether they intend to legislate to reduce the time limit for abortions.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the Government have no plans to review the Abortion Act 1967. It is parliamentary practice that any proposals to change the abortion laws come from Back-Bench Members and that decisions are made on the basis of free votes. The current time limit for an abortion is 24 weeks’ gestation.
Baroness Thornton
I thank the noble Earl for that Answer. He must forgive me and others for being worried about this matter after recent statements from his right honourable friend the Secretary of State and other senior members of the Government, who of course have a perfect right to their personal views, but we also need to know how that might influence public policy. For clarification, does the Minister mean that the Government will not support any change to the abortion time limits for the duration of this Parliament? Indeed, when will the Department of Health publish its sexual health policy document, which has been delayed for the past 18 months? Will it include any reference to abortion time limits, availability and funding?
Earl Howe
My Lords, I am grateful to the noble Baroness for acknowledging that my right honourable friend is entitled to express his long-held personal view, which he did the other day. With regard to her first main question, however, successive Governments have taken the view that they should rest on the evidence. There is currently no call from the main medical bodies for a review of the Act in relation to time limits, and the British Medical Association and the Royal College of Obstetricians and Gynaecologists support that view. I hope that the noble Baroness regards that as a clear enough answer in support of my initial Answer. As regards the work that is being done in my department, it is expected that the sexual health strategy will be published within a few months.
NHS: Mental Illness
Baroness Thornton Excerpts(12 years, 4 months ago)
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Baroness Thornton
To ask Her Majesty’s Government what is their response to the report How mental illness loses out in the NHS, published by the London School of Economics and Political Science on 18 June.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, we agree with the report’s insistence on both the importance of investment in mental health services and on the necessity of treating mental ill health as seriously as physical ill health. Our mental health strategy, No Health Without Mental Health, makes our commitment to these principles clear, and we are soon to publish an implementation framework that will help to embed them in NHS practice.
Baroness Thornton
I thank the Minister for that Answer. I remind the House that during the passage of the Health and Social Care Bill it was agreed that mental health should have the same, equal status as physical health. In that light, at present the 50 outcomes of the NHS outcomes framework include no health outcomes for the millions of people with clinical depression or crippling anxiety disorders. Do the Government have any plans to change that and, if so, when will they change it? When will we see mental health outcomes appear in the outcomes framework?
Earl Howe
My Lords, we have deliberately taken a generic approach to the NHS outcomes framework. That said, the framework for 2012-13 contains three improvement areas relating specifically to mental health: premature mortality in people with serious mental illness; employment of people with mental illness; and patient experience of community mental health services. Therefore, the noble Baroness is not quite right in what she has just said. Many of the indicators in the outcomes framework relate to all patients, including in relation to safety incidents, for example, or experience of primary care. Improving outcomes for people with mental health problems will be a crucial element of success.
National Health Service Trust Development Authority (Establishment and Constitution) Order 2012
Baroness Thornton Excerpts(12 years, 6 months ago)
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Baroness Thornton
My Lords, much of what I would like to say has been said by my two noble friends, but I would like to add my tuppenceworth because this is the beginning of some of the very important statutory instruments we are going to consider that will bring the Act into being. I have a few questions for the Minister. The first one has been alluded to by my noble friend Lord Warner: I refer to the creation of a new arm’s-length body, which I thought the Government did not really want to do. I wonder why it was felt necessary to create another arm’s-length body when many of the useful arm’s-length bodies, which some of us thought should not have been abolished, have been abolished, particularly the NHS Appointments Commission, which I will come back to in a moment.
Under point 7.1 in the Explanatory Notes, liabilities and assets are referred to. There is the recurring notion that this new body will take responsibility for those. My noble friend Lord Warner questioned the liabilities, but I am interested in the assets. For example, if an NHS trust is not viable as a foundation trust but a private sector organisation offers to purchase it, merge with it or whatever, what happens to the ownership of its assets—the land, the buildings and the kit? Where do they go? Who do they reside with? Is it the new provider body, whatever that is? I would like some explanation.
Appointments are important. Once the NHS Appointments Commission has been abolished, I cannot see from the Explanatory Notes that there is a guarantee of independence and transparency in appointments to the new bodies or when people in NHS trusts retire and have to be replaced. I am not clear what happens in those circumstances and who makes those appointments. If it is the new authority, which is my understanding, what guarantees do we have of independence, accountability and transparency in those appointments? The reason why I think that is important was alluded to and described much more adequately than I can by my noble friend Lord Warner and is in point 8 of the evidence base, which states:
“To date, 50 per cent of NHS trusts whose applications for FT status are rejected by Monitor fail because they do not have sufficiently robust governance. It is proposed that SHAs will be abolished in 2013, so new support arrangements will be required to support the FT pipeline”.
Do the Government think that, because NHS trusts fail because of their lack of robust governance, by taking control of this issue they will be able to appoint more robust trustees or do whatever it is to ensure that they meet the foundation trust requirement? I have exactly the same question as my noble friend: what is the magic that will increase the success rate from 50% to 100% with the new authority? We need to be concerned on several counts: the accountability, viability and credibility of the new body proposed in these statutory instruments. I am not convinced that what is being proposed meets those requirements.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I am grateful to the noble Lord, Lord Hunt, and the two other noble Lords who have spoken because their questions give me an opportunity to clarify what these statutory instruments are designed to do and to say why we believe that they are appropriate.
The NHS Trust Development Authority will play a vital part in laying the foundations for the new health and social care system. From April 2013 it will provide essential governance and oversight of NHS trusts that are not yet foundation trusts to support them in delivering the vision of an NHS consisting entirely of fully autonomous healthcare providers.
Foundation trusts are sustainable, autonomous providers with far greater freedom to innovate, design and deliver services to local communities, and there I believe that the noble Lord, Lord Hunt, and I are in full agreement. Helping every NHS trust to attain foundation trust status is key to creating an environment in which adaptable, sustainable organisations deliver high-quality care and collaborate with NHS and other partners to provide integrated care designed around the needs of individual patients.
The Government’s vision of care delivered in an all-FT landscape means that NHS trusts must either become authorised as foundation trusts in their own right, merge with an existing FT, or move forward in another organisational form. There is a strong expectation that the majority of NHS trusts will achieve FT status by 2014 and that only by exceptional agreement, made after close scrutiny of financial and clinical feasibility, will they be allowed to continue in their present form beyond this date. Supporting the progress of NHS Trusts through the process of applying for FT status is often referred to as “managing the FT pipeline”.
Of course, FT status is not an end in itself but a crucial step in the process by which we can drive up the quality of care and make sure that the services we offer patients are robust, sustainable and of the highest quality. The benefits that achieving FT status can bring patients and communities cannot be underestimated. In doing so, NHS trusts examine their leadership, financial sustainability, quality of service and plans for continuous improvement. It is a mechanism designed to bring all provider services in all parts of the country up to a level of excellence.
An important part of this transition is the establishment of a new special health authority, the NTDA. The orders before noble Lords now provide the legal underpinning. The NTDA will be a short-lived, enabling organisation in the reform programme. The authority is important because once the current system of strategic health authorities comes to an end in 2013, the infrastructure to support NHS trusts on their way to becoming foundation trusts, or indeed to support them if they become unsustainable and can no longer function as a foundation trust, will no longer be in place.
The legislative framework set out in the Health and Social Care Act 2012 introduces a new and comprehensive regulatory system, including measures for dealing with providers at risk of becoming unsustainable. The new system will concentrate on protecting essential local services for NHS patients, not on maintaining failed organisations at great and unnecessary cost to the taxpayer. The NTDA will work closely with the whole of the new NHS to ensure innovation and that the very best of clinical practice is brought to bear on the most complex problems. It will work with local communities and their representatives to make the case for change when service reconfiguration is needed to deliver sustainable services.
The NTDA, on behalf of the Secretary of State, will also appoint chairs and non-executive directors to NHS trusts while they continue to exist, and appoint certain trustees such as special trustees and trustees to hold trust property for some NHS bodies. The organisations that the NTDA will take responsibility for cover a wide spectrum of services, including acute hospitals, ambulance services, mental health services and community services. Some are on the cusp of achieving foundation trust status while others face some of the most significant challenges in the NHS, with long-standing financial and operational difficulties to contend with.
It will not be an easy task. That is why the Secretary of State has appointed David Flory, currently deputy chief executive of the NHS and director of finance, performance and operations, as its chief executive-designate, and Sir Peter Carr, former chair of NHS North East SHA and vice-chair of the NHS north cluster of SHAs, as its chair. We are establishing the authority now to give it time to design its operating model, recruit staff and engage in the planning round for NHS trusts for the financial year 2013-14 before it takes up its full operational functions in April 2013.
Baroness Thornton
My Lords, I am not completely clear that the Minister answered my question about independence. The point is that the appointments commission enjoys widespread public confidence in the way that it goes about its business of appointing people. If that function is to be taken into the new authority within the department, how will the Government ensure public confidence in its independence and integrity, even if there is a dwindling number of appointments? I do not think that he answered that question.
Health and Social Care Act 2012
Baroness Thornton Excerpts(12 years, 7 months ago)
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Earl Howe
I do not agree that HealthWatch has been left in limbo; in fact, only this morning I was attending a round table of pathfinder local healthwatches and witnessing for myself the tremendous energy and enthusiasm that they were devoting to HealthWatch. So the short answer to the noble Baroness is no, I think the process as regards HealthWatch is very much on track.
Baroness Thornton
My Lords, my question follows on very nicely from that of the noble Baroness, Lady Masham, because “No decision about me without me” was the Government’s mantra when they first introduced the White Paper and the Bill. I would like to know not only how soon that mantra might become a reality but also, in terms of post-legislative scrutiny, how the Minister thinks that post-legislative scrutiny might be carried out to allow independent scrutiny given that the two bodies that will essentially control the funding for the patients’ voice, HealthWatch, are the Care Quality Commission and local government—in other words, government bodies?
Earl Howe
My Lords, we should not forget the capacity of Parliament, particularly the Health Select Committee in another place, to conduct scrutiny whenever it chooses. Indeed, your Lordships' House could if it wished configure itself in a way to conduct scrutiny of any aspect of the Health and Social Care Act.
Health: Pancreatic Cancer
Baroness Thornton Excerpts(12 years, 7 months ago)
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Baroness Thornton
My Lords, as ever with these debates, particularly when we are disciplined by having a short time, I find that most of the questions that the Minister needs to address have been asked—some of them more than once, and certainly much more ably than I can manage. I start by thanking Pancreatic Cancer UK for its excellent briefings, and also the Library for the excellent and detailed briefing that it produced for this debate.
I will focus on two issues. One is a catch-up on research that I know was published last December and January and was featured by the BBC and at least one national newspaper. I will then ask a question about research that will amplify things. The research linked processed meat to pancreatic cancer. It was done by researchers in Sweden. The World Cancer Research Fund joined in the discussion on that research, which focused on eating red and processed meat. We knew that this had been linked to bowel cancer, but the study published in the British Journal of Cancer analysed data from 11 trials and 6,643 patients with pancreatic cancer. It found that eating processed meat increased the risk of pancreatic cancer. The risk increased by 19 per cent for every 50 grams that someone added to their daily diet. Eating an extra 100 grams increased the risk by 38 per cent.
Professor Larsson, who conducted the research, made the obvious point that pancreatic cancer has poor survival rates, so as well as diagnosing it early it is important to understand what increases the risk of the disease. Has any further research been done on the issue of the link with diet? We know that smoking, too, is a risk factor. I am thinking of the responsibility campaign on food and diet that the Government have been running. Are they using those statistics as part of the campaign on what people should or should not eat?
My second question is about research. We know that there is a commitment to further investment in research into pancreatic cancer. However, I am aware that unless the research is properly commissioned, even if the funding is there, the money will not be spent in a timely fashion. My question echoes that of other noble Lords: are the Government increasing the spend on research in this area? How will they ensure that we develop the kind of critical mass of UK talent that will enable us to deliver world-class, groundbreaking research into pancreatic cancer, as we have done in other areas?
EUC Report: Healthcare Professionals
Baroness Thornton Excerpts(12 years, 8 months ago)
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Baroness Thornton
My Lords, it does indeed feel that normal service has been resumed in the Chamber. I thank the noble Baroness, Lady Young, for the report and for the coherent way that she introduced it. I congratulate her and her committee on a brilliant job.
It is true that in September we had a preview of the report. We even saw some of it circulated during the debate initiated by the noble Viscount, Lord Bridgeman. During that debate in September, the Minister said:
“This summer we have been working constructively with other government departments and the health regulators themselves to formulate our response to the European Commission’s Green Paper on reforms to the directive. On that Green Paper there is very little on which the department and our partners disagree regarding areas of the directive that need strengthening. We agree that the harmonised training standards underpinning automatic recognition need updating and that a mechanism for regular updates is required. We would also like to see a focus over time on competencies in training rather than particular length of training”.—[Official Report, 8/9/11; col. 457.]
The Minister then goes on to talk about those negotiations. Those remarks were very important because they showed that we were making progress and moving forward together in the UK. What further progress is being made on that? I ask because it is not completely clear from the Government’s response to the report what the scale of progress is in the different areas that are covered by this report.
It seems to me that government policy, the report and the response are all broadly in the right place and there has been agreement in the House many times, not least because the noble Viscount has championed this issue for some time.
As well as being grateful for the report from the noble Baroness’s committee, we also need a report back on how the Government are progressing with these negotiations, what they expect the outcomes will be and at what times. This is indeed an issue of patient safety but, as the noble Lord, Lord Dykes, said, we also have to recognise that it is an issue from our NHS benefiting from the free movement of health professionals across Europe. Which one of us has not been treated by a nurse, doctor or health professional from some part of the European Union? That will absolutely be the case and is quite right. In the vast majority of cases, we do not even think about the fact that we may be treated by a German doctor, a Scandinavian nurse or whatever because we assume that they will be competent. In the vast majority of cases, they will be.
I hope that the unanimity in this House will help to inform the Government’s position on this review and indeed strengthen the Minister’s arm in these negotiations. However, I have a question about what and how much impact the Government’s position on light-touch regulation will have on these negotiations. That is slightly going back to the Health and Social Care Bill, where we had a discussion about that. I would like to know what impact that might have. It seems clear that the language skills clarity and the continuing professional development are still very important issues that need to be resolved. However, finally, there is no question that the EU Committee has done a great favour for patient safety not only in the UK but also across the whole of the European Union.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 8 months ago)
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Baroness Thornton
Is the noble Lord aware that all NHS organisations, strategic health authorities, PCTs and local authorities have risk registers and they publish them?
Lord Birt
I shall come to the risks of publication in a second. What are the means of creating an effective risk register? You need to involve those in governance and delivery and you need absolute candour and trust in the process. The consequence of making any risk register public is that it will be anodyne and the risks would simply cease to be managed, which is not in the public interest. I would hope that Governments of any persuasion would resist the notion of publishing any risk register. It is a matter of regret that one risk register in respect of Heathrow was published. It follows from that that I am unable to support the amendment.
Lord Deben
My Lords, I would like to share with your Lordships’ House, for the first time, my experience of trying to deal with the complicated matter of BSE as it makes clear this distinction. I committed myself to total openness; I knew nothing that the public did not know. It was the only way in which one could be sure of obtaining people’s trust. Nothing was hidden. We did not have risk registers in the sense that we do today but it would be quite wrong to say that we had not considered every possible risk.
I put it to your Lordships that there is a difference between what you know and the extreme cases which you ask about in order to make sure that what you know covers everything that you could know. If in the middle of that terrible crisis newspapers more interested in their numbers of sales had accused the Minister of uncertainty because he had asked about risk—and I do not need to go into the kinds of risk you had to ask about—it would have been impossible to make what were already difficult enough decisions. It turns out now, 20 years later, that the decisions were right but at the time they could only be what you knew, and what I knew I shared.
Consider also what it meant for my civil servants. Do your Lordships really believe that your civil servants would be able to be as frank and direct and complete if they found themselves and their relationships being used as part of a battle? There were some terrible battles at that time between people who had all sorts of other interests. Compare this to another case, which out of kindness I will not be too detailed about. For many years in the ministry of agriculture a particular view had been upheld and we had been told that it was true. When I sought further information I discovered it was not. It was at that point that I tried to establish a very clear distinction between what you know and what you have to ask about which you do not know.
The risk register has come into our governmental structure largely from private business. I sit on the boards of a number of companies and chair several; in all those cases we have a risk register. That risk register is only useful if it is kept entirely to the company itself, because you want to ask questions of a very extreme kind. I ask the noble Lord, Lord Owen, whether he can imagine a Foreign Secretary who had to reveal his risk register asking what would happen if this or that Government did this or that, or what would happen if some Middle Eastern state refused to allow our ships into the Strait of Hormuz at this moment. Would any Foreign Secretary be able to be Foreign Secretary?
Baroness Thornton
Does the noble Lord not think that the Information Commissioner and the tribunal have taken those points into account?
Lord Deben
I would not dream of suggesting that I know what the tribunal and the commissioner have taken into account. All I am saying is that if they have taken it into account and come to this decision, I think it is wrong, and if they have not taken it into account they ought to have done. That is why I come to the point that the noble Baroness raised when she said that it is all very good because the National Health Service has risk registers and publishes them. They are not risk registers, not in the sense that a business has risk registers. They are not risk registers in the sense that the Foreign Office has risk registers. They are such risks as the National Health Service believes will stand being in the public domain. The risk registers that a Government have are a wholly different kind of thing and need to be. I believe that we must protect them.
Lord Armstrong of Ilminster
My Lords, I support the noble Lord, Lord Fowler, and my noble friend Lord Wilson of Dinton in advising the House not to support the Amendment to the Motion. I do not want to go into any more detail on the risk registers. They need to be comprehensive and candid; if there is a risk of publishing them, the compilers will be less likely to make them as comprehensive and candid as they need to be in order to be of value. When the Information Commissioner suggests that, even if this is published, people will be equally comprehensive and candid in future, I am afraid that I think he is guilty of wishful thinking.
There is a process with this risk register. I understand that we have not yet seen the reasons for the decision reached by the Tribunal. When that is known, the Government have the right to appeal. I hope that they exercise it because the considerations against publication, as they have been stated more than once today, are very cogent. That process is likely to take a great deal longer than the three weeks that the Amendment of the noble Lord, Lord Owen, gives the Bill. The only sensible course now is to disentangle the business of the risk register and the business of passing the Bill, to let the Bill go forward and not to support the Amendment to the Motion.
Baroness Thornton
My Lords, little needs to be added to the eloquent and succinct arguments deployed by the noble Lord, Lord Owen, and built on by my noble friends Lady Jay, Lord Peston and Lord Grocott, and my noble and learned friend Lord Falconer. These arguments are in the best liberal tradition and should be supported by anyone who genuinely believes in openness and transparency.
Many people inside and outside the House have expressed concerns about the risk posed by this Bill, especially the implementation of the biggest-ever reorganisation of the National Health Service. It was those fears that led to the initial request by my right honourable friend John Healey 18 months ago. I do not think that even the noble Baroness, Lady Murphy, could imagine that it was a plot of some kind to delay the Bill at this point. I can assure the noble Baroness that that it is not the case. What is being considered here is a risk register maintained for the transition programme; for the work necessary to implement the changes in the Bill. That is going to be done together with delivering the Nicholson challenge, so there are huge challenges to our National Health Service. It is not the same as a departmental risk register, which might be closer to policy matters and advice, and the concerns expressed by many noble Lords, particularly those who have been Ministers and Permanent Secretaries.
My noble friend Lord Grocott is right. What is being asked for here are three weeks to see what this says. Surely the balance of public interest lies in disclosure, to enable consideration of this Bill to be as effective as possible. In short, we needed it in November to do our job adequately and we still need it. Noble Lords have said that it will be now out of date, but that is a question I asked many months ago and I was assured that it would not be the out-of-date register that would be available, but the most current. I say to those representatives of Permanent Secretaries in your Lordships’ House that the last time they engaged with this matter—never with the Bill, but with this matter—I quoted “Yes Minister” at them. I shall be less elevated this time. I shall use the Mandy Rice-Davies defence and say, “Well, they would say that, wouldn’t they?”.
I agree that it is time to move on. The issue is simple enough; we need to understand the risks in order properly to consider the Bill. We did need them. We have time to take this matter in hand. The answers are very clear and we should support the noble Lord, Lord Owen.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, as ever I am grateful to the noble Lord, Lord Owen, for speaking in such clear terms to the amendment he has tabled. I am equally grateful to other noble Lords who have contributed to this debate, on both sides of the argument. At the heart of this, I suggest that the noble Lord, Lord Owen, is putting forward two propositions. The first is that the Government have concealed the nature of the risks associated with the Health and Social Care Bill and therefore the House has a right to be made aware of what the department’s transition risk register contains. The second proposition is that the Government’s refusal to publish the risk register is inherently improper under the terms of the Freedom of Information Act. In other words, the alleged sin of concealment on the part of Ministers is compounded by an unreasonable obduracy in not complying with the decision of the Information Commissioner and now the First-tier Tribunal. It will not surprise the House to hear that I fundamentally reject both propositions. First, the suggestion that the Government have consciously set about concealing the risks associated with the NHS—
Baroness Thornton
My Lords, the time has come for a vote on this matter. I add my own thanks to all noble Lords for the work that they have done on the Bill. I pay tribute to the huge efforts that have been made and the commitment that noble Lords show to doing their job as legislators. I thank my own support on the Front Bench, my noble friends Lord Hunt, Lord Beecham, Lord Collins and Lady Wheeler. I could not have been better supported.
Unlike the Minister with a cast of thousands, I have had a small but perfectly formed team of about three, led by Jessica Levy in the opposition office and with my intern Tom Woodford keeping my papers in good order. However, we on these Benches have also been supported and sustained in our consideration of the Bill by literally thousands of people across the country. I say to the noble and learned Baroness, Lady Butler-Sloss, that it is actually up to the Government what they do about the Bill if they lose this vote.
Perhaps the Minister might agree that this parallel universe that we inhabit in your Lordships’ House, where deals are done and amendments are crafted, is hardly the same as the real world for those who will now manage commissioning, make budget cuts, deploy staff, recruit accountants and try to make sense of the competition and integration strategies and to make the Bill work. I pay tribute to those people.
I feel like saying to noble Lords, “Hands up those who have received letters and e-mails supporting this Bill”. I had two, among a torrent of e-mails, tweets, texts and letters asking us to drop the Bill or dramatically change parts of it. We have received thousands of expressions of concern. Noble Lords have reacted variously to that, and I think that the noble Lord, Lord Greaves, is right to say that in some respects parties have reacted well to this but not in others. It is clear that there are thousands if not hundreds of thousands of people watching us and what we do, and it is for those people—the nurses, the doctors, the healthcare assistants, the patients, my mum with her COPD, my cousin whose daughter has just been diagnosed with a brain tumour, and the hundreds of thousands of people who have signed petitions, sent letters, gone on demonstrations and continue to make our beloved NHS work—that I wish to test the opinion of the House.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 8 months ago)
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Baroness Thornton
“(A1) Part 3 of this Act shall come into force, by order, on a date to be determined by Parliament, which shall not be before April 2016.
(A2) Before bringing forward any order to bring Part 3 of this Act into force the Secretary of State shall consult the NHS Commissioning Board, the Independent Regulator of Foundation Trusts, the Care Quality Commission, patients or their representatives, and staff delivering NHS services or their representatives, and shall report to Parliament on the outcomes of the consultation.
(A3) Any such order must be laid in draft and approved by a resolution of each House of Parliament.”
Baroness Thornton
My Lords, as we near the end of our deliberations on Report, I hope to set out the case for changing not the policy but the pace of implementation. We have discussed extensively the policy background and the legal and other implications of this Bill. We have agreed on some things and disagreed on others. The case for Amendments 300A and 300B is simply that we have learnt a great deal in the past 13 months since my noble friend Lady Wheeler and I asked 18 other noble Lords to join us in organising seminars about this Bill because we felt that the House needed to understand it better. I have to say that 13 months later I am not sure whether we do understand it any better. However, what is quite clear from those seminars and our discussions since the autumn is that there are risks involved in this Bill. There are credible claims that detrimental consequences brought about by the scale of change are already being felt. There are some extreme assertions, such as from regional risk registers, that patient care could be seriously impacted.
In these remarks I am really only going to assert what we know. We know what is in those risk registers, we know the risks that we have discussed and we know that this is the largest reorganisation that the NHS has ever undergone, including the one that set it up. The evidence that we collected in our seminars raised the scale of those risks. During our debates risks have been mentioned time and again—risks to children, to older people and to people with long-term conditions. The Health Select Committee and the Public Accounts Committee have both added weight to those expressing concerns about the scale and pace of change, and that is the point of these amendments.
We still do not know what the key risks are in the risk register, which is a grave disappointment, but that may actually add to our concerns. Our concerns should also be heightened by the poor track record of the Department of Health to oversee and manage change on this scale. The wisdom of ex-Ministers in this House is such that they know very well how hard change is to manage within our NHS. Added to this particular programme is one of the worst impact assessments that I have ever seen and, one suspects, a deficient risk management process. The level of organisational change was acknowledged when the coalition agreement specifically ruled out any such major programme.
In adding to the risk inherent with the implementation of this Bill, we have put forward an amendment that is intended to ensure that part of the Bill is deferred and the major part of the Bill is proceeded with. That is what this amendment is about, and I think it has advantages. First, we have to allow time and bring about some stability for the Nicholson challenge, as it has been called, to deliver the savings. We know that economic regulation is not a key factor in delivering those savings, as evidence to the Health Select Committee demonstrated. Reforms in both commissioning and provision can continue as now in advance of economic regulation in the full market. That is the first reason. The Nicholson challenge and the savings need time to embed themselves and to work their way through the system.
Secondly, many in this House and outside have expressed concerns that the role of Monitor as the independent regulator of foundation trusts should not be weakened. To some extent that has already been acknowledged in the changes made to the Bill, but the addition of new rules and duties to Monitor is, we believe, in itself a risk. Under our amendment, Monitor would complete its role in authorising foundation trusts and be well on its way to moving to a light-touch regulation, so that the inevitable conflicts of interest, which many noble Lords have raised during the course of this Bill and outside the Chamber, would be lessened. The pipeline of expectant foundation trusts is still long and will not decrease any time soon. It seems that there is a job of work for Monitor to do in managing things such as mergers, takeovers, and franchising for laggards. That process, of itself, is enough, and we want to reduce the risks of failure in those processes.
It also seems that developing and building the capacity and capabilities required in a wholly new regulatory regime will and should take time. There is much to do, and we think that undue haste brings with it its own risks. The emerging clinical commissioning groups will be commissioning with billions of pounds of public money, yet they are young organisations with only light governance. They will need time to grow and to build capacity, capability and experience before they have the additional complexities of market regulation, and this amendment allows for that.
The most compelling reason for sequencing—a term that I openly acknowledge I first picked up from the noble Baroness, Lady Williams—is that it will give time to work with those who have to implement the changes, as opposed to forcing those changes upon them. Even those in the Government and on the Liberal Democrat Benches cannot really pretend that the widespread opposition to this Bill and the arguments for it to be reconsidered are all part of some Labour plot, as has been suggested. Would that it were that the Labour Party had such influence and strength. I do not think that is the case, but calling distinguished academics and leaders of professional bodies Labour stooges is both offensive and counterproductive. There is widespread opposition to and fear of the risks that this Bill brings. They are not borne of ignorance and ideology but based on knowledge, evidence and experience, so the Government would be wise to take time to win people over to what they want to achieve. As the Prime Minister himself said last year, he would not wish to move forward with these reforms without the support and commitment of the National Health Service’s staff and patients.
My final point is about the consequences of sequencing. At the outset, we heard claims that the NHS was in urgent need of competition to drive through reforms to improve outcomes, but evidence has been compiled to show that while our NHS is far from perfect—and indeed may need reform—it is still arguably up there with the best in the world. Where we lag behind, we are closing the gap, which is testimony to our support and investment in the NHS. We believe that there is no urgent reason for implementing Part 3 of this Bill, either for clinical or financial reasons. On the positive side, we are not suggesting any delay in developing other aspects that have wider support, such as clinically informed commissioning, health and well-being boards, HealthWatch and much else. These changes need not be delayed if our amendment were passed—indeed, they are pretty much going ahead anyway—but could proceed with less risk. By sequencing the changes, the risks posed to patients can be lessened and the prospects of delivering the Nicholson challenge increased.
While other parts of the Bill bed in and foundation trusts can be regulated and registered as far as possible, it seems to me that May 2016 is the right time to implement Part 3 of the Bill. At some point in this Bill, the Government had set that date for getting foundation trusts set up, as far as they could be. That will be when all the other work has been done and is bedded in, and has perhaps built up some support with less fear and hostility than it does at the moment. I beg to move.
Lord Clement-Jones
My Lords, I am afraid that I cannot agree with the noble Lord, Lord Owen, as regards supporting the amendment. However, I appreciate that the noble Baroness, Lady Thornton, has adopted a much more emollient line on Amendment 300A, is not making a full frontal attack on the whole Bill and is looking simply at Part 3. There is certainly an argument to be explored in what she had to say but I cannot understand the logic of why, of all the parts of the Bill that she has talked about today, she is focusing on Part 3. I find it extraordinary that throughout the debates that have taken place on the Bill the Opposition have refused to accept that the National Health Service Act 2006 introduced price competition into the NHS. If Part 3 did nothing else but plug some of the competition problems in the 2006 Act, I would support it.
Baroness Thornton
Would the noble Lord care to tell me to which part of the 2006 Act he is referring because, according to my recollection of the Act, it does not mention the word “competition” anywhere?
Lord Clement-Jones
My Lords, that is precisely the point and that is precisely why the Labour Government were avoiding any argument because that is where the big loophole lies. Any competition lawyer will tell you that that was the point where EU competition law started to bite in the NHS. That is a fact which you cannot deny. The establishment of independent treatment centres constituted a major introduction of the private sector into the health service by the Labour Government. That process was far more unregulated than it will be in the future under this Bill. There were major flaws in the 2006 Act which have never been fully acknowledged by the Labour Party throughout these debates. The noble Baroness’s speech could have been written three or four weeks ago. The Opposition refuse to accept the value and benefit of the amendments that have been made to Part 3 just in the past two weeks. I will not adumbrate them all. I refer the Opposition to the House of Commons paper that has just been written which sets out in great detail something like 2,000 amendments that have been made to the Bill since it started its passage through the House of Commons. We have had Future Forum, we have had 1,000 amendments tabled in this House alone and we have had changes to the Competition Commission’s involvement.
Baroness Thornton
What is the noble Lord’s answer to the question which I put? I was not attacking him and his party. I realise that he has to attack; that is his method of dealing with issues. That is a shame as I have from time to time tempted him not to do so. However, does he accept what the noble Lord, Lord Owen, said about the hundreds of thousands of people and professionals who are fearful of this Bill? Attacking me as much as he likes will not alter that fact.
Lord Clement-Jones
My Lords, I really enjoyed the noble Baroness’s intervention. Today’s news about the change in attitude of the Royal College of General Practitioners shows that we have reached a genuine watershed. It may not have changed its mind absolutely, although it appears that membership pressure is being applied to the leadership of the royal college, but this is a real watershed whereby the acceptance of the fact that the Bill is going through is changing hearts and minds—not just minds but hearts as well. I am far more optimistic than the noble Lord, Lord Owen, because I believe that the other royal colleges will follow suit. They are actually looking at the substance of the Bill, not at some of the alarmist propaganda being put out. They are considering how mergers between foundation trusts will be regulated, how Monitor will do its duty and the additional powers that Monitor will have following consideration by Future Forum and Members of this House. They are also considering the impact of EU competition law following the Pepper v Hart statement that was made the other day. They are looking at the substance, which is exactly the way to look at the Bill. I believe that Part 3 is one of the most valuable parts of the Bill. I did not believe that it was acceptable to start with. That is precisely why I put down amendments in Committee and on Report. I am very pleased to say that it is much improved. The Bill should not be held up because of Part 3. In fact, it should be celebrated because of Part 3.
Baroness Thornton
Surely the Co-operation and Competition Panel still exists, will continue to exist, and can deal with any competition issues that are raised—as it already does.
Earl Howe
My Lords, the proposal that we have made in the Bill is for the Co-operation and Competition Panel to be part of new Monitor. If the noble Baroness’s amendment runs a coach and horses through those new arrangements, they are clearly very seriously destabilised.
Part 3 provides for a comprehensive system of regulation, covering all providers of NHS services and so protecting all patients whenever they use the NHS. The amendment would mean that patients using services supplied by the independent sector, social enterprises or charities would continue to be denied those protections. The protections would not, for example, apply to the 500,000 people in Hull and the East Riding of Yorkshire who receive NHS services from the City Health Care Partnership, a community interest company established under the previous Administration. The partnership offers a range of community-based treatments as well as early interventions to help minimise the need for acute care in hospital and promote healthy lifestyles. Monitor does not currently regulate the partnership, because it is a social enterprise.
Part 3 will extend equivalent safeguards to protect patients’ interests, irrespective of who provides their treatment. That is a huge step forward. For the first time, there would be regulation to protect patients from the risk that poor management decisions may put essential NHS facilities and continuity of services at risk. By contrast, the amendment would perpetuate the situation whereby such protection exists only where patients receive essential services from foundation trusts. This would not recognise the nature of our NHS as a comprehensive service delivered by a diverse range of providers.
As well as providing for comprehensive regulation, Part 3 provides for effective regulation that will benefit patients by better enabling positive change. The noble Baroness mentioned the Nicholson challenge. Change in service delivery will play a vital role in achieving the Nicholson challenge of realising up to £20 billion of recurrent productivity improvements in the NHS, for example by providing older people and those with long-term conditions with more integrated care outside hospitals.
Part 3 will enable such change by empowering clinical commissioners to decide how best to improve services and when, where or, indeed, if to use competition as a means to that end. The amendment would leave no provision for sector-specific rules of this kind. Let me explain what that would mean. It would mean that clinical commissioners would face continuing risk of legal challenge whenever they decided to secure services without competition. It takes little imagination to see how that would stifle enthusiasm for clinical commissioning and potentially prevent the sort of innovative, integrated solutions needed to meet the demands of caring for an ageing population.
Part 3 would also enhance the NHS’s ability to deliver positive change by improving the current pricing system. Improving the pricing system is important for three reasons: to strengthen incentives for improvement, to enable integration and to remove incentives for cherry-picking. Part 3 will establish a transparent, legally enforceable pricing system that rewards providers for treating NHS patients. Money will follow the patient, and providers will be paid a fair price for treating complex cases. Again, this is central to the Nicholson challenge. Reform of the tariff in a systematic way will encourage service redesign and better integration. The current system, under Department of Health control, has, I am afraid, often failed to achieve these aims. For example, although foundation trusts should have been paid for every NHS patient treated, that has not always been happening. There have been unacceptable levels of cross-subsidy, and prices for complex cases have sometimes been woefully inadequate.
These and other problems have been highlighted by the royal colleges and are well documented, including in the recent report by PricewaterhouseCoopers. However these are also complex issues that will take time to solve, and as the noble Baroness, Lady Thornton, herself has said, it has taken time and is likely to take time. Therefore time is of the essence. The NHS cannot afford further delays. For all of these reasons, there is a clear, compelling and urgent case for moving forward with Part 3 of the Bill. I hope that I have been able to able reassure noble Lords exactly why it is that we need it.
Baroness Thornton
I thank the noble Earl for his, as usual, extremely expert and very technical response, and I think that he completely missed the point. He did not address the risks that I mentioned all the way through the Bill, the risks that are contingent on implementing so much change so quickly and simultaneously. We will be back here very soon, I suspect, when we will be trying somehow to manage and mend.
I want to make just one or two remarks and will not keep the House very long on this matter. I would like to read to the House a Motion that Liberal Democrat MPs have tabled in the debate that is going on in the Commons right now. Both ends of this building are, as we speak, engaged with their concerns about the Bill. In seeking to amend the Labour amendment in the other place, colleagues of the noble Baroness, Lady Williams, and the noble Lord, Lord Clement-Jones, have said that they decline,
“to support the Bill in its current form”,
and they call for,
“an urgent summit of the royal colleges, professional bodies, patients’ organisations and the government to plan health reforms based on the coalition agreement”.
Lord Clement-Jones
Would the noble Baroness like to say how many Liberal Democrat MPs have put their name to that particular Motion?
Baroness Thornton
It does not really matter. Five of his colleagues have put their names to it. The point I am making to the noble Lord is that I agree with them about the way forward. It echoes very much what the noble Baroness, Lady Williams, was saying about recognising the disquiet, hostility and fear that exists towards this Bill, particularly this part.
At the end of the day, the Royal College of General Practitioners and the other royal colleges, trade unions, nurses and doctors are the people who will save our NHS, whatever the Government have decided to do to it. They are the people who will actually deliver the healthcare. That is what the royal college of GPs is saying now. It did not say that it resiled from its position about this Bill; not at all. It is acknowledging that, along with the nurses and everybody else, it will deliver this Bill. It will put patients at the heart of the health system. I think that we should all pay tribute to that and be reassured by it.
The noble Lord, Lord Newton, said that mergers will still proceed. They will still proceed regardless of whether this amendment is agreed. However, he also said that good people leave when there is disruption in the health service. That is very true. They are leaving in their droves. We are losing hundreds if not thousands of good people from the National Health Service because of the past two years, the White Paper and the Bill.
I thank the noble Lord, Lord Crisp, for his remarks—I think he was very wise—and the noble Baroness, Lady Williams, for hers. She is quite right. I am flattered that she took my remarks seriously, because this is not about wrecking the Bill. I did not tackle any of the policy issues that the noble Earl chose to stand up as Aunt Sallies and then knock down. When I introduced the amendment, I said that this was about doing things in an orderly fashion, in a way that would help to save our NHS. That is the point. The noble Earl did not tackle any of the risks that I raised about how to deliver the Nicholson challenge simultaneously with all the other changes in the Bill. In fact, he went close to saying that we have gone too far anyway to stop that. I was not convinced by his remarks about the risks and how they might be mitigated. We need time to work on this. We need time to get support for it, if it goes through. The amendment allows us to do that. I wish to test the opinion of the House.
Health and Social Care Bill
Baroness Thornton Excerpts(12 years, 8 months ago)
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“(1B) Annual proper accounts and proper records must be separately prepared and kept which separately detail the income and expenditure derived—
(a) from private charges, and(b) in relation to the provision of services to NHS patients.(1C) “Private charges” means charges imposed in respect of goods and services provided to patients other than patients being provided with goods and services for the purposes of the health service in England.”
Baroness Thornton
My Lords, I start by wishing everybody in the Chamber a happy International Women’s Day.
We turn to the discussion about the private patient cap. We have three amendments in this group, and I will talk to each of them.
Amendment 218A seeks to ensure that proper information is available on private patient income—that is, more than just the final line of total income. This is relevant to ensure that there is no possibility of cross-subsidy from the NHS to the private sector, either directly or by some accountancy magic. There needs to be absolute clarity. As we see new foundation trusts emerge that are neither mental health nor acute-based trusts—ambulance trusts, for example—the issues may be different but the need for transparency and accountability is just the same. This is important for openness and transparency and makes easier the kind of considerations that the governors need to apply. It is also a means of sending a signal that this activity is separate and, at least in some sense, subordinate to the principal purpose, which is to treat NHS patients.
The amendment seeks to delete the part of Clause 163 that brings in the 49 per cent test, which is a new way of making explicit the “principal purpose test” that all foundation trusts have to meet. I think we could all agree that the reaction to the figure of 49 per cent shows how strongly many believe that this is an obvious signal that there should be a great increase in private income that is neither anticipated nor desired. We know that in reality very few foundation trusts even get to 5 per cent, let alone 50 per cent, and there is no immediate prospect of them doing so. It is therefore difficult to see why the Liberal Democrats or indeed Mr Lansley would be so crass as not to see how the 49 per cent figure would be greeted.
There are several dangers with this late pre-Christmas addition to the Bill. It sends the wrong message. We believe that it may tempt bureaucrats and quangos charged with funding to say that some foundation trusts should get less funding as they have not done enough to push up their other sources of income, as we have seen with local authorities that rely heavily on other income. This would be totally wrong and an inappropriate target for the NHS. We also think that there is a danger that high levels of foundation trust income may exacerbate fears of queue-jumping and charging.
There is a serious argument that when private patient income is as the result of innovation and intellectual property, as we all wish to be the case, then high levels of benefit should be shared more widely rather than being kept in one trust. Since the NHS as a whole will have nurtured that opportunity, the NHS as a whole should benefit. A high-performing trust with little or no private income is certainly no worse than any other, and some may argue that it may even be better if its focus is in the right place—that is, NHS patient care. We suspect that this might be an attempt to shift foundation trusts from being NHS providers that focus on NHS patients to some sort of multinational health business, and that their success or otherwise will be measured against a new benchmark of how much private patient income they generate.
Of course we recognise the special place that some of our leading hospitals have in the high private patient cap that they need to reflect their partnerships with research and other institutions across the world. None of these amendments seeks to diminish that—indeed, quite the reverse—but those hospitals will only ever be a small number, and the amendments address the majority of foundation trusts.
In Committee I asked the Minister for any evidence of benefits to NHS patients. It seems that the Government were just relying on claims made by a number of foundations trusts eager to expand. One day perhaps a proper independent study will be carried out. Some would say that independent studies into claims that foundation trusts are more innovative or that they improve faster than non-foundation trusts have been disproved by evidence. The real test is how private income benefits NHS patients, and that is not the same as benefiting the organisation or the prestige of some of its senior staff. Removing the 49 per cent and relying on the principal purpose, plus the role of governors, is a much better route to providing the flexibility that is needed to change private patient income caps. Our Amendment 220C addresses that issue, and it has been the subject of much discussion. I hope that the misrepresentation of that amendment, particularly by the Prime Minister, will not be repeated here. We accept the need for flexibility, and were looking at this matter when in office.
Lord Marks of Henley-on-Thames
My Lords, this group of amendments is on the question of foundation trusts’ private income cap. All of us are agreed that the number of private patients and the amount of private income are important considerations for foundation trusts. The risks to the NHS of too much private income and private treatment in foundation trust hospitals are clear and perhaps do not need rehearsing at length. If too many beds in such hospitals are taken up with private patients, unless we are very careful, that may limit accessibility of those beds to NHS patients. The development of foundation trust hospitals with an unusually great proportion of private income may—again, unless we are very careful—threaten to undermine the commitment to reducing health inequalities that runs through the Bill. Emergence of “star hospitals” could threaten other hospitals in the region.
Finally, the threat of foundation hospitals being subject to EU competition law would have been greater if it were possible to have foundation trust hospitals a majority of whose income was private; that, at any rate, is our view. This is one of the principal reasons for the cap on caps, by which the principal purpose of foundation trust hospitals can only be fulfilled if more than half of foundation trusts’ income is NHS income. That is the so-called 49 per cent.
I say to the noble Baroness, Lady Thornton, that the only reason that that majority provision can be said to send the wrong message is that, sadly, some in her party have taken to the airwaves to say that there is a hidden agenda to the Bill by which the Government seek to make national health foundation trust hospitals have 49 per cent of their income from private patients. There is no such hidden agenda. Frankly, it has not been responsible politics to raise people’s fears by going around the country suggesting the contrary.
Baroness Thornton
Does the noble Lord think that it was necessary to put 49 per cent in the Bill? Why did the Government have to put a percentage in at all? Does he think that the communication issues, as it were, around this were handled very well?
Lord Marks of Henley-on-Thames
My Lords, on these Benches we take the view that it was sensible to include this provision. The advice that we have is that the risk of the application of competition law is reduced by ensuring that the majority of income for NHS foundation trust hospitals will always be for the purpose of treating NHS patients. It is not an absolute guarantee but it is a sensible risk-reduction exercise and it was put in for that purpose. There is no point in taking a risk unnecessarily. The communication problem has frankly been the result of the efforts of opponents of the Bill, partly in the party of the noble Baroness, in stressing the 49 per cent and suggesting that it is the purpose of the Bill, which, as I say, it is not.
That is not to say that private income in NHS foundation trusts is bad. The Labour Government recognised that throughout. In her speech, the noble Baroness herself very properly recognised it. Private income represents an opportunity for foundation trusts to attract innovation, to buy new and expensive equipment and to develop world-class centres of excellence. We recognise and applaud those features of private income. However, when tabling Amendment 220B, we were concerned that there should also be an individual arrangement for foundation trusts by which individual limits would be subject to agreement with Monitor.
Earl Howe
With respect to the noble Lord, perhaps I may point to a later group of amendments in the name of my noble friend Lord Phillips, which gets to the heart of that question. I do not think that the noble Lord’s question is directly related to the private patient income cap but, if I may, I should like to cover the answer to it when we reach the later group.
Baroness Thornton
This goes back to the maths, which partly relates to the question that I asked the noble Earl earlier. I think that the Minister and his colleagues may need to look at what his proposals actually say about the proportion. His amendment refers to 5 per cent, and I am not sure that that is not a very tiny amount. I do not want it to be a particularly big amount but I am not sure that the Bill says what the noble Earl says it says. That is the clarification that I need.
Earl Howe
I shall gladly seek clarification and, if I have misled the noble Baroness, I apologise. By the time we reach the end of the debate, I shall have made doubly certain that what I said was correct. I hope that the approach that I have just laid out will allay noble Lords’ concerns, subject to any clarification that I am able to offer the noble Baroness. I am now told that I was absolutely right in what I said.
One thing that these arrangements may well do is nurture the working relationship between directors and governors. I think that they would help to ensure that directors worked collaboratively with their governors to develop non-NHS activity in the best interests of NHS patients. A planned increase of 5 percentage points or more in one year would be a very significant increase in non-NHS income for any foundation trust. Such an increase would certainly be due to a major development becoming operational, such as a new private patient facility. Requiring governors to vote on such a significant development strengthens directors' accountability to their local communities. However, I take the point made by the noble Baroness, Lady Murphy, about confidentiality. In all of this, we should be aware that the strengthening of the governors' oversight in this way places increased responsibility on the governors to maintain an appropriate level of confidentiality while a new project is initially developed. I would expect the directors and governors to ensure that a foundation trust's constitution would protect that.
Earl Howe
My only frustration was that I was getting to what my noble friend wanted me to cover but she did not give me the chance to do it. Otherwise, I am more than happy to take questions from noble Lords on points of clarification.
I was explaining that governors, as representatives of local communities, will hold directors to account for ensuring that non-NHS activity does not significantly interfere with the foundation trust’s principal legal purpose, which is to provide NHS services. Our proposals strike the right balance between the powers of the directors and the responsibility of the governors.
The answer to my noble friend’s point, and that of my noble friend Lady Williams, is that Monitor will publish guidance for NHS providers on the requirements it sets for them to maintain the continuity of NHS services. We fully expect this guidance to cover conditions for foundation trusts relating to the need to ensure that the continued provision of NHS services is not put at risk by non-NHS activity. As the House will know, foundation trusts will be required to demonstrate how non-NHS income contributes to the foundation trust’s delivery of improved NHS services. In particular, if a foundation trust is increasing its non-NHS income by more than 5 per cent of its total income in a year, we will expect Monitor in every instance to review whether there is any cause to intervene in order to safeguard the ongoing provision of NHS services. This will be in addition to the required scrutiny and approval by the foundation trust’s governors. I hope that fully reassures my noble friends that this matter is not just a question that will be looked at within the confines of a foundation trust. It will have wider exposure than that.
I am afraid I am going to disappoint the noble Baroness, Lady Finlay, not as regards her amendment, which she did not speak to, but as regards Amendment 220C. The problem with it is that it would give Monitor the discretion to agree private income caps for foundation trusts. It would also retain the current cap and, as I have indicated, we think that the cap is unfair and has definitional complexities. That is an undesirable road to go down. It would burden foundation trusts with a governance regime that would be bureaucratic, costly and at odds with a foundation trust’s ability to manage itself.
Requiring governors to vote on any increase to their trust’s private patient cap, and therefore any increase to non-NHS income, would unreasonably inhibit the board of directors’ ability to manage its organisation. We surely do not want foundation trusts being run by boards that are constantly requiring votes by governors. The proposal in Amendment 220C would also require a majority vote by the members of a foundation trust for any increase to the trust’s private patient cap. That is a completely misguided approach. It would undermine the authority of the governors. Governors represent the members, the majority are elected by the members, and they should be allowed to get on and fulfil their responsibilities.
Securing a majority vote by members would also be very expensive. Many foundation trusts have several thousand members. Do we really want scarce NHS resources being spent on polling members about any increases to non-NHS income? I gently ask noble Lords opposite to think again about that.
Finally, Amendment 220C proposes that Monitor should be required to approve any increases to private patient caps beyond 5 per cent. My objection to that is that it would undermine foundation trusts’ autonomy to manage themselves. Directors and governors are better placed than Monitor to decide what is best for their organisation. Monitor’s involvement could also dissuade foundation trusts from pursuing innovative approaches if they are required to go through an external assessment and, in effect, a second approval process.
The central point is this: Part 4 has been built on the experience of what foundation trusts know will work. It represents the opportunity to realise what value foundation trusts can bring to the NHS. It will enable them to develop as responsive, transparent, autonomous and accountable bodies. Removal of the private patient income cap is about foundation trusts making the most of the opportunities they have to earn additional income for investment in the NHS. It is precisely why many NHS leaders and clinicians wrote an open letter to this House urging support to remove the cap. I hope that what I have said will reassure noble Lords that we have the right checks and balances in place while also giving foundation trusts the freedom that they need and have asked for. I also hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Thornton
I thank the Minister for those remarks. I might be able to make him happy at least in one or two respects. This has been an interesting and useful debate, but I would like to start by making two comments. The first is about the remarks made by the noble Lord, Lord Marks. I know that he and his colleagues have been frustrated about the interpretation that has been put on the 49 per cent. The noble Lord spoke about that being there to mitigate risks. The only point that I would make to him and his colleagues is that the opportunity to mitigate those risks was there earlier this week, and they did not take it.
I would also like to apologise to colleagues on the Cross Benches if they have found the adversarial style in this part of the Bill unhelpful. On these Benches, it partly stems from our very grave disappointment that we have not managed on Report to protect the NHS in the way that we felt was necessary. I am afraid that those arguments are political arguments and the arguments that we have had to have. I put that on the record. I do not apologise for the fact that they have been political, but I apologise to my colleagues that sometimes they have not been entirely comfortable with that.
Lord Low of Dalston
My Lords, I cannot speak with anything like the authority of the noble Baroness, Lady Finlay. Few of us can. The noble Baroness, Lady Massey, has obviously been working off the same brief that I have been looking at, so there is little that I can add to what she said. However, I was struck by the research findings that she told us about, which make clear the lack of attention that is paid to the involvement of children. I note also that there were concerns expressed around the involvement of children in patient and public voice mechanisms in the NHS. These concerns were reflected in the report of the Future Forum. Therefore, I think there is every reason to make the involvement of children explicit on the face of the Bill.
Baroness Thornton
My Lords, we welcome the amendments. Anxiety has been expressed by children’s organisations on two fronts throughout the course of the Bill. One is that the fragmentation and reorganisation proposed in the Bill mean that the safeguarding of children’s health may be lost in some way. The second is that it is not clear that children’s voices will be heard, which is the subject of these two very modest amendments. I hope that the Government will accept them. I cannot see any reason why they should not.
Baroness Northover
I am very sorry if there was a conflict of timing. Obviously it is difficult to schedule all the various meetings. My noble friend Lord Howe has had 100 meetings on this Bill.
Baroness Northover
I am very sorry if that was the case. If it was the case all the way through, as the noble Baroness, Lady Thornton, indicates, perhaps it might have been an idea to feed that in.
Baroness Thornton
The noble Baroness might like to check with the Box. I informed the noble Earl’s office of the times of our group meetings at the beginning of proceedings. Meetings and seminars have clashed all the way through.
Baroness Northover
I am very sorry if that is the case. I would hope that we would be able to have other such meetings. As these arrangements are taken forward, it would be extremely useful to have people’s engagement. I was extremely glad that, even in such a clash, the noble Baroness, Lady Wheeler, and her noble friend were there.
The noble Lord, Lord Harris, should have received the letter about the amendments, but I gather that he thought he had not. A letter and briefing notes were sent to all Peers when the amendments were tabled and a full narrative of local healthwatch policy has been published on the Department of Health website. If the noble Lord has not seen the letter then I will feed that into the department to make sure that he receives this information so that he has it at his fingertips when he is contacted late at night by people who email him with concerns.
As I have mentioned before, it is very important that the local healthwatch seeks out views right across the area. It is an important factor in this arrangement that the local healthwatch will have a seat on the health and well-being board. I hope that that will help to reassure people of the influence of local healthwatch.
The noble Lord, Lord Harris, talked about privatisation by so-called social enterprises, or he flagged that up as a concern. I emphasise that the Government are huge fans of social enterprises, which perform a range of roles across the NHS. Social enterprises such as Turning Point are, of course, extremely valuable. This is not about privatisation or competition, as I feel we have made very clear.
The noble Lord, Lord Harris, also referred to my noble friend Lord Howe. My noble friend’s concern in 2007 was that local LINks should have at least a basic structure of governance. That is precisely the concern that has led us to propose that local healthwatches should be social enterprises. The question of governance is quite separate from the question of whether or not an organisation should be statutory. Perhaps the noble Lord, Lord Harris, can enter dialogue with my noble friend Lord Howe on all of that in due course.
The noble Lord, Lord Harris, also asked about the possibility of there being more than one local healthwatch. Only one local healthwatch will be permitted for each local authority area. Each local authority will be able to make only one contract. If the local healthwatch wishes to subcontract some of its functions it can do so if the local authority permits, but the functions would still remain the responsibility of the local healthwatch. I hope that that clarifies the position.
Health and Social Care Bill
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“CHAPTER A1Principles of regulations of health and adult social care servicesPrinciples of regulation of health and adult social care services
Any person undertaking any regulatory functions under this Part or any functions in relation to services provided under this Part shall exercise all such functions based on the principles of universality and social solidarity.”
Baroness Thornton
My Lords, at last we come to the heart of the Health and Social Care Bill—Part 3. On 3 March, David Cameron was again telling his party about the need for greater competition and for the private sector to be encouraged. He has since justified his remarks by saying that it would have been easier not to have addressed the “invisible crisis” in the National Health Service in England. So, the “invisible crisis” which no one but the coalition Government seem able to see is the justification for fragmenting our NHS and opening it up to the private sector.
Our fundamental disagreement with the two parties opposite is that we think that competition should be used only within a managed framework and when it adds value. There has to be freedom to use non-competitive means and to deliver co-operation, collaboration and integration. For a moment we thought that we had a new recruit to the argument, when the Secretary of State announced that he had lost faith in competition. He was all for it in his landmark 2005 speech to the NHS Confederation, and he was all for it when he and his coalition allies launched this Bill with price competition and an economic regulator to promote competition. Now, however, it is reported that he is not so sure.
We on these Benches have not changed our minds. We share the view expressed by the noble Baroness, Lady Williams, that Part 3 should be dropped—a view which is shared by almost all the professional bodies, as well as the staff in the NHS. Even the evangelical GP commissioners are very aware of competition, and we note that the drive to force through any qualified provider for the operating framework for 2011-12 has just been thwarted—a highly embarrassing defeat for government policy.
Making competition central to the reform of the NHS, as opposed to making it one component of a more rational and comprehensive reform with collaboration and co-operation at its heart, remains dangerous. Even with the amendments already agreed, Part 3 is a mess; and even at this late stage the Government should think again and try to build on the very wide consensus that accepts a role for competition only when it adds value for patients.
The three amendments in this group—and the late arrival of a manuscript amendment in the name of the noble Lord, Lord Clement-Jones, which I will return to in a moment—seek to address fears that have been widely expressed about the way that competition will intrude into the NHS in ways that we do not want, and that do not benefit patients. The fear is supported by the legal advice of many experts, who foresee how the Bill will open up opportunities for legal challenge in ways that are not currently acknowledged.
We also see that some clinical commissioning groups are asking awkward questions about how autonomous they will be, and how free to do the job that they are given. We know that they will have to obey the rules set out for them both by the NHS board and by Monitor, but is it worse than that? Will they have to employ legal and consultancy support on a grand scale to avoid being challenged by the courts or by whatever the co-operation and competition panel turns into? Will fear of challenge deter the innovation that the Bill claims will be unlocked?
Amendment 178A is the best effort of many legal minds collectively to solve the problem of ensuring, so far as is possible, that commissioners can do their job. When one looks at the old NHS, or even at Wales, one sees that there is a very high degree of confidence that arrangements made between different parts of the NHS will not be subject to legal challenge on competition grounds. There are no contracts on the arrangements of which the law may get traction. However, even in Wales, if there is a decision that some aspect of provision may require non-NHS providers to be engaged, the full force of competition law applies. We all know that. We are part of the EU so these rules apply.
We know that health services can, as Part B services, get some protection from the full force of EU competition law. We believe that that protection will be chipped away over the years. Although procurement is simpler under Part B, it is still open to challenge if the basics around transparency are not met. If there is an intention to enter into a contract that is enforceable in law, you quite rightly have to go through the correct procedure. This is no different from what is set out in the current principles and rules, which, if you read them, make a lot of sense—as they should, because my Government wrote them.
The doubt and the opportunities for challenge will remain unless you construct in the legislation a framework to protect commissioners of the kind that we set out. Such an approach might not be perfect but it is the best that major brains can come up with. Since the coalition Government’s stated intention is that commissioners should be free, we should be able to see either their version or their legal advice—but we have not. The purpose is not to give unfair preference to NHS providers, or, indeed, to prevent third sector providers; the purpose is to free commissioners to make decisions that would have to pass the test of reasonableness in any event. Neither the third sector nor private sector providers would be any worse off, because they would still have to go through procurement procedures under any circumstances if a service went out to tender.
We think that Amendment 163BZZA, at the head of this group, and the following amendment are the right place to recognise this important principle from the outset. Amendment 163D follows a line that our Liberal Democrat colleagues have also explored, which is to define our NHS in a way that makes it clear that it is not a market despite what the Bill states.
The principle of social solidarity is used in the courts to help differentiate national social policy from the EU internal market and competition law. Social solidarity is therefore not an invention of the Labour Party, it is a term used in EU law. Social solidarity means “provided for that purpose as a matter of social policy” and as such may be considered by the courts to restrict the application of EU internal market law. All this has the same objective—to limit the scope for EU law to be applied in ways that do not help.
The noble Lord, Lord Clement-Jones, has, as it were, come to the party somewhat late by tabling his manuscript amendment. My colleagues and I have been in discussion with him and his colleagues, including the noble Baroness, Lady Williams, for many months, and we have shared with them our thinking on this matter. Indeed only last week I wrote to the noble Baroness, the noble Lord and their colleagues about exactly what we thought we should do together on Part 3. In that letter, as point one, I said:
“Your amendment 177”—
the manuscript amendment—
“and our 163 cover the same kind of point and should be combined”.
I am very pleased that this burst of late enthusiasm from the noble Lord, Lord Clement-Jones, has led to his agreeing that we should combine our amendments, and I am absolutely delighted to say that I would want to accept his amendment as an amendment to our amendment. I hope that noble Lords will have time to work out what exactly is going on here as the discussion progresses. Essentially, however, the noble Lord, Lord Clement-Jones, wants to amend our manuscript amendment with his manuscript amendment—which I am sure he will explain. I apologise to the House that this has been done as a manuscript amendment, but I am happy to report that we seek the same end. When the time comes, I will be very happy to accept the noble Lord’s amendment.
Our amendment does not oppose the use of competition, in its place, and will enhance the Bill. I also like its use of the term social solidarity, as that appropriately describes what our NHS is, and why and how it exists. I beg to move.
Amendment 163BZZB (to Amendment 163BZZA)
Earl Howe
My Lords, competition in the health service is a complex topic and very often, in my experience, misunderstood. It is important that we start with a misconception which several noble Lords have raised with me outside the Chamber and, indeed, in Committee. We need to be clear that competition already exists in the NHS and that the Bill does not herald its introduction. The last Government fully recognised that and encouraged it. The last operating framework which they put in place for the NHS stated:
“We shall enable this by … re-affirming our commitment to the ‘any willing provider’ approach for free choice of elective care, reducing the barriers to the entry of new providers”.
The previous Prime Minister, Gordon Brown, giving evidence to the Liaison Committee in December 2007, said that,
“the private sector … is expanding, will continue to expand and will be a lot bigger in the next few years than it is now”.
The Labour Party manifesto of 2010 said:
“Patients requiring elective care will have the right, in law, to choose from any provider who meets NHS standards of quality at NHS costs”.
The previous Government’s policy of increasing the use of competition is already benefiting patients. The recent report from the Office of Health Economics Commission on Competition in the NHS concluded that,
“evidence both from the UK and internationally suggests that quality based competition with prices fixed by a regulator can be beneficial, producing higher quality care at the same cost on average and, importantly, not leading to increased inequity in access to health care”.
Baroness Thornton
I thank the noble Earl for allowing me briefly to intervene. He has given some useful and selective quotes. Do not those quotes go on to warn very seriously about cherry picking?
Earl Howe
I think that the noble Baroness and I agree that cherry picking is highly undesirable, which is why this Bill outlaws it.
I do not see, as some do, competition and integration as polar opposites, nor are they mutually exclusive. I agreed entirely with the Future Forum when it said in its report last year:
“We have also heard many people saying that competition and integration are opposing forces. We believe this is a false dichotomy. Integrated care is vital, and competition can and should be used by commissioners as a powerful tool to drive this for patients”.
That is worth keeping in our minds.
In response to my noble friend Lord Clement-Jones, let me turn to competition law. I understand that some noble Lords want to prevent competition law ever applying to NHS services. That is to wish for the impossible. The question is not whether competition law should apply to the health service but how. That is why I agree with my noble friend that we must make sure that the NHS is insulated from the inappropriate application of competition law. In particular, we must ensure that clinicians are free to commission NHS services in the way that best serves patients’ interests and that there are no impediments to beneficial co-operation to increase integration, improve quality or reduce inequalities. Under our proposals, a series of protections will provide the sort of insulation against inappropriate application of competition law that my noble friend and others require. I hope that the House will allow me to set this out in a little detail.
Co-operation for the benefit of patients should not breach competition law. Article 101(3) of the Treaty on the Functioning of the European Union and Section 9 of the Competition Act lay down exemptions which apply if the wider benefits of an agreement outweigh its anti-competitive effects. On an individual basis, we would expect collaborative arrangements whose overall effect was beneficial to patients to meet the criteria in Article 101(3) and Section 9.
Competition law would be unlikely to apply to a wide range of NHS services. Some obvious examples are accident and emergency, trauma, critical care, maternity, specialist surgery and many others, particularly in remote or rural areas.
Monitor would support the NHS to understand where competition law does and does not apply. A key benefit of establishing Monitor as a sector regulator, with concurrent responsibilities under the Competition Act, is that it will be able to provide authoritative guidance to the NHS on where that law would and would not apply. The Government’s firm expectation is that Monitor would produce sector-specific guidance and address this question in terms of relevant examples, including models of integrated care and clinical networks, which would be updated in line with developments in healthcare practice. This guidance would help reduce unnecessary fear of legal challenge and uncertainty for both commissioners and providers.
Monitor could also provide informal advice in individual cases, building on what the Co-operation and Competition Panel does now. For example, that might include commenting on what types of collaborative arrangements and specific provisions within such arrangements are and are not likely to comply with the competition rules. Any such advice would be without prejudice to any future decision that Monitor might have to take to enforce the provisions of the Competition Act. However, like the guidance, such advice would provide reassurance to providers and could help them to avoid unnecessary legal costs.
If and when it became appropriate, Monitor could make the case for block exemptions. That would mean that the Competition Act would not apply to specified arrangements for the provision of NHS services. At this stage, it is not clear whether or where block exemptions might be appropriate, but an example of the sort of arrangement that could potentially be covered is clinical networks. In any event, this protection would remain available and there is no doubt in my mind that Monitor would be better placed than the OFT to determine when and where it might be needed.
In these and other areas, competition is unlikely to be effective in providing services on the scale or in the way that best promotes patient's interests. The NHS often acts to promote social objectives to ensure that patients receive the level of service that they could not afford or which private companies might not find it profitable to provide. Applying competition law in such contexts makes little sense and such activities are likely to fall outside its scope.
Next, commissioners would not have to create markets against the interests of patients. Clinicians will be free to commission services in the way they consider best. We intend to make it clear that commissioners will have a full range of options and that they will be under no legal obligation to create new markets, particularly where competition would not be effective in driving high standards and value for patients. As I have already explained, this will be made absolutely clear through secondary legislation and supporting guidance as a result of the Bill.
The Bill already creates duties on commissioners to secure continuous improvement in the quality of services, reduce inequalities and promote integrated services. The Government intend to complement these by making it explicit through regulations under Clause 73 of the Bill that commissioning decisions must be in the best interests of patients, those decisions must be transparent and commissioners will be accountable for them. We would expect the NHS Commissioning Board to maintain guidance to support commissioners in these decisions, based on the available evidence and drawing on academic research.
It is worth reflecting that without Part 3, the main legal provision on commissioning NHS services would continue to be the general procurement regulations for public bodies introduced by the previous Administration in 2006. The application of that law to the NHS is unclear. Without the provision that we intend to include in regulations under Clause 73, commissioners would continue to face risk of legal challenge when they decided not to open services up to competition, even where the decision was in the best interests of patients. That uncertainty is unacceptable.
Finally, the Bill would prevent private companies taking over NHS trusts or foundation trusts. There has been a lot of misconception about that. I assure the House today, unequivocally, that that could not happen.
I now turn to the opposition amendments. Amendment 163D raises the application of competition law to the provision of NHS services. Its intention is to ensure that competition law does not apply to the provision of NHS services. However, as I have said, there is a basic point to make here: it is not within the gift of this Bill to secure that. It is like saying that if you pass a law saying that black is white, that is what will happen. However, what I agree on absolutely is that we need to protect the NHS from inappropriate application of competition law and its undesirable effects. Equally, as I said earlier, we do not want to leave patients unprotected from potential abuses by providers. That would be the effect of the amendment and I hope that the noble Baroness will reconsider her wish to move it.
I also referred to the fact that this Bill would provide for clinical commissioners to decide how to secure NHS services to best serve the interests of their patients. Hence, I do not agree with Amendment 178A.
The NHS has always been a comprehensive service, free to patients, with treatment and care based on clinical need and delivered through a wide range of diverse providers. That includes GPs, dentists, independent sector providers, NHS trusts, foundation trusts and a range of charities and social enterprises. Taken together, these providers operate across the various sectors of healthcare, including the community and mental health. They provide a range of services, including vital specialist services to people in lower socioeconomic and minority groups, and people with rare medical conditions.
Amendment 178A does not acknowledge that reality at all. Instead, it seeks to create an arbitrary and unnecessary presumption in favour of NHS and foundation trusts which would likely act against patients’ best interests. For example, the amendment would make it more difficult for a clinical commissioner seeking to manage long-term conditions such as diabetes or COPD in primary care and in the community—involving GP practices or social enterprises—instead of sending those patients to hospital. That could prevent choice for patients in a very crucial area. It could also prevent choice in end-of-life care by restricting the extent to which organisations such as Macmillan and Marie Curie were able to extend the services that they delivered for the NHS. It could prevent charities such as Turning Point transforming—
Baroness Thornton
My Lords, has the noble Earl actually read the amendment? Paragraph 6(c) says,
“the need to commission health services in a way that promotes the integration of health and social care services”.
Will the noble Earl accept that he just said that it does not say that? It says that; it is there.
Earl Howe
My Lords, we are talking about Amendment 178A. I disagree with the noble Baroness’s reading of it. It is quite clear what it says. It is geared towards making the NHS the preferred provider. The noble Baroness shakes her head. If I have misunderstood and that is not her intention, I will obviously retract that.
Yet the amendment would increase the risk of commissioners facing legal challenge under procurement law. As the noble Baroness pointed out in 2010,
“procurement must be transparent and non-discriminatory”.—[Official Report, 9/3/10; col. 137.]
Amendment 178A would be a retrograde step. I ask the noble Baroness to withdraw it, as well as the other amendment in this group.
Baroness Thornton
My Lords, I apologise to the House for the confusion that has just reigned. I blame the Liberal Democrats for that, but then I would, wouldn’t I? The noble Lord, Lord Clement-Jones, decided to seek to amend my amendment. Then, when I said that I would like to accept his amendment, he refused to allow me to do so. What can a girl do when she has been rejected in this way? My Amendment 163BZZA is the lead amendment in the relevant group. It is very disappointing that the Liberal Democrats did not feel confident enough to vote for their own amendment, again. They seem to be making a habit of that.
Lord Clement-Jones
My Lords, perhaps I may intervene. Has the noble Baroness received legal advice on the benefits of a Pepper and Hart-type statement versus the kind of amendment that her party has tabled, its effectiveness and the width of the statement made by the Minister?
Baroness Thornton
The noble Lord, Lord Clement-Jones, has a very legalistic manner of addressing the House. Of course I understand exactly what was happening there, and I understand exactly what the deal was between his Benches and the Minister, which was that the noble Lord would get a strong statement in response to his amendment. Is he satisfied with it? If so, he is wrong. That strong statement means that the protection comes when legal action starts to take place. I would prefer the protection to be in the Bill. That is what these amendments are about—protecting the NHS. We disagree about that and the noble Lord knows it. If I may address the Liberal Democrat Benches, it seems likely that the noble Lord’s spring conference will agree more with me than with him. However, that is his party’s problem for this weekend—not ours, for now, on the Bill.
I should like to make two further remarks on the substantive amendment and what the noble Earl said. He suggested that we were making the procurement rules more complex. We were not; we were making them simpler. The NHS deserves protection in the Bill. The Liberal Democrats have made a deal that sells the NHS short, as happened on the issue debated last week on conflict of interest. That is a great shame.
Lord Clement-Jones
I apologise for interrupting the noble Baroness, but does she realise that the more she attacks us, the more chances we have of a very positive outcome at our Gateshead conference?
Baroness Thornton
I was not actually attacking the noble Lord; I was just speculating about what might happen. I feel for Liberal Democrat Peers when they go to their conference this weekend, because they may be in for an uncomfortable time. However, that is absolutely not my business. I will just witness it with interest. It is time that we moved on and I beg leave to withdraw the amendment.
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, this is a large group of amendments led by our amendment. In fact, we have only two amendments in the group, but they address issues regarding Monitor. The amendment suggests that Monitor should continue to be the independent regulator of NHS foundation trusts.
Our Amendment 167B would remove Clause 63. It might be easier if I were to explain why that amendment is there. It is not that we are necessarily opposed to Monitor’s functions as a regulator of social care, but something as important as this matter should be done not through regulations but in a proper manner through primary legislation. That is the only reason why that amendment is there and we seek the Minister’s views on it.
Returning to the amendment, Monitor must remain as the independent regulator of foundation trusts. We do not believe that now is the time to relax oversight of foundation trusts. We can be confident that the Francis inquiry will have views on this. We support trusts becoming foundation trusts, but only half of trusts have achieved foundation status, and the issues facing those unable to achieve the required standard remain. There is yet another drop-dead date; my Government had a drop-dead date and that did not work; we do not think that another drop-dead date will change that situation.
We must also be cautious in overclaiming the merits of the foundation trust model, because time will tell. Monitor has an important role in that, which should continue, although we do not support the need for an economic regulator for our NHS, because we do not see healthcare as a market. I do not intend to rehearse those arguments, but patients are not consumers, and choice for patients is not shopping. Economic regulation and privatisation are certainly linked in the view of those who want to break up our NHS—many of those who want the Bill in the private sector.
The Bill is radical, not evolutionary. We believe that the Government should have taken a different approach, but it is important that Monitor continues to carry out its role. It should not be asked to do two roles: those of the foundation trust regulator and the economic regulator for the NHS. We think that that presents Monitor with an insurmountable conflict of interests and that it lacks the capacity and capability to carry out the enhanced role. I hope that the Minister will accept our sequencing idea—I freely confess that it was stolen from the noble Baroness, Lady Williams, who first used the word sequencing— which is to allow Monitor to become an economic regulator only after it completes the job of authorising all those bodies which will get foundation trust status after a few years’ oversight. We believe that Monitor should take on those new duties and roles only at that point, May 2016, which is in the Bill.
Even for supporters, there is a realisation that Part 3 is a direct challenge to the idea that local commissioners will be free to shape local services as they see fit. The more we have patient choice, the more we have any qualified provider, the more regulatory enforcement around competition, the less need for commissioners. That is the central irony of the Bill. Any commissioner needs to read Clauses 19 and 73.
I think we need a discussion about Monitor’s roles and functions. I will wait until I sum up to comment on other noble Lords’ amendments in the group. I beg to move.
Earl Howe
Nor have I, which is why I listed earlier some prime examples of collaboration. Clinical networks are a prime example of collaborative behaviour which is clearly in the interests of patients. The noble Baroness is asking me to think of examples in my head of collaborative behaviour in the NHS that does not advantage patients. I cannot think of any, which is why it would be hard for Monitor to find fault with collaboration where it has clearly been designed to improve patient care.
Baroness Thornton
In response to that last remark, it depends on whether Monitor decides it is collusion or collaboration. That is the key point. We suggested that that was a problem right at the very beginning of the Bill—how you distinguish between collaboration and collusion and what you do about that. I do not think we are any closer to finding the answer.
I turn to remarks that were made during the course of this very useful if diverse debate. I want to take one moment to say something to the noble Baroness, Lady Williams, and her colleagues and to the noble Baroness, Lady Murphy, about the fact that they feel misrepresented in social and other media. Indeed, as politicians it goes with the territory that you may be misrepresented from time to time. I have the greatest respect and admiration for the noble Baroness, Lady Williams, and she knows herself that that is where you are when you are in politics.
However, the noble Baroness herself wrote in an article in the Guardian on 13 February about dropping the chapter on competition, and in a letter that the noble Baroness and her leader wrote to their own MPs and Peers, they set a high bar for how Part 3 of the Bill might be made safe. It is just and proper that everybody will be looking at the noble Baroness and her friends to see and test whether they have succeeded and met their own aspirations. At the moment, I think that that is open to question. I do not think that it has been achieved. I know that that might be painful, but that is the case.
We have had some thoughtful amendments and contributions. As usual, the noble Baroness, Lady Finlay, in her amendment and questions put her finger on a very important issue that the Bill needs to address even at this late stage. I had a great deal of sympathy with the amendment of the noble Baroness, Lady Cumberlege. I rather hoped that she would get a more positive response than she did and I am sorry about that.
Baroness Williams of Crosby
The noble Baroness is perfectly entitled to say what she had said. I accept that fully and I am sure that she said it in all sincerity. But the difference between us is that I believe that the Government have moved a long way, particularly because of the Minister. I believe that that culmination of changes will enable us to bring about an improved NHS. I may be proved wrong. I freely accept that I may be proved wrong. But I believe that the changes that have been made are so far reaching that we can make the NHS better than it is today. I know that the noble Baroness, who herself has been responsible in her attitude towards the Bill, would wish to see that, even though she may not think that this is the way to do it.
Baroness Thornton
I am not sure whether this is the way to do it. We disagree. I do not think that the Liberal Democrats have achieved it, but there we are. As the noble Baroness said, history will see who is right and who is wrong.
I am extremely pleased to see that the noble Baroness, Lady Meacher, has transferred her attention from the Welfare Reform Bill to this one. She is quite correct that it is impossible to stop the negative impact that has been observed in the studies that she referred to. She is completely right about that. This whole debate illustrates the problem: half of the Bill seems to be there to mitigate the damage that the other half does. What used to be, for example, a clear duty to co-operate—and it was a simple duty—is now dense and complex.
Turning to our Amendment 163B, I should like to say to the noble Baroness, Lady Murphy, that it does not rule out the economic regulator function. That amendment does not seek to do that, so I hope that the noble Baroness, with that reassurance, might support our amendment. We seek to clarify and put beyond doubt that Monitor should have that function. We seek to do it in the first part of the Bill. We want Monitor to keep its current role. We believe that there should be two bodies and that it is difficult for Monitor to do both jobs at once, but it is important at this point of this first part of the Bill that we make it completely clear. Where the Bill says that Monitor should be the,
“Independent Regulator of NHS Foundation Trusts”,
we need to make it completely clear that it will continue to do that job.
We are not trying to weaken the role of Monitor. We think that foundation trusts are facing huge risks and huge reorganisation. They need the support that Monitor will offer them. I suspect that the Francis report, as I said earlier, will indeed have something to say about the strength and importance of Monitor as a regulator of foundation trusts. We would like this to be in the Bill because it makes it completely clear that this is an important job that Monitor does and that it should keep doing that job for the foreseeable future. I wish to test the opinion of the House.
Baroness Thornton
“(5) An NHS commissioner shall be entitled to undertake a review (“a Commissioning Review”) of all or any part of the health services that the NHS commissioner considers are reasonably required in order to discharge its functions under this Act, and, upon completion of such a Commissioning Review, an NHS Commissioner shall be entitled to determine that the most appropriate way to deliver all or any part of such services shall be through the conclusion of arrangements with one or more health services bodies or one or more NHS Foundation Trusts.
(6) NHS Commissioners shall, when conducting a Commissioning Review, have regard to the following factors—
(a) the need for NHS services to be provided in a way that is economic, efficient and effective;(b) the need to commission services in a way that maintains or improves the quality of the services;(c) the need to commission health services in a way that promotes the integration of health and social care services;(d) the need for health care services provided for the purposes of the NHS to be provided in an integrated way where this will—(i) improve the quality of those services (including the outcomes that are achieved from their provision) or the efficiency of their provision, (ii) reduce inequalities between persons with respect to their ability to access those services, and(iii) reduce inequalities between persons with respect to the outcomes achieved for them by the provision of those services;(e) the likely future demand for health care services;(f) the desirability of patient choice.(7) An NHS commissioner shall be entitled, as part of any Commissioning Review, to seek expressions of interest from health services bodies or from NHS Foundation Trusts which may have an interest in providing such services, and shall be entitled to undertake such processes as it shall consider appropriate to determine which of such bodies is able most appropriately to provide any such services.
(8) A Commissioning Review and decisions made following a Commissioning Review to make arrangements with one or more health services bodies or NHS Foundation Trusts shall not constitute anti-competitive behaviour for the purposes of this or any other Act.
(9) The Public Contracts Regulations 2006 shall not impose any obligations on an NHS commissioner which undertakes a Commissioning Review or makes decisions to make arrangements with one or more health services bodies or NHS Foundation Trusts following a Commissioning Review.
(10) Regulations under this section shall not impose obligations on an NHS commissioner undertaking a Commissioning Review.
(11) The NHS Commissioning Board may, after consultation with Monitor, publish guidance to NHS Commissioners concerning Commissioning Reviews.
(12) The National Health Service Act 2006 shall be amended by adding the following after section 9(4)(r)—
“(s) An NHS Foundation Trust”.”
Baroness Thornton
My Lords, I would like to comment on the three amendments in the name of the noble Lord, Lord Clement-Jones, and then speak to the two amendments that we have in this group. They say that imitation is the sincerest form of flattery, so I am very happy that the noble Lord saw fit to take three of the amendments that we tabled in Committee and to make them his own. Those are Amendments 186, 187 and 188. That is fine by us. I understand that the Minister will be very sympathetic to these amendments and might accept them, which is probably just as well, as I would hate to embarrass the Liberal Democrat Benches any further by having votes on amendments that they have tabled and speak to but then do not support.
These three amendments would stop a review from happening. I know that the noble Lord, Lord Clement-Jones, and his colleagues need to tell us that they have won a great victory by getting the Government to concede on these amendments. Far be it from me to intrude on the coalition parties’ love-in, so to speak. When we tabled these amendments in Committee they were part of an overall, comprehensive change to Part 3 of the Bill. In many ways these amendments were part of the tidying up of our suite of amendments to effect radical change to and improvement of Part 3. We certainly support these amendments.
I turn to Amendments 196A and 196B, which stand in my name and that of my noble friend. We do not understand why the noble Lord, Lord Clement-Jones, did not also table those amendments as he is going to be very successful in having his amendments agreed to. In fact we think that there is no need to have any mention of the Competition Commission in the Bill. For the sake of completeness, we would have preferred those amendments to be included. Perhaps I may implore the Minister to accept them as well.
Earl Howe
My Lords, Amendments 196A and 196B, tabled by the noble Baroness, Lady Thornton, would remove the provision for adjudication if a significant proportion of those affected object to proposals by Monitor for methodologies to be used to calculate prices of levies to ensure the continuity of the central services or proposed licence modifications.
I am clear that we must have a process for adjudicating on Monitor’s proposals if a sufficient number of those who will be affected by them object; otherwise, in these circumstances, either Monitor would have no way of proceeding with disputed proposals or those affected would have no other way of disputing proposals other than by judicial review. Either way that would be unacceptable and could result in significant harm to patients, for example if a licence condition that Monitor proposed related to securing essential NHS services. For pricing methodologies, for example, the amendments would mean that Monitor could go ahead with its proposals even if sufficient numbers of those affected objected. The only way that providers, in the case of pricing commissioners, would be able to ensure that their concerns were taken into account would again be through judicial review. We need to ensure a fair and transparent system of pricing, securing competition on quality and not price, and removing incentives for providers to cherry-pick the services that they deliver or the patients whom they treat.
I am therefore clear that we should have a process for adjudication. I am also clear that the Competition Commission should undertake that role. It has other adjudication roles. The commission has experience of working across a range of sectors, on the basis that it does not necessarily have the knowledge which it needs about those sectors in-house. It would be free from political intervention in making these judgments. It is well respected by other regulators across the economy, for which it performs a similar role. In our earlier debates, some noble Lords expressed concern that there should be appropriate checks and balances on Monitor’s powers. The provision for adjudication by the Competition Commission creates one such check and balance. These amendments would remove it. For those reasons, I oppose Amendments 196A and 196B, and I hope that on reflection the noble Baroness, Lady Thornton, will withdraw them.
I turn to the Competition Commission’s role in reviewing how competition is benefiting patients in the NHS. After briefing myself, I came to the conclusion that the reviews will bring considerable benefit to the NHS because they will help us understand further what effect competition has on NHS services for patients. They will also increase Monitor’s accountability because they will consider how Monitor is discharging its functions. The commission will be well placed to conduct them because it is an independent body with a long history of performing such reviews across the economy. It is the body where the expert technical knowledge needed to perform this function already resides, and it understands and reviews how markets and regulation work in the best interests of people. That was why the provision was put in the Bill.
However, I listened to the points made this evening by my noble friends Lord Clement-Jones and Lord Newton. On earlier occasions my noble friend Lord Clement-Jones was quite vocal in expressing his views to me on this subject. I have some sympathy with the argument that prescribing reviews every seven years, as the Bill stipulates, may place too great an emphasis on competition. Greater flexibility about the timing and specification of reviews may be helpful. Therefore, I am clear that such reviews of competition in the NHS, when they happen, should focus on benefits to patients. On the basis that prescribed seven-year reviews may place too great an emphasis on competition in the NHS, and given the role of the Competition Commission, if it is the view of the House that Clauses 78, 79 and 80 should be removed from the Bill, I will not oppose Amendments 186, 187 and 188.
I turn briefly to the issues raised by the noble Baroness, Lady Hollins, on procurement in Surrey. The issue was raised earlier by the noble Lord, Lord Adebowale. I agree with her and with the noble Lord that social enterprises can and do play an important role in providing innovative, high-quality services, often to very vulnerable people. Turning Point is an excellent example. The key aim of our reforms is that patients should be treated by the best providers; that bureaucratic procurement practices should not frustrate this; and that it should be quality that counts. We will take all this into account when framing the commissioner procurement regulations.
On the example quoted by the noble Baroness, I understand that the requirement for the £10 million performance bond to which she referred was subsequently withdrawn and therefore played no role in the decision to appoint a preferred bidder. However, I will write to her with further details on this.
Baroness Thornton
Baroness Thornton
My Lords, we now move on to pricing. We believe that setting the national tariff is a matter of policy and that it should be set by a Secretary of State, not Monitor. That is the main thrust of these amendments. Amendment 201A is about setting the national tariff as a matter of policy. Amendment 201B proposes that regulations to the national tariff must state how the prices and methods were determined, that any proposed change to the national tariff will be subject to proper evaluation and testing, and that there must be evidence of consultation between the Secretary of State and Monitor. Amendment 201C states that the national tariff should not be allowed to vary in relation to different descriptions of provider. Amendment 201D states that where a commissioner of a health service receives an offer from a service provider who is licensed by Monitor at a price below the national tariff—I am sorry; that is my noble friend’s amendment. I beg his pardon. Then there are a whole set of amendments which seek to delete clauses—Amendments 211A, 214A, 214B and 214C—because if the Secretary of State is setting the national tariff, these clauses are unnecessary.
At present, the national tariff is set by the Department of Health, often in ways that are mysterious, probably less than optimal and without sufficient consideration of unintended consequences, and often without enough testing. Nevertheless, we remain firmly of the view that price setting is such a fundamental part of the system that it has to remain the responsibility of the Secretary of State and the Department of Health. We do not have an answer as to why you would give such a potentially potent policy lever to the regulator. I should be grateful if the noble Earl could explain that. Why keep price control with Monitor? I should be interested to hear what he has to say. I am sure that we would all agree that the key point is that we get tariffs right. We therefore seek to insert the need for proper consultation and transparency in the tariff-setting process. I beg to move.
Lord Davies of Stamford
My Lords, I shall speak to Amendment 201D in my name. I tentatively proposed this in Committee as a probing amendment. I bring it forward now much more seriously because I have been reinforced in my belief that this is a necessary amendment by everything that has been said. My belief has also been reinforced by the support of a number of colleagues, including explicitly by my noble friend Lord Warner, to whom I am grateful.
It has been clear from our debates that the Government’s intention is that there should be two price regimes in the NHS—one for services for which there is no national tariff and one constituted by the national tariff itself. Services that are outside the national tariff will be contracted for on the basis of a tender offer and good value for the taxpayer or customer. I have no quarrel with that, and the Government have clearly stated that they intend to achieve contracts on the basis of the right reconciliation of quality and price. I argued in Committee—and I am sure that I was right —that that constitutes price competition. The Government do not like the phrase “price competition”, but I am not interested in semantics or the party-political reasons that may lie behind their semantic choices; I am interested in the reality, which is that commissioning services on that basis is entirely rational, and I have no quarrel with it.
The problem arises in relation to the national tariff. The Minister set out the position clearly in his response to me on 13 December. He said,
“we want a system of fixed prices”,
and then stated that,
“the tariff would not be a maximum price”.—[Official Report, 13/12/11; col. 1229.]
In other words, the tariff could not be varied either upwards or downwards; it would be an immutable price. I regard this as extraordinarily irrational and perverse, and I hope that I can persuade the Government to think again. It has at least four problems.
First, if there is an immutable price, you may not be able to pay for certain services that are required and are of the quality necessary for patient outcomes. The Government have recognised that point at least. Indeed, Clauses 124 and 125 appear to address that because they make it clear that there is scope for an agreement between a commissioner and a provider to be approved by Monitor at a price above the tariff. The wording in Clause 124(5) and Clause 125(3) is identical, except for the words “approve an agreement” and “may grant an application”, and states:
“Monitor may approve an agreement”—
or “grant an application”—
“only if, having applied the method under section 116(1)(d), it is satisfied that, without a modification to the price determined in accordance with the national tariff for that service, it would be uneconomic for the provider to provide the service for the purposes of the NHS”.
That makes it clear that it is possible for the commissioner to pay more than the tariff in those exceptional circumstances, with the consent of Monitor, and of course I approve of that, but it is not possible for the commissioner to approve less. That is an extraordinary state of affairs.
I can quite understand why the Government do not want to write into the Bill that it will not be possible for a commissioner to accept a lower price. That would not make the slightest sense. It would be all over the tabloids in headlines. Instead, it is disguised in the language of parliamentary drafting as being a power that would exist only if it was uneconomic for the provider to provide the service for the purposes of the NHS. You can never argue that it is uneconomic to provide a service at a higher price. The amendments provide only for the circumstance in which the commissioner finds it necessary to pay a higher price than the tariff to secure the patient services which the commissioner is procuring.
That is the only one of the four problems raised by that approach to a national tariff which the Government appear to have addressed. The second is that in many cases, it may be possible to provide the same quality of service at a lower price, but the Government are excluding, a priori, from the beginning, outright, in principle, any possibility of that happening. That makes no sense. We and the Government surely agree that the NHS budget will always be under great pressure, that there must be financial discipline in the NHS, and that when there are opportunities to secure the same quality at a lower price it should be the obligation of commissioners to achieve that. My amendment does not go so far as to create an obligation—I was more hesitant than that—but at least there must be the possibility for commissioners, if they see an opportunity, to procure that service at a lower price and save money for the benefit of patients and the National Health Service as a whole.
The third and fourth problems created by government policy in this area are perhaps a little more subtle. The third, which I mentioned in debate in Committee, is that if you deny the possibility of bids coming in at a lower price for any given service, you deny the possibility of ever investigating or having insight into the process of price formation in that sector of activity. You simply do not know to what extent the prices you are working on—the prices you are accepting—contain an unnecessary level of cost and overheads, or the extent to which you are not getting a good bargain. In my view, you should not be sleeping at night if you are a commissioner and you do not know how prices are formed, whether you could be getting a better price and, if so, what that better price would be.
The fourth problem created by the Government's approach to this up until now— I live in hope that they may change it in the light of this debate—is that it dampens or may even be fatal to innovation in this area of the National Health Service. I think we are all agreed in principle that we should encourage innovation, but there is no point in any prospective provider spending time and money on developing a better approach to solving a problem or a new technique for diagnostics, therapy or what have you, which has the same quality and outcomes, or even better, which could be delivered at a lower price, because the price is fixed. You can only come up with the same price because you are not allowed to be given a contract if you tender at a lower price. That makes no sense, so I must press the amendment again.
I emphasise, as I did in Committee, that the amendment is in no sense prescriptive. It does not force commissioners to take the lowest price. There might be an argument for forcing commissioners to take the lowest price where quality remains the same, but I have come up with a much weaker amendment. It is purely permissive. It provides for commissioners, where they wish to and where Monitor approves—so there is a double check, a double brake on the mechanism—to accept a lower price. It is extraordinary that they are not allowed to do something which all of us in every other field of economic activity would feel to be the rational thing to do.
My noble friends on the Front Bench have made the point several times that there are many situations in which it would not be sensible to take the lowest price in an NHS context. One of them I described in some detail in Committee, so I do not need to go over it too much tonight. There is no doubt that in any field of economic activity where overheads or fixed costs are a high proportion of the total costs there is a temptation or opportunity for predatory pricing. If the fixed costs are a very high proportion of the total costs, then anyone who has the capacity to make a one-off offer can come in with an offer which may be at a substantial premium to variable costs and therefore very attractive to him if he has spare capacity. It would be much lower than the full cost and therefore very tempting but it might be very dangerous for the customer—the commissioner in this case—to accept because it might undercut and perhaps destroy the capacity on which he relies on a long-term basis. Clearly, no one is going to provide services at below full cost on a long-term basis. Therefore, there is always a danger of predatory pricing in healthcare and we must be alert to it. There is no question about that.
Earl Howe
I will be happy to meet the noble Lord to talk about that.
I was talking about the example of the Netherlands and Germany and was about to make the point that bodies of that kind can create a transparent and stable environment for pricing outside the influence of politics so that providers have confidence to invest and regulators can develop strong technical skills in setting prices at efficient levels. The Bill proposes that independent statutory bodies—Monitor and the NHS Commissioning Board—would collaborate to regulate prices. This will give commissioners a key role in price setting, whereas the opposition amendments would prevent this and would return control to Whitehall.
Monitor would publish national tariff prices based on a methodology subject to consultation where providers and commissioners could trigger an independent adjudication to ensure transparency and fairness. I am clear that we must have, as I said earlier, a process for adjudicating on Monitor’s methodology. Otherwise Monitor could just go ahead with its proposals, even if there were a whole lot of people affected by the proposals who objected and the only way that they could see those objections through to a conclusion would be through judicial review. The government amendments in this group ensure that the appropriate providers could trigger independent adjudication.
I am also clear that the Competition Commission should undertake this role. As I said earlier, it would be free from political intervention in making these judgments and is well respected as an organisation across the economy for the role it performs. The opposition amendments would prevent any of these benefits being realised. A key priority for improving the system is to expand its coverage so that more and more services are brought within scope. The previous Government failed to do this in line with their own published timetables, for example, regarding mental health services. The Bill would place duties on Monitor and the NHS Commissioning Board to secure the standardisation of service specifications to support the foundation of a comprehensive tariff system. This will make reconfiguration of services and integration across administrative boundaries easier.
To put matters beyond doubt, the national tariff would be a fixed price, with any competition based on quality and choice, not price. We listened to representations made to us about this, and we amended the Bill to make clear that the tariff would not be based on a maximum price. Of course I understand the points made very ably, if I may say so, by the noble Lord, Lord Davies, and the noble Baroness, Lady Murphy. We all want to see best value for money for taxpayers in the way that services are provided, but our judgment was that, for reasons that I will elaborate on, that is not the right way to go. Where services were not covered under the national tariff, there would be rules to govern those prices locally. Prices and rules within the national tariff would be legally binding and independently enforceable by Monitor to eradicate any abuses. Tariff prices could not be varied for different providers according to their ownership status. That would prevent future Governments paying inflated high prices to private providers.
I shall elaborate a little on what I said in answer to the noble Lord, Lord Davies. The purpose of the tariff is to ensure that providers are reimbursed fairly for the services they provide and to allow competition to be based on quality and not price, as I mentioned. When a maximum price was suggested, the fear was that there would be a drive to the bottom on prices, thus jeopardising the quality of care. The evidence from the UK and internationally suggests that quality-based competition with fixed prices can be very beneficial in producing higher quality care—that evidence is reported by the Office of Health Economics—whereas evidence from the USA sounds a note of caution that the wrong kind of competition based on price can lead to a race to the bottom on quality. Our judgment was that we should stick with our position that the tariff will not be a maximum price.
Finally, the Bill addresses the problem of cherry picking, which I am afraid was a problem that the previous Government did not grip. It places a duty on Monitor and the NHS Commissioning Board when setting prices to consider the range of services provided by different providers and the differing needs of the patients treated. As the Royal College of Psychiatrists noted:
“We are particularly glad to note the Government’s moves to prevent the cherry-picking of services and hope that the safeguards are a success”.
The Opposition’s amendments would actually delete these important provisions from the Bill, thus not addressing the concerns expressed by clinicians up and down the country.
To conclude, the status quo is not an option. The Bill strengthens the current system and meets the concerns raised by clinicians and others. I ask noble Lords not to press their amendments which would fail to address the current fundamental problems and would deny patients and taxpayers the benefits of an independent, fair and transparent system. Finally, I hope the House will accept the minor and technical amendments in my name in this group when I come to move them.
Baroness Thornton
My Lords, the Minister has explained this very clearly. We part company about the transparency, clarity and accountability. I resist the temptation at this time of night to start asking questions of the Minister about this matter, but I fear that it is going to take a very long time to sort this one out. One of the reasons why my own Government had not completed this task is that it is fiendishly difficult and fiendishly complex. I fear that this Bill is not going to make it any less fiendishly difficult and fiendishly complex, but it also might make the whole process a lot less accountable.
This was in fact the final group of amendments that we had put down in our suite of amendments to reform the whole of Part 3 in Committee. The noble Baroness, Lady Murphy, is quite right. If you give the responsibility and accountability for the tariff to the Secretary of State, you undermine the role of the economic regulator. Yes, that was the point of this amendment in the very first place. She got it in one—well done.
At this time of night, it is probably best if we do not delay proceedings. I beg leave to withdraw the amendment.