Health and Social Care Bill

Earl Howe Excerpts

Monday 5th December 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, Clauses 30 and 31 abolish strategic health authorities and primary care trusts and remove the relevant parts of the NHS Act 2006. Let me start by addressing the noble Lord, Lord Warner by setting out where I feel we have consensus, because I think there is some consensus.

There is agreement that decisions in the NHS need to take place at different levels and we need to ensure that decisions take place at the appropriate level. I agree with the noble Lord that these levels do include an intermediate tier and there are decisions which should happen. However, where we differ is on how best to facilitate these decisions. We do not feel that the best solution is to have separate statutory bodies to play this role. Instead, we propose flexible arrangements that will best meet the changing demands of what needs to happen at this level—hence the board’s field force, which noble Lords have spoken about, which will be adaptable in the future to grow and evolve in partnership with CCGs. That is the background to our approach.

As we have already discussed, many of the necessary functions and duties SHAs currently undertake will, in future, be undertaken by the NHS Commissioning Board or by clinical commissioning groups. Where existing functions or duties are unnecessary, we are removing them, making the system more streamlined and reducing administrative burdens. The amendments in this group would prevent the abolition of strategic health authorities until such time as the Secretary of State is satisfied that all of their functions and duties have been transferred to other bodies.

I understand the importance that noble Lords place on getting the timing of the transition right. As the NHS Future Forum pointed out following its consultation exercise, some people felt that the changes were proceeding too quickly, while others were concerned that the pace of change was not fast enough. The forum recommended further changes to phase the transition, and the Government responded by postponing the abolition of SHAs by a year. I believe this allows enough time for a safely managed transition.

The NHS Commissioning Board is due to take on its commissioning responsibilities in April 2013, and we believe that it is vital that SHAs and PCTs do not continue beyond that date. There are two main reasons for that. A key aim of the Bill is to ensure that the functions and duties of all bodies within the system are clearly defined. To have a confusion of responsibilities would be a retrograde step. The second reason is that allowing SHAs to run beyond the current proposed deadline for their abolition would also incur extra costs and hinder the Government from meeting the efficiency targets set by the quality, innovation, productivity and prevention programme. I will say more about that factor in a moment.

--- Later in debate ---

[Lord Mawhinney]

My noble friend knows that three months ago in the Peterborough PCT there was a non-executive chairman and six non-executive directors. To the best of my knowledge, they have all gone. What now constitutes the Peterborough PCT and how does it make decisions when a cluster refers something to it for legal validation?

[Earl Howe]

The clustering is a clustering of the boards. In other words, there is one board serving two or three PCTs, depending on the area of the country. The staff of the PCTs remain in place. There is capacity there to carry out the functions of PCTs. That is why PCTs remain statutorily accountable and they are in a position to perform the functions that the law places on them. We have streamlined the direction from board level. That is a practical and efficient thing to do and I do not think that it poses the kinds of risk that my noble friends were suggesting that it would.

I am very happy to meet both my noble friends again. I would say to my noble friend Lord Mawhinney that I was smiling when he spoke only because I know that Sir David Nicholson would be amused to be referred to as the chief technocrat. I would simply say that the NHS chief executive, while no substitute for me, I quite agree, may nevertheless prove helpful. That is certainly the object of his offer to meet my noble friend.

[Lord Newton of Braintree]

My Lords, I think that we are talking about conflicts of interest in two different senses. My problem about conflicts of interest goes back to the accountability point that the Minister touched on. These two or three PCT boards remain accountable at least in part to the people of the area they were appointed to represent. Then there is conflict of interest in the narrower sense. I am chair of the board of the Suffolk Mental Health Partnership. If I had an interest in a private sector mental health outfit, I would obviously declare that and that is normal business. I am talking about a fundamental conflict of interest between the people on these boards and the interests of the people to whom they are supposed to be accountable, wearing three different hats.

[Earl Howe]

My Lords, my point was that such conflicts have been managed in the past and can be easily managed in future. While there may be a specific example my noble friend wishes to draw to my attention, which of course I shall take seriously, I am not aware of any such examples. The clustering arrangement in practical terms is working efficiently around the country. Of course, I regret if hard-working non-executive directors who have served PCTs in the past have stepped down, because they have done sterling service, but it has been necessary to rationalise that structure.

[Lord Beecham]

Would the Minister care to reply to the rather disturbing question of the noble Lord, Lord Mawhinney, about the threat to members of the PCT who decline to resign and the consequent apparent disqualification from subsequent appointment?

[Earl Howe]

My noble friend refers to the current legal position—that a non-executive director can leave his or her office in only one of two ways: by resigning or by being forced to resign. There is no desire on anybody's part to force non-executives to resign. These are not non-executive directors who in some way have misbehaved—not at all. However, it is necessary in the interests of the NHS that we rationalise the system.

The proposal put before non-executive directors was that, in the interests of the health service, they should consider their positions. That is not because they have done anything wrong but because of the transition that we find ourselves in. I would ask any non-executive directors who are listening or who read Hansard not to take offence at this. It is no reflection of their service to the public or the health service; it is simply a reflection of the transition that we are going through.

With my noble friend's permission, I should cover some of the other questions that have been raised. Of the many functions transferring from SHAs, Amendment 236AAA specifically seeks to address the role of postgraduate medical and dental deans in the new system. I recognise the vital role that the deans currently play to ensure quality within education and training. The important work of the postgraduate deaneries will continue through transition and into the new arrangements from April 2013. The SHAs will continue to be accountable for postgraduate deaneries until 31 March 2013, allowing time for a phased transition of their functions. This will ensure stability and help develop the improved system.

As the noble Baroness indicated, I have undertaken to come forward with more detailed proposals on education and training between now and Report. I repeat that assurance. Further work is under way on the detail of those arrangements with the right accountabilities for the quality of education and training to Health Education England and the professional regulators. That detail will be published as soon as possible. I hope I can reassure her that we have listened to the concerns in this area and that we are taking steps to address them

I would also like to address the matter of Clause 45 standing part of the Bill, which is part of this group. This clause will ensure that the Secretary of State will be able to establish new special health authorities only temporarily, for a maximum of three years. If there is a compelling reason for a special health authority to continue to exercise its functions beyond the three-year deadline, it is possible to extend its existence. However, any decision to do so would be subject to full parliamentary scrutiny via the affirmative procedure. This is to reflect our intention that any body in the health system exercising functions on a longer-term basis should have those powers transparently conferred on it in legislation.

--- Later in debate ---

[Lord Warner]

I am sorry to interrupt, but I am really bemused by what the noble Earl has just said about the accountability of the local entity of the national Commissioning Board to health and well-being boards. Health and well-being boards have no budgetary responsibility whatever, as I understand what the Government are saying; whereas the national Commissioning Board has two lots of budgetary responsibility—for its own specialist commissioning and for its oversight of the money that it hands out to clinical commissioning groups. Perhaps the Minister can explain it to me. I can understand that it might want to consult the health and well-being boards but, in terms of accountability, I cannot understand how it can be accountable for its budgetary priorities and decisions to the health and well-being boards.

[Earl Howe]

It is accountable for its decisions at a regional or sub-national level in a real sense. If it was not interacting with the boards, the noble Lord, Lord Hunt, might have a point; but it will be. I think that that is accountability in a meaningful sense. The noble Lord, Lord Warner, talks about budgetary accountability, and I understand that that is a real issue. Of course there will be no budgetary accountability, but there will be accountability for the decisions and actions taken by the field forces.

I was saying that the structure means that all too often neither of the roles that PCTs perform is performed well. GPs, who actually make the clinical decisions, are not properly involved in PCT commissioning; and PCTs do not have the detailed understanding of their communities or the link to other local public services. The result is an unsatisfactory compromise, with commissioning that fails to deliver improvements in health outcomes and local services that are fragmented and not integrated.

It has been suggested by some noble Lords that one could have kept PCTs and parachuted in a whole lot of doctors, perhaps filtering out some of the administrators. Anyone who has visited any pathfinder CCG and put that question to the doctors and other clinicians involved will know the answers to why that would not have been a valid and sensible idea. The way in which services are commissioned has to depend on the judgment of clinicians and the wisdom of establishing geographic areas for commissioning groups that make sense in terms of patient flows and in terms of links with local authorities, social services and public health. It does not make sense to retain structures that, frankly, are administrative constructs that do not necessarily bear any relation to patient flows or relationships with local authorities. These clinical commissioning groups are being created from the bottom up by those who know what is in the best interests of patients, and it is to patients that we must always return in our thinking. We currently spend £3.6 billion a year on the commissioning costs of PCTs. PCT and SHA management costs have increased by £1 billion since 2002-03. That is a rise of over 120 per cent. We cannot make savings on the scale that we need to while retaining the administrative superstructure of the NHS.

The noble Lord, Lord Hunt, suggested that the pathfinder CCGs were being built on nothing at all. They are not being created from nowhere. They are building on, and are indeed a logical development of, practice-based commissioning groups, of which there were a very significant number. There are currently 266 pathfinder clinical commissioning groups covering 95 per cent of GP practices in England. As I have indicated before, I cannot say how many we will eventually end up with, but that will give noble Lords a rough indication of the order of magnitude.

The noble Lord, Lord Rea, quoted some words of mine from a debate of several years ago. I would simply say to him that I was speaking then of something completely different from the Government’s current proposals, and I am grateful to the noble Baroness, Lady Murphy, for pointing that out. These reforms place leadership of commissioning firmly with clinicians. I completely agree that giving leadership to a non-statutory, private-sector firm would be a bad idea. That is why there are very clear safeguards against this happening. With PCTs, I feel that there was a genuine question over where commissioning leadership really lay, and this is very firmly no longer the case.

On Amendment 236A, I must clarify one point. It is not the case that a clause stand part debate on Clause 30 would be consequential if a Division was to be called on Amendment 236A and won. It would simply amend this clause and not entail that it needs to be removed.

I hope that I have sufficiently covered the issues raised by noble Lords. I do not suppose that I have satisfied everyone, but I hope that I have at least indicated the direction of government policy in a coherent way.

[Lord Rea]

The staff of PCTs below management level are going to be rather disappointed that the Minister did not answer my question regarding their employment and the possibility of their being moved over to the CCGs, where many of their functions are going to be precisely similar. Are they going to be made redundant? Is it going to be possible to move staff over smoothly without a break in their employment status?

[Earl Howe]

My Lords, the rules apply on transfer of employment, and we anticipate that around 60 per cent of PCT staff will transfer to clinical commissioning groups, local authorities or the NHS Commissioning Board. It has been necessary to institute a programme of managed accelerated retirement for those for whom there will be no posts. However, this is being done in as friendly and generous a way as possible and the process is working well. But on the noble Lord’s main concern, yes, the terms and conditions of employment should not alter for those who stay.

[Lord Warner]

Could the Minister give us an assurance that before Report he will give us some idea of the extent to which the current arrangements are going to meet the targets set by the Government for delivering the Nicholson challenge for this coming year, so that we can see the extent to which the Government are at risk if they abolish the SHAs from April 2013?

[Earl Howe]

My Lords, the SHAs have already published their plans for delivering the Nicholson challenge and those are on the SHA website. There is no secret about that. I can tell the noble Lord that we are on target to deliver the Nicholson challenge over the four-year period as a result of savings already made.

[Lord Hunt of Kings Heath]

My Lords, this has been a very interesting and instructive debate. I should tell the noble Earl, Lord Howe, that I do not have a rose-tinted view of primary care trusts. They were improving, I believe. But the question that I put to the Government is why on earth, instead of going through this convoluted and complex restructuring, they did not say immediately to primary care trusts that they should divest themselves of the services that they ran and get a move on with giving more responsibility to GPs? They could have done it on their first day, instead of which, instead of SHAs and PCTs, we have a much more complex structure, with clinical commissioning groups, health and well-being boards, senates, the NHS Commissioning Board and—blow me down—their field offices as well. I can tell the noble Baroness, Lady Murphy, that as the NHS Confederation says, we now have a very complex structure—not a streamlined approach that will deal with all the problems of the NHS. My goodness me, this structure will cause as many problems as it is potentially there to deal with.

There are some very serious questions about how the Government have done this. I am glad to know from the noble Lords, Lord Mawhinney and Lord Newton, that I am now part of the same region as they are. I look forward to further discussions and perhaps meetings in Nottingham from time to time, if we are summoned together.

The fact is that, in effect, primary care trusts have been abolished in advance of legislation. I understand what the Minister says—that by creating a cluster with non-execs from the PCTs, in effect those non-execs become the non-execs of each primary care trust. That is how the Government are essentially doing it, but that is a very disingenuous way in which to deal with the issue. They are skating on very thin ice, and the potential for judicial review is, I suspect, quite considerable.

Let us take this issue of the interest of the non-execs in Peterborough and Cambridge. I do not know the area particularly well, but let us say that, because of the financial issues facing Peterborough, a decision was made by the cluster to reduce services in Peterborough and ensure that those patients then went into Addenbrooke’s. I suspect that might well be a proposal. The question arises as to the legitimacy of that decision if people in Peterborough think that they are being marginalised from that decision. That some bold decisions need to be taken I do not doubt, but I suspect that there will be some issues about legitimacy.

As for the issue of tiers, my noble friend Lord Warner is surely right. Since 1948, the health service has not done without a regional tier. The fact that the Commissioning Board is going to have to set up local field forces is a recognition of that, but they will have a heavy responsibility. The financial challenge, the reconfiguration challenge and the specialty challenge call for strong leadership at that level. My argument for the Minister is that they surely need to be accountable and seen to be accountable in their communities. I do not believe that in the end the mandate set by the Secretary of State or the outcomes framework really satisfies that kind of accountability, given that they are clearly going to have to intervene at local level and deal with issues to do with finance and reconfiguration.

I have listened to the noble Lord, Lord Mawhinney, when he advised me not to oppose that Clause 30 or 31 stand part of the Bill. I fully accept what he says. However, as the Minister has made clear, my Amendment 236A stands apart from that. It is a question of timing, and I do not believe that these changes should take place until we are sure that they are right. I beg leave to test the opinion of the House.