National Health Service Trust Development Authority (Establishment and Constitution) Order 2012

Lord Hunt of Kings Heath Excerpts

Monday 28th May 2012 Grand Committee

Moved by

[Lord Hunt of Kings Heath]

That the Grand Committee takes note of the National Health Service Trust Development Authority (Establishment and Constitution) Order 2012 (SI 2012/901).

[Lord Hunt of Kings Heath]

My Lords, I declare an interest as chairman of an NHS foundation trust and as a consultant trainer on NHS and health issues.

At first sight, these statutory instruments, Nos. 901 and 922, which set up the NHS Trust Development Authority, may appear to be anodyne and uncontroversial. They may seem, for example, as certainly the authors of the impact assessment document believe, to be a necessary tidying-up operation to remedy some of the gaps in the NHS architecture as a result of the Health and Social Care Act. The language of the statutory instruments and, in particular, the impact assessments reminds us of the changed and fragmented landscape that is being created, with new bureaucracy and largely unaccountable quangos in practice.

The Government state in the impact assessment that some of these organisations will be abolished and that their functions will therefore need to be located in another organisation to ensure that the process of reaching an all-provider landscape is achieved that is in line with the Government’s vision for an autonomous NHS free from day-to-day political control. I have to say that I am not sure that we have quite seen that lack of political control yet.

The NHS Trust Development Authority has an important role to play in the NHS as it is constituted under the 2012 Act. It is also part of a series of statutory instruments that we can expect to see in the next few months. I thank the noble Earl, Lord Howe, for his helpful letter of last week that gave an overview of the kind of statutory instruments we can expect. I do not know whether we might, at some stage, get a fuller programme of statutory instruments but it would be helpful if he indicated whether that will appear in due course, whereby we can properly prepare for what will be a marathon parliamentary Session as regards debating those statutory instruments.

The interest in the NHS Trust Development Authority is due to the process under which NHS trusts are to become NHS foundation trusts—a matter of some importance. I was at the Department of Health when the concept of foundation trusts was created, and I now chair one. I am very enthusiastic for them and their governance structure. The fact that chairmen and non-executive directors are appointed by the governors, who in turn are elected by the members, is a very important asset that ensures that these bodies are rooted in the community that they are there to serve. I am very clear that it is right to encourage NHS trusts to become foundation trusts.

The concern that I have, and the key point that I want to put to the Minister, is whether the criteria against which FT authorisation is judged will be maintained in future. I ask that in light of the statistics that appear in the assessment, which refers to the report of the National Audit Office of 1 October 2011, that there were then 139 foundation trusts and that the task of progressing the remaining 108 NHS trusts to foundation trust status was considered by the NAO in October last year as,

“challenging given the ‘tripartite formal agreements’ for 20 NHS trusts show they are not financially or clinically viable in their current form”.

My understanding is that about 50% of NHS trusts’ foundation trust status applications are rejected by Monitor due to insufficiently robust governance. Yet the Government have given very clear signals that they wish to speed up the translation of NHS trusts to become foundation trusts, either by themselves becoming foundation trusts or merging with an existing foundation trust or moving forward in another organisational form.

My understanding is that the Government had a deadline for this of 2014. We discussed this during the passage of the Bill, and I would be grateful if the Minister clarified what the Government’s intent is for a timetable. My concern is that, whether or not 2014 is no longer an absolute deadline, the Government seem very keen for existing NHS trusts to move on into a different status. My concern in the light of past experience is whether this is too much pressure or too quick a timetable, and whether there is a risk of lowering the barrier for authorisation, forcing unwanted mergers or inappropriately involving the private sector. I would be interested in the Minister’s views on this.

I would also be interested in the views of Monitor, the regulator, which has been scrupulous in ensuring a rigorous approach towards authorisation. Any person who has gone through the authorisation process will testify to its rigour. Is Monitor itself happy with the Government’s intentions on the timetable for NHS trusts to become foundation trusts? I remind the Minister, and maybe he could confirm, that at the end of April 16 NHS trusts were in escalation process after missing the milestones in their applications to become foundation trusts. Although I believe that our debate on the Bill may have overtaken what is contained in the impact assessment, I refer to paragraph 19 of that assessment, which says:

“There is a strong expectation that the majority of NHS trusts will achieve FT status by April 2014”.

--- Later in debate ---

[Earl Howe]

I apologise. The rules surrounding public appointments will of course still apply, particularly those relating to open competition. The continued existence of those rules and their implementation should give the public confidence that this system will be open and unbiased.

[Lord Hunt of Kings Heath]

My Lords, like other noble Lords, I thank the noble Earl, Lord Howe, for his response. I prayed against this statutory instrument in a genuine spirit of seeking information. I agree with the Minister about the importance of foundation trust status. I have no problem at all with the Government wishing to see NHS trusts becoming foundation trusts as soon as possible; that is absolutely right. Equally, I have no problem about the establishment of the new authority, and I commend the Government on the appointment of David Flory as the chief executive and Sir Peter Carr as chairman. Sir Peter has been a long-standing chairman in various guises in the health service going back more than 20 years. I suspect that he may well be chairman of this authority for a little longer than the department thinks at this moment.

There is genuine puzzlement about how these trusts—more than 100 of them—are to become foundation trusts by 2014. The fact is that many of them are facing great problems, mainly financial. They may have a PFI scheme that is expensive and which the local system is unable to afford without consequences on the rest of the system or, as my noble friend Lord Warner said, it may be tied up with very difficult reconfiguration issues.