National Health Service (Approval of Licensing Criteria) Order 2013

Lord Hunt of Kings Heath Excerpts

Tuesday 12th November 2013 Grand Committee

[Lord Hunt of Kings Heath (Lab)]

My Lords, first, I thank the noble Earl for that very full explanation of this order. In the context of the order, I should declare my chairmanship of an NHS foundation trust, which is subject both to Monitor and the Care Quality Commission.

I thought that the noble Earl’s full explanation of the order really reinforced concerns about the complexity of Monitor’s role and potentially the conflict between its licensing responsibilities, its independent regulation of pricing of NHS services and the general support that it gives for NHS foundation trusts. Now that Monitor has had time to consider these matters, since the passage of the 2012 Act, can he explain how it avoids conflicts of interest between these three separate roles? He will be aware that we discussed that issue when we debated the Bill.

Clearly, a lot of responsibility in Monitor rests on the leadership of Dr David Bennett. The noble Earl will be aware that in the pre-scrutiny hearing in the other place, the Health Select Committee—after examining Dominic Dodd, who had been proposed as chairman of Monitor—said of David Bennett that he,

“was appointed as interim Chief Executive in April 2010, and appointed as substantive Chair in March 2011. Since then he has filled the roles of both Chair and Chief Executive—effectively Executive Chair—and has led Monitor through the whole process of change brought about by the Health and Social Care Act 2012. This has been a period of great uncertainty for Monitor, with the nature of its role in the new system being unclear for most of the 18 months between the introduction of the Bill in January 2011 and its passing in 2012. Dr Bennett has both shaped and interpreted the role that Monitor now plays in the system which makes the transition to another individual taking on the Chair an especially difficult one. We do not think Mr Dodd is the right person to undertake that difficult transition”.

I understand that, following that, Mr Dodd withdrew his nomination, or at least his nomination was withdrawn.

In the context of this order, which sets the framework in which licensing will be undertaken by Monitor in future, can the Minister say a little more about the Government’s intention with regard to leadership, particularly the continuing role of Dr Bennett as both chairman and chief executive? As the Minister will know, in normal corporate governance terms that is not normally encouraged.

My third question relates to the Explanatory Memorandum, rather than the order itself. I was interested to see that, under “Policy Background”, paragraph 7.2 sets out three key functions of Monitor. I have already referred to them as,

“working with NHS England to provide independent regulation of pricing … protecting patient choice and”,

addressing,

“anti-competitive behaviour … and … working with commissioners to secure continuity of services”.

I just wondered where integration had got to. Have the Minister’s officials forgotten that? We debated this at great length and the Bill was amended to ensure the importance of integration. The noble Earl will recall that Monitor was given that express role. I am very disappointed to see that it is not referenced in the policy background but I am not surprised because, frankly, we have seen very little work on integration coming out of the various bodies concerned with the health service.

There has, however, been an awful lot to do with competition. As the noble Earl will know, in evidence to the Health Select Committee—I think it was only two weeks ago—the chief executive of the NHS railed against the way in which competition was being introduced in the health service. He knows, as everyone working in the health service knows, that a huge amount of money is being spent because of the enforced tendering of services that is undoubtedly taking place. It is very important that the Government reconsider the architecture that they have now put in place.

In addition to Monitor, we have the CQC, the NHS Trust Development Authority, the NHS Executive—I am sorry, I meant NHS England; that was a Freudian slip—and Ministers. Compared to the previous Secretary of State, the current Secretary of State takes a very different view of his role, and so we have a very confusing architecture. We also have the Office of Fair Trading making extremely unhelpful and unwelcome interventions, which again seems to act against the appropriate integration of services. It really needs to be sorted out.

I have no doubt that we will talk about this in a few minutes, but after Monitor’s welcome report on walk-in centres—I do not know whether it was as welcome to the noble Earl as it was to me—we have a situation where NHS England has undoubtedly been encouraging clinical commissioning groups to close down walk-in centres to make savings. However, yet another part of the architecture has come out with a report essentially saying that this has been a big mistake and has added to the pressure on A&E departments. One is entitled to ask: who on earth is really driving the policy at the moment?

Although I welcome the Monitor report, I was interested to know why it has produced it. At paragraph 1.2 on page 9 of the report, Monitor says:

“Our decision to review walk-in centre provision is grounded in our main duty as health care sector regulator: to protect and promote the interests of patients by promoting the provision of health care services that is effective, efficient and economic and that maintains and improves the quality of services”.

Well, yes, but is Monitor’s role really to look at this area of service provision? Fine—it is a good and welcome report, but it is confusing as to where one regulator’s role stops and the other starts. I have this great impression of five or six large, powerful bodies, all with well paid executives and strong boards, vying for influence. What that does at a time of huge pressure in the health service is to create uncertainty about who is leading, who is setting the policy and who is responsible for its implementation.

Finally, I come back to the question raised by Don Berwick in his very interesting report on patient safety, which the Government commissioned. In that report, which was published only a few months ago, he said:

“The current NHS regulatory system is bewildering in its complexity and prone to both overlaps of remit and gaps between different agencies. It should be simplified”.

It certainly should be simplified. He went on to say:

“The regulatory complexity that Robert Francis identified as contributing to the problems at Mid Staffordshire is severe and endures, and the Government should end that complexity”.

Does the noble Earl agree that the order he brings before us today is simply a sign of greater complexity? I do not think that we have had a response from the Government on this recommendation. I know that the noble Earl has a regulatory Bill up his sleeve for the next Session. Given what Don Berwick said and the evidence that Sir David Nicholson gave to the Health Select Committee, does he not agree that it might be sensible to go wider and look at this whole business again, to get much greater clarity into what is a complex situation?

[Earl Howe]

My Lords, I am grateful to the noble Lord, Lord Hunt, for his questions. I start with the issue that he raised initially, which was about the role of Monitor and what he perceives as the conflicts within that role. I address that by saying that there is no fundamental conflict, although he is perfectly right to say that Monitor has distinct, separate functions. Different executives within Monitor lead on each of those areas. Monitor has a board, which functions to ensure that David Bennett’s dual role as chair and CEO works effectively. At the same time, the Department of Health, as the steward of the system, keeps Monitor’s performance under review. It does that through quarterly accountability meetings. I suggest that the conflicts that the noble Lord perceives are much more in the perception than the reality. There are mechanisms in place within Monitor to ensure that the functions are kept distinct and that, where appropriate, Chinese walls operate.

The noble Lord referred to the nomination of Dominic Dodd as the chair of Monitor and the Select Committee’s view that he was not the right person to lead the organisation. That was a view which Mr Dodd himself accepted, and he volunteered to step aside. In the light of that, we are currently considering options for a sustainable solution to Monitor’s leadership. We will make an announcement as soon as we can on that, but, meanwhile, I emphasise that we have complete confidence in David Bennett’s leadership of the organisation.

[Lord Hunt of Kings Heath]

I meant no criticism of Dr Bennett in his role. I just point out that if one goes back to Cadbury and all sorts of reports since then, the evidence is clear that it is undesirable to have the same person carrying out both roles.

[Earl Howe]

I completely take the noble Lord’s point. We will of course be looking carefully at how best to proceed. It was, of course, with a view to appointing a separate chair that Mr Dodd’s name was put forward.

The noble Lord referred to the importance of integration. He is of course right that we debated the issue extensively during the passage of the Health and Social Care Act and have done so since. The Health and Social Care Act established Monitor as the sector regulator of healthcare. That involves a duty placed on Monitor to protect and promote patients’ interests by promoting provision of NHS services which is economic, efficient and effective and which maintains or improves the quality of those services. Within those broad headings, integration fits neatly.

The provider licence is a key tool which Monitor will use in carrying out its duties and in influencing and regulating the provision of NHS services. Specifically, the licence enables Monitor not only to set prices for NHS-funded care, which it does in partnership with NHS England, but to enable integrated care. The fact that that is not explicitly referenced in the Explanatory Memorandum is not something to which noble Lords should attach particular significance. Integration is part and parcel of Monitor’s overall duties.