Committee (5th Day)
Health and Social Care Bill
3:07 pm

Relevant document: 19th Report from the Delegated Powers Committee, 18th Report from the Constitution Committee.

Moved by Earl Howe

That the House do now resolve itself into Committee.

Photo of Baroness Thornton

Baroness Thornton (Labour)

My Lords, I rise to intervene at this stage because I think this is the only place where I can ask the Minister about an important matter concerned with the ability of the House to conduct a comprehensive consideration of the Health and Social Care Bill.

On Friday last week my honourable friend John Healey MP made available the report that he had received from the Information Commissioner. What he asked for a year ago was the risk register which would have set out the key risks with information about them and an assessment-RAG, which is the traffic lights system-of their likelihood and impact on the implementation of the Bill through the transition period. His request was initially refused and has gone to appeal. Noble Lords will realise that this information is completely pertinent to the further consideration of the Health and Social Care Bill in Committee here. The issue I seek clarification on is the very damning judgment of the Information Commissioner. He says that the Department of Health must disclose this information within 35 days of receipt of his notice. Were the Secretary of State to wait until the last possible minute, this would take us near to the very end of our Committee stage on the Bill. In the spirit of open and transparent government, I ask the Minister to make the information available to the House as soon as possible, and certainly in time for consideration of the Bill on Wednesday morning at 11 am.

The risk register is available immediately because it is a regularly updated component of good governance of any major programme, and as such can be easily accessed. In other words, it is not a difficult document to duplicate or forward to anyone. The commissioner finds that there is a very strong public interest in the disclosure of this information given the significant change to the structure of the NHS proposed by the Government. I hope that the Minister will be able to assist the House by making this information available very quickly because I am sure he will realise its relevancy. I hope very much that I will not find myself back here on Wednesday morning asking why the release of this documentation has not been possible. I regret that, under those circumstances, I may be asking what the implications for the future consideration of the Bill might be if the House does not have access to this potentially very important information.

Photo of Baroness Williams of Crosby

Baroness Williams of Crosby (Liberal Democrat)

I hope that the Minister will give very careful consideration to this request. I believe it will enrich our debate substantially and of course enable us to deal with issues that may change as we learn more about the effect of these statements. I plead with him on behalf of these Benches to consider whether the department could release these documents as quickly as possible.

Photo of Earl Howe

Earl Howe (Conservative)

My Lords, I am grateful to the noble Baroness for giving me prior notice of her question. I am grateful too to my noble friend Lady Williams for her remarks. As I stated in my letter to Mr John Healey some time ago, I am of course conscious that there will be public interest in the contents of the risk register. However, from a government perspective, we need to balance this with the public interest in preserving the ability of officials to engage in discussions of policy options and risks without apprehension that suggested courses of action may be held up to public and media scrutiny before they have been fully developed or evaluated. We also need to balance the need for my ministerial colleagues, our officials and I to have sufficient space in which to develop our thinking, explore policy options, and weigh all this against the risk that disclosure may deter candid discussion in the future, which may in turn impact on the quality of decision-making. Those are the issues.

We are therefore currently considering the decision notice from the Information Commissioner. We have to respond by 6 December and we intend to meet that deadline. Unfortunately, I cannot go beyond that commitment today. In the mean time, it is perhaps right for me to point out that we have already made public a very considerable amount of detail about our reforms, including information on key sensitivities and risks by policy area in the impact assessments that were published in January and September this year. I refer the noble Baroness to these documents. In addition, we continue actively to engage with stakeholders, building on the work of the NHS Future Forum and listening exercise.

Motion agreed.

Amendment 46

Moved by Lord Patel of Bradford

46: After Clause 5, insert the following new Clause-

"Secretary of State's duty as to promoting equality of provision

After section 1D of the National Health Service Act 2006 insert-

"1E Duty as to promoting equality of provision

In exercising functions in relation to the health service, the Secretary of State must have regard to the need to promote equality for those providing services on behalf of the health service and shall within one year of passing this Act, lay a report before Parliament on the treatment for Value Added Tax of supplies by charities to bodies exercising functions on behalf of a Minister of the Crown of healthcare services or associated goods."

Photo of Lord Patel of Bradford

Lord Patel of Bradford (Crossbench)

My Lords, we have discussed many aspects of equity and equality in relation to this Bill. In moving this amendment, I wish to draw attention to one matter that concerns the equity of provisions for VAT. Noble Lords will be aware that certain organisations, such as the NHS and charitable organisations, have particular exemptions in respect of VAT. I am not an expert in this area and certainly would be keen to hear from those noble Lords here today who are.

It was only in January this year that we debated the unfair burden placed on charitable organisations that take on public services but cannot claim the same VAT exemptions as the health service providers they have succeeded. A major inequality exists with respect to irrecoverable VAT for charities providing healthcare services. While the NHS is able to recover VAT on, for example, certain non-business supplies, charities are unable to do so. Of course, the NHS's ability to recover VAT on certain non-business supplies is written into Section 41 of the Value Added Tax Act 1994. Under current legislation, when services are transferred from the NHS to the charity sector, there is a VAT gap that needs to be filled either by charitable funds or by the local PCT.

I shall give one small example, provided by Sue Ryder, one of they UK's largest specialist palliative care providers. One of Sue Ryder's hospices incurs £44,000 in VAT each year. If that hospice was run by the NHS, it would be able to recover 57 per cent of that amount under Section 41 of the VAT Act. That would allow the hospice to employ a nurse for around 44 weeks, or provide 1,500 bereavement sessions to families who had lost a loved one, or provide 2,500 hours of support from a carer. This amendment recognises that the Treasury has been engaged with the hospice sector to try to find a solution to the problem. I want to ensure that it remains on the Government's agenda, so the amendment asks them to present a report to Parliament on this critical issue.

I am grateful to Sue Ryder Care for making me aware of this issue. As many noble Lords are aware, Sue Ryder provides specialist palliative and long-term care for people living with cancer, multiple sclerosis, Huntington's disease, Parkinson's disease, motor neurone disease, stroke, brain injury and other life-changing illnesses. It is one of the largest specialist palliative care providers in the UK, offering 4 million hours of care, over 100,000 days of long-term residential care, with the help of more than 8,000 volunteers. It provides vital services for people in their darkest hours of need. Who would argue that we should not do all we can to ensure that this continues? Yet these services are threatened. They face an additional burden at a time when the Government are asking organisations such as Sue Ryder to do more. It could be one of the many "any qualified providers" that are invited to take over services such as hospice care under the Bill.

As far as I am aware, there are currently 36 NHS hospices, all of which are rightly exempt from VAT. I understand that the issue is complex. It concerns EU legislation as much as our own national fiscal policies. Moreover, the Government have previously expressed concern that addressing the unfairness for the charitable sector would subsequently create problems for the private sector. Nevertheless, I am not convinced by these arguments and find it untenable to believe that this House, with all its creativity, cannot address this problem. It is surely unreasonable to expect those who give charitable donations to organisations such as Sue Ryder to pay tax twice-their donations are from income that is already being taxed, yet the vital services which their donations go towards supporting are then taxed again for VAT.

This issue is not limited to hospice services but affects many charitable organisations providing a range of health services. The situation is made all the more grave by the recent increase in VAT to 20 per cent. Estimates by the Charity Tax Group state that, prior to the rise in VAT, charities were paying more than £1 billion in irrecoverable VAT and that, after the rise, this figure has gone up by an extra £143 million. Sue Ryder informs me that approximately one-third of its income is from statutory services. What this means in effect is that, without its valuable contribution to care, the cost of providing it in the NHS would be two-thirds more.

We should not expect the charitable sector and those individuals who give their hard-earned money to support it to subsidise care that everyone agrees is vital, yet we do. We not only ask the sector to continue to provide these services at such significant cost-savings but we add insult to injury by saying that it should do so without the tax benefits given to the NHS.

I am aware from a discussion on this same issue in the other place that various solutions have been put to government to rectify the problem. One is the so-called "poppy" solution, whereby a matching grant for the VAT is given by way of return to the charitable organisation. This solution worked well for the Royal British Legion, and it should be possible to have something similar for hospice-care providers. It has also been proposed that relief enjoyed by local authorities and other public bodies under Section 33 of the VAT Act 1994 and certain healthcare provisions under Section 41 of the same Act could be used to assist hospices. Alternatively, similar exemptions to those in operation across the education sector, where academies are able to enjoy the same exemptions as those given to local authorities, could be used.

To date, the Government have taken no action on any of the proposed solutions. Given the scope in the Health and Social Care Bill for additional services to be taken on by the sector, the need for action is even more urgent. The amendment seeks to strengthen the duty on the Secretary of State to promote equality in health service provision and would require the Secretary of State to report to Parliament on the way in which VAT has been treated with respect to charities providing health services. This would enable us, in a transparent way, to see clearly the impact of any inequity in this kind of provision and also the total impact on the sector.

I am aware that more will be needed. There will almost certainly need to be two solutions to the problem-one pre and one post NHS reform. It is for this reason that the amendment seeks a report and not a solution. We want to ensure that we create a sustainable solution that applies when the clinical commissioning groups commission care. In order to do that, we need to have the information about how this affects voluntary sector service providers. I am sure noble Lords will want to discuss the merits and potential benefits of this approach and I look forward to their contributions. I strongly hope the Minister will see fit to accept the amendment and recognise that the unfair treatment of charities that are taking on health services from the NHS must be addressed as an urgent issue if the aims of the Bill are to be realised. I beg to move.

3:15 pm
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Lord Noon (Labour)

My Lords, I wish to support the amendment moved by my noble friend Lord Patel of Bradford. I declare an interest as chair of the Noon Foundation, which has made significant donations to charitable organisations and others concerned with the care of those living with cancer and those in hospices or receiving palliative care in the community.

My noble friend has outlined many of the key issues faced by the charitable sector with respect to VAT exemptions. I do not want to repeat these arguments, but let me add further information on the scale of the services that we are discussing. The combined contribution of these services amounts to more than 26 million hours of care every year. In excess of 2,000 adult in-patient beds are provided by the voluntary sector and more than £1 million is raised in charitable donations every day.

Of course, these are voluntary sector services that rely on thousands of people who give up their time to ensure the work is done. In fact, the estimated value of the 100,000 volunteers is said to be more than £112 million each year. The value of this sector as a whole in providing hospices and palliative care is in the order of £3 worth of care for every £1 invested. This is an outstanding achievement that should make all of us very proud. It is also why we should be doing much more to protect the sector and ensure that it can operate and grow on a level playing field.

I am a businessman so I know something about VAT and the need for equality in financial arrangements when different providers are in the same market. I am perhaps less anxious than some about the use of competition as a driving force in healthcare. I believe that competition can be harnessed for good and that there are many benefits to be realised by opening up the healthcare sector to this kind of discipline. However, competition must be fair and the current arrangements on VAT between health services and the charitable sector are certainly not fair.

One of the charities that I have been most closely involved with, as a donor and a supporter, is Marie Curie Cancer Care. Marie Curie provides high-quality end-of-life nursing care throughout the UK and has more than 2,000 Marie Curie nurses, who care for half of all cancer patients who die at home. These nurses provide essential care for patients and their families at the most stressful time of their lives. I have met many of these nurses, and their dedication and passion is second to none. They not only provide essential practical support to people as they face the end of their lives but are an emotional support for the whole family.

In addition to a range of community and home nursing services, Marie Curie is one of the largest providers of hospice care outside the NHS in the country. It runs nine specialist hospices which deal with all the patients' needs-physical, social and emotional-across in-patient and day-care services. These services are vital to those who use and need them but we should put them in this context: 65 per cent of people say that they would like the choice of being able to die in their own home, surrounded by family and friends, but the reality is that only 20 per cent manage to achieve this choice.

It is clear that we need more of these provisions, and the Health and Social Care Bill will help to extend them. The new arrangements for commissioning mean that other organisations can provide more health services. This will also mean that there will be much more competition from lower-quality commercial organisations, but we must support them to be able to do this. Part of that support must be to ensure that there is a level playing field in respect of VAT. We should not expect charities to take up an extra burden in providing these vital services by expecting them to take on costs that do not currently apply to the NHS. The amendment provides a way of achieving this social goal by placing a clear duty on the Government through the Secretary of State's report to Parliament on the treatment of VAT provisions across the charitable sector. I hope the Minister agrees that it is an important move in the right direction and will support the amendment.

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Baroness Finlay of Llandaff (Crossbench)

My Lords, I declare all my interests in relation to hospice and palliative care services.

The amendment is particularly important because of the any qualified provider provision which seeks to bring in more charitable sector providers, working with NHS commissioners, to provide essential services where the NHS is not able to plug the gap. That is why there was a debate in the other place in May this year on the effect of VAT on hospices. However, it goes much wider than simply hospices.

The VAT gap means that the private sector can claim back VAT by passing on the cost to customers; the public sector pays VAT, which is then refunded by government; but the charitable sector can do neither-it fund raises. In the hospice world-I am grateful to Help the Hospices for the figures-an average hospital in the UK, supporting about 1,000 patients and spending £8 million on care, may receive about 30 per cent of its funding from the NHS but it will spend about £82,000 on irrecoverable VAT. So money has to be raised just to cover that VAT gap.

As the hospital takes on more and more responsibilities, the problems become greater. As we try to get hospices to work together on joint ventures and share services with other providers and other charities, one hospice has to recharge services to another-one voluntary sector provider to another-including VAT, and that cannot be recovered. It also cannot recover any VAT on the repair and construction costs of charitable buildings. As there is increasing use of its buildings and it needs to upgrade to meet more modern quality requirements, VAT becomes a problem because, for the hospital to provide the quality service that we need, it has to outlay on capital expenditure.

The other difficulty is that VAT is fairly complicated for charities and requires expertise to manage the VAT process for them, which of course also incurs a cost on them in terms of personnel, which again is irrecoverable.

This is an extremely important amendment and the principle behind it has to be tackled if the fundamental idea of any qualified provider is to work in practice in the long term and provide stable, quality clinical services.

3:30 pm
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Baroness Pitkeathley (Labour)

My Lords, charities have been campaigning about the VAT issue for many years. My charitable interests are declared in the Register of Members' Interests. Without doubt, the VAT issue is an unfair burden and a major inequality in the charitable sector. Why should it be of concern to us? Let us think of what charities are good at. In addition to the services outlined by noble Lords already, charities are good at spotting gaps and funding innovative solutions. They are good at bridging gaps, especially between health and social care. They are very good at seeing patients or service users in their particular situations and providing services which meet their needs and not some notional need determined by an assessor. Those things are going to be tremendously important in the new NHS going forward.

Noble Lords should think of the contributions to care and health made by helplines, information provision, carer support groups and specialist nurses. They should think of the particularly significant service of incontinence supplies and advice-so vital to people with disabilities and to older people and their carers-provided extensively by charities. It is vital that charities are not only encouraged to continue to participate, but are also supported to do so-and not to be made subject to additional burdens such as those that noble Lords have outlined. The NHS and social care service cannot do without these services and, most importantly, patients, users and carers cannot do without them. Therefore, we must make it as easy as possible to provide for all qualified providers, including charities. I support the amendment.

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Lord Turnberg (Labour)

My Lords, I rise to lend my support this amendment. I speak here as a trustee of the Wolfson Foundation, which has a programme of support for hospices and care homes and over the years has given many millions of pounds, largely for capital projects. VAT is a constant source of unhappiness to the trustees, and, in fact, they have reached the conclusion that they will no longer pay VAT for capital projects. This means, of course, that the hospices and care homes themselves will have to find that money, which is unfortunate. Therefore, I hope that the Minister will take this amendment seriously.

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Lord Warner (Labour)

My Lords, I support the amendment and I do so from a background of having been the chairman of the National Council for Voluntary Organisations and a trustee of a number of organisations that have supplied services to the NHS and local government. This is indeed a very long-running sore; it is a sense of grievance. It often goes with another grievance-one which is not germane to this debate but which I might as well mention, because it explains why voluntary organisations are sometimes reluctant to provide some services for public authorities. That is a kind of meanness, almost, on the part of many public bodies about meeting the administrative costs-the management costs-of local authorities. If one takes the two together-a meanness about meeting management costs and being treated unfairly on VAT-this is a barrier to entry.

I fully support the points made by the noble Baroness, Lady Finlay. As the Minister knows, I have probably made myself a little unpopular on these Benches through my support for the idea of competition on a level playing field. I have a later amendment which raises the issue of barriers to entry. This is a barrier to entry. It is stopping voluntary organisations participating fully on the basis of a level playing field as a qualified provider. Therefore, in terms of the Government's own philosophy in the area of competition, they would do well to listen to these arguments and remove this barrier to entry.

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Baroness Armstrong of Hill Top (Labour)

My Lords, I rise briefly to lend support to the amendment. I work with charities for the homeless and for children. If the Government's ambition is to enable the NHS to work with the patient on the full pathway-rather than work being done in little bits by different organisations-then making the playing field level for the voluntary sector is absolutely critical to developing those pathways. In my experience, the voluntary organisation is frequently the glue in making sure that the pathway for the patient works for the patient.

I remind the Minister that when this works well there are often savings for the National Health Service. I have experienced that in homelessness, where we have been able to work with the PCT to get a community matron. That has reduced the number of expensive admissions to hospital and A&E for the most disadvantaged-the homeless. I have also seen that work well with, for example, children with disabilities and children who are very ill. They have been enabled to remain at home with the proper support instead of being frequently admitted to hospital.

It is to the advantage of the NHS that we get this right. What will the Government do to bring forward in the Bill comfort and encouragement for the voluntary sector? After the pause, that sector has been left with a rather large amount of confusion.

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Baroness Barker (Liberal Democrat)

My Lords, for over 25 years I have worked either in or as a consultant to voluntary organisations. Consequently, my eyes lit up at the sight of an amendment that said VAT and charities. In my time, I have sat with wet towels around my head trying to figure out this, one of the most complicated subjects. I have attended seminar after seminar with the Inland Revenue at which people with bigger brains than me have come away with their heads reeling from trying to understand the issue of VAT and charities. It is infinitely more complicated for charities than it is for the private or public sectors. That is not new. As various people have said, this issue has been running for some considerable time.

I want to correct two impressions that might have been given inadvertently in the debate. First, there is the impression that there is a view in the charitable sector on this issue. There is not, because the issue effects different organisations disproportionately. While there may well be a consensus among hospices that it would be advantageous for them to make such a change, it may not be and indeed is not for other, smaller charities. That is the first thing.

Secondly, we have this new generation of social enterprises. These organisations are not charities but businesses. They are intended to be big players in the provision of services. The noble Lord, Lord Patel, has been clever here in not asking for the Government to take a particular step. He simply asks for a report on a subject that will fascinate some of us quite deeply. Were the Government to take on board the point that the noble Lord makes, apart from looking at a whole range of different charities-not just hospices-would they also consider the effect on social enterprises? I do not think that it is possible to come up with a set of legal proposals that relate simply to health and social care. By definition, they would have to go across the whole of public services. I hope that the noble Lord, Lord Patel, would accept that an exercise of this kind should do that.

Finally, be careful in the questions that you ask of HMRC. As someone who advised charities, I was always brought up never to ask a question of HMRC unless I was pretty confident that I would get back the answer that I wanted. This may be an answer that the hospices want but I would wish to be pretty clear that it worked for charities across the board. I simply finish by saying that if this subject were straightforward, it would have been sorted out a long time ago-but it is not and that is why it has not been.

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The Bishop of Chester (Bishop)

I am very grateful to the noble Baroness, Lady Barker, for what she just said about the complexity of the question. However, I would like to go back to what the noble Baroness, Lady Pitkeathley, said about what charities do well. Particularly important is their face-to-face concern with the whole needs of whole persons rather than the abstract application of principles. I would add two things that some charities offer that intersect with other bits of our social agenda at the moment. One is the passion of those volunteers who work particularly for local, small charities. A lot of energy is sapped by precisely the issue that we are discussing this afternoon. If we are concerned for what might be called in the most general way the big society, how you engage people in maximum participation at a local level in concerns and charities-particularly small ones, which are very close to the action-is extraordinarily important, it seems to me. Passion and localism are two aspects of this that must not be forgotten.

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Lord Cormack (Conservative)

My Lords, I thought that the noble Lord, Lord Patel of Bradford, moved an absolutely model probing amendment, and the complexity of the issue was very well illustrated by the brief contribution of the noble Baroness, Lady Barker. I came not to take part in this debate but to listen, but I just want to say, as someone who represented a constituency in Parliament for 40 years, that I saw the enormously valuable work that so many charities did, particularly hospices and organisations that provide support, such as the Macmillan nurses and, as the noble Lord, Lord Noon, mentioned, the Marie Curie nurses, who do a very similar job.

As we have this seminal opportunity to get it right, I hope that my noble friend the Minister, for whom I have enormous respect and regard, will be able to respond to this exemplary probing amendment in his customary exemplary way by indicating that the Government are indeed taking these matters exceptionally seriously. I hope that the Government are anxious to ensure, when this Bill emerges from Committee and goes to Report, that the Minister will have some remedies to meet the extremely important and pertinent points raised by the noble Lord, Lord Patel, when he moved this amendment and others who have supported him in this brief but, I think, important debate.

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Lord Beecham (Labour)

My Lords, like other noble Lords, I declare an interest in charitable organisations that are in the register. When it comes to the details of VAT and its complications, my expertise is roughly equivalent to that of Vince Cable. In the light of that, I took the very sensible advice of my noble friend Lady Wheeler and discussed matters with a charity here in London. It was quite an enlightening experience. I was told that the change in the world of voluntary organisations has made a significant difference to their position in relation to VAT. At one time, much of their income came from grants; now it is increasingly contracted. As contracting organisations, they become liable for the tax. For example, a new build for that particular organisation at one time would not have attracted VAT, but now it does; and as we have heard, there are other examples of that happening. Moreover, some of the services that it provides are exempt, as in education and social care, while others are not. As the noble Baroness, Lady Finlay, told us, smaller organisations in particular have to invest resources in getting the necessary advice to deal with their VAT problems. The organisation to which I spoke had an even more complicated position. It has a building, and because it is carrying out work that is both subject to VAT and not subject to VAT, it has effectively had to split the building into those parts that provide services that are exempt and others that are not; and there is a problem with mixed use in part of the building. It has to monitor and record everything scrupulously and file returns accordingly, so it is an extremely difficult position for such organisations.

I congratulate my noble friends Lord Patel of Bradford and Lord Noon on bringing this amendment to the House, as it throws light on a significant anomaly affecting very many voluntary organisations-the very sector that all of us, especially I suppose the Government, in the light of their proclaimed belief in the big society, would wish very much to encourage. The amendment does not require a change in the law at this stage; it merely seeks a report. It is time that this long-running matter, which has endured for many years under Governments of both political persuasions, should be resolved on the basis of a report. It is of growing importance, as the noble Baroness, Lady Finlay, again reminded us, because of the position of any qualified provider, which would now be open to a wider range of organisations.

At the moment, the anomaly exists in relation to the charitable sector and the National Health Service, but clearly there are other implications, including for the social enterprises to which the noble Baroness, Lady Barker, referred. In that context, it is interesting to consider the position of the voluntary sector compared with other organisations, some of which purport to be social enterprises. I cite the example of Circle, of which we heard a good deal last week and read about over the weekend. This organisation has now taken over the management of the Hinchingbrooke Hospital, which apparently had a pre-tax loss of £44 million in its last year. When it floated on the stock market, its prospectus said that growth would place,

"a strain on its managerial, administrative, operational, financial, information technology and other resources and could affect its ability to provide a consistent level of service to its patients".

I cannot imagine that any voluntary organisation, or most other social enterprises, would have come within a mile of obtaining a contract under those circumstances, and it seems strange that that contract should be given to an organisation of that kind while the voluntary sector is significantly handicapped by the current VAT regime.

I hope very much, therefore, that the Government accept the amendment and undertake the review that it suggests, so that we might take matters forward and relieve them of a burden which reduces nobody's profits but does reduce the capacity of the sector to provide a better and wider-ranging service to the people whom it seeks to serve, and in whom we all have an interest.

3:45 pm
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Earl Howe (Conservative)

My Lords, I begin by saying that I completely understand the seriousness of the issues raised by the noble Lords, Lord Patel of Bradford and Lord Noon, and others noble Lords. The noble Lord, Lord Patel of Bradford, suggested that part of his purpose was to ensure that this issue remained on the government agenda. Let me assure him that the issue is very firmly on the Government's agenda, and I am pleased that we are having this debate today so that I can outline exactly what we are doing.

Before I turn to address the amendment, I think it would be helpful if I briefly laid out the Government's view of the role of the voluntary sector in the NHS. We firmly believe that voluntary sector organisations have a strong and often crucial role to play, due to the experience, expertise and insights that they can offer to commissioners and the system more widely. I of course acknowledge and pay tribute to the valuable work performed by Sue Ryder and numerous other charities, including most especially hospices. We recognise that they can play a vital role in delivering innovative, high-quality user-focused services in their local communities, along with improved outcomes for patients and increased value for taxpayers. We also acknowledge, as Amendment 46 highlights, that taxation treatment is one potential barrier to voluntary sector organisations' entry into the provision of NHS services and to their increased involvement in those services. Access to capital is another. We are very keen to explore ways to overcome these challenges. The department is discussing this, as part of a wide range of issues, with voluntary sector providers of NHS-funded services.

When I was preparing for this debate, I asked whether the Treasury was looking at these issues, and the answer is that it is. I understand that Treasury officials are already working with representatives from the voluntary sector to explore the value added tax treatment of charities supplying the NHS, taking into account the legal limitations and the potential complexities around possible solutions. We are keen that they should make speed over this. However, the introduction of an artificial one-year timetable, as this amendment proposes, would limit the scope for a full and thorough discussion and consideration of this issue. I cannot commit to that limitation. However, I emphasise that we are very keen to work at possible solutions as fast as we can. It is a complex issue. My noble friend Lady Barker pointed us towards some of those complexities.

It is worth my repeating a general point here. The Government are committed to fair competition that delivers better outcomes and greater choice for patients and better value for the taxpayer. We want to see providers from all sectors delivering healthcare services. We have not the least wish to favour one type of provider over another. Indeed, as a result, and to ensure that the Secretary of State, Monitor and the Commissioning Board do not confer preferential treatment on any type or sector of provider, the Government have introduced amendments to Clauses 144, 59 and 20, inserting a new section, Section 130, into the National Health Service Act 2006.

We know very well that the voluntary sector plays a strong role in bringing the voices and experience of patients, service users and carers to the work of improving services, often reaching individuals who are excluded or who cannot access mainstream services. The voluntary sector brings advocacy and information to support individuals to exercise choice and control over the services that they access. These are major prizes, and we wish to capitalise on them. Opening up services to greater choice, for example, through "any qualified provider"-as was pointed out by the noble Baroness, Lady Finlay-allows for greater involvement by social enterprises or voluntary sector organisations. To a great extent, this is already happening.

Listening to noble Lords, I felt that there was a great deal of consensus around those points. There is a shared feeling across the House that charities have a key part to play in NHS provision, that the current VAT rules can act as a barrier and that this needs to be looked at very closely and urgently. I completely agree with that, and I would like to reassure the noble Lord, Lord Patel of Bradford, that we will ensure that this taxation issue continues to be considered urgently, as we develop work on a fairer playing field for delivering NHS services. In establishing Monitor's new functions, the department and Monitor will continue to consider these issues and the priorities to be addressed.

The noble Baroness, Lady Armstrong of Hill Top, asked in particular what comfort there is in this Bill for the voluntary sector. She quite rightly mentioned the Future Forum in highlighting the work of the sector. The noble Baroness will be aware that the forum gave a very strong endorsement to the Bill's creation of a bespoke provider regulator, Monitor, in order to oversee a level playing field. Such a commitment to a fair market was and remains a comfort to the voluntary sector. Of course, we acknowledge that more needs to be done, and that includes the ongoing work at the Treasury.

With those remarks, although I am sure that I have not completely satisfied the noble Lord, Lord Patel of Bradford, I hope that I have given noble Lords the sense that we are onside with this issue and shall be pursuing it with as much urgency as we can. I therefore hope that I have done enough to persuade the noble Lord to withdraw his amendment.

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Lord Patel of Bradford (Crossbench)

My Lords, I have listened carefully and with great interest to the many excellent contributions on this proposed amendment. I am grateful to the Minister for giving a very considered and what I believe to be a very sincere response by recognising the issues. Noble Lords have spoken eloquently about many of the issues: the huge numbers of services and people involved-it is absolutely the big society in action. Yet they also clearly talked about what goes to the heart of this Bill: the barriers that are there to stop the provision of equal services. My "unpopular" noble friend Lord Warner clearly outlined those barriers and I will not repeat them.

We have heard from my noble friends about the importance of the voluntary sector. The Minister clearly repeated the importance of the role of the charitable and voluntary sectors, and the fact that they work with some of the most vulnerable people in our society. I completely agree with the noble Baroness, Lady Barker, about the complexity of the situation. She raised the important issue of social enterprises and the potential exemptions and disbenefits there as well.

We are not asking to make a single-line solution to the problem; we are asking for clarity and transparency. This Government have clearly talked about transparency throughout, and it is so important for us to have that information. I listened to what the noble Earl said about them still discussing how the Treasury will go ahead and that they are in the process of taking urgent actions, but those urgent issues have been there for a long time. I suppose that I go back to the issue of my day job, when I am working with service users and local communities. When working with people with mental health problems and drug issues, nobody disagrees with me. Everybody says, "Yep-this is really important and urgent. We have got to look at it and we will. We will talk and we will make sure users are on the panel", but we are still talking about it 20 years on. We need a document or something that focuses the mind. That is why the amendment seeks to ask the Secretary of State to give us the data.

I do not think that a year is problematic. I think it should be six months. Why do we not have these data? The whole premise of lots of the services we provide is that we need high-quality data to tell us what is missing and what is wrong. I am hoping that a report will be presented to give Members of the House an opportunity to reflect on that data and to look at what is going wrong, and where, because the big danger is that there will be a discussion between the charity sector and the Treasury, and that the Treasury will say, "This is what we can and cannot do-accept it". It is important that the House and others outside look at the data and the transparency within that and make an informed decision. I will not keep the Committee much longer. It is such an important issue and, as I genuinely think that we should have a report presented to Parliament by the Secretary of State, I therefore wish to test the opinion of the Committee.

Division on Amendment 46

Contents 195; Not-Contents 183.

Amendment 46 agreed.

Division number 1

See full list of votes (From The Public Whip)

Amendment 47A

Moved by Lord Kakkar

47A: After Clause 5, insert the following new Clause-

"Health Education England

(1) The Secretary of State shall establish a body to be known as Health Education England, answerable to the Secretary of State and charged with the responsibility of ensuring and maintaining high standards of education and training of the NHS healthcare workforce.

(2) In pursuit of that responsibilities, Health Education England shall have due regard to-

(a) the responsibilities of the universities and the Royal Colleges and of other bodies involved with education and training;

(b) the statutory responsibilities and authority of the regulatory bodies operating in the healthcare field; and

(c) the necessity of ensuring that commissioning groups, foundation trusts, general medical practices and other qualified providers offer appropriate facilities for education, training and research."

4:10 pm
Photo of Lord Kakkar

Lord Kakkar (Crossbench)

My Lords, I beg to move Amendment 47A, which stands also in the names of my noble friends Lord Walton of Detchant and Lord Patel, who, regrettably, cannot attend the Committee this afternoon.

In moving this important amendment and speaking to Amendment 133 in this group, I wish to recognise the important statement made by the Minister on the first day in Committee on 25 October, when he made the case for an amendment to place a duty on the Secretary of State to exercise his function so as to secure an effective education and training system. This is an important and much welcomed recognition of the fact that education and training is absolutely critical to the delivery of healthcare.

The Minister will recognise that, without an appropriate system of education and training, whether it be for a surgeon or a physiotherapist, a neurosurgeon or a nurse, a physician or a radiographer, or indeed a psychiatrist or an occupational therapist, patients will be put at risk. The important gains that the Bill proposes in terms of improving clinical outcomes will not be achieved and vital resources will be squandered.

Education is at the heart of delivering effective healthcare. The professions, the public and indeed government have had previous experience of the introduction of changes in education and training with modernising medical careers that cause severe anxiety and disruption and have made all exceedingly sensitive to the importance of ensuring that any change in systems in the future provides the best opportunity for the patients who have to use health services in our country.

It is well recognised that Her Majesty's Government wish to deal with education and training in a responsible and sensitive way, and it is broadly recognised that the changes proposed by the Bill raise anxieties about how education and training might be discharged in the future. In this regard, the commitment of the Government to seeking further clarification and the views of the NHS Future Forum is an important initiative. However, it would be impossible for the Bill to proceed unless there were absolute clarity with regard to education and training.

The intention is that employers will play a much greater role in the future discharge of education and training functions, and there is no doubt that the education and training system must be sensitive to the needs of the service and, most of all, to the needs of patients. We must also ensure, however, that two vital issues are addressed. The first is the ongoing interaction and engagement with the academic sector, universities and educational expertise. It would not be right for employers alone to determine the nature and content of curricula associated with the training of the healthcare workforce. Secondly, notwithstanding that there will be a second Bill-most likely in the next Session of Parliament-to deal with health workforce education and training, it is critical that enough detail is associated with this Bill to ensure that we can continue with confidence in planning and organising the arrangements for the healthcare workforce to be appropriately trained and educated.

With regard to interaction with those bodies, authorities and universities that have an expertise in the education of the healthcare workforce, will the Minister confirm that it is indeed the Government's intention that, in the proposal to establish Heath Education England-whether as a special health authority in the intervening period and, thereafter, ultimately as a statutory arm's-length body in a future Bill-there will be a requirement for Health Education England to engage fully with the academic sector? Will the development of curricula for the training of different disciplines in the healthcare workforce be set in partnership by service providers, employers and academic institutions working together to develop the curriculum? Will the working of local education and training boards be such that there is a clear relationship between them and Health Education England? Will the boards be composed of appropriate academic-health service partnerships to ensure that the valuable expertise in both the service and the academic sector can be brought into play to develop appropriate curricula and ensure that they are delivered to the highest standard; that those curricula are developed to meet both service needs and, most importantly, patient needs; and that, within the structure of local education and training boards, there are non-executive independent directors who ensure that any potential conflicts of interest are overcome?

We have certainly been fortunate in having strong deaneries that have accumulated large volumes of expertise in and insight into the delivery of postgraduate medical education and training. It is important that these functions and this expertise are not lost in the system, and that postgraduate deans are potentially housed in universities in the future so that their important functions can continue to be delivered as part of the local education and training board structure.

It is critical that there is an obligation on Health Education England to have an appropriate level of engagement and interaction with the royal colleges in medicine and other professional colleges. They are the regulatory bodies that play an important role in the supervision of training and the development of standards for practice in our country. Heath Education England should also be under an obligation to ensure that any qualified provider-NHS trusts, general medical practitioners and others-who ultimately has the responsibility and privilege of delivering NHS services has regard to providing appropriate education and training opportunities. This is vital, as the basis of education and training in our country has always been strong clinical exposure. If many of those clinical opportunities for training move to different service providers, the opportunities for education and training must not be lost. Amendment 133 deals with a further responsibility of the board and commissioning groups-to ensure that these interactions are properly addressed and that opportunities for training are not lost but well understood.

I recognise that the Government are considering these matters through the work of the NHS Future Forum and in other consultations. The purpose of tabling these amendments is to probe the Government's view about education and training, and to determine whether there remains a strong commitment to academic service partnerships to drive forward education, training, innovation and research opportunities. These are all vital in ensuring that we have the highest-quality healthcare workforce for the future. They will also help us to understand better how Her Majesty's Government envisage the relationship between Health Education England and local education and training boards.

Other amendments in this group deal with the important question of the future funding of education and training, and the importance of funding being ring-fenced and applied only for this purpose, rather than being put into potential jeopardy and used for other elements of the responsibility of the NHS Commissioning Board.

4:15 pm
Photo of Lord Warner

Lord Warner (Labour)

My Lords, I rise to speak to Amendment 47B, which to some extent overlaps with Amendment 47A, which the noble Lord, Lord Kakkar, has moved so eloquently. I fully support the remarks that he made, particularly in relation to medical deaneries.

I want to start from the position in which we find ourselves. This Bill contains a major reorganisation, which affects 1.4 million employees. As David Nicholson has said, the size of this reorganisation can be seen from space. I can remember making these rather trite speeches as a Minister about the NHS being the largest organisation alongside Indian Railways and the Red Army. Ministers before me made the same speeches just to emphasise the sheer scale of the NHS and the number of employees working in it. Therefore, it seems extraordinary that the Government could have considered for a long time reorganising this organisation in such a way without taking into account the education and training of probably the most labour-intensive and largest workforce in the country. It is not surprising that, in these circumstances, people in the NHS are very concerned about what is going to happen to education and training in this brave new world that the Government are taking us into.

That is why some of us want to move amendments that go a good deal further than did the Government's amendment in this area, which seemed to me not unlike those Russian dolls-once you open one doll, another is inside and a smaller doll is inside that-in its endless reference back to other bits of legislation. We need something much clearer than that if we are to reassure the people working in the NHS that education and training are going to be safeguarded and looked after in a period of major disruption to the way we run our health service.

Amendment 47B imposes a clear duty on the Secretary of State,

"to provide or secure the provision of an effective system for the planning and delivery of education and training of a workforce of sufficient size ... to discharge his duties under this Act".

That seems to me to be the focus that we should have in our discussions in this particular area. It tries to produce a clearer duty on the Secretary of State than the Government's Amendment 43, but goes further by requiring the establishment of a new body, Health Education England, to oversee, supervise and manage the current functions and national budget relating to multidisciplinary training.

As we take the Bill through this House, it is not enough simply to say, "Oh dear, we are waiting on the Future Forum". I am sure that the Future Forum will have something good to say, but before this Bill leaves this House as an Act we need to produce much more certainty about how this service is to be continued and how the money is to be safeguarded. The size of the budget involved is considerable-somewhere in excess of £5 billion a year. Much of that money is looked after and spent by the rather maligned strategic health authorities, which will disappear in 2013 as I understand it. That money passes through them to the end-users of the money that deliver education and training. There is great uncertainty and concern about how national and regional planning of education and training, including the medical deaneries, will actually work, how they will be funded and how the current budget will be safeguarded.

I recognise that employers need to play a full part in education and training, as the noble Lord, Lord Kakkar, has said, but I have seen the briefing by NHS Employers on this issue. That briefing makes pretty clear that there is huge uncertainty below the national level about how education and training will be managed when the strategic health authorities are abolished in 2013. People seem to be fumbling their way around, searching for a way forward when the SHAs go. We know that some activities cannot be left to local employers alone. A prime example of this is the specialist training that has to go on in securing placements for younger doctors coming through the early stages of their training and needing to have specialist postings to ensure that they can progress along the specialist route to fill the consultant posts of tomorrow.

At the national level we need to achieve greater clarity on how the Secretary of State will discharge his responsibilities in relation to education and training. The Government seem to think that this can be left to legislation in the next Session but as far as I can see they can give no assurances, other than resting on good will and the Future Forum, to say clearly what this system would encompass, what it would look like and how it would work. The more sceptical among us have doubts about whether the Government will have the appetite for another Health and Social Care Bill in the next Session. If one was Prime Minister for a day, it would not be surprising to doubt whether one would entrust another Bill in this territory to the team that gave us this Bill. That thought must have occurred to the Prime Minister at some time in his busy life.

In closing, I would like to say a few words about the third subsection in this amendment. This is in response to the concerns that have been expressed that many current functions and their budgets will be passed to the national Commissioning Board almost by default, and at the very time when the crisis on meeting the Nicholson challenge of saving £20 billion in four years will be moving to crunch time. I suppose there is a kind of poetic justice that David Nicholson should be asked to consider his own challenge and deal with it as chief executive of the national Commissioning Board, but people are concerned that temptation should not be put in his way in the form of the £5 billion or so of the budget for education and training work of the NHS. To help him resist that temptation, should it arise, this amendment includes a formula for preserving the education and training budget. It may not be the perfect formula-I am sure that noble Lords across the House would be willing to discuss a better one-but some kind of formula and ring-fencing which protect the budget for education and training is a sine qua non if we are to carry with us staff up and down the country working in the NHS whom we expect to continue to deliver a highly effective NHS at a time of great organisational change.

Of course, the Minister may be able to reassure us all and give us some guarantees, and I look forward to hearing them. These need to be guarantees about how the amount currently spent on education and training will be safeguarded. We will also want to know: what is to happen to the money when the SHAs are abolished? What division of responsibility between Health Education England and employers are the Government planning? Do the Government envisage a role in this sphere for the national Commissioning Board? I hope the Minister will not simply say that the Government are waiting for the Future Forum to report.

4:30 pm
Photo of Lord Turnberg

Lord Turnberg (Labour)

My Lords, my name is attached to Amendment 47B, so ably introduced by my noble friend Lord Warner. I simply wish to emphasise some of the points that he has raised and some of those raised by the noble Lord, Lord Kakkar. The amendment is an attempt to fill a conspicuous gap in the Bill in relation to education and training-namely, to introduce at this stage the idea that we have a Health Education England. I recognise of course that we are waiting for further information from the Future Forum and that we should expect further legislation on this in due course, but this is a subject on which we cannot afford to wait. We need something in this Bill, if only to try to settle some of the many uncertainties that are so disabling for many out there. We cannot wait for a second Bill at some uncertain and probably distant time.

The White Paper Liberating the NHS: Developing the Healthcare Workforce is frankly disturbing in some of its recommendations. Putting responsibility for education and training at the local level entirely in the hands of provider networks-so-called local skills networks-is to my mind, and that of many I have spoken to, both dangerous and potentially damaging. Of course we need, and should have, local input in planning for local workforce needs. However, the standards of education and the level of skills and knowledge that patients deserve have to be set on a national scale. It is not helpful to have a healthcare worker trained solely for local needs who is unable to transfer to another part of the country without going through another local training scheme. Training must be transferable. For that we need national curricula, assessments and levels of achievement, so that when a new healthcare worker joins an organisation, the organisation can rely on that training.

At the moment, for medicine at least, the GMC sets the overall standard and the royal colleges and their specialist advisory committees provide all the curricula and set the exams, assessments and qualifications so that employers and patients can rely on the fact that a newly appointed cardiologist or surgeon, for example, has reached a recognised and approved standard on a national scale. However, most of the medical, nursing and other training takes place at the coal face: in the wards or in general practice by trainers who are themselves practitioners. Here, out and about, the postgraduate deans play the pivotal role because they oversee the whole process of training and planning of the workforce for their part of the country. The deans are the glue that makes it all happen. They control, of course, the budgets for the salaries of all the medical trainees. At the moment, they are employed by the strategic health authorities. When those authorities disappear, the current proposal is for them to be taken over by local provider skills networks. I have already suggested that it would be unfortunate if these bodies were purely NHS providers with little input from those with experience of what education and training entails. Providers may know something about what they want out of it at the end, but they are not set up to oversee and provide the education by themselves.

There are two things that must happen if we are to have a reliable system. First, Health Education England must be set up now, as this amendment suggests. This organisation should become a focus for the postgraduate deans and should probably be their employer. Secondly, we must make more use of the expertise in education that lies in the universities across the country. While universities are engaged in nurse education and that of some other healthcare workers, we must be one of the few countries in the world where universities play little or no formal role in postgraduate medical education. Of course, most clinical professors and their staff are engaged in teaching postgraduates, but the universities have no formal roles. It makes quite a bit of sense, therefore, to consider having the universities play a much bigger role in the local skills networks with the NHS providers. The postgraduate deans might indeed be employed by the universities if they are not to go into Health Education England, although I am not suggesting that their budgets go across to the universities-that may be a step too far.

Perhaps I may ask the Minister whether it would be possible for the deans to be seconded to the local university. It might well be a valuable outcome if the deans could then work closely with local NHS/academic partnerships rather than with NHS providers alone. The example of the academic/health service partnerships set up as collaborations between the NHS and universities to encourage research and the transfer of innovation into practice, as initiated at UCL, might be worth following, and I hope that it might find favour with the Minister. A new partnership built on this kind of model, with deans, providers and universities, and advice from the royal colleges and oversight from Health Education England, would, I believe, find a lot of favour. It would not be providers alone, and it would not be universities alone-where we have seen some of the difficulties associated with nurse education-but a balanced combination of the two. I hope that we can see something emerge along those lines. If that is seen to be the general direction of travel now, even if the detail comes later when we have seen the Future Forum's report, it will settle many of the anxieties that exist.

I understand that there is an intention to set up an interim Health Education England some time next year, but unless it is given the budget for education, some £5 billion a year, and if the money is instead diffused into local skills networks in the meanwhile, I fear that it will be lost for ever. That is why we should have a clear statement in the Bill now about Health Education England and its funding.

The other part of the amendment refers to the need to ensure that the funding for education and training is not eroded in the changeover, and I hope that the Minister can give us some comfort there, too.

I know that there is much more work to be done by the Government, but we should not leave this until some uncertain future. We must have something a little more concrete in this Bill, and I hope that the Minister will be able to help us.

Photo of Baroness Emerton

Baroness Emerton (Crossbench)

My Lords, I have put my name to Amendment 47B. At Second Reading, I referred to why I thought it important that education and training be mentioned in the Bill, even though it was understood that work was already under way. Noble Lords who have spoken have underlined the importance of education and training being mentioned in statute now.

The Health and Social Care Bill proposes a comprehensive health service reliant on an effective workforce that is capable and competent to deliver a service that demonstrates improved patient outcomes. For this to happen, there needs to be an effective partnership between the NHS and universities. The introduction of local commissioning of services will also require local commissioning for education and training places for the agreed workforce plan at both local and national level. There must be multi-professional involvement if professional silos are to be avoided, both in relation to funding and the structures and governance arrangements that underpin the workforce. For too long, silos have been the problem in the funding arrangements for education, training and research.

Developments around the establishment of the Health Education England are now being considered, but, as has already been said, progress is slow and is causing anxiety out in the field. The intent to move to an integrated health and social care service calls for these partnership arrangements to be made. There is a need to ensure the right balance of responsibility and accountability between Health Education England and the provider-led networks-employers/professions, the education sector and the whole workforce, plus patient and public representatives, working together. It is vital that this is a proper partnership and representation on the boards of local education and training boards, which can ensure effective multi-professional workforce planning. Representation of universities, medical schools and postgraduate deaneries, in relation to both non-medical and medical education, on the board of the local education training boards will ensure effective co-production of the healthcare workforce.

Universities should not be considered simply providers of education programmes but also co-producers of the workforce through this wider role of research, innovation, releasing social capital, and the globalisation of healthcare, which is integral to the development of advanced clinical care, service redesign and workforce planning. Universities should work in co-operation with the NHS to ensure the delivery of high- quality education and training and then be held to account by Health Education England. Ensuring that universities are a central part of the local education will facilitate effective partnerships, improved quality outcomes and a multi-professional approach.

The intent to move to this is very important and the establishment of budgets, which has already been mentioned, is also crucial. As already stated, silos should be avoided so that an integrated approach can be established to the education and training of the workforce. The challenge for the new education system will be whether it can truly ensure the co-product of a workforce that can deliver the new way that care can be delivered-one that will provide holistic care, especially adapting to the demographic changes, demanding more care in the community for the elderly, frail, vulnerable and for end-of-life care. Budgets will need to reflect the most cost-effective provision of care to enable hospital expenditure to be reduced.

Nursing, midwifery and other allied healthcare professions are committed to evidence-based practice and would warmly welcome the multi-professional involvement in education and training programmes as well as the benefit gained from multi-professional buildings and shared facilities. Not only would this be of benefit for the learning environments but it could be cost-effective in the use of expensive educational facilities, tutorial staffing and equipment. Could the Minister clarify some of these issues in his summing up?

Photo of Baroness Finlay of Llandaff

Baroness Finlay of Llandaff (Crossbench)

My Lords, I have an amendment in this grouping. It addresses the duty that I would like to see on clinical commissioning groups to promote education and training of the current and future NHS workforce. The reason for putting the future in is because of the undergraduates who are studying to become healthcare professionals. This is important because we know that primary care placements at undergraduate level have a significant influence on career choices and therefore on career progression. The quality of training and the quality of care given by the tutor who is their tutor in primary care is influenced by having undergraduates with them. That applies across all the disciplines that work in the community.

The other point is that general practitioners will need training in commissioning responsibilities in the future. Therefore, if we are to attract the brightest and best of our undergraduate clinical workforce to work in the community and eventually contribute in clinical commissioning groups, they need to have excellent exposure at an undergraduate level.

I also support the other amendments in the group so eloquently introduced by my noble friend Lord Kakkar. I strongly support the comments made by all the other noble Lords who have spoken. We need to have this duty at every level-at Secretary of State level, at commissioning board level and, as I have suggested, at clinical commissioning group level. The one area that we have not addressed and that is not in the amendments is the way that Monitor grants licenses. We might need to come on to that at a later stage when we discuss Monitor.

There is a particular need for planning medical education and training and having it planned nationally. It takes 15 years, on average, from start to finish to develop a specialist in highly technical, very complicated areas of medicine. There are about 32 small specialities, and in-depth local intelligence and intelligence within that speciality are needed to know both the numbers that are needed in the future and to horizon scan and look at the type of training that will need to be delivered and whether things will change. A simple example is in surgery, to which reference has already been made, where keyhole surgery came about. My discipline, the development of palliative medicine as a distinct speciality, has completely altered the face of some of the care in both hospitals and the community, and it has a significant workforce which is still developing.

There is also a need for reliable information on education and training so that the Centre for Workforce Intelligence can work with the proposed Health Education England to ensure that there is good information and opinion decisions. Quality management of education and training in medicine is currently undertaken by the deaneries, by and large, and that should be built on. They provide independent quality assurance. If the dean is the responsible officer and has a ring-fenced budget and a financial lever, they can withhold funding for posts and have been shown in many parts of the UK to rapidly drive up quality where there have been concerns about the training environment into which trainees were going. It is not difficult to expand that system to take on postgraduate deanery structures for the other disciplines as well.

I strongly endorse the need for the allied healthcare professionals and nursing to come under the new structure as well. There is a need for inter-professional working and learning. Inter-professional learning and integrated delivery of services with integrated learning will drive up the quality of care and ensure the development of good clinical leadership so that we bring the level of the best into the delivery and content of education and training.

The commissioning groups, in particular, must ensure that there are appropriate facilities for education and training. The quality of the commissioning they do at a local level, with both NHS and other providers, will ensure that undergraduate and postgraduate students can be placed in and learn from a wide range of services. We will then have a workforce fit for the future.

Health Education England, when established, can audit the local education and training boards and maintain a national perspective. There is worrying information about the way things are going. I have spoken to the Medical Schools Council, which recently surveyed medical school involvement in the development of the emerging local education and training boards. It indicates a variable extent to which higher educational institutions are involved in planning and suggests that the structures will vary widely. In some areas, such as the north-west and the east Midlands, medical schools and higher educational institutes appear to be actively excluded from the developing local education and training boards. This is extremely worrying because in service transformation there needs to be quality control and academic rigour. Medical schools are required by the General Medical Council to act as quality managers of clinical placements but, by excluding those which are providing education from the local education and training boards, we risk having a serious disconnect in the way that services develop and are delivered, and in the way that our workforce is trained.

4:45 pm
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Lord Ribeiro (Conservative)

I have listened to the debate with considerable interest, particularly as it brings to our attention the whole concept of Health Education England. I think Health Education England is a work in progress, and the reason I say that is that, as a result of the MMC/MTAS debacle that took place in 2006-07, one of the major recommendations of the inquiry that followed by Sir John Tooke was that a new body should be set up called Medical Education England. That recommendation was accepted by the Government at the time, and by the Opposition. It started work under the chairmanship of Dr Patricia Hamilton, who has come to this House to give her views on the development of education and training.

The reason I mention that is that Medical Education England was designed to deal with medicine. Yet, as the noble Baroness, Lady Emerton, has said, more than 50 per cent of the multiprofessional education budget actually goes on nurses and other non-medical members. Therefore, it is totally inappropriate to be moving on to a Medical Education England model when clearly we have to encompass all the other health providers, and hence we have Health Education England. I understand the desire of the noble Lord, Lord Warner, to get on with this but, to get this to work, it needs to be thought through very carefully. One of the reasons-certainly from the medical point of view-is that, among the questions we asked in 2006 was, "What is the end point of training? What are we training these doctors for?". One has always assumed that most medical treatments will occur within the hospital sector but we know, because of the ageing population, that more and more is being done in general practice and in the community. We therefore need to think very carefully about how we train doctors for the future and where they are going to work.

It is important, therefore, that we give time for the development of the workforce as well as the training and the education of the workforce. The noble Baroness, Lady Finlay of Llandaff, referred to the Centre for Workforce Intelligence, which is very important, but that is a new agency. I was in America last year, when a representative from it came to brief the American College of Surgeons Health Policy Research Institute on how it was trying to work out where doctors should go within the UK with respect to geography as well as specialty. They were taking advice from the Americans as to how they were trying to map and plan their health workforce.

I think this is work in progress. I welcome that this is a probing amendment, but I do not feel that at present we are in a position to roll out Health Education England without having heard the full report from the Future Forum.

Photo of Lord Owen

Lord Owen (Crossbench)

My Lords, I reiterate some of the comments that have already been made by many noble Lords on the sense of urgency about this issue. Above all, I feel rather like the man in the Bateman cartoon who mentions the words "party politics" in the Health and Social Care Bill in the House of Lords. There is here a very deep question. It is frankly inconceivable that there will be legislation in the next Session; I would think it would be almost inconceivable that there would be legislation on this before the next election, which is currently scheduled for 2015. Politicians simply do not usually go in for a repeat hiding, and this Bill has already had one hell of a political controversy. If we have legislation, it may be all on medical education, but it opens up a whole realm of party politics, which I just do not see being done.

Therefore, I want to make a practical suggestion to the Minister. There is a way through this if there could be bipartisan agreement. One only has to think of a situation in which there is no legislation until 2016 to realise that we are facing a real chasm in medical education and continuity. As I understand the legislation, the Secretary of State is empowered to create special health authorities. Whether he does that or removes the ones that are necessary, that power is there. If not, he could easily take it in the Bill.

There is so much cross-party agreement that doing something about health education is pretty urgent. I would have thought that it would be perfectly possible to meet most of the demands. The noble Lord, Lord Ribeiro, is completely right. We are not in a position to legislate now on anything other than a structure. That structure might be a temporary special health authority. It is not worth prejudging the question but, if it was a special health authority, it would need some form of regulation passed. As long as an agreement could be made-first on the clause that would be in the Bill, along the lines more of Amendment 47B than 47A; and, secondly, with the main substantive regulations for the special health authority done through an affirmative resolution-then it would be perfectly possible for us to move on the creation of this training authority, which has to embrace all the health professions and be pretty wide-ranging, some time at the end of 2012 or early 2013. That would meet the wishes of most people in the National Health Service.

It is really not enough to rest on the fact that there will be a Bill in the next Session of Parliament. I have already tried to convince my own college, the Royal College of Physicians, that it is highly unlikely that this will be fulfilled. As practical politicians, we should ask the Minister to take this away with a measure of real good will to see if there is some way through this issue which does not prejudice the long-term future but allows us to fill a very serious gap.

Photo of The Archbishop of York

The Archbishop of York (Bishop)

My Lords, I too support the amendment of the noble Lord, Lord Warner. Proposed new subsection (2) simply says that:

"In discharging this duty, the Secretary of State must establish a body known as".

It does not tell us the rest of the details. It puts a duty on him or her to establish a body responsible for,

"the oversight, supervision and management of all current functions relating to NHS multi-disciplinary education and training, including post-graduate deaneries".

How will it deliver that? What is going to be its content? That is for the Secretary of State in the future. But we fail in our responsibility if we miss the opportunity right now in the Bill to flag that up as part of the duty of the Secretary of State.

Noble Lords may remember from Second Reading that I spoke against supporting the Motion of the noble Lords, Lord Owen and Lord Hennessey, because I wanted to ensure that the constitutional duty of the Secretary of State is to promote a comprehensive health service and improve the quality of that service. I told the House that I have recently spent time in three different NHS hospitals: University College, London; St Thomas's Hospital; and York Hospital. These are teaching hospitals. I was more than content that whenever the doctors saw me they came with a large range of nurses, doctors and those in training of all kinds. I became a guinea pig. I did not mind because I knew that I was in a training hospital. How are we to ensure that our National Health Service has that responsibility of making sure they are training hospitals? We must not assume that our NHS delivery of clinical care is almost like the assembly line of a motor car where you fix it and it goes out okay. It is not that kind of thing. What distinguishes most of the best clinical practice is the fact that our National Health Service has these training hospitals. I would be unhappy to know that the Secretary of State had not established a body, known as Health Education England, with responsibility,

"for the oversight, supervision and management of all current functions".

Where will those lie when the Bill has been passed?

Last time, when we debated other amendments, there was a worry about the diagram of the proposed structure of NHS reforms in the Bill. I drew one up for myself. Listen: the Secretary of State is on top, then there are other bodies-Public Health England, HealthWatch England, the Care Quality Commission, Monitor, NICE, clinical senates and networks, the NHS Commissioning Board, local HealthWatches, health and well-being boards, the community voluntary sector, local government social and public health, and multiple clinical commissioning groups. Where is education in all this? When the Minister replies, will he tell us where he thinks education is going to lie? If it does not lie within this Bill, with its already very complicated structure, the next time I am being treated in the NHS I will be crying, "Where are those learning as I am being treated?".

5:00 pm
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Lord Mawhinney (Conservative)

My Lords, I do not intend to detain your Lordships very long. However, I very much hope that my noble friend the Minister will consider, as I do, that these amendments and this debate are premature. I do not think that we should be focusing on the substance of these debates other than to point out to my noble friend, as was pointed out when we did this a few sittings ago, that there is a broad sense of the importance of putting on the face of this Bill the responsibility of the Secretary of State for education and training. In that sense I agree with the most right noble Prelate-with the Archbishop of York.

Noble Lords:

Primate!

Photo of Lord Mawhinney

Lord Mawhinney (Conservative)

I am a just a simple Belfast boy. Archbishop of York seems pretty good to me; most of the clergy I know can only fantasise.

The timing of this debate is important in that it reinforces the message that my noble friend got the last time this was debated in this Chamber. I hope that he will tell those who tabled the amendments that they are premature. If he does, he will need to tell them that he will take away the contents of this debate and the previous one and bring back, in whatever way the Government think is appropriate, a means to attach the principle of education and training to this Bill. He knows that I hope that he will do that, but I hope that he is encouraged that I share the views expressed that this is not yet the time.

The noble Lord, Lord Owen, has addressed particularly well the element of perplexity and perhaps confusion in the NHS about the Government's intention. My noble friend and his colleagues keep going on about the Future Forum. I am sure that it is doing a fine job, and no word of criticism about it will cross my lips-except to say, as a simple Belfast boy, that in a democracy it seems to me that the role of this House is to try to persuade Ministers; it is not its role to try to persuade those who are going to try to persuade Ministers. The Future Forum may have an important role, but I would like us to discharge our role quite clearly. The noble Lord, Lord Owen, has the experience of having served in Cabinet, and I have been extremely fortunate and blessed to have had a similar experience. If my noble friend or the Secretary of State can go to the Dispatch Box and say, "I undertake that there will be legislation", and specify the Session, we will all believe him. However, if that is not possible, it adds to the importance of bringing forward at least the principle to get this issue into this Bill.

Those of us who are in favour of education and training but want to support the Government are not entirely clear whether we should be tempted by Amendments 47A, 47B or 133, and I have to say to the noble Baroness, Lady Finlay, that I am not tempted by her Amendment 199A. But at some point this House has to make a decision, so I hope that my noble friend will stand up, look the noble Lords who tabled these amendments in the eye and say, "Thank you, it's been very helpful and I've heard what you've said. I'll take it away and I'll bring something back on Report, which I hope will satisfy the whole House". In the mean time, I hope that noble Lords will not press their amendments.

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Baroness Finlay of Llandaff (Crossbench)

I hope that the noble Lord, Lord Mawhinney, will be tempted by this comment. If commissioning groups do not have a duty towards education and training, there is a real danger that they will commission services that are equal in quality but undertake no education and training and are therefore of a lower price as they do not incur the expenditure of having to have facilities, and so on, to provide education and training as well. In that case, we will deny the developing workforce expertise of quality placements in many parts of Britain as local commissioning will not take account of it.

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Baroness Thornton (Labour)

My Lords, at the risk of stating the obvious, the massive reorganisation of the NHS proposed in the Bill, combined with the need to make £20 billion of efficiency savings, without doubt, and with common agreement across many of the professions, threatens the quality and delivery of medical training, post-graduate training and workforce planning. That is why noble Lords have been exercised about this matter from the outset.

The concern is that responsibility for medical training will be given to healthcare providers who, as I understand it, have a history of allowing service and research to dominate the agenda at the expense of education. That brings with it risks of its own. Many trusts, as other noble Lords have said, have persistently failed to support education supervisors by recognising this activity in job plans and increasingly failed to support their staff in fulfilling important national roles related to standards setting and training. I think that most noble Lords who have spoken would agree that there is an insufficient mention of the safeguards that need to be put in place to protect the quality of medical training.

The noble Lord, Lord Kakkar, and my noble friend Lord Turnberg mentioned their concern about post-graduate deaneries. Indeed, that was a major stream of work for the Future Forum. I would like to say to the noble Lord, Lord Mawhinney, that as he made his remarks about the Future Forum I wrote in my notes that I do not understand why the Department of Health seems to have franchised that particular piece of policy-making out to the Future Forum. I think that the Future Forum was right in what it said about the dangers and risks involved in abolishing the strategic health authorities and its recommendation that it was mandatory and critical that alternative arrangements should be made.

We know that post-graduate deaneries are currently pivotal in quality managing the delivery of medical training in trusts, but the planned replacements, being answerable to and funded by healthcare provider units, may lack the impartiality required to drive the quality agenda at a time when it is most needed because of the fiscal pressures and the associated threat to education quality. We all agree that effective management of the complexities of post-graduate medical training require professional leadership skills and experience, which take many years to develop. The noble Baroness, Lady Finlay, underlined that point in her remarks. My noble friend Lord Warner put his finger immediately on the crucial aspect-how will the money be safeguarded and how will we make sure that the funding that is necessary is in the right place, is accountable in the right place, and cannot be directed into places that we would not wish it to be? How will the Government make sure that that is what happens?

I was very struck by the briefing on this matter by the Royal College of Nursing. The noble Baroness, Lady Emerton, referred to this. The Royal College of Nursing expressed its concern that Medical Education England would dominate the new organisation, HEE. I think we would all agree with the RCN that:

"It is essential that nurse educators are treated as equals and the membership of HEE is representative and not led by the medical deaneries".

The Royal College of Nursing also believes that there is an essential role for national planning in the delivery of these important functions. I think that there are great risks in the decentralisation of education and training in terms of quality, standards and safeguards. It is unclear how the skill networks or the LETBs will be held accountable for performance issues. It is not clear what authority Health Education England will have to enforce performance issues or how its overseeing of the skills network will take place.

There are some key questions for the Minister to address. The crucial one, which was mentioned by the noble Lord, Lord Owen, who used the expression "chasm in continuity", is how long we will have to wait for legislation. We cannot be sure that the primary legislation that will be required in this area is going to come down the track in the next year. The Minister needs to recognise that it is too risky to leave this to chance and we have to put the appropriate duties and powers in the Bill to ensure the continuity that the noble Lord, Lord Owen, mentioned. On these Benches, we are very happy to discuss how to resolve that particular issue and how to ensure that medical education is safeguarded.

This is an important group of amendments. I am slightly worried by the statement of the noble Lord, Lord Ribeiro, that this is work in progress. The problem is that there is too much work in progress and there will be too much work in progress for the next few years. This is an area where we cannot take chances. We know from previous reorganisations, for which my Administration were responsible, that we have to be absolutely sure that we are safeguarding the education and training of future generations of workers in the National Health Service.

The most reverend Primate said that continuity and certainty are vital. I agree with him. Certainty in this area is vital. I look forward to hearing the Minister's views, but I suspect that we have not heard the last of this subject.

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Earl Howe (Conservative)

My Lords, the Government are clear that the education, training and continuing development of the healthcare workforce are fundamental in supporting the delivery of excellent healthcare services across the NHS. I am very pleased that so many noble Lords here today share that view. It is certainly the Government's view. I very much welcome what have been excellent comments on this subject.

Amendment 47A, tabled by the noble Lord, Lord Kakkar, seeks to insert a new clause placing a duty on the Secretary of State to establish a body called Health Education England. Similarly, Amendment 47B, tabled by the noble Lord, Lord Warner, seeks to place a duty on the Secretary of State to "provide or secure" an education and training system and to establish Health Education England to take responsibility for these education and training functions. Amendment 47B also specifies that the budget for education and training should be calculated on the basis of total health service expenditure and,

"should be no less than the level of expenditure on education and training at the time of Royal Assent".

The Government recognise the importance of having an effective education and training system for the healthcare workforce. The NHS invests approximately £4.9 billion centrally in the education and training of health professionals. It is vital that there is a robust system in place to manage this investment wisely, with clear lines of accountability to Parliament. I would point out to the most reverend Primate that that is exactly why we tabled Amendment 43 which, as the Committee will recall, we debated in our first session. The Committee has already approved that amendment, which is now in the Bill and which says that there is a duty on the Secretary of State to exercise his,

"functions ... so as to secure ... an effective",

education and training system. It is perhaps worth my flagging up that that amendment has received a positive response from the British Medical Association, which, in the current circumstances, is a rather remarkable fact. I reiterate that it is designed to ensure that the healthcare workforce has the right skills, behaviours and training to deliver a world-class health service. But we want to put flesh on the bones here. We recognise the need to do that and I therefore undertake that we will publish detailed proposals for the education and training system ahead of the Bill's Report stage where we will describe how this duty will be enacted in practice. However, there are parts of our plans that I can set out now.

It is vital that we ensure a carefully managed transition into the new system and protect staff and students currently undertaking training. We are taking a number of actions in developing the new system to achieve this that I would like to highlight. The Future Forum recommended that the establishment of Health Education England should be expedited to provide leadership and stability in the system. We agree and it is heartening to see that many noble Lords support this course of action. We have appointed a senior responsible officer to drive this forward and inject pace into the design and development of Health Education England.

To respond to the noble Lord, Lord Owen, while I do not share in any way his analysis of the future prospects of the next health Bill, he was right on one matter: we plan to establish Health Education England as a Special Health Authority in 2012. This will enable it to take on some of its functions from October 2012 and be ready to be fully operational from April 2013. There is not and there will not be the chasm that the noble Lord referred to. Noble Lords will have a chance to scrutinise the establishment order and regulations to set up Health Education England as a Special Health Authority when they are laid before Parliament in early summer 2012. Lest there is any doubt on the matter, I reassure the Committee that it is our intention that Health Education England should form excellent partnerships with a full range of bodies involved in the planning, commissioning, provision and quality assurance of education and training.

However, I can say in particular to the noble Lords, Lord Warner and Lord Kakkar, that Health Education England will provide national leadership for education and training, overseeing workforce planning and the commissioning and delivery of education and training across the system. We have been clear about its accountability to the Secretary of State to ensure that, at national level, there are sufficient health professionals with the right skills, education and training to meet future healthcare needs. Providers of NHS services will be expected to meet the obligations set out in the NHS constitution, including the right of recipients of NHS healthcare to be treated with a professional standard of care by appropriately qualified and experience staff. Health Education England will hold responsibility for the management of the NHS multi-professional education and training budget, or MPET. To ensure that this budget is sufficient to support the development of the future NHS workforce, equipped with the right skills, our intention is to base the size of this budget on the needs of the service, supported by robust analysis of local workforce and education and training plans.

The question of postgraduate deaneries was raised in particular by the noble Lord, Lord Turnberg. The SHAs will continue to be accountable for postgraduate deaneries until 31 March 2013. Securing continuity for the work of the deaneries will be a key part of a safe transition. It is expected that deans and many of their staff will continue to take forward the work of deaneries with an emphasis on a new, multi-professional approach in the new system architecture.

To pick up one point made by the noble Lords, Lord Kakkar and Lord Turnberg, we also want to see stronger partnership working between postgraduate deaneries and universities. Further work is under way on the detail of these arrangements, with the right accountabilities for the quality of education and training lying with Health Education England and the professional regulators.

I was asked by the noble Lord, Lord Kakkar, about ring-fenced funding. As he knows, the MPET budget currently funds the education and training of the healthcare workforce and it is the responsibility of SHAs to invest the budget appropriately. We have proposed transparent systems to ensure that organisations receiving MPET funding under the future arrangements are held to account for using it for the education and training of the workforce.

The noble Lord also asked whether there will be a requirement to engage fully with academics. I partly covered that point but I emphasise that the new system presents a golden opportunity to build stronger links between the NHS and the academic health sector and to strengthen the educational foundation for research and innovation. Health Education England will ensure that research capability and capacity is maintained and it will forge strong partnerships with academia. Health Education England will work with the royal colleges, the Academy of Medical Sciences, regulators, universities and service providers to ensure that the needs of healthcare delivery are reflected in developing curricula in the context of the statutory responsibility of regulators.

The noble Lord, Lord Turnberg, asked me about standards. I reassure him that standard-setting will be the role of Health Education England at a national level, and this is in addition to the important role that the professional regulators play in this area.

However, despite the progress that we have made, a lot more work has to be done to get these important arrangements right. In my view, that is why it is important that we do not try to amend the Bill in a way that later turns out not to be appropriate. The Future Forum is now leading a second phase of engagement on education and training, focusing particularly on the need for greater flexibility in training, variation in standards and quality, and the need for stronger partnership working between education, academia and service providers. I take this opportunity to mention that tomorrow I am hosting a seminar with Professor Steve Field, chair of the forum, and I welcome your Lordships' involvement.

I appreciate that the service is waiting for detailed plans for the education and training system to be finalised and published, and I have two promises that I can make on this. The first is the one to which I have already alluded. Once the Future Forum has concluded its work, and prior to Report, the Government will publish more detail on the changes to the workforce planning, education and training system. That, incidentally, will include more detail on postgraduate deaneries. Secondly, it is likely that primary legislation will be required to support the continuing development of the education and training system, including establishing Health Education England as a non-departmental public body, but we think it is important to spend time to make sure that these arrangements are correct rather than legislate at this stage. However, I can tell the Committee that we intend to publish draft clauses on education and training for pre-legislative scrutiny in the second Session in the same way as on research. This approach will enable us to ensure that the legislation is fit for purpose and that it allows additional opportunities for parliamentary scrutiny of the legislation. I hope that this undertaking will be welcome to noble Lords and will indicate the Government's strong desire to provide maximum clarity on these matters at an early stage. Therefore, I hope that noble Lords will feel able not to press those particular amendments.

The noble Lord, Lord Kakkar, and the noble Baroness, Lady Finlay, have tabled remarkably similar amendments-Amendments 133 and 199A respectively-also on the subject of education and training. The noble Lord, Lord Kakkar, wishes to impose a duty on the NHS Commissioning Board to,

"promote education and training of the health care workforce".

The noble Baroness, Lady Finlay, wishes to introduce a similar duty on clinical commissioning groups. As I have indicated, the Government's intention is to delegate responsibility for education and training to healthcare providers. They are at the front line of service delivery and are best placed to understand how the workforce needs to develop and respond to the needs of patients.

Responsibility for education and training is of great importance to employers and the various professional bodies that the noble Lord, Lord Kakkar, mentions in his amendment, but commissioners will also have a role. I agree entirely that education and training needs to be effectively linked with the wider system. I am aware of concerns voiced by the royal colleges and professional bodies on precisely that matter. I wish to reassure the Committee that I recognise the vital interrelationship between education and training, and commissioning decisions. That is exactly why national and local education and training plans will need to respond to the strategic commissioning intentions set out by the board and clinical commissioning groups.

Similarly, in commissioning decisions there will be a need to consider the implications for education and training-it works both ways. The NHS Commissioning Board has to work closely with Health Education England and it will be a mutually supportive relationship. Indeed, this will be a prime example of the co-operation duties that will apply to the board and to other NHS bodies. Commissioners must also promote and have regard to the NHS constitution, which of course contains the pledges that I have already referred to.

I do not intend to speak for very much longer but there are a couple of points that I ought to cover. A number of noble Lords pointed to the lack of medical school involvement in the set-up of local arrangements. I need to be clear about this: the new arrangements are underpinned by the desire to strengthen both the provider voice at the local level and the role of professionals and education providers. We envisage that one of the functions of local bodies will be to ensure strong partnerships with universities and medical schools. Providers of services will have to work in partnership; they cannot just sit alone and ignore everybody else. The form of the local provider-led arrangements is still being developed. More details will be available prior to Report, but I have stressed the links that we envisage with academic colleges at a local level.

I hope that I have indicated that, contrary to the statement from the noble Lord, Lord Warner, that within the modernisation agenda we somehow forgot about education and training, this is not at all the case. As I mentioned when we debated this before, this has been an active programme of work ever since the general election. It is a complex issue and we want to get it right. My noble friends Lord Ribeiro and Lord Mawhinney were spot on in their judgment on this. We are taking action now. We are not losing time over this.

To sum up, we have made provision for education and training in the Bill. We will publish our detailed proposals before Report and we will publish draft clauses on education and training for pre-legislative scrutiny in the second Session. With those assurances, I hope that the noble Lord will feel able to withdraw his amendment.

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Lord Kakkar (Crossbench)

My Lords, I thank the Minister for his very detailed and extensive response, which is genuinely welcome. He has dealt with a number of the issues that were covered in this important debate. The confirmation that Health Education England is to be established as a special health authority and that a senior responsible officer has been appointed to drive forward its development at a pace to ensure that it is in a position to fulfil its important obligations and functions is a very welcome announcement. I think it will provide considerable hope that the question of education and training can be fully and appropriately dealt with in such a way that any future legislation can build upon an established structure that has already given confidence to those responsible for education and training that these matters can be properly dealt with.

The noble Earl has also confirmed a number of other important actions that he and his department propose to take as we move forward with this Bill. His confirmation that draft clauses of any future legislation dealing with education and training will be available for pre-legislative scrutiny and that an understanding around those draft clauses will be provided prior to the Report stage is welcome, as is the confirmation that the work of the NHS Future Forum will also be available to inform any potential discussion that we have in this matter on Report.

The confirmation that it is envisaged that Health Education England and any local arrangements for education and training boards represent true partnerships-academic service partnerships across the broad discipline, representing elements of the healthcare workforce-is also warmly welcomed. The question of the budget for Health Education England will require further discussion but the confirmation that Health Education England will have responsibility for supervision of the budget for postgraduate education and training is important, as is the recognition that postgraduate deans need to have an ongoing and developing relationship with the universities.

I wish to address the implied criticism that it was inappropriate to bring this group of amendments at this stage, the Committee having on its first day considered government Amendment 43. As I said at the outset, Amendment 47A and the others in this group were probing amendments to build upon the welcome comments of the Minister on the first day of Committee when Amendment 43 was moved. The Government's approach to specifying in the Bill a responsibility for education and training for the Secretary of State for Health was an important announcement. Many noble Lords felt therefore that probing amendments thereafter to explore the opportunity for the establishment of Health Education England in whatever form to relieve anxieties about the situation described by the noble Lord, Lord Owen, was an appropriate amendment to bring at this stage.

I am grateful to the Minister for having dealt with these matters with such clarity and in such a way that anxieties around the areas of education and training can now be addressed in a constructive and co-operative fashion with broad support from all parts of your Lordships' House. This will ensure that this vital function is developed for the benefit of patients who need to use our health services by ensuring that we have the best trained healthcare workforce to deliver the highest standards.

5:30 pm
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Earl Howe (Conservative)

Before the noble Lord decides what to do with his amendment, I should say that I did not wish in the least to imply that this debate was inappropriate in any way. If I did, I apologise. If I may correct one thing that he said, the draft clauses for pre-legislative scrutiny will come forward in the next Session of Parliament rather than before Report. However, we will be publishing much more detail before Report about what our plans will look like.

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Lord Kakkar (Crossbench)

I welcome those comments. It was not a criticism made by the noble Earl about this but by other noble Lords; there was a suggestion that it was not appropriate to discuss education and training in any detail at this stage. These were probing amendments, designed to provide Her Majesty's Government with the opportunity to address issues, to allay concerns and to allow for further appropriate and constructive evaluation of this matter in the Bill in such a way that noble Lords could fulfil their function of scrutiny and revision to ensure that the best possible Act is finally delivered for the people of our country. With those comments, I beg leave to withdraw the amendment.

Amendment 47A withdrawn.

Amendment 47B

Tabled by Lord Warner

47B: After Clause 5, insert the following new Clause-

"Secretary of State's duty relating to education and training

(1) The Secretary of State has a duty to provide or secure the provision of an effective system for the planning and delivery of education and training of a workforce of sufficient size and competence to discharge his duties under this Act to ensure a comprehensive health service.

(2) In discharging this duty, the Secretary of State must establish a body known as Health Education England and this body will be responsible for the oversight, supervision and management of all current functions relating to NHS multi-disciplinary education and training, including post-graduate deaneries.

(3) The budget for this body and its functions should be calculated on the basis of a formula related to the total health service expenditure and initially should be no less than the level of expenditure on education and training at the time of Royal Assent."

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Lord Warner (Labour)

My Lords, I am grateful to everybody who has spoken in this debate. I particularly welcome the support given by the most reverend Primate and by the noble Lord, Lord Owen. I share the scepticism of the noble Lord, Lord Owen, about next-Session legislation and we would all do well to think carefully about his remarks.

I am still rather puzzled about why, if the Government are prepared to set up Health Education England as a special health authority, they cannot put it in the Bill along the lines of Amendment 47B. By all means doctor Amendment 47B. It was not the purpose of Amendment 47B to unreasonably tie the hands of the Government but I am still struggling with the question of why, if the Minister is prepared to produce a detailed paper before Report in which he agrees to set up a special health authority by next September, we cannot have a sensible cross-party discussion about setting up Health Education England in this Bill and giving the Government the necessary powers to make regulations to fill in the details.

My ears pricked up on the subject of money when the noble Earl said that there would be a "robust analysis". I am willing to open a book on how far south of £4.9 billion the Government end up with on the robust analysis on education and training. I am available at all hours to discuss the odds a little further on this issue.

I will study the noble Earl's remarks carefully. I listened carefully to what he said. He has moved some way. Whether he has moved sufficiently far to stop us bringing forth an amendment on Report is in doubt.

Amendment 47B not moved.

Clause 6: The NHS Commissioning Board

Photo of Baroness D'Souza

Baroness D'Souza (Non-affiliated)

I must advise your Lordships that if Amendment 48 is agreed to I cannot call Amendments 49 to 51 by reasons of pre-emption.

Amendment 48

Moved by Lord Hunt of Kings Heath

48: Clause 6, page 3, leave out lines 27 to 34 and insert-

"(2) The Board has the function of arranging for the provision of services for the purposes of the health service in England in accordance with this Act and subject to any directions issued by the Secretary of State.

(3) The Board must exercise the functions conferred on it by this Act in relation to clinical commissioning groups so as to secure that services are provided for those purposes in accordance with this Act.

(4) The Secretary of State may give a direction to the Board to discharge each of those functions, and in such manner and within such period or periods, as may be specified in the direction."

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Lord Hunt of Kings Heath (Labour)

My Lords, we come to a very important matter-the role and function of the national Commissioning Board. It is almost as important as the previous debate on the responsibilities of the Secretary of State.

In a telling intervention last week, the noble Lord, Lord Marks, spoke of the tension in the Bill between the proposed duty to promote autonomy on the one hand and the fulfilment of the Secretary of State's overall responsibility for securing the provision of services on the other. I suspect there is a similar tension built into the Bill in terms of the relationship between the Secretary of State and the national Commissioning Board.

At the heart of this debate have been concerns about the alleged micromanagement by the Secretary of State into the affairs of the National Health Service and specifically with regard to reconfiguration decisions. I sympathise with those in the NHS who can feel frustrated if hard-worked-through proposals are held up or rejected by Ministers or the service is constrained by too many interventions and targets from the centre. To think that this can simply be waved away in the new structure may prove to be optimistic. I suspect that a confusion of responsibilities between the Secretary of State and the national Commissioning Board and the plethora of organisations the Government have established or proposed to set up may well add to the burdens of the NHS.

Why is there political intervention in the health service? Surely there is political intervention because the NHS is one of the most important services that the Government are called upon to deliver to the public. Surely there is political intervention because, in the end, the public require it. In our debate last Wednesday the noble Lord, Lord Mawhinney, said that the public, for whom the NHS exist and who pay the NHS bill, expect politicians to intervene on their behalf. Indeed, democracy may be a messy process but I prefer a messy process to rule by quango or even an unaccountable group of clinicians.

Even if you succeed in removing the Secretary of State from the picture, is it likely that local NHS organisations will simply be left to get on with life without external interference? The public will certainly not go away and nor will their representatives, Members of Parliament. They will still encourage the Secretary of State to intervene in the health service. Even if the Secretary of State courageously resists that pressure, it will then fall on the national Commissioning Board. I doubt that the regulators, the CQC and Monitor, will be immune. Nor, I suspect will clinical senates, the health and well-being boards that will be established or the commissioning support units that are apparently to emerge up and down the country. Certainly, clinical commissioning groups themselves will not be immune.

The idea that if you remove the Secretary of State from reconfiguration proposals all will be sweetness and light, with rational bodies making rational decisions and a grateful public acquiescing to those decisions, does not seem to be in the real world. Is it really suggested that £120 billion of public money does not require full accountability of Ministers to Parliament? By full accountability I mean sole accountability, rather than the construct of this Bill, which quite remarkably gives the Secretary of State and a quango-the national Commissioning Board-concurrent powers in relation to the crucial duty in Clause 1. It is so important that the Secretary of State is solely accountable because that is probably the best protection of the overriding mission of the health service to provide comprehensive services to all.

I recently read the transcript of the evidence that the chairman of the national Commissioning Board, Professor Grant, gave to the Health Select Committee, which is very interesting. Professor Grant disarmingly described the Bill as "unintelligible" but we know that all Bills, on the face of it, look rather unintelligible. He went on to make much of the Secretary of State's responsibility for delivering, as he put it, a comprehensive NHS. He then laid great stress on the mandate set for the board by the Secretary of State. He suggested that it should be for three years, rather than an annual mandate as laid down by the Bill. He made it clear that if,

"the matter is within the mandate of the Board, it is not within the jurisdiction of the Secretary of State, except that he has power to revise the mandate with the consent of the Board or ... in exceptional circumstances",

he can intervene. The professor concluded that,

"ultimate political accountability ... remains secure, but it requires a Secretary of State to define upfront what he or she wants the Board to be accountable for and to hold the Board accountable for it".

I found that, from the chair of the NCB, eminently sensible and I have no criticism to make of the points that he put forward. However, does that reflect the real world? Things happen, reports are published and crises occur. The Secretary of State cannot simply wash his hands of responsibility. There will be occasions when, mandate or no mandate, he will want to intervene.

A number of today's newspapers carried stories that indicate that the Secretary of State is prepared to sack PCT chairs if they continue to save money by rationing treatments or making patients wait longer for operations. I do not know whether that is true but I say to the noble Earl that I certainly make no complaint about Mr Lansley's actions. It seems entirely appropriate for the Secretary of State to wish to intervene in that kind of event. However, what would happen if the Bill were to be enacted? Let us say that continuing financial pressures led clinical commissioning groups to implement a 15-week wait for non-urgent treatment, or that patient choice was restricted to ensure that sufficient money flowed into the local hospital to ensure its continued viability. Assume then that MPs raised complaints about that in Parliament to the Secretary of State, and that the Secretary of State wanted to intervene. How? Would he call in the chair of the national Commissioning Board? Would the chair say, "I'm afraid that's an operational matter-nothing to do with you, Secretary of State. It's not in the mandate". In any case, the chairman of the national Commissioning Board might go on to say, "You set the NCB one of its main goals, which is to balance the books of the health service. If we take action in the way you want, the books won't be balanced". What happens then? I suspect that there will be a huge tension and tussle, with real confusion in the NHS and among the public as to who is in charge.

Coming back to my Home Office brief, in the past two weeks we have seen some of the problems that can arise between a Secretary of State and an executive agency such as the UK Border Agency. There is absolutely no question that the UKBA is a subordinate agency of the Home Office. Therefore, there is no question over the Home Secretary's right of intervention. Whether she intervened correctly is, of course, another matter. How much more confusion will there be if you establish a hugely powerful quango and give that body the same, concurrent duties as the Secretary of State in relation to the crucial duty set out in Clause 1?

I wish Lord Marsh was still here to talk about his experience in the nationalised industries. He was both Minister for and chairman of British Rail. Those of us who can recall those heady days will remember the inevitable tension between the Minister and the chairman of the nationalised industry. We certainly saw day-to-day intervention by Ministers in rail, steel and the other industries. We also saw a great deal of resentment on behalf of the chairmen of the boards of those industries. My suggestion is that the same is likely to happen over the NHS between the Secretary of State and the national Commissioning Board. That is why the relationship between the NCB and the Secretary of State is so important. Amendment 48 goes to the heart of this by removing the proposal in Clause 6 that the Commissioning Board should have concurrent powers with the Secretary of State in relation to Clause 1. I know that the Government have invited noble Lords to withdraw all their amendments to Clause 1 to allow for further discussions. I hope that the noble Earl will agree to do the same in relation to Clause 6.

The NHS Commissioning Board, however well led and powerful it is, ought not to be given the same, concurrent powers as the Secretary of State. There should be a clear hierarchy and the hierarchy should be the clear accountability of the Secretary of State. In Clause 1, clear responsibility should be given solely to the Secretary of State. That would therefore mean that the Secretary of State would have full power of direction over the national Commissioning Board. That would establish a sensible priority and ensure that clear accountability to Parliament through the Secretary of State is maintained. Above all, it would give clarity to the National Health Service. I beg to move.

5:45 pm
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Lord Mawhinney (Conservative)

My Lords, I too want to focus on line 27 of Clause 6:

"The Board is subject to the duty under section 1(1) concurrently with the Secretary of State".

This raises all the issues that we have debated at length. I know that the Minister has taken away Clauses 1, 4 and 10, but, as the noble Lord, Lord Hunt, said, it would be extremely helpful to the Committee if he agreed to take away Clause 6 as part of the package on which to consult. Otherwise, those words in the Bill continue to provide a fault line that at some point will need to be addressed. I hope that my noble friend feels that it would be more productive to address this point in the spirit of co-operation and cross-party support that he has engendered for Clauses 1, 4 and 10 and include Clause 6 as well.

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Lord Warner (Labour)

My Lords, I rise to speak on this amendment, mainly because of my puzzlement over why the Government want to give the national Commissioning Board a concurrent duty with the Secretary of State under new Section 1(1), given all the other provisions in the Bill which try to shape-if I may put it that way-the relationship of the Secretary of State with the national Commissioning Board. This is especially the case with Clause 20, the mandation clause. One interpretation of this concurrency is that the Secretary of State can pick and choose how he interprets his responsibility.

My noble friend Lord Hunt has mentioned, as delicately as he could, what has happened in the Home Office recently about the sometimes rather strange boundary between policy responsibility and management responsibility and the confusions that could arise. This is not the first time that the Home Office has got into this kind of territory. Your Lordships will remember the difficulties that Michael Howard, when he was Home Secretary, had with the chief executive of the Prison Service, Derek Lewis. It boiled down to this problem of uncertainty about where the remit of Ministers ended and where responsibility began, in this case with the Prison Service, an executive agency. Equally, though, I suggest it could have been a non-departmental public body.

There is a lot of history in this area where one should be extremely wary about passing legislation in particularly high-profile areas and giving concurrency of responsibility to a Secretary of State and to a powerful arm's-length body, in this case a non-departmental public body, the national Commissioning Board. It is fraught with difficulties. I thought that the Government were trying to clarify this with Clause 20. I think the clause has been misunderstood a little bit by the new chairman of the national Commissioning Board, but the wording as it stands gives the Secretary of State the right, before the beginning of each financial year, to set out a mandate for the board.

There are a lot of safeguards in Clause 20, on both sides of that discussion and agreement. The national Commissioning Board has a lot of safeguards. The Secretary of State cannot keep coming back and adding bits and pieces as the year progresses. The Secretary of State also has quite a lot of safeguards. He or she can expect the national Commissioning Board to stick to what has been agreed in that mandate. There is no doubt about the Secretary of State's ability to give instruction to the board and there is no doubt about his ability to change those instructions on an annual basis after proper discussion and consultation. That is very clear. One of the strengths of Clause 20 is that it does make the relationship clear between the Secretary of State and the national Commissioning Board.

I have tabled an amendment that tries to restrict the number of requirements that the Secretary of State can place on the national Commissioning Board. I can well remember the time when the noble Lord, Lord Mawhinney, was a Minister with responsibilities for health, along with his colleague the noble Baroness, Lady Bottomley, who is not now in her place. We had somewhere in excess of 50 priorities in the NHS that we were required to deliver each year. In practice, we had no priorities, because no one could hold 50 priorities in their head, so there is an issue about how far you go on mandation. Nevertheless, the structure of Clause 20 clearly states what that relationship is, on an annual basis, between the Secretary of State and the national Commissioning Board.

We would do well to stick with that kind of relationship rather than muddy the waters with a concurrency of responsibility. I will be interested to hear what the Minister has to say on this issue.

Photo of Earl Howe

Earl Howe (Conservative)

My Lords, as has been pointed out, this amendment returns us to the topic of the comprehensive health service. We have had a wide-ranging debate on that issue. I appreciate the concerns held by some noble Lords about the extent to which the Secretary of State will be genuinely accountable for the health service under the new arrangements introduced by the Bill. I have outlined the reasons why I believe accountability will be maintained and how accountability to Parliament and the public will be increased by our proposals. We have indicated our intention to look further at what could be done to put the Secretary of State's ultimate accountability for the health service beyond doubt. We will do that.

However, it is a core principle of our reforms that politicians should step back from day-to-day interference in the NHS to allow clinicians to take the lead in developing services that are built around the needs of patients. That would simply not be possible if the Secretary of State retained broad powers of direction over the NHS Commissioning Board. As I have previously described, the role of the Secretary of State in future should be to set the legislative and regulatory framework; to set the strategic direction for the NHS through the mandate, as the noble Lord, Lord Warner, has rightly reminded us; and to hold the national bodies in the system to account for fulfilling their responsibilities effectively.

I also understand the argument that the Secretary of State alone should be responsible for promoting a comprehensive health service. However, I believe that there are strong arguments that, in the interests of accountability, the NHS Commissioning Board should share this duty as far as it relates to NHS services. The NHS Commissioning Board will be the body responsible for ensuring that there is a comprehensive coverage of clinical commissioning groups covering every area of the country. It will be responsible for authorising and assessing clinical commissioning groups, providing support and guidance to them, and intervening if they run into difficulties. It falls to the NHS Commissioning Board to ensure that the continuity and quality of service provision is maintained at all times.

I am afraid that the arguments of the noble Lord, Lord Hunt, expose a clear fault line between the Government and the Opposition. We believe it is important that the board should be under the same obligation as the Secretary of State to promote a comprehensive health service in so far as this relates to the health services that the board and clinical commissioning groups will be responsible for. Let me be clear: the Bill's provisions would in no way dilute the Secretary of State's overarching duty. Indeed, they are intended further to reinforce the promotion of a comprehensive health service rather than to undermine it. With the general desire of noble Lords to strengthen accountability in the Bill, it seems odd that the noble Lord, Lord Hunt, should want to weaken accountability in this way, for that is what his amendment would do.

I listened to the point made by my noble friend Lord Mawhinney that this is another facet of the issues that we are going to consider in relation to Clauses 1, 4 and 10. He made a good point. Therefore, I suggest that, in the light of our intention to consider together how we approach the duty on the Secretary of State and return to this on Report, the amendment should also be withdrawn and that any consequential changes to the functions of the board or clinical commissioning groups are considered as part of those deliberations.

I have omitted to cover a number of points made by the noble Lord, Lord Hunt. He referred to minimum waits and restricting patient choice. Of course, the mandate on the standing rules would allow for specific requirements. For example, they could be used to prohibit minimum waits, and it is very likely that they will be used for that purpose. The Secretary of State would be able to set that kind of direction in order to achieve that. Patient choice could form part of the mandate. It is also something that Monitor would look at. The purpose of the mandate is to set out exactly what the Government expect from the NHS. It is intended to provide the clarity that the noble Lord and, indeed, most other noble Lords, would seek for the NHS Commissioning Board's remit.

I do not think that the noble Lord has made his case; in fact, far from it. It would significantly weaken the Bill if we were to go down the road that he is suggesting. I once again ask him to give further thought to this issue before pressing it any further.

6:00 pm
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Lord Hunt of Kings Heath (Labour)

My Lords, I am grateful to the noble Earl for his response. I am, of course, very happy for this to be considered in the light of the debate in relation to the other clauses around the Secretary of State's powers. I may not have convinced the noble Earl but he has convinced me that a "train crash" will inevitably occur given the ambiguity and confusion built into the Bill on the role of the Secretary of State and the national Commissioning Board. The more the noble Earl spoke about that, the more evident the ambiguity became. As regards the mandate, my noble friend's amendment suggests that only five functions should be given to the national Commissioning Board with five other objectives. I think that he is supported in that by other noble Lords. He has probably forgotten about the innate ability of the wonderful civil servants at the Department of Health to write very long functions which could probably embrace the world. However, I understand where he is coming from.

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Lord Warner (Labour)

I well understand the Civil Service's ability to use the semicolon to extend a sentence for a very long period.

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Lord Hunt of Kings Heath (Labour)

My Lords, my noble friend should refine his amendment by limiting the number of grammatical devices that can be used.

I raised this matter because of what the noble Earl said. I raised the reported intervention by the Secretary of State in relation to primary care trusts and the concern that because of their financial issues they are essentially putting in some artificial barriers in relation to patient treatment such as having a rule that on non-urgent treatment you have to wait a certain length of time before you can be treated, and other such mechanisms. When I asked the noble Earl how this would work in the future, he told me that it would be put in the mandate. Clearly, what will happen-

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Earl Howe (Conservative)

I am grateful to the noble Lord for giving way. If the board was not delivering the mandate, it is surely right that the Secretary of State should intervene. He has powers in the Bill to do that. Equally, if it is delivering the mandate, it is also right that it should be allowed to get on without interference from the centre. All we are saying is that the Secretary of State should be clearer about the reasons for his intervention in future. That is in everybody's interests.

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Lord Hunt of Kings Heath (Labour)

Either the mandate is so detailed that you will have reams of paper telling the board what to do or the Secretary of State will rightly become concerned at issues that arise during the year. Those issues will not be covered by the mandate as they will not have been anticipated. The Secretary of State will wonder what to do and how to intervene. He will wonder whether he will be told by the national Commissioning Board, "Back off. It is nothing to do with you", as nationalised industries used to do. This is no different from a nationalised industry. I am concerned because I believe that giving concurrent powers to the national Commissioning Board as well as to the Secretary of State will lead to a great deal of confusion, tension and ambiguity. At the end of the day I would prefer one person to be accountable-the Secretary of State. However, I am encouraged by what the noble Earl said about agreeing to look at this in the context of the other questions about the duty of the Secretary of State. I beg leave to withdraw the amendment.

Amendment 48 withdrawn.

Amendment 49 not moved.

Amendment 50

Moved by Lord Warner

50: Clause 6, page 3, line 38, at end insert-

"( ) must include at least one member who is a registered public health specialist and who has a broad range of professional expertise in public health"

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Lord Warner (Labour)

My Lords, in the unavoidable absence of my noble friend Lord Rooker, he has asked me to move Amendment 50 standing in his name and those of a number of colleagues. This amendment is very simple in intent. It seeks to ensure that the national Commissioning Board has at least one member who is a public health specialist. Much of the work of the board and, indeed, of the clinical commissioning groups, is to commission services that arise from failures of public health, or the associated issue of the absence of clinical intervention at an early stage in a person's condition. Later we will discuss a raft of amendments for strengthening the Bill's provisions on public health itself. This group of amendments is concerned with the membership of the national Commissioning Board and the disclosure of information.

This amendment is intended to help the board in its deliberations. It is essential that it has ready access to public health expertise. I very much support Amendments 153ZA and 153B in this group, standing in the names of my noble friends Lord Hunt of Kings Heath and Lady Thornton, which seek to curb the administrative costs of clinical commissioning groups. I have degrouped my amendments on controlling the overheads and management costs of the board. I have also tabled amendments that try to curb clinical commissioning group management costs. I tabled these amendments because I wanted to ensure that we had a fuller discussion on the two linked issues of overheads and administrative costs at a later stage. I will not speak on that issue at length today but I want to flag up to the Minister that this is an extremely important issue in this very difficult financial climate. Rather unusually, we may need to put in a Bill establishing new bodies a curb on the extent to which they can grow their administrative budgets in the future. My noble friends are doing the House a service in giving us a chance to have a debate on this issue.

I return to Amendment 50. It may not be directed at the right place in the Bill-I leave the Minister to think about that-but its substance should be in the Bill. I hope that the Minister will reconsider the Government's position on this issue. I beg to move.

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Baroness Finlay of Llandaff (Crossbench)

My Lords, I rise to speak to this amendment, which is also in my name, and to support the other amendments in this group. They have the effect of ensuring that public health considerations and public health expertise are given due weight in the new arrangements set out in the Bill.

Public health covers three main domains: health improvement; health protection; and health service delivery. Public health specialists are trained and skilled in interpreting data and information about populations, understanding health needs and securing the services required to meet those needs. That expertise is vital to having effective commissioning at every level, particularly that of the NHS Commissioning Board, which will have the overarching responsibility for commissioning health services, so as to ensure that the services are effective, appropriate, equitable, accessible and cost-effective. It therefore seems only sensible to make sure that that expertise is incorporated at board level.

The Commissioning Board exists to secure and improve the health of the population through the NHS services it commissions, and indeed through the services which are not NHS-provided, if I have understood this Bill correctly. To do this, the board would benefit from public health input. Public health specialists have an unparalleled overview of a community's need for health services and how they are best commissioned, including changing, adapting or even decommissioning services which could work better in other ways. The role of a public health specialist would also be to provide the essential expertise needed to commission preventive services, such as screening and immunisation, and to look at the evidence relating to those services. The board may need the courage to decommission some of those services as well, or to substantially alter the way that they are delivered.

It would be inappropriate to say that this is going to be too expensive, because a public health specialist should pay for themselves many times over with their presence on the board. It is only by having such an expert at board level that we can their ensure expertise is incorporated into decision-making, rather than only feeding into the process in an advisory capacity.

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Baroness Williams of Crosby (Liberal Democrat)

My Lords, one of the most interesting aspects of the proposals in this Bill is the greater status to be given to public health. I think we all recognise that for some years public health has been something of a Cinderella in the medical establishment. To have public health lifted, as it should be, on to board representation seems to me absolutely central in our attempt to put greater accent on prevention, education and information; there are future amendments by some of my noble friends on some of those issues. I wish to say very briefly that I think that this amendment is absolutely right. It is crucial that public health recognition is given at board level, and I hope we can echo that in having it also represented in the clinical commissioning groups as they emerge.

One other question to raise in relation to public health, which we have been considering very carefully, is how we deal with chronic illness. Chronic illness is obviously not unrelated to lifestyles and life behaviour, so here again, raising the influence of public health in the attempt to bring about a healthier lifestyle among our fellow citizens and ourselves is absolutely essential. I therefore completely agree with what has been said by the noble Baroness, Lady Finlay, and the noble Lord, Lord Warner, in moving this amendment: that it is vital that public health be represented at the highest level.

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Lord Patel (Crossbench)

My Lords, I have added my name to the amendment, and I strongly support it. It is absolutely crucial that a public health specialist is a member of the NHS Commissioning Board. I note that protection and improvement of public health is one of the two crucial functions imposed upon the Secretary of State for Health by the Bill, and in several places. Three different bodies will be involved in discharging this function: the board, the commissioning groups, and local authorities. It is therefore essential that each has a public health physician at board level to do so. Effective commissioning requires expert understanding of populations and the diseases they might get, as well as their health needs and how these can best be met.

There are major public health roles for the NHS Commissioning Board, including the direct commissioning of services, for which public health specialists' expertise needs to be embedded in the board's management structure. The NHS Commissioning Board will continue to manage primary care contractors, hold the population registers which make screening programmes possible-as the noble Baroness, Lady Finlay, mentioned-set the policy direction and operating framework of the NHS, and oversee major commissioning decisions and plan commissioning groups.

Without a registered public health specialist as an integral member of the NHS Commissioning Board, national commissioning decisions will be made without an expert population health perspective informed by clinical and population-based data. It is critical that public health expertise informs all commissioning decisions and that commissioners have access to timely, reliable and relevant information and analysis. To meet this need, it is crucial that there is a registered public health specialist on the board of every health commissioning board, including the NHS Commissioning Board.

There are other issues. Public health expertise within the service is also essential if the escalating costs of low-benefit technologies are to be controlled and the health service commissioners are to have the knowledge to implement the most effective and lowest-cost services. There should also be a duty placed on commissioning organisations to work with directors of public health and the public health teams on all commissioning decisions to ensure they meet the health needs of their communities. In addition, health impact assessments, and especially health inequalities impact assessments, are needed in all commissioning group investments in healthcare and in all clinical care pathway design. Where different care options exist, it is necessary to model which intervention will deliver the greatest health improvement for the lowest cost. Public health specialists are trained to do this, and to not have them at the board level of every commissioning body, including the NHS Commissioning Board, would be wrong.

I know that there is a later amendment which proposes that, if there is a member of the executive or a civil servant with public health expertise on the board, the current amendment might not be necessary. I do not agree. I think it is absolutely necessary that the public health specialist on the board is there independently, to give an independent view.

6:15 pm
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Lord Rea (Labour)

My Lords, I support all those noble Lords who have spoken so far and I agree with everything they have said; there is hardly anything for me to add. I just want to emphasise that a public health specialist will have had special experience and training in dealing with the massive amount of health data that comes into a health authority or, in this case, to the NHS Commissioning Board; it will be a huge amount. Public health specialists are trained in statistics and in epidemiology, and have other skills needed to handle this information and to help the board to make the correct decisions. I would like to emphasise the point made by my noble friend Lord Warner that very often this can be extremely helpful when certain services are deemed no longer appropriate. They may save a lot of money by giving backing to decommissioning and reconfiguring certain services, ensuring that populations are best served with the resources that are available.

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Baroness Jolly (Liberal Democrat)

My Lords, it sounds as though there is a considerable level of agreement on this. I, too, believe that we should have a public health specialist sitting on the board. Members of the faculty have said that if there is not going to be such a specialist on the board by right, there should at least be one where the CMO is not a public health specialist. This Bill has put public health at its core and at every level.

I shall not say any more about the public health appointment but I will talk a little about the involvement of the patient. The patient is also meant to be fundamental to this Bill: "no decision about me without me." Again, we have the patient involved through local government and the local commissioning groups but not necessarily on the board. I think that whoever is chair of HealthWatch England should have a seat on the board.

What would both of these positions bring to the board? They would bring a level of expertise that nobody else has. I understand the Government's reluctance to be specific, and I know that lists are problematic. I also know that with these things there is a tendency to request that every man and his dog, or all and sundry, sit around the board table. However, it is a board table and not a representative council, so I would put those two people there for one distinct reason: they add a dimension that the board does not know it misses. Decisions made without them will be made in a vacuum and will be all the poorer for it. Somebody put it to me earlier today-your Lordships will have to excuse me for this-that the board knows what it knows, it knows what it does not know, and it does not know what it does not know.

A noble Lord:

Was it Donald Rumsfeld?

Photo of Baroness Jolly

Baroness Jolly (Liberal Democrat)

Apparently there was a Persian poet who got there even before him, but whether Donald Rumsfeld was a reader of Persian poetry, I know not. The point is that you do not know what you do not know. Both those voices would bring to the board serious added value.

I have another four or five amendments in this group which relate not to the composition of the board but to its work. Every year, the board is tasked with producing a three-year business plan on how it is going to discharge its functions. We have a Secretary of State who produces a mandate for the board. We are all in total agreement that the board has huge powers to shape the NHS. New Section 13S of the 1996 Act indicates that there should be an ability to revise the plan. It talks about a "revised plan" but says nothing about the process of revision. The Bill is silent also on the operational plans of the board. I am slightly curious as to which comes first-the mandate or the plan.

How might a conversation with patients and other stakeholders be managed to revise the draft plan? Clearly, we have to start with a draft and then it will be revised. To what extent does the Minister envisage the plan being amended? Might the details on board membership and business plan consultation be included in guidance to the board? One half of my amendments is about board composition; the others are about business planning. It will be interesting to hear the Minister's response to the latter because it will give us some indication of the way that the board plans to work or it is planned that it should work.

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Lord Hunt of Kings Heath (Labour)

My Lords, I have a series of amendments in this group concerning membership of the national Commissioning Board and its cost. There is common consent that getting the board's membership right is important.

My Amendment 52A would ensure that the chair could be appointed only with the consent of the Health Select Committee. I fully acknowledge that Professor Grant, the chair of the NCB, went before the Health Select Committee; I have already referred to the transcript. It is clear that the process ensured proper and effective scrutiny. However, I should just like to put the matter beyond doubt and make sure that the procedure will always be followed in future, and I hope that the Minister will agree to my amendment. I should say that I followed the legislation which established the Office for Budget Responsibility, so we have a precedent for ensuring that a Select Committee of the other place has an important role to play in such appointments in the future.

My Amendment 52B is simply a matter of good governance to ensure that a lay vice-chair is appointed, which I am sure I am right to assume is the Government's intention.

On the composition of the board, my Amendments 54 and 56 are intended partly to probe and partly to make a point. It would be helpful if the Minister could give some indication of the likely make-up of the board, both executive and non-executive, and perhaps some details about how non-executives are to be appointed. My specific point is to encourage the Minister to ensure that, on the executive side, a medical director, a nursing director and a finance director are always appointed. To be frank, my main focus is in relation to a nursing director. I have no doubt that there will always be a finance director and a medical director; I want to ensure, and I want the Minister to give an absolute assurance, that there will always be a nursing director on the national Commissioning Board. I go back to 1991, when NHS trusts were first appointed. Some noble Lords here will recall that some rather foolish chairs of those trusts did not want to appoint a nurse to their board. They were forced to do so, I am glad to say, through the intervention of a Secretary of State at the time. I have no doubt that it is the intention of the Government to ensure that there is a director of nursing on the board, but I should like to make sure that it always happens.

I understand that getting a range of expertise on the non-executive side will always be difficult. As the noble Baroness, Lady Jolly, said, the risk is that Parliament will always seek to legislate for a list of backgrounds, which we know is not a practical way to ensure that a fairly small board is appointed. My amendments seek to ensure that there are at least some non-executives on the NCB who have some experience of the National Health Service. While the temptation will always be to appoint people from other sectors because of the experience that they can bring, there is something unique about the National Health Service. I think that non-executives find it helpful if, among their number, they have people who know the business and help them to challenge the executives. One of the risks of the fashion-my own Government were as guilty of it as any other-of thinking that what the health service most needs is outside business expertise is that, when it comes to issues of safety and quality, you do not have anyone on the non-executive side who can effectively challenge the executives. I urge the Government to ensure that there are non-executives on the board who have real experience of the National Health Service and how it works in order to enable a proper challenge to be put to the executive directors.

Amendments 52D and 54A are probing amendments, designed to tease out the place of public health on the national Commissioning Board. I support the comments already made by noble Lords. On my proposal that the Chief Medical Officer be a member of the board, the Minister may say that he thinks it more appropriate for the Government's chief medical adviser to be seen purely as part of the department than to be on the national Commissioning Board. I sympathise with that point. I suspect that the answer to the question of the noble Baroness, Lady Jolly, in relation to HealthWatch is that there is always a problem if people are appointed because of their other positions. The problem is that they then have to take responsibility for the corporate decision-making of the NCB. I can therefore assure the Minister that my amendment to place the CMO on the NCB is probing, designed to enable us to hear how the public health function will be given sufficient prominence within the national Commissioning Board.

My Amendment 55 would remove the requirement for the appointment of the chief executive to be approved by the Secretary of State. I have no problem with paragraph 3(4) of Schedule 1, which provides for the first chief executive to be appointed by the Secretary of State. This is normal practice and is entirely sensible in view of the need to get the national Commissioning Board up and running. However, my question is why the Secretary of State needs those powers in relation to subsequent appointments. After all, the Minister has waxed lyrical about the need for there to be distance and for the Secretary of State no longer to intervene, so why on earth does he have to approve the appointment of a chief executive? Surely that is for the board to do. Surely it is for the Secretary of State to nominate the chairman of the board to go through the necessary parliamentary scrutiny. For the Secretary of State to actually have to approve the appointment of the chief executive is ambiguous. The department has not sorted out the real relationship between the Secretary of State and the national Commissioning Board. On the one hand, there is the desire to give the NCB as much freedom as possible; on the other hand, one knows that in these clauses there is a desire to control it. I should have thought that the fact that the Secretary of State has a veto over the chief executive appointment is an example of that. I hope that we can see that go between now and the conclusion of our proceedings on the Bill.

Finally, I come to some probing amendments concerning the number of staff to be employed by the national Commissioning Board and the staffing. I should like to hear from the noble Earl something about the size of the NCB and what its regional and local structure is likely to be, remembering that it will hold the contracts of thousands of practitioners. My understanding is certainly that it will hold the contracts of all GPs because it is deemed that presumably the local clinical commissioning groups cannot hold the contracts of the GPs who are members of the clinical commissioning groups. Clearly, if the Government's proposals are to streamline decision-making, then finding that the national Commissioning Board becomes an absolutely huge organisation with thousands of people employed will rather detract from what the Government seek to do. It would be very helpful if the Minister could give assurances about the cost of the NCB.

6:30 pm
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Baroness Masham of Ilton (Crossbench)

My Lords, I should like to go back to Amendment 50 and, in supporting this amendment, to tell your Lordships that during the deliberations of the House of Lords Select Committee on HIV and AIDS this very subject came up. It was felt to be essential that a public health specialist should sit on the Commissioning Board. Also, I feel that he or she should be the link between the NHS and the local authorities. Public health needs to have a high profile. It is vital to have someone who understands the problem of sexually transmitted infections-in which we lead Europe-as well as PVL MRSA, which is a community-type MRSA, food poisoning and epidemics such as flu. It could be possible for somebody who was interested only in obesity and exercise to be put on the board. Our public health is vital.

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Baroness Murphy (Crossbench)

My Lords, this is a very large group of amendments and I take them in the spirit that they are mainly probing. One cannot help but be sympathetic to the intention to have public health expertise available to the Commissioning Board, as well as the patient's view and all those other things. The professional point of view is vital.

I speak as someone who was the only NHS non-executive on the Monitor board for many years before I recently ended my term of office. I am also very sympathetic to the idea that there should be an external non-executive person on the board. Having said that, I think that the noble Baroness, Lady Jolly, and the noble Lord, Lord Hunt of Kings Heath, have mentioned that what we have here is a corporate board, not a representative committee, and a relatively small board. Therefore, it is vital that we do not put on the face of the Bill the number of people who we would like to see have an impact on this board. I look forward to hearing how the noble Earl responds on how we can address these concerns.

I strongly support the amendment of the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Thornton, about having a senior independent director on the board. I have seen how extraordinarily valuable that role can be in foundation trusts and, indeed, on the Monitor board. A little holding to account of the chairman by the non-executives through that senior independent director-a powerful second person on the non-executive front-gives the board great added strength. I support that amendment, although a deputy could well play that role. I certainly support the thrust and meaning of these amendments but I would not like to see them written into the Bill as they are.

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Baroness Cumberlege (Conservative)

I would like to support the noble Baroness, Lady Murphy. It is really rather a mixed bag of amendments that we have before us. Clearly what is proposed in the Bill is that there should be 11 members on the NHS Commissioning Board. Perhaps the most wonderful Primate-I hope that Hansard will allow me to make the change-and the right reverend Prelate will think that the number 11 has a certain resonance about it, historically and religiously. We will leave it at that.

What I wanted to address was the size of the board and what has been said about whether it should be representative or whether it should be left to the board to decide the skills and experience that it needs to act effectively. I saw in the amendments-sadly, he is not in his place at the moment-that the noble Earl, Lord Listowel, suggested having a director or a previous director of children's services on the board. I can fully understand that because the noble Earl has done so much to try to promote the well-being of children. Clearly he feels that it is a constituency that needs to be represented on the board.

Other people might think that perhaps we need a past director of adult services on the board, especially as we have an increasingly elderly population. I can think of other professions which may ask where on the board are the pharmacists, the podiatrists, the physiotherapists, the occupational therapists and the dentists. We could have a litany of people who wanted to be on the board, so we have to be very careful.

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Lord Warner (Labour)

I think that the noble Baroness is experienced enough, like me, to remember the 1974 reorganisation of the NHS, where we ended up debating whether area gymnasts should be appointed. Therefore, I have every sympathy with her particular line of argument.

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Baroness Cumberlege (Conservative)

My Lords, I am very grateful for that intervention. I have no experience of gymnasts and, sadly, I cannot remember that particular time. However, I have chaired very big boards. I have chaired a board of 26 and it was a nightmare. It was a nightmare because we are such a lovely nation and we always try to get consensus. Trying to do that takes time and tough and speedy decisions are not taken. In the end, the board loses the grip necessary to manage the service, the organisation or whatever it is in charge of. Therefore, I strongly support my noble friend on the issue of having 11 members on the board. When one has a very large board, a clique forms; one gets a few people who in the end run the board. They run it outside board meetings. They make the decisions before they come to the board. One gets a body of people who are responsible on the board but are actually disenfranchised-they are accountable but disenfranchised-and I think that that makes the board totally dysfunctional. Therefore, we should resist the temptation to have representatives on the board. We need a chairman with considerable leadership skills; a chief executive of proven management expertise; executives who know the business; and non-executives who bring a breadth of experience.

I have some sympathy with the arguments that have been put on the issue of the Director of Public Health but I wish to reserve my position on that, as I do on the suggestion put forward by my noble friend Lady Jolly on HealthWatch England, because it could be that the board, or whoever, might decide that there is a non-executive who has wider experience and possibly could be more effective on the board than the chairman of HealthWatch England. This needs discretion and we should leave it in the hands of the board and the Bill and not try to make it representative.

In an earlier debate the noble Lord, Lord Davies of Stamford, who is not in his place today, referred to the "fatal tendency" of the NHS to be bureaucratic and exercise producer catch-up. He said:

"the tendency of any organisation that is in a monopolistic position [is] to be run for the convenience and in the interests of those who are providing the service, whether doctors, nurses, managers or whatever".-[Hansard, 9/11/11; col. 251.].

We have to be very careful that we do not fall into that situation and we must try to address that "fatal tendency", as he described it.

I wish to make one comment on the seductive amendment on limiting the numbers to be employed to 500. That again is a mistake. If we set a number, it is very likely that that number will be reached where possibly only 100 are required. It needs a great deal of scrutiny by the Secretary of State and others, through the mandate, to see what the board is doing and whether it is effective and keeping to its budget, which I am sure will be closely watched. I would like to keep the number on the board to 11.

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Lord Harris of Haringey (Labour)

My Lords, it is always a pleasure to follow the noble Baroness, Lady Cumberlege. She and I have sat opposite each other at meetings for more years than I care to remember.

However, her belief that the chair of the NHS Commissioning Board will only be able to manage a board of 11 is slightly misplaced. We already know that the person who holds this office will be able to walk on water, with due deference to the most reverend Primate. We know that this individual will have the most extraordinary qualities. Indeed, the Health Select Committee has demonstrated that by the overwhelming vote that it gave him on his appointment. Therefore, any person of such calibre who is able to manage a quango with such an enormous budget must surely be able to manage a board of more than 11 people. That goes without saying.

It is probably unhelpful for the Bill to specify precisely the number of people who will be appointed because circumstances will change. At different times it may be appropriate to have particular people or specialisms involved, but that will change over time. To lay down the numbers too specifically is probably a mistake. Indeed, I am not sure that 11 is a sensible number for the effectiveness of boards. It is too large for the most efficient and effective of boards but it is not quite large enough to bring together all the strands of opinion and expertise that you might wish to bring.

My main reason for intervening was not to pick up on that point but to question a couple of the amendments, in particular Amendment 52C in the name of the noble Baroness, Lady Jolly. The amendment refers to the board,

"including one member who is also the Chair of Healthwatch England".

That is a misguided amendment. It is very important that the viewpoint of the patient is heard clearly by the NHS Commissioning Board, but it would be wrong to bind HealthWatch England into the collective decisions that will be taken by the NHS Commissioning Board. Had the amendment said something along the lines of, "The chair of HealthWatch England will be able to attend all meetings of the NHS Commissioning Board and to contribute to them fully" rather than talking about membership, it would have been much better.

There is already a concern that HealthWatch England will not be seen as a properly independent organisation, partly because in the Bill it is framed as a committee of the CQC and also because the local healthwatch organisations will be wholly owned subsidiaries of local councils around the country and the money for them will not even be ring-fenced. Under those circumstances, there is a real problem about the reality of the independence of HealthWatch England. Further to put the chair of that body in the position of perhaps having collective responsibilities for NHS Commissioning Board decisions is potentially a serious mistake. I would like to see a position where the board has the chair of HealthWatch England as an adviser. His advice may or may not be accepted, but it will be on the record what advice has been given.

I hesitate to oppose an amendment moved by my noble friend Lord Hunt of Kings Heath but the same applies to the Chief Medical Officer. He should be there to advise the board-and that advice should be recorded-rather than being a member of the board and therefore being part of that collective responsibility. In framing the structure of the NHS Commissioning Board, there needs to be clarity of thought. There are a number of areas of expertise and interests that ought to be reflected in board membership-those individuals should bring their expertise to the table-but they cannot be there as representatives of those particular interests because they will have to take collective responsibility for the decisions of the board. However, it is also important that you have explicitly there a number of people to give advice. That should certainly include the chair of HealthWatch England and the Chief Medical Officer.

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The Archbishop of York (Bishop)

My Lords, I was not going to speak to these probing amendments, but as I have been gratuitously referred to twice it is prudent that I should speak.

The noble Baroness referred to number 11. We should remember that Jesus had 12 disciples; the twelfth betrayed him and so there were eleven left. Then the disciples decided before Pentecost to choose Matthias, so they then had 12 again. They then ran into trouble once St Paul the Apostle came along and they had 13, but they did not know where to put him. Numbers are always dangerous.

I am with the noble Baroness, Lady Murphy. We may need all kinds of characters on the board but it would be wrong to specify them in the Bill. If we do, then we will not have the kind of liberty and freedom to be creative and to enable the Secretary of State to promote a comprehensive health service and improve the quality of service. He needs that to help him promote the health service and then improve it. The board needs to consist of people who have the calibre to do that.

I have sympathy with Amendment 54 but not in the precise form in which it is put. It states:

"The Secretary of State must ensure that a majority of the non-executive members of the Board appointed under subsection (1)(b) have relevant experience".

Those members should have relevant experience but as to whether they should be a majority, again, the discretion should be left to the Secretary of State and the board. If that is specified, they will all be there in big numbers but might end up not delivering or promoting whatever is required. Yes, the people appointed should clearly have relevant experience of either working in the NHS or serving on an NHS body-the NHS is not the same as Rover cars, Marks & Spencer or Tesco and you need people with relevant experience who are able to deliver properly-but I would go for the Secretary of State having people with relevant experience of working in the NHS or serving on a body without necessarily saying that they must be in the majority.

As these are probing amendments, I shall be interested to hear what the Minister has to say about that.

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Baroness Hussein-Ece (Liberal Democrat)

My Lords, I want to make a few brief comments on Amendments 50 and 52C. I listened to all of the arguments about the public health specialists being on the national board, and I think it is really important. If we are going to have, or aspire to, a national health service that is about prevention and improving health rather than just treating it, there needs to be somebody on the board who attends or has that specialism and brings in the local government perspective. I was involved nearly 10 years ago in appointing one of the early public health directors. It was a joint appointment between the PCT and the local authority that I represented. That person sat on the senior management board of both the local authority and the PCT and was able to bring that expertise to both of those boards. Importantly, in the local government setting, he was able to bring together the directorships of education, environment and social services and to ensure that, when we were trying to address issues such as teenage pregnancies-which is still a massive problem in this country-it was everyone's responsibility. It was not just over there; it was not just a health problem: it was a borough-wide problem. In terms of bringing that thinking on to the national stage-as other noble Lords have mentioned in this and other debates-local government has to be seen to be a key member if we are to aspire to improving the health of the population. Someone experienced in public health should have a very strong voice on the national, as well as the local, CCGs .

I now turn to Amendment 52C in the name of my noble friend Lady Jolly, which aims to have as a board member someone who is also the chair of HealthWatch England. I support having the patient's voice heard at a national level. I listened very carefully to what the noble Lord, Lord Harris of Haringey, was saying: the important thing is to have the voice there. Quite often, with a group of 11 or however many it will be of the "great and the good", it is very important that we have somebody on that board who is going to represent the wider public as well-a lay person who can bring about some of the thinking that is going on locally around the country. The proposed chair of HealthWatch England might be bound in to some sort of collective decision-making which might sometimes make him or her quite unpopular with the other local HealthWatch organisations across the country. The most important thing we should be focusing on is that there is somebody on the board who has the authority, who can bring the voice of the patient and the public to this board.

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Lord Beecham (Labour)

My Lords, these are probing amendments: as the debate has shown, there is a great deal to probe. I hope that when the Minister replies, he will be able to answer some of the questions and give more details of the thinking that underlies the Bill as it stands, and how it might be carried out in practice.

The body that we are talking about will have-as the noble Lord, Lord Harris has pointed out-an enormous budget and enormous responsibilities, both nationally and extending to localities. It will be responsible not just-just!-for commissioning general practice throughout the country, as the noble Lord, Lord Hunt reminded us, but also for a range of other services which will effectively be delivered locally. Yet in terms of the structure, composition and governance of the board, this Bill is about as skeletal as I imagine is the specimen that will greet first-year medical students at their first anatomy lecture. It needs flesh on the bones. There are a number of suggestions here; I have rather too many suggestions and I plead guilty to having advanced only some of them, but we clearly need a view about how the board will work and who will serve on it. I concur with the views of the noble Lord, Lord Harris, in relation to the appointment of the chair of HealthWatch England as proposed by the noble Baroness, Lady Jolly, as a member of the board. That person is likely to be conflicted: part of the job of HealthWatch will be to look at the operation of the board in an objective way. It may be that an attendance, as he suggests, would suffice.

Although I put down the amendment about the Chief Medical Officer being a member of the board, I can see the logic of the suggestion of the noble Lord, Lord Harris, that the Chief Medical Officer should attend without necessarily being a member of the board. I am temperamentally averse to mixtures of executive and non-executive directors. In the local government sphere, I never felt very comfortable with chief officers voting alongside elected members, but I suppose that members of this board are not going to be elected: they are going to be selected. I therefore think that it is sensible to have the best advice possible available to the board in the way that the noble Lord, Lord Harris, has described.

In terms of public health specialism, I think there needs to be a public health specialist-but not necessarily a serving public health specialist. I see the noble Earl, Lord Listowel, has tabled an amendment calling for the appointment of a former director of children's services. Without necessarily agreeing that that particular post should be designated, the concept of somebody with that experience-not necessarily being a serving member and therefore not conflicted-might well appeal. It is crucial-given that we are now going to have public health delivered in a very different way from what we had before, and basically rightly so, though in a complex structure that will involve the Secretary of State, the Commissioning Board and local government as well-that there should be a public health specialist of some kind serving on the board. I hope that the Minister may indicate a degree of sympathy with that.

As to the total size, I am a bit ambivalent about that, too. It clearly needs to be a working board and therefore cannot be too large; it cannot possible reflect every conceivable interest. I agree with noble Lords who said perhaps it would be a mistake to prescribe the number in the legislation. That is a matter that could well be discussed later by the Secretary of State, no doubt having taken views and not least the views of the Health Select Committee in another place.

I hope that we can make some progress tonight in identifying issues which the Government will look at sympathetically and bring back on Report. If they do not, then at least those of us who want to press points will have an opportunity of doing so.

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Lord Greaves (Liberal Democrat)

My Lords, I have for most of this Committee so far been listening to and reading what people have said and have been astonished, as I always am, by the immense amount of expertise and distinction there is in this House. There are all the professionals, and there seem to be more former Health Ministers in this House than in any other place that could be gathered together. Most of the debate so far has been about high-level, national-level principles and structures, and we are now moving on to the area that I have been trying to get my mind around since I first obtained a copy of this extraordinarily huge Bill. That is the new structures that are being set up at all levels and how they are all going to work together.

At Second Reading, I laid some claim for my party for some of the improvements that were made to this Bill after the pause in the House of Commons, but one thing that certainly happened to the Bill after that pause is that it became more complex as the number of different organisations and bodies became greater. The need for this House is to sort out how this new galaxy, or kaleidoscope, of new bodies within the health service are going to relate to each other and how it is going to work-I use the word "work" in a neutral sort of way-how it is going to happen in practice and how they are going to relate to those bodies which continue to exist, such as the hospital trusts, the PCTs, the strange clusters of PCTs that will stagger on for a certain amount of time and then disappear by some means that is not completely understood yet and, of course, local authorities and the whole of the voluntary and private sector involved in healthcare.

I was interested to hear the comments of the noble Lord, Lord Harris of Haringey, on HealthWatch and its relationship at national level-and, indeed at local level-to these other bodies. That is an important issue which I hope we will go on to talk about before long. The Committee is beginning to bring expertise and experience from all sorts of personal levels to the debate, not just political stand-offs. That is what we should be doing. Personally, I support what the noble Lord said about the importance of HealthWatch being sufficiently independent and detached while also being able to be present at the table at all levels of bodies and at the national Commissioning Board, without necessarily being part of the collective responsibility for decisions. Noble Lords may want to think carefully about that principle. We will no doubt come back to it when we talk about HealthWatch specifically.

There has also been discussion of the question of having a public health professional on the national Commissioning Board. This raises questions, which we will come to fairly soon when we talk about Clause 8, on the different ways in which the public health functions of the health service are to be dealt with compared with its clinical commissioning functions. In Clause 8, the public health functions of the health service are in future to be mainly divided between the Secretary of State, who will keep direct responsibility in this area, and local authorities, which will have enhanced responsibilities for public health and entirely new ones-though in many cases they regain functions lost in the 1974 reorganisation of local government.

I have not yet got my mind round what the function and responsibility is of the national Commissioning Board in relation to public health. How will that work? Whether a specific public health professional should be required to be on the national Commissioning Board may depend on what the functions are of the NCB in relation to public health. It is impossible to put a clear dividing line between public health and clinical health issues. They overlap and are obviously incredibly interconnected. Nevertheless, how the administration will take place in future raises these questions. They need to be thought about carefully before a final decision is made on whether there should be public health representation on the national Commissioning Board.

The particular amendment that I wanted to speak to before I started listening to the debate-which is always fatal: you should never do that but just stand up and say what you wanted to say-is Amendment 153ZA, presented to us by the noble Lord, Lord Hunt of Kings Heath, which goes under the beguiling title, "Duty to reduce bureaucracy". I could not help an ironic smile at that and could not help wondering why, if the noble Lord is so keen on that, he did not do a bit more to assist in it when he was a Health Minister. Perhaps that is an unkind thing to say-perhaps he did.

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Lord Hunt of Kings Heath (Labour)

Can I say how much I welcome the noble Lord, Lord Greaves, to our Committee? We have missed him. Now we have turned our attention to detail, his particular expertise comes to the fore.

On bureaucracy, I have tabled this amendment because I have genuinely been a passionate fighter of bureaucracy. That is why sometimes as Ministers we have to intervene in the bureaucratic affairs of the health service. The noble Earl may find that he himself has to do so. My concern is that, partly because of the listening pause, there is now a plethora of organisations to be established. Apart from clinical commissioning groups, we have commissioning support units-about which we have heard very little but apparently will be there-as well as the senates, the health and well-being boards, the clinical pathways and the national Commissioning Board. The regulators are likely to be given more power in the future: Monitor is being given more powers and, post Francis, there will probably be changes to the CQC and other regulatory matters. The risk is that, far from this being a streamlined process, it will be a very complex and bureaucratic one. I seek here merely to help the Government deliver their aims by encouraging them to restrain the cost of the whole exercise.

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Lord Greaves (Liberal Democrat)

I was of course teasing the noble Lord in as pleasant a way that I could. This is another instance where Hansard ought to have a few smileys liberally littered round the text. The noble Lord made the same point, at slightly greater length, that I made when I referred to the kaleidoscope of bodies that we now have. An important job of this Committee is to sort out the relationship between all these different bodies before they are finally set up. We have got to do that absolutely vital job.

Subsection (2) of the noble Lord's proposed new section "Duty to reduce bureaucracy" says,

"For that purpose the Board must exercise its functions ... so as to ensure that at no time there exists more clinical commissioning groups than there were primary care trusts on 1 April 2011".

That is a slightly different point, hitched on to his bureaucracy point. This is a vital question. Again, this will not appear in the Bill-it will not say that there will be X number of clinical commissioning groups-but, in general terms, we need to have clear in our minds when the Bill leaves the House how many clinical commissioning groups there will be and of what sort of size. This has evolved with discussion over the legislation. When the first proposals came out-when they were called GP commissioning groups because that is what they were-there was a feeling among many people throughout the country, the health service and among politicians that they might be quite small, or even that large GP practices might try and do it on their own. A lot of people were alarmed by this because they thought it would not be very efficient and it would not work. How on earth do you commission the kind of facilities which have to be provided, whether it is a local health centre or specialist clinical services, on a sufficient scale? The more people thought about it, the more it seemed that these groups had to be larger than just a large GP practice or group of GP practices in a smallish town.

The Government then encouraged GPs in particular areas to get together and co-operate to set up early-stage shadow commissioning groups. This happened and the Government issued a statement saying that a high proportion of the country-I forget what, but perhaps 70 or 80 per cent-was covered by these voluntary, shadow groups. These GPs quite rightly wanted to make things work in their area, whatever they thought of the legislation and changes. In my part of the world, it tended to come down to one commissioning group per second-tier or lower-tier district council area, in places like Burnley, Hyndburn and Pendle. Now, apparently because of pressure from above, people are talking very strongly about having-or having to have-a commissioning group on the same boundaries as the existing primary care trust. This would not be the cluster of trusts that is at the county level but at a sub-county level.

So in effect people are looking at the groups and saying, "What will be the difference?" What will be different will be the functions and the direct control of community services, which effectively has gone already to the hospital trusts. As for commissioning, it will be effectively the same body, probably in the same premises, controlled by different people. We need to understand this regardless of whether it is necessary to reduce bureaucracy or whatever, which is secondary, in a sense. Before we leave the question of the commissioning groups, which we will be talking about in great detail, we in this House need to understand the Government's thinking about the future likely site of these groups.

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Lord Hunt of Kings Heath (Labour)

I am grateful to the noble Lord for giving way again. I think it is a very interesting point about the size of clinical commissioning groups. My amendment was simply a probe to get a debate on this. Is there not a tension here? In order to get CCGs dealing with strategic issues, they have to be pretty large and cover a large population, but, in order to get the interest of GPs, they need to be smaller because the GPs need to feel involved. In essence, there is a tension there. The approach of the previous Government of taking primary care trusts and encouraging more practice-based commissioning may well have proved to be a better approach. The risk with CCGs at the moment is that, when they emerge with a board, they will be so removed from the individual GP that the very purpose of setting them up in the first place, which of course was about controlling demand through GPs, will lose that essential aim.

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Lord Greaves (Liberal Democrat)

There is a great deal of truth in what the noble Lord says. Looking at this from afar, I think that the Government have had to struggle with this tension. In order for the bodies to be serious commissioning bodies, commissioning not just for their patients individually or collectively but for the health needs of their area, they have to be sufficiently large. What will happen is that the GPs who sit on these new commissioning groups almost certainly will represent the GPs in the whole of that area, and they will have to be appointed by some democratic process representing the whole area-perhaps one from each area. I do not know how they will do it but that will have to happen at a local, practical level.

In my view, one thing that has bedevilled this debate is that the word "commissioning" has been used in two quite separate senses. One has been the idea of a GP commissioning services for his particular-

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Lord Warner (Labour)

I am sorry to interrupt the noble Lord's flow, but I would like to press him a little further to give us some clue as to his thinking on this. My noble friend Lord Hunt gave us a snippet of history, but there is quite a lot more. We have been through a process where we have come down since 2002 from 300 PCTs to 50 or so PCT clusters. We have been on that journey because we found it extremely difficult to commission services effectively when there are very large numbers of PCTs covering small geographical and population areas. There is simply not the expertise to do that. Could he give the House some clue about where he thinks this is all going to end up? At the moment, in terms of starters for 10, we have about 250 of these clinical commissioning groups. I think it would be helpful to know where the members of his party and others who have argued for this stand on where the journey may end.

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Lord Greaves (Liberal Democrat)

I am extremely flattered that the noble Lord, Lord Warner, thinks that I have the slightest idea where it is going to end up. I am doing exactly what the noble Lord, Lord Warner, and other noble Lords are doing-trying to get the Minister to give us some idea of that. We will be interested to see whether he gives that. Over the political lifetime of this subject, we have had constant changes. We started with bigger area health authorities and smaller district health authorities, going down to district level, and then going back to the area level, with the regional level having a greater or lesser influence. The fact is that this is a fundamental administrative difficulty-not a philosophical difficulty-for an organisation like the health service.

Everybody tends to think that what they have at the moment is not perfect and therefore they try to change it. Because there are only a limited number of options available, it goes backwards and forwards, from local to less local back to local again. If the noble Lord thinks that I know what is going to happen, I am afraid that I do not have the slightest idea. It seems to me that we need a clear idea of what this Bill is going to result in when it leaves this House and we need to understand how it is going to work. In a sense, the details of that matter less than the workability of it.

The point that I was making about "commissioning" being used with two different meanings is that it is used for a particular GP practice commissioning services for the people on its list-

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Lord Hunt of Kings Heath (Labour)

From what the noble Lord said, why on earth did we not continue with PCTs and give them a kick up the backside to allow GP surgeries to commission more locally as well? Why have we gone through this?

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Lord Greaves (Liberal Democrat)

I am not quite sure why the noble Lord is asking me that question. He is tempting me to make provocative statements in relation to the coalition Government of which my party is a member. I think that it is an open question and the answer can remain open. I am not in the mood to make provocative statements today. I might be tomorrow, and the noble Lord can come back to me then.

The point that I am trying to make before I finish, if the Labour Benches will not interrupt me just one more time-

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The Archbishop of York (Bishop)

The Benches opposite are probably provoking you into some kind of statement because of your earlier comment that you were reputed for having influenced the Bill during the pause. Given that influence, why did you not go back to what was working?

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Lord Greaves (Liberal Democrat)

It is our view that the original proposals were not working at all, and the proposals that we have now are better than the original ones. That does not mean to say that they are perfect, and it is the job of the House of Lords to check that the imperfections in them are removed before the Bill leaves your Lordships' House.

The point that I was trying to make, which I will finally make once more, is that there is a real difference between the two meanings of "commissioning". If you are a GP, you can commission services from an existing, static landscape or system of provision for your patients. However, commissioning services on a wider scale, commissioning the very landscape of services and the series of organisations that exist, whether it is deciding to put more money overall on a wide scale into one area of medicine and pulling back on others or just keeping the others going as they are, or whether it is financing capital projects-where to build new hospitals, new health centres or whatever it is-is very different indeed. You need bodies on a larger scale to do that. The idea that practices on their own or small groups of practices could commission that kind of undertaking on a wider scale is nonsense. You cannot rely on the market to provide them all because that will produce chaos and a lack of provision in many areas. That is why the original proposal for GP commissioning groups, which were to be quite small, simply would not have delivered at that level. The original proposals did not indicate in any way how that wider capital commissioning would take place.

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Earl Howe (Conservative)

My Lords, this has been an excellent debate on a set of important issues, and I am glad to count my noble friend Lord Greaves as one of my staunchest supporters.

The NHS Commissioning Board is one of the key elements of our vision of a modernised NHS-a highly professional organisation, focused on q quality and able to support clinical commissioning groups in delivering the best care possible to patients. I completely accept that these amendments were proposed with the best of intentions, to strengthen the way in which care is commissioned. However, in setting out why the Bill is drafted as it is, I hope that I can explain to your Lordships why I cannot accept them.

It will be key to the effectiveness of the board to ensure that it obtains sufficient advice and input from clinicians, public health experts, other professionals and those with relevant experience of the NHS-patients and the public-and that it has effective working relationships and arrangements with local authority government. We have stated our intention that there should be clinical and professional leadership on the board, but in terms of the legislative framework for the board it is an important principle to maintain that it should have autonomy of decision-making on matters such as its own membership and its structures and procedures, as far as possible, to determine how best to exercise its functions. This would include, for example, whether it has a vice-chair or a senior independent director, as Amendment 52B suggests.

One thing is absolutely clear. Members of the board will, in practice, need to have a range of skills, knowledge and experience appropriate to the issues faced by the board. Ensuring the right balance of non-executive members from a variety of backgrounds is key to achieving a successful board. But if the majority of non-executives were required to have a particular background, such as NHS experience, as suggested in Amendment 54, that might create an unbalanced board and effectively disqualify potential candidates from the private and voluntary sectors. I agreed with the most reverend Primate in what he said here. It is worth remembering that the board and its members will be expected to follow the seven principles of public life-the Nolan principles-one of which will mean that it must appoint a,

"well-informed choice of individuals who through their abilities, experience and qualities match the need of the public body in question".

That sums it up very well.

A number of noble Lords made the point that if we require the inclusion of doctors and nurses or a public health specialist as put forward in Amendments 50, 52D, 54B and 56, what about representation on the board of dentists, pharmacists and allied health professionals? The list could go on. It would simply not be possible to accommodate all interests in the board's membership adequately, and we would surely invite valid criticisms that one group is being prioritised over another. Nor would this be desirable from a Government's point of view, given that the primary purpose of the members of the board is to hold the organisation to account. Nor, in my very firm view, would it be appropriate for a senior member of another organisation with a different purpose or remit, such as the chair of HealthWatch England, or indeed the Chief Medical Officer, to have a seat on the board, as suggested in Amendments 52C and 54A respectively. That could lead to a potential conflict of interest and confuse accountability. I agreed with the noble Lord, Lord Harris, on that point-although he is not in his place.

Of course, in practice, the board must have the freedom to determine how these varied and legitimate interests are best involved and represented in its work. The noble Baroness, Lady Murphy, was quite right-the board will want advice and expertise readily available to it-but that is a different issue from board membership. It is worth bearing in mind that the board will have the freedom to appoint committees and sub-committees as it considers appropriate, and this may prove useful to the board to bring in interested parties on specific issues.

A number of noble Lords asked about public health expertise. We are coming on to debate clinical senates, but one main reason for establishing them is to bring in this wider range of expertise in a way that would provide practical benefit. This would absolutely include public health expertise. We amended the duty to obtain advice to make this explicit. New Section 13J inserted by Clause 20 makes it absolutely clear that the board must obtain advice from those with professional expertise in,

"the protection or improvement of public health".

There will be an interrelationship between the board and HealthWatch. The board must inform the body in writing of its response, or proposed response, to its advice; it must also have regard to the views, reports and recommendations of local HealthWatch.

My noble friend Lady Cumberlege asked about the size and membership of the board. The requirements in the Bill are that there is a minimum of seven members; the Secretary of State must appoint a chair and at least five other non-executives, so that is a minimum of six non-executive members. The non-executives must appoint a chief executive, who must be a member of the board. That is to say, there must be at least one executive member. Beyond that, they may appoint other executive members as long as the total of non-executives is always more than the total number of executives. The final decision on the number of other executive posts and the nature of their roles will need to be agreed with the chair and non-executive members, but it is envisaged that the other executive members besides the chief executive will include a nursing and a medical director, a director of finance, of performance and operations and of commissioning development.

All departments are required to ensure that appointments are open, transparent and made on merit. The Commissioner for Public Appointments regulates the processes by which Ministers make appointments to the boards of certain public bodies in England and Wales, and this will continue to be the case. It is not government policy to offer confirmation or affirmation hearings for public appointments, as Amendment 52A, tabled by the noble Lord, Lord Hunt, would require. These are ministerial appointments to make. The Cabinet Office maintains a list of posts that are subject to pre-appointment hearings by a House Select Committee. Ministers would consider the committee's views, but such hearings are not binding and do not represent a power of veto. Your Lordships will be aware that we followed this process in the recent appointment of Professor Malcolm Grant as the chair of the NHS Commissioning Board.

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Lord Hunt of Kings Heath (Labour)

I am grateful to the noble Earl for what he said, but did he pick up my point that the Government set the precedent in relation to legislation with regard to the Office for Budget Responsibility? The Government have moved on, and I am sure that they did it because of the importance of that body. My argument is that the National Commissioning Board will be such a responsible body that there might well be an advantage in giving the Health Select Committee rather more leverage on it.

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Earl Howe (Conservative)

My understanding is that we are following the normal procedure. There is a list of appointments that are subject to Select Committee scrutiny. Departments are consulted over the list. It is our intention that the role of the chair will be included in that-and that is exactly the same situation that applied under the previous Government. The Office for Budget Responsibility is an exceptional body in this respect, given its role in providing both government and Parliament with essential, impartial information, necessary for both bodies to be able to fulfil their responsibilities. Although I will reflect on the noble Lord's comments, I do not know that there is the parallel that he seeks to make there.

Amendment 55 would remove the requirement from the Secretary of State to approve the appointment of a chief executive of the board. This requirement is included for the important reason that the chief executive of the board will be the accounting officer for the commissioning budget, so it is entirely appropriate that the Secretary of State should approve his or her appointment.

7:30 pm
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Lord Warner (Labour)

Can I press the noble Earl a little further on that? If a chairman has been appointed for this body who has a level of experience to enable him or her to function at that level, then requiring the Secretary of State to approve the appointment of the chief executive seems to throw into doubt whether the Government have confidence in that chairman running that kind of body-they need to be able to appoint an accountable officer as their chief executive. I find this a pretty considerable vote of no confidence in the kind of people who are being appointed as chairmen.

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Earl Howe (Conservative)

Not at all, my Lords. Of course we have confidence in the chairman. However, it is a little strange to hear from the noble Lord that he suddenlythinks the Secretary of State should not be involved in an area where he has a legitimate interest to make sure, on behalf of the taxpayer and indeed patients, that we have somebody who is capable of fulfilling the role of accounting officer. This is an important role for the Secretary of State to have.

Turning now to Amendments 57, 153ZA and 153B, let me assure the Committee, and especially the noble Lord, Lord Hunt, that we want to reduce the amount of NHS funding spent on back-office bureaucracy. That is why have made a commitment to reduce administration costs across the health system by one-third in real terms, saving £1.5 billion annually by 2014-15. All that money will be put back into patient care.

Clause 21 provides powers for the Secretary of State to impose certain limits on the overall expenditure and use of resources by the board and clinical commissioning groups, including in relation to administrative matters defined through parliamentary regulations, for the first time. The board has the power to set similar limits for individual CCGs. I see no reason to change this to a duty to do so, as Amendment 153B suggests. As the board will itself be responsible for overall administrative spending, I am sure it will want to use this power carefully. Within those limits, it should be for the board to determine how best to use the resources available to it, and to decide on its own structures and ways of working, and the number of staff that it needs to perform its functions effectively. It is not appropriate to set a staffing cap on an arm's-length body.

How big will the board be? In a document called Developing the NHS Commissioning Board, Sir David Nicholson, chief executive-designate of the board, estimated that the board was likely to have 3,500 staff, carrying out the functions currently exercised by around 8,000 staff in the Department of Health, strategic health authorities, PCTs and a number of arm's-length bodies that are being abolished, along with its own new functions. It will deliver these in a much more streamlined way.

Likewise, setting an arbitrary cap in the Bill on the number of clinical commissioning groups or on their expenditure on administration in comparison to PCTs is not, in our view, an appropriate means of controlling administrative costs. CCGs will be different from PCTs. They put local clinicians in charge and align clinical decisions with the financial and quality consequences. It is a little unfair of the noble Lord, Lord Hunt, to say that we are creating a complicated and bureaucratic system, and citing clinical senates and networks and health and well-being boards. Clinical senates and networks are not new organisations in their own right: they will be hosted by the board. Clinical networks already exist. Health and well-being boards are also not separate statutory organisations: they will be hosted by local authorities. We are abolishing a whole raft of bodies under this Bill, as I have said on previous occasions. It is important to bear that in mind.

I appreciate the concerns underlying Amendments 58 and 59. It is important that there should be transparency in all the workings of the board. This is why Schedule 5 to the Bill was amended in another place to include the board in paragraph 7 as a body to which the duty in Section 1 of the Public Bodies (Admission to Meetings) Act 1960 applies. This would include any annual meeting that the board may decide to hold. I say "may decide" because the Bill is clear, in new paragraph 12 in Schedule 1, that:

"The Board may regulate its own procedure".

This would also apply to determining when it is quorate.

However, the Bill does include clear procedures around the publication of the board's annual accounts and annual reports, to ensure transparency. The board must send its annual accounts to the Secretary of State and the Comptroller and Auditor-General. The latter must examine, certify and report on the accounts and then lay copies of the accounts and the report before Parliament. The Comptroller and Auditor-General is responsible for the audit of the accounts of all arm's-length bodies. The board must publish an annual report and lay it before Parliament. The Secretary of State must then write to the board, providing an assessment of the board's performance of its functions, publish the letter and lay it before Parliament. That gives an indication that there will be maximum transparency here.

Turning to Amendments 145A, 146A, 147ZA and 147C, I am afraid that I do not agree that it would be worth while to add the unusual burden of an explicit duty of consulting on a draft business plan. The board is already required in new Section 13P(2)(a) to involve and consult the public in planning its commissioning arrangements. Under a duty in new Section 13J, it is required to obtain appropriate advice to enable it effectively to discharge its functions, including the planning of how it will exercise its functions.

I hope I can reassure noble Lords that Amendments 147A and 147B are also not necessary. First, the duty to produce a business plan already provides for transparency by obliging the board to publish its plan. Secondly, while the Bill requires that the board's annual report and annual accounts are laid before Parliament, that is part of specific processes for scrutiny of the board's performance against the objectives it was set and the outcomes it has achieved. It is right and proper that the board should be held to account in such a way. Another clear recommendation by the NHS Future Forum was that the autonomy of the board needs to be respected. With this in mind, although it is right that the board should be required to produce a plan and for that plan to be published for all-including Parliament-to see, I am not convinced that it would be appropriate to have parliamentary scrutiny of the board's plans or draft plans. The Bill places certain functions on the board, and it should be for the board to determine how it will seek to exercise these.

With regard to the questions asked by my noble friend Lord Greaves concerning the size of clinical commissioning groups, I respectfully suggest to him that we defer them to a later group of amendments, where this issue will come up and I shall be able to talk more about it. For now, I hope that the noble Lords are sufficiently reassured to be able to withdraw the amendment.

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Lord Greaves (Liberal Democrat)

Before the noble Earl sits down, the question I asked about the specific role of the national Commissioning Board in relation to public health is one that he did not address. Can he tell us when he might address it?

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Earl Howe (Conservative)

I apologise to my noble friend. The national Commissioning Board will, we envisage, be tasked with commissioning a number of public health functions by Public Health England. There will be a close relationship between Public Health England and the board. Much of the work of the board will straddle both public health and the provision of NHS services. There will be an intimate symbiosis between the two bodies.

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Lord Warner (Labour)

My Lords, on Amendment 50, which I seem to have moved quite a long time ago, I will consider the noble Earl's remarks. I am grateful to noble Lords who spoke in support of Amendment 50. Public health is a rather special case and I would want to reflect, in a later debate, on the public health amendments. In the mean time, I beg leave to withdraw the amendment.

Amendment 50 withdrawn.

House resumed. Committee to begin again not before 8.39 pm.