Mr John Denham (Minister of State, Department of Health; Southampton, Itchen, Labour)

I beg to move, amendment No. 218, in page 60, line 19, leave out

`as to the circumstances in which a Health Authority must'

and insert

`requiring a Health Authority to'.

Mr David Madel (South West Bedfordshire, Conservative)

With this it will be convenient to take the following: Amendment No. 219, in page 61, line 17, at end insert—

`( ) Sub-paragraphs (3) to (6) of paragraph 2 apply in relation to an application for preliminary approval of proposals under this paragraph as they apply in relation to proposals under that paragraph.

Effect of proposals on existing services

. —(1) Proposals for a pilot scheme submitted under paragraph 2, or included in an application for preliminary approval of proposals under paragraph 4, must include—

(a) an assessment by the Health Authority of the likely effect of the implementation of the proposals in the Health Authority's area on the services mentioned in sub-paragraph (2);

(b) any assessment supplied to the Health Authority by another Health Authority under sub-paragraph (4).

(2) The services are—

(a) pharmaceutical services (within the meaning of section 41 of the 1977 Act);

(b) local pharmaceutical services provided under existing pilot schemes or LPS schemes (within the meaning of Schedule 8A to the 1977 Act);

(c) general medical services provided under arrangements made under section 29(1) of the 1977 Act;

(d) personal medical services provided under arrangements made under section 28C of the 1977 Act or under pilot schemes made under section 1 of the National Health Service (Primary Care) Act 1997.

(3) If it appears to a Health Authority that the proposals would, if implemented, affect any of the services mentioned in sub-paragraph (2) provided in the area of another Health Authority, they must consult that other Health Authority about the proposals before submitting them under paragraph 2 or including them in an application for preliminary approval under paragraph 4.

(4) A Health Authority consulted under sub-paragraph (3) must prepare an assessment of the likely effect of the implementation of the proposals on those services and supply it to the Health Authority which consulted them.'.

Amendment (a), at end of amendment No. 219, insert—

`(e) the provision of retail pharmacy services for the supply of non-prescription medicines.'.

Mr John Denham (Minister of State, Department of Health; Southampton, Itchen, Labour)

This schedule deals with the detailed arrangements by which proposals for pilot schemes are to be developed and approved. It also covers the steps to be taken once schemes have been approved. For the most part the provisions are modelled on those that have been successfully used for personal medical and personal dental services. However, there are some noteworthy differences. First, we have decided that prospective providers of LPS services should not have an absolute right to demand that health authorities work up and submit their proposals. That is because anyone can own a pharmacy, so in practical terms the potential pool of applicants was too large for the PMS approach to be viable. Health authorities could be swamped with propositions from all over their area and all over the country. There was also a risk that people would see this as a way of getting round existing control of entry rules, rather than as an exercise to develop genuinely innovative schemes.

We believe that there should be a safeguard against health authorities that deliberately or inadvertently hold back good ideas. That is why we have included specific powers for the Secretary of State and the National Assembly for Wales to require health authorities to provide details of ideas put to them by prospective pilot scheme participants. If necessary, health authorities could be directed to work up and submit such ideas.

Government amendment No. 218 clarifies that such directions may deal either with particular cases or impose a more general requirement.We have also introduced the concept of preliminary approval. Health authorities could identify situations in which an LPS pilot scheme would be an ideal way of filling a gap or otherwise promoting access to high-quality services, such as the opening of a new one-stop primary care centre. It could also be part of the strategy to develop new services in areas of social deprivation.

Preliminary approval will allow health authorities to work up proposals for LPS schemes without having definitely identified a particular person or organisation to provide the services. Having received preliminary approval from the Secretary of State or the National Assembly for Wales--the relevant authority as identified in clause 62--they would be able to seek offers from people wanting to participate. Whether or not they go through the preliminary approval stage, we expect all proposals for pilot schemes to be the product of full local involvement and discussion. We are taking a specific power to require health authorities to conduct formal consultations in paragraph 2(4) of the schedule.

We will naturally expect the proposals to be accompanied by a full and honest assessment not only of the likely benefits, but of the effect on existing services, especially pharmacy and GP services. I know that the pharmaceutical services negotiating committee and the general practitioners committee of the British Medical Association were both keen to see a provision in the Bill to that effect, and we have introduced Government amendment No. 219 in response to their concerns. It explicitly requires health authorities to assess the effects of their proposals on the overall provision of pharmaceutical services and on general and personal medical services. They must consult with neighbouring health authorities if necessary, to ensure that the assessment is not arbitrarily restricted by administrative boundaries. The assessment must then be included in the proposals submitted for approval by Ministers. Naturally, we will pay close attention to the assessment, and we will expect health authorities to consult widely and thoroughly in drawing up their assessment.

Amendment No. 219 also clarifies that requirement, and the other direction-making powers in paragraph 2 apply to both full and preliminary applications.

Opposition amendment (a) to Government amendment No. 219 would add to the matters to be covered in health authorities' assessments the effect of the provision of retail pharmacy services on the supply of non-prescription medicines. I am happy to acknowledge the importance of people having ready access to retail supply of non-prescription medicines. That aspect of the role of community pharmacists was highlighted in ``Pharmacy in the Future''. Pharmacists are well placed to help people to cope with everyday health problems. As I mentioned earlier, the ``ask your pharmacist'' message has been a strong part of the Government information campaigns during the past two winters.

We want more medicines to be available for retail sale where this is safe and appropriate, so we expect that pharmacies will have a growing range of medicines to offer people. The Medicines Control Agency will shortly be holding a meeting with interested parties to consider how that can best be achieved. We are developing the links between NHS Direct and community pharmacy, and by 2002 all NHS Direct sites will be able to refer callers to their local pharmacy where appropriate.

I listed those measures to reassure the Committee that I have no quarrel with the sentiments behind amendment (a). However, it is unnecessary. A few pharmacies do not provide NHS dispensing services, but in the overwhelming majority of cases pharmacies both dispense and sell medicines. Any assessment of the impact on pharmaceutical services as currently provided and on local pharmaceutical services as provided for in the Bill will inevitably deal with the availability of over-the-counter non-prescription medicines. Given that some pharmacies exist without NHS business, the only danger is that assessments will exaggerate any undesirable effects on that aspect of community pharmacy.

Clearly a balance must be struck between patients having ready access to their medicines after they have seen their GP—nobody would dispute that patients value that—and ready access to over-the-counter medicines when people are out shopping for other things. That will be covered by any assessment of the impact on pharmaceutical services, as that will look into the effect on existing service providers and possible changes in the pattern of services. Therefore, I am not convinced of the need for the amendment, and I ask the Committee to resist it.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

So far we have taken an hour and 25 minutes to cover two clauses. We have 19 clauses to cover today, but thanks to the Government's timetabling arrangements we do not have much time to do it in, so I shall attempt to be brief.

Mr David Jamieson (Government Whip (technically a Lords Commissioner, HM Treasury); Plymouth, Devonport, Labour)

We can go to 10 o'clock tonight.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The Government Whip says that we can go to 10 o'clock tonight. Is that a formal proposal that the Programming Sub-Committee should sit and change the timetable that has been imposed on the Committee? I am happy to give way to the hon. Gentleman if he wants to put that proposal, but my understanding is that we have to finish at 5 pm under the terms of the programming resolution.

The Minister has outlined what our proposed amendment to the Government's amendment No. 219 seeks to do. I spoke earlier about our concern that arrangements under the Bill could, by allowing dispensing to be handled by a hospital pharmacy, have an unintended negative impact on the availability of over-the-counter medicines and non-medicinal products typically sold in pharmacies. We sought to write into amendment No. 219 a requirement to assess the impact on the provision of those services. The Minister says that the amendment is unnecessary because the required assessment of pharmaceutical services would cover that. I do not agree. The required assessment is an assessment of pharmaceutical services provided under section 41 of the National Health Service Act 1977, which does not include the provision typically made in retail pharmacies incidental to their principal activity of dispensing prescription medicines.

It is not clear that a health authority would be required to measure the impact of any proposal on the loss of over-the-counter sales. If a health authority was able to show that the provision of pharmaceutical services as defined in section 41 of the 1977 Act would remain unaltered, there is nothing in the schedule as drafted that would require them to make an assessment of the impact on non-section 41 services, such as the provision of non-prescription medicines.

The Minister acknowledged that we would need to know whether the reconfiguration of services would result in the loss of over-the-counter retail opportunities for consumers. He said that it would not necessarily, but I ask him to reflect on that, in the light of the definition of the pharmaceutical services that have to be assessed. We may return to the question in future.

Paragraph 4 of schedule 2 deals with preliminary approvals. It provides that even though a health authority has obtained a preliminary approval, it must re-submit the final project proposal for approval by the relevant authority. I gather from the explanatory notes that the process is likely to be one of structuring an outline of the intended pilot and inviting bids from commercial partners to operate the pilot, perhaps from Boots and Sainsbury.

It seems inappropriate that the health authority should have to go through a proper, arm's length, objective evaluation process with competing commercial promoters if the relevant authority has the power of veto over what should be an objective commercial bidding process that is undertaken in open and transparent competition. It suggests that closed-door negotiations are more likely than what I would consider to be the proper process, in which the health authority would structure the pilot that it wanted to see in operation, without reference to particular individuals or companies. It would then invite those who are in a position to do so to make bids to provide those services on a non-preferential basis and evaluate the bids objectively. The import of paragraph 4 is that the Government do not intend that. Will the Minister clarify that point?

Dr Peter Brand (Isle of Wight, Liberal Democrat)

This is an interesting schedule. I wonder why it has been determined that the Secretary of State or the Welsh Assembly should have to give permission for that work rather than that the health authority should make its own proposals, with the Secretary of State or the Assembly acting as the court of appeal should a party feel aggrieved by the authority's decision. I fail to see how the Secretary of State can better judge than the health authority what is needed locally. The health authority's commissioning function will be undermined by the authority becoming a mere agent of the Secretary of State.

Sir George Young (North West Hampshire, Conservative)

I welcome both Government amendments. They bring some order to the almost free-for-all envisaged under paragraphs 4.13 and 4.14 of ``Pharmacy in the Future''. I have one specific request. Amendment No. 219 provides that the health authority should make an assessment of the likely effect of its proposals on existing services and that a copy must be sent to the Secretary of State. Will the Minister ensure that a copy is sent also to the local medical and pharmaceutical committees, so that they too can be confident that a thoroughly informed assessment that takes account of all the local circumstances has been made of the impact of the proposals? I see no reason why those committees should not have a copy. It would enhance confidence in the decision-making process.

Mr John Denham (Minister of State, Department of Health; Southampton, Itchen, Labour)

I shall answer first the hon. Member for Isle of Wight. In common with other personal family health services legislation, it was thought that all pilot schemes should be agreed by the Secretary of State. Both sides in the previous Parliament thought that to be a sensible balance when bringing new elements into established national contractual arrangements. It seemed to provide adequate safeguards on all sides. If everything is successful, as we hope and intend, it is envisaged that permanent arrangements will enable the health authority to take the decisions at local level. We are being prudent, having borne in mind the element of innovation and experiment.

The hon. Member for Runnymede and Weybridge talked about preliminary approval and the Secretary of State's approval. It is unlikely that there would be changes between the outlying specification set out at preliminary approval stage and the final scheme as a result of discussions from providing parties. We do not envisage that, at preliminary approval stage, the health authority will have a final, detailed and complete specification for every element of the service, against which providers simply submit commercial bids as though it were, say, a building project. That will allow the Secretary of State to pick up significant or problematic variations between preliminary and final approval.

In answer to the right hon. Member for North-West Hampshire, there is no reason why health authorities should not share the results of their assessments with local medical committees and pharmaceutical committees. We should deal with the matter in guidance in due course. It is important that people have confidence in the system.

The crucial question is whether we need to accept the amendment. Typically, 70 per cent. of the business of a community pharmacy is NHS business. The only danger of our current system is that if it were interpreted as narrowly as the hon. Member for Runnymede and Weybridge suggested, we would consider that 70 per cent. as though it were 100 per cent. of the income, and so overstate rather than understate the impact of an LPS contract to provide NHS services. The LPS contract is, of course, for the provision of NHS services, and we shall consider the impact of the new NHS service on the existing NHS service.

The hon. Gentleman said that everything would be okay if one could show that there would be no detrimental effect on NHS business. Obviously, we intend there to be no such effect, but in considering the wider issues of public health interest, the availability of over-the-counter medicines and so on, health authorities would in practice take stock of whether the new LPS provision for NHS services would have any impact on the wider provision for the local community. Although I understand where the hon. Gentleman is coming from, I believe that he is wrong.

The hon. Gentleman asked me to consider various matters. I once said that we would consider some matter and was told that, under parliamentary convention, that meant that I would table an amendment about it on Report. Having been caught like that before, I shall not be so caught again, although, as a reasonable man, I shall have a think about these matters. That is no commitment to table amendments on Report.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The Minister has accepted that there needs to be an assessment of the impact on over-the-counter sales opportunities. The only issue is whether that needs to be clear in the Bill. I should be grateful if he had a think about that, as it is simply a different interpretation of the narrow duty placed on health authorities by his own amendment.

Mr John Denham (Minister of State, Department of Health; Southampton, Itchen, Labour)

There is nothing further for me to say.

Amendment agreed to.

Amendment made: No. 219, in page 61, line 17, at end insert—

`( ) Sub-paragraphs (3) to (6) of paragraph 2 apply in relation to an application for preliminary approval of proposals under this paragraph as they apply in relation to proposals under that paragraph.

Effect of proposals on existing services

. —(1) Proposals for a pilot scheme submitted under paragraph 2, or included in an application for preliminary approval of proposals under paragraph 4, must include—

(a) an assessment by the Health Authority of the likely effect of the implementation of the proposals in the Health Authority's area on the services mentioned in sub-paragraph (2);

(b) any assessment supplied to the Health Authority by another Health Authority under sub-paragraph (4).

(2) The services are—

(a) pharmaceutical services (within the meaning of section 41 of the 1977 Act);

(b) local pharmaceutical services provided under existing pilot schemes or LPS schemes (within the meaning of Schedule 8A to the 1977 Act);

(c) general medical services provided under arrangements made under section 29(1) of the 1977 Act;

(d) personal medical services provided under arrangements made under section 28C of the 1977 Act or under pilot schemes made under section 1 of the National Health Service (Primary Care) Act 1997.

(3) If it appears to a Health Authority that the proposals would, if implemented, affect any of the services mentioned in sub-paragraph (2) provided in the area of another Health Authority, they must consult that other Health Authority about the proposals before submitting them under paragraph 2 or including them in an application for preliminary approval under paragraph 4.

(4) A Health Authority consulted under sub-paragraph (3) must prepare an assessment of the likely effect of the implementation of the proposals on those services and supply it to the Health Authority which consulted them.'.—[Mr. Denham.]

Schedule 2, as amended, agreed to.