Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I beg to move amendment 177, in clause 15, page 11, line 36, after ‘it’, insert ‘necessary and’.

It is a pleasure to be dealing with this part of the Bill under your directorship, Mr. Key. You must have done a fair bit of homework in the last 24 hours to be assisting us on the Bill.

This important part of the Bill deals with trust special administrators. The whole area of failure within the NHS is something that needs as much transparency as possible. The good news is that I will not move all the  amendments on the amendment paper, not least because I want to listen to what the Minister has to say. Perhaps we can come back to some important areas on Report.

Amendment 177 is important because at the moment the Bill says that the Secretary of State should appoint a trust special administrator only if they consider it

“appropriate in the interests of the health service.”

The amendment would insert the word “necessary” so that it would be not only appropriate for the whole NHS for the Secretary of State to approve such a measure, but necessary.

Those of us with experience of local trusts bringing in turnaround teams and so on have concerns about who these administrators will be. It seems that there is an assumption under the Bill that the administrators will mainly cover fiscal problems within foundation trusts, but that might not be the case. Will the Minister not only address whether he is happy for the word “necessary” to be inserted, which I think would improve the Bill, but give an indication as to who these administrators might be, where they might come from, and the cost implications of their appointment?

Sandra Gidley (Romsey, Liberal Democrat)

I wonder whether the amendment would restrict inspectors too much. If we think of recent examples, it took quite a time in some cases for a body of evidence to become available indicating that there were problems. By inserting the word “necessary”, presumably there would have to be some sort of test, but I wonder whether that would restrict the possibility of proper investigations taking place. I am also keen to hear what the Minister says.

Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

By using the word “necessary” as well as “appropriate”, as the amendment proposes, a higher standard would be imposed on the Secretary of State when appointing a trust special administrator. I agree with the hon. Lady that that would restrict the ability of the Secretary of State to deal with problems that could arise. These problems could relate to finances, but they could be much broader than that, as we have seen in recent cases. Perhaps this is not the place to discuss those, but I think that we are all aware that there needs to be an appropriate ability to deal with problems that arise in not only finance, but the provision of health care.

If we inserted the word “necessary” and it were argued that other options should be canvassed, the Secretary of State would not be able to take the appropriate action that was needed. The appointment of a special administrator could not be said to be necessary if there was any other option. This would apply even if appointing a trust special administrator might be the best outcome. We do not want to be prevented from using a regime when it is most needed and could be the best possible outcome. For that reason, I cannot accept the amendment.

We envisage that the Secretary of State would use the power rarely. Interventions will be made through the new NHS performance framework or Monitor’s compliance framework. In the very rare cases when these interventions are unsuccessful, or the strategic health authority is not able to get plans agreed on how to address the situation, it would be appropriate to appoint a trust special administrator. The trust special administrator would need to be an individual or a body with the skills and  knowledge to work collaboratively with staff, patients and local and national bodies. They would require significant experience of the NHS and would not be in any way described as not appropriate to carry out the role assigned to them.

A degree of flexibility would be necessary when establishing exactly who a special administrator would be. It would depend on whether the key issue was primarily finance, in which case a special administrator would need to have considerable experience in that area, or the management of health care, in which case the expertise would need to be in management. Those are primarily the key issues. However, the requirement that the special administrator should have a clear understanding of the way that the NHS works is enormously important.

John Pugh (Southport, Liberal Democrat)

I have some sympathy with the amendment. While the Minister was speaking, I was thinking of scenarios in which, for example, the Secretary of State might judge that decisions are not being made for the best configuration of health services. For instance, there might be a need to close down a maternity wing because it is not sufficiently subscribed to by local mums. The hospital might decide to preserve the maternity wing in response to local opinion, but the Secretary of State could take a harder line, and he would obviously be free politically to do so. While the Secretary of State might deem it appropriate to intervene in such a scenario, I get the sense that the general intention of the measure is to deal only with conditions of chronic failure, not to override local autonomy. It might be helpful if the Minister put that on record.

Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

I can certainly confirm that the measure is intended to be used only where there is a chronic failure—a serious collapse in administration, health care or the finances of an organisation. It is not intended to deal with the types of disagreements that happen on a not irregular basis because we have local autonomy. There will be disagreements within organisations, between different groups and between the view of the Government and the view of a local PCT, but it is not intended that the measure will be used in such cases. It is designed to deal with very serious situations. I hesitate to use the word “crisis”, but it would certainly be used in a situation that was bordering on a crisis when there was a serious or even chronic failure that required intervention that was proportionate but substantial.

John Horam (Orpington, Conservative)

To what extent do the arrangements give the Minister powers that he does not already have? For example, he might be aware that, in my constituency, the Bromley Hospitals NHS Trust had accumulated debt of £100 million as well as an operating debt. As a consequence, there was a turnaround directive and an independent accountant examined the figures from the previous four or five years to find out how the trust had got into that position. The non-executives were sacked and the whole situation was turned around. Frankly, the process was not wholly satisfactory, but we reached a new situation as a result of Ministers’ existing powers. That purely financial situation is being dealt with satisfactorily, so why does the Minister need these further powers, given that he already has substantial powers in his existing remit?

Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

As far as the areas of intervention are concerned, to some extent this depends on whether a foundation trust is involved. If that is not the case, it is possible for the PCT to carry out the sort of intervention that has been described to ensure that appropriate people are in place to deliver a local health service in an organisation. If the PCT itself is at fault, the SHA might well have the ability to intervene. However, when we get to foundation trusts, the situation is somewhat different. In that situation, Monitor and its compliance framework are the key criteria, because foundation trusts are much more independent and they have a greater degree of autonomy. An intervention in that situation would be much more restricted, so Monitor would be required to intervene and would have responsibility for taking the appropriate action.

A question then arises of whether, if that action fails, foundation trust status should be withdrawn. Monitor would have to take a view on that. If foundation trust status was withdrawn, the foundation trust would move into the category of being a trust, which could be intervened on by the Secretary of State or the person appointed by the Secretary of State as a special trust administrator. That is the straightforward process. Yes, there are existing powers, but the clause gives the Secretary of State additional ability to intervene and to appoint special trust administrators.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I thank the Minister. There are other aspects of how the special administrators will operate. He might wish to intervene on me, because he did not indicate where the cost burden of the special administrators will fall. Certainly when turnaround teams went into the constituency of my hon. Friend the Member for Orpington and mine, the cost burden was taken up by the trust, although the contract for the turnaround team had been agreed by the Department of Health and the SHA. If the Minister cannot reply now, perhaps he will write to me. I listened carefully to his comments, and I think he has taken on board what hon. Members said. I beg to ask leave to withdraw the amendment.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I beg to move amendment 178, in clause 15, page 12, line 10, at end insert—

‘( ) the staff of the Trust.’.

Robert Key (Salisbury, Conservative)

With this it will be convenient to discuss the following: amendment 179, in clause 15, page 13, line 5, at end insert—

‘( ) the staff of the Trust.’.

Amendment 180, in clause 15, page 13, line 5, at end insert—

‘( ) the trustees,

( ) the board of governors.’.

Amendment 181, in clause 17, page 18, line 5, at end insert—

‘( ) the staff of the Trust.’.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

This group of amendments addresses the fact that there is no requirement in the Bill for staff to be consulted before special administrators are appointed. The Government’s impact assessment says that it should be a priority to ensure that staff are engaged in the  process. Retaining staff and maintaining morale within an organisation is crucial, but nothing in the Bill indicates that such consultation would be required before a trust special administrator was appointed. That is the reason behind these four amendments, and I hope that the Minister will explain why such a requirement is missing from the Bill.

Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

The hon. Gentleman makes a good point. I entirely agree that staff engagement is a central principle of such a regime. When such intervention is triggered, it will understandably be unsettling for staff, so we designed the process to produce a swift resolution while ensuring that staff are engaged throughout. In Grand Committee in the other place, my noble Friend Lord Darzi of Denham said that staff should be engaged throughout the process, and that staff engagement would be further strengthened by statutory guidance, which we will produce. With that assurance, I hope that the hon. Gentleman will withdraw his amendment.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

The assurance on the statutory guidance addresses the point that it is important that staff have confidence in the system, so I beg to ask leave to withdraw the amendment.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I beg to move amendment 93, in clause 15, page 13, line 43, at beginning, insert ‘Immediately’.

Robert Key (Salisbury, Conservative)

With this it will be convenient to discuss the following: amendment 95, in clause 15, page 15, line 24, at beginning insert ‘Immediately’.

Amendment 96, in clause 17, page 19, line 7, at beginning, insert ‘Immediately’.

Amendment 97, in clause 17, page 20, line 18, at beginning insert ‘Immediately’.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I decided not to move amendments 182 and 101 to give me a bit of extra time—[Interruption.] Just joking.

This important group of amendments addresses the fact that the Secretary of State is ultimately responsible to Parliament, and would require the Secretary of State to place before Parliament the report on the failing trust as soon as it was available. The report could be presented to Parliament or to a scrutiny Committee, such as the Health Committee.

When there are problems in the NHS, transparency is vital. I am sure that you agree, Mr. Key, that it would not be right and proper for the Secretary of State to have on his desk a trust special administrator’s report on how bad a situation was when Members of Parliament for the constituencies involved and, more importantly, the public and local involvement networks did not have a copy of the report. The amendments would require the Secretary of State to place the report on a failing trust before the House.

Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

In practice, we anticipate that the draft report will be published and sent to the Secretary of State by the trust special administrator simultaneously. The Secretary of State will then lay it in Parliament as  soon as is reasonably practicable. The amendment would therefore be problematic if, for example, the House was not sitting. There are procedures, but they take some time. However, there would be no reason in such circumstances for the Secretary of State to delay laying the report before Parliament, because it will have been published.

The TSA would need a good reason to send a draft report prior to publication to the Secretary of State. For example, they might have to intervene in a particular way if the Secretary of State needs to be informed about something that need to be dealt with that could involve confidential patient information. It might be possible to produce a draft report, but the aim is for the trust administrator to publish a broad report and for the Secretary of State to make it available to Parliament at the earliest appropriate opportunity.

Michael Penning (Shadow Minister, Health; Hemel Hempstead, Conservative)

I listened carefully to the Minister, and he has now placed on record that the report will be published simultaneously. I still have concerns about why a draft report will not be available and under what circumstances the Secretary of State would hold it back from public and parliamentary scrutiny. I said at the outset, however, that because I would not move some amendments and I was going to listen to the Secretary of State, I might return to some of my remaining concerns at a later stage of the Bill. I emphasise again that there is an absolute necessity for as much transparency as possible, and that there is also a need for a regime. As yet, we still do not know how much the special administrator will cost, but on the basis of the Minister’s comments and reassurance, I beg to ask leave to withdraw the amendment.