Clause 22
Health and Social Care Bill

Liz Kendall (Leicester West, Labour)

I was asking what difference the Government amendment will make. At the moment, anyone who commissions a service from a voluntary organisation has to go through this process. What will be different as a result of the amendment, and why do the Government wish to make the change?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

If it helps to have it on the record, I can tell the hon. Lady that the amendment will transfer the power of PCTs to make grants of section 64 money to voluntary organisations to consortia. Under the new architecture, consortia will have that power.

Liz Kendall (Leicester West, Labour)

I thank the Minister for that clarification. When I ran a voluntary organisation, I had some experience of dealing with grants under section 64. GPs may not be used to giving grants to charities. I hope that the Minister will intervene to explain where GPs will get information about how to run a section 64 grant—not only about the power to give grants, but about what is done with them and how they are supposed to be run.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I suppose that I have had experience similar to what GPs will have, as I used to dole out section 64 grants when I was at the Department of Health in an earlier life. Some GPs will obviously be more familiar with the procedures, but I am confident that they will get to know them quickly and will soon be able to carry them out as well as PCTs do now. To totally encapsulate the point, so that the hon. Lady is fully reassured, the board will be giving guidance to consortia on how to do that.

Liz Kendall (Leicester West, Labour)

If the board is to give guidance to consortia on the running of the section 64 grant, which is vital to many local charities—the Minister has put that on the record—I shall stop talking.

Jeremy Lefroy (Stafford, Conservative)

I have a question for the Minister. When I last asked whether GP consortia would be able to carry money forward—not budgets for costs, but the commissioning budget—I was told by the  Secretary of State that because they were Treasury funds it could not be done. Much as I applaud it, I wonder whether the new power to make loans might sometimes be used as a method by which consortia offered loans in order to carry funding forward from one year to the next.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I shall write to my hon. Friend, so that he has a categorical answer. However, off the top of my head I think that that would not apply because section 64 funding is given to voluntary organisations for the specific purposes that we have already discussed. I do not believe that it could be assimilated into a general pot for general commissioning purposes in the way that my hon. Friend suggests. If there is more to it than that, I shall write to my hon. Friend with a full explanation.

Jimmy Hood (Lanark and Hamilton East, Labour)

I invite the Government Whip to move an amendment to the programme motion.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I beg to move amendment 95, in clause 22, page 33, leave out lines 12 to 14.

The amendment is a proposal to remove subsection (3) of new section 14V of the National Health Service Act 2006, which will be inserted by clause 22. The new section concerns the commissioning guidance that is to be produced by the board and that consortia must have regard to when discharging their functions. The purpose of subsection (3) is to allow the board to obtain assistance from third parties, including NICE, in producing commissioning guidance.

Other provisions elsewhere in the Bill mean that the subsection is redundant. Clause 225 provides the necessary powers for the board to direct NICE to exercise any of its functions in relation to the preparation of commissioning guidance. The board’s general powers under section 2 of the 2006 Act, as amended by the Bill, will be sufficient to allow it to obtain assistance from others in the preparation of commissioning guidance. Subsection (3) is therefore unnecessary.

Liz Kendall (Leicester West, Labour)

I beg to move amendment 211, in clause 22, page 33, line 14, at end insert—

Jimmy Hood (Lanark and Hamilton East, Labour)

With this, it will be convenient to discuss amendment 217, in clause 23, page 40, line 43, at end insert—

Liz Kendall (Leicester West, Labour)

Amendment 211 relates to clause 22 but amendment 217 relates to clause 23, so we are discussing related amendments to two separate clauses.

Subsection (1) of new section 14V of the National Health Service Act 2006 says:

“The Board must publish guidance for commissioning consortia on the discharge of their commissioning functions.”

Amendment 211 seeks to ensure that

We will come to discuss clause 23, which refers to the financial duties of commissioning consortia. Amendment 217 seeks to ensure that

“A commissioning consortium must ensure that in the use of its resources conflicts of interest are managed to prevent members benefitting financially from the consortium’s commissioning arrangements.’.”

In other words, these two amendments seek to ensure that conflicts of interest between those GPs responsible for commissioning services and the responsibilities of the providers of services are very clearly set out, and that GPs who are commissioning those services should not be able to benefit financially from those commissioning arrangements.

During earlier discussions, we have already discussed the need to ensure that conflicts of interest do not arise. Government Committee members believe that there are two ways of doing that: first, through very clear guidance from the NHS board, if it is established after the deliberations of the Committee and the House; and secondly—crucially—through their financial arrangements.

The Minister has said that he believes that all those conflicts of interest can be sorted out in the GP consortia constitutions, but I do not believe that that is possible, because the constitutions would end up being far too long. In fact, GPs who set up commissioning consortia would themselves need, and I am sure appreciate, guidance from the board on how to separate those conflicts of interest and ensure that they do not occur.

Being sure that GPs do not financially benefit from commissioning responsibilities is critical for the House as a whole. I know we are not on clause 23 yet, but we are discussing the amendments together. It is vital that conflicts of interest are managed to prevent members from benefiting financially from the commissioning arrangements.

The amendments are pretty straightforward and clear. Accepting them would provide an extra lock on the situation, alongside arrangements set out in a constitution. Unless there are further measures—“rules and regulations” is the wrong term—in the Bill to ensure that conflicts of interest are managed, I am afraid that there will be very real concern about the effective use of taxpayers’ money and concerns from those who provide other community primary services such as pharmacists, who we discussed. They will fear that GPs will simply commission services from themselves.

I do not believe that that would be the case everywhere. Many GPs will want to look at other services to commission, but these two amendments would make those conflicts of interest much more clearly managed and accountable, which is why we tabled them.

Grahame Morris (Easington, Labour)

I rise in support of amendments 211 and 217. Amendment 211 would give an important duty to the NHS commissioning board in relation to the guidance it gives to commissioning consortia. New section 14V to the 2006 Act sets out the responsibility of the board to publish guidance for consortia on how they discharge their commissioning functions. As with much of the Bill, there seems to be little by way of teeth when it comes to regulating the functions of the new key statutory bodies it creates, such as commissioning consortia, and that is without addressing the issues of concern to the public over private providers that are looking to enter the market and that stand to gain so much from the changes.

Whatever guidance the board gives, the only obligation placed on a consortium is to “have regard” to the guidance. Time and again on earlier clauses, Ministers and Government Members have said that something is implied in the Bill, but we, on this side, want it explicitly spelt out.

When addressing the amendment, I start from the premise that far too few protections or safeguards are placed on each consortium. All hon. Members should take a moment to reflect on the fact that the legislation will transfer more than £80 billion of taxpayers’ money to GP consortia across the country. If the right safeguards are not in place before the Bill finishes its passage through Parliament, there may well be consequences and a day of reckoning for the coalition parties.

Amendment 217 would insert a specific direction to the NHS commissioning board to address the obvious and blatant conflicts of interest, to which my hon. Friend the Member for Leicester West referred, that are certain to arise out of the legislation. I draw the attention of the Committee, especially Government Members who have as yet refused to oppose any aspect of the Bill, to the written question I referred to earlier. It was a specific question about

“whether a licensed private healthcare provider will be permitted to (a) provide services and (b) enter into a contract with GP consortia to carry out duties in relation to its work as a commissioning body.”

In other words, could a private health care company be a licensed provider and at the same time be contracted by a consortium as part of its commissioning arm?

I was surprised by the response. I expected the reply to point me in the direction of a clear, unambiguous safeguard against what most people would agree could be a gross conflict of interest. In fact, as I said this morning, the response was:

“Consortia will be free, within the legislative framework, to make the decisions that they judge are right for patients and provide value for money.”

Mr Burns indicated assent.

Grahame Morris (Easington, Labour)

The Minister is murmuring from a sedentary position, but I am surprised that consortia are free to do that. A reasonable person might have expected that safeguards would be in place. The answer continued:

“This includes commissioning services from the public, voluntary or private sector”

and the consortia will have

“the freedom to decide what commissioning activities they undertake for themselves, and for what activities they choose to buy in support from external organisations, including local authorities…voluntary sector bodies”—[Official Report, 2 March 2011; Vol. 524, c. 495W]—

and private sector companies. Indeed, as the Minister indicated at Health questions earlier, it is not envisaged that GPs will spend time managing the consortium’s function. The Minister indicated that they would probably buy in that expertise, and that is increasingly the expectation.

Daniel Poulter (Central Suffolk and North Ipswich, Conservative)

It is easy to read out statements completely out of context. We had the discussion earlier so I am not sure how useful this is, but we clearly said that there are clear guidelines and that each GP consortium must have in its constitution provisions for dealing with conflicts of interest. That is in the schedule, and we have already discussed it. Can the hon. Gentleman please accept that?

Grahame Morris (Easington, Labour)

I am pleased to have the opportunity to respond. Basically, that is the nub of our argument. We want some explicit safeguards to be spelt out in the legislation, not just a vague commitment to address the issue. We want to see that in black and white in the Bill. I really think that the general public out there expect us to scrutinise the Bill properly and to ensure that that is addressed.

I will give an example in a moment, if I am allowed to continue, Mr Hood, but perhaps when the Minister has the opportunity he will respond to some of those points. It seems from the Minister’s considered written reply that he is unable to tell me where the protection exists to prevent private companies from being commissioners and providers. It is clear that the Bill permits that, and if that is not a conflict of interest, I am a monkey’s uncle. I have the attributes.

It is clear that there is more to be done to provide the public with the confidence, and to ensure, that such a gross conflict of interest does not occur, so I urge all right hon. and hon. Members to support amendment 211, which would ensure that the guidance from the board must, as the amendment says,

“include procedures for the management of conflicts of interest in the commissioning arrangements of commissioning consortia, and in particular between the interests of persons engaged in commissioning services and the interests of those engaged in their provision.”

The Minister would do well to ask his colleagues to support amendment 211; it does not play well with the public to resist all our reasoned amendments. In addition, I suggest that he goes away and looks at how to put further safeguards in the Bill so that protection from such a clear conflict of interest is not only set out in guidance notes, but enshrined in legislation.

Amendment 217 aims to address another potential conflict of interest. It would place a financial duty on the commissioning consortium to prevent its members from benefiting financially from any of their commissioning arrangements.

There is plenty of evidence to suggest that that safeguard is not only required for the protection of public money and to safeguard against any conflict of interest, but desirable, to protect GPs from allegations of misuse of public money in future. Indeed, Dr Clare Gerada, the chair of the Royal College of General Practitioners, to whose evidence we have already referred, has warned that the potential conflict of interest in the current proposals could amount to a scandal on the scale of MPs’ expenses. In this case, however, it is worth remembering that we are talking about £80 billion of taxpayers’ money.

Daniel Poulter (Central Suffolk and North Ipswich, Conservative)

On the misspending of public money, which the hon. Gentleman is so keen to point out, would he think that when the Suffolk PCT spends £500,000 on a car park while closing front-line community hospitals, that is a good use of public money? Would he not think that GPs are much better placed to spend money on patients, rather than on bureaucracy and wasting money on car parks and infrastructure?

Grahame Morris (Easington, Labour)

I am grateful for that intervention because it brings me to some examples that I have gleaned from the Health Service Journal. I do not condone any waste of public money, be it by the PCT, the strategic health authority or GPs. I advocate that we build into the Bill some safeguards to prevent the scope for such misspending of public money.

Tom Blenkinsop (Middlesbrough South and East Cleveland, Labour)

My hon. Friend might want to confirm that the NHS was one of the most efficient health services in the world last year.

Grahame Morris (Easington, Labour)

I am sorely tempted to be diverted from the amendment. My hon. Friend is right; evidence has been presented to the Committee to indicate that.

I would like to refer to some examples. I know that the Minister is not keen on that, but it might be instructive. The Health Service Journal found that where GP-led commissioning had been trialled over the last two years, funds had been diverted away from patient care to the benefit of the commissioning bodies themselves, through excessive amounts being spent on new equipment and refurbishments.

GPs have always acted as private businesses contracted to the NHS. That means that we expect them to fund their own running costs out of one budget, which will also be available for care. There will be maximum set for expenditure on management costs under the Bill, but that alone will not protect against any conflict of interests. The Health Service Journal found that by increasing spending on their own operating costs, GPs were able to increase their own practice profits.

I am sure that all Members will have also seen the Channel 4 News investigation, which revealed that under these reforms GPs could make arrangements with private sector organisations that would ensure that they can make a profit from commissioning decisions by pushing down the cost of provision. I was aware of that conflict of interest, but I was shocked by that report.

The truth is that under these reforms there is little or no protection for patient care against the conflict of interest inherent in GPs’ controlling two-thirds of the  NHS budget. The excellent Channel 4 News investigation by Victoria Macdonald highlighted the business opportunity for private companies, which are already lining up to offer their services, and for GPs, who could work within the legislative framework to make a profit. During the course of the programme, a leaked document from Integrated Health Partners was cited as setting out a clear plan to push down the amount spent on patient care in order to push up profits and give payments to GPs.

Daniel Poulter (Central Suffolk and North Ipswich, Conservative)

I have to bring the hon. Gentleman back to planet Earth for a second. The fact is that the previous Government paid private companies 11% more than NHS providers to provide health care, so I do not understand where his point is coming from.

Grahame Morris (Easington, Labour)

I am grateful again to have an opportunity—

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Answer the point.

Grahame Morris (Easington, Labour)

I will answer the question, but it is important that we address the clear and present danger presented by the Bill. I will respond in a moment to the hon. Gentleman’s question about moneys spent by other organisations, but we need to address the amendment.

Mr Burns indicated dissent.

Grahame Morris (Easington, Labour)

Well, that is what we are dealing with. I am trying to identify a problem that will arise from the Bill. The existing legislation will be amended and replaced, and I want to address certain points.

The Channel 4 News investigation stated that Integrated Health Partners

“talks about plans for five per cent cost savings from patient budgets, and that the less they spend, the more there is left over to share between them”—

the GP consortia which will commission it. It

“even proposes that in three to five years, the overall business should become profitable enough to attract City investors. We have established that IHP is involved with a number of consortia in Surrey.”

It is not only the loopholes, which allow direct conflicts of interest to occur, that we need to consider. Commissioning consortia are not required to have some of the most basic features that we would expect in order to have transparency and openness and to carry the confidence of the British public.

As has been mentioned, there is no requirement on consortia to have a board or outside non-executive directors, to have public meetings or to publish an agenda or minutes, which primary care trusts are currently required to do. As I said, the term “GP commissioning” is an absolute red herring. There will be no requirement on GPs to play any role in management or commissioning decisions, which they can simply subcontract to a private company.

Emily Thornberry (Islington South and Finsbury, Labour)

I think that the hon. Gentleman was at Health questions before this sitting. Did he hear a Minister say  that GPs did not need to cut back on the eight to nine minutes they spend per patient, because they would subcontract?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

No, I did not.

Emily Thornberry (Islington South and Finsbury, Labour)

It may not have been the Minister who is now jumping up and down in his seat. The point may have been made by the Secretary of State.

Grahame Morris (Easington, Labour)

I recall that very clearly. It was said in reply to a question from my hon. Friend the Member for Stockton North (Alex Cunningham), and I may have referred to that in my opening remarks, because the suggestion from the Minister—we can check Hansard—was that GPs would not have to reduce the time spent, which is eight or nine minutes on average.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Will the hon. Gentleman give way?

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. Before the hon. Gentleman answers the question whether he will give way, I say to Ministers that I can hear you whispering away, when you should be listening to the Member who is addressing the Committee. As I have previously asked, I hope that right hon. and hon. Members will pay attention.

Grahame Morris (Easington, Labour)

Thank you, Mr Hood. I just want to answer the question, and then I will give way to the Minister.

The Minister’s response was that there was no need for GPs to set aside time for training in commissioning, because—[Interruption.] That is the answer that he gave, and we can check Hansard. He is grimacing.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

It was me.

Grahame Morris (Easington, Labour)

I know who it was, but I am not going to identify him. The suggestion was that the expertise would be bought in. Clearly, the Bill allows for that, and however the Minister wriggles on it, the written record is absolutely clear: in response to parliamentary questions, he gave assurances that are implicit, not explicit.

Mr Burns rose—

Grahame Morris (Easington, Labour)

No, I am going to make some progress, because I am almost finished, and the Minister will have ample opportunity to respond.

With the limits on management and administration spending set out in the Bill, the pressure will obviously be to delegate commissioning decisions elsewhere. The most likely scenario seems to be that the entire commissioning function will be contracted out over time to private companies and there will be no proper scrutiny or accountability—remember, they do not have to respond to freedom of information requests, for example. Will the Minister act before it is too late, not just by accepting the amendments but by putting the tightest regulations possible in the Bill to safeguard against the misuse of public money?

John Pugh (Southport, Liberal Democrat)

Will the hon. Gentleman give way?

Grahame Morris (Easington, Labour)

I have finished my remarks.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I shall start my speech slightly differently from how I planned to start it. Having just listened to details of the fantasy world of the hon. Member for Easington, I come to the conclusion that he was not at the same Health questions as I was, because the Minister who answered the oral question from the hon. Member for Stockton North—I shall be quite frank—was me. I think that in his keenness to be called by Mr Speaker, the hon. Member for Easington was not listening to what was going on; he was concentrating on jumping up and down like a yo-yo. What I actually said will be shown in Hansard tomorrow. The question from the hon. Member for Stockton North said that patients got only eight or nine minutes with their GP. I said that I did not accept that figure because I believed, from my experience of going round the country, that GPs made as much time available as they thought was appropriate to see their patient. That is completely different from the fantasy land revealed by the comments made by the hon. Member for Easington.

Grahame Morris (Easington, Labour)

That was not the question at all. I know that we are deviating from the amendment, Mr Hood. The question is: what estimate has the Minister made of the average amount of time per week—

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. Much as it may be tempting to have another go at Question Time today, it is not in order for this Committee to do so. I invite the Minister not to encourage other hon. Members to follow the wrong route.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I certainly will not, Mr Hood. Would it be in order, though, for me just to explain to the hon. Member for Easington that he is confused because—

Jimmy Hood (Lanark and Hamilton East, Labour)

No.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

It is not, so I shall stop there.

What is more in order, and which I will mention in passing, is that it was significant that the hon. Member for Easington failed to answer, although he promised to, the extremely pertinent point made by my hon. Friend the Member for Central Suffolk and North Ipswich, because that goes to the nub of what has been going on with independent sector treatment centres. ISTCs were private providers, set up by the last Government—

Liz Kendall rose—

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

One minute—let me finished. The hon. Lady cannot have been enraged so much so soon, when I have not actually finished what I am saying. When I have finished, I will give way to her. The point that my hon. Friend made was that we had a system, set up by Tony Blair, which was to cherry-pick certain services at the expense of the local NHS provider and to encourage them—[Interruption.]

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. I have previously urged the Minister to remain in order when other hon. Members are speaking. In the interests of fairness, I should insist that Opposition Members give him a good hearing when he is addressing the Committee.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Thank you for your protection, Mr Hood. Opposition Members should listen because they may learn something, even if they find it unpalatable.

The ISTCs set up by Tony Blair were allowed to cherry-pick at the expense of the local NHS provider and, rather ironically, they were then paid about 10% or 11% above what the NHS got for that cherry-picking. I find that incredible and I find it—well, I do not find it so surprising that the hon. Member for Easington did not want to address that point, because I understand how embarrassing it is.

Owen Smith (Pontypridd, Labour)

Will the Minister give way?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I do not know whether there were ISTCs in Wales, but I will give way.

Owen Smith (Pontypridd, Labour)

The intervention is not about Wales. I simply wish to point out that the issues the amendments deal with relate to the conflicts of interest that would occur if a private provider both commissioned and provided a service. That did not happen with ISTCs. Will the Minister concede that that is a critical difference? We are trying to tease out whether that would be allowed under the new system.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

The hon. Gentleman can rest assured that I will deal with amendments 211 and 217 presently. I wanted first to clear up the misunderstandings, or fantasies, of the hon. Member for Easington.

Kevin Barron (Rother Valley, Labour)

I do not think that cherry-picking was a part of ISTCs. They were under contract so that people who had many things that could potentially go wrong with them during a knee or hip operation could not be in a unit that did not have full back-up. Will the Minister tell us why the Conservatives did not oppose ISTCs, given that he seems to oppose them now?

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. I insist that hon. Members get back to discussing the amendments before the Committee.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Thank you, Mr Hood. I say only that I would regard that as institutionalised cherry-picking.

The amendments seek to address how conflicts of interest are managed within consortia and that appropriate safeguards are in place to ensure that decisions are taken in the interests of patients, rather than of member practices. I think we can all agree—notwithstanding the past five minutes of debate—that it should be patients who reap the benefits from consortia commissioning activities in terms of improved health outcomes.

Let me reassure Opposition Members that conflicts of interest arising within the new commissioning arrangements are a matter to which the Government have given considerable thought. We are of course not  in favour of such things—not in favour, I hasten to repeat, before anyone misunderstands or mishears—and I will demonstrate that we have put necessary safeguards in place to ensure that the potential for such conflicts is transparently and properly managed.

Respondents to the “Equity and Excellence” White Paper consultation supported our proposals to put systems in place to ensure fairness and transparency in decision making, particularly in relation to any decisions to commission services from GP practices. We have therefore laid down in the Bill measures that ensure, in an environment of flexibility and freedom, that the actions and decisions of consortia and their member practices are transparent and appropriate.

Clause 63 is important in that regard. It allows for regulations to impose requirements on both the board and consortia so that when commissioning services they adhere to good practice in procurement. Regulations may impose requirements relating to

“the management of conflicts between the interests involved in the commissioning of services and the interests involved in providing them.”

Amendment 211 would require the board to include in its commissioning guidance for consortia guidance on arrangements to manage conflicts of interest. The regulation power in clause 63 to impose requirements about conflict is stronger than that. In addition, paragraph 4 of new schedule 1A to the National Health Service Act 2006, inserted by schedule 2 to the Bill, requires each consortium to set out its arrangements for managing potential conflicts of interest. Consortia will have the flexibility to specify their own arrangements, but it will be the role of the board to review and approve those arrangements as appropriate.

As part of the establishment process for consortia, the NHS commissioning board must be satisfied that the applicants have made appropriate arrangements to ensure that the consortium will be able to discharge its functions. The board will review consortia constitutions for evidence that clear arrangements are in place to discharge their functions, including promoting choice and managing potential conflicts of interest. If the board is not satisfied that the proposed arrangements are adequate, it will simply not establish the consortium.

Doctors are also bound by a duty under General Medical Council guidance that any commercial interest GPs might have in a company must not affect how they refer or prescribe for a patient. If they do decide that it is most clinically appropriate to refer a patient to a company in which they have an interest, they must inform the patient of that interest. Such commercial interests might take the form of shareholding in or ownership of companies providing community-based services, such as dermatology or podiatry.

Liz Kendall (Leicester West, Labour)

Is the Minister saying that patients must be informed every time a GP refers them to a dermatology or any other service provided by an organisation in which the GP has some kind of interest?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Yes, I am.

Liz Kendall (Leicester West, Labour)

Is the Minister guaranteeing that?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

The hon. Lady asked a question, and my answer is yes, the GP must inform the patient every time. She went further, to ask whether I am guaranteeing  that—an interesting point but clearly, it would not be realistic of me to stand here and guarantee that every time a GP sees a patient in certain circumstances he will do what he ought to do.

To strengthen my argument—I alluded to this just now—GPs currently have a duty under GMC guidance, and that will not change under the modernisation proposals. It is probably fair to say that Members of all parties feel that the duty under the current GMC guidance is satisfactory. In that case, logically, they should also expect and accept that that will remain so under the modernisation of the NHS. It would be slightly contradictory to take another view.

Owen Smith (Pontypridd, Labour)

Does the Minister not agree that nothing in what he has just said outlaws a situation arising under the Bill whereby a private provider might be contracted both to commission and then to provide a service? All he is saying is that the consortium needs to have in place appropriate mechanisms to deal with such conflicts, but they are not outlawed from occurring. Am I right or am I wrong?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I will not say what I was about to say in reply to that last question. I will say that I fully understand that the purpose of the Committee is to hold the Government to account and to question our purposes and what a piece of proposed legislation will achieve or not, depending on one’s point of view. However, let me say this: hold the Government to account by all means and ask questions by all means, but let us not be too pedantic. The system works at the moment, and I imagine that the hon. Gentleman had never questioned it as a system that did not work until this afternoon when we reached the clause. At the moment, GPs have a duty in similar circumstances, under GMC guidance. What is more, it is a matter of—

Owen Smith rose—

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

No, please sit down, at least until I have finished answering the point.

It is also a matter of professional standards, enforced by the General Medical Council. The system has worked up until now, and I have no reason to believe in any way, shape or form that it will not work under the modernised NHS. For that reason, I am satisfied that the checks and balances, as outlined during the course of my remarks, will be as effective in a modernised NHS as in the current NHS. I will not go on, because I fear we will go round and round in circles.

Owen Smith (Pontypridd, Labour)

The Minister has not answered the question.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I have answered the question.

Owen Smith (Pontypridd, Labour)

No you have not.

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. It is for the Minister to respond to an intervention in the manner he feels fit.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I want to be helpful to the Committee, and I hope that hon. Members agree that I have been over the past few weeks. On this narrow issue, however, I am satisfied that I have outlined, with great clarity and  detail, that the system that works at the moment will be just as effective and relevant with GP consortia. I do not accept that there is a problem. The hon. Member for Pontypridd is making a meal out of this, particularly as the regulations made under clause 63 will set requirements in relation to conflicts of interests. We are not using only one mechanism to minimise the potential for such conflicts; we are using a number of them, including those that we have been discussing—the General Medical Council guidance and professional standards.

Owen Smith (Pontypridd, Labour)

rose—

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I honestly think that I should move on, because we have exhausted the subject, although I accept that the hon. Gentleman does not agree.

The arguments about measures to safeguard against conflicts of interests apply equally to amendment 217. It is simply not the case that member practices will be able to pocket savings from their commissioning budgets. With the exception of the funding for administrative costs, which is to cover the costs of commissioning, the consortium’s commissioning budget must be used exclusively for the commissioning of patient care. Commissioning budgets will also be distinct from the income that GP practices earn under their primary medical care contract, from which GPs meet their practices expenses and derive their personal income.

There seems to be an element of confusion, so it might help the Committee if I give a little background detail to the quality premium. The premium is a financial incentive to reward effective commissioning in the same way that quality and outcomes framework payments provide incentive for effective health care provision. The quality premium is intended to encourage GP-led commissioning consortia to achieve high-quality health outcomes from within NHS resources. It will be funded from existing resources, and the Department will continue to discuss with the profession the nuts and bolts of its design.

I think I have dealt with the query raised by the hon. Member for Easington about whether a private contractor could be contracted by its commissioning arm to be part of commissioning functions. He cited my answer to his recent written parliamentary question, in which I said that there would be flexibility for consortia within the rules set out in the legal framework. Those rules include regulations and requirements on procurement practice and the safeguards that I have already set out in my response.

Grahame Morris (Easington, Labour)

Will the Minister just give a straight yes or no answer to this question: can a private sector company that is engaged by the GP-led commissioning consortia be both commissioner and provider?

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. The hon. Gentleman must be standing when he makes contributions to the Committee.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I am a bit perplexed by the hon. Gentleman’s question, because there will be certain circumstances, as there are now, where a GP may be also attached to a  provider of a service in some shape or form. Provided that the safeguards and protections that I have outlined are in place and operate, I do not have a problem with that. I am not sure why he has a problem. It may come as a surprise to him, but that has been going on for years. It is not as though some completely new procedure has suddenly been revealed to him; it has been happening for a long time. GPs will refer people to treatments or care in certain circumstances, with protections against conflict of interest, and I do not understand why he has a problem.

Owen Smith (Pontypridd, Labour)

May I help the Minister understand? With respect, the simple point we are trying to make is that there is a radical difference between an individual GP who may have an interest in a company to which he refers a patient, and BUPA running both the commissioning for a slew of GPs across a given area and then the service provision at the other end. That is the difference. Is that latter scenario possible and will it be dealt with? Our contention is that it looks feasible under the legislation.

Mr Burns rose—

Daniel Poulter (Central Suffolk and North Ipswich, Conservative)

Will my right hon. Friend give way?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Before I answer the hon. Member for Pontypridd, I will give way to my hon. Friend, because he has a medical background, and far more experience than the hon. Gentleman, I suspect, who does not have a medical background. I think it will be useful and of interest to the Committee to hear from him before we proceed.

Daniel Poulter (Central Suffolk and North Ipswich, Conservative)

It is worth drawing out briefly the fact that the very issue that the hon. Gentleman has just raised, arises in hospitals at this moment, because of the policies put in place by the previous Government. In fact hospital services are already contracted out on a large scale by the NHS, often paying private providers a lot more than NHS service providers, as I outlined earlier. The same consultants will be doing the same operations at different ends of the hospital, one for a private provider, and one for the NHS.

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. It is a bit strange for Back Benchers to be answering interventions for Ministers. I would much prefer the Minister not to take such long interventions from his hon. Friends.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Notwithstanding its length, I think the content of my hon. Friend’s intervention was rather useful for Opposition Members. Although I am grateful for the information, I will also provide an answer myself, which was the intention. I thought that the hon. Member in particular could benefit from the medical and health background of my hon. Friend before we progress. The fact is that, yes, a company could assist with commissioning and be involved in provision, but—there is a but—only if all regulations and requirements are being fulfilled; furthermore, as I said, there are protections, including those of the GMC, by which it has to abide in order to minimise a conflict of interest. The hon. Lady looks staggered.

Emily Thornberry (Islington South and Finsbury, Labour)

I am staggered. The reason I am so staggered is that the hon. Gentleman says, “There will be regulations. Everything will be fine.” We have not seen the regulations. This is a very serious matter. The Minister cannot simply say, “Oh well, we are sure the General Medical Council will sort it out,” or, “We will have some regulations,” That is not good enough.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I have waited 13 sittings for a Labour Member to make that point. I should like to point out to the hon. Lady that we have reversed a trend to which we became accustomed between 1997 and 2010. Some hon. Members have criticised the length of the Bill, but the reason for its length is that we have sought to reverse recent precedent and insert as much relevance as possible into the Bill and primary legislation—unlike the health Bills of 1998-99, 2002-03, 2006 and 2009, in which the previous Government adopted the deliberate tactic of providing Committees and the House of Commons with a skeleton, while all the powers and detail flowed from regulations, statutory instruments and other secondary legislation, but when the Bills were progressing through Committee, no guidance and no draft statutory instruments had been published.

I represented the then Opposition on the Health and Social Care (Community Health and Standards) Bill Committee in 2002-03 and, to be frank, I made the same plaintive plea on far more occasions than the hon. Lady has; the difference was that there was virtually nothing on the face of the primary legislation. We have decided that it is only right and proper that to insert in the Bill as much information as we can for the Committee’s consideration. It is inevitable, however, that there will be a number of provisions from which statutory instrument regulations will flow. We cannot put everything on the face of the Bill.

It says in my speaking notes, “I hope that I have satisfied the concerns of hon. Members on this point,” but I can tell my hon. Friends that I will not have done so. I have reached the point of believing that nothing will satisfy or convince Opposition Members.

Emily Thornberry (Islington South and Finsbury, Labour)

Give up.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Never give up. I ask the Opposition to reflect upon the debate and to consider withdrawing the amendment.

Jimmy Hood (Lanark and Hamilton East, Labour)

Order. Before I ask the hon. Member for Leicester West to reply, I once again remind Members that it is not good enough for them to heckle others in Committee. There has been to-ing and fro-ing—no one side has been doing it more than the other—and I will jump to my feet in future to bring it the Committee’s attention. It is not satisfactory for people who watch and read our proceedings to hear that sort of heckling. I deprecate it and invite Members to listen to those who are on their feet, to intervene briefly, and to address the amendments under consideration.

Liz Kendall (Leicester West, Labour)

Let me explain why the Opposition are not satisfied with the Minister’s explanation. He frequently asked why we are complaining now, when this has always been the case and nothing much is changing. The General Medical Council already requires GPs to  disclose whether they have an interest in a particular company to which they refer a pensioner, and the hon. Member for Central Suffolk and North Ipswich has said that GPs are already able to refer someone to a private provider where they or one of the colleagues work. The difference, though, is that GPs do not currently have responsibility for commissioning £80 billion-worth of the NHS budget. For all their faults, as well as some of their benefits, primary care trusts have a board, a chair, and executive and non-executive directors. The new body being established has no requirement to involve a GP, let alone any other provider, on its commissioning board. That is why we are so concerned.

I hope that the Minister will allow me to make some progress here. He has made his point about why he thinks the amendments are not sufficient. I am setting out the case for why they are. We are concerned because, although some of the issues may be the same, the point is that the Bill changes the structures that deal with them and the accountability in those structures, and for the first time it gives GPs a role as commissioners of services, not just providers. There is no GMC requirement, as I understand it, for a GP to disclose anything involving a conflict of interest in terms of commissioning. It is about the provision of services, which is why we have tabled the amendments.

I thought that the hon. Member for Central Suffolk and North Ipswich was uncharacteristically ungentlemanly in his suggestion that my hon. Friend the Member for Easington was somehow living in a fantasy world when he talked about the potential for a conflict of interest if a private provider could both commission and provide a service.

I do not want to stray beyond the scope of the amendment, Mr Hood, so I shall not comment on whether the policy is good or bad. I am talking about the reality—what could happen. It is not fantasy. According to Pulse magazine today, the spokesman for the consultancy McKinsey—a private provider—has said it is

“supporting ‘more than two dozen’ consortia on commissioning”.

Other organisations are helping GPs in both the commissioning and provision of services. That is not a fantasy; it is happening. As I said, I am not commenting on whether that is good or bad. I am saying that there must be proper accountability to avoid conflicts of interest. The Bill does not provide that. There are indeed issues to do with a clear process in procurement, but the question is the lack of accountability of the proposed new consortia, which we have discussed previously.

The Minister said that it was not possible for GPs to benefit personally from the commissioning decisions that they take, such as if a surplus is made. He talked about the premium and the quality and outcomes framework. We will, with the next group of amendments, reach a direct contradiction, in the Bill, of what he asserted. I shall not discuss it now as it is an issue that requires full discussion under clause 23.

The Bill changes the current situation as to the roles and responsibilities of GPs, giving them a strong role in commissioning as well as in providing services. That is why we propose a change. I do not believe that the Minister has responded to those questions.

John Pugh (Southport, Liberal Democrat)

Can I ask the hon. Lady to make clear what she is saying? One point might be made, which is to claim that the Bill makes the probability of or opportunity for conflicts of interest greater—a separate point, regardless of what solutions there were for it. Is that her point, or is it that, given that there will be conflicts of interest in any system, there is no adequate provision in the Bill to deal with them? Those are really two distinct points, are they not?

Liz Kendall (Leicester West, Labour)

Not for the first—and probably not for the last—time, the hon. Gentleman puts the point very well, perhaps better than I have. I am concerned about both those issues. I do not believe that there is sufficient provision in the Bill to address those conflicts of interest. The amendment is a good attempt to do so, which is why I should like to press it to a Division.

Emily Thornberry (Islington South and Finsbury, Labour)

I beg to move amendment 171, in clause 22, page 33, line 15, after ‘consult’, insert

‘representatives of commissioning consortia and’.

Jimmy Hood (Lanark and Hamilton East, Labour)

With this it will be convenient to discuss amendment 143, in clause 22, page 33, leave out lines 15 to 19 and insert—

Emily Thornberry (Islington South and Finsbury, Labour)

I shall be brief. The amendments are to do with the board giving guidance on commissioning. Essentially, they deal with who the board should consult before giving such guidance. They attempt to broaden things so that the board will have the benefit of listening to the public, the Care Quality Commission and HealthWatch England. They are another attempt to insert some democracy into the national health service.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Amendment 171 would require the NHS commissioning board to consult commissioning consortia before publishing commissioning guidance. Amendment 143  would delete subsection (4) of new section 14V and instead require the board to consult

“bodies and persons with professional expertise relating to patient and public involvement and review and scrutiny”

before publishing commissioning guidance.

New section 14V requires the NHS commissioning board to publish guidance for commissioning consortia on the discharge of their commissioning functions. Each commissioning consortium must have regard to that guidance. Subsection 14V(4) requires the board to consult the HealthWatch England committee of the Care Quality Commission before publishing commissioning guidance and before publishing revised guidance containing changes that the board considers significant.

The amendments propose extending those consultation requirements beyond HealthWatch England. However, I would expect HealthWatch England to include persons with professional expertise in patient and public involvement and scrutiny, and I am not convinced of the need to go any further. In addition, the board may enter into arrangements with other persons to assist the board in the preparation of guidance. That will ensure appropriate expertise in producing the guidance. For those reasons, I urge the hon. Lady to withdraw the amendment.

Emily Thornberry (Islington South and Finsbury, Labour)

I beg to ask leave to withdraw the amendment.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I beg to move amendment 96, in clause 22, page 34, line 5, leave out ‘each financial year, each’ and insert ‘each relevant period, a’.

Jimmy Hood (Lanark and Hamilton East, Labour)

With this it will be convenient to discuss Government amendments 97, 98, 101 to 103 and 105.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

This is a series of seven amendments to new sections 14Y, 14Z, 14Z1 and 14Z9. The Committee might find it helpful if I addressed them in three groups.

Amendments 96, 97 and 98 would together ensure that new consortia were obliged to produce a commissioning plan in respect of the remainder of the financial year in which they were established. Subsection (1) of new section 14Y requires every consortium to prepare a commissioning plan before the start of each financial year. Such plans set out how the consortium proposes to exercise its functions in that year. However, that requirement cannot logically be met for the year in which a new consortium is established. If the consortium did not exist before the start of the financial year, the obligation to produce a commissioning plan could not properly apply under the current wording.

I am sure that hon. Members will agree that such a situation is not desirable. It is for that reason that I propose amendments 96, 97 and 98. These amendments modify the link between plans and financial years by introducing the concept of a “relevant period” for which the consortium must prepare a commissioning plan. That would allow the board to direct new consortia to prepare a plan covering the period between establishment and the end of the financial year.

For consortia that are already in existence at the start of a financial year, these amendments make it clear that the “relevant period” relates to the forthcoming financial  year. In so doing, the amendments ensure that every consortium, regardless of when it is established, is obliged to produce a commissioning plan for each financial year.

The second issue is addressed by amendments 101, 103 and 105. It is not the most controversial issue that the Committee will be asked to consider. These amendments simply tidy up separate definitions of what constitutes a “financial year” with a single definition that applies to all the new sections of the National Health Service Act 2006 that the clause will insert. The definitions of a “financial year” contained in new section 14Y and new section 14Z1 are identical. For that reason, it is preferable that these definitions should be removed in favour of inserting a single definition in new section 14Z9. Hon. Members will note that that new section is on “Interpretation”, which will contain the provisions set out in clauses 21 and 22.

Finally, amendment 102 amends new section 14Z1, which would require a consortium to produce an annual report setting out

“how it has discharged its functions in the previous financial year.”

As it is currently drafted, new section 14Z1 requires a newly established consortium to provide a report for the previous year, in which of course it did not exist. Amendment 102 rectifies that. The intention is to make clear what common sense would conclude.

Taken together, the amendments are proposed in the interests of common sense and good housekeeping, and I trust that they will be acceptable to the Committee.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I beg to move amendment 99, in clause 22, page 34, line 31, at end insert—

New section 14Y of the 2006 Act concerns the requirement for consortia to produce and publish an annual commissioning plan setting out how they will exercise their functions. In preparing their plans, consortia must consult relevant health and well-being boards about whether the plans properly take into account the most recent joint health and well-being strategy published by that health and well-being board.

Amendment 99 will give consortia the ability to revise their commissioning plans once they are published. I am sure that hon. Members will agree that that is an expedient measure, allowing consortia to adapt their plans if it becomes necessary for them to do so. The amendment will also ensure that where consortia intend to revise their plans, they are obliged to consult relevant health and well-being boards when making significant revisions. That would be consistent with the requirement to consult health and well-being boards when producing a plan in the first instance. Similarly, where a health and well-being board has been consulted, consortia must include a statement of the health and well-being board’s opinion in the revised plan.

While the question of what constitutes a “significant revision” will be a matter for consortia to judge, the board will have the power to issue guidance to help consortia to determine what is significant and what is minor. Consortia will need to have regard to such guidance.

A revised plan, or, in cases where the changes are not considered to be significant, a document setting out the changes, must be published and a copy given to any relevant health and well-being board. I trust that the Committee will find the amendment suitable and accept it.

Derek Twigg (Halton, Labour)

I would like to press the Minister a bit further. The amendment may just be badly drafted, but I want to explore some points with him. First, we have concerns that it would be up to the consortium to decide what is significant. The plan itself is clearly set out and there is consultation and a procedure to go through, but it is not clear that that is the case with the amendment.

The amendment states:

“The Board may publish guidance for commissioning consortia on the discharge of their functions”.

It does not say “will” and it is not specific about what should be termed “significant”. It is quite woolly as an amendment. I hope that the Minister will look at the matter. I do not suggest that he is trying to get something through the Committee that has deeper implications; it may just be the way in which the amendment is worded.

The amendment states:

(8C) If the consortium revises the plan so as to make changes which it considers significant, subsections (4)(b) and (6) to (8) apply in relation to the revised plan as they apply in relation to the plan.”

Will the Minister explain that in more detail? It is the plan, whether it is being prepared or published. I am not sure why there have to be two separate paragraphs on the plan and its preparation.

We are concerned that it would be left to the consortia to decide what is significant, although we have no argument with the fact that a consortium might want to revise a plan at some point. The Opposition would be more comfortable if there were some recourse to the health and well-being board or the local authority. They could be consulted on what could be termed “significant” and could negotiate on that. I would be very concerned if the amendment were left in this state. I hope that the Minister will take it away and look at how it could be strengthened.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

The short answer is no, simply because I do not share the hon. Gentleman’s concerns. I happen to think that it is relevant and appropriate for the consortia to do that. They have to consult the relevant health and well-being boards on whether the plans properly take into account the most recent joint health and well-being strategy published by that health and well-being board, which I think is logical and a sufficient safeguard to prevent the sort of problems that the hon. Gentleman says might happen. I think that the consortia are the right people to deal with this. I hope that that allays the shadow Minister’s fears.

Derek Twigg (Halton, Labour)

I am sorry to disappoint the Minister, but my fears are less than allayed. There is a clear requirement on the plan to have this consultation with the health and well-being board, but the revision could be significant and could alter the commissioning plan. We do not argue that they have to consult unless the consortium deems that to be the case. The amendment is woolly in that there may be some guidance published by the board, but that is not necessarily required. I am very concerned. The Minister has not answered my question about why we need two separate paragraphs about significant changes around preparation and significant changes to the plan.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I am sorry, but I have to say that the amendment ensures that when consortia intend to revise their plans, they are obliged to consult the relevant health and well-being boards when making significant revisions. I am not a lawyer, but I think that “significant” is a catch-all word so that we do not have this procedure for really minor, irrelevant changes. I think the hon. Gentleman will accept that point as viable.

Can I say before he comes back that the requirement for the consortia to consult the relevant health and well-being boards when they intend to revise their plans is consistent with the requirement of the health and well-being boards to be consulted when producing a plan in the first instance? There is consistency, and I think that is a safeguard with regard to revisions. I accept that, where a health and well-being board has been consulted, consortia must include a statement of the board’s opinion in the revised plan, which I also believe is a protection because it will be in the public domain.

Derek Twigg (Halton, Labour)

We are not dancing on the head of a pin here—“significant” has not been defined. While a very well run consortium may decide to consult on a variety of changes, there is no requirement as to what  they must consult on. Nor is there any requirement on the board to produce guidance—the provision says that it “may” do so. Quite frankly, I think this is a poorly written amendment.

I completely accept that the board should be able to revise its plans, but the Minister seems unwilling to take this back and look at it. He has also not answered my other question; perhaps I can get the answer now. Why are there two specific applications, in terms of significant changes to the preparation of the plan and significant changes to the plan itself, which come in (8B) and (8C) of the amendment? The Minister may want to write to me about that, but my main point is that I am not satisfied with the assurances that he has given. I urge him again to take the amendment away and have a look at it. Otherwise, we will be forced to vote against it.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I am not convinced that this will satisfy the hon. Gentleman, but on the question of why there are separate paragraphs on the plan and the preparation, the answer is simply for drafting clarity. We are not trying to hide anything. If the hon. Gentleman would prefer me to write to him in greater detail to expand on that explanation, I will be more than happy to, but if he is satisfied, I will not, so long as he nods his head.

Derek Twigg indicated assent.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Thank you.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I beg to move amendment 100, in clause 22, page 34, line 33, leave out ‘established for an area which’ and insert ‘established by a local authority whose area’.

I hope that we can deal with this swiftly because the amendment corrects a minor and technical inaccuracy. As drafted, subsection (9) describes health and well-being boards as being “established for an area” In fact, the reference should be to the local authority area. As clause 178 will make clear, health and well-being boards are to be statutory committees of local authorities. They will not have an area in their own right distinct from that of the local authority that establishes them.

It is more accurate to refer to “a local authority area” for the purpose of identifying a relevant health and well-being board, and that is what the amendment makes clear. The intention is to define which health and well-being board or boards must be consulted by a consortium when it prepares its commissioning plan under the duty in new section 14Y. A relevant board will be one established by a local authority whose area coincides with, or includes, the whole or any part of the area of the consortium.

Liz Kendall (Leicester West, Labour)

I beg to move amendment 213, in clause 22, page 35, line 18, at end insert—

The amendment relates to the important issue of the responsibility of the NHS commissioning board to conduct an annual performance assessment of every consortium. If the Government proposals go through—we hope they will not—the consortia will have £80 billion of taxpayers’ money to spend, and it is vital that proper processes should be in place to ensure that the performance of those consortia are properly assessed.

However, many GPs are concerned that there is no requirement within the legislation for the board to publish or define the criteria by which it will assess whether a consortium has performed well, or to consult on that or publish it. The amendment would ensure that the board defines, consults on and publishes the criteria by which performance will be measured. That is important not only for the effective functioning of the consortia but, as we shall see under clause 23, for other related issues, which are extremely important but which I shall save for the delight of hon. Members in a few moments.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

The amendment concerns the performance assessment of consortia by the commissioning board, as the hon. Lady said. It would require the commissioning board after consultation to define and publish the criteria by which the performance of consortia will be measured. New section 14Z1 of the 2006 Act specifies that the board must conduct an assessment of how well each consortium has discharged its functions during each financial year. The amendment is unnecessary. New section 14Z1 also specifies that the performance assessment of a consortium should consider, in particular, how well the consortium has discharged its financial duties and its duties to make continuous improvement to the quality of services.

Subsection (4) allows the Secretary of State to publish a document about consortia performance assessment, which the board must take into account when drawing up such arrangements. Drawing on the NHS outcomes frameworks, the NHS commissioning board will develop a new commissioning outcomes framework to help consortia account for effective commissioning. The framework will allow the board to identify the contribution of consortia to achieving the priorities for health  improvement. It will be for the shadow board to take forward work on developing the framework during 2011-12. To help maintain momentum, the Department will publish a discussion document seeking the views of stakeholders on possible features of the framework. Consultation will, therefore, be forthcoming.

On financial performance, quite simply consortia will be under a clear duty to ensure that their expenditure does not exceed the commissioning budgets allocated to them.

Liz Kendall (Leicester West, Labour)

What will happen if they do not stick within their budgets?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I do not think the problem will arise because they will not be allowed to go beyond their budgets. That is the whole point. They will have to remain within their budgets.

Liz Kendall (Leicester West, Labour)

That is the situation at the moment, but PCTs go over budget. What will be different this time?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

The fact that consortia will not be able to exceed their budgets. Of course, they will have help and assistance with that through the guidance—

Liz Kendall (Leicester West, Labour)

Will the Minister give way?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

How can the hon. Lady intervene when she has not listened to the conclusion of my sentence? They will have guidance, help and assistance through the national commissioning board, because one of its responsibilities will be to ensure that consortia keep within their budgets.

Liz Kendall (Leicester West, Labour)

PCTs have guidance, help and assistance at the moment from SHAs and often, I would say, from the Department of Health, but some of them go over budget. Why will it not happen this time? What is different?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

As the hon. Lady knows, the situation with regard to PCTs is that for some years there has been a mechanism within the system for them sometimes to go over budget in a year. As long as over a three-year period they break-even and redress the problems of the deficits in each year, they fulfil their obligations.

Liz Kendall (Leicester West, Labour)

Under the Bill, the NHS commissioning board will also top-slice GP consortia to create a contingency fund. It is exactly the same as it is at present, but the Minister has contradicted that by saying that GP consortia will not be able to go over their budgets; which is the real answer?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I thought I was explaining the situation with PCTs. Consortia will have a clear duty to ensure that their expenditure does not exceed the commissioning budgets allocated to them. I do not think that the next thing I am going to say will satisfy the hon. Lady: it is that I hope my remarks reassure hon. Members that the measures against which consortia will be held to account will be developed in an open and transparent way. As I said before this broad, sweeping statement about the  financial position, the framework will allow the board to identify the contribution of consortia in achieving priorities, health improvement and developing the framework, but that will be done during 2011-12, under the auspices of the shadow board—

Emily Thornberry (Islington South and Finsbury, Labour)

I want to be sure I understand. Does it mean that, if four elderly gentlemen came to a commissioning consortium at the end of the financial year, all needing heart bypasses, none of them would be allowed one until the new financial year?

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

No, it does not. Before such a suggestion sets any hares running, I repeat, once and for all, that that is not what will happen.

The shadow commissioning board will be working on the framework during 2011-12. Consortia are expected to stick within their budgets. If they go over, a centrally held contingency fund will help them in the short term, but the guiding principle will be that they are not expected to go over their budgets.

With that in mind, I beg to move the amendment—[Interruption.] I apologise—I oppose the amendment.

Liz Kendall (Leicester West, Labour)

I shall be generous: we accept that the Minister does not agree with the amendment.

I want to deal with the money first—

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

Yes, go on.

Liz Kendall (Leicester West, Labour)

Thank you.

In reality, at present PCTs are “not allowed” to go over their budgets, but they do. A top-sliced fund at the strategic health authority level manages such situations. All SHAs—as anyone who has worked in a PCT knows—are extremely rigorous in pressing PCTs to keep within their budgets, but sometimes that does not happen. The reason is that in some parts of the country there are huge structural deficits that have been there for a long time and that are difficult to assess without undermining the financial position of hospitals. If we were to get rid of those structural deficits, some hospitals would have to close. That is the reality.

Under the system proposed by the Government, consortia may be required not to go over their budgets, but simply asserting something in the NHS does not make it happen. Even if the structural debt problems relating to hospital services and some areas’ long-term difficulties are addressed, some GP commissioning consortia will still have deficits, which is why the Government are proposing that the NHS board will top-slice consortia and hold a contingency fund. So we will be going through a huge reorganisation to end up in the same position. In fact, as we heard in evidence to the Committee, some consortia might find it harder to stay in budget if they cover a small population—a point made by my hon. Friend the Member for Islington South and Finsbury—because only four or five expensive patients could put such a consortium into debt.

The Minister’s claim, simply that consortia have a duty to stick within their budgets, will not achieve his desired goal, which is keeping the NHS in balance. He is  replacing one system with a similar system, but with organisations that are smaller and that might find it more difficult to handle financially. That was not the point of the amendment, but the issue was raised. It is important for the Committee to realise that things will be no different in trying to address the structural debt in particular parts of the country.

I am reassured by the Minister’s comment that there will be a consultation on how the performance of consortia will be assessed in relation to the outcomes framework, which is a welcome development. I wanted to place on the record my comments about the financial problems that consortia will face, because those problems will remain and might become worse, but I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)

I beg to move amendment 104, in clause 22, page 38, line 24, leave out from ‘if’ to end of line 25 and insert

I hope I can reassure the Committee that the amendment is minor and technical. The intention is to define which local authority or authorities will be considered relevant, and accordingly must be consulted, before the NHS commissioning board dissolves a consortium, exercising its power of intervention under new section 14Z6(7) of the 2006 Act. The proposed new definition of a relevant local authority depends on whether its area coincides with or includes the whole or any part of the area of the consortium. The change of wording introduced by the amendment is not substantive. It will mirror the provision in new section 14Y(9), in which the definition of local authority areas determines which health and well-being boards must be consulted when consortia prepare commissioning plans.