Clause 153
Health and Social Care Bill
5:15 pm
Derek Twigg (Halton, Labour)
I beg to move amendment 626, in clause 153, page 129, leave out line 24.
The amendment would ensure that the application for merger must describe the goods and services that it is proposed should be provided by the new trust. The clause would change section 56 of the National Health Service Act 2006 so that the application for merger between foundation trusts or between foundation trusts and NHS trusts would not need to describe the goods and services that it is proposed should be provided by the new trust. We believe that a description must still occur.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
The intention behind the amendment is one that I think members of the Committee will have sympathy with. I am sure we can all agree that it is important to protect patients and ensure that essential services continue to be provided in the event of a merger between two foundation trusts. We also agree that regulation is necessary to ensure continuity of essential services. However, the amendment is unnecessary. The new system will go even further in protecting patients’ interests in relation to mergers than the hon. Gentleman’s amendment would.
In its new role as economic regulator, Monitor will ensure that services designated for additional regulation would continue to be provided in the event of any merger of providers, not just those involving foundation trusts. If a merger were to threaten the provision of a designated service, Monitor would have the power to stop it going ahead. That would protect patients’ interests to a greater extent than do the current arrangements. In the new system, Monitor’s functions in relation to mergers would simply involve ensuring that all legal requirements had been met relating to the merger. After that, it would issue the orders that would give effect to the changes taking place because the foundation trusts remain statutory organisations.
It is not appropriate or necessary for Monitor to have controls over foundation trusts that it would not have over other providers, because that could disadvantage foundation trusts in relation to those other providers; that takes us back to the concept of the fair playing field. It is likely that Monitor, as an economic regulator, would want all providers from all sectors to describe their goods and services when they apply for a licence to provide NHS services, and when there are significant changes to those services. Requiring merging foundation trusts to describe separately what goods and services a merged organisation would provide would place an additional and unnecessary bureaucratic burden on them.
I hope that I have been able to reassure the hon. Gentleman, and I hope that he will withdraw the amendments.
Derek Twigg (Halton, Labour)
I beg to move amendment 627, in clause 153, page 129, line 33, at end insert—
‘(8) National terms and conditions of NHS staff will be preserved.’.
Mike Hancock (Portsmouth South, Liberal Democrat)
With this it will be convenient to discuss the following:
Amendment 628, in clause 154, page 130, line 13, at end insert—
‘(6) National terms and conditions of NHS staff will be preserved.’.
Amendment 629, in clause 155, page 130, line 34, at end add—
‘(6) National terms and conditions of NHS staff will be preserved.’.
Derek Twigg (Halton, Labour)
These are essentially probing amendments, through which we seek assurances. While I am on my feet, I notice that the Minister referred to a bank, and perhaps he would direct the Committee to the relevant clause.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
It is clause 148.
Derek Twigg (Halton, Labour)
I thought the Minister meant that it was a further clause, which we had not yet debated, later on in the Bill.
The amendments address concerns felt by organisations such as the British Medical Association, which also is opposed to any changes that would undermine the national terms and conditions for staff who deliver publicly funded care. That applies also to the trade unions, which have done a lot of work over the years in negotiating with the NHS and the Government. The concerns are essentially about maintaining an equitable spread of doctors across the UK; safeguarding against variable and substandard working conditions; and avoiding the creation of a market in which doctors move around the UK. The local pay bargain is also very wasteful in both management and clinical time. Local pay bargains produce a huge extra administrative burden for hospitals at a time when the Government claim to want to cut back on bureaucracy. Every time a new pay round takes place, local employers are to be found in negotiations rather than letting such things happen centrally and cascade down.
The British Medical Association’s point about the need for an equitable spread of doctors across the country applies equally to other professions. The Government are taking another step towards removing the “national” from the NHS; perhaps the Minister will reassure me about that. The whole point of the agenda for change was to achieve equality and equal pay across the NHS work force. Once employers move away from that, the prospect of equal pay claims escalating becomes a distinct reality. That is further evidence that the Government are taking the NHS down an increasingly litigious route, unless the Minister can reassure me that that is not the case.
These are, essentially, probing amendments, and if the Minister can reassure us we can move on. If not, we may well press amendment 627 to a vote.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
I hope that I can offer the hon. Gentleman some reassurance, because we have sympathy with the intention behind the amendment. It is not necessary, however. Foundation trusts cannot merge with, or be bought outright by, an independent sector provider whether private, voluntary or social enterprise. The Bill would not change that. The clauses on mergers, acquisitions and separation only allow organisational changes involving NHS foundation trusts and other NHS foundation trust, or NHS trusts, while they remain in existence. They would not allow an independent sector organisation to merge with or take over an NHS organisation.
The effect of clause 153 is simply to enable the NHS organisations to adapt and form anew where governors elected by the public and NHS staff decide that such changes are in the best interests of the public and staff. The amendments are unnecessary, because the organisations that would exist after such organisational changes would still be NHS organisations. Clauses 153 to 155 specifically detail the process that an NHS foundation trust must undertake to effect mergers, acquisitions and separations.
In relation to this group of amendments, the hon. Gentleman mentioned the concerns that staff might have. He spoke about removing the “national” from NHS. We should be clear that the last Government gave NHS foundation trusts freedom on pay policies so that those organisations could decide how best to adapt to local requirements and deliver high-quality health care provision. NHS foundation trusts therefore already have the right to determine pay for their own staff. The Bill will not change that. It is likely that many providers will continue using national contracts as a basis for their local terms and conditions. The position of individual staff after transfer will depend on their existing contracts. In those circumstances, the amendment would make no difference whatever. If he wishes to intervene, I am happy to give way.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
Within such organisational changes, there would normally be a requirement for the transfer of staff to the resulting NHS foundation trust or trusts formed after the change. In such circumstances, the transfer of undertaken protection of employment principles may apply.
The clauses on mergers, acquisitions and separations concern organisational changes involving foundation trusts. They address gaps in the legislative framework of public benefit corporations and increase accountability by allowing NHS foundation trust governors to take decisions. They would not allow a foundation trust to merge with or be acquired by an independent sector organisation. I hope that that reassures the hon. Gentleman and that he will not feel the need to press the amendments.
Derek Twigg (Halton, Labour)
I beg to move amendment 632, in clause 153, page 129, line 33, at end add—
‘(8) After subsection (11) of that section insert—
(12) With regard to undertaking the duties in this section, Monitor and foundation trusts must consult with the local relevant Health and Wellbeing Board(s).”.’.
Mike Hancock (Portsmouth South, Liberal Democrat)
With this it will be convenient to discuss the following: amendment 633, in clause 154, page 130, line 13, at end add—
‘(6) With regard to undertaking the duties in this section, Monitor and foundation trusts must consult with the local relevant Health and Wellbeing Boards.’.
Amendment 634, in clause 155, page 130, line 34, at end add—
‘(6) With regard to undertaking the duties in this section, Monitor and foundation trusts must consult with the local relevant Health and Wellbeing Boards.’.
Derek Twigg (Halton, Labour)
The amendments are useful for putting the Government’s position on the record. I am sure that they will be considered elsewhere and that whatever action is appropriate will be taken, but it is useful to have these matters on record.
Again, in that spirit, the current position before reform is that any mergers of, significant acquisitions by or separations of foundation trusts must have the approval of Monitor. That requires a thorough business case, including setting out the clinical benefits and any consultations done with the public, commissioners and so on. Effectively, the local strategic health authorities and primary care trusts would have been involved centrally, and would almost certainly have had to support the move for it to be approved.
Under the Bill, Monitor’s approval will no longer be needed, so neither Monitor, commissioners nor the health and well-being board will have any power to prevent mergers, acquisitions or separations of financial trusts. If such a move could affect competition significantly, the OFT might investigate, but beyond that it would be left up to the foundation trust governors to decide whether a merger, acquisition or separation should go ahead. We have discussed whether governors are properly able to do that job, so I will not raise that issue again.
Our amendment would require foundation trusts at the very least to consult health and well-being boards when deciding on a merger, acquisition or separation. Health and well-being boards could bring up the concerns of the local population or the fact that the move did not fit in with the joint strategic needs assessment. That would help ensure that the merger benefited local people and fitted in with the joint strategic needs assessment.
The health and well-being board could, for instance, bring up local concerns that a merger might lead to the shutting down of services that local people consider vital, or the provision of which is vital as part of the JSNA. Their input would ensure that local people had a say. Surely the Government would not want to object to that. We are not saying that they would have formal approval powers, but it is important to have the facility for input. Again, the point is to involve the wider public in major changes to hospitals, but the health and well-being boards might be the appropriate way for that to happen. I would welcome the Minister’s comments.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
Health and well-being boards are rightly acknowledged as an important innovation. They will have an important leadership role in influencing the commissioning of health and social care services. That will include a strong role for local councils in shaping local commissioning. At the same time, councils will have a separate scrutiny responsibility enabling them to scrutinise local health and social care services.
Changes in services affect local people, and we expect health and well-being boards to have a say in such changes. However, in our view, the amendments are misguided. The clauses under the heading “Mergers, acquisitions, separations and dissolution” are simply about changes to organisational form, not to services, and they provide for a range of contingencies that we would not expect to be used frequently. They are, however, the logical progression of a policy initiated by the previous Government to free providers to innovate and deliver better patient care. That policy was not completed, so that is what the legislation does.
Where such organisational changes might have material impacts on the provision of services, safeguards are already in place. As the economic regulator, Monitor would have an interest in such changes in relation to public and patient interest in the continued delivery of services designated for additional regulation. In addition, the amended regulation-making powers will enable the local authority scrutiny function to scrutinise those services that are subject to substantial change and reconfiguration and are designated. As we have discussed, those can be referred to the NHS commissioning board and the Secretary of State, and power exists for the scrutiny function to call on any provider to scrutinise any aspect of its work. The scrutiny is real and ongoing.
Where a foundation trust considers that an organisational change would help it successfully pursue its purpose, it should be able to get on with that change with the agreement of the governors who are, after all, elected by the public and staff and hold the board to account. The public accountability about which the hon. Gentleman wanted assurance is in the system.
Imposing consultation requirements could cause unnecessary delay and is neither necessary nor appropriate. In this case, the role of health and well-being boards is different. It is about giving councils a leadership role on health by bringing together locally elected councillors, public patient representatives and health and social care commissioners to assess needs and develop joint commissioning strategies for which commissioners must have regard. For those reasons, we do not believe that the requirement in the amendment would help if placed in the Bill, and I urge the hon. Gentleman to withdraw the amendment.