New Clause 12 — De-authorisation of NHS foundation trusts

Part of New Member – in the House of Commons at 4:45 pm on 12th October 2009.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Health Services), Department of Health 4:45 pm, 12th October 2009

I take my hon. Friend's point, but in a sense the Care Quality Commission will be considering the quality of the NHS as a whole; it will examine particular trusts and particular issues in relation to trusts where it needs to do so. Monitor's role is different: to oversee foundation trusts and to ensure that that brand of independence, identity and accountability demonstrates good standards.

The amendments need to be viewed in the context of Monitor's existing powers of intervention under the National Health Service Act 2006 and the de-authorisation proposals already in the clauses relating to trust special administrators. The 2006 Act gives Monitor wide powers to intervene on an FT in the event of a significant breach-the word "significant" is important-of the terms of authorisation. Monitor has a range of powers, including removing any or all of the directors of the board or requiring the board of an FT to do, or not to do, specific things. The clauses relating to trust special administrators already enable Monitor to trigger de-authorisation of a foundation trust that is no longer sustainable-again, an important word-in its current form. That is as a preliminary to the de-authorised trust coming under the control of a trust special administrator as part of a clearly defined six-month process.

The proposal under consideration today is a further, distinct piece of the jigsaw. It enables Monitor to trigger de-authorisation when-and this is very rare-a sustainable FT has breached any term of its authorisation or a statutory requirement and the breach is so serious that it justifies that step. A power to de-authorise makes it clear that foundation trusts must maintain the high standards expected of them and gives a strong signal to the public that organisations must earn the right to continue as foundation trusts. A de-authorised foundation trust would become an NHS trust under the Secretary of State's powers of direction. As with the clauses relating to trust special administrators, transitional arrangements would be put in place to allow the continuation of commercial arrangements entered into using FT freedoms and to ensure continuity of services for local people; that was particularly important in relation to Monitor.

Triggering de-authorisation is a complex decision. I make no apologies for the complexity of the process, which is about balancing the freedoms and independence of the FT network with the need for democratic accountability. The amendments establish a framework requiring that Monitor considers the health and safety of patients, the quality of services that are provided, the financial position of the trust and the way in which it is being run. To ensure full and proper consideration of this issue, the amendments propose that Monitor be required to publish guidance setting out in detail the factors that it will take into account. It is also important that before triggering a de-authorisation, Monitor consults key stakeholders to get their views. Accordingly, the amendments require Monitor to consult the Secretary of State, the trust, the appropriate strategic health authority and relevant commissioners of the trust's services. That mirrors the process relating to trusts' special administrators.

In addition to highlighting the need for such a de-authorisation process, the Mid Staffordshire experience highlighted issues of democratic accountability. While Monitor is responsible for the regulation of foundation trusts, the Secretary of State is ultimately accountable to Parliament for the overall provision of NHS services. Monitor's operational independence is a vital component of the regulatory framework, and one that we should seek to maintain, but when considering the most serious risks to patients the Secretary of State should have the ability at least to express formally his view. To enable that, the amendments propose that the Secretary of State will be able to request formally that Monitor considers de-authorising a foundation trust. In such a situation, it will be vital that the Secretary of State and Monitor are able to act quickly and transparently.

We therefore propose that if Monitor believes that a differing course of action is preferable, it will be required publicly to explain its decision, either within a default of 14 days or within such further time as the Secretary of State deems appropriate to the particulars of the case. If there is a case for a longer period, Monitor may ask for that and the Secretary of State will be able to consider it and take a view as to how long it should be.

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