My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Hunt of Kings Heath.)
I shall also speak to the remaining amendments in this group.
The proposal that there should be local health boards in place of the existing health authorities in Wales is controversial for a number of reasons. Amendment No. 76 proposes that there should be consultation before an order establishing a board is issued by the National Assembly for Wales. There is already provision for consultation in the event of variation or revocation of a local health board order. In our view, prior consultation is essential before boards are established.
If the boards are to be coterminous with local authorities, there will be more of them than the present five area health authorities. There could be as many as 22—one for each local authority. I should have thought that the Assembly would seek to avoid such proliferation if only for reasons of economy in terms of staff and resources. There will obviously have to be consultation with the existing health authorities, local authorities and health trusts before the final geographical map of health boards is decided. It is important that the map is the best that can be devised and that it is satisfactory to all concerned.
I can recall the reorganisation of local government in the early 1990s when the present 22 unitary authorities were established. Indeed, I can remember the previous reorganisation in the 1970s. My enduring memory of both is the difficulty that we had in getting proposals accepted and boundaries agreed. These new proposed health boards will prove just as contentious when the Assembly gets down to the business of deciding the precise localities that they are to serve. People are naturally very sensitive about such issues.
There is a further complication that not all the boards will have the same functions. They will have a variegated pattern of functions and responsibilities. Some will have major hospitals within their areas, and others will not. Again there will be considerable scope for argument and the Assembly would be well advised to consult before the pattern is imposed which, I dare say, will happen.
Many people in Wales, both within the National Health Service and outside it, have grave doubts about the practicability of the new system. For it to have the smallest chance to succeed, there must be extensive consultation with all the parties involved. We would be foolish not to provide for it in statute, especially when the Bill already provides for consultation in the event of variation or revocation of an LHB order.
The Minister may say that of course there will be consultation before an LHB order is issued and that we can take that for granted. I do not think that that is an adequate reply to the argument. Without the amendment we shall be storing up trouble for the Assembly and for the National Health Service in Wales.
Amendment No. 77 is a probing amendment. It seeks to find out how the Assembly proposes to direct the local health boards at national level. In other words, who precisely in the Assembly is to issue directions? Presumably they will be authorised by the Minister in the Assembly on the advice of the NHS directorate. We should like to know more about that top structure.
I imagine that there will be an infinite variety of directions related to different aspects of the NHS. Some will be purely local and apply only to a particular board or boards; others will be national in scope. As we have said before, the NHS in Wales will clearly need an all-Wales dimension, which is currently not defined in the Bill. It is very important that we have some idea as to what that all-Wales structure will be. We debated this point last Thursday when we considered the new clauses proposed by the noble Baroness, Lady Finlay of Llandaff.
I had ministerial responsibility for the NHS in Wales between 1979 and 1983. That was a period, I am glad to say, of extensive new hospital building and innovative strategies such as our mental handicap strategy which pioneered the transfer of people with learning difficulties from hospital into the community. We did not have a regional health authority in Wales; the regional authority was the Welsh Office and its Ministers. So I have some idea about the enormous range of NHS activity in Wales even 20 years ago.
It is quite clear that the thrust of the Welsh provisions in the Bill is to devolve responsibility to local health boards, but it is also clear that there will have to be some central direction in order to ensure a degree of uniformity and fairness all round. It is therefore necessary, as I have said, for us to know what kind of structure the NHS will have at Assembly and ministerial level.
I referred a few moments ago to the noble Baroness, Lady Finlay of Llandaff, who introduced new clauses asking for a national health agency for Wales. The noble Baroness not only enjoys an international reputation, but she has a high reputation in Wales as vice-dean of the University of Wales College of Medicine and as honorary professor of palliative medicine. In short, she knows the NHS in Wales. She knows the scene very well indeed.
Last week the noble Baroness told us of the concerns expressed at the conference of Welsh local medical committees as recently as last Wednesday. She said:
"They cannot take on the huge number of functions about to be devolved to them".—[Official Report, 14/3/02; col. 994.]
She went on to say that GPs wanted a primary care directorate, but that is now in doubt. What is proposed are six directorates for renewal, policy, finance, quality, human resources and facilities—all six presumably overarched by the existing NHS directorate.
As the noble Baroness hinted in the debate last week, there is a threat of fragmentation here and, I would add, an incoherent, possibly conflicting guidance to local heath boards from the various directorates. I hope that further consideration will be given to the single primary care directorate and the significant body that the local medical committees want,
"to handle contractor services to protect both professional interests and those of patients".—[Official Report, 14/3/02; col. 994.]
With regard to secondary and tertiary care, it is proposed to strengthen the Specialised Health Services Commission for Wales, to commission tertiary care and advise, guide and facilitate the commissioning of secondary care. But the remit is still being worked out, as the noble Baroness told us. The noble Baroness, Lady Farrington, confirmed that the Specialised Health Services Commission for Wales is to be given an enhanced role. But that is as far as we got in learning about the national structure.
So what can we make of that? The structure of the NHS in Wales is being built from the bottom up. That makes sense, provided that the builders know how the structure is to be completed. The foundations have to match the superstructure, and vice versa. That is where the current problem lies. There seems to be no clear idea as to what the final structure will look like or how it will work. Any help that the Minister can give on this matter will be most welcome.
Amendments Nos. 90 and 91 are different in character from previous amendments but still deal with local health boards. I have tabled Amendment No. 90 to seek clarification on certain aspects of local health board expenditure. My understanding is that they will have very little income, other than the allocations given to them by the Assembly. Such allocations will be the major part of their revenue. Clause 10(9) defines general Part 2 expenditure under the Act. That means expenditure in connection with the council for the regulation of health care professionals, and appeals. My amendment deletes subsection (2) of Clause 10(9) which excludes four kinds of expenditure that may clearly be incurred by local health boards; otherwise they would not be specified for inclusion in the way that they are. This subsection must be read in conjunction with new Sections 97H and 97G which deal with resource limits of local health boards and their financial duties. Subsection (2) of new Section 97H states that,
"no account shall be taken of ... general Part 2 expenditure", as defined by a board in carrying out its duty not to exceed its expenditure limits.
My first question is: why is Part 2 expenditure open ended? Is it demand led? It does not say much for the Assembly's sense of priorities that regulatory expenditure is open ended.
Secondly, why are there the four specific exclusions from the definition? They are a mixed bag. I hope that the Minister will comment on each. I am particularly interested in Clause 10(6)(b), which refers to,
"remuneration referable to the cost of drugs".
What does that specific exclusion mean in practice? Does it mean the perpetuation of postcode prescribing in Wales; that certain drugs will be available under one board but not another, depending on whether it has the resources and the will to provide them?
Finally, who, if not the local health board, will pay for these excluded items? I am bound to say that the whole of the resource and expenditure situation of local health boards is complex, to say the least, in the Bill.
Amendment No. 91 seeks to introduce the principle of equity into the National Assembly's annual apportionment of remuneration for the cost of drugs. Drugs expenditure is clearly no longer demand led and open ended. There is no commitment here on the part of the Assembly to meet a local health board's drugs bill in its entirety and whatever it may be. Indeed, under Clause 10(9), new paragraph 6C(4) states explicitly that the Assembly will exercise its discretion in paying for drugs ordered by a board on its own account. That seems a shot across the bow for boards that respectfully follow clinical judgment in drug prescribing. The same applies to primary care trusts in England.
I hope that I have properly understood the financial provisions and that the Minister will be able to answer some of my queries. I beg to move.
Those of us who are particularly interested in the workings of devolution are bound to be interested in this part of the Bill, which establishes for the first time an arrangement set up by Westminster in Wales—upon which the National Assembly will make many decisions and within which framework it will operate.
There are many provisions in the Bill for secondary legislation. The Delegated Powers and Regulatory Reform Committee, of which I am a member, examined that aspect of the Bill with care and on the whole—as the Minister knows—the Committee is satisfied with the way in which the secondary legislation is arranged. It seems to have been well drafted.
The Bill allows the Assembly enormous freedom to make the arrangements to which my noble friend referred in the way that it wants and which suits Wales. Far be it from me even to imagine the scene, because I have not seen the Assembly in action, but it should be having an interesting time.
Westminster must decide what should be on the face of the Bill and what should not—and what consultation should be set out by Westminster. Defining the board areas is obviously important. My noble friend made a good point when he said that there must be consultation before orders are made, not just the varying of orders afterwards. Amendment No. 76 probably has a lot going for it. It will be interesting to hear the Minister's response.
The clause about which I believe many of your Lordships are doubtful emanates from the arrangements for England and Wales—as does much of the pattern of the Welsh clauses. We must be sure that the pattern that is right for England is right for Wales.
The clauses in question imply that the Assembly will have enormous freedom to spend money on the health service in Wales in the way that it wants. How will the Government fix the Assembly's block grant in relation to health? I do not know whether my noble friend disagrees but that seems so open ended that it might be difficult to do. We need to know whether there is any basis for knowing the overall sum within which the Assembly will have to operate.
I thank the noble Lord, Lord Roberts, for his generous comments about me. I appreciate them enormously and feel humbled by them.
After last week's debate, I wanted to feel in tune with the views of general practitioners across Wales in relation to the proposed arrangements, so I attended a joint meeting of the Royal College of General Practitioners and the General Practitioners Committee of the British Medical Association in Wales. The turnout was so great that the room booked for the meeting was too small—which reflected a surprising concern among GPs about the changes that they are facing.
I shall not reiterate the whole meeting, which lasted two and a half hours, but there was resounding concern that the new local health boards would have great difficulty coping with the workload that they are expected to take on and the speed. The new general practitioners' contract, which is currently being negotiated, aims at attracting back into the profession groups who are currently not working—particularly young women—through family-friendly policies, which are to be welcomed.
There is concern that the different arrangements for local health boards will present them with great difficulties in commissioning secondary care. There is concern in the secondary care sector that some of the arrangements could precipitate a destabilising crisis.
Concern is felt among patients about the loss of collective memory among those who administer community health services, particularly primary care. They have often provided a safeguard and acted as a point of detection when problems have arisen. I do not want to overplay the problems but one patient said to me at the weekend, "The NHS is working very well in Wales. Why does everybody knock it and need to rearrange it?" The overwhelming experience of patients is that they are getting a much improved service.
At the meeting that I attended, it was estimated that there would be only two senior administrative managers who really understood the ins and outs of primary care as it has existed. Much work has been done on setting standards across Wales and it will be important to ensure uniform measurement of services against standards.
Equity is absolutely crucial. It is crucially important that there is no return to the feeling of rationing by postcode. Patients feel that they are being rationed even when they are not and lose confidence in the service. It is not uncommon for patients to ask me whether the failure to offer them a particular form of treatment is because the NHS cannot afford it. When I point out to patients that the treatment was not offered because it would not do them any good—otherwise, they would certainly have been offered it—they often look surprised. Then they comment to the person next to them that they might get extra treatment if they paid for it. There is a perception of rationing even though that may not be true, so it is important that equity is firmly embedded in any new arrangements.
This has been an important debate and I am particularly grateful to the noble Baroness, Lady Carnegy. Because of her interest in devolution, we spent many hours debating not only the Bill establishing the Assembly but also that which established the Scottish Parliament. No one appreciates more than the noble Baroness that many things have changed.
As to Amendment No. 76, it is precisely because of the changes in responsibility and accountability that we are not able to accept that amendment. It is for the National Assembly to consider such matters as part of its devolved function. The only practical effect of Amendment No. 76 would be to fetter the devolved powers granted under the Government of Wales Act 1998. I am sure that no one wants to unravel the devolution settlement.
I hope that I shall give the assurance that the noble Lord, Lord Roberts and the noble Baroness, Lady Finlay, are seeking by saying that the clause has been drafted to reflect the full and open consultation that the Assembly has already undertaken on the establishment of local health boards. In addition to consultation, the secondary legislation necessary to implement local health boards will also pass through the Assembly's scrutiny procedure before it is made, thus allowing Assembly Members an opportunity to comment further on it.
Imposing a further consultation requirement would seriously delay implementation of local health boards, which are a key feature of the strategy for reform of the NHS in Wales voted for by the Assembly. That would frustrate the intentions of the democratically elected devolved administration which, under the devolution settlement, is responsible for such policy matters.
Amendment No. 77 is again a matter for the National Assembly to consider as part of its devolved function. Its only practical effect would be to fetter the devolved powers granted under the Government of Wales Act 1998 and prevent the National Assembly from giving directions to local health boards as to how they should exercise any delegated powers—a function that the National Assembly will retain with regard to health authorities. The amendment is therefore prejudicial in relation to England, as the Secretary of State will retain various powers of direction over the equivalent English bodies.
Directions in relation to the conferring of functions on local health boards must be made in regulations, which will be subject to the secondary legislation scrutiny procedures of the Assembly. They will therefore not be issued directly by the Welsh Minister for Health and Social Services but made by the Assembly under its own processes.
I turn to Amendments Nos. 90 and 91. Proposed new Section 97F confers a general power on the National Assembly for Wales to determine the treatment of discretionary and non-discretionary expenditure in relation to local health boards. That power currently exists in respect of health authorities, and we intend to transfer it to local health boards. To remove the power would be most unhelpful and unjustified.
Schedule 12A to the Health Act 1999 provides the mechanism by which the National Assembly for Wales determines the treatment of discretionary and non-discretionary expenditure. It has always been for the National Assembly for Wales to decide on such treatment, subject to the usual constraints, as it is for the Secretary of State in England. Those powers must be exercised in accordance with the principles of administrative law. We therefore cannot agree to limit the powers of the National Assembly for Wales.
However, some specific reassurances were sought. In answer to the noble Baroness, Lady Finlay, the strengthened Specialised Health Services Commission for Wales will support the local health boards with advice and guidance on commissioning, in addition to its role in commissioning tertiary and other specialised acute services—a point also raised by the noble Lord, Lord Roberts.
In answer to the question about the post code lottery asked by the noble Lord, Lord Roberts, clearer priorities are emerging through the plan implementation process. Priorities are increasingly delivered through national service frameworks that set clear minimum standards to be applied across Wales. Local health boards will be responsible for assessing the health needs of their populations and securing the range of services to meet those needs. The block vote is given to the Secretary of State for Wales. It is passed to the Assembly after allowing for his expenditure in running the Wales Office. The Assembly then decides how that funding is allocated across its functions. That is decided at a plenary session of the Assembly.
Local health board budgets will be prescribing budgets. They are currently dispensing at health authority level. Action is in hand to move towards a needs-based allocation. The report debated in plenary session of the Assembly last week determines that direction and was overwhelmingly accepted, I believe.
Finally, in response to the noble Baroness, Lady Finlay, we intend commissioning partnerships between local health boards, local authorities and NHS trusts to be formed as collective organisations. They will have geographical proximity and common patient flows and we expect there to be between 10 and 12 such partnerships in Wales. A typical partnership could be composed of two local health boards, two local authorities and one NHS trust. Partnerships will not be viewed as organisations but mechanisms for effective commissioning.
The noble Lord, Lord Roberts, raised the issue of the number and role of local health boards. The boards will be coterminous with local authorities in Wales. Identified benefits include: enabling the development of new and better ways for the NHS to work with local government to implement the health and well-being agenda for Wales; facilitating the requirement for LHBs and local authorities to assess the health and well-being needs of their population; sharing a population focus to provide more flexible services; providing a shared focus to address the determinants of health, which span NHS and local government responsibilities; and providing more flexibility in the use of staff and resources and clear accountability to the local population between statutory bodies.
The 22 health boards proposed for Wales are a natural development from the 22 local health groups that already exist as sub-committees of the health authorities. Local health boards will pay for admitted Part 2 items. Contracts for primary care contractors will be held by the Assembly, but financial control and scrutiny will be exercised via the local health boards.
I hope that I have answered in some detail the points raised. I return to the fundamental point, which is that unfortunately the amendments proposed by the noble Lord, Lord Roberts, would undermine the devolution settlement agreed to by your Lordships.
Before the noble Baroness sit down, in relation to Amendment No. 76, she said a good deal about how times have changed and that the matter is up to the Assembly. We know that, but we must consider what Westminster has to do by way of constructing a framework within which the Assembly will work. Proposed new subsection (4) states:
"If any consultation requirements apply, they must be complied with before an LHB order is varied or revoked",
I am sorry if the noble Baroness feels that the argument is specious. These matters are rightly for the Assembly to determine. Unlike that which established the Scottish Parliament, the settlement gives the National Assembly for Wales the power to develop its own instruments and orders in secondary legislation.
The noble Lord, Lord Roberts of Conwy, presses us to accept that, as it were, a member of our family has reached the age of majority, but that we should still control the way in which he exercises his adult rights. The primary contractor contracts will be held by LHBs. I hope that that is an additional piece of information for the noble Baroness, Lady Finlay.
I assure the noble Baroness, Lady Carnegy of Lour, that we are being extremely careful to ensure that during the passage of this legislation Members are kept informed about the degree to which consultation forms the ethos of the exercise of the Assembly's devolved powers.
We are all grateful to the Minister for her comments. I am grateful to my noble friend Lady Carnegy of Lour and to the noble Baroness, Lady Finlay of Llandaff, for illuminating us on the feelings of GPs, particularly in Wales. I listened to her with great care. She talked about their concern, not only on this occasion but also last Thursday, as a result of their meetings. I know that such concerns about the formation of these boards are real in Wales.
It is all very well for the Minister to say that the Assembly must consult if an order is varied or revoked, because that is required here in primary legislation. But the Assembly does not have to consult when an order is issued, which is what the amendment seeks. There is a contradiction in the Minister's approach, which states that we ordain in primary legislation that when a local health board is varied or revoked, the order must be consulted on, but that there is no need for consultation before the first order is issued. The Minister says that consultation has taken place. I am sure that there has been endless talk within the NHS in Wales, but there is still a considerable degree of dissatisfaction among professionals there.
My experience of local health reorganisation and also local government reorganisation in Wales on more than one occasion is that public consultation is essential, otherwise discontent prevails and the system fails to work.
It may help the noble Lord, Lord Roberts of Conwy, to recall, as I believe he knows, that I was involved as the leader of the Association of County Councils during the period of local government reorganisation in Wales. I was assured by the noble Lord's government when in office that everyone had been fully consulted. I fear that occasionally, irrespective of who carries out the consultation process, some of those consulted will never accept that it took place unless they obtain the results that they want. Sometimes there are conflicting demands and it becomes impossible for everyone's views to be met.
I accept that one cannot please everybody; one cannot please all the people all of the time, but we hope to please some people some of the time. That does not dispel the need for consultation. In such an area, where we are establishing totally new local health boards—22 in place of the existing five—there is a duty on the Assembly to ensure that the orders establishing the boards have been well and truly consulted on.
If there is no such consultation and ensuing satisfaction, the worst fears expressed within the NHS in Wales—that the system is impracticable—may be realised. We are not fettering the Assembly in any way as it is already obliged to consult if the order establishing an LHB is varied or revoked, as I pointed out. We will not fetter it additionally by inserting the word "issued". Perhaps the principle should have been established earlier, in new subsection (2), but it is here. It fits into that subsection.
We are still unclear about the top end of the NHS in Wales and how it will be constructed. We know a great deal about the lower end of the spectrum—the local health boards, and so on—but little about what is meant by the Assembly and the Minister and the form of organisation within the Assembly. I am not altogether happy with the Minister's answer and I shall test the Committee's opinion.