I shall deal specifically with the terms of the amendment. It invites us to explore the relationship between SHAs and foundation trusts. It is an opportunity to make clear that, while foundation trusts are firmly within the NHS and subject to national standards of performance, they will not be overseen or performance-managed by SHAs. Each NHS foundation trust will take full responsibility for the outcomes that it achieves as regards volume, quality and responsiveness to patients. So they will not be required to obtain permission from, or to provide information to, any SHA. The amendment is not necessary.
I shall attempt to answer the noble Earl's other questions. Strategic health authorities—the local headquarters of the NHS, if you like—will continue to have a significant role in establishing and implementing the vision of the local health economy, the long-term plan and the shape of the overall development of services in their area, backed by commissioning decisions of primary care trusts. In addition, we expect that SHAs, together with higher and further education institutions, will continue to be involved in making arrangements for education and training through workforce development confederations. So, however the foundation trust programme evolves, there will be a continuing role for the strategic work to be done by SHAs.
The noble Earl also asked about commissioning arrangements. The strategic health authority has responsibility for specialist commissioning. We know that those 37 areas of specialist commissioning are very important aspects of the NHS's work because they deal with some very rare conditions with very small groups of people who need to be thoroughly protected—for example, aspects of renal care or paediatric services. The relationship between SHAs and foundation trusts in relation to commissioning will be as it is now. It will be contracted in the same way, and the same arrangements will apply to the relationship that now obtains with the trusts. But the nature of the contract will change. Contracts will be binding and legal. We are making those for foundation trusts because we want greater transparency so that we know exactly what will be delivered. We want better security in innovation and development. The changing nature of the contract should enable us to deliver that. There will be no change in the capacity to commission or the trust's ability to commit to delivery.
The noble Earl made a point about the role of the modernisation agency and the position of SHAs. To the extent that any public funds are made available for any central initiative—for example, the national framework initiatives—foundation trusts should have access to an equitable proportion of those funds, wherever the source is. Such funding might be paid by way of a grant or injection of public dividend capital from the Secretary of State under Clause 11. That could be distributed by SHAs for that purpose.
The noble Earl also raised the question of CHAI. It will continue to have a role in the inspection of foundation trusts. Its functions will closely mirror its functions in relation to other NHS bodies. It will encourage improvement, carry out annual reviews, publish performance ratings and carry out value-for-money studies. But the main difference is that they will report those aspects, not to the Secretary of State, but to the independent regulator.
I confirm what the noble Earl said about the duty of partnership. It is in the Bill for a purpose. That duty of partnership is very much to ensure that, although foundation trusts are a different animal, they are firmly within the NHS and will work with SHAs in the appropriate way. For example, they will be able to continue to provide much of the information that they provide to SHAs at present, as part of their own commissioning arrangements. We look forward to that partnership flourishing in the future.