Health and Social Care (Community Health and Standards) Bill

Part of the debate – in the House of Lords at 12:15 pm on 16th October 2003.

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Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health) 12:15 pm, 16th October 2003

I accept the spirit in which the noble Earl moved the amendment. Before I deal with the amendments, I shall take the opportunity, as this is our first discussion about the insolvency regime for NHS foundation trusts—I share the noble Earl's wish that we will not need to use the arrangements, but we must make adequate provision—to inform the Committee that the department has prepared a paper setting out our proposals for the secondary legislation, which will, in effect, establish a bespoke insolvency regime for NHS foundation trusts, under Clauses 24 and 25. I have arranged for copies to be placed in the Library, and I tried to arrange for copies to be sent to noble Lords who had spoken in the debate. I detect from the noble Earl's remarks that they may not have arrived. I certainly asked for them to be sent to everybody before today's debate. I will check the arrangements and try to ensure that they are available to noble Lords during the lunch break.

I did not propose to go through the letter, which is fairly detailed—it is about four or five pages of detail—not least because I wanted to preserve my vocal chords. I shall speak briefly on the amendments. I can see that they are intended to ensure that the regulator imposes a moratorium or voluntary agreement, if it is appropriate to do so. We do not think that the amendments are necessary. Although the regulator's power to impose voluntary arrangements are discretionary, the clause sets out clearly the situations in which he would exercise the power; that is, when it is "necessary or desirable".

It is highly unlikely that we would get to the point of dissolution without some kind of interchange between a foundation trust that was in difficulties and the regulator—and, indeed, some of their creditors. It would be unusual for that to happen without some interaction between the trust and others, including the regulator. The regulator is also under a duty to act reasonably, which would include exercising his powers under Clause 24, if it were in the public interest to do so. He has an overriding responsibility to protect the NHS. If a voluntary agreement were the best way of protecting NHS interests and assets, one would expect him to use his discretion sensibly.

I hope that the noble Earl will read the detailed arrangements for a bespoke insolvency system for the NHS. I am happy to discuss it with him, if that would help, after he has had time to consider the details.