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 Baroness Noakes Baroness Noakes Conservative 12:15 pm, 16th October 2003

In moving Amendment No. 193, I shall speak also to Amendments Nos. 194 and 195, which concern the transfer of assets and liabilities on the dissolution of a foundation trust. Amendment No. 193 extends the bodies to which property or liabilities could be transferred under subsection (3) to include any other body specified by the regulator. The list in subsection (3) is quite restrictive. It does not allow transfer to a special health authority or to a local authority. There could be some circumstances where that could be appropriate. It does not allow transfer to a private sector healthcare provider, which might be appropriate in, say, diagnostic and treatment centres—or whatever it is that we are now supposed to call them. In general, subsection (3) shows a considerable lack of imagination about what might appropriately be done with assets on a dissolution. Our amendment would allow a greater range of opportunities to be considered.

Amendment No. 194 tackles a different issue. It provides that property or liabilities not transferred to the people specified in subsection (3) should be transferred to the Secretary of State; that is, assets and liabilities cannot be left in limbo but must be transferred somewhere. That would prevent the regulator from abandoning liabilities, including assets with a negative value.

In another place, Conservative Members often asked Ministers what would happen to liabilities at the end of the day. They were stonewalled. I hope that the Minister will give us a clear answer today. On our last Committee day, I talked briefly about the doctrine of "standing behind" public sector bodies, whereby the Government are expected to pick up the liabilities of any public sector body, should that situation arise. As far as I am aware, there has never been a case where a public sector body—especially one like a foundation trust, which is classified to central government—has been allowed to go bust without having its liabilities picked up. In that debate, I referred to the Treasury's view that the Government will pick up foundation trust liabilities.

In effect, my amendment expresses what "standing behind" is all about; namely, that the Government will pick up any liabilities. If the Minister thinks that that is not the case, how would the regulator pick and choose liabilities that would be left stranded? The Bill contains no rational way for any deficit to be shared among creditors. I cannot believe that the regulator has an absolute power to determine which creditors are paid and which are not.

Finally, Amendment No. 195 provides that liabilities cannot be transferred under Clause 25 without the consent of the person to whom they are being transferred. For example, can the regulator foist liabilities on another foundation trust without that trust's consent? I hope not, which is why our amendment provides for consent. These amendments may seem to be matters of detail, but they raise issues of very real substance which could have practical implications should the unfortunate situation of having to wind up a foundation trust occur, which is not beyond the bounds of possibility. I beg to move.