"Constituencies

– in the House of Lords at 3:32 pm on 6th November 2003.

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(1) Members of a public benefit corporation are referred to as follows—

(a) those who live in an area specified in the constitution as an area for any public constituency are referred to collectively as a public constituency,

(b) those who come within paragraph 3(1)(b) are referred to collectively as the staff constituency,

(c) those who come within paragraph 3(1)(c) are referred to collectively as the patients' constituency.

(2) A person who is a member of one constituency may not while that membership continues be a member of any other constituency.

(3) A person who comes within paragraph 3(1)(b) may not become or continue as a member of any constituency other than the staff constituency."

On Question, amendments agreed to.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

moved Amendment No. 16:

Page 110, line 2, at end insert—

"The constitution may make provision that any member of staff who is employed by the public benefit corporation at the date of election of the board of governors shall be deemed to be a member of the public benefit corporation unless he opts not to be a member."

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I shall put my noble and learned friend out of his misery by speaking to Amendment No. 16, which relates to the membership of foundation trusts. I declare an interest as an honorary adviser to the University Hospital Birmingham NHS Trust because the question has arisen from the discussions of several NHS trusts in Birmingham that wish to seek foundation trust status in the first or second wave.

A difference of view has been expressed in your Lordships' House about the desirability of the number of members in each foundation trust. Some noble Lords, such as the noble Lord, Lord Peyton, believe that the numbers should be kept as low as possible; others have expressed doubt that each foundation trust will reach a membership of 10,000. But in Birmingham we have much greater ambitions than that. The hope of the University Hospital Birmingham NHS Trust is that all its staff, and all patients who have been treated by the trust over the past two or three years, will become members of the foundation trust.

My amendment is designed to probe the Government on whether it would be possible in the constitution to have a scheme that pre-supposed that all staff and patients were members of the foundation trust unless they opted out. I stress that I wish only for foundation trusts to have that discretion. Many of the other trusts applying for foundation trust status to which I have spoken would not use that option. Trusts in Birmingham have thought carefully about the issue and wish to have a strong membership base.

Concerns were raised earlier about entryism. The biggest protection against entryism by the undesirable people that my noble friend Lord Lipsey mentioned as potentially becoming members and being elected to the governing body is to have a large membership base. The proposal by Birmingham trusts is imaginative. I hope that, in the fullness of time, they can be given the option of an opt-out system. I am not sure at what stage we can reach that in legislation, given the vote this morning. I beg to move.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Crossbench

My Lords, will the noble Lord clarify the situation of university staff who work in trusts but are employed on an honorary contract by the university to provide a major clinical service? Is it envisaged that they will be included or excluded under the terms of his amendment? In some major university hospitals associated with medical schools, the employment contracts of many key clinicians are lodged with the university.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, that is a very good point. I understand and have every sympathy with it. The answer depends on how those people would be treated in the Bill as it stands. If honorary staff from universities are treated in the Bill as staff for the purposes of becoming a member of the staff constituency, my amendment would apply to them, too, but it depends on how my noble friend responds to the noble Baroness's specific question. Doctors on honorary contracts with NHS trusts should certainly be considered eligible.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, as usual, my noble friend Lord Hunt argues, in Amendments Nos. 16 and 20, that NHS foundation trusts should be allowed flexibility to have membership on an opt-out basis. I wish to respond to both amendments. He presents his case persuasively.

I share his aim of ensuring that the membership of NHS foundation trusts is large and fully representative. Ensuring that all staff and a defined group of past patients are included as members can help to achieve that goal. As he says, that is protection against entryism. I anticipate that many foundation trusts will want to consider using an opt-out approach. I agree that there might be some provision to allow them discretion to do so, but we will need to consider carefully how best to provide for that alternative approach. In particular, we want to ensure that people who may not wish to participate as members are not placed under any obligation or disadvantage. We are not unsympathetic to the principles behind my noble friend's amendments and we would like to consider how best to achieve their objectives with a view to bringing forward government amendments at a later stage.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I am most grateful to my noble friend for what is, again, a most constructive response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 17 to 21 not moved.]

Photo of Lord Lipsey Lord Lipsey Labour

moved Amendment No. 22:

Page 110, line 10, leave out second "a" and insert "an advisory"

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, with permission, with this amendment I will speak to the other amendments standing in my name—not all of which bear the name of the noble Lord, Lord Clement-Jones—because they are a package. It will be a quicker way of getting through what I want to say.

This morning I made a case in the strongest possible terms for the danger that I see in the present governance arrangements. The House has sent that back to the Commons and we must hope that honourable Members there reconsider the issue. However, it may return to us and we will then face a difficult decision. We are all extremely reluctant to overrule the elected House however much we may feel that they err.

With this group of amendments I am taking a different approach. If I were organising the governance structure I would not be starting from here, but from an entirely different point. However, we are where we are and I ask myself whether it is possible to devise a minimal set of arrangements whereby the worst of the dangers that I tried to point out to the House this morning could be avoided. Could we table amendments that it would not be unreasonable to expect the Government to consider and accept, but, at the same time, would protect particularly against the concern of that highly motivated tiny minority of extremists or fanatics who could take over our hospitals? That is the purpose of my Amendment No. 22 and the others that insert the word "advisory"—Amendments Nos. 32, 55, 60 and 65. I will introduce them with as much brevity as I can.

Inserting the word "advisory" every time "Board of Governors" appears is barely a change in policy. The Minister most helpfully gave a description of what the board of governors is supposed to do, which was jolly close to the description that I would have given. However it would be helpfully clarified if the board were clearly labelled "advisory".

Incidentally, I do not think that being advisory is something that should be downgraded in any way. When there is a strong election in which lots of people vote and there is a strong mandate, it would be a mad board of directors that chose to ignore that opinion. However, clarifying the board's advisory position—and Her Majesty's Opposition have tabled amendments that would also have that effect—would help.

The amendments would also broaden the base of the board of governors. At the moment, the Bill lays down that the majority should be elected. I can see a role for some elections to the board, but if we are to make sense of the provision, I would like the board of governors to have the widest possible stakeholder approach. For example, I would give particular importance to having substantial representation for the relevant primary care trusts, which would help to deal with the worst of all the problems in this Bill—that of removing hospitals from the primary care trust remit just when most policy aims to increase the role of primary care trusts in the setting of health priorities. I would like to see strong representation from the PCTs.

I would like to see substantial local government representation, a range of staff interests and rather less representation for elected members. My Amendment No. 32 is very flexible and would provide for between two members and up to one half of the board being elected. Different people would experiment with different amounts. That is a stronger, wider board that is not just reliant on the vagaries of elections and their turnouts.

Amendment No. 55 would remove the power of the governors to hire and fire the non-executives and the chairman. Again, such power could be extraordinarily dangerous in the hands of a few people who turn up. It would mean that the chairman of the board of directors and the non-executives would not be getting on with the job of running a hospital, they would be looking over their shoulders all the time to see if they were going to be voted out. The Bill protects against that happening by requiring a 75 per cent majority vote of the board of directors. I do not disagree with that, but that provision is vitiated by another provision that I wish to tackle—that the pay of the non-executives will be set by the board of governors. If I wanted to get rid of all the non-executive directors, I would not try to get a 75 per cent majority to fire them. I would simply move a resolution to reduce their pay to zero. It would be passed by a simple majority and would soon get rid of them. Then the extremists and fascists could take over their places. Amendment No. 60 would provide that the pay would in future be set by,

"the board of directors in consultation with", the board of governors. The consultation is important.

My final amendment, Amendment No. 65, provides that rather than having a single person chairing both bodies, there should be a separate chair for the board of governors and for the executives. It is a more controversial proposal, but I think that there is a great advantage to separating those bodies. Being good at chairing an advisory body—collecting the voices, making them articulate and so forth—and being good at chairing a managing body of directors requires a substantially different set of skills. I am not saying that it is impossible to combine both, but on the whole we would do better to separate the two roles.

The Government may not necessarily welcome the set of amendments, but they would cope with the worst problems in the clause. Ministers will be tempted to say "no", and this afternoon I am ready to test the opinion of the House on any amendments for which I am not convinced of the reason for that "no". However, following this morning's debate, I say to Ministers that, even if they manage to reverse what happened in this House this morning—and they may—the Bill must be changed. We cannot simply lie down before the elected majority. If the Bill were a manifesto commitment, a Green Paper Bill, White Paper Bill or a consulted-on Bill, it would be different. But this House would be quite within its legitimate rights to refuse to accept this Bill—even if it is sent back to us at the end of the day—if the Government do not heed the remarks that were made, especially from the Cross Benches, but from all quarters of this House this morning in criticism of the detail of the governance procedures. I beg to move.

Photo of Baroness Carnegy of Lour Baroness Carnegy of Lour Conservative 3:45 pm, 6th November 2003

My Lords, I would like to support what the noble Lord, Lord Lipsey, said about the governors being advisory. I received a letter this morning that I expect other noble Lords also received from the Local Government Association. It is very concerned that plans in the Bill, should it survive, would lead to a duplication of the role of local councillors as directly elected community representatives. The association feels that two conflicting pieces of advice could come from the electorate. The noble Lord, Lord Hunt, gave one vision of an electorate of many thousands voting about something in the case of one hospital trust. That would be extremely difficult for people to understand alongside local government, which perhaps has a similar electorate and might express a different view, so I think that the noble Lord has a very good point.

The Government should try, if they persist with this clause of the Bill, to think of ways of getting it to work better having listened to the debate that we had this morning. The noble Lord has been very constructive in making this suggestion, and I back him.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I disagree with my noble friend. He spoke very thoughtfully. I know that he has given these matters a good deal of attention. I cannot agree with him that the right solution to the issues surrounding governance is to reduce the board of governors to the role of advisory council. I do not believe that that stands any chance of success in terms of ending the micro-management of the health service from the centre unless one transfers accountability. That means one has to have an electoral process. One also has to have a strong board of governors who are responsible for the essential running of the organisation.

Noble Lords will know that I do not believe that the present governance structure is the right one. We should build on it. If I had the opportunity to start with a clean sheet, I would have undoubtedly made the governing body the sovereign body. I would then have had an executive management board accountable to the governing body for the day-to-day running of the organisation. I would have rested sovereignty in the governing body itself. In the Bill at the moment is a board of directors which is the sovereign decision-making organisation within the trust, and an elected board of governors which is given certain responsibilities and powers. We shall later see whether we can amend that to make the powers more focused.

The fact is that my noble friend's amendments would reduce the board of governors to a consultative body. I do not believe that that would work. If there is a strong membership base and people put their names forward for election, engage in the hustings and are elected, they would not expect to attend a governing body to find that their only role is to proffer advice. They must be given a stronger role. If they are not, there will be trouble because the elected members of the governing body will have the legitimacy which is provided by election.

I understand my noble friend's position, but I would be much more convinced if he were making proposals to give the governing body more power rather than seeking to take it away. I believe that we are all agreed that the governance structure is not ideal. My noble friend has said that the Joseph Rowntree review of democracy and governance will enable further revision. I believe that we should continue with what we have and seek to clarify the powers of the board of governors. I invite noble Lords to look at some amendments which I have tabled later in this group which seek to do that. To reduce the governing body to an advisory council would be a mistake.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, I do not wish to prolong the debate on a schedule which no longer exists. These Benches support the noble Lord, Lord Lipsey.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I have enjoyed the bi-play on the Government Benches. The common theme appears to be "I would not have started from here, guv'nor" which is always a very edifying place to start. The noble Lord, Lord Hunt, has been fighting a splendid rearguard action and I am very surprised that he did not go into the Opposition Lobbies at the time of the clause stand part debate. There are some fundamental issues here.

Perhaps I may explain why I have added my name to the amendments of the noble Lord, Lord Lipsey, dealing with the advisory aspect of the governing board and the separation of the chairmen of the board of directors and the board of governors. I am concerned about clarity on the one hand and governance on the other. It is right that we should clarify the role of the governing board. One of the running sores throughout Schedule 1 is the fact that the governing body appears to have a very nebulous role. In a very straightforward and simple way, the noble Lord, Lord Lipsey, has inserted something which gives greater clarity. It may be that in the best of all possible worlds one might want a two-tier structure with governance at the top in the way the noble Lord, Lord Hunt, suggests. But going with the unfortunate grain of Schedule 1, I suspect that "advisory" is as good as it gets in these circumstances.

At the moment the governing body is neither fish nor fowl. At least the noble Lord, Lord Lipsey, has defined it as a fish and perhaps the noble Lord, Lord Hunt, would prefer it as a fowl. But there is the benefit of clarity. As regards governance, there is no doubt that the noble Lord, Lord Lipsey, is right. In all seriousness, one cannot have the same chairman for the board of governors and the board of directors. That means when the two bodies have a disagreement there is a conflict for the chairman and all kinds of other consequences flow.

I thought that the scenarios which the noble Lord, Lord Lipsey, put forward were a masterclass in machiavellian organisational conspiracy. I would not like to be in an organisation where I crossed the noble Lord because I feel quite certain that he would make sure I was ejected fairly swiftly.

Photo of Baroness Howarth of Breckland Baroness Howarth of Breckland Crossbench

My Lords, this may not be fish or fowl, but a real red herring. I am with the noble Lord, Lord Hunt, on this matter. The noble Lord, Lord Lipsey, is very convincing. Let us think about how governance works. Many noble Lords have sat on various boards. They will know that if the various layers of authority do not understand the nature of their responsibility—and if the board is to be elected it will expect to make certain decisions—they will be in deep trouble. I dislike these provisions intensely because I believe that they will make for extraordinary difficulties in managing the health service in future. To make the board advisory can only complicate the situation even more. I am all for trying to strengthen the nature of the board, getting its role clear and moving forward.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, I believe that I am destined never to satisfy my two noble friends on some of these issues. I shall have to be phlegmatic about that as I proceed through the Bill. I was grateful to my noble friend Lord Lipsey for almost endorsing my earlier exposition on the role of a board of governors. He will recall that I said that its role went beyond being advisory. It has an important role which goes significantly beyond that of advice. That includes the appointment of the auditor of the NHS foundation trust and the non-executive directors. I suggest that is significantly more than the functions of an advisory body.

It would be misleading to refer to such a board as an advisory board, which would occur if the noble Lord's amendments were accepted. We shall later debate Amendment No. 96 in the name of my noble friend Lord Hunt which concerns a forward business plan. I do not want to anticipate that.

I should like to reassure my noble friend Lord Lipsey about the constraints on the board of governors about which he is clearly worried. There is an alternative approach in some ways in Amendment No. 24, but it is unnecessary. I hope that my noble friend will be reassured that the Bill already provides that the board of directors must carry out the functions of the corporation and that these functions cannot be delegated. That provides them, and only them, with the power to run the day-to-day operations of the trust. That is one reason why we believe that Amendment No. 24 is unnecessary, but it is also a bulwark against many of the concerns of my noble friend Lord Lipsey. I say this as gently as I can. We respect the noble Lord's expertise on electoral systems and we have tried to respond to that. But on the issue of governance, we do not believe that he has got it right and we would not support the amendments describing the board of governors as an advisory board.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I thank the noble Lord for that reply. The trouble is that power does not always follow constitutions or laws. Although the law may say that management is for the board of management, when sitting with a group of people who can sack someone, one finds that power lies in a slightly different place. I believe that the shareholders in BSkyB have found that Rupert Murdoch was in power despite the fact that he did not have a majority of the votes. There are often cases of that kind.

I cannot say that my noble friend's reply satisfies me. The noble Lord, Lord Clement-Jones, put the matter very well by saying that it was a choice of fish and fowl. I have more sympathy with my noble friend Lord Hunt's fish than with the Government's fudge, although personally I remain persuaded that fowl would be better.

I am extremely tempted to seek the opinion of the House. I shall not, simply because further discussions have to take place about the issue. I hope all noble Lords, whatever their position on the amendments, will agree that it is clearly not right at the moment and that deep down the Government agree with that. We have to sort the matter. By having further votes at this stage I would not be assisting the process of sorting. I hope that we can all leave the Government with the message that they do not have it right yet and that there must be changes before we can go forward on the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 23 to 26 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendments Nos. 27 and 28:

Page 110, line 15, leave out "the public constituency or the staff" and insert "a"

Page 110, line 17, leave out sub-paragraph (5).

On Question, amendments agreed to.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour 4:00 pm, 6th November 2003

moved Amendment No. 29:

Page 110, line 18, at end insert—

"(6) The constitution may provide for the sub-division of the public constituency into different geographical areas and categories to ensure that taken as a whole, those members of the board of governors elected by the public constituency will be representative of those eligible for membership of the public constituency."

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, Amendment No. 29 aims to give foundation trusts the opportunity to sub-divide the public constituency into different electoral areas. I think that my noble friend's Amendment No. 7 has taken care of the issue of geographical sub-divisions. I am quite happy, and very much welcome that.

There is another issue for foundation trusts. My noble friend Lord Lipsey spoke about the need to get the wider spectrum of stakeholders on to the governing body. I very much agree with that. Clause 6(2)(b) regarding membership makes clear that in authorising a foundation trust, the regulator has to be concerned that,

"taken as a whole the actual membership of the applicant's public constituency will be representative of those eligible for such membership".

My contention is that, if that is right for the membership, it must be right for the governing body. One would expect that the elements of the elected public constituency would reflect the actual membership of the foundation trust. My amendment seeks to allow foundation trusts discretion to propose a scheme of election allowing it to categorise membership into different categories—perhaps gender or age group. It might ensure that the ethnic diversity of a particular membership was reflected in the governing body.

Clearly, that discretion cannot be drafted in Parliament; it cannot be enunciated at national level. One has to allow for it at local level. I hope that the principle I have enunciated in my amendment finds support in the House and that my noble friend will be prepared to give this issue some consideration. I beg to move.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Crossbench

My Lords, I briefly seek clarification from the noble Lord, Lord Hunt. Does the amendment mean that a person could not be a member of more than one foundation trust, because, if the constituencies are divided into geographical areas, people would either belong to one or the other? I was uncertain about that and about whether it would need to be done in collaboration with other foundation trusts so that the lines were clearly drawn.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

Well, my Lords, the Minister may want to respond to the issue of how the geographical splitting down of electoral constituencies impacts upon different trusts. Speaking for myself, I do not have any problem about individuals belonging to different foundation trusts. Indeed, I would welcome that. If someone had an interest in mental health or in acute care services, one would welcome them joining a mental health foundation trust or an acute services foundation trust.

I think that the geographical issue has been well satisfied by my noble friend's Amendment No. 7. The issue on which I seek some clarification from my noble friend is on ensuring that the mixture of people elected to the governing body reflects the actual membership.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, I am grateful to my noble friend's acknowledgement that our Amendment No. 7 fits the bill, so to speak, on a geographical subdivision. We have some nervousness about the aspect of my noble friend's amendment which allows for sub-division of the public constituency into different categories. We are not sure that it is appropriate to allow that kind of sub-division. First, there is no real description of what type of categories are intended—for example, are we talking about age, disease group, gender or ethnicity—and no limits are placed on what is acceptable.

Secondly, allowing such categorisation would raise issues about what would happen for members who were fitted into more than one category. There are many complexities around that issue. Without making any promises whatever—and I do not want to raise false hopes in the noble Lord—I am happy to go away and think more about the matter. Certainly, our initial thoughts are that that is extraordinarily difficult, and certainly it is not easy to do in the Bill.

The noble Baroness, Lady Finlay, raised the issue of geographical areas. She asked whether a person could be a member of more than one constituency. Our understanding is that they can be a member of only one constituency for each NHS foundation trust.

My noble friend has been on a bit of a roll recently, so I hope that, against that background, he will be willing to withdraw his amendment and allow us to think again about the matter more quietly.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I am grateful to my noble friend for agreeing to look at the matter again. Of course I understand the complexities. We now have in the Bill his amendment allowing the Government to make regulations, which will help to clarify the electoral systems. All I seek is for foundation trusts to be allowed discretion to deal with the issues and to make proposals, which of course would have to be in line with the regulations that he intends to bring in later. I am most grateful to him for his constructive response. I beg leave to withdraw.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 to 33 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 34:

Page 110, line 33, leave out "public constituency" and insert "members of the corporation other than the members of the staff constituency"

On Question, amendment agreed to.

[Amendments Nos. 35 and 36 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 37:

Page 110, line 40, leave out "the area specified under paragraph 3(1)(a)" and insert "an area specified in the constitution as the area for a public constituency"

On Question, amendment agreed to.

Photo of Lord Lyell Lord Lyell Conservative

My Lords, if Amendment No. 38 is agreed to, I will not be able to call Amendment No. 39.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 38:

Page 111, line 1, leave out from beginning to "may" in line 2 and insert "An elected member of the board of governors"

On Question, amendment agreed to.

[Amendment No. 39 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 40:

Page 111, line 4, leave out from "But" to end of line 5 and insert "such a member ceases to hold office if he ceases to be a member of the corporation"

On Question, amendment agreed to.

[Amendments Nos. 41 to 46 not moved.]

Photo of Baroness Cumberlege Baroness Cumberlege Conservative

had given notice of her intention to move Amendment No. 47:

Page 111, line 27, leave out from "directors," to end of line 28 and insert "including the chief executive, finance director and a medical practitioner (or in the case of a dental trust, a dental practitioner) and a nurse who shall both be registered on the relevant professional registers"

Photo of Baroness Cumberlege Baroness Cumberlege Conservative

My Lords, I understand that the noble Lord, Lord Warner, has tabled Amendment No. 50 which enables the amendments that we have sought to be enacted. I want to take the opportunity to thank the noble Lord for acceding to the request. I have prepared the most uplifting and arresting speech. Noble Lords will be delighted that I am not going to give it, but I should like to say thank you.

[Amendment No. 47 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 48:

Page 111, line 27, after second "executive" insert "(and accounting officer)"

On Question, amendment agreed to.

[Amendment No. 49 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 50:

Page 111, line 29, at end insert—

"( ) One of the executive directors is to be a registered medical practitioner or a registered dentist (within the meaning of the Dentists Act 1984 (c. 24)); and another is to be a registered nurse or registered midwife."

On Question, amendment agreed to.

[Amendment No. 51 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 52:

Page 111, line 33, leave out "the public constituency" and insert "a public constituency or the patients' constituency"

On Question, amendment agreed to.

[Amendments Nos. 53 to 57 not moved.]

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

moved Amendment No. 58:

Page 112, line 3, leave out sub-paragraph (4) and insert—

"( ) The appointment of a chief executive requires the approval of the board of governors."

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, noble Lords will have become tired of me talking about the role and powers of the board of governors. Indeed, I am putting on my anorak to have a few more attempts at the issue. I wish that the board of governors had been given more power, but it is important that it is given the right powers. As the Bill stands, I am not sure that it is right that appointment or removal of the executive director of a board of directors should require the approval of a majority of the board of governors voting at a general meeting.

A practical issue is that if that has to be done at a general meeting, it would be very difficult for any organisation to manage. First, a special meeting would have to be called to make an appointment or to remove a person. Secondly, the removal or appointment of executive directors is not really a matter for the board of governors. The people who should know what is required in relation to the executive directors ought to be the non-executives on the board of directors. That is what they are there for.

As regards the dismissal of an executive director, that must be a matter that rests with the non-executives on the board of directors. There is a special case in relation to chief executives. Given their important role, it is right and proper that the board of governors should be asked to ratify that appointment. They should not be asked to approve the dismissal of the chief executive. That, too, should be a matter for the executive directors. I know that my amendment would be very welcome in the first wave of foundation trusts. It clears up a problem that many have foreseen in this area. I beg to move.

Photo of Baroness Hanham Baroness Hanham Conservative 4:15 pm, 6th November 2003

My Lords, I appreciate that we are speaking to a non-existent schedule. I apologise for my rather late intervention. I support what the noble Lord, Lord Hunt, said. If we are to get anywhere with foundation trusts in any form whatever, it must be correct that the board of directors is responsible for the appointment of the chief executive. In the very unfortunate circumstances where the board does not think that the chief executive is measuring up, the board should also make that decision. Therefore, I strongly support what has been said. I hope that the Government will listen.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, we never tire of listening to my noble friend Lord Hunt, whether or not he has his anorak on. As regards Amendments Nos. 58 and 67, we have listened. We accept the logic of his position, as supported by the noble Baroness, Lady Hanham. We are prepared to accept both Amendments Nos. 58 and 67.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I am most grateful.

On Question, amendment agreed to.

[Amendments Nos. 59 to 65 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 66:

Page 112, line 32, at beginning insert "Sub-paragraphs (a) and (b) of paragraph 15(3) do not apply to the appointment of any initial non-executive director in pursuance of this paragraph and"

On Question, amendment agreed to.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

moved Amendment No. 67:

Page 112, line 32, leave out from "of" to end of line 33 and insert "the initial chief executive of the corporation in pursuance of sub-paragraph (5)"

On Question, amendment agreed to.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 68:

Page 112, line 38, at end insert—

"( ) a register of interests of the members of the board of governors"

On Question, amendment agreed to.

[Amendments Nos. 69 to 71 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendments Nos. 72 and 73:

Page 112, line 43, at end insert "the members of the board of governors and of"

Page 113, line 1, leave out from beginning to "available" and insert "A public benefit corporation is to make the following documents"

On Question, amendments agreed to.

[Amendments Nos. 74 and 75 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 76:

Page 113, line 19, at end insert—

"( ) An officer of the Audit Commission may be the auditor if he is appointed by the board with the agreement of the Commission."

On Question, amendment agreed to.

[Amendments Nos. 77 and 78 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendments Nos. 79 and 80:

Page 113, line 27, at end insert—

"( ) Where an officer of the Audit Commission is appointed as auditor, the Commission is to charge the public benefit corporation such fees for his services as will cover the full cost of providing them." Page 113, line 28, leave out from "directors" to end of line 29 and insert "as an audit committee to perform such monitoring, reviewing and other functions as are appropriate"

On Question, amendments agreed to.

[Amendment No. 81 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 82:

Page 113, line 29, at end insert—

"( ) In this paragraph "the Audit Commission" means the Audit Commission for Local Authorities and the National Health Service in England and Wales."

On Question, amendment agreed to.

[Amendments Nos. 83 to 85 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendments Nos. 86 to 88:

Page 114, leave out line 12.

Page 114, line 12, at end insert—

"( ) The constitution is to provide for the functions of the corporation under this paragraph to be delegated to the accounting officer." Page 114, line 19, leave out "and the registrar of companies"

On Question, amendments agreed to.

[Amendment No. 89 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 90:

Page 114, line 22, leave out "its public constituency" and insert "any public constituency and (if there is one) of the patients' constituency"

On Question, amendment agreed to.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, in moving Amendment No. 91, I shall speak also to the raft of amendments grouped with it. We have listened carefully to the arguments put forward in another place and in Committee here in support of the establishment of the office of the independent regulator with a board structure rather than as a single office-holder. I made a commitment at the previous stage that, if the Better Regulation Task Force report on independent regulators recommended that a board structure was appropriate for that type of regulator, I would bring forward on Report suitable amendments to take account of the recommendations of the task force.

I am now honouring that commitment in the amendments grouped here to that effect. Noble Lords may be alarmed at the number of amendments required to achieve this, but I can give an assurance that the majority are simple consequential amendments that arise from changing the regulator from an individual to a body corporate with a board structure.

Some noteworthy changes are contained in Amendment No. 106, which sets out that the independent regulator must consist of a board of up to five members, including a chair and a deputy. The general and specific powers of the independent regulator are set out in Amendment No. 119, and the accounting requirements are set out in Amendment No. 128. Given that the government amendments have the desired effect of Amendments Nos. 99 and 103, I hope that the noble Earl will not press his amendments. I beg to move.

Photo of Earl Howe Earl Howe Conservative

My Lords, I begin by thanking the Minister for taking on board the proposals advanced by myself and others in Committee and which were first mooted in another place. His amendments are welcome for all the reasons that we debated.

Perhaps I may pick up one issue only from our Committee proceedings: why are the Government insisting on not delegating to the NHS Appointments Commission the appointment of the regulator on first establishment? The Minister said that he envisaged that only a small proportion of national appointments would be made directly by the Secretary of State. Why should this be one of them? I wonder what that says to the outside world about the qualifications for the role of the regulator or, as he is described, the chairman of the board. The manner of appointment does not look good from that perspective. We need to know exactly why the NHS Appointments Commission, which was created expressly to avoid the suspicion or, indeed, the reality of any political bias, should not be tasked with that important appointment.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I add my thanks to the Minister for responding to the amendments tabled in Committee seeking to appoint a board rather than an individual regulator and for accepting the reasons that were put forward, along with the recommendations of the Better Regulation Task Force.

I wish simply to supplement what was said by the noble Earl, Lord Howe, as regards the NHS Appointments Commission. Even if, in the view of the Government, the chairman has to be appointed by the Secretary of State, there is no reason why the other members of the board should be so appointed. Members on these Benches feel that all members of the board should be appointed by the NHS Appointments Commission, which would be open, transparent and the correct way to proceed. However, if there has to be an element of shying away from that position, then the Minister could at least undertake to consider whether members of the board other than the chairman should be appointed by the NHS Appointments Commission.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, I am grateful to noble Lords for that positive response. It is the Government's intention that the Secretary of State shall appoint the regulator on first establishment. Further, noble Lords are probably aware that the appointment process is well under way, which is a consideration.

In the future, the Secretary of State may delegate the appointment of holders of the office and any subsequent independent regulator to the NHS Appointments Commission; he has the power to do so. We have listened carefully to the points that have been made by noble Lords in this debate. Certainly it is well within the bounds of possibility that the concerns that have been expressed will be met.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, before the noble Lord sits down, would he update the House on the appointment process for the regulator? What stage has it reached and has an appointment yet been made?

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, the appointment process is ongoing and has not yet been completed. I am not in a position to say any more than that.

On Question, amendment agreed to.

[Amendment No. 92 unallocated.]

[Amendments Nos. 93 to 95 not moved.]

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

moved Amendment No. 96:

Page 114, line 31, leave out sub-paragraph (2) and insert—

"( ) The document containing the information is to be prepared by the directors.

( ) In preparing the document the directors must have regard to the views of the board of governors."

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I promise that this is my last word on the issue of governance on Report, although no doubt there will be opportunities over the coming two weeks for further discussion if the House of Commons does the right thing by the Bill.

Ideally, I would give the responsibility of approving the forward plan of the trust to the governing body. That would encapsulate a very proactive and proper role for the governing body in which, essentially, it would be asked to agree the strategic plans of the organisation. However, I understand that that is not possible because of the construct of the Bill. The board of directors has to take corporate responsibility for all that is done in the trust. Therefore to have given to the board of governors the absolute right of approval over the forward plan would not be consistent with the corporate responsibility of the board of directors.

What I have sought to convey in my amendment is a form of words which would still leave the final decision with the board of directors, but would also ensure that that board really had to listen and have regard to the views of the board of governors. That goes somewhat further than simply to consult and would give the board of governors a constructive role, while leaving the actual decision on the forward plan with the board of directors. I hope that that commends itself to the House. I beg to move.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I rise briefly simply to remark that I think that if the composition of the board of governors were right and did not have all the flaws that I have pointed out, then this would be an extremely good amendment. Certainly it provides a means of moving forward. In fact, the reconciliation is that if you had the right people on the board of governors—representatives of primary care trusts and so forth—it would be all the more important that regard should be given to their views than if the board is merely elected by a very small electorate.

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

My Lords, we are always willing to listen to good argument. My noble friend has done that and we are pleased to accept his amendment.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, I am most grateful. In response to my noble friend Lord Lipsey, I very much agree that we do want to attract a high quality membership to the board of governors; that must be the aim of all foundation trusts.

On Question, amendment agreed to.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

moved Amendment No. 97:

Leave out Schedule 1.

On Question, amendment agreed to.

Clause 2 [Independent Regulator of NHS Foundation Trusts]:

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 98:

Page 1, line 11, leave out "an officer" and insert "a body corporate".

On Question, amendment agreed to.

[Amendment No. 99 not moved.]

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 100:

Page 2, line 1, leave out subsection (2).

On Question, amendment agreed to.

[Amendments Nos. 101 to 105 not moved.]

Schedule 2 [Independent Regulator of NHS Foundation Trusts]:

Photo of Lord Warner Lord Warner Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health)

moved Amendment No. 106:

Page 115, line 6, leave out from beginning to end of line 15 and insert—