Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Clause 4 - Application by NHS trusts

Health and Social Care (Community Health and Standards) Bill – in a Public Bill Committee at 3:30 pm on 20th May 2003.

Alert me about debates like this

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 3:30 pm, 20th May 2003

I beg to move amendment No. 103, in

clause 4, page 2, line 8, after 'trust', insert

', a Primary Care Trust, or any combination of trusts,'.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

With this it will be convenient to discuss the following amendments: No. 201, in

clause 4, page 2, line 8, after 'trust', insert

'or combination of NHS trusts'.

No. 106, in

clause 5, page 2, line 31, after 'trust', insert

', Primary Care Trust or combination of trusts'.

No. 202, in

clause 5, page 2, line 31, after 'trust', insert

'or combination of NHS trusts'.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

Clause 4 is about applications—[Interruption.] I thought that the Government had abandoned clause 4, but I am reminded that it was rewritten, and we shall rewrite it again.

The structure of clause 4 does not cause me any difficulties, although later clauses may. My four amendments have a specific purpose, which is to broaden the scope of those NHS organisations that can apply to become NHS foundation trusts.

Amendments Nos. 106 and 202 apply to clause 5 and are consequential on the other two amendments. Therefore the first two in the group, amendments Nos. 103 and 201, are the ones that matter. Amendment No. 103 relates to the beginning of clause 4, which states:

''An NHS trust may make an application''.

The amendment proposes to insert after ''NHS trust'' the words,

''a Primary Care Trust, or any combination of trusts''.

That amendment takes up one of the principal arguments, which, as the Committee may recall, was discussed in January when the House debated a Conservative motion on hospital foundation trusts. One of the strongest arguments for consideration at that early stage concerned the question of with whom responsibility and accountability should lie—that is, where patients' proper control should lie in the NHS. If, as I hope is the case, NHS patients have a clear mechanism for controlling the structure and the way in which the NHS is delivered in their locality, then primary care trusts are the obvious starting point. Primary care trusts are the commissioning bodies that operate on behalf of patients.

I have annual discussions with the primary care trust and the hospitals in my area about service level agreements. Although there is negotiation between the hospital and the primary care trust, technically speaking, the operation is primary care trust-led. However, if the hospital is essentially a monopoly provider—as is the case in some places—and offers services to the primary care trust with the expectation that they must simply take what they are given, we are not getting the primary care-led NHS in the form in which the Government have told us it should be structured. If the NHS is to be primary care-led, it will have to be primary care trust-led, and the involvement and the accountability of patients should be focussed on primary care trusts. I will not argue that point at length because the hon. Member for Oxford, West and Abingdon (Dr. Harris) made a similar argument on an earlier group of amendments, and that was set out then and on Second Reading.

I suspect that Ministers must agree, in theory, and are minded to say, ''Make us logical, but not yet.'' They want to keep primary care trusts out, on the grounds that they have only recently been established and therefore need to bed down before being given the opportunity to become NHS foundation trusts.

That is slightly odd in two respects. First, the Select Committee report details the frequency with which NHS bodies are subjected to an additional administrative overhaul. The Government's desire to get all the mechanisms of primary care trusts thoroughly bedded down, before digging them all up again and turning them into something different, is perverse. If we know where primary care trusts are travelling, and if that route is one of accountability to patients through direct membership of a foundation trust by NHS patients in their area, why not move there more quickly? Why not quickly make the primary care trusts accountable?

Alternatively, the amendment may commend itself to Ministers on the grounds that, although they do not wish to carry it out now, they will wish to do so at some later stage. Unless a later amendment that I support were to succeed, an NHS trust or any other trust could make an application to become a foundation trust only if it were supported by the Secretary of State. If Ministers want to hold primary care trusts back—even for years—there is absolutely nothing to stop them doing so.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West 3:45 pm, 20th May 2003

I follow the logic of the hon. Gentleman's argument, and I concede that there is something in it. However, does he not recognise that when an essentially new concept is introduced—local involvement in the provision of health care—it is sensible to make that provision for the body that local people most readily understand, identify with and want to get involved with? If that were set up and working well, it would be much easier to make other elements of health service organisation and provision more democratic by using the first as an example and inspiration.

To put it simply, were I to ask people on the streets of West Bromwich whether they wanted to get involved in the running of the local Sandwell hospital, I could be quite sure of a favourable reply. However, if I were to ask people whether they wanted to get involved with the running of Oldbury and Smethwick PCT, I should be met only with blank looks. That approach tries to surmount that difficulty.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I understand the hon. Gentleman's point; however, it is essentially an issue of timing and phasing in rather than of principle. In his argument, the hon. Gentleman does not dispute that, if we seek accountability to patients and patients exercising greater influence over the structure of services provided to them, it must be done through primary care trusts.

The question then becomes how to reach the point at which the public understand the nature and the role of primary care trusts. As someone—perhaps my hon. Friend the Member for Westbury (Dr. Murrison)—said from a sedentary position, patients encounter their GPs much more frequently than they do their hospital. During a year, many more patients see their GP than attend hospital. Although we have the physical appreciation of the hospital, if, over time, one wanted to create among patients an understanding of the nature of a primary care trust and the role that it

fulfils, so that they had an impetus towards participation in membership, it would not take long for GPs to create that sense of awareness and impetus in their population. That would depend on GPs being minded to give their support, but I suspect that for an application to be submitted the area's GPs would have to go in that direction.

We do not say that all must become foundation trusts in a particular time frame—or perhaps Ministers do take that view. My view has always been that devolved management must have a degree of organic growth. I am not sure that I subscribe to the argument of the hon. Member for West Bromwich, West (Mr. Bailey), but it can be contemplated. However, even if the hon. Gentleman is right, primary care trusts themselves can hold back because, at this stage, they do not think that the public know enough about them to wish to become members. Ministers, too, can hold primary care trusts back.

The second limb of my argument concerns whether it makes sense to leave them out of the legislation. As far as I can see, if they were left out now, we would need new primary legislation to reintroduce them. From past experience, we know that that can be a significant constraint on the timetable and the development of services to patients if structural change is required.

Photo of George Young George Young Chair, Standards and Privileges Committee

My hon. Friend will recall that, on Second Reading, the Secretary of State, when pressed on that point, said:

''Down the line, I have no objection whatever to the idea of applying the democratic or foundation principle to primary care trusts.''—[Official Report, 7 May 2003; Vol. 404, c. 705.]

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I do recall that the Secretary of State said that. I also recall that later I asked him similar questions on a different subject, but I shall come to that in a moment.

As my right hon. Friend makes clear, if the Secretary of State was willing to say that on Second Reading, logic tells us to include primary care trusts in the clause and make it possible for those to become foundation trusts. If Ministers are not ready for that to happen, it can be held back using the discretion that Ministers have.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

We must assume that there is a purpose in not including primary care trusts in the Bill. Does my hon. Friend agree that one reason could be that the Secretary of State, because he is very clever, perceives that control is through the primary care trusts? Given that 75 per cent. of NHS funding goes through primary care trusts, is that a way to maintain control, while, on the face of it, devolving power to foundation hospitals?

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

My hon. Friend makes an important point. If Ministers are not minded to accept the amendment, they will have to explain why. I am not by nature someone who is given to conspiracy theories, but the Minister asserted on several amendments that Ministers will not have powers of direction or control and that foundation trusts will have operational and organisational freedom. However, that freedom can be

exercised only to the extent that the foundation trusts are commissioned, and the role of the Secretary of State in directing the commissioning bodies is a powerful one.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Does my hon. Friend agree that the Government might be putting the cart before the horse? If a primary care trust were to become a foundation trust with local accountability, democracy and ownership, it would be the unit that buys in services from hospitals and it would not commission services from hospitals that did not deliver high-quality services. That would create gaps in the market for other provision to come forward. One way to control the quality of services in hospitals would be to set primary care trusts free, so we might not have to go down the foundation trust route at all.

Mr. Lansley rose—

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I will say yes to the first half, but not to the second. I see merit in giving operational freedom to hospitals, as distinct from the benefits that would accrue from the additional accountability to patients if primary care trusts had the chance to become NHS trusts.

The structure of amendment No. 103 would allow primary care trusts to be piloted as NHS foundation trusts. We have first-wave foundation hospitals, but the impetus behind the first wave is such that it draws Ministers into the expectation that all hospitals will become foundation hospital trusts. However, I am sure that they would acknowledge that, in practice, piloting some of the changes is important.

If the legislation is changed to allow primary care trusts to become foundation trusts, it may be possible to engage in a pilot study with PCTs—consistent with the Bill—in one or two places, without creating the expectation that all primary care trusts will get there. However, if we take the path of legislating again for PCTs to become foundation trusts, that will imply that Ministers have decided that that is the route for all primary care trusts to take.

There is a further limb to amendment No. 103, but that may have to wait.

Sitting suspended for a Division in the House.

On resuming—

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 4:10 pm, 20th May 2003

I was just coming to the final limb of the argument in support of amendment No. 103. It will be obvious to the Committee that if the language were changed so that an NHS trust,

''a Primary Care Trust, or any combination of trusts''

were able to make an application, that would mean that PCTs and NHS trusts together could make an application to become an NHS foundation trust. I am motivated in this direction not least by the arguments of the King's Fund. I have great respect for its work, and appreciate its argument that one model for the restructuring of accountability in the NHS could be the creation of a whole health economy foundation

trust. If one were to go down that path, one would need the PCT and the hospital trust to be able to come together to create a single foundation trust. That would be acceptable only in circumstances in which further progress had been made in extending patient choice, which is being contemplated to some extent in ministerial thinking. If that progress were made, we could consider such a model, in particular for urban areas, because it would not be monopoly provision.

At this stage, Ministers are looking for different models of structure to develop the NHS in different places. The structure of the legislation does not at the moment permit either PCTs, or PCTs and NHS trusts together, to respond in accordance with their local circumstances.

There is an alternative, which is addressed in amendment No. 201. The amendment would mean that an NHS trust,

''or combination of NHS trusts'',

may make an application to the regulator. Amendment No. 103 encompasses this amendment, but No. 201 is separated out for a reason.

In some parts of the country, hospitals have come together when NHS trusts have been established to create combined hospitals trusts. I think that one or two of those might be on the list of those that applied for foundation status—certainly, the Bradford Hospitals NHS trust is one that did and it has more than one hospital, and the Gloucestershire Hospitals NHS trust is another. East Cheshire NHS trust was another, but it has not pursued its application at this stage.

It is a consequence of past events that some hospitals have come together to form NHS trusts, and others have stayed as distinct and separate trusts, not part of one organisation. That is a bar to hospitals coming together to create an NHS foundation trust and restructuring themselves locally. My constituency has a particular interest there, because in order to reconfigure its services to respond to patients' needs—I made this point on Second Reading—Addenbrooke's hospital could choose to work with, say, West Suffolk hospital, the Hinchingbrooke hospital in Huntingdon or other local hospitals to create a new structure of services: those at the Addenbrooke's site might focus on the most serious illnesses, while some of the elective surgery and other functions could be redistributed to other sites, making the services more accessible to patients. Patients' needs might well be met more effectively that way.

If Addenbrooke's were to become a foundation trust at a point when the other hospitals had not yet become foundation trusts or, in the fullness of time, they become different foundation trusts, we may be creating barriers. Moreover, we may be creating a curious situation for patients, in which, for example, they are members of the Addenbrooke's foundation trust and, in the fullness of time, they might also become a member of the West Suffolk NHS foundation trust; both would be a hospital to which they might go for different reasons. Although a member of my constituency as a patient might think that those two things were complementary, in practice

the two boards would have no mechanism for taking their decisions together. There would be the co-operation provisions, but they would be separate boards making separate decisions.

With the amendment I am opening up the possibility of NHS trusts thinking hard about the structure of an NHS foundation trust and how it can best serve their locality, sometimes by the reconfiguration of services across several hospitals. The amendment is designed to address that point, without the further complication of primary care trusts at this stage. I hope that Ministers will recognise that this is not intended simply as a probing amendment. It is intended as a serious set of amendments, proposing two options as to how one might proceed. The first amendment, which attracted much support on Second Reading and in Committee debates, relates to the principal of how foundation trusts should be established. The second amendment proposes a practical option in relation to the structure that Ministers are currently considering. It does what they seem to be in favour of—that is, it allows trusts to set up local arrangements that, in their view, are better able to meet the service needs of patients in their area.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I want to say a few things in response to the interesting set of amendments tabled by my hon. Friend the Member for South Cambridgeshire. He has put his finger on one of the clearest issues arising from the structures that have been put in place by the Government under the Bill—that is, that there is a coherent argument to say that the democratic model that is being phased in to the NHS is in the wrong place. It is logical that there should be a debate over whether primary care trusts should enjoy the same rights as foundation trusts, as set out under the Bill. It is an irony that in many ways the primary care trusts themselves will lose freedoms as a result of the establishment of foundation hospitals in the way that the Government have envisaged it. That is because the Government envisage establishing—Ministers will correct me if they have changed those plans—long-term contracts between primary care trusts and foundation hospitals to secure the financial solidity of the foundation hospital trusts, once established. The effect of that will be to reduce the freedoms that primary care trusts enjoy to secure the treatments of choice of their patients. It requires them to follow a fixed balance between secondary and primary care. It will inevitably reduce their ability to move services into the primary care sector, which is ironic because part of the core of the Government's strategy for the NHS, most recently articulated in ''Keeping the NHS Local'', is to begin to move services out of acute hospitals into primary care. If the primary care trusts lose freedoms as a result of the changes, it is not clear how they will be able to do that.

I can envisage that one of the challenges that Ministers will face in the years ahead under the structure they are establishing is a degree of tension between acute and primary care trusts as they seek to implement the strategy outlined in ''Keeping the NHS Local''. There is a clear argument, which merits further debate, that the democratic element of local

NHS structures should relate to the area where decisions are made about care.

Community decision making should be setting priorities about services in local health care purchasing; it should be deciding the priority between, for example, an additional focus on mental health care, orthopaedic care, stronger community-based services, or strengthening acute-based services. With the foundation hospital structure alone that will not be possible. If there were greater community participation in primary care trusts and other kinds of NHS trusts, people would be afforded the opportunity of having a stronger say in decision making about the allocation of health care resources in their community. The range and portfolio of services would not then simply be decided within a hospital.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

On the theme that the hon. Gentleman is pursuing, does he recognise that that is exactly what happens in social services, despite the constraints on local authorities? Not only can local people vote for a programme to be provided under different proposals put by various parties, but the local revenue-raising powers, limited though they are, can be used to ensure that extra priority is given, without having to take social services from another vulnerable group in order to fund it. Does the hon. Gentleman think that there is merit in that, and would that be transferable in any circumstances to health care commissioning?

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

One of the great dilemmas faced by many social services departments is that their freedom to manoeuvre is constrained by statute. There are many parts of the country in which decision making has to be skewed one way or another, because central Government diktat requires it. Local authorities do not enjoy the freedom to make decisions without their having to make especially difficult financial decisions that may have an adverse effect on the elderly, for example, through substantial council tax increases. I suspect that that line of argument is not entirely in line with the nature of the amendments, so I will avoid being drawn too far down that road.

My hon. Friend the Member for South Cambridgeshire made an interesting point about the combination of trusts. It is conceivable that ambulance and acute trusts may move closer together in future to ensure a more seamless and effective delivery of services and a better allocation to the correct place in the NHS of patients who summon an ambulance. At the moment, there are frictions in the NHS between accident and emergency trusts and ambulance trusts over the admission of patients. It is conceivable that in future there will be much greater collaboration between, and possibly even the unification of, hospital and ambulance trusts to create a seamless system for the handling, admission and treatment of patients coming through the emergency access channels into the NHS.

I commend my hon. Friend on raising an important issue. The Government should leave the door open. There is an important point about the Bill effectively excluding the extension of the foundation principle in the NHS, without the need to come back to the House

to discuss the matter further. It is not necessary to have an additional piece of legislation to allow the Government to extend the foundation model if they wish; all they have to do is leave the option open in the legislation. Like my hon. Friend, I am interested to hear the response of Ministers, especially after the comments of the Secretary of State on Second Reading. I would like to hear something about how the Government envisages the foundation model developing further in the NHS and why the Bill does not permit that in a managed way.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I should be grateful if the Minister could confirm that if a PCT were to seek foundation status, that further legislation would be needed. That was not discussed in detail on Second Reading. It was implied that that was a question for later and that it was necessary to start with NHS hospital trusts. Can the Minister help to curtail the debate by clarifying that that is the case? It is a reasonable question. Clause 4(1) deals with an NHS trust that makes an application, and clause 5(1) states that an application may be directed by

''persons other than NHS trusts''.

That seems to cover all options.

A PCT could be considered to be either an NHS trust—although I do not believe that it is in law—or something other than an NHS trust. When I first saw the hon. Member for South Cambridgeshire's amendments, I thought that they were not necessary because that matter would be dealt with under clause 5. I hope that the Minister will put me out of my confusion on that matter. The explanatory notes to clause 5 state that

''This clause allows persons other than NHS trusts'',

which I assume to mean PCTs,

''to apply to set up an NHS foundation trust. They may only do so with the support of the Secretary of State.''

We know what we think about that matter. The explanatory notes continue:

''This allows organisations that are not currently part of the NHS such as charities and voluntary sector organisations to become involved in the establishment of a new NHS foundation trust.''

That does not preclude that explanation. It applies to PCTs. Perhaps there is some clarification on that matter.

Photo of George Young George Young Chair, Standards and Privileges Committee

I was hoping that the Minister would provide the hon. Gentleman with the answer. The answer lies in clause 1, where a foundation trust is defined as an organisation that provides goods and services. As a PCT does not supply goods and services, it is excluded by clause 1.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I am grateful to the hon. Gentleman for his response, as we always are. PCTs provide goods and services. They are providers of primary care. Under GMS and personal medical services no goods and services are more direct than primary care. Will the Minister curtail that part of the debate by clarifying that issue?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I wish it were in my power to curtail the debate but I do no think that it is.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

It is a very important debate. I want to confine my remarks to my response to it, rather than intervene at that point. The difficulty I have is that both the right hon. Member for North-West Hampshire and the hon. Member for Oxford, West and Abingdon are partly right. Primary care trusts are not solely commissioners, they are providers. In relation to the provider aspects of PCTs, they are broadly within the scope of the Bill. The commissioning function clearly is not. I hope that answers the hon. Gentleman's point.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I am pleased that the Minister is talking about the provider function. We have tabled an amendment on clause 5—which is not in this group—that clarifies the issue, and which would allow other bodies such as PCTs to become public benefit corporations, provided that they do not commission services.

The Minister says that that amendment is not necessary because of clause 1, and that PCTs would fall under clause 5, despite the fact that the explanatory notes do not specify that. Some of the hon. Member for South Cambridgeshire's points would not apply in that respect. I would be interested in the Minister's full exposition of that point. It is useful that we now know that. We might have saved time if we had understood that point at an earlier stage. We will wait to hear what the Minister says on that matter.

The other point that I will make concerns issues relating to the commissioning and providing sides. I was delighted to hear the hon. Member for Epsom and Ewell say that to a certain extent—I am quoting him broadly, not exactly—democratisation is occurring first in the wrong place. That is because of the importance of the commissioning role in the NHS, as the hon. Member for South Cambridgeshire stated. If nobody is interested in commissioning, other than in cases where there is a monopoly suppler and the split between commissioner and provider is not working well—that is an internal market, even if the Government deny that—the commissioners have the upper hand.

In another debate the Under-Secretary stated that commissioners have a powerful hand in that matter. That is why it is important that democratisation takes place on the commissioning side. However, I do not believe that giving foundation status is the best way to go about that; if democratisation is needed on the commissioning side, the best way to provide it is by holding elections to a public body, whether it be a health board or a local authority, or having revenue-raising or tax-varying powers so that the priorities that the hon. Member for Epsom and Ewell talked about could be met. He makes the fair point that council tax is not a pleasant tax for older people. There is an alternative, which I shall not go into at this stage, and that is local income tax.

We would like the democratisation to apply to the commissioning side of PCTs, but the mutual aspect of foundation status could easily apply to the primary care services provided by a PCT. We envisage PCTs

returning to being providers and advisers of the commissioners.

To a certain extent, the hon. Member for West Bromwich, West did not exactly recognise the truth, although I partly understand where he was coming from. The services that most people use, see first, use most frequently, are most local and most useful to them are GP services. It is true that, as the hon. Member for West Bromwich, West said, if someone was asked whether they would be more interested in running their local hospital or their local PCT, they might opt for the former because of the over-concentration on acute services and secondary care services. However, in reality, we all have a duty and a role to raise the status of primary care, so that when people think about the NHS in their area, they think about GP services as much as they do about their hospital.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West 4:30 pm, 20th May 2003

I am quite happy to take the point that people use GP services more than the hospital, but PCTs are not just about GP services. It is a different body. If we are to enthuse people about participating in health provision, it is better to start with the service that they understand and identify with most readily. I still think that that amounts to the hospital.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I understand the hon. Gentleman's point, but I would argue that more people have direct experience of general practice. As far as the provider of service is concerned, PCTs should not be seen as anything other than a way for providers to get together to provide a service. In my view—this is why I did not support the establishment of PCTs, as the record will show—in the early provision, PCTs should not have been confused with the commissioning role that will be best placed with a democratically based, and not a more democratically based, organisation.

I have half-sympathy with the hon. Gentleman, in that we would welcome finding a way of ensuring that the non-commissioning functions of primary care trusts were available for mutualisation, or them becoming public benefit organisations, rather like housing associations, in a way.

However, I think that two stages are required: first, the commissioning function must be split from the providing function, and secondly, as a priority, there must be a democratisation of the powerful, responsive, accountable commissioning function. Then we can consider the issue. That is what we Liberal Democrats have always wanted to happen before we get involved in the detail of exactly what shape the mixed market in providers will take. It is more urgent to sort out the commissioning side. Part of this debate is academic, because the Minister may pursue the course that he hinted at earlier, under which clause 5 would apply to the provider side of the role of PCTs.

It is for those reasons that we do not support the proposal of the hon. Member for South Cambridgeshire, but I thank him for the clear way that he set it out, and for the interest that he has taken in the importance of ensuring that the primary care side of the NHS is not forgotten in our debates.

Photo of George Young George Young Chair, Standards and Privileges Committee

I am particularly interested in amendment No. 106, which brings primary care trusts within the enfranchising part of the Bill.

Once again, I pray in aid the report of the Select Committee. So far, whenever I have tabled an amendment that is based on a Select Committee recommendation, it has been dismissed with a wave of the hand by the Minister—the last time, a few words were said on amendment No. 200.

Page 49 of the Select Committee report states:

''We also recommend that the Government considers a wider democratic option for trusts, including PCTs, to consider with or without the freedoms associated with the current foundation model.''

Therefore, its view is that they should be brought within the framework of the Bill.

Paragraph 168 states:

''Equally, to ensure a genuine level playing field across the NHS, the needs of mental health trusts, ambulance trusts and primary care trusts must all be taken into account.''

I agree with what my hon. Friend the Member for South Cambridgeshire said at the beginning of this debate. In a sense, the Government are democratising the wrong body. If we had gone back to the model that we had 30 or 40 years ago, where the budget went from the Department of Health to the local hospital, which then decided what services would be provided, there would be some validity in doing what the Government are doing—making the hospital accountable with regard to the needs of the local community. However, in between times, we have had the split between the purchaser and the provider, and it is the provider rather than the purchaser that has been exposed to the new forms of social governance.

The situation has been made worse by Ministers using careless language: they have implied that what they are doing will alter the services that are being provided locally. In his foundation hospital speech of 30 April, the Secretary of State said:

''By all means let us debate NHS foundation trusts but let us do so on the basis of what the policy is rather than what it is not. Greater local freedom, real local ownership, genuine staff involvement to give more responsive services and ensure community needs are better met.''

The more responsive services are a matter for the primary care trust.

On Second Reading, the Secretary of State admitted:

''Primary care trusts will continue to have the power to use their resources as they see fit.''—[Official Report, 7 May 2003; Vol. 404, c. 711.]

Therefore, it is the primary care trusts rather than the foundation trusts that will shape the services that the community gets. That is why I have a lot of sympathy with the argument, which was deployed on Second Reading by many Labour Members, that the primary care trusts rather than the hospitals should be exposed to democratic accountability.

In response to that, the Secretary of State has shifted his position as he has come under pressure. That was particularly the case during the debate. I have to hand the quote that I used when I intervened

on my hon. Friend the Member for South Cambridgeshire. The right hon. Gentleman said:

''Down the line, I have no objection whatever to the idea of applying the democratic or foundation principle to primary care trusts.''—[Official Report, 7 May 2003; Vol. 404, c. 705.]

Given that that is the Government's policy, it is odd for legislation to go through that precludes that. We have the perverse position whereby a hospital trust that does not want to become a foundation trust will have to do so because they all must do so within a certain period, but a primary care trust that would like to enfranchise itself under this process is not allowed to do so. If one wants to make the NHS more accountable to local people, why does one have legislation before the House that ensures that a PCT cannot become democratically accountable?

Therefore, I have a lot of sympathy with amendment No. 106. It would preserve the flexibility that the Government want. Under clause 5, it is not possible to apply to become trusts unless applications are supported by the Secretary of State. If it is the Secretary of State's view that these are fragile organisations that are not quite ready for that, he can simply not validate an application under clause 5. However, it would be sensible and avoid primary legislation if we were to agree to amendment No. 106, or a similar one.

The view of the Select Committee, a number of Labour Members on Second Reading and many Opposition Members should be accepted: to do so could save the Government some time in a few years.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Again, I find myself in the position of welcoming this debate and congratulating the hon. Members who have spoken.

The hon. Member for South Cambridgeshire started his argument from the point at which I should start mine: a sensible position. He does not want the Bill to create further barriers between different parts of the NHS, and nor do I. For reasons that I shall outline, that is not what the Bill will do. He does not want the Bill to act as a deterrent to planning and proper strategic development across the NHS; it will not do so.

The right hon. Member for North-West Hampshire said that I had dismissed out of hand the Health Committee's report, but I have not. We hold that Select Committee in the highest regard, and we will carefully consider its report on NHS foundation trusts. On several occasions, the hon. Gentleman invited me—tantalisingly—to respond to certain recommendations in the report. With the greatest respect, he knows that it would not be appropriate for me to pre-empt the Government' response to the report. He might be delighted to hear my thoughts on the subject, but he will have to contain himself until the appropriate moment; wisdom and light will then shine upon him, and we will all be happier individuals as a result.

Photo of George Young George Young Chair, Standards and Privileges Committee

Is the Minister seriously saying that we will debate the Bill, even though the Health Committee has produced a report with a number of recommendations to which the Government will not respond until after the Bill has left Committee?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

It is true that the Government's response to the report will not be made until the Standing Committee is over.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West

One of the reasons why the timetable of the report was so tight vis-à-vis Second Reading was the delays in getting the report out because of the deliberative sessions. It could have been out much sooner, and the Government's response could therefore have been produced before Second Reading, but the Committee's deliberations made that impossible.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I am grateful to my hon. Friend. I am sure that many of us, including myself, would have liked to have listened in on those deliberations.

The right hon. Gentleman quoted various paragraphs of the Select Committee report, and, in response, I am giving the Government's view on those issues that are pertinent to the Bill. I am not dismissing the contents of the report, but nor is the report influencing our debate or shaping my responses. As the hon. Member for South Cambridgeshire made clear, the Health Committee felt that the Bill should address the issues that he raises. I shall respond to those particular points, and, in the process, cast light on the Government's view on some aspects of the report.

I shall treat amendments Nos. 201 and 202 together because they relate to combinations of NHS trusts applying for NHS foundation trust status. I shall also deal with the wider point of primary care trust applications for foundation trust status. Without running through the history and background to the Bill, in a nutshell we are establishing a new form of governance for NHS trusts that is independent of Whitehall control. That is one part of the wider programme of system reform that is needed to deliver our strategy in the NHS plan.

The Bill is not designed to be a backdoor route to large-scale service reconfiguration, which must be considered properly in the context of wider policy development. As my right hon. Friend the Secretary of State made clear on Second Reading, the Bill envisages one NHS trust becoming one NHS foundation trust. Anyone reading the Bill will see that we have clearly set out that process in part 1. The Secretary of State also made it clear that different configurations might be considered, although he rightly counselled caution. Our top priority is to ensure that NHS foundation trusts work before we move to adopt different models.

Any configuration would have to take place according to current arrangements before an application could be made to establish an NHS foundation trust. There needs to be consultation, not only on a proposal to apply for NHS foundation trust status—I shall come to that when we consider clause 6—but on the whole package, including the proposal to merge two NHS bodies. The organisations involved would need to satisfy the consultation provisions in clauses 6 and 7, the regulations on consultation for dissolution of NHS trusts and section 11 of the Health and Social Care Act 2001. Section 11 places a duty on NHS bodies responsible for services to involve and consult patients and the public on the planning of services, their development and proposals

for service change, and on decisions that may affect the operation of those services.

Further, under regulations made under section 7 of the same Act, NHS bodies that are considering a proposal for a substantial development or a variation of their health services must consult the overview and scrutiny committee of the relevant local authority.

I will translate that into plain English: I need to do so for my own purposes, let alone anyone else's. During the course of discussions within local health economies, it is possible for more than one NHS acute trust to come to the view that they wish to apply for NHS foundation trust status, and that they wish to do so as part of a programme of bringing together the provision of acute services in the locality. Under the Bill, it is possible to do that. However, there is a difficulty.

Because of the way in which the Bill is constructed, the process of NHS acute trust merger will have to run in parallel or coterminously with the application to establish an NHS foundation trust. The provisions about authorisation in clause 6 make it clear that the independent regulator of NHS foundation trusts can only authorise the trust that applied for foundation trust status to be a foundation trust. I am sure that the hon. Member for South Cambridgeshire can see the difficulty. Two acute trusts are applying separately, but with the intention that at the end of the process there will be an acute trust merger and that the merged trust will become an NHS foundation trust. Under the Bill, only the merged trust can be authorised to become an NHS foundation trust, so the merger would have to precede the authorisation under clause 6.

That might not be the process that the hon. Gentleman wants, and I share some of his frustrations about it. I do not want unnecessary bureaucracy to come out of this legislation. However, it is clear that we cannot look at this subject only in terms of the Bill: we have to look at it against the background of the wider legislation on NHS trusts, including that on trust mergers. An acute trust merger would be a significant service change, so there would have to be a process of consultation about it. We cannot escape that. If that is part of the process of more than one NHS trust wanting to become an NHS foundation trust, it will have to be gone through.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 4:45 pm, 20th May 2003

I do not wish to put barriers in the way of configuration, and I accept that that would need proper consideration through all the mechanisms of the independent panel, the regulator and so forth, but there is something that I still do not understand. If, for example, a first wave foundation trust wished at a subsequent stage to add by way of merger other acute trusts or smaller hospitals in its area which themselves wanted to apply to be foundation trusts, I cannot see how the Bill allows that to happen. Does the regulator have the power to entertain a subsequent application to become part of a pre-existing foundation trust from other NHS trusts?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I will have to take legal advice about that from my officials. Perhaps we can return to the matter at a later stage of our proceedings?

I think that this is the question that the hon. Gentleman is asking: if there is a pre-existing NHS foundation trust that, having had a process of consultation with other acute trust advisers, wants to merge its services with those of existing trusts that are not NHS foundation trusts, would there then need to be a separate NHS foundation trust application to the regulator? I will have to get back to him on that, as I do not want to risk misleading the Committee.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Before the Minister moves on from reconfiguration, can I ask him to address the question of the reconfiguration of services that would result from the ''Keeping the NHS Local'' strategy, and the relationships between PCTs and foundation trusts in such a situation?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

There is absolutely nothing in the Bill that makes the ''Keeping the NHS Local'' strategy impossible to deliver. Service reconfiguration will be dealt with in the way that already applies to non-NHS-foundation trusts and, under the Bill, service reconfigurations will need to go through the oversight and scrutiny committees of the local authorities and then be referred up to the regulator for him to decide. In the process, the independent regulator can refer such a decision to the independent reconfigurations panel, which will consider the guidance and ''Keeping the NHS Local'' in coming to a view.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

I detect a mood of support in Committee for the process. I hear people saying that we do not want to be unnecessarily restrictive, given that the purpose of the measure is to give people a chance to be innovative, to use capacity in the best possible way and expand it, and to be more responsive to patient needs. However, when my right hon. Friend the Minister described the situation, it sounded as if he himself was acknowledging that the process is unnecessarily rigid and complex under the Bill, in terms of achieving the combination that we are seeking.

As the Minister is going to seek legal advice to answer an earlier point, will he also consider whether there is a way of simplifying the process, so that we can achieve the ends, on which there is some consensus? Will he report back on that?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Yes, I will certainly do that. However we get there, and whatever adjustments we might want to consider, one thing is reasonably clear: if acute trusts wish to apply jointly to become a foundation trust, we will end up with one NHS foundation trust. There will have to be a way, facilitated through one process or another, whereby the several trusts become one.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Yes, that is absolutely right, but whichever way we cut it, a proper process will need to be followed, and that process is already set out in existing legislation for an acute trust merger. Of course, I do not want an overly bureaucratic process; I eschew that approach altogether. However, we must

enter into this discussion with our eyes open, and must realise that, however we care to look at it, this is quite a complicated legal and organisational process. I want to find the simplest way through it.

I tell the hon. Member for South Cambridgeshire and the Committee that there is an obvious way for the several acute trusts to do that—they can go through the merger process and apply to be established as an NHS foundation trust. That is perfectly possible. Nothing in the Bill precludes that from being a way forward. I suggest to my hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) that that is perhaps the simplest way to cut through the problems.

Obviously, such decisions will, in the first instance, be taken locally—and rightly so. However, I enter a precautionary note: if we are talking about multiple acute trusts coming together to form one large super-trust, we must remember that the wider we cast the net in terms of acute trust reconfigurations, the further we are moving in a difficult direction. We would probably be taking the foundation trust further away from the local communities that we are considering. The hon. Member for South Cambridgeshire might think about a Cambridgeshire-wide NHS foundation trust. We start from a large pool of potential operations.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

I understand what my right hon. Friend is saying, but surely what he describes would have to be approved by both the regulator and the Secretary of State. It is highly unlikely that he would agree to a super-trust that takes away from local areas, as the purpose of the scheme is to give freedom at local level.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I agree absolutely. I am sorry if I am labouring the point, but my hon. Friend has, in his characteristic way, helped me out significantly; we need to consider the matter in context. How big an issue will it be for the NHS in the immediate and medium-term future? I do not think that it will be the big issue on how we take forward the policy on NHS foundation trusts. The model that we had in mind when we set out on this path was the single NHS trust applying to be, and becoming, the new NHS foundation trust. If one considers the first and second waves, that is how the model will develop.

However, I agree with the hon. Member for South Cambridgeshire, in that I do not want to put an artificial break on discussions about the best way that local services can be put together. Those discussions should always take place locally. If a combination of acute trusts wants to go down the route that the hon. Gentleman says they might want to, I would not want to get in the way of that, and neither would my right hon. Friend the Secretary of State.

I am grateful to my hon. Friend the Member for Birmingham, Hall Green for giving us a bit of context. I have said to him, and the Committee, that we will look carefully at the procedures to ensure that they are the most streamlined that we can develop and devise, and if there is a need to come back with changes on Report, we will consider that.

There is a way forward, as I suggested to the hon. Member for South Cambridgeshire, through a merger and the merged trusts applying to become an NHS

foundation trust. If there is one obvious way through the difficulties, that is probably it. With respect to the hon. Gentleman, his amendments Nos. 103 and 106, which would allow primary care trusts, or groups of trusts, to apply for NHS foundation trust status were of more substance.

The right hon. Member for North-West Hampshire was, as always, correct in his intervention on the hon. Member for Oxford, West and Abingdon. The model set out in the Bill was designed with provider organisations in mind. The Bill requires that the principle purpose of any NHS foundation trust is the provision of NHS services. That is true in clause 1(1), to which he referred, and in clauses 5(2)(a) and 14(2). As the Secretary of State made it clear on Second Reading, we have no objection in principle to applying democratic or foundation principles to primary care trusts. However, we want to do that carefully at the right time. We have started the process at the logical place, which is, as my hon. Friend the Member for West Bromwich, West has made repeatedly clear in effective interventions, with NHS hospitals.

PCTs are new, embryonic organisations that are not yet ready to go through that stage of change. If and when we decide that that should be so, we will need to bring forward specific, separate legislation. The right hon. Member for North-West Hampshire has bemoaned the perpetual revolution in the NHS—the constant organisational change. I say to him that about half of the primary care trusts in England are barely a year old. It is fair to give them time to develop and mature.

Primary care trusts could not become NHS trusts for the reasons I have set out. That does not, however, rule out consideration on a case-by-case basis of whether it would make sense for a provider arm, or an element of the primary care trust, to establish partnership arrangements with an NHS foundation trust. For example, it might even be possible under clauses 4 and 5—ahead of the application process—for a service reconfiguration to be planned with that end in mind. The provider elements of a primary care trust might merge with the acute trust and the new acute trust would apply to the independent regulator for foundation trust status.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

The Minister was speaking very quickly when he listed the areas in which he felt that an existing primary care trust that provides and commissions would not qualify. He referred to clause 1, but I do not think that it is contained in that clause. I may be wrong. There may be another relevant area. However, the primary or predominant purpose of the provider has to be provision, rather than commissioning. Although I understand that the Government and the Secretary of State would resist a PCT applying, I am not clear whether it would need additional legislation. When the Secretary of State feels that the time is right, given the pressure on parliamentary time, could not the Secretary of State say that clause 5 applies to a PCT, at least in terms of its provider function?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

With respect, the hon. Gentleman may not have heard me. Perhaps I was speaking too quickly. I apologise to the hon. Member for Oxford,

West and Abingdon and to the Hansard reporters, who always have a job of work to do when I speak.

The point I am trying to make is this. Under the terms of the Bill—clauses 1, 5 and 14—the principle purpose of the applicant for foundation trust status has to be the provision of NHS services. That could not be said to be the principle purpose of a primary care trust. The hon. Gentleman should look at clause 14 if he has any doubts about that. He might also consider clause 1(1), which makes it clear that the provision of NHS services is the principle purpose of the NHS foundation trust.

Primary care trusts, which have a commissioning role and some elements of the provider responsibility, do not meet that condition. Under the Bill as currently drafted, primary care trusts in commissioning roles would not be eligible to apply for foundation trust status. I am trying to make it clear to the Committee that the provider elements of a primary care trust could, under clauses 4 or 5—depending on how the application proceeded—be eligible to form part of a joint application with an NHS acute trust to become an NHS foundation trust. That is entirely sensible.

This has been an important debate. The hon. Member for South Cambridgeshire has hit on an important issue of principle. As my right hon. Friend the Secretary of State has made clear, we have no objection to the concept of applying foundation trust status to primary care trusts. The issue is when, not whether. The question is whether the Bill is the right model for the Government structure to use. Those are issues that still need to be resolved.

It does not make sense at the present stage in the development of primary care trusts to passport them into the legislation in the way that the hon. Member for South Cambridgeshire is suggesting. There is a way through his concern about joint applications from several acute trusts. Perhaps it is not the best and most streamlined piece of engineering. We will have a look at it to see if there is any way in which it can be improved.

On balance, many Labour members would take with a pinch of salt the Opposition's new-found passion for democratising the NHS, which has now manifested itself in the desire to find a way of democratising primary care trusts. I do not recall such a desire appearing in any official policy document produced by the Conservative party in all the time that I have been a Health Minister. I readily acknowledge that I do not trawl the internet for that sort of material. Perhaps when the hon. Gentleman responds, he will point out to me the document that identifies the new-found passion for democratising the NHS, and we look forward to that.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury 5:00 pm, 20th May 2003

I am grateful to the Minister for giving way on that point, because I should be fascinated to know where in the 2001 Labour manifesto foundation hospitals were mentioned.

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I can point out to the hon. Gentleman that there are several parts of my party's manifesto that I read—although I am not sure that he did—

where we talked about increasing the representation of the public on the boards of NHS trusts. That is what the Bill will do. Obviously, the hon. Gentleman has had some sort of episode, because he usually follows our procedures very carefully.

It has been a longer debate than I should have preferred, although many important issues have been raised. I have an open mind on the point that my hon. Friend the Member for Birmingham, Hall Green has raised, and I share the general direction of travel in which the hon. Member for South Cambridgeshire wants us to proceed. The question is what vehicle, what procedure and what legal platform we choose. It does not make sense at the present time to go down the road that the hon. Gentleman is inviting the Committee to take.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I am surprised that the Minister says that an hour's debate on this subject is excessive. It has been an important debate and we have given it the minimum time to do it justice. The Minister's response raised further issues that we might have gone on to discuss further, but we have not. First, I am pleased that the Minister took the amendments in the order that he did, and he was probably right to do so. I am grateful to him for his willingness to consider carefully amendments Nos. 201 and 202 on whether trusts can successfully combine, which is a practical issue. We do not want to get bogged down in the question of whether we press an amendment to a Division.

I am not persuaded, by virtue of my thinking about the circumstances of Cambridgeshire, that the idea that there should be a service reconfiguration in advance, which then leads to a foundation trust application, is the right way of proceeding. One might well presume that the Addenbrooke's trust would therefore hold back on a first wave application to be able to think about service configuration. In fact, it works the other way round. As a foundation trust, it needs to think about the way in which it can apply itself to creating additional capacity. It does not follow that that will be on the Addenbrooke's site or that it will be offered by the Addenbrooke's trust; it might better be offered by other acute trusts, such as Hinchingbrooke or West Suffolk.

The alliance of their freedom to borrow and their ability to create additional capacity with the ability to offer those services in smaller acute trusts, more local community hospitals and acute trusts is the complete opposite of the point that the Minister was making. It is not about centralisation in super-trusts; it is about the additional capacity not necessarily being provided by the super-trust, but by more local and accessible acute trusts working in combination.

The question is whether the creation of one foundation trust on the part of the dominant provider makes more difficult the subsequent process of configuration of services when we are working through two different systems. We must work that out. I asked about the mechanism by which other trusts could combine together subsequently in a pre-existing NHS foundation trust. The Minister may like to consider that as a means of dealing with that issue. I

will not pursue that matter now, but I hope that we will return to it later. It is an important, practical way of assisting the first wave trusts that are thinking creatively and innovatively about the way in which they reconfigure their services.

Commissioning by primary care trusts will not be subject to the processes of local accountability that the Government are setting up for NHS providers in the short, or even medium term. I think that is illogical, and that the matter is being approached in the wrong way. That argument has been established. It is curious, however, that, at the same time, the Minister argues under clause 14 that the fact that the primary purpose of a trust must be to provide goods and services for the NHS precludes primary care trusts.

The point of a primary care trust is to provide goods and services. In some respects, it does that directly; in others, it does so through the process of commissioning. I cannot find a definition of ''provision'' that precludes commissioning services from being part of a provider process in the Bill, or in other legislation.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I have worked out what the Minister meant, and I accept his point. I take a risk by saying that, as I am sure he would have put it better.

Clause 14 implies that only an NHS trust could authorise the provision of services. If a PCT was a foundation trust, it could not be authorised under the legislation to commission services. Where would the commissioning go? As there is no legislative provision for the PCTs to drop their commissioning function, there is no way for them to be foundation trusts under clause 14. That is how I understand the matter, and that is what the Minister may have said quickly.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

We will come back to that matter, not least because Government amendment No. 148 is designed to make clearer a matter that the Minister has already told us is clear under clause 14. We will come back to that later.

The Minister is arguing that we should not allow primary care trusts to become foundation trusts because the Bill precludes it. That seems to be an argument for coming back to the matter at a later stage with the series of consequential amendments that will allow that to happen. The right hon. Gentleman's statement that new primary legislation would be required in order for primary care trusts to become NHS foundation trusts in their commissioning role makes it all the more necessary that we return to that matter with the intention of creating the legislative vehicle that will allow that to happen, even if there are some transitions and delays before that occurs.

I am surprised that the Minister has not referred to the recommendation from the Select Committee that consideration be given to establishing an additional pilot scheme that would allow all the trusts in a particular area to become foundation trusts. As I mentioned in my opening remarks, representatives of the King's Fund have discussed that matter, and the Select Committee has endorsed it. I interpret that to be a whole health economy approach, with the PCTs and providers working together. If the Select Committee endorsed that, I am surprised that the Minister has

precluded it already, rather than noting that by amending the legislation we could create the mechanism that would allow such a pilot to take place.

If all trusts are to become foundation trusts in the long run, it might be sensible to have a pilot that looks at the consequences of how that happens in a given area at an early stage. That could be in a place like Cambridgeshire, where all the trusts in question, the PCTs, the tertiary hospital and the secondary hospital—a teaching hospital—have high levels of clinical governance. They have the capacity to work together, but the question is how should they do that? Let us work out those problems in practice. The Minister is not giving himself the opportunity to do that.

Amendment No. 103 would give primary care trusts the explicit opportunity to become NHS foundation trusts. I gather from my hon. Friends on the Opposition Front Bench and my right hon. Friend the Member for North-West Hampshire that there is support for that argument. I think that we might attract moral support from elsewhere, not least because of the way in which many hon. Members expressed themselves on Second Reading and before. Regardless of whether we have anything more than moral support, I shall certainly press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 13.

Division number 7 Adults Abused in Childhood — Clause 4 - Application by NHS trusts

Aye: 7 MPs

No: 13 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I beg to move amendment No. 75, in

clause 4, page 2, line 9, leave out from 'trust' to end of line 10.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

With this it will be convenient to discuss the following amendments: No. 135, in

clause 5, page 2, line 32, leave out from 'trust' to end of line 33.

No. 105, in

clause 6, page 3, line 23, at end insert—

'(aa) the application is not objected to by the Secretary of State,'.

No. 246, in

clause 6, page 3, line 29, after 'provide', insert—

'(dd) the application is endorsed by the relevant local authorities, primary care trusts, patients' forums and representatives from local staff side organisations;'.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I shall endeavour to be brief, because I know that we need to move things along. Amendment No. 75 and the consequential amendment No. 135 refer to a matter on which there is a

fundamental difference of principle between the Opposition and the Government. The amendments would delete the words

''if the application is supported by the Secretary of State''

in clauses 4 and 5.

The issue that we are addressing is simple; the inclusion of those two proposals in the Bill provides clear evidence of the Government's intention to maintain some hold on the reins of decision-making in the NHS. We believe that that is wrong. The powers are wholly unnecessary, and we would like them to be removed.

We must ask the Minister a basic question about the freedom to apply. Why should not the regulator simply decide whether an NHS trust's application to become an NHS foundation trust is appropriate? Why is it necessary to duplicate the application process, and why must the trust first make a case to the Secretary of State and win his approval? Only then can it formally put forward the application to the regulator. Why can we not simply make it the decision of the regulator, possibly to agreed criteria—that is, if the regulator is genuinely independent of Government and can take a rational independent view of the rights and wrongs, uninfluenced by the Department of Health?

How will an application secure the support of the Secretary of State? Will a full application go to the Secretary of State? I cannot believe that the chief executive of a local NHS trust will simply pick up the phone to the Secretary of State and say, ''Hey, we're going to apply,'' and the Secretary of State will say, ''That's fine.'' Clearly, the trust will have put forward a detailed case to the Department. How will that happen? What deadline will the Secretary of State set for it to take place? Will a trust have to go through a timetable process to secure consent? What conditions will the Department set to permit an application to go forward to the Secretary of State? What criteria will the Secretary of State use to judge whether an application can go to the regulator? Will it be simply a matter of star ratings?

I hope the Minister will clarify the statement that his Department made 10 days ago to The Times. It acknowledged that the star rating system may not in future be the criteria used for judging whether an application for foundation status is appropriate because that system allows three-star hospitals to be only a proportion of NHS trusts. It is therefore impossible to extend the number of foundation trusts beyond a certain proportion of NHS trusts without diluting that criterion and accepting that one or two-star trusts should be also be allowed to apply.

On the speed of decision making, how quickly will decisions be turned round? Will the Department's consideration of the exercise prolong an application for a significant time? What assessment process will the Department use to decide whether an application is suitable to go forward to the regulator? Does the Secretary of State envisage the regulator routinely having the power to overrule him if he suggests that an application is suitable? Will the regulator really say no it is not?

What will be the consequences to a trust of rejection by the politicians, for example if an application from a hospital is turned down by the Department? What consideration have Ministers given to the impact on local management and staff of a veto, not by the regulator, who is the decision maker, but by the politicians?

There is a similar effect in the second condition of application permissible in the measure. Clause 5(1) must rank as one of the most intriguing in the Bill: it allows organisations that are not NHS trusts to come forward and establish themselves as NHS foundation trusts. What does the Government envisage will happen as a result of the measure? Are they looking to the private sector to establish organisations that would become freestanding foundation trusts? Would BUPA, for example, float off part of its business and turn it into an NHS foundation trust? Might there be the equivalent of management buy-outs in the national health service, with groups of doctors and staff coming together to establish their own NHS foundation trusts, perhaps securing assets from existing hospitals?

These matters will be factors in the Secretary of State's consideration of an application under clause 5(1), but why cannot that decision be assigned to the regulator? Why is a political process necessary? Why is it necessary to expose people who will be setting up foundation trusts under the measure to a politically based, rather than a merit-based, decision-making process through the regulator system? Is clause 5(1) intended as a screening-out mechanism for applicants that politicians deem to be unsuitable for foundation trust status?

There is no reason for politicians to remain as part of a process when there is an independent regulator who is supposed to be the arbiter of the foundation hospital sector. We fundamentally disagree with the Government's inclusion of the two proposals and we will vote against them.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon 5:15 pm, 20th May 2003

I rise to support amendment No. 75 for the reasons given by the hon. Member for Epsom and Ewell (Chris Grayling). I subscribe to almost all of what he said about this flawed provision and agree that there should not be a political process. I add only that it is nonsense that the Secretary of State would use the star rating system, as it is not clinically based. When providers do well against the star rating system the Government have not adduced a shred of evidence to show that patient care is better or that patient outcomes have improved in clinical terms.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

In the context of the two amendments tabled by my hon. Friends, there would be implications for Oxford's Nuffield hospital. Does the hon. Gentleman support the hospital's application for foundation status?

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

Order. That is not relevant to the amendment.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I fear that I am in error for not having provided the hon. Gentleman with the document that I promised him. It awaits him, and he will find out exactly what our view is. I have been reading the

Conservative document, entitled ''Setting the NHS Free'', which is somewhat thinner. As the Minister said, it does not really address any of the policy issues.

To return to my point, part of the problem is that politicians base decisions about the NHS on political criteria. The use of such criteria does not have a good record in terms of the patient's interest.

My other point, which the hon. Member for Epsom and Ewell touched on in introducing the amendments, is that the Government claim that the creation of foundation trusts is a decentralising measure. However, many people have questioned that. The Government have also claimed that their proposals are all about independence, but trusts must go through a centralising process to achieve foundation status. The achievement of so-called independent status is part of a dependent process, because trusts will even need to ask the Secretary of State for permission to apply. That reveals the Government's motives. They pretend to be decentralising and to be giving independence, but they are centralising even the decision to introduce what they describe as decentralisation, and making dependent what they describe as the creation of independence. I hope that those who put their names to the amendment will press it to a vote, because it deals with a key flaw in the Government's proposals for foundation hospitals.

There are two other amendments in the group. I shall leave the hon. Member for South Cambridgeshire to introduce amendment No. 105, which is in his name. Amendment No. 246, which is in my name and those of my hon. Friends the Members for Cheadle and for Sutton and Cheam, is important. It relates to clause 6, subsection (1) of which states:

''The regulator may give an authorisation under this section . . . if he is satisfied as to the following matters'',

Subsection (2) lists those matters, and the amendment would add the extra criterion that

''the application is endorsed by the relevant local authorities, primary care trusts, patients' forums and representatives from local staff side organisations''.

I am prepared to negotiate about the list—[Hon. Members: ''Oh!''] I think that that is extremely generous.

Chris Grayling rose—

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

If the hon. Gentleman is rising to applaud my generosity, I shall certainly give way.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

It may seem churlish to draw attention to this, but the hon. Gentleman is endorsing giving politicians both less and more of a role in the decision-making process. That might appear slightly contradictory, given that he is referring to the same set of amendments.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I think that the hon. Gentleman knows the answer, although I may have been imprecise and not said that my remarks were about centralising politicians who are not accountable to local people. If politicians acting locally were not accountable for their decisions, we would be wrong to include overview and scrutiny committees. However, the Government have introduced the committees, presumably with a view to them overseeing and scrutinising changes in the health

service. It is astonishing that the Government seem to think that applications can be made regardless of those committees' views or of the fact that they opt for outright rejection. The Government say that the applicant is required, if regulations require it, to consult prescribed persons. I have faith that Ministers will produce regulations that require consultation. Clause 6, subsection (4) states:

''If regulations require the applicant to consult prescribed persons about the application, the regulator may not give an authorisation unless he is satisfied that the applicant has complied with the regulations.''

Those consulted do not have to agree with the proposal; it is simply the case that the applicant must comply with the regulations. Those of us who know about changes in provision—and the way in which community health councils have been treated—often find that consultation ends with strong opposition over a matter, but the proposal of the local managers is to go ahead regardless. The matter ends up—regrettably, as far as the Government is concerned—on the desk of the Secretary of State, who must attempt to resolve the problem. However, the clause does not provide for even that fall-back measure, unsatisfactory though it is, being a centralised decision. There is no process for patient forums, particularly primary care trust patient forums, to be consulted and to give approval. It is for that reason that amendment No. 246—[Interruption.]

I hear chattering from the hon. Member for Ealing, North (Mr. Pound). I am sure that his community health council—while it survives—would expect him to support an amendment such as this, although he is more than capable of speaking for himself. Perhaps he will be dragooned into voting against the amendment.

I ask the Government what provision will be made for meaningful local consultation with overview and scrutiny committees, and with primary care trust patient forums. What provision is there for support for foundation status and mutualisation from representatives of the staff? It is quite possible under the arrangements for there to be objections to the proposal from the overwhelming majority of staff employed in a trust, only for them to be dragooned—[Interruption.] Dragooning is what the Government do. The hon. Members for Ealing, North and for Poplar and Canning Town (Jim Fitzpatrick) know a thing or two about dragooning.

I regret that we do not have an opportunity to vote on amendment No. 246 at present. We will have to wait for that opportunity. I hope that Ministers will set out in clear terms what provision there is for meaningful local consultation. There should be a local democratic veto over a centralising proposal on change of status.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 5:28 pm, 20th May 2003

Amendment No. 105 is in the group for debate. If amendment No. 75 were to be agreed, there would be a curious situation in which the only person who would not have any influence over whether an application went forward would be the Secretary of State. Amendment No. 105 would ensure that, at a later point, the Secretary of State could object if he wished.

Sitting suspended for a Division in the House.

[Continued in column 277]