Clause 79

Health and Social Care Bill – in a Public Bill Committee at 3:30 pm on 17th January 2008.

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Fees

Photo of Stephen O'Brien Stephen O'Brien Shadow Minister (Health)

I beg to move amendment No. 46, in clause 79, page 38, line 33, leave out ‘specified factors’ and insert ‘factors specified by regulations’.

As we gallop towards schedule 5, we just have to rein in a touch on amendment No. 46. Subsection (1) of the clause enables the commission from time to time to make provisions for fees to be paid in various circumstances. Our amendment would give Parliament sight of the factors on which the amount of a fee would be determined. There is a wider principle about fees and whether Parliament should vote not only on the fee-making powers, but the level of the fees charged. One recent example of the potential impact of such a power comes from the palliative care sector.

The Government have set the Healthcare Commission, along with all other regulators in England, a requirement to recover the full costs of regulation from fees by the 2008-09 financial year. In the past, fees for hospices have been at discounted rates. In 2006-07, the Healthcare Commission froze fees for regulating hospices and type 3 hyperbaric chambers that are used inter alia to combat the side effects of some cancer treatments, and by voluntary multiple sclerosis treatment centres for MS sufferers. From April 2007, it reduced fees by 22 per cent. for hyperbaric chambers and slowed down significantly the planned phasing out of existing subsidies for hospices, with most fees frozen for the second year running.

The Healthcare Commission is working from a principle that the fees should reflect the actual costs of regulation, not what establishments can afford to pay. Fees are therefore highest for those establishments that are unable to provide assurance of standards and need frequent check-ups, and lowest for those that need the least intervention. The commission notes that it consulted on that approach and received strong support, including from voluntary organisations. However, in its briefing on the subject, it says that it believes

“that if a special case were to be made for voluntary organisations’ fees, it would be for democratic Government—not the regulator—to decide that public funds or other establishments’ fees should be used to subsidise them”.

It continues to say, however, that it acknowledges

“that voluntary organisations and small businesses feel the impact of a fixed overhead such as regulatory fees more acutely than large businesses”.

I am sure that we all say “Hear, hear” to that. It goes on:

“Our fees schemes take this into account”.

Under the planned increases for 2007-08, the Healthcare Commission is proposing charge increases for hospices with four or more beds, involving a frozen fee set at £2,376. A hospice with, for example, three  in-patient beds, would see the burden of costs rise from the current total of £907—the registration fee plus the flat rate for inspection costs—to £2,213. That is far more than double, encompassing the doubling of the registration fees for small hospices, plus the new increased flat-rate inspection fee and the removal of the exemption from the charge per bed for hospices with fewer than four beds. Therefore, the impact on smaller hospices is disproportionate and seems to run counter to the commission’s stated goal of finding a balance between full cost recovery and affordability for voluntary organisations.

Furthermore, in response to a written parliamentary question asked by my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) in February last year, the Chief Secretary to the Treasury, who was then a Health Minister, said:

“We have made no assessments in connection with the regulatory fees hospices pay the Healthcare Commission.”—[Official Report, 28 February 2007; Vol. 457, c. 1425W.]

In my view, that suggests a disturbing lack of ministerial accountability and parliamentary control in the fee-charging arrangements. It is not that it is coarse for us to fix the charge of the precise fees, but the concept of trying to minimise the burden on the smaller organisations, particularly the voluntary organisations that are doing such valuable work, and also of trying to establish a fairer arrangement, rather than a financially driven arrangement, seems to be an area where we as parliamentarians can set the appropriate parameters.

Therefore, I hope that the Minister will address the following questions. First, can he confirm that he does not expect the fees to deviate wildly from those currently levied by the regulatory bodies? Secondly, can he confirm the unfortunate increase in the regulatory burden on smaller hospices? Thirdly, what assessment has he made of the Healthcare Commission’s contention that it is for democratic Government to make the case for public funds or other establishments’ fees being used to subsidise voluntary organisations’ fees? Finally, where would he see the power of Parliament in relation to that contention?

I hope that that is a clear outline of the concern that arises as a result of clause 79. The amendment that we have tabled is to enable the Minister to give some insight and also to ensure that those who have to deal with this Bill have the platform of fairness as well as that of practicality going forward.

Photo of Ben Bradshaw Ben Bradshaw Minister of State (Regional Affairs) (South West), The Minister of State, Department of Health 3:45 pm, 17th January 2008

I accept that it is important that there are safeguards in place to ensure that the fee levels set are reasonable and proportionate; I also accept that that is the aim of this amendment. However, we believe that there are already a number of safeguards in place in the clause. For example, although the commission will be able to choose what approach it takes to charging fees, which I think is absolutely right—we are keen to ensure that the commission remains independent—those fees will need to be approved by the Secretary of State. The commission will also have to consult before making provision about fees. The Secretary of State may also make regulations to provide for matters that the commission should take  into account when setting the fees. Finally, the clause allows the Secretary of State to create regulations making alternative provision about fees to replace that made by the commission in the unlikely scenario that we think that the commission has exercised, or is proposing to exercise, its power inappropriately. Given all those safeguards, I hope that the hon. Gentleman may acknowledge that the amendment is not necessary.

Photo of Stephen O'Brien Stephen O'Brien Shadow Minister (Health)

I am not going to detain the Committee by asking us to divide, because I think that this exchange itself has been useful. If there are any further points to be made about the clause that can help to clarify matters for those who must deal with it in the future, I am sure that that is something that we can come back to on Report or in another place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 79 ordered to stand part of the Bill.

Clauses 80 to 84 ordered to stand part of the Bill.