With this it will be convenient to discuss the following amendments:
No. 215, in schedule 6, page 132, line 13, leave out ‘Secretary of State’ and insert ‘OHPA’.
No. 218, in schedule 6, page 133, line 16, leave out ‘Secretary of State’ and insert ‘OHPA’.
No. 220, in schedule 6, page 133, line 19, leave out ‘Secretary of State’ and insert ‘OHPA’.
No. 221, in schedule 6, page 133, line 23, leave out ‘such period’ and insert ‘six months’.
No. 222, in schedule 6, page 133, line 24, leave out from ‘relate’ to end of line.
Welcome to another day of our deliberations; it continues to be a pleasure to serve under your chairmanship, Mr. Hood. I believe that we have copies of the Official Report of last Tuesday, when we debated the Ways and Means resolution on the Floor of the House, which relates to this group of amendments. Those hon. Members who are anxious to see the full detail of the arguments should apprise themselves of the record, which will save some time. The amendments seek to secure the operational independence of the office of the health professions adjudicator. As I speak, copies of the Official Report are arriving, and I refer hon. Members to column 796 of the Official Report, 15 January 2008, when we dealt with the Health and Social Care Bill Ways and Means resolution on the Floor of the House.
For the amendments to be complete and effective, the Committee should bear in mind that an amendment removing the Secretary of State’s responsibility for setting levels of remuneration and allowances for the chair and members of the OHPA is also required. With that caveat at the outset, amendment No. 213 would give the OHPA, rather than the Secretary of State, the power to determine whether, how and to what extent it pays or makes provision for the payment of pensions, allowances and gratuities to current or former chairs, or members of the OHPA.
Amendment No. 215 would allow the OHPA to determine the compensation that it would need to award. If the Minister were to smile upon the principle of the amendments—I hope that he has a sunny disposition this morning—an amendment would be needed to line 8 to give the OHPA the power to determine when it is right for a person ceasing to hold office as the chair of the OHPA to receive such compensation.
Amendments Nos. 218 and 220 would remove the power of the Secretary of State to direct the form in which the OHPA keeps its accounts and prepares its annual accounts. I note that amendments Nos. 217 and 219 are grouped for debate immediately after this group. They have a bearing here, and if the Chairman would like me briefly to mention them now, I will do so.
With this it will be convenient to discuss the following amendments:
No. 217, in schedule 6, page 133, line 16, after ‘keep’, insert ‘auditable’.
No. 219, in schedule 6, page 133, line 20, after second ‘the’, insert ‘auditable’.
I am grateful. As my points on amendments Nos. 217 and 219 are brief, I will tack them on to my comments on the larger group of amendments under discussion. Amendments Nos. 217 and 219 are consequent to the removal of the Secretary of State’s power over the form of the accounts—I can see why they were in a separate group, as their effect might depend on a vote. I am extraordinarily hopeful that the Minister will smile upon the amendments and therefore this grouping makes sense. The amendments are to ensure that the OHPA keeps auditable accounts.
Amendment No. 221 would make the OHPA produce copies of its annual report within six months of the end of the year. There seems no reason for the period not to be enshrined here, other than to recognise that if the OHPA were unable, for good reason, to produce accounts within the specified period, its remedy would be, first, the force of law, and secondly, applying to have the publication of accounts postponed, although only for a short period. I cannot see why it is not appropriate to put a realistic time on the face of the Bill, as it would rightly reduce the Secretary of State’s power in the area and provide for clearer expectations. Amendment No. 222 would remove the power and discretion of the Secretary of State in the matter.
The General Medical Council is currently independent from Government, and the Government are seeking to remove its adjudication function. While we have discussed whether that is necessary for any reason other than public perception, the amendments deal with a different issue. If the OHPA is to be established, it should be on similar terms to the GMC in order to give it the confidence of the profession and the public. As the Bill is drafted, while the OHPA is independent of Government in, for example, regulating its own procedure—delineated in paragraph 11 of schedule 6—and while those appointments which it does not make itself are overseen by the Privy Council, it should be noted that in terms of its finances it has a duty to report to the Secretary of State. The Committee will remember that in her oral evidence on 8 January 2008, Official Report, column 38, Lady Justice Smith noted that she was “sympathetic” to the GMC’s point.
This measure makes even less sense given that the professions, through fees levied on the GMC and the General Optical Council, will foot the Bill, yet they will have no power over the operational effectiveness and value for money delivered by the OHPA. It is unfortunate that other than my hon. Friends on the Conservative Benches, who, I am pleased to say, were all present, the Minister and the Government Whip, there were no members of the Committee present for the debate on the Floor of the House last Tuesday on the Ways and Means resolution that made this levy possible. I note that the Liberal Democrat spokesman on health, who is not a member of this Committee, was there. I hope that the Committee has had a chance to catch up with the proceedings that took place on that occasion, and I hope that after that debate and these questions the Minister will reflect that the amendments are both appropriate and timely. We need to ensure that we underpin independence and put motivations and incentives in place for the OHPA not only to wish to take responsibility, but to have the chance to deliver on its responsibility in running an independent, but appropriate, organisation.
In addressing the amendments, I hope that the Minister will make it clear why the Bill states that this body should report to the Secretary of State, and I hope that he will also take the chance to explain the revelation made by the GMC during the oral evidence, that it was only in late November last year that the OHPA’s lack of independence was suggested by the Department in negotiations with the GMC.
I will be brief in the hope that I have a voice left at the end of the day.
I understand the spirit in which amendments Nos. 213 to 215 and 221 to 222 have been tabled, and concerns have been raised about the independence of the OHPA from the Secretary of State. I have slightly less sympathy with amendments Nos. 218 and 220, which deal with the form that the accounts will be kept in. Presumably, some public money is involved in the organisation, and it is entirely right for the Government to have some direction over the clarity with which accounts are presented. I realise that amendments Nos. 217 and 219 were tabled to ensure the accounts will be auditable, which was an attempt to achieve clarity in another way, but it is right that, through the Secretary of State, Parliament has a chance to scrutinise the matter.
As the subject will probably take up much of this morning’s proceedings, as well as addressing the points raised by the amendments tabled by the hon. Member for Eddisbury, I want to make a few general remarks about the independence of the OHPA, which is a theme that runs though this morning’s clauses, schedules and amendments.
It is important that the Committee remembers that the status of such organisations is not defined by their name or definition, but by the powers given to them by Parliament. As a result of the powers that we intend to give the OHPA in the Bill, it is likely that the OHPA will be defined by the Office for National Statistics as an executive non-departmental public body, which is a type of arm’s length body. The GMC’s powers and the proposed powers for the OHPA are similar in many respects—for example, as the hon. Gentleman has acknowledged, both bodies have the power to make rules that are then subject to approval by Privy Council negative resolution procedure.
What does that mean in terms of independence? An ENDPB does not have to refer any of its professional judgments back to the sponsoring Department; it does not have its professional decisions overturned by the Department or Ministers; it does not have to explain to the Department why it has made any professional decision; and it does not have to give the Department details of its professional decisions. The key aspect of the independence of the OHPA is its panels and their independence of judgment. There is total independence in the panels’ professional decisions, and Ministers will have no power to interfere in any adjudication decision made by them.
As the hon. Member for Romsey has mentioned, however, the OHPA is a public body that will be set up with public money. Although it will mostly be funded by the professionals who use it, it is likely to receive some ongoing public money, which means that clear lines of accountability to Ministers and Parliament are important. The Committee and the GMC have expressed concerns, which were raised in the debate on the Ways and Means resolution, about having proper controls over the OHPA’s costs. That is precisely why we expect the OHPA to be an ENDPB, which is a tried and tested model that will allow the OHPA complete independence from Government in every aspect of the adjudication function and the Secretary of State and the Treasury to ensure that the fees charged are reasonable.
We could refer to plenty of models of successfully operating ENDPBs—for example, the Independent Police Complaints Commission and the Financial Services Authority. In the area of health, other examples include Monitor, the Appointments Commission, the Council for Healthcare Regulatory Excellence and the Healthcare Commission itself. All those bodies have demonstrated their independence from sponsoring Departments in decision-making processes.
The Secretary of State will have the power to make directions in a limited sphere and only with regard to payments and loans made to the OHPA by the Secretary of State. Let me state this clearly because it is one of the assurances that the leaders of the GMC sought: that is the only power of direction in the Bill that the Secretary of State has with regards to the OHPA; they will not be given a general power of direction, and the power to direct in schedule 6 is strictly limited to making payments and loans to the OHPA. As recently as last week, I had detailed discussions with the leaders of the GMC, who were reassured by that. The hon. Member for Eddisbury has referred to Lady Justice Smith’s support for the expressions of concern about independence, but I recall that when we asked what alternative Lady Justice Smith favoured, she did not suggest one, which was also true of the GMC in its evidence.
On appointments, GMC lay members are appointed by the Privy Council, although in practice, that is delegated to the Appointments Commission. As recommended in our White Paper, “Trust, Assurance and Safety”, that is being altered, so that all members of the GMC are appointed by the Privy Council. The Bill provides for the Privy Council to appoint the chair, the non-executive members and the first executive members, and it is expected that the Privy Council will make use of the Appointments Commission for those positions. In that respect, there will be no difference between the appointment of GMC members and the OHPA members. I hope that that is the reassurance that hon. Members are seeking on the independence of the appointments system.
The amendments seek to remove the power of the Secretary of State to make determinations on remuneration and allowances for chairs and members, pensions and the form of the OHPA’s accounts. For the reasons that I have just described, it is important that the Secretary of State has those powers. In the debate on the Ways and Means resolution, Opposition Members emphasised the importance of proper financial oversight, and one of the main concerns at the GMC was that the level of fees would not simply escalate.
Amendments Nos. 221 and 222 specify the time scale with which the accounts should be laid, but we do not think that the independence of the OHPA should be fettered in that regard. Amendments Nos. 217 and 219 concern auditability. We recognise that there needs to be proper financial propriety and accountability, but the accounts of public bodies are auditable simply by the virtue of their existence. In addition, one of the mechanisms by which that is guaranteed by the Bill is the role of the Comptroller and Auditor General in carrying out an audit of the annual accounts. That means that all the OHPA’s financial affairs will be subject to audit, and nothing will be exempt from that requirement. We do not think that the amendment is necessary, so I ask the hon. Gentleman to withdraw it.
It is interesting to have the report on the further discussions that the Minister had with the GMC. I am glad that he had them, not least in the light of the comments made by Lady Justice Smith during the oral evidence session. I fully accept his general statement of principle that the name of a body does not describe whether it is independent—it is the powers granted to it, and the accountabilities and authorities that are contained within its strategic and operational procedures. I also accept that nobody is arguing for an alternative model and that the issue concerns the current framework.
Once one accepts that the OHPA will come into existence and that it will be carved out of the current GMC, it becomes important as a matter of principle to decide, having established that model, the expectations of its true ability to be unfettered. Regardless of how unfettered such a body might be, if public money is used, there must be accountability, not least towards moneys, and the Liberal Democrat spokesman addressed two of the amendments on that basis.
I am disappointed that the Minister has decided that amendment No. 221, which would make the OHPA produce copies of its annual accounts within six months of the year end, is over-fettering. That seems to be the one area where one should lay out the expectations on being accountable for public money and put an expectation of time upon that. In many ways, that gives the cover for all the rest to be much more independent, because one would have an approximate time period between the operations and the accountability by ensuring that accounts were produced and presented within six months, which is a really tight time frame in accounting terms.
I am therefore not persuaded that the Minister has demonstrated that there is a true prescription for independence from Government. We should not underestimate how much the GMC has delivered on success. That is a different approach with the OHPA than has hitherto been the case, and it has come about not because the GMC was regarded as having failed, but to retain the best parts of what it has been able to deliver in this area, including independence from Government. There is an opportunity to maintain trust with the public and to retain the confidence of the profession. It is vital that we have that complementariness in the process. On that basis, I will put the amendments to the test, including amendments Nos. 217 and 219 if that is acceptable, by seeking to divide the Committee on amendment No. 213.
I beg to move amendment No. 216, in schedule 6, page 132, leave out lines 19 to 22.
This is a probing amendment, so I shall not trouble the Committee with a Division. It is useful to note that members of the OHPA can be members of the civil service pension scheme, which further highlights the closeness of the OHPA to the Government. I am also concerned that the Government are voting yet another liability on the civil service pension scheme. As the Committee will be aware, the Chief Secretary to the Treasury is still too embarrassed to reveal to the House the state’s liability for public sector pensions. The estimate is a year overdue, but actuarial firm Watson Wyatt estimates that the liability today could be as high as £960 billion. Given the size of the liability, I am concerned that the Bill puts no limit on the sum that the Minister for the Civil Service might determine.
As I noted in the debate on the Ways and Means resolution, the OHPA is effectively a tax-generating body through the combination of its fee structure and its dependence on the Government. In it, we see doctors, opticians and associated professionals funding a Government body directly. Not only are there no effective checks and balances on how the OHPA spends its money—the Committee is effectively examining a blank cheque that the Government are writing but which the professionals will have to pick up—but what is there to prevent the Minister for the Civil Service from squeezing extra money out of the OHPA, and consequently doctors, to pour into the public sector pensions black hole?
As I am sure the hon. Gentleman is aware, it is custom and practice for executive non-departmental public bodies to be able to join the civil service pension scheme, which does not mean that their employees become civil servants. The problem with the amendment is that it removes the requirement for the OHPA to make payments to the Minister for the Civil Service, although it would be able to receive benefits from the civil service pension scheme, which it could join by virtue of paragraph 15 without being required to make a payment into it. In our view, the amendment is flawed, and it is perfectly normal for people who work for ENDPBs to be eligible to join the civil service pension scheme.
Amendment No. 223 seeks to include the regulatory bodies in the list of persons to whom the OHPA must send copies of its annual accounts. Amendment No. 224 gives the regulatory bodies, in addition to the Privy Council, the power to direct the OHPA as to matters dealt with in the report. The amendments do not establish what we are truly seeking—effective control of the operating costs of the OHPA by the bodies, and ultimately the professions, which fund it. It would be wrong of the Committee to propose a cap on OHPA spending, because it must have the resources to adjudicate fitness-to-practise cases in a timely and effective manner. Having said that, there need to be more effective checks and balances to potential profligacy than the Bill currently provides. As the Committee knows, full GMC registration on the medical register will rise to £390 a year with effect from April 2008, having been frozen at £290 per annum since 2002, and GOC registration stands at £169 pounds per annum. Those costs will presumably go up again given the creation of the OHPA, because while the adjudication costs should remain substantially the same, two bodies invariably cost more than one to run. That is not rocket science, and it would be helpful for the Minister to indicate by what amount he expects the fees to escalate.
During the oral evidence-taking session, Sir Graeme Catto noted that while, in his opinion, the GMC did not think that the move to the civil standard of proof would have, in terms of numbers
“any significant effect at the serious end of the spectrum...There may be an impact on doctors whose practice has failed to a lesser extent” although,
“any impact is likely to be small”.
Will the Minister tell the Committee what sort of increase the Department is expecting in the number of adjudications, as that obviously plays into any debate on the costs of the OHPA?
In its written evidence, circulated to the Committee yesterday, the GOC noted
“the provisions of paragraph 19 of Schedule 6 as to financial accountability. There are provisions elsewhere in the Bill allowing representations to be made to OHPA regarding the fees paid to OHPA by the regulators. However, there is no mechanism for the regulators to take further any concerns they may have over excessive expenditure (hence higher fees) should those representations not be met with an adequate response.... We acknowledge that OHPA must be independent of, and not accountable to, the regulators. There should, however, be a mechanism to ensure proper oversight of OHPA’s expenditure that takes into account the views of the regulators.”
In support of the amendments, it also said:
“We would expect the regulators to be provided with OHPA’s annual accounts and business plan, and to be invited to provide comments on those documents to the Secretary of State. We would welcome these arrangements to be provided for in the Bill. If they are not to be provided for in the Bill, we would expect to see these in the regulations to be made under new clause 7(1)”.
Would the Minister now tell us what the running costs, as a distinct item from the adjudication costs of the OHPA, will be? Will that come out of the fees, or from a Government grant? In the debate on the previous group of amendments, the Minister said that it would be, at least in part, a publicly funded body. I hope that the amendment and a direct question will flush out from him precisely what will be the split between those costs that will be recoverable through fees and those that will effectively be a subvention on the public purse. I also hope that there are sustainable expectations that it will remain a public subvention rather than something that will be clawed back from doctors themselves over time, notwithstanding that in our view the Government have not established that the OHPA is effectively a public body rather than an independent body.
What powers will the profession and the current councils have over value for money issues with the OHPA? What protection will the profession have from continual fee hiking? What guarantees are there that the Committee is not voting for a blank cheque and what increase in adjudications will the move to the civil standard bring? Some questions about the Privy Council, to which the Minister alluded in his more general remarks at the beginning of the previous group of amendments, may be more appropriate for a stand part debate. Therefore, I move the amendments on the basis of the arguments just advanced.
I have no problem with amendment No. 223. Given the arm’s-length, but hopefully in some way joined-up, relationship between the regulatory bodies and the OHPA, it is important that the regulatory bodies receive the reports.
I have slightly more difficulty with amendment No. 224. I agree with the hon. Gentleman that there needs to be some mechanism to scrutinise spending. He mentioned the increase in fees of the GMC and I know from my own profession that provisions in the section 60 order were responsible for a big fee increase that did not go down well among the profession. I assume that it is the same with doctors. Having said that, the mechanism advanced by the hon. Gentleman is rather over-prescriptive and although he wants greater financial clarity, it seems that the amendment as drafted provides room for professional games playing.
It is worth reminding the Committee at this stage that the genesis of the OHPA was concerns resulting from the Shipman inquiry about the independence of the adjudication system from the medical profession. The hon. Gentleman seemed to be more concerned about independence from Government. I warn him that in pushing the amendments—I will come back to this in a moment—he is taking us back into a sphere where the organisation would not be as independent from the profession as I am sure he would want it to be.
On amendment No. 223, which is about sending a copy of the report to the relevant regulatory bodies, clause 100 already requires the OHPA to make public information relating to it and the exercise of its functions. It is anticipated that, in line with best practice, the publication of its annual reports will be carried out in that manner. We do not think that requiring it additionally to send its reports to the regulatory bodies is necessary.
Amendment No. 224 seeks to confer the power to direct the content of the OHPA annual report on to the regulatory bodies. We do not think that it would be appropriate for the regulatory bodies to direct the OHPA, which we are setting up to be independent. It is important that the OHPA’s decisions are seen to be made in an independent manner. The whole point is to set up a body that is independent from the regulatory bodies and therefore from the professions. Even if that problem could be overcome, we do not think that it would be appropriate for the regulators that use the services to say what information the OHPA should provide in its annual report. Although the regulators may use the OHPA services, it should not be accountable to them for how it discharges its adjudication functions per se. That is dealt with through the power of appeal to the High Court that the regulators have if they are concerned that the OHPA is making decisions that are too lenient. On those counts I hope that the hon. Gentleman is reassured.
On fees, which we discussed at rather more length than most of us were expecting during the debate on the ways and means resolution, I indicated that the estimated current cost of the General Medical Council’s adjudication is around £11.5 million a year. That would be apportioned between the regulatory bodies using the OHPA’s services. However, I went on to add that the GMC is currently engaging a firm of financial advisers, which is undertaking an independent assessment of the costs, and it expects that report to be available by the end of January. We shall look at that very carefully. As I also made clear in the ways and means debate—and this was one of the GMC’s concerns—the Government have said that we will meet the set-up and transitional funding costs of establishing the new organisation. We will also help out where High Court referrals could create a potential burden, such as when the appeals courts overturn a decision. We do not think that it would then be fair to expect those costs to be met by the GMC, the equivalent organisation or their members.
If there is a sudden increase in costs—one could imagine a Shipman or equivalent type of inquiry—there is a power in the Bill for the level of fees to be varied throughout the year, for them to be reviewed and for the regulatory bodies to appeal against decisions. The fee setting will also be subject to full consultation when the regulations are discussed.
The Minister said that the report is due by the end of the month, and I hope that it will be available to members of the Committee, as much as anybody else, by the time we get to Report. That might be quite instructive. I think that I have made the points that are important to highlight, so on that basis, I beg to ask leave to withdraw the amendment.
‘Seal and evidence
The application of the seal of the OHPA must be authenticated by the signature—
(a) of any member of the OHPA, or
(b) of any other person who has been authorised by the OHPA (whether generally or specifically) for that purpose.
(a) purporting to be duly executed under the seal of the OHPA, or
(b) purporting to be signed on behalf of the OHPA,
is to be received in evidence and, unless the contrary is proved, taken to be so executed or signed.’.
Archaic as it may seem, the amendment allows the OHPA to have an official seal.
I am a bit surprised to see this amendment now. Perhaps it was an oversight. I do not want to embarrass anybody by saying that they need to own up to that, but there have been a tremendous number of changes to the use of seals in terms of both public and private limited companies. I dare say that, for an organisation such as this, this may be more symbolic than necessarily being available in order to bind the body. If there is something much more legally significant than appears in this simple amendment, I hope that the Minister will make us aware of it.
I promised a short debate on the schedule, Mr. Hood, and I would not want to disappoint you. The Privy Council has various powers under schedule 6, notably the appointment of the chair, non-executive members, the first executive members, removal of members and regulations concerning those responsibilities. While the explanatory notes state, in relation to the Council for Healthcare Regulatory Excellence, that:
they make no mention of either the Appointments Commission, or the commissioners’ code of practice in relation to OHPA appointments. Does the Minister agree that the councils should have a right of recommendation to the Privy Council for executive and non-executive members, rather than the power of recommendation lying solely with the Department? Can he also clarify the actual process that the use of “Privy Council” signifies in schedule 6? That would be a helpful clarification before we decide whether the schedule should stand part.
In response to the last question, the reason for that system is that it most closely replicates the existing system of appointments to the GMC. The OHPA will be the UK-wide body, hence we have the Privy Council route; the Privy Council covers the whole of the UK. The professions, including the GMC, were concerned that that should be the case. As I said earlier, we have included provisions in schedule 10 that allow the Privy Council to delegate its powers of appointment regarding the board members, through directions. We have done that following discussions with the Privy Council and I would fully anticipate that that would be the case.