Clause 143

Health and Social Care Bill – in a Public Bill Committee at 3:15 pm on 24th March 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee

I do not want to delay the Committee, but I thought that I ought to try to ensure that we clarify the intention of clause 143 regarding the

“Power to make provision about voting”.

The explanatory notes for clause 143 state:

“This clause inserts a new paragraph into Schedule 7 to the NHS Act. This would give the Secretary of State, in light of new decision-making powers for foundation trusts in subsequent clauses, a regulation-making power to alter the associated voting arrangements for directors, governors and members of foundation trusts provided for in this Bill.”

Two examples are then given:

“the Secretary of State could, for example, change the size of a majority required for approving mergers or for making changes to the constitution of a foundation trust, or specify that such a majority should be of those eligible to vote as opposed to those actually voting.”

That seems pretty clear on the face of it, but the powers could presumably ensure the opposite of what is suggested in those two examples. I am not saying that that is the case, and I do not want to scaremonger in any way, but we ought to give the Secretary of State such powers only if we really deem it necessary.

I want to draw the Committee’s attention to clause 153, which would be affected by clause 143. Clause 153(2) states quite clearly:

“An application under this section may be made only with the approval of more than half of the members of the council of governors of each applicant.”

I do not know exactly what that means, because we are giving massive powers to the Secretary of State to move the majority around, which may be very necessary in mergers and acquisitions—I would probably argue that that is the case; maybe two thirds ought to be able to take such decisions—but we are saying in the Bill that it has got to be a majority. Will the Minister tell us exactly where the power lies: in regulation or in what is in the Bill? I hope that he can clear this matter up. If he does not, it seems to me that if we take the wording in the Bill, which states that it is a simple majority—not even of those in attendance, according to the explanatory note—at least we know where we stand. If regulation can ride roughshod over the simple majority mentioned in clause 153, maybe we should not give the Secretary of State the power under clause 143 to determine the matter by regulation.

We have been talking most of the afternoon about foundation trusts: their shape, who should be on them, what powers they should have. The Government consistently talk about the localism of decisions in the Bill, but they are leaving powers in the clause for the Secretary of State to bring in by regulation something—we know not what—that will affect mergers, acquisitions, separations and dissolutions. I hope that the Minister can reassure the Committee. The power that we are about to give the Secretary of State could ride roughshod over what many of us thought was to be the real decision making in our health service, done by GP consortia and the local trust delivering the services.

Photo of Paul Burstow Paul Burstow The Minister of State, Department of Health

I hope that I can give the right hon. Gentleman all the reassurance he seeks. He has perfectly described what we intend to do—that is, to create increasingly independent organisations, able to focus on the interests of their patients and the public and deliver ever better services.

It is worth saying that the regulations in the clause are given effect only by affirmative order, open to a lot of scrutiny by the House. The clause enables the Secretary of State for Health to amend the new voting arrangements—just the new voting arrangements—provided for in the Bill. That is to ensure that the arrangements could be modified if necessary in the light of how they are working in practice. Part 4 introduces a range of new voting arrangements for members, governors and directors of foundation trusts. Those arrangements are important measures to strengthen,  quite rightly, the internal governance and to place genuine responsibility on foundation trusts to enable them to become more autonomous and accountable to their local population. I will get to the point, but I think it important to develop the argument first, if the right hon. Gentleman will forgive me.

The Bill would allow a foundation trust to change its constitution if a majority of the governors and directors voted to approve the amendment. Governors would have the power to approve mergers, acquisitions and separations on a majority vote. Members could approve certain constitutional amendments on a majority vote. The power in the clause will enable the Secretary of State to modify the provisions if necessary. For example, he could make regulations changing the size of the majority needed to change the constitution from a simple majority to a two-thirds majority—I think the right hon. Gentleman suggested that might be in order—or he could require a majority to be a majority of all those entitled to vote, as opposed to a majority of those actually voting.

We are confident from our discussions with stakeholders that the voting arrangements we have provided for in the Bill are robust and would prove effective in practice. They strike a balance between the appropriate accountability and not having unnecessary bureaucracy that could impede the organisation’s operational effectiveness. We do not, therefore, expect to use the power. However, it is prudent to ensure the necessary changes could be made to respond to unforeseen or exceptional circumstances. In order to ensure proper parliamentary scrutiny, these matters will be dealt with by an affirmative resolution of both Houses of Parliament. I hope I have reassured the right hon. Gentleman that the provisions are necessary.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee

Nice try, but as the Minister just pointed out, it is the Secretary of State to whom we are giving the power to alter the voting patterns, not foundation trusts. The Secretary of State will have the power to bring in regulations to direct foundation trusts on what they can and cannot do. The Minister has not answered my question. Clause 153, which will be affected by clause 143, refers to a majority, not even the majority in attendance. What takes precedence: something in the Bill, which will become law, or a regulation that the Government propose?

Photo of Paul Burstow Paul Burstow The Minister of State, Department of Health

Clearly, unless the Secretary of State, on the basis of advice and in the exceptional circumstances I just referred to, believes there is a need to amend the arrangements using the power in clause 143, of course clause 153, which sets out the requirement of a simple majority, would be the operative clause in the future.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee

So it could be that foundation trusts, under clause 153, need a simple majority for mergers, acquisitions, dissolutions or separations. On that basis, I am unhappy about giving the power to the Secretary of State. I just do not know where it goes. If the Bill requires a simple majority, why are we giving the Secretary of State the power to alter that? Presumably he cannot alter it, and I am misinterpreting what the Minister has said.

Photo of Paul Burstow Paul Burstow The Minister of State, Department of Health 3:30 pm, 24th March 2011

I have just given examples of where the Secretary of State might determine that the majority should shift upwards, in light of experience and the representations he might receive at some point in future on how the provisions we will go on to discuss are working, in terms of votes on mergers, acquisitions and separations. That is what the clause will provide for. FTs will be able to specify higher voting thresholds when framing and approving their constitution if they wish to do so; the Bill provides for the minimum amounts.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee

I thought the Minister said that what is in the Bill will take precedence, and if there is a simple majority, as stated in clause 153, it cannot be overridden by regulation.

Photo of Paul Burstow Paul Burstow The Minister of State, Department of Health

The Bill provides, if one likes, the de minimis; a foundation trust, when framing its constitution, could go further. That is the point I made to the right hon. Gentleman.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

Clause 143 ordered to stand part of the Bill.

Clauses 144 to 147 ordered to stand part of the Bill.