Clause 68 - Requirements under section 67: investigations, declarations and directions

Health and Social Care (Re-Committed) Bill – in a Public Bill Committee at 4:15 pm on 12th July 2011.

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Photo of Liz Kendall Liz Kendall Shadow Minister (Health) 4:15 pm, 12th July 2011

I beg to move amendment 236, in clause 68, page 82, line 40, leave out subsection (3).

Clause 68 enables various powers to be given Monitor through regulations, as we have seen in previous clauses, including the power to

“declare that an arrangement for the provision of health care services for the purposes of the NHS is ineffective”.

On 17 March, the Minister said that the reason for the clause was

“to establish clear requirements on commissioners that would be binding and enforceable…Monitor needs credible sanctions to deter the types of behaviour that would be bad for patients…Without enforcement powers, Monitor would be in the same toothless position as the Co-operation and Competition Panel”,––[Official Report, Health and Social Care Public Bill Committee, 17 March 2011; c. 882.]

the same Co-operation and Competition Panel that the Government are now saying is a crucial part of Monitor. I will ask the right hon. Gentleman the question that I asked him last time, and to which I did not get an answer.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health)

Well, it was not a satisfactory answer.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health)

If the Minister gives me a direct answer, I am usually satisfied, although I might not agree with it, but he does not tend to do so.

The measure prompts the question: what is ineffective? If Monitor decides to declare health services provided for the purposes of the NHS ineffective, what does that mean? Why is it up to Monitor—not commissioners, the doctors and clinicians whom the Minister is so keen to involve, the NHS board, clinical senates or networks—to decide whether a service is ineffective? Amendment 236 would delete that part of the clause, which is why we will be pressing it to a vote.

Photo of Simon Burns Simon Burns The Minister of State, Department of Health

This is a tremendous pleasure. I assumed that some other Opposition Members would want to contribute to this debate.

Photo of Simon Burns Simon Burns The Minister of State, Department of Health

I will not, Mr Hancock. Funnily enough, on this occasion, for the first time today, I was rather keen to provoke them, but we are where we are.

Subsection (3) provides that regulations made under clause 67 on procurement, choice and competition that apply to commissioners could include a power for Monitor to declare a contract or other arrangement for the provision of services invalid. The power would be a back-stop provision and there would be restrictions on its use. The regulations would ensure that commissioners procured services effectively, in line with best practice and in patients’ best interests. For example, they might provide that commissioners should not restrict tenders for services to existing providers unless they could demonstrate that doing so would benefit patients. Limiting potential providers could deny patients access to treatment at home or innovative treatments, for example.

If a provider breaches regulations on procurement, it is unlikely that Monitor would declare the arrangements for a particular service invalid as a first step. As subsection (4) makes clear, regulations would have to set out the circumstances in which Monitor could do so, as well as restrictions on its use of the power. Subsection (4)  also makes it clear that Monitor could use the power only where it was satisfied that a commissioner had failed to comply with requirements in the regulations and that the failure was significant.

For example, if a commissioner tendered a service, failure to consider one of the tenders would be significant. However, if a commissioner made an error in procedure, Monitor might conclude that in that particular case the failure had not had a significant effect on the outcome of the exercise. In such circumstances, it would not set aside the arrangement, but take other action, such as reminding the commissioner of the relevant provision in the regulations or directing it to take steps to prevent the failure in future.

There would be further constraints on Monitor’s exercise of any power conferred on it by regulations under subsection (3). The Committee has discussed Monitor’s main duties at some length. Monitor can set aside any arrangement that commissioners have made only in furtherance of its main duty to protect and promote the interests of patients by promoting the economic, efficient and effective provision of health care services. If it were relevant to a specific case of a breach of the clause 67 regulations, Monitor would also have to take account of its duties to enable integration of services and any relevant matters in clause 58.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

Since we have amended the Bill such that the general duties of Monitor in clause 56 are indeed to promote provision that is economic, efficient and effective, I fully understand why Monitor should have the ability to say whether a service is ineffective. The second part of Monitor’s duty is to promote provision which

“maintains or improves the quality of the services.”

I wondered whether there was room for Monitor to talk about quality of services, as well as ineffectiveness, as that is one of its main amended duties.

Photo of Simon Burns Simon Burns The Minister of State, Department of Health

Again, I am grateful to my hon. Friend for that question, because it enables me to give greater clarity to the context of our discussions. Yes, Monitor will be able to do that.

Amendment 236 would remove Monitor’s power to declare that an arrangement is ineffective. I understand the Opposition Members may need reassurance about that power and, as I have set out, there would be safeguards and restrictions on Monitor’s use of it. It is an important provision. If a commissioner fails to comply with the regulations and if that failure is sufficiently serious and has a significant impact on patients, Monitor should be able to declare the arrangements for a particular service ineffective. The commissioner would then have to make alternative arrangements, in line with the requirements in the regulations. I remind the committee that the Secretary of State already has that power. In the event of a severe failure to comply with the principles and rules of co-operation, the Secretary of State could direct a commissioner to set aside a contract. Following my assurances and explanation, I ask the hon. Lady to consider withdrawing the amendment.

Photo of Grahame Morris Grahame Morris Labour, Easington

I seek clarification on the Minister’s concluding remarks about the reserve powers and that the Secretary of State may choose to direct Monitor not to use its powers of referral. Can he give a situation where that might arise?

Photo of John Pugh John Pugh Liberal Democrat, Southport

I think I am reassured by what the Minister said. If I have got it wrong, he can correct me as I try to replay what I think he said. As I understand it, Monitor works with a constrained set of rules as an adjudicator or referee, which is the expression I used the other day, and if clear breaches of those rules occur that can be identified within the tight remit of Monitor, Monitor has the power to declare a service to be ineffective. I imagine that the Co-operation and Competition Panel previously had a power to throw things back at the commissioners in a similar sort of way, but it lacked any statutory effect. What I am—or think I am—assured about is that Monitor will not be taking a strategic view about which services within a local authority are effective and which are not, but rather it is working within its tight remit.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health)

Does the hon. Gentleman agree that that is not what the legislation actually says?

Photo of John Pugh John Pugh Liberal Democrat, Southport

The Minister is on record explaining what it says and that has some force in terms of how it will be interpreted. There are certainly ways in which that can be made clear through the legislation, but the clear intent of the legislation seems to be the clear intent of the Minister’s remarks.

Photo of Simon Burns Simon Burns The Minister of State, Department of Health 4:30 pm, 12th July 2011

I can, I hope, deal with this very quickly. I can give the hon. Member for Southport the assurance in respect of what he thought I said. The answer is yes.

I hope that the Committee will bear with me while I explain something to the hon. Member for Easington; I would like to repeat what I said so that there is no misunderstanding of the tail end of my speech. I think that it is quite clear, and I assume that my hon. Friends do. I hope that the hon. Gentleman will also think so once I have repeated myself.

I said that if a commissioner fails to comply with the regulations, and that failure is sufficiently serious and has a significant impact on patients, Monitor should be able to declare the arrangements for a particular service ineffective. The commissioner would then have to make alternative arrangements in line with the requirements in the regulations, and under these proposals—under this legislation, if and when it receives Royal Assent—it will be up to Monitor, not the Secretary of State, to take the decisions in the circumstances.

Just to cheer up the hon. Member for Leicester West—I think that this is going to be the end of my debut today—may I say that when we last discussed this, in March, she seemed to think that I did not answer her question about the meaning of “ineffective”? I think she will now agree, having listened to me for the past 10 minutes or so, that I dealt with it during the course of my comments this afternoon. In the vernacular, it would mean that the contract was invalid. I urge Opposition Committee members to withdraw the amendment.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

I thank the Minister for his clarification that Monitor will have an important role in ensuring that service quality is maintained, because that is one of its main functions. May I ask about the duty of the Care Quality Commission and Monitor to co-operate with each other, which is clearly set out in clauses 281 and 282? It does relate to clause 68, which we are discussing at the moment.

How does the Minister envisage the two bodies working very closely with each other, particularly in matters of quality, in which they both have an interest? I am concerned by the lack of communication that has come out in the Francis inquiry into Mid Staffordshire. I am talking about the lack of communication between Monitor as it exists now—I appreciate that its role is changing, but it will still be a body called “Monitor” with many of the same functions—and the then Healthcare Commission, which will now be the Care Quality Commission.

Will the Minister reassure me that there will not be a great separation of the two bodies’ roles, which might mean that they do not talk to each other—something that would be against the spirit and letter of the Bill? Will they co-operate in a way that is efficient and effective?

Photo of Liz Kendall Liz Kendall Shadow Minister (Health)

As always—for the record, I say this with irony—the Minister’s great clarity in describing what the Bill seeks to do has inspired me to stand up and make a couple of closing points. First, as the hon. Member for Stafford and my right hon. Friend the Member for Rother Valley have said, the Bill does not guarantee that Monitor will consider quality alongside issues of efficiency when looking at the competitive tendering of services.

Secondly, having listened to the Minister’s response, I should say that if I was a commissioner I would have no idea about the process, whether my services would come under scrutiny or whether Monitor would swoop in to say that I had somehow broken the rules and that my services were now ineffective. What the Minister has described is completely unclear and so, for clarity of purpose, we should delete this part of the clause. That is why I wish to push my amendment to a vote.

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

Mr Burns, would you like to respond to your hon. Friend?

Photo of Simon Burns Simon Burns The Minister of State, Department of Health

My hon. Friend raised a number of issues with regard to the CQC and Monitor working jointly. Let me give him some examples that hopefully go some way to addressing his issues, which include the sharing of information and a close working relationship. There is already a memorandum of understanding that will need to be updated, and the CQC will remain primarily responsible for quality regulation. I hope that those examples answer his points.

Question put, That the amendment be made.

The Committee divided: Ayes 9, Noes 12.

Question accordingly negatived.

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

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

Clause 68 ordered to stand part of the Bill.