We now come to group 24, and Amendment 73 to Clause 29 tabled by Charlie Maynard. Does any Member wish to move amendment 73? With that not being so, the question becomes that clause 29 stand part of the Bill.

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

With this it will be convenient to discuss the following:

Amendment 74, in schedule 3, page 80, leave out paragraphs 5 to 8.

This amendment would retain the requirement for NHS Trusts to have a Council of Governors.

Amendment 75, in schedule 3, page 80, leave out paragraph 14.

This amendment would retain the requirement for NHS Trusts to have a Council of Governors.

Government amendment 19.

Amendment 36, in schedule 3, page 82, line 3, at end insert—

“(1A) The function under sub-paragraph (1) must be exercised by a person employed in the civil service of the State, and a Minister of the Crown or a special adviser must not be involved in any decision relating to such an appointment, suspension or removal.”

This amendment would ensure that civil servants are responsible for the decision making and appointment processes for trust and ICB leaders, rather than Ministers or Special Advisers.

Schedule 3.

Clause 30 stand part.

New clause 59—Independence of appointments—

“The Secretary of State must make provision to ensure that operational decisions regarding the appointment, suspension or removal of—

(a) chairs and directors of NHS trusts and NHS foundation trusts, and

(b) chief executives of integrated care boards,

are made exclusively by persons employed in the civil service

Amendment 19 reinstates in primary legislation the requirement in schedule 7 to the National Health Service Act 2006 for an NHS foundation trust board to include one executive director who is a medical or dental practitioner, and another who is a registered nurse or midwife.

I want to be clear to the Committee from the outset that there was never any intention to change the policy on the clinical membership of NHS foundation trust boards. Foundation trusts would still have been expected to have appropriate clinical leadership on their boards, but we had heard from ambulance foundation trusts that the current framing of the requirement for clinicians is not always helpful, and greater flexibility was therefore required. However, we also heard from important stakeholders, including the Royal College of Nursing, that removing the requirement from primary legislation has been perceived as deprioritising clinicians, which is absolutely not the case. We have therefore tabled amendment 19 to remove any doubt.

These roles provide valuable clinical oversight of board governance in decision making in foundation trusts, and are essential to ensuring the safety and quality of patient-facing services in the NHS. At the same time, some providers may need different clinical expertise at board level. For example, in ambulance trusts, an experienced paramedic may be better placed to provide the relevant clinical guidance and oversight. The amendment therefore gives the Secretary of State a regulation-making power to create exceptions to the requirement following engagement with relevant stakeholders. That preserves the current position in primary legislation while allowing for targeted flexibility for ambulance or patient transport-focused foundation trusts where appropriate. I commend amendment 19 to the Committee.

Clause 29 introduces schedule 3, which makes changes to the governance and constitution of NHS foundation trusts. It removes the various statutory roles of foundation trust members and councils of governors, and repeals the requirement for FTs to have them. Amendment 73 to 75 look to oppose that, but I do not think that we are discussing those.

Order. Forgive me; let me interrupt to explain. I asked if anyone wished to move Amendment 73, and no one did. We will come to amendments 74 and 75, so the Minister is welcome to speak to those amendments now or at the end of the debate if she wants to. Other members of the Committee may wish to move those amendments subsequently.

Thank you for the clarification, Sir Jeremy. I will come to Amendment 75 at the end of the debate.

The Bill’s removal of councils of governors from NHS foundation trusts is part of delivering the 10-year health plan goal of hospitals putting patient experiences and outcomes at the heart of their decision making. That is not because we want to rid the system of local voices in democratic accountability—far from it. Although governors have provided helpful advice and oversight for some foundation trusts, we expect the next generation of NHS foundation trusts to put in place more responsive and flexible arrangements for drawing on patient, staff and stakeholder insight.

Rather than a one-size-fits-all model, providers should develop engagement arrangements that reflect their local populations, geographies and healthcare needs. Foundation trusts will have the option to retain aspects of their engagement model where it is working well, but can take a different approach if needed. Following Royal Assent, foundation trusts will be expected to have those arrangements in place and will be assessed as part of the non-statutory advanced foundation trust process.

Schedule 3 makes related changes to governance and decision making, in line with the Government’s policy to streamline oversight of providers and reduce duplication in the system. For example, the legal powers to appoint chairs and non-executive directors of foundation trusts and NHS trusts will, in future, both sit with the Secretary of State while supporting the effective use of talent across the NHS. Other functions of the council of governors, such as reviewing plans and major transactions, currently duplicate existing NHS England responsibilities, which will transfer to the Secretary of State through this Bill. Removing those requirements will therefore reduce duplication in the system.

Schedule 3 will also give the Secretary of State responsibility for approving changes to foundation trust constitutions and material changes to private patient income, and deciding chair and non-executive remuneration. The Secretary of State will take on the oversight role currently exercised by NHS England, and previously Monitor, including monitoring foundation trust performance, use of resources and governance. That will support system alignment and ensure that appropriate accountability arrangements are in place. Can I seek clarification, Sir Jeremy, that I can speak to Clause 30 at this point?

Yes, we are debating all the provisions in this group together, so the Minister is welcome to speak to Clause 30 now or later, when she winds up.

Thank you, Sir Jeremy. Clause 30 clarifies how NHS foundation trust status will be applied for and granted following the abolition of NHS England and the removal of the council of governors model. The Government are committed to reinvigorating the foundation trust sector by granting high-performing providers greater freedoms and autonomy. The power to authorise foundation trusts originally sat with Monitor and passed to NHS England in 2022. The clause, alongside schedules 3 and 11, sets out how that power will operate when it transfers to the Secretary of State. It also makes consequential amendments to the authorisation process, including removing requirements linked to recruiting members and electing governors. The Secretary of State will also set the criteria for becoming a foundation trust. I commend the clauses and the schedule to the Committee.

This is quite a large group. First, Clause 29 introduces schedule 3, which will make changes to the constitution of NHS foundation trusts. Currently, chapter 5 of the National Health Service Act 2006 establishes NHS foundation trusts as public benefit corporations in accordance with schedule 7 to the Act. That schedule, “Constitution of public benefit corporations”, sets out, among other things, the requirements for a constitution, the eligibility for membership, and the council of governors.

Schedule 3 to the Bill, introduced by clause 29, has a number of functions. First, it modifies the 2006 Act so that a foundation trust will no longer be a public benefit corporation, but will now be a body corporate—I would be interested in the Minister’s explanation of that change. It also modifies section 33(4) of the 2006 Act to remove reference to councils of governors, so that trusts no longer need to set those up, and modifies section 37 so that an NHS foundation trust can amend its constitution with the approval of the Secretary of State, where previously, that would have required a vote of more than half the members of the board of directors and more than half the members of the council of governors.

The schedule also deletes section 39A of the 2006 Act, “Panel for advising governors”, because one presumes if there are no governors, they do not need advice. It modifies section 43, “Provision of goods and services”, so that if a foundation trust wishes to raise its non-NHS income by 5% or more, the Secretary of State must approve it—previously that would have required local decision making from more than half of the members of the council of governors. It also deletes section 51A, “Significant transactions”, which states that an NHS foundation trust may enter into significant transactions, as defined in its constitution, only if more than half the members of the council of governors voted to approve it.

The schedule also deletes sections 56(1A), 56A(2), 56B(2) and 57A(2) of the 2006 Act. That means that governors will no longer have to approve a trust merging, being acquired, splitting or being dissolved. The Bill’s explanatory notes say that the Secretary of State will take on those approvals via schedule 11. Schedule 3 also deletes section 59, “Conduct of elections”, section 60, “Voting and standing for election” and section 61, “Representative membership” of the 2006 Act, which set out the democratic machinery for foundation trusts.

Schedule 3 also substitutes schedule 7 to the 2006 Act with an entirely new version. Elements of that new schedule 7 are as follows: the Secretary of State will now be able to appoint, suspend or remove the chair and non-executive directors—previously that was a governor’s role—and they can set the pay, allowances and terms of non-executive directors, and may regulate their tenure. The chief executive will be appointed by the non-executive directors, and the other executives will be appointed by a committee of the chair, the chief executive and non-executive directors, but the Secretary of State may set when those powers may be used. As the council of governors and its membership will be abolished, there are no members, elections or constituencies anywhere in the new schedule. Constitutional amendments will need the Secretary of State’s approval, not the approval of members and governors. The Secretary of State may make regulations on director eligibility, beyond the standard disqualifications. Directors owe a duty to promote the trust’s success, to maximise benefits for the public, with respective interests, duties and registers of interest. Board meetings must be open to the public. Accounts and audits are aligned with NHS trusts and ICBs. The Secretary of State may direct the form, content and timing as we have talked about before. Annual reports and forward financial plans go to the Secretary of State in the form that the Secretary of State decides, and trusts must publish their constitution, register, accounts and annual reports and hold a public meeting on them.

The council of governors was intended to feed in democratic input. Does the Minister have any comment on where democratic input will be held? Will it be solely through the Secretary of State, or is there any intent for local patient voice, now Healthwatch is being abolished too? How will local decision making be informed, and how will they understand their local area, particularly if it is to be directed largely by the Secretary of State?

Removing the council of governors will save money on administration, as noted in the impact assessment. The impact assessment also notes the Secretary of State does not have the ability to intervene in serious instances of foundation trust failure. Could the Minister comment on that?

Foundation trusts were intended to be independent. If the council of governors is removed and many things, as I have listed, are put under the control of the Secretary of State, they become increasingly more like an ordinary NHS trust, pre-foundation. Will they be independent in name only?

Non-executive directors are meant to be there to hold the leaders of the trust to account, but the Secretary of State can now appoint, pay and fire every non-executive director so a foundation trust’s internal watchdog can now be controlled by an elected politician who is potentially quite remote from that area. Does the Minister have any comment on how she sees that working?

Foundation trusts may have failed to increase democratic involvement in so far as there has not been huge interest in some of these elections for chairs of governors. But the answer to that would be a better version of local involvement rather than removing local input entirely.

The theme right across the schedule and the changes I listed is that foundation trusts are looking up to the Minister rather than out to local communities. Many NHS inquiries have reported back that frontline concerns did not reach the highest tiers of leadership. The Government are now closing an independent channel for sounding the alarm. Will the Minister comment on that?

I welcome Government Amendment 19 because the idea that you need medical expertise on the board of a trust that delivers medical care seems to me fairly obvious, because otherwise you will get decisions that are not grounded in medical knowledge. I do recognise what the Minister says about it was not having been her intention to demote the voice of clinicians, but that was the effect. This amendment will go some way to correcting that, by having an executive director who is registered medical practitioner or a dentist, and another who is a registered nurse or midwife. Could the Minister be clear if a foundation trust wanted a nurse and a midwife, perhaps because they had a specific issue with the midwifery area, or a medical practitioner and a registered dentist, could they have both?

The Minister suggested that an exemption would be ambulance care, but there are medical practitioners, consultants, with expertise in out of hospital care. Does the Minister feel their expertise is not useful in some way?

I will speak to amendment 36 once it is moved. On clause 30 stand part, that clause removes the requirement for NHS England to consult prospective members or governors of a prospective foundation trust before its authorisation. Getting a new foundation trust without NHS England because it has been abolished is a consequence of earlier clauses that we have already voted on. Therefore, I will not go further on that issue.

I wish to speak to Amendment 36 and new Clause 59, which are different ways of seeking to do the same thing. They are aimed at ensuring that “civil servants are responsible for the decision making and appointment processes for trust and ICB leaders, rather than Ministers or Special Advisers.”

In earlier sessions, we spoke about the risk of political capture; the amendment and new clause intend to deal with that. The Government’s intention is to give providers more freedom to design services around local needs, but we are worried that giving the Secretary of State the powers to appoint trust chairs and non-executive directors will undermine that local flexibility and agency. It risks creating a bottleneck in the Department for Health and Social Care, leaving foundation trusts waiting for approval to make their arrangements. In theory, the Secretary of State will be responsible for the appointment of 143 foundation trust chairs and roughly 1,000 foundation trust non-executives, who themselves will appoint the executive directors. Clearly, there is the potential for a bottleneck there.

We also think that in the hands of the wrong Secretary of State—I cast no aspersions about the current one—there is potential for mass manipulation of the make-up of future NHS leadership. I think everybody here would agree that NHS leaders should be the best possible people for the job, not those who best fit the political agenda of the Secretary of State of the day. We are worried that future Secretary of States could abuse their power, intervening unnecessarily and for non-clinical reasons in hiring and firing decisions. Their political views could heavily influence the make-up of trust and ICB non-executives across the country—who are themselves responsible for appointing the chief executive— and lead to the firing and hiring of those who suit their personal vision of what a leader should look like.

From speaking to chief executives and other senior NHS leaders, I know that many already feel that chief executives are subject to the political whims of the day and are too easily scapegoated for wider failures. Holding poorly performing leaders to account is extremely important when there are failures, but sometimes those concerns and the blame culture that can exist in those organisations stops capable, impressive NHS leaders from taking the next step up the ladder to becoming a chief executive. We think a safeguard is necessary there.

We recognise that someone has to hold that power and appoint those people now that NHS England has gone. That is why amendment 36 proposes that in order to ensure there is not political capture of those decisions, they are taken by impartial civil servants who are given a set criteria of what a good leader looks like, rather than by Ministers or their special advisers.

As I mentioned, new clause 59 broadly seeks to do the same thing, but uses a different mechanism for getting that into the Bill.

Will the hon. Lady give way?

I had finished speaking, but I will give way and think of something else to say.

The civil servants will be under the direction of the Minister, so how does the hon. Lady envisage it working? Presumably, civil servants are there to deliver for their Ministers or Secretary of State? Is she suggesting that makes the decision more impartial? Can she give us some detail on how that will work?

As I mentioned in my previous remarks, one imagines that a Secretary of State would set out criteria to ensure that the best people for the job are appointed. We are in a situation where a current Parliament cannot bind a future one, but we do need to set a precedent that political capture of these important leadership roles is not an unintentional consequence of this legislation. I accept that it is unintentional; I think the Secretary of State and the Minister have drafted this legislation with the best of intentions, but this is something we should guard against.

On Clause 29 and the relevant amendments, the membership model and the council of governors were originally introduced to give patients, staff and local communities a formal voice in the governance of NHS organisations. I worry that by removing them the clause concentrates power in the hands of the trust board at a local level and, potentially, the Secretary of State at a national level, while reducing opportunities for local scrutiny and public participation. As my hon. Friend the Member for Sleaford and North Hykeham said, there is a real danger that organisations will be independent in name only.

That brings us back to the never-ending tension in the Bill between the centralisation of power in the Secretary of State, through the abolition of NHS England and all the other bodies we have talked about, and the Government’s stated desire to have more accountability for decision making at a local level.

I am aware of the role of governors in some of our NHS trusts and the way in which they are appointed, but governors have said to me that they are sometimes disappointed by the level of influence they can in fact have in their trust. Can the hon. Member think of examples of where governors have particularly influenced the activities of individual trusts? I have not found that to be the case in my experience.

The hon. Gentleman’s Intervention neatly brings me to my next point. I have some sympathy for his viewpoint—and apparently the viewpoint expressed to him by governors—that in many cases, if not most, governors do not have the teeth, the influence or the ability to change things in the way they would like. My argument is very similar to the one we will expand on later regarding the abolition of the Healthcare Services Safety Investigations Branch and Healthwatch: the Government’s response to something not working as effectively as it could is to abolish it, but why not give those organisations the teeth—the powers—to achieve the things they were set up to do, unless the hon. Gentleman and the Government feel that there is no need, in Healthwatch’s case, for that level of independent scrutiny or, in governors’ case, that level of independent influence on boards?

There is a fundamental difference here: the Conservatives would take something imperfect and make it better; the Government’s response is to take something imperfect and abolish it. That is the wrong way round.

Does my hon. Friend think that this leaves a bit of a gap? The Secretary of State will not have the level of local oversight that the governors had, so how will that local oversight feed into the Secretary of State so that he or she can make the decisions instead?

My hon. Friend is right that there will be a gap in local decision making on these issues. It goes back to that tension I described some moments ago: the Government’s stated intention is to devolve powers locally, but they seem to be pulling so much power up to the Secretary of State that we will lose the ability to make local decisions for the benefit of local populations where appropriate. We have a stated ambition for neighbourhood health, but those neighbourhoods are rapidly expanding in this legislation to become areas of millions of people. Local people who are interested in their local health delivery or local hospital trust would not see that as local decision making, and there is the gap that my hon. Friend describes.

I do not think that amendments 74 and 75 have been moved, so I will not talk about them. Government Amendment 19 will require

“NHS foundation trusts to have at least one executive director who is a registered medical practitioner or a registered dentist and another who is a registered nurse or a registered midwife.”

As also stated in the explanatory note, and as the Minister mentioned, regulations may create exception—for example, for ambulance trusts. That is the right decision, and it is important that we have medical experience on foundation trust boards. I am interested in understanding from the Minister, first, why she has chosen a medical practitioner or registered dentist. Does she see some equivalence in their expertise that could be substituted? I have great respect for doctors and for dentists, but they have potentially different clinical expertise. If a foundation trust does no oral healthcare or maxillofacial reconstruction, and does no dentistry or allied specialties, would it really satisfy requirements to have a dentist on the board? Likewise, given that the amendment also refers to a registered nurse or midwife, if a trust has no maternity services, would having a midwife on the board really satisfy the requirement of that trust to have nursing care input? I ask those questions, and I would be interested in the answers.

Likewise, there is the exemption for ambulance trusts. Like my hon. Friend the Member for Sleaford and North Hykeham, I would be interested to understand from the Minister why she thinks ambulance trusts do not need a medical practitioner on their boards, given that they are doing medicine. Plenty of consultants work alongside paramedics and in ambulances, so again I am not quite sure why she is making that exemption. I would be interested to hear from her on that.

I understand the intention behind Liberal Democrat amendment 36. Once again, it is trying to soften the Secretary of State’s power grab over decision making—like the hon. Member for North Shropshire, I am not saying anything against the current Secretary of State, but a future Secretary of State could be different. The aim is to try to temper that in some way. Unfortunately for the hon. Member—I have sympathy for the amendment—the stated intention of the Bill is to pull more power to the Secretary of State. The Minister may surprise me, but I fear that the amendment will not find favour with the Government, because the whole Bill is about pulling more power to the centre, certainly when it comes to appointments, and to the Secretary of State.

However, the Minister should think about how future Secretaries of State may have to go through some process whereby their decisions are checked and justified, especially at local level. If we want local people to have influence and say over their local health systems and trusts, there needs to be some sort of bridging legislation or bridging process to ensure that whatever a Secretary of State decides, it has the confidence and support of local people and local service providers.

I think I am almost going to agree with the hon. Gentleman on his final point. It is important that local people have confidence in how their local systems are run and managed and, clearly, in the outcomes.

I will come first to the issue of governors and boards and then move to the amendments. I think we have all had emails, as is quite right, from local board members. Let me say, as I did earlier, that that is with good intent; they are very good people, who have given public service to be part of their local health system. As I said, this provision is no judgment on them; it is, as we heard, about effectively making the really important patient voice and patient experience central to the functions of the organisations delivering our healthcare. As I said in previous sittings, a debate will continue to be had about where we most effectively have that, but our intention throughout the 10-year health plan and this Bill is about devolution to providers and to ICBs and about making boards, as I also said in a previous sitting, responsible and accountable for the outcomes.

Let me outline broadly, because I think this is of interest to people, the impact on governance and the role that governors had. Just to be clear, since the creation of foundation trusts in 2004, NHS England—and, before it, NHS Improvement and Monitor—has had a statutory role to oversee the governance of NHS foundation trusts, including holding the whole board to account and taking steps where it identifies weaknesses in how foundation trusts are being run. The regulatory function is underpinned by the NHS provider licence, which will continue when NHS England’s functions pass to the Secretary of State. That is why we do not consider that the removal of the council of governors will have a negative impact on the governance of FTs, as some hon. Members have suggested.

We are developing an approach that sets out what that might look like in practice. The hon. Member for Farnham and Bordon said that this principle—there is perhaps a disagreement in the Opposition—runs through other areas. For example, a better approach to local engagement would reflect local demographics and geography better than a one-size-fits-all governor model. We would also be more likely to focus on the outcomes of engagement, looking to see if there is evidence that local people are involved in key decisions regarding how care is provided and how their voice is listened to.

To be clear, all NHS trusts and foundation trusts will continue to be expected to put in place effective arrangements for engaging patients, staff and the local community, as set out in section 242 of the NHS Act 2006. To ensure their effectiveness, we will test providers’ engagement arrangements as part of ongoing assurance processes, including provider capability assessments, Care Quality Commission well-led assessments and the assessment process for advanced foundation trust status.

On the question of the right level of clinical representation, our Amendment 19 is clear that clinical and medical representation is fundamental to the work of those boards. It is important that boards reflect that clinical and medical work, although it will be for them to determine the right balance.

Will the Minister give way?

I will move on, if I may. I think my response will the cover the issues raised in the debate.

On Amendment 36 and new Clause 59, I note the concern that the Secretary of State could act inappropriately when making appointments to the boards of ICBs and NHS trusts and foundation trusts. We discussed democratic accountability in a previous sitting, and at the end of the day it is up to the British public whom they elect to Parliament and as the governing party.

Transparency and democratic accountability are at the heart of our reforms. It would not be right for the civil service to be given sole legislative responsibility for appointments to NHS trusts, foundation trusts or integrated care boards. Ministers are democratically accountable to Parliament, and civil servants act on their behalf under the Carltona principle. Civil servants serve and advise the Government, and act on behalf of Ministers, but it is for Ministers to take decisions and to be held accountable to Parliament for the performance of the NHS. The civil service will run fair, open and equitable campaigns to fulfil these roles and will recommend appropriate candidates to Ministers.

Ministers are under a duty to comply with public law principles and to act reasonably, and will adhere to the Nolan principles, including objectivity, transparency and integrity, in discharging this function. The practical arrangements for appointments are being developed as part of the transition planning for the integration of NHS England’s functions into the Department, and will be based on these principles. It would therefore be inappropriate to exclude Ministers entirely from the appointments process. I urge hon. Members not to push the amendments to a vote.

Will the Minister give way?

I think the Minister has finished.

Question put and agreed to.

Clause 29 accordingly ordered to stand part of the Bill.

Amendment made: 19, in schedule 3, page 81, line 10, at end insert—

“(1A) Unless or except to the extent that regulations provide otherwise, the executive directors must include—

(a) at least one person who is a registered medical practitioner or a registered dentist (within the meaning of the Dentists Act 1984), and

(b) at least one other person who is a registered nurse or a registered midwife.”—

This requires NHS foundation trusts to have at least one executive director who is a registered medical practitioner or a registered dentist and another who is a registered nurse or a registered midwife. Regulations may create exceptions (for example, an exception could be created for ambulance foundation trusts).

Schedule 3, as amended, agreed to.

Clause 30 ordered to stand part of the Bill.