Lord Owen
My Lords, I wish to draw attention to Clause 72(1)(b), which refers to,
“a power to investigate on its own initiative whether the National Health Service Commissioning Board or a clinical commissioning group has failed to comply with a requirement imposed by virtue of section 71(1)(c)”—
which we discussed earlier, the provision to,
“not engage in anti-competitive behaviour which is against the interests of people who use such services”.
I had understood that the decision not to have competition as one of the main functions of Monitor was a considered political decision, but the more one looks at Clause 71(1)(c), and now at Clause 72(1)(b), the more one realises that this has been got round, effectively, by ensuring that anti-competitiveness becomes a prime responsibility of Monitor.
There are a number of objections to this. The noble Lord, Lord Whitty, put his finger on it, that a good regulator does not also become a policeman in an anti sense to the people he is trying to regulate. There is a deep question as to whether you really want a situation where Monitor can be set against the National Health Service Commissioning Board and the commissioning groups. I am very doubtful that this is a sensible power to give to Monitor.
I know it is regulating the whole group, but if you look at the way Monitor is approaching its tasks, time and again it is going to be reliant on good will and an atmosphere of trust between Monitor, the NHS Commissioning Board and the commissioning groups, and now there is this question of anti-competitiveness. It is not as if nobody else is going to be looking at anti-competitive behaviour of the National Health Service Commissioning Board. The private sector wants to go into this whole area and will be looking very carefully at whether or not it is being given an even playing field. It will be taking, and threatening to take, the Commissioning Board to law—I am not even raising the issue of EU legislation, but just under British legislation.
I do not think it is fair to argue that there is unlimited freedom for the National Health Service Commissioning Board or the commissioning groups to operate in this area, particularly the board. You are really setting yourself up for a very difficult situation. Also, to do it “on its own initiative”—does that mean Monitor would not consult the board or a clinical commissioning group but just suddenly involve itself in an investigation? I would be grateful if the Minister could give some indication of how he sees this in practice.
Will some guidance be given not to develop an adversarial relationship? It is very easy for animosities to start coming in to this area. As I say, it is not as if it is free from legal challenge. Their actions can be challenged. However, for another NHS body to be able to question the judgment of the Commissioning Board that in this particular case it is best not to put something out to competitive tender, or to make a judgment when it has been done because somebody feels that it is anti-competitive, is a really dangerous power. In the wrong circumstances, where Monitor might be chaired by somebody who is getting into a bad relationship with the NHS Commissioning Board chairman, something not totally unknown in these areas, this is a tool which could be used in a destructive and adversarial fashion.
It would be very helpful, for future occasions, to hear from the Minister as to how he thinks this would actually work out in real life.
(a) commercial information the disclosure of which would, or might, significantly harm the legitimate business interests of the person to whom it relates;(b) information relating to the private affairs of an individual the disclosure of which would, or might, significantly harm that person’s interests.”
Baroness Wheeler
I also support Amendment 295G from the noble Baroness, Lady Greengross, replacing the similar amendment from the noble Baroness and the noble Lord, Lord Low, both of whom have argued the case strongly and convincingly on this matter.
The importance of addressing current loopholes in the application of the Human Rights Act to publicly funded healthcare and home care services is underlined by the scale of the legal anomaly that the amendment seeks to address. As we have heard, almost 500,000 older people receive essential care in their own homes provided by the local authority. Some 84 per cent of them lack the protection of the Human Rights Act because their care is provided by private or third sector organisations, or independently by 150,000 self-employed personal assistants who care for people in their homes through the application of personal care budgets or direct payments.
The noble Baroness’s own work in highlighting the inadequacy of at least 50 per cent of the home personal care received by older people as part of her recent inquiry underlined the prevalence of human rights abuses in home care settings. The report makes painful reading for all who want dignified and appropriate standards of care for older people in their homes. The stark reality is that, if their human rights are violated through inappropriate standards of care, they at present have no direct legal redress against their care providers.
Of course, we need to make the caveat that good practice is often exemplified by the private and voluntary sector. As a carer, the care provided by the private sector agency to the person I care for at home is of good quality and the care support workers are committed and dedicated professionals, despite long hours and low pay. Their care for the person that I care for is not covered by the Human Rights Act but would be if he were in residential care. That is a serious anomaly. I hope that the Minister will be able to reassure us that the Government recognise that this is a major problem and will take the opportunity presented in the Bill to address the matter. With an increasing number of people receiving home care from a private or voluntary sector organisation rather than directly from their local authority, there is a vital need for certainty around the application of the Human Rights Act to these care providers.
I was going to comment on four other amendments but none of them was spoken to so I will leave it at that.
Baroness Northover
My Lords, we have two diverse areas in this particular group. Clause 75 would consolidate the oversight of mergers involving NHS foundation trusts under the UK general merger control regime operated by the Office of Fair Trading’s Competition Commission. That is the area addressed by my noble friend Lord Clement-Jones. We argue that the approach that we are taking here would have a number of benefits.
First, it would eliminate the risk of double jeopardy for NHS foundation trusts. Uncertainty currently exists as to when and where the Enterprise Act 2002 would apply to mergers of activities involving foundation trusts. As a result, under the current arrangements for review of mergers involving foundation trusts by the Co-operation and Competition Panel, there is always potential risk of duplication or double jeopardy by both the OFT and the Co-operation and Competition Panel. The Bill proposes to consolidate oversight of foundation trust mergers under the OFT. It would already seem likely that most mergers between foundation trusts would meet the relevant thresholds, eliminating the uncertainty with the current approach. We therefore sympathise with my noble friend Lord Clement-Jones’s amendment but feel that it would not be required as foundation trusts would be captured.
Secondly, the OFT would provide effective, light-touch regulation regarding mergers. This gives confidence to providers that might be considering a merger and ensures that mergers go ahead where they are in patients’ best interests and that the process is not unduly delayed by bureaucratic approvals or the risk of political interference. The evidence demonstrates that this approach does not result in excessive intervention, as the Enterprise Act sets a high threshold for looking at the merging of activities.
Thirdly, the approach would avoid the duplication of specialist resources between the OFT and Monitor, ensuring better value for money. Mergers are a specialist area. It therefore seems a far better use of resources to maintain the responsibility and expertise within the OFT and the Competition Commission rather than resource a further sector-specific body. However, we appreciate and sympathise with the argument put forward that Monitor, as the dedicated health regulator, will have a valuable contribution to make in the review of foundation trust mergers.
As part of any merger investigation, the OFT and the Competition Commission would engage with Monitor as the sector regulator in order better to understand the services involved. They would obtain Monitor’s view on how a merger would affect services and whether it would bring benefits for patients. The OFT would need to consider whether the benefits of higher quality, a greater choice of goods or services and greater innovation outweighed the negative impacts of mergers. These views would then be considered in the analysis, along with other evidence. We want to work with noble Lords to see how we can ensure that Monitor’s role regarding mergers is adequately reflected in the Bill.
My noble friend Lord Clement-Jones was asking about thresholds. The thresholds for merger reviews are set out in the Enterprise Act. On this basis, the OFT would not generally review mergers involving a turnover of less than £70 million. This contrasts with the approach of the Co-operation and Competition Panel, which operates at significantly lower thresholds.
As my noble friend Lord Howe said in an earlier part of this debate, the operation or otherwise of EU competition law is something that he will take back and consider further in the light of what my noble friend Lord Clement-Jones said. At this stage, therefore, I will not go into that area further, but I refer the noble Lord, Lord Owen, to those discussions and the fruits of those discussions.
We move on to a separate area raised by the noble Baroness, Lady Greengross, and supported by the noble Lord, Lord Low. The issue raised by Amendments 280 and 295G is one in which I know the Equality and Human Rights Commission is keenly interested, and the Government have carefully considered it in the preparation of the Bill. The issue has been raised with us not only by the EHRC but by the Joint Committee on Human Rights. Noble Lords are right: these are extremely important issues.
The department has set out publicly and in detail the reasons for its firm view that private providers are now, and will be in future, exercising public functions when they provide NHS or public health services. The effect of this is that they are bound by the relevant duties in the Human Rights Act and the Equality Act when they provide those services. As the noble Lord, Lord Low, pointed out, these reasons can be found at paragraphs 1534 to 1537 of the Explanatory Notes and in our response to the letter from the Joint Committee on Human Rights to the Secretary of State, which is available on its website.
In summary, our view is based on the following arguments. NHS and public health services will continue to be commissioned by statutory bodies subject to the framework in the 2006 Act. The nature of the services provided will be determined by those commissioning bodies in the exercise of their statutory functions, and is not affected by the status of the provider. The services provided pursuant to those arrangements will be funded by the Secretary of State, the NHS body or the local authority concerned. There will be no contract between the patient and the provider other than where direct payments are concerned. The relevant provisions of the 2006 Act will continue to make no distinction between private and NHS providers.
Lord Clement-Jones
My Lords, I thank the Minister for a totally convincing response. The trouble is that it was a response to an amendment that I did not put, although I could have. The amendment which was responded to would have eliminated the OFT from consideration of FT mergers. My amendment was about inserting an additional ground for consideration by the OFT or the Competition Commission, if it went as far as that, so that the public interest was taken into account, as it is in bank mergers nowadays.
I thought that the Minister’s arguments about why the OFT should be involved were wholly convincing—eliminating double jeopardy with the Co-operation and Competition Panel, providing confidence to providers and so on. Mergers are a specialist area. I am sure that the OFT is great at merger consideration. I deliberately did not put down an amendment about the OFT being eliminated from FT mergers—that was the House of Commons amendment to which I referred in the course of my speech.
The noble Baroness’s assertion that the OFT could ensure that patients’ best interests are looked after is precisely my concern. If ordinary merger principles are followed in terms of the OFT looking at the merging of two foundation trusts, I do not believe that it is in law able to take a very close view of what genuinely is in the public interest in terms of provision of a comprehensive National Health Service. I am delighted that the noble Lord, Lord Owen, thought that that was ingenious. Certainly, it seemed to be the logical way to try to get some sense into these foundation trust mergers. Therefore, I very much hope that—
Baroness Northover
I do not wish to interrupt my noble friend’s flow. If I have not covered all the areas that he wished to flag up, I will indeed write. However, I made the point that the OFT needed to consider the benefits and the negative sides of mergers in terms of how they would impact on patients. I hope that my noble friend was satisfied at least on that point, even if the leapfrogging and slipping of various amendments from the agenda this evening has tripped me up at this late hour.
Lord Clement-Jones
My Lords, we could all be tripped up at this late hour, as, indeed, I was earlier. However, it is a question of what it is possible for the body that is judging the merits of a merger in competition terms to take into account. The reason for including the public interest considerations in the amendment was that the OFT would be extremely limited in the patient considerations that it would be able to take into account. The noble Baroness was pretty sanguine about that. There is still further work to be done in that respect and further consideration needs to be given to the matter. It seems to me that, if nothing else, the question of whether one’s local trust and local foundation hospital will survive as entities is of huge importance to local people and is something that needs to be judged properly with their benefit in mind when the time comes.
Unless I divine that my noble friend is going to give me further guidance or inspiration, I beg leave to withdraw the amendment.
“( ) Where an exemption is granted the Secretary of State—
(a) if the exemption is granted to a prescribed person, must give notice of it to that person, and(b) must publish the exemption.”
Baroness Finlay of Llandaff
My Lords, I have several amendments in this group. I shall start with Amendment 294N, which is a probing amendment. As far as I have understood it, social enterprise bodies which are NHS bodies in all but name are coming into existence. They have evolved from PCTs under the transforming community services programme. They will be subject to special health administration arrangements. I ask the Government to confirm whether the social enterprises that come under the health special administration arrangements are coming under arrangements based on insolvency law and that, as such, that allows assets to be transferred outside the NHS and the redundancy payments are not guaranteed.
Amendment 295CA is intended to ensure that clinical commissioning groups are consulted before the Secretary of State makes regulations that allow Monitor to impose charges on commissioners. The charge imposed can include a levy to fund Monitor’s functions that have to be invoked in the event of failures. Amendment 295CB is intended to ensure that when setting such a levy, Monitor takes into account the impact of the levy on the financial stability of the organisation, especially a financial trust that is already in distress or failing. Amendment 304A requires that the commissioners are considered when the services of a failed financial trust are considered by Monitor and should be involved in the decision as to which should be continued, and that such services must include some continuation of education and training, because in planning for the future workforce, if a whole lot of posts were suddenly lost, it would destabilise the workforce planning. That is in addition to considerations such as the service provision and issues of equity and access. That becomes particularly important because if you do not have the staff with the appropriate training, you cannot, in the long term, provide the service anyway.
Amendment 304B is intended to ensure that commissioners are involved in the board's role in agreeing arrangements to secure continued access to NHS services will be achieved. Will that include the board’s selecting which commissioner would become lead commissioner for the process during a failure?
Earl Howe
My Lords, this has been an excellent short debate on a large number of amendments, but focusing on a critical issue, which is what should happen to providers when they get into significant difficulty. While the debate has focused on the role of Monitor, it is the Government’s firm view that commissioners should lead the process of ensuring there are services available to meet the needs of local communities.
The Government brought forward amendments in another place to improve our proposals for ensuring continuity of services. These included removing provisions to apply an insolvency-based approach to foundation trusts in the form of health special administration. If a provider of NHS services becomes unsustainable, there has to be a legal framework that provides effective safeguards to protect patients’ and taxpayers’ interests. We have therefore taken an evolutionary approach in developing proposals to ensure sustainable local services. The Bill sets out a clear framework to achieve this.
We will maintain the existing regime for foundation trusts but we will improve it significantly. First, we have removed the need to de-authorise a foundation trust. This is because the Government are committed to all NHS trusts becoming foundation trusts, so that all NHS providers have the freedom to innovate and drive sustainable improvements in quality and efficiency, and are accountable locally. I am aware that the noble Baroness, Lady Thornton, has tabled amendments which relate to the issue of de-authorisation and we will discuss those when we reach the appropriate clause.
Further, the Government will also ensure taxpayers’ interests would be protected by securing solutions that make best use of available NHS resources. We do not want patients to use, or taxpayers to subsidise, poor quality, inefficient services or providers. Instead we will ensure an end to the culture of hidden bailouts. That is why Clauses 131 to 143 set out provisions for a transparent financing mechanism to fund continuity of services during a period of administration. In addition, I reassure noble Lords that the existing regime for NHS trusts, as distinct from foundation trusts, set out in the 2009 Act, would remain in place. Through a separate health special administration regime, legislation for the first time will also extend equivalent protection to patients who use NHS services provided by a company. Provisions set out in Clauses 125 to 130 would achieve this.
I turn to Amendment 282ZA. The Bill gives Monitor broad powers to collect financial information for the purposes of monitoring providers’ financial stability. Monitor will be gathering a range of information, including financial, to enable it to undertake an ongoing assessment of risk. Monitor would also be able to intervene in order to support a provider to recover and to prevent failure where possible.
I understand that some noble Lords are concerned about the range of interventions available when a provider becomes distressed. Providers themselves can take a range of actions, including improving the management capability and expertise that they have. Commissioners are responsible for securing access to local services and they can use contractual levers to respond to poor performance and prevent provider failure. Monitor would intervene on a provider on the basis of a predefined distress test to prevent failure where possible. The CQC would monitor providers’ compliance against patient safety and quality requirements.
This locally led approach is especially appropriate where there is a pressing need for services to be reconfigured to ensure sustainability. I am sure that noble Lords will agree that a reconfiguration is more likely to succeed if it is based on close partnership working between commissioners, providers, local authorities and their local communities.
Baroness Thornton
Perhaps I may ask for clarification. The noble Earl refers to providers all the way through. Can we be completely clear that this means all providers —that is, private sector providers, NHS providers, social enterprises and charity providers of health services? Do all these levies and fines apply to them?
Earl Howe
My Lords, when I refer to providers of NHS services, I am referring to NHS providers and non-NHS providers. It is to be determined who will contribute to the levy. That is being worked through and I am sure that the noble Baroness will have noticed from the document that we published the other day that this work is ongoing. We will make further announcements about that in due course.
On Amendment 304B, I say that the board should consult the relevant commissioners but it must make the decision itself, which is what the Bill provides for. The noble Baroness, Lady Finlay, asked whether social enterprises will be within the scope of the health special administration regime. Social enterprises are companies so they will be within the scope of health special administration. It is right that they are not treated as NHS bodies as when assets are transferred from PCTs robust rules apply, as I have set out in detail in previous debates. She asked whether the NHS Commissioning Board would nominate a lead commissioner if a provider becomes unsustainable. The answer is yes.
I hope that noble Lords will find that series of explanations helpful and I ask the noble Baroness, Lady Thornton, to withdraw the amendment.
Baroness Finlay of Llandaff
Before we finish this set of amendments, I want to mention a particular group. I am grateful to the noble Baroness, Lady Thornton, for her intervention, as I want to refer to charitable sector providers who are finding fundraising particularly difficult now. They are beginning to be hit by the downturn in the economy and the downturn in giving, and there is a real risk that some of the charitable sector providers will find themselves in difficulty. If a levy is imposed on them as well, in terms of their registration with Monitor, that may tip them over. My request is that, in looking at all this, there will be separate consideration of the charitable sector providers from other providers.
Baroness Thornton
I thank noble Lords. I will take only a moment, but we will need to return to this. First, this was not looked at properly in the Commons and I can see that that is the case. Secondly, I recall that the chief executive David Nicholson disagrees. He said that he advocates de-authorisation. I believe that the pooling and the levy are bureaucratic and expensive and that the noble Earl does not understand that reconfigurations will not be led locally. I do not think that the Bill adequately approaches how we will manage reconfigurations. To be kind one has to say that the work is ongoing; I am not quite saying that the department and the Bill team are making this up as they go along, but it is definitely an area to which we will need to return on Report. I beg leave to withdraw the amendment.
“( ) If, at the time Monitor discharges the function under subsection (7), the day specified by the Secretary of State for the purposes of section 14A of the National Health Service Act 2006 has passed or section 6 or 178 has come into force—
(a) in the case of section 14A of the National Health Service Act 2006, the reference in subsection (8)(c) to every Primary Care Trust is to be read as a reference to every clinical commissioning group;(b) in the case of section 6, the reference in subsection (8)(b) to the NHS Commissioning Board Authority is to be read as a reference to the National Health Service Commissioning Board;(c) in the case of section 178, the reference in subsection (8)(d) to the Care Quality Commission is to be read as including a reference to its HealthWatch England committee.”
(a) commercial information the disclosure of which would, or might, significantly harm the legitimate business interests of the person to whom it relates;(b) information relating to the private affairs of an individual the disclosure of which would, or might, significantly harm that person’s interests.”
(a) commercial information the disclosure of which would, or might, significantly harm the legitimate business interests of the person to whom it relates;(b) information relating to the private affairs of an individual the disclosure of which would, or might, significantly harm that person’s interests.”
Lord Davies of Stamford
My Lords, I do not want to hold up the House for too long, but I feel that someone should respond to my noble friend Lord Warner’s amendment on behalf of what he rather dismissively described as the elected political class. I am proud to say that I was a member of that elected political class for 23 years, representing Grantham and Stamford. In the course of those 23 years I had to take action to save both Grantham hospital and Stamford Hospital, separately and at different times, when they were threatened with closure. I used all the methods which my noble friend is no doubt familiar with: meetings with Ministers, lining up local government support, petitions, threatening judicial reviews—even potentially funding a judicial review—and heading major marches. I remember leading over 9,000 people through the streets of Grantham and 5,000 through the streets of Stamford. We won in both cases. Grantham is still a very successful local district hospital and Stamford is a smaller hospital—what you might call a cottage hospital.
The point I wanted to make is this: I would have welcomed the sort of report from Monitor which my noble friend is suggesting. If one wants to save one’s local hospital, and one wants to make sure that the right decisions are made about the health of one’s constituents, one wants a warning as early as possible about the financial or clinical problems—or both—that may be arising. There are often all sorts of alternatives that one can find to closure. It is important for democratic confidence in the NHS that all the possibilities are thoroughly explored and everybody is content that the decision has not simply been taken behind closed doors and then announced to the public when there could have been some initiative that might have saved the day. On behalf of the—slightly dismissed—elected political class, I thoroughly support the amendment of my noble friend.
Baroness Thornton
I have a very small piece of advice to give the Minister. I always think that it is best to give in and agree with my noble friend Lord Warner. I have almost always found that this is the best course of action. The noble Earl might recall that, when I was a Minister, on one of the occasions where I did not give in I certainly came a cropper. I urge the Minister to think very carefully and seriously about what my noble friend has had to say. It merits great attention and it merits being in the Bill.
Earl Howe
My Lords, before that intervention I was about to say that I was very pleased that the noble Lord, Lord Warner, had returned us to this issue, which I, like he, regard as extremely important. It is a thoughtful amendment and will certainly prompt further thought on my part after this debate.
I do not think that there is any difference between the noble Lord and myself in this respect. I am certainly all in favour of ensuring that wherever possible there is early intervention and proactive monitoring of organisations well in advance of failure so that failure can be averted. The main difference between us, if there is one, is that we believe that this process should be locally led and not led from the centre, which is how I read his amendment. I probably read it wrongly. When the noble Lord spoke to it, he indicated that nothing in it was intended to run counter to that locally led process. I take that on board.
Why are we so keen on a locally led process? The overall aims that we set out are to put patients, carers and local communities at the heart of the NHS, shifting decision-making as close as possible to individual patients and devolving power to professionals and providers, liberating them from top-down control. This amendment would appear to do the opposite and could lead to an increasing level of decisions being centralised and moved away from local communities and their democratic representatives. The more that one does that, the less likely one is to get local buy-in. In a patient-led NHS, if it is to be worthy of the name, any changes to services have to begin and end with what patients and local communities need.
Baroness Thornton
Does not the experience of the last few years—we can name the hospitals concerned—show exactly the opposite of what the noble Earl is now saying to us, that this has to be locally led? We have to find some mechanism which allows decisions to be taken that does not dismiss or ignore local feelings. Of course people have to be involved in those decisions but, at the end of the day, we know about Chase Farm and several hospitals I could name. In north London, we know that we have too many hospitals. They have not been closed down because it is politically too difficult to do so. If the decision remains at local level, in north London we will still have too many hospitals. I have lots of MP friends who have campaigned to keep those hospitals in place, particularly before the last general election. It seems that what the noble Earl is outlining now will not work.
Earl Howe
Contrary to popular opinion, there have been cases of very successful and rapid reconfigurations of services. Of course, the ones that come to our attention are those that have taken a long time, such as Chase Farm. There is no better or worse example than that.
In reading this amendment, we should be cautious about any process that would significantly weaken both local commissioner autonomy and public engagement. We do not want to conflict with the statutory requirement for NHS bodies to ensure appropriate and proportionate involvement of patients and the public in service changes or reduce the ability for local authority scrutiny to bring effective democratic challenge to reconfiguration plans. I certainly do not think there is a case to reduce democratic accountability in this way.
I agree with the noble Lord that, where it is not possible to reach local agreement on a service change proposal, there should be mechanisms for independent review. We are retaining powers in the Bill for local authority scrutiny functions to be able to refer reconfiguration schemes. As part of the transition, we are also exploring how the NHS Commissioning Board and Monitor can work together to support commissioners and providers. As I have said, the key to successful service change is ensuring engagement with the local community and stakeholders so as to secure as broad support as possible in what can be very difficult decisions.