Health and Social Care Bill

Baroness Finlay of Llandaff Excerpts

Tuesday 13th December 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, licence conditions will be the mechanism through which Monitor will be able to prevent potentially anti-competitive behaviour and enable service integration, where this is what commissioners want. Monitor would also use licence conditions to collect the information it would need to set prices, and to help identify at an early stage—at an early stage—if a provider was at risk of financial distress. If that was the case, it could work with the provider to address potential problems, as well as supporting commissioners to ensure continuity of services. I completely understand the concerns in that area.

First, I think that I need to make clear that all providers of NHS healthcare services will be subject to the requirement to hold a licence. This includes providers of primary medical services, which is the question posed in Amendment 279A. Furthermore, where a provider is providing services that carry a requirement to be registered with the Care Quality Commission, that registration will be a prerequisite to being granted a licence by Monitor. We all want to see close operational links between Monitor and the CQC. The Bill emphasises this by placing duties of co-operation on both organisations, not just in matters such as information sharing, but also in the development of the joint application mechanism for providers seeking registration from both bodies.

We are also clear that regulation must be proportionate, and impose the minimum of additional burdens on those being regulated, while still safeguarding the interests of patients and the public. To that end, the Bill makes provision for the Secretary of State to make regulations establishing an exemptions regime, so that licensing can be targeted towards those parts of the health service where there is the greatest need for regulation. While we are clear that there must be an exemptions regime, we also recognise the importance of making sure that we get the scope of it right. To that end, we are already committed to consulting fully next year on our proposals for the exemptions regulations. Noble Lords may also be aware that the Delegated Powers and Regulatory Reform Committee of your Lordships’ House has recommended that the first set of exemption regulations should be subject to the affirmative resolution procedure. We agree, and both Houses will have the opportunity to debate them before they come into force.

The Bill provides for Monitor to attach conditions to licences. While the Bill sets a framework for the scope of those conditions in Clauses 95 to 97, we are clear that it will be for Monitor itself to develop the detail as the sector regulator. The intention is that the conditions will support Monitor in exercising its functions and that Monitor will be best placed to know how they should be framed to achieve that. Therefore, including large numbers of mandatory conditions on the face of the Bill, as some noble Lords have suggested in certain amendments—for example, Amendments 283, 285ZA and 287A—would undermine the Monitor’s independence, which we do not think is desirable if it is to be a robust and vigorous sector regulator.

Nevertheless, I would like to reassure the Committee that there will be proper oversight of Monitor’s proposals for conditions. My right honourable friend the Secretary of State will have the power to veto the first set of licence conditions. We are clear that Monitor must be able to operate freely and autonomously within the legislative framework established by the Bill. We have built in reasonable checks and balances through requirements for key products, such as the licensing criteria and conditions, to be subject to approval by the Secretary of State. Although I understand entirely the reasoning behind amendments tabled by noble Lords which would increase the level of the Secretary of State’s involvement in provider regulation—for example, Amendments 281A, 282A and 282B—regrettably, I feel that these go a step too far in limiting Monitor’s independence.

The noble Baroness, Lady Thornton, asked me quite a number of questions to which I feel I should write in response. In particular, however, she asked whether Monitor will have the role of resolving disputes and whether all disputes would go to court. The answer to both of those questions is no. The NHS standard contract already provides for contractual disputes to be resolved through arbitration and this will not change. Licence holders have to agree special conditions or modifications to conditions. If the provider disagrees and Monitor then wants to proceed, it must refer the matter to the Competition Commission for consideration.

My noble friend Lord Clement-Jones spoke to Amendment 281A. I want just to comment briefly on that. The amendment would increase the minimum length of notice period during which representations could be made following publication of a notice of proposed exemptions. I am grateful to my noble friend for that. The Bill is clear that the notice period should be not less than 28 days. It could therefore be much more than that, and our expectation in most cases is that it will be. But there will be times when the Secretary of State needs to act quickly, so being locked into a notice period of not less than 90 days could be detrimental to a particular provider or group of providers.

My noble friend Lady Williams spoke to two amendments, Amendments 287EA and 287EB, where the purpose is to ensure that licence conditions on providers of NHS services restrict the income they can earn from private patients and the number of private patients they treat, as well as that funds provided for NHS care are not used to subsidise private treatment offered by foundation trusts, with various conditions attached. I understand my noble friend’s concern about this. However, the amendments would be impractical, and in particular for licence holders who are not NHS bodies they would be highly undesirable. Foundation trusts’ principal purpose—we will come to this in a later group of amendments, when we discuss the private patient income cap—is to provide goods and services for the NHS in England. It means that they must earn most of their income, over 50 per cent, from NHS services. We are tabling a government amendment to make it clear that the majority of every foundation trust’s income will continue to be from NHS service provision. Foundation trusts must comply with their principal purpose or they will be breaking the law. They could be at risk of successful legal challenge if they fail to meet their principal purpose. We are tabling a second government amendment to require foundation trusts to show in their annual reports how income earned from private activities has impacted on the provision of NHS services. Using NHS income to subsidise private patient work would lead to foundation trusts breaching the NHS constitution. The Government also gave a commitment that foundation trusts will have to produce separate accounts for their NHS and private-funded work.

Finally, I want to mention briefly the amendments that will fall to me to move in relation to licensing: Amendments 280A, 281B, 284A to 284C, 285A, 286B, 287C and 287D, and 288A to 288F. These are without exception minor tidying-up amendments to improve the drafting or clarify meaning, and I hope that the Committee will accept them when they are moved. I hope, too, that the Committee feels reassured by my explanation of how we envisage licensing to operate and that the noble Baroness will be able to withdraw her amendment.

[Baroness Finlay of Llandaff]

My Lords, can the Minister provide clarification on the questions I asked? First, who is going to define what is expected of primary care services in terms of how they are integrated? If that does not form part of their licensing, who will define the minimum standard across the country? Secondly, in Amendment 282ZC I set out that:

“A criterion for a person or organisation to be granted a licence must be that that person or organisation demonstrates a commitment to education, training and research”.

I would be grateful if the Minister could explain the situation when someone may well be good enough to provide clinical services but shows absolutely no commitment to any aspect of education and training, even for the development of their own staff, or to any of the research developments that might be happening in their field. I would include in this physiotherapy and occupational therapy assistance, such as people putting appliances into homes and those providing supportive care-assistance services in health, but not the secondary and tertiary-care specialised services which are covered very adequately by all the criteria from the royal colleges. It is about the minimum standard.

My third question relates to indemnity: do the Government feel that it is acceptable for a provider to be licensed without having to demonstrate that it has adequate indemnity?

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[Baroness Murphy]

My Lords, I wanted to come in on this matter of anti-competitive practices and the role of Monitor in it. I apologise to the Committee if some of these matters have already been covered, but I was unable to be here this morning. However, this seems like an opportunity to speak, as we are discussing Monitor’s role in anti-competitive practice.

I am concerned that we have not yet talked about the quite serious anti-competitive practice that exists in the NHS today, and how damaging it is. As we know, the independent co-operation and competition panel has highlighted a range of tactics that are very common at the moment in the NHS and which go seriously against patients’ interests. We have not sufficiently considered these when we are looking at competition. We tend to think of competition in relation to the independent sector versus the NHS in approaching the provision of services, but in fact it is this anti-competitive practice within the NHS which is so damaging. An example of this is the protection of certain local services against providers for elective operations, and so on.

I can think of an example in my own backyard, at Barts and The London—and this is a very real case. For years and years Barts used the mainstream orthopaedic services to provide local podiatry services, at a very high cost and very anti-competitively against the local community services, which had very skilled podiatrists who were able to do foot operations very cheaply and simply with a much smaller waiting list. Those sorts of anti-competitive practices are rife throughout the NHS, and are against patients’ best interests. It is utterly crucial that this role to reduce as much anti-competitive practice as possible should be watched by Monitor, but we want it to be co-ordinated with its role on integration—there is absolutely no reason why the two things cannot go side by side.

I am sure that we will come on to mergers and acquisitions, but the recent protection of patients and the public—for example, against the merger of two mental health trusts, Norfolk and Waveney, and Suffolk—seems to me to be extremely good judgment about what is likely to be in patients’ best interests. We should remember these matters of anti-competitive practice that are, as I say, rife in the NHS, and we really need to do quite a lot to stamp them out. I hope that the role of Monitor in working on these practices in patients’ best interests will be strongly supported.

[Baroness Finlay of Llandaff]

My Lords, the noble Lord, Lord Warner, was most helpful in setting out the criteria with which one would want to look at competition, and emphasising the importance of competition. But there is another area of competition, which is the one that really drives up quality of care: the inherent competitiveness of different clinicians and different clinical services, their desire to have better clinical outcomes than others, and the pressure that they will put on themselves within their own team to achieve better clinical outcomes.

I apologise to the House if I contributed in any way to the confusion over the numbering of the amendments as they have arisen. I would like to address the ones that come after Amendment 266, which will be Amendments 268B and 267C. Amendment 267C was tabled because of the large number of patients with complex clinical conditions.

It is very easy, when we are thinking about tariffs and services, to look almost at discrete nuggets of care, diagnosis and so on. Indeed, Monitor has a requirement in the Bill to seek appropriate advice to effectively discharge its functions in,

“the prevention, diagnosis or treatment of illness, or … the protection or improvement of public health”.

The amendment related to the management of a wide range of complex conditions has been tabled because in complex conditions many situations overlap and cannot be discretely targeted together, nor can they necessarily be unpacked one from another because of their impact on each other. That requires integration of clinical services.

[Baroness Northover]

The noble Baroness might be aware that Amendment 267C has leapfrogged from the group with Amendment 264 to the group after this. She may wish to address that amendment when we come to that group.

[Baroness Finlay of Llandaff]

I thank the noble Baroness. I am most grateful. That message had not reached me, although I may be a little deaf. I shall simply confine my remarks to the amendment in this group about Monitor reporting annually to the Secretary of State on how it discharges its duty to promote integration. I do not think that the comments that I made previously are annulled. They are relevant because, unless we have integrated services—however much they may be seen to be in competition with each other over different aspects—and attempt to have a seamless provision of care, at the end of the day it will be the patients who fall through the gaps.

Earlier today, we heard a lot about Monitor being light touch, not having a series of minimum criteria and being able to use its discretion in how it grants licences of all sorts. But I have a concern that there has to be a means by which the way in which Monitor functions is transparent and available to public scrutiny. That is why I have suggested that an annual report to the Secretary of State would allow such scrutiny to occur, particularly as regards promoting integration.

[Lord Beecham]

My Lords, in the first instance, I shall speak to Amendments 267ZDA and 269 in the names of my noble friend Lady Thornton and myself. Amendment 267ZDA refers to the need for integration. Indeed, there are a series of amendments on integration, with which I will try to deal as a group. Amendment 267ZDA gives an interpretation of integration which would,

“mean that health-related and social care services are provided in such a manner that individuals will experience services … as being independent of organisational barriers”—

which I suppose is the very definition of integration—and which offers patients,

“the most appropriate involvement in their care choices … which reduce … the need for separate assessments; and … which result in a care plan for the individual which covers all aspects of their care”.

Surely that aspiration would be shared by the Committee and widely within both the health and social care professions. It would seem to make sense to incorporate it in the Bill. However, Amendment 269 simply makes clear that it is unnecessary for a provision in the Bill to repeat a definition of anti-competitive behaviour since that already exists in existing legislation, although that is not a hugely important point.

In relation to other amendments in terms of integration, we certainly support Amendment 268B, which would provide the duty for Monitor to report annually as to how it has promoted integration. Amendment 274B seeks a requirement to publish a statement if conflicts between its functions arise which are likely to have a significant impact on integration of services. Amendments 278 and 278B impose requirements on the national Commissioning Board and clinical commissioning groups to extend the right of patients to make choices in respect of the integration of healthcare and to ensure the integration of services where that is in the public interest. Again, the aim is to drive the integration agenda. Then, as an overarching provision, Monitor would have under Amendment 278C the power to investigate whether the Commissioning Board and clinical commissioning groups are complying with those requirements. All of these seem to be perfectly sensible amendments to provide the right structure and one which Monitor could effectively supervise.

Still on the integration agenda, there are later amendments—Amendments 286A, 287 and 287B—which impact on integration. Amendment 286A allows a modification of Monitor’s powers to encourage integration, if that is in the interest of patients, as it usually will be, presumably. The amendments provide for modifications to licence conditions—again in the interest of integrated healthcare—to ensure that standing conditions of licences include requirements relating to or encouraging the integration of healthcare services. All that makes a sensible package to drive an important part of the underlying concept of the Bill and the too-long-deferred integration of services.

The other amendments in this group essentially relate to the issues of collaboration or competition. Here, it is slightly unfortunate that the noble Baroness, Lady Finlay—I am sorry, the noble Baroness, Lady Hollins—did not move Amendment 265ZA, which stresses that Monitor must exercise its functions with a view to promoting collaboration and preventing competitive behaviour. I think that is the other side of the coin that the noble Baroness, Lady Murphy, put on the table previously when she was complaining, perhaps rightly, about anti-competitive practices within the NHS. A more positive way of looking at that agenda is to say that NHS bodies should collaborate on the provision of services, rather than take a negative stance. That is, I suppose, a necessary fallback position, but the prime objective must be to ensure collaboration within and across health service provision and—having regard to what has just been indicated in relation to integration—with social services as well. That is probably the right approach.

Other amendments in this group relating to competition raise some other issues. For example, under Amendment 265C, there is a suggestion that Monitor’s duty to prevent anti-competitive behaviour should be qualified by requiring it to aim to improve the quality of services and outcomes and the efficacy of provision and reduce inequalities. These are listed separately; I take it that all of them—rather than any alternative—are intended to be part of Monitor’s duty. If the Minister were minded to accept the thrust of that argument, he would do so in that sense.

Again, there is the provision under Amendment 266, tabled by my noble friend Lord Warner, for Monitor to conduct and publish a review of anti-competitive barriers and their impacts within a year of Royal Assent. There may well be some sense in that, particularly in regard to the way in which he moved the amendment. There are similar duties on Monitor to look at impact assessments under Amendment 275. Government Amendment 278D, to be moved by the Minister later, refers to non-disclosure of the “business interests” of parties. Does that extend to the interests of, say, trusts or voluntary sector providers? Does “business” relate to their activities or would it be confined to commercial providers? It seems to me that it would be invidious if only one part of the provider sector had the protection of confidentiality; it should be applicable to all or none. There is of course no issue with the amendment that requires individual circumstances not to be subject to disclosure.

I have a question about Amendment 278J, which requires the Competition Commission to review the “occurrence” rather than the “development” of competition in the provision of healthcare services. It is not clear to me what the significance of the word “occurrence” is. This is not a government amendment and I do not know whether those who originally tabled it want to clarify the position. I understand the amendment if it requires the Competition Commission to review the impact of competition in the provision of healthcare services, but I do not know how the occurrence of competition would be reviewed. It does not actually make much sense to use the word in this context.

The thrust of most of these amendments makes sense and sets out a sensible role for Monitor. In what would have been the next group but for the leapfrogging, we will come on to look at the issue of conflicts, and I am sure that there will be some further discussion about that. However, I hope that the Minister will feel able broadly to support the amendments in this group and recognise that they should contribute to meeting the shared objectives that have emerged from today’s debate.

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Moved by

[Baroness Finlay of Llandaff]

267ZDB: Clause 59, page 88, line 6, at end insert—
“(c) local authorities carry out their duties in providing social care for children in their area, and to the smooth transfer of their caring responsibility when a child moves into adult social care services.”

[Baroness Finlay of Llandaff]

My Lords, this group of amendments concerns children, particularly their social care. We have laid these amendments because we could find nothing in the Bill that mentions this. Children’s services will be commissioned potentially by six different groups. The Commissioning Board at national and at sub-national level, particularly through health visitors, will be responsible for the public health of children under five—until 2015 when that will transfer to local authorities—and also for primary care. That is often the first point of contact for problems in children which require a great deal of social care intervention integrated with healthcare provision. Public Health England is responsible for public health campaigns and health protection. The clinical commissioning groups will again be involved potentially at two levels; supra-locally and locally. The sixth area is the local authorities with the healthy child programmes for those aged five to 18, school nurses and child health for the nought to five year-olds after 2015, which is when the health visitors transfer.

However, all these different aspects of healthcare interrelate very closely with children’s social care. There are concerns over accountability, how the services will keep track of complex provision and who will be responsible for children’s health and welfare, particularly as regards obese children and those who have been bereaved. There is concern about children’s reaction to grief and the impact that this has on social behaviours, and how the public health services which deal with the prevention of childhood obesity can be evaluated and held to account.

Health visitors are the eyes and ears of the child aspects of primary care. However, there is concern about how they will relate to the primary care and accident and emergency sectors and social workers when they transfer to local authorities. How will the information on the at-risk register be transferred and how will access to primary care records be speeded up? Will the IT systems be compatible to enable effective information transfer between child and adult services, particularly when children who have multiple social problems reach an age when they will be transferred to adult services? There is particular concern about children with severe learning difficulties and developmental delays who require a great deal of social care input. They cannot be their own advocates and are extremely dependent on others. Therefore, it is important that the relevant information is successfully transferred. We know from previous tragic child abuse cases that information which has to be moved from one sector to another often gets lost, drops through the gaps and children suffer as a result.

There must be a smooth transition from one carer to another, particularly where children’s and adult social services are provided by different providers. It is important that adult social services should be satisfied that the children’s social services have done their job properly and thoroughly because, if they have not, the patient will suffer and adult social services may be faced with an unfair cost incurred as a result of a deficiency in the services provided by the children’s social services.

Our amendments do not propose a radical solution to the problem. We are fairly confident that the Government will not accept them as they will not want further major complications in what is already a very complicated Bill. They are simply designed to provide that at some time in the future Monitor will be given the power to check that all providers of children’s social care are doing their job properly, and that when they transfer a child to adult social care there is a smooth and sensitive transfer of responsibility and a complete transfer of information so that there are no gaps through which these children can fall.

We look forward to hearing what the Government’s solution is to this problem. We rather hope that the Minister might offer us some discussions outside the Committee to try to address some of the real problems that arise when children, including those aged nought to five, transfer from children’s services into adult services, given the gaps in information provision which can occur at the transition point. I beg to move.

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[Earl Howe]

My Lords, I understand and well appreciate the concern of the noble Baroness to ensure a high standard of children’s social care services and, in particular, a smooth transfer for young people moving from children’s to adult social care services. I would, of course, be very happy to speak to her and indeed the noble Lord, Lord Northbourne, about this issue away from the Committee, if they consider that to be an appropriate way forward.

On the specific amendments that we are looking at, I really do not think that Monitor is the right organisation to ensure that local authorities are carrying out their responsibilities on these issues, or to act as a regulator of children’s social care services. I am confident that existing arrangements for the regulation and inspection of children’s social care are sufficient and robust. Joint working is important and I hope that the noble Baroness will be reassured that the relevant inspectorates are already working together to improve the arrangements for joint inspection, which will address the very important issue of child to adult transition that she has raised.

Children’s social care is regulated and inspected by Her Majesty’s Chief Inspector of Education, Children’s Services and Skills—Ofsted. Its inspection remit covers all local authority social services functions relating to children—that means services for children in need, safeguarding children, children in care and care leavers, as well as adoption and adoption support services. Local authority adoption and fostering functions must be inspected by Ofsted at a minimum of every three years. Ofsted can of course make unannounced inspections.

We are already working to improve these arrangements. Ofsted consulted over the summer on local authority child protection inspection arrangements that will be more child-centred and less bureaucratic. This new type of inspection will begin in May next year. In addition, all relevant inspectorates have agreed in principle to Professor Eileen Munro’s ideal model of joint inspection, which looks at the contribution all services make towards protecting children. Noble Lords may recall that Professor Munro last year conducted a thorough review of child protection arrangements for the Government. The Care Quality Commission is one of the inspectorates working with Ofsted to establish what those services will look like and when they will begin.

For children with special educational needs and disabilities, the recent Green Paper proposes a new education, health and care plan, covering support from birth to 25. The new plan will include a much clearer focus on the long-term outcomes for children and young people including independent living and employment. This should improve outcomes for young people with special educational needs and disabilities as they make the transition from school into employment or training.

I hope that the noble Baroness will appreciate that work in this area is ongoing. I sympathise with the tenor of all she said, but if she is content to wait for a discussion following these Committee proceedings, I hope that she will, in the mean time, withdraw the amendment.

[Baroness Finlay of Llandaff]

I am grateful to the noble Earl for his response. It is those transitional points that we have been particularly concerned about. I will discuss this with the noble Lord, Lord Northbourne, and it would be helpful for us to have a short meeting. We are grateful for the fullness of the response from the Minister. I beg leave to withdraw the amendment.

Amendment 267ZDB withdrawn.

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[Baroness Murphy]

I realise that I have another amendment in this group, and I would have saved the Committee a great deal of disquiet over the numbers if I had spoken to this one in the first place, so my apologies all round. This group of amendments is about how Monitor discharges its functions and what it takes into account. Mine is a probing amendment on whether we have the objectives for Monitor and their number right. Experience from other sectors suggests that if too many policy priorities are set, the regulator can become confused about its primary objectives, which can reduce its effectiveness. I wonder whether we have the clarity of Monitor’s objectives right.

Monitor will find itself in the position of other regulators in having to devise policies, particularly on the tariff, to meet a wide range of objectives over and above its primary duties. The experience of Ofgem, in particular, suggests that the risk might grow over time as the Government seek solutions for new problems as and when they arise. Setting too many policy priorities carries the risk of confusing the regulator about its primary objectives. That might be inevitable, given the complexity of healthcare policy-making, but it means that the accountability of the regulator in discharging those various functions is critical.

For other major economic regulators, the Government have committed themselves to updating the objectives only once in a Parliament and ensuring that objectives are outcome-focused. Monitor's objectives, unusually, will be set in primary legislation. I wonder whether they would be better in secondary guidance, together with a clear process for agreeing changes with the Department of Health, to protect the regulator from political whim. Nevertheless, it has a number of primary duties in Clause 59. In Clause 62 it has to have regard to a number of other matters. Monitor might find it difficult to demonstrate that they are all taken into account when decisions are made, possibly making it open to legal challenge. I wonder whether it is possible to reduce the number of duties.

I have included just one or two as exemplars simply because I think that they duplicate existing duties. In Clause 62(b),

“the desirability of securing continuous improvement in the quality of health care services for the purpose of the NHS”,

which is crucial, duplicates a primary duty in Clause 59(1)(b), so I think it could be removed. Clause 62(c), on,

“the desirability of securing continuous improvement in the efficiency with which health care services are provided for the purposes of the NHS”,

duplicates a duty under Clause 59(1)(a). Surely that could be removed. These are minor, tidying amendments, but if we can clarify for Monitor what its objectives should be, that would be a help to the regulator.

[Baroness Finlay of Llandaff]

My Lords, I half spoke previously to the need for Monitor to have regard to complex clinical conditions. I return to that and build on the comments that have just been made, particularly in relation to tariffs.

We are already beginning to see a degree of fragmentation through systems such as “choose and book”. We heard on a previous day in Committee about the problems for patients with various complex conditions, who have to be sent back to their general practitioner to be able to access a different discipline in secondary care and how their care then becomes fragmented. If you are going to provide good integrated care and improve clinical outcomes, you need all the different systems of the patient to be addressed simultaneously—the psychological and welfare areas as well as the different physiological systems that might be affected by a range of pathologies.

I remind the House that it is much easier when people are not terribly ill. When they do become terribly ill, more and more systems fail and become involved: cardiac complications, overwhelming infection, renal failure and potential dialysis might all be involved, and if there has also been trauma with orthopaedics there might be a lot of complex psychological conditions relating to whatever has happened to the person. They all need to come together around that patient. The patient cannot be parcelled off from one service to another or people be brought in sequentially like small aliquots of opinion.

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[Lord Clement-Jones]

My Lords, Monitor has a range of duties which could potentially conflict with each other. Of course, we have discussed that previously, and it is recognised in Clause 63 of the Bill.

In specialised care, it is sometimes desirable to limit the number of providers to ensure that patient volumes are sufficient to support clinical expertise and high quality, safe services, an approach which was promoted by the Bristol inquiry and enshrined in the Carter report on specialised commissioning in 2006. This is entirely consistent with Monitor’s main duty under Clause 59(1), to

“protect and promote the interests of people who use health care services by promoting provision of health care services which is economic, efficient and effective, and maintains or improves the quality of the services”.

However, in terms of one of Monitor’s duties under Clause 59(3), to prevent anti-competitive behaviour, this could potentially be described as a restriction of competition. It is therefore important, I believe, to get a clear understanding that Monitor’s paramount duty should be towards the safety of patients, or, to put this another way, towards their welfare. In other words, it is legitimate for competition to be restricted in the NHS where it is in the interests of patient safety.

This amendment is designed to seek clarification that Monitor’s role in preventing anti-competitive behaviour will not debar the designation of providers of specialised services. I beg to move.

[Baroness Finlay of Llandaff]

My Lords, I have an amendment in this group which really builds on the amendment already spoken to comprehensively and efficiently by the noble Lord, Lord Clement-Jones—that is, to not impose a burden on providers in the process.

One of the difficulties in any type of regulation or inspection is that it is very easy for those who are doing the inspection to require more and more data from a provider to support whatever they view as their outcome and their inspection processes. There is a real danger in here that sometimes the regulatory processes can develop a life of their own, and, quite inadvertently, become a burden on providers. We have already seen that occur with some of the current inspection processes in place, which seem to have collected an inordinate amount of data sometimes, but have missed out on real deficits in care.

It is a paramount duty towards the safety of people who use healthcare services, and built into that of course will be good clinical outcomes, because bad clinical outcomes will be unsafe in the process. However, it is also a suggestion—and this is therefore a probing amendment—that the regulatory burden on the providers must not be excessive. They must be able to deliver patient care without diverting resources away from it in order to meet requirements from a regulator.

[Lord Davies of Stamford]

My Lords, I find it not entirely surprising that a number of us this afternoon have found it difficult to know at exactly what point we should be making the contribution that we wanted to make, because of course there is an immense overlap between the themes that all the clauses we have been reviewing today have brought forward.

All those clauses, and most of the amendments to them, necessarily derive from a single decision by the Government. This was the decision that they wanted to distance the Secretary of State from the operations of the health service and superimpose a set of bureaucracies and regulators that would in future take on the responsibility that the Secretary of State has had until now. That was a decision that has had, and will have, a lot of consequences.

Three consequences in particular are very unfortunate. The first is that there will inevitably be a lack of transparency. You may impose on Monitor the obligation to produce the annual report and occasional statements on the decisions it takes, and impose on clinical commissioning boards, foundation trusts and other bodies within the NHS an obligation to try to relate to the local public and have meetings and report to them and so on. However, you will never get the degree of close oversight that you can get in Parliament when the important decisions are taken by the Secretary of State in Parliament, where they are subject to a weekly or, when necessary, daily scrutiny. That does not apply to the functional decisions, which I will come to in a moment. That is the first inevitable cost of this proposal by the Government.

The second consequence is the cost to democracy. People will no longer feel that the health service is being delivered by their democracy, or is part of their democracy. It will increasingly be delivered by relatively remote and autonomous bureaucracies which will no doubt be staffed by the most high-minded people—a sort of platonic mandarinate who will certainly deliver the best they can for the human beings in their care. However, that is a very different concept from the democratically driven concept of the National Health Service on which a lot of us were brought up and which was, of course, the vision of Beveridge and Bevan.

The third consequence, to which I turn in specific detail, relates directly to the clause and amendments before us. Many contradictions and conflicts of interest will be created in the organisations and bureaucracy that take over the Secretary of State’s role. Until now the Secretary of State has been responsible for taking those decisions that are properly political decisions in the true sense of the word. They involve priorities, value judgments, trade-offs and strategic decisions for the future, which have properly been decisions of the Secretary of State up to now. Many of them will now be taken by someone else, particularly Monitor, which will take over from the Secretary of State the job of making sure that the whole system works. I have no doubt that the Government hope that that will work out well, but I repeat that I think that the effort, the initiative, is misconceived.

Two types of conflict will inevitably be structurally hardwired into Monitor. There will be the functional conflicts to which I have already referred. Monitor has specific, specialised responsibility for licensing and overseeing foundation trusts and making sure that problems are ironed out. That is one particular sector on the provider side of the equation. It now has a whole lot of responsibility for everyone else on the provider side and for the supplier side. There are some inherent conflicts.

There are also philosophical conflicts. Monitor is being given very many criteria. Clause 59 sets out what probably most of us would write if we were asked to write the most important targets of the health service on the back of an envelope. However, there is no attempt to establish a hierarchy and there will be conflicts between them the whole time. In the short term at least there could be serious conflicts between increases in efficiency, for example in access and improvement in care, and in all the other virtuous objectives set out in that clause.

The noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Finlay, have brought forward their own solution. They say, “Well, let us take one criteria, make that the overriding criteria and then Monitor won’t have a conflict any more”. That is how I understand the logic of what they propose. Perhaps I may disagree for a moment with the noble Baroness, Lady Finlay. It is not right to say that she builds on the suggestion made by the noble Lord, Lord Clement-Jones, because her proposal comes under different criteria. The noble Lord thinks that the safety of the patient is the most important thing, and the noble Baroness thinks that it is not to place too great a burden on providers. Both are admirable considerations, but by definition they cannot both be the overriding determining consideration where there is otherwise a conflict between desirable objectives. That will occur the whole time. These two amendments highlight the problem created by the way that the Government have decided to approach the future of healthcare in this country.

I turn now to the Government’s answer to the problem that I have set out. It is quite extraordinary. Clause 63(2) states:

“Monitor must act so as to secure that there is not, and could not reasonably be regarded as being, a conflict between”,

its responsibilities, which in this case are foundation trusts, and the rest. How can Monitor possibly act as if there is not conflict if there is a conflict? You cannot just pretend that there is not conflict and think that that means that the conflict has disappeared. That does not work at all. The same thing applies to subsection (3), which states:

“Monitor must ignore the functions it has under sections 109 and 111 when exercising … its functions under Chapter 2 … and Chapter 4”.

What exactly does that mean? It cannot be ignored. Of course, Clause 109 is about when a foundation trust runs into difficulty. When that happens the Government cannot wish away the fact that the foundation trust has a difficulty; they have a responsibility to resolve it. Perhaps they mean that there will be a department looking after the foundation trust’s problems but that it will not be allowed to speak to the departments with the general responsibility that Monitor exercises across the rest of the health service.

If that is what the Government are saying, perhaps they should say it explicitly. But if they are going to set up two separate departments which will not be allowed to talk to each other—there is a kind of negative synergy in an organisation having two functions of that sort—why not have two separate organisations? What is the logic for having Monitor at all if it will have to operate in this extraordinary way? I have intervened because the Government need to tell us clearly, before we agree Clause 63 and accept this Bill into the legislation of this country, exactly how they propose to grapple with the serious problems that their decision has created. I do not think that we will accept in this House that their decisions can simply be wished or thought away.

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[Lord Clement-Jones]

My Lords, I thank my noble friend for that reply, which I have found very helpful. It was robust in one sense and has set out a robust framework in another. Although I was also interested in what the noble Lord, Lord Davies, had to say, in that it would tie us all in knots, I think that the Minister’s exposition was clear in that it has set out a suitable conflict framework. Although I cannot speak for my noble friend Lady Williams, I thought that the Minister explained the necessity for Clause 63(3) very well. His reassurance on the aspect of patients’ interests was extremely helpful as well, although of course it does not mean that the spectre of EU competition law does not still haunt us somewhat and that it will continue to be the subject of discussion, perhaps outside this Chamber. After all, that could override everything else if we are not careful.

I took considerable comfort from the Minister’s undertaking to review Clause 62 as well, because that is quite a shopping list. If it could be clarified, that would be helpful. His general undertaking to the Committee on the conflict area was also very helpful. In the circumstances, I am happy to withdraw my amendment.

[Baroness Finlay of Llandaff]

My Lords, I want to make a brief comment in response to the Minister’s reply to my amendment in the group, Amendment 274ZAA. He said that he was minded to rationalise the items in Clause 63 and therefore I feel that I must put in a formal plea that research, education and training should not be deleted from the list in the process of rationalisation. Having said that, I shall not press my amendment.

Amendment 274ZA withdrawn.

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[Lord Clement-Jones]

My Lords, I will speak to Amendment 292ZA, the question that Clauses 119 and 120 stand part, and Amendment 294M. I shall principally speak to Amendment 292ZA, which is designed to make sure that the national tariff recognises the varying costs associated with people who have experienced homelessness or have complex needs in respect of the full range of healthcare services.

The Bill commits Monitor to publishing a national tariff for services which are or may be provided for the purposes of the NHS. Within this, the Bill makes provision for this tariff to be varied to reflect certain circumstances in which it is provided. However, homeless charities believe that the Bill needs to go further and make provision for tariffs to be varied to reflect the level of complexity and disadvantage experienced by certain patient groups. People who have complex health needs can cost more to treat. Unless the tariff structure reflects this, there is a real danger that services will not wish to treat those patients for whom health outcomes can be harder to achieve—such as homeless people.

Why should this not be reflected in the Bill? There is evidence that health services can already be reluctant to work with homeless people because of the higher costs of treating them. Unless the higher costs of treating some patient groups are taken into account, there is a real danger that the new tariff system may discriminate against homeless people and others with complex needs. In the long term, this will also incur a far higher cost to the NHS and other public services. Failure to treat disadvantaged patients at a primary care level can result in higher rates of hospital admissions, greater demands on acute care and the wider costs of ongoing poor health such as worklessness.

Homeless people have some of the poorest health in our communities. People experiencing acute disadvantage can have complex health needs. As the Department of Health’s Inclusion Health report stated, in order to meet the complex health needs of socially excluded groups, we need,

“a sophisticated, coordinated and flexible response from services. The costs of failure are great not only to the individual life chances of socially excluded clients, but also to the taxpayer, services and the communities who pick up the pieces”.

Unfortunately, many mainstream services do not offer this and as a result are not accessible to disadvantaged patient groups.

Currently, some specialist homeless or vulnerable person’s health services have negotiated their own tariff system so that they are not unduly penalised for treating complex patients. However, this can be difficult to negotiate and such services are not widespread. Unless there is provision for this and the new tariff system takes the wider factors that affect disadvantaged patients into account, services may be disincentivised from treating them. This will lead to poorer health outcomes and make it harder for the NHS to achieve a reduction in health inequalities.

My amendment builds on the commitment to improve the health of the poorest the fastest. The intention to reduce health inequalities through the reform of the NHS has been embedded in the reform process from the first White Paper in 2010. It was revisited by the NHS Future Forum, which flagged up a number of concerns about incentives against cherry-picking at the expense of more complex and expensive patients. In their response, the Government said that services,

“will be covered by a system of prices that accurately reflect clinical complexity”.

My amendment would help to achieve that.

Amendment 292ZB is simply designed to make sure that when Monitor sets prices, and consults on whether to vary prices, it takes into account its duty to promote integration. That is the reason for the reference to Section 13M of the National Health Service Act 2006 and clinical commissioning groups’ duties under Section 14Y of that Act.

On the question that Clauses 119 and 120 stand part, these were referred to in my speech at the beginning of the day—that now seems a long way away. This relates to the reference to the Competition Commission under Clauses 119 and 120. This is also to do with the reference to the method of reaching a price under the national tariff. The Minister dealt earlier with the issue of why an independent body had been chosen for that purpose but it could equally well be the OFT, which I believe would be less provocative and probably more apposite. That was certainly the view of my noble friend Lady Williams when she spoke to her amendment, and I very much hope that the Minister and the department will revisit that issue and see whether it is possible for the OFT to be the body that actually looks at the method of setting tariffs in those circumstances where there is disagreement. That would be a lot less provocative and less liable to introduce EU competition law, along with all the other matters that are involved.

I do not currently have Amendment 294M to hand, sadly, but no doubt I will shortly if I keep talking for slightly longer. It ensures that all providers licensed under chapter 3 and operating in relevant clinical commissioning groups are paid the same price for the provision of services. This is designed entirely to make sure that there is a level playing field within clinical commissioning groups’ areas. I hope that it is the intention in the setting of national tariffs that they will be uniform and there will be no difference in tariff paid by one provider versus another within the same CCG area. With that, I think that I have completed all the amendments that I intended to speak to.

[Baroness Finlay of Llandaff]

My Lords, I am tempted to say, “Follow that”; I certainly cannot. The reason why my Amendment 294BZA in this group is a probing amendment is that the wording in Clause 117(1)(a) talks about the,

“differences in the costs incurred in providing health care services for the purposes of the NHS to persons of different descriptions”.

It seemed to be extremely elegant and important to have in the Bill a recognition of the wide variation in both physiology and pathology that different people will present with and that that should determine the tariff itself, not simply be part of the consultation.

I hope that the Minister will be able to provide some assurance that findings from the consultation may indeed provide the range. Is it correct that additional support to secure continued access to services could come through commissioners and providers or, if they cannot reach agreement, for providers alone to be able to apply to Monitor for a modification of the price determined in accordance with the national tariff? Is it correct that Monitor would have the ability to approve and/or set the level of the modification under certain circumstances, using a methodology agreed between Monitor and the NHS Commissioning Board, if a provider could not, at the tariff price, cover its cost with an efficient service? One of the difficulties that keep emerging as we discuss tariffs is the complexity of applying them in the enormously wide variety of clinical situations that will be dealt with across the whole of the health services.