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7.16 pm

The Minister of State, Department of Health (Mr. John Hutton): I congratulate my hon. Friend the Member for Warrington, North (Helen Jones) on raising this subject and on her interest in ensuring that public resources in the national health service are used properly and effectively. I am also grateful to her for the opportunity to deal with some of the wider issues that she has raised and to reassure her that the Government share her concern to make sure that the highest possible standards of care are provided to people in care homes in future. In doing that, I hope that I will be able to confirm to her that we have the coherent strategy for improving services that she seeks.

I also wish to confirm that the modernisation process that we have set in train will not bypass community care. The new arrangements for improved planning between health authorities and local authorities that we have put in place, the use of the flexibilities in the Health Act 1999

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on pool budgets and other arrangements and now the creation of new care trusts will lead to the progress that my hon. Friend wants.

I start by addressing the concerns that she has raised again about Integrate Services and its use of section 64 grant money received from the North Cheshire health authority. She raised her concerns with me earlier in the year and also during an earlier Adjournment debate in February to which the Minister of State, Home Office, my right hon. Friend the Member for Brent, South (Mr. Boateng), replied.

Since then, as my hon. Friend has reminded the House, the Charity Commission has completed its investigation into the organisation. In its report, published in September, the commission found no evidence of fraud on the part of the trustees of Integrate Services. However the report criticised Integrate Services for poor management and poor financial and accounting procedures.

In particular, the commission found no evidence of detailed and effective systems for recording the use of charity expenditure and senior staff time. It also found that insufficient attention was given to ensuring that management and staff had the appropriate range of skills and experience needed in running such an organisation and considered that the trustees had failed to institute sufficiently robust checks and report-back arrangements on the effective systems of management control. As my hon. Friend will be aware, the report adds that some of the misunderstandings and disagreements that arose between Integrate Services and the health authority over spending could have been avoided had a full service specification been in place, and with better communication. Again, my hon. Friend has expressed her concerns about the lack of both.

The section 64 grant to Integrate Services ceased in March this year and the organisation has now gone into liquidation. However, ensuring adequate control over such public finds remains an issue to which we attach the highest importance. We have taken action, as the result of the case to which my hon. Friend has referred, to ensure that better and clearer procedures are in place in future surrounding the use of section 64 grants. I will say more about the changes that we have made shortly.

It might help my hon. Friend if I explain how the section 64 grant scheme works, and I shall do that as briefly as I can. At a national level, the Department itself gives grants to voluntary bodies in the health and social care sector. Applications for these grants are subject to close checking, including a check of the organisation's accounts. My officials keep in regular touch with the voluntary body to monitor whether the money is being spent for the purpose that it was given. During the life of the grant the voluntary body must identify its grant expenditure in its annual accounts and the Department checks these.

Several bodies are also selected annually for value-for-money audits by our auditors. Any signs of misuse of grants, lax accounting or poor value will be followed up. Through these arrangements the Department seeks to ensure that section 64 grants are spent in the way that we intended and are properly accounted for. These arrangements are kept under review in the light of events. I am satisfied that they enable us to identify a situation such as that at Integrate Services.

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At local level, health authorities also have powers to give section 64 grants to voluntary bodies in their areas, and my hon. Friend has expressed her concern about this. First and foremost, the section 64 grant scheme is an effective and important way of developing local partnerships between the national health service and independent providers. I am sure that my hon. Friend will welcome this close partnership working. She, like the Government, believe in partnership working in this area. It can lead to an improvement in services and good use of public resources.

Health authorities have a wide discretion over the terms and conditions that they apply to the use of grant by recipient bodies, though these must all be in keeping with the wider objectives of the NHS. As in their other financial dealings, they are required to exercise the standards of financial management control that is specified in their standing orders and standing financial instructions. These follow the normal conventions for public bodies. Authorities are subject to audit on that performance.

The example of Warrington Integrate Services is unusual. In our experience, it is rare for relationships between voluntary bodies and health authorities, founded on section 64 grants, to give rise to such problems. That in itself is evidence of the robustness of section 64 as a financial mechanism. None the less, the Warrington Integrate Services case has caused us to consider the general lessons to be learned from what went wrong. I pay tribute again to my hon. Friend for helping us to do that.

In particular, we have considered again the guidance that is available to health authorities in exercising their grant-aiding powers. As a result of the Warrington case, we have strengthened the guidance to help prevent, wherever possible, any repeat of this sort of problem in future. The revised guidance, which I am happy to send to my hon. Friend, emphasises the importance of there being a clear shared understanding about the purpose for which grant is, or is not, intended. It puts particular stress on monitoring to provide the necessary assurance that the original decision to award a grant remains valid, and that value for money continues to be secured. That is important at any time, but especially so when considering requests for renewal of grant.

The new guidance makes it clear that grant renewal should be managed as an active rather than a merely passive process. So, for example, we would expect authorities to be aware if a body was starting to build up a cash surplus on the basis of grants received, and if so to adjust any future grants to take account of that. At worst, if it became evident that money has not been, or is not being, used for the purposes set out in the grant conditions, it would be open to the authority to seek recovery at law. I hope that my hon. Friend is reassured by the steps that we have taken as a response to the problems that she helped to identify with Integrate Services.

I listened carefully to what my hon. Friend said about health authorities' responsibilities in working with the independent health care and social care sectors. Officials are working on guidance that will include model contracts to help social health and care communities to engage more effectively with the independent sector. It will make explicit the responsibilities of both the commissioners of services and the providers of care, ensuring the delivery of services that people need. The contracts will reflect

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the national minimum standards which we are currently developing and which will be applied by the new National Care Standards Commission.

In addition, we have published a concordat, which aims to develop the way in which the NHS should commission services from the independent sector. The Government see an important role for the independent sector, working in partnership with the NHS and local authorities, in the provision of services for older people. As highlighted in the NHS plan published earlier this year, the Government are developing a wide range of intermediate care services--as it were a bridge between hospital and home--to prevent avoidable admissions, to enhance rehabilitation and to enable as many people as possible to maintain or regain functional independence at home. That can be achieved in a number of ways, partly by investing more in NHS services, including giving new life to community hospitals, and partly by entering into new arrangements with the independent sector.

The whole-system approach, which is essential to the development of intermediate care, should be exactly that. There should be an inclusive approach that recognises the contribution made by all partners in the health and social care system. As part of this approach, the Government are currently exploring the opportunities for developing arrangements that would enable the best use of facilities, both in the NHS and in the independent sector.

The concordat highlights three particular areas for co-operative working--elective care, critical care and intermediate care--and it will be for local agencies to decide on the best way of providing services to meet the needs of their local population. The Independent Healthcare Association, a signatory to the concordat, has been contributing to the intermediate care debate and supports the introduction of contracts of the sort to be included in the guidance.

The measures that we are taking to reform the current regulatory arrangements for social services will also help to ensure that social care providers, whether private, voluntary or statutory, are properly regulated in terms of their financial probity, management and provision of care.

The Care Standards Act 2000 received Royal Assent in July, and I am grateful for my hon. Friend's support for the measures that we introduced in it. The Act will establish for the first time an independent National Care Standards Commission, responsible for regulating social care services. The legislation also enables the introduction for the first time of national minimum standards in care settings, and extends statutory regulation to care services which have not up to now been regulated at all.

As I hope my hon. Friend will agree, all these measures will help drive up standards of care, ensure better public information about the quality of care services and improve safeguards for those who use these vital services.

The National Care Standards Commission will ensure that all regulated care providers meet the Government's national minimum standards through a system of registration, inspection and enforcement. National standards, which are currently being developed, will apply to all providers. They will ensure that providers will be clear about the standards that they must meet to gain and maintain registration, and they will ensure that users and their carers know what they can expect as a minimum. They will cover key issues relating to staff recruitment and training.

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National standards will also address issues relating to the way in which care organisations are run, including the suitability of those who manage care homes. Care providers will have to demonstrate the financial viability of the establishment and have in place appropriate financial systems to ensure continued good management.

As my hon. Friend is no doubt aware, we are also establishing the General Social Care Council, which will be in operation from next October. It will raise public confidence in social care standards and promote best practice in social care.

The council will be responsible for registration of the social care work force. One of its first tasks will be the publication of enforceable codes of conduct and practice for all social care staff. It will also draw up an enforceable code of best practice for employers, which will include good recruitment practices and rigorous checks on recruits, so that unsuitable people do not enter the work force in the first place.

Providers will have to ensure that their staff receive a copy of the General Social Care Council code of conduct, and National Care Standards Commission inspectors will check that staff know what is expected of them. Registration of individuals will be subject to the person being of good character, being physically and mentally fit for all or part of the work for which registration is sought, and satisfying the requirements of conduct and competence that the council will lay down.

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My hon. Friend raised the issue of advocacy services for providers and users, particularly in the area of learning disability. However, advocacy is not just about human rights, although I recognise the strength of the argument that she made. Advocacy is also about improving practice and services, because listening to what patients and users say about the services that they have received is an important lesson for all health and local authorities.

Advocacy services can play an important role in helping people get the best out of the social care services that are available. Self-advocacy groups have worked with the Department on the new national learning disability strategy. My hon. Friend will be glad to know that that is to be published as a White Paper early next year, and we are looking at how we can develop services in this area.

With the development of the new guidance for health authorities in relation to their dealings with the independent sector, and through the new regulatory system that will operate from April 2002 onwards, I hope that my hon. Friend will be reassured that we are taking coherent measures to ensure that users are fully protected and providers of care are properly regulated.

I am grateful to my hon. Friend once again for raising these important matters with me, and I look forward to working closely with her in the future to ensure that our common objectives to improve both the quality of care and the use of public resources can be realised.

Question put and agreed to.

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