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Dr. Stoate: The purpose of the Bill is to give patients more say, flexibility and control over local services. Surely foundation hospitals are merely one mechanism

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for doing that. We are making a huge amount of fuss about a relatively small reorganisation to allow more flexibility in the running and provision of services.

Mr. Hutton: I agree with my hon. Friend in many respects. The reforms are important but basic, and I hoped that my hon. Friends could support them, especially since they apply to the democratic governance arrangements. Labour Members have always argued that there is a democratic deficit and the Bill tries to remedy that.

As my hon. Friend said, the measure gives patients a stronger say about what happens in their local NHS and allows local staff to get on with the job of sustaining improvements in the quality of local services. It will take Whitehall out of the daily management of NHS hospitals and help to deal with health inequalities more effectively than the current "one size fits all" model. Local needs and priorities can be better reflected. Giving foundation trusts greater freedom to do the job must be matched by new forms of local accountability, otherwise we could disfranchise rather than empower local people.

The measures on NHS foundation trusts are based firmly on Labour's traditional values and applying them to today's new world, where people rightly want more personally tailored health care, where their needs should always come first and where everything that we do is judged by one simple yardstick: how will matters be improved for patients? That is why we are introducing the Bill.

I simply say to all my hon. Friends: do not vote in the same Lobby as the Tories when the future of the NHS is at stake. The Tories want only one simple thing—they want the NHS to fail so that they can peddle their solutions of spending cuts, subsidised private medical insurance and top-up vouchers for those who can afford to go private. It is a policy for the few, not the many. Labour Members should be in the Government Lobby this afternoon, supporting NHS principles and values.

Let me briefly consider the Government amendments, especially No. 253. It would require NHS foundation trusts to use electoral wards to define their public constituencies. The amendment would provide further clarity in defining boundaries for public constituencies.

In Committee, concerns were raised that those whom the trust did not directly employ could not become staff members. Government amendment No. 254 would ensure that those people, who have an interest in the organisation because they work there and contribute to its services, could also be members of the staff constituency. That will include, for example, those who work for cleaning contractors when that work has been passed to a private, independent operator. The amendment would also affect our stated intention to ensure that staff on rolling contracts who are continuously employed by the trust for at least 12 months are eligible to become members of the staff constituency.

Government amendments Nos. 255, 256, 257, 258, 260 and 262 would remove the bankruptcy and criminal conviction exclusion criteria for members and apply them solely to governors and directors. As I said earlier, we shall accept new clause 24 and amendments Nos. 233

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and 234, which my hon. Friend the Member for West Bromwich, West tabled. I pay tribute to him for his work to strengthen the Bill.

Clearly, the process for selecting the representatives of the local community who serve on the board of governors must be fair and transparent. The Bill therefore requires governors who represent patients, the public and staff to be chosen by election. Provided that there is a requirement for contested ballots to be secret, foundation trusts could be allowed to use different forms of voting, such as voting electronically or in person, as set out in Government amendment No. 259.

Government amendment No. 261 clarifies that representatives of local partner organisations can be appointed to the boards of governors of NHS foundation trusts, as set out in a guide to NHS foundation trusts. Government amendment No. 263 deals with the appointment of a chair, to put the matter beyond doubt.

The Government will also accept amendments Nos. 242 to 244, which my hon. Friend the Member for Ealing, North tabled. They deal with conflicts of interest. We shall also accept amendment No. 354 on local authority representation on the board of governors of NHS foundation trusts. I am grateful to my hon. Friend the Member for Milton Keynes, North-East (Brian White) for tabling it.

Opposition Members and some of my hon. Friends intend to move other amendments later. I shall deal with those shortly. Government amendments Nos. 247 and 248 deal with the private patient cap. Earlier, we discussed private patient provisions. I should like hon. Members to accept amendments Nos. 247 and 248. The regulator has powers to set any terms that he considers appropriate to the terms of authorisation under clause 6(3). However, the amendments would make it explicit that the regulator can restrict the provision of non-NHS health care in all NHS foundation trusts, not only those that were previously NHS trusts.

New clauses 36 and 37 and amendments Nos. 355, 357 and 358 concern mergers. I shall be happy to deal with that issue in my winding-up speech. In Committee, Members drew attention to a deficiency in the Bill, and these technical amendments seek to close the gap.

In amendment No. 378, the Government propose a change in respect of Wales. Although the Bill provides for the Welsh Assembly to inspect care provided for Welsh patients by foundation trusts, it includes no requirement for it to report matters of concern to the independent regulator. The amendment will allow the Assembly, like the Commission for Healthcare Audit and Inspection, to report failings in trusts to the regulator.

Part 1 sets out a new direction for the national health service, but it is the right direction. Our proposals are based firmly on traditional NHS values. These reforms are sensible and reasonable. They will help to sustain improvements in the NHS that are now under way. They will give patients and local staff more say over what happens to their local NHS. They will result in a better and more responsive service, so NHS patients will be the winners.

For all those reasons, I ask my right hon. and hon. Friends to support the Government's proposals.

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Dr. Evan Harris: When the Government first proposed the establishment of foundation trusts, we examined their plans carefully and compared them with our own policies for NHS reform before considering the likely consequences. For reasons that I will give, we believe that the foundation trust policy is deeply flawed, and, having failed to secure key amendments in Committee, my colleagues and I will vote against it. That contrasts with the position of the Conservatives, who will vote against foundation trusts although, as they themselves say, they support the principle. Some may consider that approach opportunistic—[Interruption.] I believe that it is opportunistic to vote against a proposal when one supports the principle behind it. We have always made clear where we stand, and what our principles are.

Because of the opportunistic nature of the Conservatives' support for the amendment, Labour Members need not be deterred from supporting it by a fear of being identified with their approach. We will certainly resist that.

I intend to identify the respects in which the Government's proposals fail to deal with our concerns, and the problems inherent in foundation trusts. I shall then say a little about pay beds. The key flaw in the Government's initiative is its failure to address the issue of NHS commissioning. NHS commissioners—largely primary care trusts—are charged with a duty to plan, organise and purchase NHS care for the populations that they serve by making contracts with those who provide services, mainly hospitals and clinics. There is a desperate need for decentralisation, democratisation and empowerment on the commissioning side of the health service, even more than on the providing side. Primary care trusts are run by doctors and other health care professionals, with a sprinkling of local people on the board. They are not democratically accountable, and have very little discretion because of excessive interference from Whitehall and from Ministers. They cannot raise extra resources from their local populations to expand or improve services, even when there is local consent.

The best way of protecting and promoting the interests of patients is to give more power to those who are responsible for planning and buying services on their behalf, rather than to those who provide care. We would prefer an approach that created reform by tackling restrictions on the power and freedom of health and social care commissioners.

2.45 pm

We would have liked the Bill to free local commissioners from central political diktat. While retaining evidence-based clinical outcome national standards and tough quality inspections, we would abandon the politically based targets that distort resource allocation and clinical decision making, replacing them with clinical decisions driven by clinical needs. We would introduce light-touch performance monitoring and the auditing of performance against standards. The Government's proposals include no such provision.

We wanted the Government to replace strategic health authorities and primary care trust commissioning roles with democratically accountable elected

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commissioners of health and social care at regional and local level, advised by primary care trusts and with a reinvigorated public health function. They would have a legal duty in regard to equity, effectiveness, quality and cost-effectiveness, but would be able to make local decisions. The efficiency involved in electing the same people who are currently elected has already been noted indirectly by the hon. Member for Woodspring (Dr. Fox).

The empowerment of commissioners would allow them to raise resources locally through a progressive taxation to meet the demands of the local population for a more responsive, comprehensive and high-capacity NHS.

Sadly, the Government propose no such changes for commissioners, who will consequently have little control over the services that they can develop, despite the rhetoric of "increased devolution to the front line". Indeed, the Bill actually bars commissioners from ever sharing in any of the reforms.

As for the possibility of a diversity of providers of NHS care, we are committed to a mixed market in provision including the private and voluntary sectors, NHS hospitals and other providers, as long as the care is free at the point of delivery and access is based on need rather than ability to pay. In the not-for-profit sector, we are keen to see the development of mutuals. Although aspects of foundation hospitals are similar to aspects of mutuals, we would allow them greater financial freedoms, and would not allow the freedoms that are given to be exercised at the direct expense of non-mutual NHS hospitals. We would not impose mutual status on a few hospitals, or "award" it to them; we would allow all hospitals to consider whether they wanted such status. We would consider it to be different from, not better than, the status of other NHS hospitals.

The way in which the Government propose to award foundation status to three-star hospitals is extremely divisive—especially given that the star rating system does not measure good clinical care, higher quality or meaningful patient outcomes. It measures performance, or statistical massage, against a series of political targets which, if anything, threaten good patient care by distorting resource allocation to areas that are outcome-measured and distorting clinical decision-making.

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