Standing Committee E
Tuesday 20 May 2003
[Mr. Win Griffiths in the Chair]
Constitution of public benefit corporations
Dr. Evan Harris (Oxford, West and Abingdon): I beg to move amendment No. 181, in
schedule 1, page 95, line 22, at end insert 'and their interests,'.
The Chairman: With this it will be convenient to discuss the following amendments:
No. 182, in
schedule 1, page 95, line 23, after 'directors', insert 'and their interests'.
No. 132, in
schedule 1, page 95, line 25, at end insert—
'17A (1) The public benefit corporation is to establish a register of interest for those service on the board of governors as directors.
(2) The information to be registered shall include relevant financial interests and any political affiliations within the previous five years.'.
Dr. Harris: I understand that there is an even greater urgency for us press on, so I shall be very quick.
Mr. Stephen Pound (Ealing, North): Get on with it.
Dr. Harris: I do not know whether the hon. Gentleman will be happy with one minute, but that is how long I shall give to this matter.
Amendment No. 181 is a very obvious one, as is amendment No. 182. They ensure that a register of interests is set up for directors of, or those who sit on the board of governors of, a foundation trust. That is in line with good practice generally where budgets involving public money are being wielded, or where any large organisation requires transparent accountability. I hope that the Government will not have a problem with it.
It is not appropriate for political affiliations to be registered. If this is supposed to be a genuine quasi-democracy of which people seek to be members, we should not discourage those who are interested in local politics; rather, we should do the opposite. The need to declare such interests seems to imply that there is something wrong with them, and that that might be a factor in the poor or inappropriate performance of a governing body or a board of directors. I am not sure that that is the case. I cannot see how political affiliation would be relevant in the running of a governing body. However, I look forward to the hon. Member for Epsom and Ewell (Chris Grayling) setting out why he and his colleagues think that it is necessary, and we will keep an open mind. We did not include that in our amendments because we did not feel that it was necessary. I hope that the Government will see
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that this is a reasonable and necessary step to take, and I commend the amendment to the Committee.
Chris Grayling (Epsom and Ewell): Good morning, Mr. Griffiths. I will also keep my remarks brief on these amendments. The hon. Member for Oxford, West and Abingdon (Dr. Harris) has already indicated broad agreement from the Opposition Benches that some form of register of interests is appropriate. Indeed, in tabling amendment No. 132, we anticipated the Liberal Democrats' amendments and have set out what we believe is the right way to do things.
It is essential and, indeed, common practice, that those serving in an elected public office in today's world register their interests. Sometimes that requirement goes a little bit too far. As the Under-Secretary will know, in some areas of public life, such as county councils, we have had our doubts about whether that is appropriate. That cannot be the case in this circumstance. We are looking at substantial public bodies with significant turnover of anything up to £100 million or more and at people who will have a role in the governance of those organisations.
It seems entirely appropriate that there should be some requirement to register relevant financial interests. That could include directorships of companies that sell services to that organisation or that could, in some circumstances, sell services to a foundation trust, or a directorship or financial interest in another health care organisation. Those are the classic forms of registration that we would go through, and it is entirely appropriate that those people should go through them.
I shall touch briefly on the question of political affiliation, which is connected to the points that have been made by Government Members and me about entryism. In using the word ''political'', we are not referring simply to a political party. We did not use the words ''political party'', because, in today's world, the words ''political affiliation'' can have a broader meaning. If someone is a director of a substantial pressure group, is a member of a political party, has held political office or has been appointed to a position by a political party because of specific interests, it is right and proper that those interests should be registered. That is appropriate.
For all NHS appointments, it is expected that candidates' political affiliations will be registered and made available to the public. It is not unreasonable that a member of a foundation hospital's board of governors should be required to make the same kind of declaration, particularly given the fact that those boards could be the targets of pressure groups that may want to influence unduly the management of hospitals. It is right and proper that there should be some form of political registration.
Dr. Harris: I have listened carefully to what the hon. Gentleman has said. First, would membership of an organisation such as the Society for the Protection of the Unborn Child come into that category? SPUC is often cited as an example in such cases. The hon. Gentleman's explanation suggests that it would not. Secondly, my understanding is that one reason why appointments to bodies such as NHS trusts must
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declare affiliations is for the purpose of transparency; they are appointed positions. There may also be other reasons. That rationale would not apply to members of a board of governors, because those members are elected.
Chris Grayling: In the case of SPUC, let me give the hon. Gentleman a specific example. In recent years, the ProLife Alliance has nominated candidates for election. Candidates have also been nominated for election by other single-issue pressure groups. Surely it is right and proper that someone who stands for election in such a capacity to the board of governors of a local hospital should be required to make such information available, in the same way that a person must declare that he or she is a Liberal Democrat MP, a councillor, or whatever. It is entirely appropriate to do that. It simply means that people declare that they have a political involvement. That information should be in the public domain.
I can see no reason for any objections to including that amendment in the Bill. It is a simple process; it would mean no more than ticking a box, in the same way as financial interests are declared. In a spirit of openness and in an effort to provide full information about the people who run or steward hospitals, there is no reason why people should not be asked to make such a declaration. We endorse the requirement for some form of registration, a practice that is common in public life.
I am sure that the non-inclusion of such information is simply an omission by the Government in the Bill's drafting. I hope that if the Under-Secretary cannot accept the amendments that have been tabled, she will at least give an assurance that she will return with Government amendments that will fill an unnecessary gap in their proposals.
The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): The declaration of interests from people who may have a role in NHS foundation trusts is an important issue. ''A Guide to NHS Foundation Trusts'', paragraph 2.24, clearly states:
''The Independent Regulator for NHS Foundation Trusts will publish guidance on eligibility for members to sit as governors on the Board of Governors covering such matters as terms of office, conflict of interest and payment of expenses.''
We are concentrating on those important matters of probity to ensure that there are no conflicts of interests when decisions are made. Potential conflicts of interest are particularly serious for members of boards of governors and boards of directors who would have decision-making powers in the organisation.
However, in accordance with the thrust of schedule 1, we have tried to outline the minimum requirements and have indicated that NHS foundation trusts must make provisions in consultation with local communities. The Bill contains three safeguards. First, there must be consultation and agreement with local communities. Secondly, the Secretary of State must support the application and examine the constitution. Thirdly, the independent regulator must also support the constitution. We expect all NHS foundation trusts to tackle the potential for conflicts of interests in the
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provisions of their constitutions. That is the proper place in which to include those provisions. I am happy to confirm that, when the Secretary of State considers constitutions, he will be looking for provisions that deal with conflicts of interests and declarations.
Clause 23, subsections (4) and (5), contain powers for the independent regulator to intervene if there are any problems. If governors or directors abuse their positions, strong powers are available in the Bill. For that reason, I do not believe that the amendments are necessary, and I ask the Committee to reject them.
Dr. Harris: The Under-Secretary's reply is disappointing. It is representative of a general difficulty, which is that when something is suggested by Opposition Members, and perhaps even by Government members of the Committee, for inclusion in the schedule in respect of foundation trusts, the Under-Secretary always says that it should be left to the trusts to solve the problem without including appropriate provision in the schedule. She talks about the need to consult locally and introduce a constitution that must be triply approved.
The same argument, however, could be applied to anything in schedule 1. It could be applied to the series of measures that the Government have seen fit to include in the schedule concerning foundation trusts and their constitutions. What makes a matter important enough to be included in schedule 1 and not merely to be subject to guidance or the good fortune of trusts getting it right first time and reinventing the wheel? The trusts would face potential problems with the way in which they do that, given that they have to be analysed by the regulator, as we would have it, and the Secretary of State, as the Government would have it. To answer that question, fundamental points must be taken into account in the constitutions, and some of those are laid out in schedule 1. Provision for an appropriate declaration of interests by members of the board of governors should be an essential part of a constitution, perhaps more important than some of the provisions that the Government have seen fit to include in schedule 1.
As regards the Government's general answer to amendments that seek to include provisions in the schedule, the Under-Secretary's response is not satisfactory. It would not be appropriate—given the critical role that the Government see the trusts playing—to take chances with the need for trusts to recognise that a register of interests is important. Appropriate provision would bring about proper governance, and there would be seen to be proper governance.
I am very disappointed, therefore, with the Under-Secretary's response, but I do not intend to seek to divide the Committee on the matter now because we may return to it either later in the House or in the House of Lords. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.