Health and Social Care (Community Health and Standards) Bill

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Mr. Hutton: I apologise to the hon. Gentleman. I thought that he was saying that he supported the amendments that were moved by his hon. Friends. I thought that he said that he supported amendment No. 75.

Mr. Lansley: Yes, and amendment No. 105.

Mr. Hutton: The amendment that the hon. Gentleman tabled—amendment No. 105—makes a slightly different point. He at least acknowledges that the Secretary of State should have some role, which is progress. However, I think that the Secretary of State should be involved at the beginning of that process, whereas the hon. Gentleman thinks that he should be involved at the end of it. A trust will go through all of the expense and consultation that will be required, but the Secretary of State may then say, ''Actually, I object.'' I can no longer say that I have respect for the hon. Gentleman: I have taken a Trappist vow not to repeat that. However, that proposal is absurd and ridiculous. It puts the Secretary of State into the process at the wrong point. He should enter it at the beginning. He has clear statutory responsibilities under the 1977 Act. He has clear financial responsibilities to account to hon. Members in this House on how NHS resources are used. It is absurd that, notwithstanding all those statutory responsibilities, in this place we should say that he should have no involvement whatsoever in the biggest transformation that the NHS will undergo for 50 years.

I say to my hon. Friends who have any concerns about this policy that they should have nothing to do with that amendment. This provision provides the essential balance that needs to be in the legislation. Significant operational freedoms are being created for NHS foundation trusts, but we must have a gatekeeping function and it is located in the right place.

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My concern about amendment No. 105 is that it parachutes the Secretary of State into the process at the wrong point. He should be involved in it at the beginning.

My concern with amendment No. 75 is that it is preposterous to say that the Secretary of State should have no interest whatsoever in the process of NHS trusts becoming NHS foundation trusts. Committee members should look carefully at the argument that underlies that proposition and agree with me that the amendment is absurd.

Amendment No. 246 on consultation was tabled by the hon. Member for Oxford, West and Abingdon. We have set out in the guide to becoming an NHS foundation trust a detailed process that we require applicants to go through to attract the support of the Secretary of State. The hon. Member for Epsom and Ewell asked 17 questions about the application process: rather than give him 17 answers, which I would be happy to do, I will simply send him a copy of that guide. Paragraph 7 gives him the answers that he wants. For good measure, I will also send him a photocopy of page 11 of the explanatory memorandum, where the other questions are dealt with. I hope that that will give him some reassurance.

We have made it clear in the guide—particularly in paragraphs 7.10, 7.11 and 7.4—and in everything that we have subsequently said that we will examine whether NHS trusts have the widest possible local support for their applications to establish themselves as NHS foundation trusts. Both the Secretary of State and the regulator would carefully examine the situation if there was significant local opposition: that would be right.

I have one obvious problem with the hon. Gentleman's amendment. I am tempted to leave to one side the way it has been drafted. I do not want to get into that, as he will not press it to a Division; I am grateful because that will save the Committee a lot of time. There is an issue of substance about whether one consultee alone should be able to call a halt to the whole process if they have an objection. Under the hon. Gentleman's proposal, that is precisely what would happen. That is not what we suggest should happen. Clearly we need to look at the results of the consultation exercise. The Secretary of State will make regulations under clause 6 to specify who must be consulted. I have no hesitation in saying that all of the groups that the hon. Gentleman has mentioned will be covered by the regulations.

We have to step back from that and ask whether one local voice, such as a patients' forum or someone else, could say no to the process. That would bring it all crashing to a halt even though everyone else had agreed. I am sure that that is not what the hon. Gentleman intends his amendment to do, but it would certainly have that result. We should not go down that path. We need some flexibility, and the regulations will set out the process of consultation. That will accord with the spirit and the letter of our publications so far.

6.15 pm

The hon. Member for South Cambridgeshire asked a rhetorical question. Who decides whether a trust

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becomes a foundation trust? Of course it is the independent regulator who makes that decision. Without going into a long lecture on constitutional theory and practice, I should make it clear that what it says on a No. 10 website does not change the Bill. The Bill is quite clear about that. If any amendments were needed I would table them. No such amendments have been or will be tabled.

It is clear that the Secretary of State must approve the application. It then goes to the independent regulator. He will decide, on the basis of the strength of the application, whether to grant an authorisation. He may decline to do so, even though the Secretary of State has supported that application. That is obvious from the Bill. With great respect to the staff at No. 10, I had better row back a little—[Interruption.] Yes indeed, everyone one at No. 10. What appears on a No. 10 website does not constitute an amendment to the Bill. The Bill stands in its present form. We do not intend to change that.

Chris Grayling: I am grateful to the Minister for directing me to section 7 of the guide. It has answered some of my questions but it also justifies our amendment. It makes it clear that the regulator plays only a peripheral role in the decision-making process and that right up to the point of the creation of a shadow NHS foundation trusts, he has no involvement and no say whatsoever. The regulator's only participation in this may be to take a proposal that has come apart in the late stages and say that it will not do.

The guide states:

    ''Success in the second stage will lead to shadow NHS Foundation Trust status. The Department of Health and the Independent Regulator will work with shadow NHS Foundation Trusts to prepare for formal establishment.''

It is clear from that that the regulator will not have a truly independent say about which trusts are suitable for foundation status and which are not. The balance of decision-making clearly lies with the Department of Health. The Minister can read that again, but the guide is quite clear. It states:

    ''Second stage applications will be assessed by a panel of experts drawn from inside and outside the Department of Health.''

Where is the regulator's role? According to the guide, the regulator cannot input into the process until the decision to create a shadow NHS foundation trust has been established. That is clearly a political decision. The Secretary of State is controlling the decision.

Mr. Hutton indicated dissent.

Chris Grayling: I shall happily take an intervention from the Minister if he can tell me where in section 7 the guide explains how the regulator is brought into the process at either the preliminary or the secondary stage.

Mr. Hutton: The hon. Gentleman must read the guide alongside the Bill. We are considering the Bill. If he reads the Bill it will be quite clear that the regulator determines the success of an application. He is describing the Secretary of State's role in approving and supporting the application to the regulator. The regulator then determines the application.

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Chris Grayling: I am sorry to dissent from the Minister's view.

Mr. Hutton: Has the hon. Gentleman read the Bill?

Chris Grayling: I do not accept that the regulator has freedom to do that. The purpose of the amendment is to remove the phrase

    ''if the application is supported by the Secretary of State.''

Reading the guide and the Bill together makes it clear that the regulator has a peripheral role in the decision-making process, and that decisions will largely have been taken by the time the issue reaches the regulator's desk. I therefore intend to press the amendment to a Division. I do not support the scale of the Secretary of State's involvement. It is counterproductive, and the Government will live to regret it.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 11.

Division No. 8]

AYES
Burns, Mr. Simon Calton, Mrs. Patsy Gillan, Mrs. Cheryl Grayling, Chris
Harris, Dr. Evan Lansley, Mr. Andrew Murrison, Dr. Andrew

NOES
Anderson, Janet Bailey, Mr. Adrian Casale, Roger Dowd, Jim Fitzpatrick, Jim Hall, Mr. Mike
Hutton, Mr. John Jones, Mr. Jon Owen Lammy, Mr. David McCabe, Mr. Stephen Russell, Christine

Question accordingly negatived.

Chris Grayling: I beg to move amendment No. 134, in

    clause 4, page 2, line 20, leave out paragraph (a) and insert—

    '(a) the proposed constitution has effect, but the applicant may exercise the functions of the corporation on its behalf until a board of governors has been elected and a board of directors has been appointed,'.

The amendment would address what we believe is an anomaly in the Bill. I seek clarification from the Minister before deciding whether to press the matter. Clause 4(4)(a) would appear to establish the full constitutional mechanism of the foundation trust, but before the trust is fully established and while the regulator is still considering the application. The administrative implications are significant, and will affect the robustness of the process in relation to the local community.

The provisions of the proposed constitution would give effect to those elements of the constitution that involve the election of the shadow board of governors and the shadow board of directors. It seems that once the application has been put to the regulator, the would-be NHS foundation trust has to set up its membership registers, invite people to become members and go through a recruitment process in the local community. It would seem that they must go through the process of electing a governing body, establishing registers, including a register of interests, and all without knowing whether ultimately they will receive the consent of the regulator to establish trust status.

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If the regulator decided that that was not appropriate, the sums did not add up or there was a flaw in the constitution—whatever rationale was given for sending the plan back to the drawing board—considerable expense would have been incurred in establishing the constitutional structures that would be needed without having achieved foundation trust status.

There could be a serious impact on the local community if we were to see mass advertising inviting people to become members of the local hospital, only to discover that an anonymous regulator in Whitehall had said that there could not be a foundation trust in the area. It certainly might preclude the subsequent democratic involvement that would have been the case had the initial proposal been more robust. The implication of the measure is to accelerate the process too fast. By contrast, clause 5(7)(a) says that

    ''Once the certificate has been issued the proposed constitution has effect, but the applicants may exercise the functions of the corporation on its behalf until a board of directors is appointed in accordance with the constitution.''

It seems eminently sensible that a similar provision should apply to an NHS trust going through the application process. The management board of that trust should have the powers to fulfil the functions of the corporation up to the point at which the application is granted by the regulator. Only then should they start to set in place the full democratic procedures to elect a governing body. That would be a much smoother way of doing things and would remove some of the risks that would be incurred if an application were rejected at the last point. I hope that the Minister, if he cannot accept the specific amendment, will agree to look again at what seems to be an anomaly.

 
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