Health And Social Care Bill - continued          House of Commons

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Part 1 - The Care Quality Commission

537.     The establishment of a single regulator for health and adult social care will allow CHAI, CSCI, and MHAC to save some of their current costs of head office, infrastructure and support services and other costs due to merger of their functions into one organisation. Latest estimates would suggest that the yearly savings would be between £10.9m and £13.4m. The necessary organisational change would cause some transitional costs but as the regulatory changes are being implemented in tandem with a process of a significant cost reduction programme it has not been possible to be clear about what further transitional costs should be attributed to the regulatory changes here. Initial estimates have suggested that transitional costs in relation to the cost reduction exercise might total up to £140m. This sum would include the costs of ICT investment; continuing costs following planned estates rationalisation; and redundancy payments. The reduction in annual operating costs will be £60m per annum (on a 2004/5 baseline).

538.     The change to administrative costs of the Commission and NHS providers as a result of the extension of registration will be dependent on the scope of registration and the exact registration requirements that will be set out in secondary legislation. Therefore the range of possible outcomes in terms of costs for both the Commission and NHS providers is relatively wide. The introduction of secondary care NHS providers into the registration system could increase the annual costs for the regulator by £7.3m (and even higher if scope is broadened further) or decrease costs by £3.2m pa. Annual costs overall for NHS secondary care providers could increase by £1.9m or decrease by up to £5.1m as a result of the extension of registration. The Care Standards Tribunal will face a minimal increase in costs through extending its jurisdiction to cover appeals from registered NHS bodies.

539.     The Government has set a limit for the operating costs for the continuing health and adult social care regulation carried out by the Commission (excluding the costs of functions in relation to mental health legislation) as part of its policy to reduce the cost of public sector regulation. This will be made up of income generated from fees and grant in aid from the Government. The Commission will have the power to charge fees in relation to its registration activities and other functions as may be prescribed. The fees that the Commission charges in respect of particular functions will reflect the costs incurred in carrying out those functions. The Secretary of State is able to make alternative provision if the Commission does not make reasonable provision on fees, and to ensure its overall income does not exceed the operating limit the Government has set.

Part 2 - Regulation of Health Professions and Health and Social Care Workforce

540.     The Department will provide funding of £0.2m for the setting up of the OHPA. Based on current costs of adjudication in fitness to practise cases for the GMC and the GOC, the annual costs of the OHPA are estimated to be in the order of £11.5m, on the assumption that costs will not vary significantly in the transfer of such functions.

541.     CHRP (which will become the Council for Healthcare Regulatory Excellence) is a non-departmental public body, funded by the Department of Health and devolved administrations. Its baseline running costs will not increase as a result of the changes in function. However, the Department of Health in England has identified specific project work for the Council for Healthcare Regulatory Excellence to undertake as part of the overall implementation of the Government's White Paper, Trust, Assurance and Safety. Additional costs associated with this work are being funded separately by the Department and will not be recurrent.

542.     Some of the special project work referred to above will relate to the responsible officer role. The NHS will be expected to absorb the costs of the increased oversight by responsible officers (a preliminary estimate is between £3.1m and £16.7m per year) offsetting them against expected improvements in patient care and safety.

Part 3 - Public Health Protection

543.     The powers to make a Part 2A order in the new legislation are for use in exceptional rather than routine situations. There is no reason to believe that following the change in legislation there will be significantly higher incidences of infection or contamination which present significant harm to human health. In the majority of cases it is expected that people will remain willing to take voluntary action when they believe they are infected or contaminated. It is likely that the cost of the provisions for Part 2A orders will therefore remain consistent with current levels of cost.

544.     Provisions that could be introduced through regulations in cases of a major outbreak or incident could incur additional costs. However it is not possible to know how, when and where there will be an outbreak of a disease or an emergence of a disease and for that matter which disease it will be and how it will spread, so it is not possible to calculate costs. The Impact Assessment ('IA') contains some hypothetical scenarios that examine the potential financial effects of using the powers for Part 2A orders in a large outbreak scenario. Overall, the impacts on any sector are likely to be negligible and, given that the new legislation will have an overall beneficial impact in protecting public health, the legislation could lead to a net benefit to the economy as a whole.

Part 4 - Health in Pregnancy Grant

545.     Estimated implementation and running costs for the Health in Pregnancy Grant are detailed below. Work is underway to assess the precise costs beyond 2010/11, but initial estimates suggest that costs will remain broadly similar to those estimated in 2010/11. Expenditure in 2008/09 will cost disproportionately more due to the initial development costs of the new IT system.

£ 1.1m£ 8.4m£ 5.3m£ 4.8m

546.     The Health in Pregnancy Grant payments will be funded from the consolidated fund. Initial estimates of the expenditure arising in 2009/10 from the introduction of the Health in Pregnancy Grant are £175 million. This estimate is based on approximately 780,000 births each year 7 and full take-up by all pregnant women at the relevant stage of pregnancy. Initial estimates of expenditure arising in 2010/11 and 2011/12 are £145 million. The estimated cost is higher in the first year as there may be more claims in that year, from those women in their final weeks of pregnancy at April 2009, who satisfy the entitlement conditions on the date of introduction.

7 2006-based national population projections, Office for National Statistics, published 23 October 2007

Part 5 - Miscellaneous

Pharmaceutical services

547.     There is an extra cost that PCTs will incur in managing these funds, which is estimated at £600 per PCT per year.

Indemnity schemes in connection with provision of health services

548.     Clause 131 amends a framework power, which will have no impact on expenditure under any of the schemes until subordinate legislation is amended. Once new members are admitted to a scheme, this should not increase public expenditure as the total costs of the scheme are met by its members' contributions.

Weighing and measuring of children: England

549.     The key area of expenditure that will be incurred by the provisions in the Bill relates to the cost of providing feedback to parents on a routine basis. These costs will fall to PCTs and consist of the costs of staff time to prepare and send the letters, and the costs of postage. The total additional cost is estimated to be £650,000.

Social Care

550.     Most individuals who are currently excluded from receiving direct payments will be in receipt of alternative packages of care at broadly equivalent cost. There may, however, be a small increase in demand as a result of these legislative changes. Increased demand, due to the widening of eligibility, may result in approximately 150 to 450 additional direct payments across all local authorities which amounts to £1.5m to £4.5 per year recurrent (the average net unit cost of a direct payment is around £180 p/w). As a lower initial take-up rate is expected the estimated total over 3 years is £8 million. It is anticipated that local authority allocations for 2008/9 to 2010/11 will reflect the additional cost pressures arising from the extension of the direct payments scheme.

551.     The repeal of the liable relatives rule in the National Assistance Act 1948 has a financial implication for local authorities of between £3m and 5m in England. This represents the estimated revenue lost by not collecting contributions from liable relatives. This is being covered by additional funding of £4m allocated to local authorities by the Department of Health each year since April 2006.

Financial assistance related to provision of health or social care services

552.     At this stage, the total agreed costs of the SEIF (which is part of the overall budget for the Department of Health) amount to £73m for the four years from 07/08.

National Information Governance Board

553.     Establishing the National Information Governance Board will not increase public expenditure. It will use the resources of the information governance bodies which have been abolished before the relevant provisions of the Bill come into force, for example the Care Record Development Board, or after, in the case of PIAG.


The Care Quality Commission

554.     There will be reductions in public service manpower under Part 1 resulting from the dissolution of three existing bodies, CHAI, CSCI and MHAC and creation of the Commission. The Commission's functions under Chapter 5 dealing with interactions with other authorities and its duties under clause 2(3)(e) and (f) will result in wide reductions in the bureaucratic burden associated with inspections and demands for information by the Commission and other inspection authorities on NHS bodies and local authorities. This may have manpower implications.

Health in Pregnancy Grant

555.     Work is underway to assess the precise impact of the Health in Pregnancy Grant on public service manpower. On current estimates:

  • for HM Revenue and Customs, initial estimates suggest there will be an increase above current plans of approximately 125 full-time equivalent staff;

  • the policy may also have an impact on the workload of the Ministry of Justice, should there be an increase in appeals.

Financial assistance related to provision of health or social care services

556.     Four or five staff members will work on the administration of the SEIF; they will be employed by Partnerships for Health (a company wholly owned by the Department of Health).


557.     The IAs for this Bill can be found at

The Care Quality Commission

558.     The IA estimates that, given the available information, the proposed changes could lead to average transition costs of [£2.3m] over three years, and an average change in annual costs in the range of [+£2.7m to -£21.1m]. Over a 10 year period the net benefit range (NPV) is estimated at [+£129.3m to -£24.0m]. It has not been possible to quantify the cost implications of all the factors that could have an impact, and some of the ranges are necessarily large, as the extent of the impact will depend on aspects of secondary legislation.

559.     The IA identifies the potential for higher efficiency of health and social care provision due to:

  • more focused enforcement;

  • registration at organisational level;

  • fair playing field between NHS and independent sector providers;

  • (in general terms) lower entry barriers.

560.     It is noted that a one per cent increase in efficiency in health and social care would lead to efficiency gains of £1.2bn.

561.     The IA also acknowledges potential risks of the proposals including: establishment problems; lack of resources; slipping compliance with minimum quality standards; and independent sector providers lacking confidence that Strategic Health Authorities will conduct the regulatory function assigned to them independently and may unduly restrain entry to NHS markets.

Regulation of Health Professions and Health and Social Care Workforce

562.     For the change in the standard of proof, the IA considers the possible increase in the number of fitness to practise hearings that the NMC and the GOC might experience because of the change to the civil standard. It also explores the possibility of an increase or a decrease for the GMC in its hearings, due to other complementary initiatives being implemented at the same time. Overall, we think the change could be cost neutral but in our planning figures we have considered a range of between -10% and +10% in the number of hearings for doctors and of 0% to +10% for NMC and GOC. This would mean a change in costs of between -£1.86m and £2.6m.

563.     The IA for responsible officers looked at the direct costs of the role of the responsible officer, and indirect costs that are inherently linked to the role of the responsible officer. These will include cooperating with the GMC, including on: (a) considering whether concerns about fitness to practise or conduct in particular cases should be referred to the GMC; and, (b) advising the GMC on whether individual doctors met the criteria for re-licensing (one of the two components of the system of periodic revalidation e.g. liaising with the GMC about the revalidation of doctors). The estimates in the IA are based on the assumption that there are 126,000 doctors in England.

564.     The assessment is based on three key roles for responsible officers:

  • checking of skills when doctors are initially appointed. Estimates of the cost of this are in the range of £.02m to £1.1m per year;

  • overseeing appraisals. Costs will depend on the extent to which this is done already across the NHS. There is currently little hard evidence. The estimated costs for this task range from £1.7m to £10.2m per year;

  • carrying out additional investigations where appraisals indicate a problem. The estimated range for these costs is from £1.2m to £5.4m per year.

565.     The IA acknowledges that the costs are preliminary estimates only because the exact scope of the role and processes will be set out in secondary legislation.

Public Health Protection

566.     The IA considers the impact of the primary legislation (the impact of the Part 2A order making powers). As the Part 2A orders are for use in exceptional rather than routine circumstances, the overall impact on any sector is negligible. However, overall, it is likely the new legislation will have a beneficial impact in protecting public health, and could lead to a net benefit to the economy as a whole.

Amendments relating to National Health Service

567.     The overall modelling suggests that opening up the Clinical Negligence Scheme for Trusts to non-NHS providers of NHS care could present savings to the NHS of around £46m per year in the base case, rising to £79m per year for the low risk scenario or falling to £21m per year in the high-risk scenario. Even for the highest risk scenario, the modelling suggests savings achieved would still be around £15m per year.

Social Care

568.     Any additional costs associated with the extension of direct payments would fall on local authorities. However, it is expected that one-off set up costs will be minimal given that the systems to administer and support direct payments are already in place in local authorities. In addition, the majority of individuals who are currently excluded from receiving direct payments will be in receipt of alternative packages of care at broadly equivalent cost. There may, however, be a small increase in demand as a result of these legislative changes. Increased demand, due to the widening of eligibility, may result in approximately 150 to 450 additional direct payments across all local authorities, which amounts to £1.5m to £4.5m per year recurrent (the average net unit cost of a DP is around £180 p/w). It is anticipated that local authority allocations for 2008/9 to 2010/11 will reflect the additional cost pressures arising from the extension of the direct payments scheme.

Financial assistance related to provision of health or social care services

569.     The impact of this part of the Bill on small businesses that are social enterprises are expected to be positive; providing access to finance that would otherwise have been difficult to obtain.


570.     The Bill raises issues with regard to Article 5 (right to liberty and security), Article 6 (right to a fair hearing), Article 8 (right to respect for private and family life) and Article 1 of the First Protocol (protection of property) to the European Convention on Human Rights ('the Convention').

Part 1 (the Care Quality Commission)

571.     Clauses 26 and 27 provide for an urgent procedure for cancellation of registration (on application to a justice of the peace) or suspension of registration (by the Commission). The use of these urgent procedures may engage rights under Article 6 and Article 1 of the First Protocol of the Convention. In so far as Article 6 is concerned, the Department is of the view that the provisions are compatible since there are full rights of appeal.

572.     In so far as Article 1 of the First Protocol is engaged, the requirements strike a fair balance between the private interests affected and the public interest in ensuring that adult social care and health services are properly regulated. In the case of cancellation, it must appear to a justice of the peace that there is a serious risk to a person's life, health or well-being before an order can be made. In the case of suspension, the Commission must have reasonable cause to believe that unless it acts any person will or may be exposed to the risk of harm.

573.     Clauses 58 to 61 provide the Commission with powers for the purposes of carrying out inspections of providers of regulated activities and of NHS and social services for the purposes of its registration and review functions. The exercise of the powers as regards the right of entry, the right to inspect, copy and remove items, and the right to require an explanation may engage the right to respect for private and family life guaranteed by Article 8 of the Convention and the right to peaceful enjoyment of possessions protected by Article 1 of the First Protocol.

574.      The Department is of the view that the right of entry and inspection, and to inspect and take copies of or seize documents or other material or thing, are compatible with an individual's rights under Article 8 and Article 1 of the First Protocol. These provisions of the Bill pursue the legitimate aims of protecting public safety and public funds as well as for the general prevention of crime (offences in relation to registration) and protection of the health (by the provision of high quality health and social services) and rights and freedoms of others. Any interference is proportionate to the end of protecting these legitimate aims.

575.     The Care Quality Commission and Welsh Ministers will become responsible for the general protection of patients subject to the Mental Health Act by keeping under review the exercise of powers and the discharge of duties under the Mental Health Act. The review powers include: the power to enter a hospital or other establishment in order to visit, interview and examine a patient and, the power to require the production of, or inspection of, any records relating to the detention or treatment of a person who is or has been detained. The powers therefore touch on Article 8 rights. However, such powers are necessary, in the context of the Commission's and the Welsh Ministers' section 120 functions, for the protection of health and the protection of the rights and freedoms of others.

Part 2 (regulation of health professions and health and social care workforce)

576.     Fitness to practise proceedings by health care regulators fall within Article 6 of the Convention. Clause 91 establishes the OHPA to deal with fitness to practise cases relating to the medical and optical professions. Paragraph 4 of Schedule 7 inserts a new section 35ZA into the Medical Act 1983 and paragraph 28 of that Schedule inserts a new section 13AA into the Opticians Act 1989. These new sections require the OHPA to take account of guidance published by the GMC and the GOC about factors which they consider to indicate that a particular sanction should be imposed on a person whose fitness to practice is found to be impaired. The Department of Health is of the view that this requirement does not compromise the impartiality of the OHPA for the purposes of Article 6 of the Convention. This requirement will be relevant only at the stage at which the OHPA is considering the imposition of sanctions and does not in any way compromise its independence in determining whether the facts alleged against an individual have been proved. Moreover, the penalties themselves are not established by the GMC or the GOC but laid down in legislation.

577.     The new section 60A of the Health Act 1999 (as inserted by clause 104), provides that the standard of proof applicable in fitness to practise proceedings for health professionals is the standard applicable in civil proceedings. Proceedings which determine a doctor's right to practise medicine involve a determination of civil rights and must therefore be compliant with article 6 of the Convention. Article 6 does not prescribe the standard of proof to be applied in civil proceedings and the Department is of the view that the adoption of the civil standard is compatible with Article 6.

578.     Under clause 112, regulations may make provision requiring specified bodies to co-operate with each other in relation to any question or matter arising as to the conduct and performance of health care workers which could pose a risk to patient safety. The duty to disclose information may engage the right to respect for private and family life under Article 8 of the Convention. The purpose of disclosure will be to protect the health and rights of patients or the general public, which fall within paragraph 2 of Article 8 as being legitimate aims.

Part 3 (public health protection)

579.     Clause 119 inserts new sections 45A to 45S in the Public Health Act 1984. Measures adopted under these new provisions might engage a number of Convention rights. The Department is however satisfied that these provisions are compatible with the Convention. Particular consideration has been given to provisions relating to quarantine, isolation, detention, medical examination, and powers of entry in respect of public health investigations. The purpose of these provisions is to protect the public from significant public health risks and the Convention itself envisages that certain rights can lawfully be interfered with on public health grounds. Safeguards, such as limits on the period in respect of detention, quarantine or isolation, are also built into the legislation to minimise the impact on individuals.

580.     Health protection regulations under new section 45B (international travel, etc.) for health threats at borders may make provision for preventing danger to public health or the spread of infection or contamination by means of conveyances arriving at or leaving any place in England and Wales. Domestic health protection regulations under section 45C may make provision for preventing, protecting against, controlling or providing a public health response to the incidence or spread of infection or contamination. Measures under these powers might involve provision of information on, detention, isolation, quarantine or medical examination of or the application of disinfection, decontamination or other sanitary measures to persons.

581.     There are also powers for a justice of the peace to make an order under new section 45G, 45H or 45I (referred to as a "Part 2A order") providing for measures in relation to individual persons, things, premises, or groups of these. An order under new section 45G might include provision that a person submit to medical examination, be disinfected or decontaminated, wear protective clothing, be subject to restrictions on movement, be removed to or detained in hospital or other suitable establishment, kept in isolation or quarantine, or be subject to health monitoring.

582.     Also, a warrant under section 61 of the Public Health Act 1984, or similar provision in an order under new section 45K(6) might enable entry to premises (including a private dwelling), and include power to search, require information, or seize and detain or remove documents or property.

583.     A number of these potential measures, such as requirements as to quarantine, detention, medical examination, and wearing protective clothing, might engage a person's right to private and family life including bodily integrity protected by Article 8 or, potentially, the right to liberty and security protected by Article 5. However, the Bill provides that a Part 2A order may only be made where necessary to reduce or remove the risk to public health, and that regulations under new section 45C may only provide for the imposition of such measures if their imposition is proportionate to the threat arising from the incidence or spread of infection or contamination.

584.     A quarantine under these provisions may not amount to more than a restriction on freedom of movement engaging Article 8. Where there is a deprivation of liberty, Article 5(1)(e) enables a restriction of liberty to be imposed for the prevention of the spreading of infectious diseases, which the Department considers may now be read as allowing restriction of the right to liberty for the prevention of the spreading of contamination. However, proportionality is required for application of the exception for infectious disease (or contamination) in Article 5(1)(e), and the powers allow for this, for example an order could provide for the least intrusive measures, such as quarantine or isolation at home rather than in a hospital, which will achieve the permitted public health aim, and direct that appropriate support be provided.

585.     Measures under these powers, including powers to enter premises, or charges for the application of such measures might potentially affect property interests (Article 1 of the First Protocol). However, a State is able to enforce laws it deems necessary to control use of property in accordance with the general interest or to secure the payment of contributions. These powers are justified due to the public interest in investigators being able to carry out effective public health investigations, or to prevent the spread of disease, and any interference with the peaceful enjoyment of possessions is a proportionate interference with property rights. In addition new sections 45F(2)(g), 45N(2)(e) and 45K(7) enable provision to be made in regulations, or for a justice of the peace to order, that compensation or expenses be paid so as to ensure that any Convention rights under Article 1 of the First Protocol are met.

586.     Rights to apply for variation or revocation of a Part 2A order under new section 45M(4), to appeal under section 67 of the Public Health Act 1984, or for provision to be made for appeals from and reviews of decisions made under regulations made under new section 45C (new section 45F(6) and (7)), ensure that Article 6 rights are met.

Part 5 (Weighing and measuring of children)

587.     A power to obtain and further process personal information (including child height and weight information) without explicit consent engages Article 8 of the Convention. The Department is of the view that the proposed use of data will pursue the legitimate aim (included within Article 8(2)) of "the protection of health". A requirement to obtain explicit consent would reduce the value of the programme as the number of those taking part would then fall significantly. The interference with the right is reasonable and proportionate for the following reasons: the information will be gathered in accordance with the data protection concept of fair processing; the information will be gathered in familiar school surroundings in circumstances where the privacy of the child is protected; personal details will be removed from the information before it is used for research or surveillance; and, other uses of the information will be restricted. Finally, regulations will be able to provide for consent to be refused.

Section 19 of the Human Rights Act 1998

588.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined in section 1 of that Act). The Secretary of State, Alan Johnson, has made the following statement:

"In my view, the provisions of the Health and Social Care Bill are compatible with the Convention rights".

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Prepared: 16 November 2007