Memorandum submitted by Stephen O'Brien MP (H&SC 31)


Letter from the Minister of State for Health Services, dated 15 January 2008


Dear Stephen


During committee on the 10th January 2008, I promised to provide further information about the savings expected from CSCI and HC.


In December 2005, the Government set out plans to reduce burdens on front-line public services by introducing a cost/activity reduction programme in public service regulation. This included a commitment to reduce, by 2008/09, spending on public service inspectorates a third in cash terms. For the Department, the reduction applied to the CSCI andHC and meant reducing a combined CSCI/HC budget of 208m (2004/05 baseline) to 135m - 145m by 2008/09 (MHAC and other DH ALBs were unaffected). This will mean an annual saving of at least 60m from 2008/09. The Department has worked closely with CSCI and HC to agree plans to achieve these reductions which are expected to come mainly from rationalisation of corporate services and infrastructure; a significant increase in the efficiency and effectiveness in the regulation of care providers; removing functions which are not core to the regulatory remit of the Commissions.


To achieve this level of saving will require a significant level of transition costs. Based on information provided by CSCJ and HC, our estimate of these costs is in the region of 140m. This represented a rough estimate of costs associated with IT investment; continuing costs following planned estates rationalisation and redundancy payments., etc, arising from the planned reduction in the operating costs of the Commissions. These costs are therefore not the set-up costs of the new Commission- they would have applied regardless of the establishment of the new Commission. It was for this reason that neither the costs nor the savings associated with the cost/activity reduction were included in the Impact Assessment.


We believe that successful implementation of this cost/activity reduction programme will help to ensure the new Commission:


is a smaller, more streamlined new organisation able to operate flexibly in a reformed health and social care system;


provides an increasingly proportionate, co-ordinated and flexible regulatory regime with a wider range of sanctions at its disposal; and


can deliver a significant increase in the efficiency and effectiveness in the regulation of care providers.


The Impact Assessment for the Bill included a separate but initial estimate of 7m for one-off additional costs arising from the establishment of the new Commission from its shadow phase leading up to the full implementation of the new registration system from April 2010. In the longer term, whilst these may be difficult to quantify at present, we believe that there will be additional savings arising from having a single body rather than three, for example through rationalising senior teams, corporate services staff and systems. The cash released from these savings will allow for reinvestment into assessing and assuring the quality and safety of the services the new Commission will regulate.



Letter from the Minister of State for Health Services, dated 15 January 2008



Dear Stephen



At the 10 January 2008 Health and Social Care Bill Commons Committee session, I promised to write on the points below raised by Anne Milton and Stephen O'Brien:


What arrangements will the Ombudsman have in place to deal with H&SC complaints?


The two Ombudsmen, the Parliamentary and Health Service and Local Government Ombudsmen, currently have detailed arrangements in place to respond to complaints relating to NHS health services and to public social care services.


This makes the Ombudsman highly experienced in performing this role once the reforms come into force.


We are planning a transition to the new arrangements through "Early Adopters" around the country. They will be tasked with developing the new approach to handling complaints as described in Making Experiences Count, the consultation on a new approach to handling complaints which ran from June to October last year. A key element will be to resolve complaints thoroughly and robustly local level. When we introduce the new arrangements this year, we will stipulate to the Early Adopters that they must endeavour to do all they can to address complaints thoroughly and rigorously, and demonstrate what they will do to ensure the underlying issues giving rise to the complaints are addressed so that complainants will know they have achieved an improvement in the service by complaining. A natural consequence of this will be that more complainants will be satisfied with the way their complaint has been handled, so that there will be fewer requesting independent review.


The Health Ombudsman is supportive of our drive for effective local resolution. The fact that the number of requests for independent review more than doubled in each year since the Healthcare Commission took responsibility, and that at one stage around 33% were being sent back to the trusts concerned for further information, indicates that it may have had the effect with some trusts of discouraging them from conducting thorough investigation and doing all they could to resolve complaints locally. The new arrangements will put much more emphasis on local resolution with independent review available locally where appropriate, and if that fails to resolve a complaint, recourse to the Ombudsman.


We believe that having the Ombudsman as the only tier of appeal, the effect on providers will be to attempt to avoid requests for application to the Ombudsman by complainants.


Both Ombudsmen are working closely with the Department of Health and other partners. This means that we have Ombudsman input into the shaping of complaints handling at the local level (before complaints reach their jurisdiction).


Doesn't the Ombudsman deal with questions of process, rather than quality (e.g. of treatment)?


The two Ombudsmen look into complaints that local government departments and the NHS in England have not acted on properly or fairly or for which they have provided a poor service.


The Ombudsmen are responsible for deciding whether maladministration, service failure or both have occurred. The Ombudsmen apply a test of fairness and reasonableness, taking into account the circumstances of each particular case; not a test of perfection. Therefore the Ombudsmen's role is to consider both whether processes were administered correctly (whether there was maladministration) and also whether the quality of original service provided was sufficient (the quality aspect).


Additionally, the Ombudsmen pinpoint any failures and suggest how to put matters right. Ombudsmen also share lessons learned from complaints to help improve public services.


How many complaints do CHAI deal with per year? What's their backlog (O'Brien said that, anecdotally, he's heard figures of around 30,000 - 80,000)?


The Healthcare Commission (formerly CHAI) received the following requests for complaints reviews:


2004-05 8475
2005-06 7606
2005-07 7479


(these figures are drawn from Spotlight on Complaints 2, by the Healthcare Commission).


The backlog has now reduced significantly and the HC is now meeting the SLA target agreed with DH, to close 95% of cases within 12 months.


What about complaints for privately-funded social care users?


People who arrange and finance their own social care services, the majority of whom are in care homes, do not fall within the statutory local authority complaints procedure. All local providers of regulated social care services are required to offer a complaints service to their users, regardless of whether they are privately funded or not. However, this often is not as rigorous as the model used by local authorities and the NHS (both of which contain the option of independent consideration).


We are considering ways in which some form of independent resolution may be achieved for this group of service users. We are also looking at options for ensuring that local complaints procedures are as effective as possible, whether they relate to publicly or privately funded services.


We expect the regulation system to include assessment of providers in respect of their handling and management of complaints, but it is too early to be precise about the detail.










Letter from the Minister of State for Health Services, dated 21 January 2008



Dear Stephen,


In the morning session of Committee on 15th January 2008, 1 promised to write to hon. members with certain information to answer points made by the hon. Member for Eddisbury (Hansard cols, 187,188,190 & 192).


For ease of reference I have listed below the Hansard extract followed by the

information now available to me:.




...detail what that 7m covers


The organisational change inherent in the establishment of the new Commission will inevitably entail some additional transition costs on work directly associated with setting up the new organisation. Since these changes are the transition costs arising from the cost reduction programme, it has not been possible at this stage to be clear on the exact additional transition costs involved. For the purposes of the Partial Impact Assessment published with the Bill an.initial estimate of 7m one-off costs was included, which will be updated when the Final Impact Assessment is produced later this year, The comparable savings from having a single body as opposed to the current three have been estimated at between 10m and 13m per annum.



I hope the Minister will take the opportunity to detail the current estates and the length and value of their leases.


The current estate of the three Commissions is subject to significant ongoing consolidation and reduction, particularly in the Commission for Social Care Inspection. The position at mid year 2007/8 is of 67 properties in total. All are leased. The total property related costs for 2007/8 are 18.2m of which 11m is rental lease breaks or terminations range from 2008 through to 2017 with the majority before or during 2011. Long lease properties no longer required by the three Commissions or subsequently the Care Quality Commission can still be disposed of by lease assignment or subletting on the commercial market or reuse within wider government if the landlord will not accept a surrender of the lease. Whilst central London properties are generally larger with higher rental levels and therefore carry potentially higher liabilities under a long lease the potential for disposal or reuse by another government body (by giving up a short lease elsewhere) is very much greater.





Will there be downsizing beyond that already planned by the various regulators?


It will be a matter for the new senior team of the Care Quality Commission to make decisions on the shape and size of the organisation in the future, taking account of the budget available and the functions to be delivered, Ministers have set no targets for further downsizing.






Where will CQC be based and how many jobs will be moved out of London?


We are currently undertaking an independent study to identify potential locations for the headquarter functions of the Care Quality Commission. The study will be assessing locations against three main criteria (meeting the business need, value for money, meeting wider government policy for relocation and regeneration) together with an Equality Impact Study. The assessment will consider all the staff and property aspects; also any transitional arrangements as well as the long term position. The study will also of course fully take into account the existing investment in staff and property. In the three Commissions, the Commissions already have significant numbers of staff outside London. The study is due to report shortly. Until it has done so, and Ministers have been able to consider the recommendations based upon its findings, it is not possible to set a figure on the number of further posts that will move out of London from setting up the Care Quality Commission.



Will the Minister outline the liabilities of tbe three regulators?


The Department of Health has begun work with the current Commissions to identify their liabilities in preparation for their transfer to either the Care Quality Commission , the Department or Crown, as appropriate. The location study mentioned above will be examining the estate liabilities of the existing Commissions. Each of the Commissions publish an annual report and accounts which are in the public domain. .




How many staff are employed by each regulator in England, with an inside/outside London split, if possible, in Wales and in Northern Ireland.


The attached document shows numbers of staff by location of the existing Commissions as at April 2007. 1 understand latest figures for total staff are as follows:


MHAC 41 all of which are outside London (headcount)

Healthcare Commission 669 of which 359 (54%) were in London, 159 (24%) are homeworkers and 151(22%) are in the regions, mostly Manchester

CSCI 1699 (whole time equivalent posts) of which 278 are in London.




How much of the property, rights and liabilities will revert to the Crown?


Any property that is held currently by the three Commissions that has not been either disposed of prior to 1st April 2009 or required by the Care Quality Commission and transferred to it will revert to the Crown for disposal on 1 April 2009. The Department is working closely with the three Commissions to ensure that their estates are managed in a way to keep any such residual property liabilities to a minimum. The Care Quality Commission, in determining its future property strategy and requirements, is also required to take account of the wider Exchequer interest in minimising property liabilities by reusing existing surplus government space wherever it meets the business need. Until the property requirements of the Care Quality Commission are known and a disposal strategy put in place for the balance of the existing estate, it is not possible to give a reliable estimate of the potential residual properties that might revert to the Crown for disposal on 4 April 2009.




What is the expectation of paragraph 14 of Schedule 2? Does he have an estimate of the possible compensation? It is taxpayers' money, so not only should he know, but we have a right to know, and so do the public. Has the amount been crystallised or is it open to increase?


This is a standard provision and is consistent, with provisions included in the Health and Social Care (Community and Standards) Act 2003. It is our Intention that wherever possible property is disposed of In the most economical way for example by subletting. It is therefore not possible at this stage to estimate likely compensation but we will seek to minimise this.




What is the process for obtaining the consent of Welsh Ministers under paragraph 1(6)?


Consent by Welsh Ministers to a transfer scheme that transfers property rights and liabilities to the Welsh Ministers will be agreed through correspondence between English and Welsh Ministers,




It will be important to ensure that the day that the Secretary of State is likely to appoint for the transfers to take place is named.


Transfers will take place by 1 April 2009. The actual date of the transfer will be stated as required by paragraph 2 of the schedule.




I hope the Minister will take the opportunity to spell out why paragraph 3 (of

Schedule 2) is drafted as with regard to transfers under the Transfer of

Undertakings (Protection of Employment) Regulations 1981.


Paragraph 3 (employment) has been drafted in accordance with the requirements under the Cabinet Office Statement of Practice (2000) which governs machinery of government changes, and protects the employment rights of staff affected by the change under the Health and Social Care Bill.




How many posts has each regulator cut since the inception of the Gershon review? How many staff have the regulators lost through wastage due to the anticipated merger of their responsibilities?


Figures for staff reductions as a result of the Gershon review are not available. At present OSCI has 1699 staff, a saving of 923 since it was established, which reflects not only the efficiencies made, but the fact that 286 posts were transferred to OFSTFD when it took over responsibility for the regulation of children's social care in April 2007. The Healthcare Commission has cut its establishment by 14 posts over the four year period that Gershon has been in place.


Figures for redundancies as a direct result of the anticipated establishment of the Care Quality Commission have not been identified at this stage. However, both the Healthcare Commission and CSCI have made reductions in staff numbers or have plans to do so in response to the budgets approved for them for 2007-08 and 2008-09. The budget reductions do not directly relate to the establishment of a new regulator - they were designed to encourage efficiency savings as part of a more general push towards better regulation and would be implemented even if we were not establishing the new Commission. However, the internal planning processes within the two bodies are by now taking account of the suggested operational demands on the new regulator as well as configuration issues relating to efficiencies.


Given that the clause (clause 4) applies to England and Wales, should

subsection (2)(a) reflect that? What does "in relation to" mean?


The extent is clear from clause 167 that the Bill extends to England and Wales. Subsection (2)(a) is drafted so that care provided in Wales is not required to be registered with the Care Quality Commission. Care provided in England will be required to register with the Care Quality Commission, and where providers are based in Wales but provide care in England, they will need to register with the Care Quality Commission, for example where a provider has its headquarters in Wales but delivers care in England.

Where providers operate on both sides of the border, they will need to register with both bodies.




Will the Minister update the Committee on the discussions that he and his officials have had with Welsh Assembly Ministers about how the Bill will apply to Wales? Specifically, what does he understand the property rights and liabilities of MHAC in Wales to be? Did Welsh Ministers, during his discussions with them, identify any additional resources that they would need to be able properly to fulfil their new functions and powers under the Bill? MHAC...England.... Wales.... What assessment has he made of the division of staff and intellectual property arising from the split?.... What assessment has he made of the Division of staff and intellectual property arising from the division of MHAC?


I am pleased to confirm that my officials have held extensive discussions with officials in the Welsh Assembly Government on the detail of the legislation and the implications for implementation and practice. As I said during the debate on the 16th of January, and have said previously, we have liaised closely with Ministers and colleagues in the Welsh Assembly Government during the development of the policy of the Bill.


The Welsh Ministers currently provide financial resources to the Mental Health Act Commission in relation to monitoring of the 1983 legislation. These resources will be utilised in the future monitoring of the Act in Wales.


I understand MHAC has already made an assessment of the implications of a division and that any transfers of staff, property, rights and liabilities will be agreed through correspondence between English and Welsh Ministers.






Perhaps he will update us on what Welsh Ministers have said and on how they intend to use the powers to ensure that people in the Principality benefit to the same extent as those in England from the new provisions in the Bill.


Whilst the operation of monitoring the Mental Health Act in Wales will be a matter for Welsh Ministers, I am able to confirm that the Minister for Health and Social Services in the Welsh Assembly Government has already stated that such monitoring will be performed by Healthcare Inspectorate Wales (HIW).







































Letter from the Minister of State for Health Services, dated 23 January 2008


Dear Stephen,


As you will be aware, after a period of consultation, the Government has proposed a list of appointments suitable for pre-appointment scrutiny by select committees. Later today the Prime Minister will be making a statement to the House, where he will refer to the list, which will be available in the HoC library.


The Public Administration Select Committee (PASC) recently published a report on pre-appointment hearings and identified a number of posts they believed would be suitable to pre-appointment scrutiny. They recommended that the Chair of the Appointments Commission should be one such post. We agree with their proposal.


I noted in my comments to the Health and Social Care Bill Committee on 1Oth

January in relation to the proposed Care Quality Commission that the

Government was still considering which posts might be appropriate for pre-

appointment scrutiny by Parliament.


We have taken account of the strong cross-party support for this new development in the process for key public appointments. While we do not believe scrutiny would be appropriate for the appointment of all the non executive members of the CQC, in the case of the position of Chair we believe this would be warranted.


Given the crucial role the new CQC will play across the health and adult social care systems, a pre-appointment hearing would add value to the appointment process and will, in particular, help strengthen accountability to Parliament. The Chairmanship of the CQC will therefore be among those posts listed by the Prime Minister today as suitable for pre-appointment scrutiny. The view of the PASO is that arrangements for hearings are unlikely to require any change in primary legislation.


Our intention, as it has been all along, is for the recruitment process to be managed in an open and transparent manner by the Appointments Commission and for the appointment to be based on merit in line with the requirements of the Commissioner for Public Appointment's Code of Practice.


As with all other appointments on the list for pre-appointment hearings this one will be a Ministerial appointment and it will be Ministers who will seek and receive views from select committees on a candidate's suitability. On this basis, we will look to the Appointments Commission to make a recommendation to the Secretary of State who will then seek the opinion of the select committee following a pre-appointment hearing.


After considering its opinion, the Secretary of State would then make the appointment. The Appointments Commission will both manage the recruitment and make appointments to all of the non-executive board positions.















Letter from the Minister of State for Health Services, dated 23 January 2008



Dear Stephen,


During Committee last week, I promised to provide further information on a number of matters that were raised by various members of the Committee.



(Stephen O'Brien) What would be cost of any arrangements with Northern Ireland?


We cannot pre-empt which specific aspects of future cooperation between the Care Quality commission and Northern Ireland Ministers might be covered by arrangements made under Clause 68. As subsection (2) makes clear, terms and conditions would be as agreed by the two parties concerned, and would no doubt depend on the nature of whatever specific work might be agreed.



(Stephen O'Brien) clause 86 - technical point on unincorporated associations.


Under subsection (5), a member or officer of an association is guilty of an offence under Part 1 if it is proved that it has been committed with the consent of connivance of the officer or a member of its governing body, or if it is attributable to any neglect on the part of the me member or officer. A member or officer may therefore be prosecuted for an offence as well as the association itself.





What are the figures in Scotland and the forecast figures for England? May I ask the Minister what additional funding is the ombudsman likely to require and what have the Treasury offered? What length of time does "short-term" refer to in the ombudsman's evidence? What is the forecast increase in their workload?


These questions relate to the evidence provided to the Committee by the Parliamentary and Health Service Ombudsman. She is independent from the Department of Health, and is separately funded and managed. The Ombudsman, Healthcare Commission and the Department maintain a close working relationship and through a collaborative process, issues around workload and potential funding are being discussed.



My officials have contacted the Ombudsman's office and if Committee members have any further general questions relating to the evidence she provided, her office are happy to be contacted directly.


The figures for Scotland are freely available on the Scottish Public Service Ombudsman's website, which can be found at: http:/,php




What are the differences between the Healthcare Commission's investigation and the ombudsman's investigation, which is limited to maladministration or service failure?


The Parliamentary and Health Service Ombudsman can investigate not only complaint handling and the administrative aspects of healthcare, but also the clinical aspects of a complaint, such as a failure to provide reasonable diagnosis, care and treatment, or to follow prevailing clinical standards. The majority of the complaints which complainants bring to her involve aspects of clinical care.


The Healthcare Commission can review a complaint if the concerns have been raised with the local health service and if the complainant is still unhappy with the formal response received.


We are proposing to move away from the current system, which is predominant[y process-driven, to one that is more flexible. This will enable organisations to meet the needs of people; to make it easier for people to complain about their experiences of using health and social care services, and to make it easier for organisations to respond to those complaints and to learn from what people have told them in order to improve services. Patients wish to have their complaints resolved at local level, and our proposals will greatly assist in delivering that aim. The Healthcare Commission's work tells us that where providers are currently resolving complaints thoroughly and responsively, far fewer complainants seek review by an independent body.


Our experience of the Healthcare Commission's investigative role in the NHS complaints process leads us to believe that it has taken the emphasis away from local resolution. Indeed, there is evidence that it works against effective resolution of complaints at local level because organisations are aware that the Regulator will undertake the work. This approach also duplicates activity, notably the investigation function.


The Parliamentary and Health Service Ombudsman's 14 January 2008 memorandum to the Bill Committee says:


"Both the Healthcare Commission and I consider that complaints handling is not an appropriate role for the present, the new or indeed any regulator. My experience and my research convince me that effective local resolution followed by timely independent review by the Ombudsman is the comp1ainant-centred way forward for dealing with health and social care complaints."


How will the Healthcare Commission be wound up and how will it hand over its complaints function to the CQC?


Department of Health and Healthcare Commission officials are considering options for handling the independent review stage of the NHS complaints system in the run up to the Commission's replacement by the Care Quality Commission.


Will the Minister outline how the new complaints system will feed into

an effective alerts system for the CQC, regarding both broad issues in the sector and problems with specific providers?


Complaints are one source of information for alerting the Regulator that something is amiss and may require further investigation. An important feature of the new complaints system is the increased focus on organisational learning; lessons must be learnt to inform service improvement. We expect commissioners (Primary Care Trusts and Local Authorities) to ensure that all providers they procure services from have arrangements in place that respond effectively to individuals raising concerns and complaints, and to be able to demonstrate how they respond by implementing changes and improvements in response to complaints. Complaints managers in health and social care are expected to assess complaints for their seriousness and any implications for patient safety or with regard to social care, the safeguarding of vulnerable people.


What are the Government doing about two-tier complaints for social care funders?


People who arrange and finance their own social care services, the majority of whom are in care homes, are excluded from the statutory local authority complaints procedure and therefore lack access to the independent resolution and redress included in that procedure.

If services are being received from a regulated social care service, access to complaints resolution is restricted to the local process operated by the provider. We recognise that there is an issue about the fairness of these arrangements and we are considering ways in which some form of independent resolution may be achieved for this group of service users.


We are also looking at options for ensuring that local complaints procedures are as closely matched as possible, whether they relate to publicly or privately funded services.


We expect the regulation system to include assessment of providers in respect of their handling and management of complaints, but it is too early to be precise about the detail.



Clause 19: guidance on compliance with registration requirements - how often do current Commissions update this guidance and how often will CQC update such guidance?


Currently the Department of Health itself issues the National Minimum Standards (equivalent to guidance under clause 19) and the Commissions issue further guidance on specific matters where necessary. Under the new regulatory system, the Care Quality Commission will be responsible for issuing the guidance; it will therefore be for the Care Quality Commission itself to say how often It needs to update its guidance on compliance with registration requirements. Clause 20 makes clear that the Commission must consult when It proposes to revise this guidance.



Clause 36: periodic returns to the Commission -- how often will registered providers need to make returns to the Care Quality Commission?


Wherever possible, we anticipate that the Commission will draw on existing information to inform its regulatory activity, thereby minimising the need for specific additional information returns. However, where the Commission requires further information that is not available from existing sources, it may require additional information returns - as provided by clause 36 - either on an annual or some other periodic basis.



Clause 7 (Application for registration), O'Brien asked "What time limits on responses would he expect on responses" MS(H) offered to get back to him on this.


As I said in Committee, we expect there will be a uniform application form for health and social care providers. The Commission itself will determine the exact content of application forms. it may require particular information for certain regulated activities for example.



With regard to timescales for responding to applications, I would expect the new Commission to process applications for registration in a timely manner in the same way as the existing Commissions do. The Commission for Social Care Inspection for example, aims to complete applications for registration within 4 months whilst the Healthcare Commission aims to complete applications in 8-12 weeks. The Commissions need to assure that providers are, and will continue to comply with the regulatory requirements.


The time taken may of course vary significantly depending on a number of factors such as whether a site visit or interviews are required or whether the application is for a completely new provider or a provider with a proven, good track record.