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12 Oct 2009 : Column 46

(5) The required period is-

(a) 14 days beginning with the day after the regulator receives the request, or

(b) any longer period specified in the request.

(6) The Secretary of State may by order extend or further extend the required period."

(2) Schedule 2 (which inserts Schedule 8A to the National Health Service Act 2006, which makes provision about de-authorised NHS foundation trusts) has effect.'.- (Mr. Mike O'Brien.)

Brought up, and read the First time.

4.38 pm

The Minister of State, Department of Health (Mr. Mike O'Brien): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following:

New clause 11- Notification of Care Quality Commission special reviews and investigations-

'(1) The Health and Social Care Act 2008 is amended as follows.

(2) In section 39 (bodies required to be notified of certain matters) after subsection (2)(d) insert-

"(e) an investigation under section 48 (special reviews and investigations)."'.

Government amendments 21 to 37. [ Interruption. ] I appeal to Members who are leaving the Chamber to do so quickly and quietly to allow for orderly transition to the next business.

Mr. Mike O'Brien: I rise to move Government new clause 13. This amendment would insert the new clause into the Bill to enable a designated mental health NHS foundation trust to earn up to 1.5 per cent. of its total income from income that it derives from private charges. The new clause also contains a definition of mental health foundation for that purpose.

In the course of the Bill's passage through Parliament- [ Interruption. ] Sorry, Mr. Speaker, I am afraid that my speaking notes are not in the right order. I apologise for that. They have just been reorganised, and I think that those who reorganised them did so somewhat more efficiently than they should have. Let me move to new clause 12 and Government amendments 21 to 37.

The Mid Staffordshire Foundation NHS Trust failed its patents and the national health service. Members will be well aware of the history of that case, the House has debated it at length and I am grateful to many hon. Members, from all parts of the House, who during the past year have drawn our attention to the issues at Mid Staffordshire. We have to learn the lessons from that case and ensure that such events cannot take place again. The report of Dr. David Colin-Thomé, the national clinical director for primary care, contained a number of recommendations that are being taken forward, including better co-ordination among both the regulators themselves, and among the regulators and the primary care trusts and strategic health authorities.

Mr. Nicholas Soames (Mid-Sussex) (Con): Will the right hon. and learned Gentleman give way?

Mr. Mike O'Brien: I shall, but I am just introducing the issue.

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Mr. Soames: I am very grateful. On that particular point, following the dreadful events in Staffordshire did the Minister issue to the strategic health authorities throughout Britain a lessons-learned document or any other instructions?

Mr. Mike O'Brien: Dr. David Colin-Thomé undertook a report on the issue, so a full report on the lessons to be learned was issued throughout the national health service. It was not issued as a ministerial directive; it was more a clinical examination of the issues that had arisen. We have now started an inquiry into the details of what happened locally in the trust. The inquiry is hearing evidence and will, we hope, report towards the end of this year or the start of next. I hope that that deals with the hon. Gentleman's point.

Improvements have been made: for example, Monitor has formalised and improved its contact with the Care Quality Commission, which needed to be done; and, working with the CQC and Monitor, we are tightening up the quality requirements for aspirant foundation trusts.

The amendments act on just two of the many lessons that we have learned from Mid Staffordshire. First, foundation trust status should not be seen as a one-way ticket. That is an important message which we need to put out off the back of the Mid Staffordshire incident. Secondly, transparent democratic accountability is vital when a foundation trust fails. Members want to know what Ministers will do to sort out the problem, and on that issue there were clearly some difficulties.

Dr. Howard Stoate (Dartford) (Lab): Will my right hon. and learned Friend ensure that foundation trust board meetings are held in public? At the moment, the vast majority are held privately and therefore do not reassure the public that there is transparency in foundation trusts as currently constituted.

Mr. Mike O'Brien: There will clearly be variation in the work that trusts-whether foundation or, indeed, non-foundation-are able to conduct in public and in private. Some of their work is about contracts, including which contracts they are going for and how they make judgments and arrangements in relation to them, so some matters are commercially confidential. However, we need to ensure that trusts-whether foundation or non-foundation-are accountable publicly, so as much as possible should be in the public arena.

I agree with my hon. Friend as far as that is concerned, but let me say this: the foundation trust model is a key plank of reform, allowing greater freedom and autonomy to those who can demonstrate high performance. FT status is a hard-earned privilege and an incentive to drive up quality, innovation, productivity and local accountability. When an FT has failed to live up to that standard and public confidence has been damaged, it is in our interests to ensure that the privileges of FT status are withdrawn. When I say "in our interests", I am talking about the interests of the public as a whole in ensuring that the foundation trust brand justifies giving such freedom and responsibility.

4.45 pm

Mr. Lindsay Hoyle (Chorley) (Lab): Will the Minister give an assurance to the rest of the foundation trusts
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that what happened in Stafford cannot be repeated across the rest of the country? What audit has he carried out to ensure that?

Mr. Mike O'Brien: We have set up the Care Quality Commission, whose job it is to ensure that standards in the trusts across the health service are high. The commission can look at how such standards are operated. Furthermore, Monitor, the organisation that oversees the foundation trusts, is responsible for ensuring that the overall operation of the brand is of high quality.

Mr. Hoyle rose-

Mr. Mike O'Brien: I shall give way, but there is a lot to get through today and I want to make progress after my hon. Friend's intervention.

Mr. Hoyle: My right hon. and learned Friend mentioned the use of Monitor, but would it not be common sense for the organisation that oversees NHS hospitals to oversee foundation trusts as well? The fact is that Monitor does not oversee both; perhaps there would be better similarities if only one organisation investigated.

Mr. Mike O'Brien: I take my hon. Friend's point, but in a sense the Care Quality Commission will be considering the quality of the NHS as a whole; it will examine particular trusts and particular issues in relation to trusts where it needs to do so. Monitor's role is different: to oversee foundation trusts and to ensure that that brand of independence, identity and accountability demonstrates good standards.

The amendments need to be viewed in the context of Monitor's existing powers of intervention under the National Health Service Act 2006 and the de-authorisation proposals already in the clauses relating to trust special administrators. The 2006 Act gives Monitor wide powers to intervene on an FT in the event of a significant breach-the word "significant" is important-of the terms of authorisation. Monitor has a range of powers, including removing any or all of the directors of the board or requiring the board of an FT to do, or not to do, specific things. The clauses relating to trust special administrators already enable Monitor to trigger de-authorisation of a foundation trust that is no longer sustainable-again, an important word-in its current form. That is as a preliminary to the de-authorised trust coming under the control of a trust special administrator as part of a clearly defined six-month process.

The proposal under consideration today is a further, distinct piece of the jigsaw. It enables Monitor to trigger de-authorisation when-and this is very rare-a sustainable FT has breached any term of its authorisation or a statutory requirement and the breach is so serious that it justifies that step. A power to de-authorise makes it clear that foundation trusts must maintain the high standards expected of them and gives a strong signal to the public that organisations must earn the right to continue as foundation trusts. A de-authorised foundation trust would become an NHS trust under the Secretary of State's powers of direction. As with the clauses relating to trust special administrators, transitional arrangements would be put in place to allow the continuation of commercial arrangements entered into using FT freedoms and to ensure continuity of services for local people; that was particularly important in relation to Monitor.

12 Oct 2009 : Column 49

Triggering de-authorisation is a complex decision. I make no apologies for the complexity of the process, which is about balancing the freedoms and independence of the FT network with the need for democratic accountability. The amendments establish a framework requiring that Monitor considers the health and safety of patients, the quality of services that are provided, the financial position of the trust and the way in which it is being run. To ensure full and proper consideration of this issue, the amendments propose that Monitor be required to publish guidance setting out in detail the factors that it will take into account. It is also important that before triggering a de-authorisation, Monitor consults key stakeholders to get their views. Accordingly, the amendments require Monitor to consult the Secretary of State, the trust, the appropriate strategic health authority and relevant commissioners of the trust's services. That mirrors the process relating to trusts' special administrators.

In addition to highlighting the need for such a de-authorisation process, the Mid Staffordshire experience highlighted issues of democratic accountability. While Monitor is responsible for the regulation of foundation trusts, the Secretary of State is ultimately accountable to Parliament for the overall provision of NHS services. Monitor's operational independence is a vital component of the regulatory framework, and one that we should seek to maintain, but when considering the most serious risks to patients the Secretary of State should have the ability at least to express formally his view. To enable that, the amendments propose that the Secretary of State will be able to request formally that Monitor considers de-authorising a foundation trust. In such a situation, it will be vital that the Secretary of State and Monitor are able to act quickly and transparently.

We therefore propose that if Monitor believes that a differing course of action is preferable, it will be required publicly to explain its decision, either within a default of 14 days or within such further time as the Secretary of State deems appropriate to the particulars of the case. If there is a case for a longer period, Monitor may ask for that and the Secretary of State will be able to consider it and take a view as to how long it should be.

Mr. David Drew (Stroud) (Lab/Co-op): I speak as a governor of an acute hospital trust. At what stage does the Minister believe that Monitor should be talking to governors, and what time frame should governors have to consider some of the internal operations of the trust? There is not much point in being a governor if the first thing that happens is the disempowering of their role in any such questioning of the trust. Where do the governors come into this arrangement?

Mr. Mike O'Brien: Monitor will have to publish guidance on how it will carry out the process, as well as the criteria that it will use. How that is done will be the subject of further discussions between Monitor and the various trusts and/or interested parties, including the Secretary of State. Our view is that if Monitor decides that the way in which a trust has behaved means that it has to go through the process of considering whether that trust should be de-authorised, Monitor will need to carry out appropriate consultation, and it may well be that governors are appropriate people to consult.

12 Oct 2009 : Column 50

Sir Patrick Cormack (South Staffordshire) (Con): The Minister will know from our consultations on the sad episode in Stafford that I have sympathy with his view that Monitor should be able to take sanctions against a defaulting trust. However, having listened to what he has said I am a little worried that the process will be vague and cumbersome. What can he do to reassure me on that?

Mr. Mike O'Brien: We have discussed the process with Monitor and made it clear that we want it to be relatively quick. The hon. Gentleman will know from his experience as a Staffordshire MP that there were concerns about how that matter was dealt with and the speed. We therefore need to ensure that there is sufficient time to deal with the issues so that Monitor is able to receive a request from the Secretary of State, in that particular part of the process. The Secretary of State will determine whether he believes that the situation requires such a request. Monitor will then have 14 days-it will be able to apply for more time if it wishes-to take a view as to whether de-authorisation is the appropriate process. If it decides that it is not, and that it can deal with the matter by taking various steps, it will say so and have to set out its reasons.

If Monitor takes the view that de-authorisation is necessary, there will be a further stage in the process. We must not get mixed up about which stage we are talking about. At that stage, Monitor will be able to consult governors, the relevant strategic health authority and the various other parties that are directly affected, including the commissioners for the trust involved.

I make no apologies for the fact that the system is complicated, but in practice, given the urgency and rareness of the situation in question, we need to be able to deal with problems expeditiously. It is important to make the point that, thankfully, we do not expect situations such as that in mid-Staffordshire to arise with any regularity. On the contrary, we believe that the process will be very, very exceptional. However, the criteria need to be set out on which each party that has to make decisions, such as the Secretary of State and Monitor, can do so. The speed at which decisions can be made and the various consultations involved will be allowed for in the process, because various organisations have an interest in the matter.

Dr. Tony Wright (Cannock Chase) (Lab): I should like to reinforce the point that has just been made about the need for decisive action if we have another catastrophe such as that in Staffordshire, which I hope we do not. The frustration in that case, knowing the enormity of what had happened, was the delay in doing anything about it, and particularly the inability quickly to put in a new chief executive and top staff to clean up the place. This machinery sounds rather elaborate; I want to know that it will enable the Department of Health and Ministers to get in and sort the thing out immediately.

Mr. Mike O'Brien: The important point is that the system will keep Monitor as the decision maker in the process. Monitor will still have the role of making a decision, but it will have to explain and justify in a public forum why it reached it. I understand from advice that Monitor is comfortable with the position that we have reached. It has gone through the process with us and considered the matter, and it can understand
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why we feel that in certain circumstances, when a serious case arises, Ministers need to be able to make a request to it. It will then make a decision whether to de-authorise, after which the trust will be in a position in which Ministers can take action quickly.

My hon. Friend will recall that what happened in the case of Mid Staffordshire, with reasonable speed, was that as soon as the report came out Monitor acted to put in place temporary managers. One problem, as he will recall, was that the chief executive, who by all accounts was a talented individual, was part-time and was also working elsewhere for another hospital. That was not satisfactory in the view of much of the public in Stafford, and various local MPs, including my hon. Friend the Member for Stafford (Mr. Kidney), made representations expressing the view that we needed to put in place new, full-time management, particularly a chief executive. Through discussions with Monitor, we were able to ensure that that happened. My hon. Friend the Member for Cannock Chase (Dr. Wright) will be aware of the detail of the process, so I do not need to outline it. If my hon. Friend is asking whether Ministers will be able to crash into the whole process, yank out a trust and say, "You are no longer a foundation trust, and as a Minister I am going to do this", the answer is no. Ministers will not have that power, but they will work through Monitor to see whether there is a way of ensuring that the best approach is taken.

Mr. Andrew Lansley (South Cambridgeshire) (Con): Will the Minister give way?

Mr. Mike O'Brien: I will give way briefly, but I am reaching a conclusion. If the hon. Gentleman insists that he wants me to give way, I shall do so.

5 pm

Mr. Lansley: The Minister will recall that the intervention by Monitor took place on the same day as the publication of the Healthcare Commission's report on Mid Staffordshire NHS Foundation Trust. The same thing happened in relation to Maidstone and Tunbridge Wells NHS Trust. Given that the Secretary of State, not Monitor, was responsible for the scrutiny and oversight of Maidstone and Tunbridge Wells NHS Trust, what action did the Department take that was different from the action that Monitor took on Stafford?

Mr. Mike O'Brien: Clearly, it was much easier for the Minister to take action directly with regard to Maidstone, which was not a foundation trust-to deal with the problem as soon as we had looked at the detail of the evidence that was presented. The Department took action on Maidstone.

Mr. Stephen O'Brien (Eddisbury) (Con): That is not the point.

Mr. Mike O'Brien: The hon. Gentleman can stand up and give his response rather than sitting chuntering from the Front Bench. If he wants to ask a question, I will happily give him an answer, but if he just wants to dismiss it and chunter, that is up to him. I am not sure that it is the best way of dealing with arguments, but there you go; it is the way he does it.

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