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Lord Clement-Jones moved Amendment No. 38:

Page 43, line 24, after ("trust") insert ("or any other member of the trust or any person who has been a member of the trust").

The noble Lord said: I beg to move Amendment No. 38 which is a narrow but nevertheless very important proposal. This matter, which appears to us to be somewhat anomalous, was drawn to the attention of these Benches by the BMA. If one looks at paragraph 11(3) of Schedule 1, it allows superannuation, allowance or gratuity to be paid to a primary care trust chairman or former chairman. The intention of the amendment is to spread that rather more widely. It seems to us to be rather peculiar that alone among those who serve on the board of the PCT the chairman is entitled to such superannuation, allowance or gratuity. The responsibility of board members will clearly be considerable. The prospective budget of PCTs appears to be about £60 million, so the responsibility of board members will not be inconsiderable. Therefore it is important that one considers the appropriate remuneration for members of the PCT boards. Superannuation is an important part of remuneration. Primary care groups have already been established without an appropriate level of

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remuneration or superannuation for board members. The BMA believes that that has been a significant disincentive to GP and wider professional involvement.

We ask that the department look again at the issues. It may not necessitate amendment to the Bill, but perhaps the department should consider the matter again after discussion. I beg to move.

Baroness Hayman: Many Members of the Committee will have felt sympathy with the concern expressed by the noble Lord to ensure a secure retirement for those who have served the NHS in these capacities. However, I cannot accept his suggestion. It is expected that members of primary care trusts will spend up to 16 hours a month on trust business, for which they will receive appropriate remuneration. While the contribution will be of considerable benefit to the primary care trust, the Government do not feel that it would be appropriate to make provision for the payment of a pension allowance or gratuity which would be a considerable further drain on NHS resources.

As regards pensions for chairmen of primary care trusts--this is a revelation to me--we cannot at present envisage the circumstances in which it would be appropriate to consider determining that those pensions should be paid. I think that I should declare a reverse interest. Although it has never been used, there is provision in other legislation to allow for the payment of pensions, gratuities and allowances to the chairmen and former chairmen of other NHS boards. We believe that it is right, should the need arise in the future, to maintain the capacity for chairmen of primary care trusts to be treated in the same way as all other NHS chairs. But since 1977 all other NHS chairs have never been made subject to that provision or had any pension provision made for them.

However, there is no provision, even in theory, for the payment of such pension allowances to members and former members of other NHS boards. It would be inappropriate to introduce that for the members of PCT trusts, who would be treated differently from their colleagues on other boards, and, in reality, were the provisions to be invoked, differently from the chairmen of other boards.

Lord Clement-Jones: I thank the Minister for that reply. It was intriguing in many respects. The sum total of the Minister's argument is that in the current context, whatever the provisions in the Act, the payment of pensions is purely theoretical: that the department takes away with one hand and the other. Her argument also demonstrates that with quite considerable ease the Government could provide power in the Bill to pay pensions--and it would not matter. They would not pay pensioners anyway, whatever the provisions. So the permissive power would be perfectly easy to grant.

We shall think about the matter and discuss it with those who propose the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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The Deputy Chairman of Committees (Baroness Turner of Camden): I have to tell the Committee that if Amendment No. 39 is agreed to I cannot call Amendments Nos. 40 to 44 because of pre-emption.

Lord Clement-Jones moved Amendment No. 39:

Page 44, line 23, leave out from ("and") to end of line 39 and insert ("details of the measures the trust has taken to promote economy, efficiency and effectiveness in using its resources for the exercise of its functions.
(2) A Primary Care Trust shall prepare such other reports or other information as required by the Health Authority in whose area the Trust's area falls or by the Secretary of State.
(3) A Primary Care Trust shall publish reports and information compiled under sub-paragraphs (1) and (2) at least within its area of operation.").

The noble Lord said: This series of amendments is designed to improve the reporting requirements of primary care trusts. The amendments are designed to tighten up the provisions in the schedule. I do not think that it requires huge explanation. Effectively we are tightening up the wording, making the provision mandatory.

Amendment No. 50 needs further elucidation, as do the amendments about best value. We have sought to insert some provisions relating to the duties on reporting on economy, efficiency and effectiveness which mirror the best value provisions under the local government legislation. We believe that the PCTs should be in no different position from local government in that respect.

PCTs are in a peculiar position. Many professionals and lay people remark on the fact that PCTs will be both provider and commissioner. They will commission in the sense of secondary healthcare and they will provide primary healthcare. That gives them somewhat of a conflict of interests. Therefore it is important that their reporting requirements should be clear. For that reason we believe that PCTs should present to the Secretary of State an annual account of services which they commission from themselves as providers. We believe that to be a reasonable check on what is a fairly considerable degree of power. It makes sure that PCTs are properly commissioning services from themselves, so to speak. To commission from themselves is a somewhat schizophrenic duty for PCTs.

In line with a number of our other amendments, we believe that the amendment promotes transparency and demonstrates the value more widely than is currently provided for in the Bill and is not inconsistent with current legislation.

Lord Astor of Hever: I speak to Amendments Nos. 40 and 42. In supporting the principle of open government, we believe that information about the work of PCTs should be made readily available to members of the public and interested organisations throughout the country. We therefore feel that it should be the responsibility of the Secretary of State to ensure that PCTs produce an annual report and that it be publicised. In that way the Secretary of State will take on additional responsibility in a similar manner to that of the DfEE in the publication of information relating to schools' performance.

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Access to relevant information is of great concern to the public; and publication should be the responsibility of the Secretary of State rather than individual PCTs. It is vital that any important information that is given to the public should be set out in a form which is accessible and easy to understand. If left to individual PCTs, there could be wide variations in the detail, quality and clarity of that information.

In order to have reports where clear comparisons can be made between trusts in one area of the country and another, the Secretary of State should undertake to publish the information in a consistent format. We are concerned that unless that approach is adopted, real improvements in patient care, which we on this side of the Chamber seek, will be obscured by inconsistent reporting. I look forward to the Minister's comments on that point.

On Amendment No. 42 we believe that it is important that information should be available to the public on the availability of drugs, treatments and other healthcare service treatments. This should contain, as a matter of public interest, details of whatever rationing decisions the PCT has had to make over the course of the year. First, that will be an additional step towards the acknowledgement of rationing, or prioritisation, within the health service. Secondly, it will be possible to observe whether the effects of NICE and CHIMP have been to increase the rationing process over time. Despite the Health Minister in the other place having recently made the astonishing statement that there is no rationing, a wide range of rationing decisions are currently being taken in the health service and there is a great variation from one area to another.

We do not believe that it is possible simply to end rationing. What we do believe is that there is an urgent need for a mature debate on the subject of rationing and priorities of the health service. The Government are damaging public confidence in our healthcare system by refusing to admit to this obvious fact. It is no good--as the Government are trying to do--simply to force doctors to carry the can for rationing decisions. Doctors should always make decisions on clinical priorities, but the framework should be set in a transparent environment and the public involved in the setting of the framework.

The Government claim that the introduction of NICE and CHIMP will alleviate the problem of regional availability. Even if that is the case, it is likely to result only in some operations or drugs being nationally available, with others becoming available in the private sector only. Having such information from PCTs set out by the Government on an annual basis will help to clarify which areas are experiencing most rationing.

9 p.m.

Baroness Hayman: This series of amendments deals with the reporting arrangements for primary care trusts and we support their general aim to ensure that there is transparency in the activities of those trusts. We believe that it is covered by the current provisions in the Bill.

As regards Amendment No. 39, the duties in paragraphs 16 and 17 of Schedule 1 are at least equivalent to requirements on other NHS bodies. The provisions do a number of things. First, they require the PCT to prepare

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and send an annual report on its activities to the local health authority and to the Secretary of State. This is consistent with the line of accountability that we want to see--and which is also reflected in the powers of direction in Clause 7--from PCT to health authority. But it also reflects the fact that PCTs are ultimately accountable to the Secretary of State. And the Secretary of State, too, will have an interest in maintaining the performance of PCTs.

Secondly, the provision (in paragraph 16(2)) is deliberately couched in a way that will allow flexibility as to what other reports and information they can require of the PCT. This further reinforces the ability of health authorities and the Secretary of State to hold PCTs to account. Clearly, though, this power will need to be exercised judiciously so as not to impose unnecessary burdens on PCTs. And health authorities' ability to request information will be subject to the Secretary of State's direction. We want proper accountability arrangements, but not a major paper chase or excessive interference in the running of PCTs.

Thirdly, we will set out in regulations the steps PCTs must take to publicise their accounts, annual reports and other prescribed documents. Clearly, ensuring effective publication and access to such information locally will be one of the areas we will want to consider for regulations. Equally, all NHS bodies will be required to report annually on clinical governance and that will apply equally to PCTs.

We consider that these provisions are extensive and flexible. We believe that, if anything, the amendment dilutes rather than strengthens the requirement to publicise key documents such as audited accounts and annual reports. I hope that I have reassured the Committee that the existing provisions deal with the issue.

Amendment No. 40 raises an important issue here about the balance between primary care trusts' powers and their duties and accountability. We want to establish primary care trusts as free-standing statutory bodies with the operational flexibility to tackle local service problems. We want primary care trusts to be innovative and make changes for the benefit of patients. However, with freedoms must come responsibility and proper accountability. Paragraphs 16 and 17 of Schedule 5A to the 1977 Act, as inserted in Schedule 1 to the Bill, are very important in this respect. They place a clear duty on primary care trusts to report on their performance to health authorities and the Secretary of State. Those two routes of accountability are very important.

Paragraph 17 further provides for this process to be transparent and open to public scrutiny. It is our intention that primary care trusts will be required, through this provision, to publish their audited accounts, annual reports and other documents that the Secretary of State may prescribe in regulations. As it stands, paragraph 17 confers a discretion on the Secretary of State to make regulations on the publication of these specified accounts and reports. However, it is our intention to require such publication. I am grateful to noble Lords for drawing attention to this point. I am considering their amendment which will have the effect of replacing the Secretary of

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State's discretion to make regulations as to the requirements to publicise specified reports and accounts with a duty on the Secretary of State to do so.

I assure the Committee that there is no ducking out of the need to impose requirements on primary care trusts in respect of publicising reports and accounts. We will take the necessary steps to ensure that that is so. However, we believe it is right that the onus to publish reports should rest firmly with the primary care trust. Placing this duty on the Secretary of State--as the noble Lord, Lord Astor, proposes--would undermine the accountability of primary care trusts. If they are to have their own powers and freedoms to exercise functions, they should also be expected to account for the performance of those functions. This is hardly a new principle--it is the way, for example, in which NHS trusts work. To accept the noble Lord's amendment would be to separate primary care trusts' responsibilities from their freedoms. We do not believe that that is a sensible way forward and we intend that the accounts and reports are published in a way that makes them accessible to interested parties locally as well as to national interests. Paragraph 17 is couched in such a way that the Secretary of State will be able to set out any necessary requirements to that end.

Perhaps I can deal with the issue of split functions of primary care trusts with which Amendment No. 50 deals. I understand the intention of the amendment but its approach is flawed. In relation to the problem raised of role confusion, primary care trusts will not enter into service agreements or NHS contracts with themselves.

Clause 3 inserts new provisions into the NHS Act 1977 relating to the funding and financial duties of primary care trusts. However, it is only part of the overall financial framework and associated reporting arrangements. In particular, the provisions need to be considered alongside the provisions of the new Schedule 5A to the 1977 Act as inserted by Schedule 1 to the Bill. Paragraph 16 of the schedule provides for each primary care trust to report on its activities in a form which the health authority, Secretary of State or both may specify.

Together those two provisions address the issues about which Members of the Committee expressed concern. As I said, primary care trusts will not enter into service agreements or NHS contracts with themselves. If a trust wishes to provide a service for the population for which it is responsible, it will simply provide that service; there will not be a contract and there will not be a purchaser-provider split.

At level four primary care trusts can either choose to provide a specific service to their population or commission that service by entering into an NHS or other contract with another body for that body to provide the service. In the sense that it is drafted in terms of commissioning, therefore, the amendment is flawed. Nevertheless, the intention is clear. We are sympathetic to the purpose of the amendment and the concerns that underlie it. The dual role of a level four primary care trust as both the commissioner and provider of services could give rise to a perceived conflict of interest, a real conflict of interest or a failure to achieve value for money. I can assure the Committee that we will be looking to primary

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care trusts to demonstrate value for money in any services that they provide themselves for the local population rather than commissioning another body.

Paragraphs 16 and 17 of the new Schedule 5A will require PCTs to report annually on their activities to their health authority in a form specified by the health authority, the Secretary of State or both. Paragraph 16(2) requires in particular each primary care trust to report on the measures it has taken to promote economy, efficiency and effectiveness in using its resources. Again, I can assure the Committee that we will expect level four primary care trusts to demonstrate that they are achieving all three targets in the services which they provide directly to the local population. I hope that that will reassure the noble Lord that the issues are being covered.

Amendment No. 42 is also a flawed amendment. In recording all treatments that have been requested by a patient, we are opening a large door and not recognising that not all requests--certainly the first requests made before discussion with a general practitioner--are for treatments which are effective or appropriate. Treatment is based on clinical need but clinicians also need to ensure that individual decisions are taken in the light of local service priorities, making sure that maximum benefit can be derived from the resources available.

Priority setting is a necessary part of decision-making in any healthcare system. PCTs will not change that; they will not put all the responsibility on general practitioners. But they will be expected to live within their budgets, just like any other part of the NHS. Nor will PCTs change the principle that decisions about a patient's health must be taken by the clinician and the patient. They will not prevent clinicians deciding what is best for their patient--whether, for example, to prescribe drugs or refer to hospital.

Allowing local priority setting is an important strength of the new system. It brings decision-making to a level closer to the patient so that services can be better organised to reflect their local needs and wishes. With unified budgets in PCTs they will be able to make choices about cost-effective patterns of services and be free to switch resources over time to support them. They will be free to redeploy savings to meet local needs and promote local development. Those and the other efficiency savings and the £21 billion extra resources that we are putting into the NHS over the next three years amount to a service that will be better equipped than ever before to meet clinical need.

The practical implication of adopting the amendment as it stands will be to place a significant extra bureaucratic burden on primary care groups and raise issues of patient confidentiality in a system where I do not believe it would enhance proper accountability or the reporting back on the activities of a primary care trust. I hope, in my remarks related to the others amendments, that I have reassured Members of the Committee that such provisions are on the face of the Bill.

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