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Baroness Hayman: No, it is an analogous situation to the commission. If the Audit Commission was doing a national value-for-money study and was looking at an individual trust, that trust would pay towards that study in the same way as the commission might look at implementation of a national service framework and therefore charge the individual institution for that work.

This is a developmental agenda and an enabling provision, but it is very much in line with work that has been carried out already and is analogous work to that of the Audit Commission.

The costs of the commission will not be met at the expense of direct patient care. Any charges will need to be offset by reductions in non-care expenditure elsewhere; for example, by ensuring more effective use of other external audits in order to avoid duplication and an unnecessary administrative burden, and by reducing the amount of resources currently spent on litigation and the other effects of poor quality care.

The Secretary of State will determine the level of the commission's charges and how and when they will be made. The costs of an investigation or review would have to take into account various factors, including the number of review days involved and the nature of the review. It is worth noting that the commission will be under a duty, set out in paragraph 3 of the schedule, to carry out its functions effectively, efficiently and economically, so it is not as though a blank cheque is being written.

I should like to move on to Amendment No. 109. The Bill allows the commission to recover costs from persons or bodies, and those will be set out in regulations. I can reassure the noble Lord, Lord McColl, that it is not the intention that the commission will charge individuals for its services. It will review the systems which NHS organisations have in place to monitor and improve quality and will investigate service problems experienced by an organisation. That is the approach which will inform regulations in due course. Nonetheless, we would not want unnecessarily to restrict the bodies with which the commission can work and recover costs. While it is not our intention to charge

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individuals or individual GPs as instanced by the noble Lord, the commission will, as we discussed the other evening, be looking at the healthcare provided to NHS patients by the independent sector. NHS bodies enter into agreements or arrangements with a wide variety of private individuals, organisations or bodies.

As I understand it, if we restricted the terminology of the Bill to the word "bodies", the legislation would not necessarily cover all the situations which might arise and for which the commission might need to recover charges. For example, services provided even by a private partnership might not be covered by the word "bodies".

I turn now to the issue of the recovery of funds from other bodies, which relates to Amendment No. 110. I suggest that this could lead to the undesirable result of the commission being prevented from working beneficially with other bodies. It will only recover expenditure which has been properly incurred and the costs of carrying out its own functions. For the avoidance of doubt, perhaps I may make it absolutely clear for the benefit of the noble Lord, Lord McColl. NICE will be centrally funded and that cannot be changed.

The commission will only recover expenditure under Clause 15(2) where it has been directly incurred by the commission. If the expenditure is not incurred by the commission, there is no power of recovery. However, we need that power because in the course of its work the commission for health improvement may wish to draw on the particular expertise of other bodies, such as the Audit Commission. In assisting the commission those bodies would incur costs which they might wish to recover. The commission may meet those costs by making payments to those bodies in respect of the work carried out. This will be expenditure which the commission could recover under Clause 15(2)(e).

As it stands, the amendment would confuse the matter and might suggest that the commission could not recover costs in so far as they may be related to the making of such payments. Therefore, it would cast doubt on the extent to which the commission could be assisted by other bodies. We believe that that would be undesirable. The commission needs to be able to recover costs incurred in engaging other bodies to assist in its work. That is why we need the provision and not, indirectly, to fund inappropriate bodies--and certainly not indirectly to fund NICE. We must recognise the fact that there may be an area of joint working using someone else's expertise for which the commission needs to have some flexibility. Therefore, it is appropriate for the commission to be able to make charges under the provision.

Baroness Fookes: It seems to me that the Minister's reply actually causes one to ask more questions. First, will the bodies that might be charged at some stage be expected to include an element of that in their budget for the year? How can that not affect patient care in the

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sense that it is a charge upon them? Secondly, is there some kind of appeal system if it is thought that the charges made are exorbitant or unreasonable?

Baroness Hayman: I tried to cover such issues in my response. There are management costs which are part of running any organisation. I have in mind costs like publishing an annual report--some Members of the Committee are anxious about that--which are met. Of course, if you are incurring such costs, you are not spending that money on patient care. Nevertheless, they are considered to be part of, and a contribution to, providing high quality, accessible and publicly- transparent care. I am sure that Members of the Committee who have worked in the health service are aware of these circumstances. I do not believe that there is any appeals mechanism against the scales of payment of the Audit Commission or, indeed, its allocation of numbers of days to carry out the work.

We believe that the work that the commission will do for organisations will not just be some added bureaucratic cost; it will actually be an important input into improving quality. As we have discussed at other points in our debates on the Bill, improving quality is not necessarily something which always costs more. Indeed, in the long term, it can actually save money.

Lord McColl of Dulwich: I may be wrong, but I believe I heard the Minister say that she was a little concerned about private partnerships and that that is why we get into difficulties when using the word "bodies". However, I thought that there was no intention of applying CHIMP to the private sector.

Baroness Hayman: There is no intention of applying the commission to the private sector as regards providing care for private patients. However, we recognise that it might well have a role in relation to the provision of service to NHS patients in private establishments. It is in those circumstances that the need for some flexibility of terminology may arise.

We discussed the provisions about quality and the commission in regard to the private sector very late at night. I made it clear then that the commission would have a role to play both in the provision of care to NHS patients in private institutions and indeed in the provision of private care to private patients within NHS institutions.

Lord Clement-Jones: I thank the Minister for that reply. However, I agree with the noble Baroness, Lady Fookes, that the response raises more issues than even I had thought of when I tabled this probing amendment. The problem with these inspections is that they will be undertaken without the trust really having much say in the matter. The commission will review or investigate and, despite the fact that the charges will be set by the Secretary of State, the trust will really have no say in it. It will not be a contractual bargain; indeed it is not like a piece of management consultancy being undertaken by the commission.

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I accept the fact that the Audit Commission may well have been able to do exactly the same in the past, but I am afraid that I do not believe that that is necessarily the best course for the commission to follow. The point was rightly made by the noble Baroness, Lady Fookes. I say that because if we look at it closely, we have to ask: where does the money come from? For example, an NHS trust may be charged by the commission for undertaking a review. It may have been a particularly bad assignment which cost a great deal of money. Where does that money come from? Well, it comes out of management fees, IT costs or something of that nature. What we are saying is that a failing hospital actually has to pay more to CHIMP than perhaps the more successful hospitals. That kind of spiral cannot be correct. However, if the Minister then says that the Secretary of State will ensure that such a hospital has enough in its budget to pay the commission in those circumstances we are just talking about exchanging wooden dollars between the NHS trust and the Department of Health. That does not seem a very sensible way forward.

I shall seek to withdraw the amendment, but clearly we shall need to look again at the matter on Report. It seems to me that there are potential problems for budgeting at NHS trust level if the Secretary of State simply allows CHIMP in due course--I accept the fact that it may well take place over a period of time--to levy charges on trusts where it has not been part of their request for CHIMP to come in.

6.30 p.m.

Baroness Hayman: I am grateful to the noble Lord for those comments. I tried to make it clear that we were talking about moving towards a system where more of the commission's work was directly funded locally. The noble Lord may have highlighted a situation involving great difficulties where a major investigation is carried out where this provision is not necessarily appropriate. As a general rule we believe that this provision will encourage greater involvement in reviewing an investigation and will lead to wider ownership of the results, particularly when an organisation has invited the commission to investigate.

However, I must put the other side of the argument. If this can be done only at the invitation of an organisation, that could enable people to opt out of monitoring their arrangements for clinical governance. That would not be appropriate. I am happy to consider the issue in the light of the comments that the noble Lord has made but I believe that some of the problems that have been highlighted are perhaps not as great as the Committee may think.

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