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Lord Renton: My Lords, I shall try to be constructive rather than critical in what I have to say. We appreciate the efforts that the noble Baroness has made to explain the Government's intentions, but we are in a rather unusual position on this Bill. At least a third of it consists of amending previous Acts of Parliament. Indeed, Clauses 3 to 10 inclusive are confined to amending the Acts of 1977 and 1990. The 10 pages of Schedule 4 comprise a mass of amendments to previous legislation.

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Of the three amendments moved by the noble Baroness we are mainly concerned with Amendment No. 15. It adds a new clause, adding a new schedule to the 1977 Act. This is rather unusual. Rather than adding a new clause, it would have been more usual, tidier and more logical, to have a new schedule to the Bill. I have studied the content quite closely. It deals with detailed guidance as to the way in which expenditure shall be handled: the sort of thing which is very often put into a schedule. I hope that we shall have early consolidation after this Bill becomes law, because those splendid people with the professional duty and administrative ability will have a terrible time trying to establish across the statute book exactly what the law is. If one looks at the amendments in Schedule 4, it will require tremendous documentary effort on their part to find out their responsibilities.

I do not say that there is much that the noble Baroness herself can do about this. My main point, however, is to implore those concerned within the Government to give high priority to consolidating all this legislation on health before great confusion sets in.

Baroness Carnegy of Lour: My Lords, what was said by my noble friend Lord Renton is even more true of Part II of the Bill. I have attempted, with very much less expertise than he has, to ask whether the Government would consider the same matter.

I turn to the question of how prescriptions will be charged and the part they will play in the unified budget. The Minister has already kindly agreed to find out about the replication in Part II of the Bill in connection with the arrangements she spoke of last time. Could I ask her also to add what she has just said about prescribing and how those arrangements will be made, because that is part of the problem which I tried to enunciate?

Lord Walton of Detchant: My Lords, as the Minister said, the amendments tabled in her name are exceptionally complex, particularly the one relating to Schedule 12A, proposed as an amendment to the 1977 Act.

Drug budgets in the NHS have always been cost-limited to an extent. Is the intended purpose of these amendments to make prescribing across the country more even, ruling out, one hopes, the issue of post-code prescribing, which has been referred to on a number of occasions when this Bill has been debated in your Lordships' House?

We have seen the establishment of the national institute for clinical excellence, inexorable rising costs of technical and pharmaceutical developments and the introduction of expensive new drugs. After due inquiry, NICE may indicate that within the NHS a particular form of treatment is the most right and cost-effective for a particular condition. Might not the drugs budget then be adjusted to take account of its recommendations? The director of NICE has said that in making recommendations the institute will take account of cost-effectiveness. However, it is likely that drugs such as beta-interferon, the other interferons for multiple

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sclerosis, Donepezil and other drugs for the treatment of Alzheimer's, and many more, will put an increasing burden on the NHS and its prescribing budget. Does the Minister believe that the amendments she has introduced today will help to deal with such problems?

Earl Howe: My Lords, I am grateful to the Minister for her thorough explanation of the amendments. I am also personally grateful to her for taking the time to brief me about them last week with her officials. I understand that a principal purpose of the amendments is to direct the costs of prescribing to the place where they should properly fall; that is, to the point at which the prescribing rather than the dispensing is done. I entirely understand why that should be thought desirable.

However, I find one point in Amendment No. 15 somewhat obscure. In paragraph 3(4)(b) of the new Schedule 12A the Secretary of State is granted power to exercise his discretion in apportioning funds,

    "by reference to averaged or estimated amounts".
I see the sense in allowing for estimated amounts of expenditure, but what is the significance of "averaged"? In what circumstances might the Secretary of State be minded to apportion funds relating to the cost of drugs in a way which averaged out any likely differences between health authorities, or is reference being made to some other kind of averaging?

Lord Clement-Jones: My Lords, I, too, thank the Minister for her careful explanation of the amendments and for the opportunity she gave us last week of discussing them before they were tabled.

We on these Benches have considerable sympathy with the issues raised by the noble Lord, Lord Walton of Detchant. In Committee we tabled an amendment which probed cash limits and the drugs budget and the Minister gave a clear and firm assurance, as she has done today, that there was no intention to cash limit drug prescribing budgets at GP level. However, there are dangers in the unified budgets being held at PCT level when there is overspending.

The Minister mentioned the temporary financial assistance which would be available if unified prescribing budgets were overspent, and that provides some assurance. However, we believe that if NICE, which will set standards for prescribing, regards particular drugs as being important and necessary as an effective form of treatment, making GPs bound to prescribe them, there is a great danger that the overall unified budget will not be sufficient. Will not either temporary or permanent financial assistance at that unified level need examining?

We accept, however, that these amendments do not alter the principles involved and the moves towards indicative and unified budgets. We also accept that there is considerable logic in being able to pinpoint with greater accuracy who is responsible for the prescription of the drugs. Therefore, that amendment does not give us cause for concern, unlike the overall framework in which it would be placed.

Furthermore, I have sympathy with the view expressed by the noble Lord, Lord Renton. These are perhaps plangent amendments in terms of their clarity,

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and early consolidation of the Bill is important. Representations have been made to me for a memorandum explaining the amendment in greater detail prior to any consolidation. Perhaps the explanation which the Minister has given today will be extremely helpful, but there is concern about people's ability to understand the new legislation. I described our previous canter through unified budgets as being a financial seminar. Today we have had the second round of that financial seminar and I am grateful to the Minister.

6.15 p.m.

Baroness Hayman: My Lords, I am grateful to all noble Lords who have contributed to the debate, not least the noble Lord, Lord Clement-Jones. It is the first time I have ever heard the word "plangent" used in normal discourse--if a debate in your Lordships' House can be described as normal discourse.

I shall deal first with some of the technical issues. When dealing with the three components of the unified budget, I gave as the total sum £24 billion, but I should have said £28 billion.

In answer to the noble Baroness, Lady Carnegy, I point out that at a later stage my noble friend Lord Macdonald of Tradeston expects to bring forward a similar amendment.

As regards the inclusion of the words "averaged" and "estimated", the key adjustments we wish to make take account of cross-boundary prescribing but other adjustments will allow prescribing costs to be more accurately and equitably attributed to health authorities. They build on well-established systems for measuring spend against GP fundholders' budgets and against indicative budgets.

Averaging is perhaps most relevant where payments to pharmacists are made. They take into account the level of discounts which is assumed to obtain on the purchase of drugs. The larger their volume of NHS dispensing, the larger the assumed discount. The level of that discount deduction has nothing to do with the prescribing decision as such, so it is fairer to average out that discounting element in the recharging costs to health authorities. I hope that that clarifies the matter.

The noble Lord, Lord Clement-Jones, spoke of an over-commitment on unified budgets. In the first instance, it will be for health authorities, as now, and primary care trusts to manage the risks across the whole of the unified budget; in other words, by balancing over-commitments in one part by reducing spending elsewhere. But health authorities will assist primary care trusts in that task by, for example, helping them to pool financial risks.

As in the current system, an over-commitment may sometimes be unavoidable. There are well-established in-year mechanisms for dealing with over-commitments. For example, a health authority or primary care trust could have its cash-limited budget increased to cover potential overspend by transferring resources from an under-spending health authority or primary care trust elsewhere. That is the well-established brokerage system.

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I am not sure what I can say to the noble Lord, Lord Renton. I feel as much a prisoner of the complexity of the legislation as any other Member of your Lordships' House. I certainly recognise the difficulties to which he and other noble Lords referred.

As regards the issue of the new clause or schedule, I must deny all responsibility, if that is not inappropriate behaviour at the Dispatch Box. In dealing with those technical drafting issues, one depends on the advice of parliamentary draftsmen. It was chosen as the preferred method of dealing with the issue but it is obviously not the preferred method of the noble Lord, Lord Renton.

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