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Baroness Cumberlege: I support my noble friend Lord Howe on these amendments, one of which stands in my name. I am divided about the principle behind this matter. I believe that it is absolutely right that the Secretary of State should be able to dismiss his appointees when they fail to satisfy what he feels is a reasonable standard. The Secretary of State should have power to appoint and to disappoint. At the moment the system does not work well at all. It is quite ghastly. The chair of a trust of PCT who fails is taken behind a bike shed at dead of night and is persuaded to fall on his sword, drink hemlock or something similar. If the chair being dismissed seeks to hold out and tries to stand his ground, what is a bad situation locally becomes an impossible situation and a real shambles. I believe that that part of the proposals in the Bill is right.

However, I have grave concerns that the Secretary of State can seek powers to dismiss an executive director of a trust. Usually such people spend the whole of their careers in the health service or they have a job within the health service and their whole life can be ruined. They can be deprived of their job, their career and their reputation by an idiosyncratic Secretary of State who decides to take action without having the transparency that my noble friend has suggested and without reports going before Parliament and so on. Throughout the Bill we have sought to make people accountable, and the Secretary of State too should be accountable.

I have some misgivings, but I understand the purpose behind this point. The NHS Confederation, an august body with a distinguished past, has put forward some good proposals. I am not sure whether the Minister, through his various channels, has had an opportunity to see them but the confederation suggests that, where there is an occasion when an intervention order is necessary, followed by an inquiry or an investigation into an incident, it is right that the Secretary of State should present a report explaining the reasons prior to making such an intervention.

There are some detailed systems laid down that can be adopted in order to make that situation acceptable to those involved. I recommend that the Minister considers whether those are acceptable to him. As the Bill now stands, I believe that it is unacceptable. We have seen cases, particularly at the Bedford Hospital, where there was real anger at the way that the chief executive was treated, not only among the local population but also among the staff in the hospital, particularly among the consultant body, who rose up to support the chief executive, whom they felt had been treated extremely unfairly in being dismissed and in having pressure put upon him.

When such a case concerns a chair, a non-executive who has been appointed by the Secretary of State, there should be an open, fair, transparent procedure, so that everyone can see how the Secretary of State has

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acted and why he has acted. In regard to executive directors, dismissal should be by the local board. Such a local board would be on the patch and would know the individual, his reputation and his expertise, or, in cases where that person had failed, it would have become dissatisfied with him. I support the amendment put forward by my noble friend.

Baroness Noakes: I support my noble friends Lord Howe and Lady Cumberlege. The proposals as drafted are draconian. They would allow the Secretary of State to intervene in almost every trust if he really put his mind to it. The test is only that the trust does not perform one or more of its functions adequately. In my experience, almost every health body does not perform one or more of its functions adequately. That is the nature of managing in such complex environments as health trusts.

We are looking for a much higher test. The Explanatory Notes mention persistent and serious failure, but that is not how the clause is drafted. I look for clarification from the Minister on which particular ill he is trying to address in the clause. Is it an ability for the Secretary of State to intervene in any trust he chooses? That appears to be the way in which the Bill is drafted. Is it to intervene in only the most serious cases? If so, I suggest that different wording is used. If that is the case, will the Minister reflect on whether the existing procedures do not adequately allow proper action to be taken in the most "persistent and serious" cases, the language used in the Explanatory Notes?

I am not clear what the Government are trying to achieve with these provisions and look for further clarification before deciding whether the wording of the Bill is acceptable.

Lord Hunt of Kings Heath: We return to last Thursday's debate on the balance between national direction and leadership and local autonomy. I listened to the noble Earl's unkind words about centralising power, but every government who have been responsible for the NHS have faced the same dilemma.

I was interested to read Rudolf Klein's book, The New Politics of the NHS, in which he described in detail the previous government's dilemmas. Dealing with the 1982 reforms when district health authorities were created, he wrote that the rhetoric of delegation had a short shelf life. He stated that Norman Fowler began a series of measures designed to strengthen the grip of central government and that the DHSS moved to a tighter system of control and accountability than had ever existed in the history of the NHS.

Moving on through those years, Klein concluded that the NHS became a transmission belt for ministerial will and that further reforms in the 1990s, including the abolition of regional health authorities, were further indications of that process of centralisation.

I do not refer to that by way of criticism of the previous government. I merely refer Members of the Committee to it because I believe that there has always

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been a genuine problem about the NHS. As the noble Baroness, Lady Cumberlege, said, accountable through Ministers to Parliament is the expenditure of a huge amount of public money.

Clearly, the Secretary of State must have the ability to manage and direct the NHS accordingly. Equally, I accept that it is important that the people at local level, who are of high calibre and I assure the noble Earl were certainly appreciated by myself and ministerial colleagues for their hard work, are given sufficient ownership and control to do their job properly.

How does one achieve central balance? That is where earned autonomy comes into play. Earned autonomy is very much about giving greater freedom to those organisations which do well in the health service, while there is greater intervention in those organisations which are not doing well. That is the background to the debate on Clause 20 and the answer to the many philosophical points put forward by Members of the Committee.

As far as concerns the specifics of Clause 20, the clause creates a new power which enables the Secretary of State to use two types of intervention, either separately or together, in failing NHS bodies: the removal or suspension of all or part of the body's board and the replacement by other persons nominated by the Secretary of State who may then constitute a new management team; and a requirement on the failing NHS body to make arrangements for some other person or body to perform the specified functions of that NHS body. For example, that would enable the Secretary of State to require the body to delegate the exercise of specified management functions to a third party.

The test that must be met before the Secretary of State can intervene is, as Members of the Committee have said, referred to in new Section 84A(1). The test requires the Secretary of State to be of the opinion that an NHS body is not performing one or more of its functions adequately, or that there are significant failings in the way that the body is being run. In addition, the Secretary of State must be satisfied that it is appropriate for him to intervene. Therefore, the test has two elements to allow for a situation either where there has been a very serious one-off incident or where there has been a failure to provide a satisfactory service to patients over a period of time.

I assure the Committee that in the second situation clearly it would be inappropriate to use the powers of intervention at the first sign of merely inadequate delivery of services. That would not be our intention. The kinds of situations in which the Secretary of State might use the power could include the failure of trust management to address serious malpractice; for example, carrying out procedures without informed consent. Although in that example there may be only one clinician involved in that situation, if the trust was aware but failed to tackle it, or handled the incident badly, that might be a case for intervention and the removal of board members. A second incident might

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be the continuing failure of a trust board to take the necessary action to ensure that the trust was in financial balance. A third area might be continuing failure to provide services to an adequate standard. For example, a satellite renal unit might be unable to provide adequate haemodialysis because of nursing shortages. In that instance, the trust could be required to let a third party, such as a better performing green light NHS body, provide the service for a fixed period. We envisage that the use of those powers of intervention would, generally speaking, be a last resort when other actions had failed or were deemed inappropriate because of the seriousness of an incident.

10.30 p.m.

Baroness Noakes: I thank the noble Lord for giving way. Can the Minister enliven his presentation by giving examples where the existing powers have failed to enable the Government to take appropriate action when problems within trusts or other health service providers have been identified? I am troubled that the drafting gives the Secretary of State very draconian powers. I am not at all clear in what circumstances the existing powers have failed to allow the Government to take appropriate action. I should be grateful if the noble Lord could enlighten the Committee.

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