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Lord Hunt of Kings Heath: The appointment to the boards of public bodies should be free from political interference. Of course, we very much agree with that aim. That is why the intention was set out in the NHS Plan to establish an independent appointments commission, which will oversee the appointment of lay members to NHS bodies. The commission will start life from 1st April of this year.

I agree with the noble Earl, Lord Howe. It is absolutely right that we should give the commission a clear role in relation to the appointment of temporary replacement non-executive members of NHS boards. I should stress that we are talking about temporary replacement. If the Secretary of State seeks an intervention order requiring the removal of board members, their replacements would, in the first instance, be appointed on a temporary basis subject to time-scales set out in the recovery plan agreed with the body subject to the order. The remit would be to ensure that the failing body was able to implement the recovery plan in the time specified.

At that point, and assuming the performance of the body had been turned around, the Secretary of State would want to make regular appointments to the board in question for the normal period of tenure. These appointments, of course, would be subject to the established processes of the NHS Appointments Commission; that is, by advertisement and open competition. The temporary replacement members might wish to apply for the permanent positions but it would not be a case of rubber stamping their appointments.

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The involvement of the Appointments Commission in the appointment of temporary replacement members would be in accordance with standard procedures agreed with the Commissioner for Public Appointments. This means that it would have the responsibility for making the appointments and would ensure that the candidates met the relevant criteria and had the particular expertise needed. The only difference between temporary appointments and long-term appointments is that the former would not be advertised because when the intervention powers are used there will be a need to address a serious matter and therefore one would not want to delay the process. It would be open to Ministers, the Modernisation Agency or the department's regional offices to put forward names for consideration. The NHS Appointments Commission would have to treat those candidates in the normal way and take the final decision on their appointment. In those circumstances it is highly likely that experienced chairs or non-executives already serving in the NHS would be appointed temporarily to fill those positions. I hope that I have given the assurance on that matter that the noble Earl requires.

Amendment No. 156 would alter subsection (5) of the new Section 84B inserted by this clause. The subsection provides that where functions are to be performed by a third body, such as a better performing green light NHS body--we shall publish in due course details of the approved list--the body subject to the order must meet the cost of those arrangements. The amendment that the noble Earl has put forward stipulates that that could happen only if the directions did not contradict the body's existing statutory financial duties.

The financial duties to which the noble Earl's amendment refers in essence require NHS bodies to break even. An NHS trust has to ensure that its revenue, taking one year with another, is sufficient to meet its outgoings. Health authorities and primary care trusts must ensure that their expenditure in any year does not exceed the aggregate of the income they receive from various sources. These statutory duties cannot be removed or modified by the directions under the new Section 84B. In essence, directions cannot "trump" the provisions of primary legislation. Indeed, it would be unlawful for the Secretary of State to give directions which conflicted directly with the duty or prevented the body concerned from complying with its statutory duties.

That is particularly relevant to our discussions last week when discussing Clause 2. I explained that a new performance fund will be available from next year, distributed on a fair shares basis to all NHS bodies. This is additional funding which will be used by NHS bodies to incentivise performance improvement.

NHS bodies which are traffic lighted as red or poorly performing will have the spending of their share of the performance fund determined by the Modernisation Agency. They will work with their regional office and the Modernisation Agency to agree a recovery plan to turn round their areas of poor

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performance. Their share of the performance fund will be used to implement the recovery plan. In some situations implementation of the recovery plan may be cost neutral--improvements in performance will result from better ways of working and targeting existing resources. But if money is required to set up new and improved systems of working, the performance fund will be available to pay for it.

If the intervention order is applied, for instance as a result of a one-off or very serious failure, to a body that was not previously classified as red, we would then expect that body to agree its spend of the performance fund with the Modernisation Agency to make sure the failing was addressed.

We consider the amendment unnecessary, not only because a performance fund would be able to provide extra money for service improvements but also because it would be unlawful for the Secretary of State to give directions which conflicted with a body's statutory duties.

Earl Howe: I am grateful to the Minister for that helpful reply. I take on board the point that the power of direction could not trump an existing statutory duty. The difficulty would be in cases where it is not entirely clear whether a direction from the Secretary of State puts a trust in a difficult financial position. There would be one view of the matter from the trust's perspective and another perhaps from that of the Secretary of State. Much argument will no doubt take place.

However, I am reassured by what the Minister said about the availability of the NHS performance fund. I would hope that the existence of that fund will obviate most of the difficulties to which I have referred. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 156 and 157 not moved.]

On Question, Whether Clause 20 shall stand part of the Bill?

Earl Howe: Perhaps I may ask the Minister a brief question. How will an intervention order be brought to an end? Will targets have to be achieved? Will those targets be known when the order is made? What happens then? Once an intervention order is terminated, does the relevant body return to the status it had previously, run by a board which does not consist of caretaker directors? I believe that that was the implication of what the Minister said. Perhaps the noble Lord could elucidate that very quickly.

Lord Hunt of Kings Heath: The recovery plan, which has to be seen in relation to the intervention order, will have details of what has to be done to ensure that the trust meets the terms set out in the order. I would expect to be included in that order some targets in relation to timing. The hope and expectation are that these interventions will be of a temporary nature. It would be in everyone's interest to ensure that the organisation got back on an even keel as soon as possible.

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Clause 20 agreed to.

Clause 21 agreed to.

Clause 22 [Vacancies for medical practitioners]:

Lord Rea moved Amendment No. 158:

    Page 18, line 4, after "consultation" insert "including consultation with the local medical committee for its area"

The noble Lord said: I take advantage of my pole position on this group of three amendments briefly to revive the debate on the abolition of the Medical Practices Committee when I had to break off with a frog in my throat. My noble friend then replied that,

    "we shall debate the Medical Practices Committee later".--[Official Report, 15/3/01; col. 1074.]

But, apart from this amendment, I do not see any other undebated amendments in which that can be done.

My noble friend dismissed the suggestion of a national medical practice advisory body, suggested in Amendment No. 225, as recreating the medical practices committee in another guise. I believe that that may have been the intention of the amendment. The new arrangements seem to the British Medical Association and many others, including myself, to be insufficient to maintain and further improve the even spread of GPs throughout the country. That has still not been achieved. Without such a committee or an equivalent body, it is less likely to be achieved Different health authorities or even different regional offices will be able to tempt general practitioners into their areas in various ways even if basic remuneration scales are nationally agreed. The preservation of a national body to continue the role of the MPC in an advisory capacity is highly desirable if only to feed information onwards to the proposed national workforce mechanism.

I am in favour of golden hellos and golden handcuffs to attract GPs to deprived areas and to keep them there. Those mechanisms will be more effective if an expert national monitoring and advisory body is retained.

Having got that off my chest, perhaps I can return to my amendment, which would simply require that the local medical committees should be consulted when health authorities--rather than the previous local medical committees or family health service authorities--decide when to create a GP vacancy in an area. That would not only be courteous, but would provide expert local knowledge to the health authority about the situation of general practice in the area.

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I shall finish by quoting the comments of the British Medical Association:

    "Local medical committees have the requisite local understanding to promote the delivery of high standards through their professional contacts with all general practitioners".

The amendment could be included in the Bill with benefit. I beg to move.

11.15 p.m.

Lord Hunt of Kings Heath: I have only two points to make. I am the first to acknowledge that, particularly under the leadership of Ro Day, the Medical Practices Committee has done its best to try to redistribute GPs in the way that we all want. However, for one reason or another, it has not been successful enough. The arrangements that we wish to put in place will be very helpful in ensuring that the local health authority is in prime position to deal proactively with the problems and that the funding mechanism provides the right incentives.

I accept the principle behind my noble friend's remarks on local medical committees. It is not a matter for the Bill, but I assure him that the regulations will require health authorities to consult with local medical committees before making any determination on whether there is or will be a vacancy for a general practitioner in their area. I hope that my noble friend will accept that assurance.

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