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Lord Peyton of Yeovil: The Minister's response was most interesting. However, in case I gave the wrong impression, I should like to stress that I did not intend any criticism of the Commission for Health Improvement or of the National Care Standards Commission when I spoke earlier. It seems to me that bodies established to look at the work carried out in hospitals, and elsewhere, should also be inspected. I am not making a flippant point.

I was recently in a very major hospital, which is not in London. I shall not mention the name, but the chairman of the group said to me, "What we are suffering from here is death by a thousand visits". I hope that the Minister will take that message on board. Let us face it, most of those who visit and inspect hospitals do not make patients any better; they are made better by physicians, surgeons and nurses. If such people are over-inspected and over-examined, their morale may suffer.

Baroness Hanham: I am tempted to rise to my feet at this moment on the subject of the inspection of inspectorates. I should declare an interest now, and in respect of any further interventions that I may make, in that I am chairman of an NHS trust.

So far, CHI has been well received, except by those who have borne the brunt of its remarks. I support what my noble friend Lord Peyton has just said about

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the multiplicity of inspectorate regimes. Indeed, far more than that, there is the amount of information that is required both in advance and at the time of such inspections. I assume that the information required for the first visit will not subsequently be required when the overall picture has been grasped. But if that is not the case, we are talking about a week's visit to the whole trust involving many people's time and, prior to that, something like four weeks during which information from all sorts of sources must be collected. It is not a terribly useful way of serving patients because it is time-consuming.

As I said, I hope that such information would be required only once. Thereafter it should be available on computer records. Indeed, the information obtained for CHI could very reasonably be passed on to the National Care Standards Commission, which would mean that it does not have to be requested again. It is a question of trying to rationalise what the inspection regimes are doing. I am not quibbling about the fact that this work has to be done, but it seems to me that such inspections take up an awful lot of people's time that could otherwise be used more effectively.

Lord Hunt of Kings Heath: I do not disagree with the points made by the noble Lord, Lord Peyton, and the noble Baroness, Lady Hanham. The noble Lord is right to say that it is important to keep one's eye on the activities of these bodies. We agree a work programme with CHI and Ministers have regular meetings with the commission. We also listen to comments and criticisms about CHI's performance from the NHS, which we then discuss with the commission. I am sure that the same arrangements will be put in place in relation to the National Care Standards Commission when it starts its work.

I very much share the concern about a multiplicity of organisations inspecting hospitals. My right honourable friend the Secretary of State started the process of looking at the regulatory inspection regime to assess whether we can rationalise it. Therefore, although I am sympathetic to the thrust of the arguments put forward tonight, I feel that the proposed amendment is a little premature because we have not yet completed the process.

The noble Baroness, Lady Hanham, raised the question of the amount of information required to assist such inspections. I accept that the task of providing it can be quite onerous. However, I should point out that CHI has undertaken many reviews. When considering the performance of the board of some trusts, the CHI was surprised at the paucity of information at its disposal in terms of judging the performance of its organisation. It was clear to CHI that, in many of those organisations, the board of the trust was not getting enough information from which to judge overall performance. It is to be hoped that CHI focusing on information will help boards to ensure that they are able to judge their own performance, benchmark it with other organisations and, through that, improve standards overall.

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9.30 p.m.

Baroness Hanham: I think I accepted that that was what I said; that in the initial stages the collection of information was necessary. I hope that it will not be necessary to require quite so much in future.

Earl Howe: I am inwardly distraught that my amendment does not commend itself to my noble friend Lord Peyton, whose approval, when I get it, I unfailingly cherish. I have to say to him that I do not regret tabling the amendment. I am and will remain an unashamed supporter of what is termed "the quality agenda" across the NHS and the private sector. I believe that an efficient inspectorate is an integral part of that.

I fully agree with my noble friend that those bodies should have to justify their existence. However, that is perhaps a separate question to the one I sought to raise. I also agree with him about death by a thousand visits. If he is good enough and patient enough to wait for Amendment No. 96, to which my noble friend Lady Noakes will speak at a later stage in Committee, he will find that the issue is brought into even sharper focus.

The noble Baroness, Lady Pitkeathley, chided me for proposing the merger between the two bodies with, as she thought, undue haste. I enjoyed the point she made. However, the fact that PCTs are, in the view of some of us, not ready for the big changes that are about to engulf them, has nothing to do with the fact that CHI and the National Care Standards Commission may be ready. The fact that the Secretary of State has spoken of organisational integration and, indeed, the fact that the Minister has tonight confirmed the department's intention is, at least to me, a hopeful and promising sign that I am on the right track. Perhaps I may say to the noble Baroness that the amendment was not that hasty in that it proposed a two-year delay before we plunge into the merger. I was struck by the comment of the noble Baroness, Lady Northover, that this was a good time to consider the merger immediately prior to the National Care Standards Commission being up and running for the first time.

I do not want to prolong the debate. I thank the Minister for his sympathetic response. I am glad that he acknowledged that life has moved on from a year or two ago. There is little between us on the issue. We wait with interest to see how the convergence of the four regulatory bodies is brought about in practice over the months ahead. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 [Funding of Strategic Health Authorities and Health Authorities]:

Baroness Noakes moved Amendment No. 62:

Page 9, line 11, leave out subsection (3) and insert—

"(3) Subsection (3C) is omitted."

The noble Baroness said: Amendment No. 62 is a probing amendment which would amend subsection (3) of Clause 7 by deleting the current subsection (3) and replacing it with a new subsection deleting subsection (3C) from Section 97 of the 1977 Act.

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Subsection (3C) of Section 97 of the 1977 Act was inserted by the Health and Social Care Act 2001. It gives the Secretary of State power to pay additional amounts to health authorities if they satisfy objectives or perform well against criteria. We debated those powers last year. Subsection (3) of Clause 7 amends that to replace health authorities with strategic health authorities while Amendment No. 62 deletes the power altogether.

When we come to Clause 8 of the Bill we shall deal with the financial arrangements for PCTs and the creation of a similar power for the Secretary of State to pay additional amounts to PCTs. The Secretary of State has said that he intends to allot at least 75 per cent of the funds available to him to PCTs. Strategic health authorities will not have significant functions other than performance management of PCTs and NHS trusts and so it is difficult to see why the Secretary of State needs these performance payment powers over strategic health authorities.

Can the Minister give any explanation of why in reality these powers created over health authorities are needed for strategic health authorities, given that the vast majority of the functions will now be taken over by PCTs?

As far as I can see, the only possible reason why the Secretary of State would require the powers is because he cannot bear to see any tiny part of the NHS over which he has less than a complete set of powers for use one day when the mood takes him. I shall be interested to hear whether the Minister has any substantive reasons for these powers over strategic health authorities. I beg to move.

Lord Peyton of Yeovil: I should like to congratulate my noble friend on having given us as lucid an explanation of what she was after as the Bill which she seeks to amend allows. I am just a little sorry that she allowed her natural good nature to get the upper hand of her and did not try to turn the knife slightly in the wound which I tried to inflict on the Minister just now about this awful habit of superimposing a Bill on an old Act of Parliament. No one just coming to look at the amendment could possibly understand without a certain amount of research what it intended to do. My noble friend moved her amendment very well, but I do think that she allowed herself to be a little more merciful than the situation caused her to be.

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