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Baroness Finlay of Llandaff: I thank the noble Lord, Lord Roberts, for his generous comments about me. I appreciate them enormously and feel humbled by them.

After last week's debate, I wanted to feel in tune with the views of general practitioners across Wales in relation to the proposed arrangements, so I attended a joint meeting of the Royal College of General Practitioners and the General Practitioners Committee of the British Medical Association in Wales. The turnout was so great that the room booked for the meeting was too small—which reflected a surprising concern among GPs about the changes that they are facing.

I shall not reiterate the whole meeting, which lasted two and a half hours, but there was resounding concern that the new local health boards would have great difficulty coping with the workload that they are expected to take on and the speed. The new general practitioners' contract, which is currently being negotiated, aims at attracting back into the profession groups who are currently not working—particularly young women—through family-friendly policies, which are to be welcomed.

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There is concern that the different arrangements for local health boards will present them with great difficulties in commissioning secondary care. There is concern in the secondary care sector that some of the arrangements could precipitate a destabilising crisis.

Concern is felt among patients about the loss of collective memory among those who administer community health services, particularly primary care. They have often provided a safeguard and acted as a point of detection when problems have arisen. I do not want to overplay the problems but one patient said to me at the weekend, "The NHS is working very well in Wales. Why does everybody knock it and need to rearrange it?" The overwhelming experience of patients is that they are getting a much improved service.

At the meeting that I attended, it was estimated that there would be only two senior administrative managers who really understood the ins and outs of primary care as it has existed. Much work has been done on setting standards across Wales and it will be important to ensure uniform measurement of services against standards.

Equity is absolutely crucial. It is crucially important that there is no return to the feeling of rationing by postcode. Patients feel that they are being rationed even when they are not and lose confidence in the service. It is not uncommon for patients to ask me whether the failure to offer them a particular form of treatment is because the NHS cannot afford it. When I point out to patients that the treatment was not offered because it would not do them any good—otherwise, they would certainly have been offered it—they often look surprised. Then they comment to the person next to them that they might get extra treatment if they paid for it. There is a perception of rationing even though that may not be true, so it is important that equity is firmly embedded in any new arrangements.

Baroness Farrington of Ribbleton: This has been an important debate and I am particularly grateful to the noble Baroness, Lady Carnegy. Because of her interest in devolution, we spent many hours debating not only the Bill establishing the Assembly but also that which established the Scottish Parliament. No one appreciates more than the noble Baroness that many things have changed.

As to Amendment No. 76, it is precisely because of the changes in responsibility and accountability that we are not able to accept that amendment. It is for the National Assembly to consider such matters as part of its devolved function. The only practical effect of Amendment No. 76 would be to fetter the devolved powers granted under the Government of Wales Act 1998. I am sure that no one wants to unravel the devolution settlement.

I hope that I shall give the assurance that the noble Lord, Lord Roberts and the noble Baroness, Lady Finlay, are seeking by saying that the clause has been drafted to reflect the full and open consultation that the Assembly has already undertaken on the establishment of local health boards. In addition to

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consultation, the secondary legislation necessary to implement local health boards will also pass through the Assembly's scrutiny procedure before it is made, thus allowing Assembly Members an opportunity to comment further on it.

Imposing a further consultation requirement would seriously delay implementation of local health boards, which are a key feature of the strategy for reform of the NHS in Wales voted for by the Assembly. That would frustrate the intentions of the democratically elected devolved administration which, under the devolution settlement, is responsible for such policy matters.

Amendment No. 77 is again a matter for the National Assembly to consider as part of its devolved function. Its only practical effect would be to fetter the devolved powers granted under the Government of Wales Act 1998 and prevent the National Assembly from giving directions to local health boards as to how they should exercise any delegated powers—a function that the National Assembly will retain with regard to health authorities. The amendment is therefore prejudicial in relation to England, as the Secretary of State will retain various powers of direction over the equivalent English bodies.

Directions in relation to the conferring of functions on local health boards must be made in regulations, which will be subject to the secondary legislation scrutiny procedures of the Assembly. They will therefore not be issued directly by the Welsh Minister for Health and Social Services but made by the Assembly under its own processes.

I turn to Amendments Nos. 90 and 91. Proposed new Section 97F confers a general power on the National Assembly for Wales to determine the treatment of discretionary and non-discretionary expenditure in relation to local health boards. That power currently exists in respect of health authorities, and we intend to transfer it to local health boards. To remove the power would be most unhelpful and unjustified.

Schedule 12A to the Health Act 1999 provides the mechanism by which the National Assembly for Wales determines the treatment of discretionary and non-discretionary expenditure. It has always been for the National Assembly for Wales to decide on such treatment, subject to the usual constraints, as it is for the Secretary of State in England. Those powers must be exercised in accordance with the principles of administrative law. We therefore cannot agree to limit the powers of the National Assembly for Wales.

However, some specific reassurances were sought. In answer to the noble Baroness, Lady Finlay, the strengthened Specialised Health Services Commission for Wales will support the local health boards with advice and guidance on commissioning, in addition to its role in commissioning tertiary and other specialised acute services—a point also raised by the noble Lord, Lord Roberts.

In answer to the question about the post code lottery asked by the noble Lord, Lord Roberts, clearer priorities are emerging through the plan

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implementation process. Priorities are increasingly delivered through national service frameworks that set clear minimum standards to be applied across Wales. Local health boards will be responsible for assessing the health needs of their populations and securing the range of services to meet those needs. The block vote is given to the Secretary of State for Wales. It is passed to the Assembly after allowing for his expenditure in running the Wales Office. The Assembly then decides how that funding is allocated across its functions. That is decided at a plenary session of the Assembly.

Local health board budgets will be prescribing budgets. They are currently dispensing at health authority level. Action is in hand to move towards a needs-based allocation. The report debated in plenary session of the Assembly last week determines that direction and was overwhelmingly accepted, I believe.

Finally, in response to the noble Baroness, Lady Finlay, we intend commissioning partnerships between local health boards, local authorities and NHS trusts to be formed as collective organisations. They will have geographical proximity and common patient flows and we expect there to be between 10 and 12 such partnerships in Wales. A typical partnership could be composed of two local health boards, two local authorities and one NHS trust. Partnerships will not be viewed as organisations but mechanisms for effective commissioning.

The noble Lord, Lord Roberts, raised the issue of the number and role of local health boards. The boards will be coterminous with local authorities in Wales. Identified benefits include: enabling the development of new and better ways for the NHS to work with local government to implement the health and well-being agenda for Wales; facilitating the requirement for LHBs and local authorities to assess the health and well-being needs of their population; sharing a population focus to provide more flexible services; providing a shared focus to address the determinants of health, which span NHS and local government responsibilities; and providing more flexibility in the use of staff and resources and clear accountability to the local population between statutory bodies.

The 22 health boards proposed for Wales are a natural development from the 22 local health groups that already exist as sub-committees of the health authorities. Local health boards will pay for admitted Part 2 items. Contracts for primary care contractors will be held by the Assembly, but financial control and scrutiny will be exercised via the local health boards.

I hope that I have answered in some detail the points raised. I return to the fundamental point, which is that unfortunately the amendments proposed by the noble Lord, Lord Roberts, would undermine the devolution settlement agreed to by your Lordships.

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