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Baroness Carnegy of Lour: My Lords, during our discussions on Report, no reference has so far been made to the fact that the Chancellor of the Exchequer will put enormous sums of money into the health service. I am wondering to what extent primary care trusts are being told that they can anticipate increased funds for the future. If they are to receive 75 per cent of the health spend, which is so much bigger, it seems strange for them not to take that into account when making appointments. If they are experiencing difficulty in attracting adequately qualified people to fill key posts for the future, are PCTs being told that they can upgrade somewhat as regards qualifications and salaries? Are they being told that the Chancellor's infusion of cash can affect their attitude to the debts that they inherit; and, indeed, to their general spending plans?

It seems strange to be engaged in this and previous discussions without reference being made to the fact that the spending of PCTs will be enormously increased. If account is not now taken of future funding, it will be very difficult for those bodies properly to use such money. Indeed, it should affect the thinking from this moment. When he replies, can the Minister enlighten the House in this respect?

Baroness Pitkeathley: My Lords, like many noble Lords, I used to have anxieties about the state of readiness of primary care trusts. However, I recently had the opportunity to meet quite a few chief executives, chairmen, and non-executive directors. I was extremely impressed by their level of readiness, and especially by their confidence and eagerness to get on with the job. They are not envisaging taking on their considerable responsibilities without support; nor, indeed, should they be expected to do so. Adequate support is available and will be provided in terms of both training and information.

Primary care trusts are already becoming a resource for each other as regards shared learning, examples of good practice, and so on. Once again, we must return to the purpose of this reorganisation; namely, to shift the balance of power and the decision-making to primary care level. We must resist anything that detracts from that aim. In my view, the proposal to ask the Audit Commission to investigate the state of readiness would be both cumbersome and expensive. Therefore, I oppose it.

6.45 p.m.

Lord Hunt of Kings Heath: My Lords, my noble friend is absolutely right with regard to her experience when meeting members of primary care trusts throughout the country. In all our debates—on Second Reading, in Committee, and now on Report—many doubts have been expressed about the capability and capacity of primary care trusts to take on the responsibilities that they have been given. However, I have not come across the degree of doubt expressed in this Chamber when talking to those working in primary care trusts, and those in the health service generally. There is very genuine enthusiasm at the

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primary care level for those responsibilities, and for the potential of primary care to have such a dynamic influence on the rest of the NHS.

Although I accept that we must do everything that we can to ensure that PCTs are able to take forward the major responsibilities that they have now been given, we should not talk ourselves into the rather doom-and-gloom scenario outlined by some noble Lords. Judging from my meetings with members of PCTs throughout the country, I believe that they are well able to take on such responsibilities.

The noble Baroness, Lady Carnegy, is surely right to ask us to consider the funding context in which PCTs address their future strategies. The noble Baroness will know that the Budget announcement in terms of NHS allocation does not kick in this financial year. Specific allocations to the health service will need to be made in due course for the next financial year. However, she is right to point out that that gives PCTs an ability to look ahead over a five-year period so as to get an idea of the scale of likely funding. That will enable them to plan forward with a much greater degree of certainty than has often been the case with the NHS where annual allocations were often not notified to authorities until a very late stage.

The amendment specifically suggests that the Audit Commission should publish a report when a PCT is ready to carry out its functions. I am the first person to acknowledge the role of the Audit Commission, which has a very good track record in ensuring economy, efficiency, and effectiveness in the delivery of health services. However, I do not believe that it would be appropriate for the commission to make the kind of decisions envisaged under the proposed new clause. Ultimately, the decision as to whether a PCG should become a PCT, or whether a PCT should take on certain functions, is surely a matter for the Secretary of State to decide in the light of all the information to which he has access.

I was grateful to the noble Baroness, Lady Noakes, for identifying the four key areas about which the Secretary of State must be satisfied: the benefits of what will be achieved; the degree of support for the proposals; the fitness of the proposed organisation to deliver; and the impact on other organisations. However, it is the responsibility of the Secretary of State to make that decision. I can tell the noble Baroness that Ministers have been extensively involved in reaching considered judgments as to the readiness of primary care groups to take on primary care trust status. We have not hesitated to refer proposals back for further work and consideration. Indeed, we have rejected proposals on a number of occasions over the past year, or so. It is in our interests, as much as in anyone else's, to ensure that PCTs have the necessary capability.

We want to support PCTs in their development. In Committee, I mentioned a number of initiatives that we have taken in order to help PCTs reach the necessary position in terms of capability and skills. I agree with the noble Baroness in relation to the issue of management capacity. We are talking about new

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organisations, which will need time to develop their management capacity. However, I have been encouraged by the calibre of people who have applied to become PCT chief executives. With the available programme of support, we shall be able to ensure that leadership in PCTs is of a very high order.

I should also point out to the noble Baroness that it is not just a matter of executive directors. The chairmen and the non-executive directors will also have a significant role to play in ensuring that boards reach sensible decisions. Again, the calibre of chair appointed to lead primary care trusts has been of a high order. At the end of the day, it is a question—really, a judgment—of whether we believe that PCTs are capable of performing this very responsible task. I believe that they have the ability to do so. The support that they will receive through the modernisation agency, and through other mechanisms, will assist them in their task. However, it is a matter for Ministers to make such judgments. It would not be right to ask the Audit Commission to carry out a role in relation to that function.

Baroness Carnegy of Lour: My Lords, with the leave of the House, perhaps I may ask the Minister to clarify his answer to my question. Can he say whether or not primary care trusts are being told that they can upgrade salaries and qualifications in anticipation of receiving more money?

Lord Hunt of Kings Heath: My Lords, on the question of staff salaries, primary care trusts will be bound, as are other NHS organisations, by national terms and conditions agreed between the department and staff organisations. However, there is a great deal of flexibility in the health service now in relation to what staff can be paid for particular job responsibilities. At the moment we are in discussion with relevant staff interests to introduce much greater flexibility in the future. Certainly I hope that in the future primary care trusts will be able to take part in those enhanced flexibilities.

Baroness Noakes: My Lords, I thank all noble Lords who have taken part in the debate. I also thank the Minister for responding. I do not doubt the enthusiasm that he has reported today and on previous occasions. That is wholly consistent with my knowledge of managers in the NHS. However, enthusiasm does not make them ready to assume managerial responsibilities and that is the direction in which the amendment takes us.

I believe that there are significant risks. The Minister talked about issues of managerial capacity. My solution was to ask the Audit Commission to look at that. I accept that it is the Secretary of State's decision at the end of the day. However, I genuinely would have been more reassured if I had heard that the department had some robust process that could inform the Secretary of State after approval of a PCT.

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Baroness for giving way. I tried to describe

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the process that led to the approval of primary care trusts. Although I do not claim that the amount of paperwork involved is always a symbol of a rigorous process, the reports that Ministers received in relation to applications from PCGs to become PCTs were extensive. They covered issues of management capacity as well as other considerations.

Baroness Noakes: My Lords, I thank the Minister for those comments. I was not trying to suggest that the process of becoming a PCT was handled on a less than rigorous basis. My point was that the decision to approve a PCT occurred some time before the PCT assumed the significant additional responsibilities that are implicit in the provisions of the Bill that is before your Lordships' House. I refer to a gap as between considering a process sufficient in terms of acquiring PCT status but not considering whether that process achieves the quality of result that is desired. It is that gap that I focused on.

I issue the gypsy's warning; namely, that I hope that I do not have the opportunity to say from this Dispatch Box, "I told you so". In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

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