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Baroness Noakes: My Lords, I thank all noble Lords who have taken part in the debate, and I thank the Minister for that comprehensive response. The concerns which have been raised are fundamentally about accountability and the strength of the accountability relationships. There is deep scepticism about the efficacy of networks as proper accountability arrangements for something as important as specialised services.

I was heartened, however, to hear that the regional specialised commissioning groups will stay in position for "at least another year". The "at least" was significant as the Minister seemed to be saying that subsequent events will be determined by how the arrangements progress. I should hope that the arrangements will not be dismantled if there is any significant doubt that PCTs can handle them on their own. I was also interested to hear what Mr Hutton has announced in another place about a review. I shall read with interest the comments of both the Minister and Mr Hutton on the matter.

Therefore, I do not think that it would be appropriate to press this amendment today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Northover moved Amendment No. 10:



"THE HEALTH INSPECTORATE
(1) There shall be a body corporate known as the Health Inspectorate, which shall take effect from 1st April 2004.
(2) The Health Inspectorate shall assume at that date the functions undertaken prior to that date by—
(a) The Commission for Health Improvement, and
(b) The National Care Standards Commission.
(3) The Secretary of State may by order make such amendments to the legislation relating to the health service in England and Wales as in his opinion facilitate, or are otherwise desirable in connection with, subsections (1) and (2)."

The noble Baroness said: My Lords, Amendment No. 10 seeks to establish a health inspectorate incorporating CHI and the National Care Standards Commission. The noble Earl, Lord Howe, moved the provision in Committee and we supported him. We had a particular and longstanding concern—which has been supported in your Lordship's House but overturned in another place—that independent hospitals should come within the same inspection system as NHS hospitals. That point is the subject of our Amendment No. 23.

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The case for Amendment No. 23 also was argued in Committee. As we seem to have prevailed in the matter, perhaps I do not need to rehearse the arguments. However, we are seeking to probe the position in the light of the Chancellor's Budget Statement on 17th April; the resultant statement by Alan Milburn in another place on 18th April, which was repeated to your Lordships by the Minister; and the document Delivering the NHS Plan. In the section on "Strengthening Accountability", that document states that there will be an,


    "independent, single new Commission for Healthcare Audit and Inspection which will bring together the health value for money work of the Audit Commission, the work of CHI and the private healthcare role of the National Care Standards Commission. The new single Commission will have responsibility for inspecting both the public and private health care sectors".

Given that we have been calling for just such integration for a number of years and in various health Bills, we welcome the fact that we have finally persuaded the Government of our case. Although it may seem slightly churlish of me, I find it irresistible to refer to the Minister's reply in Committee—on 18th March; not so long ago—that such a merger was "somewhat premature". One has to wonder how a matter of a few weeks and the Easter holiday has given him sufficient pause for thought to decide that a merger is no longer premature.

Indeed, the Government have adopted our proposals with such enthusiasm that even more organisations are to be merged. Welcome though that conversion is, however, I feel some sympathy for the Minister. One consequence of this Bill's passage is that we shall soon have to unpick other arrangements. Should not the Government stop right now—as my noble friend Lord Clement-Jones suggested when we first considered the Bill—collect their thoughts and work out what they really need to do? Perhaps my amendment should not simply have sought the merger of CHI and the National Care Standards Commission but sought to merge this Bill and its successor. Meanwhile, I recognise that there seems to be agreement on merging some of the current inspection organisations and strengthening their independence from government. In the spirit of wishing to know exactly what the Government have in mind, I beg to move.

Baroness Noakes: My Lords, I shall speak to Amendment No. 22, which is grouped with Amendment No. 10.

Although Amendment No. 22 is similar to Amendment No. 10, Amendment No. 10 proposes the setting up of a new body—the health inspectorate—to take over all of the functions. Amendment No. 22 takes the different and more targeted approach of combining only the independent health sector functions of the National Care Standards Commission and the relevant functions of CHI. In that respect it is like Amendment No. 23.

In Committee, we proposed an amendment in the terms of Amendment No. 10. However, we recognise that the Government's policy has moved on, and we

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are confident that the Minister will welcome Amendment No. 22 as it more closely reflects government policy. The White Paper Delivering the NHS Plan sets out the Government's own aims, which include the merger of the private health functions of the National Care Standards Commission with those of CHI.

This group of amendments concentrates on merging the inspection functions of CHI with those of the National Care Standards Commission relating to independent hospitals. These amendments will not transfer the Audit Commission's value for money functions which are part of the Government's White Paper proposals. We believe that audit issues are separate from inspection issues. When the Government choose to present legislative proposals to address those issues, we shall of course consider them carefully. Nevertheless, it is not yet abundantly clear that the transfer of the Audit Commission's functions is a good thing. However, it clearly would be a good thing to merge the relevant inspection functions of CHI and the National Care Standards Commission. Like the Liberal Democrats, we on these Benches have been arguing for such a merger ever since we debated the Care Standards Act 2000.

Timing is another difference between Amendment No. 10 and Amendment No. 22. Amendment No. 10 sets up a new body and allows until April 2004 for the provision to take effect. However, the National Care Standards Commission has been in existence for only a few weeks and it would make sense to transfer its functions now. Although it would be complex and take some months to establish a new body, using CHI as the vehicle for merger would allow much faster implementation.

I recently had the opportunity to talk to the chief executive of the National Care Standards Commission, which is very much an embryonic organisation. The chief executive is trying to create a coherent whole out of 2,000 or so staff who have been drawn largely from local authorities across the country. Inevitably, the organisation does not yet have a clear ethos and corporate style. Although it is being structured and developed for the agenda which was first set for it, that is not happening in a manner that matches the Government's latest statement of intent.

I am quite clear that the chief executive, whom I have known for a number of years, will be energetic in his desire to forge a fully functioning National Care Standards Commission and that he will work towards whatever structure will facilitate the ultimate transfer of its functions. However, I am also clear that it is not a good use of his time, or that of his management team, to concentrate on bringing the private healthcare functions fully within the National Care Standards Commission. It would be much better if they could concentrate on transferring those functions to CHI so that the style, ethos and structure can be determined from the outset in a new home. It is also not fair to the independent hospital sector to have them exposed to different regimes over time.

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The Government have announced that the inspection of independent hospitals will be carried out by CHI on behalf of the National Care Standards Commission. But that still leaves significant functions in the hands of the commission. It seems that the only sensible course is to let CHI forge the managerial identity of all of the independent hospital functions. It does not make sense to keep them in separate bodies, however much co-ordination and co-operation takes place.

I look forward to the Minister's comments. I fully expect him to welcome the move towards government policy exhibited by these Benches and by the Liberal Democrat Benches.

7.30 p.m.

Lord Clement-Jones: My Lords, I shall speak briefly, as the dinner hour approaches. I could not resist twisting the Minister's tail a little further than my noble friend Lady Northover has done, and indeed the noble Baroness, Lady Noakes. Words such as "water under the bridge" and "blinding lights" spring to mind in respect of the Secretary of State's—and indeed the Minister's—conversion.

Perhaps I may remind the Minister of his words in Committee to the noble Earl, Lord Howe. He said:


    "There is nothing between us on this matter, therefore. Our intention is that there will be a convergence between the activities of these four bodies, including CHI and the National Care Standards Commission, drawing together their expertise in joint work where appropriate, and sharing best practice".—[Official Report, 18/3/02; col. 1202.]

The reference at the time was to health and to social care. It is interesting, therefore, that between March, when the Minister uttered those words, and the publication in April of Delivering the NHS Plan, the Government changed their mind about how many audit and inspection bodies they wanted.

I appreciate that it is difficult for the Minister to keep up with the pace of reform ideas within his department and indeed outside it. I wonder whether all this is the result of having policy-makers at No. 10, at the Treasury and at the department itself, all vying for influence, so that it is not known finally what a policy outcome will be until the protagonists have worn themselves out in argument. I assume that that took place some time in early April.

Further questions arise in connection with the new body. As my noble friend indicated, these amendments have been superseded and could well have been substituted with a much grander amendment. But whatever the structure, the quality of information generated by trusts which will be subject to inspection and audit is of great importance. I ask the Minister to comment on the recent Audit Commission paper, Data Remember, which highlighted the need for much better management and production of data, particularly non-clinical data. I am sure that the Minister has the facts discovered by the Audit Commission, which in many respects were quite depressing in terms of the quality of data, particularly non-clinical data, that are available to inspection and

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audit. It does not matter whether that is the Audit Commission or the new body. The new body will have to have that data available to it.

I share much of the agnosticism of the noble Baroness, Lady Noakes, as to whether the value-for-money inspection aspect of the Audit Commission needs to be merged into the new body. Clearly, we shall await the proposals. However, I ask the Minister to comment on an interesting statement made last week by Sir Andrew Foster, the controller of the Audit Commission. He said that the Government are taking a "risk" in launching the commission for healthcare audit inspection while radically reforming the structure of the NHS. He is very close to the audit and inspection process.

There is a further situation. On the same page of the Health Service Journal—which I know the Minister reads when it is hot off the press—there is an article relating to Dame Deirdre Hine, who it appears will not be carrying on in the same function with the new audit body. The issue is to some degree about whether the new body will have a developmental agenda or whether it will be purely audit and inspection. Many people feel that CHI has been successful in its developmental approach. It has not been a purely punitive, performance and target based body. There has been quite a degree of mentoring, coaching and so on about its activities. Many people and many managers in particular have welcomed that approach. It would be unfortunate if some of those elements were lost in creating the new body.


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