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Lord Clement-Jones: My Lords, I welcome the fact that the Secretary of State appears to have accepted that accountability for clinical governance and performance standards should be separated from the management of the delivery of healthcare. Currently, when it comes to inspection and bodies like the Commission for Health Improvement, the Secretary of State still calls the shots on the criteria by which hospital trusts are to be judged. But the regulatory system must be publicly accountable and transparent. For that reason, as mentioned by my noble friend Lady Northover, the professional regulatory bodies and the proposed new commission for healthcare, audit and inspection—and, indeed, the commission for social care inspection—should be subject to direct overview by Parliament through a Select Committee, not by the Secretary of State.

From the recent White Paper, to which some noble Lords have referred, Delivering the NHS Plan, it is unclear exactly what the proposed accountability of the new commission for healthcare, audit and inspection will be. As has already been mentioned, the paper states that the new commission will be more independent of government than the Audit Commission. I am sure that many of us will use that as a stick with which to beat the Minister during the progress of forthcoming Bills in an effort to ascertain whether or not that yardstick is being fully applied.

In his current state of grace or knowledge, can the Minister enlighten us as to whether or not the commission will determine the standards and targets to be met without the intervention of the Secretary of State? There are some crucial questions to be answered. I very much hope that the Minister will be able to enlighten us at this stage.

Lord Hunt of Kings Heath: My Lords, I am gratified that the noble Lord, Lord Clement-Jones, believes me to be currently in a state of grace; indeed, that is rather more encouraging than his usual remarks about my position.

The amendments before us are most interesting. They bring us back to one of the essential components of the The Way Forward for the NHS; namely, the Commission for Health Improvement and the health inspectorate, for which we shall bring forward legislation in due course.

I should tell the noble Baroness, Lady Finlay, that it seems to me that we must distinguish between the annual report to Parliament, which forms part of a provision under the Bill, and the separate question as to how Parliament deals with such a report and the work of the commission. It is right to distinguish

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between those two facets because it is not for the Government to dictate to Parliament on how it discharges its functions. That is my essential difficulty with an amendment that proposes the establishment of a Select Committee.

If I am asked how Parliament discharges its own responsibilities, I should point out that it is abundantly clear: through Questions, through debates, and through the work of Select Committees, Parliament is able to question and call in witnesses from the Commission for Health Improvement, and other bodies, and thereby discharge its own responsibilities. However, that is a matter for Parliament to decide.

Having been responsible for some of the organisations about which we are debating—such as the National Institute for Clinical Excellence—my experience is that Select Committees are most interested in the affairs of such bodies; indeed, they have no hesitation in undertaking reviews through which they call in witnesses, including the bodies and those affected by what they do, as well as Ministers. I have no sense of Parliament not being able effectively to scrutinise the work of CHI, and its successor body. My difficulty is that I could not support an amendment that sought to dictate to Parliament the establishment of a specific Select Committee. At this stage of the Bill, I do not believe it is appropriate to take such a move. However, if it were decided by Parliament to establish such a committee, it would be the duty of NHS bodies to co-operate with it. I have no hesitation in saying that the Government would encourage that process.

I turn to Amendment No. 30. I should point out to noble Lords that one example of the effect of accepting such amendments would be to give the commission the power to deal with matters like remuneration and allowances. I wonder whether the noble Baroness, Lady Noakes, really considers it appropriate simply to hand over that kind of power, lock stock and barrel, to the Commission for Health Improvement. Surely, public accountability and the discharge of the Secretary of State's accountability to Parliament suggest that that matter should rightly fall to the Secretary of State.

We have already made clear—and shall certainly do so when it comes to the health inspectorate—that we expect the commission to continue to operate at arm's length from Ministers, as is the case with other non-executive public bodies. Indeed, it is a key feature of executive non-departmental public bodies that the Secretary of State remains accountable to Parliament for the performance of the body in question. As a vital part of the constitutional arrangements to ensure public accountability, so far the Secretary of State has appointed the chairman and other members of the commission. Clearly, the debate has moved on and, as the noble Baroness, Lady Noakes, suggested, when we announced plans to establish an independent single new health and social care inspectorate, we made it clear that the commissioners of the new inspectorate would not be appointed by Ministers but by the NHS

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Appointments Commission. That seems to me to constitute an acceptance that the new body will have more independence. It is an important step forward.

I now turn to the general direction-making powers which the amendment would remove. We debated that matter in Committee. At that time I made it clear that they were reserve powers. There is no question that they should be used as a matter of routine; but one has to accept that there is always a possibility, I hope remote, that a serious problem could arise in relation to the commission's activity or governance which, for whatever reason, the commission failed to address. Surely it would be right that the Secretary of State, who is accountable to Parliament for how that body acts, should be able to take whatever action is necessary at the time. If an executive non-departmental public body receives funds from the Secretary of State, as is the case with a commission, surely it is appropriate and necessary for there to be some control to guard against financial impropriety and to ensure that funds are applied for proper purposes as set out in the Bill.

However, as I said in Committee, one would expect that kind of intervention to be rare indeed. The whole case behind the Government's proposals and programmes for the National Health Service is to put in place a rigorous inspectorate which is fully independent in the way it conducts its reviews and inspections. There can be no advantage whatsoever in the Government seeking to influence such an organisation in the conduct of those inspections. The whole strategy of the Government depends on having a robust independent organisation undertaking those inspections. It must make sense that, as with all non-departmental public bodies, there are safeguards that allow intervention to take place in what one hopes would be wholly exceptional circumstances where the public interest would demand that that takes place. Having said that, I hope that noble Lords will recognise that we have listened carefully to the arguments; that we are moving the agenda on with the announcement made by my right honourable friend two weeks ago; and that we are committed to a robust independent body to undertake the inspections.

Baroness Finlay of Llandaff: My Lords, I thank the Minister for his reply. I am glad to hear that he found the amendment interesting. He clarified the matter by distinguishing between the annual report to Parliament and how Parliament would deal with such a report and monitor it. He clearly outlined that, under the Select Committee structure, Ministers can be questioned and called to account. I understand from that that he is implying that the questioning on the reports as laid before Parliament would come within the remit of the current Select Committee structure.

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Baroness for giving way. I was trying to say that it is for Parliament to decide how arrangements will be set in place. I described some of the ways in which currently bodies can be called before

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parliamentary committees. If Parliament decided to set up a separate Select Committee, it would be the responsibility of NHS bodies to co-operate with it.

Baroness Finlay of Llandaff: My Lords, I am grateful to the Minister for that clarification. It would be helpful for the public to be assured of the mechanisms whereby Parliament will rigorously evaluate the inspection processes. The inspection processes will be more distanced from government than was previously the case, as has been set out in the document to which we alluded and which has been quoted.

The question of reserve powers becomes very important as the process of devolution gets further under way. It is particularly important for areas of health services that develop differently to be sure that the inspection bodies are functioning appropriately, independently and at a level of equity in their judgment of services which may be fundamentally different in different parts of the United Kingdom. Certainly, the Secretary of State funds the bodies as they stand, but if there is irregularity or misappropriation of money, I should have thought that the ultimate sanction was to withdraw the funds. That would have to be justified.

The question of influencing an inspectorate has been raised. That is a concern because an inspectorate may find and report on occurrences in the NHS as it devolves that are not favourable to the government of the day and it may also find that the investment of moneys—even new moneys—has not achieved the required outcome. It is for those reasons that this has been an important debate which has emphasised the need to maintain the independence of the inspectorate and the way in which its members will be questioned. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.15 p.m.

Baroness Noakes moved Amendment No. 27:


    After Clause 12, insert the following new clause—


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