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Lord Evans of Temple Guiting moved Amendment No. 55:

"(b) may require the advice to be given in respect of a specified number of options."

On Question, amendment agreed to.

Lord Evans of Temple Guiting moved Amendment No. 56:

    Page 11, line 9, after "varied" insert "(whether or not within the period of two years mentioned in subsection (2))"

On Question, amendment agreed to.

Clause 23 [Funding for regional chambers]:

Baroness Blatch moved Amendment No. 56A:

    Page 12, line 22, leave out "any person" and insert "a regional chamber"

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The noble Baroness said: My Lords, I can be brief on Amendment No. 56A. It seems like a small point, but on rereading the Bill, I saw that it said:

    "The Secretary of State may make a grant to any person in respect of expenditure incurred in connection with the activities of a regional chamber".

That does not explain whether such a person is from the regional chamber, totally independent of the chamber or from another body.

A regional chamber that commissions work, establishes a partnership with an individual and/or another body or wishes some activity within its remit to be carried out by another person should commission that project and grant the money for it. If there is to be government funding,

    "in connection with the activities of a regional chamber"

the chamber must make the case for that activity. It must set out the cost of the project for which it is accepting bids. The grant should be made out to the chamber, which should then allocate the funding to whoever is carrying out the activity.

This is important because, as the Bill stands, any person could claim that he is carrying out work which is an activity of a regional chamber. It might be a self-appointed person—we really do not know. There is a great overlap of activities between regional chambers, regional development agencies, regional assemblies and many other bodies in the region. Therefore, it should be made explicit that the regional chamber should make the case for receiving a grant from the Secretary of State and should then allocate the money to the person carrying out the activity. I beg to move.

Lord Waddington: My Lords, in reply to the amendment, I hope that the Minister will remind us why it is thought necessary at this stage to take the power to make a grant to a regional chamber considering that we have had regional chambers for some time now, and they seem to have got on quite nicely without any grant from the government.

Lord Rooker: My Lords, I can be as brief as the noble Baroness was in moving the amendment. Part of the explanation is in paragraph 74 of the Notes on Clauses. However, I have a better, plain-English version, which I will put on the record.

Amendment No. 56A would require the Secretary of State to make the grants to the chamber rather than any person. This would be completely and utterly impractical. We do not currently pay grants directly to the seven chambers which are unincorporated associations because that would mean the grant would be recovered from the pocket of one or more members of the chamber should recovery prove necessary. Instead, we pay the grant for unincorporated chambers to an accountable body. An accountable body may be a local authority or an organisation such as a regional local government employers' association, which has legal standing. For example—I can list these all, if need be—we pay the grant to an east of England local government conference and to the Wakefield metropolitan borough council on behalf of its regional chambers. The Bill as drafted would allow us

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to continue these different secure routes for the funding of the chambers. Some are incorporated, some are unincorporated and some are about to become limited companies—but the accountable body in each case is not the chamber. For example, Northumberland County Council is the accountable body in the case of the North East Assembly.

Currently, we make the grant for activities under the regional chambers fund such as in respect of scrutiny of the chambers' regional development agency under Section 126(1) of the Housing Grants, Construction and Regeneration Act 1996:

    "The Secretary of State may, with the consent of the Treasury, give financial assistance to any person in respect of expenditure incurred in connection with activities which contribute to the regeneration or development of an area".

The words "any person" in the Bill follow that precedent. Grants are made to the legal "any person", therefore the entity—not to any Tom, Dick or Harry.

I draw the attention of the noble Lord, Lord Waddington, to paragraphs 73 and 74 of the Explanatory Notes, which refer to the funding of regional chambers. It would be ridiculous for me to read that guidance into the record but it explains the reasons for the clause.

Baroness Blatch: My Lords, I know that the Minister has fought his corner very hard to achieve more clarity in some of the legalese before us. I am sure that the noble Lord is as frustrated as I ever was as a Minister, when the argument is made that because certain wording was used for a previous statute, new legislation must abide by it.

In plain English, the Bill says that the Secretary of State may make a grant to "any person". If it said—as the Minister explained and the Explanatory Notes make clear—that grants will be made to an accountable body, that would make more sense. At least that would smack of accountability and indicate that the body receiving the funding would be accountable. The fact that the words "any person" have appeared in previous statutes is no answer. I am not happy, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 [Commencement]:

[Amendment No. 57 not moved.]

Clause 28 [Expenditure]:

Lord Rooker moved Amendment No. 58:

    Page 13, line 35, leave out "section" and insert "Part"

On Question, amendment agreed to.

[Amendment No. 59 not moved.]

In the Title:

Lord Rooker moved Amendment No. 60:

    Line 4, after "consideration;" insert "for the holding of referendums about options for implementing the recommendations of such reviews;"

On Question, amendment agreed to.

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Lord Evans of Temple Guiting: My Lords, as the Unstarred Question in the name of the noble Lord, Lord Clement-Jones, is now the final business of the day, the time limit on debate is now one-and-a-half hours, not one hour. If all noble Lords speak for no more than 15 minutes, we should finish within the time limit.

Specialised Health Services

6.43 p.m.

Lord Clement-Jones rose to ask Her Majesty's Government what arrangements are being put in place for commissioning specialised health services from April 2003.

The noble Lords said: My Lords, I am very grateful for that announcement, as it was going to be rather difficult to stick to the 10-minute limit on my introductory speech. This subject is one in which the House has shown considerable interest and is an area that affects the lives of millions of ordinary patients.

Specialised services are defined by reference to the national specialised services definitions set, the first version of which was published in December 2001. Excluding the highly specialised national set, the definitions number 35 conditions and cover services provided to catchment populations of more than 1 million—that is, those covering more than one primary care trust. They include burn care, rare cancers, cystic fibrosis, epilepsy surgery, hepatology, infectious diseases, perinatal pathology and psychotherapy specialised services. That is a considerable number of specialised areas, each of which has a great effect on the individual's life.

In its 1999–2000 report, the national specialist commissioning advisory group remarked that a common characteristic of low-volume services and treatments was that they were often provided at high cost, requiring specialist technical expertise and a concentration of clinical care. With specialised services, annual activity is often unpredictable and treatments are expensive. Providers may treat patients from all over the country.

Haemophilia is a typical example. Some 6,000 people are affected, costing about £115 million per annum to treat. Within that total, £20 million is spent on patients with inhibitors—that is, resistance to treatment with factor VIII or IX as appropriate. Immune tolerance treatment for such patients typically costs at least £1 million per patient—a very high figure. In this context, one new patient in a PCT area can severely dent a budget.

The key document, Shifting the Balance of Power proposed that the PCTs should,

    "commission specialist services for the appropriate size of population often covering several PCTs".

That was designed to replace the previous system where health authorities collaborated in commissioning specialised services through regional specialised commissioning groups.

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During debate on the National Health Service Reform and Health Care Professions Act 2002, considerable concern was expressed by Members of both Opposition Benches about the proposed devolution of specialised commissioning to primary care trusts. In particular, it was not clear how local commissioning would deliver clinical effectiveness, equity of access and economic viability any more than the previous model. There was no clear reason for changing the key factors that had led to the establishment of specialised commissioning. There was doubt about the level of expertise in PCTs to commission such services. There was concern that many specialisms would be damaged because of uncertainty. There was particular concern that specialised services would be subjected to the same local cost pressures as any other service and would receive low priority within PCTs because of the relatively low numbers within the local population depending on them. There was concern also that important developments led by regional specialised commissioning groups would be delayed by the change.

The Government assured us that PCTs would be expected to band together in effective commissioning consortiums but that strategic health authorities and health and social care directorates would exert influence in case of need. Ministers also assured us during the passage of the 2002 Act that it was better to have joint working between PCTs to deal with commissioning than,

    "some rather arbitrary definition, inevitably by central government, about which functions should be dealt with at a different level from PCTs".

The noble Lord, Lord Filkin, added:

    "The thrust of the Government's approach is to devolve, but to set very clear outcomes and standards to be achieved rather than to second guess the mechanisms in detail".—[Official Report, 16/5/02; col. 445.]

We were assured that the new consortiums would be a means of sharing risk, so that there would be no postcode lottery in future. Transition arrangements were agreed by the department to procure stability for the first year, after the implementation of Shifting the Balance of Power. Regional specialised commissioning groups were continued for a further year, with primary care trust members replacing the former health authority members. It was explicitly stated that consortium arrangements created under the auspices of current RSCGs should be continued, with PCTs honouring existing financial commitments.

In what seemed subsequently like a loss of confidence, John Hutton, the Minister of State, announced a review of specialised commissioning in March 2002 with a view to issuing guidance on arrangements to be implemented from April 2003. That was originally promised for last autumn. The consultation exercise to inform the review ended on 30th September 2002 but no announcement of the outcome was made until last week—right at the beginning of the 2003–2004 financial year.

The long-awaited guidance on specialised commissioning was published on 3rd April. Frankly, it has cleared up very little of the confusion. The guidance

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is a mere 27 paragraphs long and leaves many questions unanswered. I hope the noble Baroness will be able to answer them tonight. In summary, it says that PCTs are expected to work collaboratively and that they are responsible for establishing such groups, while strategic health authorities are responsible for oversight and performance management. Arrangements should encompass two broad groupings, with planning populations of 1 to 2 million on level 1 and 3 to 6 million on level 2. When RSCGs are working in line with the guidance, there is no need to change them. When a specialised service has a planning population greater than 6 million—in other words, fewer than eight specialist centres—level 2 groups should consider working together. Finally, decisions of collaborative groups should be binding on all PCT members.

A sample establishment agreement and performance assessment framework for collaborative commissioning groups is included with the guidance as appendices. The guidelines therefore appear to stick closely to the devolved approach to commissioning outlined in Shifting the Balance of Power: The Next Steps. Nevertheless, they are vague in the extreme and raise a huge number of questions.

The future of RSCGs, in so far as they still exist, is still extremely uncertain. It is unclear whether these bodies universally have a future after 2004, even in the light of Hazel Blears's statement in January that their lives are to be extended until 2004. It seems that only some will be retained. What will happen to existing consortia, such as the Pan Thames Consortium for Haemophilia?

The primary care trusts that join the consortia will apparently continue to have complete discretion about whether they want to prioritise spending on particular specialised areas and join an individual consortium. What happens if a PCT declines to join a consortium, or a level 1 consortium declines to join the appropriate level 2 collaborative commissioning group? The continuing RSCGs or level 2 consortia appear to have no power to compel primary care trusts to join consortia. Will the strategic health authorities be able to do so? It appears that they can performance manage, but have no power to compel. Should not the arrangements in some cases be mandatory rather than purely voluntary? There is the question whether the 75 per cent rule, which at least ensured that the old health authorities were bound by consortia decisions, is still applicable to ensure that PCTs are bound by those decisions.

We were told during the passage of the Act that the role of the strategic health authority would be to oversee the consortia arrangements, with regional directors of health and social care ensuring that the specialised services that go beyond strategic health authorities are also delivered properly within that region. Where is that stated in the guidance? How much executive authority will RSCGs or level 2 consortia have? What will their duties be? Who will ensure that commissioning collaboratives are created and quality maintained?

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Will the definition set continue to be published and developed? What plans does the department have to monitor the effectiveness of the new arrangements in the coming year? Where have the data on which the new guidance is based? Last September, a survey by the department as part of the review, which was leaked to The Times, showed that most PCTs were struggling in many specialisms to engage with the issues of specialised commissioning among their responsibilities.

Many patients' organisations, clinicians and, indeed, the Specialised Commissioning Alliance can testify to the fact that development of specialised commissioning has been patchy. Has the preparedness of PCTs to assume responsibility for specialised commissioning improved markedly since the department conducted its review last year? Do PCTs now have the necessary specialised commissioning expertise?

What about funding and earmarked budgets? Given the late date of publication for financial planning purposes of the guidance, will the department protect spending on specialised services in real terms for a further year? What will the obligations of PCTs be as regards setting aside funds for collaborative commissioning or RSCGs? What happens to existing service agreements for specialised services after April 2003? The issue of risk sharing is important. What will encourage PCTs on this score to join in with consortia rather than follow their self-interest when very few of their patients need a particular specialised service?

We on these Benches are concerned that the new guidance does not follow the views expressed in the consultation. A great demand in the consultation, from 75 per cent spread evenly across all categories, believed that PCTs should be required to delegate authority for specialised commissioning to consortia. The guidance seems to cut strongly across that. Has the majority in the consultation that supported a national group for planning purposes and a national framework for commissioning been ignored, or is this a matter for a level 2 group?

We on these Benches have always been concerned that the new commissioning arrangements could be highly detrimental to patient care. We are concerned that specialised services should not be left to compete with mainstream service priorities in PCT budgets. Our concern is that some PCTs may choose not to commission via consortia, which would mean block contracts and great difficulties for specialised services. The outcome would be a resurgence of postcode prescribing as PCTs struggle to accommodate the unpredictable and sizeable expenditure associated with many specialised conditions.

The Government's proposals in this area take a blanket view that all centralisation is bad and that decentralisation is good for all purposes. We on these Benches have always believed that devolution is best done to the appropriate level. It is not always a question of pushing everything down to the lowest possible level. The appropriate level is where the expertise and resources are best deployed. We have considerable concerns about the Government's proposal. We look forward to the Minister's reply.

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6.56 p.m.

Lord Chan: My Lords, I apologise to the noble Lord, Lord Clement-Jones, for not being in the Chamber when he began his speech. I was taken by surprise when the dinner-hour debate started at 6.45 p.m.

I want to thank the noble Lord for asking a Question about what is an important issue for patients requesting special services from their family doctor or primary care trust. Prior to April 2002, health authorities commissioned specialised services. I speak from my position as a non-executive director and vice-chairman of the primary care trust for Birkenhead and Wallasey, which serves 220,000 people on Merseyside.

Specialised health services are now commissioned by primary care trusts on behalf of their strategic health authority. In Merseyside and Cheshire, a specialist commissioning team of hospital consultants, GPs, managers, pharmacists and patients' representatives handle requests for specialised health services. This zonal commissioning team is based in Central Cheshire PCT, and serves a population of over 2.5 million people. There are three zones in our region in the North West.

Representation on the commissioning team comes from all PCTs and the strategic health authority in Merseyside and Cheshire. Decisions made by the commissioning team or consortium are binding on all member PCTs. The budget for commissioning specialised health services comes from the 0.5 per cent of the "weighted" allocation of each participating PCT. The "weighted" allocation is determined by the size of population served and the proportion of vulnerable residents such as infants, young children and older people as well as their "deprivation index".

Commissioning of specialised services is in response to requests from three sources: first, patients who approach their GPs; secondly, hospital consultants providing specialised services defined by the Department of Health; and, thirdly, health professionals using appraisals and guidelines from the National Institute for Clinical Excellence—NICE. Specialised services are defined by reference to the specialised services national definitions set. In December 2002, 36 services were listed by the Department of Health as specialised. They fell into two groups, as the noble Lord explained: specialised services with planning populations around 1 to 2 million and specialised services with planning populations around 3 to 6 million that usually cover a whole region.

In the first group commissioned by PCTs in a consortium are services related to cancer, cardiac surgery, child and adolescent mental health (tier 4 in the National Service Framework), liver disorders, low secure psychiatric services, neonatal intensive care, neurosurgery and renal/kidney replacement therapy. Of these services the most requested in our zone are coronary artery revascularisation surgery available at cardio-thoracic centres. Specialised hospitals also approach zonal commissioning teams to sell their services.

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The most recent issue for consideration by PCTs was a new drug for liver and bile duct cancers whose review has not been completed by NICE. The zonal commissioning team consulted NICE, which supported the use of this new and effective drug. The drug is now being purchased.

Specialised services with planning populations of 3 to 6 million are in a larger list that includes AIDS/HIV treatment, blood and bone marrow transplant, severe burns, cleft lip and palate, genetic services, medium and high secure psychiatric services, paediatric intensive care, morbid obesity, rare cancers, spinal injury and pulmonary hypertension. I should point out, however, that this is not an exhaustive list.

There is growing interest in the question of whether the current system of commissioning specialised services is giving more satisfaction and more promptly than the former one commissioned by district health authorities. For the past 12 months, specialised services have been commissioned by PCTs that are closer to local patients than was the case with health authorities. Together with other national initiatives such as "Patients Choice" for coronary artery surgery—I declare my interest as a national trustee of this scheme, co-ordinated by the British Heart Foundation—we are receiving fewer complaints of patients waiting more than six months for treatment.

But treatment for rare diseases, such as liver and bile duct cancers, continue to pose problems for commissioners, even when NICE guidelines recommend them. The prescribing budget of PCTs is still inadequate for expensive drug treatments. In areas of health inequalities, more prescriptions are written to treat a population whose health status is worse than that of their economically better-off neighbours.

The availability of NICE reviews and guidelines has reduced professional arguments about treatment options but increased patients' demand and expectations for effective and expensive treatment being readily available through local doctors and hospitals. This is not always the case. Some patients have had to wait for treatment.

Another issue that continues to challenge commissioners in PCTs is that of inadequate specialised services; for example, on Merseyside and Cheshire paediatric infectious diseases are a case in point. We have only one consultant. As a result of this limitation, adult physicians are treating children in some districts. The situation can be overcome by sending our patients to Manchester, or further away to Birmingham. But parents are not happy to travel 50 miles, or more, to be with their sick child. Another example is the shortage of paediatricians with skills in managing epilepsy in children. So the jury is still out on some aspects of commissioning specialised services.

In ethnic minority communities, genetic services for the diagnosis and management of inherited blood diseases, such as sickle-cell disease and thalassaemia, are still limited to a few centres in London, Birmingham and Manchester. But increasing numbers of black Africans and Caribbean people have been living and growing up in the United Kingdom since the

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end of the Second World War. So why have services for their inherited anaemias not been developed systematically in the NHS? There is a feeling among many black people that services of special significance to them are ignored while equally uncommon genetic diseases affecting white people receive funding. It is now time for government to dispel that impression.

I look forward to the Minister's reply on these unresolved issues associated with commissioning specialised health services.

7.5 p.m.

The Earl of Listowel: My Lords, I thank the noble Lord, Lord Clement-Jones, for giving us the opportunity to have this important debate. Before I begin, I should like to thank the noble Lord, Lord Hunt. I have not had the chance to speak on such matters since he took his place on the Back Benches. I should like to pay tribute to his efforts over the past four years. I have in mind in particular his efforts as regards the Children (Leaving Care) Act 2000 and the Adoption and Children Act 2002, both of which will make such a difference to children in helping them to fulfil their potential in the future.

In outline, I seek assurance from the Minister that the health needs of children in care will not be overlooked. Such children very often have very particular needs. I would not like the restructuring of the NHS to lead to this group of children being overlooked in the future. I am especially concerned about the situation of youngsters in children's homes. I believe that there are now only about 5,000 children in such residential settings. That is partly due to the fact that such homes have developed a very poor reputation over recent years. I refer to the abuse of children in the North Wales case, and in other areas of the country, along with the relevant reports. As a consequence staff working in these homes have often become quite demoralised. They have encountered what they perceive to be a lack of respect from the public, and from professional colleagues working with children in other disciplines.

Yet children's homes can provide an appropriate setting for some children in care. Indeed, the majority of children in care in Germany reside in children's homes and group settings. Nevertheless, such staff are often faced with very troubled and challenging children. The latter are becoming more and more challenging because the policy has been to keep children in their families as far as possible. One respects and values that policy, but, as a consequence, some children are often very damaged by the time that they arrive in a children's home.

On a recent visit to a children's home, I arrived to find both a police van and a police car outside the premises. The previous evening one of the children had been in discussion with one of the staff, who had been sitting in the front seat of her car. The child had punched the staff member in the face. Another recent case involved staff of a home preparing for the arrival of a child. That child, who had learning difficulties, was known to have an interest in martial arts and a

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tendency to lose his temper quite easily. Again, there can be cases regarding young girls; for example, staff at the children's home might suspect that a 13 year-old girl could be pregnant. However, she is not prepared to tell them what is happening to her. Similarly, a 15 year-old girl may be at risk of entering prostitution. She may arrive at the home late at night carrying gifts from her boyfriend which suggests that she could be running such a risk.

The staff in such homes are acting in loco parentis. They are the closest carers for these most troubled and challenging children. As we all know, such staff have been neglected for many years in terms of support and training. The Government have made moves in the right direction to improve the situation through the Quality Protects programme, the new national minimum standards for residential homes for children and the development of a statement of purpose in children's homes. I welcome those improvements.

It is important that the recommendations of the Warner report entitled Choosing with Care—my noble friend Lord Warner led the inquiry which considered the selection, development and management of staff in children's homes—are followed. The report states:

    "Children's homes should have a therapeutic and developmental role . . . Such an approach, however, requires homes to have ready access to psychiatric, psychological and psychotherapy professionals to train, supervise and support the home's staff.

    Often the most cost effective and appropriate role for professional specialists is that of supporting staff in children's homes who are working directly with children . . . 'the best [professionals] recognise that some continuing relationship with the home is the proper context in which to offer their expertise'".

The report continues:

    "We consider that there is scope for using the professional NHS or educational specialists to train, advise and support staff in homes".

Among the many benefits of such support is that,

    "the status of staff will be enhanced as they take on a more professional role with respect to children".

From my own experience, I support strongly the report's recommendations. I visited recently a home which had access every three weeks to a consultation from a psychotherapist from the Tavistock Clinic. The purpose of such support on a regular, continuing and frequent basis is to help staff to think about the children with whom they work and the impact of that work on themselves. Some years ago, I visited a hostel run by Centrepoint which had such support on a weekly basis. The hostel was dealing with some of the most challenging children. I was recommended to visit it by outreach workers working with young homeless people. They were sending their most troubled children to Buffy House in Olympia. What was remarkable was that that hostel, working with some of the most difficult children, had the lowest level of staff sickness in the whole of the Centrepoint organisations. Such high quality professional consultation for staff in children's homes reduces stress on staff and encourages them to engage in professional development. I am advised that there is plenty of evidence that it works. It is increasingly considered to be good practice. I hope that the new national minimum standards for residential

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care and the statements of mission for children's homes will be the tools by which it will be recognised that that should be a fundamental service widely available to staff in children's homes.

My concern—other noble Lords have raised such concerns today—relates to health services for small groups which demand specialist input. There is a great shortage of child psychologists. I am anxious that when the need is recognised, there will be no agency through which to commission such services. I should appreciate assurances from the Minister that these services will be provided for when need is identified. Access to consultation with an appropriately trained mental health professional on a regular basis is as important and useful to staff in children's homes as is the use of a hard hat and a pair of steel-capped boots for a person working on a building site. I look forward to the Minister's response.

7.15 p.m.

Baroness Masham of Ilton: My Lords, the noble Lord, Lord Clement-Jones, asks a most important Question. I, too, have to apologise to the noble Lord: I was not in my place at the beginning of his speech. I was travelling back from Stoke Mandeville where His Royal Highness the Prince of Wales was opening the most wonderful new sports stadium for disabled people. As every single traffic light was at red, I can tell your Lordships that I was sweating.

At the Report stage of the National Health Service Reform and Health Care Professions Bill 2002, several noble Lords who are present today debated on 29th April the national specialist services and their commissioning. I should like to take this opportunity to pay a tribute to the Minister at that time, the noble Lord, Lord Hunt of Kings Heath. He was one of the hardest working Ministers this House has ever had. Even though the noble Lord did not accept the amendment on specialist services, I miss him and his presence today.

Noble Lords are present tonight because since the middle of 2002 patient organisations, advocacy groups and professional bodies have been expressing their collective concerns about the proposed arrangements and the expected disruption to services and patient care. I am sure the Minister has anticipated that we should like positive assurances that the specialist services will be given the chance to develop and build on their expertise and will not be put at risk by PCT commissioners. We are considering life and death situations and specialist rehabilitation services which only special centres of excellence have the skills and expertise to deliver.

I should declare an interest, having broken my back many years ago resulting in paralysis. I have benefited from the expertise of specialised treatment at a spinal injuries centre. I founded the Spinal Injuries Association and am its president. I know that it is one organisation which will read with interest the Government's reply to this debate.

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If patients are not referred to spinal units when they sustain an injury which leaves them paralysed they are at risk of developing horrendous pressure sores which can cause months if not years of extra time in hospital at a cost of millions of pounds. Spinal patients treated in general hospitals have the difficult problem of having to deal with inexperienced staff who do not know or will not learn how to undertake a manual evacuation of the bowels. That is one of the most difficult and upsetting procedures for paralysed people if there is no system in place. Moreover, the urinary tract, which is prone to infection, needs expert attention, as do blood pressure problems. The psychological aspects are equally important.

All sorts of specialised units are desperate for reassurance. They need to have dedicated teams of doctors, nurses, therapists, psychologists and volunteers. They need to know that the money meant for their unit is getting there and is not being milked off for the needs of other parts of the trust. They need to be audited and monitored. Above all, we need to know how the arrangements for commissioning will work. I hope that the Minister will spell that out tonight in a way which is acceptable to all.

Spinal units are at risk of bed blocking. Patients need to leave hospital when they are ready. So often, however, they have to remain because of impossible arrangements in their homes. They may not have a wheelchair or other necessary equipment, or a care package may not have been prepared.

I pay tribute to Mr El Masri, the spinal surgeon at the spinal unit at Oswestry. He is dedicated to his patients and has worked tirelessly to build a new unit fit for this century. The unit has two bungalows, each with four rooms, so that patients who are ready for discharge but awaiting social services or the fulfilment of housing needs can leave hospital. Patients can stay in these halfway houses, called Trans House, which stop them becoming institutionalised and bored and help to relieve bed blocking. If the Minister has time to visit the unit at Oswestry and other such houses, I am sure that she will wish to congratulate the people there. Their hard work and fundraising have produced such a good outcome.

Last week, someone I know from Norfolk, a paraplegic who has lost a considerable amount of weight and been involved in investigations, learned that she needs to have a spinal unit assessment of her condition. She has been told that she will have to go privately as her home trust is outside the area. Do we have a National Health Service or do we not? Norfolk does not have a spinal unit, and the situation is similar in many other parts of the country. What is happening to extra-contractual referrals and out-of-area treatments? What are they going to be called now? It is vital that patients who need specialised treatment, wherever and whatever the need, receive it.

I do not want to be seen as partisan. I know the importance of specialisation in so many fields of medicine. In dealing with HIV/AIDS and Parkinson's disease, for example, the monitoring of drugs and research is vital if progress is to be made. One therefore

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wants consultants who are interested and trained and able to approach the issue on a worldwide basis. Complications occur in conditions such as pulmonary hypertension if the correct diagnosis is not made. Getting patients to the experts quickly saves not only money in the long run, but much suffering for patients and their families.

If the Government wash their hands of the responsibilities of providing specialised healthcare services, the gaps will get larger. I hope that the Minister will spell out how PCTs will manage to organise these services for their populations and, if they fail, who will pick up the casualties. What will be the position of the strategic health authorities? The worldwide Internet tells patients and their friends what is possible. It will not be good for the Government if the UK falls behind. There must be good staff to look after patients, there must be possibilities for research and development and suitable transport for patients and their visitors to reach places of treatment which may be far from their homes. I look forward to the Minister's reply.

7.25 p.m.

Earl Howe: My Lords, no one should conclude from the short list of speakers in this debate that its subject matter is of little importance. Quite the opposite is true. The noble Lord, Lord Clement-Jones, is to be congratulated on having tabled this Question on a day which could hardly be bettered in terms of relevance and topicality. Those of us here who are veterans of the NHS Reform and Health Care Professions Bill a year ago need no reminding of the debates that we had on specialised commissioning during both Committee and Report stages. Those debates underscored the doubts felt by many, both inside and outside this Chamber, that the model being proposed by the Government for commissioning specialised services was badly flawed. In the end, of course, no amendment to the Bill was pressed; but I venture to say that that was no reflection of the government response, which did very little to allay the concerns that we all had.

As if to acknowledge those concerns, Mr Hutton announced in March of last year that there was to be a review of the whole issue, which indeed there duly was. One must not be too churlish about this. Unlike some consultations I can think of, this one had all the signs of being a genuine listening exercise. The only trouble is that for an inordinately long time after that it was we who found ourselves listening. Until the end of last week, we were still listening for a statement of what exactly is going to happen and how the new system is going to function. Ever since the end of last year, we have been told that an announcement on this critical issue would be made "shortly". So it was a great relief to learn, on the cusp of the new financial year, that definitive guidance had actually been published by the department.

I should say straight away that our recent concerns about delay and uncertainty were not abstract worries about the process. What matters in all of this is of course the patient. The Minister will know that there has been great concern among patient organisations

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that gaps are appearing in the provision of services. We have just had a supposedly transitional period in which the regional specialised commissioning groups have continued to oversee the setting up of PCT consortia. That was undoubtedly the right decision. It was the absolute minimum needed to try to ensure some degree of stability and continuity as the new commissioning arrangements were being assimilated and put in place. But the Minister will also know that there is widespread agreement out there that the RSCGs have by no means outlived their usefulness. Many believe that they have a permanent role to play in commissioning services which are best planned across several strategic health authorities, with a population of perhaps three million to six million people.

It is pleasing to see in the new guidance that the Government have heeded those concerns by saying, in effect, "If it ain't broke, don't fix it". RSCGs, where the arrangements are currently working well, are not now to be disturbed. As I said just now, I do not want to be churlish. But really what we have just witnessed is a giant chasing-around exercise which has ended up more or less at the point where we started. At the heart of the argument is the fundamental concern that we voiced last year during the passage of the Bill, which is that to devolve the purchasing of high-cost, low-volume treatments to PCTs is to devolve down to the wrong level in the system. PCTs suffer from something that they cannot help. Most of them will have no in-house expertise for commissioning this type of service. That expertise was thinly spread in the first place when we had regional health authorities, but it will be even more thinly spread now, and much of it would have been dispersed altogether if the RSCGs had been allowed to disappear.

It is also felt by many that small PCT consortia are not good mechanisms for encouraging innovation into the NHS and for driving forward those innovations in a timely way. To do that, one needs some kind of central mechanism to operate across a broader base—not, I hasten to say, a central means of control but rather some way of overseeing and guiding commissioners and facilitating improvements.

A considerable weight of opinion in the response to the consultation favoured a national group, as mentioned by the noble Lord, Lord Clement-Jones, consisting of representatives from the various commissioning consortia, whose job it would be to take a bird's eye view of specialised services across the country and to play a role as a facilitator in introducing and monitoring them. The guidance is silent on that idea, but perhaps I could ask the Minister whether she could be a little more forthcoming on it.

In that general context, I have a query about strategic health authorities. When it comes to making a new investment through either of the two tiers of commissioning consortia, I am not quite clear what role SHAs will have in the decision-making process. Will they be able to influence or second-guess decisions taken by the collaborative commissioning groups and, if so, in what way?

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The consultation also threw up the real worry that at PCT level some specialised services will be squeezed out in the annual budgeting process. A PCT board, faced with cost pressures as all boards are, could decide that low-cost, high-volume services were a greater priority for them than signing up for a slice of a service level agreement of which only a small handful of their patients might in the end avail themselves.

Some PCTs might decline to join a consortium altogether. There are already examples of that happening around the country. A prime example is enzyme replacement therapy in Croydon PCT. Another is renal services in London. Two years ago, there was agreement in the RSCG that a fourth renal transplant surgeon should be funded in south-west London at a cost of £340,000. That money would be contributed by the PCTs in each of the five London sectors, plus Kent, Surrey, Sussex and Thames Valley. But what has happened? We find that the PCTs in four of the five London sectors have refused to put any money on the table, and that could put the proposal at risk.

So, again, it was a huge relief to find in the guidance that the Government have woken up to that damaging possibility. Henceforward, it appears that all PCTs will be required to join collaborative commissioning groups and that the decisions of those groups will be binding on all members. It would, however, be very helpful if the Minister could make clear exactly what degree of compulsion is involved here. The guidance seems to be worded in a way that could be interpreted as being precisely that—in other words, guidance rather than anything stronger. If a PCT refuses to contribute to a particular service which other members of the collaborative group are funding, what action can be taken? Are there sanctions against that PCT which can be enforced?

The noble Lord, Lord Clement-Jones, referred to the unanswered questions in the guidance. That is certainly one. I agree with him completely on his observation. But, in particular, I believe that there was a lack of clarity about the interface between the commissioning consortia and managed clinical networks. The guidance states that the collaborative commissioning groups will ensure—that is the word used—support for managed clinical networks without explaining how or through what governance mechanisms that support will be forthcoming. Managed clinical networks cover cancer and renal dialysis and transplant, among other services, and are extremely important. Clinical and managerial accountability is essential for those services. The example in the appendix to the guidance of NorCom states that it will monitor and support managed clinical networks. One has to ask how quality standards can be guaranteed if this model is not followed.

What is needed, of course, in the procurement of specialised services are two things: stability and certainty. But if there is no guaranteed, committed funding by PCTs for a service, we shall have the very opposite of that. There must be a way of achieving

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100 per cent involvement and compliance among PCTs. The obvious means of doing that is to have a levy, rather as the NorCom model does in the appendix to the guidance. Is that what the Government envisage and, if so, why is it not mentioned explicitly in the body of the guidance? For the year just beginning, it may be rather late in the day to ensure that the funding of some services is safeguarded in real terms, especially where service agreements have run out. It would be helpful to know whether the department is examining ways of addressing that.

But there is, in any case, an in-built tension here. Priorities are never set in stone; they change over time. Deciding on priorities depends on a number of things. To start with, there must be input from patients and the public. Only with that voice from outside is there likely to be an objective view about what services are needed where. Secondly, there must be some clinical input to ensure that proposals emanating from providers of services can be evaluated properly. I do not know how either of those will be achieved, and perhaps the Minister could make that clear in her reply.

The third ingredient in setting priorities is surely the freedom to move commissioning money from one provider to another. I have a particular worry here in relation to foundation trusts. Specialist providers which become foundation trusts in the future will depend on the income they receive from commissioning consortia in order to service their capital commitments. We understand that those service agreements will be legally binding. I should be very glad to hear from the Minister how this apparent rigidity in the way that funding is to be directed is consistent with the need to switch money between different services in response to changing priorities.

Notwithstanding the publication of the guidance, we should not delude ourselves that some areas of specialised commissioning are in anything other than a precarious state. In a number of regions, the commissioning consortia have barely got off the ground. Dermatology, foetal medicine, epilepsy surgery, rheumatology and specialised women's health services have very low coverage and can be seen only as being at risk. Cleft lip and palate, neonatal care and spinal injury services have very patchy provision. Those gaps must be addressed.

The government guidance, although late, is welcome. We shall need to continue digesting its implications. There are still many unresolved and serious concerns about access to services. It is helpful that the Minister now has an opportunity to shed a little light on some of the darker corners.

7.39 p.m.

Baroness Andrews: My Lords, I am very grateful to the noble Lord, Lord Clement-Jones, for giving us an opportunity to discuss what everyone who has spoken this evening agrees is an extremely important issue. I am particularly grateful to noble Lords who spoke with such affection, as well as respect, about my noble

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friend Lord Hunt. I certainly echo everything that has been said. I myself miss him very much at this moment. I am shuffling my papers in a desperate attempt to introduce some coherence into my thoughts. I am sure that he would not have had that problem.

I hope that this is an opportunity for me to do the job that I believe noble Lords would like me to do—that is, to provide clarification and reassurance on a number of the points raised about the sensitive and complex issue of commissioning specialist services. Those services go to the most vulnerable because they are rare disorders, they affect a relatively small number of people and they are provided in centres which are often far from home.

In the time I have, I shall do my best to answer the detailed questions that were raised—I am sure that I shall not be able to answer all of them; but I shall certainly write to noble Lords about those that I cannot—through my general survey of what the guidance is intended to do. Briefly, I shall consider what has been inherited; the review itself; the responses to the review; and what we want the guidance to achieve. We all agree that commissioning special services so that they meet the span of needs in the local community while balancing that against the routine and daily requirements of local health needs is a skill. It requires judgment, expertise and foresight, as well as careful planning.

Specialist services fall into two groupings related to the size of population. Traditionally, planning populations of 3 to 6 million have traditionally been provided for by the regional specialist commissioning groups, each of which established a tier below it that covers populations the same or of a similar size to that of a strategic health authority—1 to 2 million. For the transitional period, those services have been maintained.

So specialist services are part of the continuum of care that stretches from primary to tertiary services, and they are increasingly managed as part of the clinical network. Until the creation of the PCTs in April 2002, the RSCGs indeed drew their membership from health authorities, as did local groups, and those arrangements generated many advantages by basing collaborative commissioning arrangements on planning—and nurtured existing and emergent managed networks. For example, by encouraging a lead commissioner acting on behalf of everyone they supported the establishment of coherent commissioning and minimised transaction costs. By promoting collaboration, it was possible to pool financial risk.

Those are strengths that the Government wanted to ensure were continued in the new commissioning arrangements that have been in place since April 2002. Indeed, the review last summer allowed the opportunity to reveal how they were working. Noble Lords have been rather unkind about that review, suggesting that it represented a loss of confidence in some way. Perhaps not. It was an opportunity to take stock of what was developing in the field during the transitional year and to ensure that people knew what were positive outcomes and developments that could be introduced.

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As the noble Earl, Lord Howe, said, the Government listened closely to what was said. There was a large response and a large degree of consensus. That was broad-based and the guidance that has been produced is also broad, but specific enough to be extremely useful. It is broad because the whole principle of devolving NHS commissioning to primary care trusts by definition means that those decisions are best taken—as are commissioning decisions as a whole—in the local area where the NHS knows its patients, their needs and how and where to provide them.

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