Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Cumberlege: I want to raise a point with the Minister. I was interested in what he said about Kidderminster. One of the things that we are trying to do in Committee is anticipate how people will react to a different system. Does the Minister agree that the board of governors will actually be a board of supporters? They will be people who act as advocate for their particular foundation trust hospital. That is their purpose; they will focus on that hospital. If it makes sense for the local economy that part of that hospital—a maternity department, say—should be closed or should be merged with another hospital well outside the district, the governors will not be true advocates of the move. They will say, "We want our maternity department in our foundation hospital".

I cannot see how the Minister can think that, in such a case—it runs parallel to the Kidderminster situation—in the new world that we are entering, such conflicts will be better managed, given the new shape of the NHS local economy. They will not be. The changes will introduce further conflict by creating supporters with a narrow focus. In the past, we have tried to think of a health economy in wider terms. That has been the role of the strategic health authorities. The Minister says that the strategic health authorities will still be there, but, under the Bill, those authorities will not manage the performance of foundation hospitals. They are being cut out of the situation.

It is important that we think about the new world and about how people will react and behave. Everyone on the Committee cares deeply about the National Health Service, and we are anxious that it should retain its credibility, that people should trust it and that it should offer the services that are needed.

I think that the noble Baroness, Lady Finlay of Llandaff, made the point that medicine is changing so fast. There are tremendously different practices, and research is coming out that will totally change the face of healthcare in the future. We need a mechanism to make changes quickly in order to meet changing scientific developments. The system that we have now will do the reverse. It will try to maintain the status quo because the board of governors will want to see its hospital as it is now and will not want to see anything taken away from it.

9 Oct 2003 : Column 513

6.45 p.m.

Lord Hunt of Kings Heath: That is the point I have been trying to make. If the boards of governors are not given real responsibility, as the noble Baroness suggested, they will become supporters for the status quo. That is the problem of not giving them corporate responsibility. The more responsibility given to boards of governors, the more responsible they will be. The problem of not giving them any responsibility is that they will be tempted to indulge in the very practices suggested by the noble Baroness. I suspect that we do not agree on the solution to the problem, but that there is a problem I have no doubt.

Baroness Cumberlege: The noble Lord, Lord Hunt, is right. We do not agree; we disagree.

Lord Warner: I do not want to prolong the debate other than to say that I agree with many of the aspirations of the noble Baroness. On the point that she raised as regards a Kidderminster situation, I do not think that a membership organisation producing boards of governors of the kind envisaged in the Bill will handle those situations in quite the same way. They will produce better early warning systems for executive directors of such a trust and will enable a dialogue to take place with the public in a more facilitated way.

The Lord Bishop of Worcester: I begin to have some regrets about introducing Kidderminster into the discussion. But having committed the error—if error it was—it would be a good idea, not necessarily in this debate, for someone to carry out a case study looking at what might have been if such a structure had been imposed. When the Minister made his very positive remarks about how it might have been, I could only shudder with rather vivid memories of what it was actually like.

I am happy to be shown to be wrong. The noble Lord, Lord Hunt, would probably be well equipped to show me that I was wrong. But I wish that I could feel we were in a realm that was less hypothetical and that someone had looked at the steps and had determined what would have occurred. If we are getting to a situation whereby people will be empowered to defend their particular institution, which can be very laudable, it makes me wonder what will happen to the organisation of the health provision of a whole county.

Lord Clement-Jones: It is interesting that this group of amendments has elicited such eloquent speeches from the right reverend Prelate, the noble Lord, Lord Hunt, and the noble Baroness, Lady Cumberlege. In their own ways, each has demonstrated the frailty of the provisions in the Bill and provided the fuel to show why these amendments are needed. The Minister's response is not unexpected. It was extremely helpful that he explained in some detail which other bodies had responsibilities.

As regards strategic health authorities, the noble Baroness, Lady Cumberlege, put her finger on it. They will be disconnected from foundation trusts. They will not have performance management responsibilities.

9 Oct 2003 : Column 514

We have an amendment coming up which tries to solve the CHAI/regulator relationship. It is interesting that the Minister made great play of the fact that strategic health authorities will have the role. But they will need information and will need to know what impact the foundation trusts will have on local health economies. By one means or another, whether the foundation trusts do the work themselves or whether CHAI does the work, it will need to know whether the foundation trusts are generally operating according to the objectives of the NHS.

In principle, where to put the duty to produce the information and the report is not the vital aspect here. What is most important is that the report should be made. This is a straightforward way for the Government to settle a great many of the concerns about the impact of foundation trusts. As the right reverend Prelate pointed out—I am sorry, I have lost the thread of my argument.

It is also interesting to note that the Government clearly perceive foundation trusts as providing a cure for the Kidderminster hospital fiasco. The Minister has revealed a little more than perhaps he might have done, but now we know why the Government are so passionate about foundation hospitals.

I recognise the mantra of light-touch regulation, spoken by the noble Lord, Lord Hunt, from days gone by. Of course we should have light-touch regulation and fewer regulators, but all regulators will need access to information of this kind. It will allay many of the fears people have expressed about the impact of foundation trusts and I hope very much that the Minister will reconsider his view. Of course foundation trusts are not islands. We do not believe they should be and we agree with the Minister in that respect. However, these reports are not the great bureaucratic mountain that the Minister has alleged.

Earl Howe: I am glad that we have had a meeting of minds on Amendment No. 77 relating to the costs of elections and I am grateful to the Minister for what he had to say.

I am not quite so reassured on Amendment No. 79. I queried why there is a need for the discretion of the regulator on the question of what period the report should cover. The Minister sought to explain that by saying that there could be a part year involved and that that was why the provision has been included in the schedule. However, in paragraph 23(5) part years in the definition of a financial year are already allowed for. The paragraph states:

    "In this paragraph and paragraph 25 'financial year' means—

    (a) the period beginning with the date on which the corporation is authorised under section 6 and ending with the next 31st March, and

    (b) each successive period of twelve months beginning with 1st April".

To me that suggests that discretion is not needed on the period covered by the report because it is already provided for. If the accounts cover less than a year, then the report should cover that same period. I am still in the dark. It is a small point, but I am not completely satisfied.

9 Oct 2003 : Column 515

I do not know whether it is significant that paragraph 24 refers to "annual reports" rather than reports covering each financial year. However, if I have barked up the wrong tree, no doubt the Minister will correct me in writing. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 78 to 83 not moved.]

Schedule 1, as amended, agreed to.

Clause 2 [Independent Regulator of NHS Foundation Trusts]:

Earl Howe moved Amendment No. 84:

    Page 1, line 11, leave out "officer" and insert "office"

The noble Earl said: I shall speak also to Amendment No. 88. The amendments are simple in appearance but quite profound in their significance. I am suggesting that the word "officer" in Clause 2 should be changed to "office" and that, instead of the regulator being a person, the office of regulator should constitute up to five persons, including a chairman, all of them appointed by the NHS Appointments Commission.

I should make clear that this is not some idle flight of fancy. I have taken my cue directly from the Better Regulation Task Force chaired by the noble Lord, Lord Haskins, whose work was most ably highlighted by my honourable friend in another place, Andrew Lansley, when the Bill was debated there. When the report of the task force was published in the summer of 2001 it contained a number of important conclusions, one of which was on the issue of statutory regulators. It stated:

    "Our final question proved the easiest: there was widespread agreement that regulators should be run by properly appointed boards".

It also concluded:

    "Regulatory regimes should be consistent and predictable. There is a trend away from individual regulators to a board structure—we support this development".

The Government's response, published last year, accepted the recommendations in broad terms. Indeed, both Ofwat and Ofgem have moved to having a board structure, a change which Ministers have welcomed. Ofcom is to be the same.

The change implies, of course, that there are disadvantages in having an individual as a regulator. The reason is that with an individual, if one is not careful, regulation can start to revolve around a personality and the subjective judgment of the individual rather than around a consistent and logical pattern of decision making. When a regulator is a board, it is inherently more likely to avoid inconsistency and arbitrary judgment, and what it does will be more transparent because all decisions are arrived at by open discussion.

These matters are important because, when we create a regulator, there is surely one aim that we should maintain consistently—that is, that the regulator should at all times command public confidence as well as the confidence of the bodies and persons being regulated. I

9 Oct 2003 : Column 516

do not say that this cannot happen with an individual regulator, but it is more difficult. I am sure that we can cite a number of examples in the privatised utilities where tension between the regulator and those who are regulated has been exacerbated by personalities.

The presence of non-executive directors on the boards of regulators strengthens those bodies on the basis that they are appointed for their expertise. This, too, was the view of the task force. We can see that, as membership of the board changes—as it will—the corporate knowledge and corporate memory of the board among the board members who remain will be important for ensuring consistency of decision making.

I hope that those points will resonate with the Minister. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page