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Lord Hunt of Kings Heath: There is no doubt that within the construct of the Bill the person or board who is appointed will have enormous discretion on how they carry out their task. The noble Lord, Lord Clement-Jones, suggests that Clause 3 means that the regulator will require an enormous amount of information to determine whether each foundation trust is operating in accordance with the general principles that the Secretary of State is charged with under the Health Act. I believe that the person who is appointed as regulator will decide whether he wishes to be inundated with information or whether he will operate under a reporting by exception basis. I hope that the regulator will choose the latter option and that he will intervene where he must but will exercise caution on responding to every minor issue, complaint or representation that is made to him. Unless the regulator operates in that way, it will be very difficult for foundation trusts to take advantage of the new governance arrangements.

Lord Warner: The remarks of my noble friend Lord Hunt are very much to the point. The role of independent regulator is distinct from that of CHAI. They are required to co-operate with one another under Clause 54. That does not in any way prevent them

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sharing information. Indeed, the requirement to co-operate should avoid a situation in which they duplicate information collection. However, they have quite separate functions that must be exercised in an independent and separate way.

CHAI's functions relate primarily to the inspection and review of healthcare. It has wide powers—we shall debate some of those—to develop and implement policy for carrying out reviews and providing advice to healthcare bodies on healthcare improvement. But CHAI's executive powers of intervention are very much limited to decisions about registration of private providers.

On the other hand, the NHS foundation trust regulator's remit is to set and apply the statutory regime for foundation trusts. He has extensive powers but can use them only in defined circumstances—setting terms of authorisation and intervening on failure—with wide powers of discretion in how he applies those powers. He has a limited role in setting and determining policy as the aims he is to achieve are set out in the Bill.

The NHS foundation trust regulator is like a referee whereas CHAI seems to me to be very clearly a reviewer and investigator. Amalgamating those two roles does not seem to make much sense. We believe that they need to remain separate.

I should correct something that I said this morning. I am told that at around 11.30, in discussions on the governance arrangements, I said that in one case well over 1,000 people came forward just to be governors. Clearly, either I was not awake or I got carried away. I intended to say that well over 1,000 people came forward expressing an interest in being members. I apologise, and I wish to put the correction on record.

7.15 p.m.

Lord Clement-Jones: I thank the Minister for that reply. The Department of Health has given birth to a new baby, and I understand that it is very keen to keep it alive and bouncing with its role as set out in the Bill. However, I shall make a prediction. We have had great debates on a number of NHS reform Bills when the Government either did not include certain services to be regulated by CHI, or considered that there should be another regulator, the NCSC, for independent acute healthcare. We on these Benches argued strenuously for the logic of having a single regulator. Finally, after four years, we find ourselves with that single regulator coming about for acute healthcare.

The department will find itself extremely frustrated in having the role of regulator on one hand and CHAI on the other eventually. The Minister makes some case for the separation of the two in terms of their functions but, in terms of the data that they will need, the contact that they will have, and how they will operate, it will be increasingly obvious that there needs to be one body. If foundation hospitals come about, I shall look forward with great interest to the development of regulation on the subject. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Earl Howe moved Amendment No. 86:

    Page 1, line 13, leave out "Secretary of State" and insert "Special Health Authority designated under section (Appointment of the independent regulator and appointments to the CHAI and the CSCI)"

The noble Earl said: I shall speak also to Amendments Nos. 90, 92, 94, 98, 100, 101, 102 and 467. One main feature of the regulator is independence, as the Bill trumpets, yet the Bill also vests the power of appointing the regulator with the Secretary of State. If the regulator were to remain an individual, at some indeterminate time in future—not now—it would be possible to imagine a political placeman being appointed rather than someone with unbiased expertise for the role. We need to avoid that possibility at all costs.

To the extent that the responsibilities of the regulator are shared around a broad table, that risk diminishes. However, the risk would be dramatically reduced if the board or individual were to be appointed by an independent body—the NHS Appointments Commission. My suggestion is that the commission's role should be written into the Bill and, incidentally, that the commission should also be responsible for appointing the chairman and members of CHAI and CSCI respectively. That is a debate for another occasion, however. I beg to move.

Lord Clement-Jones: I shall speak to Amendment No. 87. Very similar provisions apply. The regulator should be appointed by the NHS Appointments Commission. I am sure that in practice that is the case, but it should be enshrined in primary legislation. It makes sense and is a reassurance if we are to have a single regulator, and indeed if we were to have an office of regulators the same would apply. I very much hope the Minister will consider adding the provision to the Bill.

Lord Warner: Putting the matter in context, Clause 183 will enable the Secretary of State to delegate responsibility to the NHS Appointments Commission for all or part of his duties to appoint members to public bodies that have functions relating to health, social care or the regulation of professions associated with health or social care, including CHAI and CSCI. We will debate that provision at some later stage. In addition, Clause 183 and Schedule 12 permit the appointment of lay members of health professional regulatory bodies. That clause and schedule indicate the way, broadly speaking, the Government are moving in such appointments.

Under Section 16D of the 1977 Act, the Secretary of State currently has the power to direct a special health authority to undertake any of his functions relating to the health service that he specifies in directions. Under the terms of this power, the NHS Appointments Commission has already been directed to make public appointments to a number of national bodies which have functions relating to the health service. However, the current power does not extend to appointments to bodies whose functions extend beyond the health service. That is why we are making the change.

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Against that background, we do not believe that public appointments are automatically delegated to the NHS Appointments Commission. The Government believe it is sensible to delegate specific appointment-making powers on a case-by-case basis. It is possible that in some cases Ministers, not only in this Government but in future governments—if one can even contemplate that prospect—may wish to delegate the initial selection and sifting processes, but not the final appointment. Or Ministers may wish to retain direct responsibility for certain appointments, or in some cases take back responsibility for appointments that have previously been delegated.

Notwithstanding those arguments, the Government believe that the vast majority of national appointments for which the department is responsible will be delegated to the NHS Appointments Commission, with only a small proportion of appointments being made directly by the Secretary of State.

The Government intend that the Secretary of State will appoint the independent regulator for NHS foundation trusts on first establishment. It is of course possible in the context I have outlined that he may in future consider delegating appointments of the regulator to the NHS Appointments Commission.

The position regarding CHAI and CSCI has already been made clear and no doubt we shall return to those issues at another time. We do not believe that at this time the Secretary of State wishes to delegate the appointment of the regulator to the NHS Appointments Commission. He still has the responsibility for determining the terms of the office of that regulator, including remuneration and other allowances and pension. We believe that for the moment these functions should belong to the Secretary of State, as the regulator will be paid for using public funds for which the Secretary of State is ultimately accountable. In those circumstances, we do not believe that it would be appropriate to transfer the appointment process to the NHS Appointments Commission.

Furthermore, we do not believe that a fixed term of appointment should be specified in primary legislation. The Secretary of State over time will need to take account of the background and demands of the post at the time when an appointment needs to be made and consider an appropriate period of appointment based on an anticipated work programme. That applies in particular in the years after first establishment of NHS foundation trusts when the demands on the independent regulator may change as a number of these trusts increase. We would prefer not to specify a particular time in legislation now.

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