Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Clement-Jones: The Minister's reply seems to agree precisely with the tenor of my argument: not only can PCTs not deal with the set of demands on them; it would be inappropriate for such a model to be imposed on them. That gives stronger force to the need for some wording in the Bill to prevent commissioning bodies achieving such status. I very much agreed with what the noble Lord, Lord Warner, said, when dealing with Amendment No. 9 moved by the noble Lord, Lord Blackwell, whom I am pleased to see in his place.

13 Oct 2003 : Column 657

We felt that it was inappropriate for a commissioning body to achieve that status. In that sense, the Minister has made a stronger case than I did.

Baroness Andrews: In case the noble Lord is under any misapprehension, I reiterate that the model was designed with provider organisations in mind. It requires the principal purpose of any NHS foundation to be the provision of services. It does not provide a framework for dissolving a PCT and transferring its staff, assets and liabilities to an NHS foundation trust. That would simply not work. For those practical reasons, I ask the noble Lord to withdraw the amendment.

Lord Clement-Jones: But it is possible under Clause 5 for a PCT to achieve foundation status. I hear what the Minister says and entirely agree with her. But, in that case, if the model set out in the schedule is the wrong one, why does not the Bill say so?

We can bat this ball back and forward for several more happy moments, but there is a flaw at the heart of the Government's argument on the matter. We certainly intend to return to the matter, because if that is really the Government's intention, it should be in the Bill. Otherwise the Government are giving hope to all those organisations that may want to become foundation trusts, inappropriate though they may be, that they may be able to do so, by not clearly delineating that they are talking about bodies such as mental health trusts, not primary care trusts. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 125:

    Page 2, line 37, after "trust," insert—

"( ) the financial position of the applicants,"

The noble Earl said: I shall speak also to Amendments Nos. 126 and 127. I am sure that the Minister will be delighted to read my "may" and "shall" amendment, without which no Committee stage would be complete. However, it has a serious purpose, which is to highlight the matters that the regulator must consider before issuing a certificate of incorporation for a non-NHS body to become a public benefit corporation.

What are those matters? Subsection (3) appears to set them out, but at the end we find that even if those conditions are met, the regulator still does not have to issue the certificate. Why is that? Why might he not issue a certificate when he is satisfied on the matters contained in paragraphs (a), (b) and (c)? There should be no hidden agenda; the applicant ought to be aware of exactly what is expected of him when he makes the application; but it seems that that may not be so.

I have tabled a further amendment intended primarily to probe the Minister about quality standards. Where a non-NHS body applies to become a public benefit corporation, it would seem only logical that it should have to pass the same sort of quality tests as would an NHS body in the same

13 Oct 2003 : Column 658

situation. However, there is nothing to say that that will be so. Whether it will have to receive a formal star rating before its application is advanced is another matter again, but I should be grateful for any comments that the Minister may feel able to make on the matter.

By the same token, the regulator will clearly need to guard against the possibility that non-NHS organisations that are financially failing may take advantage of the provisions of Clause 5 to gain access to public money. I am sure that that eventuality is most unlikely, but there seems no reason not to guarantee a financial focus on the applicant as an extra guard against that risk. The only safeguards that appear in the Bill are the need for the application to be approved by the Secretary of State—despite my earlier amendments, I have not contested that principle—and the general level of scrutiny by the regulator.

We could imagine a charity that to all outward appearances was a high quality provider of services applying to the Secretary of State for foundation status knowing that it had over-stretched itself and hoping that a state bail-out would be the answer to its prayers. I should be glad if the Minister would sympathetically consider the amendment or reassure me that my concerns are misplaced. I beg to move.

Baroness Andrews: I hope that we do not drift into surreality in debating the amendment or the clause, because they deal with organisations that as yet do not exist, but which may well do in future. For clarity's sake, perhaps I could offer some brief background about the intention behind the clause and how it will work.

The NHS foundation trust model has been designed to be sufficiently responsive to allow organisations outside the NHS to advance a proposal to support the establishment of a new organisation that would become part of the NHS family. That is to say, it would share the values and commitments of the NHS. Such a body would generate the formation of a new public benefit corporation. There is no provision for converting an existing organisation into another one; a new organisation must be formed. Organisations would do that by agreeing to enter into sponsor or partnership arrangements. They might then be eligible to seek the support of the Secretary of State in an application. Clause 5 provides for that potential, but, since we are dealing with the future, it is not possible to anticipate the range of organisations, and no invitations for applications have been issued yet. Applications could conceivably come from voluntary organisations or hospices, as mentioned by the noble Earl.

I agree with the intention of Amendment No. 125 that applicants for NHS foundation trust status should be financially sound, and that non-NHS organisations should not be able to obtain the status if it is not in the wider interests of the NHS. Non-NHS organisations will have to conform. Au fond, no matter what their status, organisations that come forward will have to conform to the same set of standards and principles, regardless of their initial status.

13 Oct 2003 : Column 659

Organisations will have to satisfy rigorous assessments; for example, financial and business tests. As the department's guidance on the preparatory phase makes clear, all applicants will have to prepare a five-year service development plan—a robust business plan. The plan will set out the anticipated range and volume of services to patients, and it will have to provide evidence that what is envisaged will lead to benefits for patients. That will be underpinned by an independent "health check" by accountants. That process is in line to be applied to the first wave of applicants at present. Those requirements will ensure that both the Secretary of State and the regulator have the information that they need to assess an applicant's position.

In addition, under Clause 6(2)(f), the regulator can impose any additional requirements on applicants. I hope, therefore, that the noble Earl is reassured that non-NHS trust organisations that might apply will be treated in the same way.

The same principles will apply as regards quality standards. Amendment No. 126 rests on a tautology. The same quality standards will, and must, apply to all forms of NHS care, regardless of the nature of the organisation providing it. Non-NHS organisations will, in time, provide NHS care.

Clause 5 provides for the establishment of new public benefit corporations. The Bill does not provide for organisations other than NHS trusts to become public benefit corporations. The applicant would have no way to demonstrate that it could meet the quality standards, only that its supporter-partner could. It could never be incorporated as a PBC otherwise. We are building in that requirement.

The noble Earl raised the "may/shall" debate. We should have a new parliamentary ritual to greet the appearance of the first such debate in every Bill. This is a classic example. Amendment No. 127 would remove the regulator's discretion to incorporate a PBC if it meets the criteria in Clause 5. That is a step too far. Once incorporated as a public benefit corporation, applicants can exercise the functions of the corporation on its behalf until the governance arrangements can be put in place. That is a considerable responsibility for a new organisation. It is therefore necessary and appropriate that the independent regulator retains discretion over whether he issues a certificate of registration to an applicant.

The independent regulator may become aware of factors other than those set out in Clause 5(3)(a) to (c), which should be considered before an applicant is incorporated as a public benefit corporation. He might discover, for example, that it is not in the best interests of the NHS as a whole, for financial or other reasons.

Clause 5 is slightly complicated. I hope that I have reassured the noble Earl. I will be very happy to write to him if there are other questions that he wishes to explore.

Baroness Carnegy of Lour: It is very sad that the Government are not considering the merit of thinking on this side of the Committee. I know that the noble

13 Oct 2003 : Column 660

Baroness is not personally responsible, as she was simply speaking to a brief—she did so beautifully. But the future of voluntary organisations is not necessarily financially sound. Very often, they depend on donations from members of the public—on flag days, for example. Voluntary organisations go in and out of fashion. To be sure that they are capable of such changes, it would be very important to go into such details. The organisations, and those who contribute to them, should know that those matters will be examined. Voluntary organisations are different creatures. The funds of applicant hospitals come from the taxpayer. They are a different matter.

The Government should think harder about the issue. I felt that their response was just a way of replying to my noble friend and not a proper argument. The department is not doing well in responding to the most sensible and important amendments moved on this side of the Committee or by Cross-Benchers.

The amendment would require,

    "that the applicant has demonstrated the ability to meet quality thresholds".

How can they? Are they talking about the past or the ability to meet thresholds in the future? Voluntary organisations are different. They vary among each other and in their own performance over the years. Having been involved in many voluntary organisations, I speak with great feeling on the issue. The Government should think jolly hard before they turn down the amendments.

6.15 p.m.

Baroness Andrews: I hope that we are responsive to thinking on the other side of the Committee—certainly, as the noble Baroness mentioned, the role of the voluntary sector coming forward if it wishes. The precise purpose of building additional flexibility into the Bill was to enable applications to be made by voluntary organisations, or any bodies outside the NHS, that feel that they have something to contribute and that foundation trust status would be the way forward for them.

We all know the huge contribution that the voluntary sector makes to health care provision—in particular, palliative care. We wish to use all our imagination and resourcefulness to ensure that, if the criteria were satisfied, that would happen. Such responsiveness has been built into the Bill.

It is difficult at present to talk credibly about what we mean by applying quality thresholds to organisations that do not exist. It is a very dynamic process. When applications are invited and then received, those new organisations will undergo growth and change. They will have to conform to the quality standards that we would expect throughout the NHS.

I will be happy to write to Members of the Committee to discuss further the details of our plans, if it would help.

13 Oct 2003 : Column 661

Next Section Back to Table of Contents Lords Hansard Home Page