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Earl Howe moved Amendment No. 183:

"( ) An NHS foundation trust shall have power to procure information technology systems subject only to compliance with such interoperability standards as may be specified in regulations."

The noble Earl said: I have just mentioned the experience of Sweden and Spain in pioneering the foundation trust model.

Alongside pay freedoms, the other lesson from those countries is the lesson of IT. On IT procurement the Government have returned to their age-old instincts: the IT contract for the NHS has been centrally drawn up and is being centrally managed. It will account for a vast sum of public expenditure. Recently, we understand, it has entered somewhat choppy waters. Why? Because the Government in their usual fashion have tried to impose too many risks and liabilities on the contractors, with the result that all but one of the

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three main bidders have walked away. The Government appear to be forcing an unrealistic pace on those contractors and it is said that the unprecedentedly tight deadlines have frightened off other bidders. Smaller suppliers on which the NHS depends are being squeezed out and if we are not very careful some may go to the wall. None of that has apparently deterred Ministers from pursuing their centralist policy. The NHS is to have the IT system that Ministers think is best for it.

Foundation trusts in Spain will say that one of the freedoms that has made the most difference to them is the freedom to procure their own IT. The only requirement imposed on them is interoperability with systems elsewhere. I must ask: why have the Government not looked more carefully at that model and drawn the lessons from it? I do not know what evidence the Government have for thinking that a giant, centrally managed government contract is likely to prove successful. The history of large national IT procurements in other departments is not exactly reassuring.

The NHS contract is immensely complex. Its broad specifications run to 550 pages without all the detailed technical requirements that one has to build in. Last year the DoH acknowledged openly, and I thought refreshingly, that there were "significant risks"—its words not mine—attached to the IT programme. Indeed, that is right.

So the Government have hang-ups about granting greater freedoms to foundation trusts as regards IT. I believe that that is a totally and unnecessary restriction. I really should like to hear the Minister's explanation. I beg to move.

Lord Warner: I hear what the noble Earl says about the IT strategy. I do not think that this is the place to have a long detailed debate about the Government's IT strategy. I shall try to deal with the amendment by relating why it is not compatible with the IT strategy.

I do not disagree with some of the thinking outlined by the noble Earl. It is worth bearing in mind that the regulator will have powers under Clause 6(3) to require that NHS foundation trusts comply with IT interoperability requirements to ensure that there is data integrity across the NHS.

I do not think that anyone in the Committee would disagree with the proposition—we have all learnt by mistakes made by successive governments regarding public procurement of IT—that there needs to be some common architecture for IT to operate successfully and for local systems to be able to transfer information from one part of the country to another. One of the uncomfortable facts of life for the NHS is that people move around and that records and information about them may need to move around. So a common architecture to ensure compatibility between local systems is an important aspect. Nothing in this legislation prevents the regulator ensuring that. There are many stand-alone systems that presumably are bespoke to a particular function in an office which do not come into that category.

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PCTs may also include requirements on interoperability in their contracts with NHS foundation trusts. Let us stop and think about the issue. It is not in the interests of NHS foundation trusts to do other than ensure integrity and compatibility of NHS data flows and value for money in their own IT solutions. Why would they want to buy systems that are unable to relate to other parts of the NHS?

In the light of these considerations, we believe that the regulation-making powers proposed in the amendment are superfluous and would seem on face value to reduce NHS foundation trusts' independence from the Secretary of State, a matter about which the noble Earl and his colleagues have been so concerned. So the safeguards are there, without being oppressive where there are particular local systems that do not have linkages to other parts of the NHS.

Baroness Carnegy of Lour: The Minister said that he did not think that the amendment is good enough because it limits foundation trusts unnecessarily. The Government are missing an enormous opportunity to find out how IT could operate within a common architecture—which there must obviously be because, as the Minister says, people move about, statistics will be required and all the rest of it. The systems must be interchangeable, but surely foundation trusts might find new ways that would avoid the massive problem of one great system, which is what the Government are trying to operate with.

It is yet another missed opportunity—as is the pay bargaining arrangement, although this is of course on a much smaller scale—to discover how better ways could be found by foundation trusts. They could experiment and pioneer new ways, but that is being prevented by the arrangements. My noble friend's wording may not be ideal, but surely the Government should accept this one and let trusts see whether they can find ways—within the requirements of the Bill, of course—to improve the working of their IT. The Government are being remarkably narrow minded on the issue.

Lord Warner: I do not want to go through the detail, but this House and the other place have umpteen times debated the problems of local initiatives in IT because, with the best of intentions—not just in the health service but across the public service—people have taken projects forward to a point where it subsequently becomes inevitable that they cannot inter-relate to other parts of the public service. We have only to consider the criminal justice system, to cite another example from outside the NHS where that is a problem.

We are trying to strike the right balance, which we think we have done, in enabling a common architecture. That is a rather grand phrase, but local initiatives often—because, for good reason, they are designed around local needs—do not necessarily meet the needs of a wider agenda and cause problems for inter-relation with other systems. I ask the noble Baroness to reflect on that: it is not as though we do

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not have a lot of experience of that going wrong. We must ensure that the national frameworks are right. That is in the best interest of people locally.

Earl Howe: I am again grateful to my noble friend for her support. We must ask which approach carries the greater risk: the Government's approach—which, by their admission and in my estimation as a non-IT specialist, carries considerable risk; or the approach floated in my amendment, which I advocate, under which foundation trusts should have a measure of freedom to procure and commission a system that suits their needs. The Minister and I agree that there must be interoperability and compatibility. That is not in dispute. Clearly, different parts of the NHS must speak to each other through their IT systems. But the Minister has not made the case for imposing a giant national system on the NHS.

Baroness Howarth of Breckland: May I intervene on two counts? Having been involved in at least four government computer systems, the real difficulties have been in gathering comparable information across large areas. When local projects develop programs, interface—what the noble Earl calls interoperability—is not always as easy to achieve in this fast developing technological world as one would hope.

However, I must tell the Minister that we would all feel much more comfortable with the debate if he had not rather firmly put us in our place by ruling out the big debate about the strategy for development of government IT and had been more forthcoming with information. The National Care Standards Commission and the Food Standards Agency—I declare an interest in both as a member of the boards—have had difficulties with their systems. On the other hand, it would be a real mistake not to have a system that can produce information because of the problems with small project-based systems.

11.45 a.m.

Earl Howe: I take due note of what the noble Baroness has said from her experience. I am sure that her first point is extremely pertinent.

I do not intend to prolong the debate, but I share the disappointment expressed by the noble Baroness that the Minister could not have taken us more into his confidence on the Government's thinking on IT contracts. Nevertheless, we have had a useful exchange of views, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 184:

    Page 8, line 26, at end insert—

"( ) An NHS foundation trust shall not be required to obtain permissions from or provide information to any strategic health authority."

The noble Earl said: This is a probing amendment about strategic health authorities. We have been led to understand that strategic health authorities will have no role whatever in performance-managing

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foundation trusts. The fact that they are nowhere mentioned in the Bill is, on the face of it, confirmation of that understanding. However, I should be grateful if the Minister would clarify what functions, if any, strategic health authorities will continue to have in relation to foundation hospitals. In particular, I believe that money from the NHS Modernisation Fund is usually channelled through SHAs. How will such money now be distributed to foundation trusts?

The amendment is phrased as it is because I would not want the Minister to think that I am advocating a further line of reporting for foundation trusts beyond those that are being created for them. Nevertheless, one benefit of performance management is that it can often prove helpful to a trust as a means of identifying any problems at an early stage and of providing appropriate practical assistance. The intention is that all NHS acute trusts should achieve foundation status within five years, so the question arises: what role will strategic health authorities have after that? Will there be a mechanism to substitute for the constructive role currently played by SHAs?

One of strategic health authorities' other main roles is to provide oversight of specialised commissioning arrangements. HIV/AIDS, renal services, haematology, neurosurgical services and neo-natal intensive care are examples of services provided across more than one PCT. Presumably—although we shall debate this in more detail when we reach Clause 29—foundation trusts will have an important role in delivering those jointly commissioned services. For those services not to be overseen by anyone is unthinkable. They are often extremely complex and difficult arrangements to establish and deliver. Equally, from time to time disagreements between hospitals need to be sorted out. I see no mechanism in the Bill to resolve those disagreements other than the broad duty of co-operation set out in Clause 29.

At the same time, I am instinctively uncomfortable with the thought that the role of SHAs should be replaced by enhanced functions for the regulator, who is not close to local events or circumstances and could not necessarily add much value to the process of ensuring genuine local collaboration. Ministers will need to explain this area much further if we are to be comfortable about the future of specialised services over the longer term. I hope that the Minister can enlighten us. I beg to move.

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