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Baroness Finlay of Llandaff: I rise to support the wording of the first amendment, but I will oppose the second. I will try to explain why. As is already well known, I am concerned about the involvement of politics in the day-to-day running of the NHS and the flow of political influence prior to an election, with the need, perhaps, to boost the voting ratings by using the NHS as a political football. That is why I was keen to see the Secretary of State a little out of the loop and the regulator left to specify what he felt was really required from foundation trusts. However, I am concerned about leaving out subsection (2) in Amendment No. 187, especially in the light of the Minister's comments in reply to my last question. It is essential that the regulator can draw on as much information as possible.

I return to points that I made previously about the network provision of care and data from organisations such as the cancer registries. Such information may be very important to the regulator to examine to determine the performance of the foundation trust to see whether it really is delivering the quality care that it claims. There has to be a check for the regulator on information from an external source as well as the information that is provided within the trust. I have tremendous reservations about that. In fact, I would not want anything to stop the regulator's ability to seek information from wherever he felt it should be sought in order to reach an informed decision. With

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those two different views, I support one amendment but I am afraid to say to the noble Earl, Lord Howe, that I cannot support the second in this group.

Baroness Andrews: It is such a relief to have the noble Baroness, Lady Finlay, on our side even for half the time. One out of two cannot be bad. To address the noble Earl's concerns, I will explain why it is difficult for us to accept his amendments in terms of what we are trying to do with Clause 19. For the Secretary of State to be able to set standards to allocate resources and plan provision of health care across the NHS in line with his responsibilities under the relevant Act he must be able to determine what he needs to know and draw upon information gathered across the NHS. It goes much wider than simply finding out about foundation trusts themselves. The amendment would restrict the Secretary State's ability to carry out his duties with respect to the NHS, and the second amendment would restrict the regulator's ability to monitor compliance with the terms of the authorisation.

Clause 19 requires the NHS foundation trust to provide information to be used for national policy development, planning decisions, manpower planning and tracking, and so forth. Those are matters that extend far beyond the regulator's function. If the amendment were agreed, it would be up to the regulator to provide such information as he thought relevant. However, it would hardly be appropriate for him to decide what information the Secretary of State needed with regard to those much wider matters.

I reassure the noble Earl on two points. First, the intention is definitely not to replicate existing data collection. Foundation trusts will have earned their autonomy. There is no line management or performance relationship. We simply expect the information requirement from NHS foundation trusts to be a subset of that required by NHS trusts at the moment. Members of the Committee will be pleased to hear that the Department of Health is currently undertaking work to streamline information requirements throughout the NHS. We are well aware of the arguments about bureaucracy, excessive information and paperwork, and we are doing our best.

Let me also reassure the noble Earl on the point that he made about confidentiality. The independent regulator does not have the power to require confidential information. The data protection rules apply fully. In any case, common law rights of confidentiality are not affected by this clause.

The second purpose of Clause 19 is to ensure that the regulator is able to obtain the information that he needs to set the terms of authorisation and monitor compliance with those terms and statutory obligations, as well as investigating breaches. As the noble Baroness, Lady Finlay, said, he may well need access to information from sources other than foundation trusts. The noble Baroness gave the example of the cancer networks in Wales. There are many other examples: it could be information from the PCTs on their commissioning needs or on the services

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that they have already received from the foundation trusts. The amendment would remove his power to require NHS bodies to disclose information that is essential for any proper judgment to be made about the performance of the foundation trust.

I reassure the Committee that they are legitimate concerns, and we take them seriously. We do not expect the regulator routinely to collect data from bodies other than the foundation trusts. Nor do we expect that the provision of the information will place a significant burden on them. He is most likely to require specific information if he needs to take specific action, such as varying the terms of authorisation or investigating breaches. Such information may well differ from that routinely submitted to the Secretary of State.

I hope that, with those assurances, the noble Earl will feel able to withdraw his amendment.

Earl Howe: The noble Baroness, Lady Finlay of Llandaff, need not worry; my second amendment was very much in the nature of a probe. To my delight, the Minister has satisfied me in every respect on that matter.

There is no argument between us about the need for data collection, providing that the data are necessary. My concern is about the regulatory burden. The Minister has satisfied me on that, in large measure. My fear is, for example, that non-foundation trusts could find themselves submitting information to strategic health authorities, as well as to the regulator. However, it appears, in the light of what the Minister told us about the way in which the power will be used, that that would be unlikely and that the regulator will seek to avoid doing it.

It has been a helpful exchange. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 187 not moved.]

Clause 19 agreed to.

Clause 20 agreed to.

Clause 21 [Fees]:

[Amendment No. 188 not moved.]

Clause 21 agreed to.

Clause 22 agreed to.

Clause 23 [Failing NHS foundation trusts]:

[Amendment No. 189 not moved.]

Clause 23 agreed to.

Clause 24 [Voluntary arrangements]:

Earl Howe moved Amendment No. 190:

    Page 10, line 19, leave out "may" and insert "must"

The noble Earl said: In moving Amendment No. 190, I shall speak also to Amendment No. 191.

Clause 24 deals with voluntary arrangements. I should be grateful to hear a little more from the Minister than the clause discloses about how the power that it confers is to be used. In the first instance, it is not clear why, if the regulator is satisfied that it is necessary to introduce a moratorium or to move to a

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voluntary arrangement, he then has an option to choose between those two courses of action or, indeed, to do neither. Nor is it clear what the implication of each is for the trust. I would hope that he would issue warnings to the trust in the first instance, before taking any irrevocable step. However, supposing that he specified that there should be a voluntary arrangement, what would be the financial effect on the operation of the trust?

We all hope that the provisions laid out in Clauses 23 to 25 will not in practice be required, but there needs to be certainty about them. If a foundation trust were forced into dissolution because it had failed and there were unmet liabilities, who would bear the responsibility for those liabilities? How would the creditors be paid?

The other amendment is designed to give the foundation trust some control over whether its financial difficulties can be resolved under the provisions of the Insolvency Act 1986 that are brought into play by Clause 24(2). As the Bill stands, the regulator is always in the driving seat in deciding upon a moratorium or voluntary arrangement; but we know from the commercial world that it is often the organisation itself that has the best understanding of its dilemma. It would seem sensible, if ever that were to happen with a foundation trust, to allow the board to approach the regulator and ask him to issue a suitable notice under subsection (1). I hope that the Minister will look upon that suggestion constructively; it is intended as a helpful suggestion. I beg to move.

12.15 p.m.

Lord Warner: I accept the spirit in which the noble Earl moved the amendment. Before I deal with the amendments, I shall take the opportunity, as this is our first discussion about the insolvency regime for NHS foundation trusts—I share the noble Earl's wish that we will not need to use the arrangements, but we must make adequate provision—to inform the Committee that the department has prepared a paper setting out our proposals for the secondary legislation, which will, in effect, establish a bespoke insolvency regime for NHS foundation trusts, under Clauses 24 and 25. I have arranged for copies to be placed in the Library, and I tried to arrange for copies to be sent to noble Lords who had spoken in the debate. I detect from the noble Earl's remarks that they may not have arrived. I certainly asked for them to be sent to everybody before today's debate. I will check the arrangements and try to ensure that they are available to noble Lords during the lunch break.

I did not propose to go through the letter, which is fairly detailed—it is about four or five pages of detail—not least because I wanted to preserve my vocal chords. I shall speak briefly on the amendments. I can see that they are intended to ensure that the regulator imposes a moratorium or voluntary agreement, if it is appropriate to do so. We do not think that the amendments are necessary. Although the regulator's power to impose voluntary

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arrangements are discretionary, the clause sets out clearly the situations in which he would exercise the power; that is, when it is "necessary or desirable".

It is highly unlikely that we would get to the point of dissolution without some kind of interchange between a foundation trust that was in difficulties and the regulator—and, indeed, some of their creditors. It would be unusual for that to happen without some interaction between the trust and others, including the regulator. The regulator is also under a duty to act reasonably, which would include exercising his powers under Clause 24, if it were in the public interest to do so. He has an overriding responsibility to protect the NHS. If a voluntary agreement were the best way of protecting NHS interests and assets, one would expect him to use his discretion sensibly.

I hope that the noble Earl will read the detailed arrangements for a bespoke insolvency system for the NHS. I am happy to discuss it with him, if that would help, after he has had time to consider the details.

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