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Baroness Noakes moved Amendment No. 205:

The noble Baroness said: I shall speak also to Amendments Nos. 206 and 207. The audit provisions in Schedule 5 are rooted in the audit arrangements for local authorities. I remark in passing that they are a more logical fit with the imposition of the Audit Commission as auditors, about which the Liberal Democrats spoke earlier. The amendments seek to challenge one part of those arrangements in relation to public interest reports.

In the Bill, the Government have tried to create bodies that are accountable to their members. That is the driving force behind their proposals, as I understand it. The guide to foundation trusts referred to that as local public ownership and accountability. In the guide, which was issued in December, we were told that there would be,

    "accountability mechanisms to local people",

most notably through governance arrangements that would define accountability to the local community. That is all very well. However, the audit arrangements are one of the strongest forces for underpinning accountability, and in them we find no mention of local members or the local community.

I suggest that that is another of the confusions at the heart of the Bill's approach to foundation trusts. They are local when it suits the Government to make them local, but not otherwise. In effect, our amendments replace the concept of public interest with the interest of the members of the trusts. Public interest may be too restrictive a notion in terms of what auditors should report on as a result of their audit effort. Local foundation trusts are not local authorities. They should be primarily accountable to their members according to the Government's doctrine.

Many other aspects of Schedule 5 could usefully be amended to reflect the role of the board of governors, which appears nowhere in it. I hope that the Minister

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will be prepared to look again at those arrangements to reflect the kind of accountability that the Government say that they espouse. I beg to move.

Lord Warner: We found the amendment slightly surprising. Membership provides a mechanism for the public to get involved in the running of hospitals, but NHS foundation trusts do not use membership as a means of deciding who gets what type of service. They have a much broader responsibility, providing NHS services for the benefit of the public generally, not only for the members of the NHS foundation trust. It is therefore appropriate that the auditor should determine whether a report should be made for the interest of the public generally and not only for members.

The amendment seems to narrow the obligations of the auditor and leave the general public out of the picture. Whatever the intentions may have been, the amendment does not benefit the public because it narrows the auditor's responsibilities.

Baroness Noakes: I thank the Minister for that brief response. I think that he failed to deal with the point that I put to him, which was that nothing in the schedule related to the accountability structures that the Government have alleged that they are creating. Accountability to the members of the trusts is completely absent from Schedule 5. I shall reflect on his answer and perhaps table a raft of different and more extensive amendments to consider on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 206 and 207 not moved.]

Schedule 5 agreed to.

Clause 38 [General duty of NHS foundation trusts]:

Baroness Barker moved Amendment No. 208:

    Page 15, leave out line 6 and insert "ethically, and put and keep in place arrangements for the purpose of monitoring and improving the quality of health care provided by and for that body"

The noble Baroness said: The amendment is very simple but none the less important. Clause 38 sets out the general duty on NHS foundation trusts that they must exercise their,

    "functions effectively, efficiently and economically".

Nowhere does it require hospitals to act ethically. Our amendment would restore that fundamental duty in healthcare to foundation trusts.

One could recite many different examples in which hospitals have acted efficiently and economically, but under the regime put forward for foundation trusts they would not be required to act ethically. Medical ethics might at times not be efficient or economic, but are nevertheless important. It is perhaps no surprise that my colleagues in another place considered the amendment when it was revealed that A&E services had effectively been completely distorted earlier this year, to make sure that A&E performance figures met the time scales put on them. That may have been a

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demonstration that they could work efficiently and economically, but I am not sure that it was at all ethical.

I am not a doctor and do not pretend to be. However, I am sure that in many different medical fields there are efficient and economic practices. Whether they are ethical or not is a separate matter. The issue that comes to my mind is the performance of caesarean sections in maternity provision.

It is wholly wrong that foundation trusts should not be subject to such a duty. I am sure that their staff would wish to act ethically. Therefore, the provision should be in the Bill. We talked earlier about a duty of equality, and the amendment is about the quality of the care provided by the hospitals. The amendment may be simple, but it is of fundamental importance. I beg to move.

1.30 p.m.

Baroness Finlay of Llandaff: I support the amendment. I know that everyone is hungry and I do not wish to give a lecture on bio-ethics, but I remind the Committee that as well as autonomy, beneficence and non-maleficence, there is also the principle of justice. Justice demands that the patient has the right to the best treatment within the resources available, but it also demands the just allocation of resources. It is completely dependent on management to allow the just allocation of resources and to allow the other principles of ethics to be invoked. Beyond those four principles, there are also issues surrounding scope and the size of the decision, and so on. That is a fundamental and important principle if foundation trusts are really to serve the population they are intended to serve; that is, people who are extremely vulnerable.

Baroness Andrews: Would that we had time for a seminar on medical ethics. We would probably enjoy it a lot, lunchtime or no.

As the noble Baroness has said, it is a simple but important amendment and I understand the case that she makes. Under Clause 38, the independent regulator will monitor the NHS foundation trusts' performance against that duty through their audited annual financial statements. I want to make sure that that is clearly understood.

Under Clause 44, an NHS foundation trust will be under a duty to put and keep in place arrangements for the purpose of monitoring and improving the quality of healthcare provided by and for that body. It would be an unnecessary duplication to include that duty also in Clause 38, but specific only to NHS foundation trusts.

I would ask whether the term "quality" would imply an ethical dimension. I hope that it would always do so. However, I can reassure the noble Baroness that foundation trusts will be bound by the Human Rights

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Act 1998. That will ensure ethical and equitable behaviour. On those grounds, it is unnecessary to duplicate a duty in the legislation.

Baroness Barker: I thank the Minister for her thoughtful answer. I was worried to hear her say at the beginning of her response that the independent regulator would review foundation trusts through their financial statements. We are talking a completely different language when discussing ethics.

Perhaps the Minister shone a torch on the reason for including the amendment in such a belt-and-braces fashion. I admit that it is a belt-and-braces fashion and there is a good reason for it. When one looks at the Bill in its entirety and sees the number of words devoted to finance, efficiency, and so on, the one area in which it is deficient above all others is that of ethics. I will reflect further on the Minister's suggestion that quality implies ethics. When we reach Clause 44, I do not doubt that we shall discuss the issue further. For the moment, and in view of the hour, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 38 agreed to.

Clause 39 agreed to.

Lord Warner: This may be a convenient moment to take a break in the Committee's proceedings until after Starred Questions. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Baroness Andrews: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.

[The sitting was suspended from 1.34 to 2 p.m. for Judicial Business and to 3 p.m. for Public Business.]

Horse Passports

Viscount Astor asked Her Majesty's Government:

    Why they are asking all horse and pony owners to apply for horse passports when the required statutory instrument has neither been laid before, nor approved by, Parliament.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, in February 2002, the Government announced that, in order to comply with European legislation, all horses would be required to have passports by the end of 2003. Earlier this year, the Government consulted on a draft statutory instrument

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implementing that announcement. The final version of the statutory instrument will be laid before Parliament shortly.

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