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Baroness Barker: I shall speak to Amendment No. 211 and the following amendments in the group. I echo what the noble Earl, Lord Howe, said. The Committee will recall that early last year, when the then Secretary of State, Alan Milburn, talked about setting up CHAI and CSCI, he undertook that they would be no less independent than the Audit Commission. Reading this part of the Bill, one must question that, and do so in some detail. Hence the number of amendments to this part tabled in my name and that of my noble friend Lord Clement-Jones, who I believe told Members of the Committee that he is unable to be in his place this afternoon.

The noble Earl is right to home in on the detail of the composition and operation of the regulatory bodies. As it stands, the Secretary of State retains to himself the power to hire and fire those who will have the most key roles of oversight of the work of foundation trusts and private hospitals. That is unacceptable, so we seek to remove some of those powers from the Secretary of State and, under later provisions, place them within the body of CHAI.

To reflect on some of our earlier debates, the reason we feel so strongly that those bodies must have real distance and independence from the Secretary of State is because of the doubts that have been expressed about the governance, accountability and arrangements of foundation trusts. Within that unsure framework, there needs to be a truly robust and independent body with strategic responsibility to consider critically and in an unfettered manner the performance of those hospitals. Therefore, and with some force, on one of only a few occasions under the Bill, we have common cause with the noble Earl, Lord Howe.

I hope that the Minister will understand that the measures are placed within the whole context of the operation of health and social care in future. They do not simply reflect our distaste for any particular incumbent at the Department of Health.

Baroness Finlay of Llandaff: I, too, support this group of amendments and have added my name to one of them. The arguments for the independence of the inspectorates have been well stated and I shall not repeat them. However, it has struck me that they will have two crucial roles. One will be to inspect, report, identify problems and where things are going well and to provide appropriate feedback. The other, linked but separate, will be to drive up standards in those areas where they identify a deficit for whatever reason—I stress those words. There may be complex reasons. We

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have had some inquiries that we all wish had never been needed, but behind the problems were complex faults detected in the system. It will be only through rigorous independence that the inspectorate bodies will be able to ask the questions that really need to be asked, to identify the deficits in standards and be able to drive up standards of care.

From all we have heard so far, all the Government's improvements to date have been to drive up standards. I cannot see what there is to fear from independence, but there is much to be feared in an accusation that an inspectorate body is somehow in the control, pay or influence of the political arena.

Lord Hunt of Kings Heath: I declare an interest as a member of the advisory board of the new CHAI, which has begun to meet over the past few months. I understand the points raised by Members of the Committee about the need for the two bodies to be independent and to be seen as such. They are absolutely right. Their role and responsibility for checking quality is awesome. The impact of their reviews can lead to major changes, such as the loss of jobs of senior executives and non-executives. Their relationship to performance ratings is critical. In addition, they are in a position to make more general judgments about the success or not of policies being developed in the health and social care area.

I disagree with Members of the Committee in so far as my experience of the existing CHI is that it is robustly independent. I was the Minister responsible for dealing with CHI for three years. I found it all too independent and robust. At times, I have criticised the approach taken by CHI and the review teams. That is absolutely right, as it was a visible indication of the very independence of Peter Homa, Deirdre Hine and the other commissioners. This is not a theoretical discussion. We can consider at least three years' experience of an organisation. Nobody has brought evidence to your Lordships' House to suggest that CHI has been anything other than robustly independent. Anybody who knows the character of Ian Kennedy, the chair designate of the new CHAI, or Denise Platt, the chair designate of CSCI, could doubt their robustness and independence. I have no doubt that we will see from them extraordinarily good work that is wholly independent.

I must take the noble Earl to task on his comment on performance ratings, which he said were now discredited. They are not discredited. They may not be perfect, and nobody would claim that, in their first year or two, they were 100 per cent perfect. But they give a very credible measurement of the overall performance of individual NHS trusts. I doubt that any Members of the Committee would detract from the strengths and abilities of any of the trusts going forward to foundation trust status. They are some of our best organisations. Their star-ratings contain both key targets and a huge number of benchmark indicators. Of course they need to be refined; that will happen. It would be wrong to suggest that the credibility of the star-ratings has been undermined in any sense in the way that the noble Earl has suggested.

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No doubt my noble friend will have something to say on the third issue raised, the appointment of the chair and commissioners. I put it to the noble Earl that, if the Government were concerned to put into those positions people who would simply do what they were told, would they really have appointed Sir Ian Kennedy or Denise Platt?

Baroness Finlay of Llandaff: The noble Lord, Lord Hunt, has given powerful arguments for independence and stated rightly that the people appointed are of independent mind and spirit. I am not sure, therefore, why he is fearful of adding the word "independent" into the Bill. When those people leave office, we need to ensure that that tradition is maintained.

Lord Hunt of Kings Heath: It is because I have always listened to noble Lords explain on many occasions in your Lordships' House that we should not seek to add unnecessary words to Bills or to lengthen them unnecessarily. It would be extraordinary to suggest to the appointees that adding the word "independent" to their title will somehow change the nature and philosophy under which they operate. We should think better of them.

3.45 p.m.

Baroness Howarth of Breckland: I am not sure whether I support the amendment. I wish to explain why, and to build in a few questions. I do not know what is meant by the term "independence" in relation to the two bodies. I declare an interest as the vice-chair of the National Care Standards Commission. However, what I have to say is entirely my own. I do not seek to join the new commission, so I feel very free in making my own comments.

Independence seems to mean different things in different places. Unless we have that more clearly specified—some of the amendments may propose to take that through—we might run into difficulties. For example, non-departmental public bodies, non-ministerial departments and even economic regulators are subject to financial control. But the way in which that budget is set, how representations are received in the public spending reviews and whether the Minister will make sudden cuts in assigned budgets—that has happened to some independent regulators—will affect how that independent regulator can carry out its task.

That accountability may well have a political perspective. The noble Lord, Lord Hunt, mentioned in an earlier debate that some issues will always have political outcomes—it is in the nature of the beast. I give standards for registration in old people's homes as an example. Independent regulatory agencies are given powers over regulation but are also subject to controls by elected politicians through those standards. How those standards can be interpreted and what freedom they have will also affect the nature of independence. Indeed, standards as a whole may be handed down from the Department of the Health to the regulator for implementation, with little room for flexibility, where the regulator might see better ways of, say, acting proportionately in achieving an aim.

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The nature of the relationship between the regulator and the relevant department is usually set out in a management statement that includes how the regulator will receive rules and guidelines relevant to the exercise of the regulator's functions, including how the regulator is to be held to account for its performance. We must remember that the regulator, however powerful the personality, must be held to account.

Will the Minister say whether that will be the mechanism for the agreement between new CHAI and CSCI and the departments, and whether it will give detailed instruction or broad direction for the new regulators?

This week saw the launch of the new report by the Better Regulation Task Force on independent regulators. I commend it to all Members of the Committee. The question of complexity, and sometimes duplicity, contained in the word "independent" emerged throughout the discussion. Do the Government have a clear definition of independence? That would help me to know where I stand in this debate.

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