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Earl Howe: I am grateful to the Minister for agreeing to have a second look at this issue. I believe that it is important. Whenever we set up new regulatory mechanisms, it should be more or less a reflex action to examine how the regulatory impact of those bodies can be contained, however well intentioned the new system is to be. I look forward to hearing, perhaps at a later stage, what the Minister concludes. But, for now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 126 agreed to.

Clause 127 [Reports: CSCI]:

[Amendment No. 401 not moved.]

Clause 127 agreed to.

Clause 128 [Duty to have regard to government policy: CHAI]:

Earl Howe moved Amendment No. 402:

The noble Earl said: In moving Amendment No. 402, I shall speak to the other amendments grouped with it. In this group, we return to the principal theme of our Committee proceedings on Part 2—namely, the independence of CHAI and CSCI. Clause 128 confers a power of direction over CHAI by the Secretary of State.

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A clause of this kind, tucked in towards the tail end of Part 2 and headed "Relationship with government", speaks volumes for the intentions of Ministers. Here, we have an open acknowledgement that, like it or not, CHAI will be beholden to the Government, as and when Ministers so choose, in every aspect of its operations. Its functions as an adjudicator of the quality of care and of the economy and efficiency of the provision of healthcare, as a guardian of the rights of children, as a publisher of data and as an assessor of the performance rating of trusts may not be for CHAI to perform as it seems fit but, instead, may be subject to the Government's take.

I am extremely troubled that a provision such as this should be in the Bill. It is quite unnecessary. Government policy, referred to in subsection (1), can mean many things. It can mean something as benign as a drive to get rid of mixed-sex wards or, alternatively, something that is political, such as waiting-list targets, delayed-discharge penalties and A&E waiting times.

However, the obligation to have regard to government policy is a strict provision. I have no problem with CHAI having regard to government policy. No regulatory body such as this one can possibly operate in a cocoon. Government policy is a fact of life, and CHAI must live with it. But that is different from saying that CHAI should be subject to a power of direction. The only point of a power of direction is to influence someone's actions. What possible ways are there for the Secretary of State to influence the actions of CHAI which would not amount to direct interference in CHAI's mode of working or the results that it published?

The confidence that patients and the public need to have in what CHAI says and the way that it does its business is one of the most important considerations in this legislation. People very definitely do not want to see CHAI as just another arm of government, doing the Government's dirty work and implementing the Government's political agenda. But that is what will happen if the Secretary of State is allowed to direct what it does.

In my amendment I suggest that the Secretary of State should by all means have the power to bring matters of policy to the attention of CHAI, but that that should be as far as it goes as regards any direct political influence over its operational role. The same comments apply in equal measure to CSCI. I shall not take up the time of the Committee to repeat the argument. Knowing the Minister, he is bound to present the Committee with some rational-sounding justification for these provisions, but I doubt I am persuadable.

Perhaps I may move briefly to Amendments Nos. 407 and 408. In Clauses 130 and 131 we see once again the over-intrusion of the Secretary of State in the governance of CHAI and CSCI. It is conceivable and the Bill is right to allow for the possibility that CHAI or CSCI may fail to perform their functions in some major way. Were that unlikely eventuality to come about, there has to be a means to address it. The Government's answer here is to give the Secretary of

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State a power of direction over each body so that he can tell it what to do or even what not to do. A power of direction may be the obvious device to bring out the tool kit in those circumstances, but I am distinctly uncomfortable with it. We all know about powers of direction; the point is not so much that they are used, but that they are there at all. The existence of a completely unfettered power of the Secretary of State to say that CHAI or CSCI were failing in the discharge of their functions gives him a large degree of psychological influence over the way that each body operates.

We should note that the Secretary of State does not even have to be satisfied as to the failure of CHAI or CSCI. He has to consider only that they are failing, which is much weaker. If the Government set up a body that does not work, the proper course is one of two things: to return to Parliament to introduce something else or, as my amendments propose, to get Parliament to approve the direction. To leave the Bill as it is will effectively give the Secretary of State a Sword of Damocles that he can wield almost whenever he feels like it. For bodies that are operationally independent, or supposedly so, that is simply not appropriate. Those concerns go to the heart of our misgivings on Part 2 of the Bill. I beg to move.


Lord Warner: I hope that I shall continue to sound rational at this time of night, as the noble Earl helpfully suggested. On Amendments Nos. 402 to 406, we have pointed out on a number of occasions that there are no general powers in the Bill to issue directions to either commission because we want to ensure that they are independent from government. A Minister will be able to intervene only in the specific circumstances of either body being judged to be failing in the discharge of any of its functions or under the power that we are discussing here which allows him to issue directions that require the commissions to have regard to matters of government policy. Such a power cannot be used to direct the commission on any specific matter that the Secretary of State chooses. It can be used only to issue a direction on a specific area of policy such as that CHAI and CSCI should not make a profit from any fees that they charge and that they must have regard to general government principles of good accounting in respect of such fees.

In the absence of a general direction-making power, it is essential that the Secretary of State has a power to ensure that proper democratic accountability is maintained. I do not believe that it is unreasonable that CHAI and CSCI should be expected to have regard to the broad health and social care policies of the elected government of the day when carrying out their functions. In contrast to the independent approach that we have taken for CHAI and CSCI, most other NDPBs, such as the Audit Commission, can be directed by Ministers about any matter, so they have been put in a special category. The duty to have regard to Government policy is the same duty as

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appears in the legislation that established Ofsted. I am sure that the Committee would not regard Ofsted as a body that lacks independence.

Amendment No. 406A seeks to remove the Secretary of State's power to vary or revoke any direction that he has given under this clause. I am sure that noble Lords are aware that this is a standard provision that is attached to any direction-making power. To remove such a provision would be extremely restrictive for the Secretary of State, but such a restriction would not be beneficial to CSCI. It could potentially lead to the inspectorate needing to have regard to an aspect of government policy that was long out of date, and which no longer reflected the reality of the social care world that it was inspecting. Clearly, that would be wrong.

Amendments Nos. 407 and 408 would place a duty on the Secretary of State to consult Parliament before he issued a direction to either commission. The procedure proposed by the amendments for issuing a direction to Parliament would be time consuming and a bureaucratic and unnecessary waste of parliamentary time. In the extremely unlikely event that either commission failed to carry out its duties, or failed to carry them out properly, it would be important that corrective action could be taken quickly. Let us suppose that because of the pressures of work one of the commissions refused to undertake an investigation into a Climbie case or a Shipman case, would the public think it right that an investigation was held up while we discussed the matter in the House? We think that is not so and that the Secretary of State should have these powers of direction in these rather special circumstances. I suggest that the amendment is withdrawn.

Earl Howe: I should have thought that in the kind of case cited by the Minister—the Victoria Climbie situation—where the inspectorate declined to carry out an investigation there are already separate powers in the Bill which the Government could use. I am not at all certain that these powers of direction are necessary.

The Minister may seek to present these various powers as limited in scope. I do not read them in that way. They are widely drawn. While the Government may have only modest horizons about the use of these powers that might not necessarily apply to a future government who leaf through the Act, as it will be, and find that they have very considerable influence with which to play.

Nevertheless, I can see that the Government are not going to be moved on this issue, which I find a pity, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 403 and 404 not moved.]

Clause 128 agreed to.

Clause 129 [Duty to have regard to government policy: CSCI]:

[Amendments Nos. 405 to 406A not moved.]

Clause 129 agreed to.

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Clause 130 [Failure in discharge of functions: CHAI]:

[Amendment No. 407 not moved.]

Clause 130 agreed to.

Clause 131 [Failure in discharge of functions: CSCI]:

[Amendment No. 408 not moved.]

Clause 131 agreed to.

Clauses 132 to 143 agreed to.

Schedule 9 [Part 2: minor and consequential amendments]:

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