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Lord Hunt of Kings Heath: My Lords—

Lord Peyton of Yeovil: My Lords, could someone from this side of the House say a word? I am much obliged to the noble Lord. I shall be very brief.

In Committee, in Amendment No. 17, I made a modest attempt to limit the number of people, to check the growth of a public benefit corporation to something short of a regiment. At the moment the Bill requires a minimum whereas a maximum is required. It seems to me that the idea of a public benefit corporation is an attempt on the part of the Government to give a superficial impression of being democratic. The likelihood is that it will be a mess. For those reasons I would have liked there to be a Division on this amendment, but it is absorbed into a forest of other amendments so I suppose that will not happen. However, I support every word that my noble friend Lord Howe said in moving the amendment. I hope that it will come to a Division, in which case I shall support him with pleasure.

Lord Hunt of Kings Heath: My Lords, I hope that noble Lords will not follow the advice of my noble friend Lord Lipsey. I have tremendous admiration for him and I am delighted that he has taken part in our debates on the National Health Service because he brings a very refreshing intellectual mind to bear.

This is a very important reform for the National Health Service. It would be devastating if the House were to reject the whole concept of foundation trusts and if that were to be confirmed in another place. We cannot

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continue to run the health service as we have done for 50 years through a command and control approach, with Ministers supposedly held to account by Parliament for every aspect of the running of a huge organisation. By 2008 the NHS will spend over 90 billion. It employs 1.2 million people and has a management structure that makes it impossible to run effectively and efficiently, with the ludicrous concept that everything that happens in the NHS is, in the end, forced to be held to account in this place and another place.

Such a situation leads to the fact that we have had so much restructuring over the past 20 years. I see a number of noble Lords in their places who have had a hand in that restructuring, including myself. It has lead to the concept of targets, targets and targets, central interference and micro-management. The very people to whom one wants to give space to run the health service effectively at the local level are disincentivised; their morale breaks down because they cannot carry out an effective job in the quite ludicrous over-centralised structure that we have.

The whole point about foundation trusts is the transfer of accountability from Parliament to local people. That is why the issue of democracy is so important. I say to my noble friend, having had a small role in the development of that policy, that the idea of democracy was not tacked on at a later stage. It was at the heart of the whole process when the policy was devised. Responsibility cannot be transferred from national level to local level without a transfer of accountability as well. To be accountable locally a democratic base is needed. That is why a membership structure is required for those foundation trusts that will enable the transfer of accountability to take place.

It is true that I, too, have had concerns about the Government's structure. I have made that clear on a number of occasions. I, too, do not understand why the board of governors is not the sovereign body in this legislative programme. I have never received a convincing response to that point. I share with the noble Lord, Lord Peyton, concern about the huge groupings. I can assure noble Lords that I intend to speak fully on my amendments in those groupings and I shall expect a full response. However much Front Benches may try to curtail debate and try to sort out the timing of votes, as individual Members we are permitted to debate our own amendments.

Here we are talking about the substance of the debate on foundation trusts. There are faults and flaws in the legislation, but my noble friend Lord Warner, in Committee, responded—I think very positively—to many of the points put forward. The noble Earl, Lord Howe, is a very fair person and often he acknowledges the fact that the Government have moved on many issues. I put to him this point: I would understand a principled opposition to the issue of foundation trusts if, in Committee, my noble friend had simply pushed away all the issues and concerns that had been raised. But he has been generosity itself. Not only does he bring forward today a swathe of government amendments responding to points raised, but he also accepted in Committee a number of amendments that

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improve the governance structure. On that basis, that is fair dos. I ask noble Lords whether they really believe, in the light of that flexibility, that it is in the tradition of the House to reject the whole concept of foundation trusts.

At the end of the day, if we want an excellent health service, we need to give those running the health service locally the responsibility and the trust to do a good job. Surely foundation trusts are one major way to do that. I hope that the House will support the concept.

11.45 a.m.

Baroness Cumberlege: My Lords, I want to respond to the noble Lords, Lord Hunt and Lord Desai. I fully support the case that has been put in opposition to this form of devolution to local hospitals that has been outlined by my noble friend Lord Howe. The noble Lord, Lord Hunt, and I used to work very closely together and at one time I was actually his boss. He was my chief executive and he was exceptional. He was imaginative, entrepreneurial and a person with huge skill.

A noble Lord: My Lords, and judgment.

Baroness Cumberlege: My Lords, not judgment, as I heard a noble Lord say.

The noble Lord and I worked extremely well together in the NHS and we knew it very well indeed. That is why I find it breathtaking that the noble Lord suggests that nothing has changed in the governance of the National Health Service over the past 50 years. He will remember very clearly, as I do, the right honourable Kenneth Clarke introducing many reforms that brought in a new concept that was NHS trusts. That took place just before a general election and members of the Labour Party were telling people that NHS trusts were set up to privatise the National Health Service. I remember visiting hospitals where elderly gentlemen and ladies had their wallets and purses because they thought that they would have to pay for the National Health Service. It was a disgrace.

Trusts were brought in and huge freedoms were given to most people: to the executive team, to the non-executives and to the chairs. They excelled and we saw tremendous improvements. In 1997 the Labour Party came to power. The new administration felt that they really understood the whole concept of power and how to run the National Health Service. Increasingly, they took more and more power; they took power away from those who were appointed to run hospitals, demoralised them and neutered them to some extent so that they could no longer do what they thought was appropriate for local people.

Now I want to be a little humble. I remember distinctly that when we—the Conservative administration—bought in NHS trusts, one of the things that we did was to concentrate all the skills, energy and excitement on hospitals. That was a flaw. All those attributes should have gone to the health authorities who were the commissioners. The same mistake exactly has been made this time round: the Government have again concentrated on the hospitals.

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The purpose of hospitals is to treat and to cure and to do so with compassion and efficiency, so that there is cleanliness and clean linen and that there are good treatments that are effective and efficient. I am delighted that the noble Lord, Lord Lipsey, has had such good treatment at St Thomas's. St Thomas's is an extremely good hospital, and there are others. But there are also others that are poor, where records are lost, where there is no clean linen and where there are staff who are not employed but who come through agencies and do not have the same kind of commitment. It is that which needs addressing. It is the efficiency and the effectiveness of our hospitals that needs addressing. We should not be playing around with their governance.

If we need democracy in the health service—I am not denying that we do—we need it at a different level. We need it with the primary care trusts, which decide the priorities in their area, where the money is to be spent and the major policies, working with strategic health authorities. I share enormous misgivings about the governance arrangements, not least because we are distracting the managers who should be running the hospitals but are now spending their time having to work through a whole new concept.

I thank the Minister, who sent me a copy of a letter after the Committee stage, addressed to my noble friend Lady Noakes, reminding me of a very interesting document entitled A Guide to the Preparatory Phase. On page 7, it states:

    "The minimum framework for the governance arrangements is set out in legislation".

What arrogance. It says, "set out in legislation", not "proposed legislation". That sounds as though it is all signed and sealed.

The guidance sets out a heavy burden of documentation, consultation and crystal ball gazing. It is complex; it is difficult; and for the first time it sets commissioning in a legal framework. It is onerous, but it has a comforting paragraph entitled, "Department of Health Reassurance". The reassurance given by the Department of Health to the brave people who are going forward is to set up a help line: a help line for people who should be running their hospitals. But they are going to attend, we are told, specialist events. Chief executives and treasurers are going to go for training. There will be seminars and source books. There will even be supplied secondees to hold the hands of top executives in the applicant hospitals.

I do not deny that that is necessary; I am sure it is. This is a whole new concept. Those people are going to need a lot of help. My point is that those people are managers. They have talent and skills, and there are not enough of them. They should be running the hospitals and concentrating their mind on reducing hospital infections and all the things that we know are not brilliant, but which need addressing—not in all hospitals, because some are good, but there are many that need a lot of help.

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So I share very much the views expressed by the noble Lord, Lord Lipsey. It is absolutely right that we should not be tinkering with governance when there are better things that we should be doing with the National Health Service.

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