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Lord Walton of Detchant: My Lords, I shall be brief. I am not opposed to the principle of foundation hospitals. The concept of separating hospitals in the ultimate from the direct control of the Department of Health and offering them independence in running their affairs has a great deal to commend it. In Committee, I mentioned my experience when, in Newcastle-upon-Tyne in the 1970s, we created a university hospital management committee that included representation from the public, the university and the professions. All the hospitals in the city were combined under the management committee, which worked extraordinarily well.

Then came the ill-conceived reform of 1974 with the McKinsey management consultants report. Keith Joseph, the sadly lamented late Lord Joseph, introduced a form of consensus management with district health authorities, area health authorities and regional health authorities—a multitude of tiers. It soon became evident that the management of the hospital service was impossible because decision-making congealed because everything had to be achieved by consensus management at every level. That simply did not work.

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We then had several debates about what to do. It became perfectly clear that at least one tier of management should be removed. One of my colleagues wisely suggested that the tier of management that should be removed was the department, but that did not achieve support in many quarters.

The concept is therefore attractive, but I warn the Government of what was referred to in Committee by me, the noble Baroness, Lady Cumberlege, and others. When the late Lady Castle introduced her reforms introducing democracy into the National Health Service, the health authorities were loaded with very many local councillors. They were in the majority over professionals and people with a great deal of management experience. We all wish to see democracy in the NHS, but at that time, because of the enormous majority of people representing, as they saw it, their constituents, all too often they filibustered to try to look after constituents' interests and to ensure that a small hospital in their constituency was not closed. At times, decision-making almost ground to a halt. It is therefore very important that the Government recognise that the governance machinery set out in the Bill is impossibly complex and fraught with danger.

Although I accept the concept and would like eventually to see every NHS hospital achieve foundation status, the Bill is framed dangerously and is likely to create even more problems than envisaged by the speakers today.

The noble Lord, Lord Dubs, talked about the old teaching hospitals. That concept is long outdated. Practically every hospital in the NHS is now involved in teaching medical students. The number of students has increased so much that they have to be sent for part of their clinical training to regional and local hospitals. The dominance to which the noble Lord refers is a thing of the past. In many parts of the country, regional hospitals that were previously uninvolved in teaching are now very much involved. Teaching and research as a major function of the NHS is spread much more widely than it ought to be. I am concerned about whether those aspects, so crucial to the future of the NHS, can be achieved with the Bill as framed at present.

Lord Turnberg: My Lords, I am beginning to think that there may not be much left to say. I admit to finding the reasons behind Amendment No. 2 confusing. However, I must express my interest as a rather simple and naive physician without much nose for the political background to some of the amendments.

Words such as "bath water" and "babies" come to mind. The Bill makes the first steps away from control by central government and the Secretary of State. But, instead of trying to make the proposals work, with the many amendments that the Government have moved and accepted, and instead of pushing away from the centre, we are being asked to get rid of it altogether.

At Second Reading, I said that we should look towards the not-too-distant future, when all hospitals will be able to become foundation hospitals. I accepted that we must start somewhere, with some hospitals

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that seem best prepared. The morale of everyone I know in the National Health Service, including all the doctors and nurses, depends on being free of constant regulation, the constant drive from the centre and constant jumping to what one Minister or another has said. That devolution is essential if we are to run a health service that will be good for patients in the way that the right reverend Prelate seeks. They want to get the Government out of their hair as quickly as possible. It seems to be a given that that is desired on all sides of the House; in fact, there is almost desperation to get rid of central control. But, instead of starting down the route that we all want to take, we are being asked to close off even that opportunity. I accept that there is much more to do, but I cannot accept Amendment No. 2.

12.15 p.m.

Baroness Carnegy of Lour: My Lords, unlike the noble Lord, Lord Dubs, who said that he was sceptical about the concept of foundation hospitals when he first heard of it but has become convinced that it is a good idea, I was extremely encouraged when I heard that we were to have foundation hospitals. Ever since the ending of the idea that the money should follow the patient, which I thought was developing well under the previous Conservative government, it has become clear that we need hospitals with some independence. As time has passed, notably during Committee stage, it has seemed that foundation hospitals were like a ship that was well built at the start, and a good idea, but that has became encrusted with so many clusters of barnacles that there is a problem over whether it can work as intended originally.

When noble Lords and, I hope, Members of another place read carefully the remarks of the noble Earl, Lord Howe, they will see that he made a pretty devastating account of what has happened to a good idea during the development of the Bill. The noble Lord, Lord Clement-Jones, added to that. Interestingly, he indicated what he thought community politics would do to foundation hospitals. He knows all about that, as his party is expert at community politics, so I listened to him with great interest.

We will look at various clusters of barnacles during Report. At present, we are looking at the system of governance. The noble Lord, Lord Desai, made an unusually vague speech on the subject, ending up by saying, very laudably, "Trust the people". The noble Lord, Lord Hunt of Kings Heath, told us that the present system cannot possibly work and described why. He certainly knows about that, as he has been trying to run the system, with a great deal of expertise, and knows the difficulties. One of the answers, he said—I do not quote him precisely—was to change the answerability to Parliament to answerability to local people.

The noble Baroness, Lady O'Neill, a most distinguished philosopher, who sits on the Cross Benches and whom we all respect—alas, she is not with us today—gave last year a very interesting set of brief lectures entitled "A Matter of Trust". She described the

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accountability culture that has developed in this country, why accountability is necessary, how professional people know that it is necessary, but how it can go wrong and make it very difficult for professional people to operate well. It is a very interesting account of which I am reminded constantly as the Bill proceeds.

The noble Lord, Lord Lipsey, puts his finger on the button very adroitly and hits nails on the head very smartly. He said that the problem with Schedule 1 is that politics will become embedded in the National Health Service. That is a problem that the noble Baroness, Lady O'Neill, discussed in her lectures. The noble Lord is a good socialist, so far as I know, and a loyal supporter of the Government at this time. He can criticise on detail, but, at present, he is criticising the Bill. He said a very brave thing—that he would like to take this clause out of the Bill. I hope that Members of another place will read what he and others on that side of the House have said, because we have come to a point at which our thinking about accountability has gone badly wrong. We will spoil the whole concept of foundation hospitals if we do things in this way.

The elaborate construction of an electorate in the Bill, the proposed way that governors will be elected, the way that governors will appoint managers and managers will run the hospitals make it clear that it will be possible for community activists—whether party politicians or any other sort—to ruin the whole thing quite easily. They very likely will. They may not mean to and may think that they are doing the right thing, but those of us who know how these things work can see what is likely to happen.

We want hospitals to create a setting in which professionals can function to high standards and communicate with their communities in a way that they need to do in order to keep in tune with what is wanted, but that will never happen with local activists breathing down their necks. The Bill asks for just that. There are so many simple ways that patients and potential patients could have a say, and ways in which competent hospitals could be set free to operate professionally to work out their own methods of working. There are so many ways that that could be done, but this part the Bill precludes that happening. I hope that noble Lords will examine this issue with great conscience and not vote to spoil our system just because of one quite small thing—the way in which hospitals will be governed.

I have one detailed question for the Minister if it is not out of place. I hope that he will forgive me. It may be in his briefing for the previous amendment that was not moved. If it is not, perhaps he could write to me. Is it possible for foundation hospitals in England to refuse under any circumstances to treat a patient based in Scotland? If that is so, it really would not be fair. At the moment, any Scottish hospital would treat anyone based in England who came to it for treatment and any English hospital would do the same for someone based in Scotland. If that will no longer be the case under the Bill, it would be a matter of great concern. I hope that he can give me a precise assurance, because it is an anxiety north of the Border and I feel that it is

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something about which your Lordships would want me to ask. I hope that noble Lords will take courage and support my noble friend if he divides the House.

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