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Lord Walton of Detchant: My Lords, I see a great deal of virtue in this amendment. It has now become evident for instance that there was no appeal mechanism against decisions of CHI relating to whether or not hospitals should be awarded three stars or two stars et cetera. Now the Government and others are making it quite clear that they hope to introduce an appeal mechanism against decisions of CHAI in that situation. Hence it seems to me entirely appropriate to introduce such a mechanism in this Bill.
Lord Warner: My Lords, as the noble Baroness said, the Better Regulation Task Force included in its recent reports on regulators a recommendation that all independent regulators have an appeals mechanism. The Government will be responding to the whole of the
Better Regulation Task Force report on independent regulators around the end of the year. If the Government accept in full the recommendation that all independent regulators have an appeals mechanism, we will of course ensure that provisions are made for such a mechanism for the NHS foundation trust regulator.However, that report goes much wider than this particular regulator's role, or indeed the NHS, and we do not want to prejudge the outcome of the Government's response to the Better Regulation Task Force report by jumping the gun and putting a provision in this legislation as it is. If the Government decide to accept that mechanism, we will of course have to create a legislative opportunity to implement it. That will cover all the regulators and not just this particular regulator. I hope that the noble Baroness will withdraw her amendment on that basis.
Baroness Noakes: My Lords, I thank the noble Lords, Lord Walton and Lord Clement-Jones, for their support. We think that the existence of an appeal mechanism for foundation trusts is important in its own right. We thought that before the Better Regulation Task Force, which is why we tabled alternative amendments in Committee. We continue to believe that that is important. We think that it would be unwise to go forward with this new scheme of regulation for foundation trusts without something quite explicit there waiting to be actioned. I should like to test the opinion of the House on this.
5 p.m.
On Question, Whether the said amendment (No. 145) shall be agreed to?
Their Lordships divided: Contents, 111; Not-Contents, 94.
Addington, L.
Ampthill, L.
Ashcroft, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Biffen, L.
Bradshaw, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Byford, B.
Campbell of Alloway, L.
Carlisle of Bucklow, L.
Carnegy of Lour, B.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L.
Cox, B.
Craigavon, V.
Crickhowell, L.
Cumberlege, B.
Dahrendorf, L.
Darcy de Knayth, B.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Elton, L.
Emerton, B.
Ferrers, E.
Finlay of Llandaff, B.
Flather, B.
Fookes, B.
Fowler, L.
Freeman, L.
Gilmour of Craigmillar, L.
Glentoran, L.
Goodhart, L.
Hamwee, B.
Higgins, L.
Holme of Cheltenham, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Inglewood, L.
Jenkin of Roding, L.
King of Bridgwater, L.
Kingsland, L.
Knight of Collingtree, B.
Lester of Herne Hill, L.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
Mancroft, L.
Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Monro of Langholm, L.
Monson, L.
Montrose, D.
Moynihan, L.
Newby, L.
Nicholson of Winterbourne, B.
Noakes, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Onslow, E.
Oxford, Bp.
Palmer, L.
Phillips of Sudbury, L.
Plummer of St. Marylebone, L.
Prior, L.
Rees, L.
Renton, L.
Renton of Mount Harry, L.
Rodgers of Quarry Bank, L.
Roper, L.
Russell, E.
Russell-Johnston, L.
St. John of Bletso, L.
St John of Fawsley, L.
Scott of Needham Market, B.
Seccombe, B. [Teller]
Selborne, E.
Selsdon, L.
Sharman, L.
Sharples, B.
Shaw of Northstead, L.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Smith of Clifton, L.
Strange, B.
Tebbit, L.
Tenby, V.
Thomas of Gwydir, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tordoff, L.
Trumpington, B.
Ullswater, V.
Wakeham, L.
Walmsley, B.
Walton of Detchant, L.
Williams of Crosby, B.
Acton, L.
Ahmed, L.
Alli, L.
Amos, B. (Lord President)
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Bassam of Brighton, L.
Billingham, B.
Blackstone, B.
Borrie, L.
Bragg, L.
Brennan, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Crawley, B.
Davies of Oldham, L. [Teller]
Desai, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. (Lord Chancellor)
Farrington of Ribbleton, B.
Filkin, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Goldsmith, L.
Gould of Potternewton, B.
Grantchester, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howells of St. Davids, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jordan, L.
King of West Bromwich, L.
Lea of Crondall, L.
Lipsey, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Mitchell, L.
Morgan, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Randall of St. Budeaux, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Roll of Ipsden, L.
Rooker, L.
Sainsbury of Turville, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Simon of Glaisdale, L.
Smith of Gilmorehill, B.
Symons of Vernham Dean, B.
Temple-Morris, L.
Tomlinson, L.
Turnberg, L.
Turner of Camden, B.
Warner, L.
Weatherill, L.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.
Resolved in the affirmative, and amendment agreed to accordingly.
5.11 p.m.
Clause 4 [Applications by NHS trusts]:
[Amendment No. 146 had been withdrawn from the Marshalled List.]
Earl Howe moved Amendment No. 147:
- Page 2, line 11, leave out from "trust" to end of line 12.
The noble Earl said: My Lords, in moving the amendment I shall speak also to the other amendments in the group. In Committee I questioned why, when an application is made by a hospital to become a foundation trust, it is necessary for two approvals to be given, one by the Secretary of State and the other by the regulator. I am afraid that I was left dissatisfied with the Minister's explanation. The principle espoused here amounts to a duplication, or what my noble friend Lord Peyton memorably referred to as double banking. It is also yet another way of ensuring that the regulator is not as independent as his billing makes him appear. In fact, he is little more than a proxy for the Secretary of State.
Either the Government should be honest and say that the decision is for the Secretary of State acting alone, or they should give the decision to the regulator. Why give it to both? The Minister said that the Secretary of State was in a position to judge whether each trust was ready to go forward based on merit. However, I am pleased to see that, in a later group of amendments, the Government have conceded the point that I made in Committee that the regulator should have regard to quality benchmarks in arriving at his decision. If the regulator will be tasked with taking the decision as well, he is in just as good a position to make such judgments as the Secretary of State.
The Minister also said that the Secretary of State had a role as gamekeeper in overseeing how the policy for foundation trusts was rolled out, and how affordable the rollout was. That is not a good reason, if I may respectfully say so, because it relates not to individual applications but the rate at which applications come forward for approval. The Secretary of State need only be given a veto on the issue. That is what lies behind my amendments. They put the regulator fully in the driving seat, but give the last word to the Secretary of State in case any overriding policy reason prevents the approval being given at that moment. To pretend that the regulator has a free hand once the Secretary of State has given his verdict in the first instance would otherwise be a charade.
I also want to revisit the questions raised by Clause 5. If an application for foundation status is made by a non-NHS body and the Secretary of State is
required to approve it first, for what will he be looking? What considerations will he exercise? I do not fully understand what his role is in the first place as regards such applicants or, once again, why the process cannot be left to the regulator. How will the non-NHS bodies fit into the foundation trust structure? I did not get a clear sense of how the Government envisaged the provisions being used, and was left wondering whether it was premature for them to be included in the Bill at all. I beg to move.5.15 p.m.
Baroness Andrews: My Lords, we had a very lively debate in Committee on the respective roles of the Secretary of State and the regulator. I am very sorry that the noble Earl has abandoned his stick of rock metaphor; I quite enjoyed it. I am glad that the metaphor has settled down around gothic, rather than gothic/Byzantine and so on. I shall address the question that he has raised and see whether I can use some different, and I hope more persuasive, words.
The noble Earl asked in Committee who would do the work and what sort of work needed to be done. Essentially, the process that we envisage has two stages, each with different sorts of work. The Secretary of State is vital, because he ensures that the trust is ready to apply. The independent regulator sets the terms of authorisation and authorises the final application. As trusts come forward and the programme rolls out, the function of determining who can go forward and make an application—which trusts are appropriate, fully prepared and ready—is a vital and objective task. The Secretary of State is more concerned with the quality of the application having met the criteria than the rate of application, so I take slight issue with the noble Earl on that. Crucially, no matter what the Secretary of State says, the regulator will make the assessment of whether the authorisation should be issued and under what terms.
Very unusually, Hansard misheard what I said in Committee. I referred to the Secretary of State not as a gamekeeper, but as a gatekeeper. It was as though I had drifted into the debate on hunting, with which I was extremely glad not to be involved. There are enough descriptions of that benighted individual flying around for him not to be a gamekeeper as well.
Members of the Committee queried why the two processes could not be undertaken by either the regulator or the Secretary of State. There was no consensus from the Opposition in Committee about the relative merits of either. Some noble Lords wanted the Secretary of State out of the picture, while others felt that he should do everything. What we have proposed meets the real world of what trusts have to do to prepare the application as well as providing a fully independent process. Having put a board around the regulator, that process is even more robust.
Let me reiterate very quickly that the Secretary of State needs to be involved. He is the person responsible for ensuring provision of NHS care across England. He is responsible for funding the NHS, and will be able to advise on the development of the number of trusts.
However, he also knows the landscape of the NHS. The existing management framework means that the Secretary of State and SHAs are uniquely placed to consider the performance and potential of NHS trusts. His basis of responsibility and knowledge, backed up by the guidance and support earlier referred to as necessary by the noble Baroness, Lady Cumberlege, means that he has a transparently legitimate and proper role in deciding which applications will be passed to the regulator.The role of the regulator is very different. There is no pretence of independence; the process will indeed be independent. The regulator alone will determine what terms to set to the authorisation. Under Clause 14, the regulator will determine which health, education and training services the trust must provide, any additional activities that the trust might want to carry out, and what assets are to be protected. He will set the prudential borrowing code, apply the private patient cap, determine the information that the NHS foundation trust must provide, and impose any additional requirement that he sees fit. That is a different process from that of being a gatekeeper. It is indeed a process of determination; of authorisation. I hope that the noble Earl will accept that.
The question relating to what the regulator does has become confused. Is he independent enough? I hope that I have shown that he has a major task to do; a task which is different from that of the Secretary of State at a different stage. As regards independence, there are too many arguments and, frankly, too much evidence to the contrary. Independent regulators have to justify their reputations and roles. We certainly do not expect that he will not reject applications and that he will not want more information. We expect him to be extremely robust and very rigorous.
Amendment No. 154 would allow the Secretary of State to prevent an applicant from being authorised as an NHS foundation trust by objecting to the application. But that is not a satisfactory alternative to his gatekeeper role. That role, as I have explained, is an important part of the process. The amendment brings the Secretary of State into the process at the wrong end—after applications have been prepared and submitted following discussion between the applicant and the regulator.
Our concern, as I said in Committee, is that the impact on applicants could be extremely deleterious. They will have to prepare for applications, and we know that that is a serious process requiring a great deal of time and effort. They will have to submit those applications to the scrutiny of the regulator before their authorisation is granted. However, the amendment proposes that, at the last stage, the Secretary of State can object. It is not clear on what ground.
I suggest that, given the distance the Secretary of State will be from the application process at this point, it would be more likely to be politically inspired judgment than at any other part of the process. The amendment would effectively give the Secretary of State a power to contradict the decisions of the independent regulator and I see that as a recipe for
conflict. It would certainly cause confusion over the roles and it would also mean a major waste of resources.Finally, the noble Earl asked about Clause 5, which allows the non-NHS trusts to come forward. The provision we have made is for the future. It is to ensure that if there are any bodies which are not NHS trusts at the moment but may wish to become so in the future, we will have the capacity to do that. The noble Earl asked about the certification process. I shall be happy to write to him about that because we did not pin it down in Committee.
I hope that on the basis of what I said about the earlier amendment, the noble Earl will withdraw his amendment.
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