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6 May 2008 : Column GC107

Grand Committee

Tuesday, 6 May 2008.

The Committee met at half-past three.

[The Deputy Chairman of Committees (Lord Colwyn) in the Chair.]

Health and Social Care Bill

(Fourth Day)

The Deputy Chairman of Committees (Lord Colwyn): I give the usual reminder that, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Clause 4 [“Regulated activity”]:

Lord Warner moved Amendment No. 29:

The noble Lord said: I shall also speak to Amendments Nos. 33, 36, 69, 73, 84 and 86—but not 85—91, 98 and 103, which are in my name. I am grateful to my co-signatories for their support. Most of these amendments are designed to bring the commissioning of health services, not just their provision, more clearly within the scope of the Care Quality Commission’s regulated activities. Amendments Nos. 33 and 36 would clarify and widen the meaning of “health services” covered by the Bill. In tabling the amendments, I have done no more than attempt to put the Bill in the shape that I would have preferred if I had continued as the responsible Minister, so in mitigation I claim at least intellectual consistency in my position.

Let me start with the commissioning amendments. In any local area, commissioners of health services can do more damage to that community’s health than any individual provider. It is their capacity and competence in assessing local health needs, identifying appropriate service responses, contracting for the necessary services and dealing with poor providers by terminating contracts that most affect local health. Commissioners have been given the authority and the access to resources to effect real change. About 80 per cent of the NHS budget of some £110 billion a year passes through their hands. If the Government want a risk-based regulatory scheme for health services, with which I agree entirely, as I think do many Members of the Committee, it seems to me perverse to exclude commissioners or to leave matters unclear as to the new commission’s role and powers in this area.

This has been a contested area, with some in senior NHS positions arguing that oversight of commissioners is a performance management matter for strategic health authorities—and so it is, up to a point. When the original consultation document, with which I was heavily involved, was issued in November 2006, it showed, on page 63, commissioner assurance as a shared responsibility between strategic health authorities and the new regulator in the proposed future structure.

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That remained the position when Alan Johnson published his response to the consultation in October 2007, as set out on page 36 of that second document.

I am told that nothing has changed and that the new commission can still intervene with commissioners. However, I do not consider that the current wording of the Bill adequately makes it clear that the commission can take action in respect of failing commissioners where SHAs do not take sufficient action. We will come to some of that later. I also do not think that the Bill makes it absolutely clear that the commission has rights to intervene in various functions in relation to commissioning.

The performance of commissioners under successive Governments has been less than convincing. Too often, commissioners have been out-muscled by a powerful acute trust and too often in some of our most deprived communities they have failed to replace inadequate and failing primary care services. Sometimes, a cosy relationship within the so-called NHS family has worked against the public interest.

The Government’s new World Class Commissioning initiative is extremely welcome. It certainly has my support and I hope that it will improve matters. I was pleased to see in Ben Bradshaw’s recent Health Service Journal interview the recognition of the need for clear dividing lines between commissioning and providing, because primary care trusts are too often conflicted in this area. However, if, as I think we should be, we are providing for a future regulatory system for health services, I believe that we must clearly state in the legislation the ability of the commission to be involved in, and to take action on, commissioning and not simply leave matters to strategic health authorities. Similarly, we should not leave in doubt the commission’s ability to intervene and take action in this area.

Amendment No. 29 would bring commissioning clearly within the scope of the commission. Amendment No. 69 would ensure that the standards that the commission inspected against included commissioning, as they do now. Amendment No. 73 would ensure that the commission’s periodic reviews of primary care trusts covered commissioning as well as PCT provision of services. Amendments Nos. 84 and 86 would bring commissioning within the scope of special reviews and investigations that the Care Quality Commission may need to carry out. Amendment No. 98 would require the commission to keep the Secretary of State informed of commissioning. Amendment No. 103 would ensure that inspectors could get involved with commissioning.

I hope that the Government can accept these improvements, which put the commission’s role on commissioning well beyond doubt. Indeed, I think that these changes will reduce ministerial frustration when the NHS family declines external therapy for failing PCT commissioners. I confess that I may have overdosed with Amendment No. 96 by including PCTs in the definition of “health authorities”. I am not totally inclined to pursue this amendment but it would be helpful if I had the Minister’s reaction to it.

I turn briefly to Amendments Nos. 33 and 36. My reading of Clause 5 is that “health care” is too narrow a term for defining the activities of the new regulator. My amendment would broaden the term to “health

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services”, which include preventive services, and it would bring into the definition the issue of commissioning, for the reasons that I have explained. Amendment No. 36 would carry this broadening into Clause 5(4). The whole area of genomic medicine is developing at a phenomenal pace and is likely to reshape health services in ways that we cannot fully envisage at present. Therefore, in my view, we need a broader definition than is currently provided for in the Bill.

I regard these amendments as important ways of strengthening the Bill and giving the commission a clearer remit in the area of commissioning. I beg to move.

Baroness Murphy: I support this group of amendments. In my view, we come to the absolute nub of the role of the Care Quality Commission and its ability to act as a quality improver of NHS and other service providers.

I reiterate what the noble Lord, Lord Warner, said. It seems to me that in the current structure of the National Health Service the commissioners should play a crucial role in demonstrating that they are the champions of the local community and that they are purchasing on its behalf for the improvement of public health. It is true that they are directly responsible to the strategic health authorities for the delivery of that, but they are simply managed by the SHAs. With the Care Quality Commission, we are proposing that there should be independent regulation by people who have no direct interest in how the budget is spent or divvied up across their patch and no direct interest in the support of the providers; we are proposing a body that can monitor independently the quality of what is being provided.

I remind the Committee of a good example. The Maidstone and Tunbridge Wells NHS Trust inquiry report clearly demonstrated that the local primary care trusts were—not to put too fine a point on it—fiddling while Rome burned. They were so busy joining themselves up and reorganising themselves from two primary care trusts into one that their functions went to pot and they were not adequately monitoring what they were purchasing in terms of the quality of care being delivered.

At a Monitor board meeting this morning—I declare an interest as a board member—I came across a good example of how things can go wrong if you monitor the providers and not the commissioners. We were having a board-to-board meeting with an acute hospital in the Bristol area that wishes to become a foundation trust. We noted that its performance on its MRSA and C. difficile targets looked dodgy last year and that it did not look as though it would be in great shape this year unless something was done about it. The trust pointed out to us that the local Bristol primary care trusts had set it a target for this year with which it could comply because the new contract would include only MRSA that was picked up in the hospital and excluded that which was picked up in the local community, thus at a stroke allowing the local hospital to meet its contractual targets.

It seems to me that, from the point of view of the Department of Health, that is perfectly okay—we want local commissioners to make local decisions

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about the health of their local populations. Under the old system, the strategic health authorities—right up to the Minister—were responsible for the lowering the contractual target. Under the new local commissioning arrangements, it is very directly the responsibility of the primary care trust. However, will the Care Quality Commission pick up where a local area produces more community MRSA and does not improve against its hospital MRSA targets? It will have satisfied its local commissioners but what is delivered to the local community will be of poorer quality. If the NHS reforms are to work and we are to have arm’s-length responsibility in the local commissioning bodies, it is crucial that we have independent regulation of what is purchased by local community primary care trusts.

When we talk about commissioners, we ought also to include joint commissioners of health and social care, because they, too, are responsible for what is delivered. The commissioners of services must be held just as accountable when things go wrong. We must make it clear that the whole gamut of the processes that we put in place for the system must be able to deliver and be accountable to the regulator.

3.45 pm

Earl Howe: I cannot better the speeches of the noble Lord, Lord Warner, and the noble Baroness, Lady Murphy. However, I should like to add some brief remarks.

The Bill is not absolutely explicit about whether commissioning is to fall within the ambit of the CQC’s regulatory duties. Reading the Hansards of the debates held in other place, I detect that the Government intend it to do so. However, if we read what the Bill actually says, we see that it refers to,

It may be that the legal interpretation of this phrase is different from the ordinary language interpretation and that it does in fact encompass commissioning. However, if that is so, it is not clear. In Clause 5(2), “health care” is defined in a way that appears to exclude commissioning and, if we look ahead to Clause 42(1), which covers periodic reviews, we see that it states that the commission must,

Again, “health care” in this context is defined in Clause 92(2) in a manner that seems to focus exclusively on the provision of services.

We need to be clear in our minds about why this issue is so important. We have heard a number of the reasons already. Those noble Lords who have read the evidence given by Anna Walker to the Public Bill Committee in the Commons will have been struck by her succinct analysis of why it would make no sense for there to be statutory regulation of healthcare providers without simultaneous regulation and oversight of what happens at the commissioning and purchasing end.

It could be argued that, as commissioners, primary care trusts benefit from being overseen by strategic health authorities, whose job, as we have heard, is to performance manage what they do. But performance

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management and assessment by an independent regulator are two distinct things. Anna Walker spoke specifically about the CQC’s power to conduct wider reviews. She said:

That point was endorsed by Chris Heginbotham of the Mental Health Act Commission, who pointed out that monitoring the way in which commissioning is undertaken is important as a means of ensuring that the money is available to pay for any necessary changes or improvements. I thought that that was a very telling point.

A basic further point relates to this: without good and effective commissioning, it will be next to impossible for standards of care to be driven upwards, which is part of what the CQC is there to facilitate. Performance management on its own will not do that. Moreover, as practice-based commissioning becomes more established, as it surely will, the importance of this area of the CQC’s work will most certainly increase. What the CQC will undoubtedly do in the area of commissioning, as in other matters, is to make the NHS more publicly accountable. That principle surely has to be right.

Lord Warner: Perhaps I may correct a slip of the tongue in my opening remarks. I said that I had overdosed on Amendment No. 96, but of course there is no Amendment No. 96 in this group; I meant to refer to Amendment No. 91.

Baroness Cumberlege: I, too, should like to speak in support of these amendments. I start by setting the PCTs in context. When the Government came to power, they inherited eight regional offices. Four years later, those offices were abolished in favour of four regional directorates. The directorates lasted for just one year and were replaced with 28 strategic health authorities. The 28 SHAs did not last long and were merged into 10 bodies. I find that quite ironic because, in 1997, there were eight regions with organisations that had very similar functions. The importance of mentioning this is that these are the bodies that are accountable for the performance management of organisations that are much lower in the hierarchy and, of course, that deliver services, so it is all of a piece.

GP fundholding was scrapped nine years later; practice-based commissioning was put in its place. In 1997, the internal market had to go and was replaced in 2005 by payment by results—a purchaser/provider split by any other name. In 1998, primary care groups were formed, but they were swept aside in favour of 303 primary care trusts. Established in 2003, those trusts were merged three years later to 152. Not all PCTs merged—those in London were left as they were for political reasons. In June 2006, the PCTs were told

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to divest themselves of the services that they provided but, in October of the same year, because of the uproar, the Secretary of State told them that that was not, after all, her plan.

Some PCTs are considerable providers. For instance, Hampshire has more than 1,000 hospital beds in addition to all the community services, such as district nursing, health visiting, physiotherapy and speech therapy. The Gloucester PCT has a provider budget of £100 million—considerably larger than the neighbouring foundation trust. If the Government are serious about commissioning, it seems sensible to encourage PCTs to divest themselves of their provider role, but the question remains: who is to manage those services and where are they to go? Is the Government’s long-term plan to divest PCTs of their provider role and, if so, where are those services to go? I have given the Minister notice of that question.

In its report following an inquiry into PCTs, the Health Select Committee commented:

The committee goes on to describe the Government’s approach as “clumsy and cavalier” and states that PCT reform has,

That is very strong language for a Select Committee with a Labour chair and majority. In giving evidence, the chairman of Basildon PCT told the committee that,

The average life of a chief executive in one post is three years.

I take up the point raised by the noble Lord, Lord Warner. Is it any wonder that PCTs have not fulfilled all the Government’s expectations of powerful, well informed commissioners when they are in a state of constant turmoil? Individuals are worried about their jobs, homes, mortgages, schools for their children and continuing employment opportunities.

In addition, salaries are low compared with foundation trust salaries. On our first day in Grand Committee, we debated the salary level of the new chairman of the Care Quality Commission. We agreed that a salary sends a strong message about the importance of the position. The chief executive of a medium-sized PCT with a commissioning budget of £760 million and a turnover of provider services of £100 million receives a salary of £140,000. I mentioned that the foundation trust up the road with a turnover not of £100 million but of £30 million—less than one-third—receives a salary of £180,000. That is £40,000 more than the head of the neighbouring PCT who is to commission its services. What signal are we sending to PCTs, which are doing a much more complicated and difficult task? I suggest that it might be that they are less valuable, and certainly less appreciated.

Several clauses cover PCTs as providers of services, as we have heard, apart from Clause 42(1)(a), which is quite opaque, using the words, “pursuant to arrangements”—I cannot find anything else that might refer to commissioning. Is it the Minister’s interpretation that that is all that we need to meet the concerns

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expressed in the amendments? Whatever arrangements are made to regulate PCTs, it is of fundamental importance that they do not duplicate the performance management functions of the strategic health authorities, as the noble Lord, Lord Warner, said. I agree with him. Mark Britnell and his team are doing a splendid job in trying to introduce the World Class Commissioning programme and it would be a great pity if any proposals interfered with what he was trying to achieve.

PCTs have a huge responsibility. In addition, they are effectively local monopolies, buying care in any given locality and acting on behalf of users of the service. Since they are local monopolies, there needs to be some form of comparative information and competition to drive up performance. I see a parallel with the water industry, which is also a local monopoly. There, the regulator is keen to encourage competition by ensuring that there is comparative information for him to use. In addition, I realise that, as there are two parts in our system, purchaser and provider, it is difficult for a regulator to regulate providers without seeing the other half of the equation, the purchasers—a point that has been ably illustrated by the noble Baroness, Lady Murphy.

A problem in a service may well arise due to the service not being commissioned or being commissioned incorrectly in the first place, thus affecting the delivery of quality in the service. As the Bill already provides for the assessment of local authority commissioning in social care, it seems a little perverse not also to consider the assessment of healthcare commissioning. I am delighted that some enlightened authorities and PCTs are experimenting with joint commissioning, which leads to the conclusion, in my view, that joined-up regulation as mooted in these amendments is also required. I live in hope that we are pushing at an increasingly open door and that the Minister will think again and return with her own amendments.

Baroness Barker: I have some sympathy with these amendments, as my amendments in the following group might indicate. My name is not on these amendments solely because I have one or two questions for the noble Lord, Lord Warner. He said in his introductory remarks that he was completely sold on a risk-based approach to regulation. In the light of some of our discussions in the first two days of Committee, does he accept that, at least in the world of social care, there is a need for a rights-based approach?

My key question is whether his definition of “commissioning” also includes procurement. Those of us from the social care field understand only too well the difference between the two. Commissioning is an engaging process of negotiation and discussion between stakeholders and potential service providers that sets out what one would ideally like to buy. That is then handed over to the procurement officials, who get down to the realities of what is going to be bought and provided.

That process, under the European directive rules, is direct and limited. It is pretty much the same whether it applies to the procurement of social care or of street furniture; indeed, I have seen examples of contracts

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for social care services that, when one drills down into them, are based on templates for contracts for the procurement of street lighting. It is exactly the same process. Procurement is altogether a much harder legal process, which has much less to do with quality of outcomes and more to do with price and risk.

The noble Baroness, Lady Cumberlege, talked about PCTs becoming solely commissioners. That is already happening: Kingston PCT is in the process of divesting itself of all its provision and moving to becoming solely a commissioner and procurer of services. Whether or not that is the Government’s intention, it is becoming a reality. I would be grateful for some clarification.

Lord Warner: Do I support a rights-based approach in social care? Yes. However, the primary objective for a regulator is to protect the public against risk. By all means encourage a regulator to promote a rights-based approach, but it is more for Governments and Parliaments to specify rights, which then become part of the day-to-day business of providing services.


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