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This range is in response to the feedback, particularly from CSCI, in devising a more flexible range of powers than exist in the Care Standards Act 2000. Initially, the Care Quality Commission might decide that it is necessary to increase only the frequency of monitoring and inspection visits, but it can escalate to statutory warning notices, penalty notices, cautions, conditions on registration, prosecution through to suspension or even cancellation of registration.

The enforcement powers are an important part of the new commission’s armoury. Providers operating outside the remit of their registration could pose a serious risk to patients and service users. For example, a care home’s registration might be subject to a condition not to provide services to people with learning disabilities because it does not have appropriately trained staff in place. Failure to comply with such a condition would clearly be serious. It is therefore entirely appropriate that the penalty on conviction for each such offence can be a fine of up to £50,000. The range is up to £50,000 and multiple offences can attract multiple fines, which I hope answers one of the questions raised by my noble friend Lord Campbell-Savours.

If the Care Quality Commission concludes that a fine is not the most effective way of addressing a problem, it will use its other powers—for example, suspending or cancelling registration. That fine is addressed to the corporate organisation; that is, the business, the trust or whichever part of the care and health services being addressed by that issue. On the amendment in the name of the noble Baroness, Lady Barker, I should say that we do not believe that increasing the upper limit to £250,000 is necessary because of the option to have multiples of £50,000, should that prove to be necessary.

Although the fines should be significant enough to be taken seriously by the provider, the level of fines is not intended to be set at such a high level as to damage the local care economy or have a negative impact on patients or service users. But fines should have an additional deterrent effect, partly because of the stigma attached. On whether this is taking money away from front-line services, where fines and penalties are incurred by NHS trusts, we are looking for a practical administrative way to return the money to local commissioners to be reinvested for the improvement of services, so that local populations do not lose out through incompetence.

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I now focus on Amendments Nos. 60 to 62, which would allow for imprisonment on summary conviction. In line with Ministry of Justice guidance, sentences of imprisonment have been reserved for the most serious of offences: the offence of not having registration.

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That is, first, because the commission will not be able to use any of its other powers in these cases and, secondly, because operating without registration potentially puts patients and service users at great risk. This offence is therefore triable either in a Crown Court or a magistrates’ court and is punishable by an unlimited fine and/or a custodial sentence. Where a provider is registered, the commission will have the full range of enforcement powers at its disposal, and in those cases it would not seem appropriate to make failure to comply with conditions an imprisonable offence. Therefore, we do not think that these amendments are necessary.

The three existing commissions, which the Care Quality Commission will replace, were outside the scope of the Macrory report—the report that proposed the regulatory powers in the Regulatory Enforcement and Sanctions Bill, recently debated in your Lordships’ House, and which form the basis of Amendments Nos. 109A and 109B. That said, the Care Quality Commission’s power to issue penalty notices is consistent with the six Macrory principles as applicable to health and social care. Penalty notices are intended to assist in changing the behaviour of the offender, to act as a punishment, and to attach public stigma to non-compliance with regulatory requirements, as well as acting as a deterrent to future non-compliance.

In both the Regulatory Enforcement and Sanctions Bill and the Health and Social Care Bill, the penalty is intended to be an alternative to prosecution. However, fixed monetary penalties in the Regulatory Enforcement and Sanctions Bill are enforceable by the regulator and, therefore, subject to a notice of intent, written representations and a full appeal structure.

By contrast, penalty notices under Clauses 82 and 83 of the Health and Social Care Bill require the offender to consent to pay the penalty, with the threat of something worse. The penalty notice procedure offers the recipient an opportunity to discharge liability for the offence. If they do not, the commission would, of course, be free to use any of its other enforcement powers against that person, as it considered appropriate, instead. We therefore do not believe that a provider will turn down the option of a penalty notice lightly. This Bill does not make provision for a notice of intent, written representations or a right of appeal in respect of penalty notices because it does not need to. Clauses 82 and 83 are deliberately constructed in that way, which we believe provides for an efficient and effective sanction which meets the specific needs of the sectors that are to be regulated, avoiding the potential for delay and legal expense associated with the prosecution of offences or indeed any other sanction that requires full appeal rights.

In answer to my noble friend Lord Campbell-Savours, Clause 84 sets out that the commission will issue guidance on how it will exercise its function in relation to cancellation, suspension notices and penalty notices. Before my noble friend arrived, we had had a discussion about the balancing of risks that that would involve and how those decisions could not be taken lightly.

I believe that the Bill already allows the commission the freedom to respond appropriately to breaches of

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requirements of the registration system, and I hope that the noble Earl will therefore agree to withdraw the amendment.

Baroness Howarth of Breckland: The complexity of the answer given by the Minister, which I look forward to reading, alerts me to the concerns on the ground as regards implementing penalty notices. If there are two systems, and the first system related to healthcare and the recycling of funds, what other kind of organisations would recycle the money? How would it be recycled, and under what code of practice would that happen? If there is not a similar provider in that given area, would the money go to another provider? Having worked in this area, I know that it is crucial that the rules on penalties are clear, straightforward and simple. The difficulties encountered in the past by CSCI in deciding, with providers, whether there would be a fine or closure, lead me to hope that it will be clarified rather than left as it is. Despite my views on this, it would also be useful if all the providers had very similar regulations, bearing in mind that we are supposed to be aiming for greater conformity between the two.

Lord Walton of Detchant: If one supposes that these two clauses go through unamended and thus without the option of criminal conviction suggested in the amendments, would a care home or other organisation which had been shown to have exercised a lack of care that could amount to serious negligence, leading to the death of one or more patients, still be liable to prosecution for manslaughter or corporate manslaughter?

Lord Campbell-Savours: I want to refer specifically to a case where two breaches had taken place. My noble friend referred to multiple penalties; if the manager of a care home took an action which came under the heading of “subject to penalty” against a particular resident, I presume that that would incur one penalty. If the manager took similar action against another resident, would that be treated separately? Is that what my noble friend means by “multiple”? If, say, half a dozen residents were affected, would that mean a fine of half a dozen times £50,000, which is a potential penalty of £300,000?

Baroness Thornton: In response to the noble Lord, Lord Walton, the answer is yes. The penalty scheme is a coherent scheme that will be applied across the board; it is not a dual scheme. As we read the various clauses, it is clear that it applies all the way through. On how fines are recycled, the only assurance I can give at the moment relates to those that involve public funding. We are still looking at how the others might be recycled or what could happen to them. I cannot give a specific answer at this point, but no doubt we will return to this issue.

While I cannot comment on any specific instance—indeed, it would be wrong of me to do so at this point—if a provider offends in many different ways, a fine can be imposed relating to each of the different instances. However, I am not going to state specifically what those ways might be, although it could be a fine

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of up to £300,000 if that was deemed necessary in terms of the severity of the sanction required.

Baroness Cumberlege: This is an interesting debate because penalties are a difficult area to consider. I noted with interest the point made by the noble Baroness, Lady Howarth, about a dual system, but I think the Minister said that it is not a dual system. Does that mean that if a small residential home comprising around eight beds and a large hospital both have a situation where a health-acquired infection such as MRSA is present, it is a question of degree? The fine imposed on the small residential home may well force it to go bust, whereas the state-funded hospital is likely to continue to function. Further, if the hospital is fined, we understand that the money is given to the commissioners who then return it to the hospital so that it can improve its services. Presumably that would not happen with the residential home because it is a private organisation.

Baroness Thornton: The point to make is that the fines are up to £50,000 and that we are trying to build in as much flexibility as possible. Obviously, the impact of the sanction would, as I have already mentioned, have to be taken into consideration. To be completely clear to my noble friend Lord Campbell-Savours, if there are six breaches, six fines can be applied.

Baroness Barker: I did not have to move my amendment because the Minister answered the question about the scale of the fines. I congratulate her on selling a difficult issue. It is difficult to have a system of fines that applies to St Thomas’s Hospital as well as a tiny place. As the noble Baroness, Lady Howarth, said, flexibility is fine, but these things work only if there is clarity and transparency. They will have to be a little bit more definite if they are going to work.

Will the Minister respond to the point made by the noble Baroness, Lady Murphy, about who will be fined? In Clause 30, the fine relates to managers. The Minister said that the fine would be levied on the corporate entity. She will understand from some of my amendments down the track that this is a particular issue of mine. For the sake of our understanding, could she deal with that point again? What she said appears to be at odds with what is in Clause 30, which is an important point, partly because, in the NHS, it is not always possible to tell who the manager of the service is.

Baroness Thornton: I realise that this is important. Who is liable in an organisation such as an NHS trust? Is it the person or the body itself? In other words, it would be the trust, not any individual person. But under Clause 87, if an individual is responsible, that person would be liable. I hope that helps.

Baroness Barker: This is an important point for the avoidance of doubt. This provision may be a product of other laws, such as the Corporate Manslaughter and Corporate Homicide Act 2007. Is the Minister trying to convey to us that the corporate body would

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be responsible, but if an individual acted in a way that was found to be outwith the policies and procedures of the corporate body and was acting solely in an individual capacity, they would be liable for prosecution in addition? Is that what she is trying to say?

Baroness Thornton: No, that was not what I was trying to say. The body itself—the trust—rather than any individual person is responsible. That is under Clause 87.

The Earl of Onslow: I am coming in later to talk on the amendments of the noble Baroness, Lady Stern, but I heard something so inherently and deliciously “Alice in Wonderland” that I need it confirmed. Something goes seriously wrong in an NHS hospital. The hospital is fined: it does not matter what the sum is. The money goes into one pocket and it is given back to the hospital to do something with. Where does the fine go, and what on earth is the point of fining the taxpayer? I always find that slightly dotty because it just goes round the system. It is not a real fine and the only people who suffer are the public.

Baroness Thornton: I did not say that it would go back into the pot. I actually said that we were looking for an administrative and practical way to return the money to local commissioners to reinvest, which is not at all the same thing.

I would like to have another go at this. The trust is liable as the registered person, but Clause 87 means that an individual can be liable for an offence if that person is culpable.

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The Earl of Onslow: We have this lovely concept of mother state saying to national health hospital, “Can I please have 50,000 quid because you’ve left dirty lavatory paper”. So you go into the hospital’s budget and out you take £50,000. I thought that somebody said—I may be wrong—that that money is then given back in some way to the trust to help clear it up. What happens to that £50,000? It is ridiculous to take money away from a hospital.

Baroness Thornton: A fine is a process of the regulatory requirements. It is not just about a fine but the reputation of the hospital concerned. A whole range of other things exists. I said that we are looking at practical ways to return the money to local commissioners, which means that the money can be spent on commissioning, reinvesting in and improving services, which may be quite separate from the hospital that has been fined.

Baroness Barker: I shall not pursue the matter much more, because we are not getting much further. There may have been a lack of understanding on my part, but will the Minister look again at Clause 30 in relation to this matter and write to Members of the Committee, because the clause refers to managers rather than corporate bodies? That would be helpful.



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Baroness Thornton: That is exactly the right thing to do.

The Earl of Onslow: You take money away from the hospital. Who suffers? It is the hospital. What is the hospital for? It is for making people better. That hospital will have less money; it has already done something stupid; so you take money away from it. That strikes me as stark, staring, raving mad.

Baroness Thornton: I can only repeat what I have said. Perhaps I need to write to the noble Earl and explain the difference between commissioning, hospitals and patient services. That might help to clarify the matter. I see nods around the Committee, because noble Lords seem to understand my point; that is, that the aim of the fine is not to make the patients suffer but to encourage the hospital—or whichever part of the health service is being dealt with—to improve and for the commissioners to look at the best way to reinvest in services in that area. I cannot think of a better way of describing it, but I shall definitely write to the noble Earl.

Baroness Cumberlege: If the Minister could write to all of us, it would be very helpful. Perhaps she could refer also to fines and reimbursement for private nursing and residential homes and who the commissioner is.

Earl Howe: This has been an interesting debate. I am grateful to my noble friend Lord Onslow for making a perfectly valid point, because, as explained by the Minister, money is taken away from the provider, but it is the provider who perhaps needs that money to look after patients. This story will run a little.

The Minister made some helpful comments on the amendments. She said that she was not drawn towards the option of a prison sentence as an alternative to a fine, and I think that she said that the Government did not consider this option appropriate or necessary. I am not sure that I heard a logical, underpinning argument for that point of view, except that, in the eyes of the Government, a failure on the part of a provider to be registered in the first place is a more heinous offence, where a prison sentence could be appropriate. I am not sure that that hierarchy of heinousness is necessarily self-evident or would command common agreement, so this could be an issue to which we return later.

On Amendments Nos. 109A and 109B, it is simply wrong to set up a system of unenforceable penalties. Of course, the unspoken—or perhaps even explicit—threat is that if you do not pay up, you will be taken to court. However, you will not be taken to court for failure to pay the penalty, but for breaching the regulations governing registration. One must ask how ethical or proper it is for the threat of a more severe penalty to be used as a lever to force someone to comply with a less severe penalty. If the less severe penalty is regarded as the appropriate sanction for the offence in question, then that framework of penalties should stand or fall on its own terms. That surely means having a set of safeguards of the kind outlined

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by my noble friend Lord Goodlad, treating fixed penalties as a self-contained, free-standing system of sanctions quite separate from a prosecution taken through the courts.

This is quite an important point of principle. I am left feeling somewhat uneasy by the Minister’s reply. While I shall of course reflect on what she has said, it will be illuminating to see what my noble friend Lord Goodlad has to say in response to the letter that has been sent to him. For the time being, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 61 not moved.]

Clause 29 agreed to.

Clause 30 [Offences relating to suspension or cancellation of registration]:

[Amendment No. 62 not moved.]

Clause 30 agreed to.

Clause 31 [Contravention of regulations]:

[Amendment No. 62ZA not moved.]

Clause 31 agreed to.

Clauses 32 and 33 agreed to.

Clause 34 [Provision of copies of registers]:

Baroness Barker moved Amendment No. 62A:

The noble Baroness said: This is a straightforward probing amendment. Clause 34 rather gives the impression that it is about paper registers being available at offices for inspections at reasonable times. The purpose of the amendment is to ensure that, just as CSCI does now, the new commission works primarily in an electronic form. I am therefore seeking clarification that the CQC will not have to keep up-to-date paper records of those whom it inspects, but can fulfil its functions simply by having electronic registers. I beg to move.

Baroness Thornton: I appreciate the intention that information on the register should be available in a convenient format for members of the public, including electronically, as intended in the amendment. As mentioned by the noble Baroness, much of the information held by the existing bodies is held electronically and is accessible. It is my understanding that requiring copies of the register to be made available to view would include information held electronically. We would expect the commission to continue the good work of the Healthcare Commission and CSCI, and make as much information available as possible through its website. Indeed, in recognition of the fact that we increasingly communicate electronically, we have tried, through Clauses 89 and 90, to ensure that people can choose that the commission should send them documentation by e-mail.

I think that we are in agreement on this, although I do not think that it would be appropriate to be prescriptive about it. I hope that the noble Baroness will see that we agree completely about the need for modern, electronic communication and that the amendment is not required. I ask to her to withdraw it.



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Baroness Barker: I thank the noble Baroness for that reply. I wish that across government we could find a format of wording to indicate in all sorts of spheres that laws apply in electronic form as well as in paper form, which would save a lot of time and trees. That said, I welcome her answer and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.


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