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The other point that was raised—it has been raised on several occasions—concerned the overuse of tick boxes. I am worried that the Government propose to move away from on-site inspections to an increased use of form filling whereby people will be able to tick boxes and self-justify their activities. I am still not clear whether the Minister is saying that, having gone through a whole series of cuts, inspections will not be cut further. If she is saying that, I shall feel slightly reassured and would be prepared to withdraw the amendment. However, I would like further clarification on whether we shall retain the current level of on-site inspections, which is what I intended my amendment to deliver. However, I thought that I had made a neat compromise that went some way to accommodate what the Government are trying to do. I seek clarification on that.

Baroness Thornton: There is no intention to reduce inspections. It is intended that the commission will use the excellent practice of the existing commissions, particularly CSCI, to inform its work. It is certainly our intention that it will use spot checks, where necessary, and that it will adopt an intelligent approach which will allow inspections to be triggered by an emergency.

Baroness Jones of Whitchurch: On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 agreed to.

Clause 58 agreed to.

[Amendment No. 104 not moved.]

Clauses 59 to 62 agreed to.

Schedule 4 [Interaction with other authorities]:

[Amendment No. 104A not moved.]

Schedule 4 agreed to.

Clauses 63 and 64 agreed to.

Clause 65 [Co-operation between the Commission and Welsh Ministers]:

Baroness Thornton moved Amendment No. 105:

On Question, amendment agreed to.

Clause 65, as amended, agreed to.

Clause 66 [Co-operation between the Commission and the Independent Regulator of NHS Foundation Trusts]:

Baroness Murphy moved Amendment No. 106:



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(a) the Independent Regulator shall take all necessary and reasonable steps to ensure that the NHS foundation trust rectifies the failures set out in the warning notice in accordance with any requirements set out in the warning notice, including if necessary by using its statutory powers of intervention; and(b) where the NHS foundation trust fails to comply with the requirements, if any, of the warning notice (whether or not the Independent Regulator has used its statutory powers of intervention) the Commission shall only be entitled to—(i) exercise its powers under section 13 (cancellation of registration) or 14 (suspension of registration),(ii) take proceedings under section 29 (failure to comply with conditions), or(iii) take any other action against the NHS foundation trust in respect of the failure,with the prior approval of the Independent Regulator.

The noble Baroness said: This amendment seeks to resolve the crucial relationship between the new Care Quality Commission and Monitor, the independent regulator of NHS foundation trusts. Grouped with it is Amendment No. 212, to which I shall return later, which addresses Monitor’s current status. First, I must declare a personal interest as a member of the board of Monitor. This is also an opportunity for me to express my admiration for the rigour and quality of the regulatory regime that Monitor has established. Unfortunately, I cannot claim to have contributed much to it personally, since it was set up well before I joined the board. However, it bears witness to the superb work of the chair and chief executive, Bill Moyes, and his inspiring team of executives, most of whom come from outside the health service but all of whom feel passionately about improving the quality of care in the NHS.

As the Bill stands, it could damage the accountability arrangements for NHS foundation trusts and weaken the effective regulatory regime currently in place. It introduces a second regulator of NHSFTs with overlapping intervention powers and blurs the clarity of the accountability arrangements, putting at risk the success that Monitor has had to date. I should remind noble Lords that just under 90 of the 220 NHS trusts are now foundation trusts, and it is expected that all trusts will become foundation trusts quite quickly. The success of FTs reflects on the effectiveness of the

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regime in which they operate, and indeed the regime has proved its effectiveness by identifying and ensuring the correction of failings in both service and financial performance.

There are well known examples such as the Bradford hospitals and UCLH as well as quiet interventions that are not so widely known publicly where major board changes have effected improvements in governance arrangements. I refer to Peterborough, Moorfields Eye Hospital and several others. Surely it would be better to build on the existing successful approach taken by Monitor and the Healthcare Commission working together. In the current arrangements, the HCC uses its clinical expertise to assess compliance with core standards and identify failures. It is, however, for Monitor to ensure that NHS foundation trusts address these failures and intervene if necessary.

I am not convinced that Ministers have understood what it is that Monitor does. Monitor is not simply an authorisation regime, although it is rather famous for the rigour of its authorisation process. In fact, its main function is that of an ongoing compliance organisation because compliance monitoring is its primary activity. We monitor how finances are managed and, crucially, quality as evidenced by performance against targets set by the Government, and the delivery of quality standards established by the Healthcare Commission. We do not monitor quality in order to assess the governance capacity of the board, as I believe Ministers may think. In fact it is exactly the opposite. We monitor on a quarterly rolling programme which has predictive value, whereas the Healthcare Commission collects aggregate quality data at the end of the year. The pragmatic collection of predictive information has the potential for use as a tool for improvement. There is no conflict at all here; rather there is total complementarity between the way Monitor works to assess predictively how quality is being upheld, along with the Healthcare Commission’s assessment at the end of the year.

Monitor has run an exercise to look at what would have happened if, for example, Maidstone and Tonbridge Wells NHS Trust had been a foundation trust. Would its compliance regime have picked up earlier what was happening? Indeed, it would have done so. We believe that we would have known considerably earlier that the trust was in deep trouble with regard to the development of its MRSA and C. diff. problem. Monitor’s wide-ranging powers are much more useful in securing improved performance in NHS foundation trusts, and indeed in all trusts, than the powers being proposed for the CQC, which are essentially limited to the issue of warning notices, fines, the closure of services, and of course the pressures that we know all regulatory bodies can exert through personal influence.

4.45 pm

The government policy document The Future Regulation of Health and Social Care in England: Response to Consultation see out clear arrangements for Monitor and the CQC working together, yet this position is not reflected in the Bill. The issue is that in providing the CQC with intervention powers that cut across NHS foundation trusts, the Bill creates a situation

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where NHS foundation trusts face two regulators with overlapping powers and no clear accountabilities or boundaries to their responsibilities.

The Bill needs to be amended so that there is clarity in the roles and responsibilities of the two organisations in relation to FTs. This should be addressed in the legislation. Only one regulator should be accountable for foundation trust performance. Having two regulators will not work. It would lead to confusion, duplication and delay; and there would be arguments about who intervenes on what account. There should be one regulator clearly accountable for performance.

There are strong arguments for Monitor retaining the primary accountability for NHSFTs. It is the only body that is able to take a broad view of FTs’ performance covering both service quality and financial performance. It is no good saying that you have a problem in one area and discovering that there is not sufficient money going in from the primary care trust to effect anything like the quality that is required and that the trust has no ability to manage the finances in a particular area. Monitor has wide-ranging powers to address failings, from requiring particular actions, such as the withdrawal of a service, to replacing the board of directors. Changing the regime merely introduces unnecessary risk.

The Government have argued that to provide a level playing field all providers must meet the same standards and face intervention by the same body. While I agree that common standards are crucial, I see no reason why the same body must be responsible for enforcement. The regulatory regimes for the different types of providers are simply different and we should seek the arrangements that provide the clearest lines of accountability and the best prospects of success.

The amendment would provide for a clear, single line of accountability and ensure that NHS foundation trusts were assessed for their compliance with registration requirements by CQC in the same way as any other registered providers. Monitor and the CQC would work together on who was to issue the warning notice and who was to intervene, and the CQC would be responsible for intervening to rectify identified failings, just as the Healthcare Commission does now.

I accept that in the most serious cases, where there is serious risk of harm, the CQC would still be free to seek an urgent cancellation of an FT’s registration by order of a JP. That seems to us entirely proper. The CQC would seek Monitor’s support and approval before imposing an urgent suspension or variation on an FT. This would ensure that it could not circumvent the role of the independent regulator. The power currently provided in the Bill is drawn extremely widely and at the discretion of the CQC. It would be possible to replicate the existing, successful arrangements that Monitor and the Healthcare Commission have put in place without jeopardising the role of the CQC, which is so vital to this new regime.

Some of the points made during the Second Reading of the Health and Social Care Bill added to my concerns. The noble Lord, Lord Darzi, in his winding-up speech recognised that the relationship

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between Monitor and the proposed Care Quality Commission is an issue, but he did not address the key concern. There seems to be a lack of understanding at departmental level that Monitor is first and foremost a compliance organisation.

I know that there have been attempts behind the scenes to produce a way forward, which has not yet been achieved. I very much hope that the Government will continue to seek some resolution to what we see as a most important and difficult issue for an effective regulatory regime.

Briefly, Amendment No. 212 is something of a minority interest. Monitor’s current status is that of an executive non-departmental public body, despite the Government’s stated intention in 2003, during the passage of the Health and Social Care (Community Health and Standards) Bill, that the independent regulator should be a non-ministerial government department. To give the Committee chapter and verse, the noble Baroness, Lady Andrews, stated in Committee on 13 October 2003:

Further, in answer to a Written Question on 16 October 2003, John Hutton answered that Monitor would be established as a non-ministerial government department. Also, as Members will be aware, the Government’s report, entitled Reconfiguring the Department of Health’s Arm’s Length Bodies, published in 2004, reconfirms very clearly the Government’s commitment to establish Monitor as a non-ministerial government department. It said:

Monitor’s current status results from the erroneous inclusion of paragraph 16(1) of Schedule 2 to the Health and Social Care (Community Health and Standards) Act 2003. Unfortunately, the inclusion of the paragraph, which I shall not quote from now, meant that the Cabinet Office could not classify Monitor as a non-ministerial government department. However, there have now been two opportunities in legislation to amend this. The amendment would give Monitor the status that was originally intended.

Why is Monitor so fussed about this? In practical terms, its independence from the Department of Health—in some ways, of course, everyone needs a responsible Minister to report to—would effectively put Monitor’s position beyond doubt and on a level footing with other established regulators such as the Food Standards Agency, the Charity Commission and Ofsted. The main purpose of the amendment is to try to understand why the Government have resisted doing what they said they would do. Is this, as I suspect, because of the resurgence of the centralising tendencies in the past few months? Is that why we have never achieved the status that we were promised? Is there a shifting attitude, which we have heard in some small measure in the past days of this Committee, to the powers that the Secretary of State will have in relation

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to the CQC? I wonder whether the Minister can reassure me if I am wrong. I beg to move.

Baroness Meacher: I strongly support the purpose behind Amendment No. 106, which was moved so ably by my noble friend Lady Murphy and to which I added my name. It is important to see the amendment as a probing amendment, because I do not think that any of us feels that we necessarily have the words precisely right. I spoke about this at Second Reading very much from my experience on the receiving end of the services of Monitor. I shall not repeat what I said then, but I do want to make a few points.

It is significant, and perhaps rather shocking, that the consultation document, the subtitle of which is “The future regulation of health and adult social care in England”, makes little mention of Monitor, the independent regulator of nearly half the provider health trusts in this country. I checked this with the Bill team and with Monitor, and I think it is true to say—have you found it since, then?—that none of us could find any reference to it. If someone has found a little reference to it, it is obviously very well hidden away. None of us could find it the other day.

This lack of attention suggests that the potential confusion and double jeopardy in the future system were not adequately taken into account by those people who planned this legislation. No one anticipated the serious issues which could arise when a failing trust finds itself under scrutiny by two regulators who will be fighting between themselves about whose warnings, and sanctions should be used to bring the trust into line. What a time to have confusion.

I understand that the noble Lord, Lord Darzi, fully understands the risks of this double jeopardy and the need to do something to avoid potential problems. But why does this issue give rise to such concern? It is that we risk damaging what in my view is the best regulatory system that the NHS has ever had. That is rather a strong comment to make, but I have been around, in and out of this system, for about 25 years.

The system of regulation by Monitor is incredibly effective, in my view, not only in ensuring the financial viability of the trust, as the noble Baroness, Lady Murphy, said, but also in raising standards. I will not repeat the extraordinary impact on my own trust of raising standards—I covered all that on Second Reading. Therefore, for me, this is the first time that the regulatory system enables high-flying managers to get on with the job, to think laterally and to innovate without the dead hand of bureaucracy eliminating all initiative. I have to say that that is how it has felt to me, as a member of boards in the NHS for many years.

I cannot overemphasise the importance of that aspect to the quality of services that the NHS is going to provide over the years ahead. It is the more important when foundation trusts will, as we know, become the norm in the NHS as regards providers. If a board underperforms, I am clear that Monitor will micromanage the organisation until the Government’s failures have been put right. But if a board does well, if the financial position is strong and if reports from

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service users and the Healthcare Commission show that services are good and improving, Monitor will take a careful view, monitoring quarter by quarter how it is doing, and pick up any change. My trust is under obligation to report to Monitor any significant change in it: for instance, a change of chief executive; a change of chair; a difference in our financial systems; and a poor report from the Healthcare Commission on a particular aspect of our service. If it did not report those matters to Monitor, it would be seen to have failed and it would come under very close scrutiny. We are left in no doubt about those things. It is therefore a very robust system when it needs to be, which to me feels right.

I want also to emphasise that the relationship between Monitor and the Healthcare Commission appears to work well. From the receiving end, you do not get a sense of confusion in those bodies. But the CQC will have more powers than the Healthcare Commission. I have no objection to that in principle, but the work of Monitor risks being undermined if the powers of the two bodies are not clarified in the legislative framework. It would be a shame if the legislation were to undermine the highly successful regulatory system put in place by our Labour Government. So far, we have suggestions that the CQC will have the power to consult various organisations. That, in relation to Monitor, would be disastrous. We know that consultation means that you talk and listen to people, but then you can go away and ignore what they have said. I would therefore be most grateful if the Minister would today assure the Committee that either in the Bill or in regulations—one or the other, it is not frantically important, but it would be nice to have it in the Bill—there will be a clear provision to ensure that Monitor’s powers are protected. It should be made clear that the CQC and Monitor are equal and that their powers should be clearly different and complementary.

5 pm

Baroness Thornton: I absolutely agree with the noble Baronesses, Lady Murphy and Lady Meacher, that Monitor has done a fantastic job in driving improvements in foundation trusts and that the Care Quality Commission and Monitor need to work closely together to ensure that these closely related but distinct roles can be fulfilled.

I reassure the Committee that the Bill already provides for those two organisations to share information and co-ordinate their efforts. The provisions mean that the amendment is unnecessary. The first part of the amendment would require the commission to send a copy of any warning notice it served on a foundation trust to Monitor as well. Clause 35 already provides for this. In addition, Clause 66 requires the commission and Monitor to co-operate to carry out their respective functions. In particular, it states that the two organisations must share information with each other. Together, Clauses 35 and 66 will ensure that Monitor is aware of any concerns that the Commission has in relation to a foundation trust.



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Clause 66 requires no further amendment to achieve an effective working relationship between Monitor and the Care Quality Commission—which is, after all, what we all want; it is essential. We would like them to work out for themselves what that relationship would look like, in the same way that the Healthcare Commission and Monitor developed their own successful working relationship, although we would expect it to be similar to the arrangements in the future regulation of health and adult social care in England consultation document.


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