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A particular concern, put most eloquently by my noble friend, was that we should make it clear that the new Care Quality Commission could have a role in helping strategic health authorities to intervene—to

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administer the red card—against a PCT that was failing to commission adequate services. I hope that my noble friend will allow me to say a few words on Amendment No. 38 before he speaks to it. The amendment seeks to address this issue, proposing that, if reviews identify failings in commissioning, the commission itself should be able to require SHAs to take action.

We are now in a phase of organisational stability for the NHS—this was recently reinforced with the launch of the next-stage review—which also requires a more hands-on role for SHAs in the context of the world-class commissioning assurance process and the performance management of PCTs. As such, strategic health authorities continue to have the key performance management role here, and this is where it should stay, rather than sit with the new regulator. The Secretary of State and strategic health authorities have significant powers to intervene if PCTs are failing in their commissioning role.

The document Developing the NHS Performance Regime, published on 4 June, sets out how the various elements of the NHS performance regime, including the role of the Care Quality Commission, fit together. The document focuses, in particular, on the role of strategic health authorities as performance managers of PCT commissioners. Where a challenged PCT fails to demonstrate recovery, intervention on behalf of the NHS chief executive may include replacement of the PCT board, outsourcing some or all of the PCT functions, or even takeover of the organisation by another PCT. The document also sets out our proposals to develop a system for the Department of Health’s assurance of the strategic health authorities themselves.

Our amendments requiring the Care Quality Commission to consider whether it should advise and make recommendations where it finds failings as part of its special reviews will allow the commission to recommend which actions should be taken. The Bill will also give the commission considerable new powers to intervene directly where service providers are failing to provide services to an acceptable standard.

Noble Lords sought clarification of what action the commission could take about problems across care pathways or resulting from poor commissioning strategies that it might identify as a result of its reviews, including special reviews or investigations under Clause 44, where it will not have powers to intervene directly. The regulator will, of course, be able to express any specific concerns that it may have about the quality of commissioning, either in its reports published as a result of the reviews under Clauses 42 and 44, or in specific advice to the Secretary of State under Clause 49. Having listened closely to the debates on this issue, we have brought forward Amendments Nos. 36 and 37 to clarify that, following a special review or investigation, the regulator must consider whether the report raises issues on which it should advise the Secretary of State.

I sincerely hope that my noble friend will agree that our government amendments give the clarity that he and other noble Lords were seeking. I beg to move.

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3.45 pm

Lord Warner: My Lords, I wish to speak briefly in support of the government amendments in this group before moving Amendment No. 38. I have to move it so that I can say what I want to say. I am grateful to the Minister for responding so positively to the concerns that I expressed in Grand Committee about what I thought was the Bill’s lack of clarity over the ability of the commission to review and inspect against standards in relation to the commissioners of services. I accept the argument that the Government made then that it would be wrong to require commissioning to be a registrable activity. That would, in my view, lock the commission and the PCTs into unnecessary bureaucracy.

Amendments Nos. 32, 34, 41, 42, 50, 51, 52 and 54 meet most of my concerns, I have to acknowledge, in a rather more elegant and comprehensive way than my own amendment. I would, however, like clarification and reassurance on Amendment No. 52. As I read it, it has the effect of applying the standard-setting power in Clause 41 to commissioning as well as to the provision of health services. That is an important change and means that the Secretary of State will be setting standards for commissioning under Clause 41 that the commission can inspect and review performance against in terms of PCTs. The Government’s original position was for guidelines rather than setting standards under Clause 41. As I understand this amendment, it brings the standards in relation to commissioners on a par with standard setting under Clause 41 for providers, but I would like reassurance from my noble friend. If he wrote to me on that, I would be quite satisfied.

On my Amendment No. 38, as I said in Grand Committee, if we are running a risk-based regulatory system—as we will be—it has to apply to commissioning as well as to the provision of health services. Commissioners can do more damage to a community’s health through ineptitude than nearly all, if not all, providers. The registration system has a series of sanctions that can be applied to providers—the Bill provides for that and is very clear about it—as does Monitor in relation to foundation trusts. I am not completely convinced by all my noble friend’s arguments. I accept everything that he says about the performance management responsibilities of the strategic health authorities. No one is arguing—I am not arguing—that the SHAs do not have a responsibility to ensure that the world-class commissioning initiative, which I fully support, is applied and to address shortcomings in commissioning.

My concern is based on history; I have often thought that history is one of the best predictors of future behaviour. In the past, there has been a considerable reluctance on the part of the NHS, and often of the Department of Health and Ministers, to act when commissioners are failing. They are much more willing to act when providers are failing. The Bill is strongly focused on providers, with a registration system and a set of sanctions accordingly.

I do not want to put the noble Baroness, Lady Young, in a difficult position in her future relationships with Ministers and SHAs, but there is an issue about whether, in the Bill, the commission should be able to require some action from the performance managers

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of the PCTs when there are failures of commissioning. We know that there have been quite a lot of failures of commissioning in many of these areas. Many of the hospitals that have got into financial difficulties and are letting down patients and producing unsafe services are in that position because the commissioners let them get into it; they facilitated a failing health economy in their area. My concern is that we have to allow the commission to be able to require action, as it is able to do in relation to providers. The action would very much focus on the strategic health authorities.

I accept most of the arguments that my noble friend has made and I can see that I may appear churlish and ungrateful in relation to the Government’s response. This is an extremely important issue, which we have not yet totally cracked. I would like to hear what my noble friend has to say in response. In the mean time, I beg to move Amendment No. 38.

The Lord Speaker (Baroness Hayman): My Lords, perhaps it would assist the House if I made it clear that at the moment we are debating Amendment No. 32. The noble Lord, Lord Warner, was in order to speak to his amendment in the group, but we need to go through the subsequent amendments. When we reach Amendment No. 38, the noble Lord can make his decision on whether to move it.

Lord Warner: My Lords, I apologise.

Baroness Murphy: My Lords, I add my thanks and appreciation to the Minister for giving a good deal of clarification of the CQC’s responsibilities in respect of commissioning. On Clause 60, who would have guessed that “pursuant to arrangements made” turns out to mean “commissioned”? That is a great improvement.

I shall speak in support of Amendment No. 38, only as an addition to the clarification that we have already had. I am almost persuaded that the problem of giving the CQC intervention powers with commissioners is the difficulty of cutting across the strategic health authorities’ intervention powers as managers. It is a pity that this is the case, because I am rather a nostalgic fan of commissioning, having been the first chief executive of any commissioning health authority back in 1990. I have never really given up hope that commissioning health authorities will be the force that we had originally hoped that they would be but which they have so far singularly failed to become. Although primary care trusts are developing, they have not yet had the influence on the shape of health services in their local communities for individuals and families that we had hoped for, but I have not given up hope that they will have such influence. It would be an important signal to say that they are as important as providers—quite often more so—in shaping how a set of circumstances rolls out and produces disaster for the patient or recipient of a service in the end.

The CQC should have the ability to show the red card or the yellow card—I am not sure which colour it should be. It must have the ability to point out that things are going amiss and that strategic health authorities do not always grasp their responsibility to remove or reshape the boards of primary care trusts in the way that they should. It is a pity that there is not some greater pressure that we could exert; this is our one

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opportunity to do so. I seek reassurance that the changes on commissioning so far will give that possibility to shape failing commissioners so that they make real progress.

Earl Howe: My Lords, prior to the first day of Report, the noble Lord, Lord Warner, tabled a number of amendments about commissioning, to which I asked that my name be added, only to discover that he had withdrawn them. I was rather sorry about that. Despite the amendments in this group in the name of the Minister, to whom I have listened carefully and whom I thank for his consideration of the points raised in Committee, the amendments originally tabled by the noble Lord, Lord Warner, would have achieved something materially and importantly different from those we are invited to approve.

Clause 42, as the Government now wish to amend it, will state that the commission will be given the duty to,

and adult social care—


The clause is still focused on the provider end of care rather than also on the commissioning activity, notwithstanding the insertion of the words “commissioned by”.

I hope that the Minister will not mind if I press him, but the legal interpretation of the clause as amended will definitely enable the CQC to review and assess the quality of commissioners and their commissioning as opposed to just the services commissioned. There is a difference, which Amendment No. 54 seems to confirm. It states:

If we received a commitment that,

would also be subject to review by the CQC, I would be happy.

Following our debates in Grand Committee, I welcome Amendment No. 36 in particular as it provides useful clarity. However, I do not think that it takes us quite as far as we need to go, which is why I have added my support to Amendment No. 38 and why I agree very much with the remarks made by the noble Baroness, Lady Murphy. Amendment No. 38 captures the very important and specific issue of the interrelationship between the CQC and strategic health authorities. It acknowledges explicitly that the responsibility for performance management of PCTs as commissioners, while vested in strategic health authorities, is one in which the CQC will be able to assist and support in its reviewing role. Shortcomings in commissioning may not always be apparent to a strategic health authority through its standard performance management processes, so I am sure that this is an area of the CQC’s work that the noble Lord, Lord Warner, is right to highlight and which the Minister perhaps ought to take away and consider again.

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4 pm

Baroness Barker: My Lords, I, too, would welcome clarity from the noble Lord, Lord Warner, and the Minister that “commissioning” is intended to include assessment not just of the needs of people deemed eligible for a service but of all social care needs.

Lord Darzi of Denham: My Lords, I am grateful to my noble friend Lord Warner for his considered comments and for taking us through Amendment No. 38. He is right when it comes to the history of commissioning, which is why I made the point that we need to remind ourselves that most PCTs are barely 18 months old. We need to give them maturity in establishing their commissioning competencies. Historically, one way of dealing with poor commissioning was restructuring, but we have made a commitment that there will be no further restructuring. However, I agree with noble Lords who made the point that we should build up competencies of commissioning. There is the publication of the Department of Health on the assurance system, to which I referred earlier, but also a failure regime for commissioning, details on the rules and how we set the bar in measuring the quality of commissioning.

The noble Earl, Lord Howe, raised the issue of the balance between provision and commissioning. Reviews of PCTs will look at commissioning functions as closely as at the provider function. Some aspects of the commissioning functions that will be part of these reviews are: value for money in commissioned care, in other words whether the PCT has made good use of the resources available to it; quality of commissioning, for example whether the care commissioned by the PCT is of high quality and achieving good health outcomes for individuals using it; the availability of commissioning, in other words whether the PCT has purchased enough healthcare to meet the needs of its population and whether waiting times are within the national standard of 18 weeks; and finally—I feel this will probably be more important in the future—overall health outcomes, in other words whether the PCT has succeeded in improving the overall health of its population by reaching out to those in most need. Those are the type of competencies that a mature PCT in the future will have responsibility for, and, more importantly, through the assurance regime it will be assessed on whether it is meeting those needs.

The answer to the noble Baroness, Lady Barker, is yes. I am delighted that, having considered our amendments, in particular Amendments Nos. 36 and 37, my noble friend Lord Warner has agreed that we are striking the right balance of responsibilities between the commission and the Secretary of State and that he will not press his amendment.

On Question, amendment agreed to.

[Amendment No. 33 not moved.]

Lord Darzi of Denham moved Amendment No. 34:

On Question, amendment agreed to.

[Amendments Nos. 34A and 34B not moved.]

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Clause 43 [Frequency and period of review]:

Lord Darzi of Denham moved Amendment No. 35:

On Question, amendment agreed to.

Clause 44 [Special reviews and investigations]:

Lord Darzi of Denham moved Amendments Nos. 36 and 37:

On Question, amendments agreed to.

Lord Warner moved Amendment No. 38:

(a) require any relevant Strategic Health Authority to propose and publish appropriate changes to the arrangements for and governance of commissioning of health services in any geographical area to which the evidence relates in order to reduce the risk of harm to that area’s population; and(b) recommend to the Secretary of State that the changes proposed should be implemented.”

The noble Lord said: My Lords, I will not treat noble Lords to the whole speech again. I have not yet withdrawn my amendment, but as we have got to this point in the discussion I think that I can say a few more words. I do not want to get into an historical debate with the Minister, but I used the term “commissioners”. Commissioners, as I recall, were around before this Government were in office. There was an NHS market from Ken Clarke’s days, and there were commissioners; they were simply not called primary care trusts. There has therefore been a history of commissioning for some time. Many PCTs have been around for five or six years rather than for 18 months, so we have quite a spread of experience of commissioning from which to draw.

The harsh reality is that, when push comes to shove with rather powerful acute hospitals, commissioners often back down. They simply do not take the action necessary to balance provision of health services in their area. I in no way disagree with the Minister or with the Government’s position on the performance management role of the strategic health authorities. However, when Alan Johnson published the document about the new regulatory system in October 2007, he very clearly said—I referred to this in Grand Committee—that commissioning was a shared responsibility between strategic health authorities and the commission.

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The Minister has graciously moved a long way to get commissioning properly established in the Bill. I apologise to the noble Earl, Lord Howe, if I marched him up to the top of the hill and marched him down again by withdrawing my amendments, but I do think that the Government have moved a long way in these areas and I am comfortable with their amendments. However, I still come back to the question of who can take the action to push the SHAs where there is evidence of a failure of commissioning in a particular geographical area. I am still concerned about this. I probably used “red card” inappropriately. I bow to the noble Baroness, Lady Murphy, and her superior knowledge of soccer; a yellow card was probably the appropriate analogy.

We need to think about this a little more, and as we are at this point in the Bill, I ask the Minister to consider this issue further. In the mean time, I beg leave to withdraw the amendment.

The Chairman of Committees (Lord Brabazon of Tara): My Lords, the noble Lord has spoken to the amendment, so I must propose the Question. I do not know whether the Minister wishes to respond to the amendment or whether the noble Lord would now like to withdraw it.

Lord Warner: My Lords, I was slightly chastised by the noble Lord’s predecessor on the Woolsack for my earlier speech, so I thought that we were getting into some confusion about the process. I do not want to deny any other Members the opportunity to speak on this issue, but I do not see anyone moving to do so, so I beg leave to withdraw the amendment.

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