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House of Lords

Wednesday, 7 December 2011.

3 pm

Prayers-read by the Lord Bishop of Newcastle.

Corporate Governance


3.06 pm

Asked By Lord Lea of Crondall

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, the Government are examining the responses to a recent discussion paper on corporate reporting, which includes proposals for clearer reporting of corporate social responsibility issues and on executive remuneration. Professor John Kay is due to publish his recommendations for encouraging more long-term behaviour in equity markets in the summer of 2012. In February this year, the Government welcomed the publication of proposals by the noble Lord, Lord Davies of Abersoch, for increasing the number of women on boards, and that work continues.

Lord Lea of Crondall: I thank the Minister for that reply, and I apologise for sounding like a frog-I do not mean one of those Frogs, or a Kraut. Do I get more time for all these interruptions?

I welcome the commitment by the Deputy Prime Minister at the weekend to curb the excesses of top boards of directors, whose pay is spiralling up as everyone else's spirals down. Will the Minister accept that the key option to restore confidence in the workforce and the wider society is-in Mr Clegg's words-to break open the closed shop of board remuneration by adding an employee representative? Secondly, does she agree that this test will be missed not by appointing a hand-picked favourite, which would make the whole exercise cosmetic, but by some mechanism whereby the person-he or she-self-evidently has the confidence of the whole workforce?

Baroness Wilcox: Some have said that remuneration committee membership as a whole does not come from a wide enough talent pool, that it stifles innovation and that the closed shop of boards and board committees needs to change. We know that diverse boards that bring a range of experience are more effective. The idea of introducing employee representatives may be one way of encouraging more challenge on pay. As I said, we have three consultations out at the moment, all of which report at various times leading up to the spring, so I hope that we will be able to give the noble Lord answers that he will find favourable at that time.

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Lord Taverne: My Lords, there is in all quarters deep concern about the inequalities of pay in industry, which have increased dramatically in recent years. The Government could do something practical about that in this House. Will they seriously consider looking again at the schedule and the timetable for the Second Reading of the Bill of the noble Lord, Lord Gavron, which would give us an early opportunity to debate it? Will they also give it a fair wind, so that this Bill, in one form or another, can find early expression in the law and make quite a difference to the present situation?

Baroness Wilcox: I am sure that the usual channels will discuss the matter and we will come back to the noble Lord.

Baroness Howe of Idlicote: My Lords, given the mention of the Davies report and given a recent report which I read, which showed that women's contribution had increased UK GDP by a considerable percentage, can the Minister give us a clear idea of what steps she and the Government intend to take to speed up the process of implementing the Davies report?

Baroness Wilcox: The implementation of the Davies report is going ahead and things are improving, but we want to see what results can be achieved through a voluntary approach, and we are taking a very close interest in how much progress is being made. We want to encourage talent, but we want to avoid tokenism. I think that 89 per cent of the women whom the noble Lord, Lord Davies, spoke to said that they were not in favour of quotas, so we are trying to avoid getting to that stage if we can. There is no one-size-fits-all answer-companies need to be flexible in their operations. I should like to think that the women who are chosen to go on those boards are chosen because they are the right people for the job.

Lord Monks: My Lords, does the noble Baroness accept that there are many lessons to be learnt from our neighbours across the North Sea in terms of rebalancing the economy, which is an objective of all of us? It seems to me that the Government have not yet accepted that one component of the success of these economies is that workers and other stakeholders have an influence at board level. What plans do the Government have to move in the direction of our successful North Sea neighbours?

Baroness Wilcox: So why do we not let employees have a say on pay? Some have said that remuneration committee membership as a whole-

Noble Lords: Oh!

Baroness Wilcox: Was that the question?

Lord Monks: On boards.

Baroness Wilcox: On boards and pay, I shall refer back to my notes because we have three reviews going on at the moment. There are no noes on anything. At the moment we are keen to listen to everybody's views and to look at progress anywhere else in the world. The UK has a strong corporate governance framework

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and we are committed to strengthening it further, as we should do. As it happens, this country has a good reputation in the world for running boards, although of course we will have to wait to see what Professor Kay says in his review.

Lord McFall of Alcluith: My Lords, does the noble Baroness accept that there will be no long-term future for companies if there is not adequate shareholder engagement? To date, the level of that engagement has been shameful, allowing ownerless corporations to dictate and a managerial class to prevail. Does the Minister not agree that the Government should do something to ensure that we get both short-term and long-term engagement with shareholders, which is crucial for the long-term health of a company?

Baroness Wilcox: There is no doubt that shareholder engagement should-and, I hope, will-be improved. After all, it is shareholders who can, as is only right and proper, hold the company's feet to the fire on the day they are asked to put up the salary of the chairman and the chief executive. They are not doing their job well, particularly the very big shareholders-the big pension funds and so on. I myself have sat on boards and have experienced these big shareholders not turning up at the shareholders' meeting, instead having another meeting at another time. Usually, small shareholders turn up and make very good suggestions, but then in come the proxy votes-and there are millions of them. We are doing everything we can to see whether we can get shareholders to take the responsibility and the power that they have to put this right.

Baroness O'Cathain: My Lords, can the Minister go a little further on shareholders and their involvement with boards? As we all know, the major shareholdings are held by big institutional investors-namely, pension funds-and the problem with that is that they never have taken their responsibility seriously enough. Instead of hammering on about worker representation and women's representation, they ought to get right down to the bottom of the issue and find out what the responsibilities of these pension funds are.

Baroness Wilcox: My noble friend has expressed it extremely well. We would like to think that this will happen voluntarily, but in the mean time the Kay review is examining proposals for tackling potentially damaging short-term economic behaviour in the markets. We will also be looking at the actions of the shareholders and seeing what recommendations are made there.



3.14 pm

Asked By Lord Roberts of Conwy

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The Minister of State, Home Office (Lord Henley): My Lords, we are committed to reducing net migration to tens of thousands, not hundreds of thousands, by the end of this Parliament. We have already introduced an annual limit on the number of non-EU workers, overhauled the student visa route and increased enforcement activity. Our next steps are to break the link between temporary and permanent migration by restricting settlement rights and to reform family migration.

Lord Roberts of Conwy: I am glad to hear that very positive response. With immigration in the last calendar year running at 591,000, and in this year to March at only 9,000 fewer, is it not imperative that we do all that we can to reduce immigration for the sake of everyone already here and relying on our hard-pressed services, and to keep the total population from reaching the projected high of 70 million about 16 years from now?

Lord Henley: My Lords, we are trying to reduce the net migration figures-that is, the difference between immigration and emigration. I stress that we believe that immigration enriches the country and we owe a lot to all those who have come and who will come to this country. However, there must be limits, and it must be sustainable. We have seen a smallish drop in net migration, but it is not as small as it should be. That is partly because emigration seems to have gone down very dramatically. There could be a number of reasons for this; I cannot speculate on that. I suspect it is not for the reason that the noble Lord, Lord Tomlinson, is trying to give from a sedentary position. Emigration has probably come down because there is no longer a Labour Government in power and people want to stay in this country.

Lord Anderson of Swansea: Will the noble Lord confirm that many of those hard-pressed services, including our health service, are in fact provided by immigrants? Will he also say how robust are the efforts to ensure that marriages apparently properly entered into subsist at the end of the relevant period?

Lord Henley: My Lords, the noble Lord, Lord Anderson, is right to point out that we owe a lot to immigrants, particularly in those so-called hard-pressed services. However, there are a great many employed people in this country. As he will remember, a previous Prime Minister, Mr Gordon Brown, made a point of wanting British jobs for British people. Those jobs could be done by people here if they were able to take them up. Regarding the noble Lord's substantive point about the genuineness of marriage, that is something we want to address and are addressing.

Baroness Hamwee: My Lords, the Office for Budget Responsibility has drawn attention to the link between migration and growth. Its July report on fiscal sustainability mentioned that immigrants are more likely to be of working age than the general population. Will the Minister acknowledge the importance of this factor, given our generally ageing, and therefore less economically productive, society?

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Lord Henley: My noble friend makes a very valuable point about the demographic changes we are facing. People have fewer children, we are an ageing population and we live longer. I welcome and acknowledge what she says. However, there is a limit to the number of people we can get into the country and we want to make sure that the net migration figure is sustainable in the long run.

Baroness Prashar: My Lords, does the Minister agree that overseas students are not immigrants and should therefore not be included in the net migration figures?

Lord Henley: The noble Baroness makes a very good point. The changes we are making for overseas students are intended to make sure that they can come here to study and can possible stay on, but we do not want them to bring their families where that is not necessary or to stay on as permanent residents afterwards if that is not appropriate.

Lord Peston: Will the Minister enlighten us on the economics of all this? A great many of his noble friends in this House and his honourable and right honourable friends in the other place claim to be great supporters of free trade and the free market. Will he explain how that is compatible with denying employers and other institutions the right to buy labour services, wherever they might come from, that can be used profitably? Surely supporting the free market means allowing precisely that, and not limiting immigration?

Lord Henley: My Lords, I could, if I had the time-but I do not have the time-give the noble Lord a long lecture on the economics of this.

Noble Lords: Oh!

Lord Henley: Perhaps the noble Lord and I could have a discussion about this at another time and in another place. The simple fact is that some control has to be brought in because the numbers are unsustainable in the long run. The noble Lord does not agree with me; we will have to remain not agreeing on this subject. However, there are limits to the number of people we can fit into the country.

Lord Willoughby de Broke: My Lords, if the aim is to reduce net immigration, will the noble Lord say whether he is going to repatriate the power over immigration from the EU? It would surely help to reduce net immigration if we controlled immigration from the EU.

Lord Henley: My Lords, there are no plans to do so.

Lord Hunt of Kings Heath: My Lords, on the economics of immigration, is the absurdity of the Government's position not shown by what has happened in relation to the students whom he mentioned? Already, universities are reporting a downturn in the number of international students coming to this country, causing grave

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disadvantage to the UK. What does he say to the House when other countries have opened their doors with open arms to such students?

Lord Henley: My Lords, I am not going to take lessons from the noble Lord on the absurdity of our position when the party opposite, when in government, did absolutely nothing to control immigration-nothing whatever. It is right to control the numbers and we will continue to try to do so. It is also right to control the number of students, particularly the number of bogus students coming to bogus colleges who should not be coming in at all.

Culture and Arts: Funding


3.21 pm

Asked By Baroness Jones of Whitchurch

Baroness Rawlings: My Lords, this Government believe that the arts should look for funding from as many different sources as possible. It is for each local authority to decide how and to whom it distributes its funds. Central government will provide over £800 million to the arts, museums and heritage through grant in aid in this financial year. We are also working with bodies in this area to improve their fundraising capabilities.

Baroness Jones of Whitchurch: I thank the Minister for that reply. Given the scale of the cutbacks in local authority funding, is she concerned that councils are disproportionately cutting local arts projects to protect other essential services? Does she recognise the large disparities that are developing in arts activities between one council and another, with some areas in effect becoming cultural deserts? As the noble Baroness knows, some councils are proposing cuts of up to 100 per cent. Is this the time for the Government to consider imposing a statutory duty on councils to fund local arts provision?

Baroness Rawlings: My Lords, the noble Baroness, Lady Jones, raised several important points. I will try to answer them all. Her Majesty's Government appreciate that local authorities have had to make difficult decisions on spending. The noble Baroness is absolutely right that it is harder for smaller, regional bodies to cope with the changes. However, we are glad that some enlightened councils have recognised not only the economic contribution that the arts can make to an area but the way they enhance the environment in which we live. Her last point was about imposing a statutory duty, but this would only add to the burdens placed on local government at a time when deregulation is a priority. It is right to give responsibility to local communities and local authorities to take the decisions that are most appropriate to their areas.

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Lord Storey: My Lords, the Minister will be aware-as the noble Baroness opposite said-that many local authorities have made disproportionate cuts when making savings, including local authorities that are run by her party. Will the Minister assure us that the Government will do all in their power to ensure that young people, particularly those from disadvantaged backgrounds, will be able to access the arts?

Baroness Rawlings: My Lords, my noble friend is absolutely right that some local authorities have cut more than others. He is also right that we should encourage the private sector into sponsorship. This is exactly what the coalition Government announced yesterday in the draft clauses of the 2012 Finance Bill. There will be legislative provision for a new cultural gifts scheme.

The Earl of Clancarty: My Lords, is the Minister aware of the recent Museums Association report that shows that cuts to local authority funding are already having a direct and drastic effect on many local and regional museums, with cuts to staff, opening hours and events, and the risk of closure. Bolton museums are selling off numerous art works to pay for other services. Will the Minister admit that there is no realistic alternative to proper public funding of local authority museums?

Baroness Rawlings: My Lords, the noble Earl makes several important points, and the Museums Association's cuts survey in June 2011, which he mentioned, showed that many local authorities are still finding it possible to maintain museum services.

The Lord Bishop of Exeter: My Lords, I invite the noble Baroness to join me in welcoming the reopening next week, after a £24 million refurbishment, of the Royal Albert Memorial Museum and Art Gallery in Exeter. We in Exeter are enormously proud of this flagship project, because it has been driven by an understanding of the wide contribution of the museum to the city's quality of life. That includes cultural provision, community cohesion, individual well-being, civic identity, economic attractiveness and destination tourism. Will the Minister affirm the importance of ensuring that this broader impact of culture is embedded in a wide spectrum of cross-cutting policy-making, and will she say what Government can do proactively to secure this at both the national and the local level?

Baroness Rawlings: I congratulate the right reverend Prelate on what has been happening in Exeter and the reopening of the museum. I totally agree with him that quality of life will be enhanced by all that. I would like to stress what the Chancellor of the Exchequer announced in his autumn Statement: that the overall annual budget for the acceptance in lieu scheme will now be £30 million, an increase of 50 per cent, which will have an effect in Exeter as well.

Lord Howarth of Newport: My Lords, while there is all too little that the DCMS can do directly to assist local authorities faced with the devastation of their finances to carry out their cultural responsibilities,

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will Ministers at the department do everything in its power to support the Arts Council in its efforts to mitigate the effects of this, and will it also encourage national institutions that the department funds to emulate the excellent example of the British Museum and its programme of partnership with museums across the country?

Baroness Rawlings: My Lords, the noble Lord, Lord Howarth, makes an important point. I could not agree with him more in his praise for the British Museum and for its director, Mr Neil MacGregor, for all his excellent work in the area. I can reassure him that each of the national museums that the DCMS sponsors has a specific obligation to work in partnership with regional museums. We will give every support to the Arts Council and to Dame Liz Forgan. The noble Lord is right to be concerned-we are all concerned-and I know she is talking across the board with local authorities and that they are interested in fostering their cultural enterprises.

Lord Stevenson of Balmacara: My Lords, when the Minister for Culture, Ed Vaizey, gave oral evidence recently to the Culture Select Committee, he admitted that while the department cannot dictate to local authorities what spending decisions they make, he hoped that the signal from us to support the arts will be taken on board. Can the Minister share with us what signals have actually been sent recently to local authorities, and what the reaction has been?

Baroness Rawlings: My Lords, the biggest signal of all, which we just made yesterday, is the philanthropic legislation that is coming through. I am sure the noble Lord will agree that with the acceptance in lieu, lifetime giving and acquisitions, this is one of the biggest supports for all arts bodies. I am very pleased that he asked that.

Economy: Government Policies


3.29 pm

Asked By Lord Clinton-Davis

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, the Government took decisive action at the Autumn Statement to ensure sustainable public finances and to meet the fiscal targets set at Budget 2010.

Lord Clinton-Davis: The Institute for Fiscal Studies has referred to higher inflation, unprecedented cuts, the longest wage stagnation in history and plunging incomes. Is it not appropriate in the light of this respected organisation's report that the Government should change their economic course, to avoid a major shipwreck before it is too late?

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Lord Sassoon: No, my Lords, that is precisely not the conclusion from the IFS report. What the IFS report also pointed out was that Labour's plans-the plans of Mr Alistair Darling in his March 2010 Budget-

There would have been £100 billion of additional debt if we had followed Labour's plans, and that was under Mr Darling. Mr Ed Balls has so far announced unfunded commitments of £91 billion a year-£326 billion of unfunded expenditure. Mr Ed Balls wishes to pave the road to Rome, if not to Athens.

Lord Christopher: My Lords, did not the Conservative Party embrace Labour's spending plans?

Lord Sassoon: My Lords, what my right honourable friend the Chancellor said we would do is to stick precisely to the spending plans that he set out in the March Budget and the subsequent spending review. That is what we will do, and that is what will keep our interest rates low.

Lord Vinson: My Lords, as part of their measures to see what can help this poor old country out of its troubles, would the Government look at our huge imbalance of trade-currently running at about £30 billion a year plus? I am not suggesting for one moment that all those jobs could be done in this country, but it is the equivalent of about 1 million jobs that we are shipping overseas. There are some areas of our economy that could be done here. For instance, why do we need to import so much cement, which we can make in this country just as well as importing it from other countries? Could we not look at a sensible policy of import substitution to try to create jobs in this country that are being created unnecessarily in other countries, when we could do the jobs perfectly well ourselves?

Lord Sassoon: My Lords, our exporters are leading the growth in this country and indeed, although it is early days, there are some signs from the figures over the past 18 months that at last, after a decade of a declining share of world trade, the UK's share is increasing. It is a modest increase and it is early days but our exporters are performing very strongly.

Lord Barnett: I would like to welcome one part of the Statement from the Chancellor, when he said that he had negotiated £20 billion of funds from pension funds for infrastructure investment. That is very welcome. However, could the noble Lord tell us how exactly it is to be financed with the pension funds? Is it a PFI deal, or what rate of interest are they going to be paid?

Lord Sassoon: I am grateful to the noble Lord, Lord Barnett, for welcoming this important initiative. In fact it is a case of the pension funds coming to us. That particular group of pension funds has £800 billion under management. So it will be funds that they already have under management, and they wish to allocate a greater share to the infrastructure sector. It does not hit the public sector in any way.

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Lord Newby: On that exact point, my Lords, the IFS says that the £20 billion of additional funds from the pension funds looks to be,

It adds that they,

Is the Minister able to tell us, first, what priorities the Government have assigned to that potential additional expenditure; and secondly, when he hopes the benefits of that additional funding might come through?

Lord Sassoon: My Lords, to repeat, the pension funds and also the insurance companies have come to Government and asked for our help. We have signed a memorandum of understanding to help them set up their vehicle as quickly as possible, because clearly they want to find an investment home for their money.

Lord Davies of Oldham: My Lords, does the Minister accept that the best deficit reduction strategy is in fact a growing economy? Why are the Government pursuing policies that have already reduced growth, and are destined to do so for several years?

Lord Sassoon: I do not accept that at all. Of course we all wish to see a strongly growing economy. The latest forecasts from the OBR are that the private sector will generate 1.7 million jobs over the forecast period. That is strong growth in the private sector.

Baroness Wheatcroft: My Lords, while cutting the deficit is essential, it will undoubtedly leave many people facing financial hardship. In the light of that, does the Minister have any comment on the stories this morning about the forecast growth in what is known as payday loans and the interest rates-some might say extortionate interest rates-charged on them?

Lord Sassoon: I completely agree with my noble friend that it is very concerning that people on low incomes should be exploited. Therefore, it is important that this issue is fully debated. However, I would also point out that the latest forecast from the IFS shows that real household disposable income will stabilise in 2012 and sharply rise in 2013.

Airports (Amendment) Bill [HL]

First Reading

3.36 pm

A Bill to make provision to amend the Airports Act 1986.

The Bill was introduced by Lord Empey, read a first time and ordered to be printed.

7 Dec 2011 : Column 723

Accession (Immigration and Worker Authorisation) (Amendment) Regulations 2011

Electricity and Gas (Carbon Emissions and Community Energy Saving) (Amendment) Order 2011

Storage of Carbon Dioxide (Inspections etc.) Regulations 2011

Elected Local Policing Bodies (Complaints and Misconduct) Regulations 2011

Financial Restrictions (Iran) Order 2011

Local Policing Bodies (Consequential Amendments) Regulations 2011

Open-Ended Investment Companies (Amendment) Regulations 2011

Motions to Refer to Grand Committee

3.36 pm

Moved By Lord Strathclyde

Motions agreed.

Health and Social Care Bill

Main Bill page
19th Report from the Delegated Powers Committee
18th Report from the Constitution Committee

Committee (11th Day)

3.37 pm

Moved by Earl Howe

Amendment to the Motion

Moved by Baroness Thornton

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Baroness Thornton: My Lords, I move the amendment, which is for a Motion of Regret, in my name on the Order Paper. This is the third time that I have asked for the indulgence of the House to bring this important matter before it and I hope that this will be the last. My amendment is not a fatal Motion. It does not intend to stop the progress of the consideration of the Bill, much as the doctors, the BMA and others might desire it. The battles to change the Bill are for later today and in the new year. This is a broader issue.

This amendment will allow the House to express its dismay, should it so wish, that the Government are denying the Committee currently considering the Bill information that may be pertinent to its deliberations. Noble Lords may recall that my right honourable friend John Healey MP and the Evening Standard both submitted freedom of information requests in November 2010 to have the register of risks relevant to the Bill released. They went through the procedures of review and appeal with the Department of Health.

On Friday 2 November, the Information Commissioner ruled that, given the particular circumstances-that is, the passage of primary legislation through Parliament-the register of risks should be released. I raised the matter in the House on 14 and 16 November, asking for the information to be made available. On 28 November, the Minister informed the House that the Department of Health was appealing the decision of the Information Commissioner. He was unable to inform the House of how long the appeal process might take and whether the risk register might ever or eventually be made available to the House in time to be considered during proceedings on the Bill.

The Minister also said that some information might be made available. However, he said:

"I cannot share the detailed breakdown of the information recorded in the risk register, or the wording".-[Official Report, 28/11/11; col. 16.]

The noble Baroness, Lady Williams, supported the need to make this information available to the House, for which I for one am very grateful. It underlines the fact that this is not a party-political issue and is not for point-scoring. It is about the proper functioning of this Chamber doing the best job it can with all the information available to enable us to do so. The pros and cons of releasing the information have been thoroughly explored by the Information Commissioner in his ruling, including addressing the concern about precedent-setting expressed by the noble Lord, Lord Butler, on 28 November. The Information Commissioner argues with great clarity in his ruling that the particular circumstances of the Bill mean that the information is directly relevant and should be released. He said in his ruling of 2 November that:

"The Commissioner finds that there is a very strong public interest in disclosure of the information, given the significant change to the structure of the health service the government's policies on the modernisation will bring".

In this ruling the commissioner goes on to say that he,

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This is the information that we have been refused. Today we start day 11 in the Committee on this huge and complex Bill, with its implications for our NHS. We have been considering this Bill for over 60 hours, and by my reckoning we have about another 25 or so to go before we embark on the next stage in the new year. We do so ignorant of this information.

As well as regretting the decision taken by the Government, the amendment asks the Minister to reconsider the decision to appeal the Information Commissioner's ruling. I appreciate that the decision about this matter may be above the Minister's pay grade, and I sympathise with his position. It seems to me that a clear expression of the House's dismay and regret may strengthen the Minister's hand when he discusses this further in the department.

There are two final matters which I ask the House to consider. The first is that the last Government, under similar circumstances, and indeed after a year of resisting, released the third Heathrow runway risk register to Justine Greening MP. It did not create a rush to request risk registers. Secondly, it has also emerged, as was published in the Evening Standard, that NHS London publishes quarterly on its website a risk register for health services in the capital, including how they could be affected by the Government's reforms. NHS London's frankness can only add to the case for publication. I understand that one other NHS region is also considering this course of action. I ask the Minister if he is aware of this, and does it not rather undermine the argument the Government are using to appeal this decision? Indeed, does his department intend to stop NHS London?

I hope the House will regard this as a very serious matter. I hope that noble Lords will consider supporting this Motion of Regret if there is no change in the Government's position. Like all noble Lords here, I hold the noble Earl, Lord Howe, in great respect and esteem, and I have come to the decision to proceed only after much reflection. It is because this House is a body of revision and scrutiny. It has without doubt a worldwide and distinguished record of scrutiny, which includes, after consideration of evidence and facts, telling Governments that they need to change legislation. This House has a reputation for standing up to Governments when it believes that rights and liberties are in jeopardy, and having access to the information allows us to reach considered decisions. I suggest that we are being denied the ability to do our job. A GP sent me a message this morning:

"Glenys Thornton, how can you debate a Bill without knowing the risks?".

He is right.

3.45 pm

Baroness Williams of Crosby: My Lords, it is important to spend a moment or two explaining the purpose of a risk register. One of the difficulties that has arisen over recent years is that risk registers have been used in the planning of long-term substantial projects by both the last Labour Government and the present coalition Government. When a risk register is produced, the effort is to consider all the contingencies-some of them highly unlikely-which might arise in relation to

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that project. There will certainly be some information in that category that would enable the discussion of any Bill of sufficient significance passing through Parliament to be treated with better knowledge than might otherwise be the case. It is also true that under the terms of the relevant legislation, particularly under Section 35(1)(a), there is an exemption category which allows those registers that directly affect policy formulation to claim an exemption from the output and effect of information legislation.

What we now know happened in this case is that when the Information Commissioner considered the point put to him by the original seeker after information, he had to weigh up on the one side the exemption argument and on the other side the argument of the public interest. He himself indicated in his original findings in early November this year that it was a very narrow balance, but that he believed, as the noble Baroness has said, that the issue was sufficiently in the public interest for him to overrule the exemption. There is a legislative right to appeal, of course, and that right to appeal was taken up by the Department of Health on the grounds that this is to do with policy formulation and therefore falls within the exemption. It asked the commissioner to overrule the application. The commissioner decided to uphold the application on the balance of considerations both ways, and the Department of Health then decided to use its right to appeal and it is that appeal which is now about to come before the tribunal. My understanding is that both sides in this argument, the complainant and the defendant, have asked for more time in order to prepare their cases. Only after that will the tribunal be able to make a ruling.

Along with the noble Baroness, I am of the view that it would be helpful to the Report stage of this Bill to have as much information as can possibly be made available. However, the proper way to do that is to allow the tribunal to reach a judgment. My understanding is that if both parties to the tribunal were to request a decision to be made as quickly as possible after the cases have been prepared, the tribunal might be agreeable to a rapid decision. That is very important because nothing can happen before such a decision and it would be unfortunate for the House if the result was not known well before the Bill reaches Report.

I ask the Minister whether he could consider such a joint approach to the tribunal, recognising fully that the two sides must be able to prepare their cases, to see whether it could not act much more quickly than is its usual practice in order to allow the House to have the information if, indeed, the tribunal decides not to uphold the appeal. If it does uphold the appeal, it will then of course be a different case and there will not be any further argument about it. I put that to the Minister because I believe it is very important to settle this issue quickly. I fear that it may hang like a dark shadow over the whole of the Report stage. It must be decided one way or another either before or very soon after the Report stage begins when the House resumes in the new year.

Lord Pannick: My Lords, I understand the wish of the Government to appeal against the decision of the commissioner because of the general issues of importance

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raised under the freedom of information legislation, but the issue raised today by the amendment does not depend on the proper answer to the question that was before the commissioner and which will be before the tribunal. That is because the issue before the commissioner and the tribunal was the proper balance of interests-a very difficult balance of interests, as the noble Baroness, Lady Williams, has said-between the public interest in having this information and the very real need to ensure that risk registers in general are not disclosed. But the issue before the House is different. It is the issue of whether the Members of this House should be given information that the commissioner in his judgment, having seen that information, has said will be of considerable importance in enabling the Members of this House to perform our scrutiny function in relation to this vital Bill.

I cannot share the opinion of the noble Baroness, Lady Williams, that this is the same issue as will be before the commissioner. It is a matter for the judgment of this House how best we perform our scrutiny function. Whatever the balance may be, in general, between the public interest in disclosure and the very real interest in not disclosing confidential information that is on a risk register, the balance is surely very different in principle when we have before the House a Bill that we are scrutinising and considering. It would, I think, require an overwhelmingly strong argument to justify non-disclosure to this House of information that is relevant to our scrutiny function. I therefore hope that the Minister will be able to say today that he is prepared to disclose to this House at least the substance of the information that is contained in the risk register, so that we may fully perform our scrutiny function in relation to this vital Bill.

Lord Clement-Jones: My Lords, I am very interested in the argument of the noble Lord, Lord Pannick. He seemed to be setting a rather different standard, well above that imposed by the Freedom of Information Act 2000. I have no doubt that the Minister will deal with that argument when he comes to it. However, I believe that the question for the House today is whether we support the Department of Health's right to appeal against the Information Commissioner's decision. This has been a much more finely balanced decision than I believe the noble Baroness, Lady Thornton, is prepared to credit, which I find somewhat surprising given her recent role in government. In this kind of situation, with a qualified exemption under the Freedom of Information Act, it is all about whether the balance of public interest is served by disclosure or non-disclosure. The arguments put forward to the commissioner were in relation to two essential aspects. First, there is the "safe space" argument: the importance of government having the freedom to debate policy and make decisions,

Secondly, there is the "chilling effect" that disclosing information relating to a particular policy, while that policy is still being formulated or developed, could have on,

7 Dec 2011 : Column 728

These are perfectly respectable arguments and that is why the commissioner found that the factors are finely balanced, as my noble friend Lady Williams said. In the light of the particularly strongly held views of the department-and I believe that these are genuinely held-it seems that it is entirely valid for the department to appeal to the First-tier Tribunal.

However, I agree very strongly with my noble friend that time is of the essence in this case. There is little point on a decision on appeal not being made until March or April; because, as my noble friend has pointed out, the Bill will probably have passed through this House entirely by then. To mitigate the possibility of that kind of delay, my noble friend's suggestion is entirely right and sensible. The Department of Health and the complainants should apply to the First-tier Tribunal for an expedited hearing. This is well within the tribunal's case-management powers under paragraph 5 of the procedural rules, which were last set out in 2009. Of course, this is a discretionary power, but I believe that any tribunal would recognise the need to resolve these matters quickly, particularly in the light of the debates we have had in this House. I believe it would be extremely helpful in the circumstances if the Minister indicated the department's willingness to proceed along these lines. I hope that my noble friend can give a positive response today, even if further time is needed to prepare the case on both sides.

Lord Turnbull: My Lords, I was not involved in the earlier exchanges in this House on this issue. Coming to it new, my view is that first, there is a very important issue of public policy here; and secondly, the FOI process, still less the procedural devices in the course of this Bill, is not an effective way of resolving the issue.

The issue is this: in what way should public authorities report on risk ex ante and account for their management of it ex post? A ruling on a request for a specific document from a specific department is, in my view, incapable of addressing that issue adequately.

Let me declare an interest: I am a director of Prudential plc. This, in the jargon, is a SIFI-a significant financial institution-and, as such, it is now required to have a separate risk committee. In the rest of the plc world, risk is still dealt with as the work of the audit committee. I am a member of that risk committee. Looking at its experience, one can identify three categories of material. First, there is a definition in the annual report of the risk universe and the organisation's risk appetite: capital risk, liquidity risk, credit risk, operational risk, and so on. In addition there is a definition of the organisation's appetite for risk.

Secondly, the annual report has material on how risk is managed-the so-called three lines of defence: front-line managers, the risk function at the centre, and internal audit. There is then a third category of information. It might be about the risk of falling below a particular level of capital, or the danger of not finding enough liquidity at a crucial time, or the danger that the key supplier might fail or that IT systems might be interrupted. There are also watch lists: what banks or counterparties does one not want to increase one's exposure to? This is often set out in the diagrams

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with which many Members of this House will be familiar, in red, amber and green, showing impact, likelihood, a combined score and then the mitigants.

Very little of this category of information is disclosed, for a very good reason. Discussing it can risk making it more difficult to manage the case in question and in some circumstances might crystallise the very event one is trying to avoid. The same should apply to public bodies. Mention has been made of the chilling effect-that is, officials being reluctant to give candid advice more or less in real time. There is also something that has not really been covered by the Act, which I call the "crystallisation effect". Managers might be reluctant to be frank in public about operational difficulties if that would undermine their ability to make contingency plans or could trigger an event before their plans are ready.

In my view this is the wrong way to resolve this issue. Where the line should be drawn, what is reported and what is withheld should not be decided on a case-by-case basis. The Information Commissioner-indeed, the whole of the FOI Act, in my opinion-is afflicted by the fallacy of composition. Because something is desirable in case A, it will also be desirable in all cases, if all cases alike are treated in the same way. However, if I stand up to get a better view of a football match, I will improve my view; if we all stand up, none of us will. The fact that one cannot take cases in isolation is perfectly illustrated in this case. The Information Commissioner issued a decision on 2 December on a request from the risk register on the NHS reform programme. Yet only the day before, he issued a decision on a different request, I think from a different complainant, on the strategic risk register. It is fanciful to think that those things could be decided independently or that they could be isolated from what happens in the rest of the public sector.

How, therefore, should this issue be dealt with? Not, as I say, by requiring the release of a particular document originally written for a different audience. It would be better if the Information Commissioner had recommended that the Government should set in hand work involving the man known as HOTGAS-the head of the Government accountancy services-and the NAO, to create a framework of best practice on what should be provided in departmental reports, and what operationally should be withheld. It is normally the case that public accounting standards in the private sector have developed over time and the public sectors usually follow with a lag. The reporting of risk and of risk management is in my view the next area for improvement in the public sector accounts, and the role of the CAG should then be to police whether those principles are being followed. In the case of this Bill, I hope that the Minister can be as forthcoming as possible on what the risks are without creating any of the perils that I have indicated.

The Information Commissioner has made a decision so it goes to the tribunal, and the Government's case would be greatly improved if they were able to indicate that they supported the kind of initiative that I have suggested. Meanwhile, I hope that the noble Baroness, in the light of any assurances and further information from the Minister, will not press her amendment, but

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if she does I hope that the House will support the Government, on the understanding that the reporting of risk is the next issue to be advanced across public bodies as a whole.

4 pm

Baroness Scotland of Asthal: My Lords, I think we need to be clear that my noble friend Lady Thornton's Motion is simply for this House to express its regret. It is not a fatal Motion but an opportunity to express a view.

I have to say, and this is rare, that I disagree with the noble Baroness, Lady Williams; indeed, this may be one of the first times I have done so when not sitting where the noble Earl, Lord Howe, now sits. The whole purpose of the Information Commissioner is that he is charged with looking at the most delicate and difficult issues and seeking to come to a balanced view on whether the public interest points in one direction or another. It is clear that both parties have an opportunity to appeal if they disagree with him, but I hope that Members of this House, if they have had an opportunity to read the commissioner's decision, will have found it sound, well argued and balanced. So we have a well argued, balanced view from the Information Commissioner that he believes, having had the advantage of looking at the documents, that the risk register would enable this House to better scrutinise the Bill to the effect of helping us to make a better Bill for the people of our country.

I agree with those who say that this opportunity has to be sparingly used, and it is clear that the commissioner agrees. This will not open the floodgates, which it sounded as if the noble Lord, Lord Turnbull, was suggesting would happen if we agreed to this Motion of Regret. It is clear that the National Health Service is dearer to the people of our country than almost any other institution, so this touches every single citizen. Be they a baby or a person in their third age, it is of equal importance. If we compare it to the importance of the third runway at Heathrow, I hope that the House will think the NHS is a tad more important. Notwithstanding the difference in importance and, as my noble friend Lady Thornton made clear, the great reluctance from my own Government-it took over a year-we gave way, because it was right and proper to do so and there appeared to be an overwhelming public interest. If there was an overwhelming public interest in that case, how much more is there an overwhelming interest in this?

I suggest to the House that the noble Lord, Lord Pannick, is right that this goes to our power and ability to properly scrutinise the Bill. I therefore invite your Lordships to join my noble friend in gently saying to the much beloved noble Earl, Lord Howe, that this is may be a moment when he has to take a message back to his department and say, "Can this not be released?". If it is as cogent, sound and well placed as the Government believe it is, surely that will only persuade those of us who have anxieties and assist in our scrutiny.

Lord Warner: My Lords, I hesitate to intervene but it is a Motion of Regret, and one element of the regret the House would express would be regret for the

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position the noble Earl has been put in. Much of our debate so far on this Bill has been on the basis of how it would work in practice and how things would happen on the ground. I suspect there is a lot of information about how things would work in practice in the risk register. My concern is that the noble Earl is being put in a very difficult position and at risk of misleading the House-I am not saying he has; I am not saying he has not-as he has been put in a position where, because he is unable to use that information, he may be forced to hedge his bets to reassure the House on some of the practical issues. I hope that is not the case and he has not been put in that position, but we need to be sure and I hope he can give us some reassurances.

Lord Mackay of Clashfern: My Lords, the decision of the commissioner is certainly well argued, but under the existing system it is subject to appeal to the tribunal and the Department of Health intends to exercise the right to appeal. In that situation, in my submission, the Minister is entitled to give this House the best information he has. There is no question of failure to release this report in any way leading to the noble Earl, Lord Howe, misleading this House. I do not believe that is at all likely.

The noble Lord, Lord Pannick, developed a cogent argument, but the question he raises in relation to what is to happen here today is a different question from that which arises on the appeal. Unfortunately, although it is a different question, it is very closely related because, if the document is to be released now, the question of an appeal to the tribunal is evacuated because the document will already have become public, which is the issue in the appeal. Therefore, I believe that my noble friend Lady Williams of Crosby has suggested the best way out of this business: the Government and the other parties to the appeal should do what they can to have the appeal expedited. I do not believe that the tribunal is in any worse position than a court of law in getting on with the job quickly and that is the best course because if the tribunal endorsed the commissioner's decision then that solves the matter.

Lord Pannick: Would the noble and learned Lord agree that if the tribunal dismisses the appeal it would then be open to the Government to take the matter to the Court of Appeal?

Lord Mackay of Clashfern: Certainly. The Court of Appeal has a very great record in dealing with matters quickly.

Noble Lords: There will be delay.

Lord Mackay of Clashfern: Delay is something that the courts can control. That is one of the functions they have to try to do expeditiously when an expeditious judgment is required. I believe the solution proposed by my noble friend is the best one: namely, that an expedited decision should be sought from the tribunal.

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Lord Richard: I want to ask the noble and learned Lord a question. If there is an expedited appeal and it is going to run its course, does the noble and learned Lord think we should continue with this Committee stage or wait until we see the result of the appeal?

Lord Mackay of Clashfern: I assume that if the decision was available in time for the Report stage, the House would have ample opportunity to consider its relevance to the matters in issue in the Bill.

Lord Richard: What would happen if it were not available at the beginning of Report stage?

Lord Mackay of Clashfern: I hope that it would be possible for the decision to be available at the beginning of Report stage.

Lord Martin of Springburn: My Lords, I have listened carefully to what all noble Lords have said. I was interested in what the noble Lord, Lord Pannick, had to say. He often advises me on legal matters, so perhaps he can advise me further. If the information comes to us as an open House, it will be public information. Therefore, to say that it comes before noble Lords means that it becomes available to everyone.

Noble Lords: Yes.

Lord Martin of Springburn: That is fine. I am learning every moment. The amendment states that,

It makes no criticism of the Minister; there is nothing personal here. I am a trade unionist but I was formerly a full-time trade union official and also a lay magistrate for a very short time. My training taught me not to worry about the decisions that I made, whether they were judicial or semi-judicial, as there was an appeals procedure. The Government are exercising an appeals procedure. We go down a dangerous road if we criticise anyone-whether it be the Government or a private individual-for exercising an appeals procedure. An appeals procedure is a good, safe mechanism for everyone concerned. The wording of the amendment worries me because an appeals procedure is there to be used. The only thing I ask of the Minister is to say that it is being used as a mechanism for achieving clarity with regard to the Information Commissioner's decision rather than as a stalling mechanism to prevent the Opposition getting the information. If the appeals procedure were being used as a stalling mechanism, I would feel aggrieved as that would be the wrong thing to do.

I do not think that anyone can brag about the Heathrow decision. It took a year to release the information so there is nothing to brag about. The Government have greatly encouraged the appealing of information commissioners' decisions on other occasions and there were many occasions when the previous Government did not want to abide by an information commissioner's decision. I do not know much about the risk reports that are being discussed but I understand that they constitute officials' information given privately to the

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Minister concerned. If I am wrong, noble Lords will correct me. I was never a Minister but former Cabinet Ministers are present and the noble Baroness who moved the amendment is a former Minister. I would be deeply concerned if officials were unable to give information or advice in writing in the privacy of a Minister's office in case it was deemed to constitute data which had to be produced in the public domain. If that were the case, officials would not provide that information. I worry about that.

I know how important the National Health Service is. Like many others in this House, I was brought up in a household where I was taught to appreciate the National Health Service. However, this has implications for advice given by officials to Ministers. As I say, I am worried about the implications for that advice.

The amendment uses the word "regrets". It is a serious matter to me to express regret and to put it in terms of a Motion before the House. Let us not kid ourselves about the Information Commissioner doing a nice balancing act, looking at both sides and weighing up the public interest and the Government's interest. All too often, the Information Commissioner has said that it is in the legislation and therefore it is going into the public domain no matter what the consequences are. If there had been a wee bit more work put into the legislation years ago, we might not be standing here today concerning ourselves with an Information Commissioner's decision.

4.15 pm

Lord Campbell-Savours: My Lords, a number of Members of the House have suggested alternative ways forward. The best suggestion came from my noble friend Lord Richard. He made the perfectly reasonable suggestion that the Report stage be deferred until we get a ruling on the appeal. I am a mere mortal Back-Bencher, making the offer on behalf of colleagues, but I would imagine that my own Front Bench would support that proposition. Why do we not simply defer it? It is a perfectly reasonable suggestion. The Government will get their way and we will get our way in the sense that we will then be informed when we get to the Report stage of the Bill.

In reality, what is happening today is that the Government are simply using an appeal procedure to delay, knowing this will ensure that certain issues, which should be freely discussed on the Floor of the House during the course of consideration of the Bill, are not going to be discussed. It may be worth noting the comments of Justine Greening when she experienced similar problems under, regrettably, the previous Labour Government. These are her words:

"The DfT's refusal to release the register until ordered by the Commissioner"-

which we subsequently did, of course-

If that was the attitude taken by the noble Earl's colleagues at that time, why should it not be our attitude today? Perhaps in the light of Justine Greening's comments at that time, he may wish to reconsider his own position on these matters.

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Lord Richard: My Lords, I am very grateful to my noble friend Lord Campbell-Savours for supporting my earlier remarks. Perhaps I may expand on them briefly. This is a very strange situation. It is not one that I have ever come across quite in this way before. There is evidence which is, at least prima facie, relevant. Everyone seems to agree that it is relevant to consideration of the Bill. Indeed, as far as the Information Commissioner is concerned, it is not only relevant but disclosable. That is a fairly strong basis on which to start our consideration of what we do about the Bill. If there is a chunk of evidence which is relevant to the Bill, and if that evidence is prima facie disclosable, it is somewhat wrong for the Government to crack ahead with the whole thing while the issue of disclosure of that piece of evidence remains up in the air. If one could expedite the appeals-I am bound to say, as a former practising barrister, that it does not always happen that appeals are expedited in the way one hopes-and therefore get the appeals procedure out of the way before Report stage starts, that would be a sensible way of proceeding.

On the other hand, if you do not get the appeals procedure out of the way, you have to look at the other side of the balance, which is that if the appeals procedure is not out of the way and this issue remains live, the Report stage should not start until after the appeals have been determined and after there has been a firm judicial decision, one way or the other, as to whether or not the Information Commissioner's opinion on disclosure of this evidence is right. It is a strange position, but the evidence is clearly relevant and, according to the Information Commissioner, prima facie, disclosable. There are also precedents that this type of information should be disclosed. Therefore, it seems to me that it would be wrong just to crack ahead with the Bill as if this issue did not exist.

Baroness Finlay of Llandaff: My Lords, I hesitated over whether to intervene, but I feel that I should comment as a clinician. There is enormous concern out there in the clinical services, particularly over transition as the changes come through. There are all types of risk registers and many of them deal with financial and livelihood matters, but the problem is that this issue relates not to livelihoods but lives. People are really concerned that they will not be able to treat critically ill patients in the way that they know, and in the way that the evidence informs them, if we do not get the transitional arrangements correct. That is why there is so much strength of feeling behind the need for access and the need to know where the major risks that have been identified are. Assurance needs to be given through this House to the public at large that action has been taken to deal with the major risks that may be exposed in the risk register.

This is a Motion of Regret. It is nothing more than that. It does not alter the course of the law, and many suggestions have already been made to the noble Earl. I should emphasise that this debate in no way undermines the confidence of either this House or the profession outside in the integrity of the noble Earl, Lord Howe. That is completely intact and not under question. The anxiety relates to what is not being disclosed and what is not being dealt with and, therefore, who is actually being put at risk.

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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, as the House will recall, I have made clear on earlier occasions why the Government do not believe that it is appropriate to reveal the details of my department's risk registers. This decision was made not solely in consideration of the current Bill but in the wider context of government. It is important for me to emphasise that.

However, in addressing the noble Baroness's Motion, it may be helpful to put the issues that she has raised into the broader context of the Freedom of Information Act. The overriding aim of the Act is to maintain a balance between openness and confidentiality in the interests of good government. Openness is an intrinsic part of good government and is a principle that I and my fellow Ministers firmly believe is important. At the same time, it is equally important to acknowledge the need for a safe space when formulating policy and the associated risks. Those noble Lords who took part in the debates on the FOI Bill will recall the clear position taken by Ministers of the day about where that balance should be struck in relation to the workings of government. It was made clear that the Act was not intended to change the way that the Government conduct their business by requiring all their deliberations to be made in public. Some element of confidentiality must remain for the proper and effective conduct of that business.

Ministers and civil servants need the space to be able to consider the worst risks-even to broach quite unlikely risks-and to do so openly and frankly, without the threat of disclosure. Without this safe space for open and frank risk assessment, the registers would be in serious danger of becoming anodyne documents and their purpose would thereby be significantly diluted. That is why information relating to the formulation or development of government policy is explicitly exempt from disclosure under the Act. There is also an explicit exemption for information that would inhibit, or be likely to inhibit, the free and frank exchange of views for the purposes of deliberation.

It is my department's very clear view, and the view of other government departments, that departmental risk registers of this type and nature should be treated as being exempt from disclosure. That was also the view taken on several occasions by health Ministers in the previous Government. I say to the noble Lords, Lord Pannick and Lord Martin-I was grateful to the noble Lord, Lord Martin, for his remarks-that the Government have no wish to be discourteous or obstructive to this House. Quite the opposite.

We are absolutely not using the right of appeal as a delaying mechanism. The department has published and discussed its proposals for reform at every stage of the process; we have debated them at length in both Houses; it has released some detail about the associated risks and what it is doing to address them in its impact assessments. In response to the noble Baroness, I myself have provided the broad issues covered by the risk register in my Statement of 28 November. Incidentally, that Statement was meant to be complete. I assure the House that in taking forward the Bill, no further risks are identified on the register that would fall outside

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the list of broad issues that I provided. I am therefore satisfied that I have not misled the House as a result of the Government's decision to appeal.

I am very grateful to my noble friend Lady Williams for her suggestion that the case should be expedited. I am as keen as anyone to see the matter speedily resolved. As my noble friend knows, she and I discussed this yesterday privately and I have since pursued the matter actively with my officials. I should say, however, to place my noble friend's suggestion in context, that since we met, the solicitor acting for the Information Commissioner has requested an extension of time to file the commissioner's response to our appeal notice and has indicated that the appeal raises issues of considerable importance that will require the tribunal's normal target time for listing an appeal hearing in order for the case to be properly prepared.

I should also make clear a further point. For our part, as the House knows, we take the view that this case raises an important matter of principle for the Government as a whole. We took the decision that we have taken after very careful thought and discussion. Now, the burden is on us as appellants to provide accurate and pertinent evidence to the court to support our case. In preparing that case, we need to consider and consult across various parts of government, as indeed we consulted about our decision to appeal. It is obviously important that we have the necessary time to prepare and carry out those consultations. We have not asked for more time, but I suggest that we need enough time.

I completely understand and sympathise with the desire of my noble friends to see the matter resolved, and I undertake to use my best endeavours to pursue the suggestion so helpfully made by my noble friends Lady Williams and Lord Clement-Jones. The decision to appeal the Information Commissioner's ruling has not been taken lightly, but we have taken it because we believe that the commissioner has not given sufficient weight-

Baroness Thornton: Can the Minister give us some times here? How long is it going to take? When does he expect to have the tribunal sit? He keeps saying that it will take time to prepare and to do this, but I think that we need to know how long that will be.

Earl Howe: Having anticipated that question before this debate, I made a point of asking but I am afraid that I do not have a definite answer to give the noble Baroness at this stage. As soon as I am able, I would be delighted to do so.

Our appeal is based on the belief that the commissioner has not given sufficient weight in his judgment to the considerations embodied in the relevant provisions of the relevant FOI Act. As the noble Lord, Lord Butler, made clear on 28 November, the ruling has serious implications across government in the precedent it sets for all risk registers.

Lord Campbell-Savours: The noble Earl said that he could not give us an idea of the timetable, but he does have something under his control: he has control of

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the timing of Report. He could say, "We will defer Report stage until the appeal result". Why does he not just do that?

Earl Howe: The noble Lord knows that that is a matter for the House and the usual channels and not for me. However, I have no doubt that his suggestion will be registered in the appropriate places and will be considered. He must understand that it is not solely in my gift to order the business of this House.

I am of course acutely aware of the concerns of noble Lords on this issue. However, I would just ask those noble Lords who may at first blush be inclined to side with the noble Baroness in her amendment to recognise that there is room for an honestly held difference of view on this matter, that the principle involved is very important for the workings of government and that the Government have acted both properly and reasonably in asking the Information Tribunal to reconsider the merits of the case.

Baroness Thornton: My Lords, I thank noble Lords for this very illuminating and important debate, and I feel the weight of that importance. I think that the Minister would admit that over the past four weeks we have been very measured in our approach to this issue. We have not rushed at it; we have not sought to delay the Bill; and we have been very measured and patient in trying to work out the best way forward.

I thank the noble Lord, Lord Pannick, my noble and learned friend Lady Scotland and my noble friend Lord Richard and others for their support on this. I also thank my noble friend Lord Richard for crystallising the point that we should not proceed to the next stage of the Bill until we have the results of the appeal, and perhaps that would concentrate minds. In that context, I think that my amendment, which is a regret Motion, will help.

The noble Lord, Lord Clement-Jones, spoke about a chilling effect. I found the remarks of the representative of our former Permanent Secretaries in the House, the noble Lord, Lord Turnbull, interesting but possibly not to the point. The Freedom of Information Act may need reforming but that is not the point of my regret Motion. Particularly in response to the noble Lords, Lord Clement-Jones and Lord Turnbull, I should like to quote to the Committee from "Yes Minister". This is from episode one of the first series and is about open government. Bernard, who noble Lords will all remember is the Private Secretary, says:

"But surely the citizens of a democracy have a right to know".

Sir Humphrey-or maybe we should call him "Sir Andrew"-says:

"No. They have a right to be ignorant. Knowledge only means complicity in guilt; ignorance has a certain dignity",

although it is not dignity that I would particularly welcome.

I confess that I am disappointed by my colleagues on the Liberal Democrat Benches. I was here with them in the Chamber fighting for the Freedom of Information Act all those years ago, and I know that they would have liked my Government to have gone even further than we did. Therefore, it is a matter of regret and disappointment that they are not joining with us in saying that the commissioner's ruling is a

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good and measured ruling, that it takes account of all those issues and that this information should be made available to the public and, indeed, to the House.

Finally, the question is very simple. It is not about the appeals tribunal, and the noble Lord, Lord Pannick, was right. It is about how this House amends legislation to make it good legislation, and it is an amendment to regret the fact that we are not being given the information that we need to help us in that job. It is a very mild rebuke-it is an amendment expressing regret. It is a regret that we cannot do that job because we need this information. My view on that has not changed as a result of this debate. I feel enlightened by this debate to a certain extent and think that we may see a way forward. However, we need to regret the fact that we do not have this risk register, and I wish to test the opinion of the Committee.

4.35 pm

Division on Baroness Thornton's amendment

Contents 195; Not-Contents 248.

Amendment disagreed.

Division No. 1


Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Andrews, B.
Bach, L.
Bakewell, B.
Barnett, L.
Bassam of Brighton, L. [Teller]
Bath and Wells, Bp.
Beecham, L.
Bhattacharyya, L.
Billingham, B.
Bilston, L.
Blackstone, B.
Boateng, L.
Borrie, L.
Boyd of Duncansby, L.
Bradley, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Campbell-Savours, L.
Chandos, V.
Christopher, L.
Clancarty, E.
Clinton-Davis, L.
Cobbold, L.
Cohen of Pimlico, B.
Collins of Highbury, L.
Corston, B.
Crawley, B.
Cunningham of Felling, L.
Darzi of Denham, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Deech, B.
Desai, L.
Dixon, L.
Donaghy, B.
Donoughue, L.
Drake, B.
Dubs, L.
Eames, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falkender, B.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Fellowes, L.
Finlay of Llandaff, B.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Giddens, L.
Glasman, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Grantchester, L.
Grenfell, L.
Griffiths of Burry Port, L.
Grocott, L.
Hall of Birkenhead, L.
Hannay of Chiswick, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Hennessy of Nympsfield, L.
Hilton of Eggardon, B.
Hollins, B.
Hollis of Heigham, B.

7 Dec 2011 : Column 739

Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Hylton, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Ewelme, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of Southwark, L.
Kestenbaum, L.
King of Bow, B.
King of West Bromwich, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Masham of Ilton, B.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Mitchell, L.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Manchester, L.
Newcastle, Bp.
Nye, B.
O'Loan, B.
O'Neill of Clackmannan, L.
Palmer, L.
Pannick, L.
Parekh, L.
Patel, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Peston, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prashar, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Rees-Mogg, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Richardson of Calow, B.
Rogan, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Scotland of Asthal, B.
Scott of Foscote, L.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Snape, L.
Soley, L.
Stern, B.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Tonge, B.
Touhig, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Wall of New Barnet, B.
Walpole, L.
Warner, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Wigley, L.
Williams of Elvel, L.
Wills, L.
Woolmer of Leeds, L.


Aberdare, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Allenby of Megiddo, V.
Anelay of St Johns, B. [Teller]
Armstrong of Ilminster, L.
Arran, E.
Ashcroft, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Benjamin, B.
Berridge, B.
Best, L.
Bew, L.
Black of Brentwood, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Boswell of Aynho, L.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Brinton, B.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browning, B.
Burnett, L.
Buscombe, B.
Butler of Brockwell, L.

7 Dec 2011 : Column 740

Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlile of Berriew, L.
Cathcart, E.
Chidgey, L.
Clement-Jones, L.
Colwyn, L.
Condon, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Courtown, E.
Cox, B.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
Cumberlege, B.
Dannatt, L.
De Mauley, L.
Deben, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Doocey, B.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Emerton, B.
Empey, L.
Falkner of Margravine, B.
Faulks, L.
Feldman of Elstree, L.
Fink, L.
Flight, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geddes, L.
German, L.
Glasgow, E.
Glenarthur, L.
Gold, L.
Goodlad, L.
Greaves, L.
Hamilton of Epsom, L.
Hamwee, B.
Harries of Pentregarth, L.
Harris of Peckham, L.
Henley, L.
Heyhoe Flint, B.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Home, E.
Hooper, B.
Howard of Lympne, L.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
Inglewood, L.
James of Blackheath, L.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Jopling, L.
Kakkar, L.
Kerr of Kinlochard, L.
Kilclooney, L.
King of Bridgwater, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Kramer, B.
Laming, L.
Lamont of Lerwick, L.
Lang of Monkton, L.
Lawson of Blaby, L.
Lee of Trafford, L.
Lexden, L.
Lingfield, L.
Linklater of Butterstone, B.
Liverpool, E.
Lucas, L.
Luce, L.
Lyell, L.
Lytton, E.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
MacLaurin of Knebworth, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Magan of Castletown, L.
Mancroft, L.
Maples, L.
Mar and Kellie, E.
Marlesford, L.
Martin of Springburn, L.
Mawhinney, L.
Mayhew of Twysden, L.
Montgomery of Alamein, V.
Montrose, D.
Moore of Lower Marsh, L.
Murphy, B.
Naseby, L.
Neuberger, B.
Newby, L.
Newlove, B.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
O'Neill of Bengarve, B.
Oppenheim-Barnes, B.
Palmer of Childs Hill, L.
Palumbo, L.
Parminter, B.
Patten, L.
Perry of Southwark, B.
Phillips of Sudbury, L.
Popat, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rennard, L.
Renton of Mount Harry, L.
Ribeiro, L.
Ripon and Leeds, Bp.
Risby, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
St John of Bletso, L.
Saltoun of Abernethy, Ly.

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Sandwich, E.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Selsdon, L.
Sharkey, L.
Sharples, B.
Shaw of Northstead, L.
Shephard of Northwold, B.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Slim, V.
Smith of Clifton, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stephen, L.
Stevens of Ludgate, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Strathclyde, L.
Sutherland of Houndwood, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tope, L.
Tordoff, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
True, L.
Trumpington, B.
Turnbull, L.
Tyler of Enfield, B.
Ullswater, V.
Verma, B.
Vinson, L.
Wade of Chorlton, L.
Wakeham, L.
Waldegrave of North Hill, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Walton of Detchant, L.
Warsi, B.
Waverley, V.
Wei, L.
Wilcox, B.
Williamson of Horton, L.
Willoughby de Broke, L.
Wilson of Tillyorn, L.
Wolfson of Sunningdale, L.
Younger of Leckie, V.

Motion agreed.

4.48 pm

Clause 49 : Secretary of State's duty to keep health service functions under review

Amendment 240

Moved by Lord Warner

240: Clause 49, page 83, line 3, after "review" insert "the cost and"

Lord Warner: My Lords, in moving Amendment 240, I shall also speak to Amendment 242 in this group in my name and that of the noble Lord, Lord Patel.

Amendment 240 inserts the words "cost and" before "effectiveness" regarding the exercise of functions by various bodies that the Secretary of State must keep under review. The NHS faces an unprecedentedly long period of having to survive on short financial rations. This is now likely to extend at least two years after the 2015 election, if we are to believe the Chancellor's utterances last week on the public finances and deficit reduction. The NHS has never delivered in any one year of its history the productivity and cost-saving requirements set by the £20 billion Nicholson challenge, which is to be produced at least four years on the trot. Most informed commentators expect a financial crisis of some kind in the NHS in the next few years, so the reality is that the Health Secretary will have to keep under close review the expenditure and costs of all the bodies listed in Clause 49. The Government should face up to this reality, in my view, as the Chancellor seems to want us to, by adding the words in Amendment 240 to the Bill.

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Amendment 242 is another part of that reality checking of the NHS in the Bill. On earlier amendments I raised my concern about keeping in check the overheads and management costs of the national Commissioning Board and clinical commissioning groups, and was duly told that these were not necessary. I acknowledged then that my amendments were probably not framed as they should be. However, I am returning to this issue with Amendment 242, which requires the Secretary of State to report annually to Parliament the administrative costs of the bodies listed in Clause 49, together with the percentage of the NHS budget they represent and their percentage increase over the previous year. If the Secretary of State is doing his or her job properly, they should have this information available to them and be monitoring it closely, especially in the financial climate the NHS faces over the coming years.

We know from history how, left to their own devices, bureaucracies can expand their remits and resource consumption. Ministers never like to own up to this happening on their watch. To improve the prospects of keeping Ministers and, if I may put it this way, these big NHS beasts on the financial straight and narrow, it would be extremely helpful if the Bill required the reporting of administrative costs and their movement over time to Parliament once a year. I hope the Minister can be constructive about accepting such an amendment as it in no way challenges the Government's reforms. I beg to move.

Baroness Cumberlege: My Lords, I have two amendments in this grouping and, lest I be drummed out of the Brownies, I would like to explain that there is a typo in the Marshalled List. It should read not "detailed merits" but "detailed remits". As noble Lords will appreciate, there is a great difference, and I do not need any persuasion as to the merits of this Bill.

The purpose of my two amendments is to be probing; I am really just seeking clarification. The Future Forum was very widely welcomed by most people, but it further complicated the new proposals in the Bill regarding how we are to organise and manage the NHS. After years of being dictated to and micromanaged, there is a real risk of paralysis, and this at a time when commissioners need to reach decisions and be truly radical.

As I understand the proposed structure, the national Commissioning Board and clinical commissioning groups will be supported by clinical networks, clinical senates, commissioning support organisations and health and well-being boards, which will work in partnership with them. In addition, we have a new public health system, which we debated last Monday, with the creation of Public Health England and the establishment of HealthWatch England and Local HealthWatch to try to improve patient and public involvement. This has the potential to cause confusion and duplication if the Government are not clear about the accountabilities, roles and responsibilities of these different organisations. I would like to take a very serious example: it is still unclear who will take the lead on the commissioning of specialist doctors and nurses responsible for safeguarding children within the NHS.

At a national level, the movement from a single department of state to a more dispersed range of organisations, including the national Commissioning

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Board, Public Health England, HealthWatch England, Monitor and the Care Quality Commission, could have a similar effect. The danger is that the NHS could find itself in paralysis at just the moment that it needs to make key decisions that are crucial for the sustainability of parts of the service. In particular, some of the important decisions on potential service reconfigurations are urgent if the NHS is to meet the Nicholson challenge and at the same time fulfil its commitment to high quality and safe services to patients.

It is still unclear to me, and I know that it is to some others, how the respective responsibilities and accountabilities of commissioners, providers and regulators for quality are intended to work together. We also need to ensure that additional complexity does not result in an increased administrative burden or financial cost, as the noble Lord, Lord Warner, has said, falling on healthcare organisations. I think that my noble friend gave an undertaking on that on Monday but further clarification would be welcome.

Because of these concerns about the complexity of the new structure, I am asking the Minister if he could look seriously at this issue; go beyond the organograms and design detailed remits and powers for all those in the system to minimise confusion, gaps and duplication; and be as clear as possible at the outset as the reforms are implemented, while at the same time keep under review and address any confusion, gaps and duplication between the components in the system. Change is always a challenge. The more we can reduce muddle and confusion from the outset, the more successful these reforms will be.

Lord Hunt of Kings Heath: My Lords, I have a number of amendments in this group which concern the duty of the Secretary of State to keep health service functions under review. This is an important provision. I note that on what will probably be the last day in Committee, we have Amendment 354, which relates to a requirement on the Secretary of State to publish a report which can then be debated by Parliament. Although it is not grouped with this amendment, it is highly relevant to it.

It would be helpful to know from the Minister just how these matters are going to be monitored and how adjustments can be made in the light of experience. As my noble friend Lord Warner suggested, although we are not going to be allowed to see the risk register-I am very doubtful that we will see it before the Bill has passed through your Lordships' House-we know that considerable risks will come with these changes. The noble Baroness, Lady Cumberlege, spelled out some of the key issues that we face. The last thing that the health service needs is a massive reorganisation. Clearly, there are risks and it is right that there should be a regular review by the Secretary of State.

It is also right that the Secretary of State, when reviewing the operation of the changes, reviews all parts of it. I am extremely puzzled by Clause 49 concerning the duty to keep under review. The Bill sets out the bodies to be reviewed. They are the NHS Commissioning Board, Monitor, the Care Quality Commission, the National Institute for Health and Clinical Excellence, the Health and Social Care Information Centre and

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special health authorities. There is no mention of the plethora of bodies that will exist in the new system. There is no mention of clinical senates, the local field forces of the NHS Commissioning Board or health and well-being boards. Quite remarkably, there is nothing about clinical commissioning groups. Perhaps the noble Earl could tell me why the effectiveness of the CCGs is not to be kept under review?

Perhaps I have misread the Bill and this will be done in some other way. But I find it remarkable that this Bill is built around GPs and clinical commissioning groups, which are untried and untested, yet they are not to be kept under review. Looking at the architecture of this Bill, one begins to see very tight control of most of the health service but when it comes to clinical commissioning groups, issues of corporate governance, conflicts of interest or any of the other matters, it is incredibly light touch. It is as if we are to believe that, somehow, this part of the reforms is believed by the Secretary of State to be so remarkably able to carry out its duties that very little monitoring, performance management or review is to be undertaken. I would be grateful to know why clinical commissioning groups in particular have been left out of this list.

Amendment 243A concerns the annual report. In Clause 50 we see a requirement on the Secretary of State to publish an annual report on the performance of the whole service in England, which must be laid before Parliament. That, of course, is welcome. But my amendment asks that the report should include a statement on progress towards reducing relevant inequalities, on integration of services, on waiting time performance, and on health outcome performance. No doubt the noble Earl will argue that it is a list, and that the Secretary of State's annual report is bound to cover these matters.

However, we are in new territory when it comes to specifying matters in the Bill. We are told that the Secretary of State is stepping back from involvement in the National Health Service, and that we should not worry about that, because there will be a mandate, and a constitution. All will be well. Those of us with some experience in these matters are rather doubtful as to whether that is sufficient in terms of accountability. In that context, it is right for Parliament to set out some details which we would expect the Secretary of State to report annually. Of course, there may well be other matters which one would wish the Secretary of State to report on, but my four areas cover some of the main points.

Amendment 245B relates to the intervention orders under the 2006 Act. I would be grateful if the noble Earl would confirm whether those intervention orders apply to the NHS Commissioning Board and clinical commissioning groups. If they do not, perhaps he could explain why not?

Amendment 245C deals with liabilities and the Secretary of State's responsibility in relation to NHS organisations. Again, could the Minister confirm whether this duty applies to the NHS Commissioning Board and to clinical commissioning groups?

Amendment 245ZA relates to the general power of the Secretary of State. In page 289, line 30, the Government seek to dissipate the general power of the Secretary of State, as is currently set out in Section 2

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of the 2006 Act. I realise that this takes us back to the crucial debate we had on day 1 about the powers and duties of the Secretary of State. The Explanatory Note which relates to this says that the reason for changing the wording is because there is no longer a duty on the Secretary of State to provide services. Given that those matters have been, in a sense, put to one side, is this part of the package that is being looked at, because it does relate to the general powers of the Secretary of State?

My noble friend Lord Warner made some very apposite points which I certainly support, and I was very interested in the remarks of the noble Baroness, Lady Cumberlege. I had been agonising about her amendments, and she has very helpfully clarified a point for all of us. She has really put her finger on it. I am disappointed that she did not take part in our debate at our last sitting ,when we discussed the complexity of the new arrangements.

We were promised a streamlined approach. What we have got instead is a highly complex set of arrangements. The NHS Confederation has expressed its concern about their complexity. I therefore like the amendment of the noble Baroness, Lady Cumberlege, that asks the Government to try to clarify for us who on earth is responsible for what in the new system.

When it comes to the key issues of the reconfiguration of specialist services and of funding, someone out there is going to have to hold the reins. Some agency or body is going to have to sort the problems out. It ain't going to be the clinical commissioning groups. They are too small and they will not be able to do it, so someone else will have to. Is it going to be the clinical senates, or are we going to have to rely on the local government health and well-being boards, or will it actually be the local offices of the NHS Commissioning Board? I know that it will be the local offices of the NHS Commissioning Board. If that is so, we come back to the fact that that is patently going to be where the power is, and surely they ought to be made accountable. That is why I had an amendment down on our last day in Committee to turn them into statutory bodies. I detected a modicum of sympathy around the Committee, but not much more than that. However, the noble Baroness, Lady Cumberlege, as a distinguished former regional health authority chairman, knows that when we had the RHAs it was they that, in the end, had to intervene and sort problems out. There needs to be some sort of agency to do that in the future, and I think we should be told.

Baroness Murphy: My Lords, I had not intended to intervene but I have been stimulated to do so by the noble Lord, Lord Hunt of Kings Heath. The model being described of the Commissioning Board and its regional offices-the outposts-is very similar to the model that functions rather well for universities. There is the Higher Education Funding Council for England, which is centralised but also corporate with all its regional offices. The vice-chancellors, who you might say are the chief executives of the local organisations, relate directly to HEFCE. However, the regional executive officers are there to act as a moral support and a conduit. They do not necessarily sort out problems, but at least they are aware of them and know which

7 Dec 2011 : Column 746

areas the central body ought to be looking at. That is not so different from the way the regional officers from the Department of Health worked during the time of the district health authorities, between 1983 and 1990. If it is well done, and it has certainly functioned well for the duration of HEFCE, then it seems to me that it is a model which can be built on and developed. Is not that the way the problems the noble Lord is talking about will be resolved?

Lord Hunt of Kings Heath: I am grateful to the noble Baroness for her helpful intervention and I fully accept what she says. I want to make two points. First, we need an acknowledgment by the Government that there is going to be a kind of intermediate tier that, in the end, they can turn to when there are problems-if CCGs cannot work out a strategic approach or if reconfiguration is not taking place, as well as all the things that arise in the health service generally. My second argument is that I believe the health service is somewhat different from HEFCE in that it touches everybody, and the kind of issues that this intermediate tier will intervene on are likely to concern the public much more. There is then a case for making the intermediate tier a statutory body. Essentially there are two points here. I certainly agree with the noble Baroness about the importance of a helpful enabling intermediate tier which occasionally needs to intervene.

Earl Howe: My Lords, as I have observed on earlier occasions, I believe that this Bill increases Ministers' accountability for the health service through a range of mechanisms. However, perhaps I may begin by saying to the noble Lord, Lord Hunt, that I agree that the Secretary of State's annual report is an important mechanism through which he will account for the system. I am sympathetic to the objective behind Amendments 243 and 243A, which seek to specify areas for inclusion in the Secretary of State's annual report, but I can reassure noble Lords that I expect to see mention of areas such as the reduction of inequalities set out in the report, as these issues are the foundation of a high-performing health service.

The Bill also sets out extensive powers of intervention in the case of failure, which are essential if Ministers are to be able to retain ultimate accountability for the health service. The intervention powers in the Bill are specific to the organisations to which they apply, which is the issue covered by Amendments 245B and 245C. With that point in mind, I believe that the powers set out by the Bill strike the right balance, enabling appropriate freedom for NHS bodies while ensuring that the Secretary of State can intervene in the event of their failure.

The Secretary of State's duty of keeping performance under review only applies to national arm's-length bodies. It does not refer to CCGs. The noble Lord, Lord Hunt, questioned why that was. We think that is right; however, the CCGs will very definitely be kept under review. The Bill sets out a robust process for the board to hold CCGs to account and sets out extensive powers for the board to keep the performance of CCGs under review and to step in where they are not performing.

7 Dec 2011 : Column 747

The noble Lord also queried why there was no mention of a range of other bodies, such as senates and field forces. The answer is that they are part of the NHS Commissioning Board, which is specifically mentioned. As regards health and well-being boards, as the noble Lord will know, we intend them to be part of local government. I do not think local authorities would take very kindly to the Secretary of State for Health keeping them under review.

There are also a number of amendments in this group that are concerned with the transparency and accountability of arm's-length bodies, such as the amendments of the noble Lord, Lord Warner. Much like the Secretary of State's annual report, each arm's-length body's annual report and accounts must be laid before Parliament. I simply remind the Committee that all ALBs are under a duty to exercise their functions effectively, efficiently and economically, and the Secretary of State is required to keep under review how effectively they are exercising their duties and functions.

Finally, I turn to co-operation between the bodies in the system. The Bill sets out a formal duty on each organisation to co-operate, and the department will hold organisations to account for the way they work with each other, not just how they perform their own functions. As regards Amendments 240A, 243ZA, 350 and 351, I hope I can reassure noble Lords that, through these two routes, the department will work to ensure that duplication is prevented and gaps do not emerge. If the Secretary of State believes that the duties of co-operation are being breached or are at significant risk of being breached, he will be able to write formally and publicly to the organisations. If the breach is significant, sustained and having a detrimental effect on the NHS, the Secretary of State will have a further ability to lay an order specifying that the organisation should take certain actions only with the approval of another specified body, other than the Secretary of State himself.

Amendment 245ZA looks to reinstate a power at Section 2 of the National Health Service Act 2006, which would enable the Secretary of State to provide services. We believe that the role of the Secretary of State should be one of oversight, direction-setting and intervention when organisations are failing. We have had many hours of valuable discussion on this topic; so while I fully understand the various concerns raised by noble Lords, I remind the Committee that all sides of this House have agreed to a process of engagement and discussion on this subject. The noble Lord, Lord Hunt, asked specifically in relation to this amendment whether this issue was covered by that process. The Clauses 1 and 4 process, as I call it, is considering the issue of the Secretary of State's accountability for the NHS in the round rather than specific clauses in the Bill; so, yes, this would be covered by that process.

I hope that I have provided enough detail on these clauses to enable the noble Lord to withdraw this amendment.

Lord Warner: I wonder if the noble Earl could enlighten me, and indeed the House, on the story that is trailed in the Times today that the Secretary of State

7 Dec 2011 : Column 748

is going to have 60 benchmarks or indicators-which some of us would think looked like 60 targets. Are they going to be a key part of his process of keeping performance under review? Will he give the House a little more flavour of what that is going to mean?

5.15 pm

Earl Howe: My Lords, that story in the press was about the outcomes that the Secretary of State is proposing should form the basis on which the health service is held to account. It is likely that the outcomes framework will form part of the annual mandate. These are proposals which we are hoping for comment upon. Therefore the answer to the question of the noble Lord is that the health service-I am not talking about the ALBs other than the board, but the National Health Service Commissioning Board-will be held to account against those outcome measures.

Lord Warner: My Lords, I have listened very carefully to the Minister. I am disappointed that he cannot agree to put something more specific in the Bill about administrative costs. I am concerned about those getting out of control, when the NHS faces a very difficult set of financial challenges. However, I hear what he says. We may want to come back to this at a later stage, but in the mean time I withdraw the amendment.

Amendment 240 withdrawn.

Amendments 240A to 243A not moved.

Clause 49 agreed.

Clause 50 : Secretary of State's annual report

Amendment 244

Moved by Lord Warner

244: Clause 50, page 83, line 23, at end insert "and its integrated working with adult social care services"

Lord Warner: My Lords, I have deliberately grouped these two amendments so that we can have a proper debate about the role of social care in this Bill-after all, it has "social care" in its title-and, indeed, about the associated issue of the importance of integrating health and social care, on which we have touched on a number of occasions in the Bill so far.

As I said in our recent debate on the Dilnot commission report, secured by my noble friend Lady Pitkeathley, we need to consider whether this Bill is a suitable vehicle for progressing implementation of that report. Here I should declare my interest as a member of the Dilnot commission. First, I shall make some remarks on the growing crisis, if I may put it that way, in social care and the implications of that crisis for the NHS and patients, particularly as, despite the extra money the Government have provided for social care in the spending review-I commend the Government on that-we still face a £1.2 billion shortfall by 2014, according to the King's Fund.

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The NHS and social care are in a symbiotic relationship with each other, in that what happens in one sector can have a profound effect on the other. That is what is happening now. The current problems have their roots in the past. Both sectors face the challenge of a service response to an ageing population. The fact that we live longer is, of course, something to celebrate, but it does have consequences for health and social care. By 2030 there are expected to be £2.5 million more people aged 75 or over. The current 1.5 million over 85 will double in the same period. The number living with dementia in the UK is expected to reach 1.4 million by 2040. We have nearly 18 million people living with long-term conditions that require treatment and care, but not necessarily in hospital. Getting the balance right in the resourcing, co-operation and delivery of services between the NHS and social care is critical to the quality of care and quality of life for this ageing population and for the cost to the taxpayer of those two services.

What is clear is that doing nothing and letting the current system carry on is not really an option. For example, the King's Fund has shown that even if we do nothing to the current inadequate adult social care system, its cost will rise from £6.7 billion in 2011 to £12.1 billion in 2026. In that situation, the eligibility criteria for social care will get tighter and tighter, despite the extra expenditure, and the pressures on the NHS will increase as social care is unable to cope. Both systems need rebalancing and improved integration between the two.

However, they do not start from the same position. Since 2003-04, spending on social care has increased by 19 per cent in real terms, which is half the rate of increase in NHS spending in England over the same period. Despite this increase in spending on social care, access to state-funded services has reduced. In 2005-06, 60 per cent of local authorities restricted their service eligibility threshold to those whose needs were substantial or critical, leaving those with low or moderate needs to fend for themselves. By 2010-11, that 60 per cent had risen to 82 per cent of local authorities. As local authorities try to balance their budgets, they have cut the price they pay to providers, with a consequential impact on the quality unless they can persuade a growing number of self-funders to subsidise the care of those who are funded by the state. The impact has meant increasing burdens on informal carers, whose health is often not of the best, and rising costs in the NHS. Perversely, we can now end up with the taxpayer spending £3,000 a week to care for an 85 year-old in the medical ward of an acute hospital when they would be better off in a medically supervised £1,000-a-week single room in a nursing home.

At the heart of this problem is that social care simply does not have the standing of the NHS. If we are to improve social care and its integration with the NHS for the benefit of service users, we have to improve that public and political standing and realign the financial balance between the NHS and social care. I suggest that a good starting point for that would be the statutory duty placed on the Secretary of State. Leaving aside our current dispute over the precise wording of Clause 1, the Bill as it stands gives the

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Secretary of State the clear duty, which he has had for a long time, to promote a comprehensive health service designed to improve the physical and mental health of people and the prevention, diagnosis and treatment of illness. There is nothing equivalent to that duty in relation to the NHS for adult social care.

In subsection (1) of my new clause in Amendment 260DA, I have tried to even things up a bit by placing a clear duty on the Secretary of State to secure continuous improvement in the quality of social care services. This would mean that, when considering his priorities in relation to health and social care, the Secretary of State would have to consider securing a proper balance between both sectors. I suggest that both will face similar demographic challenges and careful consideration would then have to be given to how to allocate resources and priorities between the NHS and adult social care.

The rest of Amendment 260DA is intended, if I may put it this way, as a helpful encouragement to the Government to use the Bill to secure the legislative framework to implement the ideas in the Dilnot commission's report but without the Government, at this stage, committing themselves to the precise financial figures in our report or the timing of implementation. The Government would be able to consider the responses to the consultative process that closed last Friday and prepare their White Paper in the spring as they are proposing to do. The amendment would remove the need to worry about whether they would have a piece of legislation on this subject in the next Session. I have to say that a number of us, both inside the House and outside, have a fair degree of scepticism about whether that Bill will actually happen.

There is widespread support for the direction of travel pointed to by the Dilnot report, with widespread consensus among stakeholders that this is the road we should tread if the finances of adult social care are to be placed on a more secure footing over time. It is no purpose of mine today to go into the detailed merits of the Dilnot commission's report. However, I would like to hear, especially from the Liberal Democrats who have been supportive in this area, whether they support moving forward swiftly as many of us do. What I should make clear is that I regard subsection (1) of Amendment 260DA as standing on its own merits irrespective of the Government's attitude to using this Bill to create a legislative framework for implementing Dilnot. I cannot say that my optimism on that aspect is all that great. However, I hope we can secure support across the House for inserting something in the Bill along the lines of subsection (1) so that when the Bill leaves this House there is a bit more equilibrium between the duty placed on the Secretary of State in relation to the NHS and that placed on him in relation to adult social care. I am not wedded to the precise wording of my amendment but I hope we can actually secure some cross-party consensus on the need to put something that follows the spirit and thrust of that subsection into the Bill before it leaves your Lordships' House.

Amendment 244 simply requires the Secretary of State, when he publishes his annual report on the NHS, also to report on the health service's integrated working with adult social care. This is such an important

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part of how the NHS will work in the future, particularly with the financial challenges that are faced, that I believe we should make specific reference to it in the Bill. I hope the Government agree. I beg to move.

Baroness Pitkeathley: My Lords, my name is attached to Amendments 244 and 260DA. I want to emphasise how vital integrated working is from the point of view of the patient. Most patients, especially older ones or those with a long-term condition, do not experience either health or social care but some kind of combination of both-combinations that fluctuate according to variations in their condition.

This, as we have been reminded, is a Health and Social Care Bill yet the Committee debates thus far have not reflected the experience of patients and their families but have been very focused on acute care and the role of hospitals. I am delighted that consideration of these amendments gives the Committee the opportunity to focus more acutely-no pun intended-on the social care aspect of the proposed legislation. I strongly support the call for social care provision to be subject to annual review. I remind the Committee of the multifaceted nature of social care-residential care, home care, respite care and increasingly tele-care-and of the range of providers such as private, voluntary and social enterprises. Many of these services are facing huge challenges because of increased demand and reduced resources so it is clearly vital that a review is carried out regularly and I can see no reason why the Government should not agree to this amendment.

5.30 pm

Amendment 260DA focuses on setting standards and improving quality in adult social care. I think there is general agreement that the current social care system is not fit for purpose. It was set up originally for a country in which men died at the age of 66, shortly after retirement, and women died before they were 70. The new statistics which show, for example, that 11 million people alive today will live to be 100-I suggest that the Queen will run out of telegrams-are, as my noble friend has reminded us, a cause for celebration, as is the fact that so many more people are living not only longer but with greater degrees of disability. This means that we are spending inadequate amounts of money on care and support, both publicly and privately, and have been doing so for some time. Social care funding has totally failed to keep pace with demographic change. Since 2004, while spending on the NHS has risen by £25 billion, spending on social care rose by just £43 million; that is 0.1 per cent per year in real terms.

As my noble friend has reminded us, to cope with rising demand and static resources, councils have increased charges for care services and rapidly raised eligibility criteria, with the percentage of councils providing support to those with moderate needs decreasing from 50 per cent in 2005 to only 18 per cent in 2011 as eligibility criteria are raised to cover only those with substantial or critical needs. This has been compounded by recent local government spending reductions, with directors of adult social services reporting £1 billion-worth of cuts to services in 2010-11, and warning that the

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same level of cuts or even greater ones will have to be made next year. Our public provision is largely seen as providing poor services for poor people. There have been several examples of this in recent months, most notably the report from the EHRC, which was so notably led by the noble Baroness, Lady Greengross.

In considering how difficult the situation is with regard to social care services, we should never forget that a lot of good work is being done within the system because of the dedication and skill of thousands of people who work in it. These workers and their agencies have had some success in recent years looking at the personalisation of services and promoting independence and even early intervention. There are pockets of great service to be admired and we should always remember that, but in general the care and support system is perceived to be: starved of cash; failing to meet the volume of need; unfair; and a lottery, especially for people with middle incomes in that if you die neatly without needing to use care services, you pay nothing, whereas if you become disabled though a long-term illness or you have Alzheimer's, for example, you may need expensive services at full cost for many years, involving thousands of pounds-even hundreds of thousands of pounds-so people who have a home and modest savings are hit very hard.

The system is also extremely confusing, difficult to find your way around, different in different parts of the country and not portable when you change location. Moreover, the caring families-the informal carers, as my noble friend referred to them-as well as the individual who needs care, suffer at the hands of the system, which for them too is complex, costly and unfair. Family members end up sacrificing their careers, finance and their own health in order to provide care for disabled or older loved ones, while getting little or no help from a social care system and finding services poor-quality and expensive.

However, if you have a carer, you are luckier than the frail older person living alone whose total social care is 15 minutes once a day, twice if you are very lucky. That is not enough to keep you clean and comfortable, as we have often been reminded. These problems are only going to get worse if nothing is done. The Dilnot commission, of which my noble friend was a distinguished member, published its proposals in July. They aim to change the way in which social care funding is raised and spent, extending entitlement to public funding for social care in a way that is acceptable and sustainable for the taxpayer. Your Lordships will be familiar with its main recommendations: the contribution of an individual to their social care in their lifetime being capped-of course, there is dispute about what the level of the cap should be-the means-tested threshold over which people are entitled to full costs being raised to £100,000; national eligibility criteria and portable assessments; and all those who enter adulthood with a care and support need being immediately eligible for full state support. One recommendation which is often overlooked, but which is of huge value to users and carers, is that a new information and advice service be set up to guide families on what they need to know.

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The cost of these proposals is estimated to be about £2 billion, though the figure is disputed. This is, of course, a large sum but it must be compared to the £170 billion which social security costs, or indeed to the £119 billion which is the value of the carers' contribution. In difficult financial times, these are difficult figures and the question of how the money is to be found exercises us all. A better question may be what will happen if that money is not found. As I pointed out in the recent debate mentioned by the noble Lord, Lord Warner, unanimity of support for the Dilnot proposals is as great as I have ever seen it on this issue. The current consensus is that it is inescapable for the future funding of social care to be based on a combination of individual and state responsibility and contribution. It offers the prospect of a lasting settlement based on a partnership approach. There is not unanimity on every aspect of the Dilnot proposals, but there is more consensus than we have ever seen around this issue.

The amendment provides a practical and, I contend, relatively uncontroversial way of taking action now. If we adopted it and, indeed, if we adopted the Dilnot proposals, we would gain some advantages. We would spend existing resources better. It would improve the integration of health and social care systems. We should never forget what happens if you do not provide proper social care. People will inevitably turn to the NHS if they do not get adequate social care. They will go to their local casualty or to the NHS as an emergency, increasing the numbers of emergency admissions or delayed discharges. The inconsistency between fully funded NHS care and means-tested social care hampers delivery of an integrated care system.

If we adopt these proposals and put social care on the same footing as healthcare, the rights and responsibilities of individuals and agencies would be clear to the public. If people were clear about their future personal liability, they could plan now about how to meet care costs. One of the great problems we have in social care is that no one ever plans for their future care needs. Families just do not talk about it. One of the reasons they do not talk about it is because there is still an assumption in our society that the state will meet all your needs. Social care has always been means-tested, but people still think that the state will meet their care costs. If we put this much more openly on the face of the Bill, we would stimulate people to discuss their future care needs and stimulate the care market to provide more choice.

The Government are committed to a White Paper in the spring, but it cannot be stressed too strongly that action is needed now, to take advantage of the near consensus which exists around this issue. We should harness not only the consensus in the care sector, which is so clearly set out by the 52 organisations in the Care and Support Alliance, but the willingness of political parties to cross party-political divides in the interests of finding a solution to the social care dilemmas. Without doubt, we must find political consensus. I know my own party has suggested ways of facilitating this. In the debate on 10 November on social care, I reminded your Lordships of what the Minister for Social Care said in answering a debate in the other place: that,

I know that all noble Lords will agree with that. The Government have promised legislation in the near future. This amendment provides an opportunity to address now an issue that is of concern not only to your Lordships' House but to the whole of society.

Baroness Murphy: My Lords, I have added my name to the amendment because we are considering a Bill under which we are trying to improve the efficiency, effectiveness, productivity and quality of the NHS. Yet we know that that is completely impossible without improving the social care system.

When I first picked up a copy of the Bill from the Printed Paper Office and read it through, I thought that there must be a third part that would address social care. I therefore rang up the department and spoke to the relevant David-they are all called David-and asked, "Where is it, David? Where are the social care bits that should go with it to make it a Health and Social Care Bill?". He just said, "Oh, that comes later". The reality is that many medical specialties simply cannot function effectively without social care services. Those specialities include general practice and my own in geriatric psychiatry. Much of that work involves people with long-term conditions, mental health problems, learning disabilities, all care of the elderly, all primary care and community services. I spent some years of my life trying to transfer money-rather successfully in Lewisham-out of the NHS and into social care, in order to be able to perform my job.

We are not getting the best use of the specialities in the National Health Service for wide tracts of the population simply because we have inadequate domestic personal care, inadequate assessments under social care, inadequate provision of support for carers and those vital bits that make real life work. We know that 40 per cent of the increase in demand for NHS services is entirely dependent on the change in the demographic over the past 20 years. We know from the predictions of McKinsey and others that that increase will continue unless we do something about it.

I used to do a lot of work in the Italian health service, where social care, because it has been so dependent on church organisations, is not organised in the same way that we are. The Italians began to be seriously worried, and they still are, because of the horrendous bed-blocking and poor health services for older people. I hate the term bed-blocking; it really means an inappropriate service to an older person. Who cares whether the bed is blocked? I personally did not care about that as regards my patients. The important thing is that the patients were not getting the appropriate services they needed in the community.

Unless we get a government response on how social care is to be funded in the community and in residential and nursing care that is doable, feasible and affordable, we will not make much progress in the health service because we will be constantly coming back to this problem. It is for this reason that I have added my name to the amendment. I do not know if it is the

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right amendment. I saw it as a way of kicking the Government a bit further to get a move on about the social care response. The Bill will not work for the NHS of the future unless we have an appropriate social care service response.

Lord Turnberg: My Lords, there is little doubt that one of the key elements in the delivery of a system of care which improves on what we have now-and we certainly need to improve the current position-is the need to integrate care between the NHS and social care. It is in that light that I have found the Nuffield Trust report, Towards Integrated Care in Trafford, which I am sure that many noble Lords have read, so helpful. A number of things of value come out of the report. First, it needs local buy-in, the involvement of clinicians, managers, patients, local authorities and the public. It also needs good data-sharing, good leadership and time. It does not happen overnight. It took them two years, despite having all the enthusiasm and conditions in the area, for it to get off the ground.

Of course, all that needs the will of those who are paying for the services-the commissioners-if they are to pay for integrated care across the divide, which has proved so difficult. All those local changes depend on funding. If we believe that improvements in this area are critical-and I am sure we do-surely it should find a stronger place in the Bill, in particular in the Secretary of State's annual report. Amendment 244 states that we should insert the words,

in the report. That seems to me entirely appropriate and I hope that the noble Earl will consider that as a useful amendment to take forward.

Baroness Cumberlege: I just ask the supporters of the two amendments a question-the noble Lord, Lord Warner, may be the appropriate one, having been a director of social services. The amendment talks about breaking down the barriers. We are all at one with that. I was very interested in what the noble Baroness, Lady Pitkeathley, said about the Dilnot report; the noble Lord, Lord Warner, was a distinguished member of that committee, of course. Having listened to the amendment's promoter, I thought it was very persuasive and one could see a real future there.

One of the blocks that has not been addressed in this debate is the difference in accountability in terms of the democratically elected councillors who are responsible for social care. I wonder whether the Lord, Lord Warner, had thought about ways to try to harness that to get that integration. To try to bring together two very different accountabilities is a real challenge.

Lord Warner: I shall briefly respond to that. We should never forget that the lion's share of the money that goes on state-funded adult social care comes from central government and is passed through local authorities to be spent on that group through the commissioning of various domiciliary, residential and even nursing home care. Although what I have crafted is a duty on the Secretary of State, a lot of this comes back to where the balance is struck between the NHS and

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adult social care in terms of priority and funding in Richmond House. They are all under the same departmental expenditure limit at department level.

The sense I had as a Minister was that it is a bit like the Army: you have to put a musician in the canteen. A former director of social services is kept well away from social care in Richmond House. I saw a reluctance in the NHS culture in Richmond House-which, thankfully, has changed with the arrival of David Behan -to fight for social care at the time of expenditure reviews. That is a real and serious issue. The big guns of the acute sector are alive and well in Richmond House when the expenditure review comes around. My noble friend Lord Hunt is nodding-I think enthusiastically, given his current job as chairman of a foundation trust. This is a real issue. We need a bit more balance in the statutory duty on the Secretary of State in order to align the money going into social care vis-à-vis the NHS.

There is a perfectly good point to be made at the local level. You want to see priority being given to adult social care at the local level, and you want to see openness on the part of local government-which, if I am honest, has not always been there-in working across the boundaries with people in primary care and in the NHS. That is absolutely an issue. However, if in local government you have only enough money to deal with people with substantial or critical needs, then your ability to help people with moderate needs and stop them getting worse will be restricted by the amount of resources available. It will then be extremely difficult to work across that boundary. We know that many local authorities have reprioritised their services, taking money away from other services and putting it into adult social care, but a very clear finding from the Dilnot commission was that the adult social care pot is simply not big enough. It is no good for us to keep uttering that there is a need for integration if there is not enough money at the local level for adult social care to work across the boundaries.

Baroness Greengross: My Lords, I strongly support the amendment and the remarks of the noble Lord, Lord Warner, and the other noble Lords who have spoken. Over the past 50 years we have seen a huge rise in longevity. In this century and at the end of the last century, that rise in longevity has been largely due to medical success in taming many acute and terrible diseases that once we could hardly even talk about. Now, many cancers can be lived with for a long time. However, the big and difficult condition to be dealt with now is dementia. This is a long-term illness and it is terminal in various forms, yet the care for people with dementia is funded largely through social care. This, in itself, is an enormous anomaly. One in four patients in hospital who are elderly and a huge number of people in the community have dementia, but that illness is treated as being due for social care, not NHS care, although the borders do blend to some extent.

We need to celebrate that huge medical success but we cannot do so if we go on as we are with the funding of, and attitude towards, social care, which remains very much as the Cinderella between the NHS and the community. Many people now say that this differential means that in reality we should close 20 per cent of

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acute hospital beds and transfer those patients to a different sort of care-perhaps hospitals transformed into community hospitals. It is not a case of killing them off; they should be transformed into care centres where people with these long-term conditions can be properly treated. We really must work towards that and accept the truth of it. If we do that, there will be an obvious need to integrate health and social care quite differently from the way that we have done it in the past. What is needed is not a transfer of resources but integration. We must get this right.

I have recently been involved in the EHRC's inquiry into the care of older people in the community. We found that while a quarter of a million people are happy with the social care they receive in their homes, another quarter of a million are not-and understandably so because some of the ways in which they are looked after are, frankly, appalling. This is partly because of the huge diversity and differential in the allocation of resources, as well as the status and training of staff in dealing with the most difficult issues and problems. I am not going to go through everything I learnt from that inquiry. The report has been published, and I hope it will be helpful to many people in policy-making and in practice.

If we get this right and we keep people in the community for longer, we will save an enormous amount of money. At the moment, adult social services directors have no choice but to give money to the people in the most acute need, which means that the social care needs of all these other people are therefore not being met. If I were one of those directors and I had to choose where my money was going to go, that is what I would do. That needs to change because of the necessity of resource integration. We must find a way to intervene earlier, for dementia for example, with drugs, early diagnosis, and treatment in the community. People will then be able to live in the community for much longer and many will die in the community. An enormous amount of money will be saved. Care for people with dementia, in particular, in hospital is really unsuitable. It is bad for them and it is extremely bad for other patients. It really must change.

One reason that community care goes wrong is annual budgeting. If, like local authorities, one has to have an annual budget, one can do no preventive work. At least a four-year cycle is needed. It is like starting a business, investing in it, and expecting the return within a year-it cannot be done. One must wait a few years for the return. However, local authorities cannot wait because they lose their central government grants; we need to change that. The well-being boards need to be given the resources to integrate care properly so we can get rid of this imbalance.

Further, the Dilnot recommendations-and I congratulate the noble Lord, Lord Warner, on the distinguished role he played in this-are the first realistic proposals which bring together all sectors-public, private and voluntary-to get it right, with what seems to be a political consensus. This is such an opportunity, and we really cannot afford to lose it. Older people will suffer the most. There is still an enormous amount of discrimination. The social care we offer to younger disabled adults and to people with physical or learning

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disabilities is totally different; the attitude, and the range of resources and skills available to younger adults are quite different. This is direct and really damaging discrimination. The only way to change this is by integrating resources through the well-being boards. We need to make Dilnot a reality so that in the longer term all of us know enough to save for our pensions and our care. This amendment is essential if we are to get some action now. I support it very strongly.

6 pm

Baroness Emerton: My Lords, I support the amendments, first, because I totally agree with them. The second reason takes me back in history-I think it was 1976 or 1978-to when the Government had a Bill proposing that learning disability clients should be taken out of mental handicap hospitals and placed in the community. I had the privilege and lovely responsibility -this is when old age comes into experience-of managing that project. I worked with the noble Lord, Lord Warner, who was then director of social services. I also worked with Lambeth, Lewisham, Southwark and all the London boroughs, which were absolutely against having patients transferred to the community.

If there is something in the Bill and it is government policy, everybody will work towards it and understand that there must be integration. We have mentioned the word "culture". I found this issue absolutely fundamental. It runs through the whole issue. The noble Baroness, Lady Cumberlege, was also part of this exercise. She was in Brighton at the time and some clients went to Brighton. It was extremely difficult to get local authorities to understand the needs of some of these clients. Some had special needs and difficult behavioural problems. However, we got there because we had target dates by which we had to do it and also because we had trained staff. We have not yet spoken about the workforce, except in terms of carers and social care. We need to have a workforce that will be able to supply the level and standards of care that will be required.

My noble friend Lady Greengross has just mentioned the fact that dementia care in hospitals is not good. That is probably very true, although it is good in some places. We must look at training needs for social care as well as for transferring patients to secondary care. The culture issues are important and once they are included in the Bill, one can get to work on them.

Baroness Barker: My Lords, I will speak briefly in support of the amendment and answer the point made by the noble Lord, Lord Warner. Since 1948, we have had a system whereby there has been an agreed national settlement on a person's entitlement to healthcare. It is delivered to national criteria and demand is managed largely by waiting times. Running in parallel is social care, where there is no national entitlement and demand is managed by eligibility criteria. The two systems are administered in parallel by completely different people, side by side. Successive reports have set out for us all the different ways in which the two systems do not work together. People have analysed the reasons why the systems do not work together.

The most telling thing for me is that we have known for a very long time, because we have evidence to prove it, that if older people are discharged from hospital

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and are supported through the period of discharge, the likelihood of them being readmitted to hospital is very low. We also know, because of that, that the cost to the NHS decreases. I am afraid to say that those of us who work in the charitable sector also know how impossible it is to get the NHS to run a hospital discharge system. The noble Baroness, Lady Emerton, is absolutely right. I do not want to throw blame about, but it leads to my point about why I think the amendment is important. The biggest single thing that will make an impact on the NHS is cultural change. There are a lot of barriers in the NHS to that change. We have heard the point echoed in our debates over the past few weeks. Some of our most eminent clinicians have made the point very glibly that there is very little evidence about what works in social care. That is true; social care has some way to go in developing an evidence base. However, we have some evidence and it still gets ignored because social care is not up there with healthcare.

Noble Lords have talked throughout our debates about specialist nurses and how important they are. I have come to the conclusion that the greatest asset of a specialist nurse is that they know their way around social care and can explain it to people in the NHS. I do not wish to denigrate specialist nurses in any way; they do a fantastic job. However, part of me thinks that if they are the only ones who understand the system, are they letting the rest of the NHS off the hook? The biggest single thing that will make the Bill work or not work is whether everyone in the NHS sees it as their responsibility to understand and work with social care.

The amendment of the noble Lord, Lord Warner, is cleverly worded. I congratulate him on that. It is based on Dilnot and the Law Commission, although he has crafted it using general terms so that it is not specific to those two reports. I commend him for that. On balance, the most important part of the amendment is proposed new subsection (2)(b), which reflects the Law Commission report. Until we get nationally agreed standards of eligibility, assessment and charging policies, it will be impossible for anyone who works in the NHS to know what it is they are supposed to be integrating with. That is the key point. I understand that Dilnot is important in terms of funding, but the Law Commission report is the important one.

I listened very carefully to what the noble Lord, Lord Turnberg, said. I always do. It is a very good report; I agree with that. However, he said that all these local developments in integrated care depend on funding. He is right, but there is a huge amount of wastage of resources throughout the health service. I pick up on this at local level. It comes down to two things: data are not shared and there is no understanding of common assessment of needs. Those two things cost the NHS and social care a fortune. Proposed new subsection (2)(b) of the amendment is so important because it covers the key area on which we have to work.

Perhaps noble Lords have been slightly pessimistic about the Bill. The existence of health and well-being boards is important. It will be possible, locally if not nationally, to begin to work on these issues. It will be

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possible for some areas to do highly innovative stuff. Noble Lords have talked about the work done in Torbay. When my colleagues were in charge of the borough of Islington, they had a very interesting approach. Social services took responsibility for everything that was to do with children and the NHS took responsibility for everything that was to do with older people, which included social care. I would like to see more of that and I hope that health and well-being boards will bring it about.

Presumably the noble Lord, Lord Warner, was told to have a go at the Liberal Democrats today. I was surprised that he asked about our attitude to the Dilnot report and the Law Commission report. At our conference in September we passed a resolution to the effect that we welcomed the reports and wished to see the Government implement them quickly. We have not come up with a series of bureaucratic provisions to hold up implementation. I pay tribute to Paul Burstow. He came into government when the previous Labour Government had not resolved the issue in 13 years. He found extra funding for social care and went out of his way to make sure that the Dilnot review was set up. He laid down a challenge to us that I pass on to noble Lords. He challenged us to campaign on social care with all the passion and vigour that we do on the NHS. I challenge noble Lords to do that. Actually, I would like to challenge 38 Degrees and everybody else to do that, because there are an awful lot of people who are willing to be as vociferous as you like on the NHS but are suddenly silent when it comes to social care. Some of us have had enough of that. I commend the noble Lord's amendment.

Lord Warner: I was not doubting the enthusiasm on the Liberal Democrat Benches regarding this area. I just wanted to provoke the noble Baroness into giving the kind of excellent speech that she has given. I was hoping that we would hear from her. I also join her in paying tribute to Paul Burstow, and indeed Norman Lamb, for the very supportive way in which they have approached this issue.

Baroness Thornton: My Lords, we have had a very interesting debate on this imaginative amendment from my noble friend Lord Warner. Today's debate might well be the only debate on social care in the whole life of this Bill, including in the Commons. I would like to talk about some real people, with real conditions and real problems, because it is only by testing this Bill against those that we will know whether it is going to work, and whether the issues that are being raised by noble Lords across the House are going to be taken into account.

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