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There is great concern about accounting standards which led to false accounting regarding the state of many banks. While no one is suggesting that any senior banker should be shredded in front of his family, the fact is that there seems to be a total black hole as regards anyone taking any responsibility in the banking industry. Is that not something that still needs to be corrected?
Lord Sassoon: My Lords, the report today is a response to the Vickers commission's work on the structure of banking. I fully accept the noble Lord's reference to other matters, particularly accounting standards. The committee of this House did some extremely important work in that area. I do not pretend that we are solving everything today and accounting is another issue that I am sure Members of this House will not forget as we go forward.
Lord Stewartby: My Lords, will my noble friend say something about supervision and where it fits into this very complicated arrangement of new committees and
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Lord Sassoon: My Lords, I am sure that there will be other occasions and places in which to discuss the Joint Committee's important report on the Bill, so I do not want to get dragged too far into doing that. I recognise that, even for those of us who have been involved in the banking industry, confusing "regulation" and "supervision" can sometimes be a trap into which it is easy to fall. Supervision will be the responsibility of the Bank of England in the new structure, if the Bill is passed by Parliament.
Lord Newton of Braintree: My Lords, I have two quick questions. First, is there any estimate or expectation of a rise in the costs of retail banking as a result of these proposals? It seems to me that that must be a possibility. Secondly-I declare an interest as a 55-year long customer of Lloyds TSB bank in Harwich, Essex-given that the Minister has welcomed the sale of some Lloyds branches to the Co-op Bank, what will happen if we immediately use our switching rights to go back to another branch of Lloyds Bank if we are sold like a commodity?
Lord Sassoon: My Lords, the ICB estimates that the increased cost of borrowing could be of the order of 0.09 per cent to 0.16 per cent as a result of implementing these proposals. That is a very modest additional cost which is well within the smallest ever incremental change to the bank rate introduced by the Bank of England. I will not speculate about what might happen to bank customers where they are sold from one bank to another, but I believe that it is completely right that we should make it easier in all circumstances for bank customers to be able to switch their accounts. That is what the banking system is going to deliver.
Lord Hamilton of Epsom: My Lords, like my noble friend Lord Lawson, I shall sleep at night only when retail banks and investment banks have separate shareholders. Will the noble Lord answer my noble friend's point about the ingenuity of those who run banks to find a way round the ring-fencing, thereby enabling retail banks to continue to back investment banks?
Lord Sassoon: My Lords, as I have said, the way that the governance will work is that the ring-fenced subsidiary will have to have independent directors in the way that, for example, regulated utilities have to have directors who are independent of the holding company's board. That is the principal protection in these circumstances.
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Lord Hollick: My Lords, I welcome the Government's response. It is an important step, but only a first step, to what surely must be full separation of the banks. That is the logic of the Vickers report and is, I should point out, the logic of the Government's response, which states:
"The Government believes that the ring-fenced bank should not be dependent on the financial health of the rest of its corporate group for its solvency or liquidity".
If that is to be achieved, the treasury function, which is right at the heart of banking, would need to be split and there would need to be two treasury functions. Similarly, loan capital would have to be provided separately from the high street bank. That would simply leave the question that my noble friend Lord Eatwell raised: what happens to the capital in the event that the holding company goes under? Surely, the logic of this is to separate these two completely. Can the Minister confirm that banks would be required to separate the treasury function, whereby loan capital will have to be raised separately for the high street bank?
Lord Sassoon: First, I do not accept that the Government's logic drives towards complete separation any more than the ICB itself argued for it. The ICB and the Government believe that there are efficiency and other benefits in allowing banks to keep the two parts of the business together under one holding company. However, the principal protection in the areas to which the noble Lord refers is that there will be limits on the exposures of the ring-fenced bank to other parts of the group. That is what, in particular, will deal with the noble Lord's concerns.
Lord MacGregor of Pulham Market: My Lords, in the recent hearings of the Select Committee on Economic Affairs, the banks accepted that the Vickers report is more or less a done deal but argued that the costs would be considerably higher than those that Vickers calculated and the costs that the Government have estimated today. If in the forthcoming negotiations there is a major dispute about costs and their possible effect on customers, will the Government keep reminding the banks that there is still more to be done to contain costs on bonuses, salaries and other payments?
Lord Sassoon: I agree with my noble friend's sentiments on costs and I have stressed in the Statement that the position of the Bank of England, at this time in particular, is that banks should be using profits they generate to rebuild their balance sheets rather than pay out bonuses. However, to differ a little from my noble friend, I do not see this as representing any negotiation with banks over the costs. The ICB carried out an analysis, and the Treasury made a separate analysis that has resulted in different figures. We have used the input of the banks and their modelling in order to arrive at those numbers. We have come up with numbers for the costs that were higher in some areas than those originally estimated by the ICB. They are very much based on a lot of numbers that the banks themselves have modelled. I do not see a negotiation to be had in that area.
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Health and Social Care Bill
Committee (14th Day) (Continued)
5.34 pm
Clause 206 : Power to regulate social workers etc. in England
Debate on whether Clause 206 should stand part of the Bill.
Lord Hunt of Kings Heath: My Lords, we come to one of the most important parts of the Bill-the regulation of social workers. Although the Bill is entitled the Health and Social Care Bill, the reality is that most of our debates have been about the National Health Service. It is right that in these latter stages of Committee we give a little attention to social care and specifically the condition of social workers.
I do not think that anyone in your Lordships' House will be in any doubt about the scale of the responsibility placed upon social workers or the pressures that they come under. Although Professor Munro's review was centred on the child protection system, what she had to say about social workers would apply more generally to the profession. I was particularly struck by the conclusion, which stated:
"While well intentioned, attempts in the recent past to improve the child protection system have not secured the improvements children and young people deserve. Professional practice with vulnerable children and families has been driven too much by compliance with regulation and rules".
- "frontline social workers in particular operate within an over-standardised framework that makes it difficult for them to prioritise time to form relationships with children and to understand their needs. In parallel, it has becomes more difficult to provide the range of help and services to respond to the wide variety of needs and circumstances presented".
The Government have said that they will,
- "oversee a radical reduction in the amount of regulation, working with partners to see a corresponding reduction in locally designed rules and procedures".
They have also said that they want,
- "to improve radically the knowledge, skills, and expertise of social workers from initial training through to continuing professional development".
The Government said in July that they will,
to ensure that the specific capabilities identified by Professor Munro will,
I am sure that that is welcome and would be generally supported. It is interesting that only five months ago the Government were happy to acknowledge the role of the General Social Care Council. It must surely follow by implication that if the Government are seeking to enhance professional expertise and give social workers more discretion on the front line, it needs to be done in the context of a proportionate, though robust, statutory regulation of social workers. That is what the General Social Care Council exists to do. After a difficult start, which many would acknowledge
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Currently, the council has a register of around 200,000 people, covering 15 health professions. If it takes on social workers, it will have a further 100,000 on the register from a single additional profession. I understand that the reason for which the Government have put forward these proposals is related to cost, not the current performance of the General Social Care Council, which the Government, in the form of the Department of Health, have acknowledged to have improved its performance considerably.
The argument on costs falls away immediately. Registration with the General Social Care Council currently costs £30 per registrant. This is a low figure compared to other regulators, and the Government subsidise the council's operations to the tune of around £16 million a year. The Government want to get rid of that subsidy and their original aim was to transfer the function to an independent body that it was acknowledged would need to charge higher fees to cover costs. Originally, it was intended to make the General Social Care Council independent and for it to recoup all its costs from its registrants. However, the Government argued that an independent self-financing council would be unaffordable for social workers because registration charges for individuals would be in the region of £200 to £300. This calculation did not take on board the work that the General Social Care Council has done in developing a financial plan for independence. My understanding is that the latest calculation from the GSCC is that the actual cost would be far lower, and not dissimilar to the current HPC charges of £76 per annum. I hope that the noble Baroness will answer that point when she responds and not cite those higher figures for costs. I am clear from the evidence I have received that it would be possible to provide independent regulation in a single body for the kind of figure that the Health Professions Council charges.
Concern has been expressed about the Government's intentions. First, within the social care sector, the transfer of the General Social Care Council to the HPC, a multiple profession regulator with generic professional standards, threatens to dilute the unique identity of the social work profession at a time when, as we know, the profession has come under considerable pressure. Some critics cite the reduced representation of social workers within the new Health Professions Council and the fact that the name of the regulator will not contain the term "social work". There are also concerns that a generic, multi-professional regulator will not be well suited to deal with the complexities of social work and the social model, which underpins the practice of the profession.
There are also concerns about changes to the regulation of social work students. Like the General Social Care Council, the HPC does not currently register students of the professions it regulates. I understand that consultation is being or will be undertaken by the HPC on this matter, but it is widely expected that it will conclude that the way in which students are dealt
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That is one problem that we face. I make no criticism of the Health Professions Council, but it has a one-size-fits-all approach to regulation. Its philosophy is that it does not really matter who you register-it could be social workers, clinical psychologists or any profession you like-its model will fit. I am worried about that approach for social workers. That is why I have tabled a number of clause stand part amendments. I think social workers need to have regulation that is geared entirely to the social work profession. My amendments are intended to tease out the Government's approach to how, if social workers come within the Health Professions Council, they are to be given special provision. My Amendments 338B, 338C and 338D are aimed to do that by, first, establishing a statutory committee within the Health Professions Council to oversee the social work regulation, to ensure that the appropriate person will be director of social worker professions' regulation. That is to ensure that a senior officer is directly responsible for social worker regulation and recognised as such in statute. Next, it is important that there are social workers on the council of the Health Professions Council. I do not understand why the council of the HPC is not being dissolved and a new council formed. The number of social workers coming over to the Health Professions Council suggests that that is what should happen: not simply that the council carries on. There should be specific recognition and social workers should be on the council.
Lord Mawhinney: My Lords, a couple of minutes ago, the noble Lord said that he was not going to make any criticism of the HPC. He then sets out amendments which tell the HPC how it is supposed to behave. Is there not a smidgeon of contradiction between those points?
Lord Hunt of Kings Heath: I cannot see any contradiction, although I will of course search my mind to see whether I have been guilty of such. I wanted to make it clear that I do not seek to criticise the Health Professions Council as a body. As I set it up, I have a certain feeling of support for it. I am not sure that its approach to generic regulation, which essentially says that it can regulate any profession in the health service and does not in any way need to change how it does it, should apply to social work, which is a different profession to which different matters apply.
Lord Mawhinney: But is the noble Lord not in effect saying that he does not trust the HPC properly to discharge its responsibilities, so he has to tell it how it should go about it?
Lord Hunt of Kings Heath: If I were to say that I did not trust the Health Professions Council, that might be taken as rather pejorative, and I would not seek to do that. It has done a good job on the health professions it regulates. I simply do not feel that it is right for it to regulate social workers. I do not think
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My final amendment relates to the name of the new HPC, the Health and Care Professions Council. I am puzzled why "social worker" is not in the title. Why was it felt that when bringing 100,000 people into this body, it was not thought worth putting "social worker" in the title. I do not think that Health and Care Professions Council can possibly describe a body that will regulate 100,000 social workers.
I hope that the Government will be prepared to consider the matter again. I know that they want to reduce the number of quangos and regulators, although, if the noble Baroness had been here for the Statement on the banking system, she would have discovered that all Governments start by having a bonfire of the quangos and then inevitably they start to grow again. We saw in the past few minutes a good example of the Government starting to grow some new regulators. In this case, I do not think that the issue of money comes into it-the cost of the balance sheet is taken off the public purse, because it will be funded by registering. Because I am satisfied that the General Social Care Council can fund this through fees which would be similar to those of the Health Professions Council, I hope that the Government will give this further consideration.
Baroness Meacher: My Lords, I support the opposition of the noble Lord, Lord Hunt, to Clauses 206 and 208 to 211 standing part of the Bill, and will also speak to Amendment 338B. The noble Lord, Lord Hunt, has elaborated these issues extremely comprehensively and powerfully. I want to avoid duplication and will therefore concentrate on a few specific concerns that, for me, are the most serious, although the matters raised by the noble Lord, Lord Hunt, are also important to me.
Social work carries onerous public protection responsibilities that, to my mind, differentiate it importantly from the other professions regulated by the Health Professions Council. One issue that highlights that problem is the registration of social work students referred to by the noble Lord, Lord Hunt. This and other key matters are left to regulation under Clause 208 without any clarification of what that will mean in practice.
It is important to bear in mind that social work students have direct and unsupervised contact with vulnerable people, including children, whose lives may be at risk. That is rather different from the contact that other professionals tend to have with individuals. Following an impact assessment, the GSCC, not surprisingly, concluded that compulsory student registration was necessary. At present, the GSCC makes grants to the universities providing social work training. Those grants are conditional on the registration of students. The result is that 95 per cent of students are in fact registered. I am not sure what happened to the other 5 per cent, but in essence it is a form of compulsory registration of students.
As a result, any serious complaint about the conduct of a social work student can be referred for investigation by the GSCC. Although the number of serious complaints is small, it is larger than that of complaints about
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As I understand it, the HPC is consulting on whether the registration of students should be purely voluntary, as it is in the other health professions regulated by the HPC and as mentioned by the noble Lord, Lord Hunt. The concern is that the consultation includes all the health professions, which of course will say that registration does not need to be compulsory, and indeed it does not for these other professions. Any social work professional will recognise the importance of the compulsory registration of students, but of course they will be outnumbered by all the other professions. As a result, social work registration is likely-in fact, almost certain-to become voluntary. I understand that Paul Burstow, the Minister in the other place, has some concerns about this. Can the Minister tell the Committee what progress has been made to ensure that social work registration remains, de facto, compulsory under the student arrangements?
It is worth flagging up that Northern Ireland, Wales and Scotland will continue to have compulsory registration of social work students, and England will be out of line if this provision goes ahead. As a result, inappropriate students-potentially dangerous social workers-will come across the border into this country and practise. Do we really want that to happen?
Another issue is the assessed and supported year in employment-the ASYE. This is not yet in place but has been recommended by the Social Work Reform Board and is supported by the GSCC. I understand that senior social work professionals do not expect the HPC to introduce the assessed and supported year for newly qualified social workers because they want a common system for all professionals, as alluded to by the noble Lord, Lord Hunt. This provision is not necessary for professionals without a public and child protection responsibility.
Again, there is a problem here because of the differences between social work on the one hand and all the other professions on the other. As someone who practised social work-albeit briefly and many years ago-I fully appreciate the importance of a year immediately following qualification when social workers carry a lighter case load and receive support with more hands-on supervision to enable them to consolidate their knowledge. You could say that this was all a bit heavy-handed if it were not for the public and child protection duties of these workers. However, it really is important that those people know what they are doing and that they do not miss high-risk cases.
The GSCC wants the assessed and supported year to be a registration requirement in the future. Northern Ireland has this system. Of course, this would need to be tied in with some control over the number of social work trainees, but in my view it is a very important matter. What are the Minister's plans in this regard?
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My third area of concern is the standard of social work training. Those at the head of the GSCC would agree that we need more, rather than less, rigorous regulation of social work training. Social work standards set by the Department of Health have already fallen over a period; certainly they are quite unrecognisable to me. I think all of us who are aware of the Baby P report would agree with that assertion. We can expect these standards to fall further under the HPC because, as the noble Lord, Lord Hunt, mentioned, the HPC has basic standards across all professions at roughly NVQ level 3-not a degree level and not, in my view, a sufficiently high level-and just a few generic standards for each profession. It is not looking for intellectual rigour and does not have practice standards. Its focus is on outputs, which we all recognise and think are a thoroughly good thing. However, we all know that outputs based on book learning without any fieldwork requirements will miss absolutely essential elements of effective social work professional practice. The Social Work Reform Board is setting higher standards but these will not be regulated. Only the most basic standards set by the HPC will have that regulatory framework.
The Government are, I believe, leaving it to the yet-to-exist College of Social Work to promote excellence in social work. The BASW is challenging the establishment of the college, I understand. Will it exist and, if it does, will it be delayed? If so, for how long? I gather that even when it does exist, the college will be toothless-it will have no powers to regulate training at all. It may set standards of excellence but it will have no powers to ensure that those standards are met. Does the Minister agree that social work standards need to rise, not fall? If so, will she agree to take away these concerns and consider how best to ensure meaningful progress on the issue? That is vital to the protection of children and to avoid more Baby P scandals, with huge embarrassment to the Government. I trust that the Minister will take this seriously.
Finally, I ask the Minister what will become of the GSCC code of practice for social care workers, which is another group altogether. It is important that this code of practice is retained as an element in the standards framework for social care. This is all about standards and the quality of provision. Will this code of practice be hosted by Skills for Care in the interim before any registration of these workers, or will it be lost? I reinforce the point made by the noble Lord, Lord Hunt, about the spurious financial justification for the abolition of the GSCC. I, too, understand that, financially, keeping the GSCC would stand up perfectly well-it could be self-funding on a similar basis to the HPC. I hope that the Minister will be able to explain this.
Very real risks arise from this planned merger. England will move out of line with its neighbouring countries, and we will reduce standards and safeguards in a profession at the front line of child protection. Is it really too late to rethink this high-risk plan?
Baroness Pitkeathley: My Lords, I have interests to declare other than being chair of the Council for Healthcare Regulatory Excellence in that I chaired the advisory body that led to the setting up of the General Social Care Council, and I was its first chair.
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It is not for me to question the Government's decision on these matters, but I draw your Lordships' attention to the fact that neither the decision nor its implementation have been easy for those involved. I pay the warmest possible tribute to colleagues at the General Social Care Council and the HPC for the way in which they have dealt with this difficult situation. In particular, I acknowledge the role of the oversight group, which is chaired by Harry Cayton, the chief executive of the CHRE, and consists of colleagues from both organisations and other interested parties. However difficult those discussions may have been at times, the professionalism and commitment of those involved to the safety and interests of the end users of social workers' work have been exemplary, as has been the commitment to ensuring that there should be as little disruption as possible to their functions during any transition period. Thanks to that professionalism, these reforms will allow for the greater integration of health and social care regulation through the renamed Health and Care Professions Council. Regulation by the HCPC-I shall have to get used to the new initials-will extend regulation to the competence of social workers, as well as to their conduct, and thus improve public protection.
I have some concerns about the proposals for the governance of the HCPC, as they do not reflect the general direction of travel in recent reforms across professional regulation. These have emphasised and focused the regulator's governance and operations on the primary duty of public protection, not of professional representation. Historically, allowing reserved places for particular professionals in councils and committee structures was thought to be damaging to public confidence in regulators and in their decisions about standards and fitness to practise. These proposals might therefore represent a step backwards and not demonstrate good governance principles for professional regulation.
The HPC has a strong track record in taking on new registers, and has established quality assurance mechanisms to facilitate appropriate input from professional expertise, where appropriate. I hope that we shall be able to see that this is an important development, and one that protects all those professions, as well as, most importantly, the public, in the integration of social care and health in the way that we have been calling for in so many debates during the course of this Bill.
6pm
Lord Walton of Detchant: My Lords, I shall be brief because most of what I would hope to say has already been said by the noble Lord, Lord Hunt, by my noble friend Lady Meacher, and by the noble Baroness, Lady Pitkeathley. This Bill, in Clause 209, will abolish the General Social Care Council and place social worker and social care assistant regulation in the Health Professions Council, which is to be renamed the Health and Care Professions Council. This is highly undesirable for a profession that faces enormous challenges and which has only had its own regulator for just over two years. Is it possible for the Government to turn back from the brink? To take the regulation, education and performance standards of social workers
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If this change is inevitable, the amendments that have been tabled by the noble Lord, Lord Hunt, and others are worthy of very serious consideration. They would give social care and social workers a very special and identifiable voice in the Health Professions Council. Is it really appropriate that this mass of social workers should be regulated by a body that already regulates art therapists, biomedical scientists, chiropodists, clinical scientists, dieticians, occupational therapists, physiotherapists, and many others-people who all work primarily in the health field? I quoted many of the bodies regulated by the Health Professions Council earlier today. It seems that putting the social care profession under this council is going to make it a very uncomfortable bedfellow.
I wholly appreciate the Government's wish to have a bonfire of the quangos, and I understand why they wish to reduce the number of regulatory authorities, but there is no doubt that their last mechanism for doing this, when they brought together three major bodies and cumulated them into the Care Quality Commission, has been struggling to fulfil its responsibilities. It is functioning very effectively, but it has had a massive task in taking on all the additional responsibilities that have fallen to the Care Quality Commission since that merger. I fear that the same problems might well emerge in relation to this proposed merger, about which I therefore feel very uncertain and somewhat uncomfortable. I only wish that the Government felt able to think again.
Lord Newton of Braintree: My Lords, prompted only by the debate, I ask one simple question of my noble friend on the Front Bench. What assurance can she give me, in the light of the concerns that have been expressed, that this move will not end up with the same problems that we have had with the CQC, which was asked to take on too much, too fast, and proved incapable of doing it effectively?
Baroness Northover: These amendments on whether the clauses should stand part relate to the transfer of the regulation of social workers in England from the General Social Care Council to the Health Professions Council, and I thank noble Lords for them. The regulation of social workers in England is a very important issue, and I welcome the opportunity to discuss it.
The noble Lord, Lord Hunt, having played a key role in the establishment of various of these bodies, argues his usual very strong case. We are committed to the development of the social work profession and the transfer of the regulation of social workers in England to the Health Professions Council as part of the ongoing work to reform the profession and to ensure that such regulation is effective and sustainable. Like the noble Baroness, Lady Pitkeathley, I, too, pay tribute to those who have been involved in these changes. I have met a number of them and find impressive their commitment to the profession and to making sure
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The purpose of compulsory statutory regulation is to assure the quality and safety of the regulated professions. That, of course, is separate from the development of the profession itself. We are clear that if we separate professional regulation from professional representation, action needs to be taken to ensure that social work has a strong professional voice, and that is why we are supporting the development of the College of Social Work and the appointment of a chief social worker. The proposed transfer of functions to the Health and Care Professions Council will bring a number of further benefits in the form of standards of proficiency, many of which will have been developed by and tailored for the profession, and a fitness to practise process that will look at conduct and competence in the round.
The noble Lord, Lord Hunt, raised some issues about the General Social Care Council and the costs and so on. The council has made progress in developing the organisation since the discovery of a backlog of contact cases in June 2009. However, while the council is improving, there is still a lot of work to be done to bring it into line with the other professional regulators, such as the Health Professions Council. In addition, the council estimated that its costs would significantly rise as a result of these changes, and it would have been challenging for individual social workers to meet those costs.
Lord Hunt of Kings Heath: The noble Baroness says that, but my understanding is that the latest estimate given by the GSCC is that as an independent regulator, the cost to registrants would be no different from that to the cost of registrants under the HPC, so I just do not understand the costs issue.
Baroness Northover: As the noble Lord will be aware, the figures provided by the General Social Care Council indicated that the costs would rise from £21 million to £25 million per annum, which would indeed cost about £250 per social worker. I realise that the council later revised this downwards, but the noble Lord knows as well as I do that those were the original figures based upon what the council estimated at the time. Even with the revision downwards, it was still not in line with the HPC, as I am sure the noble Lord is well aware.
However, it is extremely important to make sure that the arrangements that are in place regulate the social work profession properly and separate out the professionalisation of social work. The noble Lord will remember that he asked a question on this, and I drew the distinction for the medical profession with which the noble Lord, Lord Walton, will be familiar; the GMC regulates the medical profession, and the royal colleges do a fantastic job in promoting the profession and taking it further. The original arrangements that the noble Lord introduced were an earlier stage for social work, and the task now is to take it to the next level of development.
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Regulation by the Health and Care Professions Council will bring social work regulation in England within the scope of the professional standards authority, with the added scrutiny that that will bring. It is our view that it would be wrong to require the Health Professions Council to move away from its tried and tested system of regulation solely for the social work profession.
Baroness Meacher: May I ask the Minister whether she agrees that the standards set by the HPC are just lower than standards that social workers are used to and require to do the job properly?
Baroness Northover: I am not sure that I would agree with that. If the noble Baroness bears in mind that the HPC will regulate the profession and that other means will be used to drive further forward the training standards and the education of the profession in conjunction with the regulator, it may very well be that those two things have become conflated and it is important that they are separated out.
Baroness Meacher: Would the Minister be willing to write to me to explain how these things will work? As I understand it, some standards might be set elsewhere but the standards that will be regulated will be those of the HPC, which will be very low. The HPC is the one with the regulatory powers and therefore it will not regulate the higher standards that might be set, for example, as good examples by the college. It would be helpful if we could have an explanation of how that will work in practice.
Baroness Northover: I am more than happy to write to the noble Baroness. In the discussions that I have had with various organisations, including the HPC, that is not the conclusion that I come away with. I hope that she is reassured.
Lord Walton of Detchant: I apologise for interrupting and I do not wish to prolong the debate but the noble Baroness was kind enough to refer to my presence at the General Medical Council, which ended in 1989. Things have changed a little since that time. Of course, the GMC was concerned primarily with standards of education and ensuring that those who were properly educated and qualified were fit to practise in the first instance. Secondly, it was concerned with fitness to practise and with individuals in the profession who deviated from proper standards of practice as defined by the standards committee. It was concerned with the ethics of the profession and with ongoing and further education as well as with many other responsibilities. My understanding was that all those matters were within the ambit of the General Social Care Council in relation to its responsibilities. When the General Social Care Council transfers to the Health Professions Council, can we be assured that all those responsibilities that fall to the General Social Care Council, which is very young and only just finding its way, will be taken on board?
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Baroness Northover: I will write with all the details so that noble Lords can see that there is no falling back in terms of the standards that people need to reach. We would hope that this separation out will drive standards up further. I will write to the noble Lord so that he can see that for himself.
On whether there should be a specific mention of social workers in the HPC and on the other points raised by the noble Lord, Lord Hunt, currently none of the professions regulated by the Health Professions Council has its own committee, director, or representation on the council. Neither is any profession mentioned in the council's title. Ultimately, it should be for the Health Professions Council to decide how best to regulate social workers and it has already established committees and appointed staff. It is very actively involved with the organisations involved in the transfer to see how best they need to gear things so that they are dealing with social workers appropriately.
The Council for Healthcare Regulatory Excellence has made it clear that in its view it is important that council members are focused on the governance of the organisation rather than on representing particular professional interests. We agree with this. The proposed new name of the council was decided upon with reference to the views of the Social Work Regulation Oversight Group, which includes in its membership Moira Gibb, chair of the Social Work Reform Board. None of the professions that the Health Professions Council currently regulates is specifically mentioned in the name and it would not be right to single out one profession now.
The Health Professions Council does, of course, recognise how vital the expertise and knowledge of social workers will be if it is to regulate them well. Its draft standards of proficiency for social workers have been developed by a professional liaison group which included representatives of social workers, their employers and educators. In addition, it uses members of a profession as partners to support its work. These partners have a role in approving training courses, hearing fitness to practise cases and assessing continuing professional development. They will ensure that decisions made about social workers are informed by an understanding of the complexities and challenges facing the profession.
6.15 pm
The noble Lord, Lord Hunt, and particularly the noble Baroness, Lady Meacher, flagged up the issue of students. We are mindful that there should be no gap in the assurance of the standards of social work students and intend to provide for the transfer of the voluntary register of social work students to the Health and Care Professions Council pending a full consideration of the best approach to assuring the safety and standards of student social workers. We are acutely aware of that concern. The council has committed to undertaking a review of the risk in relation to students and if, indeed, as the noble Baroness, Lady Meacher, indicates, there is a significant risk, that is something that the Health Professions Council will take on board. It is looking at the risk to students of all professions that it regulates, including those of social work students.
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The outcome of this process will set out the risks and issues relating to social work students. The Health Professions Council has assured us that it will seek to ensure that the outcome of its review is informed by social work expertise and evidence. If the noble Baroness wishes to send in information, I am sure that the HPC will be pleased to receive it. The Health Professions Council is currently consulting on this issue and we expect it to report on the results of this by spring 2012.
The noble Baroness, Lady Meacher, asked about the situation in relation to Scotland, Wales and Northern Ireland. She is absolutely right: the regulation of social workers is devolved, so each country can develop a system that best fits its delivery of social care. Therefore, there may well be divergences in the systems adopted. However, she is absolutely right that it is important that that divergence should not prevent, for example, the free movement of social workers or the necessary sharing of information between regulatory bodies. The Health Professions Council is working with the care councils of Scotland, Wales and Northern Ireland to establish a memorandum of understanding. That memorandum is expected to address such issues as cross-border fitness to practise, the recognition of programmes of education and training, information sharing and consistency on standards and their development. To support the Health Professions Council to develop those systems, the Bill imposes a duty on the council to co-operate with the care councils. I hope the noble Baroness will find that reassuring.
Following up on one or two other points on students, the General Social Care Council of course enforces its register of student social workers through the criteria of eligibility for an education support grant, which funds the practice placements of student social workers. The Health and Care Professions Council will not have that particular lever, but it will have other means, such as the council's approval of pre-registration courses, through which the Health and Care Professions Council will be able to encourage student registration if, following consideration, voluntary registration is considered the most appropriate way.
Baroness Meacher: I wonder whether the Minister would consider that there should be a compulsory requirement. If the HPC is registering these courses, could it not be made compulsory that the course must register the students?
Baroness Northover: As I just said, the HPC is currently consulting. I strongly suggest that the noble Baroness feeds into the consultation her recommendations and the evidence on which they are based so that they can be properly considered.
The question was raised of how social workers might be linked to the wider reform programme. The Health Professions Council is represented on the reform board and will be able to contribute its expertise to the ongoing reform of social work. Moira Gibb, chair of the reform board, is also a member of the Social Work Regulation Oversight Group. Her professional expertise and knowledge is contributing to the transfer process. Many organisations on the HPC's professional liaison
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I hope that noble Lords will see that a lot of attention is being focused on trying to ensure that the change will operate as effectively as possible and will be in the interests of those with whom social workers work. It is exceptionally important that we protect the vulnerable people whom social workers look after, and we are acutely aware of that. On the basis of what I have said, I hope that noble Lords will not press the amendments in this group.
Lord Hunt of Kings Heath: My Lords, I am very grateful for the noble Baroness's response. Of course I agree with her last point that the end result will be the impact on people to whom social workers provide a service. However, she did not respond to her noble friend Lord Newton, who asked whether creating this new body would not repeat some of the issues that were faced by the CQC. I am left with puzzlement. I have not heard one point in favour of this happening. It is beyond me to understand why it is being done. No argument with any thought behind it has been put to suggest that this will improve the regulation of social workers.
On the question of costs, whatever the original estimate, the General Social Care Council produced new work. The noble Baroness shakes her head. Is she saying that the General Social Care Council is misleading Parliament on the issue? It stated clearly that it can produce a regulatory system that will cost the Health Professions Council very little.
Thirdly, on the question of student registration, the problem is that I know what the outcome will be of the work that the HPC will do. It will continue with the system that it applies to the health professions. It is clear that the HPC, although it is a good body, is completely inflexible and will not change its approach because a new profession has been added to it. There is no trust out there-I have fallen into the trap set by the noble Lord, Lord Mawhinney. I am talking about the professions. There is no trust because the record of the HPC is simply to embrace profession after profession, which all have to be moulded into the system that the HPC has set. While that will work for health professions, my concern is that social work is a completely different profession. This point was put by the noble Lord, Lord Walton.
I understand why my noble friend Lady Pitkeathley is concerned about an amendment that stresses the importance of having social workers on the council of the HPC. However, because of the very new nature of the body, when one brings in a completely new profession some protection needs to be given. There needs to be some assurance that the HPC will have people at a very senior level who understand social work. I still do not know why a new council is not being appointed. If good faith was being shown by the Government to the social work profession, the current council would have been stood down and a new council appointed. That is why I tabled my amendment.
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Finally, I turn to the name. The noble Baroness said that we cannot put "social work" in the name of the organisation because none of the other professions covered by the HPC is in the current HPC name. If that is the case, why does Clause 210 refer to the Health and Social Work Professions Order? The Government have no problem whatever recognising "social work" in an order before Parliament. Surely it is not up to the HPC to depart from that view. Clause 219 refers to the Professional Standards Authority for Health and Social Care. Therefore, if the noble Baroness does not like "social worker" in the title of the organisation, why would she not accept "health and social care professions"? Why is there an attempt to completely remove the concept of social work and social care from the title?
Unfortunately, an existing health body is simply taking over the social work profession without any genuflection whatever to the need to embrace social workers in the new organisation, whether in governance, remit or title. It is very disappointing that the Government are not prepared to reconsider the matter.
Clause 211 : The Health and Care Professions Council
Amendments 338B to 338D not moved.
Amendment 338E had been withdrawn from the Marshalled List.
Clause 212 : Function of the Council in relation to social work in England
Amendments 339 to 339ZB not moved.
6.30 pm
Clause 225 : Establishment of voluntary registers
Baroness Masham of Ilton: My Lords, we now have another bite at a very important cherry. My amendments in this group seek to provide for a mandatory register for healthcare assistants and assistant practitioners by
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This proposal is supported by the Royal College of Nursing and the House of Commons Health Select Committee. The Select Committee's report expresses concern about the Government's proposals for a system of voluntary registration:
"The Committee endorses mandatory statutory regulation of healthcare assistants and support workers and we believe that this is the only approach which maximises public protection. The Committee notes that the Government intends to give powers to the relevant regulators to establish voluntary registers for non-regulated professionals and workers, but would urge it to see healthcare assistants, support workers and assistant practitioners as exceptions to this approach who should be subject to mandatory statutory regulation".
A voluntary register is likely to be too weak and in any event it will be avoided by the very people about whom there is most concern. The recent horrifying scandal at Winterbourne View in Bristol underlines the issues around the registration of healthcare assistants. This view is supported by the Health Select Committee. The main benefit of ensuring that every care worker and healthcare assistant is regulated by a regulatory body is that the code of practice associated with their registration must be followed or they could be subject to disciplinary procedures.
It should also be noted that the rate at which people register with a voluntary system is open to question. A similar situation arose in the UK when seat-belt wearing was voluntary. It was only when wearing seat belts became compulsory in 1983 that the rate went from around 30 per cent to its current 95 per cent. It is highly likely that the same would happen here.
If the existing regulators are too hard-pressed to take this on, I am sure that there are other willing providers who would do this job. My interest in this is the safety and well-being of patients and the morale of those who give the service that should be given with tender loving care.
I cannot accept the Minister's statement that we have not got the evidence. What about all the recent reports from the Audit Commission, the Patients Association and the CQC, the "Panorama" programme on the appalling situation at Winterbourne View care home, the review of Mid Staffordshire NHS Foundation Trust, the deaths and poisoning with insulin at Stepping Hill Hospital and many other serious incidents in hospitals and the community? I beg to move.
Lord Ramsbotham: My Lords, I wish to speak to my two amendments to Clause 225. I must admit that they are probing amendments that ask a question. I am confused by the situation that appears to be being proposed, and I am speaking in the context of two particular groups of people: Armed Forces veterans and prisoners.
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As is well known, there is a huge pool of psychiatric morbidity in prisons, which I mentioned this morning. It is also known that a considerable number of veterans suffer from a variety of mental health problems-anxiety, depression and alcoholism-but added to them is the extra spectre of post-traumatic stress disorder. Psychotherapists and counsellors are employed particularly to help with PTSD, anxiety and depression. Unfortunately, as far as veterans are concerned, they are currently denied the choice that is available to citizens in the United Kingdom because Combat Stress, which tends to be the blanket organisation for their treatment, follows rigidly the NICE guidelines in recognising only CBT and EMDR. The care and treatment that Combat Stress provides does not meet all the cases of soldiers, veterans of other services and prisoners, and other organisations, such as the Human Givens Institute, have been having enormous success with them. Those organisations currently function under the auspices of the UKCP and the BACP, which operate voluntary registers-indeed, many organisations working in this area are registered with both.
As I understand Clause 225, the HPC, established by the previous Government, will no longer exist and instead we will have two new organisations: the Professional Standards Authority and the Health and Care Professions Council. Between them, they are going to be responsible for establishing the statutory regulation, the accreditation and, we are led to believe, the voluntary registers. This is where my question comes in. The trouble with that is that it could cause confusion because you cannot have two organisations running parallel voluntary organisations if you are going to give clarity to the people who need their services. I understand that a consultation is taking place, that the outcome is due in April or May next year and that other organisations, such as the Human Givens Institute, have been invited to attend this consultation, which they are very glad of because they have at last been able to put their case on the table.
The case is very interesting because those organisations are able to prove the success of what they have done by measured outcomes, whereas organisations that follow the NICE guidelines cannot prove anything by outcomes as they have not got them. All they can say is that they have conformed to the guidelines. One of the problems in this area is that the guidelines, which I understand were originally meant to be guidelines, are being taken as tablets of stone. That is thoroughly unfortunate in this area, particularly when we are facing the need for the Department of Health to conform to the demands, for example, of the Armed Forces covenant, which will certify that all the things needed by veterans will be available-housing, of course, but also in the health area.
It is very important that this issue is resolved and that there is clarity. People should know who is responsible for setting up which register and who is responsible for accrediting whom, so that there can be no doubt in the minds of the users. Therefore, I should be enormously grateful if the Minister could clarify that. If necessary, perhaps we could meet before Report for clarification on this matter because the organisations concerned are in doubt.
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Lord Walton of Detchant: My Lords, I shall be brief but, as always, my noble friend Lady Masham was very persuasive. I have always felt, as indeed she does, that there is a powerful case to be made for the statutory regulation of healthcare assistants not only in hospitals but in homes, particularly old people's homes. As we heard during the debate on the amendment tabled by my noble friend Lady Emerton, the Government are entirely persuaded that at present the regulation of such individuals could not be done by statute. I must say that I feel uncomfortable about that.
Is there any means by which the Government can suggest a mechanism whereby, perhaps in consultation with the Care Quality Commission, the terms of voluntary registration of healthcare assistants could be based on a set of agreed principles which were accepted generally by all the professions concerned? As it exists at the moment, voluntary registration is not adequate or strong enough and needs to be strengthened. Therefore, while I support in principle the ideas put forward by my noble friend Lady Masham, I think that for the present we will have to be satisfied with voluntary registration, which should be strengthened by whatever mechanism can be introduced.
Baroness Barker: My Lords, I have a great deal of sympathy with what the noble Lord, Lord Walton, has said. If noble Lords look at A Vision for Adult Social Care, a document published by the Government last year, they will see that the principles underpinning health and social care have been set out perhaps more clearly than they have been for some considerable time. I do not think the problem is that the principles are not there or are not known; it is that the training that brings those principles to life for a practitioner is not there.
I am torn on this issue. I listened to the noble Baroness, Lady Pitkeathley, and I was persuaded by what she said. I know of organisations which use staff who are not registered but who are exceptionally well trained and have very high standards. If the Government are reluctant-I am sure that my noble friend will again say that they are-to go down the path of full registration, I would understand that position if my noble friend would give a commitment to the development of training. That would go a long way to meeting the point to which I think all noble Lords are trying to get; namely, that the training of people involved in the direct care of those who, usually, have long-term conditions is of a high-enough quality. That is the most helpful thing that my noble friend might be able to say.
Baroness Pitkeathley: My Lords, in response to the two noble Lords from the Cross Benches who have spoken, the thinking of CHRE, which is to become the Professional Standards Authority, on the accreditation of voluntary registers is quite well developed. We would be very happy to participate in any meeting of the kind suggested.
6.45 pm
Lord Hunt of Kings Heath: My Lords, that is a very helpful offer from my noble friend. I welcome the debate and I am grateful to the noble Baroness, Lady
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I was very interested in what the noble Lord, Lord Ramsbotham, had to say and he will know that I have a particular interest in prison healthcare. I think that the involvement of the National Health Service in prison healthcare has led to a great improvement but more needs to be done. The points that he raised are very important.
I have put my name to Amendment 339BZA, which is in the name of the noble Lord, Lord Low, who, unfortunately, is unable to be here today. Perhaps I may briefly say that he has some strong arguments in relation to rehabilitation officers for the blind. He has pointed out that such officers work within the same legal framework as occupational therapists and social workers. They case-manage clients, devise and manage packages of care, oversee the work of lower skilled workers and manage risk-intensive situations with already vulnerable people. In Wales, statutory regulation for rehabilitation officers is due to be finalised at the end of this year. The noble Lord, Lord Low, would like some recognition that at least voluntary registration could be considered for this profession under the terms of the Bill. On that basis, I hope that the noble Baroness may be able to give some positive response to the noble Lord's amendment.
Baroness Northover: My Lords, I thank noble Lords for these amendments, which raise important issues about the ways in which we assure the quality and safety of our health and social care workforce. It is another bite of a very important cherry, as the noble Baroness, Lady Masham, put it, which is a wonderfully graphic image. We had a full discussion of this issue earlier. Perhaps I may emphasise again that the Government are committed to embedding quality of care and patient safety at the heart of health and social care provision. These are the key drivers of our policy on workforce assurance.
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I fully agree with the noble Baroness, Lady Masham, that we need to drive up quality, which has run through a lot of our debates today. In considering how we achieve this, we need to ensure that any system is proportionate and effective and properly balances the need for local responsibility for providing high-quality, safe services, and the need for consistent and rigorous national standards. I assure noble Lords that we are not ruling out compulsory statutory regulation for any groups of workers. Compulsory statutory regulation will be considered where there is a clear body of evidence that the risks presented by specific groups cannot be mitigated by assured voluntary registration alongside other existing systems of assurance of standards, such as supervision of workers by qualified professionals, enforcement of standards by employers, registration with the Care Quality Commission, and the vetting and barring system.
However, compulsory statutory regulation, as we discussed earlier although we did not all agree, is not a panacea. It is no substitute for good leadership at every level and proper and visible management of health and social care services. The best protection for the public is, of course, well run services focused on the individual and delivered by qualified staff and appropriately trained and supervised care workers. Employers, commissioners and managers must take responsibility for ensuring this and we need to make sure that local service providers and commissioners are held to account for managing problems effectively and promptly.
The Care Quality Commission sets standards of care for all providers of regulated activities and takes action when they are not met. These standards include a requirement that providers use suitable numbers of appropriately trained and qualified workers. In the rare cases where health and social care workers present a risk of harm to service users, the vetting and barring system can be used to ban individuals from working with vulnerable adults and children. In this context, our view is that the standards of unregulated groups of health and social care workers can generally be assured without imposing compulsory statutory regulation. However, we recognise that we need to ensure that commissioners, employers, supervisors and individual users of services have the knowledge needed appropriately to employ, delegate to and supervise health and social care workers. The Government believe, as noble Lords have clearly picked up, that assured voluntary registration enables this to be achieved.
The amendment tabled by the noble Lord, Lord Low, and spoken to by the noble Lord, Lord Hunt, seeks to enable regulatory bodies to establish and maintain voluntary registers of unregulated rehabilitation officers for the blind in England. The assured voluntary registration of this important group of workers would enable standards to be set for entry to and practice of the profession. I hope that I can reassure the noble Lord, Lord Low, through the noble Lord, Lord Hunt, that the amendment is unnecessary as we are confident that the provisions which enable voluntary registers as social care workers in England to be established by the Health and Care Professions Council and accredited by the Professional Standards Authority for Health and Social Care are already wide enough to include such officers.
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The noble Lord, Lord Ramsbotham, flagged up key areas with his particular concern about prisoners' mental health and the mental health of those coming out of the Army. The Health and Care Professions Council will be given the power to set up voluntary registers of workers. Perhaps I may clarify for him the possible confusion over the roles of the various bodies. The council can set up voluntary registers of workers. The Professional Standards Authority for Health and Social Care will not hold registers, but will have the function of accrediting them to ensure that they are robust. However, I am happy to write with further details to clarify the situation for the noble Lord so as to ensure that he is quite happy with the way that things will be organised.
In referring back to our earlier debate, perhaps I may assure my noble friend Lady Barker, who is absolutely right in terms of training, that we place great importance on improving the training of health and social care workers, and especially on further integrating it, something flagged up not only by my noble friend, but also earlier by the noble Baroness, Lady Emerton, and others.
I hope that I have been able to reassure noble Lords of our commitment to assuring the quality and safety of health and social care workers and the contribution assured voluntary registration can make to the existing systems of assurance of the standards of health and social care workers. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.
Baroness Masham of Ilton: My Lords, I thank all the supporters of the amendment. In an ideal situation, what the Minister has said might work, but it is not an ideal world. The important point is that of picking up those people who will not come forward for voluntary registration. What does one do with them? Some agencies might not take people on who have not voluntarily registered, but others take on anyone without even taking up references. There must be safeguards, as the noble Lord, Lord Hunt, has said. We live for the Report stage. With that, I beg leave to withdraw the amendment.
Amendments 339B to 340A not moved.
Clause 226 : Accreditation of voluntary registers
Amendments 340B to 340G not moved.
Amendments 340GA to 340GC had been withdrawn from the Marshalled List.
Amendments 340H to 340V not moved.
19 Dec 2011 : Column 1634
Schedule 17 : The National Institute for Health and Care Excellence
340W: Schedule 17, page 413, line 15, leave out sub-paragraph (2) and insert-
"( ) The Chair will be appointed by the Secretary of State with the consent of the Health Select Committee of the House of Commons."
Lord Hunt of Kings Heath: My Lords, this amendment brings us to NICE. I start by paying tribute to its work, and I should say that I much appreciated the commendation for the institute made by the noble Earl, Lord Howe, in the Oral Question last week. NICE was established because of the slowness of the NHS to take up proven new treatments and drugs, and although there was concern at the time of its establishment, I do not think there is any doubt that it has done a good job and that it has achieved global recognition for aspects of its work. It is important to build on this in the future and not to put any qualifications or impediments in its way or undermine its independence. That is why Amendment 340W would provide that the consent of the Health Select Committee ought to be required for the appointment of the chairman of NICE. This is a very important appointment, and I would have thought that parliamentary scrutiny will enhance confidence in the independence of NICE's role.
Amendment 340X would remove the current provision in Schedule 17 to give the Secretary of State a veto over the appointment of the chief executive of NICE. Given the Secretary of State's desire to take a hands-off approach and given also the enhancement in the status of NICE, I remain somewhat puzzled as to why the Secretary of State wishes to maintain a veto power over the appointment of the chief executive, and I wonder if the noble Earl would consider removing it. Surely it would be appropriate to leave it to the good sense of the chairman and members of the board to appoint the chief executive.
Amendment 344ZA ties in with Amendment 344, to which my noble friend will speak in a moment. It is important that NICE should continue to assess the cost-effectiveness to the health service of new pharmaceutical products, and certainly until this matter is incorporated into a system of quality standards as provided for in Clause 231. I assume that this is also tied to proposals on value-based pricing which we debated a little at Second Reading. Essentially, however, I would like some assurance from the noble Earl that in the current circumstances, appraisals by NICE will be subject to directions so far as implementations are concerned and that clinical commissioning groups will be required to implement such guidance. The point here is this. The other reason NICE was established was to try to remove postcode prescribing as far as possible, so it is important to ensure that this continues under the Government's new proposals. I beg to move.
7 pm
Lord Warner: My Lords, Amendment 344 in this group, in my name and that of the noble Lord, Lord Patel, and the noble Baroness, Lady Thornton, has
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I join my noble friend Lord Hunt in paying tribute to the work that NICE has done. These technology appraisals were the original purpose of NICE when it was set up, against the wishes of the pharmaceutical industry. It has done sterling work in this area which has provided it with an international reputation. One of the strange ironies of this is that the pharmaceutical industry has come almost to love NICE, because the commercial value and standing given to some of its new products when companies receive a positive appraisal by NICE has been considerable. When I went to America to make my peace with some in the pharmaceutical industry after cutting their prices, and after they sometimes broke down in tears over the drop in their profits, they would say that if the mean NHS was willing to pay for those drugs, they must be good things in themselves.
Value-based pricing still looks to be some way off and it seems premature to many to remove NICE from the sphere of technology appraisals-here, I should declare my interest, because I have been a Minister with responsibilities for NICE. I want to press the Minister to tell us more about the arguments for removing NICE from this work, particularly given the financial challenges faced by the NHS, and whether the Government will think again about technology appraisals and NICE's responsibilities there. That is the purpose of the amendment; I look forward to hearing the Government's views.
Lord Owen: My Lords, I wish to extol the merits of NICE after watching it from the other side, which is the pharmaceutical industry. It is certainly true that the United States pharmaceutical industry was appalled initially by the appointment of NICE and there are still a lot of people who dislike it intensely. Nevertheless, it has established a scientific credibility which is rare in regulatory activities and which it would be absurd to forgo.
I am worried about a lot of the language used about NICE in this legislation. I know that "direct" will be discussed in another context, but there is an overall intent effectively to bring the body into the Government and make it answerable to them. The important quality of NICE, which was established particularly when it first arose, is its measure of independence. If that measure of independence is lost, NICE's authority and credibility will go with it. I see a lot of merit in ensuring that the appointment of the chair carries not just the imprimatur of the Secretary of State but the imprimatur of Parliament. The Select Committee on Health, which has shown itself over many years to take an informed and knowledgeable view of the National Health Service, is a credible check on NICE becoming not just another annexe to the Department of Health.
I am also concerned about the additional responsibilities being given to NICE. NICE's quality came from the fact that it was highly focused. That focus was on the pharmaceutical industry but it was also on science and scientific appraisal. It is a great help to the department to have this authoritative, independent view. We all know how easy it is for
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I hope that the Government will not only listen to the proposers of the amendments but take this issue away and ask themselves whether they are not scoring an own-goal. NICE is an organisation that has worked; not many of our organisations in this field work quite so successfully and build such a substantial reputation within the profession which was sceptical about it. I agree with the noble Lord, Lord Warner, that even the pharmaceutical industry has come to see its value. A lot of other countries are looking at NICE and want something similar to be established. A lot of the language in this part of the Bill goes against that trend. I will listen carefully to the Minister's reply, but I hope that the Government will have a fresh look at this matter.
Lord Patel: My Lords, I have added my name to Amendment 344 tabled by the noble Lord, Lord Warner. NICE should continue to do technology assessments or appraisals. It is not surprising that I should support the amendment, because I was closer to the establishment of NICE than most people may know, although I said so at Second Reading. It was a paper written when I was chairman of the Academy of Medical Royal Colleges, to establish a national institute of clinical effectiveness, which led to the establishment of NICE as an institute of clinical excellence. At the same time as Mike Rawlins, a good friend for many years, started with NICE, I was involved in a similar exercise with SMC, its sister organisation in Scotland.
The key thing about both organisations is that, despite their appraisals of drugs, neither of them has been taken to court about their advice. That says something about the scientific veracity with which examinations are carried out. Although I have views that are sometimes slightly different from NICE-for example, I think that we will have to adjust in due course the QALY from £30,000 a year because we will find with drugs that are more expensive and effective that that price is too low-I go further and say not only that NICE should not be stopped from doing these appraisals but that its remit should be extended to biochemical tests, which should not be used in the NHS unless they are proven to be useful. As genomic medicine advances, more molecular and genetic tests will come on the market. It is already happening in the United States. Tests are used which are not found to be scientifically appropriate and marketed at a ridiculous price. I give the example of a test that is used to predict whether a person with a myocardial infarction will develop chronic heart failure. We use a much simpler test. They charge £8,000 for a test which must be done twice a year; we use a stethoscope to listen to the chest
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Earl Howe: My Lords, I know that NICE is held in very high regard by noble Lords in the Committee. The Government share that view. That is why we are putting NICE on a firmer statutory footing in the Bill, extending its role to cover social care as well as healthcare and public health, and putting NICE quality standards at the heart of quality improvement. NICE will continue to play a key role in helping to ensure that decision-making in the NHS is robust and evidence-based.
The noble Lord, Lord Owen, said that the Bill gave the impression that NICE would turn into a kind of annex of the Department of Health. I can assure him that that is not the intention of the Government. A special health authority, as NICE technically is at the moment, is much closer in technical terms to the Department of Health than the non-departmental public body that we will set up. He also said that he felt that the additional responsibilities we were placing on NICE were inappropriate. When I have spoken to Sir Michael Rawlins, the chair of NICE, he does not take that view. He regards what we are doing as a vote of confidence in NICE, which is what it is intended to be.
There has been some confusion throughout the passage of the Bill about the detail of NICE's future role. This may underlie some of the discussion we have had in the debate around the incorporation of NICE's technology appraisals into quality standards. First, I can confirm that NICE will continue to appraise new drugs and technologies at least until we implement our plans for value-based pricing from 2014. The Bill enables us to provide for NICE to continue this important work when it is re-established.
As we develop our plans for value-based pricing of new branded medicines, NICE's role in appraising drugs will inevitably evolve. However, we have been clear that we expect NICE to have a central role in the value-based pricing system, including in undertaking an assessment of the costs and benefits of different medicines. That is highly analogous to its current role. I very much agree with the noble Lord, Lord Owen, that we do not wish to lose-and certainly not downplay-the skills and scientific and analytical expertise
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Alongside that, NICE may also need to continue to undertake some technology appraisal activity after 2014-for example, to review existing recommendations in the light of new evidence or to assess important new non-drug technologies. It is quite wrong to suggest that we will cease that activity within NICE.
I also take the opportunity to reassure noble Lords that we will use powers in the Bill to replicate the effect of the funding direction which ensures that the NHS in England continues to fund drugs that have been recommended by NICE's technology appraisal guidance. However, it would not be appropriate to place in the Bill such a requirement on clinical commissioning groups-as Amendment 344ZA would seek to do. That would leave no flexibility to alter the requirement in the event that there were clear practical barriers to implementation within three months of the final guidance. Amendments to the existing funding direction have only been made on a small number of occasions but it is important to retain that flexibility and secondary legislation supports this better than putting a requirement in the Bill.
7.15 pm
In our response to the Future Forum report, we also confirmed our intention to maintain the effect of the funding direction in the new value-based pricing arrangements from 2014 to ensure that the NHS in England consistently funds medicines with a value-based price. This means that NHS patients can be reassured that they will continue to have a right to clinically appropriate, cost-effective drugs and treatments as set out in the NHS constitution and handbook. Quality standards bring clarity to quality and are a resource that supports clinicians and commissioners in driving quality improvement locally. They serve a different purpose from the technology appraisal guidance that NICE provides on drugs and treatments.
There has also been some debate around the promotion of innovation by NICE. It has been a recurring theme in the Committee. A few days ago we published Innovation, Health and Wealth, which recognises the key role that NICE guidance should play in supporting the adoption and diffusion of innovation and sets out a range of measures to support and improve implementation of NICE's guidance, such as the establishment of a NICE implementation collaborative.
There has also been discussion about whether it is appropriate for NICE to have a training function. I can reassure noble Lords that there is a clear need for this provision. I am looking here at Clause 236. Among its important functions, we intend that NICE will undertake work historically delivered by the National Prescribing Centre, which provides support for high-quality, cost-effective prescribing and medicines management across the NHS through the development of a range of tools and services. NICE, in its current statutory form, absorbed the NPC in April of this
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There have also been suggestions that we amend some of the provisions relating to the chair and non-executive directors in Schedule 17. I can understand why the noble Lord, Lord Hunt, suggested that the Health Select Committee should approve the appointment of the chair of NICE but this provision has not been made for the other bodies being established in the Bill and I do not believe it is necessary for NICE. Under the Bill, the Secretary of State will be responsible for appointing the chair of NICE, as is the case for NICE in its current statutory form. To require Health Select Committee authorisation would be to add a further layer to the appointments process for the NICE chair to little obvious benefit.
I can also appreciate why noble Lords have asked me to clarify Schedule 17(3). It may at first glance appear to contain an unusual level of detail for primary legislation but I should point out that this provision is here for a serious purpose: to ensure that in the very serious but, we hope, unlikely eventuality that a non-executive officer of NICE is suspended there can be no argument about whether they have been properly informed of that decision. This provision is consistent across the arm's-length bodies being established in the Bill.
Finally, I briefly speak to the amendments that I will seek to move. They are all minor and seek to: clarify some of the wording around NICE's additional functions; ensure that public consultation for quality standards produced now will be recognised as effective consultation following NICE's re-establishment; and remove an amendment to Welsh legislation in the consequential provisions that is considered unnecessary. I hope that the noble Lord will feel reassured by my explanations of these issues and that he will withdraw his amendments.
Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Earl. At heart, there are two key issues here. One is the independence of NICE-I am grateful for what the noble Earl said on that. I certainly support the change in status. The reason there is some anxiety about independence is that in two parts of the Bill the NHS Commissioning Board has powers of direction over NICE. We will come on to this in relation to Clause 231 on quality standards-it applies also to Clause 236 but this is where some of the concern comes from. I am very dubious about whether quangos, to put it kindly, should have power over NICE. That is where the concern comes from and why scrutiny by the Health Select Committee of the chair would be important.
The noble Earl has reassured us that the technology appraisals will continue and that, until value-based pricing is introduced, there will be a clear understanding that NHS bodies will implement the technology appraisals. He said that it would not be appropriate for those directions to the health service to be in the Bill, but can he clarify that the current order will be amended
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My third point to the noble Earl is about value-based pricing. One of the joys of talking about value-based pricing is that no one understands it, and, frankly, having read all the reports and the original OXERAreport, I confess that I am still rather puzzled by it. It sounds good, but I caution the Government that the PPRS has served us reasonably well. It has allowed the Government to cap the profits of the pharmaceutical industry but has given them complete discretion about the price of individual drugs-the advantage being that prices set in the UK have then been influential throughout the rest of Europe. My concern about value-based pricing is that, combined with issues around the regulation of medical health research, it makes the UK a less attractive place for the industry to invest in R&D.
My noble friend Lord Warner toured the boardrooms of New York and New Jersey, and I followed him to sweep up-
Lord Hunt of Kings Heath: -not the mess, my Lords, but my noble friend's vigorous discussions-because of the wish to ensure that those global companies continued to invest in the UK. The problem with the Department of Health is that while it sponsors the industry, its real concern, when it comes down to it, will always be the cost of drugs to the National Health Service-hence my concern that powers of direction by the NHS Commissioning Board will not be used in a way that is conducive both to the independence of NICE and to the continued R&D spend on pharmaceuticals in this country. I do not really want to institute a debate on value-based pricing at this point, but I hope that the Government will look very carefully at its introduction and all the consequences from it. Having said that, unless the noble Earl wishes to answer the point on direction, I certainly beg leave to withdraw.
Earl Howe: My Lords, I will drop the noble Lord a letter on the funding direction, but it is our intention to place this in secondary legislation, appropriately amended as he indicated. It is possible that this will be incorporated in the standing rules as a fixture. On value-based pricing, I can tell him only that quite detailed work is currently under way on the model and that, while I agree in many ways with his comments on the PPRS, it has two unsatisfactory features. One is that it does not recognise fully the factors that society values; the other is that it does not incentivise research sufficiently to address areas of unmet need. If we can achieve both those things, it will represent an advance, but the noble Lord is right that there is still some way to go before this model is finalised.
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Lord Hunt of Kings Heath: My Lords, I am grateful and beg leave to withdraw my amendment.
Clause 231 : Quality Standards
342: Clause 231, page 232, line 11, leave out "may direct NICE to prepare statements of standards" and insert "shall each year agree with NICE a programme of clinical quality standards to be completed or revised"
Lord Warner: My Lords, briefly, Amendment 342 is in my name and that of the noble Lord, Lord Patel, who will speak to Amendment 343, which I also support and to which I have added my name.
Amendment 342 was prompted by the rather slow progress that seems to have been made so far on developing clinical quality standards. I accept that these are very important, so there is nothing between me and the Government on the virtue and value of those standards. However, the rate of progress seems to be about five a year, on the information that I have managed to obtain, and at the present rate of progress it looks to be well over a decade before the exercise is completed-and then, I suspect, the whole process will have to start again because standards are likely to be out of date, and science and clinical practice will have changed. This exercise could become rather like painting the Forth Bridge.
I am all in favour of taking care in the preparation of clinical quality standards and of the need for proper consultation to ensure that a spectrum of expertise and discussion is brought to bear on each clinical quality standard. It is important to get clinical support for those standards, but in this area speed is also important if patient care is not to suffer. I wonder therefore whether the processes for preparing these standards do not need some review. It is possible that the resourcing of the work may need to receive some attention. In addition, I believe much work has been done in other jurisdictions-certainly, a lot has been done in the United States-and I wonder whether the Government and NICE could not draw on this work in an effort to speed things up.
To buck things up a bit, Amendment 342 requires the Secretary of State to "agree with NICE" an annual,
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in that year. This should ensure that the process and resourcing are kept under review and that faster progress is made. These clinical quality standards are critical to delivering improved quality and efficiency in the NHS at a time of great financial challenge and rapid clinical and scientific advance. We need to press on with their preparation and to ensure that the Secretary of State and NICE give proper priority to this issue. I hope the Minister can agree that an amendment of this kind will help to achieve this. I beg to move.
Lord Patel: My Lords, briefly, I support this amendment and Amendment 343, which has been tabled in my name. Although the amendments refer to "clinical quality standards", I am well aware that the Bill itself refers to them as "quality standards". It was I and the noble Lord, Lord Warner, who suggested in previous amendments that "clinical" should be introduced, but I recognise of course that these quality standards will concern not only clinical but social care, and there should therefore be a reference to clinical and social care.
I have also made the point before that these standards ought to cover the patient's journey of care, which goes from diagnosis through primary, secondary and tertiary care and on to social care.
I believe that I know something about clinical quality standards, and while the noble Lord, Lord Warner, referred to standards written in the United States, closer to home there have also been hundreds of standards written over the past eight years. I bet your Lordships now that the methodology that will be used by NICE will be exactly identical, but that is an argument which I will have with the chairman or chief executive of NICE-no doubt over a dinner some time.
What is important about these standards is that they are evidence-based so that it is possible to defend them, just as technological appraisals are evidence based and therefore possible to defend. The evidence that we are looking for is that which will deliver the best outcome for the patient, in terms of safety of treatment, diagnosis, patient experience and outcomes in terms of diseases.
It is also important that they should stand the test of time-that they are written and based on evidence that is tested over time, so that they do not have to change every three months and have people complaining that treatment has moved on. Experience has taught us that it is possible to write those kinds of quality standards, which stand the test of time but, as the noble Lord, Lord Warner, said, they are time consuming to create and therefore they have to be resourced. If you are creating standards for over a patient's journey of care, it will require several months and expertise to do so. If you intend to have more than five or six standards a year, you require to resource them fully.
Another important issue is that standards have to be tested before they are finalised so that, just as with the technological appraisal of drugs, you do not get complaints from clinicians or anyone else. I can tell noble Lords that doctors are very good at complaining afterwards if they are not consulted. There have to be consultations with both clinicians and the public so that they will feel happier that the standards are evidence-based and will deliver the outcomes that we expect.
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A third important aspect is that the standards should be easily understood. I was clear when I did the job that every one of the standards written should get a crystal mark, so that they were written in a language that people could understand. If we are going to evolve and develop information standards, a further value is that each of the quality standards is an opportunity to inform the patient about what they should know about their disease and its treatment. There can be simply written questions that the patients or relatives can use to ask about the problem in question. That gives us an opportunity to use the standards not only to manage the care of the patient but to inform the public and the patients about their disease. That way, you make the public better informed and able to demand the kind of quality care that they should get, so the systems will be operating in a way that delivers care.
My Amendment 343 says that standards should also cover long-term conditions. To me, that deals with the problem of complex long-term diseases, which need to be managed in both the acute sector and the primary or community sector. The standards should therefore be written as a patient journey of care over a longer period of time. Those are the quality standards that we should be embarking on and the numbers that we should provide for.
Lord Owen: I thank the Minister for his explanation earlier. I found much of it convincing, particularly his statement that Professor Mike Rawlins thought that this was a vote of confidence in his organisation. I have long had respect for Professor Rawlins-he was an adviser to the SDP many years ago, so I can hardly disavow his advice at this stage. I urge the Minister to consider for one moment that Amendment 342 would go a long way towards reassuring a lot of us. It would take out the word "direct" and put in the concept of agreeing, which would be much more beneficial if he wants to establish the relationship in reality.
Lord Hunt of Kings Heath: My Lords, I follow on from the noble Lord, Lord Owen. Clause 231 says:
"The relevant commissioner may direct NICE to prepare statements of standards in relation to the provision of ... NHS services".
In relation to a quality standard regarding the provision of NHS services, the relevant commissioner means the Commissioning Board.
I come back to the point about independence: surely it should be the Secretary of State who should direct NICE to prepare statements of standards in relation to the provision of NHS services. Surely, under this architecture, the concern of the Commissioning Board will be money. It is going to have to ensure that the NHS delivers what the Secretary of State requires in the mandate, which is growing ever longer as we debate the Bill, and that will mean quite a lot of pressure on it. I am worried that because it can direct NICE to prepare statements of standards, it is bound to be governed by finance; in fact, it is bound to relate the number of standards that it directs to the resource issue.
Of course one has to take account of resources, and the very fact that NICE's technology appraisals are concerned with cost effectiveness is a recognition that we have to make judgments about the use of resources,
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I wonder if the Minister would be prepared to give this further consideration. In this part of the Bill and in Clause 236, where the board can give directions to NICE, one simply has anxieties that, at least visibly, the independence of NICE might be compromised.
Earl Howe: My Lords, NICE's independence is the foundation of its reputation as an authoritative source of evidence-based advice. To guarantee that independence, to pick up the point made by the noble Lord, Lord Hunt, the Bill contains no direction-giving power to enable NICE to be directed as to the substance of a quality standard, and explicitly prohibits regulations from enabling the Secretary of State or the NHS Commissioning Board to direct NICE on the substance of its advice, guidance or recommendations. I reassure noble Lords that the independence of NICE's advice is assured by the very mechanism by which it formulates it-through public consultation and collaboration with respected authorities such as medical royal colleges.
I shall explain in a moment how we propose that the NICE quality standards should be commissioned, because there are different arrangements for different types of quality standard. However, the amendments begin to chip away at what we want to see-that is, a clinically led process-by specifying what really does not need to be specified, as the evidence of the quality standards published to date shows. I appreciate that many people have an interest in this programme, and that is why subsection (7) not only requires NICE to establish a process for its quality standards programme but requires a consultation on that process. That gives ample opportunity to patients, clinicians and other interested parties to have a say in how the programme is delivered.
NICE is expected to develop a broad library of between 150 and 175 quality standards, spanning the domains of the NHS outcomes framework and commissioned by the NHS Commissioning Board. The Secretary of State will have responsibility for commissioning quality standards for social care and public health. For integrated pathways of care covering NHS treatment together with public health and/or social care interventions, the Secretary of State and the Commissioning Board will be able to commission quality standards jointly. So, NICE will prepare quality standards when commissioned to do so by the board for NHS healthcare services, by the Secretary of State for the public health service and social care and jointly by the Secretary of State and the board for integrated pathways.
The noble Lord, Lord Warner, expressed his disappointment at the rate of progress of the rollout of NICE quality standards. Actually, there has been a steady start to this: we have some two dozen quality standards at the moment and, as I mentioned, we will have between 150 and 175 of them over a five-year programme. We agree with the noble Lord that it is crucial to maintain momentum with this important work, and NICE has told us that it believes that the
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The noble Lord, Lord Patel, asked how we will ensure that standards will stand the test of time. NICE regularly reviews its products, including guidelines and standards. This is an established part of NICE's working procedure that has helped it to attain its high standing with patients, clinicians and, indeed, the industry. NICE is keen to take into account any new evidence and to be responsive to changes in circumstances.
As I said earlier, NICE quality standards bring clarity to quality, providing definitive and authoritative statements of high quality care and based, as the noble Lord, Lord Patel, rightly said, on the evidence of what works best. As we move towards a system that will focus on improving the outcomes that matter most to patients, it is vital that quality standards reflect these.
Amendment 343, which places a particular emphasis on long-term conditions, is understandably motivated but it may have the unintended consequence of excluding other conditions. While I sympathise with the sentiment, it is probably undesirable to specify that in the Bill. That is why the National Quality Board is overseeing the development of a process for selecting topics for the rest of the library that will integrate and build on the current process for selecting the NICE clinical guidelines. This process recognises the importance of ensuring that smaller specialties are taken into consideration. I have a long list here of topics in the proposed programme that address long-term conditions. I am happy to let noble Lords have that. This reflects the fact that these quality standards are needed to help the NHS improve outcomes in this area, as we envisaged in the NHS outcomes framework.
NICE recently completed an engagement exercise on the proposed library of quality standards. The responses were overwhelmingly positive about the programme and the role of quality standards in the new system. This feedback is reassuring, and I hope it reassures the noble Lords sufficiently to enable them not to press their amendments.
Baroness Emerton: My Lords, could I just interrupt to ask a question about the evidence-based quality standards? Where do we fit in the culture change that is so important when we look at quality standards? It is very difficult to measure a culture. We talk about trying to integrate health and social care in all the standards in primary, secondary and tertiary care. An evidence base is essential for NICE, but we have not mentioned culture at all today in this context. It is absolutely fundamental, particularly with the long-term conditions, to talk about or to include some measurement of culture.
Earl Howe: The noble Baroness is quite right and no legislation can provide for that culture change, as she will appreciate. At the same time, we can put in some important building blocks to encourage a change
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The work that my department has done on accelerating the uptake of innovation is relevant here. The NICE implementation collaborative-the NIC-that was part of our announcement about the growth agenda some days ago is designed to bring together the relevant stakeholder groups to see how the uptake of innovation can be accelerated and how people can be made to look at working practices in rather a different way so that cultures shift. However, it is easy for me to stand here and say that; it is less easy to drive this forward. I would not pretend that the Government are necessarily in the best place to do that, although we are clear that this shift in approach, which largely underlines the QIPP agenda as well, has to take place. However, it will take a little time.
Lord Warner: My Lords, the total purpose of my Amendment 342 was to inject some momentum into the process of delivering these quality standards. I am much reassured by what the noble Earl has said. I think my noble friend's point about directions for the national Commissioning Board is important. It can be misleading. I hope that the revelations of the noble Lord, Lord Owen, about the chairman of NICE's past associations will do no damage to his reputation. I beg leave to withdraw the amendment.
7.45 pm
Amendments 343 and 343A not moved.
Amendment 343B had been withdrawn from the Marshalled List.
Clause 234 : Advice, guidance, information and recommendations
Clause 240 : Additional functions
344A: Clause 240, page 237, line 23, leave out "its functions" and insert "any function it has under or by virtue of any other provision of this Part"
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Debate on whether Clause 240 should stand part of the Bill.
Lord Naseby: My Lords, the Deputy Speaker called the amendment and it was agreed, but I did not specifically hear that Clause 240 should stand part. If I may, I will intervene briefly on whether the clause should stand part, particularly the additional functions under subsection (1)(a). It states:
"NICE may do any of the following ... acquire, produce, manufacture and supply goods".
I have a query for my noble friend on the Front Bench. We are well aware that in the past some hospitals have manufactured certain generic medicines and marketed them, which has caused the normal market for medicine and pharmaceuticals to be disrupted. Secondly, we are aware, particularly recently, of certain hospitals that have been selling medicines in another market, which has caused disruption to that market and particular difficulties for parts of the country where there has been a shortage of medicines.
I may be wrong but, as I read it, this clause means that NICE will be in a position to manufacture directly, maybe even under a licence. I see that under paragraph (f) NICE will be able to,
Can we be quite clear? Is my noble friend really saying that NICE, the adjudicator of value for money and all the other dimensions in the Bill to do with pharmaceuticals, medicines et cetera, will manufacture certain medicines on the side? That does not seem to be part of the role of the regulator. It seems, frankly, to be virtually direct labour within the context of NICE. I would be most grateful if my noble friend would respond. If he is not able to respond today, perhaps he will respond on Report or write to me.
Earl Howe: My Lords, I hope I can assist my noble friend. Clause 240 enables NICE to undertake additional functions, such as supplying new services and exploiting intellectual property. These functions must be related to the provision of health and social care. They seek to reproduce the income-generation powers that NICE currently enjoys as a special health authority and do not therefore represent an expansion of its powers. NICE may do this for any number or type of organisations, including the private sector and overseas Governments. This clause allows NICE to charge for carrying out these additional functions on an appropriate commercial basis.
In the White Paper Liberating the NHS: Report of the Arm's-Length Bodies Review, the Government stated that,
- "where appropriate, arm's-length bodies will be expected to exploit commercial opportunities and maximise commercial discipline across the sector".
NICE may carry out these additional functions provided that they do not have an impact on its ability to carry out its functions. We do not envisage, and nor does NICE, that the performance of any of these functions will interfere with its normal work programme. I hope that that is helpful to my noble friend. It is certainly not the case that NICE will be manufacturing medicines, as I think he feared.
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Lord Hunt of Kings Heath: Is not the point that NICE enjoys a global reputation for the excellence of its work, as we discussed earlier? I do not know how many hits it has on its website every day but I understand that it is a considerable number. Is this not a huge advantage for the UK and that all the Government are seeking to do is to ensure that NICE can exploit that so that its work in the UK can be developed elsewhere?
Earl Howe: The noble Lord is exactly right. He will know from his time as a Minister with responsibility in this area that NICE has steadily grown its reputation overseas, and that with that have come opportunities to sell its services in a number of quarters. We simply want to see that continue.
Lord Naseby: I understand that and I understand the point made by the noble Lord, Lord Hunt. Nevertheless, to the best of my knowledge, NICE has never manufactured, and presumably from what my noble friend has said is not going to manufacture, in which case perhaps "manufacture" can be deleted from the Bill when it returns on Report.
Earl Howe: I will take advice on why "manufacture" is in the Bill and come back to my noble friend.
Clause 240, as amended, agreed.
Clause 246 : Consequential and transitional provision
Clause 246, as amended, agreed.
Schedule 18 : Part 8: consequential amendments
Schedule 18, as amended, agreed.
Baroness Rawlings: My Lords, I beg to move that the House do now resume. We are most grateful to noble Lords for their brevity. As a result, we have reached our target for today so noble Lords do not need to return after the dinner break this evening for further debate on the Health and Social Care Bill.
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EUC Report: Money Laundering
Question for Short Debate
7.53 pm
Asked By Lord Hannay of Chiswick
To ask Her Majesty's Government what is their response to the Report of the European Union Committee on Money Laundering: Data Protection for Suspicious Activity Reports (6th Report, HL Paper 82).
Lord Hannay of Chiswick: My Lords, dinner hour debates in your Lordships' House are often a welcome interlude between two lengthy sessions devoted to the House's primary function of rigorously scrutinising and, where necessary, amending the contents of the Government's legislative programme, an interlude during which we can look at wider horizons and examine issues falling outside the purely legislative framework. I know that that is not the situation tonight but that is by happenstance rather than by design. However, this dinner hour debate is not one of those occasions. It is rather, as I will seek to show in a minute or two, the combination of a long process during which the European Union Select Committee has pressed the Government, eventually with some success, to modify the way in which they implement a particular legislative framework, in this case one based on an EU obligation to clamp down on money laundering. It is therefore in a way an example of that post-legislative scrutiny for which so many calls are made and of which there are few practical examples. It also involves an issue that concerns the balance to be achieved between the unquestionable need to take tough action against a form of criminal activity which has grown exponentially in recent years-namely, money laundering, with the liberalisation of capital movements on a global basis driving it-and the need to respect the protection of the individual against disproportionate action by the state and against the use of information for purposes other than those originally intended. It is therefore very much a piece, albeit a small piece, of that agenda for restoring freedom which the coalition Government have set as one of their principal objectives.
If these introductory remarks may seem a trifle self-congratulatory, I should point out that the whole process was initiated by my predecessor as the chair of the EU Select Committee's sub-committee on home affairs, the noble Lord, Lord Jopling, and brought to fruition, with rather more delay than we would have wished, only under my own chairmanship. The purpose of this short debate is not simply to ask a question but to receive a detailed answer setting out the changes in the implementation of the rules against money laundering which the Government are now introducing. With that in mind, I look forward with anticipation to the reply of the noble Lord, Lord Henley.
Many of the matters the sub-committee looks at are concerned with the use of personal data in the fight against terrorism and other serious organised crime. The use of personal data is essential for these purposes, and the committee has always said as much. We have been quite clear on that point, but we have also been concerned that personal data should be
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The committee's involvement arose in the context of our inquiry in 2009 into money laundering and the financing of terrorism. Under the Money Laundering Regulations 2007, which implement the third money laundering directive, banks, other financial institutions, lawyers, accountants, auditors, insurers and many others are required to report to the Serious Organised Crime Agency (SOCA) any transaction or activity which seems to involve funds which are the proceeds of criminal activity. Knowledge is unnecessary. It is a suspicion based regime, and the reports are known as suspicious activity reports, or SARs. As the bankers told us in the evidence we took, "If you smell a rat, you must report it". We did not then, and I do not now, question the utility of this; it is central to the fight against money laundering. However, we did, and still do, have concerns about the handling of the data. SARs are entered by SOCA onto a database known as ELMER, which is in effect a database of suspects, and, given the number of reports, a very large database indeed. At the time of our 2009 report, there were 1.5 million entries, and the number increases by 200,000 every year. Access to the ELMER database is available, as one might expect, to police forces and others responsible for prosecuting serious crime. However, we discovered that the data were much more widely available; for example, to trading standards authorities, and to Nottinghamshire County Council to investigate housing benefit fraud. This seemed to us to be an unwarranted use of information collected for a quite different purpose.
The committee recommended that the Information Commissioner should review and report on the operation and use of the ELMER database. I pay tribute to the noble Lord, Lord Marlesford, who was then a member of the committee, and who is unfortunately unable to be present tonight, for the persistence with which he pursued this with the Government. Eventually they agreed and the matter was referred to the Information Commissioner. The Information Commissioner conducted a full investigation and prepared a report which he sent to the chairman of the European Union Committee on 29 November 2010-slightly more than a year ago. We published it in January 2011 as an appendix to the report which we are now debating.
The Information Commissioner made four detailed recommendations as to how SOCA might improve the data protection regime of ELMER. Over the past year, we have been monitoring how those recommendations have been implemented. We have had letters from SOCA and from James Brokenshire MP, the Home Office Minister, and in October we held a very useful oral evidence session with the Information Commissioner and the Director of SOCA. Since then, we have received further information from SOCA.
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Our first concern was the period for which the data are retained on the database. This used to be 10 years. The Information Commissioner suggested that five years might be more appropriate, but agreed on six years. In his latest letter, the director of SOCA has told us that as of 31 October this year SOCA had deleted some 119,000 records and intended to delete a further 600,000 by the end of this year. This would leave some 1.3 million records on the database-still a very large number. It compares unfavourably with the number on the database at the end of September 2007, which was 932,324. I hope the Minister can tell me when he expects that all records over six years old that are not being used for investigations will have been deleted, how many records he estimates will then remain on the database, and whether the number is likely then still to be increasing every year.
Our other main concern was the range of persons and bodies with access to the database, and the purposes for which the SARs data could be used. I am relieved to hear that all the arrangements for local authorities to have direct access to the database have been terminated. I note that local authorities can still have indirect access to SARs by requesting SOCA to search the database. I should be happier if the Minister could assure the House that local authorities will never have access in any other way, even if they meet the new and more stringent requirements for direct access.
In all the detailed criteria for direct access to suspicious activity reports, I could not find any limitation on the purposes for which the data can be used once they have been accessed. Could they still be used to investigate housing benefit fraud? This is not something that most people would class as serious organised crime. These are still matters about which I and the committee have some reservations, but overall the position has greatly improved over the past year. The hundreds of thousands of people who do not know that their financial transactions are listed on this database have reason to be grateful to the Information Commissioner for his review and his proposals, to SOCA for its implementation of them, although it is still incomplete, and, dare I say it, perhaps even to this committee and to this House for having set the ball rolling. We hope to receive from SOCA over the coming months further details of its implementation of the Information Commissioner's proposals.
There is one other matter arising out of the committee's report on money laundering, which has been the subject of correspondence with a number of government departments-the assembling of ransoms for ships and crews seized by Somali pirates. The committee recognises that this activity is not, in the present state of British law, in any way illegal. However, we can see no justification at all for the view that appears to be taken by the Government that those assembling such ransoms do not need to file a suspicious activity report. After all, the money involved is quite certainly set to become the proceeds of crime. The people to whom that money is being paid are certainly criminals and the chances that the money will subsequently be laundered must be very high, even if there is not also at least a risk that it will end up financing terrorist activities. In those circumstances, it seems to me and to my committee odd, to put it mildly, that the
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I am afraid that our attempts to address this point through correspondence have been met by evasion and obfuscation. I hope that the Minister can give the House a clearer and more convincing response when he replies to my Question.
8.04 pm
Lord Dykes: My Lords, I am sure that the whole House will very much appreciate the sensible comments of the noble Lord, Lord Hannay of Chiswick. It has been some time between the publication of the report in January and this debate. Perhaps there is an important point there about the need for greater speed on a matter of enormous interest to large numbers of people. I commend the report in every way and, on these Benches, we give full support to the main points to which the noble Lord, Lord Hannay, referred and to the other details in the report.
I must declare an interest as a member of the full European Union Committee, which by implication and by asserting itself in the background has given its support to this report. Sub-committees' reports are always published as reports of the whole committee. I hope that the Minister will respond positively to some of the important points made by the noble Lord, Lord Hannay. I add my support to his comments at the end of his speech about the problem of ship ransoms, which needs to be dealt with.
The need to find a balance in these matters is always difficult, as the noble Lord declared. I agree, and the balance will be a question of continued supervision and surveillance as time goes on, and is not an easy matter. However, we live in a world where not only technology but international capital transactions and flows have improved. As has been said, there has been the removal of national and collective exchange controls of one kind or another-particularly in this country many years ago. There have also been other developments on a rapid scale in the use of the internet and communications systems. People with crime as their intention and activity, rather than just ordinary citizens in different countries, use the same systems and technologies as others to pursue their very evil objectives in the field of terrorism and the organisation of serious crime, which is in many ways a worldwide phenomenon on a gigantic scale. The statistics are very chilling indeed when one begins to examine those matters in depth.
Therefore, that balance and government rules on access to details on any database that is growing exponentially have, as has been said, produced a great deal of anxiety among the highly educated citizens of advanced countries and others in the world who are wondering how this balance will be maintained in the future. It is very difficult.
It is not right for us automatically to begin to criticise the authorities and the Government for how they deal with this because, for them, it is a difficult balance. They must support the agencies of protection for us-the secret services as well as the police authorities, our other security agencies and the military-in how
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I was very impressed with some of the suggestions made in the latest report which, as the noble Lord, Lord Hannay, said, followed the original report under the noble Lord, Lord Jopling, from the same Sub-Committee on Home Affairs. In the recommendation for future action on page 19, paragraph 6.1 states:
"The Commissioner makes a number of recommendations to help ensure that the processing of personal data on the ELMER database complies with the requirements of the Data Protection Act and on the legislative approach to the reporting of suspicious financial activity".
There is a mention below in the subsequent parts of paragraph 6. In paragraph 6.1.5, the sub-committee suggests:
"That the Government considers whether, in the light of experience, the current arrangements for reporting of SARs continue to be justified, whether they are both effective and proportionate and whether they could be improved. Consideration should be given to whether there is a pressing social need to justify the requirement to report any transaction which is based on a very low threshold of suspicion that handling criminal property or money laundering is taking place".
In relation to the accumulation of names and information on the database at a very rapid rate, the exclusions announced by the Information Commissioner have been very modest. I should have thought that the number could be greater and I look forward to the Minister's response on how he thinks that process is developing.
In the original July 2009 report on money-laundering and the finance of terrorism, the wider subject, rather than the more narrow one on money-laundering and data protection for suspicious activity, the definitional base of what is money-laundering was set out very clearly. That, too, needs more attention to detail as experience has developed of the phenomenology of money laundering, the detail of how it is done. The knowledge of public authorities about that is not perfect; they need to investigate more and share information with other Governments and collective bodies such as the European Union. We need to consider future EU legislation to strengthen the European basis for the control system without, as I said, denting significantly the precious freedom of the individual citizen, which I hope is dear to everyone in this House.
We strongly support the contents of the report and the suggestions made by the noble Lord, Lord Hannay, tonight, particularly his final remarks on ships' ransom construction, and hope that they will be met with agreement in all parts of the House, subject to what my noble friend can say to us to guide us on how the Government will deal with those matters with the Information Commissioner.
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8.12 pm
Lord Judd: My Lords, this is an opportunity for me to share with the House what a joy it is to serve on this committee under the chairmanship of the noble Lord, Lord Hannay. He is a tough chairman, a firm chairman, never short of his own ideas; but it is really stimulating to work with him. For me, this is not a new experience because more than 30 years ago, when I was a Minister of State in the Foreign Office, he was one of the young, immensely able, talented civil servants with whom it was good to be able to work. I am therefore having another exposure to what he brings to public affairs, which is altogether good. I say thank you.
On the report itself, with which the noble Lord has dealt as well as anyone possibly could, I have just two general points to make which struck me during our deliberations. The first is how dealing with this kind of crime and others which we considered has become immensely more challenging and complex because of the impossibility of seeing a clear dividing line between legitimate and illegitimate business. This must be a huge challenge to all those who try to police what goes on in international operations. Therefore, I think that a tribute to those who are involved in that work is timely.
The second thing that strikes me equally is the vast amount of personal information which is now available to those involved in government at a national and local level. It is a matter of not just the amount of information and how it is kept secure for the purposes for which it has been gathered but the very large number of people who are involved in the operation. I am always brought back to the old adage that "confidential" means telling other people one at a time. I find it very difficult to imagine that we can have a really watertight situation in which all this information is preserved simply for the purposes for which it was gathered. That is not to call into question the good faith of the people concerned, but inevitably, with the number of people involved and the number of conversations that take place, then again at times the dividing line between the specialists working for a particular purpose and those with whom they talk must be very difficult to keep clear. There are very big issues here that we all have to watch like hawks if we are to preserve the context of freedom and human dignity, let alone human rights, as we have come to understand them in this country.
The main point that I want to make is that, if I may say so, the noble Lord, Lord Hannay, has put the findings, feelings and discussions of the Select Committee extremely well tonight, and the whole House should be grateful to him for the work on which he leads so well.
8.16 pm
Lord Rosser: My Lords, I, too, thank the noble Lord, Lord Hannay of Chiswick, and his committee for this report. It is clear from what he said that there has been some helpful progress over the past few months, and I hope that the Minister will be able to provide an update on exactly where we are now in relation to the Information Commissioner's recommendations and the committee's recommendations.
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As the noble Lord, Lord Hannay, said, this is the second recent report on money laundering. The first, in 2009, contained a recommendation that,
"The Information Commissioner should review and report on the operation and use of the ... database, and should consider in particular whether the rules for the retention of data are compatible with the jurisprudence of the European Court of Human Rights".
The second report, which we are considering tonight, includes the report from the Information Commissioner and the reiterated recommendation from the committee's first report that,
- "consideration should be given to amending the Proceeds of Crime Act 2002 to include a de minimis exclusion",
which arises from the committee's concerns about the requirement to report suspicions about the commission of trivial criminal offences and now the commissioner's doubts about the justification of reporting transactions where there is a very low level of suspicion.
In their two letters of response in May and June this year-I do not know whether there have been further letters-the Government, as did the previous Government, rejected the introduction of a de minimis requirement,
- "primarily due to the opportunities for criminals to exploit the threshold of any de minimis approach based on either the value or the seriousness of the crime".
The Government state in their response that:
"Reports on the laundering of small amounts can and do help in identifying and tackling serious crime".
That may well be the case but, when he responds, can the Minister provide some evidence to back up the statements in his department's response of 17 May this year about the de minimis threshold?
The committee says that it is of the belief that,
- "the Information Commissioner's report justifies our view that the ... database is not fully compliant with the Data Protection Act and the Human Rights Act".
A considerable amount of information has to be provided, ideally in a suspicious activity report-namely, the subject's full name, date of birth and addresses, as well as subject details, such as national insurance number, vehicle registration, driving licence, passport and phone numbers, website addresses, details of occupation and employer, details of any associates of the subject, and company details, including full legal name, designation, country of incorporation and contact details. The list does not end there.
Each suspicious activity report was assigned a deletion date of 10 years after receipt and was automatically deleted unless it had been amended or updated, in which case the deletion date was reset to six years following that event. There is also a procedure for earlier deletion of individual SARs where all necessary activity relating to an SAR has been undertaken, but it does appear that only a relatively small number of SARs compared with the total number have been permanently deleted from the database, although I understand from what the noble Lord, Lord Hannay, has said that some further progress appears to have been made in this regard.
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The Information Commissioner queried whether there was any evidence of the value of data over time, such as SARs, being accessed which had been on the system for, say, longer than five years. Evidence was provided of the number of times that SARs received in 2004 or earlier were accessed by end-users during each month in 2009. What the figures showed was that the number of checks dropped substantially when records were over seven years old, and in addition it is possible that some of the older hits could have occurred when searching on similar names and not because of concerns about unlawful activity by that person. The Information Commissioner was not satisfied that there was currently sufficient evidence to support the long-term retention of SARs of no concern, and it raised concerns about compliance with the Data Protection Act.
Indeed, the committee was apparently also concerned that SARs were routinely retained for 10 years on a database to which there was wide access, especially in those cases where it could be shown that the initial suspicion was unfounded. The committee referred particularly to,
- "the ruling of the European Court of Human Rights that the retention on the DNA database of the DNA of persons not convicted of a criminal offence could amount to a breach of their right to respect for private life under Article 8 of the European Convention on Human Rights".
While, as I understand it, the Serious Organised Crime Agency has been considering this point with the Information Commissioner, does the Minister feel that there is any conflict between the Government's intended change in policy on retention of DNA and the current revised policy, as I understand it, on retention of SARs as mentioned by the noble Lord, Lord Hannay of Chiswick-particularly bearing in mind the extent of information retained about an individual and their associates?
In his letter of 24 June of this year responding to the committee's report, Mr James Brokenshire, the Parliamentary Under-Secretary for Crime and Security, said that he would provide an update on progress being made by the SARs committee towards the end of this year. Can the Minister say what progress has been made by this committee in seeking to improve the effectiveness of the regime, including considering whether legislative changes are necessary?
Apart from the committee's own inquiry there has been very little in the way of post-legislative scrutiny of the relevant legislation that introduced the requirement to report suspicions over financial transactions to the Serious Organised Crime Agency. The law focuses on reporting, but there are no additional safeguards on the face of the legislation to prevent a disproportionate retention or to prevent reporting of cases likely to be of little, or indeed of no, interest. It seems that the Information Commissioner's view is that any legislation which engages significant privacy concerns should include on the face of it a requirement on the Government to report to Parliament on how the measures have been deployed, including evidence of the extent to which the expected benefits and possible risks have been realised in practice, and the continued need for the measures in question. I simply ask the Minister: what is the Government's view on that point?
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The committee's report also states that it is estimated-and I think I have got the figures right-that between 125,000 and 175,000 businesses could be subject to the SARs reporting requirements, but that apparently only approximately 5,000 actually report. No doubt there may be good reasons for that, but could the Minister say what interpretation the Government put on this piece of information and whether any checks are done to ensure that those who are subject to the reporting requirement are actually carrying out their responsibilities if they have suspicions of potentially questionable financial transactions?
The committee concludes its report by repeating its view that the Information Commissioner's report justifies the view that the database is not fully compliant with the Data Protection Act and the Human Rights Act. It goes on to say that it looks forward to hearing from the Minister what steps the Government and SOCA will take to comply with the commissioner's recommendations and the committee's recommendations. As I said at the beginning, clearly some progress has been made on these issues over the past few months, but I hope that tonight the Minister will provide an updated response to the committee.
8.25 pm
The Minister of State, Home Office (Lord Henley): My Lords, as always, I am grateful to the noble Lord, Lord Hannay, and to other noble Lords who have spoken, particularly the noble Lord, Lord Judd, and my noble friend Lord Dykes who are members of the committee. I am grateful that we have had an opportunity to debate this report of the EU committee as well as, to some extent, the 2009 report and the Information Commissioner's report which dealt with a number of these matters. I am also grateful to the noble Lord, Lord Hannay, for outlining the very important work that the House does in relation to its post-legislative scrutiny of these matters. I hope that I can give a reasonably detailed response to the various points that have been made.
The first important point is the Information Commissioner's report. I am grateful to the noble Lord, Lord Rosser, for emphasising that. That made a number of findings, notably referring to the Elmer database. As someone rather new to this, I was fascinated to discover that the Elmer referred to in that name is not an acronym but the first name of the original head of the United States Department of the Treasury intelligence unit, back in the 1920s or 1930s, who was responsible for nailing or achieving the conviction of Al Capone on the famous occasion when they got him for tax evasion rather than for other matters. We must be grateful to that Elmer-I imagine in the United States they are even more grateful-for so doing.
The first point of call with the Information Commissioner's report is access to the Elmer database. Secondly, the Information Commissioner referred to the retention of records, which are of no concern and which may not comply with data protection principles. Thirdly, the report also refers to how SOCA develops retention policies which are data protection and human rights compliant. I hope that I can deal with all those
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I start with access to Elmer. As recommended in the report, SOCA has continued to maintain its robust policies and procedures in respect of access. It must be remembered that Elmer is a very important intelligence tool, not just in respect of financial crime but in respect of all levels of all crime. The use of financial intelligence is not an addition but an essential part of the wider armoury of techniques to investigate criminality. That said, obviously access to Elmer has to be limited and those wanting direct access have to go through a user agreement which sets very strict criteria and which is kept under review. It is also of importance that these are individual financial investigators rather than bodies themselves. SOCA provides guidance to users and all users are required to undertake training which is generally delivered by the National Policing Improvement Agency or some other similarly approved agency before accessing the database.
Having said that, I cannot give any assurance about who may have access to Elmer in the future but, of course, concerns of this House will be considered very carefully as we develop these items.
I move on to the question of record retention and deletion policy. SOCA has introduced a new retention regime that will delete suspicious activity reports that are more than six years old. It expects to complete this task very soon. I will add one further remark. I need not even say "very soon" because the task was completed today. I can assure the noble Lord that as of today there are 1,384,477 entries on the Elmer database, and that 584,351 entries were deleted in a recent exercise. All entries that were more than six months old were deleted today, so we achieved the aim of deleting them by the end of the year.
My third point on the Data Protection Act is that SOCA will implement a Data Protection Act and Human Rights Act-compliant retention policy in three months. It is important to note that the Elmer database does not focus specifically on collecting information relating to individuals. It is essentially an assembly of reports submitted in the light of the Proceeds of Crime Act, the Terrorism Act and associated regulations. SOCA has introduced processes that will provide for the immediate deletion of SARs that are confirmed as being not linked to criminality, and for the deletion of others after six years. That is why I was pleased to make the remark about what we achieved today.
The report also asked if there was a justification for the current arrangements for reporting SARs. We feel that setting a suspicion threshold would send the wrong signal to reporters, who may reduce their scrutiny. Experience shows that criminals will attempt to find ways to circumvent controls in order to avoid arousing suspicion-for example, by breaking down large deposits. Reports that may look minor may take on a much larger significance to law enforcement when matched with intelligence both within Elmer and beyond. A threshold might have the unintended and unwanted effect of causing us to miss vital intelligence opportunities.
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I will deal with a couple of further questions. The first, which was raised by the noble Lord, Lord Hannay, referred to Somali piracy. We recognise the committee's concerns regarding possible links between the payment of ransoms and terrorist finance in Somalia. There is currently no evidence of any formal organisational relationship between pirates and terrorist organisations operating in Somalia. However, we are keeping this assessment under review. My honourable friend Mr James Brokenshire, who was referred to by the noble Lord, Lord Rosser, is in receipt of the letter on this matter from the noble Lord, Lord Roper, and will provide an appropriate reply in due course. I cannot take that further and say precisely when it might appear.
The second point I will deal with, which concerns money-laundering and the Financial Action Task Force, was raised by my noble friend Lord Dykes.
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