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Grand Committee

Monday, 28 May 2012.

Arrangement of Business

Announcement

3.30 pm

The Deputy Chairman of Committees (Baroness Andrews): My Lords, I am advised that if it gets intolerably hot, jackets may be removed. I remind noble Lords that in the case of each statutory instrument, the Motion before the Committee is that it do consider or take note of the statutory instrument in question. I should make it clear that the Motions in the name of the noble Lord, Lord Hunt of Kings Heath, are both on negative instruments for which praying time has expired, so no further proceedings on them are expected.

Infrastructure Planning (Waste Water Transfer and Storage) Order 2012

Infrastructure Planning (Waste Water Transfer and Storage) Order 2012 44th Report from the Joint Committee on Statutory Instruments

Considered in Grand Committee

3.30 pm

Moved by Lord Taylor of Holbeach

That the Grand Committee do report to the House that it has considered the Infrastructure Planning (Waste Water Transfer and Storage) Order.

Relevant documents: 44th Report from the Joint Committee on Statutory Instruments, Session 2010-12

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach): My Lords, in November last year, Ministers made a Statement in the other place on the Thames tunnel. This included our plans to introduce an order amending Section 14 of the Planning Act 2008, which would classify proposed major sewer projects as nationally significant infrastructure projects, or NSIPs for short. This Section 14 order is before your Lordships today.

We conducted a 12-week public consultation on the draft order last summer and published its summary of responses in January this year. More than 900 organisations and individuals were consulted about our proposals. The consultation documents were publicly available on Defra’s website, and two question-and-answer drop-in sessions for the public were held at Defra’s offices. We received a total of 44 responses to the consultation. The majority were from local planning authorities and individuals near to potential construction sites for the Thames tunnel project proposed by Thames Water. The outcome of the consultation showed that the draft order itself was not opposed. What opposition there was came mostly from local people living near proposed Thames tunnel construction sites. They were concerned that local planning authorities were being excluded from the streamlined NSIP planning application process.

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The order would perform two functions. First, it would extend the categories of NSIPs to include major sewer developments with a capacity of 350,000 cubic metres or more. Secondly, it would allow public consultations that are carried out on such proposals before being designated as NSIPs to be treated as part of the planning application process as if they had indeed been classed as NSIPs.

The main advantage of classifying proposed major sewers as nationally significant infrastructure projects is that they would benefit from the existing streamlined NSIP planning application process under the Planning Act 2008. This involves a single application to the Planning Inspectorate for a development consent order.

The NSIP planning application process ensures that local authorities and local communities are included as an essential part of the whole process, enabling them to submit representations to the Planning Inspectorate as part of its consideration of an application. Democratic accountability is built into the system, with Ministers making the final decision on such applications at the end of the 12-month process, taking account of the recommendations of the Planning Inspectorate.

The planning application process for proposed major sewers was considered in February 2011 by the Environment, Food and Rural Affairs Select Committee as part of its scrutiny of the waste water national policy statement. The committee found it inconsistent that major sewer developments were not included as NSIPs alongside major new sewage treatment works within the Planning Act 2008. The committee recommended that the situation be rectified accordingly.

The order before your Lordships today meets that recommendation. It does not specifically refer to the Thames tunnel project. However, this is currently the only proposed major sewer development that would meet the threshold of the order. In the future there may be other such projects and so it is right that an appropriate legislative framework is in place to ensure that they too can progress with as little unnecessary delay as possible.

As far as the Thames tunnel is concerned, the waste water national policy statement was approved by Parliament and designated on 26 March. This sets out the need for the Thames tunnel as the most cost-effective, timely and comprehensive solution currently available to the problem of significant ongoing sewage pollution into the River Thames in London, when compared with the alternatives. It will enhance the ecology of the river and is estimated to directly employ around 4,200 people in its construction and in related sector works, with an estimated several thousand secondary jobs in the supply chain and wider London economy. Thames Water has set itself a target of employing local workers to make up to 20% of its tunnel construction workforce.

I know that many of your Lordships have firmly held views on the merits or otherwise of the Thames tunnel and I look forward to this debate during which, no doubt, many of these views will be put forward. However, I ask your Lordships to bear it in mind that the order may apply not only to the Thames tunnel

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but also to any similar major sewer projects that may be brought forward in the future. I commend the draft order to the House.

Baroness Parminter: My Lords, there is clearly widespread support for this order, as the Minister said. The Environment, Food and Rural Affairs Committee in another place recommended that the Government go down this route and the responses to the consultation contained widespread support, including from the local authorities that would be affected by the Thames tunnel proposals. Therefore, on this side of the coalition, we support the order. It is important to remind ourselves why it is being brought forward. It is not about trying to speed up any decisions; it is about making a process that is timely and minimises unnecessary cost but remains democratically accountable.

This is a new type of engagement for the public in terms of how they respond to major sewer proposals; in the past DCLG has been very good at public education campaigns about how the public can engage which allays fears that these are processes that are somehow to speed things up and stop them being involved. Will the Minister be speaking to his colleagues in DCLG to ensure that a proper public consultation campaign is undertaken so that people realise how they can engage in this new major infrastructure order?

Lord Berkeley: My Lords, I spoke about this project—well I did not actually speak, my noble friend made my speech for me because I was on the sleeper to Scotland. He did an extremely good job especially when it apparently diverged from our party policy, but there we are. I do not have a particular problem with the concept of an order such as this amending the planning process because I have always supported the Infrastructure Planning Commission and its successor. I did, however, have a chuckle when I read the impact assessment for this project: in answer to the question of what was the CO2 equivalent change in greenhouse gas emissions in millions of tonnes of CO2 equivalent, the answer was “not applicable”.

When I worked out that for the Thames tunnel— I do not know whether Thames Water is still going to move all the spoil away by road—that was going to be 500 trucks a day, the idea that that would not produce any CO2 was laughable. Of course, many other bits of CO2 will come out of the construction, let alone the operation. The matter might be a little detailed but it needs looking at again.

Since the debate on 27 March, things have moved on and Thames Water has produced a second consultation report. It has made some changes but I do not think it has recognised that it may have an unnecessarily expensive scheme. The eminent water engineer, Chris Binnie, produced a report, about which I shall speak in a minute and which could reduce infraction fines by obtaining improvement much sooner than 2023, which I believe is the latest date for the scheme to be completed. We must not forget that the cost is now something like £4.2 billion, plus I think that the estimate of infraction has gone up to £1.5 billion. There is, of course, always a risk of cost overrun in tunnelling. Further, there is the estimated £80 per annum for 30 years that every

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Thames Water customer will have to pay, with or without the extra subsidy from the Government that was agreed a couple of months ago. Therefore, I suggest that the Government ought at this stage to take a step back and reflect before spending nearly £6 billion of taxpayers’ money, which may not even satisfy the European Commission’s requirements. Indeed, we do not yet know what those requirements will be until the Court has concluded its deliberations.

Mr Binnie’s report refers to a possible fine of £1.5 billion. He believes that the fish issue can be addressed much more cheaply and that the same applies to the problems of sewage, litter and health impacts in the London docks. He says that these rather smaller issues could be addressed within two or three years, although one of them will not be resolved until 2023, which is more than 10 years away. However, all this is dependent on the European Court’s judgment, which will go back to the European Commission. Therefore, I argue that it is well worth trying to introduce some interim measures. That would probably reduce the fine significantly as the matter is assessed on a five-point basis and if you make improvements, the fine goes down.

This project has gained a momentum of its own, as do many big projects, some of which one likes and some of which one does not like. This theory of mine as regards projects gaining a momentum of their own goes back many years. Ministers like to put their names to big projects but these projects do not always survive political pressures. That is true of Governments of all parties, and 2023 is a very long time away, although I am sure that the Minister opposite does not fall into that category. However, I am concerned about where the independent advice is to be found in all this. I understand that the person in Ofwat who is responsible for this project used to work for Thames Water and that the person responsible for the technical advice on this scheme used to be responsible for the Mogden sewage works. I also understand that during the hearings that the noble Earl, Lord Selborne, held a few months ago, Thames Water referred to Ofwat and the Environment Agency as its team. This should not be a team. The regulator has an independent role. It is all wrong that they should all be one happy family when they are spending £6 billion of taxpayers’ money. Nobody is looking at alternatives. The Minister said in his introduction to the debate that this was the best scheme, having considered alternatives, but who is considering the alternatives?

I suppose it is not surprising that people are not looking at alternatives but this needs to be done. If one looks at some of the mitigating measures produced by Mr Binnie and others, there are probably many of them. We also need to make sure that if the Thames tunnel scheme goes ahead, it achieves the results we want. However, we do not know what the Commission will decide in this regard. I hope that the Minister will advise his colleagues that it is time to take a step back and look at alternatives. I would very much welcome a quick meeting with him to go through this in more detail. In the mean time, I shall not oppose the order and wish it well. However, I am not sure that I wish the project well at this stage.

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3.45 pm

Lord Grantchester: My Lords,

“Infrastructure investment is vital to the UK economy and jobs”.

That is the first sentence in the background paper to the order today. It is wonderful to hear the Minister speak to it and, as we have been reminding him and his Government constantly, place it at the top of the action for growth agenda. This order is coming forward just before the Recess. The Water Industry (Financial Assistance) Bill was scheduled for the day before the Easter Recess. From this side, we welcome them at whatever time. We will very much take these orders as a quasi-Committee stage—as a Committee stage was denied to the water industry Bill as a money Bill—to follow up the progress of activity.

This order fulfils the recommendation in the EFRA committee report on the draft waste water national policy statement that the Government should bring forward proposals to amend the Planning Act 2008 to bring large-scale sewerage infrastructure, such as the Thames tunnel, within the planning regime for nationally significant infrastructure projects. As the Minister said in his introduction, this order is concerned with the construction and alteration of infrastructure for waste water. Currently, around 39 million cubic metres of waste water enters the Thames every year from London’s combined sewage overflows. When storm water capacity is exceeded, they discharge. On average, that happens once a week. The urgency of the work as a health hazard and to improve the environment is increased by the infraction proceedings being pursued against the UK by the European Commission for breaches of the directive.

Is there any update the Minister could give since the passing of the Bill in March? Is he now more confident that the scheme will be fit for purpose for the long haul? Is there an outcome he can share from the consultation undertaken by Thames Water Limited in the early months of this year, a measure spoken to by my noble friend Lord Berkeley, who also asked questions about the costs and outcomes of the scheme? It is very encouraging that the amendment to Section 35 of the Planning Act 2008 came into force in April instead of in December this year. The memorandum points out in its policy options analysis that this will save costs: each month’s reduction in time will save in the region of £5 million.

I thank the Minister for his letter following the passage of the Bill in March. I shall follow it up with a few questions for information on the detail of the order today. The memorandum lists the groups contacted in the consultation process undertaken last year on the capacity threshold of 35,000 cubic metres and indicates 62% agreement with the threshold and 73% agreement with the proposed supplemental provisions. The noble Baroness, Lady Parminter, mentioned the local groups established in response to the Thames tunnel proposals. Will the Minister give an indication of the percentage agreement of community groups within the overall figures? Can we be assured that the worried section of the population, apart from all the relevant authorities

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and planning associations, is on the whole happy with the proposal? I know the Minister mentioned this in his opening remarks.

On the capacity threshold, will the Minister indicate what increase in capacity over today is indicated by 35,000 cubic metres? What level of occurrence will overwhelm this capacity? Has there been any assessment of what increases in households the system will adequately cover or for how long, assuming all other activity remains the same?

From our debate on the Bill in March, the Minister will know that we look to encourage many more water efficiency proposals to come forward: to separate out as far as possible water runoff from the sewerage system; to reduce the replacement of gardens and green space with paved areas; to replace hard non-permeable surfaces with porous materials; and, last but not least, to encourage measures to reduce household consumption of water. Can the Minister update the Committee today on any of those aspects since the Bill’s passage?

The memorandum also outlines the fact that 350,000 cubic metres capacity was informed by experience of large projects. Could the Minister explain what is meant in the memorandum when it says that in the next 10 years the proposed Thames tunnel has an estimated capacity of 1,580,000 metres? The memorandum also mentions the reviews of the scheme into the future. May I ask that the Minister builds into that regime a review to be implemented as any overspill occurs? That will underline that the hygiene problems of London are to be consigned to the past.

Finally, in a debate on the Water Industry (Financial Assistance) Bill, we called for apprenticeships to be set up and included in the project. We welcome the remarks made by the Minister on future projects in his opening statement. With all that said, we agree to take note of the orders today.

Lord Taylor of Holbeach: My Lords, it has been an interesting if fairly brief debate and exchange of views that I hope will inform your Lordships for future occasions. I tend to agree with the noble Lord, Lord Berkeley, that perhaps it might be useful to have a meeting of Peers and those at Defra some time in the autumn where we can bring together all those matters. A debate such as this has helped considerably to bring to the fore some of the issues that are being considered by government. After all, there is a contingent liability to government in the Water Industry (Financial Assistance) Bill in these matters, and those are not undertaken lightly or without the Government having a proper care of what is involved.

As I said in my opening speech, it is appropriate that the issue of this order amending Section 14 of the Planning Act 2008 should be separate from the specific matter of the Thames tunnel. However, I do understand that the Thames tunnel is the only one that fits the Bill at the moment. So we have two elements to the debate today—one about the statutory instrument before us, which I have commended to the Committee, and the other about the broader issues. I hope that I can indulge the Grand Committee by talking about Thames tunnel matters, because it is clearly a public platform.

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I am very grateful to my noble friend Lady Parminter for her general support for this project. As I say, it is not something that the Government have entered into lightly. Indeed, it is of course Thames Water that is entering into the project; the Government are providing a framework against which they can make their application. I assure her that Thames Water expects to commence its publicity notice in mid-July, which will publicise the impending planning application in early 2013. There has been a lot of public liaison by Thames Water itself, but of course that will mean that the consultation on the planning process opens up formally at that time.

The noble Lord, Lord Berkeley, whose professional and parliamentary expertise on matters of tunnels I respect, mentions the Binnie report. Our view is that the environmental criteria set in 2007 remain robust; they are not gold-plated in any way, and we cannot afford to downgrade them. Alternatives such as a western tunnel or a piecemeal approach—and I do not mean that in a derogative sense—which the noble Lord recommended, showed that there can be considerable problems. None of the alternatives identified during the extensive studies carried out over the past decade has been able to deal swiftly and adequately with the true environmental and health objectives of the Thames Tideway, while at the same time complying with statutory obligations. For example, separate rainwater from foul water sewerage systems would be far more costly, possibly £12 billion. It would be extremely disruptive and would take far too long to complete.

The shorter west London tunnel coupled with green infrastructure measures would still not fully reduce the volume and frequency of discharges either sufficiently or quickly, so we would not, in fact, be able to meet the environmental and health objectives.

Lord Berkeley: I am grateful to the Minister for that response. I have heard that statement from him and others before. But this kind of thing needs debating. Nobody is quite sure what standard is trying to be achieved that would meet either UK or European legislation because we do not know what the European Court will say. I hope that that is something we can talk about in the meeting in the autumn and I am grateful to the Minister for agreeing to that meeting.

Lord Taylor of Holbeach: It would be useful. I am satisfied that Defra has thought this matter through. Clearly, at the current stage of the economic cycle, we are not looking to spend money that it is beyond the capacity of this Government to endorse. I will come on to the European Court in relation to that. The interim measures, as I said, will not meet the waste water directive. That is one of the difficulties. We have to consider the urban waste water directive. The proposal to construct a tunnel should be sufficient to avoid fines completely if it is delivered to the planned timetable.

Within that process, it is important for the noble Lord to understand that although we expect a judgment concerning London in the next few months, if we lose and the European Commission wishes to pursue fines because it does not think that we are addressing the

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issue properly, it needs to return to the Court for further judgment. The Court has wide discretion about the levels of fines depending on several factors including the seriousness and the duration of the breach. In this case, we would expect the level of fines against the UK to be significant and set at a level to act as an incentive to remedy that breach as quickly as possible. But fines would be levied until the breach is rectified. Currently, the proposed Thames tunnel offers the solution most likely to rectify the problem within the shortest time.

We cannot prejudge this issue, but clearly we are seeking to address it. It has arisen over a century or more of the growth of London and the growth in its sewage. Much of our sewerage infrastructure was built by Bazalgette 150 years ago and is clearly no longer capable of coping.

I think that I have covered those questions raised by the noble Lord, Lord Berkeley, and I now wonder if I have some points to help the noble Lord, Lord Grantchester. I am grateful for his contribution, which was supportive of the process that the statutory instrument is trying to bring about. Indeed, he is grateful for the Government tabling this debate because it is something that the Opposition have supported in the past.

There is no question of us seeking to curtail debate. I hope that the noble Lord will accept that. The money Bill was a money Bill and we were not able to debate that further. I hope that he is happy with the suggestion I made to the noble Lord, Lord Berkeley. There were a number of detailed questions that he asked me and I hope that he will forgive me if I write to him on those matters. I can make sure that other noble Lords who spoke in the debate get a copy of that letter.

Lord Grantchester: I am grateful to the Minister for offering a meeting in the autumn so that we can get to grips with some of these more pertinent matters.

Lord Taylor of Holbeach: I thank the noble Lord very much for that suggestion. I conclude my remarks by saying that the order will help to prevent some of the indecision and delay that has gone on around many of these projects and the additional costs incurred by them. I hope that it will prove to be of utility for this Government and future governments.

Motion agreed.

Advisory Committee on Hazardous Substances (Abolition) Order 2012

Advisory Committee on Hazardous Substances (Abolition) Order 2012 42nd Report from the Joint Committee on Statutory Instruments56th Report from the Merits Committee

Considered in Grand Committee

4 pm

Moved by Lord Taylor of Holbeach

That the Grand Committee do report to the House that it has considered the Advisory Committee on Hazardous Substances (Abolition) Order 2012.

Relevant documents: 56th Report from the Merits Committee, Session 2010-12; 42nd Report from the Joint Committee on Statutory Instruments, Session 2010-12

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The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach): My Lords, I am very pleased to have the opportunity to introduce the Advisory Committee on Hazardous Substances (Abolition) Order 2012, to add to the points that were made in the explanatory document accompanying the order.

This is an order to be made under the Public Bodies Act 2011—a number of noble Lords will have fond memories of that piece of legislation. It reflects one of the outcomes of the Government’s programme of reform for public bodies. The order will abolish the Advisory Committee on Hazardous Substances and pave the way for the reconstitution of its successor as an expert scientific committee.

I reiterate that this is not an attempt on the Government’s part to stem the flow of impartial and independent scientific advice on hazardous substances. We want this advice to continue, but we want to improve the process. We firmly believe this reform to be necessary and that there will be benefits from the successor committee operating in a different way, while of course retaining its independence.

We need new arrangements to reflect wider changes in the regulatory landscape for hazardous substances since the Advisory Committee on Hazardous Substances was set up, more than 20 years ago. We need to establish a broader, more strategic and proactive role for the successor committee in that landscape while meeting the continuing need for independent expert scientific advice in this area.

At the same time, we have taken a considered view of how better to manage scientific advice and evidence in my department. In particular, as an expert scientific committee, the successor body to the Advisory Committee on Hazardous Substances will work in a more co-ordinated and peer-reviewed environment under the purview of our Chief Scientific Adviser and our Science Advisory Council.

The rationale for this reform was, of course, articulated in the context of the passage of the Public Bodies Act in which we sought powers to abolish the Advisory Committee on Hazardous Substances. We also consulted widely, as required by the Act, on the future of the Advisory Committee on Hazardous Substances and, as we reported, there was clear public support for our proposals. We also have the full support of the devolved Administrations and have secured the required clearance from the devolved legislatures for the order.

I believe that we have this support because we have given thought to the successor arrangements, as I will explain shortly, in relation to the terms of reference for the expert scientific committee that will replace the Advisory Committee on Hazardous Substances. It has been decided, subject to the coming into force of the order, that the successor body will be known as the Hazardous Substances Advisory Committee. This will avoid confusion with the existing committee, which will have been abolished, and mark the start of the new enhanced arrangements.

I turn to the report of the Merits of Statutory Instruments Committee and give the assurance to the Committee that in future all Defra orders deriving

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from the Public Bodies Act will carry the preface in their title, “public bodies”. This is a specific request of the Merits of Statutory Instruments Committee so that the statutory instruments can be clearly identified.

In its consideration of the order, the Merits of Statutory Instruments Committee, now of course renamed as the Secondary Legislation Scrutiny Committee, concluded that my department’s case for the order probably just crossed the statutory threshold for the exercise of public functions. I believe that our case is stronger than this and that this order, and the new arrangements which will follow it, will deliver the benefits that we anticipate. We have listened to the committee and responded to it, and as part of these new arrangements, and in anticipation of the order coming into force, I have agreed new terms of reference and, as I mentioned earlier, a new name for the successor body. I know from the report that there is particular interest in these terms of reference, with their central importance for ensuring that the new committee can operate in a truly independent manner. The report invited Ministers to say whether these terms of reference have been agreed in a form that will address the committee’s concerns. I believe that they have. I have arranged to share with the committee my recent correspondence with Professor Stephen Holgate, the chairman of the Advisory Committee on Hazardous Substances, on this matter. As chairman-designate of the successor body, Professor Holgate has welcomed these new terms of reference, which are those recorded in the report of what we must now refer to as the Scrutiny Committee, as part of the information which my officials provided to assist consideration of the order. The only change made, for greater clarity, was to separate out in two supporting protocols the committee’s relationships with our Chief Scientific Adviser and Science Advisory Council, and with Ministers. We are getting ready for this change, and to this end I commend the draft order to the House.

Lord Knight of Weymouth: My Lords, it is a pleasure to follow the Minister and to have heard him talk about public bodies again, as the father of the Public Bodies Bill through this House. What a joy it is to hear him talk about it. Even though I disliked the Bill intensely, I enjoyed the way in which he steered it through this House and the way in which he listened. I am sure that he will continue to listen as we talk about some of the detail in these SIs.

I am also grateful to the Merits Committee, as was, for its 56th report on this order. As I understand it, it was the third order made under the Public Bodies Act that has been considered by the Merits Committee. As we know, the committee did not recommend it for the enhanced scrutiny procedure—we have one of those coming shortly—but made it clear that this was a close decision, as the Minister has said. In paragraph 18, the committee said that it,

“struggles to see much discernible benefit in the proposals”.

It describes the case for the order as “far from compelling” and says that,

“it probably just crosses the statutory threshold”.

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I accept that the Minister thinks that it does a little bit better than just crossing the threshold, but it is important that that is noted.

The committee poses questions for the Minister to answer in the debate. In particular, it points to evidence from the Royal Society of Chemistry recalling that Parliament and especially this House insisted in 1989-90 that the Advisory Committee on Hazardous Substances was established as a statutory committee. This was to ensure that Ministers and officials took proper scientific advice before taking decisions on controls on hazardous substances.

Let me put the questions implied by the committee. I am grateful, through signalling, that I have gone first. I thought it would be helpful to the Minister’s in-flight refuelling if I were to answer the questions first to give maximum time for the fuel to surge through to the Minister. First, the current cost of the advisory committee is £30,000 per annum. Will the new body cost the same or less than that £30,000 and how much will the preparation form passing the order cost the department in staff time and Parliament in printing and staff costs? That will give us a rough idea of whether this move is good value for money.

Secondly, how will the Minister ensure that the newly constituted committee will, in the words of the code of practice for scientific advisory committees, be able to,

“operate free of influence from the sponsor department officials or Ministers, and remain clear that their function is wider than simply providing evidence just to support departmental policy”?

Thirdly, the framework proposed by the Government is as follows—I am sure the Minister will correct me if I am wrong. The new body is to operate within a closer network of expert scientific committees overseen by Defra’s Chief Scientific Adviser—the Minister has said as much in his comments—and is to be supported by its Scientific Advisory Council, the SAC. The chair is to meet Defra’s Chief Scientific Adviser at least annually to discuss its work. The chair is to attend the annual meeting of Defra’s Scientific Advisory Committee.

Fourthly, there is to be routine reporting by the new advisory committee after its quarterly meetings—it is worth knowing to whom—in addition to its reports on specific projects and its annual report. There is also to be other reporting to Ministers by the Chief Scientific Adviser and the Scientific Advisory Committee on the new body’s work. Ministers are to set and change the new body’s terms of reference—we have heard some discussion of that—and will possibly attend its meetings from time to time. I would be grateful if it could be confirmed that that is all correct. If that is all correct, what independence is left to the committee? Is not the price of better co-ordination and peer review that the Minister mentioned in his opening comments a loss of independence? The form of the set of questions is: what is the problem to which the Government’s proposal is the solution? For example, on which scientific initiatives have Ministers been less well advised than they would wish? Which scientific developments has the present committee overlooked?

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Fifthly, the Government’s case for improved accountability and independence of advice hinges in part, as the Merits Committee and the Minister have said, on the proposed new terms of reference. Have they now been agreed in a form that would support this objective, as the Merits Committee requested? Will the Minister share with us the correspondence he referred to with the incoming chair?

Sixthly, if the current terms of reference in the Environmental Protection Act 1990 are out of date, could they not have been changed or a power inserted in the Act to amend them by statutory instrument subject to parliamentary approval? Seventhly, is not the key to these proposals that whereas the terms of reference for the Advisory Committee on Hazardous Substances are set out in statute and thus decided by Parliament, in future they will be set and amended by the Secretary of State? How will that be subject to transparency and scrutiny? Why was Parliament right in 1989-90 to insist that the committee was statutory, but wrong now?

Finally, if the purpose of the proposal is not increased ministerial control, is the real explanation that the Government want to be seen to be culling quangos—in the end the motivation for the Public Bodies Act—but because the Advisory Committee performs a sufficiently important role, it is keeping the members and staff intact and simply making an appearance of change? Should the Cabinet Minister responsible for public bodies not be watching this very carefully? This feels like business as usual. A name has been rejigged with a few words in a different order, but everything continues as normal with no real financial saving. In the end, a headline two years ago about culling quangos now has to be delivered and is taking up parliamentary time.

4.15 pm

Baroness Parminter: My Lords, these Benches support the proposal to abolish the advisory committee, principally on the grounds that we are satisfied that the replacement will be independent of Ministers, that it will continue to work openly and that the public and specialist interests will be able to attend meetings. I agree with the noble Lord, Lord Knight, that in the absence of the terms of reference, it is difficult to find the discernible differences between the old committee and the new committee. However, I put that to one side.

It is quite clear in the explanatory documents that the consultation took views on the terms of reference and the name of the successor body. The Minister has been kind enough to share the new name and to give some indication of the terms of reference. At this point, there does not seem to be any clarity on the number of members and the scope of representation on the proposed new committee. We want to feel reassured that the scientific experts will come from a breadth of fields across the industry and more broadly to represent some of the consumer champions that have scientific experts on their staff to ensure that the general public can have full confidence in the scientific decisions that we desperately need from this committee.

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Lord Taylor of Holbeach: My Lords, this has been a good debate. I will write to the noble Lord, Lord Knight, about some of the detailed questions he asked me, but I will be writing to him anyway because I would like to share the correspondence we have had with Professor Stephen Holgate and there is no reason why the terms of reference for the new body should not be included with the correspondence as that is what it was principally about.

The most important element of all this is accountability. I am sure the noble Lord, Lord Knight, will agree, and my noble friend Lady Parminter knows from her experience, that science is highly valued in Defra. It is a science-based department. Indeed, our science and technology committee produced a report on the way in which departments handle their science, and Defra came out of it very well.

I see science as being at the heart of this. Ministers’ engagement in the science is also very important. That is why I have attended a number of these bodies during the relatively short time I have been in the department. I assure the noble Lord, Lord Knight, that I intend to attend not only the Scientific Advisory Committee but the committees that will be sitting under the framework of the Scientific Advisory Committee. I have regular meetings with the chief scientist. It is important that in an evidence-based department, which Defra inevitably is, Ministers are, as much as possible, scientifically literate and capable of being advised directly. I value independence, and there is no suggestion that the closeness of this body within the Defra family is designed to reduce that independence. The terms of reference make it quite clear that the department requires independent advice and wants to be able to be advised from a position of scientific authority about what it is best for the department to do. Political decisions have to be made on the basis of that advice, but it is the most important thing. The chairman and the committee are therefore responsible to the Scientific Advisory Committee and the Chief Scientific Adviser, as well as being responsible to the Minister. That is important to bear in mind.

This order is part of a wider package and is the first of a number of bodies within Defra where we are hoping to take advantage of what we believe is a better structure to bring into effect this particular body of our family. We do not think that there will be any saving in terms of money on this matter. There will be some consultation on the terms of reference. If noble Lords feel that they have comments to make, they would be perfectly correct to do so. The new committee will not wait to give advice; it gives advice, and Ministers are responsible for their reaction to that advice. The committee does not have to wait until it is asked before that happens. I am happy to share the terms of reference with noble Lords who are present—I have already given that commitment, as noble Lords would expect me to.

I have commended the statutory instrument to the Grand Committee and I hope that it will be supported.

Motion agreed.

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National Health Service Trust Development Authority (Establishment and Constitution) Order 2012

Motion to Take Note

4.22 pm

Moved by Lord Hunt of Kings Heath

That the Grand Committee takes note of the National Health Service Trust Development Authority (Establishment and Constitution) Order 2012 (SI 2012/901).

Lord Hunt of Kings Heath: My Lords, I declare an interest as chairman of an NHS foundation trust and as a consultant trainer on NHS and health issues.

At first sight, these statutory instruments, Nos. 901 and 922, which set up the NHS Trust Development Authority, may appear to be anodyne and uncontroversial. They may seem, for example, as certainly the authors of the impact assessment document believe, to be a necessary tidying-up operation to remedy some of the gaps in the NHS architecture as a result of the Health and Social Care Act. The language of the statutory instruments and, in particular, the impact assessments reminds us of the changed and fragmented landscape that is being created, with new bureaucracy and largely unaccountable quangos in practice.

The Government state in the impact assessment that some of these organisations will be abolished and that their functions will therefore need to be located in another organisation to ensure that the process of reaching an all-provider landscape is achieved that is in line with the Government’s vision for an autonomous NHS free from day-to-day political control. I have to say that I am not sure that we have quite seen that lack of political control yet.

The NHS Trust Development Authority has an important role to play in the NHS as it is constituted under the 2012 Act. It is also part of a series of statutory instruments that we can expect to see in the next few months. I thank the noble Earl, Lord Howe, for his helpful letter of last week that gave an overview of the kind of statutory instruments we can expect. I do not know whether we might, at some stage, get a fuller programme of statutory instruments but it would be helpful if he indicated whether that will appear in due course, whereby we can properly prepare for what will be a marathon parliamentary Session as regards debating those statutory instruments.

The interest in the NHS Trust Development Authority is due to the process under which NHS trusts are to become NHS foundation trusts—a matter of some importance. I was at the Department of Health when the concept of foundation trusts was created, and I now chair one. I am very enthusiastic for them and their governance structure. The fact that chairmen and non-executive directors are appointed by the governors, who in turn are elected by the members, is a very important asset that ensures that these bodies are rooted in the community that they are there to serve. I am very clear that it is right to encourage NHS trusts to become foundation trusts.

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The concern that I have, and the key point that I want to put to the Minister, is whether the criteria against which FT authorisation is judged will be maintained in future. I ask that in light of the statistics that appear in the assessment, which refers to the report of the National Audit Office of 1 October 2011, that there were then 139 foundation trusts and that the task of progressing the remaining 108 NHS trusts to foundation trust status was considered by the NAO in October last year as,

“challenging given the ‘tripartite formal agreements’ for 20 NHS trusts show they are not financially or clinically viable in their current form”.

My understanding is that about 50% of NHS trusts’ foundation trust status applications are rejected by Monitor due to insufficiently robust governance. Yet the Government have given very clear signals that they wish to speed up the translation of NHS trusts to become foundation trusts, either by themselves becoming foundation trusts or merging with an existing foundation trust or moving forward in another organisational form.

My understanding is that the Government had a deadline for this of 2014. We discussed this during the passage of the Bill, and I would be grateful if the Minister clarified what the Government’s intent is for a timetable. My concern is that, whether or not 2014 is no longer an absolute deadline, the Government seem very keen for existing NHS trusts to move on into a different status. My concern in the light of past experience is whether this is too much pressure or too quick a timetable, and whether there is a risk of lowering the barrier for authorisation, forcing unwanted mergers or inappropriately involving the private sector. I would be interested in the Minister’s views on this.

I would also be interested in the views of Monitor, the regulator, which has been scrupulous in ensuring a rigorous approach towards authorisation. Any person who has gone through the authorisation process will testify to its rigour. Is Monitor itself happy with the Government’s intentions on the timetable for NHS trusts to become foundation trusts? I remind the Minister, and maybe he could confirm, that at the end of April 16 NHS trusts were in escalation process after missing the milestones in their applications to become foundation trusts. Although I believe that our debate on the Bill may have overtaken what is contained in the impact assessment, I refer to paragraph 19 of that assessment, which says:

“There is a strong expectation that the majority of NHS trusts will achieve FT status by April 2014”.

4.30 pm

It is at least arguable that those NHS trusts that are not foundation trusts are the weaker brethren of the provider community within the NHS. Given the failure rate of 50% and the rigorous process followed by Monitor, it is very difficult to see how all those trusts could become foundation trusts by 2014 unless there were a lowering of the bar or forced mergers. Indeed, the Government’s real aim may be to provide a context in which a great number of NHS providers go to the private sector.

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On the relationship of Monitor to the other bodies in the new architecture, if Monitor is unhappy about the pressure being placed on it regarding the process and timetable, what can it do? Can it be overruled by Ministers, the NHS Trust Development Authority or the NHS Commissioning Board? It would be useful to know what the hierarchy of decision-making is in relation to these different bodies.

On how the new structure will aid this process at local level, as ever there are mixed views about the strategic health authorities of old. They played an important role locally, acting as reinholders when the future of non-foundation trusts was discussed and decided. The SHAs were in a position to influence commissioners and to encourage a change of non-executives. They were able to intervene and, when they thought it necessary, to encourage the removal of weak chief executives and other executive directors. In the new set-up where the strategic health authorities will cover much larger areas, and where the local offices of the NHS Commissioning Board will be much more concerned with commissioning, and presumably with holding GPs’ contracts, who will act as the honest broker locally, or is it all to be done by the NHS development authority? If it is to be done by that authority, will it know all the nuances of local circumstances?

I also want to ask the Minister about the impact on foundation trusts if the department’s policy is to force through mergers of non-foundation trusts with them. There are examples of successful mergers but those examples, which are very close to home for me, suggest that it can take a long time, a lot of energy and a huge amount of resources and can have an impact on targets for the foundation trust that takes over the non-foundation trust. What arrangements will be in place to ease the passage of mergers? What will happen to the debt of these non-FTs, because most of them are in financial trouble? How will Monitor deal with the targets? Will there be a breathing space for the foundation trust to get the element of the non-FT that is coming into that trust up to speed?

Is there a risk that the Competition Panel or the OFT might impede what might be seen as a sensible merger in NHS terms? We have seen the recent intervention of the OFT in relation to mergers on the south coast. It would be a matter of great regret if the competition authorities inhibited the sensible rationalisation of NHS organisations and services.

I have questions about one or two other practical matters. Will the Nolan principles of public life apply to the NHS development authority? Will the authority be under a duty of consultation?

The authority’s decisions could have a big impact on the local provision of NHS services, and I would have thought it would be a great pity if the authority were not under an obligation, before it took action in relation to a non-foundation trust, to consult local NHS organisations, clinical commissioning groups, local authorities and health and well-being boards. It would be quite wrong for a national quango simply to intervene in local matters without that being transparent and subject to rigorous public consultation. This is an important body and I do not object at all to its

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establishment, but we need to know much more about the context in which it is going to work in future. I beg to move.

Lord Warner: My Lords, I speak on this Motion and the regulations as a former Health Minister with responsibility for the foundation trust pipeline when FTs were started. I took the foundation trust legislation through this House back in the heady days of 2003, when we sat until about five o’clock in the morning dealing with this legislation, so I have some background in this. After I ceased to be a Minister, I was chairman of a provider development agency in London for a couple of years. We grappled with the issue of trying to get people through the pipeline to FT status without lowering the regulatory bar for the standards that they had to achieve to do that. I make it clear that I am not auditioning for a position on the Trust Development Authority.

I saw the decision to set up the new authority with considerable puzzlement verging on disbelief. We know, as my noble friend has said—I am grateful to him for putting down this Motion and giving us the chance to debate it—that 50% of FT applications fail to satisfy Monitor that they should be accorded FT status. It is worth bearing in mind that to have got to Monitor, they must have been through the department as well and the SHAs. They would not have got to Monitor without going through some vetting process beforehand. So even after that process, 50% of them are failing when they get to Monitor. That is a pretty high failure rate, given that we already have a vetting system.

We need to think a bit about what causes them to fail. The Explanatory Memorandum was rather kind about some of these reasons. The main reasons why they fail, wrapped up in terms like “governance”, is that they do not have a credible business plan in the circumstances that the new foundation trusts will face to be an organisation that is viable and sustainable clinically and financially. Their business plans are often simply not credible. That has been a longstanding problem for many of those that have failed at the stage of going to Monitor. At the root of that problem is the fact that they have tried to put in place a set of service configurations that are not economically or financially sustainable and, in some cases, are not clinically sustainable either.

In those circumstances, what is the magic dust that the new authority will bring to this set of circumstances that will resolve these problems—and not just over the long term? I will come to the timetable in a minute, which my noble friend eloquently outlined. What is the new ingredient that this authority will bring to the party which is lacking in the present arrangements, which have a 50% failure rate when the trusts reach Monitor? Why and how is a new body going to do things differently? I would like to hear from the Minister what the new ingredients are that we will get from this body that will produce a real improvement in the number of FTs going through the foundation trust application process.

In particular, will it have the authority to push local people on reshaping and reconfiguring services? Many trusts in the 108 that have not made it through the Monitor hoops will fail because they are not going

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concerns in commercial terms, either clinically or financially. Will the body actually provide the leadership to shift and change the configuration of services at local level to produce more viable applications? Or will it just be a body that pushes for mergers and hopes for the best? The track record on mergers in the NHS is not a good one on reshaping services. They tend to be expensive, difficult to do and time consuming. We need more explanation from the Minister than is in the Explanatory Memorandum about what the new approaches will be from this body that justify setting it up and that will produce change.

I want to say a few words about London in particular. Among the 100 or so trusts that have not made it to FT status are some powerful players with international reputations, such as Imperial College, Barts and the Royal London. These are international bodies that have still not made it through the foundation trust application process. Will the new development trust have the authority to look around in London and answer some questions about why these powerful trusts have not been able to get through the process and satisfy Monitor that they can become foundation trusts?

Turning to a slightly different part of these regulations, I notice that the Government are now required to set up a replacement, in effect, for the NHS Appointments Commission. It is extraordinary that we should have spent time in this House getting rid of the Appointments Commission and then find that we have to set up another health authority to do its job. Why have the Government changed their mind on this? I understood the argument to be that the Health Secretary wanted to ensure that the right and appropriate people were appointed. What has caused the change of heart since the Public Bodies Bill and the department’s own arm’s-length body review to cause them to require these old functions on appointments to be put into this new body, which is a considerably different set of functions from strengthening the FT pipeline?

A couple of areas in the Explanatory Memorandum are very difficult to understand. This issue impinges on the timescales that my noble friend outlined. Paragraph 31 quotes the recent NAO report, which identified 139 foundation trusts established since the 2003 enabling legislation was passed and 108 trusts that have not made it yet. But if we compare that with paragraph 19 of the impact assessment, we find that,

“only by exceptional agreement made after close scrutiny of financial and clinical feasibility will they be allowed to continue in existence past this date”.

That date is April 2014. If we discount the 20 or so trusts that have been accepted by the Government as non-viable as foundation trusts, we are left with 88 trusts that are somehow going either to become foundation trusts by April 2014 or, in the wording of paragraph 19, they will not be allowed to continue in their current existence.

4.45 pm

Are the Government saying that they have found some magic gold dust for a new ingredient in the new body that is going to deliver more than 80 successful foundation trust applications within about two years? If not, what are they going to do with the very large

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number of trusts, it seems to me, which will not have got to FT status? What is going to happen to them after April 2014? I think we really need to know, and in particular the NHS needs to know, what is going to happen to them after 2014 if they have not actually made it through the Monitor system.

I am also puzzled by the performance monitoring functions given to the new body. We know that the Government disapprove of centrally driven targets. However, they seem to have found that there may be something to be said for targets, although they call them requirements, and issues of that kind. However, as I understand the Explanatory Memorandum, paragraph 21 says that waiting times and healthcare-acquired infection rates together with other issues—unspecified—will be areas that continue to help determine whether a trust becomes a foundation trust.

Are the Government going to set out clearly for all concerned the list of requirements in that kind of area—what I would call, in old speak, targets—that trusts are going to have to meet if they are to satisfy the new trust development authority so that they can safely be put forward to Monitor? We need to know—I would be very happy for the Minister to write to us on this—what are the performance monitoring requirements that are going to be a key part of determining whether this authority can satisfy itself that a trust can go forward to Monitor with a good chance of its application being successful.

Finally, I notice in the documentation that there is to be a review of the new body in 2014. That implies that the Government are not terribly optimistic about meeting the 2014 deadline. In 2016, there is to be a review of the new authority. Theoretically, it should be out of business by April 2014, as I understand it, but there seems to be an acceptance that that will not happen. Will the Minister say whether the trust will publish an annual report on its progress and what will happen if, as is likely, it has not completed its job by 2016?

Baroness Thornton: My Lords, much of what I would like to say has been said by my two noble friends, but I would like to add my tuppenceworth because this is the beginning of some of the very important statutory instruments we are going to consider that will bring the Act into being. I have a few questions for the Minister. The first one has been alluded to by my noble friend Lord Warner: I refer to the creation of a new arm’s-length body, which I thought the Government did not really want to do. I wonder why it was felt necessary to create another arm’s-length body when many of the useful arm’s-length bodies, which some of us thought should not have been abolished, have been abolished, particularly the NHS Appointments Commission, which I will come back to in a moment.

Under point 7.1 in the Explanatory Notes, liabilities and assets are referred to. There is the recurring notion that this new body will take responsibility for those. My noble friend Lord Warner questioned the liabilities, but I am interested in the assets. For example, if an NHS trust is not viable as a foundation trust but a private sector organisation offers to purchase it, merge with it or whatever, what happens to the ownership of

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its assets—the land, the buildings and the kit? Where do they go? Who do they reside with? Is it the new provider body, whatever that is? I would like some explanation.

Appointments are important. Once the NHS Appointments Commission has been abolished, I cannot see from the Explanatory Notes that there is a guarantee of independence and transparency in appointments to the new bodies or when people in NHS trusts retire and have to be replaced. I am not clear what happens in those circumstances and who makes those appointments. If it is the new authority, which is my understanding, what guarantees do we have of independence, accountability and transparency in those appointments? The reason why I think that is important was alluded to and described much more adequately than I can by my noble friend Lord Warner and is in point 8 of the evidence base, which states:

“To date, 50 per cent of NHS trusts whose applications for FT status are rejected by Monitor fail because they do not have sufficiently robust governance. It is proposed that SHAs will be abolished in 2013, so new support arrangements will be required to support the FT pipeline”.

Do the Government think that, because NHS trusts fail because of their lack of robust governance, by taking control of this issue they will be able to appoint more robust trustees or do whatever it is to ensure that they meet the foundation trust requirement? I have exactly the same question as my noble friend: what is the magic that will increase the success rate from 50% to 100% with the new authority? We need to be concerned on several counts: the accountability, viability and credibility of the new body proposed in these statutory instruments. I am not convinced that what is being proposed meets those requirements.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, I am grateful to the noble Lord, Lord Hunt, and the two other noble Lords who have spoken because their questions give me an opportunity to clarify what these statutory instruments are designed to do and to say why we believe that they are appropriate.

The NHS Trust Development Authority will play a vital part in laying the foundations for the new health and social care system. From April 2013 it will provide essential governance and oversight of NHS trusts that are not yet foundation trusts to support them in delivering the vision of an NHS consisting entirely of fully autonomous healthcare providers.

Foundation trusts are sustainable, autonomous providers with far greater freedom to innovate, design and deliver services to local communities, and there I believe that the noble Lord, Lord Hunt, and I are in full agreement. Helping every NHS trust to attain foundation trust status is key to creating an environment in which adaptable, sustainable organisations deliver high-quality care and collaborate with NHS and other partners to provide integrated care designed around the needs of individual patients.

The Government’s vision of care delivered in an all-FT landscape means that NHS trusts must either become authorised as foundation trusts in their own right, merge with an existing FT, or move forward in another organisational form. There is a strong expectation

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that the majority of NHS trusts will achieve FT status by 2014 and that only by exceptional agreement, made after close scrutiny of financial and clinical feasibility, will they be allowed to continue in their present form beyond this date. Supporting the progress of NHS Trusts through the process of applying for FT status is often referred to as “managing the FT pipeline”.

Of course, FT status is not an end in itself but a crucial step in the process by which we can drive up the quality of care and make sure that the services we offer patients are robust, sustainable and of the highest quality. The benefits that achieving FT status can bring patients and communities cannot be underestimated. In doing so, NHS trusts examine their leadership, financial sustainability, quality of service and plans for continuous improvement. It is a mechanism designed to bring all provider services in all parts of the country up to a level of excellence.

An important part of this transition is the establishment of a new special health authority, the NTDA. The orders before noble Lords now provide the legal underpinning. The NTDA will be a short-lived, enabling organisation in the reform programme. The authority is important because once the current system of strategic health authorities comes to an end in 2013, the infrastructure to support NHS trusts on their way to becoming foundation trusts, or indeed to support them if they become unsustainable and can no longer function as a foundation trust, will no longer be in place.

The legislative framework set out in the Health and Social Care Act 2012 introduces a new and comprehensive regulatory system, including measures for dealing with providers at risk of becoming unsustainable. The new system will concentrate on protecting essential local services for NHS patients, not on maintaining failed organisations at great and unnecessary cost to the taxpayer. The NTDA will work closely with the whole of the new NHS to ensure innovation and that the very best of clinical practice is brought to bear on the most complex problems. It will work with local communities and their representatives to make the case for change when service reconfiguration is needed to deliver sustainable services.

The NTDA, on behalf of the Secretary of State, will also appoint chairs and non-executive directors to NHS trusts while they continue to exist, and appoint certain trustees such as special trustees and trustees to hold trust property for some NHS bodies. The organisations that the NTDA will take responsibility for cover a wide spectrum of services, including acute hospitals, ambulance services, mental health services and community services. Some are on the cusp of achieving foundation trust status while others face some of the most significant challenges in the NHS, with long-standing financial and operational difficulties to contend with.

It will not be an easy task. That is why the Secretary of State has appointed David Flory, currently deputy chief executive of the NHS and director of finance, performance and operations, as its chief executive-designate, and Sir Peter Carr, former chair of NHS North East SHA and vice-chair of the NHS north cluster of SHAs, as its chair. We are establishing the

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authority now to give it time to design its operating model, recruit staff and engage in the planning round for NHS trusts for the financial year 2013-14 before it takes up its full operational functions in April 2013.

5 pm

The establishment and constitution order sets out the central functions of the authority. It sets out the constitution of the authority and the core purpose, which is to provide performance management of NHS trusts, improving clinical quality, governance and the management of risk in those organisations and supporting their development into clinically and financially sustainable providers of health services.

The NTDA will be subject to the Public Bodies (Admission to Meetings) Act 1960 and will be required to hold its meetings in public. The order provides that some staff from the appointments commission will transfer to the NTDA and I assure noble Lords that a communications programme is in place to keep staff well informed. The regulations cover the appointments processes for the NTDA chair, the chief executive and non-executive directors; make provision about the meetings and proceedings of the NTDA; and impose a requirement on the NTDA to make reports to the Secretary of State. The Explanatory Memorandum accompanying these statutory instruments sets out our commitment to review the continued need for the authority after three years of full operation or on completion of the foundation trust pipeline, whichever is the earlier.

I shall attempt to address the questions that noble Lords put to me. It may be helpful if I give an outline of the current position on the pipeline. As at 1 April 2012, there were 144 FTs of 248 eligible organisations. There were 104 remaining NHS trusts. The wider objective is for the vast majority of the remaining NHS trusts to be FTs by April 2014, as I have said, either as stand alone organisations or as part of a new organisational form, including as part of an existing FT. NHS trusts will have planned authorisation dates post-April 2014 only with a nationally agreed plan, which may include new management arrangements.

Tripartite formal agreements for all remaining NHS trusts are in place. These include clear timelines and actions for each individual organisation. The agreements identify the scale of challenge and provide unprecedented clarity on what needs to be done to complete the rollout of the FT pipeline. Where plans are not delivered, NHS trusts are being subjected to escalation actions to intervene as necessary to mitigate the risks of non-delivery. This has already occurred for organisations that have missed key milestones and deliverables set out in their tripartite formal agreements.

The noble Lord, Lord Hunt, pointed out that 50% of NHS trusts in the past have failed at the Monitor authorisation stage, largely due to governance issues. I accept that governance has been an issue in the past. That is exactly why we have been working with the NHS Leadership Academy to develop the board governance assurance framework that all aspirant FTs now have to undertake. The department is also funding governor training to be delivered by the NHS Leadership Academy to publicise the role, attract the right people to act as governors and equip them for the role.

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The noble Lord asked whether the criteria against which authorisation is currently judged will be maintained. I assure him and other noble Lords that there will be no lowering of the bar to achieve foundation trust status. The NTDA will have strong expertise in clinical quality and will assess the clinical and financial sustainability of NHS trusts before putting them forward to Monitor’s assessment. We expect the majority of NHS trusts to get through the process.

The noble Lord, Lord Warner, asked me what the added ingredient was in the NTDA that will make a difference. I have already alluded to one, which is that the NTDA will have a strong clinical quality presence at the board level, a nursing and a medical director and financial and governance assessment expertise throughout its organisation. As he knows, part of the process of authorisation includes CQC registration. The NTDA will work closely with the CQC and with Monitor on trusts’ readiness for authorisation. We believe that this will be a better and more collaborative and aligned system than that in place at the time that Mid Staffordshire FT was authorised, for example. Essentially, the NTDA will mean a co-location of skills and expertise. With a single national dedicated organisation, we stand the best possible change of delivering the pipeline.

Despite the doubts expressed by the noble Lord, Lord Warner, we strongly expect the vast majority of trusts to become foundation trusts by 2014. Some may not achieve it in their own right but will do so by merger or acquisition by another foundation trust. For some, a more radical solution may be needed, such as a reconfiguration of services in a different organisational form—whether that is to meet demand, accessibility, requirements of quality or value for money. However, as I have said, because the NTDA will concentrate solely on overseeing the NHS trust programme, it has the best chance of seeing this through to a conclusion. Reconfiguration, where that is thought to be appropriate, will be led by commissioners, but the NTDA, through owning the management of the pipeline, will have a key role in identifying where a trust may become unsustainable and in alerting local commissioners to the consequences. In any event, the Government are determined to find solutions that support the continuity of essential services, not necessarily particular organisations, and ensure the exit of inefficient cost in the system. Once all this has been achieved, the NTDA will no longer be needed.

The rationale for setting up the NTDA was questioned. I hope that I have addressed why we believe this to be the right solution. The impact assessment carried out by the department identified the benefits of incorporating the functions that the NTDA will have within one organisation, making the all-FT provider environment easier to achieve. The impact assessment concluded that the benefits outweighed any cost implications in setting up the authority.

The noble Baroness, Lady Thornton, asked about the review of the NTDA in 2016, and rightly suggested that that might mean that not all trusts would become FTs by 2014. She asked whether we would publish an annual report on progress. Yes, the NTDA will publish

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regular reports to the Secretary of State. We strongly expect that by 2014 the bulk of trusts will have achieved foundation status, but we recognise that it may take longer to resolve the challenges for a few trusts with the biggest challenges. It is therefore sensible to allow some leeway for the NTDA to continue while it is needed.

The noble Lord, Lord Hunt, asked about Monitor’s capacity and the hierarchy of decision-making, as he put it. The NTDA’s technical application assessment process will result in recommendations to the Secretary of State on which trusts are ready for assessment by Monitor, including registration by the CQC. However, Monitor has the final decision on authorising a trust as a foundation trust.

The noble Lord also expressed concern about possible intervention by the OFT or other competition authorities that he feared might inhibit the sensible development of local services. I simply remind him that Monitor will have as one of its important roles that of preventing anticompetitive behaviour and encouraging competition on quality, where that is in the patient’s best interests.

The noble Lord, Lord Warner, asked why the Government had, as he reads the situation, changed their mind regarding the appointments function previously carried out by the appointments commission. While NHS trusts exist, the Secretary of State has an obligation to make appointments of chairs and non-executive directors to these trusts. It seemed to us to be sensible to place that function with the NHS Trust Development Authority. However, one of the reasons why the appointments commission appeared to us to have a finite life and finite utility was the prospective abolition of PCTs and SHAs, which have accounted for the vast bulk of the commission’s work to date. The workload in appointing people to the dwindling number of NHS trusts will clearly diminish over time and we do not think that that makes the case for retaining the appointments commission. It is much more cost-effective to co-locate that function within the NTDA.

The noble Lord, Lord Hunt, asked me whether the Nolan principles of standards in public life would apply. Yes, they will. The NTDA will be a public body that must consult and operate transparently, but in any major reconfiguration there will be joint work with the local and national commissioners for consultation. The circumstances in which they must consult Monitor and the Competition Commission are clearly laid down.

I hope that I have covered the bulk of the questions put to me. To the extent that I have not, I will of course write to noble Lords. In the mean time, I commend these statutory instruments to the Committee.

Baroness Thornton: My Lords, I am not completely clear that the Minister answered my question about independence. The point is that the appointments commission enjoys widespread public confidence in the way that it goes about its business of appointing people. If that function is to be taken into the new authority within the department, how will the Government ensure public confidence in its independence and integrity, even if there is a dwindling number of appointments? I do not think that he answered that question.

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Earl Howe: I apologise. The rules surrounding public appointments will of course still apply, particularly those relating to open competition. The continued existence of those rules and their implementation should give the public confidence that this system will be open and unbiased.

Lord Hunt of Kings Heath: My Lords, like other noble Lords, I thank the noble Earl, Lord Howe, for his response. I prayed against this statutory instrument in a genuine spirit of seeking information. I agree with the Minister about the importance of foundation trust status. I have no problem at all with the Government wishing to see NHS trusts becoming foundation trusts as soon as possible; that is absolutely right. Equally, I have no problem about the establishment of the new authority, and I commend the Government on the appointment of David Flory as the chief executive and Sir Peter Carr as chairman. Sir Peter has been a long-standing chairman in various guises in the health service going back more than 20 years. I suspect that he may well be chairman of this authority for a little longer than the department thinks at this moment.

There is genuine puzzlement about how these trusts—more than 100 of them—are to become foundation trusts by 2014. The fact is that many of them are facing great problems, mainly financial. They may have a PFI scheme that is expensive and which the local system is unable to afford without consequences on the rest of the system or, as my noble friend Lord Warner said, it may be tied up with very difficult reconfiguration issues.

5.15 pm

I noted that the intention is that the role of the appointments commission regarding formal appointments, and the role of the SHA in encouraging people to move on if they feel that there are issues regarding governance, will now fall to the new authority. I know that the wording used by Monitor is always about governance. With respect, though, that is just a phrase that it uses; the real issue is usually money or reconfiguration. However much you remove the current boards and put new people in, they will still have to wrestle with these very hard financial issues. The fact is that we are talking about the trusts that have found life pretty difficult in the past few years. It is getting tougher. The demands in relation to the efficiency and cost-improvement programme are now likely to go on beyond three years to perhaps five, on at least an average of 5% CIP per trust if not more—some trusts this year are aiming for up to 9%; there was at least one trust with a 9% CIP programme. Life is very tough indeed. There is no let-up on quality; trusts are under the microscope with regard to their staff ratios. So there is genuine puzzlement about how in two short years these trusts, which are facing momentous problems, are going to be brought to the table in relation to foundation trust status.

There is real concern that the bar will be lowered and that because of the imperative on the Government’s part to assure that there are no non-FTs left on the books after 2014 except in exceptional circumstances, one way or another there will be messy mergers and

28 May 2012 : Column GC68

that Monitor in the end will be forced to agree to FT status, or the private sector will be brought in inappropriately. That remains a matter of great concern.

On the question of mergers, I echo my noble friend Lord Warner. The history of mergers in the health service has not been a happy one—rather like much of the private sector. In the case of my own trust, it is reckoned to have taken four years for a merger to recover from taking over a failing trust. The cost has often been to the existing successful organisation in terms of management time, energy and the amount of money that has to be shored up into the failing organisation. One should not underestimate the huge costs that there can be in a merger. It is all very exciting to start with—we are seeing announcements made about billion-plus mergers that seem to be becoming the fashion—but we should not underestimate the tremendous challenges faced there.

The Minister mentioned the OFT. Yes, Monitor has a role in relation to anticompetitive behaviour and in encouraging integration. If, as a result of the NHS Trust Development Authority, it decides that there can be some neighbouring trust where a merger is sensible and where it runs with the reconfiguration of services, I hope that the OFT is not going to wade in, because I think that we would probably find that that acted against the best interests of the NHS.

The Minister mentioned, too, that the Appointments Commission process will come into this new agency. I am sure that we would all wish to pay tribute to the tremendous work of the NHS Appointments Commission. However, as someone who is now asked to chair panels for non-foundation trusts, I have never come across a more bureaucratic approach to the appointment of non-execs as that used by the commission. I hope that the new authority might take an opportunity to introduce a little common sense into that process.

I echo the point raised by my noble friend Lady Thornton. We are concerned that this might be used inappropriately as a way of privatising parts of the provider part of the NHS. Her point about assets is an important one, and I hope that the Minister might consider writing to my noble friend on that point.

This has been a good debate. The concerns that we have raised are shared widely in the NHS, and I hope that it will give the Government a little pause for thought. We wish the new body well in its new responsibilities. I beg to move.

Motion agreed.

National Health Service Trust Development Authority Regulations 2012

Motion to Take Note

5.21 pm

Moved By Lord Hunt of Kings Heath

That the Grand Committee takes note of the National Health Service Trust Development Authority Regulations 2012 (SI 2012/922).

Motion agreed.

28 May 2012 : Column GC69


Riots Communities and Victims Panel Final Report

Question

5.21 pm

Asked By Baroness Sherlock

To ask Her Majesty’s Government what is their response to After the Riots, the final report of the Riots Communities and Victims Panel.

Baroness Sherlock: My Lords, I am glad to have the chance to debate this issue, and I am most grateful to all noble Lords who are here today. Looking around the Room, I can see a range of expertise and wisdom that far outstrips mine, so I am very grateful indeed and look forward to hearing all the contributions this afternoon.

The riots last August shocked the world. The Riots Communities and Victims Panel, of which I was a member, was set up to explore the causes of the riots and to consider how communities can be made more socially and economically resilient in order to prevent future disorder. At the end of March 2012, we presented our final report to the Prime Minister, the Deputy Prime Minister and the leader of the Opposition making a series of recommendations that we believe, taken together, could help to prevent a rerun of those five days last August. I confess that I am disappointed that we have not yet had a response from the Government or even a date on which we might expect one. I hope the Minister can tell us more today.

We spent seven months on this process. We were a cross-party group and produced a consensual report even when, on occasion, that was a challenge. Along the way, we gathered a lot of facts, as anyone who has glanced at the report will see. Up to 15,000 individuals actively participated, and there were countless more bystanders. Five thousand crimes were recorded, five people died and the cost is probably up to half a billion pounds. Thinking about it now, in preparation for this debate, it is the people who still haunt me—an older couple we met who had been forced to leave their home in the middle of the night, evacuated into the middle of a riot. When we met them some weeks later, they were still traumatised and homeless. I met a young mother who talked about the fact that months after the riot her son still cried whenever he heard a siren. We met people who had spent 25 years building up their businesses and had just been holding on in the teeth of the recession for whom this was the last straw—not only the damage in the riot but the drop in footfall that followed. I also very clearly remember the young men we met in prison. I think about the one who seemed nonchalant when we went to visit, the one on suicide watch and, probably most of all, the one who said that when he got to prison someone asked him what he wanted to do with his life. It was memorable because nobody had ever done that before and he must have been 19 or 20.

So what do we know of those who took part in the riots? Mostly they were young men, although that is probably an historical truth as well as a current one.

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Only a quarter were under 18, but almost three-quarters were under 25. Most of these young people had poor academic records. Nine out of 10 were known to the police, and a third had been in prison. Our own analysis found that 70% of those arrested came from the 30% most deprived areas. I must sound a note of caution on the data, particularly in relation to those who were convicted or arrested. Inevitably, people known to the police are caught first, so there are still many cases to be processed and it may well be that those involved were from a much wider background.

Of the children brought before the courts at the time of our interim report two-thirds had special educational needs of some sort. On average, they were missing a day of school a week. They were much more likely than average to live in the 10% poorest areas, to be receiving free school meals and to have been excluded from school at some point. The millionaire’s daughter, beloved of news reports, is atypical. I guess that is why she is news. None of this is to excuse people who took part in the riots. People must take responsibility for their actions, but we need to understand them.

Of course, most people, even from the most deprived areas, did not riot. One of things I found most interesting in going round was when we asked people why they thought the riots happened, of which more later. When they gave us their reasons, I often then said, “But you come from this area and you didn’t riot. Why not?”. Probably the most common answer I got from young people was something along the lines of, “My mum wouldn't let me”. In that is a huge amount of truth and it tells us a lot about the communities that people come from. When we talked to people who did not riot, they often said something about having something to lose: a job, a college place or the respect of family and friends. Sometimes they just had an adult who helped to steer their path.

We visited 22 communities, mostly those that had been very seriously damaged by riots and, for comparison, some that did not riot. We did research into a small number of them. Many of the issues that came up were very similar from one community to another. They top ones that emerged were: a lack of opportunities for young people; poor parenting; a lack of character or resilience in some people; an inability to prevent reoffending; concerns about brands and materialism; and issues relating to confidence in the police.

The report addresses each of them in turn. I cannot go through them all here, but I hope the Minister has read the report and I will be interested in her views. I would like to highlight just a few of our recommendations. Every child should be able to read and write to a minimum standard by the time they leave primary and then secondary school. That should be obvious, but it is depressingly not the case for too many of our young people. We made recommendations about how to achieve that, but I will be open to any suggestions from the Minister about how schools can be encouraged in every case to make sure they address that problem. When they leave school, children should be prepared not just for work but for life in terms of character or resilience as well as skills. Offenders should not be put back into the community on leaving prison, even after short sentences, without some rehabilitation

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for the sake the community as well as the individual. Young adults should not be parked on the work programme with no realistic prospect of getting a job. We recommended a youth job guarantee scheme to make sure that those who have been unemployed for one year really have a chance of a job. I will be very interested in the Minister’s view on that.

Steps should be taken to address the fact that trust and confidence in the police are far too low, especially among some minority-ethnic groups. Families facing multiple difficulties should be supported by public services working together, not in isolation. We support the Government’s problem families initiative, but that is targeted at the 120,000 most seriously challenged families that are already in crisis. It is essentially crisis intervention. We estimate that around 500,000 forgotten families are being left to bump along the bottom and are not getting the help that they need. It cannot make sense in human or economic terms to wait for them to reach crisis point before we intervene. The principles of the problem families initiative should be applied to them.

We also addressed some of the short-term issues. Noble Lords will be aware that I and other noble Lords have commented in the House more than once about the very slow speed at which compensation has been arranged for those who were making claims under the Riot (Damages) Act. The Government have committed to look at whether the Act needs updating, and it does need updating, for example, to address vehicle cover, but I hope that they will not try to take the chance to abolish the Act. If the state were to cease to offer indemnity in the case of riots, I fear that some areas of our country would simply become uninsurable, with all the consequences for citizens that that would bring. I hope the Government will tell us today whether they will go to a full public consultation before making any changes to the Act.

Beyond all the detailed recommendations were the messages that I heard around the country that stay with me still. When we visited the areas that had serious disturbances, we asked people why they thought the riots happened. Sometimes answers were specific—the problem was parents or the police—but very often they spoke to a more inchoate sense that we have somehow lost our way as a society, that somehow we do not know what matters any more. We are obsessed with stuff not people. We do not look out for each other the way we used to, we do not know right from wrong and yes, politicians’ expenses and bankers’ bonuses came up pretty much everywhere we went. Asking young people usually produced very particular answers. Theirs were voices of anger and sometimes despair. They said to us: you have trebled university fees; taken away our education maintenance allowances; shut down our youth clubs; there are no jobs; no apprenticeships; no opportunities. What is going to happen to us? What is going to become of us?

The first of those issues is a challenge for all of us in politics. But the second, more than anything, is an immediate challenge for the Government. I fear that we are at risk of losing a whole generation of young people. Will the Minister tell the House what the Government will do to help those young people get

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the jobs and the opportunities they so badly need? Indeed, if there is an overriding point to government, it is surely to order society so as to enable all its people to flourish, to be all that they possibly could be and all they are meant to be. In the end, that was our top message—that everyone needs a stake in society, both because they deserve it and because I really do not want to be asked to serve on a future riots panel.

5.30 pm

Lord Griffiths of Burry Port: My Lords, we owe a great debt to the noble Baroness and her colleagues, who have worked so hard to bring this report to our attention. We must share with her the sadness that, as yet, we do not have an official response to it. I do not need to say more than that.

Yesterday, I was with the family of a young man who, one year ago, was stabbed to death in Tottenham. Just two weeks ago, I was with a young man who escaped being killed on the streets of London on the release of a young man who had spent seven years wrongly accused and imprisoned with all the anxiety that flowed from that. On Sunday, I was with the family of one young man who was in Pentonville prison awaiting sentence for pushing drugs. His best friend, who is playing for Arsenal football team, came to church on his seventeenth birthday driving a BMW.

It is not just those with no education and no family support. I was with a very fine family with four kids. One of them, who had four straight As for his A-levels, was dropping out of university and said to me, “What is the point of building a career? We all know on the street that the ways to get ahead are through crime or drugs or fame or football or music”. He has dedicated himself to music. The breakthrough perhaps will come or perhaps it will not. It is a tough old world out there.

It is a very tough world on the streets of London. The church that I minister fronts on to Islington and backs on to Hackney. It is true that the low expectations and aspirations of people living in the urban jungle have to be combated at every stage. We find scholarships and support through university. We are all the time robbing philanthropists of their money and trying desperately to put packages together. At the same time, I could name a whole pile of things in local authority or voluntary community work with young people in the arts, activities, football, and raising awareness that are no longer happening.

How can we possibly talk about building society from the top downwards? Everything that is happening at the bottom is being severely challenged by goodhearted people who can no longer put in the 60 hours a week for the minimum wage that they were doing. We have to look at this and take corporate responsibility for it. I do not want to address my questions to the Government; I want to address my questions to all of us. Some of us are working in the inner city and have been for decades. I have never known it quite as devoid of hope as it is now. Last August, it was appropriate to point the finger at those who did bad things and it is right that we should expect them to be punished. However, I do not think that the analysis ends there or that the responsibility ends there either.

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5.33 pm

Lord Cotter: My Lords, this is a very important debate, and I thank the noble Baroness, Lady Sherlock, for bringing it forward. When the Government made their Statement on 11 August last year, I and many others were there. I congratulated the Government on their response, or their projected response, for small businesses and business community. I want to speak about the business community. I also asked the Government to ensure that the response measures they outlined, which sounded very good, would be implemented speedily with the minimum red tape. I was assured that that would be the case. However, since then, on many occasions in this House and elsewhere we have had to raise the inadequate response that has been given to the business community. In particular, I have come across many examples of shops that have struggled to survived, and some that have not survived, through lack of support. A number of trade associations have pitched in to provide tangible help to said small shops, but many other shops have been forced to look elsewhere to get help, and particularly to get money from banks, which is not easy at present and can be quite punitive. Those shops that have managed to work their way through have learnt the hard way that they have to fend for themselves. I am sure that the Minister will give me other good examples, but the trade associations have played their part. I quote from just one group of shops, which said:

“The Riot (Damages) Act should have achieved the same thing”—

that we had from the trade associations—

“but proved to be overly bureaucratic, immensely slow and in some parts of the country failed to provide any compensation at all”.

That is very disappointing in view of the fact that this issue was highlighted by me and others at the time. As the noble Baroness, Lady Sherlock, said, the Act needs looking at again. Also, I hope that when Ministers make these statements and say that yes, they will get behind businesses and that it is awful what has happened to them, they will ensure that a Minister is appointed to monitor the situation and not just let it drift along. I hope that civil servants are put in charge of ensuring that the words of the Minister are actually implemented and are not just warm words said easily at the time.

5.37 pm

The Lord Bishop of Birmingham: My Lords, I am most grateful for this opportunity to raise something that was, of course, short term and was asking for quick answers. This is a matter of complex issues in our society which require sustainable results and responses. I am very grateful for the point of view expressed by my noble friend Lord Griffiths that this is the responsibility of all of us.

I would like to point out the issues to do with justice and the opportunity to engage with restorative justice in our local communities. Then I would like to go on to develop a couple of more general themes, which are important in connecting the complexities of our society and a sustainable response. As we heard in the Queen’s Speech, we are aiming for economic growth, which is very laudable. We know that that means

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offering people jobs of some kind. At the same time, we want sustainable and flourishing communities. I hope that we can take an opportunity to be statespersonlike and see the whole picture in trying to avoid riots in future but also lifting up those who cannot participate in our society.

Two things occur to us in Birmingham. First, as is well established in a wonderful analysis—and there have been many—called Mad Mobs and Englishmen?, by two scholars, the main frustration is the sense that people do not have a legitimate engagement in society. They instinctively feel that it is unfair, and that is really what was behind last summer. Secondly, the role of faiths and people with beliefs is recorded as being most significant in what happened during the days and in putting things back together quickly. I hope that the Government will notice that as well in their response. For fairness, there should be access to work. For recognition of the contribution of faiths, there should be support for community projects. We have already heard how difficult it is for people to sustain local involvement when cuts are destroying long-term work.

So in response to the report, please notice the children and parents section. We want to see troubled families developed, but notice the good work that is going on in communities with families with complex needs. We need to keep going with that programme in addition to the point made by the noble Baroness about the wider community. On personal resilience, where is the role of not just values but virtues? Some of these the underlying moral and behavioural attitudes are mentioned in the report. Human beings flourish when they exercise discipline, application and deferred gratification. There I must end to give everyone their time. I commend this report and trust that it will be taken in a connecting-up way and that local enterprise partnerships in particular will have it on their desks by Monday morning.

5.40 pm

Baroness Healy of Primrose Hill: My Lords, I, too, thank my noble friend Lady Sherlock for giving us the opportunity to discuss this important report and congratulate her and the other panel members on producing a significant piece of work. I urge the Government to give serious consideration to the recommendations even in a climate of austerity and recession.

Other noble Lords have already spoken of the need to create jobs and hope for young people, and I will speak on the importance of rehabilitation. I was shocked to see that rioters brought before the courts had on average 11 previous convictions, so the question of rehabilitation needs to be urgently addressed. The report recommends that youth offending teams adopt triage approaches whereby public services come together to undertake a thorough assessment of a first-time offender’s behaviour and the reasons that lie behind it.

Though prison provides punishment, I am concerned that the level of reconviction rates for young adults discharged from custody are higher than for those given community sentences and strongly support the panel’s recommendation that some of the resources

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currently spent on custody could be redirected into community sentencing. Short prison sentences give little opportunity for interventions that could encourage rehabilitation, such as help with employment and drug and alcohol addiction. The panel’s call for probation trusts to develop intensive alternatives to custody schemes for young adults should be taken up. Evidence given to the panel showed that prison for young adults can be disruptive to housing status, employment and personal relationships making them more vulnerable to reoffending by losing their tentative stake in society.

However, where young offenders are imprisoned they should not be released back into the community without what the panel describes as “wraparound” support packages of help with finding housing, employment and health advice. The recommendation that probation, prisons and voluntary and community sector partners work together with the aim of ensuring that every young adult is offered a mentor to support them on release must also be worth exploring.

After the Riots also examined the way young adults move between the two systems of youth and adult justice. For 18 year-olds, the sudden difference between treatment by the Youth Justice Board and with adult offender status can have a negative impact. Both young offenders and probation teams questioned by the panel thought that transitions,

“could and should be handled better”.

Will the Government consider putting 18 to 21 year- olds under the Youth Justice Board jurisdiction rather than the instant transfer at 18? The report has found that young adults are a distinct group with a different set of needs from older adult offenders. The offender assessment system operated by probation officers to check the likelihood of reoffending found that the most common needs of offenders aged 18 to 20 are education, training and employment. The Government should act on the recommendations in this report to help make our communities safer.

5.43 pm

Lord Kennedy of Southwark: My Lords, the first thing that I want to do in the few minutes I have is to place on record my thanks to my noble friend Lady Sherlock for securing this debate and to thank her and her fellow members of the Riots, Communities and Victims Panel under the chairmanship of Mr Darra Singh for its excellent report into the disturbances between 6 and 10 August 2011 across towns and cities in England.

Like all noble Lords, I was shocked at what I saw unfolding across England during those few days in August. I remember sitting at home with my wife Alicia, who said, “Look that is Lewisham on the television”. I was amazed to see that there were problems only a few streets away from where we lived. We all have our memories of what happened that night. We can remember watching in horror the old Co-op store in Tottenham going up in flames or the Reeves furniture store being completely destroyed, having served the local community in Croydon for generations.

I am a Londoner and I love this city very much. It is one of the truly great cities on the planet. I was born in Lambeth, grew up in Southwark and now live in

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Lewisham. As a Londoner, I want to say how disappointed I was with the lamentable performance of the London mayor, Boris Johnson, who took days to return home from holiday, and contrast that with the activity of local communities who came out the following morning and got to work cleaning up their high streets, shopping arcades and communities. In the face of these terrible activities, criminality and the worst of behaviours we also saw communities and people coming together, displaying the best of what people and communities can do.

I understand that the noble Baroness, Lady Hanham may not be able to respond straight away and I would be happy to receive a letter from her, but I have a question on the issue of the victims and businesses affected and the lack of swift action to get compensation. The Government need to look at the role of the insurance companies in this respect. The report highlights that small businesses and individuals have experienced unacceptable delays and difficulties in getting matters resolved. In particular, small businesses may be less resilient to delays in this respect and may fold altogether.

The Riot (Damages) Act of 1886, while fit for purpose in principle, would benefit from urgent updating. That is something that the Government could do in this particularly light Session of Parliament with support from across this House and the other place. Will the noble Baroness tell the Grand Committee how many claims she believes have been settled to date? Does she think that that is acceptable? When have the Government sat down with the insurance industry since the riots to address these concerns? When does she expect the review of the Act to have been completed? What are the chances of getting what should be a fairly uncontroversial review onto the statue book? The Government have a duty to respond to these failings. If they do not do so they are letting the country down badly.

5.46 pm

The Earl of Listowel: My Lords, I, too, am most grateful to the noble Baroness for calling this timely debate and for her report. I will concentrate on success at school. I hope that the Minister will take back these concerns to the Department for Education.

The report highlights concerns at school failure and the consequences for young people. Academics highlight that schools make up only about 10% to 20% of the difference in terms of educational outcomes for children. Children spend about 9% of their time in school, so by far the most important factor is what happens at home. Sadly, that is less susceptible to intervention than school. Good quality early years care has also been shown to be an important factor in educational success.

Whether a parent succeeded at school is the strongest indicator of whether his child will succeed there. One important means therefore of improving literacy in our children may be to ensure access to adult education for their parents. In the past, many primary schools could offer parent classes in literacy and maths. I encourage Her Majesty's Government to promote such practice again. I know that there is good work in this area.

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The parents most likely to benefit from such an approach trust their local schools and will turn to them before adult education colleges. With a child of their own, they may have gained motivation that was lacking before. Starting school is the single biggest trigger for parents to do something about their own literacy and lack of skills. I suggest to the Government an agency dedicated to promoting adult education in schools might be a significant help in improving educational outcomes and reducing adult unemployment. I pay tribute to the admirable contribution in this area of the National Institute of Adult Continuing Education.

I would be grateful to hear from a charity prepared to champion this particular cause. What is being done to encourage adult education based in schools? I would be grateful if the Minister could write to me with information on the availability of adult education in primary and secondary schools and early years settings. I should be grateful for information on the number of schools offering adult education and research undertaken on the effect on child outcomes of linking adult education to schools.

Finally, I want to say a brief word about transition from custody for young people, which the noble Baroness, Lady Healy, mentioned. There is a suggestion that some strong central attention such as the Youth Justice Board has been able to give to children now needs to be given to 18 to 21 year-olds. What good practice shown by the Youth Justice Board does the Minister think might be adopted for this age group? If the Youth Justice Board were prepared to consider it, could its remit be extended to 21 year-olds? Here I echo the words of the noble Baroness, Lady Healy. I look forward to the Minister's response.

5.49 pm

Baroness Lister of Burtersett: My Lords, I pay tribute to the contribution of my noble friend Lady Sherlock to the work of the panel. Its final report challenges us to give everyone a stake in society if we are to avoid future riots. Is it surprising that so many of those involved in the riots feel that they do not have a stake in society when,

“over half the respondents to the Panel’s Neighbourhood Survey believe there is a growing gap between rich and poor in their local area”,

and we know that those brought before the courts came disproportionately from our most deprived neighbourhoods? Among the rioters surveyed in the separate Reading the Riots study, poverty emerged as the single most important perceived cause. It was mentioned by 86% as important or very important, with inequality mentioned by 70%. The study revealed a pervasive sense of injustice.

Of course, there is no deterministic link between poverty and rioting, and the panel points to the importance of good parenting and the development of character and resilience as key preventive factors. However, research illuminates the ways in which the stress associated with poverty and the survival strategies adopted by parents to cope can undermine their best efforts to be good parents.

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Moreover, rampant advertising of brands often aimed at children and young people, which was highlighted by the report, makes poverty and inequality that much harder to bear, and parenting in poverty that much more difficult. When young people living in poverty can be bullied because they do not have the right trainers, it is perhaps understandable, even if not justifiable, if they grab them when they can in what the report describes as,

“opportunistic looting … very much targeted at brands”.

I therefore believe that in addition to the report’s recommendations, we need a coherent anti-poverty and inequality strategy, not to be confused with a social mobility strategy. We need to go further than the report does in its suggestion with regard to the regulation of marketing directed at children and young people.

More than four-fifths of those interviewed in the Reading the Riots study believe that the riots will happen again. Unfortunately, with spending cuts hitting deprived individuals and communities disproportionately, according to a Joseph Rowntree Foundation Study; with youth services taking a significant hit in many areas; and with family poverty forecast to rise, I fear that they could be right. Punishing rioters with loss of housing or benefits is not the answer. It would only reduce further their stake in society. We urgently need a more constructive response.

5.52 pm

Baroness Tyler of Enfield: My Lords, I was in Northumberland when last summer’s riots started in the London Borough of Haringey, where I live; and it was with incredulity that I heard that the main street of my home town of Enfield, where I grew up and went to school, had turned into a near-war zone. As so many commentators and politicians said at the time, much of the rioting, looting and arson attacks were no more than mindless criminality and delinquency. There was a complete breakdown in social order, in a sense of personal responsibility, and in the mutual bonds of trust and reciprocity on which communities are built. Of course, there are no excuses for this sort of behaviour but that does not mean that we should not look long and hard at some of the underlying factors that may explain what happened.

I said at the time that it was important to embark on a thoughtful and thorough public policy response to the riots, and recognise that simplistic solutions to deep-seated social problems do not exist. That is what this excellent report has done, and I pay tribute to everyone involved in it, particularly the outstanding work of the noble Baroness, Lady Sherlock. I also found the reports produced by NatCen and the LSE/Guardian insightful. The reports made it clear that we are looking at deep-seated problems in our society—a complicated mix of failure within families, the community, the economy and politics. Poverty and deprivation clearly have a role to play but are by no means the whole story. Just look at the background of people going through the courts in such large numbers. While some were clearly from deprived backgrounds, others had good jobs and came from stable families. While some were young, many were from older age groups.

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Reactions of those being charged and sentenced also varied wildly. Some were quite unrepentant while others were guilt stricken. Some parents were appalled at the behaviour of their children, while others were unprepared to accept any responsibility or were absent altogether.

There is so much that I should like to say about the contents of the report but I do not have time. However, I shall pick out a couple of key themes that are important to me relating to the values that we espouse as a society—so much of it consumption-led and dominated by self interest. The size of the gap between rich and poor does matter and has a real impact on social cohesion. This is about how everyone must feel they have a stake in society. Turning to the good, let us not forget those young people who came out on the streets the next day to help shopkeepers and others affected to clear up and rebuild their lives. I strongly support the recommendation to honour the riot heroes, and I would like more to be done on that. I am fascinated by the focus on resilience and character—an issue that came out strongly in a recent report by the All-Party Parliamentary Group on Social Mobility, in which I was involved. It found that resilience and character are central to this issue, and I hope that we can work jointly as we further develop our understanding in this area.

5.55 pm

Baroness Massey of Darwen: My Lords, I am most grateful to my noble friend Lady Sherlock for introducing this debate so coherently and for her work on this report.

I want to talk about stress and frustration with systems, which may lead to anger, disillusionment and reaction. We see it in schools and on the streets of some countries today. It is interesting that in the riots most of those involved were of job-seeking age. Punishment may well be an obvious reaction to disturbances, but causes of bad behaviour may need to be explored and punishment made appropriate—for example, restorative justice or community sentencing, as referred to earlier. I am amazed that those two things are not applied more consistently.

I want to reflect on a series of meetings held during the previous parliamentary Session by the All-Party Parliamentary Group for Children, which I have the honour of chairing. The meetings were on the impact of recession on young people. The report on those meetings will be launched in June, but I well remember some of the chilling messages that came across from those working with children, from research, and from children themselves. It is clear from our meetings that the recession was causing cuts to services and stress in families. Children themselves spoke of stress in relation to social class, parental employment and changing household income. Any Government seeking to address the needs of young people must address those key issues and crisis points.

Early intervention is still the key to well-being, academic and social success, and the social mobility and intervention mentioned by the noble Baroness, Lady Tyler. Frank Field’s report on child poverty and life chances recommended indicators at age three and five to monitor development indicators. Will we do

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that? Graham Allen’s report suggested that unless government intervened early, the result will be cycles of poor outcomes. He suggested that the cost of 150 babies having positive early intervention may be the same as the cost of keeping three boys in a secure unit for a year, two of whom will go on to reoffend.

Tim Loughton, a very engaged Minister for Children, talked at one meeting about reforms to child protection and early intervention. I know that he has visited several interesting and effective services—for example, the multiagency safeguarding hub in Haringey. There are other examples of good practice in the youth service, children’s centres and schools. I hope that we work on that good practice and share it.

Intervention has to be seamless and co-ordinated throughout a child’s life and family experiences. It is not so much intervention but what a healthy society provides consistently for its people. It involves health services, education, welfare and, in particular, vulnerable children. I saw little evidence in recent Bills in your Lordships’ House of a particular sympathy for struggling families. I am suggesting that frustration is contagious and damaging. The more that inequality in society is seen to exist, the more hardship people will feel and the more difficult it will be to prevent stress, anger and frustration.

5.58 pm

Lord McFall of Alcluith: My Lords, I thank the noble Baroness, Lady Sherlock, and her colleagues on the After the Riots report for a thorough piece of work. I agree with previous speakers that this issue is complex and is the responsibility of us all.

There are two aspects missing from this debate regarding growth—the economy and society. Even today, the CBI came out with its proposals: there are 500 major infrastructure projects in the pipeline worth £250 billion, and the Government are spending less than 15% on that—less than £40 billion. At a time of record low borrowing, something needs to be done there. Secondly, on growth and social capital, what we are seeing is the destruction of social capital, with cuts in the finances of voluntary sector organisations. I say to my colleagues that the glue that has held these communities together is now losing its adhesiveness. That should be the twin message.

We have seen an absence of hope from the Government—no narrative or vision other than austerity. One has to give hope to people if we are all going to have a future. I warn the Government that £33 billion of the £100 billion of savings and cuts are coming in 2014-15. They are still to come, so they have to be very careful and, as they say in Scotland, ca’ canny, on this particular issue. I would suggest to the Government a narrative on child poverty. The Labour Government of 1998 adopted a child poverty target of elimination of child poverty by 2020. That means 1 million fewer children are under the poverty line in Britain today, but the Government have an absence of referring to the issue of child poverty. When I was chairman of the Treasury Select Committee in the other place, an all-party committee, we were very heavy on the Government regarding that target. This Government should at least talk about child poverty.

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From working in communities and schools, I know that it is not a lack or a poverty of ambition on the part of children lying below the poverty line. It is a poverty of opportunity that they have had, which is why we need to increase the social capital. The Joseph Rowntree Foundation recently said that child poverty alone was costing the UK economy £25 billion per annum, so there are great social and economic costs. There is merit in social capital. I refer to a speech that President Obama made in April to the Associated Press Luncheon, when he said:

“I have never been somebody who believes that government can or should try to solve every problem. Some of you know my first job in Chicago was working with a group of Catholic churches that often did more good for the people in their communities than any government program could”.

If anything is an articulation for building up social capital, it is that particular comment. It has been absent from the Government’s agenda to date, and I want that along with others on the agenda very forcefully.

6.01 pm

Baroness Hayter of Kentish Town: My Lords, I also congratulate my noble friend on opening the debate with clarity, commitment and passion. In five days in August, 5,000 crimes were committed, 50,000 people rioted and five people lost their lives. Many more lost their businesses or homes. We live in challenging times, with high youth unemployment, lack of opportunities for youngsters and perceptions of poor parenting. Then there is our inability to prevent re-offending; high brand awareness; and declining confidence in policing.

A parallel report, commissioned by Enfield Council, recommended that the police ensure that their approach to young adults is proportionate, and that the police should be more representative of the local community. All the other recommendations for Enfield Council itself related to young people. We all have a duty to help create a climate of hope, and to ensure that those who are not resilient enough to cope with today’s challenges are supported, not further marginalised and excluded. We must tackle the deep-seated problems that contributed to the riots. Our questions today are about the Government’s response, or non-response, to the report of the riots panel.

The riots were not carried out by children, nor by gang members, nor were they race riots. They were largely the actions of young adults; the overwhelming majority of those were male and with a previous conviction. Almost half of the under 18 year-olds charged lived in poverty; as we have heard, 70% in the most deprived postcode areas. The report suggests there are half a million forgotten families, not quite hitting the threshold required to get the help they need, because no one member quite reaches that threshold, but, as a whole, the family is dysfunctional. They experience problems not as individuals, but as families. That is where intervention is needed, to identify children with actual or potential needs.

The panel recommended extending the family nurse partnership programme to all teenage mothers. Have the Government agreed to this? What discussions have

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been held with social services about contacting absent fathers? What progress has been made in involving businesses in local schools and in creating work experience placements? What discussions are being held with the ASA and manufacturers to reduce advertising aimed at the young? Given that one in three think that the police are corrupt, what discussions has the Home Office had with police to engage with communities about the impact of such perceptions on their effectiveness? Given that police numbers were not sufficient then, how do the Government assess a further reduction of 16,000? And when are the Government going to respond to this report?

We need to look forward in how we respond to this. I do not believe that society is broken, but we must all rise to the challenge of providing greater inclusion, improving community solidarity and above all creating a fairer share of what this country has to offer.

6.05 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I thank the noble Baroness, Lady Sherlock, for introducing this debate on a report on which she had a great deal of influence, and for introducing it to us in a way that makes me understand why she was involved. It is clear that this was an extremely difficult report to write and a great deal of care has been put into it. I thank her for what she has done and for making sure that we had an opportunity to debate it today.

The interest in the debate was enormous. When I saw 25 speakers and only an hour for the debate I wondered how many times in the House of Lords we have had a speech of 30 seconds, which is what it would have amounted to. Obviously, others felt the same and did not think that their words would have quite the same effect as if they had been able to speak for longer. As a result, I congratulate everybody because we have been able to reduce this and not have a re-statement of all the facts. We have covered a wide variety of topics in the report. The report was beautifully produced and well written, which is always a huge help, because it means that people pay attention to it.

None of us will ever forget the scenes that came before us last summer. For five days, we witnessed wilful destruction and criminality on a large scale. We can only imagine the fear and distress felt by those who were affected and who were watching what was going on. There was shock that something like this could happen in our society. What was going on had a mind-boggling and terrible effect. The noble Baroness, Lady Sherlock, graphically described the effect on local people.

There were 15,000 rioters, 4,000 arrests, 5,000 crimes and £500 million loss to the economy. Those figures cannot sum up the devastation of seeing your community turned upside down and your business lying wrecked and in flames. We must not forget, as we have been reminded today, that five people lost their lives.

As regards recovery, the first priority was to get communities back on their feet as quickly as possible. Some things will always take much longer than others. The right reverend Prelate and other speakers referred

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to one of the most amazing outcomes of this, which was the broom brigade. People arrived spontaneously to clear up the mess and try to put their community back into some kind of order, and they did it without prompting. The word for the riots may have gone round quickly, but word also went round very quickly that voluntary help to sort this out would be appreciated. That message went round and was responded to very quickly. I shall never forget the pictures on television of people standing with their brooms and rubber gloves getting down to it.

The right reverend Prelate the Bishop of Birmingham also drew attention to the work carried out by the faith organisations and I agree that faith organisations and other voluntary organisations were involved too. Suffice to say that our appreciation to them is very marked for what they did.

People have been slightly dismissive about the response that came from government. Local authorities played an enormously important part in leading recovery in their areas. They helped to bring people together, provided them with vision and reassurance and galvanised efforts across agencies and the community, doing so with great speed. Indeed, some local authorities provided immediate funding from their own resources or facilitated access to other funding.

The Government, including my department, also responded very quickly. There was no big delay in responding to this situation. Councils have said that without recovery funding from the Government, which was made available almost immediately, many businesses other than those affected by the riots would also have shut. Financial support was made available to keep them going. Under that recovery scheme, nearly £3 million has been claimed by 29 local authorities. There was also the £7.4 million high street support scheme, which has helped 25 councils to reduce business rates, fund emergency repairs and encourage customers to go back to their local shops.

The Government also provided direct support to help communities get back on their feet. For example, my department provided £35,000 to a specific local authority to enable caseworkers to provide support to affected families for six months. Therefore, there has been a response all round to this almost unprecedented event, not only from volunteers and local residents but from the Government. There was no blueprint for response to this event. Having seen that, we must ensure that it does not happen again.

The six themes around which the panel’s report is structured focus on some of the Government’s priorities, some of which we have already made significant progress on. Both the panel and the Government share an ambition to give power back to communities, reform and join up public services and extend opportunities for young people. A number of contributors have spoken of the importance of good parenting. The importance of good parenting was brought out strongly in the panel’s report. As noble Lords will know, this is being addressed through the Government’s trialling of universal parenting classes, giving access to high-quality parenting classes to mothers and fathers of young children. I agree with the noble Earl, Lord Listowel, that we should encourage parent involvement as good

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parenting is what it is all about. One wants to concentrate on addressing the absence of good parenting. The noble Earl referred to elements of the troubled families programme. That programme will support some of the report’s recommendations and offer 120,000 troubled families immediate support by getting parents into work. It will also start to address the lack of education described by the noble Baroness, Lady Sherlock.

The report raises the lack of hopes and aspirations for young people facing unemployment. We have recently introduced the youth contract, which will provide additional support worth almost £1 billion to young unemployed people over the next three years. The report highlights the fact that many of the rioters had previous convictions, as a number of noble Lords mentioned. We are confident that payment by results for offender rehabilitation will encourage providers to tailor services to help offenders turn their lives around.

If I have time, I wish to respond to points made by noble Lords. I shall do so with a broad sweep as I am not sure whether I shall run out of time. I understand that the noble Baroness and other noble Lords are keen for the Government to respond formally to the report. As she will know, there are more than 60 recommendations which go across government. Every single department is affected by the report and needs to consider what its response will be. There will be a response; that is vital. I am not in a position today to give any date for that but I can give the reassurance that this has been taken extremely seriously. Any response needs to underline that and needs to demonstrate that it has taken the recommendations clearly into account. So although I cannot give a date today, I can give an assurance that the response will surely come.

I will try to pick up some of the other points that were made. I hope that noble Lords, particularly the noble Baroness, Lady Sherlock, will forgive me if I cover the same ground again. There is an intention to look at the Riot (Damages) Act. Delays have been caused by the fact that this is a very old Act of Parliament and has to be looked at very carefully. That is a matter for the Home Office, as is the public consultation. Concerning youth job offers, we have already got a number of programmes for youth including apprenticeships and encouragement to go to work.

The right reverend Prelate the Bishop of Birmingham welcomed the faith organisations. The vast majority of young people in this country are responsible, hard-working, law-abiding and care about their communities. Therefore, one has to be careful not to tar a whole generation with the same brush. Having said that, we have to understand that there are always going to be problems and that needs to be part of the response.

Regarding the Riot (Damages) Act, I would like to make it clear that the vast majority of people affected have received compensation—92% of businesses from insurance, while 93% of valid uninsured claims are being dealt with. The noble Baroness, Lady Healey, referred to the revolving door situation. The Government are looking at this revolving door and the short sentences that often lead to reoffending. The Government, in line with the public and the panel, believe that sentences should have a very clear element of punishment and that rehabilitation should be incorporated into those

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sentences. People should not be allowed to leave prison with nowhere to go, no support and nothing to help them care for the future.

I am out of time. There were a number of other very important points and I am sorry if I have not

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picked them up. I will pick them up and ensure that everybody gets a response to the points they made and that that response is in the Library. Again, I thank all noble Lords very much indeed, especially the noble Baroness, Lady Sherlock, for introducing this debate.

Committee adjourned at 6.18 pm.