Lord Peston: I take it that the people who have already behaved in a criminal way can be prosecuted under the criminal law as it is. In other words, there is no need for retrospection because there is a criminal law sitting out there waiting. For all we know, it is already dealing with them.
Lord Sassoon: I am grateful to the noble Lord. As I have answered before in Questions on the LIBOR issue and as I said earlier, there are potentially other offences which may have been committed, and the prosecuting authorities and investigators are looking to see whether anybody could be charged under pre-existing law, so I am grateful for that clarification. The point is that it would be much more effective to have a targeted offence, which is what we are putting in place here.
Turning to Amendment 80A, under which the noble Lord, Lord Eatwell, would like the FCA to have the ability to refer to codes published by the Financial Reporting Council, as well as the body responsible for setting the benchmark, I believe that Amendment 80 already allows the FCA to make such a reference since it would be able to make,
“reference to any code or other document published by the person responsible for the setting of the benchmark or any other person”.
As Amendment 80 stands, the FCA is able to refer to a code issued by the FRC or any other body.
Having said that, while from time to time the Financial Reporting Council publishes codes and documents relating to standards of corporate governance and so on, it is unlikely that they will be directly relevant to the setting of specific benchmarks. Of course, as the noble Baroness, Lady Hogg, is here, if she would like to correct me I am very happy to be corrected, but I think that is very unlikely. The intention of the provision in the Bill is to allow the FCA to make reference to detailed codes, allowing the detailed instruction of how, when and to whom information should be provided to a benchmark. I certainly do not anticipate that the FRC would publish codes relating to benchmarks in that detailed way. I therefore do not believe that the amendment extends or affects the powers of the FCA to make the rules in any material way, and I cannot accept it.
I spoke earlier of my gratitude—and this has been repeated by other noble Lords—to the noble Baroness, Lady Hayter of Kentish Town, for spotting the small drafting mistake, and confirm my intention to accept her proposed Amendment 80B. I encourage her to move it.
I now turn to Amendment 80C and the recommendation that the BBA transfer responsibility for administrating LIBOR to a successor body. I have already dealt in some detail with aspects of this, but let me go through it again. The nomination for that successor body will be determined through an open and transparent tender process that will be run by an independently chaired committee comprised of respected individuals from the financial services industry and the UK authorities. As I have already said, I am delighted that the noble Baroness, Lady Hogg, has agreed to chair that committee. The committee’s work
is in its preliminary stages, but further information will of course be published in due course. I acknowledge the noble Lord’s concern that there is a risk that a suitable rate administration will not be willing or able to administer LIBOR; I firmly believe, however, that this risk is of very low probability. As I said, a considerable number of expressions of interest have already been received.
In the unlikely event that there is no appointable administrator, or in the event that we have already discussed that the administrator is appointed and then fails, the FCA will already have power to step in to administer LIBOR, should that be necessary. A disorderly collapse or the unavailability of LIBOR would have severe implications for institutions and financial markets across the globe, as the Wheatley review sets out in detail. It is under the objectives of the FCA, particularly its consumer protection and integrity objectives, that would give it sufficient basis to step in and administer the rate. The FCA therefore would not need any specific legislative power to administer LIBOR, and it is worth reminding ourselves that LIBOR is currently administered by the BBA without a statutory underpinning. We know that this is unsatisfactory, but I am just making the point that the setting of LIBOR itself has never required any statutory powers. I am quite clear that the FCA’s powers, as outlined elsewhere in the Bill, are sufficient for it to undertake such a course of action, although we anticipate that being very unlikely.
I do not wish to put a specific time limit on how long the FCA could maintain the administration of LIBOR, but neither the Government nor the FCA would want the FCA to administer LIBOR in the long term. We want the regulator to concentrate on regulating the market, not to fill a gap in the market on a permanent basis. I do not consider Amendment 80C is needed.
5.45 pm
Lord Eatwell: I thank the Minister; that is very clear and helpful. My only question arising from that is whether the noble Lord is confident that the FCA would have the appropriate range of skills, the intellectual property, to perform the task of administration. Is there going to be a shadow specified person within the FCA, ready to take over? As he pointed out, this may be very unlikely, but if it occurred it would be catastrophic. If there is a collapse or other form of demise of the specified person through inappropriate behaviour, inadequacy or some other reason, is he confident that the FCA would have the appropriate skills to do the job straight away?
Lord Sassoon: Yes, my Lords, I am confident that the FCA, on the risk approach that it takes to preparing itself for a huge range of potential eventualities, will prepare appropriately to step in. I have said, however, that those are a very low-probability set of circumstances.
The last thing that I was going to do, because I think that noble Lords are probably sick of hearing my voice for the moment—
Lord Sassoon: They will have another opportunity very shortly because I am afraid I will be introducing the next group as well, so I am encouraged by that reaction. I was going to go on to Amendment 80D, which is all about the Treasury Select Committee being involved, but I am not sure that the noble Lord said very much about that, so—
Lord Eatwell: I said quite a lot about it, so perhaps I could remind the noble Lord.
Lord Sassoon: It has suddenly come back to me; it was just a momentary lapse. The noble Lord spoke about the merits of the Treasury Select Committee being involved in the process of selecting the person responsible for setting the benchmark. There may be a slight misinterpretation of the process for selecting a successor to the BBA and administrating LIBOR, which was outlined in a government Statement on 17 October. As I have already mentioned, the successor to the BBA will be nominated by an independently chaired committee, convened by Martin Wheatley and the Treasury and at the commission of the British Bankers’ Association, which has publicly relinquished the nomination of a successor to the committee.
Those involved in the process can be called to account by the Treasury Committee. However, the transfer of responsibility for administering LIBOR from the BBA to a successor body is not a legislative matter. I do not think it would be appropriate for Parliament or the Treasury Committee to be directly involved in what is ultimately a process between private sector commercial bodies. For that rather technical reason—but nevertheless constitutionally rather important —I am unable to accept the noble Lord’s proposed amendment. I stress that those involved in the process can and may be called to account—I do not know—by the Treasury Committee.
Lord Eatwell: The noble Lord has completely misinterpreted what I said and apparently has not read Amendment 80D. One of the main points I made was that currently we have this particular conjuncture where the BBA has said that it does not want to continue doing the job. Quite rightly, the Treasury and the FCA have stepped in and set up an entirely appropriate procedure, as far as we can tell. I am sure that it will be appropriate, given that it will be under the chairmanship of the noble Baroness, Lady Hogg.
However, this is not the only potential benchmark covered by this legislation. There may be other specified persons to be appointed with respect to other benchmarks. To achieve the transparency to which the noble Lord said the Government aspire, the rules for determining the identification of a specified person—the objectives and the characteristics that the specified person might have—should be agreed in broad terms with the consent of the Treasury Select Committee. We then would have a procedure which everyone has looked at and has agreed upon. It can be used not as a reactive measure after a crisis but would be in place, ready to be used, at any time the Government deem it appropriate that, by order, a new benchmark is specified, and that there is a need to search for a new specified
person to manage and to be responsible for setting that specified benchmark. I hope that the amendment is now clear.
Lord Sassoon: I may not have expressed myself clearly but I was entirely clear that that is the purpose of the amendment. I illustrate the situation by reference to LIBOR but the same considerations would apply in relation to any other benchmark where the process of the transfer would be very dependent on the private sector current administrator of the benchmark. It would be very specific to the nature of the market and the benchmark about which we were talking. I just do not see this as a class of activity that normally ever would be set down in some sort of framework of rules that would be agreed with the consent of the Treasury Select Committee. It is not territory into which that committee gets in terms of setting rules.
However, the noble Lord does not say that: Amendment 80D states:
“The rules determining the identification of the specified person responsible for setting a specified benchmark must be agreed with the consent of the Treasury Select Committee”.
It gets the Treasury Select Committee into vetting rules of a sort which I am not aware that the committee gets anywhere near, particularly because there will be secondary legislation, which case by case needs to deal with what benchmarks come in. The Treasury Select Committee at all stages can call people in to discuss the process. I entirely stand by my remarks on the amendment. This does not work with the nature of the transfers about which we are talking, with the flexibility we need to have, or with the way in which the Treasury Select Committee operates. However, what works very effectively is the committee calling people to account, which it may well do in this area.
The final amendment I wish to cover is Amendment 80CA, which requires that 12 months after Royal Assent,
“the Treasury shall report to Parliament on the progress of the extension of”,
the regulatory regime to cover benchmark activities. Given that the extension of the regulatory perimeter into a new type of activity may well have significant consequences, I agree that there is merit in making an assessment of the efficiency and operation of this new area of regulation.
I can confirm that it is the intention of the Financial Conduct Authority to conduct a thematic review into the system and control procedures of LIBOR-submitting firms and the LIBOR administrator in the first year of the implementation of the LIBOR supervisory regime. The FCA will be accountable to Parliament through the usual procedures, which we have debated at length.
I believe that the suggestion of a review is good but a review by the regulator itself is likely to be far more fruitful than a review by the Treasury. It is the regulator rather than the Treasury which will be best placed to modify and fine tune the regulatory regime to accommodate lessons learnt from the review. Of course, should the review suggest that there are difficulties with matters for which the Treasury is responsible, such as the scope of regulation, the Treasury stands ready to consider and, where appropriate, implement
the recommendations made by the review. The underlying point is very good and the FCA will take it on board but I cannot accept the amendment.
I hope that, at some length, I have dealt with as many of the points raised as I could.
71: Clause 7, page 43, line 34, after “(1A),” insert—
“( ) after subsection (5) insert—
“(6) “Benchmark” means an index, rate or price that—
(a) is determined from time to time by reference to the state of the market,
(b) is made available to the public (whether free of charge or on payment), and
(c) is used for reference for purposes that include one or more of the following—
(i) determining the interest payable, or other sums due, under loan agreements or under other contracts relating to investments;
(ii) determining the price at which investments may be bought or sold or the value of investments;
(iii) measuring the performance of investments.””
73: Clause 7, page 44, line 35, at end insert—
“Part 2BRegulated activities relating to the setting of benchmarksGeneral24E The matters with respect to which provisions may be made under section 22(1A)(b) include, in particular, those described in general terms in this Part of this Schedule.
Providing information24F Providing any information or expression of opinion that—
(a) is required by another person in connection with the determination of a benchmark, and
(b) is provided to that person for that purpose.
Administration24G (1) Administering the arrangements for determining a benchmark.
(2) Collecting, analysing or processing information or expressions of opinion for the purpose of the determination of a benchmark.
Determining or publishing benchmark or publishing connected information24H (1) Determining a benchmark.
(2) Publishing a benchmark or information connected with a benchmark.””
73A: After Clause 9, insert the following new Clause—
(1) Section 39 of FSMA 2000 (appointed representatives) is amended as follows.
(2) After subsection (1B) insert—
“(1C) Subsection (1D) applies where an authorised person (“A”)—
(a) has permission under Part 4A, or permission resulting from any other provision of this Act, only in relation to one or more qualifying activities,
(b) is a party to a contract with another authorised person (A’s “principal”) which—
(i) permits or requires A to carry on business of a prescribed description (“the relevant business”), and
(ii) complies with such requirements as may be prescribed, and
(c) is someone for whose activities in carrying on the whole or part of the relevant business A’s principal has accepted responsibility in writing.
(1D) Sections 20(1) and (1A) and 23(1A) do not apply in relation to the carrying on by A of a relevant additional activity.
(1E) In subsections (1C) and (1D)—
(a) “qualifying activity” means a regulated activity which is of a prescribed kind and relates—
(i) to rights under a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land, or
(ii) to rights under a contract of the kind mentioned in paragraph 23B of that Schedule;
(b) “relevant additional activity” means a regulated activity which—
(i) is not one to which A’s permission relates, and
(ii) is comprised in the carrying on of the business for which A’s principal has accepted responsibility.”
(3) For subsection (2) substitute—
“(2) In this Act “appointed representative” means—
(a) a person who is exempt as a result of subsection (1), or
(b) a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.””
Lord Sassoon: My Lords, noble Lords have to hear me again for just a little longer, although I will not speak at quite such length at least in my opening remarks. This important and substantial group of amendments concerns the regulation of consumer credit, which we considered in quite some detail in Committee.
The government amendments in this group share one overarching goal; namely, to ensure that the transfer of consumer credit regulation from the OFT to the FCA can happen smoothly, and in a manner which is proportionate and offers the right protections to consumers. The move of consumer credit regulation to the FCA, under FiSMA, is a significant step towards better quality regulation and even greater consumer protection for borrowers. That is because FiSMA provides the regulator with substantial and flexible powers to tackle issues quickly and effectively. The interim report by the OFT on its compliance in the pay-day lending sector makes very clear why a move to an FCA regime is the right thing to do.
In the vast majority of cases, it is right that the legislation treats credit-related activities just like any other regulated activities under FiSMA. That is, after all, the rationale for the transfer. But in the course of preparing for the transfer of consumer credit regulation from the OFT to the FCA, the Government have identified a small number of areas where simply applying FiSMA to credit-related activities may have unintended consequences. As my noble friend Lady Kramer has
already said, we certainly do not want any unintended consequences, which is what this group of amendments seeks to address.
Amendments 73A and 94C relate to how the appointed representatives regime will operate where firms carry out a credit-related activity. An appointed representative is a firm, or a sole trader, which is not authorised but is allowed under Section 39 of FiSMA to carry on certain regulated activities as agent for an authorised firm or principal under a contract by which the principal accepts responsibility for the regulated activities carried on by its appointed representatives. For example, many insurers act as principals for those brokering insurance for them as appointed representatives.
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Under FiSMA as currently drafted, no person may be both an authorised person and an appointed representative at the same time. At present, a significant number of firms which hold consumer credit licences and will move from the OFT to the FCA are already appointed representatives under FiSMA for non-credit-related activities. This is particularly the case for retailers whose primary activity is not consumer credit related. This population includes, for example, furniture shops or car dealers who introduce their customers to insurance providers as appointed representative. Under FiSMA, as it is currently drafted, there would be two options open to these firms when consumer credit is brought into FCA regulation. They could either seek to become appointed representatives also for their credit-related activity or they could apply for full FiSMA authorisation for all their activities.
Amendment 73A provides a third option: it creates a limited carve-out from the provision that firms cannot be both an appointed representative and authorised at the same time. Amendment 73A provides that if a firm were authorised for a particular category of consumer credit activity, it would also be able to become an appointed representative for non-credit-related and credit-regulated activities.
Amendment 94C makes clear that in being both authorised for any of the activities set out in the order made by the Treasury and acting as an appointed representative, firms would not be committing a criminal offence. The intention here is to deliver a very limited exemption that will permit a proportionate and workable approach to the regulation of, for example, ancillary credit brokers, while still delivering the right levels of oversight and consumer protection.
I turn now to the group of amendments connected to Amendment 94D. Amendment 94D modifies Section 23 of FiSMA to provide that a person who carries on a credit-related regulated activity without the relevant permission to do so commits a criminal offence—even if the person has permission to carry on another regulated activity. Under FiSMA, it is an offence to carry on a regulated activity without authorisation; whereas under the Consumer Credit Act, it is a criminal offence to lend money or collect debts without the right category of licence. This amendment would bridge the gap and potential loophole between the Consumer Credit Act and FiSMA. Amending FiSMA to make it a criminal offence to lend or collect money without the correct permission would avoid the risk of sophisticated
illegal money lenders seeking authorisation for a lower-risk activity—for example, being a credit broker—only to use this as cover to engage in lending or debt collection, to the potential detriment of consumers.
Amendment 94D also amends Section 26 of FiSMA to ensure that any agreements entered into, or being enforced by, a person without the necessary permission cannot be enforced. It means that important protections in the Consumer Credit Act for victims of illegal money lenders or debt collectors are replicated in the new FiSMA-based regime. The other amendments in this group make related consequential amendments to FiSMA.
Finally, I will deal with Amendments 114A to 114C. Under the Consumer Credit Act regime, Trading Standards, and, in Northern Ireland, the Department of Enterprise, Trade and Investment, have the power to investigate and prosecute offences committed under FiSMA. Trading Standards and the Northern Ireland Department of Enterprise, Trade and Investment do important work in this area which the Government are keen to acknowledge. The Bill already allows the Treasury to enable Trading Standards and the Northern Ireland department to continue to prosecute offences under FiSMA—and this will include the new offence that we have just discussed. These amendments complete that picture by enabling the Treasury to confer powers on Trading Standards and the Northern Ireland department to use their existing investigatory powers in the Consumer Credit Act to investigate offences under FiSMA. This power to investigate complements provisions in the Bill which give Trading Standards powers to prosecute offences under FiSMA and ensures that Trading Standards and the Northern Ireland department can continue to play their vital role in the effective enforcement of the consumer credit regime. I beg to move.
Lord Flight:My Lords, I rise to ask the Minister some questions about the transfer of the regulation of the providers of credit to the FCA. I had understood that it was the Government’s current intention to repeal as much as possible of the CCA and replace the relevant clauses with a new rulebook written under FiSMA and that the Government have been proposing to finalise this new rulebook by March 2014 to be implemented the following month. The Minister will be aware that a lot of the industry feels that this will be physically impossible given the necessity of wholesale change to the credit industry’s computer systems and the need to retrain staff. It is also questionable whether the new rulebook will be ready by March 2014, as none of the main features of the new regime has yet been agreed—and some may not have been discussed.
The Minister will be aware that much of the industry accounting for some 65% of UK credit is urging the Government to take advantage of the flexibility in the Bill by keeping much of the existing CCA in place in April 2014. The FCA will be able to enforce the CCA using its new powers which exceed those of the Office of Fair Trading. This would allow time for the design of a generally proportionate new regime. If such an approach is not taken, tens of billions of pounds of existing credit currently available to ordinary consumers in the high street and elsewhere could be at serious risk.
Lord Stevenson of Balmacara: My Lords, I thank the Minister for his helpful introductory remarks, and the Bill team for letting us have information about this rather complex group of amendments early last week. I declare my interest as the Chair of StepChange, the debt charity.
My first point is that although I accept this is a relatively complex area, these amendments are rather late and, as a result, they have not been considered in the other place, and were not available for our discussions in Committee over the past few months. You have to wonder why that is—apart from the wholly frivolous idea that it was set up to coincide with the news today that the OFT has completed its progress report on payday lending and announced that it has opened a formal investigation into several such lenders over aggressive debt collection practices, as well as taking steps to write to all 240 payday lenders highlighting its emerging concerns over poor practices in the sector.
The OFT's progress report confirms what a lot of us knew already. Thanks to the sterling efforts of my noble friends Lord Kennedy, Lord Mitchell and Lady Sherlock, and indeed many others all around your Lordships’ House, we have been made well aware that there are concerns about the adequacy of checks made by lenders on whether loans will be affordable for borrowers; the proportion of loans that are not repaid on time; the frequency with which some lenders roll over or refinance loans; the lack of forbearance shown by some lenders when borrowers get into financial difficulty; and, in general, debt collection practices.
We welcome in particular the revised debt collection guidance, focusing on continuous payment authorities, which have been causing problems to our clients and also contributing to the workload of the Financial Ombudsman. I look forward to the full OFT report in the New Year, and in particular to learning whether wider action is needed to tackle problems in the sector. My personal view is that such wider action will definitely be required.
We do not dissent from the principle being expressed here: that it is necessary to make further provision related to the transfer of Consumer Credit regulation from the OFT to the FCA. However, in the short time available to us, we have been receiving representations on several issues; some of which I will pose as questions to the Minister; others may have to be raised later. In the event that he is not able to respond to them all today, perhaps the Minister might, when he winds up, agree with me that it may be necessary to return to this issue at Third Reading.
Turning to the amendments, the main concern being addressed is that without the amendments the transfer of responsibility from the OFT to the FCA should create a loophole for illegal money-lenders and debt collectors to evade the risk of criminal sanction by becoming authorised by the FCA for a low-risk activity and then crossing over to some other activities. As we have been arguing for some time, these concerns are exacerbated because the credit market deals with many financially and otherwise vulnerable consumers who may be subject to exploitation by unscrupulous operators, particularly when the individual enters into a spiral of debt and becomes reliant on the lender for further
credit. So we welcome the Government’s decision to ensure that the transfer of regulation to the FCA does not lead to a reduction in consumer protection, and we accept that criminal offences should be retained in relation to illegal lending and debt collection so as to serve as deterrent to those who seek to exploit the FiSMA regime to avoid prosecution. In particular, we welcome the fact that the Government are bringing forward an amendment creating a new criminal offence of carrying out a credit-related activity without permission.
My questions are as follows. There are concerns that the appointed representative regime does not provide sufficient protection for consumers. I can see the point of a dentist allowing patients to pay in instalments through a credit agreement not having to be directly licensed, for example, and, under an AR regime, the firm providing the credit could assume regulatory responsibility for what the dentist does in respect of the credit. But what happens in a high-risk sector, such as second-hand car sales, when a risk-based approach might suggest that the sales people brokering the HP agreements et cetera should also be directly authorised? Could the Minister comment on that issue, and can he say—as I think he tried to explain about the new clause in Amendment 73A—whether it is the Government’s intention that a person can be an AR but can also be directly authorised? If so, how exactly is that dual system going to be introduced?
As we have heard, FiSMA makes it an offence to carry out a regulated activity without authorisation, but it is not an offence to do something without the right permission if you are authorised under the CCA. These amendments allow the Government to make it an offence to offer credit activities without the right permissions. However, the categories of credit activity that the amendment covers seem to include lending, administering credit agreements and debt collection— but debt management is not explicitly included. Can the Minister explain why debt management has been excluded? Surely, for all the same reasons that we were given in the introduction, it should be an offence to offer debt management services without proper authorisation.
Can I press the Minister for an explanation of why the claims management sector is not being included within this group of amendments? We heard at the meeting that the noble Lord, Lord Newby, kindly convened a couple of weeks ago why the original decision was to leave the regulation of CMCs within the MoJ, but on a temporary basis. We also heard, at the same meeting, a very good account of the discussions that accompanied a recent review of that decision but which opted for the status quo. Clearly, there will be some operational difficulties wherever the responsibility lies, but we on this side of the House are convinced that it would serve consumers much better if regulatory authority for this sector was transferred to the FCA. As I am sure my noble friends Lord Kennedy and Lady Sherlock would also confirm, having also attended that meeting, the arguments used to justify the amendments today could just as easily have been deployed to include CMCs. It is, after all, at heart a credit-related sector. I would be grateful if the Minister could respond to that point.
Developing a new regulatory regime for consumer credit, one that is firmly focused on consumers, raises a number of important questions for consideration by the new regulatory authority around the issue of how the FCA will need to adapt its operations, and indeed its whole approach, to be able to deal with the consumer credit market. Can the Minister share with us the likely consequences of that change in terms of structure, personnel and budget for that work? It will be a tragedy for consumers if the Government turn out to have willed the ends of the right policy but have at the same time failed to will the means.
Consumer credit is vital to the UK economy, but it is also one of the biggest causes of problems raised with the agencies operating in this field, including StepChange, the debt charity, and Citizens Advice. Over the last year, citizens advice bureaux in England and Wales have dealt with more than 2 million problems with debt, 41% of them consumer credit related. Debt problems overall represented 30% of all the matters that they dealt with. StepChange has helped more than 1.5 million clients with unmanageable debt in the past four years. There is great scope for consumer detriment where credit and debt are concerned, from a payday lender entering an individual’s bank account using CPA to a family losing their home because poor advice from a fee-charging debt management company meant that they paid non-priority debts instead of their mortgage. Problems with consumer credit can also have a significant impact on consumers’ family life and health, with increased stress causing both physical and mental health issues. In other words, these amendments presage important changes. They are sensibly focused on the regulatory aspects of consumer credit, but they have wide-ranging impacts and deserve to be considered with great care.
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Lord Sassoon: My Lords, I thank the noble Lord for one or two focused questions on this. First, I repeat what I think I said before in answer to my noble friend Lord Flight and his concerns. I have nothing new to add in this area, but the question of the transition is an important one. I will say again what I have said before—that the Government will consult on their proposals for the transition in early 2013 and no final decisions have been taken. The Government are very much aware of the need to allow the FCA and firms time to manage a smooth transition. In that context, we are considering options for phasing the implementation of the new FCA rulebook as well as interim arrangements for existing licence holders. So I can only repeat that my noble friend’s concerns are perfectly fair and reasonable, and the Government are reflecting on them as we speak. Well, I am not—but wiser heads than mine are beavering away on this very topic this afternoon.
I come to the issues brought up by the noble Lord, Lord Stevenson of Balmacara. The reason why we are coming forward with these amendments now, having already dealt with the substantive matter of the transfer, is that, perfectly properly in the process of scrutinising legislation, the Opposition, Peers on the government Benches and all sorts of interested parties come up with points, reflected in many amendments, which are making this a better Bill as we carry on with
our deliberations. These are issues that have been brought to the Government’s attention during the ongoing discussions with stakeholders, so I make no apology for bringing them forward now as an improvement to the legislation, giving better and more seamless protection to consumers but also treating firms in a proportionate way. I assure the noble Lord that the FCA will certainly have the means and resources at its disposal to carry out its new responsibilities in this area.
I do not wish to get too deeply into the general question of debt management and claims management companies, because we are talking about a narrow and specific but important area of the transition here. We could open up a debate that is not directly relevant to these amendments about debt and claims management companies. But I address the specific question about the new criminal offence applying to credit situations and not debt management, because it is right that the new criminal offence should be targeted proportionately at areas where there is the greatest risk of detriment caused by unscrupulous people selling dubious product. In that context, there is a great distinction between the provision of unsuitable credit and debt advice. In any cases where a firm engages in debt activity without the right permission, it would be a breach of FiSMA and the FCA will act.
On the appointed representative regime and the way it will work with the authorisation regime, I do not think that the noble Lord was challenging the basic premise behind the carve-out, but he is quite right that we need to get the way in which the two regimes mesh in together to work appropriately. To that end, as part of the 2013 consultation early next year, we will address that point and specifically ask who those firms should be. However, we will be putting forward a presumption that the firms to which this applies will be low-risk firms and all those whose primary business activity does not relate to consumer credit. The Government think that it is important that legislative provision is made now so that this option is available in the future, and that will help design a proportionate and appropriate regime. Nevertheless, I recognise that we should and will consult to make sure that we draw the line in the right place. Of course, if concerns emerge in future, the Treasury can change the class of people to whom the carve-out applies by order, and may in fact decide not to make it available to any firms at all if it thought it appropriate. I hope that that has addressed the main issues.
Lord Stevenson of Balmacara: My Lords, may I press the Minister on the point that I made earlier in my remarks about receiving a number of representations on this issue? Indeed, some of the points that he made reflected the fact that thinking is still going on. He mentioned that people were working on things as he spoke. In the circumstances, will he accept that it might be appropriate to have a further debate on this at Third Reading?
Lord Sassoon: My Lords, I was referring to people working on the transitional arrangements that come out of this. I have not been made aware of any further
concerns or issues that would merit a debate at Third Reading; if I had, I would have brought forward amendments at this stage. So I am not aware of any concerns, but, as the noble Lord was kind enough to say, the Treasury team and I will be open to him and to anybody else if further issues come up. However, I do not anticipate them and I can think of nothing of a Third Reading magnitude—if I may put it that way—that is likely to detain your Lordships.
Clause 10 : Permission to carry on regulated activities
73B: Clause 10, page 47, line 32, at end insert—
“( ) The regulators must co-ordinate their procedures for, and provide clear and detailed guidance on, the processes for applying for, varying and cancelling permission that are applicable to authorised persons regulated by both PRA and the FCA.”
Lord Eatwell: My Lords, Amendment 73B reflects a concern that we have expressed at numerous stages in the discussion of the Bill about the process by which entry is possible within the financial services industry and the processes by which permissions are varied and are cancelled.
Our prime objective is to stimulate greater competition within the financial services industry. Entry is notoriously difficult, particularly in the banking sector, and it has been made more difficult since the financial crisis as the stable door has been banged firmly shut. The shutting of the stable door, of course, has not implied any extra sanction on those banks or other institutions which already exist but has made it much more complicated for new banks to be established or new firms to enter other major parts of the financial services industry.
From an examination of the provisions of the Bill on the issue of permissions, it seems clear that there will be firms that are regulated by both the PRA and the FCA and, indeed, that there will be firms that are regulated by one of these organisations but the process of granting permissions, variations and so on will require reference to the other organisation. Given the way in which permissions are dealt with at the moment, it seems likely that this will introduce further bureaucratic steps inhibiting entry. Those bureaucratic steps will be entirely unnecessary if the regulators have a statutory requirement to co-ordinate their procedures. If, on the other hand, as we suspect, the PRA and the FCA develop different procedures relative to their differing objectives, the possibility that processes will become excessively complex, slow and expensive increases significantly.
The objective of the amendment is simply to require the PRA and the FCA to,
“co-ordinate their procedures for, and provide clear and detailed guidance on, the processes for applying for, varying and cancelling permission”,
in order to facilitate competition and ease of entry into, particularly, the banking sector and into financial services in general. I beg to move.
Lord Newby: My Lords, as I said in Committee when we debated this issue, we are extremely sympathetic to what the noble Lord is seeking to achieve. However, as I also pointed out, the PRA and the FCA are already required by proposed new Section 3D in Clause 6 to co-ordinate their regulatory processes, including the authorisation process, so this element of the amendment would have no effect.
On the publication of detailed guidance, I point out that in order for the regulators to carry out authorisation, they will need to give instructions to firms about how to engage with the process. That is what the FSA does now, and what the PRA and the FCA will have to do in the future. Firms need to be authorised before they can enter the market and the Government agree that it is extremely important to encourage new entrants. The noble Lord talked about the shutting of the stable door in respect of new banks. The truth is that the stable door has been shut for many decades and there have been no new banks. We have to try to change the culture, in terms both of the regulators and of the regulated, that has been in place for many decades, and we are very keen to do it. That is why we had brought forward an amendment requiring the PRA to have regard to the need to minimise the adverse effect on competition that arises from its actions. One of the effects will be to ensure that the PRA works to remove unnecessary obstacles to new entrants; for example, by ensuring that the authorisation process runs as smoothly as possible.
The Government agree that it is important that the regulators explain how they will co-ordinate their regulatory activities. That is why there is a statutory duty to co-ordinate and to set out in an MoU how that co-ordination will operate in practice. The process for applying for permission is one of the things that proposed new Section 3E specifically envisages being in the MoU.
The Government entirely agree with the thinking behind the amendment but we do not believe that anything further is needed to implement what it seeks to achieve.
Lord Eatwell: That is rather complacent. If the noble Lord thinks that the FSA provides clear guidance at the moment, he has not tried to establish a bank. I can assure him that it does not. There is a reason for that. Given that most business plans are rather different and the guidance has to be specific, the FSA has expressed a reluctance to get involved in specific cases.
General guidance is of general use but is seldom useful in the establishment of a given institution. That is why the amendment calls for the provision of,
“clear and detailed guidance”.
That is not available elsewhere in the Bill. The Government are being seriously remiss by discouraging the competitive process as regards this aspect. I know that they want to increase competition but it is a mistake to do it in this way. It is not an intentional discouragement and so it would be enormously helpful if the amendment
were to be accepted or some version of it were to be considered at Third Reading. I admit that it may well be belt and braces, but the amendment derives from experience of dealing with the FSA on these matters. It is in this area that the Government do not live up to the picture of assistance and guidance that the noble Lord has painted. However, at this stage, I beg leave to withdraw the amendment.
6.30 pm
75A: Clause 10, page 49, line 23, after “FCA” insert “, which shall not be required where the applicant seeks permission to carry on the regulated activity of accepting deposits,”
Lord Flight: My Lords, Amendments 75A to 75G and Amendment 77 relate to Clause 10 and Amendment 77B relates to Clause 13. The amendments to proposed new Section 55 seek to remove the need for the PRA to consult the FCA over authorising a bank or in relation to other regulatory actions, such as variation and cancellation of permission, and imposition of requirements. The effect of the amendment to Clause 13 is that the FCA would have no role in approving an application to act as a bank director.
I raised a similar area of principle at Second Reading. I remain of the view that the double doing of applications for banks and bank directors by the PRA and the FCA is unnecessary and adds to the costs and hassle for new banks trying to emerge and compete. The PRA process for bank applications is more than sufficient. The matters that the FCA deals with, such as good conduct in relation to citizens and consumers, are essentially ongoing rather than being about having a good banking plan and appropriate directors, appropriate capital and appropriate systems in order to be able to start a banking business. I have also recently encountered a situation whereby the new yet-to-be FCA organisation made inquiries of a senior director that related to PRA, not FCA, territory.
The amendments are also in part probing amendments because it is not clearly understood by the industry how the new arrangements are intended to operate. At one level, my understanding is that an application for a banking licence and bank directors will be dealt with by the PRA, which will merely refer to the FCA to see whether it wants to raise any issue. However, in other circumstances, there seem to be two different processes to go through. Therefore, if the Government are not
willing to accept my point of principle, which is that it would be much better to leave the approval of banks and bank directors purely to the PRA, it would be helpful for the Minister to set out today exactly how the new dual system is intended to operate in practice. I beg to move.
Lord Sassoon: My Lords, Amendments 75A to 75G, tabled by my noble friend Lord Flight, would remove the requirement for the FCA to consent to authorisation decisions taken by the PRA relating to banks and other deposit-takers, including the decision to grant or remove permission. We discussed a similar group of amendments in Committee.
As I previously said, authorisation is a vital tool for the authorities to set and enforce standards for regulated firms efficiently. It is much more costly to address issues within firms following authorisation than it is to do so during the authorisation process. Such costs will fall on regulated firms and, eventually, consumers. Of course, it is far preferable for the FCA to be able to identify and address potential threats to consumer protection or integrity as part of the authorisation process and to prevent consumer detriment or improper behaviour before it happens.
The FCA will have a significant role in the authorisation process—for example, in assessing the range of products being proposed by the applicant, its systems and controls, its processes for treating customers fairly, including dealing with complaints, ensuring the business is not being used for a purpose connected with financial crime, and promoting effective competition in the interests of consumers. It is surely right that all these matters should be carried out up front. To take one clear example, it must be right that the FCA should carry out its anti-money laundering checks as part of the authorisation process. In addition, it is surely right that the FCA should be able to object to an application if it is not satisfied that a firm can comply with its threshold conditions.
Similar points apply in relation to Amendment 77B, which would establish that the FCA should have no role in approval of any person who is to be a director of a deposit-taker. This would mean, for example, that the FCA has no role in approving a director of customer services or a director with responsibility for regulatory compliance.
Let me cut to the chase, because my noble friend made it clear that he is probing around how the system will work. There will be one application, not two. This is the crucial point that people have not fully grasped. I believe that I have said this before in our debates but I say it again clearly. My noble friend is right to say that we want to minimise the inconvenience of the process. There will be a single administrative process for approval of firms and of persons to perform significant-influence functions. It would not be appropriate now for me to go through the detail of how the PRA and FCA will do it, but the key issue for this House and the Government in setting the framework is that there has to be one application. That is what sets the tone of the necessary and appropriate co-operation to make the process as seamless as possible.
On the basis of that further assurance, I ask my noble friend to withdraw the amendment.
Lord Flight: My Lords, it is highly important that it should be absolutely clear that there will be one application and, as I understand it, that means that an application to establish a bank will be dealt with by the PRA, which will then have its own arrangements to deal with the FCA for FCA matters. What really matters in establishing a bank is whether there is enough capital, whether the management and the directors are suitable and whether the business plan is sensible. The bits that the FCA is concerned with are much less relevant up-front and more relevant as the business develops, so the PRA really should be in the driving seat for approving banks.
I would also make the point that I made in a slightly different context the other day. A team from the BIS made an appointment to come and see me to ask whether, in my view, the process of applying for licences for new banks and approval of new directors was anti-competitive. I was pleased to find that the BIS was very focused on that aspect, even if the Treasury was not quite as focused. I am pleased to have the assurance of the Minister that effectively it will be one process with the PRA and the FCA liaising and, on that basis, I beg leave to withdraw my amendment.
Amendments 75B to 75G not moved.
77: Clause 10, page 56, line 10, leave out “this” and insert “the imposition of a requirement that expires at the end of a specified period”
Clause 11: Passporting: exercise of EEA rights and Treaty rights
77AA: Clause 11, page 65, line 22, at end insert—
“( ) In seeking to ensure an appropriate degree of protection for consumers, the PRA and FCA shall—
(a) require banks to provide clear and prominent warnings to consumers where deposits are not covered by the Financial Services Compensation Scheme; and
(b) make and maintain effective arrangements to consult consumers on the prominence and method of such warnings.”
Baroness Hayter of Kentish Town: My Lords, this amendment stands in the name of my noble friend Lord Eatwell and myself. It relates to passporting and, in particular, where a UK-authorised bank works in another EEA member state. Our concern, as we raised in Committee, is about adequate protection for consumers in those EEA states. This amendment would require the relevant authority, be it the FCA or the PRA, to require banks to make clear, prominent warnings to consumers where their deposits are not covered by the Financial Services Compensation Scheme. It is fairly obvious that it is vital that consumers know precisely and clearly whether their deposits would be covered by this compensation scheme and the extent of such coverage.
In Committee, the Minister assured us that it was sufficient for such a requirement to be in the regulator’s rule book. We have considered this further and we would beg to differ. It is such an important area of consumer protection and really important for the confidence in our banks that we must ensure that every depositor knows the security of their deposit. Furthermore, given that we saw a range of views in Committee on where and how such warnings to customers should appear, it is important that consumers themselves are consulted on this so that the most effective method of communication is used. I beg to move.
Lord Phillips of Sudbury: My Lords, I am generally sympathetic to Amendment 77AA, but what would the consequences be of a breach of its provisions?
6.45 pm
Lord Davies of Stamford: My Lords, I was struck by my noble friend’s amendment. In reading it, I wondered whether this was already a provision which applied, quite outside the passporting context in which she moved it, to deposits in this country. I cannot see any reference to a rule of this kind elsewhere in the Bill. It may be that it is already part of statute law or part of the rule book of the FSA—and the FCA to come—but, looking back on my own experience, I do not normally have deposits which are greater than the threshold, which I believe is £85,000. On any such occasions when I have, I do not recall a bank telling me that part of my deposit was not subject to the national retail insurance scheme or to consumer protection. That seems to be a great weakness in the system and I would be grateful if the Minister could tell me what the rules are relating to the taking of deposits. Is this or is this not an obligation of a bank taking a deposit now which is in excess of that ceiling? I may be wrong in saying it is about £85,000, as it may have increased since I last heard a figure. If not, such an amendment should be made and this Bill presents us with an opportunity to do so.
I think we all agree that a balance needs to be struck here. No one is suggesting that the state should guarantee all banking deposits. That would be a massive moral hazard and would mean that depositors no longer had to interest themselves in the quality of the banks with whom they are investing. Equally, I think we all agree that it is unreasonable for small depositors to make a credit assessment of the banks with which
they are depositing small amounts of money. It is not just a question of looking at the solvency ratios or capital adequacy ratios. You need to look beyond that if you want to assess the credit-worthiness of the bank. You look at the quality of the assets of the bank and the quality of its deposits. These are areas where it is not only difficult for an individual to come to a judgment but where we know that there has been fantastic regulatory failure throughout the world, particularly in this country.
The FSA’s behaviour in this matter was negligent to an extraordinary degree. It never seemed to interest itself in the declining quality of the assets of many British banks, which were buying more and more CDOs, for example. It never seemed to interest itself in the deteriorating quality on the liabilities side of the Northern Rock balance sheet and the fact that Northern Rock was becoming excessively dependent on wholesale deposits. If the regulators fail so badly, it is all the more important that the protection available for small or medium depositors is great.
It is very important that people should know because, as I have explained, even though I try to take an intelligent general interest in these matters I do not know exactly where the threshold currently lies. In my experience, I have certainly not had a notification from a bank that I may be placing deposits with it that are not in any way subject to such a guarantee. That is an enormously important aspect of the risk involved in such a transaction and, clearly, it ought to be brought to the attention of retail depositors. Is this currently part of statute law? Is it currently part of the rule book and, if not, is this amendment an opportunity to make it so or should we take another opportunity in this Bill to bring forward an amendment of that general kind?
Lord Newby: My Lords, I think everyone is agreed that the regulators should require banks to make their customers aware when their deposits are not covered by the Financial Services Compensation Scheme.
Lord Davies of Stamford: Did I hear the noble Lord say that it is a requirement from regulators that banks should notify their depositors when they are covered? If so, that is quite wrong. They should be notified when they are not covered. That is the important thing. It is no use notifying them when they are covered and saying nothing at all when they are not covered, for that is when the risks arise.
Lord Newby: My Lords, as I was saying, the regulators make considerable existing requirements in this area and I will explain what they are. Firms from the EEA that passport into the UK are covered by their home-state compensation scheme rather than by the Financial Services Compensation Scheme. It is obviously right that consumers are made aware of it but, as we have said before, this already happens. The FSA already has rules requiring this in the COMP 16 section of its handbook. Explicitly, EEA firms passporting into the UK are required to inform their customers that they are covered by their home state scheme. This is already included on customers’ bank statements and notices are prominently displayed in their branches.
“Your eligible deposits with [insert name of firm] are protected up to a total of 100,000 euro by [insert name of compensation scheme]”—
depending on which country is involved—
“… and are not protected by the UK Financial Services Compensation Scheme”.
“above the 100,000 euro limit are not covered”.
This wording is already being displayed and circulated to potential customers of these branches. In tandem, the FSCS has launched a programme to raise awareness of the scheme in general and to inform consumers how they can check whether they are covered by the scheme, so it is clear to us that this amendment is simply unnecessary. The FSA and FSCS are taking action in this area already and we strongly believe that that will continue once the new regulatory system is in place. It is right that the regulators and the FSCS have the flexibility to address this issue in the way that they see as most appropriate. On this basis, I trust that the noble Baroness will feel able to withdraw her amendment.
Lord Davies of Stamford: The noble Lord has read out the text of the communication which banks in this country must make to depositors who are resident in other EEA countries when they deposit more than the threshold amount of €100,000. Can he read out the text of the communication that banks in this country are obliged to make to depositors resident in this country when they deposit with them amounts over the threshold of £85,000 or whatever it is?
Lord Newby: I will check what I said, but it may have covered what the noble Lord is looking for. If it does not, I shall write to him with the relevant wording.
Baroness Hayter of Kentish Town: My Lords, I am sorry that the Minister did not listen to what I said, which was the reverse of passporting. It was about the passporting of our banks into EEA countries. I was interested in the protection of customers in those areas who are served by the UK banks that are being passported there but would be regulated here. Our regulator should therefore cover that. That is a different issue from the one that the Minister has answered. If he would check on that, I would be quite happy for us to revert to the matter at Third Reading. I am interested in consumers wherever they happen to dwell, such as the consumers in EEA areas being served by our banks. I am therefore worried about their lack of coverage by our compensation scheme, which should be brought to their attention. If I could leave the Minister to clarify that, at this stage I beg leave to withdraw the amendment.
Clause 12 : Prohibition orders
77AB: Clause 12, page 67, line 12, at end insert—
“( ) In the event of a prohibition order being made, the FCA and PRA shall—
(a) publish an explanatory statement regarding the decision; and
(b) include the individual on an updated list of those subject to prohibition orders to be presented on HM Treasury’s website.”
Baroness Hayter of Kentish Town: My Lords, this amendment stands in the name of my noble friend Lord Eatwell as well as mine. It is about transparency and we have moved from passporting to prohibition orders, with a big jump to Clause 12. The amendment would ensure that, when a prohibition order is made, the regulator publishes its reasons and the individual's name appears on a list of people subject to prohibition orders on the Treasury website. The purpose of this is both to promote good practice, by making it clear what constitutes bad practice, and to enable investors and others easily to identify who has been subject to such an order.
As was clear in Committee, the issue did not really divide us. At that stage, I quoted Matthew Hancock as saying in another place,
“the principle that prohibition orders on people who are not fit and proper persons should be published is crucial … Prohibition must not only be a sanction for past irresponsible behaviour, but a deterrent for future irresponsible behaviour … the point of prohibition is not only … to stop the actions of those who have … committed acts that make them not fit and proper, but to demonstrate the bounds of behaviour that are deemed responsible and reasonable”.—[
Official Report
, Commons, Financial Services Bill Committee, 6/3/2012; col. 384.]
The then Minister, Mr Mark Hoban, agreed that prohibition is both a punishment and a deterrent.
When we discussed this in Committee, the noble Lord, Lord Newby, replied in this House along similar lines, saying that,
“regulators ought to give explanations of their actions and I do not think anyone would dispute the need for the identity of persons subject to prohibition orders … to be made known”.—[
Official Report
, 8/10/12; cols. 860-61.]
However, he felt that the existing duty on the FSA to maintain such a list was sufficient. We disagree with regard to the list of those prohibited. Investors and borrowers here and abroad would be more likely to see the Government as a source of such information, and we would therefore like HMT, via its website, to have a role in this.
With regard to the first part of our amendment, it is crucial, if the findings of a case are to help influence the future behaviour of other firms and authorised persons, that they can read and understand exactly what was alleged and why it was found to have transgressed acceptable behaviour. Hence there is the need to publish reasons. I beg to move.
Lord Newby: My Lords, as the noble Baroness says, we discussed this at some length in Committee and, to a certain extent, I am afraid I can only repeat what I said then. I repeat that FiSMA already requires the FSA to maintain a publicly available record of individuals subject to prohibition orders. The relevant subsection simply says that the register must include a record of every,
“individual to whom a prohibition order relates”.
and provides that the register must include the name of the individual and,
“details of the effect of the”,
The FCA will keep these records in future and the Bill, in paragraph 17 of Schedule 12, also requires the PRA to assist the FCA in keeping the record up to date, including by notifying the FCA of every prohibition order that the PRA makes. The principal effect of the amendment would be to move these records from the FSA website on to the Treasury website. The noble Baroness said, in effect, that the Treasury website would almost command more respect or be more likely to be looked at for this purpose. We disagree with that. The Treasury website sets out government policy, not records of regulatory decisions. The logical place to go for a record of a regulatory decision is to the regulator. We think that it would be confusing if investors expected to go to the Treasury website rather than to the regulator’s website to get the relevant names and other information. In our view, it would be contrary to the noble Baroness’s stated objective of ensuring clarity and transparency. I am afraid I cannot give her much comfort. We believe that what we are doing meets her requirements and that those are better met by doing it via the regulator’s website rather than via the Treasury website.
Baroness Hayter of Kentish Town: I thank the Minister for that response. I have a query that is not so much on the website. I think he said that the list was kept along with details of the effects of the prohibition order, which I assume means that this person cannot do this, that, or the other. We were asking for the reasons. I hope that he will look at this, even if there is only a recommendation back to the regulator. It is really important that the allegation and the reason why it was found proven is there as guidance for others. I hope that he will look at that and reassure me that the reasons are there, not just the effects of the prohibition order. With those comments, I beg leave to withdraw the amendment.
Clause 13 : Approval for particular arrangements
Clause 15 : FCA to exercise functions under Part 6 of FSMA 2000
7 pm
78A: Clause 15, page 70, line 15, at end insert—
“( ) For section 73 substitute—
In discharging its functions under this Part, the FCA should, so far is compatible with its strategic and operational objectives, have regard to the international
character of capital markets and the desirability of maintaining the competitive position of the United King dom.””
Lord Flight: My Lords, Amendments 78A and 79A are supported by the Listing Authority Advisory Committee to the FSA, which is an external committee appointed by the FSA. The amendments have the objective of permitting the FCA going forward as the listing authority to have regard to the international character of capital markets and the desirability of maintaining the competitive position of the UK in international capital markets.
The advisory committee is concerned that without the amendment the FCA, when regulating, will not have the power to consider UK competitiveness in international capital markets and could in fact be challenged for doing so unless the issue is specifically covered. Under current legislation, the listing authority is separately set out in FiSMA, while most legislation under FiSMA is about the regulation of those conducting various forms of standard financial services businesses. The listing function is a very different role, though; it is about setting the rules for and regulating listed companies as the issuers of securities, both debt and equity, where issuers obviously have choices as to the markets in which they opt to access capital. Hong Kong in particular has become an even more important financial capital than London, which also faces great competition from New York.
At present, under Section 73 of FiSMA, the FSA is obliged to have regard to market competitiveness and the UK’s position in carrying out this function. These two amendments would leave the listings authority’s role and function substantially aligned with the rest of the FCA but would reflect the fact that this part of the FCA’s function is about regulating listed companies, not the financial services industry. It is different and should have competitiveness not as an objective but simply as a matter to which the FCA should have regard.
This may sound a slightly obscure point but the chairman of the Listing Authority Advisory Committee is concerned that unless this particular, slightly different responsibility of the FCA going forward is given at least the steer to have regard to international competitiveness, it will not be covered by the wider parts of the Bill requiring the FCA to have competitiveness as an objective. I hope that the Minister will be able to give comfort that the wider competitive objective covers the particular listing authority context of the FCA. If not, I hope the Government might consider this somewhat offbeat territory. I beg to move.
Lord Northbrook: I support my noble friend Lord Flight’s amendment. It is important that in this area the FCA should have regard to the international character of capital markets and the desirability of maintaining the competitive position of the United Kingdom.
Lord Sassoon: My Lords, Amendments 77A and 79A would reinstate an existing “have regard” that applies to the FSA in its capacity as UK listing authority as a “have regard” applying to the FCA’s listing work.
This “have regard” is a requirement to take account of the international character of capital markets and of UK competitiveness. I can assure my noble friend that these amendments are not needed. As we discussed in Committee, the FCA and the PRA will be bound to have regard to the regulatory principle that any burden they impose should be proportionate to the benefits that flow from it. The proportionality principle will apply where a requirement would have an effect on UK competitiveness that would be a burden, and the same need to ensure that the burden was proportionate to the benefits would apply.
In addition, last week we debated and agreed to make an amendment to the Bill to add a new regulatory principle giving the regulators the duty to have regard to the desirability of sustainable UK economic growth. My noble friend was good enough to welcome that amendment, which I assure him will also encompass international competitiveness in the appropriate way in relation to listing as well as more generally. I think that that answers the direct question he posed to me. My noble friend refers to the London Stock Exchange and my understanding is that, although it was rightly concerned about the removal of the listing authority competitiveness “have regard”, it has welcomed the new regulatory principle. I hope therefore that my noble friend will agree to withdraw his amendment.
Lord Flight: My Lords, I thank the Minister for the comfort on this point. I am aware that the London Stock Exchange has raised this issue and I hope that what he has said will also provide comfort to the Listing Authority Advisory Committee. The only grey area for me is that I am still not entirely clear whether the general burden upon the FCA with regard to competitiveness automatically covers its role as the listing authority. The Listing Authority Advisory Committee seems to think it does not. However, I note that the point has been generally picked up and therefore beg leave to withdraw.
79: Clause 15, page 70, line 18, at end insert—
“( ) In section 87A (criteria for approval of prospectus)—
(a) in subsection (1), for “competent authority” substitute ““FCA”,
(b) in subsection (7)(a), for “competent authority”, in the first place, substitute “FCA”, and
(c) in the heading, for “competent authority” substitute “FCA”.”
Clause 17 : Listing rules: disciplinary powers in relation to sponsors
“( ) The Treasury must lay before Parliament a copy of any statement published under this section.”
Baroness Hayter of Kentish Town: My Lords, we reach the last amendment of the evening, which stands in the names of my noble friend Lord Eatwell and myself. It is short, sharp and clear. The Bill allows for FCA statements of policy relating to its use of disciplinary powers to be provided to anyone, for a fee if necessary; to be given to the Treasury, presumably for free; and to be published as appropriate. Noble Lords will have noticed that the one body not automatically to receive the statement is Parliament. This amendment would correct that oversight. I beg to move.
Lord Newby: My Lords, no one disagrees with the proposition that certain important reports and other documents that are produced under the new regime should be laid before Parliament. A good example of this view is to be found in Clause 80 under which, if the Treasury in future receives a report relating to an inquiry or investigation carried out under the provisions of Part 5 of the Bill, it must publish the report and lay what it publishes before Parliament. Since these reports concern inquiries or investigations in connection with possible regulatory failure or on other matters relating to the public interest, this is clearly the right approach. It enables Parliament to consider the matter and, where appropriate, call upon Ministers or the regulators themselves to give an account of their actions. Indeed, the Government are so committed to ensuring parliamentary accountability in this area that they have tabled Amendment 107D to ensure that any direction that the Treasury gives regarding these investigations is also laid before Parliament.
However, the statement of policy issued by the FCA under new Section 88C is not a report of that kind. It is more like the guidance issued under FiSMA, although it is really guidance for the regulator itself rather than for regulated firms. This explains why the FCA must follow the procedure in Section 88D before it issues a statement, which is essentially the same as the procedure when the FCA issues guidance to firms set out in new Section 139A. The Treasury must be notified of any new FCA guidance or changes to existing guidance but it has never been thought necessary for the Treasury to lay that guidance before Parliament, although it will be available on the FCA website.
The approach that we are taking not only follows the general FiSMA model but it is the same approach that is taken in other regulatory legislation. For example, Section 38 of the Competition Act 1998 requires the OFT to prepare and publish guidance on the appropriate amount of any penalty imposed for abuse of a dominant position. It must get the Secretary of State’s approval for it but there is no obligation to lay it before Parliament. Equally, Section 392 of the Communications Act 2003 requires Ofcom to prepare and publish a statement containing guidelines on the penalties that it may impose under that Act or other legislation, except the Competition Act 1998. Again, though, Ofcom is not required to lay that before Parliament.
All we are doing is following normal procedure. We do not think that this kind of guidance should be laid before Parliament because it is guidance to the regulator
and will be available on the regulator’s website. In those circumstances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Hayter of Kentish Town: My Lords, I thank the Minister for that answer and, via the Minister, I thank his Bill team because they have clearly done some interesting research for us in areas beyond HMT.
Ministers have probably not made the right call. There will be an increased requirement for transparency and Parliament is becoming more interested in questions of guidance, particularly in relation to disciplinary matters. My guess is that there will come a time when more of these will come to Parliament, because saying that it is normal practice and we can go on as before is not necessarily always the right view. We will get there, even if it is not in the Bill, but for the moment I beg leave to withdraw the amendment.
Consideration on Report adjourned.
7.12 pm
Health: Neurological Services
Question for Short Debate
7.30 pm
To ask Her Majesty’s Government what progress has been made in improving neurological services, and in particular the provision of epilepsy services, in the United Kingdom.
Baroness Ford: My Lords, I am very glad to have the opportunity to table this Question for short debate this evening, which is now a longer debate. It covers a really important topic at a time of great change and potentially great opportunity for the National Health Service. The opportunity is there to improve neurology services if the clinicians and managers in charge of the new arrangements enable this to happen. But the converse is also true: there is also a risk that current service levels, already unacceptable in many parts of the country, will deteriorate, and I hope that the Minister will address that risk in her response.
I begin my declaring my interest as honorary president of Epilepsy Action, the national charity. I have had the privilege of being associated with Epilepsy Action for some years now and the work that it does and support that it provides for people with epilepsy and their families is simply tremendous. I also have close family experience of the condition and so completely understand the frustrations and challenges that managing the condition brings and of the hit-and-miss nature of the services in different parts of the country.
First of all this evening, I would like to draw attention to the wider issue of neurology services in general. The National Audit Office published a report in 2011 into
services for people with neurological conditions, and it is worth reminding ourselves that neurological conditions affect about 8 million people in the UK. The report was not positive. Despite an astonishing 38% increase in spending between 2006 and 2010, there was no commensurate improvement in outcomes. Specifically, people received little or no support after diagnosis. Ongoing care was often fragmented and unco-ordinated. People admitted to hospital as an emergency were usually cared for by health professionals without any neurology experience or knowledge, and perverse performance incentives resulted in a cycle of referral, discharge, and referral. So, one has to ask, where was the money going?
The Public Accounts Committee did just that, and in response, produced an excellent report that set out six recommendations on how the situation could be improved. To their credit, the Government agreed to implement four of these. Can the Minister tell us what progress the Government have made on the PAC recommendations that were accepted? First, can she tell us what progress has been made in the promise to offer a care plan to each person with a neurological condition? The promised implementation date was April 2012. Secondly, the Government agreed to develop a generic neurological quality standard, again by 2012. Can she say what progress has been made in this? Thirdly, a commitment was also given to a plan for driving improvements in quality. This was promised by April next year and so an update on progress would be welcome. Finally, a promise was made to produce a neurological dataset—an extremely important commitment by the Government—by April 2014. Although that is still some way off, again, an update would be welcome.
All of these commitments were made by the Government and will go some way to helping the situation. But I would also like to ask the Minister whether the Government will again consider the recommendation by the PAC to appoint a national clinical lead for neurology. Given that there are currently 8 million people with neurological conditions in the country, that is not a huge ask. We have very welcome national clinical leads for other conditions such as dementia and diabetes, conditions that affect far fewer people, so why is the chief executive of the NHS so resistant to appointing a clinical lead in this important area, particularly as we know there is real room for service improvement and money is not being well spent? Perhaps the Minister can tell us.
The Minister might also like to say why the Government were resistant to mandating joint commissioning at exactly the time when the new NHS arrangements are expected to be significantly more joined up than before. It occurs to me that mandating joint commissioning is simple common sense now.
Turning to epilepsy services in particular, the Minister is aware of the 2009 report by Epilepsy Action, Epilepsy in England: Time for Change. We debated it in this House in September 2010. At that time, I expressed my great frustration that many of the basic building blocks of a decent service were still not in place. Two years on, there has been a slight improvement—I stress slight—but no real movement in getting to an acceptable standard of service.
That brings me to the changes planned for the NHS. The opportunity is clearly there to improve the service for people with epilepsy. But is the will there, and is the leadership there? The new clinical commissioning groups will have a critical role to play in providing and improving services. They could develop a much better quality service than has been the case in the past. But so far the evidence in terms of their planning is not reassuring. Epilepsy Action has been carrying out research into how the NHS in England is preparing for the reforms set out in the Health and Social Care Act. We will publish this research in January 2013, but our findings so far show that two thirds of the clinical commissioning groups that were surveyed do not have, and do not intend to produce, a written needs assessment of the health and social care needs of people with epilepsy. How on earth can appropriate services be provided without a clear assessment of need?
Equally, fewer than one in five clinical commissioning groups that responded has appointed a clinical lead locally for epilepsy. In the absence of a national lead, there is a serious vacuum if there is no local leadership either. Is this something that the Government are prepared to tolerate? How can we possibly maintain and improve services against such a backdrop?
My plea to the Minister is that the Government get on top of this and send out a very clear message to clinical commissioning groups that long-term neurological conditions have to be taken seriously and services planned appropriately. The services for people with epilepsy have not been at anything close to the NICE guidelines for many years. It would be a tragedy if the changes that the Government are implementing now cause the situation locally to deteriorate further because there are welcome changes at a national level, particularly in respect of national or specialised commissioning.
As I understand it, once the changes are implemented, specialised commissioning will become the responsibility of the NHS Commissioning Board. This is a major change and offers a real opportunity to improve services. A single national specification and single national commissioning policy should lead to more consistent standards of care and an improvement in care in those areas where the quality of care in the past has been highly variable. This is a big step forward and I would ask the Minister if she might say a little more about this in her summing up.
Greatly to be welcomed also is the move to commission epilepsy surgery for children nationally. The Government have committed to a three-fold increase in the availability of this surgery, which is fantastic news. Perhaps the Minister could also say whether there will be a commensurate increase in the availability of surgery for adults with epilepsy too, given that we know how totally life-changing and life-enhancing the surgery can be when used appropriately.
There is a huge opportunity to improve services for people with a range of neurological conditions, and we particularly welcome the planned clinical network for neurology. This is a really good step forward. There have been some important changes in the way that the Government have looked at these issues nationally
and the new arrangements are to be applauded, but the worry persists—it has been a constant worry all the way through the passage of the Health and Social Care Act. That worry relates to how well the clinical commissioning groups will focus on long-term neurological conditions such as epilepsy, how they are to be held to account for the services that they provide and what the Government will be prepared to do in the event that such services continue to fall short of the basic guidelines set out by NICE. Epilepsy services are already a long way off being acceptable. The last thing we want is for that situation to persist.
7.40 pm
Baroness Jolly: My Lords, I thank the noble Baroness, Lady Ford, for bringing this important issue to our attention, especially at a time when decisions are still being formulated by the NHS Commissioning Board. We know that neurological conditions and epilepsy in particular are great challenges facing the NHS. The efficient and effective provision of these services is crucial to the good care of the estimated 8 million people in England who have neurological conditions and the 600,000 of those who have epilepsy.
We know that good treatment of these conditions is vital. However, my comments today focus less on the method of treatment than on the commissioning of the care. Under the coming system of healthcare commissioning through GP-run clinical commissioning groups, will the Minister guarantee the training and resources to support GPs in these new roles for the commissioning of neurological care? Specifically, what is the NHS board doing adequately to prepare clinical commissioning groups to commission high-quality, appropriately targeted epilepsy and other neurological services?
I shall separate my concerns into three areas. First, I am concerned that neurological conditions have not been made enough of a priority within the Government’s objectives for the NHS. Secondly, I welcome the national network, but am concerned that our current approach to neurological care lacks focus, including, as it does, dementia and mental health. My third and perhaps greatest concern is that the board should help create and sustain local or regional neurological networks to support the commissioning process within CCGs.
On my first concern, what are the Government doing to ensure that there is adequate emphasis on and measurement of neurological care? Are these conditions being recorded by GPs? If they are not being recorded, we do not know where they are and we cannot plan properly
Some groups have come forward citing that only three out of the 60 outcomes within the 2012-13 NHS outcomes framework were neurological. Without appropriate outcome measures driving change, key problems with diagnosis and treatment may not be resolved. For example, Epilepsy Action notes that the epilepsy misdiagnosis rate is 20% to 31%—that is, between one-fifth and a third—meaning that around 138,000 people are currently misdiagnosed each year. What have the Government done within the new mandate to react to these past criticisms? How are decisions made about the relative focus among different conditions and how can we be sure that this is adequate?
On my second concern, recent reports from the National Audit Office and the Public Accounts Committee have cited some areas within neurological care as being in need of improvement for increased co-ordination of care, to address delays in diagnosis and to address recent increases in emergency hospital admissions. For example, 66% of patients with epilepsy presenting at an emergency department have not seen an epilepsy specialist in the previous 12 months. It is important that the Government develop a consistent national strategy and then help co-ordinate efforts in order for the board to bring this to the local level.
Lastly, I ask the Government what has been done to support local clinical leaders within neurological care, to connect them and to leverage this network to inform CCGs in their commissioning. This is the greatest concern that I have and the one that I am most anxious to see addressed.
Neurological care as I see it, especially in the case of epilepsy, fits within the spectrum of diseases for which GPs are now responsible for commissioning care. Many of the diseases for which clinical commissioning groups will commission care carry a level of familiarity with GPs—for example, various cancers, diabetes and kidney failure—but neurological conditions are not seen so frequently.
While I have confidence in the expertise and scientific knowledge of our GPs, my fear is that neurological disorders require a special understanding of prevalence and societal factors, and this leads GPs to having less familiarity with neurological conditions than with more common ailments. These networks could contribute to commissioning by helping demonstrate pathways of care for epilepsy and other neurological conditions.
While I am pleased to see the commissioning of treatment of specialised neurological conditions being carried out by the board—as has been said earlier, that is really good news, meaning that commissioning of really rare conditions will be the same across England—I believe that the board should also support and maintain local networks of neurological experts.
For commissioning under the new Health and Social Care Act to be effective for all with a neurological condition, the following three objectives must be reached. First, neurological disorders must become a priority in the measurement of clinical outcomes. Secondly, a national plan should be set out for addressing neurological conditions and, thirdly, networks of expertise should be created to inform the commissioning of CCGs and sustained support be given to them. I look forward to the Minister’s responses and the Government’s call to action on these specific issues.
7.46 pm
Baroness Masham of Ilton: My Lords, I thank the noble Baroness, Lady Ford, for asking this important Question. There are an incredible number of neurological conditions, some very rare, all of which are important to the individual. I have a niece who has epilepsy and I know how important continuity of good-quality care is.
I stress the importance of specialist nurses for conditions such as epilepsy, Parkinson’s disease, stroke, multiple sclerosis and continence care. The withdrawal of specialist nurses would have a negative impact on
services to patients. They are the consultant’s right hand. They co-ordinate care and training for other professionals and give support to patients who, without them, could deteriorate and have to be admitted to hospital.
I take this opportunity of bringing to your Lordships’ attention the vital needs of people with motor neurone disease. They have to be addressed urgently, as the condition can so often move on very quickly.
Drug development is extremely expensive. It can take more than 10 years and cost more than £1 billion to bring a new drug to market. Will the Government’s life sciences strategy, launched in December 2011, help speed up the drug approval process?
No new drug has been developed for motor neurone disease in more than 20 years. MND robs people of the ability to walk, talk, eat normally and ultimately breathe, but they know everything. Some 5,000 people in the United Kingdom have motor neurone disease, and about 1,500 of them die each year—that is about five a day.
A new campaign, founded by Les Halpin, a remarkable person who has motor neurone disease, has been set up to highlight the patient voice in this debate. It is called Empower: Access to Medicine and is focused on accelerating the drug approval process for people with life-threatening illnesses. Les Halpin has the strong support of his constituency MP, Geoffrey Clifton-Brown, and addressed a gathering of parliamentarians in June, when I met him. He has also met the noble Earl, Lord Howe, to discuss the campaign in more detail.
Genetic Alliance UK carried out a survey of patients with rare disease earlier this year and asked them for their views on trying drugs before they are fully approved. One patient replied: “If I was in a plane and offered a parachute with a 90% chance of failing, I would refuse it unless that plane was spiralling out of control towards the ground, in which case I might well be glad of it”.
Motor neurone disease—MND—is a rare condition that progressively damages the nervous system, causing the muscles to waste away. A medication called riluzole can extend the lifespan of people with motor neurone disease but it is only moderately effective. Empower: Access to Medicine is a new platform created to open the debate around the lack of drug development for patients with rare or life-threatening conditions. The discussion is not focused on one particular illness but is interested in any life-threatening illness which has a lack of drug development across the whole of the patient body. Given how long it takes to find the right combination of drugs to treat life-threatening conditions, Empower: Access to Medicine is keen to harness this collaboration to ensure that patients and doctors across the world share their experiences in an effort to improve knowledge and accelerate the timescale within which new drugs are developed and approved.
Speeding up the development and availability of drugs that treat life-threatening diseases would benefit everybody in society. The current testing and development process is long, cumbersome and expensive. In fact, a recent report by the Office of Health Economics found that it takes five years on average after launch for a new drug to win NICE approval. This timescale can be more than doubled when added to the time taken
for a new drug to go from the development stage through to Phase 3 and beyond. As an example, no new drug has been approved for motor neurone disease since riluzole was approved 20 years ago.
The Empower: Access to Medicine campaign is a unique one, created for patients by patients. It is a powerful voice, rarely heard, but one that I believe could have a real impact on how pharmaceutical companies, regulators, politicians and the general public view drug development. As the director of the Oxford Centre for Accelerating Medical Innovations said:
“I am delighted to be involved in this campaign. Opening up the discussion around the lack of availability of effective drugs for rare and life threatening diseases is a vital first step on the path towards accelerating new innovative drugs”.
One of the key problems we are facing today in overcoming the lack of drugs for rare or orphan diseases is the challenge for industry in achieving a return on investment. Major drug companies have been cutting back on their research budgets because the R&D process has hit a wall of cost, time and failure rate. It is a staggering figure worth repeating: to bring a new drug to the market can cost up to £1 billion. Seriously ill patients are quite understandably more willing to try different combinations or new drugs. Because these drugs may improve their quality of life or even stop the progress of their disease, they are willing to accept the risk of possible side effects. We need to involve them more fully in the decision-making. This is a societal issue and all stakeholders must work together. We must be willing to rethink regulation, especially for rare and life-threatening diseases. The European Medicines Agency has an objective to pilot a new approach along these lines which goes under different names—for example, “adaptive licensing” and “progressive authorisation”. We must find ways for patients to access drugs more quickly.
I end by saying that there is currently no national guidance for MND. This is a huge gap. MND is rare, complex and progresses rapidly, so health professionals need clear guidance on how to care for people with this disease. Will the Minister please help to expedite the National Institute for Health and Clinical Excellence —NICE—to produce guidance and quality standards for MND? Both have been referred to NICE for development but the timescale for the guidance to start has not yet been determined. How long have they got to wait?
7.55 pm
Lord MacKenzie of Culkein: My Lords, I join in the thanks to my noble friend Lady Ford for securing this important debate on neurological services. I have spoken in a number of debates on this subject over the past five or six years. I have an interest, partly as a nurse but more specifically because a few years ago a very close friend and colleague of mine died from motor neurone disease. After diagnosis he had good support from the health and social care professionals as well as brilliant support from St Raphael’s Hospice in the London Borough of Sutton. It was a very different story for another colleague of mine, whose father’s care before his death was nothing short of scandalous, with health and social services unable to get their act
together, either within each service or between the two services. Those are two stories in different parts of the country—the postcode lottery—so I hope that I can be forgiven for concentrating, like the noble Baroness, Lady Masham of Ilton, on motor neurone disease.
I pay tribute to the Motor Neurone Disease Association for its untiring support for those living with motor neurone disease and for its funding of cutting-edge research into this miserable, rapidly progressing and ultimately fatal disease. I suspect that it is going to be a long time before we have a world free of motor neurone disease and, until that time, we need to concentrate on the best possible care for those living with it. It is to be welcomed that the Government have added improving the experience of care for people at the end of their lives to the new mandate issued to the NHS Commissioning Board in the past few days. That is good so far as it goes. It is perhaps not surprising that there is no specific reference to motor neurone disease in the mandate, but I was confident that there would be some reference to neurology. If there is one, I am afraid that I have missed it.
I find that omission to be surprising to say the least, given that, as has been said, there are something like 8 million people with neurological conditions in this country and about 500,000 new diagnoses each year. According to the Neurological Alliance, the cost to the National Health Service is some £4.3 billion each year, with social care budgets adding another £2.4 billion. That is a lot of money, but it is not surprising when almost 20% of hospital admissions are for neurological issues. Emergency admissions under this heading in the five years up to 2009-10 increased by 32% compared with 17% for the National Health Service as a whole. That does not sound to me as if there has been progress.
A great many conditions are wrapped up under the heading “neurological conditions” and these in turn get wrapped up, it seems, in the generic description “long-term conditions”. Motor neurone disease is not a long-term condition. The average lifespan after diagnosis is 14 months. So what needs to be done? It would be good if the Government were to revisit the reports of the National Audit Office of December 2011 and the Public Accounts Committee of March 2012. It is particularly disappointing that the Government have rejected the advice of the PAC relating to the appointment of a national clinical lead for neurology. Quite frankly, it is difficult to understand. Neither have the Government accepted the advice to mandate the commissioning of neurological illnesses. We know that national clinical leadership works. It has done a great job in, among other things, driving improvements on strokes and cancers. It is now essential that this is done for neurological conditions, so that improvements are driven there as well and can lead to a far greater visibility for neurology.
If there is a lack of visibility for neurology generally, specific conditions such as motor neurone disease are hardly on the horizon. Most general practitioners will see one case, perhaps two cases, if that, in a whole career, but five persons die from motor neurone disease every day and there are probably 5,000 living with motor neurone disease at any one time in the United Kingdom. It is notoriously difficult to diagnose—it can be done only by excluding every other possibility—and rapidly progresses, to the extent that 18 health or
social care professionals can be providing care at any one time. Anyone with any appreciation of motor neurone disease must know that it cannot be dealt with by a one-size-fits-all approach to long-term conditions.
It is good that the National Institute for Health and Clinical Excellence has been asked to develop clinical guidance and a quality standard for the rarer neurological diseases, but is that likely to be forthcoming in the near future, or is it at the tail end of the very long list of quality standards that NICE has been asked to develop? Perhaps the Minister can tell us about that.
Any delay, together with the absence of a national clinical lead, certainly gives me no confidence in the effective commissioning in the new National Health Service of the complex services necessary for motor neurone disease so that we can get away once and for all from the fragmentation, lack of co-ordination and postcode lottery. The present situation is not good enough; indeed, it is unacceptable in 21st-century health and social services. It is self-evident that there is an urgent need for NICE to expedite its guidance and quality standards for motor neurone disease.
These poor, fragmented care pathways, including emergency admissions to hospital, together with the lack of access to palliative and respite care services, can double or triple the costs per patient per year from the estimated £200,000 that good care costs. There is a clear imperative to get this right. It is a classic case where what is best for the patient is also good for the taxpayer.
In summary, can we have as a matter of urgency a national clinical lead for neurology, the mandating of the commissioning of neurological conditions and, I stress again, the expediting by NICE of clinical guidance and quality standards for the rarer neurological conditions? I very much look forward to hearing what the noble Baroness will tell us about the way forward and again thank my noble friend Lady Ford for giving us this opportunity to discuss this important matter.
8.02 pm
Lord Patel: My Lords, I am pleased to take part in this debate initiated by the noble Baroness, Lady Ford. She should be congratulated; I think that every patient with epilepsy would wish to congratulate her on her perseverance in ensuring that she holds the Government to account on services for patients with epilepsy.
As the noble Baroness, Lady Ford, mentioned, we had a similar debate more than two years ago, so the Minister is in a good position to have prepared her answers. The Question for Short Debate today is:
“To ask Her Majesty’s Government what progress has been made in improving neurological services, and in particular the provision of epilepsy services, in the United Kingdom”.
The last time we had this debate, the Minister ran out of time. It was late at night and she was unable to answer all the questions. I have adopted a different tack today: I shall put the same questions to her again. No doubt her assistants have read the Hansard of the debate then and they have had two years to try to address the issue of poor-quality care for patients with epilepsy. To remind her of what was said, I shall pose the same questions again.
To give some background, if the quality of services provided for people with epilepsy were measured on the basis of outcomes—that is, measured by appropriate diagnosis, appropriate and timely treatment, the education of patients and carers and avoidable deaths—the service currently provided would be regarded as a total failure. The Minister may contradict me by citing hard facts—not processes, because it is easy to say that progress is made by citing processes, such as that the Government have asked NICE to develop quality standards. That is good, but, as the noble Lord, Lord MacKenzie, said, quality standards will take some time to produce, be implemented and be audited, only to find that there has been no change. She may suggest that the mandate given to the commissioning board has within it a mandate to improve services related to neurological conditions but that, again, is a process.
I shall confine my comments to the care of children and young people with epilepsy. Epilepsy is the most common neurological condition among children and young people, affecting about one in every 200 of the population; that is, approximately 60,000 young people in total in the UK. On average, there is one child with severe epilepsy in every primary school and five in every secondary school.
Although those national numbers can be calculated, local and regional numbers are not available. If those numbers are not available, how are the commissioning groups to commission services for those children? Clinical guidelines from the National Institute for Health and Clinical Excellence exist, but they are not implemented in many areas. Where they are implemented, it is patchy. That means that children who have had seizures are typically referred to general paediatricians rather than paediatricians with training and expertise in epilepsy. From the very beginning, that makes the outcomes for those children poorer. Misdiagnosis is an issue. Up to 40% of children referred to a specialist clinic are not fully assessed as having epilepsy. If a child is branded as having epilepsy, they carry that diagnosis and treatment for life, so the outcome for those not fully assessed is worse than if they had been assessed as having epilepsy.
About 365 avoidable deaths occur per year of children with epilepsy. The Minister may correct me and tell me what progress has been made, because that is the number that I cited two years ago. If there is progress, that number should have come down—I know the real number, by the way. I look forward to hearing that.
I come to the five questions that I raised. They related to the campaign conducted by the National Centre for Young People with Epilepsy, which suggested 10 levers that could improve services for children with epilepsy—so two and a half years ago there was already help for the Government to have some idea of how to improve services. They were that NHS commissioners should know the number of children and young people with epilepsy in their area; the level of resources that they have in place to support these children and young people; the waiting times faced by children and young people with epilepsy for initial appointments, diagnosis, treatment and tertiary assessment; and the current perceptions of children, young people and their parents of epilepsy services. They also include the need for NHS commissioners to adopt one or more care pathways
for children and young people with epilepsy; the need to ensure that they are seen by paediatricians with training and expertise in epilepsy; an easy-to-use and efficient process for referring children and young people to specialist epilepsy services; the need to ensure that every child or young person with epilepsy is offered a care plan; and the need for children or young adults with epilepsy to have their case reviewed at least once a year by a health professional with expertise and training in the epilepsies.
Those levers were based on National Institute for Health and Clinical Excellence guidelines and were therefore mandatory, so it ought to be easy to measure the progress against those indicators. I very much look forward to the Minister answering this time, because she will not run out of time today.
8.09 pm
Baroness Gale: My Lords, I congratulate my noble friend Lady Ford on securing this important debate tonight. I declare an interest as I chair the All-Party Parliamentary Group on Parkinson’s. Approximately 127,000 people in the UK live with Parkinson’s and rely on the support provided by the neurological services to help them manage with the debilitating effects of that condition. Neurological services in the UK are not working as best they could to serve the people who have neurological conditions. This is despite the introduction of the National Service Framework for long-term conditions in 2005.
When the National Audit Office published its report on services for people with neurological conditions in 2011, it found that although waiting times for inpatient and outpatient neurology had improved, the NSF for long-term conditions had not delivered for people with neurological conditions. The report found that there had been a decline in quality services, despite an increase in health spending on neurological conditions of 38% in real terms, from £2.1 billion in 2006-07 to £2.9 billion in 2009-10. The NAO report identified a number of problems including delays in receiving a diagnosis, a lack of access to information and care that is fragmented and poorly co-ordinated.
The report also found that the Department of Health had not put in place specific arrangements for monitoring how the NSF for long-term conditions was implemented. As a result, it was unable to hold local commissioners to account for implementation because no national monitoring of its impact had taken place.
Following the NAO’s report, the Public Accounts Committee conducted its own inquiry into neurological services and published its report in March 2012. It made a number of recommendations, including one that a national clinical director of neurology should be appointed to provide clear national leadership. Other noble Lords have called for this tonight, so I hope that the Minister will take that seriously. It is disappointing that the Government rejected a number of the recommendations, including the call for a national clinical director for neurology. The Government agreed to adopt some of the recommendations, including developing a data set for neurology and ensuring that NICE develops a quality standard for neurological conditions.
In the new structure, the NHS Commissioning Board has appointed directors to the specific domain outcomes. This means that neurological conditions are considered under both domain one, reducing avoidable death, and domain two, long-term conditions. These are extremely large areas for the appointed directors to consider, and there is concern that neurological conditions will not receive the appropriate focus that they require.
There is a similar lack of prioritisation within the new structure of the NHS when it comes to appropriate outcomes and indicators for neurology. There are 44 indicators that have been published for the Commissioning Outcomes Framework, which will be used by the NHS Commissioning Board to hold clinical commissioning groups to account. While there are indicators specifically for dementia and stroke and one for epilepsy in under-19s, the only indicators relevant to neurology apply to all long-term conditions. This is further compounded by the fact that the NHS Outcomes Framework, which will be used to hold the NHS Commissioning Board to account, does not have any indicators specific to neurology.
The NHS Commissioning Board has acknowledged the need to improve services for specific conditions at a national level and has therefore introduced strategic clinical networks, one of which is for mental health, dementia and neurological conditions, to support and advise clinical commissioning groups. There is great urgency for a quality standard to be developed for both Parkinson’s and for neurological services, as identified in both the National Audit Office and the Public Accounts Committee reports.
A crucial part of ensuring that services are appropriately developed and improved is the use of accurate and up-to-date data to make decisions. It is encouraging that an appropriate database for neurology will be developed. However, there is real concern about how the data will be collected. Sir David Nicholson feels that data should be collected from voluntary sector organisations that represent patients with neurological conditions. While organisations like Parkinson’s UK can contribute to these data sets, the Government cannot rely solely on voluntary organisations to provide a robust and accurate data set.
The lack of specific leadership means that neurology will not receive the prioritisation that it needs to make the clearly and repeatedly identified and much needed improvements. The lack of specific outcomes and indicators suggests that neurology may be neglected for areas that do have specific targets. The lack of a comprehensive data set means that it will be impossible to get even a baseline understanding of what is needed to bring about these improvements.
I will put some questions to the Minister. Will she give assurances that people with neurological conditions will see the much needed improvement in neurology services? Can she give assurances that neurological conditions such as Parkinson’s will be appropriately prioritised within the new structure? How and when will the data set for neurology be developed, and what steps will be taken to ensure that it will be suitable, accurate and comprehensive so that it takes account of everyone living with a neurological condition? Will she provide clarity about when the quality standards for
Parkinson’s and for neurological conditions will begin to be developed and when they are likely to be implemented? I look forward to the Minister’s response.
8.16 pm
The Countess of Mar: My Lords, like other speakers, I am grateful to the noble Baroness, Lady Ford, for raising this subject today. She has asked several very valid questions, as have other speakers, and I hope that the Minister will be able to answer them all.
While the noble Baroness, Lady Ford, has specified epilepsy services in her Question, I realise that she is aware that epilepsy is far from being the only neurological service that has inadequacies. For many years, I have worked with people with ME, also known as CFS/ME. I am chairman of Forward-ME, vice-chair of the All-Party Parliamentary Group on ME and patron of a number of ME charities. Forward-ME is a member of the Neurological Alliance.
I have been assured that Her Majesty’s Government accept the WHO’s categorisation of ME as a neurological condition. The CMO report of 2002 described it as a “genuine illness” which,
“imposes a substantial burden on the health of the UK population”.
The NICE guideline of 2007 stated that:
“The physical symptoms can be as disabling as multiple sclerosis, systemic lupus erythematosus, rheumatoid arthritis, congestive heart failure and other chronic conditions”.
Yet there is no provision to examine the neurological aspects of this illness. Patients are simply allocated to either the CFS/ME group, where they are offered psychological therapies, or to various ad hoc diagnostic categories containing patients with neurological symptoms of unknown aetiology. In practice, these can be considered dustbins where no further investigations are considered necessary.
After the Chief Medical Officer’s report on CFS/ME in 2002, £8.5 million was allocated to setting up specialist ME centres. Some of the centres have closed because of a lack of funding. Others continue to operate but are somewhat constricted by the view that the only scientifically validated treatment for the condition is a combination of cognitive behaviour therapy and guided exercise training—CBT and GET. In fact, the much trumpeted PACE trials, which cost the taxpayer some £5 million and were intended to demonstrate the effectiveness of these so-called treatments, did no such thing. There is no indication in the trial results that one single person fully recovered after a year of CBT and GET. There is no indication that any who were not working went back to work or, in fact, that there was more than a very modest improvement in those whose health was deemed to have improved.
I would like to be able to go into the facts behind this research in more detail, but this is not the occasion. However, I must say that the spin on the results has had a very deleterious effect on the public perception of the illness and on the provision of health and social care for people with ME.
What is happening to these frequently very sick individuals? There is still a great deal of scepticism surrounding the reality of this illness, despite pronouncements from government, the CMO and NICE.
It is acknowledged that if the condition is caught in the early stages and dealt with conservatively, it can improve and patients can recover. Instead, patients and, particularly, children are pushed by medical practitioners or, in the case of children, by teachers, social workers and carers, to keep going to work or school on the basis that it is good for them, until they collapse and what was a mild, treatable condition becomes chronic and untreatable. They are then encouraged to undertake programmes of cognitive behaviour therapy and guided exercise training which, at best, may help them to cope with their illness or, at worst, may exacerbate their symptoms, and they are blamed for not wanting to get better.
The Neurological Alliance is concerned that for clinical commissioning groups which cover relatively small population areas, it will not be cost-effective to commission services for less common conditions. I am particularly concerned about ME because GPs will do the commissioning. The Neurological Alliance suggests that the NHS Commissioning Board should monitor the observance and development of collaborative arrangements to prevent what we have come to know as a postcode lottery.
I have spoken about the poor levels of understanding of ME among health and social care professionals. This runs through much of neurology. Lyme disease, for example, is often mistaken for ME, and no treatment is offered as a result, yet with simple antibiotic treatment, Lyme disease can be cured. There is a need to equip properly commissioners in order to address successfully the legacy of neglect which has resulted from the complexity and relative rarity of most neurological conditions. There is a need for a national neurology strategy, as other speakers have said, dedicated national leadership and mandatory quality, accountability and incentive mechanisms.
The Neurological Alliance recognises that cross-cutting initiatives can help to support, develop and enhance services for people with long-term conditions, but it is concerned that the NHS Commissioning Board takes only a generic approach to certain long-term conditions while giving particular attention to others and that commissioners’ priorities will be weighted in favour of areas given a profile. Will the Minister say what guarantees there are that patients with less well recognised conditions, or conditions such as ME and Lyme disease, will be given equal treatment?
NICE, the Department of Health and the National Quality Board have yet to establish how they will prioritise the development of more than 160 quality standards. This will have the effect of prolonging neglect in areas without NICE-accredited guidance— ME is an exception as there is guidance—leaving commissioners unsupported in what are often the most complex and challenging areas. As other speakers have already asked, is the Minister able to enlighten the House on the likely progress?
8.24 pm
Baroness Wheeler: My Lords, I too would like to thank my noble friend Lady Ford for initiating this debate. Like others, I pay tribute to her work as honorary president of Epilepsy Action and as a
campaigner for improved services for people with neurological conditions. As usual, we were fortunate in this debate to have contributions from noble Lords with huge experience and expertise in this field, either as medical experts themselves or from working with health and social care professionals and expert organisations, institutions and community groups that provide such vital support for patients, clients and their carers. The debate is very valuable, because we know that we need a more holistic approach to the provision of neurological services if the barriers to progress are to be overcome and large-scale, consistent improvements are to be made at the urgent pace necessary.
Noble Lords have spelt out the facts and figures, issues and concerns very comprehensively, covering many of the specific conditions. On epilepsy, my noble friend Lady Ford drew a wide-ranging picture of the challenges to improving services and of what could be achieved given the political will to make those improvements happen. Both the noble Baroness, Lady Masham, and my noble friend Lord MacKenzie spoke of motor neurone disease—my noble friend referring to our wonderful mutual friend and work colleague who succumbed to this terrible disease, which kills an increasing number of people year on year. My noble friend Lady Gale focused particularly on Parkinson’s disease. The stark fact is that every hour, someone in the UK is told that they have this degenerating disease. The noble Lord, Lord Patel, asked some key questions about the real progress being made since the last debate, and I look forward to the Minister’s response to them.
I thank the Neurological Alliance, Epilepsy Action, the MND Association, Parkinson’s UK and the Sue Ryder charity for their excellent briefings for this debate. It is clear that much still needs to be done to allay the fear and confusion among people with neurological conditions, staff and their carers and the organisations providing support and care for them about how the new NHS structures will work, particularly the process and outcome of commissioning for neurological conditions across health and social care.
The two recent debates in your Lordships’ House on epilepsy and long-term neurological conditions and the important role played by the NHS and social care allied health professionals both took place in the early days of this Government, before we began on our marathon deliberations on the Health and Social Care Bill. Substantial reductions in both NHS and social care resources are starting to have a major impact. There is massive upheaval in the NHS as the new structures come in. Many CCGs are still in the early stages of development and are only just beginning to decide how commissioning will take place in their areas. We know that, despite Government denials, the NHS is having to make substantial cuts in resources that have already led to the loss of 6,000 nurses—including the deletion of specialised nursing posts—and the closure of many services.
In social care, many local authorities have had to make dramatic cuts to services and do not have systems in place to cope with the scale and quality of care that is needed. The recent Sue Ryder report on social care,
The Forgotten Millions,
spells this out quite vividly. This found that only 10% of local authorities had an agreed commissioning strategy for people with neurological conditions and only 6% categorised all specific neurological conditions.
I would quickly like to pick up on some common themes from today’s debate, starting with the issue of preventable early deaths. In epilepsy, for example, estimates show that one in three deaths is avoidable and that mortality is two to three times more than in the general population. We saw last week the publication of the Government’s NHS mandate, promising “measurable progress” against the NHS outcomes framework, rather than specific targets to reduce premature deaths or enhance the quality of life for people with long-term conditions. Will the Minister tell us, for example, how progress in reducing the number of avoidable deaths of people dying from epilepsy as a result of late diagnosis or misdiagnosis is to be measured across the two NHS outcomes domains?
Last week, my noble friend Lord Hunt expressed his concerns that the mandate was a wish list. I see that the Independentechoed this sentiment, describing it as,
“worryingly short on specifics and suspiciously free of concrete commitments”,
“the unmistakable sense of a Minister expertly ensuring that he would not be blamed for any failings come the election”.
Secondly, noble Lords have underlined the need for expert commissioning for services, involving those with knowledge and experience of the treatment and nursing and care needs of patients and clients. Clarity over how services are to be commissioned in the future is urgently needed. During the mandate debate, we were promised regulations on exactly what “conditions”, “specialised conditions” and “highly specialised conditions” are. It is hard to see how commissioning planning either at national Commissioning Board level or CCG level can proceed effectively without the Government being clear and definitive about this. Will the Minister tell us when we can expect the regulations? Will they spell out exactly how the Commissioning Board is to provide leadership and direction on this matter?
Thirdly, there is evidence that the number of specialist nurses for neurological conditions is diminishing, not increasing—this when their role and cost-effectiveness is widely acknowledged and recognised. Parkinson’s, motor neurone, MS and epilepsy nurses, for example, make a huge difference by being a focal point of advice and support for patients and their carers; they signpost and provide important access to a range of therapies and other services.
With their support, people stay independent for longer, are better able to manage their own conditions, and the number of unnecessary hospital and care home admissions is reduced.
However, we know that we will be told by the Minister that provision is down to decisions made by local CCGs, hospitals and local authorities. Does the Minister accept that the provision of specialist nurses is an essential element of care for people with
specific neurological conditions, including dementia and stroke? What action will the Government be taking to ensure that the number of posts is maintained and increased?
In the time left, I should like to highlight the often forgotten but vital importance of effective and dignified continence care for people with long-term conditions and its need to be integrated into care and treatment pathways. The noble Baroness, Lady Masham, touched on that issue. As I have stressed previously, this requires specialist knowledge and understanding of the different needs of continence care in primary and secondary care settings, and a joined-up approach across the full care pathway. We know that the system is too often slanted towards containment through pads and catheters rather than assessment for treating incontinence. We also know that these types of services have been undercommissioned in the past. Is the Minister confident that CCGs and social care will have the specialist knowledge to ensure effective and consistent commissioning of this service? What work has been undertaken by the Department of Health on this issue?
Finally, the need for an integrated, overall strategy for neurological diseases, which joins up and integrates provision with that for the higher profile conditions such as dementia and stroke, has been underlined. Does the Minister accept that the NHS Commissioning Board needs to show leadership on this issue, as called for by the report published by the Commons Public Accounts Committee earlier this year? Getting back to the NHS mandate, will she spell out for those of us who are still very confused how Ministers will account to Parliament over performance of the mandate generally and the provision of services for neurological diseases in particular?
8.31 pm
Baroness Northover: My Lords, like other noble Lords, I pay tribute to the noble Baroness, Lady Ford, for tabling this Motion and for her very effective introduction. I know how important this subject is to her. I am also very well aware of her excellent work with the All-Party Parliamentary Group on Epilepsy and with Epilepsy Action to improve care and support for people living with this condition. Like others, I must declare an interest, as I did two years ago, that I have two close relatives living with epilepsy.
As ever, this has been an extremely well informed and wide-ranging debate, which has raised issues across a range of neurological conditions. In November 2010 I was in the fortunate position to be able to answer an equally illuminating debate put down by the noble Baroness, Lady Ford, to which she and the noble Lord, Lord Patel, referred. I know that she has been somewhat busy with one or two things since then, including the Olympics, but I am glad that we are returning to putting an emphasis on this issue.
I assure the noble Lord, Lord Patel, that, in being briefed on this subject, one of the first things that I did was to ask what I had promised two years ago and what had been delivered, and I hope that I can provide some reassurance. I cannot guarantee that I will not overrun, but if I do not answer all the questions asked by noble Lords—there have been a multitude of them—then I will write to them.
This evening, we have heard that the challenge posed by neurological conditions is huge. Taken together, they are common: more than 10 million people in the UK live with such a condition. As noble Lords have indicated, they can give rise to complex needs that require support from a wide range of professionals. They also can change people’s lives profoundly. We have heard that neurological conditions have not always been well served in recent years, which, once again, as it was two years ago, was reflected in many of the speeches tonight.
Since then, the Public Accounts Committee has reported on neurological services, and the noble Baroness, Lady Ford, and others made reference to that. That report, which was published earlier this year, clearly argued that we need to do more to improve the quality of services. We have already responded to that report and we take its recommendations very seriously. Some of the issues that were flagged up had been flagged up before, and work is already under way to improve neurology services.
As noble Lords well know, it has been argued for years that better integration between health and social care is vital in this area, as in so many others. That is something that we are working hard to achieve; my honourable friend Norman Lamb has it at the top of his agenda. Better integration of health and social care offers a real opportunity to improve care and support for people with complex needs.
The noble Baroness, Lady Ford, and others made reference to the current changes in the health service. Locally, joint health and well-being strategies will, as noble Lords know, set out how local commissioners will work together to deliver the best possible outcomes for their communities. Health and well-being boards will bring together local partners to address the wider determinants of health such as education, transport and housing. So there are new opportunities there.
The Health and Social Care Act 2012, the outcomes frameworks for the NHS, adult social care and public health, the NHS constitution, the mandate we have just heard about and the draft Care & Support Bill all emphasise how collaboration between local government and the NHS is crucial to the future success of health and care systems locally. We are working to identify barriers to integration—those who were at the King’s Fund breakfast the other day will have heard how people across the spectrum are seeking to do that—and the means to encourage integration, which will seek to ensure that the patient is the focus, whatever complex needs they have.
Integrated care will also be the key theme of the outcomes strategy for long-term conditions that we are developing. The strategy will take a life view of long-term conditions, looking at issues across the course of a person’s life, and will set out what local government, the NHS, communities and individuals themselves can do to improve outcomes. In addition to integrated care, the strategy will be structured around the goals of early diagnosis—again, noble Lords made reference to that—promoting independence and taking steps to support those with long-term conditions to live as well as possible.
The PAC’s report in particular identified a lack of neurological expertise in developing services. In the current system, clinical networks have been responsible for sustained improvements to particular care pathways or for particular groups of patients. Noble Lords made reference to that too. They have raised standards, supported easier and faster access to services and encouraged the spread of best practice.
We are committed to ensuring that in the new system this way of working and delivering services is maintained, and that we build upon the progress that has been made. In July the NHS Commissioning Board Authority announced the establishment of four new strategic clinical networks, including one covering dementia, mental health and neurology. The network will help to improve outcomes for patients across England by ensuring that the NHS Commissioning Board and clinical commissioning groups have access to expert clinical opinion about the way that care should be planned and delivered.
Quality standards, to which noble Lords have also referred, published by the National Institute for Health and Clinical Excellence, will also play a central role in the new health and care system by providing patients and the public, health and social care professionals, commissioners and service providers with definitions of high-quality health and social care. We have asked NICE to develop a number of quality standards that are neurologically focused. Noble Lords also made reference to them, and I shall come back to them in a minute. These are already in development and, additionally, people with a neurological condition will benefit from cross-cutting quality standards.
I want to try to address a number of noble Lords’ questions at this point. The noble Baroness, Lady Ford, raised a number of specific questions. She asked about individual care plans. I assure her that personalised care planning is already being delivered. She also asked what was happening with regard to quality standards. A clinical guideline on assessment is to be developed, and from this we can develop a generic quality standard.
The noble Baroness asked about the continuation of the PAC recommendations on progress and wanted to know about driving up quality. The mandate to which people have referred emphasises what is important for people with long-term conditions. Irrespective of the nature of that condition, the focus is on how you try to ensure that people with long-term conditions are supported and how they would best manage their conditions. Taking it in a generic way, you try to ensure that you do not exclude other long-term conditions that we have not been talking about this evening, but obviously these ones would be included in that approach.
A number of noble Lords referred to data. The NHS Commissioning Board is working with the Neurological Alliance to develop a data set. It is extremely important that the information is there because, as noble Lords have said, unless you understand the nature of the problem—where you have patients, what treatment they are receiving, and so on—you cannot take forward what you wish to achieve. When I first became involved in this area, I was astonished at the lack of information on particular conditions around
the country. That is something that the previous Government, and Governments before them, must take responsibility for. I am not at all surprised that the noble Lord, Lord Darzi, started to try to draw up atlases of diseases and outcomes and suchlike. To me as a former academic, it was astonishing that that kind of information was not there before. I assure noble Lords that this Government are taking that forward, but I would pose a criticism to previous Governments for not having done that basic work.
The noble Baroness, Lady Ford, asked about clinical commissioning groups taking specialised commissioning seriously, as did my noble friend Lady Jolly. It is extremely important. The neurological charities and organisations are providing support in this area, and I welcome that; they are supporting commissioners to understand the complexity of support and services needed, and the Department of Health has funded neurological commissioning support to work with the CCGs. I hope that that will pay dividends.
My noble friend Lady Jolly asked about the national strategy to help with the diagnosis of epilepsy. Quality standards are due for publication in February which will cover referrals to specialists and timely access to diagnostic tests, which we hope will improve things.
The noble Baroness, Lady Masham, asked about MMD guidance and various aspects to do with that, including the development of drugs. The UK rare diseases plan, which will be implemented before the end of 2013, will be looking at drugs for rare diseases and the research needed to bring them to market. She is quite right that, as in developing countries, rare diseases do not bring in the kind of investment that is needed in these areas. That is something that we are looking at.
We continue to review how NICE is taking things forward, and, of course, NICE itself reviews its workload and how it is managing it. Clearly, those who are concerned about other diseases are equally concerned that their NICE proposals are expedited. It is extremely important that NICE carries this forward as rapidly as it can, but it needs to balance that with its other workload. We recognise the importance of specialist nurses—a point made by the noble Baroness, Lady Masham. They help to achieve significant cost savings, and the Royal College of Nursing is at the moment looking at the value of specialist nurses and will help service commissioners in trying to understand what is required and what the workforce needs to be.
The noble Lord, Lord MacKenzie, asked a number of questions, some of which I have dealt with in my previous answers. He wondered whether the PAC recommendations would be revisited. No doubt the noble Baroness, Lady Ford, will have another debate, which I will no doubt answer, but I can say that the PAC has been asked by the National Audit Office to follow up on its report in 2014.
In terms of clinical leadership, the NHS Commissioning Board is determining how to structure national clinical leadership and advice within the board, and further announcements will be made shortly. I note that Dr Martin McShane, who has been appointed as the lead on long-term conditions, met the Neurological Alliance on 12 September, so I hope that that is encouraging to those who are concerned about leadership.
The noble Lord, Lord Patel, raised a number of questions that he had put to me previously. In terms of better services for children, subject to regulations being laid, children’s neuroscience services will be commissioned by the NHS Commissioning Board, which will promote greater consistency. The children’s health outcomes framework, which will be published by Christmas, will support the delivery of better children’s services and better outcomes. The noble Lord asked whether that would be carried over to adults, and I will get back to him about that. With regard to following the NICE guidelines, I remind him that they are advisory, not mandatory. Clinicians are free to adapt the guidelines. However, in a transparent system where those guidelines are known, that, too, puts pressure on the clinicians via the patients and certainly by the specialist organisations, which are clearly so well aware of what is required.
I have talked about the NHS Commissioning Board developing data sets and how astonished I was that they did not exist in a previous era.
The noble Baroness, Lady Gale, asked whether Parkinson’s and other diseases could be prioritised. All conditions will have equal priority under the new system. For those who are concerned about so-called Cinderella conditions, that should be an encouraging answer, although those who feel that the diseases that they are particularly concerned about get a lot of focus already might be a bit concerned. All conditions will have equal priority, so Cinderella conditions should be improved.
I conclude by assuring noble Lords that there is a real commitment within the Government to address the challenges identified this evening, with the support of the NHS Commissioning Board and generally within the health and social care sectors. We recognise that much still needs to be done, but our primary goal is the same: to improve the patient experience and outcomes, and to bring real benefits and real change to the lives
of people living with neurological conditions. I am very sure that the NHS Commissioning Board will have heard what noble Lords have said in this debate.