Health Authorities Bill

HL Deb 30 March 1995 vol 562 cc1712-55

3.32 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Baroness Cumberlege.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.] Schedule 1 [Amendments]:

Baroness Jay of Paddington moved Amendment No. 18:

Page 12, line 19, at end insert: ("((aa) after that subsection insert— "() For the purpose of ensuring the effective integration of clinical teaching and research within the National Health Service, the Secretary of State shall, in relation to any committee, office or other body which he establishes to exercise any regional management function within the National Health Service, provide, following consultation with the relevant universities, that at least one member of that committee, office or body is a representative of the university medical or dental schools within that region.".").

The noble Baroness said: In the absence of the noble Lord, Lord Walton, and with his permission, I rise to move the amendment, which also stands in my name and that of the noble Baroness, Lady Robson. With this amendment I also speak to Amendment No. 24.

The purpose of these two amendments is to formalise the involvement of academic medicine in the new NHS structures, and to probe the Government's present rather unsatisfactory suggestions for resolving this question.

Universities with undergraduate medical and dental schools have a key role in underpinning the National Health Service. The noble Lord, Lord Walton, who unfortunately cannot be with us today, and the noble Lord, Lord Dainton, were eloquent in exploring the importance of this role at Second Reading. The noble Lord, Lord Walton, in referring back to the debates on this subject that were held in this House in 1990 during the passage of the Health Service and Community Care Bill, said:

"I am absolutely convinced that, in the light of the important development in medical care, in medical education and research and in the education of the other caring professions, such a link"—

the link between the universities and the health service—

"is even more important now than it was at that time".—[Official Report, 6/3/95; col. 26.]

Amendment No. 24 refers to the membership of the new health authorities. As the Committee will know, the Government accepted in the other place that the new health authorities will have a statutory duty to include a member from a local university where that is relevant. However, this is a provision to be contained in regulations—regulations which are, of course, as yet unknown. But the professional bodies, led by the Committee of Vice-Chancellors and Principals, is anxious that the regulations ensure that the new arrangements work at least as well as the existing ones.

There are many concerns and uncertainties surrounding, for example, the merger of academic institutions and institutions involved with research. Members of the Committee will remember that we heard the noble Lord, Lord Walton, refer to the particular problems of the National Hospital for Neurology and Nervous Diseases earlier this week and the potential threat to academic work and research because of the potential merger when that hospital is moved. There are also concerns and uncertainties about the new arrangements for medical training and for funding research. They are such that the Committee for Vice-Chancellors and Principals feels that its members would have much more confidence in the future if the Government were to accept this amendment and the requirement for university representation on local health authorities were placed on the face of the Bill.

There is even greater anxiety about the new regional outposts of the Department of Health which are the subject of Amendment No. 18. At present, relevant universities have statutory membership of regional health authorities, which enables them to participate in planning and decision-making at that level. If the universities are not included in the new regional arrangements, their important contribution will be lost. And, very importantly, the issues of postgraduate medical education and the supervision of vocational training for general practitioners will be thrown into disarray.

Another crucial area is the distribution of the special funding for teaching and research—what the noble Lord, Lord Walton, referred to at Second Reading as "that animal known as SIFTR". This money, which sustains most of the innovative work in the health service, must be distributed on a strategic basis with universities playing a leading role. It is inappropriate that this should be done at the local health authority or trust level. It is difficult to see how the strategic role of the universities in distributing and helping to guide and advise on SIFTR can be achieved effectively if the universities are not formally linked to the new regional offices. That is the purpose of this amendment.

I understand that there has been correspondence between the Secretary of State and Dr. Edwards, who is the chairman of the CVCP, about achieving effective arrangements without the statutory requirements of legislation. I understand that the Secretary of State told Dr. Edwards that regional directors have been reminded that they should take account of the views of the universities "in appropriate circumstances". However, Dr. Edwards wrote to the Secretary of State on 1st March stating that this was an inadequate safeguard. He said that there was a need for a clear and unambiguous formal mechanism. He went on to say:

"The fact that letters have to be written reminding Regional Directors to take account of the views of universities 'in appropriate circumstances' underlines the very heart of the problem. From my own experience, and that of other statutory university representatives at the regional level it is precisely when they are in at the decision making level that their role is most valuable in alerting and reminding their colleagues of the implications of health service-led decisions on the research and teaching base. It is not clear from your letter who is to decide when and what would be 'appropriate circumstances'".

The CVCP has further asked that, if it is unacceptable to the Government that the arrangement for a formal link between its members in the universities and the regional outposts is included in statute, they should at least be consulted about the regulations which will govern the appointments and arrangements. I understand further that the Secretary of State again responded to the CVCP in the past week offering informal discussion but no proper consultation about the regulations. Quite rightly, the CVCP does not feel that this is good enough.

All of this is of great significance to distinguished members of the medical profession, and indeed to the universities in general. It is also very important to the users of the NHS. The academic medicine which has underpinned standards of care and improved services for patients has been a very important ingredient in the National Health Service in the past. We have heard that in the present and the future evidence-based health service care is to be the theme of the new health service. I hope very much that in the spirit of maintaining excellence, the Government will be able to accept these amendments. I beg to move.

Baroness Robson of Kiddington

I rise to support these two amendments. We on these Benches consider them to be two of the most important amendments to the Bill.

The success of the NHS is largely dependent on the quality of doctors and dentists trained and educated in university medical and dental schools and on the research which leads to advances in medical care. Close co-operation between clinicians employed by the universities and those employed by the NHS is essential for the maintenance of medical standards in the future.

Health authorities inevitably have to make decisions which may have an impact on medical training and research. It is most important that there is a member who combines expertise both in clinical practice and in teaching and research drawn from the universities. The Government have recognised the need for universities which have medical and dental schools to be members of the relevant health authorities. As the noble Baroness, Lady Jay, said, that will be a requirement contained in the regulations.

I am not fond of things contained in regulations. This is such an important issue that it should be on the face of the Bill. On the other hand, at present the universities have statutory membership of the RHAs. When the RHAs are abolished and replaced by regional outposts of the NHS Executive, there is no requirement for relevant universities to be part of the regional office. To me that is an enormous mistake, I urge the Government to think again.

3.45 p.m.

Baroness Gardner of Parkes

I agree with the statements that have been made about the importance of this issue, but I believe that it will be covered by regulations. I rise to speak on these amendments only because the noble Baroness, Lady Jay, brought out a point about the National Hospital for Neurology and Nervous Diseases, which I feel was rather a red herring. It was about as inaccurate as the Evening Standard reports, which said that this was a shotgun marriage and the hospital would be closed by the end of April. That is not the situation at all. The hospital has been told to choose a partner for itself.

The noble Lord, Lord Walton, is a great expert in this field and I am sorry that he is not in the Chamber. He might perhaps have put the case slightly differently or perhaps his points would have been accepted. But I do not believe that this amendment is in any way related to the future of that particular hospital. Everyone wishes to ensure a safe future for the National. The present decisions that have been made have been announced in order to give the hospital itself time to consider what it wants to do.

As chairman of the Royal Free hospital, I know that we should love to have that hospital as a partner. But I read in the newspaper that it is much more likely to go to the UCL. But we do have close working links with the National now and there will be combined medical schools of University College and the Royal Free; so there is no question but that the institute will go to that combined body, as will most of the postgraduate institutes in that area.

I feel that that matter is a small red herring in relation to these amendments. I could not let it go without some comment.

Baroness Jay of Paddington

Perhaps I may respond very briefly to the noble Baroness on that point. I am sorry if she felt that I spoke like the Evening Standard. That was not my intention. My hope was to sound much more like the noble Lord, Lord Walton. Obviously, I did not succeed.

I heard the Question put by the noble Lord, Lord Walton, on Monday. It did not reflect the positive virtues or otherwise of any alternative plan for the future of the National hospital. Indeed, any hospital which acquired that particular resource would be very fortunate. I believe that the noble Lord was referring in part to the uncertainty around the whole area of research and development and the research focus on hospitals in London, as well as other places in the country. It was that concern in this administrative area that I sought to illustrate, giving an example of the way in which the universities, if included in planning and strategy, automatically have a voice at the table, which they might not have under the new arrangements.

Baroness Gardner of Parkes

I thank the noble Baroness for that clarification. I agree that the institutes and research are extremely important. But the message that comes through to me very clearly on a day to day basis in the National Health Service is that everyone is very conscious of the importance of research. I do not believe that any of those research facilities are threatened. In fact, I believe that they will expand as time goes by.

Baroness McFarlane of Llandaff

As one who worked for 17 years in a medical school, I should like to add my support to this amendment. I worked and watched the very close relationship between the regional authorities, the health authorities and the trusts. I am convinced that it achieved a great deal in the interests not only of medical education, nursing education and education of other health professionals but also in research and the quality of clinical care. It would be unthinkable that we should lose any of that very close relationship between the authorities and the universities.

Lord Jenkin of Roding

I share the view of the noble Baroness, Lady McFarlane. It is unthinkable that there should not be a very proper close and continuous interaction between the medical schools, the universities and in particular the deans of the medical schools—I would also add the Royal colleges—and the organisation of the health service.

The problem arises with the abolition of regional health authorities and the conversion of the regions into outposts of the management executive. They are birds of a different feather; a different kind of animal to which one does not appoint, as it were, outside members. I have absolutely no doubt about the future turbulent process of change, which is already in train and affecting medical education and research. There is the Culyer Report and the Calman Report on the changing patterns of training for doctors; there will be the merger of two of the training grades (registrar and senior registrar); and there is the whole process of continuing postgraduate medical education. As employers address these matters, they will have a profound impact on the way in which the whole of the medical clinical manpower of the health service will be deployed.

I have previously declared my interest as chairman of the Forest Health Care Trust. That trust has had a preliminary look at the whole raft of issues which it will have to address. It has already indicated that some sort of prioritisation of those issues will be considered. It is a huge agenda.

I put to my noble friend on the Front Bench a point which I raised at Second Reading of the Bill; namely, that I am not yet convinced that the whole of that process, which is very properly being driven by the Department of Health and the management executive—indeed, principally by the chief medical officer and others—is at the moment being meshed in with the process of change, which is the subject of this Bill. It comes to a head with Amendment No. 18, with which I have some sympathy. I look forward with great interest to hearing whether my noble friend is able to put a little more flesh onto the bare bones of the suggestion that this matter will be dealt with by regulation. We want to hear exactly how the universities will have that continuing interaction at the regional level, so that the many issues which affect medical education and research are addressed with the full understanding and input of the universities. It is enormously important.

During the passage of the 1990 Bill we secured the representation on a trust with a teaching hospital of a university representative. Noble Lords will remember that I spoke in favour of that. I have to say to the noble Baroness, Lady Jay, that I am less convinced that the same applies to commissioning authorities. Their role will increasingly develop into a different one. Therefore, I have rather less sympathy with Amendment No. 24 than I have for Amendment No. 18. However, in one form or another, Amendment No. 18 appears to me to have cardinal importance as the health service develops because of the huge agenda of change that surrounds the whole question of medical education.

I know that my noble friend the Minister is well seized of the issue, and I shall not take up any more time before she is able to reassure us. I should just like her to know that I, too, am concerned.

Baroness Cumberlege

I shall do my very best to clothe the skeleton to which my noble friend Lord Jenkin referred. I understand the concerns of the noble Baroness, Lady Jay, and very much respect the views of the noble Baronesses, Lady Robson and Lady McFarlane.

The Government are strongly committed to the vital partnership between universities and the new National Health Service. We will work with them to achieve the highest standards of education and research. Your Lordships will perhaps be aware of the major changes to the funding and support of research and development to which my noble friend has referred. Those developments were announced at the end of last year in response to the Culyer Report. The new measures will include: bringing together all NHS research and development funds into a single funding stream; an extra £8 million in 1995–96 for research commissioned by the NHS; and the creation of a national forum to bring together the major funders of health research to provide advice to the NHS and the Government. The new system will be put in place at the same time as the measures in this Bill on 1st April 1996. Before then, we look forward to the report of your Lordships' Committee on Science and Technology when it has completed its current inquiry into medical research.

There will continue to be a national NHS research and development strategy, but the regional offices will have an important role in informing national priority setting. Each region will have a director of research and development in a senior post.

As your Lordships have emphasised this afternoon, the relationship with the universities is crucial. For that reason, we have already given a clear undertaking that we will include in regulations a requirement that health authorities whose areas include a medical or dental school must have a university representative as a non-executive member. Trusts with significant teaching responsibilities already have a similar requirement. It is in line with our general approach to membership to specify that requirement in regulations. These will be made shortly after the Bill's passage.

The regional offices are very different bodies from the old RHAs. They will not have boards on which different groups are represented. Therefore, it will not be appropriate to have a university representative within the regional office. However, the Government recognise the need for links with universities at regional, and indeed national, level. There will continue to be important strategic bodies at national level, including the Steering Group on Undergraduate Medical and Dental Education and Research, chaired by the Department of Health's permanent secretary. Its members include representatives from the Committee of Vice-Chancellors and Principals, the general medical and dental councils and the Medical Research Council.

The steering Group agreed the 10 key principles which will continue to guide NHS and university relationships. As regards medical workforce planning, the Advisory Group on Medical and Dental Education, Training and Staffing will continue. Chaired by the Chief Medical Officer, this brings together medical professional representatives with the NHS executive to advise Ministers and that executive. Planning the number of higher specialist trainees will be an important part of its work.

At regional level my right honourable friend the Secretary of State has asked the regional chairmen to take particular responsibility for building links with the universities. The postgraduate dean will be a key fink between the regional office and the university, and the consultation paper published by the Government this week will help to ensure that we get the right arrangements in place for medical education at this level.

The noble Baroness, Lady Jay, mentioned the correspondence that had taken place between the Secretary of State and Dr. Edwards, chairman of the CVCP. Correspondence has indeed taken place. My right honourable friend the Secretary of State has willingly agreed to let Dr. Edwards have sight of and comment upon the final draft of the membership regulations as early as possible. In addition, the effectiveness and continuing relevance of the 10 key principles has just been examined in detail by the Joint Medical Advisory Committee of the Higher Education Funding Councils of England and Wales, Scotland and Northern Ireland. They have concluded that the NHS and universities continue to conduct an effective dialogue. We will ensure that that continues under the new arrangements in this Bill. I hope that the noble Baroness, Lady Jay, will be content with this, because it concerns the issues that she raises in relation to SIFTR. An advisory group with senior medical and education membership is reviewing the future arrangements for funding NHS teaching. That body has been asked to report by the end of March, which will allow time for us to consult key groups before implementation in 1996–97.

I deal finally with the point raised by my noble friend Lady Gardner of Parkes concerning the National Hospital. All of our endeavours are intended to strengthen the excellence and expertise of the institute and hospital. That was a point that I tried to make yesterday in the debate in your Lordships' House.

With those remarks, I very much hope that the noble Baroness will agree to withdraw this amendment.

Baroness Jay of Paddington

I thank the Minister for her very detailed reply. It put much more flesh on the bones which before had been rather bare. She mentioned the need for chairmen to achieve links with the universities, which were being encouraged by the Secretary of State. That is precisely the kind of informal arrangement, which depends on individual personalities and the good will of different people in different parts of the country, about which the CVCP has felt uneasy. But I fear that, though the Minister has put much more flesh on the bones, the clear and unambiguous formal mechanism that is asked for is far from being in place. I also suspect that the arrangements for consultation that she has described will not quite meet the requirements of the CVCP. However, as the noble Lord, Lord Walton—the original author of these amendments—is not present, on the understanding that he may wish to bring the matter back at Report, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Jay of Paddington moved Amendment No. 19:

Page 19, line 41, leave out ("appointed by the Secretary of State") and insert ("elected by members of the authority.").

The noble Baroness said: In moving Amendment No. 19, I should also like to speak to Amendments Nos. 21 and 22. All three are exploratory amendments designed to look at ways to improve the selection of health authority members and suggest alternatives to those that are proposed by the Government. They try to address some of the public anxiety that surrounds the question of appointments to health authorities. They are also designed to root health authorities in their local communities and correct the so-called democratic deficit. If authorities and trusts are to retain and improve public confidence, a rigorous process of selection, appointment and reappointment of their boards is necessary. At the moment, the practice varies between the different territories and, within England, between the various regions. We know that the regions in their present form will cease to exist, and there is little evidence of awareness of a need for some universal standards to be applied.

I remind the Committee that the Committee on Standards in Public Life of the noble and learned Lord, Lord Nolan, has received more representations on the question of membership of health authorities than on any other subject. The evidence given to that committee by the National Association of Health Authorities and Trusts was that, in order to improve the present situation, more people needed to be attracted to putting their names forward for consideration for appointment. Greater balance needed to be shown in the people appointed in order to embrace different skills, experience, attitudes and background, and the process of appointing and reappointing chairmen and non-executives needed to be transparent and more rigorous.

Amendment No. 19 addresses the question of how the chair of a local health authority will be selected. The Committee will know that the Bill proposes that this should continue to be done directly by the Secretary of State for Health. The amendment proposes that, although this may continue to be someone appointed under a selection system, which I shall describe as one alternative in a later amendment, once one has agreed a group of local people (all, it is to be hoped, with local interests and local responsibilities) and who must know each other better, one assumes, than the Secretary of State, they should themselves elect their own chair. After all, that is done at every level in every organisation, whether it is a voluntary body, a political party, any form of charity or any other informal organisation.

The amendment would correct some of the feeling that all chairmen are simply there as place people of the Secretary of State. I shall forbear this afternoon getting into the argument about whether they need to be political place people. If a simple system were adopted whereby on a more free basis members were appointed to authorities, there should be little to stand in the way of the local members, with their local appreciation of each other and their understanding of the qualifications of their colleagues, electing their own chairman.

Amendment No. 21 refers to a method which was originally suggested by Mrs. Winifred Tumim. She has written about this proposal in the Health Director magazine this year and has also canvassed the idea very widely. She is a non-executive member of a London trust and has enormous experience in the voluntary sector. Drawing on that experience she has suggested—I am in agreement with her about this possibility being considered—that community health councils could act as a form of electoral college and that perhaps two or three board members could be elected by that local community health council. Candidates would have to agree to give a minimum monthly time commitment and a commitment to undertake training on appointment. It would not be possible to serve on both bodies simultaneously, although CHC members in their current role would be eligible to stand for election. Once selected, the elected board members of the community health council would serve as individuals and not as representatives of that council.

Although that process may at first sight seem somewhat cumbersome, it is a proposal which enables people who are involved in their local community and who have already shown an interest in the management and operation of the health service to become more formally involved in the decision-making process and, indeed, to reach that level by a form of election. Community health councils, as we discussed during the previous Committee day debate, have sometimes come to feel rather marginalised in the new organisation of the NHS. This would be a way of ensuring a degree of community health council involvement at a very important level and would also add an element of election into new health authorities which I think could be very appropriate.

I suspect that the Minister will reject out of hand both Amendments Nos. 19 and 21 partly because they include this element of election. But I would hope that she would look favourably at the suggestion of Amendment No. 22, which would simply bring the situation in England and Wales into line with what is now happening in Scotland. Perhaps I may remind the Committee of the situation in Scotland. Last August the Secretary of State for Scotland announced the creation of a committee of five, which I believe is chaired by the Lord Provost of Edinburgh, to advise him on the appointment and reappointment of non-executive members of health boards and directors of trusts. That was repeating an earlier exercise which was conducted two or three years ago and was intended to broaden the selection base for health authorities and trusts.>

Invitations were issued in Scotland to a wide range of bodies which represented many different aspects of community life. Opposition party leaders were invited to put forward names, and advertisements were placed in newspapers across the country inviting people to put forward their names. Initial interviews are undertaken by the chairmen of relevant boards and trusts and recommendations are then forwarded to the advisory committee for consideration. In addition, reports are submitted of those existing members of boards and trusts who wish to be considered for reappointment. That seems to be a system which we could well adopt south of the Border. There seems no reason why this independent advisory body should not in some form or another be part of our system in England and Wales.

Consideration should also be given to the appointment of an advisory committee on appointments within each of the territories—in England, each of the regions—which would embrace regional chairmen or the regional non-executive members of the NHS policy boards, as they will be after April 1996, and eminent people from outside the NHS who could advise the Secretary of State on the appointments and monitoring process. That would be broadly similar, again, to the arrangement in Scotland. Once that advisory board had screened the names initially put forward, a chairman or a non-executive person nominated for such a position should be asked to attend a briefing seminar to make them aware both of the problems and the issues that may arise from being a member of a health authority board or trust and aware of the commitment that they would be asked to take on. That might absolve many of the authorities and trusts from some of the difficulties which we described as being current when we discussed an earlier amendment. People shortlisted for appointments should be asked to give the names of referees and should be interviewed by a panel established for that purpose.

I would remind the Committee that when Mr. Langlands, the Chief Executive of the Health Service, described to Lord Nolan's Committee the arrangements which the Government are now suggesting for improving the selection to health authorities and hospital trusts, the committee members described themselves as being disappointed by the suggestions. They described the suggestions for reform, which also include advertising but no formal independent scrutiny by an independent body, as "inbred", and they criticised them because there was no suggestion of any form of election and, more specifically, because of the lack of independent assessment.

These amendments, which are exploratory and designed partially to make suggestions about ways in which the present situation could be improved, would meet those three criticisms. They would meet the criticism that the Government's suggestions are inbred; they would meet the criticism that there is a lack of election; and they would meet the criticism of there being a lack of any independent assessment of those putting their names forward or of those whose names are put forward for appointment to these trust bodies and authorities. I beg to move.

4 p.m.

Lord Tope

I rise to support Amendments Nos. 19 and 21, but not Amendment No. 22, about which we have reservations. The noble Baroness, Lady Jay of Paddington, has made the case very well indeed for some form of independent appointments committee. She is certainly right in saying that there is great concern about the current method of appointment to health authorities. The proposals she has put forward are an interesting way of trying to address some of those anxieties. At the very least, members of health authorities should have the right and should be trusted to appoint their own chairmen. After all, that is what the Government have allowed the new police authorities to do. If the Minister is not minded to accept the amendment, I hope that she will explain to the Committee why the Government feel that police authorities can be trusted to appoint their own chairmen but that new health authorities cannot be so trusted. We support Amendments Nos. 19 and 21.

Baroness Cumberlege

The appointment of the chairmen of health authorities by my right honourable friend the Secretary of State provides a direct line of accountability from the chairman, through her, to Parliament, To break that line by the election of the chairman by his or her colleagues on a health authority would reduce that accountability rather than improve it. An internal system of making such an important appointment flies in the face of all our moves to open up the appointments process. It would only lead to more allegations of "jobs for the boys and girls".

The Committee will be aware that on 14th February the Secretary of State published new guidelines on the appointments process. They reinforce the key principles of the appointments process that all appointments should be made on merit and individuals appointed solely for the skills, experience and the commitment that they bring to the National Health Service. Appointments should be open to as wide a range of people as possible. The process for identifying appointees should be transparent and clearly understood by candidates and the public. A policy of equal opportunities should be pursued.

We could not ensure that these very simple principles were adhered to if the appointment of the chairman was conducted by the members of the health authority. This amendment would do nothing to make sure that appointments were made openly on the basis of merit.

The Secretary of State is able, when making the appointment of chairmen, to look at the matter impartially, with due regard to the advice of others. She can ensure that her decision is based on what is best for the health service rather than on what is best for those appointed to serve on the authority.

The appointment of chairmen by the Secretary of State means that national standards are applied to these key appointments, ensuring that every health authority across the country will benefit from the appointment of the highest calibre chairman.

The new guidelines on appointments made it clear—

Baroness Robson of Kiddington

The noble Baroness spoke about people having not the same feeling and desires to do the right thing by the health service because they have not been appointed by the Secretary of State. That is absolutely unforgiveable. The fact that people are members of an authority and elect their own chairman does not make that chairman less responsible to the Secretary of State. It certainly does not make them less able.

Baroness Cumberlege

As I continue the noble Baroness will realise that what we are also trying to achieve is criteria against which the chairmen are judged. The criteria are set out; they are public and people can then judge. We feel that that would not be possible if health authorities elect their own chairmen from within. Having been a former chairman, as I was, the noble Baroness will be aware that special responsibilities are laid on chairmen. It is a national health service. The Secretary of State is accountable to Parliament for the whole of the National Health Service. We believe it right that she should have confidence in the chairmen who represent her at local level.

Baroness Jay of Paddington

I am sorry to interrupt the Minister. That is a rather peculiar argument. If, on the Government's arrangements, all the members of a health authority are appointed by the Secretary of State—and certainly in the subsequent amendments it is simply to improve the method of assessing the people who are appointed—presumably they all enjoy her confidence. Therefore, what is to prevent members of the health authority, if they are all responsible people, from electing the person whom they feel is most appropriate judging, if one wishes, on the criteria which the noble Baroness says are published and available?

4.15 p.m.

Baroness Cumberlege

Serving on a health authority, the noble Baroness will appreciate that when one is trying to build a board one chooses people with different skills because they bring forward different talents. The chairman has a different role from many of those people. One would perhaps choose as a non-executive someone who has special skills in finance or special knowledge about voluntary organisations in that area. But the leadership role of the chairman is different. It is very logical that the Secretary of State, who has to have confidence in the chairman, should appoint that person, believing that that person has the special skills to lead the team and is not someone who just makes a contribution to a team.

I now turn to Amendment No. 21. The new guidelines on appointments make it clear that all new candidates for non-executive appointments will be sifted by a panel of at least three people. Those chosen to serve on sifting panels should be local health authority or trust chairmen or non-executives. We believe that they are best placed to judge whether a candidate is suited to the demands of service as a non-executive director, because they are already working in this area.

The noble Baroness mentioned the Nolan Committee. The Government are committed to a transparent, fair appointments process for NHS boards. We will consider carefully any recommendations that come from the Nolan Committee.

We recognise the need to avoid bias. The guidelines emphasise that the members of sifting panels should not be all drawn from the same NHS health authority or trust board and that the panel may include an independent member. This might be a member of a local community health council, or, for example, a local justice of the peace. The views of people who are more detached from the NHS can also be valuable.

The panels will sift all new candidates against agreed criteria so that all those recommended for appointment possess the skills, personal qualities and experience required. This use of nationally agreed criteria, against which experienced NHS chairmen and non-executives will judge candidates for non-executive appointment, is the most important element of the sifting process. It will ensure that those being recommended are of a uniformly high standard.

The new guidelines also emphasise the role of regional chairmen in the appointment process. They will make their own assessment of candidates before making recommendations to Ministers. This means that the suitability of any individual candidate will be double checked before he or she is recommended. So the appointments process will be conducted objectively and fairly and those finally selected really will be the best people for the job.

The noble Baroness, Lady Jay, mentioned the Scottish system. We do not agree with the noble Baroness that the Scottish system of appointments, where Ministers are advised by an independent panel comprising people from outside the NHS, should be adopted in England. The population of Scotland is broadly equivalent to one of the eight regions in England. Problems of scale would make it extremely difficult to adapt Scottish practice for use in this country. In England the regional chairmen, who are themselves appointed for their independence, will be responsible for the rigour and integrity of the new system and will advise Ministers on appointments.

As regards Amendment No. 22, we have already spoken during earlier debates about the valuable role of community health councils. They are the patients' defenders, friends and representatives and we know that they are diligent in monitoring the service. They have a well deserved reputation for independence, authority and insight.

Community health councils have a statutory responsibility to represent the interests of the community in the National Health Service. Indeed, they have the right to be consulted on any substantial changes in services to local patients. These are important safeguards which ensure that CHCs have a voice in the management of the NHS. In addition, CHCs have observer status on health authorities and the right to meet them annually.

As I made clear in an earlier debate, there will be no change in the requirements of health authorities to consult community health councils.

But the Government are not convinced that the proposals in this amendment would improve the workings of health authorities or of CHCs. We have the same reservations as the noble Lord, Lord Tope. As I understand it, this amendment will add community health council nominees to the executive and non-executive members. I would be very concerned if, as a result, the health authority began to get much larger than the dozen or so members we now envisage.

More importantly, we need to keep CHCs and HAs quite distinct. Community health councils speak with an independent voice. They act wholly on behalf of the local community. There must be no risk of a conflict of interest or confusion about that role. The community health council should speak clearly from outside health authorities, or trusts for that matter.

Indeed, that is why the current regulations governing community health councils specifically disqualify members of health authorities and trusts from membership of a community health council. If we include on a health authority members elected by the community health council we risk eroding the distinct roles of the two bodies; and we risk undermining the effective working relationships developed over the years.

Health authorities and community health councils perform two completely different functions. The new health authority is responsible for ensuring that the health needs of the local communities arc met. The community health council is there to provide a voice, although not necessarily the only one, for the views of the local community. It is important that these two functions remain distinct if they are to be performed effectively

Having listened to my remarks, I hope that the noble Baroness will not wish to press these amendments.

Baroness Jay of Paddington

I am very grateful to the Minister for that reply. I am disappointed by her response, particularly as regards the amendment on the election of a chairman of a health authority and her response to the amendment as regards the independent advisory body. For the reasons which I believe I gave in my earlier intervention and those which were expressed by the noble Baroness, Lady Robson, I find the arguments which the Minister advanced for not having a chairman elected for a local health authority to be not very convincing.

I can only repeat what I said when I intervened earlier; that if all members of a health authority are regarded as being of equal responsibility by the Secretary of State, I am sure that the members of the health authority themselves will be perfectly able to distinguish between their relative skills. If the chairman of a health authority is clearly inappropriate to the tasks, surely that can be left to the good judgment of the authority. There does not need to be somebody hand-picked from above by the Secretary of State.

On the question of independent bodies to advise on appointments, I understand what the Minister said about the size of Scotland and the relative numbers in the populations that are served by the different regional offices, but that does not seem to be an argument for not adopting some form of system. After all, that system could be arranged on the new regional basis by the regional outposts. The body does not necessarily have to consider appointments for the whole of England and Wales. That is not what was suggested by the amendment.

I was pleased to hear the Minister say that the Government will look closely at the recommendations of the Nolan Committee on this subject. Judging from the committee's questioning of the chief executive of the National Health Service, my suspicion is that its recommendations may come closer to some of the suggestions in our amendments than to the Government's present proposals.

As I said earlier, the amendments are exploratory. They were designed to explore some of the different ideas for improving the democratic accountability of health authorities. However, the Minister's response has made me feel that perhaps we should return to the subject on Report. I shall examine carefully what the Minister has said, but for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Gardner of Parkes moved Amendment No. 20:

Page 19, line 43, after ("Authority)") insert ("at least one of whom shall be a health professional working in primary care").

The noble Baroness said: I rise to move Amendment No. 20 because I think it important that the new health authorities, as constituted, should have a clear recognition of the role played in the health service by primary care. I believe that those involved in delivering primary care form the basis of the health service. Although we have acknowledged that in central London people tend to visit accident and emergency departments as a first port of call, that is not the pattern throughout the country. Usually, someone will visit first their GP, the local community pharmacist, dentist, midwife, practice nurse or a health visitor who may be sent in by the local council. All of those people are involved in delivering primary care and are normally a patient's first contact with the health service.

The work done by those involved in primary care is close to the patient and the community and is of enormous value to the health service. That is the level at which decisions are made as to who needs more complicated or specialised treatment, who should be referred on, and to where. I fear that people working in primary care are being overlooked in the Bill because they are not specifically mentioned on the face of the Bill.

The Royal College of General Practitioners asked me to use the term "a medical practitioner in primary care" in this amendment. The reason that I did not do that, although agreeing to move the amendment, was that I did not think that we should be too specific by mentioning a "medical practitioner". However, I acknowledge that most patients would view their general practitioner as their first port of call. Indeed, general practitioners are undertaking more and more work. Many more treatments are now given within practices and standards have improved greatly. Years ago in the area where I practised as a dentist, the local GP did not have a car because he said that people lived in such a confined area that he could walk around it more readily than he could drive. That was true because the living conditions in the area were terrible. That GP was very much at the centre of the community, although the practice was primitive. I am pleased to note the way in which practices have changed over the years and that the standard of primary care provision is now so high.

Those involved in primary care feel that they are being ignored in the reorganisation and that their role is not receiving the recognition that it deserves. They feel that the only way in which they can be confident of having a proper degree of input is to be specifically mentioned on the face of the Bill in the provisions relating to membership of the authorities.

As I have said, I believe that it would be wrong to specify any particular branch of primary care because to do so would be to define that profession, and that profession only, whereas many professions are involved. I believe that the Minister referred the other day to the fact that something like 20 different professions are involved in primary care. Under the terms of my amendment, a member of any one of those professions could be chosen. The amendment would not restrict the Secretary of State to any particular branch of primary care when making appointments. However, the provisions would be some recognition of that marvellously hardworking and progressive part of the health service. That is important because the primary care service is ever-growing. I beg to move.

Lord Rea

I fully support the noble Baroness, Lady Gardner of Parkes, in her amendment. Once again, I apologise to her if in speaking to her last amendment I seemed to suggest a hierarchy among the professions working in the family health services authorities. That is not my view. We are certainly all in the same boat together on this. I thank the noble Baroness for putting the case for the general practitioner. It means that I do not have to do that. The noble Baroness did it very well, and it is better coming from someone who is not a general practitioner. Perhaps I may point out, however, that, although I changed from visiting patients on foot to visiting them by car, the wheel has now gone full circle because you cannot park. I find that visiting patients by pushbike is the quickest way to get around. That is the same means by which I come to your Lordships' House.

There are anxieties among GPs, dentists, pharmacists and opticians about the new arrangements. Unlike professionals in hospitals, they are independent contractors and wish to remain so, and the Government have agreed that their independent contractor status shall continue. The system has worked well—even though it has its critics, including myself, with regard to certain aspects of the independent contractor system, but that is another story.

The new health authorities will, by merging with FHSAs, regain a dual role in primary care—both as purchasers and providers, thus functioning in that respect rather like the old district health authorities prior to the 1990 Act. The FHSAs and their predecessors, the executive committees and the family practitioner committees, have had to perform the balancing act of looking after some of the interests of the professions contracted to work for the NHS in the community while at the same time administering their contracts and, among other things, operating the complaints procedures against them. In other words, they have in a sense been both poacher and gamekeeper. In most cases, they have been remarkably successful in their dual role and are regarded as friends by most of the professionals involved.

However, when merged with the larger and financially more powerful district health authorities to form the new combined health authorities, there are worries, first, that that carefully built-up relationship will suffer and, secondly (despite the Government's very welcome aim of building a primary care-led service) that the costly needs of the hospital service will dominate, even though it is now held at arm's length through the purchaser-provider split, and even though hospitals are now semi-independent NHS trusts.

Logically, it is right that primary and secondary care should be purchased by the same health authority—many of us have been suggesting that for years—but safeguards are needed to reassure primary care providers that their needs, and particularly those of their patients and communities, are not to be submerged. The amendment is one way in which that reassurance could be given, at least partially.

I should like to see more details on the face of the Bill of how the new combined health authority will be structured and regulated. Failing that, I should like to ask the Minister whether regulations governing those arrangements will be laid before this place so that we can scrutinise them. It would be preferable if that were done before Report. At this stage I ask the Minister to accept this modest amendment. But I give notice that we shall probably return to the topic on report. Conversations about it in the meantime would be very welcome.

4.30 p.m.

Baroness Cumberlege

We very much share the commitment to primary care of my noble friend Lady Gardner of Parkes and the noble Lord, Lord Rea. As the Committee will be aware, the Government's intention is to have eventually a primary care-led NHS. But we do not believe that the best way to achieve that is by restricting non-executive membership of health authorities to particular groups. That runs contrary to our aim of opening non-executive appointments to as wide a range of people as possible.

We want the new health authorities to be compact and streamlined. There will be a maximum of seven non-executive members, although the normal number will be five. We could not hope to reserve a place for each organisation and group with an interest.

Of course, those working in primary care have a great deal to contribute. I am sure that many HAs will have non-executive members with experience in these areas. GPs, nurses, dentists and pharmacists will be welcome to apply provided there is no conflict of interest. Indeed, I hope that many of them will apply. But to reserve a place for a representative of each of the interested groups, even if it were possible, would not be enough.

Since we are moving towards a primary care-led NHS, the new HAs will be very different kinds of authority from the old DHAs and FHSAs. They will have a major new role in supporting and developing primary care. Every person working for HAs, from the chief executive downwards, will need to understand and support primary care provision. They will need to ensure that primary care practitioners contribute to the development of the HA's strategy. So they will need to involve fundholding and non-fundholding GPs and a wide range of other professionals working in primary care.

We do not believe that it would be possible for a single member to provide that broad spectrum of advice. We have discussed in detail under a previous amendment the Government's proposal to secure broad professional involvement—by requiring health authorities to make arrangements for receiving advice from a wide range of professionals.

We believe that that is the best way of securing advice, expertise and involvement of the range of health care professionals in the decision making processes of the new health authorities. I am grateful to my noble friend for reminding us that that must include primary care. I hope she will be able to withdraw her amendment.

Baroness Gardner of Parkes

I thank my noble friend for that reply, but of course I am disappointed that she is not accepting the amendment. If the NHS is to be so primary care-led, I find it difficult to understand why primary care is not of sufficient importance to be represented on the authority. My noble friend said that there would be seven members. I did not specify any particular person because I thought that to have one out of seven would be asking too much.

The right reverend Prelate the Bishop of Liverpool, who spoke on Tuesday in the debate on primary care and its great importance in Liverpool, wished to support the amendment but was unable to be here today. He would like to have that mentioned, because he said that people involved with primary care did such a marvellous job in Liverpool.

I hope that my noble friend will think again.

Baroness Cumberlege

I want, for the record, to make it plain that the normal number of non-executive members will be five and, in exceptional circumstances, seven.

Baroness Gardner of Parkes

I thank my noble friend for that clarification. I thought that the number was to be five, but when I heard my noble friend mention seven I thought that was to be the norm. The one good bit of news that came out of my noble friend's reply was that some of the people I have mentioned will in any case be appointed and they are not ruled out. I hope that that will be the position. I accept entirely my noble friend's point that there will be a good method of consultation, but consultation is not the same as being represented on the authority. That is why I believe that the amendment is a good one. My noble friend gave a most interesting reply. I shall discuss the matter further with her at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 21 and 22 not moved.]

Lord Tope moved Amendment No. 23:

Page 20, line 4, at end insert ("and (c) must on appointment declare and record in a public register any private interests which may be material and relevant to NHS business").

The noble Lord said: In the absence of the noble Lord, Lord Dean of Beswick, I move the amendment which stands in his name and mine. I understand that the noble Lord's wife has been taken ill and that he has had to return home at short notice to see her. He is naturally very sorry at being unable to be here to move the amendment. I am sure that the Committee would wish to send its good wishes to his wife for a speedy recovery.

This is a modest amendment which draws attention to an important omission from the Bill in an area which is currently of great general concern. It is at least a start. As I said earlier, my experience is primarily with local government rather than with the health service. I cannot help but contrast the absence of any provision in the Bill with the requirements placed upon members of local authorities.

Under the Local Government Act 1989, the Secretary of State has made regulations which require local authorities to keep a statutory register of members' interests. Those regulations require councillors to enter details of employment and the name of any employer or firm of partners of which the councillor is a member. They must name any sponsor who has made a payment to the councillor towards expenses as a councillor, including election expenses—which clearly would not be appropriate in this case. They have to enter current contracts with the council of which the councillor is aware in which the councillor may have an interest whether as an individual or as a director or shareholder of a company. They must enter any freehold, leasehold or short tenancy of any land in the area of that council, such as houses, buildings, mortgaged property, including joint tenancies. They must enter any licences of over a month to occupy land—for example, for an allotment plot—and any property owned by the council which is rented by a company of which the councillor is a director or shareholder. They must enter the name of any companies or other bodies in which the councillor has shares, securities or deposits, except building societies, which to the councillor's knowledge have a place of business in the area of that council, the shareholding or investment of which has a nominal value of over £25,000 or is more than one-hundredth of the total share capital. The amount of the investment does not have to be declared.

That is the requirement which the Government consider necessary for a register of interests for members of local authorities. If the Minister will not accept the amendment, I hope she will explain why it is necessary to have such a detailed and prescribed form of statutory register for members of local authorities but nothing for members of health authorities.

Local authorities meet almost entirely in public. They are subject to much greater scrutiny by the press and by the public in the areas they represent than is the case with health authorities. Members of local authorities may be subject to investigation by the district auditor; they may be surcharged; they may be disqualified; and in extreme cases they may even be imprisoned. Above all, they are subject to the ballot box every four years; in other words, members of local authorities are already subject to public scrutiny to a much greater extent than are members of health authorities. Yet the Government consider it necessary to impose upon them a statutory register of interests. Most good local authorities have kept a voluntary register containing all that information and more.

Health authorities have none of that. As has been mentioned in previous debates on the Bill, the matter has caused much anxiety in recent months. The amendment is modest and refers only to declaration on appointment. If it were to be carried we should require at least that the register be kept up to date, otherwise it would be of diminishing use. It relates only to matters of interest and relevance to the NHS; in other words, it is narrower than is the case with local authorities.

If the Government are not prepared to accept the amendment, or at least to indicate that they will bring forward regulations requiring a register of interests to be kept for members of health authorities, I hope that the Minister will explain clearly today why it is deemed necessary to have a statutory register for members of local authorities, who are democratically elected and accountable and subject to constant public scrutiny through their local press, but to have no statutory register whatever for unelected and locally unaccountable members of health authorities. I beg to move.

Baroness Jay of Paddington

In the absence of my noble friend Lord Dean, I wish to support the amendment. I join the noble Lord, Lord Tope, in sending best wishes to Lady Dean for a speedy recovery.

The noble Lord, Lord Tope, clearly outlined the purpose behind the amendment which is to try to bring health authorities a little closer in line with the proceedings that are acceptable to and demanded by local authorities. I expect that in reply the Minister will say that the codes of conduct for health authorities, which will become operational from April this year, are sufficient to meet the anxieties which the noble Lord expressed so well. However, I am sure that if my noble friend Lord Dean were present he would have referred to the scandalous proceedings in the Wessex Regional Health Authority. In that respect he, among many others, was instrumental in bringing to public attention anxieties about considerable interests that were held by members of that health authority and its managers in various computer businesses. That caused the problems with which all Members of the Committee will be familiar.

It is interesting to note that the codes, which will be effective from April, were introduced only under pressure as a result of the recognition of inappropriate actions by members of health authorities throughout the country, by the Public Accounts Committee in another place and by other public bodies and scrutineers.

I understand that according to the part of the new codes to which the amendment refers, members of health authorities will simply be required on their honour, as it were, to declare an interest as an issue arises in debate. That is rather like the convention in this Chamber. Surely it would be better—as I believe it would be better here—to have a published register in which all interests are pre-recorded. If that were enshrined in legislation, as required by Amendment No. 23, it would be much more forceful than merely being included in a code of conduct, which can be only a guideline. There can be nothing in guidelines which suggests sanctions if they are broken or which will carry the same weight as legislation.

I hope that in the spirit of openness, which the Minister and members of the Government have expressed throughout the passage of this Bill, the Government will be prepared to go one step further and, rather than rely on codes of conduct and guidance, will accept the amendment.

4.45 p.m.

Baroness Cumberlege

I too send my best wishes to Lady Dean for a speedy recovery. I sincerely hope that if she requires the services of the NHS it does her very proud. I am disappointed that the noble Lord, Lord Dean, is not in the Chamber today because I know that he feels most strongly about the issue. Indeed, we have spoken on many occasions about it. I am sure that he will be totally satisfied with the introduction of the amendment by the noble Lord, Lord Tope.

The noble Baroness is accurate; I shall refer to the codes of conduct and accountability. They were published in April 1994 by my right honourable friend the Secretary of State for Health. They make clear the expectation that those who serve the NHS should maintain very high standards of corporate and personal conduct.

On the subject of public business and private gain, the codes are quite clear and I wish to quote from them. They state: Chairmen and board members should act impartially and should not be influenced by social or business relationships. No one should use their public position to further their private interests. Where there is a potential for private interests to be material and relevant to NHS business, the relevant interests should be declared and recorded in the board minutes, and entered into a register which is available to the public. When a conflict of interest is established, the board member should withdraw and play no part in the relevant discussion or decision".

As Members of the Committee can see, the codes are specific in their expectation that chairmen and board members will declare any interests that may be relevant to NHS business and that such information should be made available to the public. In order to ensure that those appointed to serve on NHS authorities and trusts are aware of the provisions of the codes of conduct and accountability, they are all expected to confirm, on appointment and in writing, that they are willing to subscribe to the codes.

Having introduced the codes of conduct and accountability, we have begun the process of monitoring their implementation. An initial early check will be completed next month and the results will be reported to Ministers shortly afterwards. The noble Lord, Lord Tope, drew a comparison between local authorities and health authority membership. He will be aware that the two are very different in that councillors are directly accountable to their electorate and can raise a local tax. Of course, health authority members cannot raise a local tax and the Secretary of State is accountable to Parliament for the finances of the National Health Service. She is subject to scrutiny by Parliament and the Public Accounts Committee, which local authorities are not.

It is a little naive to think, if I may suggest it, that the press does not also scrutinise health authorities. I can assure the Committee that those who serve on health authorities feel that they are under very close scrutiny. Therefore, we have absolutely no objection to the principle of the amendment. However, we do not believe that it is necessary to make specific reference to such a requirement in the Bill. We believe, and I hope that I have been able to reassure Members of the Committee, that the steps that we have taken are the right ones to ensure that public service values remain at the heart of the management and operation of the NHS. I believe that we have taken a strong line and therefore I hope that the noble Lord will withdraw the amendment.

Lord Tope

I am grateful to the Minister for her reply. However, I remain far from convinced about why members of health authorities are deemed to be in such a different position from members of local authorities. Local authorities have had a national code of conduct at least since 1974. It is drawn to the attention of all councillors when they are first elected. Most authorities, including my own, include that national code of conduct with their standing orders. I believe that it is along similar lines to the code of conduct to which the Minister referred. It is always required of councillors to declare their pecuniary and non-pecuniary interests.

It was held not only by local authorities but also by the Government that a national code of conduct which is to an overwhelming extent complied with by all local authorities and councillors is not enough. The Government decreed that a statutory register was necessary, presumably in order to reassure the public and those with an interest, and to ensure openness.

It is right that local authorities can raise a local tax, but health authorities cannot. But surely the real issue is the contract into which local authorities and health authorities enter. A conflict of interest is far more likely to arise in that connection than as regards any level of tax.

I did not intend to suggest that local authorities were not subject to scrutiny by the local press. However, I suggest that in most areas, if not in all, a local newspaper is likely to be full of what the local council is or should be doing than with matters concerning the health authority, except under exceptional circumstances.

I shall withdraw the amendment today. As the Minister said, the noble Lord, Lord Dean of Beswick, feels strongly on this issue. Sadly, he has not had an opportunity to express a view today so I suspect that we shall return to the subject at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 24 not moved.]

Baroness McFarlane of Llandaff moved Amendment No. 25:

Page 20, line 4, at end insert: ("(2) In making regulations under paragraph 2 above the Secretary of State shall have regard to the need to include members with experience in providing nursing care.").

The noble Baroness said: On the first day of Committee and again today we have had lengthy discussions about the pros and cons of professional representation on the health authorities. I am sure that it may seem tedious to move yet another amendment which seeks to plead that point.

In moving the amendment, I have tried to take into account what the Minister said on Second Reading. She said,

"the Government do not in general support reserved places on authorities for representatives of particular groups".—[Official Report, 6/3/95; col. 70.]

Indeed, she has reaffirmed that position in her answer this afternoon to Amendment No. 20.

I agree with that position, and I am not seeking to plead a representative position on the authority. I am trying to look at the role of the new health authorities, which I believe is managerial and includes an assessment of the health needs of the district, the making of purchasing contracts, specifications of standards of care and auditing of the care given. To carry out those functions, the authorities will need a membership which includes certain managerial skills and, as the schedule provides, access to a wide range of appropriate professional advice.

The Government have given an undertaking that the membership of the new authorities will include a chairman, a chief executive, a director of finance and a director of public health. The arguments for a chairman, chief executive and director of finance are self-evident. Indeed, there is an argument for the inclusion of people from outside the health service. Having worked on a health authority, I appreciate the financial and business skills of some of the other members.

The inclusion of a director of public health can be made only on the basis of the expertise which he brings to the authority—the epidemiological knowledge that he has in assessing the healthcare needs of the area and his expertise in medical service planning. It is my conviction that the case for the inclusion of a member on the authority who has expertise in the planning and purchasing of nursing care and the specification of standards of care is equally important if the authority is function with any degree of efficiency.

My conviction stems from the facts which were rehearsed on Second Reading and again on the first day of Committee: namely, that 80 per cent. of patient contact in the health service is given by nurses; and they are the largest professional group in the National Health Service, accounting for 50 per cent. of the workforce and 40 per cent. of current National Health Service spending.

I am not making a case that their work is any more important than any other professional group. However, I am saying that the resource implications of that very large group of the workforce, that very complex service with many specialties, are very great in relation to the health authorities. The ability to make effective and knowledgeable purchasing contracts is crucial.

I am convinced that access to advice on the management of nursing services and criteria for purchasing and standards of care is not sufficient. Expertise on such a large and complex component of the authorities' work needs to be dealt with at the point of decision-making.

I have taken the opportunity to speak to the director of consumer and corporate affairs and nurse adviser on a purchasing authority—the Camden and Islington Health Authority. She described her work in respect of the health needs of the local population, the co-ordination of nursing advice to the authority, which is a very complex task, her role in clinical audit and the establishment of healthcare standards. I have no doubt that the health authority needs to have as a member a director of that calibre.

I have taken the opportunity also to talk to Dame Audrey Emerton, who is the chairman of the Brighton Health Trust—a provider authority. She wrote to me subsequently confirming the points made in our conversation. The letter stated:

"The inclusion of a nurse as an Executive Director on a Health Authority is of vital importance in the contribution that can be made in relation to the compiling of contracts between purchasers and providers which will include quality specifications. Community Care is expanding and there is a growth of private nursing homes for which there is a legal requirement for inspection to ensure standards are maintained. The contribution of an Executive Director Nurse comes from an in depth knowledge of the care components of a contract which (apart from the clinical intervention of a doctor) are paramount both in terms of quality and cost effectiveness".

An executive director nurse on the purchasing authority complements the role of the executive director nurse on the provider authority, which is prescribed. It seems illogical not to have such a complementary role.

I trust that in replying to the amendment, the noble Baroness will give it favourable consideration. I ask her to take it that it is not a plea on this occasion for representation; it is a plea for expertise in one of largest and most fundamental components of a health authority's work. I beg to move.

Baroness Robson of Kiddington

I support the amendment moved by the noble Baroness, Lady McFarlane. I have supported her often in the past on the question of nurses. I agree with her 100 per cent. that we want nurse directors because of their expertise and care involvement both in the community and hospitals; and because they are likely to have a much closer and deeper knowledge of what the patients want and need.

Also, patients find it much easier to talk to nurses than they do to talk to doctors. They become rather nervous about addressing that high and mighty consultant or even GP. But they talk quite easily to nurses. Therefore, nurses are likely to have a much more intimate knowledge of what the patients are looking for.

The provider units, the trusts, must have a nurse executive member. It is important to have a nurse on the purchasing authority who is able to negotiate with the trust nurse on matters such as staffing levels and meeting quality standards before placing contracts with a trust. Only a member with experience in providing nursing care can adequately assess the details relating to nursing in any contract.

I know that the Minister said on Second Reading that it would be almost inconceivable that any health authority would not, just by the very nature of things, accidentally—or in whatever way one likes to put it—appoint a nurse as one of the non-executive directors. I am afraid that I do not find that satisfactory: I want an assurance that one of the non-executive directors will be a nurse. As I said, I support the amendment.

5 p.m.

Lord Rea

I should like to express my support for the amendment for all the reasons put forward by the noble Baroness, Lady McFarlane and by the noble Baroness, Lady Robson of Kiddington. Many of the arguments put forward by the noble Baroness, Lady Gardner, as regards Amendment No. 20 also apply. Nurses bring with them an unparalleled, intermittent and practical knowledge of the working of the NHS, learnt at the bedside, in patients' homes, in clinics, in operating theatres and in almost any other location. When nurses are members of a health authority, that knowledge held by experienced members of the nursing profession is enormously helpful to the deliberations of the authority. It helps to prevent, for example, purchasing decisions being taken which may prove to be unworkable or, possibly, against the best interests of patients. I hope that the Minister will rethink her general strictures about not having specific professional members named as regards membership of health authorities in this particular case.

Baroness Gardner of Parkes

I could not think more highly of nurses; indeed, I believe that they make the most marvellous contribution to the work of the health service in the community, in the hospitals and throughout the whole of the NHS. However, I believe that the proposed amendment limits the scope of the provision to one place for one nurse. I prefer to have a place for a nurse as suggested in Amendment No. 20, which certainly would have been possible. I should have preferred the wider spread whereby any "health professional" could be appointed. If there are only five places available, I do not quite see how we will be able to fit everyone into them. I also hope that many nurses will serve in an executive role on the health authority and that they will be in close touch with nurses working in general practice.

Baroness Cumberlege

We considered the question of professional membership of health authorities in earlier debates. I made clear then the Government's general approach to membership. We do not think that it is helpful to reserve places for individuals from particular professional or other interest groups. As my noble friend Lady Eccles said in our debate on Tuesday, it is important that health authorities are made up of people from as wide a range of experience as possible and that they are tailored to suit the needs of the particular area.

It was also clear from our earlier debate that there are many groups with claims to be included on health authorities. My noble friend Lady Gardner has made the case for the range of primary care professionals, including pharmacists and dentists. However, I believe that I have made clear to my noble friend that the Government very much welcome applications from suitably qualified members of those professions, but do not see the necessity to reserve a place for them.

I recognise that the nursing profession are particularly concerned that they should be at the centre of decision making in the new authorities. The noble Baroness, Lady McFarlane, has very fairly set out the contribution that nurses can make. I know that the noble Baroness speaks from considerable and distinguished experience and that she is one of the most respected leaders of the nursing profession. I also agree with the attributes and skills of nurses as outlined by the noble Baroness, Lady Robson. However, I believe that I have explained why the Government cannot accept the amendment.

Perhaps I may just add something that I said in an earlier debate concerning not only nurses but also midwives and health visitors. In this Chamber only recently I illustrated how we had shown our trust in nurses' skills by introducing nurse prescribing. It has been recognised for a number of years that nurse prescribing in the community could bring genuine benefits both to patients and staff. Nurses themselves believe that they can do the job and do it well. The eight demonstration schemes—some of which I have myself visited—provide us with an opportunity to put that to the test.

Moreover, when speaking to Amendment No. 11, I mentioned the high priority that we have placed on nurse education and training. We made substantial funds available to support the introduction of Project 2000. As a result, the new form of pre-registration education has been introduced throughout England in only five years. It is the envy of other countries.

The "Changing Childbirth" policy gives midwives the scope to strengthen their professional skills, and the care that they give, alongside other health professionals. We have set out 10 key indicators of success and asked all purchasers to draw up plans for implementing Changing Childbirth within five years. I should say that midwives are, with enormous courage, commitment and energy, rising to that challenge.

Finally, we recognise that effective purchasing is a complex task which makes new calls on the skills of health professionals. We have invested in nurses by developing those particular skills. I am now delighted to see nurses playing a significant role in general management, as well as providing expert advice from their nursing experience. Nurses are helping health authorities to define their real purpose. They are contributing to health needs assessment, defining the need for services, including health promotion and developing plans with providers. They are ensuring value for money, challenging prices and examining alternatives for services which better match people's needs. Best practice, in relation to the nursing contribution to purchasing, is set out in the report Building a Stronger Team.

I have mentioned all the foregoing because it is very easy just to praise nurses. We have tried to give them more responsibility and extend the scope of their professional activities. I believe that we have illustrated the way that we value their profession and have put our trust in it. We do not believe that the proposed amendment is the best way to achieve what the noble Baroness seeks to achieve. Therefore, I hope that she will feel able to withdraw it.

Baroness McFarlane of Llandaff

I thank the Minister for her detailed reply and for her own considerable contribution to the welfare of nurses and nursing. Of course, I am disappointed that the strength of the case has not been taken on board. However, I shall read the Minister's response and reconsider the matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 26 to 28 not moved.]

Baroness Cumberlege moved Amendment No. 29:

Page 31, line 7, leave out from beginning to ("(accounts") in line 9 and insert: 106. In section 12 of the Local Government Finance Act 1982").

The noble Baroness said: The above is a technical amendment. Section 28A of the Local Government Finance Act 1982 confers certain functions on the Audit Commission. The section is no longer needed because the same functions are conferred on the Audit Commission by the 1990 Act. Section 28A should have been repealed by the 1990 Act. The provision inserting it was removed but, by error, the section itself was not repealed. The error came to light only recently—after the Committee stage in another place. This is our first chance to put it right.

The current draft of the Bill contains an amendment to Section 28A. That amendment would only increase the confusion over whether the section still stands. The proposed amendment clarifies the situation by repealing Section 28A and removing the provision which amends it. I beg to move.

Lord Carter

I understand that we are discussing a technical amendment. However, I am experiencing some difficulty in following the explanation. I have with me the Local Government Finance Act 1982 and am just looking at Chapter 32. I presume that I have the right document, but the sections in the Act that I have before me do not tie up with the Section 28A mentioned in the Bill and that suggested in the amendment. For example, there is no Section 28A in Chapter 32 of the 1982 Act; indeed, there is only Section 28 with subsections (1), (2) and (3). None of them says anything about the functions of the Audit Commission in relation to the National Health Service. It could be that I have got it wrong. I tried to check the position with the officials and they believe that they have an answer. I shall be interested to hear the Minister's response.

Baroness Cumberlege

I am grateful to the noble Lord, Lord Carter, for having made contact with the officials. As I understand it, the answer lies in paragraph 2(2) of Schedule 4 to the National Health Service and Community Care Act 1990. I am not sure whether that makes the matter clear to the noble Lord. Perhaps we can discuss it before the Report stage so that I can reassure him.

Lord Carter

I have a suspicion that it is not very clear to the Minister either. It is confusing for those of us who do not have the resources of the department. I am holding the document which corresponds with the marginal note "1982 c. 32.". I have checked with the Printed Paper Office. That is the only document of its kind. I accept that it is a technical point, but it would be helpful if we knew the route by which the Government arrived at the amendment.

Baroness Cumberlege

I shall be very happy to try to help the noble Lord.

On Question, amendment agreed to.

[Amendments Nos. 30 and 31 not moved.]

Schedule I agreed to.

[Amendment No. 32 not moved.]

Clauses 3 and 4 agreed to.

Schedule 2 [Transitional provisions and savings]:

5.15 p.m.

Lord Carter moved Amendment No. 33:

Page 43, line 10, at end insert: ("(c) the employee has no less a right than he previously enjoyed to speak publicly about issues or developments which are in his professional opinion of concern to the health of the public.").

The noble Lord said: Amendment No. 33 deals with a subject that we have dealt with on a number of occasions in various Bills and orders relating to the health service; namely, what are known as gagging clauses. The amendment is intended to put the matter right at least in the case of this Bill.

I should like to give a few examples to show why we feel this whole business of the gagging clause is a grave weakness in the operation of the health service. With this amendment we try to put the matter right at least in respect of the new organisation that is proposed.

After the Bill becomes an Act, on 1st April next year what have been described as the last vestiges of the public health advocacy in Britain on behalf of the public will be abolished when the eight regional health authorities are replaced by eight NHS Executive regional offices. The point has already been made in relation to a number of amendments that the regional directors of public health and their staff will become civil servants and hence will be constrained, like all civil servants, in the way in which they speak out on public matters. I am advised—and it will be interesting to know whether the Minister can confirm this—that one consequence will be that the directors of public health, who are the leaders of public health medicine, will not be allowed to become office holders in the Faculty of Public Health Medicine.

It is interesting that in 1988 the report of the Committee of Inquiry into the Future Development of the Public Health Function, chaired by the then Chief Medical Officer, Sir Donald Acheson, concluded:

"We therefore reject the view expressed in some of the evidence submitted to us that public health doctors, employed in the public sector, have a duty or a right to advocate or pursue policies which they judge to be in the public interest independently of any line of accountability. In the extreme this would place them in a position above Parliament".

I shall be interested to know whether that is still the view of the Government and whether the Minister agrees with the view expressed by Sir Donald Acheson.

I turn now to the general subject of the gagging of employees. I do not believe that it is an exaggeration to say that a large number of NHS employees feel that restrictions on freedom of speech have become much more severe since the health service has become more commercial. We feel that efficient organisations encourage internal debate and dissent. Obviously the NHS Executive wants NHS employees to talk to their managers about any problems they find in the service. Unfortunately, employees are rather sceptical about that approach because of all that has happened.

We know that so-called gagging clauses have been written into the contracts of NHS consultants and other employees. There have been several high-profile cases of whistle-blowers being persecuted. We know that the Government have produced what is known in the jargon as a whistle-blowers charter, but some people feel that the charter has made life easier for those who want to suppress information rather than for those who want to blow the whistle.

I should like to give some examples of where that has happened. The manager of the Cardiff Royal Infirmary group and a surgeon in that group made critical comments, one to the local press and the other to the health authority itself, about certain practices. They were both suspended. They responded by taking their cases to an industrial tribunal. The day before the tribunal was to sit they were paid a sum of money, not only as recompense for the damage to their careers but as a form of gag because they could no longer refer to the circumstances under which they had been suspended. That is now done almost as a matter of course to quash any dissenting opinions about the state of the health service.

There was the case of staff of the Raigmore hospital trust. Dr. Anita Reddy, a senior registrar, complained about low staff morale in the hospital. The trust managers seriously contemplated taking disciplinary action. They were only dissuaded from doing so by senior consultants who talked to them about the case. At the same Raigmore trust a letter to the board chairman, Dr. James Kyle, was leaked to the press. That letter was from five senior consultants expressing their surprise and annoyance at the callousness of managers. All five consultants were dragged before the director to account for themselves and to explain the leak. Such people should not be disciplined for bringing those matters to light: they should be congratulated.

The purpose of the amendment is to give a clear right to employees of the National Health Service and professional staff to speak up professionally on matters that concern the health of the public. We feel that the right should be enshrined in this primary legislation and override the "gagging clauses" that are increasingly being inserted into trust contracts.

The terms and conditions of service of hospital, medical and dental staff used to contain a clause in paragraph 330 which stated:

"A practitioner shall be free, without prior consent of the employing authority, to publish books, articles, etc. and to deliver any lecture or speak, whether on matters arising out of his or her hospital services or not".

That is an absolute freedom. It is a safeguard for the public health, for the public good and for the professionalism of medical staff which is the cornerstone of the National Health Service.

A further matter which is causing concern is the additional financial incentive for trusts, as employers, to keep quiet matters which might have a negative impact on the marketing (these are customers, not patients) of hospitals to purchasers such as GP fundholders, health authorities and those who make extra-contractual referrals from other health authorities. Trusts have every incentive to enforce the gagging clauses on their staff in case their speaking out has an adverse impact on the trusts' ability to trade under the new contract system.

The amendment is intended, at least in this Bill, to deal with this pernicious aspect of the health service, which is causing great anxiety. The issue has not arisen from stories in the tabloid press but from conversations with doctors, nurses and consultants. One knows that it is causing increasing concern. I hope that the Minister will be able to show that the Government recognise the genuine public concern that exists on this matter and will accept the amendment. I beg to move.

Baroness Gardner of Parkes

I find this a strange amendment. For 20 years I have sat on an industrial tribunal. If one has rights, under employment legislation those rights continue. Therefore, in that respect the amendment should not be necessary.

As regards the aspect of confidentiality, to which the noble Lord, Lord Carter, referred, I understand that this relates to people transferring from one employment to another. It is possible that one might negotiate terms which include a confidentiality clause. That is not an unusual clause. It occurs frequently in ordinary business.

I agree with the noble Lord that people should not feel inhibited about whistle blowing. It is right that people should draw attention to problems. I recall a case many years ago of an elderly patient being brutalised by one nurse in the hospital. It was extremely important that someone drew that fact at the time to the attention of the health authority, otherwise we would not have known about it. The person using that brutality said, "No, this old lady fell". Therefore I appreciate that such cases exist. However, I am not sure how I regard the amendment.

The noble Lord, Lord Carter, implied that there was something sinister or mysterious in a sum of money being paid over the day before the industrial tribunal hearing. In the employment field that is common. Indeed, papers are no longer sent out in advance of a hearing. The tribunal members pick them up on the morning of the hearing because a large number of cases are settled. It would waste members' time to read those cases because they never come before the tribunal. I do not believe that there is anything sinister in that point.

The loss of Crown immunity means that all bodies in the health service now have to be very careful. Although litigation is necessary, unfortunately, that awareness has crept into all areas of the health service and in general. Everyone is aware of litigation. They have to be very careful. No one wishes something said that would bring a legal case against him which was not justified. He would wish to have the opportunity for the whistle blowers (to use the noble Lord's expression) to bring the case forward to be investigated thoroughly rather than to have a sensational piece in the press which might or might not be accurate and might lead to a major legal case. I find the amendment unusual, but I believe unnecessary.

Baroness Cumberlege

I am grateful to my noble friend for putting the position on record with such clarity and accuracy. She is quite correct that staff who are transferred to a special health authority or NHS trust will retain exactly the same rights to speak openly as they enjoyed previously. There will be no reduction in the right of health authorities to represent publicly the needs of their population.

The regional offices will have a different role from that of RHAs. The new health authorities will be the operators in the new system. They will be taking the decisions which will directly affect local people.

The regional offices will contribute to the development of central policies for the NHS, monitor the health authorities and trusts in their areas and intervene managerially where necessary. These are responsibilities appropriate to the Civil Service and it is therefore right that regional office staff should be civil servants. Clearly this change of status reduces the rights of regional office staff to "speak out", but it gives them more effective influence on central policies. As civil servants, they will have enhanced opportunities to shape central policy making by offering advice to Ministers.

The Government issued to NHS employers in June 1993 guidance for staff on relations with the public and the media. That document sets out the rights and responsibilities of all staff when raising issues of concern about healthcare matters. NHS staff have a right and duty to raise with their employer concerns about health service issues. In no circumstances are employees who express their concerns in accordance with the guidance to be penalised. I am concerned by some of the examples that the noble Lord raised.

NHS employers are required to introduce procedures for handling of staff concerns after consultation with local staff and should promote a climate of openness and dialogue within the NHS so that staff concerns can be dealt with properly and effectively. I believe that the situation is quite clear. We tackled the issue in June 1993. I hope that the noble Lord will withdraw his amendment.

Lord Carter

I am not surprised by the response from the Minister. The noble Baroness, Lady Gardner of Parkes, gave the game away when she referred to the industrial tribunal. Those tribunals deal with employment rights. The amendment deals with what I have described as the "gagging" clauses. The noble Baroness referred to "ordinary business" and business confidentiality. We are not referring to factories or shops. We refer to hospitals, clinics, doctors and nurses. It is interesting that the Minister did not deal with any of the examples I gave regarding public health directors and trust hospitals.

Baroness Cumberlege

Perhaps the noble Lord will give way. I dealt with that point. It is the regional directors of public health who will join the regional offices. As I said, quite rightly they become civil servants. The directors of public health at health authority level will have the opportunity to join the faculty, to speak out and to do things that they have done in the past, subject to their contract.

Lord Carter

That is the whole point. The regional directors have to advise the Executive; they will not be able to become office holders in the faculty of public health medicine. That is the point I make.

Baroness Cumberlege

Does the noble Lord agree that one would not expect civil servants to speak out?

Lord Carter

I would expect public health directors to speak out about public health.

Baroness Cumberlege

At health authority level, they would be able to do so.

Lord Carter

We shall not agree; we are not talking the same language. That is why there is a difference between the two sides of the Committee. Civil servants give advice to Ministers. That advice is never published. We never know whether Ministers take it. We do not know the quality of that advice. We do not know whether Ministers are warned of the problems.

I gave a few examples of various cases—the Minister did not deal with them in her reply—which we know exist. This is a taxpayer's service. It is paid for by the taxpayer. The information should be made available. It should be a duty on employers in the health service to bring these matters to the attention of the public and to give their professional opinion about their concerns regarding the health of the public. The Government see the health service as a business. We heard such words as "customers" rather than patients. There was reference to "ordinary business", "commercial confidentiality". That is what is happening to the health service. That is why the gagging clauses have been introduced. We know that they exist. When we form the Government we shall end them, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 34:

Page 43, line 43, after ("duties") insert ("(including full recognition of the appropriate trade unions)").

The noble Lord said: I have a feeling that I may receive the same answer to this amendment as to Amendment No. 33. The amendment proposes,

"including full recognition of the appropriate trade unions".

We know that the Government feel the same way about trade unions as they do about the health service.

The amendment provides for the continuation of full recognition of appropriate trade unions for staff transferred to National Health Service Executive offices. I expect the Minister to say that those members of staff will be able to retain their personal membership of trade unions. Even under this Government that is possible. We welcome that.

I understand that in another place the Minister and the Under-Secretary have talked separately about accepting the TUPE regulations about pensions. It has been pointed out that the functions of the regional organisations are different from those of the regional health authorities. That point was made on the previous amendment by the Minister. We believe that there is good reason to ensure that the trade unions, UNISON, the RCN and the BMA, all of which have members at regional health authority level, should be fully recognised when the staff transfer to new NHSE offices. We shall deal with the TUPE provisions later. They are meant to protect union recognition. I hope that the Minister will confirm that the recognition will be protected and that she will accept the amendment.

The RCN and the BMA are not affiliated to any political party. They are certainly not affiliated to the Labour Party. Of course, we know that UNISON is. This is not a Labour Party amendment; it is an attempt to ensure that the proper rights of members of trade unions are protected when the changes envisaged under the Bill take place. The amendment asks for the full recognition of appropriate trade unions. I beg to move.

Lord Stoddart of Swindon

I support the amendment. I declare an interest as a consultant to UNISON.

I shall be brief because my noble friend has put the relevant points. However, I wish to emphasise that trade unions are, I think rightly, suspicious of government intentions towards them. We have seen many instances where trade unions have been pushed aside, not consulted when they should be, and given the impression by government that they have no real part in the industries or services in which they are employed. Where such a reorganisation comes about, it is bound to engender in the breasts of trade unionists that it may be another opportunity for the Government to remove some of the rights which they have hitherto enjoyed.

The noble Baroness may tell me and members of trade unions that their fears are quite unwarranted. I hope that she will. If so, I feel quite sure that the Government will not mind strengthening their assurances by agreeing to the amendment. I hope that they will do so.

5.30 p.m.

Baroness Miller of Hendon

I must tell the noble Lord, Lord Carter, that the Government have the highest regard for the National Health Service and we have the greatest respect for the trade union movement. I hope that the noble Lord, Lord Stoddart, is pleased to hear that.

I understand the anxieties of both noble Lords, but the amendment is not consistent with general employment legislation, which does not impose a statutory obligation on employers to recognise unions. More important, it is also unnecessary. Where transfers of staff take place from the district health authority, family health service authority and regional health authority to a new health authority, the same unions will be involved on either side of the transfer.

The amendment is clearly aimed at the transfer of staff from the National Health Service to the Department of Health. The noble Lord, Lord Carter, may be worried about staff moving into the Civil Service, but I can assure him that the department is committed to consulting the recognised Civil Service trade unions. There is a well-established consultation machinery in place which is capable of representing the transferring staff. In addition, certain National Health Service unions are affiliated to political parties, and by convention government departments may not recognise such affiliated organisations.

The transferring employees will have the opportunity to transfer to Civil Service unions when they become civil servants and to have their views represented through the existing consultative arrangements. I hope that I have managed to reassure the noble Lord, Lord Carter, and that he will realise that the amendment is not necessary and will withdraw it.

Lord Carter

When I moved the amendment I said that I did not believe I would get far with it. I am glad that the Government have the highest regard for the National Health Service and the highest regard for the trade unions—yet another U-turn.

Baroness Miller of Hendon

I said that the Government have the greatest respect for the trade unions.

Lord Carter

I must read Hansard with care because that is a connoisseur's distinction between "respect" and "regard". I understand the points that the Minister made but I thought it was important for us to make some from this side. The RCN and the BMA, of course, are not affiliated to the Labour Party, as I made clear. I hope that those who transfer to the Civil Service unions, with the encouragement now of the Government, fare a little better than the members of the Civil Service unions at GCHQ. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 35:

Page 44, line 21, leave out sub-paragraph (8).

The noble Lord said: Perhaps with this amendment we shall have a little more light and a little less heat than with the last two. It is a probing amendment to establish why occupational pensions are not included, as we understand it—I shall be glad to be proved wrong—in the transfer of employment rights.

Paragraph 9 of Schedule 2 is concerned with the transfer of contracts of employment and the protection of the rights of transferred employees. I am advised that it is not clear why sub-paragraph (8) is necessary, given that, where there is a transfer of undertakings, the Transfer of Undertakings (Protection of Employment) Regulations 1981—the TUPE regulations—provide for the transfer of conditions of service, with the exclusion of occupational pensions.

I am advised by the RCN that female nurses have special status under the NHS occupational pension scheme and are able to retire at the age of 55. I am not sure what the position is regarding male nursing officers. It would be interesting to know and perhaps the Minister could advise on it.

The RCN seeks an assurance that those nurses affected by transfer arrangements under the Bill will not lose the special status to which they are currently entitled. It will be helpful if the Minister can give an assurance that the provisions of the NHS occupational scheme will be extended to those staff transferring under the Bill.

As I said, this is a probing amendment on an important matter. I hope that the Minister can throw some light on it. I beg to move.

Baroness Miller of Hendon

The Transfer of Undertakings (Protection of Employment) Regulations provide generally for the transfer of contractual terms and acquired rights to a new employer. Most employees transferring under the Bill will be covered by the provisions of TUPE. However, to make sure that all staff will be protected, we asked for provisions in Schedule 2 which parallel TUPE.

However, under the TUPE regulations, pension rights are not transferred to the new employment. Regulation 7 of TUPE specifically excludes those provisions of an occupational pension scheme which relate to benefits for old age, invalidity or survivors from the general transfer requirement. The sub-paragraph which the amendment seeks to delete does no more than reflect the TUPE provisions.

The Government believe that Regulation 7 of TUPE fully accords with our obligations in relation to pensions under the acquired rights directive. That does not mean that we are not bothered about pensions. Far from it. Our view is that the new employer should provide broadly comparable pension arrangements or make a compensating adjustment within the overall remuneration package.

We are committed to ensuring that staff transferred under the Bill enjoy similar pension rights in their new employment. We are taking steps to ensure that they do.

For the vast majority of NHS staff covered by the Bill—that is, those transferring from district health authorities and family health service authorities to the new health authorities—there will be no impact at all on current pension arrangements. They will remain National Health Service employees and continue to have access to the National Health Service pension scheme.

The position is different for regional health authority employees who transfer to the employment of the Department of Health. That is because, on transfer to the regional offices, they will become civil servants. They will not be able to remain in the National Health Service pension scheme. A basic pensions principle is that pension cover should follow from employment. It would be inappropriate for former regional health authority staff, as civil servants, to belong to the National Health Service scheme, which is the occupational pension scheme for National Health Service employees.

Regional health authority staff who transfer to the National Health Service Executive will be able to join the principal Civil Service scheme, which is an excellent non-contributory pension scheme. But we have proposed special arrangements to protect National Health Service pension benefits which are not offered by the Civil Service scheme. That will ensure that all regional health authority staff who become civil servants will have access to pension rights in their new employment which will be broadly equivalent to those which they enjoyed in the National Health Service.

The detailed proposals have been put to the staff and their representatives for consultation until the end of April. It will be for regional health authority staff to decide whether to transfer their accrued National Health Service pension rights to the Civil Service scheme. If they choose to leave them in the National Health Service scheme, their NHS pension rights will he preserved, index-linked and fully protected for payment at normal retirement age. If they choose to transfer their National Health Service pension rights, they will be offered a year-for-year service credit in the Civil Service scheme.

Paragraph 9(8) simply parallels the provisions of the TUPE regulations. Satisfactory arrangements will be put in place to protect staffs pension positions. On that basis, we do not feel that the amendment is appropriate. I hope that I have said enough to reassure the noble Lord, Lord Carter, and that he will be able to withdraw the amendment.

Lord Carter

I am grateful to the Minister. I believe that I am reassured but I shall have to read what he has said and take advice on it. It seems that the Government have tried to meet the anxieties expressed; and in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 5 agreed to.

Schedule 3 [Repeals and revocations]:

Baroness Cumberlege moved Amendment No. 36:

Page 50, line 30, at end insert: ("1982 c. 32. The Local Government Finance Act 1982. Section 28A.") .

The noble Baroness said: We have already debated this amendment. I beg to move.

Lord Carter

To clear up any confusion, we had a highly technical discussion on Amendment No. 29 about the Local Government Finance Act. I believe that the Minister said "Not moved" in relation to Amendment No. 30, when I believe she should have said that she wished to accept the amendment; Amendments Nos. 29, 30 and 36 are grouped. I am happy to accept that if it is what the Minister intended.

Baroness Cumberlege

I am clearly at fault here. I had presumed, because we had discussed the amendments, that I did not have to move them again—that is, as they were grouped together they were all moved.

On Question, amendment agreed to.

Schedule 3, as amended, agreed to.

Clause 6 [Subordinate instruments]:

Lord Carter moved Amendment No. 37:

Page 4, line 9, leave out ("annulment") and insert ("approval").

The noble Lord said: Amendments Nos. 37 and 38 deal with a matter that we have often dealt with before in discussing Bills; namely, the question of affirmative or negative resolution. These two amendments give the Government the chance to make the case as to why in Clause 6(3) all the statutory instruments to be used under the Bill are negative resolutions, with the curious exception of the order to be made under Clause 9(3), which deals with the Scilly Isles. I am interested to know from the Minister why the Scilly Isles needs an affirmative resolution and everybody else needs a negative resolution. That is a serious question. I am indeed puzzled as to why that should be the case.

This debate always takes place. I sometimes have the feeling that there are in the offices of the parliamentary draftsman a little book of rules headed, "Saving the Government Time and Bother, Parliamentary Draftsman, Rules for the Use of'. Whenever we have this debate, the Government try very hard to put everything into the negative form. We feel that there are aspects of this Bill which should come to Parliament and be dealt with through the affirmative route.

Perhaps I may give just one example. New Section 8(4) in Clause I states that the Secretary of State:

"may by order…vary a Health Authority's area…abolish a Health Authority; or…establish a new Health Authority".

I entirely understand paragraph (a) in relation to such technical matters as the variation of the boundaries. The negative procedure would be entirely right in that respect. But if the Government intend to abolish a health authority or establish a new one, they should be required to bring the necessary order to Parliament and seek the approval of both Houses through the affirmative route.

The amendment as drafted would reverse the Government's approach and require them to make all orders affirmative. I am entirely happy to discuss with the Minister outside the Chamber which type should be affirmative and which should be negative. It is in a sense a probing amendment to give the Government, as I say, a chance to say why they decided, as they usually do, that all the orders that are required under this Bill should use the negative route.

I believe that the Government have said that the boundaries and functions of the new health authorities will be dealt with, obviously, by order. I shall be interested to hear how they propose to deal with them. With the negative route, there is a problem over time limits, the praying against, the resolutions, and so on. We do not suggest otherwise, in spite of the wording of the amendment; we phrased it this way merely to have the matter debated. After I have heard the Minister I shall withdraw it and perhaps return to the matter on Report to try to tease out then which areas of the Bill should be subject to the affirmative resolution route and which to the negative. The purpose of this amendment is to give the Government the chance to state on the record the reason why, with the curious exception of the Scilly Isles, they believe that this Bill requires the negative route for every order. I beg to move.

5.45 p.m.

Baroness Cumberlege

I presume that these amendments were tabled in the belief that the Secretary of State is seeking unduly wide powers to make orders and regulations in the Bill. That is perhaps what the noble Lord, Lord Carter, is trying to say. Of course we do not agree with that. In fact, the Government plan to include only four new permanent regulation and order-making powers in the Bill.

First, it will enable regulations to be made allowing consortia of health authorities, special heath authorities and NHS trusts to work on and contract for education and training. The second new power in the Bill will enable regulations to be made setting out requirements for consultation on the establishment of NHS trusts. This is hardly a sweeping new power. It simply adds flexibility to the arrangements following the abolition of regional health authorities. The third new power will allow the regions of mental health review tribunals to be varied by order. Again, this is not a controversial power. Finally, we shall debate on Report the fourth new power to be introduced by Amendments Nos. 27 and 28.

All the other powers that are taken in the Bill, except those that will have effect only until 1st April 1996, replicate existing powers in relation to district health authorities or family health services authorities. Statutory instruments made under similar powers in the National Health Service Act 1977 and the National Health Service and Community Care Act 1990 are subject to the negative resolution procedure.

The power in relation to the Isles of Scilly needs no parliamentary procedures. This power enables the Health Authorities Act to be amended in its application to the Isles of Scilly. The National Health Service Act 1977, the Mental Health Act 1983 and the National Health Service and Community Care Act 1990 have all been applied to the Isles of Scilly by order. Modification was needed to ensure that any reference to a local authority or local social services authority was construed to be a reference to the council of the Isles of Scilly. That council fulfils the role of a local authority in the islands. Any order under this Bill will contain a similar modification. I hope that that is very clear to the noble Lord and that I have dealt with his problem in the necessary detail.

I see no need to take a different approach in this Bill. If the amendment were passed, a disproportionate amount of parliamentary time would have to be taken up with statutory instruments under this Bill. Therefore I invite the noble Lord to withdraw his amendment.

Lord Carter

I am extremely glad that the Minister has been able to explain so clearly the particular problems in relation to the Isles of Scilly. I shall read what she said in Hansard. It is the answer that I expected. It appears that the orders are not so wide as we thought they were, but I shall need to read her response.

I still do not entirely understand the Government's response to a point that I made earlier. I do not believe that the Minister dealt with it. I referred to the power to abolish or establish a new health authority, which seems to me to be a substantial power to be made by order. The best thing for me to do is to read what the Minister said and to take advice. In the meantime—

Baroness Cumberlege

Perhaps I can help the noble Lord. It concerns consultation; it does not concern the power to abolish.

Lord Carter

I am extremely grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 38 not moved.]

Clause 6 agreed to.

Clause 7 [Financial provisions]:

On Question, Whether Clause 7 shall stand part of the Bill?

Baroness Jay of Paddington

I beg leave to oppose the Question that Clause 7 stand part of the Bill. I do so because of the considerable confusion and concern which still remains—at least on these Benches—about the short and long-term impact of the Bill on the public purse. The arguments that have been put forward throughout the debates, both in this Chamber and in another place, to suggest that this Bill is a very important and necessary measure have largely concerned savings in public expenditure that will result from it.

In the initial Financial Memorandum to the Bill when it was published, the figure of £150 million was mentioned as a saving in public expenditure. As I understand it, that was later informally amended in Committee and on Report in another place to £60 million, and then subsequently to £50 million. The figure for savings of £3 million for Wales has seemed to be reasonably consistent. At the same time, there is concern about the transitional costs, which were mentioned and allowed for in Clause 7 of the Bill: why they are necessary; what is their sum; and precisely how they will be expended. There has been difficulty in establishing the overall size of the potential savings which will arise from the enactment of the Bill and the precise size of the interim expenditure.

It is not surprising that there is concern about the transitional costs and the size of any expenditure that the Secretary of State, under this Act, may provide to cover that period. As the Committee will remember, very substantial costs indeed accrued to the public purse the last time that there was any reorganisation of the health service. I am sure that the Committee will recall the very large sums of money which were spent in establishing the internal market. I have today received a rather glossy version of the Health Director which talks about a "managed metamorphosis" into the new health service authorities. It is published with the touching and seasonal picture of a butterfly emerging from a chrysalis. It speaks in considerable length and glowing terms about the transitional arrangements which will be needed between now and next April to establish the new health authorities. But it does not mention any costs.

There has been an equal lack of clarity in the Bill and the speeches, both from the Minister in this Chamber and her honourable and right honourable friends in another place, about how those long-term savings are to be made. We have heard and been told again this afternoon that all the important functions of the regional health authorities will not be lost. They will simply he transferred either to local health authorities and trusts or to the regional outposts of the Department of Health. If those functions are to be satisfactorily maintained and just simply relocated, how can very substantial savings be made?

One of the suggestions has been that salaries and allowances to health authority members will be reduced by the abolition of the regional health authorities and the merger of the district health authorities and family health service authorities. We on these Benches have sometimes queried the size of the salaries bill and the expenses for members of those authorities, but savings in that area cannot possibly add up to some of the sums that have been mentioned.

It was also suggested in Committee in another place that savings would be made because the regional function of compiling reports and statistical work would no longer be necessary. That brings forward another worry about the reduction in public accountability through the reduction of information. But again, if that is to be a source of major savings, it does not seem to be a very important one.

Overall, as we know, regional staff have already been reduced. It is not in the areas of the regional health authorities that the enormous explosion in managerial costs has occurred in the past few years. It has been further down the line at the trusts and health authority level. What assurances do we have that there will not be a similar enlargement of management costs which will eat very substantially into those savings—savings which, as I said, have not been accounted for very much?

The other financial information mentioned in the guidance to the Bill is that the money that is saved—the very large sum of £150 million which was originally mentioned— will be reinvested in patient care".

That is what the financial memorandum says. How is that to be monitored and reported on? How are we to know exactly how the money will be redirected from those savings? It is unclear where those savings will be made at such a substantial level. How will they be transferred?

I should like to ask the Minister about several matters before the Question is put to the Committee. Can she tell us the precise size of the savings, where they will come from and how the money from those savings will be deployed? I should also like some reassurance that a great part of those savings will not be swallowed up by extravagant expenditure on the transitional costs or legitimate expenditure on maintaining functions which were previously carried out by the regional health authorities.

Lord Boyd-Carpenter

It would be helpful if my noble friend the Minister could possibly tell us what now are thought to be the likely financial consequences of this measure. As the noble Baroness opposite said, it is perfectly true that on occasion changes of this kind involve transitional expenditure which exceeds what was hoped would be the outcome of those changes. I do not know whether that is likely in this case but I suppose that it is possible. In any event, in view of the fact that rather different figures, both plus and minus, have been given of the effect of this Bill on public expenditure, it would be very helpful if my noble friend would spend a few minutes bringing the Committee up to date on the matter.

Lord Stoddart of Swindon

I should like to ask the noble Baroness to do just that. I am thoroughly confused now. My noble friend mentioned that there had been a revision of the figures, first down to £60 million and then to £50 million. I took a small part in Tuesday's Committee stage, when the noble Baroness reiterated (recorded in Hansard at col. 1519) that there would be savings of around £150 million. Indeed, I asked her a question about that. I asked where the £150 million was going to and would Parliament be informed about where it was going. I am now thoroughly confused. Is the figure £150 million, £50 million or £60 million that will be saved?

I feel that we are entitled to know—if £150 million is still a relevant figure—when that amount will be saved and how Parliament will be told when that amount has been saved and where it has gone to within the National Health Service, as my noble friend requested.

Baroness Cumberlege

Perhaps I could deal first with the principle and then go on to the savings in particular. The Committee has now agreed all the issues of principle in the Bill and there can be no reason not to agree to the financial provisions.

When fully implemented, the Bill will not lead to additional costs. In fact it will result in substantial savings. But this clause is needed to give legislative cover for spending in the transitional stages and for technical changes to the basis of NHS funding. Savings after 1st April 1996, when the transitional stages are completed, will continue to be realised year after year.

The effect of the clause is as follows. It permits money to be paid by Parliament to cover expenditure under the Act. Any expenditure incurred by the Secretaries of State during the transition stage will be paid under this provision—for example, expenditure arising our of liabilities inherited from abolished authorities or out of additional staff costs while transferred staff are still employed by them.

It also permits money to be paid to cover any increases in spending under any other Act. This is essentially a technical point. The new system will be cheaper to run than the old; nevertheless new sorts of payments may be needed under existing Acts. For example, it is obvious that payments are not currently made to health authorities under the 1977 Act because these new health authorities do not yet exist. So from 1st April 1996 this will be a new sort of expenditure under Section 97 of the 1977 Act, which this clause needs to cover.

It provides for sums received by the Secretary of State to be paid into the Consolidated Fund. There will be cases where the Department of Health receives sums relating to transfer to the Secretary of State of some of the rights of the regional health authorities. For example, regional health authorities may have rights to sue for sums due on a contract. When the rights transfer to the Secretary of State on the abolition of the regional health authorities, provision is needed for such sums to be received.

In regard to the individual savings—an item raised by some Members of the Committee—we estimated that the abolition of regional health authorities and the merger of district health authorities and family health service authorities would result in savings approaching £60 million in 1995–96. By 1997–98, when the new structure is fully implemented, those savings will rise to approaching £150 million a year. Over £100 million of the total savings figure results from the abolition of regional health authorities and the consequent reduction in overlap of work between the central department and the regions. The remainder is due to the replacement of district health authorities and family health services authorities with the new authorities. In addition, savings from the elimination of overlapping functions between regional health authorities and the NHS Executive will contribute to the savings of £50 million to be made in the running costs of the Department of Health by 1997–98. The total figure is £150 million made up of the two sums of £100 million and £50 million.

My noble friend Lord Boyd-Carpenter asked about transitional costs. Whenever one brings about a change there are always costs. Of course, we shall try to keep these costs to a minimum. But the key point about the reorganisation is that it will enable substantial benefits to be made year in year out in the long term. As regards the money that is to be saved, an undertaking has been given that it will be reinvested in patient care. There will be close monitoring of that. When we set priorities, go into the PES round and draw up budgets for the year, those items will be closely monitored.

6 p.m.

Baroness Jay of Paddington

Perhaps I may ask the Minister to give some details of the monitoring and how it will be reported to Parliament. I think that noble Lords have demonstrated this afternoon the concern that if that money is saved—the Minister has clearly explained the difference between short and long-term savings—it should be reinvested in patient care. How will we know that that money is being spent?

Baroness Cumberlege

The accounts of health authorities are open to scrutiny. I believe that the National Audit Office, Audit Commission and internal and external audit will provide plenty of opportunities for people to see where the money is spent.

Clause 7 agreed to.

Remaining clauses agreed to.

House resumed: Bill reported with amendments.