Health Bill [H.L.]

HL Deb 01 March 1999 vol 597 cc1457-542

8.39 p.m.

House again in Committee on Clause 16.

Baroness Gardner of Parkes had given notice of her intention to move Amendment No. 119:

Page 13, line 25, at end insert ("from that document or information alone, or in combination with other information which is in the possession of, or is likely to come into the possession of the Commission,").

The noble Baroness said: I believe that my noble friend Lord Howe would want me to move this amendment in his absence; indeed, as I understand the procedures involved, I believe that anyone may do so. Unfortunately, my noble friend did not reach the Chamber this afternoon in time to move an earlier amendment. I do not want that to happen again. I believe that the amendment is self-explanatory. I certainly hope that it is. I am pleased to see that my noble friend Lord Howe has returned to the Chamber. I shall not move Amendment No. 119.

[Amendment No. 119 not moved.]

[Amendments Nos. 120 to 123 not moved.]

Clause 16 agreed to.

Clause 17 [Restrictions on disclosure of information]:

[Amendments Nos. 124 to 128 not moved.]

Clause 17 agreed to.

Clause 18 agreed to.

Baroness Thomas of Walliswood moved Amendment No. 129:

After Clause 18, insert the following new clause—

PERFORMANCE STANDARDS AND INDICATORS

(".—(1) The bodies mentioned in subsection (2) below must make arrangements to secure continuous improvement in the way in which their functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

(2) The bodies are—

1. (a) Health Authorities;
2. (b) Special Health Authorities;
3. (c) Primary Care Trusts; and
4. (d) NHS Trusts.

(3) For the purpose of deciding how to fulfil the duty arising under subsection (1), a body must consult—

1. (a) representatives of persons who use or are likely to use services provided by the body; and
2. (b) representatives of persons appearing to the body to have an interest in any area within which the body carries out functions.

(4) The Secretary of State may by order specify—

1. (a) factors ("performance indicators") by reference to which a body's performance in exercising functions can be measured; and
2. (b) standards ("performance standards") to be met by bodies in relation to performance indicators specified under paragraph (a).

(5) In specifying performance indicators and standards, and in deciding whether to do so, the Secretary of State shall—

1. (a) aim to promote improvement of the way in which the functions of a body are exercised, having regard to a combination of economy, efficiency and effectiveness; and
2. (b) have regard to any recommendations made to him by the Audit Commission and the Commission for Health Improvement.

(6) In exercising a function a body must meet any applicable performance standard specified under subsection (4)(b).").

The noble Baroness said: This amendment forms a link between Clauses 13 to 18 which are about quality and Clauses 19 to 25 which are concerned with partnerships among NHS organisations and particularly between National Health Service organisations and local authorities. In brief, it introduces the concept of best value into NHS practice. The definition of that in the first part of the amendment concerns having regard in the actions that one takes, to a combination of economy, efficiency and effectiveness". As I said, this Health Bill creates a duty of partnership between National Health Service bodies and local authorities. When the Local Government Bill is passed, local authorities will have to conform to best value procedures. Best value principles include the need for meaningful consultation and the involvement of local communities in planning and providing services; the promotion of clarity about how service standards are developed in co-operation with the people using the services; and requirements for reporting on all the processes involved.

However, there is no similar best value requirement on health authorities and trusts at present. It is difficult to see how the new duty of partnership can work unless all the parties to it conform to the same obligations for best value. This difference of approach is part of the culture clash between local authorities and National Health Service organisations, to which reference was made by a number of speakers during the Second Reading of the Bill. Interestingly enough, other organisations have stepped in to support this amendment, which was put forward in collaboration with the consumer organisations. For example, a major drug producing group is worried that, faced with decisions on whether or not to recommend a new drug or a technological innovation, decisions will be made purely on the basis of cost rather than of cost benefit.

The language of the Bill is taken precisely from the language of the Local Government Bill which is going through another place. For example, the proposed new subsection (4)(a) and (b) is an exact replica of Clause 4(1) in that other Bill. The proposed new subsection (5) in this amendment is a replica of Clause 4(3) in the other Bill. During the Second Reading debate the Minister raised the topic of best value when she said, The new provisions will provide space for health services and local authorities to think more inventively; to develop innovative solutions to long-standing problems; and to use local resources in new and imaginative ways. They complement those in the Local Government Bill which will introduce the duty of best value for local authorities and enable the Government to remove obstacles to joint working".—[Official Report, 9/2/99; cols. 112–113.] This amendment tests the Government's commitment to ensuring that both partners in these partnerships work to the same song book. I beg to move.

Lord Harris of Haringey

This is an interesting amendment. Those of us who are currently involved in local government look forward to the legal introduction of the best value regime, which in many ways will be more testing than the previous system of compulsory competitive tendering. It is an important new regime in that it has as an integral part consultation with the people who use the services, the requirement that the authorities concerned challenge the way in which those services are delivered and think about innovative ways of providing them. It requires that there is proper comparison with benchmarks and other providers and it also involves competition. Those four "C's": consult, challenge, compare and compete, are extremely important. That is a discipline which local government is prepared to take on board. It could well be applied to much of the rest of the public sector. For that reason alone I believe that the amendment has merit and I look forward to hearing the Minister's reply.

However, there is a second reason, which was touched on when the amendment was introduced. If there is the expectation of increased joint working between local government and the health service, it will be extremely difficult, if not totally impractical, for one side of that joint working—the local authority side—to apply best value principles and for the health service not to embrace the principles in the same way. In the interests of ensuring that joint working between the health service and local government is as effective as we would all wish it to be, it makes sense for both the health service and local government to follow a similar regime. For that reason I have much sympathy with the amendment which has been proposed.

Baroness Gardner of Parkes

I have a certain sympathy with the language of the amendment, which I believe is interesting and probably quite effective. However, my sentiments are the opposite of those expressed by the noble Lord, Lord Harris. I am not at all satisfied that the concept of best value for local authorities is nearly as good as the concept of compulsory competitive tendering. I believe that the provision allows people to wriggle out of the concept of good value. They may say, "We thought it was best value bearing everything in mind". The best value element is the one part of the concept that I do not like. Fortunately the amendment does not appear to use those words. It appears to be the consumer organisation which is concerned with that phrase. I support the amendment not on the basis of best value but because it seeks, a combination of economy, efficiency and effectiveness". Those are the words which I value.

Baroness Hayman

It has been interesting to debate the amendment moved by the noble Baroness, Lady Thomas of Walliswood, and to consider ways in which the duty of partnership and the joint working that we wish to foster will take place on the ground. I do not believe that there is so great a culture clash as the noble Baroness may have suggested in speaking to the amendment.

While we want to see joint working it is important also to draw out the differences between the position of local authorities and that of NHS bodies in relation to best value. We must recognise that the relationship of the Secretary of State for Health to NHS bodies, including assigning the status of accountable officer to NHS chief executives, is different from that which exists between local authorities and the Secretary of State for the Environment, Transport and the Regions.

Best value is a duty owed to local people by elected members of councils, and the provisions of the Local Government Bill have been drafted to reflect that. I accept the point made by Members of the Committee, including my noble friend Lord Harris of Haringey, that the principles of best value should apply to the NHS. The Government are committed to driving up performance and standards across the NHS through continuous improvement in both the quality and the efficiency of NHS services. Where I would differ from my noble friend is that it is our belief that this does not mean that we could or should apply those best value principles in exactly the same way. The point is that the regimes should complement each other—I made this point in the Second Reading debate—and that the principles on which they are based should be the same but that we should not necessarily be taking through exactly the same regime.

We have set out in The new NHS White Paper our strategy for achieving the high quality and efficiency to which I have referred, with specific proposals to strengthen the existing statutory and performance management framework through introducing the duties of quality and of partnership on all NHS bodies, now being given effect to through this Bill; through requiring health authorities to lead the development of a local strategy for improving health and modernising services and for ensuring the active involvement of local service users and local communities in that process, which is covered by Clause 21 of the Bill and to which I know Members of the Committee pay particular attention; through setting clear national standards that will apply to all NHS bodies; through the establishment of the national institute for clinical excellence and the development of national service frameworks for assuring local delivery; through the introduction of clinical governance arrangements and to complement existing corporate governance arrangements to ensure probity and regularity; and, finally, through monitoring performance through a national performance assessment framework, the establishment of the commission for health improvement and the annual surveys of patient and user experience.

These measures will complement the Secretary of State's wide-ranging powers of direction over NHS bodies which are subject to external audit by the Audit Commission to ensure that they have proper arrangements in place to secure economy, efficiency and effectiveness—the criteria to which the noble Baroness, Lady Gardner of Parkes, referred—in the use of their resources. Taken together, they ensure that our approach to improving performance in the NHS is consistent with those principles underpinning the best value regime being introduced for local government. However, as I said earlier, that does not mean that the detailed provisions should he the same for NHS bodies.

This amendment seeks to provide NHS bodies with similar duties of best value to those provided for local authorities in the Local Government Bill. I hope the Committee will understand that we can achieve this through the powers already available to us, including the Secretary of State's powers to direct NHS bodies. In a number of important respects, those powers are strengthened and those arrangements made more robust. I would therefore suggest to the Committee that importing wholesale the best value provisions from local government is not the best way forward. I trust that the noble Baroness will feel able to withdraw her amendment.

Baroness Thomas of Walliswood

I thank the noble Lord, Lord Harris of Haringey, for making some points on my behalf with which I entirely agree. I did not do so because I felt that time was moving on. I thank him all the same. I thank the Minister for a very careful answer. I must confess that I do not find myself entirely at ease with all the points she made. We are talking here about a partnership with local authorities which involves joint commissioning of services. It involves commissioning services from each other, or the possibility that that should happen. If one comes at that from a different standpoint, one could be getting oneself into trouble. However, I do not want to dispute every point that the noble Baroness raised, as that would take another three-quarters of an hour. I shall read carefully what she said. I shall withdraw the amendment at this stage but may come back with another version of it at a later date. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clement-Jones moved Amendment No. 130:

After Clause 18, insert the following new clause—

STANDING CONFERENCE

(".—(1) The Secretary of State shall establish a standing conference (referred to in this Act as the Standing Conference) which shall have the duty of—

1. (a) conducting an annual review of, and the making of reports and recommendations to the Secretary of State on, treatment priorities and funding in the NHS after consultation with the National Institute for Clinical Excellence; and
2. (b) establishing a clear set of values and guidelines to clarify the decision-making process to be applied by Health Authorities, Special Health Authorities, Primary Care Trusts and NHS Trusts to ensure that patients are entitled to equal and consistent treatment, to be given clear treatment options and reasons where treatment is denied.

(2) The reports of the Standing Conference shall be published annually and shall take account inter alia of—

1. (a) the views of the public on the priority of treatments;
2. (b) the efficacy of treatments;
3. (c) the cost benefit of treatments; and
4. (d) the affordability of treatments.

(3) The members of the Standing Conference shall be appointed by the Secretary of State and shall consist of an equal number of lay members and members involved in the delivery of health care.

(4) In exercising his functions under the 1977 Act, the National Health Service and Community Care Act 1990 or this Act, the Secretary of State shall have regard to the reports and recommendations of the Standing Conference.").

The noble Lord said: Several of our debates have touched on rationing. At this time of night I have no intention of instigating a long debate on the subject. Indeed, we alluded to so-called post-code rationing when discussing the commission for health improvement and NICE. However, it is clear that rationing occurs in a number of different ways. It occurs where health authorities have decided that treatments are core and non-core healthcare services; it occurs where health authorities, while generally being favourable to a treatment which may be provided in another district, insist on more evidence than is reasonable in order to ensure that their bills are not unduly inflated; and it occurs where health authorities have run out of money for particular treatments.

When one looks at the whole area of rationing, one sees that there are huge variations in how communications take place with patients about treatments that are being denied. That is a matter of particular concern. The amendment attempts to tackle the first kind of rationing. The second type, we hope, will be dealt with by the combination of NICE and CHIMP. The third is a matter of year-on-year resources as provided to health authorities and NHS trusts. We believe that the first type will be dealt with by our amendment. It seeks to set up a standing conference along the lines of the Dunning Committee which was set up in Holland to provide a public forum in which rationing issues could be debated.

For instance, what is core healthcare? Noble Lords may have seen an interesting article in The Times of 23rd February which looked at the detail of IVF treatment. The article was headed "IVF treatment and the lottery by postcode". Clearly, IVF treatment is not provided on a consistent basis across the country and health authorities have very different views about it. Members of the Committee may have heard on the radio this morning a discussion about chemotherapy and the kinds of so-called chemotherapy cocktails which consultants wish to make but which are denied them by their health authorities. Who in a health authority decides on what is core and non-core? Is the Viagra example the model? Do we expect the Secretary of State to descend in a chariot of fire to make a decision on a single drug; or is there another model? We suggest that there is another model. We are not proposing an executive body or anything that actually takes the decision on what is core and what is non-core. We are suggesting simply a forum available to the Secretary of State to advise him. The pattern of differences between health authorities is enormous.

Nowadays, health authorities, to their credit, are being much franker about whether tattoo removal or infertility treatment is or is not included in their menu of treatments. However, by itself, that is dangerous. It means that potentially we no longer have a national health service. We have a series of health authorities deciding on what treatment is available in their localities. That means, in the words of the Question that has been tabled for tomorrow by the noble Baroness, Lady Knight of Collingtree, that people literally have to move house in order to find different treatments. That cannot be desirable. We are trying to ensure that there is at least a forum for a national debate on the subject that is long overdue. I beg to move.

9 p.m.

Baroness Hayman

The noble Lord has argued persuasively that we need to take measures to ensure that we have less unacceptable variation in standards of care in different parts of the country. I do not in any way disagree. What I believe the Committee should consider is whether the establishment of a national standing conference—a national priority-setting body—would be helpful in the process that we have set out in order to ensure a more nationally accountable NHS.

We are already setting up two new national bodies—the national institute for clinical excellence, in order to assess treatments, to examine their clinical and cost effectiveness, and to make the best possible evidence available to local health authorities, trusts and individual clinicians; and the commission for health improvement, whose role we have just discussed, to monitor the implementation not only of NICE's recommendations but of the national service frameworks, which will be aimed at reducing unacceptable variations and ensuring national standards of quality for patients wherever they are.

In some ways the arguments for a national standing council seem persuasive. The noble Lord alluded to the Dutch experience. Other countries have trodden that path but have not found it as easy or as successful a process as he suggests or they perhaps imagined it would be.

To reiterate, we have made it clear that we are committed to high quality, comprehensive services. We discussed earlier the need to ensure equality of access to those services and to ensure that there is not discrimination on the grounds of race or age. It is the Government's responsibility to decide on priorities within the resources that are available. That is not a responsibility that we wish to abdicate. In setting out national priorities, which we did in the national priorities guidance for 1999–2001 that we issued to the service last September, we made that clear.

We have set out our plans for ensuring a clearer national framework within which decision-making by local clinicians and commissions should take place. That involves setting up the national service frameworks, the commission and the national institute, and ensuring that there are clinical guidelines and advice on treatments that should be routinely available within the NHS. That will be underpinned by local clinical governance and the new performance assessment frameworks. There are also the health improvement programmes at local level. All those bodies and undertakings will need to engage the community and the interests of users and carers at appropriate levels. Earlier, we discussed the appropriate lay input into the commission for health improvement.

We want to ensure a more consistent approach across the country. However, at the same time we must recognise not only that individuals have different needs, to which clinicians will respond, but that local services need to reflect local needs and take account of local views. We recognise that health authorities and primary care groups are in the best position to make judgments as to which services and which treatments are required, but we want them to do that within a stronger national framework. We are setting about creating that stronger national framework after the fragmentation of the past. I hope that on that basis the noble Lord will accept that the aims that he intends to promulgate with this amendment are being addressed by various measures from the Government.

Lord Clement-Jones

I thank the Minister for that interesting reply. In a sense, it attempts to offer the best of both worlds—strong local views and a stronger national framework. I am not sure which bit is going to give at the end of the day.

Interestingly, the Minister did not mention Greg Dyke's NHS charter, which clearly has a role in this provision. If the Government accept any or all of the Greg Dyke formula, I should have though that subsection (1)(b), dealing with establishing a clear set of values and guidelines to clarify the decision-making process to be applied by health authorities, would be attractive. One does not quite understand the status of the Greg Dyke exercise; however, he has made some interesting suggestions. They fit in with the local decision-making aspect mentioned by the Minister.

Baroness Hayman

I am grateful to the noble Lord for giving way. He is absolutely right. The recommendations from Greg Dyke on the current patient's charter and how we could move forward on the NHS charter are interesting. He makes the point that, while there are some basic values which he believes ought to be national standards, he very much feels that charters ought to be determined at local level. I did not refer to this in particular, although we intend to take forward those proposals and, before too long, issue suggestions for consultation throughout the service. Setting national standards is the responsibility of government, after proper consultation, rather than the responsibility, as this amendment would make it, of a standing conference.

Lord Clement-Jones

I thank the Minister. That was the most interesting of her responses. It demonstrated the direction from which the Government are approaching the matter. I look forward to consultation over the Greg Dyke proposals.

I agree that, when discussing rationing, there are difficult issues in relation to national bodies and whether there can be a consistent overall set of core healthcare treatments which form the NHS service. The Minister may have been thinking of Oregon, New Zealand and other such places as providing difficulties. If that is not to be the model that the Government wish to follow, the NHS charter model pursued by Greg Dyke must in a sense be the alternative approach: a broad set of values are laid down by which health authorities and NHS trusts are expected to be guided. The indication from the Minister is that that is the direction in which the Government wish to go, subject to consultation. To that extent, this has been an interesting exchange. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 131:

After Clause 18, insert the following new clause—

("Access to information

ACCESS TO INFORMATION

The provisions of Part VA of the Local Government Act 1972 shall apply to a Primary Care Trust and to the Commission for Health Improvement as if in that Part any reference to a principal council included a reference to a Primary Care Trust and the Commission for Health Improvement.").

The noble Lord said: This is a purely probing amendment. I do not suggest that the Local Government Act 1972, or even a reference to it, belongs in this part of this Bill, but it is a useful model for deciding whether meetings of councils or public bodies should be open to the public. It seems to me a much better, more up-to-date and much more New Labour freedom-of-information model than that which is embedded in the Public Bodies (Admission to Meetings) Act 1960, which is an ancient piece of legislation applying principally to health authorities and parish councils. I believe that, if the department had had the opportunity to address itself de novo to how meetings of health authorities and the bodies referred to in the amendment should be made open to the public, it would not have set the provision in the following words: A body may … exclude the public from a meeting … whenever publicity would be prejudicial to the public interest by reason of the confidential nature of the business to be transacted or for other special reasons … A body may … treat the need to receive or consider recommendations or advice from sources other than members, committees or sub-committees of the body as a special reason why publicity would he prejudicial". That amounts to carte blanche to close meetings to the public. I hope that that is not what the noble Baroness contends should be the case with these bodies. I hope that she will be able to give me some comfort that in practice she would expect a much more open set of attitudes than would be permitted under the Bill as it now stands. I beg to move.

Baroness Hayman

I hope that I can give the noble Lord some reassurance on the issues which concern him. The Government are committed to openness and transparency of process and the principle that public bodies be accountable to the people they serve.

The noble Lord rightly points out that, while we have made provision in the Bill for primary care trusts and the commission for health improvement to hold their meetings in public, this is done by making them subject to the Public Bodies (Admission to Meetings) Act 1960, which is the Act that NHS bodies are generally committed to. It is our firm intention to extend this to primary care trusts, and we have done that in paragraph 1 of Schedule 4 to the Bill. I was interested to hear the noble Lord say that because this was an Act of 1960 it was ancient legislation. I suggest to him that in your Lordships' House legislation of 1960 is probably not ancient legislation. It is, however, as he correctly points out, not phrased in exactly the same terms as the Local Government Act 1972, which requires committee meetings to be held in public and agendas and minutes to be made available to the public.

I suggest to the noble Lord that the commission for health improvement and primary care trusts are more like health authorities and trusts than they are like local government. They will not have a large and complex committee structure at which main decisions are taken. The majority of the business of the commission for health improvement is likely to be undertaken in main meetings. While there may be some sub-committees, they are likely to be on technical and administrative matters. To make such meetings open to the public would impose considerable administration and costs on the organisation. The document published last year, Quangos: opening the doors, which I hope he will recognise as showing our commitment to openness in the working of non-departmental public bodies, makes clear that there are costs involved in these matters.

We want to be as open as possible. We believe that meetings should generally be held in public. Both primary care trusts and the commission will hold open annual meetings at which members of the public will have an opportunity to question and gain greater understanding of the work of those bodies.

The noble Lord suggested that there was something rather sinister in the ability of those bodies to meet in private and not to make documents public when they thought that necessary. Given our earlier debate on confidentiality, Members of the Committee will be aware that both bodies are likely from time to time to deal with matters of a confidential nature and that at such times it is reasonable that the public should be asked to withdraw. The same arrangements to maintain confidentiality should apply to any papers made available to PCT boards and the commission. To complete the picture, I should add that, as we discussed earlier, specific provision is made in Clause 15(2) and paragraph 12 of the schedule for the commission to make its findings public and to issue an annual report.

In addition, the local NHS has a duty to consult widely where there are proposals for change in local services. There is already a requirement on NHS bodies to publish annual reports and to make available other information to the public concerning plans for health and healthcare. We do not wish to impose further administrative burdens and costs on the NHS. Earlier we had a debate about the importance of ensuring that maximum funding is directed at delivering and improving services for patients.

I hope that, in view of what I have said, the noble Lord will feel that not only is there already extensive provision as to public access to proceedings and reports of both the commission and primary care trusts but that there is absolutely no intention that those bodies should operate in any kind of shadow and that we are committed both to openness and transparency of process.

9.15 p.m.

Lord Lucas

I am very grateful for the Minister's explanation but it does not go a very long way to address the basic question that I ask; namely, why these new bodies and existing health authorities are given a blanket permission to close meetings to the public, whereas local authorities are allowed to close meetings to the public in particular circumstances but are not given a blanket permission. The difference is that in the case of local authorities and other bodies certain circumstances will arise where it is right to close meetings to the public, but those circumstances are specified in the Act. Under this legislation and that which applies to existing health authorities—one asks why the opportunity is not being taken to revise the latter—these authorities are given blanket permission to close meetings to the public. The noble Baroness appears to believe that a formal annual general meeting every year—rather like some corporate bunfight—is sufficient to meet the obligation on health authorities to open their meetings to the public.

Baroness Hayman

If the noble Lord will forgive me for interrupting, I believe that he has misrepresented what I said. I did not say that I believed one annual meeting to be sufficient. I thought I had made it clear that the Government considered that these bodies, governed as they would be by the Public Bodies (Admission to Meetings) Act 1960, should hold their meetings in public. I take the noble Lord's point that these bodies will be governed by one piece of legislation that does not specify what is a confidential piece of business, and therefore the circumstances in which part of an agenda may be debated in closed session. But the noble Lord should not suggest that the Government consider that there should be only an annual meeting. I hope I have assured the noble Lord that, unless there are confidential matters on the agenda, the intention is that these bodies will meet in public.

Baroness Thomas of Walliswood

I have restrained myself until this moment. I am entirely in agreement with the noble Lord, Lord Lucas, on this matter. As a member of a local authority for 12 years, almost all of our meetings were held in public. Working group meetings were not held in public because no decisions were taken at those meetings and the position was quite different. But any meeting where decisions were taken, whether it be a sub-committee or whatever, was held in public. When matters were not made public it was for a specific reason laid down by statute, always on the basis of advice from the responsible officer in the legal office who served that particular committee. This is a rather different situation. After all, both bodies spend very large sums of public money. A district general hospital spends about as much money as a district authority. I am not sure why one should have greater protection than the other.

Baroness Hayman

I am grateful for the intervention of the noble Baroness. I shall consider what both she and the noble Lord, Lord Lucas, have said. But I hope that the noble Baroness will acknowledge that the practice of NHS bodies particularly recently has been to hold meetings in public and not to make use of the provisions in any way to cloud matters or to meet secretively.

Baroness Thomas of Walliswood

I apologise for interrupting the noble Baroness. I am very glad to hear what she says. However, my experience of a few years ago was not in that direction.

Lord Lucas

I am very grateful for the support of the noble Baroness, Lady Thomas of Walliswood. Her experience bears out part of what I have said. I do not argue with the Minister and suggest that there is widespread misbehaviour, but this Bill gives these new parts of health authorities a power which, looking at health authorities and these bodies in general, they should not have. They should be much more tightly regulated as to what items they are allowed to debate in these circumstances.

Lord Nunburnholme

Perhaps I may remind the noble Baroness that a D Notice applies only in wartime.

Lord Lucas

I do not pretend to be able to draft the measure this evening. I am sure that the noble Baroness and her officials will be better at drafting than I am. However, it would be a better basis for legislation to specify in the Bill the information which allows the authorities to close meetings to the public rather than provisions allowing them general good will and giving them blanket permission to close meetings to the public.

I shall consider pursuing the matter at Report stage. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 [Co-operation between NHS bodies]:

Baroness Sharp of Guildford moved Amendment No. 132:

Page 15, line 32, after ("other") insert ("and relevant voluntary and community organisations").

The noble Baroness said: In Clause 19 we move from the Commission for Health Improvement to the duty of partnership. The purpose of Amendment No. 132, and Amendment No. 134, tabled by the noble Lord, Lord Harris, extends the duty to co-operate to include a duty on NHS bodies to co-operate with relevant voluntary and community organisations. The amendment in the name of the noble Lord, Lord Harris, carries that concept somewhat further forward. It places a reciprocal duty of co-operation on those bodies with the relevant NHS bodies.

The purpose of the amendment is to bring about better co-operation, communication and co-ordination between different parts of the NHS for the benefit of the public. NHS bodies should try wherever possible to work closely and co-operatively with outside agencies and non-statutory bodies such as community and voluntary groups, community health councils and other groups representing patients and health service users, advice and welfare agencies and the professional organisations and trade unions representing NHS staff.

We from these Benches believe that such groups can offer a great deal of help to the NHS. Patients and patient groups are often well placed to advise on the quality of current services and to suggest ways in which services could be developed and improved. Advice and welfare agencies can bring a wider perspective to the NHS—for example, on public health issues such as the effects of poor housing and health. Professional organisations such as the Royal College of Nursing, the British Medical Association and the Royal College of Midwives also have a contribution to make.

Many NHS trusts already benefit from working closely with those organisations on such issues as employment policies and policies relating to clinical practice. Further co-operation of that kind, we believe, will benefit patients and staff and is to be encouraged. I beg to move.

Earl Howe

I am sympathetic to the general thrust of the amendments and the thinking underlying them, but I cannot support them. While we all want to see the best possible co-operation between the NHS and voluntary groups, it is no good imposing a duty in law on the health service to co-operate with such bodies when no corresponding duty is being created in reverse. There has surely to be symmetry. One would have to widen the scope of the Bill quite dramatically to achieve that, even presuming that it seemed to be a good idea in the first place.

Baroness Carnegy of Lour

I agree with what my noble friend said, but I believe that there is something behind the amendment to which the Government should pay attention. At the annual conference of the National Council of Voluntary Organisations on 21st January, the Prime Minister made what I think he intended to be a key speech on government policy. Perhaps I may quote one part. He said: In the second half of the century we learnt that government cannot achieve its aims without the energy and commitment of others—voluntary organisations, business, and, crucially, the wider public. That is why the Third Sector is such an important part of the Third Way". If voluntary organisations are the third way, and the "giving society" is a key government policy—I can find no fault with that—it is important to provide in the Bill that the health service bodies consult and co-operate with those parts of the voluntary sector involved in the area in which they are functioning. To that extent I believe that the amendment is important.

Baroness O'Cathain

For clarification, can we be given an estimate of the number of voluntary and community organisations which might be classified as "relevant"? Who will say that those organisations will be relevant? The people in the voluntary and community organisations probably count themselves as relevant, but who is to make the judgment? It could well be that they might not appear to be relevant to the people running the NHS.

Baroness Sharp of Guildford

The term "relevant" appears frequently in legislation in a somewhat ambiguous fashion. In this circumstance, a self-sorting mechanism arises. These are the voluntary organisations which are concerned with carers, caring organisations and particular aspects of health. I refer, for example, to the schizophrenia organisation.

Baroness O'Cathain

I believe that to put them on the face of the Bill would invite a huge raft of people to declare themselves as relevant. They may feel that they may have some influence and want to be heard. We could be creating an enormous bureaucracy and a talking shop, which is my problem with the amendments. I can see the principle or the thought behind them, but trying to effect them would be difficult.

Baroness Sharp of Guildford

My proposal is not to list them in the Bill, because there has been criticism of lists which have been given, but to allow for discretion on such occasions.

Lord Hunt of Kings Heath

I agree with what I take to be the intention behind both amendments; namely, to promote stronger relationships between all parts of the NHS and local voluntary, community and patient organisations and to bring about better co-operation. I do not believe that any Member of the Committee would disagree with that. However, apart from the specific points made by the noble Baroness, Lady O'Cathain, in relation to the definition of "relevant", I am not persuaded that the clause is the right vehicle for such a sentiment.

The clause we are discussing is directed to re-establishing the principle of partnership working across the NHS in place of the fragmentation of the internal market. The clause makes clear the reciprocal nature of the duty binding each of the NHS bodies to co-operate with each other. That is a sufficiently important principle to stand alone and I suggest that the clause contemplates a different kind of partnership relationship from that with non-statutory bodies.

I can conceive of few if any circumstances in which one would want to put the same duties of co-operation on these non-statutory, and sometimes informal, bodies as are appropriate to bodies working within the NHS. Indeed, I suggest that the onus has to be on the NHS to reach out to such bodies, inviting their participation in planning and delivering improvements in local services and the health of the local community.

In that context, Clause 21 on developing and taking forward local strategies for improving health and healthcare seems to be the better context for pursuing voluntary body, user, carer and community involvement. There are a number of amendments to be debated on that clause to which we shall turn shortly. However, we have already made clear in previous guidance on health improvement programmes the crucial importance of promoting full involvement in the full range of community, voluntary, user and care interests in developing these plans. Work is in hand with health action zones and others to promote stronger forms of community involvement.

Given the forthcoming debate on Clause 21, I hope that the noble Baroness will agree that an amendment to the duty of co-operation on NHS bodies would not be appropriate.

9.30 p.m.

Baroness Sharp of Guildford

I thank the Minister for his answer, although I am not satisfied with it. We have deliberately drafted the amendment so that the duty of partnership is on the NHS bodies to share and co-operate with the voluntary organisations.

The point made by the noble Baroness, Lady Carnegy, is extremely important in this regard. Given the role that voluntary organisations play today within the NHS, it is extremely important that they are included and not excluded from that partnership. In the light of that, we shall look carefully at the Minister's reply. We are not fully satisfied with his answer and we may wish to return to the matter on another occasion. However, for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 133:

Page 15, line 33, at end insert— ("(2) To this end any bodies mentioned in subsection (1) which have co-operated with each other in exercising prescribed functions shall—

1. (a) meet at least 4 times per year in public to discuss partnership arrangements;
2. (b) invite a representative from all affected community health councils and local authorities;
3. (c) make an annual report on such meetings to the Secretary of State, which he shall publish.

(3) In subsection (2) "prescribed" means prescribed by regulations made by the Secretary of State.").

The noble Earl said: Clause 19 is a short and delightfully simple-sounding clause which states that: It is the duty of Health Authorities, Special Health Authorities, Primary Care Trusts and NHS trusts to co-operate with each other in exercising their functions". So short is the clause that I feel I must ask the Minister a few questions.

Looking at the clause purely as a matter of law, the first question is very simple: what does the duty amount to? Who is to decide whether the duty has been breached or fulfilled? What mechanisms are to be put in place to ensure that the duty is met? How is the duty to be enforced? What are the penalties for non-compliance? Indeed, are the terms of Clause 19 sufficient to enable a court to reach a judgment on the issue, if it came to that?

That is why we need some flesh on the bones and that is the reason for my amendment. If the duty of partnership is to amount to anything tangible or to mean anything to the public, there must be an opportunity for bodies which are working in partnership to meet to discuss how they can work together more effectively. It is necessary also for those meetings to be reported so that patients can be assured that their healthcare bodies are working together in a productive manner. I beg to move.

Lord Hunt of Kings Heath

The noble Earl expresses some scepticism about the duty of partnership laid down in the clause. I regard this is an extremely important component of the Bill.

I believe that the very specific requirement imposed by Clause 21 on health authorities, primary care trusts and NHS trusts—the bodies to whom that duty applies—to participate with their local authority in developing health improvement programmes and in working together to implement them is a clear indication of the strength and breadth of the duty of partnership, because that requirement makes clear that the Bill is about partnership and co-operation for a purpose—namely, improving the health of local communities and improving the health services they use.

We already have in Clause 21 a framework for bringing together all the local players with an interest in an inclusive process. That includes also local authorities and community health councils, along with the wider community and a wide range of local organisations. I am sure that we shall discuss that in depth when we deal with the amendments to Clause 21.

Perhaps at this stage I may concentrate on what seem to be difficulties with the amendment now before us. First, I have some concerns about its scope. Clause 19 is deliberately drafted to embrace co-operation between bodies right across the NHS. In the main, of course, the need will be for local co-operation in the planning and delivery of local services. The health improvement programme process reflects that. But there will be many instances where much wider co-operation is at issue, some of them on important themes on which we have already touched in this Committee—in the commissioning and provision of specialised services, for example; on matters of education and training; or on research. Each NHS body will need to co-operate through a network of different relationships for these purposes and we intend the scope of Clause 19 to reflect that.

I do not believe it would be appropriate to subject each such example of co-operation to the sort of arrangement proposed in the amendment. The key ongoing relationships will be covered by the health improvement programme process. To subject other wide-ranging forms of co-operation to the processes in the amendment would, I fear, prove bureaucratic and burdensome. Indeed, at worst it could prove a disincentive to the very partnership working we are all seeking to achieve.

Secondly, I am uneasy at the concept of a series of meetings and reports "to discuss partnership arrangements." I would much rather see all concerned getting on with the business of working together to achieve some results for their local communities. We want partnership for a purpose and I believe that is what the partnership clauses of this Bill, taken as a whole, offer us.

I believe that we are right to set a broad duty of co-operation in Clause 19. I should be reluctant to see it circumscribed by procedural requirements. We must certainly ensure that partnership working becomes a reality but I believe that the health improvement programme process at Clause 21 provides a better means of achieving this.

The noble Earl raised some questions about how such co-operation was to be enforced. From my experience of working in the National Health Service we should not under-estimate the capacity of the NHS to respond to the underlying philosophy enunciated in the clause in relation to the NHS bodies we wish to see co-operating. If there were specific situations where it was seen that some NHS bodies were not co-operating and that that was undermining the effectiveness of the health service, exceptionally the Secretary of State's powers of direction could be used over NHS players. But I hope that that will be unnecessary. The clause is an important philosophic statement about the way in which we expect the NHS to conduct itself in the future. I have every confidence that the NHS will accept and embrace that philosophy.

Baroness O'Cathain

Does the Minister really believe that people volunteer to be co-operative the whole time when they have so many jobs to do? This type of arrangement whereby people would need to put into their diaries the relevant names of those with whom meetings had to be arranged once a quarter would target attention to co-operating. They would not allow something to go to the bottom of the in-tray; they would just get on with it.

It may be that these bodies could be told to meet just four times a year in public. If they needed to meet more frequently they could do so because the amendment suggests "at least" four times a year. If people know that they have to meet those with whom they should be co-operating on the basis of once a quarter, that will focus their attention on co-operation. The Minister says it is a philosophic statement. It is also philosophic to say that they should have a target to co-operate.

Lord Hunt of Kings Heath

My experience of NHS bodies, if we take, for example, the area of a district health authority and the organisations within that authority—NHS trusts, primary care groups and so forth—is that they will meet many more than four times a year.

My point is that the duty of co-operation is an important statement about the values within which we expect the NHS to operate. That is unlikely to be added to or solidified by a requirement to meet four times a year. We shall come to this matter later, but as regards joint consultative committees and the requirement to meet with local government, in the past 20 or 30 years we have moved beyond that. Relationships are so important now to provide integrated services that whether or not there are four statutory meetings a year would have no effect on that. We have to ensure that everyone in the NHS is signed up to real co-operation. On that basis, stating this duty is important.

Earl Howe

Of course, I understand that it is important, in the context of the Bill, that the various arms of the health service should work together. I did not mean to sound like a sceptic on the concept of partnership or, indeed, to question the worth of making statements of intent. My only concern was that the words that we convert into law should have real meaning; that any duty in law should be capable of being enforced and adhered to, and that there should be proper mechanisms in place to help the parties to do that.

With the best will in the world, there will be conflicts of interests at play, even with this duty in place. My noble friends alluded to those. Health authorities, primary care trusts, NHS trusts and so forth will sometimes have to sublimate their own interests in order to assist or support one another if this duty is to be fulfilled. What happens if they have different priorities? All these questions arise.

I thank the Minister for his reply. However, I shall have to reflect a little further on what he has said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 134 not moved.]

Clause 19 agreed to.

Clause 20 agreed to.

Baroness Pitkeathley moved Amendment No. 135:

After Clause 20, insert the following new clause—

REQUIREMENT OF HEALTH AUTHORITIES TO ASSIST COMMUNITY CARE ASSESSMENT

(".—(1) Section 47 of the National Health Service and Community Care Act 1990 (assessment of needs for community care services) is amended as follows. (2) In subsection (3), for the words "notify that Health Authority or local housing authority and invite them to assist, to such extent as is reasonable in the circumstances, in the making of the assessment;" there shall be inserted "in the case of a Health Authority require, and in the case of a local housing authority invite, the authority concerned to assist, to such extent as is reasonable in the circumstances, in the making of an assessment;".").

The noble Baroness said: This amendment would require the health authority to assist a local authority when it is carrying out an assessment of a person's need for community care services. The health authority would be required to assess the person's health needs in relation to community care. The amendment also mentions that housing authorities would be invited to assess those needs.

The background is as follows. As noble Lords will know, the National Health Service and Community Care Act 1990 came into force in April 1993. The Act places the responsibility for arranging community care services on local social services authorities. A local authority must carry out a community care assessment where it appears to that authority that a person may be in need of community care services which the local authority may provide or arrange.

Where the local authority believes that the person has health needs, it is required to invite the local health authority to assist in that assessment. However, there is no corresponding requirement on the health authority to respond to a local authority's request for assistance.

Accordingly, the amendment would place a duty on the health authority to participate in the assessment of a person's health needs when asked to do so by the local authority. The amendment makes it clear that the health authority's duty is to assist the local authority, to such extent as is reasonable in the circumstances". In my view, that would very much accord with the duty of co-operation set out in Clause 20. I am sure that it is very much in keeping with the commitment to partnership between health authorities and local authorities which is expressed in the Bill and which, as we know, is active between many of the professionals involved.

I should point out that the amendment has the support of the Association of Directors of Social Services, the Local Government Association, and of charities such as the Carers National Association and Scope. I beg to move.

9.45 p.m.

Lord Skelmersdale

I spoke slightly on this matter at Second Reading. It seems to me to be absolutely vital that if Clause 22, which we have not yet reached, is to stand part of the Bill, the local authorities, social services, health authorities and the whole health machine must talk together before anything can happen. Therefore, I support the noble Baroness in her amendment.

Baroness Thomas of Walliswood

I rise briefly to echo the words of the noble Lord, Lord Skelmersdale. I look forward very much to hearing the Minister's response to this interesting amendment.

Lord Warner

I too speak in support of the amendment. In doing so, I declare an interest as a member of the Association of Directors of Social Services. From my experience as a director of social services, I regard this as a worthwhile amendment which would deal with some of the occasionally difficult cases where health authorities do not always co-operate.

Lord Hunt of Kings Heath

The effect of the amendment would be to require health authorities to assist in community care assessments undertaken by local authorities. I believe that the amendment is unnecessary.

Local authorities are under a duty to give a community care assessment to anyone who, in the authority's view, may be in need of community care services. We have made clear in guidance that these assessments should always involve medical professionals when appropriate, but this will not always be necessary.

Community care assessments should enable the local authority to make appropriate decisions about service provision, but the exact form of each assessment is something best left to them. In some circumstances, a fully comprehensive assessment will clearly be essential, involving people from a number of professional backgrounds in working with a person with multiple needs to identify the best way forward. But in other cases, a quick and simple assessment may be all that is needed so that necessary help can be provided with minimum delay. Requiring NHS input in every assessment might make it more difficult to target timely help where it is most needed.

I believe that my noble friend and I have the same underlying aim: to get the right services to the right people at the right time. Although I do not believe this amendment offers the best way forward, we do have other action in hand. We set out in our better services for vulnerable people initiative the requirement on health and social services to develop a joint framework for multi-disciplinary assessment of older people in acute and community healthcare settings. Improved multi-disciplinary assessment—where this is appropriate—leads to better co-ordination of care between agencies and better outcomes for service users. I believe this developmental approach to multidisciplinary assessment is the right way of achieving flexibility and better outcomes for service users by tailoring assessment to their needs.

We shall, of course, continue to monitor the development and implementation of these multi-disciplinary assessment frameworks to ensure there is good progress on the aims I have described. I hope that my noble friend will accept that this is a serious endeavour to address the concerns behind her amendment and will not feel the need to press it.

Lord Skelmersdale

Before the noble Baroness goes any further, the Minister mentioned multi-disciplinary assessments. He is, of course, absolutely right, but unless one organisation—the health authority, for example, or the local authority—can push the case of an individual—it will almost invariably be an individual whose needs are being assessed—there will not be a multi-disciplinary assessment. How does the Minister intend to carry this forward? To paraphrase, he said, "We will wait to see how the system develops." I am tempted to use the oft-quoted expression in this House, "How long, dear Lords, how long?"

Lord Hunt of Kings Heath

We should not underestimate the likely impact of the better services for vulnerable people initiative because it is intended to deal with the problem of people slipping through the net who are not best served by the current assessment procedures. In the very nature of achieving better co-ordination care between agencies and better outcome for service users, the whole intention is to deal better with the needs of the individual.

Clearly, noble Lords have raised issues on the basis that it is deemed that the NHS is failing to respond to local authorities in the assessment procedures. It is certainly my hope that NHS failures to provide the support the local authority requires are limited. However, there is an overall duty of co-operation and powers of direction under Section 17 of the National Health Service Act 1977 which allow the Secretary of State to direct health authorities and trusts to provide services. So there is a chain of accountability which enables the health service to respond to problems in this area.

Baroness Pitkeathley

I thank the Minister for his thoughtful reply. It is no part of my approach to doubt his commitment and that of other noble Lords to a multi-disciplinary approach to assessment. The amendment was put forward to address the few problem cases we can identify. I shall carefully study what has been said and trust that his hopes are justified about the limited number of cases to which this would apply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn

Clause 21 [Plans for improving health etc.]:

Baroness Sharp of Guildford moved Amendment No. 136:

Page 16, line 6, after ("Authority") insert ("and Special Health Authority").

The noble Baroness said: This is a minor probing amendment. We believe that special health authorities as well as the health authorities should have a duty to prepare a health improvement plan. I believe that it is the intention of the Government eventually to phase out special health authorities, but for the moment they exist and it is important that they do not opt out of the health improvement framework in the Bill. I beg to move.

Lord Hunt of Kings Heath

I accept the points made by the noble Baroness, but there is a problem in seeing how the duty in Clause 21 could properly be laid on the special health authorities, which would include NICE, the Central Blood Laboratories Authority and the Special Hospitals Authority. It is difficult to see how they could strictly fulfil the requirements of Clause 21.

We will ensure that all special health authorities work in partnership with others in the NHS and local government to ensure that NHS services are delivered effectively to improve the health of the population. That is why special health authorities are explicitly included in the duties of co-operation in Clauses 19 and 20. Clause 21 is different because it is based upon the duty of each health authority to secure health services for, and advance the health of, a defined local population. All the more detailed requirements of Clause 21 flow from that starting point. It is difficult to see how that could realistically be extended to put this duty on special health authorities, which are established generally with a much more closely defined function, usually exercised on a national basis.

If the intention is to ensure that all special health authorities seek to exercise their functions with the aim of improving health and healthcare, I do not think that there is any disagreement between us in principle. I hope that the noble Baroness will agree that extending Clause 21 in the way suggested is not the best means to achieve this aim.

Baroness Sharp of Guildford

I thank the Minister for his most helpful reply. I think we now understand better the reasons for leaving out these authorities. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Sharp of Guildford moved Amendment No. 137:

Page 16, line 6, leave out from ("Authority") to ("to") in line 7.

The noble Baroness said: Amendments Nos. 137 and 139 would have the effect of making it the responsibility of each health authority to prepare its health improvement plans on a rolling basis, publishing them on a regular annual basis. The reason is to ensure that health authorities recognise that it is their responsibility to produce the plan and thereby have a sense of ownership rather than regarding it as just another of those tasks which must be completed for the department. Annual publication would keep the authority up to the mark. Amendment No. 138 makes it clear that such a plan would provide a framework for wider consultation within the community. I beg to move.

Lord Hunt of Kings Heath

The effect of these amendments would be to put on the face of the Bill a mandatory requirement that a health improvement programme be prepared annually. As a general rule, we would wish to avoid specifying matters of administrative procedure on the face of the Bill. In the case of health improvement programmes, I would be particularly uneasy because one of our aims is to break out of the strait-jacket of the annual planning and contracting round. We certainly intend—as the noble Baroness suggested—that the programme should be rolled forward, and published, each year. Our existing guidance makes clear this expectation. I am happy to give a firm assurance now that this is what we intend for the future.

However, our intention is that the health improvement programmes should cover a three-year period. As they are rolled forward each year, we intend that a number of issues will be reviewed in depth rather than the whole plan being updated in every detail. We believe that this will enable better planning for strategic change. Critically, it will allow more time for the in-depth involvement of users and carers, community groups, clinicians and other staff—all those whom noble Lords are keen to see more fully engaged and who, as my noble friend Lord Harris, the noble Lord, Lord Rix, and others, have pointed out, have found the traditional arrangements for formal and tightly timetabled consultation on comprehensive plans so frustrating.

We want to develop the new arrangements differently. For example, we expect the health improvement programmes for the period beginning April 2000 to cover implementation of the first two national service frameworks on coronary heart disease and mental health. If we take the example of mental health, I can tell the Committee that during 1999 we envisage that health authorities will plan to bring together NHS trusts and the clinicians concerned, primary care groups, social services and other local authority representatives—such as housing—and other local players, together with users, carers and the voluntary groups to whose important contribution the noble Lord, Lord Rowallan, drew our attention earlier in the proceedings. The intention is that, together, they will take the time to look in depth at what needs to be done and plan the way ahead. When the programme comes to be rolled forward again, the same sort of in-depth review would be applied to other topics.

It is on that basis that I would be reluctant to see us put anything on the face of the Bill that bound us tightly into an annual round at the expense at this sort of in-depth planning on a longer cycle. I hope that I have reassured the noble Baroness of our clear intention to see regular publication of what is contained in this work and that, on that basis, she will be prepared to withdraw the amendment.

Lord Skelmersdale

If that is the case, why does not the Bill say so?

Lord Hunt of Kings Heath

We have certainly made it clear in guidance that this is what we intend to see happen. However, I am not sure that one would necessarily want to constrain on the face of the Bill for all time the necessary administrative arrangements in relation to the publication of plans. The intention, though, is quite clear.

10 p.m.

Baroness Sharp of Guildford

I thank the Minister for his reply. I am not totally satisfied with it because it seems to me that the sense of ownership that I spoke of is an important issue. However, in the light of his reply, for the moment I shall withdraw the amendment and reconsider the issue at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Sharp of Guildford moved Amendment No. 138:

Page 16, line 10, at end insert— ("( ) Health Authorities shall before drawing up any plan under this section consult relevant voluntary and community organisations, including in particular organisations representing carers.").

The noble Baroness said: In moving Amendment No. 138, I wish to speak also to Amendments Nos. 140 to 144, 146 and 147. This series of amendments all relate to issues of who shall be consulted by health authorities when they draw up local health improvement plans. We believe that the wording of the Bill as it stands is too vague. The purpose of these amendments is to flesh out consultation arrangements and to ensure that the process is broad and that there are statutory requirements to include certain organisations or kinds of organisations within the process of consultation.

Our main concern in framing these amendments is to ensure that the consultations over the health improvement plans are thorough, inclusive and effective. We reject the approach of Amendment No. 141 in the name of the noble Earl, Lord Howe, because we believe that it is too prescriptive. We do not think that lists of this kind are the right way to handle this issue. Nor do we see why central organisations such as the BMA or the RCN should be included in this process at the local level. There must be some local flexibility. We therefore believe that the right approach is to list—as we have done in Amendment No. 143—the kinds of organisations that should be included.

As is clear, Amendment No. 143 is supported by the noble Lord, Lord Rix, who is unable to be here today. He has asked me to read out his contribution to this debate. The noble Lord wishes to bring a quick example to the Committee's attention to highlight the importance of delivery of public health initiatives to people with learning disabilities. Some of the inequalities in access to healthcare are quite startling. Research by Mencap reveals, for example, that cervical smear testing in women with learning disabilities is as low as 3 per cent. for those living with their families compared with the UK average of 85 per cent. This is clearly unacceptable. We must ensure that groups of and for people with learning disabilities are well represented in the formulation of local health plans of this kind. I beg to move.

Earl Howe

I am all too well aware that Amendments Nos. 141 and 144 tabled in my name fall foul of the Skelmersdale injunction against shopping lists, and I accept the criticism. However, I believe they serve a useful purpose. This is not just a ritualised exercise in listing. What it is designed to emphasise—as has been said already—is that consultation has to be wide and inclusive, and that health improvement programmes cannot just be imposed. There needs to be a sense of ownership on the part of all those directly involved. That comprises a great many groups of people.

Amendment No. 144 specifically refers to universities and schools for medicine and nursing or professions allied to medicine. It does so because one needs to remember how important those are to the functioning of the health service as we know it. If I were to single out one group for special mention, it would be the voluntary organisations because so often it is those groups who represent users and carers who can identify needs and gaps in the current provision, particularly as they affect minority groups or those who may find it difficult to access mainstream services. During the first round of health improvement programmes it has not always been easy for voluntary organisations to contribute as ideally they would wish to do. That is why I believe it is particularly important that their voice should be heard during the process of consultation.

The Explanatory Notes to the Bill make it clear that the process is intended to engage voluntary bodies. The Secretary of State's direction-making powers in Clause 21(5)(a) and Clause 21(6) could be used to ensure that such bodies are involved. But there is a gap here. What mechanisms will there be to ensure that the Secretary of State is aware that the process is not working as perhaps it should? How will a voluntary organisation, if it is out of the loop, so to speak, know what is going on and how it can make an appeal? I shall be pleased to hear the Minister's comments.

Lord Walton of Detchant

I would not wish to anticipate whether the noble Lord the Minister or the noble Baroness the Minister—in tonight's double act—will respond to these amendments. Having said that, I am sure that I can anticipate their response. They will say that these amendments are unnecessarily detailed and prescriptive. The point that has been made by the noble Earl about the involvement of the universities is absolutely crucial. The universities are now playing an increasingly important role, not only in the training of doctors and dentists, but in the training of nurses, physiotherapists, occupational therapists and many other health care professionals, including speech and language therapists. Scientists too are playing an increasingly important role in the NHS as are the medical laboratory technologists and many more.

I know that, at an earlier stage of the Committee's proceedings, the Minister gave us a number of assurances about the involvement of and consultation with the universities. But in some way the important role that they play, like the important role of the voluntary organisations to which the noble Earl has referred, must be acknowledged in the proceedings on the Bill.

Lord Harris of Haringey

Amendment No. 140 stands in my name. It highlights the importance of involving not only community health councils but groups representative of patients and groups representative of carers. One of my concerns is that while the health improvement programme process will be an extremely important one, there is a danger that it will be dominated by institutional structures and by the various statutory agencies. Bringing them together and getting them to talk to each other about these matters is a considerable step forward and of benefit to the local community. It is important that measures are taken which, on the face of the Bill, ensure that there is an expectation that user groups, carers groups and the local community health councils are involved in the process of drawing up health improvement programmes.

It is also worth recognising that if these programmes and plans are to mean anything they will lead to resources being shifted from one area to another between priorities. Locally, this might be very controversial, and the achievement of long-term national and local priorities—particularly in the reduction of health inequalities—may mean that established services have to be reconfigured or cut if further resources are not identified. For that reason it is particularly important that the groups set out in my amendment are fully involved and that there is a clear expectation set out on the face of the Bill that they will be involved in order to ensure that there is public support and consent for the changes which will come forward through this process.

Lord Rowallan

I, too, rise to support the amendment of the noble Baroness, Lady Sharp of Guildford. It is essential that the voluntary organisations are mentioned on the face of the Bill. The point made by my noble friend Lord Howe is terribly important. If by any mischance the voluntary organisations miss out on this whole future arrangement, how will they get back into the system? I should appreciate an answer from the Minister on this very important point.

Lord Hunt of Kings Heath

As the noble Earl said in speaking to his amendment, we have returned to the subject of lists and the "shopping list" phenomenon described so eloquently on the first day of our deliberations in Committee. Many of the lists that are before us reflect the dangers that we have already discussed. There are very few proposals on which I take issue in principle. Indeed, some of the amendments, in particular Amendment No. 143 tabled by the noble Lords, Lord Clement-Jones and Lord Rix, bear a striking resemblance to aspects of the guidance that the department has already issued on this subject. Indeed, if one were to be drawn further into the list business, one might say that important groups of NHS staff still appear to be missing from the amendments as tabled. While the noble Lord, Lord Clement-Jones, has done justice to the dentists, pharmacists might have good cause to feel hard done by, as none of the detailed definitions appears to cover them.

Turning to general principles, this debate has brought out the importance that we all attach to seeing health improvement programmes developed and implemented through arrangements that are truly inclusive. That is entirely what the Government want to achieve. The existing guidance points out to the wide range of local stakeholders that we wish to see all staff engaged, not merely professional representative bodies: voluntary groups, users, carers, the wider local community and other partners such as universities, local schools, employers and others. We could not have been clearer in the message that we have given to the National Health Service.

We have also made it clear that we are looking for full involvement, not the traditional type of NHS consultation, which I have known and loved for so many years; namely, brief consultation on a plan that is all but finalised. We wish to see active participation right through the process of assessing local needs, identifying the best way to respond to national and local priorities and developing firm plans for action. I am convinced that that will mean new ways of working. Through health action zones and other means we are already encouraging innovative approaches to partner and community involvement. And we are supporting health authorities and others in developing the skills that they need to acquire in order to achieve that. Many local authorities have valid experience in community involvement which we hope that they will bring to the table of discussions and joint working between the health service and local government.

The amendment proposed by the noble Earl, Lord Howe, draws particular attention to the importance of ensuring proper links to the universities and to the wide arrangements for the education and training of those who work in and with the NHS. The noble Lord, Lord Walton, had some important points to make on that issue.

It is our intention that those links should be strong. Indeed, I do not believe that the NHS could hope to be successful in the future unless it had very strong links with universities and institutes of higher education, to which we look for so much support, collaboration and co-operation.

Equally, it is critical that the service needs identified by the health improvement programmes feed into the planning of education and training programmes, so that staff numbers and skills match local needs. We want the process of achieving partner involvement to be transparent. That is why we have already asked for health improvement programmes to record not merely those who have been involved in their development but how they have been involved and what plans there are to build on that in the future.

We recognise that developing strong partnerships may take time. We have asked that the first improvement programmes include an honest account of what has been possible for this first round, and where more remains to be done. We shall monitor progress on this matter very closely.

The subject of learning disabilities was raised, which I am sure would have been raised by the noble Lord, Lord Rix, had he been able to be present. We have asked health authorities to take particular care to involve groups who have tended to be under-represented. We fully recognise that learning-disabled people have often fallen into that category. As I have previously explained, with the opportunities of a three-year rolling programme and a new approach to involvement, we very much hope that we have the process with which to be able to achieve that.

I hope I have made clear the Government's commitment on this front. I would add that, over and above the general concerns that have emerged about lists of organisations, I have some particular concerns in this instance. I believe that there is a real risk of highlighting some local players rather than others, while an attempt to be comprehensive seems doomed to failure. Equally, we do not want to see health authorities checking exhaustively that they have made contact with every player on a national list in a "tick-the-box" mode. I believe that that has been the traditional experience of NHS consultation, which has not worked very effectively in the past. I believe that our effort is injecting into the NHS a new spirit of real participation with the kind of organisation and players that Members have mentioned tonight. We want to see them grasp the spirit of inclusiveness and work out imaginatively who needs to be engaged, and how they can be engaged, in different elements of the process. For example, local businesses and employers may be key players on some local issues but have much less reason for involvement in others. Different community and voluntary groups, and different users and carers, will have their own special interests. This is precisely the kind of detail that is best left to local handling within a clear direction set through guidance or perhaps, where necessary, secondary legislation.

Clause 21(5) enables the Secretary of State to issue directions should there be difficulty in securing proper involvement either nationally or locally. I believe that the arrangements I have described mean that we shall be able to monitor progress and act if need be. That is why the power is there.

I hope that the assurances I have been able to offer and the safeguards available will meet the concerns that have prompted these amendments.

Baroness Sharp of Guildford

I thank the Minister for his reply. As the noble Earl, Lord Howe, said, it is extremely important that these local health improvement plans are locally embedded and locally owned. That is why the whole process of consultation is so important. As the Minister stressed, that has not been the habit of the NHS, and old habits die hard. There are occasions when it is useful to embody new procedures in statutory instruments rather than in directions. This might have been an occasion when it would have been useful to do so in order to push people out of old habits. However, given the Minister's assurances that he will monitor progress and that, if this provision does not seem to be sufficient in engendering a new spirit of consultation in local NHS participants, he will issue the necessary directions, I shall withdraw the amendment for the present time.

Amendment, by leave, withdrawn.

[Amendments Nos. 139 to 144 not moved.]

10.15 p.m.

Lord Clement-Jones moved Amendment No. 145:

Page 16, line 37, at end insert ("which shall include needs assessment, statement of resource (including human resource) requirements and identification of priorities for action,").

The noble Lord said: On the previous Committee day we had a most interesting discussion on Amendment No. 64 relating to medical workforce planning and the shortage of consultants. Amendment No. 145 is similar in intent. I believe that we on these Benches have made it clear that we very much welcome the health improvement plan process. Indeed, I am very influenced by the document produced by the department which considered why Health of the Nation had not been as effective as it might have been. I have a suspicion that, if we get these health improvement plans right, they will make Our Healthier Nation successful where The Health of the Nation was not. Health improvement plans may be the instrument by which to do that.

That said, there is nothing on the face of the Bill as to how matters are to be dealt with in relation to the content of the strategy stated in Clause 21. We believe that that is a gap. The circular itself to an extent goes into the detail but we believe that it is important to state at least some of the contents of the plans. For that reason we have repeated some of the wording of the circular. The noble Lord, Lord Hunt of Kings Heath, has spotted the way that we have put together the amendments; namely, we have looked at the circulars to see what is in them. We believe that that is a reasonably informed way to do it. I admit that we gagged slightly at the phrase "resource mapping", since we were not sure how many members of the Committee would accept the insertion of such a phrase on the face of the Bill. We thought that "human resource planning" might be slightly less jargonised.

This is a matter of some concern. As in the case of medical workforce planning, hospital doctors wished us to table this amendment, particularly the aspect of human resource planning. They wanted us to make the point very strongly that the whole question of the number of jobs and the people required to fill them—the human resource requirement of hospitals—was a matter of intense and important debate at local level. It was an opportunity for staff, particularly junior staff, to get involved in discussion particularly about levels of staffing required in hospitals. This may be a bridge too far in terms of wanting to insert this in primary legislation but it is nevertheless a very important point. Junior staff in particular should be allowed to enter the debate and discuss the human resources required at their level. I beg to move.

Lord Hunt of Kings Heath

I am sorry that the noble Lord does not like the term "resource mapping". I regarded it as a rather good phrase. I readily recognise the important point he makes that the human resource dimension should be fully taken into account in relation to the future plans and priorities of the health service at local level. All of us with experience of the NHS are aware of the problems that can arise when this is not done. The intention expressed in this amendment is one that the Government absolutely share. As the noble Lord implies, this matter is reflected already in guidance that we have issued in the health improvement programme process. The issue before the Committee is not whether those plans should take proper account of needs assessment and available resources including, critically, appropriately trained clinicians and other staff. Clearly, they should. They should certainly focus on local and national priorities and the way that they can best be addressed. The difference between us is not about our aims but about whether this kind of essentially procedural detail belongs on the face of the Bill.

The Bill includes a direction-making power that combines the ability to specify certain core requirements, should that seem appropriate, with flexibility to modify and update these in the light of experience. I believe that this offers the best means to ensure that the points put forward by the noble Lord are given due weight. It has already been stated that the HR requirements of the health improvement process will be published within the health improvement programme. We have also made clear that when we talk of the need to take account of the views of staff we mean all staff—not just clinicians and professionals but all staff in the health service. I hope that on that basis the noble Lord is prepared to withdraw his amendment.

Lord Clement-Jones

I thank the Minister for that very helpful reply, which is not unexpected. Clearly, this is an issue that needs to be aired because it is a matter of considerable importance particularly to those staff within NHS trusts. I fully accept that the intention is that they will be involved in that process. We look forward to seeing how that works in practice. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 146 and 147 not moved.]

Clause 21 agreed to.

Clause 22 agreed to.

Clause 23 [Payments by local authorities to NHS bodies]:

[Amendment No. 148 not moved.]

Clause 23 agreed to.

Clause 24 [Arrangements between NHS bodies and local authorities]:

Lord Clement-Jones moved Amendment No. 149:

Page 20, line 17, at end insert— ("( ) Nothing contained in this section shall permit charges to he made for health care by any local authority.")

The noble Lord said: This is potentially an important amendment. It goes to the core of joint working arrangements on food, budgets, and so on, It seeks clarification on the interface between social care and healthcare. Clause 24 allows the NHS and local authorities flexibility to work together in new ways by pooling budgets and delegating functions and resources. Health and local authorities will be able to agree which is best placed to provide particular functions.

However, it is incumbent on the Government to answer a number of questions about the way in which those arrangements will operate. Do they recognise the barrier that charges present to joint working at present; and the fact that those problems will increase with an unamended Bill? Precisely when do they expect to publish guidance on charging? Currently it is not available.

Charges cannot be made for NHS services, but local authorities are under a duty to charge for residential services and have the power to charge for non-residential services. We are concerned that it is not clear how the charging for services will work. Most local authorities now charge for non-residential services. But the current charging policies are complex and confusing. We are concerned that many carers may be paying for services received by the person for whom they care despite the fact that carers should not be charged for such services.

We welcome the statement in the government paper, Partnership in Action, about guidance being issued. However, there is little consistency nationally on charging. Little consideration is being given to the impact of charging on the joint working arrangements.

The Select Committee on health—we have referred to it on previous occasions during Committee stages—commented about the confusion as to which agency, health or social services, is responsible for which service. It said that this confusion is epitomised by the farcical question of whether a person in the community needing a bath should receive a "health" bath or a "social" bath. The first comes free; the second, in theory at least, has to be paid for on a means-tested basis. I do not wish to carry things to their logical conclusion—that clearly takes things to an absurdity—but it is a typical example of what could grow into a considerable problem with the joint working arrangements. We are concerned that the requirement to charge for social care proposed by the Bill could lead to more services being treated as social care and therefore subject to a charge, thus seriously undermining the principle that healthcare should be provided free of charge. The amendment ensures that the situation is clarified.

Perhaps I may refer to other services such as physiotherapy. The chartered institute is worried that, where local authorities are the lead provider of some community health services, the services will be prevented through means testing and that there will be charging for them. We on these Benches wish to see on the face of the Bill confirmation of the Government's intentions. I beg to move.

10.30 p.m.

Baroness Thomas of Walliswood

I wish to speak in support of the amendment on behalf of the noble Lord, Lord Rix, who cannot be here today. One of his principal concerns about the Bill is to ensure that partnerships between health and social services are well managed financially and operationally. MENCAP's recent report, Fully Charged, reveals that there is a growing trend towards charging people with learning disabilities for important community care services, such as day care attendance.

We need to ensure that services which are currently provided free by the NHS remain free once these new partnerships are forged. That was the point made by my noble friend. Lowering the boundaries over what counts as health services and social services should be to the advantage of service users, not to broaden the scope for charging.

Lord Hunt of Kings Heath

I acknowledge that there are issues in this area which we must examine in relation to the responsibilities respectively of health and social services. We will be considering the detail of the framework on charging, promised in the social services White paper, in the light of the recommendation of the Royal Commission report published and discussed in the House today. Until we have studied the recommendations in detail, I cannot say when we will publish the framework.

I believe that the amendment is unnecessary. We have made clear on numerous occasions that we have no intention of changing the fundamental principle that NHS services are provided free to patients. NHS bodies have no powers to charge for NHS services, except where permitted under the 1977 Act. The Bill does not alter that. There is no power for local authorities to charge for NHS services. The Bill does not alter that. Where a local authority provides or commissions NHS services on behalf of an NHS body, those services will remain free to the service users.

I understand the reason why noble Lords seek the amendment. The use of the new operational flexibilities provided for in Clause 24 will allow health bodies and local authorities to work more closely in commissioning and providing healthcare and local authority services. Under some arrangements, health and social care will be provided by the same body. Under the integrated provider flexibility, a social services authority might develop a service providing some healthcare on behalf of an NHS body—for example, physiotherapy or speech and language therapy—together with domiciliary care. As at present the healthcare provided will be free and the social care could be charged for.

We clearly recognise concerns that the distinction between health and social care may not at all times be sufficiently clear. The simple fact remains that NHS care is free and local authorities have a power and sometimes a duty to charge for the social services they provide. That distinction will remain. I am sure your Lordships will be reassured to know that we fully intend to make that clear in the regulations provided for under Clause 24.

We stated in our discussion document. Partnership in Action, that we would require authorities seeking agreement from the Secretary of State for their use of the new powers to set out clearly how their charging regimes for social services would be applied. Guidance on applications for use of the flexibilities will state clearly the position on charging for healthcare and that NHS services remain free at the point of use. We will require that applicants set out in their proposals how their local charging policies will be applied in the light of that. The bodies concerned will need to set out clearly what is NHS care and what is social care. We will use the application process to monitor how the bodies will ensure that healthcare remains free to users.

I hope that in the light of that explanation the noble Lord will agree to withdraw his amendment.

Lord Clement-Jones

I thank the Minister for that comprehensive reply. I understand what he says about guidance and monitoring, but at the beginning of his answer he seemed to imply that it would be unlawful for a local authority to charge for healthcare services. Is that correct?

Lord Hunt of Kings Heath

Yes.

Lord Clement-Jones

I am taken aback by the brevity of that answer! On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Thomas of Walliswood moved Amendment No. 150:

Page 20, line 18, leave out ("may issue guidance") and insert ("shall issue directions").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 151.

The context for these amendments is the loss of the JCCs, which is dealt with in Clause 25. Many voluntary organisations have conveyed to us that those joint consultative committees have provided a way whereby the voluntary organisations in particular can play a full part in decisions taken by the local health authority and the local authority. They want the same sort of requirement to be on the face of this Bill in regard to the joint activities of local authorities and the national health bodies under Clause 24.

The wording of Clause 21(5) is stronger in terms of consultation than is subsection (6) of this clause. Subsection (6) provides that the Secretary of State may issue guidance. I believe that we must have "must issue" even though I believe that the word "directions" is less preferable than "guidance". Therefore, I shall not insist on every word of this amendment.

The rest of Amendment No. 151 provides what the guidance must consist of and who the consultees shall be; namely, the local community health council, organisations representing the interests of people for whom the health authority is responsible—that is, people in the locality—and organisations which represent the interests of carers of those people. Broadly speaking, that is the equivalent of those people who currently have a right to nominate people to sit on the JCCs.

I hope that the Minister will recognise that at present, where they are working well, the input of the voluntary organisations and the community health councils is extremely valuable in making sure that work is well-targeted. I hope that the Minister will he able to strengthen the wording of Clause 24 accordingly. I beg to move.

Lord Hunt of Kings Heath

The new approaches to joint working provided in Clause 24 put in place a framework which will allow local innovation. It is very important that we do not stifle innovation by placing on authorities requirements which may not be necessary in every case. I understand that the reason behind the amendment is to ensure that appropriate local consultation takes place when NHS bodies and local authorities wish to use the new flexibilities. But setting out in detail on the face of the Bill who should be consulted on every occasion is against the spirit of local flexibility and partnership which underpins those provisions.

The approach we have taken is to leave the detail of the provisions to regulation while setting on the face of the Bill what those regulations might cover. Subsection (3)(b) of the clause allows the Secretary of State to prescribe through regulations the conditions to be satisfied by authorities, including in relation to consultation. I consider that power to be more than adequate to ensure that authorities consult appropriately.

The Committee will appreciate that we wish to use the regulatory powers sparingly. We do not wish to stand in the way of progress by placing unnecessary burdens on authorities. The Bill allows us to require authorities to consult particular organisations if it is necessary to do so. It also allows us to issue guidance to authorities to help them to ensure that they consult appropriately. I do not believe that we need a further power to direct authorities and we certainly do not need to constrain authorities to consult organisations where it may not always he appropriate to do so.

I turn now to the specific issue of community health councils. Of course we want CHCs to be consulted on proposals where appropriate. Health authorities already have a duty to consult CHCs when considering substantial developments or variations in services. And we want patients and carers to be consulted. But those groups will be properly involved in the development of the health improvement programme under which the new provisions will be used. It is important that the right people are consulted at the right time. But it is not necessary to set out on the face of the Bill all the details. The powers in the clause to make regulations and issue guidance are the right way of ensuring that the appropriate people and organisations are consulted. On that basis, I hope that the noble Baroness will feel able to withdraw the amendment.

Lord Rowallan

I make no apologies for once more standing up on behalf of the voluntary sector. Can the Minister give me an assurance that the money that goes into the pool will be available for all service providers, which must include the voluntary sector, and not just those that are affiliated to either the health or local authorities? Obviously that is an important issue.

Lord Hunt of Kings Heath

I assume the noble Lord is pointing to a situation where the health and local authority agree to pool funds. It would then he up to the managers of those joint funds to decide how that resource should best be spent. Whether we are talking about health improvement programmes or about the use of funds in this way, I expect voluntary organisations to play a full part in that process.

Lord Rowallan

Forgive me for coming back again. Surely if there is nothing written in the Bill and if those governing the pooled resources take the view that they do not want anybody else involved in that pool of money, that will leave the voluntary sector completely outside. Should not something be written into the Bill to ensure that that cannot happen?

Lord Hunt of Kings Heath

I hoped that I had made clear that in the whole process of partnership, health improvement programmes, developing joint initiatives and the pooling of funds, we expect the voluntary sector to play a full part in the deliberations that will take place. Indeed, I do not see how the kind of proposals being made here can be effective when it comes to developing services without the full involvement of the voluntary sector.

In relation to the issue of the money that has been pooled, it will be possible for that money to be allocated to the voluntary sector.

Baroness Thomas of Walliswood

I am not entirely satisfied with that reply. Some of the voluntary sector people who have made representations to us will also not be satisfied.

It is particularly unfortunate that in his reply the Minister suggested that in some sense the voluntary sector would hold the National Health Service and the local authorities back in terms of their innovatory approach to joint working. In fact in many cases the voluntary sector is the most innovative in providing for new patterns of care. That was a particularly unfortunate statement.

Lord Hunt of Kings Heath

If the noble Baroness will allow me to intervene, I am sorry if I gave that impression. I did not mean to imply that the voluntary sector would hold back an innovative approach to working together, to developing health improvement programmes and providing joint services. Far from it. I believe that the NHS has learnt much from the voluntary sector about innovative approaches to health services. I spent a large part of my previous life in the health service encouraging strong development between the NHS and the voluntary sector.

I was trying to explain—perhaps badly—that in these new arrangements we are trying to establish a much more dynamic approach to working relationships between the NHS and its partners, statutory or voluntary. One does not want to see such dynamic relationships constrained by too many set, bureaucratic conditions. However, I assure the noble Baroness that it is our intention that the voluntary sector will play a very full part in the new arrangements.

10.45 p.m.

Baroness Thomas of Walliswood

I thank the Minister for that assurance. We shall have to read with great care what the Minister said in both his interventions and no doubt talk to the people who have pressed us on this matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments No. 151 and 152 not moved.]

Clause 24 agreed to.

Clause 25 [Joint consultative committees]:

Baroness Sharp of Guildford moved Amendment No. 153:

Leave out Clause 25 and insert the following new Clause—

JOINT CONSULTATIVE COMMITTEES

(". It shall be the duty of joint consultative committees constituted under section 22(2) of the 1977 Act to advise the NHS bodies and local authorities on the proper performance of their duties under section 21 above.").

The noble Baroness said: Once again this amendment picks up the whole issue of consultation and voluntary sectors. We are concerned at the loss of the statutory right for the voluntary sector to be represented—which is the result of the abolition of the JCC as a statutory requirement—coupled with the lack of provision in the Bill for alternative joint arrangements which would maintain this representation. As I have said, it is the issue that we have been banging on about for some time now.

The right of representation has been crucial in enabling voluntary organisations at the local level to influence decision making and resource allocation, and to work in partnership with the health and local authorities to develop more services appropriate to people's needs. It has acted as a basis for involvement by a wide range of voluntary organisations, including small groups, at all levels of joint health and social care planning.

The loss of the right of representation is a retrograde step. That goes against stated government intentions for greater voluntary sector and service user involvement in health and community care. It will reduce the capacity of voluntary organisations to operate as an equal partner within the statutory sector in delivering improvements in health and social care. We have therefore tabled the amendment to ask the Minister to consider, once again, whether the JCCs really do need to be abolished or whether they should continue to be maintained as statutory organisations. I beg to move.

Baroness Gardner of Parkes

Perhaps the Minister can tell us about that. I was not aware, having served on JCCs, that voluntary organisations had a statutory right to be there. Perhaps I never understood the position correctly. Maybe the Minister can clarify the point.

We have heard a lot about voluntary organisations. Of course, we are all very much in favour of such organisations and all that they do. However, "the voluntary sector" is a vague term. It comprises very large numbers of organisations. Such organisations seem to come and go. Some are long-established and unchanging; others are growing up, brand new and meeting new requirements overnight. I do not quite understand how there can be a statutory position and whether it applies to one or to many.

Lord Hunt of Kings Heath

I start by saying to the noble Baroness, Lady Gardner, that voluntary organisations have a statutory right of three places on JCCs.

From what I have said in the last few debates, I hope it is clear to Members of the Committee that I and the Government recognise that the voluntary sector has a crucially important role to play in the new NHS. However, I do not believe that the retention of JCCs is necessarily the way to reflect and underpin that role.

In the new NHS, health improvement programmes have been established as the key planning mechanism determining investment in services to improve the public's health. They include the contribution of both the voluntary sector and local government. Maintaining a separate planning mechanism for the voluntary sector and local government within a JCC concept would only increase bureaucracy, duplicate the planning process and maintain the isolation of these areas from the day-to-day work of the NHS. I recognise that JCCs have performed an important and valuable role in the past and that all members have made an enormous contribution, but to retain them would run against the spirit of partnership working we have adopted in this Bill.

An important theme running through our discussions has been the rejection of simplistic structural solutions to allow local initiatives to flourish. The new flexibilities provided for in this provision will allow the NHS, local government and the voluntary sector to be involved in partnership working. When health improvement programmes are fully developed, they will be much more effective as a way of ensuring partnership because their scope will be much wider than that of JCCs.

For the first JCC that I attended, we had to hire a town hall to accommodate its 70 or so members. One remembers the bulk of paper! Although JCCs were a useful structure 20 years ago in getting health authorities and local government sitting together, almost for the first time, I believe that their time has come and is now past. On that basis, I hope that the noble Baroness will withdraw her amendment.

Baroness Sharp of Guildford

I thank the Minister for that reply. In the light of what he said, we accept that it is the intention of the Bill to replace the JCC framework with a wider and more flexible framework through the local health improvement plans. However, I repeat the point that I made earlier: where there is not a statutory obligation to consult, there is always the temptation not to do so. The old NHS was not good at involving other organisations in its planning. We look forward to seeing how the health improvement plans develop and we reserve the right to bring back at another stage the issue of the statutory right of the voluntary sector to some form of consultation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 agreed to.

Lord Clement-Jones moved Amendment No. 154:

After Clause 25, insert the following new clause—

("Regional Assemblies

Upon a regional assembly being created for any region in England, such regional assembly shall for the purposes of the 1977 Act, the National Health Service and Community Care Act 1990, or under or by virtue of any prescribed provision of any other act, assume responsibility for—

1. (a) strategic planning,
2. (b) capital infrastructure, and
3. (c) specialised services commissioning,

in the health service in respect of such region.").

The noble Lord said: When my noble friend Lady Sharp starts referring to "banging on", I know that the hour is late. As we still have some important clauses ahead, I shall speak to my next two amendments quickly.

We know that the Government want, or are prepared, to create regional assemblies where there is demand for them. We have seen one outcome of that in terms of the Greater London assembly. In a sense, this is a probing amendment to see in which direction the Government are moving. No doubt, when the GLA Bill comes to this House we shall discuss the precise powers of that authority. Particularly in public health, the powers given seem extremely disappointing.

This amendment is an attempt to draw matters wider than public health. Regional assemblies should have a strong position with regard to the provision of health care in their regions in terms of strategic planning, capital infrastructure and specialised services commissioning, which subsumes the work of the regional office of the NHS. The amendment is designed to ascertain the Government's intentions in this respect. I beg to move.

Baroness Carnegy of Lour

I shall listen to the Minister's reply to this amendment with great interest because one understands that the regional assemblies are intended to be a counterbalance, among other things, to the Scots Parliament. The Government are requiring the Scottish Parliament to appoint 15 health boards to perform these the functions and not to do it themselves. We shall be coming to that issue in a later amendment, but it would be interesting to know whether the Government are consistent in their thinking.

Earl Howe

I have real difficulties with this amendment. The time to think about the role and functions of regional assemblies is when and if a Bill comes before parliament to set them up. I do not think one can look forward hypothetically in that Bill, as the amendment seeks to do, and imagine a whole structure of government that has not yet come into being.

More substantively, I disagree with the whole premise underlying this idea. It reeks to me of divided responsibilities and confused responsibilities. It also reeks of upheaval. Where does it leave primary care trusts, which will have responsibility for the activities mentioned in the amendment? Where will it leave health authorities, for that matter? I feel that, if you believe in a health service, you should leave the running of it to those whose profession and business it is to do just that.

Baroness Gardner of Parkes

I am very much opposed to the amendment. Having been a member of the Greater London Council, it would have been quite hopeless for us to have had that health responsibility. To find a health responsibility in London, you have to go back as far as the LCC, which existed prior to 1964. It would be a retrograde move and would be very damaging to the health service. I am opposed to the amendment.

Lord Hunt of Kings Heath

It is a nice try, my Lords, and it could best be described as an interesting, speculative amendment.

Since no regional assembly in England is in existence, and there is no legislation on the statute book to enable such an assembly to be established, there could be no question of our enacting a provision to confer any responsibilities on an as yet hypothetical body.

It is important, of course, to ensure close working relationships between the regional offices of the NHS Executive and other regional bodies, not least because of the important contribution that these bodies can make in terms of the wider strategic and economic responsibilities within a region, and the links between an economic situation and well-being and improving public health and tackling health inequalities.

I assure Members that the NHS and its regional offices will want to work constructively with the regional development agencies and regional chambers, as they already seek to do with the government offices of the regions. I think that is the appropriate course of action in relation to this issue. On that basis I hope the noble Lord will feel able to withdraw his amendment.

Lord Clement-Jones

I thank the Minister for that reply; at least he did not talk about my amendment reeking. I think it is a fairly odourless amendment. I thank him for his reply, as far as it went. It will be interesting when and if there is a Yorkshire assembly because people in Yorkshire will wonder why they have distinctly fewer powers than, say, a Welsh assembly on matters of health. No doubt we shall have many hours of debate in years to come. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clement-Jones moved Amendment No. 155:

After Clause 25, insert the following new clause—

("Specialised services: consultation

CONSULTATION IN RESPECT OF SPECIALISED SERVICES

Before arrangements to provide specialised services between an NHS regional office and the relevant providers are finalised, an NHS regional office shall ensure that the Primary Care Groups and Primary Care Trusts in the area covered by the relevant NHS regional office are fully consulted.").

The noble Lord said: I can be even more brief with this amendment. This is almost a cuckoo at this point in the Committee's proceedings. The Minister took us through the detail of specialised services to show how the pattern varies between different types of treatment and different specialties. However, the mechanics of the way the consultations are expected to take place between NHS regional offices and their primary groups and PCTs are still opaque, and elucidation in this area would be helpful. I beg to move.

11 p.m.

Lord Hunt of Kings Heath

I certainly recognise and support the intention behind this amendment; namely, that we should ensure proper engagement of primary care groups and primary care trusts in the commissioning of specialised services. Indeed, we went a step further, in that we laid down in The New NHS the important principles that all health authorities, primary care groups and primary care trusts should participate in these arrangements, and that those undertaking the commissioning should be accountable back to health authorities, PCGs and PCTS. The reason is clear: the arrangements need not simply to command the confidence of the clinical units concerned but also to be properly dovetailed into the commissioning of local services.

It follows from what I have said that I have some difficulty with the premise upon which the amendment is drafted. The Secretary of State has charged regional offices on his behalf with ensuring that there are effective arrangements for commissioning these services in each region, but they do not commission services themselves. The Secretary of State is already holding his regional officers accountable for ensuring that specialised commissioning arrangements more than meet the aims of this amendment. Therefore, on that basis, I hope the noble Lord will feel able to withdraw his amendment.

Lord Clement-Jones

I thank the Minister for that explanation. I shall consider quite carefully what he has said. There may be some elements in respect of which I do not fully understand the pattern, but the Minister's response was very helpful in terms of describing exactly what the regional offices are bound to do. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 26 [Powers relating to voluntary schemes]:

Earl Howe moved Amendment No. 156:

Page 21, line 16, leave out ("The Secretary of State") and insert ("A voluntary scheme").

The noble Earl said: In speaking to this amendment. I shall speak also to Amendments Nos. 157, 158, 159 and 175. There is difficulty with Clause 26(3) as drafted. This part of the clause empowers the Secretary of State to require manufacturers and suppliers who have signed up to the voluntary scheme to "record and keep" any kind of information and to provide that information to him. The difficulty is that these provisions are not limited to those obligations contained in the scheme itself; nor are they subject to any express obligation to consult the industry body on the scope of the information requirements.

I recognise that the wording of the subsection contains the qualifying phrase, which the Secretary of State may require for the purpose of enabling the scheme to operate", but that is extremely one-sided. It is the Secretary of State who will have the power to decide what information he considers to be relevant. That, effectively, leaves the field completely open. That is a matter of concern, especially as the information powers will now be the subject of statutory penalties under Clause 30.

Therefore, the amendments I propose are quite simple. They seek to define the requirement to supply information by reference to the voluntary scheme itself, so that the provisions are automatically agreed with the industry. Moreover, under Amendment No. 175, I am also suggesting that there should be consultation with the industry about the regulations to impose penalties, so that those penalties can be considered at one and the same time as the voluntary scheme is negotiated. I beg to move.

Lord Walton of Detchant

In giving some support to this group of amendments, I should like to make a number of general comments relating to Clauses 26 to 31 as a whole, because these have given great concern to the Association of the British Pharmaceutical Industry. As I did on Second Reading, I must declare an interest as an occasional neuroscience adviser to a particular pharmaceutical company.

The problem is that an effective boundary needs to be established between voluntary and statutory schemes of regulation. The Bill ought to include objectives which reflect the needs of patients, the NHS, the UK pharmaceutical industry and the UK science base. Indeed, we shall be speaking to an amendment later which relates to provision being made for arbitration in disputes.

Similarly, it is important, as the noble Earl said, that there should be clarity as regards consultation and information required by government. The pharmaceutical industry should be regulated in line with best practice in other industries. But the Bill as it stands ignores such best practice, instead potentially threatening the future for the UK-based pharmaceutical industry. One company has pointed out that the UK is a leading country for pharmaceutical investment. Seven of the current top 25 medicines in the world are the result of UK research. One recently discovered medicine, olanzapine, for the treatment of schizophrenia, was discovered in the UK and has revolutionised treatment outcomes for this distressed patient group. It is now one of the best selling medicines in the world. Many companies believe that the current voluntary scheme has served both government and industry well since its inception. It has provided a stable base to maintain investment levels in R&D, and good value for the taxpayer.

There is an ever growing number of demand side controls on pharmaceuticals. The current NHS reforms, including unified budgets, NICE guidelines and national service frameworks, will continue the development of demand side controls. Many companies believe that supply side government imposed price and profit control is not the best way to proceed. They recognise the Government's need to address non-compliance under the voluntary scheme, but that non-compliance has in the past been limited to a small number of companies.

I trust that the Government will be able to assure the pharmaceutical industry that the voluntary scheme will continue and that the clauses in this Bill which potentially might lead to companies at present participating in a voluntary scheme having price controls imposed upon them will be withdrawn as the proceedings continue.

Baroness Cumberlege

I wish to speak to these amendments. I shall resist the great temptation to make a Second Reading speech. However, I wish to ask about something that was not available to us at Second Reading and which concerns the clauses we are discussing. We have in this House the impressive Select Committee on Delegated Powers and Deregulation. It is respected by your Lordships. Its deliberations are consistently thoughtful, wise and appropriate. I know that when I was a Minister I was extremely concerned to meet the requirements of that committee. Never have I known the committee so concerned and for it to use such direct language, urging the Committee to amend the clauses to prevent their bypassing primary legislation, and to put the Bill in proper order thus avoiding Henry VIII clauses. What does the Minister feel about the report, and how will she and her colleagues treat the considered and forthright advice given to them? At 20 minutes to 10 this evening the Minister the noble Lord, Lord Hunt of Kings Heath, said in relation to local authorities—I use his words directly—that it was the Government's intention "to use regulatory powers sparingly". If the Government are to use those regulatory powers sparingly in relation to local authorities, I wonder why the Government appear to be so punitive and dismissive of the commercial sector.

Baroness Sharp of Guildford

My name was attached to this series of amendments, I think mistakenly, although I have sympathy with some but by no means all of the proposals, as will become clear when I address the Question of whether the clause should stand part of the Bill. We on these Benches by and large do not believe it right to have statutory regulation of a voluntary scheme. By and large we support the amendments because they make the provision more of a voluntary scheme. Nevertheless, our preference would be to have the clause withdrawn completely from the Bill.

Baroness Hayman

There has been something of the flavour of a Second Reading debate about our discussion on these amendments although I make no complaint about that because we have moved on to an important area of the Bill which concerns the regulation of prices in the pharmaceutical industry. It is right that we should discuss Amendments Nos. 156, 157 and 158 which I shall discuss in a moment. The noble Earl, Lord Howe, also spoke to Amendments Nos. 170 and 175. I shall come to those in a moment.

Perhaps I may respond to two general points. I agree with the noble Baroness, Lady Cumberlege, that one should pay special attention to the Delegated Powers and Deregulation Committee. I said at Second Reading that we would look with care at its report. It made two main recommendations regarding the elements of the Bill on PPRS and statutory reserve powers for companies which were not compliant. One recommendation was that we should have affirmative rather than negative powers when regulations and directions are made under Clauses 26 to 29. I indicated to the Committee when we met last week that the Government accept that suggestion and will bring forward an amendment at an appropriate stage to take affirmative rather than negative powers. Equally, when we come later to a specific amendment on the issue of an appeals procedure—which was of concern to the committee—I can be helpful and will indicate what the Government will intend to do.

Perhaps I may respond to the comments of the noble Lord, Lord Walton of Detchant, about the value of a voluntary agreement. The noble Baroness, Lady Sharp, also referred to the general issue of the desirability of a voluntary rather than a statutory agreement. I reaffirm the Government's view that, in the main, the voluntary agreements that have existed for 40 years have been of great value. They have been to the benefit both of the industry and patients in the NHS, as represented by the Government. It is our intention—we are conducting negotiations at present—to continue that tradition. We hope that we shall reach agreement on another voluntary agreement that properly recognises fairness to the NHS in terms of the prices paid for medicines and is fair and reasonable to the pharmaceutical industry as the supplier. One would wish to take into account the need to recognise the very clear demands of funding on research and development that is very important both for the industry's success and the improvements in patient care to which the noble Lord referred. We are aiming to provide another successful voluntary agreement.

Although the noble Lord, Lord Walton, suggested that there had been very few areas of non-compliance, there are concerns that areas of non-compliance are increasing. Companies are failing to submit their financial returns by the due date to enable the Government to assess profit levels and are delaying the provision of information or delaying the repayment of excess profit. One major company has refused to submit financial returns since 1990 and has resisted all approaches to comply. Over the past year, 24 companies have increased product prices without the Government's agreement—at an estimated cost to the NHS of £30 million a year and at the expense of other NHS treatment and care.

There is a risk that if we do not take action to secure compliance, some of the companies that have so far complied properly will cease to do so. In addition, there are issues of transparency. The PPRS has been criticised by the Select Committee on Health, among others, for its lack of transparency. We need to consider that in the light of general government policy and indeed of European law. While we wish to retain a scheme of profit-capped regulation for a further five years and we hope to see that successfully and voluntarily negotiated with the pharmaceutical industry, we also need to have the levers necessary to ensure compliance. I think the noble Lord, Lord Walton, recognised that need.

The Government believe that Clause 26 provides a firm and clear foundation on which voluntary agreements will stand in the future. The voluntary scheme itself will determine what is required for its effective operation. Perhaps I may reassure the noble Earl, Lord Howe, by saying that we intend that the information required will be set out in the agreement which we are seeking to reach with the industry. However, I recognise the concerns that have been expressed that, as currently drafted, Clause 26(3) is perhaps very wide in terms of the information that could be sought. With the Committee's agreement, I should like to take that away and see whether we can come up with drafting that will suitably circumscribe the kinds of information that would be called for.

Perhaps I may deal also with the two amendments that are linked with Amendment No. 156. Amendment No. 158 also covers the information requirements of the voluntary scheme. It would remove from the face of the Bill the reason for information being required under the voluntary scheme. I believe that it is necessary to be explicit here and to make plain the reasons why companies will be required to record, keep and provide information. It would not be consistent with what I have just suggested on Amendment No. 156—to see whether we can provide additional clarity—to take on board Amendment No. 158, which would reduce that clarity. Therefore, I would urge the Committee not to pursue that amendment.

With regard to Amendment No. 157, as has been the case for the past 40 years, we envisage only one voluntary agreement to be in place at any one time. However, the term "a voluntary scheme" in Clause 26 (3), as in Clause 26(2), merely indicates that there will probably be a series of such voluntary agreements over the lifetime of the Bill rather than that there will be several specific agreements in place at any one time. Therefore, I do not think that that would be a sensible amendment to make.

Amendment No. 159 seeks to add the words, after consultation with the industry body". I said earlier that we acknowledge the value to be placed on a voluntary agreement between the Government and the pharmaceutical industry. By definition, the content of a voluntary agreement will be decided only with the express consent of both parties to it; that is, the Government and the ABPI. It is therefore unnecessary to provide a further consultation with a body that has already subscribed to and chosen to join the agreement. So I do not think that that adds anything in terms of ensuring that the agreement is voluntary.

Perhaps I may deal with Amendments Nos. 170 and 175.

11.15 p.m.

Earl Howe

I am grateful to the Minister. I did not speak to Amendment No. 170 and I shall not move it.

Baroness Hayman

I am grateful to the noble Earl. I shall follow his example and not speak to it either.

Turning to Amendment No. 175, it is entirely proper that the industry body should be consulted over matters of detail relating to sales of medicines to the NHS. The setting up of the statutory scheme is already subject to contribution. These are matters on which the industry body can contribute.

The amendment as drafted may not be the best way of extending the consultation process. If the noble Lord and the Committee were content, I should like to take the matter away in an attempt to see whether we might produce a government amendment to introduce the consultation process in the setting of maximum prices.

On an issue of clarity, I should not have given my recollection of what the Select Committee said rather than read carefully what it had actually said. The committee did not in fact recommend the affirmative resolution procedure, as I mentioned in my response to the noble Baroness, Lady Cumberlege, other than for Clause 30(6). That is the area in which we should intend to bring forward an amendment in order to conform with the recommendations of the Select Committee.

Earl Howe

I am most grateful to the noble Baroness for her response. In the interests of brevity, I shall leave it at that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 157 to 159 not moved.]

Earl Howe moved Amendment No. 160:

Page 21, line 32, at end insert— ("(5) Any dispute between the Secretary of State and a manufacturer or supplier to whom a voluntary scheme applies—

1. (a) in connection with or arising out of the scheme, or
2. (b) as to any addition or modification which should he made to the scheme pursuant to subsection (2)(b),

may be referred to arbitration or to the determination of an independent person or body in accordance with the procedures established in the scheme.").

The noble Earl said: This amendment, which I shall take with Amendment No. 176, needs only a brief comment but is extremely important.

As the Bill is drafted, there is no mechanism available to deal with disputes between a company and the Department of Health, either in relation to the requirements of the voluntary scheme or as regards the payment provisions under Clauses 27 and 28, or as regards the penalty provisions under Clause 30. I do not believe that that is equitable. Nor do I believe that it is in the interests of either the industry or the department.

The Minister mentioned at Second Reading, and again just now, that there were companies that were in breach of the existing PPRS, one for a number of years. We cannot go into detail about individual cases, but how much better it would be if there were a neutral arbitrator or tribunal available to resolve disputes of this nature. It would make both the company and the Department of Health much less inclined to be obdurate for long periods and would open up the prospect of disputes being settled more speedily. I hope that the Minister will be receptive to these proposals, as I believe she has hinted she will be. They are made in a genuine desire to see the PPRS working as we all wish it to do. I beg to move.

Baroness Sharp of Guildford

I support the noble Earl in his Amendments Nos. 160 and 176, and wish to speak to Amendment No. 174. This amendment, like the other two, might be described as a tidying up proposal. It applies to Clauses 28 and 29 relating to the setting up of a statutory price regulation scheme. Just as Amendment No. 160 calls for an arbitration scheme to be put into effect in the event of a dispute between parties to the voluntary scheme, so it is appropriate that there should also be an arbitration mechanism for any statutory scheme. Given the extensive powers that the Secretary of State will take upon himself under the establishment of any statutory scheme, equity demands ways of balancing interests. We must recognise that, however good the scheme, conflicts of interest and dispute will arise. It is necessary to write into the Bill clear dispute mechanisms as a requirement. From these Benches we support the amendments proposed by the noble Earl, Lord Howe, and I commend Amendment No. 174.

Baroness Cumberlege

I, too, support these amendments. The problem with the Government's proposals as they stand is that they give the pharmaceutical industry the feeling that it is not wanted. It is a global industry which can site its enterprises anywhere in the world. It will go where it feels wanted and respected. Indeed, in some places the pharmaceutical industry is even given sweeteners because it is recognised that the industry is a prize which is worth winning.

The Government have rightly placed an enormous emphasis on education. Those who are the brightest are employed by the pharmaceutical industry, a quarter of its employees being graduates. If we educate people in this country to a high standard but then offer them no jobs, we shall be educating people for emigration, which I think would be a very great pity. Anything we can do to make the industry feel wanted—and arbitration will clearly be a part of that, because it is a fair proposal—should be supported by the Committee.

Lord Walton of Detchant

I rise briefly to support these amendments. The ABPI has said clearly that it would have much preferred to see an effective boundary defined between the voluntary and statutory schemes on the face of the Bill, but it accepts that such a boundary could be introduced into regulations made under Clause 28. We seek the assurance of the Minister not only that the appeal mechanism and arbitration will be introduced but also that that boundary will be clearly defined in regulations.

Baroness Hayman

I hope I can be helpful to the Committee, both in what I say and the brevity with which I say it.

As far as the boundary between the voluntary and statutory schemes is concerned, there are amendments which deal with that matter, but I hope I can offer a way of making it clear that the statutory provisions will not take effect for those who agree to, and abide by, the voluntary scheme. Perhaps we can come to that point in a moment.

As regards these three amendments, which would set up an appeals procedure both for the voluntary scheme and for decisions made under the statutory scheme as defined in Clause 28 and regulations made under Clause 30 for enforcement, Members of the Committee correctly pointed out the need, to which the Select Committee on Delegated Powers and Deregulation also pointed, to set up an independent tribunal to ensure a process that is as speedy and open as commercial confidentiality allows. It has been suggested that I hinted that we might possibly want to do that. I say clearly that we intend to do it. I should be grateful for a little time to enable us to try to draft something which comprehensively covers the three areas which it is necessary to cover.

Perhaps I may say to the noble Baroness, Lady Cumberlege, that we have tried to meet the concerns of the ABPI on this and other issues. I should not like anyone to think that the Government's proposal to take what I believe is justified and justifiable action to ensure that there is compliance which gives equity, fairness and a reasonable price to the National Health Service in any way undermines our confidence in, and respect for, the contribution of the pharmaceutical industry in this country, which has been enormous. It is a world leader. It is an industry for which the department has a sponsorship role, which it is pleased to take on. It is an industry which has a considerable knowledge and research base, which is important to our economy, and nothing in these clauses should be taken as undermining our support for it.

Strictly speaking, companies under the voluntary scheme will be subject to statutory provisions—the process requirements under Clause 26—but not the statutory scheme under Clause 28. That was the distinction that I sought to make in replying to the noble Lord, Lord Walton. By definition, in putting a voluntary scheme on the face of the Bill one makes them in some way subject to statute. But I believe that the noble Lord understood what I said—at least I hope that he did.

Earl Howe

I thank the Minister for her constructive and helpful reply, which I am sure will be welcome news to the pharmaceutical industry. We look forward to seeing the amendments to be tabled by the Government at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.30 p.m.

On Question, Whether Clause 26 shall stand part of the Bill?

Baroness Sharp of Guildford

We on these Benches believe that a voluntary scheme should be what it says it is: voluntary. In this regard it should not need statutory reinforcement. If the voluntary scheme does not work the Secretary of State may introduce a statutory scheme as set out in Clauses 27 to 29. But we are opposed to a hybrid scheme that confers on the Secretary of State wide powers to enforce the terms of a voluntary scheme. We believe that the voluntary price regulation scheme, which in one form or another has worked in this country since the late 1950s, has had very substantial benefits for Britain. In particular, it has helped to encourage the development of a research-intensive, innovative pharmaceutical industry as instanced by the fact that, as the noble Lord, Lord Walton, said earlier, seven of the top selling 25 drugs in the world were developed in British R&D laboratories.

Thanks to a price and regulation regime that has favoured innovative and research-intensive activities over "me too" drug production, the industry in this country is a leading contributor to the global market-place. Three leading companies—Glaxo-Wellcome, SmithKline Beecham and Zeneca (shortly to become Zeneca Astra)—are British-based, while other international companies such as Upjohn-Pharmacia have chosen to locate their headquarters here. Many leading manufacturers, including Merck-Sharp & Dohme, currently regarded as the world's leading research company in pharmaceuticals, locate substantial R&D facilities in the UK. These facilities feed upon one another. In total we have a considerable "clustering" of research activities attracted to the UK by the quality of the research base and the general environment in which the industry operates. But in its turn it provides jobs for high-quality graduates and research moneys that help to maintain the excellence of the science base in this area. It is a prime example of what all political parties claim they wish to see achieved in this country: a high productivity, high value-added industry.

As the Minister made clear, especially of late there have been a number of breaches of the voluntary agreement. In our view, it is up to the industry to make sure it delivers on its side of the agreement and up to the Government also to honour their promises, which notably in 1993 they failed to do. The industry should not have to rely on the Government to pull renegades into line. If the scheme does not work there should be a fully-fledged statutory scheme in its place. While we back the voluntary scheme we are unhappy about the degree to which it depends upon secret decisions made behind closed doors. We have therefore proposed—I shall speak to this later in the debate—that the Secretary of State should issue regular reports on his negotiations with the industry that describe in much greater detail than at present the outcome of the negotiations.

But I return to where I began. We do not think that the Government should legislate to enforce a voluntary agreement, and accordingly we do not believe that Clause 26 should stand part of the Bill.

Baroness Hayman

It is late in the day to discuss the semantics of whether or not this is a hybrid scheme. Perhaps I may respond briefly to the noble Baroness. I should like to reiterate that the Government are committed to renegotiating the pharmaceuticals price regulation scheme. Negotiations are currently taking place with the industry with the objective of achieving agreement. I believe that those objectives are shared by both sides of the negotiations. We as a government want them to be a success. We recognise what has been achieved over the years under previous agreements and we consider that another voluntary scheme is the best way to proceed.

However, I have to repeat that we need to take account of recent experience in operating the current scheme. That is what has led the Government to conclude that it will not be possible to operate the new scheme fairly and effectively without some means of addressing those companies that sign up to the voluntary agreement but then do not abide fully by the agreed terms.

I have explained what some of those difficulties have been in the past and the reasons why that situation brings both the administration and the efficiency of the scheme into disrepute and delays the payment of excess profits where they are payable under the scheme. That is not fair to companies which comply with the scheme. Nor is it fair to the NHS.

We do not believe that what we put forward is a hybrid scheme. We want to reach an agreement which will be voluntary and any other provisions about a statutory need to provide information would not affect the companies which signed up and abided by it because they would be working within the terms of the agreement. We believe that that is the best way forward.

However, experience of recent years has shown that not all companies which sign up to a voluntary agreement are then prepared fully to comply with it. My understanding from discussions with the pharmaceutical industry is that it recognises the justification for the Bill including provisions for penalties to give teeth to the obligations which companies will undertake under the terms of the voluntary PPRS. I suggest to the noble Baroness that the two alternatives that she proposes, as I understand, by opposing the Question that the clause stand part of the Bill—either for a voluntary agreement, which is susceptible to the same problems that we have had in the past; or to a full scale statutory scheme—are not the best way forward. It is sensible to recognise the value of a voluntary scheme but equally it is necessary to have the statutory underpinning which ensures that that scheme is effective.

We do not believe that it would be sensible for the Government to have to decide between continuation of a probable non-compliance by some companies and a full statutory scheme. Both those outcomes are less satisfactory than a voluntary scheme with which companies comply fully. That is the aim of the clause. I urge the Committee to support that it remain part of the Bill.

Baroness Sharp of Guildford

I thank the Minister for that reply. We beg to differ on the issue, but, given the lateness of the hour, I shall not pursue the point.

Clause 26 agreed to.

Clause 27 [Power to control prices]:

[Amendments Nos. 161 and 162 not moved.]

Earl Howe moved Amendment No. 163:

Page 21, line 40, at end insert— ("(2) The powers conferred in this section shall not apply to a manufacturer or supplier to whom a voluntary scheme under section 26 applies.").

The noble Earl said: We come now to an important set of amendments. I shall speak to Amendments Nos. 163 and 167.

Clauses 27 and 28 of the Bill came as a considerable shock to the pharmaceutical industry. The provisions in these clauses empower the Secretary of State not only to limit any price which may be charged by any manufacturer or supplier of health service medicines but also to introduce a statutory scheme under which prices or profits of manufacturers or suppliers would be compulsorily curbed in respect of any health service medicines.

Only a few months ago, in July 1998, the Secretary of State was quoted in the Pharmaceutical Times as saying: The PPRS delivers with no surprises and at the same time the UK is well below the international average on the cost of our drugs. I don't think we will be looking for any giant changes". We have only to look at Clauses 27 and 28 to see how giant the changes are and how far the Government have altered course since July last year. What has brought about this dramatic change in the Government's position—so dramatic that they are effectively doing away with the voluntary nature of the PPRS by taking on powers to fix the prices of drugs as they choose?

The Government's justification for these new powers is that certain companies are not complying with the voluntary scheme. If that is really their perception, I believe that we need further and better particulars. We are told that one major company has refused to submit financial returns since 1990. If that is true, it is clearly unsatisfactory. However, there are at present 45 companies in the scheme and one problem case out of 45 hardly seems to justify the kind of power we see here. Indeed, on 26th November, the Secretary of State told another place that the reserve powers, should have no significant impact on the vast majority which always have complied and are complying at present".—[Official Report, Commons, 26/11/98; col. 332.] But these powers could apply to the compliant majority. They are not limited reserve powers; they are sweeping powers. They would enable the Secretary of State to impose direct price and profit controls on individual companies, or on the industry as a whole. The Government in the Bill makes much of the spirit of partnership, but I have to ask where the spirit of partnership is in Clauses 27 and 28.

The clear understanding within the industry was that the new statutory powers were intended as reserve powers to back up the PPRS and that Clauses 27 and 28 would be held in reserve in the full expectation that their use would he unnecessary once the new voluntary PPRS had been agreed upon. Indeed, the Minister herself on Second Reading said: We consider that a voluntary scheme which is clear and fair is the best way of working".—[Official Report, 9/2/99; col. 113.] She has repeated those sentiments tonight. How do the Government believe that a voluntary scheme can be successfully negotiated if the companies attempting to sign up to it are simultaneously threatened by the use of compulsion? That threat undermines the entire voluntary basis of the PPRS. What the Bill does is to place companies in double jeopardy and that is totally inequitable and counter productive.

If the Secretary of State and the industry reach agreement on a voluntary scheme under Clause 26, the companies which have agreed to take part in the scheme should be expressly exempted from compulsory controls of any kind. By that, I do not mean that there should be no sanction against those who break the terms of the PPRS. I see nothing offensive in principle about the provisions in Clause 30 for penalties on non-compliant companies. But what is completely unacceptable is the enactment of new compulsory powers of price and profit control which could operate indiscriminately against saints and rogues alike. And that is the purpose of the amendments. I beg to move.

Lord Walton of Detchant

I have already raised the issue of the boundary and it may well be that the Minister will say that this issue is to be dealt with under regulations. But looking at the wording of Amendment No. 167, to which the noble Earl referred, is it not possible that the Government could come hack with an amendment at Report stage indicating precisely on the face of the Bill that the statutory scheme will not apply to a manufacturer or supplier who is complying with all the provisions of the voluntary scheme? Would that not be a means of meeting the great concern of the industry on this matter?

Baroness Hayman

Yes, I believe that it would and that that is what we ought to do. With the leave of the Committee, I should like to see whether we can draft a provision which I agree with the noble Lord will be better dealt with on the face of the Bill rather than by regulation.

We have here three sequential clauses. We have Clause 26 dealing with the voluntary agreement; Clause 27 concerned with the control of prices; and Clause 28 intended to operate where there is no voluntary agreement or in relation to those companies or suppliers that fail to abide by the terms of the agreement.

The noble Earl, Lord Howe, was quite right to point out that the Government's intention has always been that the statutory provisions should have no significant impact on those companies which agree to and comply with the voluntary agreement. Amendment No. 163 underlines the Government's intention that the control of prices should not apply to manufacturers and suppliers who are abiding by voluntary schemes, as described in Clause 26. Amendment No. 167 makes clear that Clause 28 is to operate only in the case where there is no voluntary agreement or where companies or suppliers fail to abide by the terms of that agreement.

It is not our intention that any manufacturer or supplier abiding by the terms of the voluntary agreement to which Clause 26 refers should be subject to the powers conferred in Clause 28.

I believe that the boundaries to which the noble Lord, Lord Walton of Detchant, referred are not very clear on the face of the Bill, although I believe that we have been clear as to our intentions. Therefore, with the leave of the Committee, I wish to take away both amendments with a view to looking at how we may subsume their spirit and bring forward amendments at a later stage.

11.45 p.m.

Earl Howe

Once again, I am extremely grateful to the Minister for the constructive way in which she has responded to these amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Baroness Sharp of Guildford moved Amendment No. 164:

After Clause 27, insert the following new clause—

ANNUAL REPORT BY SECRETARY OF STATE

(". The Secretary of State shall make an annual report to Parliament containing a general survey of developments during the preceding twelve months on the voluntary schemes including references to—

1. (a) any modification of an existing voluntary scheme or introduction of a successor voluntary scheme,
2. (b) decisions taken to prohibit price increases and collect payments under section 26(4), and
3. (c) decisions taken to control prices and profits under section 27.").

The noble Baroness said: This amendment picks up the issue to which I referred in my earlier intervention. The Secretary of State is answerable to Parliament and, through Parliament, to the electorate. If he is party to a voluntary agreement, he should be answerable to Parliament for his actions. At present, we know remarkably little about the deals done under the PPRS. It is a classic corporatist deal. Those on the Opposition Benches should be joining us in wishing to bring some of those dealings out into the open.

The amendment asks the Secretary of State to make an annual report on developments within the voluntary scheme and to report in detail on any modifications agreed. It is pursuing the agenda for transparency and open government which we have been pressing on the Government throughout the Bill. We hope that we are beginning to make an impact. I hope that the Minister will respond positively to that request. I beg to move.

Baroness Hayman

I hope that I can be helpful in terms of the spirit of what the noble Baroness seeks to achieve.

I accept her view that there have been criticisms of PPRS agreements in terms of their complexity and lack of transparency. Indeed, that was one reason that I put forward earlier for needing to make some changes. That is why we are trying to place the voluntary agreements and statutory schemes on a clear basis—to meet some of those criticisms.

I should say to the noble Baroness that the Government intend to publish reports to Parliament on the operation of both the voluntary and statutory arrangements. Much has been done with the first two reports which have already been published, although I hear what she says about not being satisfied completely as regards the detail of that. There are problems which we should acknowledge in respect of matters of commercial confidentiality. But certainly, aggregate figures should be made available and we should do what we can to meet that.

I would question whether it is sensible to place a requirement to publish an annual report on the face of the Bill. One can easily envisage circumstances over the lifetime of the Bill once it becomes an Act when it might be inappropriate in terms of timing to publish a report as described by the amendment. There may be a time when there is no voluntary agreement or when negotiations between the Department of Health and the industry body are at a late stage when the 12 months conies round.

It is in order to have flexibility that I suggest that it is better not to put the requirement for an annual report on the face of the Bill, especially when we look at the issue of a statutory scheme where it might be the case that only a small number of suppliers and manufacturers are affected in any given year. It could be only one or two. It would be very difficult in those cases to see how confidentiality could be maintained and the company's business affairs would be placed in the public domain against its will. One way around that might be found in aggregating the results over a longer period so that a report on the results of the statutory scheme was produced which did not breach areas of confidentiality. Again, we need some ability to act flexibly and responsibly to the conditions prevailing over the lifetime of this legislation. I can assure the noble Baroness that it is our intention to publish reports to Parliament on the operation of both the voluntary and the statutory schemes.

Baroness Sharp of Guildford

I thank the Minister for that very forthcoming reply. We would like to see something on the face of the Bill as a statutory requirement. However, in the light of the Minister's assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 [Statutory schemes]:

Baroness Sharp of Guildford moved Amendment No. 165:

Page 21, line 41, after ("State") insert ("for Trade and Industry").

The noble Baroness said: This is a minor amendment but is of some significance. As I have argued, we believe that there should be no hybrid scheme. There should be either a voluntary or a statutory scheme. This amendment relates to the statutory scheme. If it is to be introduced we believe that there is a conflict of interest between the position of the Secretary of State as a regulator and as a purchaser of health services. Essentially the statutory scheme, if introduced, is a piece of industrial policy about the health of the pharmaceutical industry. As such, we believe that the right Minister to act as intermediary is not the Secretary of State for Health but the President of the Board of Trade. I beg to move.

Earl Howe

I support this amendment. It is self-evident that if a statutory scheme were to apply the Department of Health would be both customer and regulator at the same time. That is not at all satisfactory. If we are to have a statutory scheme—I sincerely hope we do not—then there ought at least to be another department of government in charge of it, a department which can perhaps take a wider and more dispassionate view of the issues involved.

Baroness Hayman

This amendment arises perhaps from an unnecessary broadening of the Government's overall purpose in terms of any statutory scheme. Our purpose, as indeed with the voluntary scheme, is to ensure that the prices paid by the NHS for its medicines are fair and reasonable both to the NHS and the pharmaceutical industry. It is not the purpose of the Bill to regulate the operations of the pharmaceutical industry beyond that aim.

I have said several times this evening that we hope to proceed in this matter by co-operation under a voluntary agreement, but it is clear that circumstances might arise where a statutory scheme would need to be introduced. Clause 28 is concerned with the making of such a scheme. It is a matter for the Secretary of State to determine after appropriate consultation. After all, he is the purchaser of medicines for the NHS and it is his concern that those medicines are priced reasonably and fairly.

The Secretary of State for Health has a key interest in maintaining close contact with the industry in its role of ensuring best value for money as purchaser as well as seeking to maintain an industrial policy within the UK which encourages development of innovative medicines and treatments. Acting as a sponsor commits the Secretary of State for Health to maintain a sensitive and broad perspective as regards developments and concerns within the industry which will, in turn, impact on the provision of healthcare through the NHS.

The amendment will place that responsibility with the Secretary of State for Trade and Industry, whose concerns are not with the NHS. Furthermore, once the Secretary of State for Trade and Industry has made a statutory scheme, it will then fall to the Secretary of State for Health to introduce it under Clause 28. I suggest to the Committee that cannot be a sensible course of action.

I have to say also, simply in terms of drafting, that there is the issue of naming Secretaries of State in primary legislation. That is most unusual and, where it has occurred in the past, has led to confusion and uncertainty as to responsibility when departments have merged or split. Therefore, I suggest to the noble Baroness that that is one good reason for the all-purpose term, "Secretary of State" rather than being more specific in the legislation. However, that is, perhaps, a technical point.

Although I understand where the noble Baroness was coming from on the amendment, I believe that this is not a matter of regulation of the industry as a whole. This is very specifically about ensuring fairness under any statutory agreement that might need to be introduced. I suggest that putting responsibilities for part of that with the Secretary of State for Trade and Industry would not help.

Baroness Sharp of Guildford

I thank the Minister for the answer. As we know, the Department of Trade and Industry has been empire building very hard and it is possible, of course, that it might at some time merge with the Department of Health, although one would hope not to see that! We may think about this at a later stage, but, in the light of the Minister's reply, I beg leave to withdraw the amendment.

Noble Lords

No!

11.57 p.m.

On Question, Whether the said amendment (No. 165) shall be agreed to?

Their Lordships divided: Contents, 8; Not-Contents, 28.

Division No. 1
CONTENTS
Addington, L.	Howe, E.
Bumham, L. [Teller]	McNair, L.
Clement-Jones, L.	Mar and Kellie, E.
Henly, L. [Teller]	Sharp of Guildford, B.
NOT-CONTENTS
Ahmed, L.	Hardie, L.
Amos, B.	Hayman, B.
Archer of Sandwell, L.	Hoyle, L.
Bach, L.	Hughes of Woodside, L.
Carter, L.[Teller]	Hunt of Kings Heath, L.
Desai, L.	Macdonald of Tradeston, L.
Donoughue, L.	McIntosh of Haringey, L.[Teller]
Falconer of Thoroton, L.	Monkswell, L.
Farrington of Ribbleton, B.	Palmer, L.
Gilbert, L.	Pitkeathley, B.
Gordon of Strathblane, L.	Ramsay of Cartvale, B.
Gould of Potternewton, B.	Sawyer, L.
Grenfell, L.	Sefton of Garston, L.
Hacking, L.	Walton of Detchant, L.

Resolved in the negative, and amendment disagreed to accordingly.

12.4 a.m.

[Amendments Nos. 166 to 168 not moved.]

Lord Lucas moved Amendment No. 169:

Page 22, line 31, at end insert— ("( ) The Secretary of State shall publish within seven days details of any payments made under subsections (4) and (5) above.").

The noble Lord said: In moving to move Amendment No. 169 I shall speak at the same time to Amendment No. 179. My main interest is to hear the Minister's explanation of the Government's view of publishing this sort of information in the way my amendment suggests. I am not clear from what was said in relation to a previous amendment whether the names of those who default under the current voluntary scheme are made public. If they are not, I would be interested to know why. Thinking of the future, it would be thoroughly desirable if the Government's decisions under these two clauses were published. I beg to move.

Baroness Hayman

Clause 28, to which Amendment No. 169 is directed, among other things provides for the repayment of unreasonable profits made from the sale of medicines to the NHS or extra income derived from those sales gained by a price increase not agreed by the Secretary of State. It is the basis of a statutory scheme which is to operate when suppliers and manufacturers are not covered by a voluntary scheme.

The amendment seeks to make details of payments under a statutory scheme public within seven days of their receipt. I agree that the effects of a statutory scheme are of genuine interest to many parties, but I can see absolutely no point in requiring the information to be made available piecemeal and at high speed in the way that the amendment proposes. I can think of no precedent for such a requirement, and also there is the need to respect the commercial confidentiality of suppliers and manufacturers. This is an important principle and the amendment could result in its breach. We shall be making available aggregated details of the operation of both the voluntary schemes, including repayment, but we do not think it is appropriate to have to do that within seven days.

In response to the noble Lord's specific question, the names of companies not complying with the scheme have not been made public, with commercial confidentiality being cited as the main reason.

Amendment No. 179 requires the Secretary of State to publish directions given to a supplier or manufacturer about the operation of statutory schemes in individual cases.

Clause 31(1) allows the Secretary of State to make regulations generally, or to give directions to a particular manufacturer or supplier. It is constructed in this manner for a specific purpose: it allows the Secretary of State to deal with a particular supplier or manufacturer in a manner which respects commercial confidentiality.

I recognise that the amendment seeks to achieve greater transparency, but I suggest to the noble Lord that it would defeat the object of respecting commercial confidentiality by placing in the public domain matters between the Secretary of State and a particular supplier or manufacturer about that company's professional and financial affairs. We do not believe that that is the right way forward. Therefore, I hope that the noble Lord will feel able to withdraw his amendment and accept the details of what I gave him when we discussed the earlier amendment; namely, that we will be making available aggregate details of the operation of both the voluntary and the statutory schemes.

Lord Lucas

I thank the Minister for her reply, but I do not find her answer satisfactory. After all, when the Ministry of Defence reaches an agreement with a supplier which results in that supplier paying a substantial amount of money back because of overcharging, or whatever it may be, the common practice is for the identity of that supplier to be made public. Can the Minister give me an example of what sort of considerations of commercial confidentiality apply where a supplier has been misbehaving itself to the extent that the Government have taken action under one of these two clauses? Can she give an example where it would be reasonable in all the circumstances, and taking into account the public interest, not to publish the name of that supplier?

Can the noble Baroness say how commercial confidentiality applies to such things as the actual cost of manufacturing a particular medicine, or the details of what has gone on behind the scenes? The fact that a manufacturer has transgressed and has been fined, say, half a million pounds, is surely not a matter to which any commercial confidentiality can apply without stretching that concept to an extent which would make a freedom of information Act—if we ever see one from this Government—entirely unnecessary because there would be no freedom.

Baroness Hayman

Rather than chance my arm at this stage of the proceedings by producing an example which might be flawed, perhaps the noble Lord will allow me to consider that and his analogy with the MoD and write to him on both issues.

Lord Lucas

Of course I will. The noble Baroness has been extraordinarily generous, not only to me but also to other Members of the Committee. That is a great compliment to her as a Minister and has made listening to these proceedings a great delight. I doubt that I ever behaved as well as she has when I served on the Front Bench. I should certainly be grateful for that consideration. I am sure that the noble Baroness understands the point that I am making here. I look forward to receiving that letter in due course, and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

Clause 29 [Statutory schemes: supplementary]:

[Amendment No. 170 not moved.]

Lord Clement-Jones moved Amendment No. 171:

Page 22, line 33, after ("body") insert ("and bodies representing consumers and patients").

The noble Lord said: Clause 29(1), says: The Secretary of State may, after consultation with the industry body, make any provision he considers necessary or expedient for the purpose of enabling or facilitating—

1. "(a) the introduction of a statutory scheme, or
2. "(b) the determination of the provision to remain in a proposed statutory scheme".

The purpose of my amendment is to elicit from the Minister why other bodies, especially consumer and patient bodies as well as the new national institute for clinical excellence, will not be involved in that process. It seems rather exclusive simply to have consultation with the "industry body" when what is a significant step—that is, the setting up of a statutory scheme—takes place. I beg to move.

Baroness Hayman

I understand the spirit in which the noble Lord puts forward this amendment. I am sure he will be aware that we have made it absolutely clear in most responses that the Government intend to consult the representatives of patients, users and carers of the service. We have not done so here because, in terms of taking on a statutory scheme, it would be the technicalities of a scheme which set out to achieve fair and reasonable prices. In turn, that would give full regard to the needs of patients and consumers. The important issue for patients is that they continue to have access to the medicines indicated in their treatment. In considering this issue I am sure that the Secretary of State will listen to the views of patient groups. However, I do not believe that there should be a requirement to consult on the technical issues of a statutory scheme either with the national institute for clinical excellence—whose remit in this area is not clear—or with representatives of patients and consumers. A statutory scheme would be concerned with the prices paid to the NHS.

I understand that the noble Lord will say that that in turn influences the amount of money that is available for other forms of care and is, in the broadest sense, of interest to patients and consumers. I do not disagree with him on that and I think the broad framework of such an agreement is something on which patient groups may wish to put forward their opinions. However, a statutory scheme would be concerned specifically with prices paid by the NHS and would be a matter for the Secretary of State as purchaser and the industry body as the representative of the suppliers.

In that case I think it is proper that we put on the face of the Bill the duty to consult with those suppliers who would be subject to the workings of a statutory scheme. However, I am not certain that it is appropriate to refer on the face of the Bill to consultation on what, as I say, is essentially the technicalities of price setting within the pharmaceutical industry. I hope therefore the noble Lord will feel able to withdraw his amendment.

12.15 a.m.

Lord Clement-Jones

I thank the Minister for that reply. I am not quite sure that she has addressed the point of whether NICE would have information on the technicalities of any statutory scheme. Over a period it will build up an enormous amount of expertise in the whole area of drug pricing and so on. However, the hour is late and I shall ponder the Minister's reply before the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 172 not moved.]

Baroness Sharp of Guildford moved Amendment No. 173:

Page 22, line 37, at end insert— ("( ) In exercising any powers or negotiating any price under or by virtue of any provision of this Act, the Secretary of State shall have regard to the priorities of the NHS for research and development in the field of pharmaceuticals.").

The noble Baroness said: This amendment reiterates the point that has already been made in the debate. It asks that any statutory scheme of price regulation that is introduced shall take account of the importance of research and development to this industry. As I stressed earlier, we have succeeded in "growing" in this country an extraordinarily successful and innovative pharmaceutical industry. It is a highly profitable industry but a good part of its profits are reinvested. The average cost of bringing a new drug to market these days is over £250 million. This is a vast sum and the industry deals in vast sums.

In setting prices, the Government must recognise that the industry has to have this level of resources at its disposal. If they do not do so, there is a great danger that we shall lose this extraordinarily successful research-based industry from which this country currently benefits a great deal. I beg to move.

Earl Howe

I wish to speak to Amendments Nos. 178, 180, 181 and 182. One of the standard features of recent legislation giving government the power to control the prices and profits of a particular industry is a section setting out a clear statement on the face of the Bill of the objectives which underlie these powers. An example of this is Section 3 of the Electricity Act 1989. If we look at this Bill, however, the powers are there but the context is not. Indeed the powers proposed in the Bill are far more discretionary than the statutory powers which apply in industries such as the privatised utilities. With the privatised utilities the power to control prices rests effectively with an independent regulator. The Bill should state in clear terms the Secretary of State's obligation to have regard to defined statutory purposes in exercising the powers confered upon him. These purposes ought best to be a restatement of the objectives underlying the PPRS. That is what Amendment No. 178 seeks to achieve.

Statutory control of the prices and profits of private companies is very much a course of last resort for any government—even, I suspect, for this Government. Clause 31(4) of the Bill attempts to hedge in these powers by including a test of reasonableness. But, on reading that subsection, I wonder whether the wording could be made clearer and more direct. I have attempted to do that in Amendments Nos. 181 and 182. In Amendment No. 180 I have suggested that there ought to be exactly the same test of reasonableness applied to anything the Secretary of State does under Clause 26 relating to the voluntary scheme.

Baroness Hayman

I hope I can be helpful to the Committee, although I am not certain that I can accept specifically either the amendment of the noble Baroness, Amendment No. 173, or the later amendments, as they stand, of the noble Earl, Lord Howe. Amendment No. 173 would place on the face of the Bill a requirement for the Secretary of State to have particular regard to the priorities of the NHS for research and development in the field of pharmaceuticals in the exercise of any statutory scheme. The purpose of the statutory scheme—as is the purpose of a voluntary agreement—is to ensure that the prices paid by the NHS for its medicines are fair and reasonable. As I have said before, deciding what is a fair and reasonable price is a process involving many factors, one of which is the amount of profit made by suppliers and manufacturers from the sale of medicines to the NHS.

However, it is not the only one. The amendment points to the importance of research and development to pharmaceutical products. That importance has long been recognised by the NHS. In the pharmaceutical industry the cost of that research and development is high and is met from profit. It is reasonable to take account of research and development costs because the NHS ultimately benefits from the supply of safe, effective and innovative medicines. I assure the Committee that the recognition of the importance of research and development will continue in the event of the introduction of a statutory scheme. I am not sure that it is necessary to have such a commitment on the face of the Bill. The Secretary of State, in not having regard to the importance of research and development in setting prices and profits would be acting against the long-term interests of the NHS.

Amendment No. 178 is a similar but more comprehensive amendment proposed by the noble Earl, Lord Howe. It raises a number of questions. First, there is the issue of whether it is desirable to have a statement of objectives on the face of the Bill. This is a difficult matter requiring some care. It runs the risk of the objectives being followed so closely that they restrict the operation of the Bill and make it unworkable. There is also the issue of whether it is desirable to give a separate set of objectives to one part of the Bill with the statutory scheme, and potentially other objectives set out in the voluntary scheme, which is not yet decided upon.

The objectives proposed, as they are laid out, seem perfectly acceptable principles—I would not wish to dissociate myself from any of them—but we would he setting the courts a near impossible task if we were to ask them to consider not simply whether a company's profits were in accordance with the rules of the scheme but whether the Secretary of State's actions could be considered best calculated to achieve the objectives set out here.

It is vital that we work on a co-operative basis with the pharmaceutical industry, and we hope that this co-operation will be through a voluntary agreement. It is in that agreement that a statement of objectives, such as those proposed, should reside. They are then capable of change in the light of changed circumstances and renegotiation. I do not believe that it would help to have an inflexible statement of objectives on the face of the Bill if they were subsequently relied on as a key to the operation of the legislation.

However, I have some sympathy with regard to the issue of whether we could find a way of placing on the face of the Bill some general principles against which a Secretary of State would work in drawing up a statutory scheme. I hesitate to say that I am certain that we will be able to do that—because of the difficulties in the proposals before us—but I am certainly happy to take this away to see whether we can do something that is perhaps more specific than the reference to be reasonable in all the circumstances to which the noble Earl, Lord Howe, referred and which is, I have to accept, fairly broad.

We shall look to see whether we can produce something that would not introduce possibly excessive scrutiny of the operation of what is intended to he a light touch scheme but something that more clearly defines general principles and general circumstances. Perhaps I may take this away and see whether we can bring something forward at a later stage.

Baroness Sharp of Guildford

I am most grateful to the Minister for her very forthcoming reply. In the light of what she said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 174 not moved.]

Clause 29 agreed to.

Clause 30 [Enforcement]:

[Amendments Nos. 175 and 176 not moved.]

Earl Howe moved Amendment No. 177:

Page 23, line 15, at end insert— ("( ) An order under subsection (6) shall be laid before both Houses of Parliament in draft and shall be subject to approval by resolution of each House.").

The noble Earl said: Clause 30 lays down penalties for infringements of any of the regulations or directions which may arise from the preceding four clauses covering either the voluntary scheme or the statutory controls that may be imposed by the Secretary of State. This amendment is concerned not with the principle of having penalties but with the power of the Secretary of State to increase those penalties without further reference to Parliament. This is a Henry VIII power and it is one about which the Delegated Powers and Deregulation Committee expressed particular concern.

I strongly share that concern because, even setting to one side for a moment all our disagreements about statutory versus voluntary schemes, it seems wholly wrong for Parliament to give a blanket power to the Secretary of State to enable him to set literally any amount as a penalty. I do not believe that that kind of power exists in law in respect of other types of fine or penalty. Nor do I see any argument for it existing here, more especially because these penalties apply not just to the infringement of the statutory controls but to the voluntary scheme as well. I beg to move.

Lord Clement-Jones

We on the Liberal Democrat Benches strongly endorse the comments of the noble Earl, Lord Howe, and support the amendment. As he mentioned, it was strongly recommended by the Delegated Powers and Deregulation Committee and we believe that there are eminently good reasons for making subsection (6) subject to the affirmative procedure.

12.30 a.m.

Baroness Hayman

It is certainly our hope that the powers conferred under Clause 30(6) would not often be used over the lifetime of the Bill. The provision is there to ensure that the penalties for non-compliance with either the voluntary agreement or the statutory scheme should remain at appropriate levels.

Noble Lords are correct in pointing out their own view and that of the Delegated Powers and Deregulation Committee that provisions such as these should be made by affirmative resolution. I referred earlier to our intention to bring forward amendments at a later stage to bring the Bill into line with the suggestions made by the Select Committee. Perhaps this is one of a number of areas in the Bill in which that could be done.

Perhaps the Committee will allow me just a moment's leeway, for the sake of completeness, to deal with other government amendments which it may be helpful to foreshadow that we intend to bring forward. I made reference earlier to issues surrounding unified budgets. We also want to bring forward an addition to the section of the Bill dealing with evasion of charges and fraud to cover the introduction of a penalty charge for non-payment of an NHS charge or the incorrect claiming of a benefit. That would respond to the recommendations of the efficiency scrutiny on fraud published in June 1997.

I also hope, in response to the point raised by the noble Lord, Lord Colwyn, at Second Reading, to bring forward a government amendment on the issue of professional indemnity insurance and to introduce an amendment responding to concerns raised by the professions relating to the role of local medical and dental representative committees in relation to primary care Act pilots. I am grateful to the Committee for allowing me to make that clear as well as our intentions in relation to this amendment.

Lord Monro of Langholm

Will the noble Baroness make it clear that the affirmative resolution will apply to all of Part II relating to Scotland as well?

Baroness Hayman

I am not sure that I can make that crystal clear at this precise moment. We shall come to the provisions for Scotland shortly. As I understand it, the recommendation of the Select Committee and this amendment in particular deal only with Clause 30(6). Perhaps before we come to debate the Scottish provisions I can find out and respond to the noble Lord at that point.

Earl Howe

I am extremely grateful, as so often this evening, for the noble Baroness's constructive approach. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 agreed to.

[Amendment No. 178 not moved.]

Clause 31 [Controls: supplementary]:

[Amendments Nos. 179 to 182 not moved.]

Lord Desai moved Amendment No. 182A:

Page 23, line 32, at end insert— ("(4A) In carrying out his duties under subsection (4), the Secretary of State shall publish criteria setting out what factors should be taken into account in determining prices and profits which would be reasonable in all the circumstances. (4B) Prior to publishing the criteria referred to in subsection (4A) above, the Secretary of State shall consult such organisations as he considers appropriate.").

The noble Lord said: I shall be brief as this matter has partly been discussed. The amendment proposes that the Secretary of State should publish the criteria as to how he decides whether prices and profits are reasonable. It seeks to clarify the situation.

There is another problem that should be mentioned. According to the annual report of the Department of Health, the PPRS is meant both to secure cost-effective medicines for the NHS and to promote the pharmaceutical industry. There may be problems of conflict between the two. I am not sure which hat my right honourable friend the Secretary of State for Health would wear in deciding one against the other. This is a probing amendment. I hope that my noble friend can give me a satisfactory answer at this late hour.

Baroness Hayman

I am grateful to my noble friend for the clarity and brevity with which he proposed the amendment. I believe he is right to point out that there will he judgments to be made in the objective of securing an agreement that is fair and reasonable both to the NHS as purchaser and to the industry as suppliers and manufacturers. I believe that it will he difficult but not impossible to do so. Previous schemes have managed to square that circle and I hope that the current negotiations will result in a scheme which both parties feel satisfies the need of the NHS for medicines at reasonable prices and of the industry for a reasonable profit base, not least for the reasons of supporting research and development to which reference has been made.

The amendment affects the Secretary of State's use of powers conferred under a statutory scheme. Such a scheme will be used where a voluntary scheme does not exist or where a company fails to abide by the terms of that agreement. Subsection (4) confines those powers to making any decisions by reference to the prices or profits which would be reasonable in all the circumstances. The amendment puts on the face of the Bill a requirement that the Secretary of State shall consult appropriately before deciding and publishing the criteria to be used in determining what prices or profits would be reasonable in all the circumstances.

In the event that the powers are exercised to provide for a statutory scheme of profit control, the statutory scheme would be entirely set out in regulations. Those regulations would have to be very detailed and formulaic and would contain the criteria to which the noble Lord, Lord Desai, referred. The Bill already provides for consultation with the industry body before the power is exercised and the Secretary of State is free to consult other bodies as he sees fit.

On the question of price control, the Secretary of State will again have to consult the industry body before exercising any power. He is also required to act reasonably, as required by general law and Section 31(4) of the Bill. To do so, a clear statement of the criteria which had been used in determining any price would be required. I hope that my noble friend will feel that the effects which the amendment seeks to put in place are already met, if not on the face of the Bill, in the regulations that would have to be made in the exercise of this power, and that on that basis he will feel able to withdraw the amendment.

Lord Desai

I am grateful to my noble friend for that very clear exposition. I need only add that among the organisations that the Secretary of State should consult should be some consumer organisations. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 183 and 184 not moved.]

Earl Howe moved Amendment No. 185:

Page 24, line 3, at end insert— (""the supply of any health service medicine" means the supply of a health service medicine to the health service, the manufacture of any health service medicine" means the manufacture of such health service medicine as may be supplied to the health service.").

The noble Earl said: I believe that there is a problem with the definition of "health service medicine" in Clause 31(6). I take it that the Bill intends to limit the exercise of the powers contained in Clauses 26 to 31 to medicines actually supplied to the NHS. As drafted, however, the definition of "health service medicine", which is, a medicinal product … used to any extent for the purposes of the health service", leaves open the possibility that the controls would apply to such a medicine even when it was being supplied to someone other than the NHS. In other words, it would, as a product, be subject to the controls, no matter whom it was sold to. Amendment No. 185 attempts to put the issue beyond doubt by including two new definitions in Clause 31. I hope that the Government will be receptive to them. I beg to move.

Lord Clement-Jones

I wish to indicate the strong support of these Benches for the amendment. The clause as currently drafted is too wide. The amendment specifies the area that the clause is meant to cover, which I am sure is the Government's intention.

Baroness Hayman

Both noble Lords have expressed concern about the breadth of the current definitions within this part of the Bill. Clauses 26 to 31 are concerned with the single aim of ensuring that the prices paid by the NHS for its medicines are fair and reasonable. We are not concerned to control prices or profits on the sales of private medicines. However, at the margins, particularly when dealing with wholesalers, the precise destination of every drug in any particular consignment is very difficult to identify. That is the problem in limiting the scope of the price and profit control powers created under the Bill to medicines sold to the health service rather than to categories of medicine that are used to a significant extent by the service. But the problem to which I have alluded arises under the present voluntary arrangements that have operated satisfactorily.

I recognise that something may be required to deal with this marginal problem, but I suggest to the Committee that it may be best dealt with in regulations. Perhaps I can look at whether there is a way of doing that. There are problems in the suggested amendment which would have equal and opposite difficulties in the clause as it is phrased at the moment.

Earl Howe

I am grateful to the Minister for indicating that she will give further thought to the issue. I realise from her response that it is not as clear-cut as I had thought. Nevertheless, there is an ambiguity in the wording which perhaps can be removed by a little judicious rephrasing. We can perhaps look forward to returning to this matter at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 31 agreed to.

On Question, Whether Clauses 32 to 35 shall stand part of the Bill?

Baroness Hayman

Perhaps I may take this opportunity before I sit down—if that is the appropriate way to put it—to respond to the noble Lord, Lord Monro of Langholm, on the question of the affirmative procedure and Part II of the Bill and the proposals that we make in Clause 36. This is a reserved matter and therefore will apply to Scotland. Clause 36 has no bearing on Part II of the Bill nor indeed on any of the Clauses 26 to 31. I hope that that deals with his point.

Clauses 32 to 35 agreed to.

Clause 36 [Repeal of law about fund-holding practices]:

[Amendment No.186 not moved.]

On Question, Whether Clause 36 shall stand part of the Bill?

Lord Monro of Langholm

Perhaps one should take this opportunity to debate Clause 36 which, after all, represents a major change in the health service in Scotland. It removes the capability of fundholders. I believe that some explanation from the Minister is required as to the reasons for the inclusion of this provision in the Bill over and above what is in the White Paper. It is unfortunate that Part II of the Bill is being considered at 12.45 in the morning. This makes very substantial changes to the health service in Scotland. This is hardly the time to discuss such important issues. While I appreciate that fewer general practitioners in Scotland than in England undertook fundholding, I believe that fundholding has been a success in terms of what they have been able to achieve: less interference in general practice; a reduction in bureaucracy; less impact on costs; easier prescribing under fundholding; and the ease of organisation of entry into hospital. Before we say goodbye to fundholding as provided for in Clause 36, the Minister should be able to put forward a good case for this major change.

I am grateful to the noble Lord, Lord Macdonald, for the trouble he has taken in writing to us this afternoon setting out in more easily understood English the more complicated changes to the Bill under the Scottish draftsmanship. That is appreciated. I am sure that all who read it in the future will wish that the Bill had been drafted in similar terms.

Having offered those words of thanks, perhaps when the noble Lord, Lord Macdonald, replies, he will argue a case for Clause 36.

12.45 a.m.

The Earl of Mar and Kellie

In discussion with my local health board I gained the impression that the few fundholding GPs had already accepted that the writing was on the wall. In view of the advanced state of preparations for implementing the Bill by 1st April, fundholding has virtually come to an end.

The Minister of State, Scottish Office (Lord Macdonald of Tradeston)

I am grateful for the contribution by the noble Lord. He makes the case strongly that there are different circumstances in Scotland from the circumstances which existed in England. In England, 50 per cent. of GPs were standard fundholders in April 1997, with a further 7 per cent. in community fundholding. Similarly, in Wales, 47 per cent. of GPs were standard fundholders, with a further 6 per cent. in community fundholding.

However, in Scotland, although about 50 per cent. of GP practices had joined fundholding by 1998, more than 30 per cent. were in the primary care purchasing scheme, the Scottish equivalent of community fundholding, but less than 20 per cent. as standard fundholders. In Scotland the new structures that we are building will be on the same principles as those in Wales and England. They will provide strong organisational support for the development of primary care and will involve local doctors and nurses in planning and influencing the high quality of services for patients.

Members may ask: why then the difference? The difference in the two models reflects the different starting points in Scotland compared with England and Wales, as well as the differences in culture and historic structure of the National Health Service. For example, purchasing of secondary services by GPs was much less widespread in Scotland, where the majority of GPs who had joined fundholding were community fundholders. There are also substantial parts of Scotland with rural and dispersed populations such as the Highlands and Orkney, the Shetlands and the Western Isles, where competition between providers was never really a reality. In Scotland we have a different situation and it deserves different treatment.

I turn to Amendment No. 186. We have made a clear commitment to end the internal market and replace it with modern arrangements founded on the principles of partnership and co-operation. Clause 36 abolishes the GP fundholding system which formed a major part of the old internal market. The regulations were laid on 17th February to bring the existing GP fundholding schemes in Scotland to an end on 31st March. A single remaining form of fundholding will operate from then until all fundholding is abolished, as we intend, through the provisions of this Bill. Clause 36 enables us to remove this remaining form of fundholding, which we intend to do as soon as practically possible. Fundholders recognise that it is now time to move on. We believed that it is important not only to signal the end of GP fundholding as swiftly as possible, but also to ensure that transitional arrangements are in place for as short a time as possible.

Clause 36 agreed to.

Lord Mackay of Drumadoon moved Amendment No. 187:

After Clause 36, insert the following new clause—

ALL SCOTLAND HEALTH BOARD

(".—(1) Section 2 of the 1978 Act (health boards) is amended as follows.

(2) In subsection (3) after "order", in the first place it occurs, there is inserted "create an all Scotland Health Board or".").

The noble and learned Lord said: In the absence of my noble friend Lord Mackay of Ardbrecknish, in whose name the amendment stands, I rise to move it. In doing so, I preface my remarks with a view I know is shared by my noble friend; namely, to raise once again the general observation as to why a Bill containing the clauses to be found in Part II is being brought forward to this House on the very eve of devolution.

Having read the debate on Second Reading, I am well aware that the point was raised then by my noble friend, but I am not sure that the answer he received stands up. The answer was to the effect that the new primary care trusts will come into being on 1st April and need a full range of powers to do so. The legislation was necessary to bring that about. Whatever may come into being by 1st April 1999, one thing will certainly not; that is the Health Act 1999 based on the provisions which are to be found in the Bill currently before the Committee.

There is no possibility whatever that the Bill will have completed its parliamentary passage by that date. Therefore, the justification put forward on Second Reading, initially by the noble Lord, Lord Ewing of Kirkford, and subsequently adopted by the noble Baroness the Minister, does not hold water. If primary care trusts are to require some legal basis for their existence at 1st April 1999—and I do not dispute that that may prove to be necessary—they will not find it as at that date in the provisions of the Bill.

I have already referred to the fact that the Bill is brought forward on the eve of devolution coming into effect. As Members of the Committee will be aware, elections to the Scottish Parliament are due to take place on 6th May. All the parties have selected—in some cases, more accurately, appointed—those who are to stand as candidates at the election. Manifestos are being drafted; teams of election spokesmen are being appointed; and, I suspect, we are not far away from an embargo being placed on Scottish Office Ministers making any further official announcements or taking part in any further official visits in the immediate run-up to the election. Yet, here we are debating a Bill dealing with a major reorganisation of the National Health Service in Scotland. It is being considered initially by your Lordships' House and then in the fullness of time by another place.

From my reading of the Bill, the debate on Second Reading, the White Paper and surrounding documentation, I perceive nothing urgent in the subject matter of the clauses which requires the Bill to be enacted to include Part II. We will return to this matter, no doubt in somewhat greater detail, when the Committee comes to consider Amendments Nos. 219, 220 and 221.

The sharp political issue is that, if and when Part II becomes law, becomes part of an Act of Parliament, there may well be in position in Scotland a Scottish executive which is not composed entirely of members of the Scottish Parliament who are supporters of the present Government. It seems to me to be entirely wrong to place legislation on the statute book with no guarantee whatever that the people who will fall to bring it into effect and to implement it are full-blooded subscribers to the policy which lies behind the legislation.

There is also considerable force in the point made a few moments ago by my noble friend Lord Monro as to the lateness of the hour at which we are discussing this important issue. There is a certain irony in that one of the justifications for devolution, which I recognise has some force to it, is that it should do away with the need to discuss important legislation in the middle of the night. And yet here we are, on the very eve of devolution, doing that very thing and likely to be doing so, as I understand it, for not a little time yet.

Amendment No. 187 is a probing amendment which seeks to explore whether it is certain that there will always be a need to keep more than one health board in Scotland for individually defined geographical areas within Scotland.

In moving this amendment, I take the opportunity to renew the thanks of my noble friend Lord Monro to the Minister, the noble Lord, Lord Macdonald, for responding positively to the request made by my noble friend Lady Carnegy of Lour on Second Reading. She asked for a Keeling Schedule, which—possibly for understandable reasons—has not been made available. But the documentation which has been produced has certainly assisted in considering these amendments and in arguing them before the Committee.

As some Members of the Committee may be well aware, there is in fact in existence a statute law database but it is available only to parliamentary draftsmen and officials. Therefore, when one is in opposition, trying to scrutinise legislation, one is to some extent at a disadvantage. That disadvantage has been removed substantially by the extremely helpful co-operation which government Ministers have given in relation to the question that was raised.

It is clear from information made available to my noble friend Lord Mackay of Ardbrecknish that the Government propose to introduce two types of NHS trust in Scotland—the acute hospital trust and the primary care trust. It would be sensible to have a review of the boundaries and the number of health boards. One reason for the BMA putting forward this suggestion is to enable consideration to be given to the development of managed clinical networks, a concept which the Minister will be aware was discussed in a paper issued on 9th February of this year by the NHS Management Executive in Scotland.

As the Minister will know, managed clinical networks are defined as being linked groups of health professionals and organisations from primary, secondary and tertiary care working in a co-ordinated manner unconstrained by existing professional and health board boundaries to ensure equitable provision of high-quality clinical services throughout Scotland. If they fail to be introduced, there may well be an argument for restricting dramatically the number of health boards, possibly to a figure as low as one.

The amendment in the name of my noble friend Lord Mackay of Ardbrecknish seeks to amend the existing provisions of Section 2(3) of the 1978 Act to make it clear on the face of the statute that the figure could be reduced to a figure as low as one.

Some Members of the Committee may feel that that is a somewhat dramatic option to place in the hands currently of the Secretary of State but, come 1st July, it will be in the hands of the First Minister. Those Members of the Committee who were present on Second Reading or who have read the Hansard reports of the debate will be aware that the noble Lord, Lord Ewing of Kirkford, went one step further and argued very cogently at col. 148 for the abolition of all health boards from the scene. He justified his argument on a number of grounds, including a substantial saving in cost and also, by virtue of his experience as chairman of a health board, his view that strategic health planning, healthcare for the future, can be carried out over much wider areas than has hitherto been possible under the system of health boards.

Whether or not one agrees with the noble Lord, Lord Ewing, there is clearly a case to be made for the First Minister to be given power to restrict the number of health boards dramatically, possibly to one or possibly remove them altogether. This amendment will provide that the first option is clearly stated on the face of the statute. I beg to move.

1 a.m.

The Earl of Mar and Kellie

My noble friends are keen to move health into the care of local government. However, I look forward to hearing the Minister's explanation as to why we should not have one health board for Scotland, or indeed none at all, and instead have a situation where all the hospital trusts and primary care trusts report directly to the Scottish Minister for Health.

Lord Monro of Langholm

The noble Earl, Lord Mar and Kellie, is about the only chap in this building who thinks that health should be put entirely in the care of local government. As the Minister who introduced area health boards in 1972 when we reorganised the health service in Scotland into a single-tier system, which has worked well ever since, I shall be sorry to see them go. But what worries me is that we are setting up under the area health board an acute and primary care trust. It will devolve its powers into the co-operatives for managing the practices. One begins to wonder what the area health boards are going to do. I have been told that they will be there for the grand issues of long-distance planning and finance but that day-to-day management of the health service in any one area will be in the hands of the acute and primary care trusts.

What worries me in relation to the amendment is the sheer geographical size of Scotland. For instance, the area health board in my area stretches from Gretna Green to Stranraer and from the Solway Firth right the way up to Sanquhar and Kirkconnel. It is a huge area, enough for any organisation to run a health service within it. To think that that health hoard might stretch over the whole of Scotland fills me with some degree of awe.

The Minister must justify what each area health board is going to do within the current health board areas and what its relative operation control will be over the trusts and the co-operatives to be set up under the present Government's plans. Frankly, I feel we are setting up an extremely bureaucratic situation that is going to be of no advantage to the poor patient who is there to receive the benefits of the health service and at the end of the day we will ask why on earth we have gone through this enormous somersault and reorganisation of the health service in Scotland which is entirely unjustifiable.

Baroness Carnegy of Lour

Briefly I must add my voice to protest at the way the Government are treating Scotland. It is now one o'clock in the morning and we are discussing an enormously important part of the Bill which turns the health service in Scotland upside down. We are doing it when it should be the job of the Scottish Parliament, as my noble and learned friend said.

My noble and learned friend mentioned the speech of the noble Lord, Lord Ewing. He is not in his place; I do not believe he has been here today so presumably he does not wish to pursue this matter. However, he pointed out that in Fife, the health board costs £6.1 million per year. That, by my calculation, is a middle-sized health board. It is one of 15, so it may well be that the running costs alone of the health boards are something of the order of £90 million. That is a lot of money. As the noble Lord, Lord Ewing, stated, the health boards will have two roles: they will be bankers, allocating money from the Scottish Parliament to the trusts in their area, and they will do strategic planning, which is easy to do nowadays on a larger scale.

The noble Earl, Lord Mar and Kellie, who, I believe, aspires to be a member of the Scottish Parliament, can see the Scottish Parliament wanting to do that job. I could see his eyes sparkling at the idea, and he will not be alone. Would the Government not be right to make that possible? I support the amendment.

Lord Macdonald of Tradeston

I am glad to hear that Members of the Committee opposite found the information that we were able to supply of some use to them. It was with great humility and diffidence that I offered guidance in these matters to the noble Lord, Lord Monro, or even to the noble Lord, Lord Ewing, well versed as they are in Scottish Office matters.

I take the point too made by the noble and learned Lord, Lord Mackay. However, I believe that we are due to have a debate on the devolution provisions on Thursday. Perhaps I may say to the noble Baroness that I do not think it is entirely the doing of this side of the House that we are still here at five past one. However, I should like to take in some of the points raised by the noble and learned Lord, Lord Mackay. I want to make clear that the Bill does not represent a sudden rush to try to get proposals through before devolution. On the contrary, it sets the seal on a process which has been going on since before we took office.

Many of our changes have been achieved within existing legislation. Those include reducing the number of National Health Service trusts in Scotland to 28; introducing co-operative mechanisms to promote partnership through the development of health improvement programmes and the setting up of the clinical standards board for Scotland to assure quality.

The provisions in the Bill deal only with those few matters where the law needs to be changed; that is, formally abolishing GP fundholding; enabling the appropriate National Health Service trust to take responsibility for family health services under Part II of the 1978 Act; changing trusts' financial arrangements; and imposing a duty of quality on the National Health Service in Scotland.

The proposals come as no surprise. They were all signalled clearly in our manifesto at the 1997 general election. They were set out in detail in our White Paper, Designed to Care published in December 1997. The National Health Service in Scotland is already building on them.

I turn to the amendment. There is nothing in the existing Section 2(3) of the 1978 Act to stop the Secretary of State creating an all-Scotland health board should he wish to do so. The noble Lord has set out what he believes would be the advantages of such a step, but I am not convinced. The Government believe that health boards continue to have a key role in bringing a local dimension to the planning and commission of services.

The national perspective is provided by the management executive of the National Health Service in Scotland. It is difficult to see how a pan-Scotland health board and the management executive could sensibly co-exist. I am surprised that the Bill, and the arrangements set out in Designed to Care, should be read as bringing about a reduction in the role of health boards. The White Paper is about making clear the different roles within the National Health Service.

In broad terms, health boards are responsible for strategy and planning. National Health Service trusts are responsible for the delivery of services. That takes forward, in a constructive way, the distinction between the two roles introduced in 1991. Health boards have a number of specific roles which are of great importance to the health and well-being of the populations. Apart from distributing resources to trusts, they are responsible for assessing the health needs of the local populations.

As the recent White Paper, Towards a Healthier Scotland, also pointed out, health boards are responsible for protecting and improving the health of the resident populations in promoting public health issues and ensuring fully co-ordinated community care policies. Health boards work closely with local authorities. The Government are anxious to encourage working across the boundary between health and social care. The effect of delivery of healthcare often depends on the active co-operation of other agencies, especially local authority social work departments.

Whatever structure we adopt, some boundary will exist. The important principle must be that the patient's care comes first, and the patient should not be aware that there is a boundary. To achieve this, the National Health Service in Scotland and local authorities need to develop close working relationships, and we are consulting on this aspect. The paper, Modernising Community Care: an Action Plan was published last October. It emphasises better and faster decision-making and caring for people in their own homes. Any changes thought necessary will be a matter for the Scottish Parliament. Health boundaries must not act as constraints on the care provided for patients. There is increasing emphasis on designing services from the patient's perspective, and the re-design of services to suit the needs of the patient does not allow health board boundaries to get in the way.

A further example of the work of the acute services review, which reported last June, and one of the fundamental assumptions, was that the review should not be constrained by health board boundaries. Its key recommendation is the development of managed clinical networks and anticipates that many of these will operate at regional and national levels. Just as people want to be treated locally if possible, I believe that they also want services planned at a local level where it makes more sense to do so. Health boards have the expertise to assess the needs of the local populations.

I have sought to explain why the Government take the view that a single health board covering the whole of Scotland is not appropriate. Nevertheless, as I mentioned at the start, there is nothing in the existing legislation to prevent a future government making that change if they choose. It will of course be open to the Scottish Parliament to consider the number of health boards and their role. The amendment is therefore unnecessary, and I hope that the noble Lord will not press it.

Lord Mackay of Drumadoon

I am very grateful to the Minister for his full explanation. I fully accept two of the main points he made. These proposals have been heralded for some time. A number appear in the Labour Party manifesto, some in the White Paper. However, as he rightly says, this is probably more a matter for debate on Thursday, and also the fact that they have come too late. However, there is force in the final point he makes that the legislation as drafted could be construed as allowing the Secretary of State by order to vary the number down to one. With that assurance from him that the Government accept that that is the correct construction of the existing legislation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 188 not moved.]

Clauses 37 and 38 agreed to.

Clause 39 [Constitution of NHS trust boards]:

Lord Mackay of Drumadoon moved Amendment No. 188A:

Page 31, line 3, after ("trust)") insert (", at least two of whom shall be a registered medical practitioner and a registered nurse or midwife,").

The noble and learned Lord said: Amendment No.188A seeks to amend Clause 39 to provide that Section 12A of the 1978 Act would have additional words inserted to the effect that at least two of the executive directors, that is, directors who are employed at the trust, shall be in the first instance a registered medical practitioner and a registered nurse or midwife. The amendment was tabled by my noble friend Lord Mackay of Ardbrecknish after consultation and has the full support of the Royal College of Nursing.

The purpose of the amendment is quite clear: it is to ensure that health professionals, including a registered medical practitioner and a nurse or midwife, are represented at executive level on each of the National Health Service primary care trusts and acute hospital trusts in Scotland.

If acceptable to your Lordships, the amendment would enshrine in statute the commitment by the Government that there should be a nurse director as one of the executive directors on the board of each of the trusts. The matter is dealt with in a number of places in the White Paper. Page 12 indicates that the Government are committed to giving clinicians who work in the hospitals, along with those who use their services, a bigger say in management.

Clearly the amendment fits in with the manner in which the policy is described. When one turns to Section 5 of the White Paper, Designed to Care, the text makes it clear in a number of places that one aspect of the Government's policy is to involve, to a greater extent than is said to be occurring at the moment, those involved in the delivery of clinical services in the arrangements set down for managing them.

Perhaps I will be forgiven if I restrict what I quote from the White Paper to what is to be found in paragraph 75 of the section which deals with primary care trusts. This refers back to the emergence of new collaborative working methods and the benefits that they bring to patients and practitioners alike and says that, primary and community health services will be brought together under a single unifying structure in the form of Primary Care Trusts. The establishment of these Primary Care Trusts will build on the strengths of general practice and give a voice to community nursing and other primary care professionals managing and delivering care to their local communities. In this way primary care will be able to pool resources, work across organisational boundaries, and develop shared aims and objectives which will underpin the drive towards better quality of care for patients". As I said, in view of the lateness of the hour, there is no great need to review in detail what is said in other paragraphs in the White Paper, especially in the section dealing with acute hospital trusts.

The main point to be made in support of this amendment is, as I have already mentioned, that the Government have given a commitment that there will be a nurse executive director on each primary care trust and acute hospital trust in Scotland. If that commitment has been given—as it has—it seems entirely logical that the same should apply to a registered medical practitioner. Therefore, the amendment was tabled by my noble friend Lord Mackay of Ardbrecknish to give the Government the opportunity to fulfil that commitment and to give it statutory recognition in legislation which, as I understand it, the Government propose should be available for the Scottish executive to implement once it is elected in May and takes up its executive responsibilities on 1st July.

If the Government do not accept this opportunity, that might involve their sending a most unfortunate signal not only to the health professionals in Scotland but also to the people in Scotland as to whether or not their word can be trusted in health service matters. I beg to move.

1.15 a.m.

Lord Monro of Langholm

I have two points on the trusts that I should like to put to the Minister. First, this Government seem to have got themselves into an inflexible position over the Peach/Nolan recommendation on appointments to public boards, bodies and quangos. Can the noble Lord tell me what the position is over the trusts and the area health board; and, indeed, the co-operative? For example, do those bodies have to go through the Peach/Nolan recommendation of having three recommendations for each appointment? That would mean that you would have to have 36 names for a 12-member health board in order to choose 12. Further, who will put forward the recommendation and does it apply to the chairman appointed by the Secretary of State?

Secondly, the information paper that we have recommends one co-operative to a health board. However, does the noble Lord really appreciate the size of these co-operatives in the geographical sense that I indicated in terms of my own Dumfries and Galloway health board? We should bear in mind that there will be a number of professionals on the body. I refer to general practitioners. Will they have time to tour these huge areas attending bureaucratic meetings and to manage these co-operatives? That requires skill and time and will cost a lot of money. Will the Minister answer those two points?

The Earl of Mar and Kellie

I am a little concerned that particularly as regards the primary care trusts the amendment gives undue influence to doctors, nurses, registered nurses or midwives. The allocation of two of the five posts to those professions strikes me as unfair on dentists, pharmacists, optometrists, health visitors, district nurses and mental health staff. Does the Minister agree with me on that?

Baroness Carnegy of Lour

I presume the Minister will tell us that nurses and medical practitioners will take part in the co-operatives and that therefore the Government are not obliged to say that they will have to be executive directors of the primary care trusts. However, we are told that a commitment has been given to nurses. If the Government do not intend to put that on the face of the Bill, why not? That is the question the Minister has to answer.

Lord Macdonald of Tradeston

As the noble and learned Lord, Lord Mackay of Drumadoon, has explained, his amendment seeks to ensure that nurses and doctors are on the National Health Service trust boards. I hope I can satisfy him on this matter. The White Paper, Designed to Care, signalled our intention to modify the existing arrangements with regard to National Health Service trust boards as part of the modernisation of the National Health Service in Scotland.

Provision for the broad composition of a board is set out in the 1978 Act. This sets out that the board consists of directors, including a chairman appointed by the Secretary of State, and executive and non-executive directors. We specified that non-executive members, or trustees as we would now like to call them, should be representative of the community as a whole rather than representative of a single staff group. Membership of trust boards is specified by secondary legislation and this allows for a greater degree of flexibility in the future, if it is necessary. That would allow change in the composition of a board. Currently every trust board must include a medical practitioner and a registered nurse or midwife. We have no intention of changing that. The Government obviously set great store by the contribution of nurses and doctors but a difficulty would arise if that led to other groups seeking similar treatment. We believe that could lead to excessive rigidity.

The noble Lord, Lord Monro, asked how the Nolan rules might apply to appointments to health boards. I do not have an immediate answer on that point. In principle I believe that such appointments probably will be subject to those rules. Indeed the Scottish health service arrangements were probably seen as some kind of model for the Nolan rules. However, as I understand the position, the local healthcare co-operatives are not subject to the Nolan rules because they are co-operative groups of independent GPs and are part of the management structure of the primary care trusts.

As regards whether GPs have time to manage the co-operatives, the Government have provided packages of support to release GPs from other duties. It is our belief that the positive response that we have had so far from the medical community in Scotland shows that people, perhaps having weighed those options, have decided that this is not just a workable but also an attractive proposition. I hope that with the reassurance I have given, the noble and learned Lord will feel able to withdraw his amendment.

Lord Mackay of Drumadoon

I am grateful to my noble friends Lord Monro of Langholm and Lady Carnegy of Lour for their support in this matter. I am also grateful to the noble Lord the Minister for his explanation of the Government's position. Far from reassuring me, the explanation gives me further cause for concern. If, as the Government point out, this is dealt with as a matter of secondary legislation and they have no objection in principle or policy to the amendment, there does not seem to be any good reason why the commitment that was given should not be honoured and entrenched in primary legislation, which, as the Minister will be aware, is far more difficult to change than secondary legislation. The noble Earl, Lord Mar and Kellie, raised whether other health service practitioners should be included in the primary legislation. It is entirely a matter for him whether he wishes to table an amendment to that effect at Report stage.

Lord Hughes of Woodside

If these two professions were placed on the face of the Bill, would it not in future prevent other professions being added as directors?

Lord Mackay of Drumadoon

Not as I understand the current legislation, which was explained to us in the letter sent by the Minister for which we are grateful. But the fact that on the face of primary legislation it is necessary to have two types of health service professionals as executive directors does not preclude, as I understand the law, the Secretary of State or the First Minister bringing forward an order which also required chiropodists, dentists or whomsoever to be on the board; nor does it prevent such people being appointed, whether or not they are mentioned in primary or secondary legislation. Therefore I have to say to the Minister that I find his response unsatisfactory and I shall seek to test the opinion of the Committee.

1.27 a.m.

On Question, Whether the said amendment (No. 188A) shall be agreed to?

Their Lordships divided: Contents, 2; Not-Contents, 29.

Division No. 2
CONTENTS
Henley, L. [Teller.]	Mackay of Drumadoon. L. [Teller.]
NOT-CONTENTS
Addington, L.	Hacking, L.
Ahmed, L.	Hardie, L.
Amos, B.	Hayman, B.
Archer of Sandwell, L.	Hoyle, L.
Bach, L.	Hughes of Woodside, L.
Carter, L. [Teller.]	Hunt of Kings Heath, L.
Clement-Jones, L.	Macdonald of Tradeston, L.
Desai, L.	McIntosh of Haringey, L.
Donoughe, L.	[Teller.]
Falconer of Thoroton, L.	Mar and Kellie, E.
Farrington of Ribbleton, B.	Monkswell, L.
Gilbert, L.	Pitkeathley, B.
Gordon of Strathblane, L.	Ramsay of Cartvale, B.
Gould of Potternewton, B.	Sawyer, L.
Grenfell, L.	Sefton of Garston, L.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Mackay of Drumadoon moved Amendment No. 189:

Page 31, line 6, at end insert— ("(2) In section 12A of the 1978 Act (NHS trusts), after subsection (3) there is inserted— (3A) The chairman and trustees of every NHS trust shall, on appointment, be resident in or employed in the area covered by the trust."").

The noble and learned Lord said: Again I rise to move this amendment in place of my noble friend Lord Mackay of Ardbrecknish. It seeks to probe the Government and elicit from them details of their policy as to how well connected with the local area covered by a particular health service trust, whether a primary care trust or an acute hospital trust, the non-executive directors of the trust—namely, the trustees, who include the chairman—must be. In replying to the previous amendment the Minister touched on the connection between the non-executive directors and the local community—not that they formally represent members of the community, but that they should have a connection with them.

As presently drafted, Clause 39 seeks to amend Section 12A of the 1978 Act in the terms to which I have drawn attention. It is obviously unnecessary that this amendment should cover executive directors; by definition they are employed by the National Health Service trust concerned and are therefore employed in the area for which the trust has responsibility.

I trust that the Government will not dispute the importance of non-executive directors being seen to act on behalf of the people who live and work in the area in respect of which a trust has responsibility. That is seen to be their primary role, as it were, rather than becoming too involved in the day-to-day management of the provision of healthcare services, which is a matter for the professionals who are employees of the trust, whether or not those professionals also be executive directors.

Such identification with the needs of the local people is important. Those who work or reside in an area are the potential patients of a trust. It is appropriate, and indeed necessary, to have on that trust people who will speak and argue on their behalf rather than take a particular position on behalf of the employees of the trust, whom other people are there to represent.

It seems to me, and it certainly seemed to my noble friend Lord Mackay of Ardbrecknish, that Section 12A of the 1978 Act, if it is to be amended as the Government propose by Clause 9, would benefit from an amendment which required the chairman and non-executive directors, the trustees, to be either resident in or employed in the area. I beg to move.

Lord Monro of Langholm

I support my noble friend in his amendment. So far as I am aware, the chairmen of area health boards would live in their own areas. That could, however, be difficult in the central belt of Scotland, where one is domiciled to the headquarters of one's health board. In the more rural areas that was always the case, certainly when I set up the original health boards.

Although 1st April is only about four weeks away, the Minister is not aware of how new members are to be appointed to trusts or to the board. I know from experience, as I am sure does he, that it sometimes takes months to obtain the appropriate appointments to boards and trusts, going through all the formalities and the careful and diplomatic soundings beforehand. It seems to me that if area health board chairmen or members of boards or trusts are about to be appointed, the Minister should have a great deal of information in the pipeline. Yet he is not aware whether or not he has to invoke the Nolan recommendations. I hope that before we finish the debate tonight he can go a little further with regard to what the position will be in four weeks' time.

Baroness Carnegy of Lour

It may well be that in central Scotland, as my noble friend said, it is not very easy to keep membership to those living within the border of each trust. But the point is important. My research tells me that quite a number of current non-executive directors of trusts tend to "go native" and become so absorbed into the system that they begin to act like professional administrators and are therefore not as good a foil as they should be to those administrators. If they knew that they had to live in the area and therefore were speaking for the area and their minds were addressed to working entirely within the boundaries of the trust, that should help. I hope that the Government are interested in the amendment.

The Earl of Mar and Kellie

If this new statutory requirement were to be put on the face of the Bill, I should prefer it to say that the chairman and trustees should be "domiciled in" rather than "resident in". "Domiciled" means that it is their first and main home, whereas "resident" could refer to a convenient pied-à-terre, which would defeat the purpose of this statutory requirement.

Lord Macdonald of Tradeston

In reply to the noble Lord, Lord Monro, as I said earlier, I believe that the Scottish health boards have been something of a model for the noble and learned Lord, Lord Nolan. I can confirm that health boards and trusts are subject to Nolan and that people have been appointed to new trusts under the Nolan principles.

The noble and learned Lord, Lord Mackay, has explained his wish to ensure that there should be proper representation on all the boards. We accept that there should be strong links between those appointed to a trust board and the community which the trust primarily exists to serve. Geographical considerations such as this are already a fundamental part of the appointment process, as has been acknowledged. We have achieved much of what the noble and learned Lord wants without the need for legislation, and I am sure that that will continue to be the case in future.

However, a trust often provides services to a wider catchment population than lives in its immediate vicinity. That is particularly true where a trust provides services from a hospital located near the boundary of a health board. The amendment could have the effect of denying the trust the services of the best candidate for the job simply because he or she does not reside or work in the trust's area and is not prepared to take up residence there.

The example of the acute hospital trusts in Glasgow perhaps makes the point most clearly. From 1st April there will be two acute hospital trusts in Glasgow, one providing services primarily in the north of the city, the other providing services primarily in the south. In many respects they will be complementary. Patients from all over Glasgow and indeed from outside the city will be treated in both trusts. I am sure that the noble and learned Lord does not want potential trustees in Glasgow—especially the original proposer of the amendment, who lives in the lovely, leafy south side of Glasgow—to have to uproot themselves from north of the Clyde to south of the Clyde or vice versa. I repeat that the Government have every sympathy with the principle behind the noble and learned Lord's amendment but, for the reasons I have given, I hope he will not feel the need to pursue it.

Lord Mackay of Drumadoon

Once again, I am very grateful to the Minister for his response. He clearly accepts the general principle which lies behind the amendment, but he makes the valid point that there are practical problems when a hospital is located near a boundary. My noble friend Lady Carnegy of Lour also has reservations as to whether it would be appropriate for such a provision to be on the face of the Bill. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 39 agreed to.

Clause 40 agreed to.

1.45 a.m.

Lord Mackay of Drumadoon moved Amendment No. 190:

After Clause 40, insert the following new clause —

LOCAL HEALTHCARE COOPERATIVES

(". In Schedule 7A to the 1978 Act, after paragraph 13 there is inserted—

"13A. If no local healthcare cooperative has been set up in any part of an NHS trust's area, the trust shall have power to set one up and keep it in place."").

The noble and learned Lord said: Amendment No. 190 seeks to insert a new clause into the Bill and by virtue thereof to add provisions to Schedule 7A to the 1978 Act to the effect that, If no local healthcare co-operative has been set up in any part of an NHS trust's area, the trust shall have power to set one up and keep it in place". Local healthcare co-operatives are discussed and described in the following terms on page 42 of the Explanatory Notes to the Bill: These will be voluntary networks of GPs and other primary care professionals working together to plan and provide primary and community health services and provide support for general practice. Local Health Care Co-operatives will be established from April 1999 as part of the management structure of primary care NHS trusts … and will draw their powers and functions from these trusts. They do not therefore require separate legislative provision". I have already referred to the practical problem that may arise if this legislation is not in force by 1st April of this year. Clearly, it will not be in force then, and I do not repeat what I said earlier. But I seek to probe the Minister on two general lines. First, why should the setting up of these networks be an entirely voluntary exercise on the part of GPs and other primary care professionals who work in a particular locality? If the idea of the networks has merit and they are designed to play an important role in a reorganised National Health Service in Scotland, why is power not given to an NHS trust—in particular the chairman and directors—to set one up if it believes that it is to the benefit of the people to whom it has overall responsibility for the provision of healthcare? Secondly, how can such a voluntary organisation have powers and functions, which I assume to be statutory, if it is a body that has no statutory basis? That point is entirely separate from the point about the date of 1st April which I mentioned earlier. I believe that these matters should be clarified in response to Amendment No. 190. I beg to move.

The Earl of Mar and Kellie

I believe that the local health co-operative must be assembled by the primary care practitioners. After all, if the chairman of the primary care trust sets it up but nobody wishes to attend, it will not really happen.

Leaving that aside, in my view the Bill does not set out clearly enough the fact that a local health co-operative should have a coterminous boundary with a local authority, not because my noble friends wish to move health into local authority control but because the local health co-operative alongside the local authority, and the social work department in particular, will need to work hard to plan services. To do that with perhaps more than one local authority may prove to be extremely difficult. I am concerned that the Forth Valley health board is proposing to have only two. I do not think that what is called the North Forth Valley Local Healthcare Co-operative will be able to liaise effectively with Clackmannanshire and the district of Stirling without some confusion.

Lord Macdonald of Tradeston

The amendment proposed by the noble and learned Lord would go against a key principle of these reforms. The local health care co-operatives are established on a collaborative and co-operative basis between GPs and other primary care professionals. They are entirely voluntary. After a widespread consultative process we believed that that was the form closest to the culture which had been demonstrated distinctively by the medical profession in Scotland in contradistinction to the majority of the profession in England.

There is a different attitude in Scotland. That was thoroughly tested, I believe, both by experience and consultation. Therefore we believe that we can build on what we have seen to be the clear wish of the profession in Scotland, and not south of the Border. We want to put the frontline clinicians in the lead in delivering and managing services in the community.

The local healthcare co-operatives are our way of delivering this commitment in Scotland. The role we envisage for the primary care National Health Service trusts is that of supporting and developing the co-operatives as primary care clinicians come together to form them. But these co-operatives will be discrete management organisations within the primary care NHS trust. They will be non-statutory bodies and will draw all their functions from the powers of the trust. Their composition, structure and funding will be developed locally. The primary care NHS trust will have overall accountability for the services and budgets managed by the co-operatives. Co-operative leaders will be part of the management structure of the primary care NHS trust. We are receiving clear indications that a significant majority of GPs and other primary care professionals are showing interest in developing the local healthcare co-operative across Scotland. On that basis we are content that GPs and other primary care professionals will be able to join a local healthcare co-operative to develop co-ordinated services for their area. Yet again, I agree with the noble Earl, Lord Mar and Kellie, in his analysis of the situation.

Having made the point that the fundamentals here have to be collaboration and co-operation, and that this cannot be imposed on professionals, I ask the noble and learned Lord to withdraw the amendment.

Baroness Carnegy of Lour

Before the Minister sits down, he said that he agreed with the noble Earl. I had understood the noble Earl to say that he thought the co-operatives should be coterminous with local authority boundaries. Surely you could not have such a body stretching from Brechin to Forfar to Pitlochry? One could not expect doctors to drive those distances.

Lord Macdonald of Tradeston

I apologise if I gave the wrong impression. I was drawing on what I thought was the noble Earl's view—I share it with him—that this was based on a collaborative and co-operative spirit among the professionals in Scotland.

Lord Mackay of Drumadoon

I shall not enter into the debate as to whether the noble Earl's contribution supported my position or that of the Minister. I leave that for others to resolve.

While I fully accept that the use of the term "co-operative" implies a measure of consensual agreement among those involved, I remain apprehensive that, if in a particular locality—I deliberately choose a different word from "area" because that may or may not be related to the geographical area in respect of which a primary care trust may have responsibility—for whatever reasons, good or bad, the primary care professionals choose not to enter into a co-operative and a different view is taken by the trust, it may well be that, because of the local difficulties, the patients in the locality will miss out on what I understand to be the benefits of a major plank of the Government's proposals.

I do not seek to press the amendment. It was designed to explore the Government's position. I have received a reply and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 [Duty of quality]:

Lord Mackay of Drumadoon moved Amendment No. 190A:

Page 31, line 18, after ("Board") insert (", local health care cooperative").

The noble and learned Lord said: I shall speak also to Amendment No. 190B. The two amendments seek to amend Clause 41 in line 18 by adding to the list of those who will be under a duty to put and keep in place arrangements for the purpose of monitoring and improving the quality of healthcare any local healthcare co-operative which may be established, or any independent provider. I understand that both amendments were tabled by my noble friend Lord Mackay of Ardbrecknish after discussion with and with the full support of the Royal College of Nursing.

The reasoning behind the amendments is self-explanatory. Whether or not a local healthcare co-operative has any statutory basis for its existence, or whether or not any independent healthcare provider operates in accordance with some statutory appointments procedure, they are both operating in exactly the same field as health boards, special health boards and national health trusts. The Royal College of Nursing believes that every patient who might benefit from and receive treatment from those engaged in co-operatives or operating as independent healthcare providers has the right to a minimum standard of quality, care and safety, irrespective of the particular sector from which that care comes.

As the Minister may be well aware, many large independent sector healthcare providers already subscribe to quality assurance schemes and it should not therefore be particularly difficult or onerous to publish details of their arrangements for monitoring and improving the quality of the healthcare they provide. It is also important for patients that smaller independent sector providers are not left behind in the drive which rightly continues to improve quality in the delivery of services in the health centre.

The Royal College of Nursing believes that the independent healthcare sector should not find itself unwittingly using outdated practices or delivering poor standards. The same applies to those who may group together on a voluntary basis in a healthcare co-operative of the nature we have been discussing in the last few amendments.

I find it difficult to imagine why there should be any objection to people who will be assisting in the provision of healthcare being under the same duties of quality as those imposed on health boards, special health boards and national health trusts. For those reasons, I beg to move.

2 a.m.

Baroness Carnegy of Lour

This question of independent sector hospitals, homes and so on is extremely important. We had the discussion in the context of England and Wales and we were told that the whole matter had to wait until the Select Committee in another place had finished discussing it. Does that Select Committee relate to Scotland or not?

The Earl of Mar and Kellie

Perhaps I should clarify for the Committee my position on local health co-operatives which are mentioned in Amendment No. 190A. I have no objection whatever to there being two or more co-operatives in a local authority area. However, I object to the idea of having two local authorities in a co-operative area.

Lord Macdonald of Tradeston

Perhaps I may first answer the question from the noble Baroness, Lady Carnegy. The Select Committee will not cover Scotland but the Scottish Parliament will take into account its findings. I am grateful also for the explanation of the concern in relation to the local boundaries.

Amendment No. 190A is intended to ensure that the primary care services are covered by a duty of quality. That is the Government's intention. The clause as drafted already achieves that objective. The local healthcare co-operatives will be non-statutory organisations. They are an integral part of a Scottish primary care NHS trust and will thus be subject to the duty of quality. Therefore, it is unnecessary to refer to that on the face of the Bill.

Lord Mackay of Drumadoon

Before the Minister sits down, can I take it that that answer applies also in respect of Amendment No. 190B?

Lord Macdonald of Tradeston

In relation to that amendment, I do not believe that it would be appropriate to attempt to use the current Bill to place new statutory obligations on private sector healthcare institutions. That will be a matter for the Scottish Parliament to consider in due course. No doubt it will wish to take into account the conclusions of the Health Committee's current inquiry into the regulation, monitoring and inspection of healthcare outside the NHS which my noble friend Lady Hayman mentioned when dealing with Clause 13 last Thursday.

The guidance on clinical governance that was issued to the NHS in Scotland last November makes it clear that its provisions apply to services that the NHS commissions from other bodies. Thus, where the NHS contracts with a provider from the independent sector to provide a service to NHS patients, those contracts should be used to make sure that those clinical governance principles are applied. With those assurances, I ask the noble and learned Lord to withdraw the amendment.

Lord Mackay of Drumadoon

Once again, I am grateful to the Minister for clarifying his position on the two amendments. As regards Amendment No. 190A, he argues—and I see the force of the argument—that the amendment is unnecessary because anybody involved in a local healthcare co-operative would, as I understand it, be operating under the auspices of a particular trust.

I understand his response to Amendment No. 190B, which was to the effect that that is a matter which should be left to the Scottish Parliament. I must say, with respect to the Minister, that those two different answers seem to highlight the concern that I raised when I first entered into the debate on this series of amendments. However, we shall clearly return to that matter on Thursday. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 1908 not moved.]

The Earl of Mar and Kellie moved Amendment No. 191:

Page 31, line 20, at end insert— ("( ) In implementing and maintaining the arrangements mentioned in subsection (1) each body shall have regard to any guidance issued for England and Wales by the National Institute for Clinical Excellence.").

The noble Earl said: Every other Scottish proposer of an amendment has had a go at this late hour, so Members of the Committee should not imagine that I shall not. It is always a joy to move an amendment after two o'clock in the morning. I am therefore not surprised that the Consultative Standing Committee recommended standing orders for the Scottish Parliament which will be, curiously, held in the "daylight" hours. One of the features of this Bill is that it is little if at all known in Scotland, and when we debate it at this hour, I am not surprised.

Amendments Nos. 191 and 192 have the purpose of clarifying and extending the duty of quality which is rightly being imposed on health boards and NHS trusts. I am well aware that the legislative provision for the health service in Scotland has been presented in stripped-down or minimalist form; and I understand the Government's position on legislating for Scotland in this form. Generally it is right that the Scottish Parliament should have an early opportunity to put its own stamp on the NHS, and to do so in early time. This will be appropriate as health and education vie with each other to be the most important public concerns to be devolved to the Scottish Parliament.

Members of the Committee will have noticed that my amendments have the effect of adding to the minimalist functions laid down in the Bill. That may be worthwhile in this instance. Normally, I am in favour of diversity within the constituent parts and jurisdictions of the United Kingdom. However, during the Committee stages of the Crime and Disorder Act last year, I was able to argue—successfully as it happens—that the Youth Justice Board for England and Wales should be required to study systems of youth justice in other jurisdictions. I clearly had in mind the Scottish children's panels.

It can be argued therefore that health boards and NHS trusts should be required to evaluate themselves against the criteria set down by NICE for England and Wales, though NICE has no authority in Scotland. This could be seen as a useful temporary measure, at least until the Scottish Parliament has enacted its first National Health Service (Scotland) Act.

The second amendment would impose a duty to publicise how the boards and trusts have performed against the NICE criteria and against the expectations that have been sought from the public, from users and carers. That form of public evaluation and identification of future solutions will bring a real relevance to reports on the NHS, its boards and trusts. I beg to move.

Lord Macdonald of Tradeston

I understand why the noble Earl is keen to ensure that work on clinical effectiveness is shared throughout the United Kingdom. That clearly makes sense and the Government have every intention of encouraging that process.

Our firm intention is that the national institute for clinical excellence will work closely with its counterparts in Scotland. Indeed, arrangements already exist to facilitate such collaboration. The remit of the national institute for clinical excellence (NICE) extends only to England and Wales. In Scotland the Clinical Resource and Audit Group (CRAG)—our acronyms are more rugged than theirs—and the Scottish Intercollegiate Guidelines Network (SIGN) have been in existence for some years performing equivalent functions to NICE. They will be joined later this year by the new Scottish Health Technical Assessment Centre (SHTAC).

The intention is that those Scottish bodies should work closely with NICE, avoiding duplication of effort where appropriate. Already working relationships exist across the Border and there is no need for that to be made a statutory requirement. Indeed, it would be puzzling if there was to be a statutory provision in Scotland relating to NICE without there being reference to the Scottish bodies performing similar functions. I can therefore reassure the noble Lord that guidance produced by NICE will not be denied to Scottish National Health Service bodies. Indeed, I expect guidance issued by our bodies in Scotland to be similarly available, where appropriate, to bodies in England and Wales.

I also appreciate the noble Lord's concern to ensure transparency and accountability by requiring National Health Service bodies to publish information on the arrangements they put in place under that duty. That is a concern that the Government share. However, we do not believe that it is necessary to specify this requirement on the face of the Bill. In guidance issued last November we made it clear that we expect National Health Service organisations in Scotland to publish annual reports on what they are doing to improve and assure quality through clinical governance arrangements. We shall be specifying what those reports should contain.

I do not believe that a statutory requirement for publication will be necessary to ensure that the bodies in question comply with the guidance. After the past hour, I very much look forward to my first appointment tomorrow morning, which is at the dentist. However, I hope that I have said enough to convince the noble Lord that he need not pursue his amendment.

The Earl of Mar and Kellie

I am very pleased to hear from the Minister that what I have suggested will be happening on an informal basis. Therefore, while contemplating a head to head between CRAG and NICE, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 192 not moved.]

Clause 41 agreed to.

Clauses 42 to 45 agreed to.

Clause 46 [Disqualification of Part II practitioners]:

[Amendment No. 193 not moved.]

Clause 46 agreed to.