HL Deb 07 January 2003 vol 642 cc882-5

3.14 p.m.

Lord Chan

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare that I am a non-executive director of a primary care trust.

The Question was as follows:

To ask Her Majesty's Government whether the performance of the National Health Service Appointments Commission in appointing non-executive directors of primary care trusts is satisfactory.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)

My Lords, the Government are confident that the National Health Service Appointments Commission is performing satisfactorily. In its first year the Commission made over 1,700 appointments.

Lord Chan

My Lords, I thank the Minister for his soothing reply. Is he aware that the unhelpful advice given by the head of the appointments Commission—that non-executive directors should reduce their involvement in primary care trusts—has been totally contradicted by the findings of the NHS Confederation? Only two out of 70 primary care trust chairmen felt their colleagues were spending too much time and interfering with the work of full-time staff. Does not that serious lack of perception by the appointments Commission indicate the need for a review of its services to PCTs, many of which are still without their full complement of non-executive directors?

Lord Hunt of Kings Heath

My Lords, I think that the noble Lord is being a little unfair to the appointments Commission and Sir William Wells. When he appeared before the Public Administration Select Committee in June last year, he made clear the Commission's view that perhaps the level of time commitment was too great by some non-executive directors and chairs. He thought that that level of time commitment might discourage people from a wide range of backgrounds applying to be non-executive directors. The response from existing non-executive directors does not share Sir William's view and the Commission is giving the matter further consideration. I think that it is right for Sir William to draw attention to the dangers of non-executives taking on an executive role. Executive directors are employed to do that job. I also believe that in handling a large number of appointments the Commission is doing an effective job.

Lord Clement-Jones

My Lords, following the Minister's reply to the noble Lord, Lord Chan, is it not the case that many people are reluctant to come forward for these non-executive jobs because of the very poor remuneration, as many of them have to spend up to 60 hours a month on those jobs?

Lord Hunt of Kings Heath

My Lords, I disagree. First, the remuneration for non-executive directors is £5,294 per annum. The chairs receive a range of honorarium from just over £16,000 to just over £20,000, depending on the size of the organisation they chair.

These appointees do immensely valuable work. But they are not executive appointees. They are there to bring the public's view to these bodies. I believe, as someone who has worked with these people for many years, that there is a great danger in their undertaking too many duties and not giving enough space for executive directors to do what they are paid for.

Baroness Gardner of Parkes

My Lords, the Minister said that the time commitment was supposedly an issue. I agree with that. I declare an interest in that one of my family works on the Commission and my husband serves as an interviewer of possible applicants.

The Minister said that he had asked people about the time commitment. Does he agree that one of the problems is the age of non-executive directors serving on primary care trusts? There are few under the age of 45. That is because the hours and times of the meetings are such that if someone is in employment they cannot give up the number of hours to which the noble Lord, Lord Clement-Jones, referred. When does the Minister think that the Secretary of State will be able to look at the question not just of the actual time commitment, which is not clear enough often for young people in employment, but also at the possibility of changing hours and having meetings at different times, which would enable young people to have jobs and to take on this commitment?

Lord Hunt of Kings Heath

My Lords, I have a great deal of sympathy with the point made by the noble Baroness. As to the recommendations of the Commission, I understand it will now be submitting advice to Ministers in the spring of this year. The noble Baroness referred to the number of younger people appointed to the boards of NHS organisations. I should point out that 13.8 per cent of all appointees come within the 36 to 45 age group and 1.8 per cent are in the 35 and under age group.

I agree that it would be useful to have more younger people on those boards. I do not think that, given the current time requirement, one can reasonably expect people fully engaged in a career to be able to give that time. That is why I personally, in the light of my own experience of working with board members, think that Sir William has a point here.

Baroness Pitkeathley

My Lords, does my noble friend accept that the relationship between governance and management is complex, as anyone in public life knows? Current problems are largely a result of the current stage of development of PCTs. As each side—executive and governance—begins to be more confident of its role, that problem will in all likelihood disappear.

Lord Hunt of Kings Heath

My Lords, I hope that it will disappear, but there are examples of non-executives of existing acute trusts, for instances, which have been existence for many years, who still seem to see their role as more executive than non-executive. It should be made clear, and we shall continue to encourage the appointments Commission to make clear, to those people so appointed that their job is not to run the organisation day to day but to provide effective public stewardship. We pay executive directors rather a lot of money to take on those responsibilities and I am clear that it is they who should take on the executive role.

Baroness O'Cathain

My Lords, on a point of clarification, the Minister has now in effect said three times that some non-executive directors are being dysfunctional by taking on executive roles and meddling with executives. Would it not be much easier for everyone if the Government were to specify exactly how many hours they expect non-executive directors to serve per month or per year? That might release some of the younger people who they want to serve on the hoards. For example, if they suggested that 10 hours per month and no more were required, companies might be prepared to release good executives to take on non-executive roles in PCTs.

Lord Hunt of Kings Heath

My Lords, I do not disagree with the point made by the noble Baroness. Sir William's aim was clearly to specify a general level of commitment that would enable the kind of people mentioned by the noble Baroness to serve on boards. We want to encourage not just senior company executives but people from all walks of life. We should not let an arbitrary rule that they must give a certain amount of time bar good people from applying and being appointed. Equally, we need flexibility. There may be occasions, as my noble friend Lady Pitkeathley suggested—especially when a primary care trust is starting its work—when we would naturally expect non-executives to give more time. Once trusts are fully established, they should be able to ease off. We clearly need flexibility.

Lord Tebbit

My Lords, are the responsibilities in law of the executive and non-executive directors of PCTs the same as they are under company law for commercial directors?

Lord Hunt of Kings Heath

My Lords, all the directors, whether executive or non-executive, are corporately responsible for the activities of the organisation. The chief executive will also be an accountable officer. For instance, if the Public Accounts Committee was inquiring into the financial matters of an individual organisation, that officer could be required to accompany the Permanent Secretary of the Department of Health to PAC hearings.