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Bodmin Moor Commons Bill [H.L.]

King's College Bill [H.L.]

The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That the promoters of the Bills which originated in this House in the last Parliament but had not received the Royal Assent shall, notwithstanding anything in the Standing Orders or practice of this

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House, have leave to introduce the said Bills in the present Session and the petitions for the Bills shall be deemed to have been deposited and all Standing Orders applicable thereto shall be deemed to have been complied with;

That every such Bill shall be deposited in the Office of the Clerk of the Parliaments not later than 3 o'clock on Monday 23rd June next with a declaration annexed thereto signed by the agent concerned, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the last Parliament;

That the proceedings on such Bills shall in the present Session of Parliament be pro forma only, in regard to every stage through which the same shall have passed in the last Parliament, and that no new fees be charged to such stages.--(The Chairman of Committees.)

On Question, Motion agreed to, and a message was ordered to be sent to the Commons to acquaint them therewith.

National Health Service (Private Finance) Bill [H.L.]

3.34 p.m.

Baroness Jay of Paddington: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.--(Baroness Jay of Paddington.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Powers of NHS trusts to enter into agreements]:

Lord Brightman moved Amendment No. 1:

Page 1, line 7, after ("agreement") insert ("(which includes a series of connected agreements)").

The noble and learned Lord said: The amendment seeks to clarify a short point which arises on the certification of what is called an externally financed development agreement. The purpose of the Bill, as the Committee will be aware, is to remove any doubt about the power of NHS trusts to enter into such agreements; for example, an agreement for a hospital project where finance is to be provided from the private sector.

The Bill is designed to set at rest any question that the NHS trust is acting ultra vires, and that those who provide the private finance may lose their money as a result. To be legally watertight under the Bill in the area of ultra vires, an externally financed development agreement will usually need to be certified as such by the Secretary of State. In practice, an important project is likely to involve a series of separate agreements, not necessarily all between the same parties, which together form the total package; for example, a project may involve the lease of a hospital site and such subsidiary matters as the provision of laundry facilities for staff and patients. The lease would normally be in one

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document in the usual form, and the laundry services would probably be the subject matter of a totally different document.

It would be inconvenient and cumbersome if everything involved in the project had to be contained in one document. However, I have been told by the Financial Law Panel that the department has indicated that it is its present intention to certify only one document in any project. Does that mean that if, for convenience, the project is contained in five separate documents, only one agreement will be certified, and therefore made legally watertight in the area of ultra vires, and that the other four agreements will not be certified and therefore can be vulnerable?

The amendment is designed to make it clear that the Secretary of State can be asked to certify all the agreements which form a particular project, by saying that the agreement includes a series of connected agreements. I beg to move.

Baroness Anelay of St. Johns: I thank the noble and learned Lord for his explanation of that legal point. If the amendment were to be considered necessary to ensure that agreements are properly certified and that no part of such an agreement remained vulnerable, is it not a pity that the definitions could not be contained within just one clause? As a layman, it is difficult sometimes to find one's way through legislation. I have had to read social security law and regulations over the past 20 years, and sometimes still feel no better off when trying to unravel them. Clause 1(5) contains definitions of two other terms which fall within subsection (3). I am referring to the terms "another party" and "facilities". If it were necessary to have the amendment to secure the underlying nature of the agreements, we might be able to look at having all definitions within one clause.

Baroness Jay of Paddington: I am grateful to the noble and learned Lord for employing his legal erudition to move the amendment. I, too, feel rather like the noble Baroness, Lady Anelay, that we are, as it were, amateurs in the legal minefield. I am also grateful to the noble and learned Lord for acquainting me with the reasons for putting down the amendment before he did so. The amendment, as he said, seeks to clarify the fact that a series of connected agreements may be treated as a single externally financed development agreement, and certified as such by the Secretary of State. I entirely appreciate the noble Lord's intention to improve and clarify the Bill, but my advice is that the amendment is unnecessary. The purpose of this Bill is simply to give bankers reassurance that NHS trusts have the power to enter into externally financed development agreements; in other words, private finance contracts. We have been in close contact with the banking community at all stages, and they have signalled their satisfaction with the Bill as drafted.

Their confidence in the Bill is not misplaced. My legal advice is that the Interpretation Act states that the singular includes the plural. This allows the Secretary of State to certify a group of agreements as constituting one externally financed development agreement. This, in practice, is what we see happening.

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Typically, a major PFI scheme involves a contract between the NHS trust and the private sector consortium, and a series of further contracts between the consortium and its individual members; in other words, a whole group of contracts. However, it is unnecessary to certify each of them separately.

What we envisage is what already happens in the leading PFI schemes: there is an overarching project agreement between the trust and the consortium which incorporates all the others by referring to them. The Secretary of State will issue one certificate which lists or refers to all the documents that constitute the externally financed development agreement--that is, the overarching project agreement and all the related contracts--and will certify that they together constitute such an agreement. Certification of the project agreement will therefore provide certification of all the related contracts.

It is, of course, true that this approach would not allow the certificate to cover contracts made subsequent to the certificate, which might happen if, for instance, a member of the private sector consortium were replaced by another company. However, I am advised that the proposed amendment would not solve that problem. The easiest way of covering such contracts would be to amend the overarching project agreement to include the new contract and to issue a new certificate. This could also be done if a contract were accidentally left out when a project agreement and its related contracts were being certified. I have to say that, given the time, money and amount of legal brain power applied to these agreements, I find that particularly unlikely.

Some lawyers have asked what would happen if a satellite or subsidiary contract fell outside the scope of the Bill. In practice, it is hard to see this happening since in Clause 1(3) the Bill refers very loosely to agreements "in connection with" the provision of facilities to enable a trust to discharge its functions. If the satellite contract were omitted accidentally from the overarching project agreement, the agreement could, as I have said, be amended and recertified. If the satellite contract were not related to the functions of a trust, it is hard to see why it would form part of the PFI scheme in the first place.

While we understand that the intention behind the amendment is sound and is meant to be helpful the approach we are taking makes it unnecessary. We are grateful to the noble and learned Lord for tabling the amendment, but hope that he will not press it.

Lord Brightman: I am grateful to the noble Baroness for that explanation, which is entirely satisfactory and relieves me of all anxieties. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No. 2:

Page 1, line 13, at end insert--
("( ) he is satisfied that the provision of those facilities in the circumstances proposed is in the interests of the population of the area served by the trust and is in the wider public interest; and").

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The noble Lord said: In moving this amendment I shall speak also to Amendment No. 3. They derive from the experience at Norwich in relation to the Norfolk and Norwich Hospital project. Reference was made to that during our Second Reading debate on 3rd June by the noble Baroness, Lady Cumberlege, my noble friend Lord Addington and the noble Lord, Lord Rea. Therefore, there was reference to the issue from all sides of the House.

The purpose of the amendments is to obtain reassurance that when the Secretary of State is deciding to give his certificate under Clause 1(2) he must be sure that, according to Amendment No. 2, the proposal he is certifying is in the local and wider public interest. Amendment No. 3 provides that he must make sure that the proposal he is certifying has been the subject of adequate public consultation.

The relevance of the Norwich affair is that the project, although subject initially to detailed public consultation, was subsequently changed to a material degree. In particular, a smaller existing hospital within the city of Norwich, which was to have formed part of the project as initially discussed, was scheduled to be closed under the revised proposition. That has created a considerable amount of public concern. It is for those reasons that the amendments have been tabled. I beg to move.

3.45 p.m.

Lord Rea: The amendments could well be categorised as constructive opposition, which is the way the Liberal Democrat Party has said that it will behave certainly during the first part of the Government's term in office. They allow my noble friend to speak on a topic of strong local concern in at least one part of the country. There is no doubt that the citizens of Norwich, as represented by their elected council, do not feel that,

    "the provision of those facilities in the circumstances proposed is in the interests of the population of the area served".
Nor do they feel that there has been,

    "adequate public consultation",
as provided in the amendments.

One of the pledges of the Labour Party in its manifesto was that health service provision should become more locally accountable, since the previous government steadily eroded local democratic representation on health authorities and trusts. A meeting of Norwich City Council just over a week ago resolved that:

    "The proposals for a new district general hospital at Colney received planning permission from South Norfolk District Council and tacit approval for PFI-funding from the previous Tory Government, despite strong local opposition.

    "Norwich City Council opposed the approval particularly on planning grounds: the proposals are environmentally damaging, economically damaging to the City and very poor in access for both service users and staff.

    "Norwich City Council therefore resolves--

    To request an independent review of all decisions made with regard to new hospital provision in the Norwich area. This review to be held in public and 'transparent' in all details, including finance. The review to consider environmental impact, sustainability and access issues as well as economic impact".
That is the first of a series of clauses. There are six other clauses.

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I understand why the noble Baroness is anxious that the Bill should pass through this House unamended. One of the reasons is the ability to go ahead quickly with this and other schemes. However, this scheme in particular is very expensive, environmentally disruptive and opposed by local opinion. Surely it is time to step back and not be in such a hurry. Alternative and much cheaper schemes have been drawn up in outline and costed. Surely they should be examined. It is unnecessary and unfair to suggest, as did my right honourable friend Mr. Alan Milburn, that if the current scheme is not accepted lock stock and barrel Norwich will go to the back of the queue. Is that fair when a much cheaper and more acceptable alternative has been drawn up in outline by a highly respected architect and is waiting in the wings?

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