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Lord McColl of Dulwich: I thank the Minister for that reply. No one suggests for one moment that all the people who are trained in a speciality should be guaranteed jobs. But we have a monopoly employer. What will happen to these people? All I seek is some rapid response mechanism. A rapid response is required.

Many other specialties have problems. We happen to have these statistics. There was a 33 per cent. reduction in the number of consultants appointed last year. That is the problem. That has to be corrected. It could be corrected now. I do not ask for more money. The Department of Health is proposing to take away £5.4 million from the budget of the obstetric registrar training scheme. With £5.4 million one can create 40 consultant posts immediately. We need a rapid response mechanism.

I know the problem. I do not criticise the Minister. If the noble Baroness went to the NHS Executive and said, "We need to appoint an extra 50 (or whatever number) of consultants this year", it would say, "No, we cannot possibly do that. We need notice of that"--and that

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would be a year or more. It does not react rapidly enough to crisis situations. The amendment seeks to create a mechanism whereby the Secretary of State can act to implement arrangements which have been agreed by the whole profession, the department and all the colleges. That is all I seek.

However, it does not look as though I shall achieve that. We shall return to the issue. Many in this Committee are prepared to fight tooth and nail to put the problem right.

Lord Clement-Jones: Before the noble Lord sits down, he spoke about the rapid reaction process. I support him on that. However, does he agree that one needs also to evaluate the Calman reforms more rapidly than at present?

Lord McColl of Dulwich: I agree entirely with that. I do not suggest that we rush headlong. We need to create these extra consultant posts immediately, but we need evaluation.

The noble Lord may think that we have a problem at present. However, the problem that we shall have in four or five years is enormous. We are continuing to create vast numbers of senior house officers. What will happen to them? We are in a terrible crisis. We need solutions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 63:

Page 8, line 16, leave out subsection (2).

The noble Earl said: This is a probing amendment, but it is important. It picks up an issue identified by the Delegated Powers and Deregulation Committee of your Lordships' House.

Clause 7(2) of the Bill replaces Section 18 to the National Health Service Act 1977 and covers ways in which directions by the Secretary of State may be given to health authorities, special health authorities, primary care trusts and NHS trusts. These directions may be given in one of two ways: by regulations or by an instrument in writing. Some may be given only by an instrument in writing. Where regulations are made they will be subject to the negative procedure, but where the Secretary of State issues an instrument in writing this will not be subject to any parliamentary procedure.

My question to the Minister is the one posed by the Delegated Powers and Deregulation Committee. With the wider powers of direction conferred on the Secretary of State by the Bill, on what basis will he choose one course of action rather than the other? The position is not straightforward, because not only are PTCs and trusts being brought for the first time within the scope of the direction-making powers, but we also have provisions in Section 126(3) and (4) of the 1977 Act which give a specific power to vary or revoke a direction and extend a power so that it may be exercised:

    "in relation to all cases ... or ... subject to specified exceptions, or in relation to any specified cases and classes of case".
All that is rather baffling to the lay reader. How prescriptive does the Secretary of State intend to be? Which kind of direction or prescription will be subject

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to which kind of procedure? Which will receive parliamentary scrutiny and which will not? I beg to move.

11.15 p.m.

Baroness Hayman: I am grateful for the noble Earl's assurance that this is a probing amendment. If one took it alone it would severely disrupt the system of delegation of functions within the NHS as they have gone on for some time. It would leave the provisions of the new Section 17 about directions to NHS trusts in the exercise of their functions without any clear parliamentary scrutiny. I am sure that was not what he intended. Taken by itself, the amendment would substantially weaken rather than strengthen the degree of parliamentary scrutiny over the delegation of functions.

The amended Clause 18 provides that the delegation of certain functions to PCTs must always be subject to negative procedure rather than none at all; for example, the delegation of GMS regulations. In general, regulations made in relation to Part II of the 1977 Act--and GMS functions are Part II functions--would be subject to the negative procedure. We believe that that is entirely appropriate, given the nature of these functions. The amendment would break that relationship. We are ensuring that the correct level of parliamentary scrutiny is given in the areas where it is important that parliamentary scrutiny takes place. That will be done by the negative procedure, which the Select Committee found acceptable as a way forward. I hope that that somewhat clarifies the situation for the noble Earl.

Earl Howe: I am grateful to the Minister. It does somewhat clarify the position, although it is an extremely complicated set of provisions. That is why I tabled the amendment. I must do better in future; I must find a way of tabling a probing amendment which does not put the frighteners on the Minister or her officials. But this is the only way I know how to do it.

I shall study what the Minister has said, and in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 agreed to.

Clause 8 [Establishment orders]:

[Amendment No. 64 not moved.]

Clause 8 agreed to.

Clause 9 [Exercise of powers]:

Lord Harris of Haringey moved Amendment No. 65:

Page 9, line 45, leave out from first ("the") to ("and") in line 46 and insert ("provision of services to NHS patients by the NHS Trust or by any other health service body,").

The noble Lord said: I am conscious that the hour is late and that Clause 9, at least for someone like me, is extremely difficult to follow. I trust therefore that Amendments Nos. 65 and 66 have the effects I seek.

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As I understand it, Clause 9 amends Section 5(9) of the National Health Service and Community Care Act 1990 and that places limits on NHS trusts' exercise of their charging or income generation powers. The changes that Clause 9 brings are to be welcomed in that they make it clear that the functions of NHS trusts will be to provide goods and services for the purpose of the health service. That is clearly progress.

However, in addition to fulfilling their obligations under NHS contracts, NHS trusts are permitted to provide services to private patients and to charge for those. Given, as I may have commented earlier, that NHS trusts are publicly funded and have had transferred to them significant NHS assets, it is important that they are not permitted to operate private health services in such a way as could disadvantage NHS patients or adversely affect the ability of other health service bodies to carry out their functions and obligations to the NHS.

It is my view that any private activities engaged in should be stated to be ancillary to the core functions of providing NHS services and in any event should not be provided in such a way as to be detrimental to the interests of the NHS patients. I believe that is the purpose of the amendments and I hope that that is their effect. I beg to move.

Lord Hunt of Kings Heath: I thank my noble friend and fully appreciate the point that he makes in wishing to ensure that NHS trusts are subject to appropriate controls when carrying out charging and income generation activities, in particular the point that such activities should not interfere with the provision of services to NHS patients.

The Bill strengthens the commitment of NHS trusts to health services; that is why Clause 9 extends the current provisions in Section 5 of the 1990 Act. It ensures that the exercise of an NHS trust's charging and income generation powers should not, to a significant extent, interfere with any of its functions or obligations. That includes its primary function of providing services to NHS patients. But, importantly, it also includes other functions that would not be covered under this amendment--for instance, the trust's duties as an employer; its obligations under the new duties of quality and partnership; and any new functions under the partnership provisions such as providing social care.

As a further safeguard, Clause 9 enables the Secretary of State to specify in directions circumstances in which NHS trusts require his consent to exercise their charging and income generation powers. This power could be used, for example, to specify a level of income above which an NHS trust would require consent. Taken together, I believe these provisions are sufficient to enable the appropriate level of control over charging and income generation activities.

These amendments would subject NHS trusts' income generation and charging activities to the condition that they should not significantly interfere with the provision of services by any health service body to any NHS patient anywhere in the country. It is clear that such a condition would be impossible to implement in practice. For instance, how could an NHS trust in the south-west

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possibly determine whether its income generation activities would interfere with the provision of services to NHS patients in the north-east? On what information would it base such a decision? The same difficulty would arise for the Secretary of State when his consent was required. Furthermore, it is difficult to believe that such a requirement is needed.

It is important that the charging and income generation activities of an NHS trust do not interfere with the provision of services not only to its own patients but also to patients of other NHS trusts locally. That safeguard is implicit in the Bill as currently drafted. Clause 19 places a duty of co-operation on NHS bodies, making clear the requirements on NHS trusts and, indeed, other NHS bodies, to work together.

Clause 9 ensures that a trust cannot exercise its charging and income generation powers if that would interfere with its duty of co-operation. Furthermore, the Secretary of State's power to direct NHS trusts would enable the Secretary of State to take action, should such a situation arise.

In regard to a particular point raised by my noble friend, I would confirm that the powers concerned are, indeed, ancillary powers. They are there to enable a trust better to perform its core functions. On that basis, I hope that my noble friend will be satisfied that we have covered the position. I invite him to withdraw his amendment.

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