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Baroness Hayman: My Lords, I, too, try to be reasonable. I can perhaps try to be helpful about the substantive issue, although there are some difficulties, as I understand it, with the amendment as drafted. The substantive issue is to ensure that proper and appropriate safeguards are in place to protect the integrity of primary care trust boards and the decisions made by them. There is also another issue of the burden put on the remaining non-executive members, in particular, of boards when there are vacancies. I take seriously the strictures of the noble Baroness in this area and perhaps in a moment I can give her some facts and figures to show that we are making progress and improving.

I wish to deal with the technical problems that I understand could arise if we accepted the amendment as drafted. There may be exceptional, rare occasions where a significant number of the officer or non-officer members resign from a board. I am sure that it would not happen under the chairmanship of the noble Baroness opposite or of any of us who have taken forward those positions. But if it were to occur-- it is not unknown in public life--we would not wish to invalidate the proceedings of the trust for the short period before replacement members were appointed. That is the technical issue.

On the substantive issue, it is the clear intention of the Secretary of State to make the appointments that fall to him--that is the non-officer appointments--as quickly as a rigorous appointment process allows to avoid leaving primary care trusts to cope with a number of vacancies on their boards, which I fully accept is a very unsatisfactory position. I can understand the concerns, given the problems experienced during the 1997 round of trust non-executive appointments, which are well documented and have been well expressed in your Lordships' House. There were delays in making decisions but, as I said to the noble Baroness, considerable improvements are being made. In 1998 approximately 50 per cent. of those appointed had four weeks' notice of their appointment and 83 per cent. were

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made before the term of the incumbent expired. There were no cases in which the quoracy of a board was compromised by delays in the appointment process.

Having said that, I should acknowledge that too many people are still being given only very short notice of an appointment decision, or perhaps none at all when there has been a delay. We are committed to securing further improvements in the appointment process and to ensuring that delays and the subsequent problems for other members are kept to a minimum. The Secretary of State has explicitly asked officials to look at ways of improving the process in 1999 to ensure that our non-executive directors are treated with the courtesy that their contribution to the NHS demands, including proper notice of appointment decisions. I recognise that I and ministerial colleagues have to play our part in ensuring a speedy process.

I wish to assure the House that we intend to put primary care trusts on the same footing as other NHS bodies as regards arrangements to ensure the proper transaction of business. Although the boards of NHS trusts have been in operation since 1991 without any restriction on the number of vacancies that might exist on their boards at any one time, they have done so within the context of the safeguards written into the NHS Trust (Membership and Procedure) Regulations which ensure that,

    "no business shall be transacted unless one third of the whole number of directors are present including ... at least one executive director and one non-executive member".
There is a similar provision in relation to the business of health authorities in the appropriate legislation. The Government would not wish to create an anomaly in relation to the proceedings of primary care trusts. The Bill as drafted allows for regulations to make provisions about the procedure to be followed by trusts in the exercise of their functions. The Government will use those powers to put in place equivalent safeguards in relation to primary care trusts. For those reasons, and in the light of the assurances I have given, I hope that the noble Earl will feel able to withdraw his amendment.

Earl Howe: My Lords, I am grateful to the Minister, in particular for her acknowledgement that the issue of vacancies has been a problem in the past and needs to be guarded against in the future. The Minister said nearly all the right things. I accept that the situation is improving. I am particularly reassured that the Government intend to see equivalent safeguards put in place to those that exist in other areas of the health service. I do not wish to press this provision. However, this is an important area for Ministers to bear in mind; that is why I tabled the amendment. I am grateful to those noble Lords who have supported the thrust of the issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 9 not moved.]

Earl Howe moved Amendment No. 10:

Page 44, line 27, at end insert (", including details of the proportion of income spent on administration.").

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The noble Earl said: My Lords, the purpose of this amendment is straightforward: it is to provide a clear and accessible way of publicising the burden of management and administrative costs carried by a primary care trust in the delivery of patient care. Subject to the acceptance of common definitions as to what does or does not constitute a management cost, a statistic in percentage form would enable comparisons to be made between PCTs which in turn could trigger some useful questioning about the factors underlying any differences.

In case noble Lords understand me to be saying that management and administrative costs are "a bad thing" and are therefore to be referred to in terms of disparagement, I need to make one point absolutely clear. The health service needs management. It needs to be properly administered. This is not, therefore, a case of saying that "less" necessarily means "better". That point needs to be made. If the present Government came to office with an idee fixe, it was that bureaucracy in the health service was "a bad thing" and needed reducing.

The elimination of unnecessary bureaucracy is wholly to be desired. However, if one examines management costs across the health service as a whole in relation to the value of services delivered, I believe that that ratio, both now and over the past few years, compares very favourably with other areas of commerce and industry. During the term of office of the previous government, NHS management costs were considerably streamlined, contrary to all the received myths on that subject.

Furthermore, it is a truism that, in any industry, cutting management below a certain level leads inevitably to a deterioration in business performance. To do so in the NHS would equally result in its being unable to sustain the delivery of services. Where that level lies is a matter of judgment; however, I suggest that there is not now a great deal of scope to alter the level downwards.

However, the messages that we are receiving from the Government are rather different. They are fond of repeating that their reforms--and not merely from the abolition of fundholding--will lead to a substantial saving in the cost of administering the NHS, amounting to £1 billion over the course of this Parliament. That is quite a claim and it needs testing. Yes, the abolition of fundholding will reduce the number of commissioning bodies, with a consequent reduction in the numbers and costs of transactions handled by NHS trusts. Yes, moving across to three-year contracts, which is a perfectly sensible move, will save additional administration.

However, we need to look at what else is happening. In the regional offices there is now a huge workload arising from the Government's reform programme. What is the cost of that at health authority level? Will the Minister say whether management costs are rising or decreasing? What are the costs of administering primary care groups? In PCGs, we are seeing a huge disparity in management costs as between one PCG and another--anything from £2.20 to £6 per head of population. I confess that I do not understand why that

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should be. However, it implies quite strongly that some PCGs will be struggling to deliver what is required of them.

I realise that my remarks go somewhat wider than the terms of the amendment, which relates strictly to PCTs. But we need from the Government more than simply generalised statements about anticipated savings in management and administration costs within the NHS. First, we need hard figures. Secondly, we need mechanisms such as the amendment proposes by which to make meaningful comparisons between different bodies within the health service. At present, it is hard to get a handle on what is happening to costs. That cannot be satisfactory for anyone, least of all the Government. I beg to move.

5.15 p.m.

Lord Renton: My Lords, I should have expected the noble Baroness on behalf of the Government to welcome this amendment. The Government keep telling us that they wish more money to be spent on health and education, and that means on the things that matter, not merely frittering it away on unnecessary administration. If this amendment, or a similar provision, were to be accepted, the Government's purpose would be achieved. I therefore hope that the noble Baroness will welcome this provision.

Baroness Sharp of Guildford: My Lords, I wish to speak to Amendment No. 11, which is grouped with this amendment. Whereas Amendment No. 10 relates to the details to be included in the annual reports of primary care trusts and, as the noble Earl, Lord Howe, explained, details of administrative costs, Amendment No. 11 relates to the need to give wide publicity to that report.

Paragraph 17 of Schedule 1, to which this amendment relates, states that the Secretary of State,

    "may provide that any Primary Care Trust shall take such steps as may be specified in the regulations to publicise... the trust's audited accounts ...[and] the trust's annual reports",
and that any report on the trust's accounts is to be made by an auditor on a matter of public interest. The provision also relates to,

    "any other document as may be prescribed".
The purpose of this amendment is to strengthen that requirement so that primary care trusts are in all cases required to take steps to publicise those documents. The amendment would achieve that aim.

As is well known, we on the Liberal Democrat Benches support the principles of open government. We therefore believe that information about the work of primary care trusts should be made readily available to members of the public and interested organisations in a form that is clear, accessible and easy to read and understand. We support the requirements in Schedule 1 that each primary care trust should prepare an annual report on its activities during the previous financial year and that the report is to be sent to the relevant health authority and the Secretary of State. However, as the amendment makes clear, we believe that there should be a clear obligation on the trusts to give wide publicity to such documents.

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We were reassured by the Minister's comments in Committee that it is her intention that primary care trusts will be required to publish their audited accounts and annual reports. However, the Minister went on to say that she was considering an amendment that would have the effect of replacing the Secretary of State's discretion to make regulations as to the requirements to publicise specified reports and accounts with a duty on the Secretary of State to do so.

Patients, local communities, community health councils, staff and professional organisations, as well as the wider public, all have a right to know about the activities of their local primary care trusts and to be able to satisfy themselves that trusts are behaving in a financially responsible way. Primary care trusts should be required to make the information available in a way which is affordable and accessible, including placing it in local libraries.

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