Select Committee on Delegated Powers and Deregulation Seventh Report



SCHEDULE 2: THE COMMISSION FOR HEALTH IMPROVEMENT

108.  Paragraph 5 provides that the Secretary of State may make regulations about the membership of the Commission, which will be subject to negative procedure, as is the case with comparable Health Authority, Primary Care Trust and NHS trust membership regulations (Schedule 5 to the 1977 Act, paragraph 5 of the new Schedule 5A of the 1977 Act as inserted by Schedule 1 to this Bill, and section 5(7) of the 1990 Act respectively). The regulations will cover matters such as the number of members, their appointment and tenure of office, any particular requirements for membership, the appointment, constitution and exercise of functions by committees and the procedure to be followed by the body. The exact membership and constitution of the body has not been set out on the face of the Bill.

109.  As the Commission's work develops, the number of members may need to vary to reflect the skills and experience required in the light of changing circumstances. To fix these matters on the face of the Bill would, in the Department's opinion, impose an unnecessary constraint on the Commission; any changes would require primary legislation, and could result in unnecessary delay and consumption of Parliamentary time. In addition, regulations are necessary to avoid placing large amounts of procedural and administrative detail on the face of the Bill, which may then require frequent amendment to meet changing circumstances. For example, the regulations would deal with such detailed matters as the circumstances that will disqualify an individual for appointment, the procedure for excluding from meetings members with a pecuniary or other interest in the matter under discussion, and the procedure at meetings (eg. quorum, voting). As noted in paragraph 33 on Primary Care Trusts, experience has shown that rules about membership need to reflect changing circumstances.

110.  Paragraph 7(6) enables the Secretary of State to give directions to the Commission as to the appointment of staff and their terms and conditions. This would enable the Secretary of State to determine the number of employees and to set the parameters within which the Commission will determine the pay and conditions of its staff. This is a similar power to that in respect of Health Authorities (see paragraph 10(1) of Schedule 5 of the 1977 Act) and the powers of approval contained in provisions concerning various Non-Departmental Public Bodies: for example, the Human Fertilisation and Embryology Authority (paragraph 8(1) of Schedule 1 to the Human Fertilisation and Embryology Act 1990) and the Public Health Laboratory Service Board (paragraph 11 of Schedule 3 to the 1977 Act). The provisions made in such directions involve a level of detail that would be inappropriate for primary legislation. Regulations are not appropriate, both because of the level of technical detail, and because the provisions might require frequent amendment as the Commission's staffing needs change and develop.

111.  Paragraph 10(7) enables the Secretary of State to give directions to the Commission as to the application of any sums he has paid or loaned to the Commission. Paragraph 10(8) creates a similar power for the National Assembly for Wales in respect of any sums it has paid or loaned to the Commission. This will enable the Secretary of State, or the Assembly, to ring-fence particular sums of money to ensure that it is spent in a particular way. The Secretary of State has a comparable power in respect of sums paid to Health Authorities under section 97(6)(a) of the 1977 Act.

CLAUSE 15: FUNCTIONS OF THE COMMISSION.

112.  Subclause (1)(e) enables the Secretary of State to confer additional functions on the Commission for Health Improvement by regulations. The regulations will be made by statutory instrument subject to negative procedure. Similar powers exist in respect of the Clinical Standards Advisory Group under section 62 of the 1990 Act. It enables the role of the Commission to develop over time as its expertise develops and additional resources become available. The power also enables the Secretary of State to exercise some flexibility so as to enable the Commission to meet the changing needs and priorities of the NHS. Without this power, additional functions, however uncontroversial, could only be conferred by primary legislation, which would involve delay and the consumption of Parliamentary time. The Commission's functions may, for example, be extended to cover additional bodies. Or it may be required to carry out new activities, for example approving clinical audit programmes. If additional functions are to be conferred on the Commission as respects Wales, such regulations may only be made with the agreement of the National Assembly (see clause 51(4)).

113.  Subclause (2) confers on the Secretary of State the power to make regulations setting out the manner in which the Commission should exercise its functions. The purpose of the power is to enable the Secretary of State to detail how the Commission will carry out the functions set out in clause 15(1). This power avoids the inclusion of a large amount of procedural and administrative detail on the face of the Bill. It also enables such provisions to be amended as the role of the Commission develops. For example, it is not envisaged initially that the Commission will charge NHS bodies for its work, but it is intended that this will change over time. The regulations would also require amendment when new functions are conferred on the Commission under clause 15(1)(e).

114.  Examples of the sorts of provisions that may be made under the various paragraphs of clause 15(2) are as follows. Subclause (2)(a) would enable the Secretary of State to provide that the Commission may carry out investigations under section 15(1)(c) when requested to do so by the NHS body in question, but will have a duty to investigate at his request. Subclause (2)(b) enables the Secretary of State to provide that the Commission must or may take various factors into account when conducting investigations or reviews - the relevant factors may need to be changed from time to time. An example of the use of this power would be a provision that in reviewing the arrangements put in place by an NHS trust to assure the quality of its services, the Commission must take into account the effect of the manner in which patients are referred to the hospital by local GPs. Subclause (2)(c) enables detailed provision to be made as to who is to receive the advice or reports of the Commission. Subclause (2)(d) enables provision to be made regarding the publication of reports; for example, whether the report is made public; if not, whether summaries of each report must be prepared and published. Subclause (2)(e) enables the Secretary of State to provide for the Commission to meet part of its expenditure by making and recovering charges from the bodies investigated and reviewed. The regulations would deal with such matters as when charges could be recovered, and the level of those charges. Subclause (2)(f) will enable the Secretary of State to make provision for the Commission to work with other statutory bodies such as the Audit Commission and the Health and Safety Executive.

115.  Regulations under clause 15(2) will be subject to the negative resolution procedure. Clause 48(2) and (3) provides that the regulations may contain supplementary, incidental, consequential or transitional provision amending or repealing any enactment instrument or document. This is to enable the regulations to make consequential amendments where this is required to give full effect to the provisions concerning how the Commission will operate. In particular, minor amendments may be required to the legislation concerning the statutory bodies with which the Commission is to work in accordance with regulations under clause 15(2)(f). The Department's view is that to include all the necessary consequential and supplementary provisions in primary legislation would unnecessarily lengthen the Bill, and take up Parliamentary time on consequential and supplementary matters. In addition, the nature and extent of some consequential or supplementary requirements, including the necessary legislative amendments, may not become apparent until after the Bill is in force, and the exact details of how the Commission is to work with other bodies has been established. Without the provision in clause 48(3), or any amending provision on the face of the Bill, any such amendments would have to be effected by a separate statutory instrument, ie. an order under clause 49. Clause 48(3) removes the necessity for two separate instruments.

116.  The Department considers that the use of the negative procedure is justified in the present case, even though such regulations may amend or repeal an enactment. The powers are merely to enable modification of statutory provisions by way of consequential, supplementary or transitional adaptation. To apply the affirmative procedure would involve the needless consumption of Parliamentary time on consequential or supplementary matters.

117.  Subclause (4) provides that the Secretary of State may direct the Commission about the exercise of its functions. Such directions must be given in writing. This gives the Secretary of State the ability to give the Commission specific instructions, or set out detailed or technical requirements (for example in relation to its financial management) that would not be appropriate for regulations.

CLAUSE 16: OBTAINING INFORMATION ETC.

118.  Subclause (1) enables the Secretary of State to make provision by regulations for the Commission to inspect premises and obtain access to such information as is required for the exercise of its functions (with certain exceptions).

119.  The power to confer rights of entry (clause 16(1)(a)) will only concern entry and inspection of NHS premises. Clause 16(1)(b) and (c) however concern access to information held by any persons specified in the regulations. This will enable the Secretary of State to specify the bodies or persons who must provide information on the request of the Commission, and set out when individuals may be required to give explanations of documents and other matters. The latter will enable the Commission to interview staff and other persons who may have information relevant for the purposes of their reviews or investigations. The persons from whom information or documents may be required and the cases in which they will be required will depend on how the Commission is required to carry out its functions by regulations under clause 15. The Commission will be operating in a variety of different circumstances, and may require information at different times from different persons. These requirements may well change over time. To avoid cluttering the Bill with unnecessary detail, and to ensure the provisions concerning access to information can be appropriately adapted to meet changing circumstances, the Department considers that these matters should be set out in regulations.

120.  The regulations will set out the limitations and conditions on which the Commission will exercise its powers to inspect premises and obtain information. In order to ensure that adequate safeguards are in place regarding confidential personal information, in particular information about patients, clause 15(2) provides that the regulations may not provide for access to such information, except in the cases listed in paragraphs (a) to (d). Clause 15(3) ensures that the regulations will not override any statutory prohibitions on the disclosure of personal information that identifies an individual. The Department considers that these safeguards should be placed on the face of the Bill rather than left to regulations. In part they are to ensure that the provisions are compatible with Article 8 of the European Convention on Human Rights (the right to respect for private and family life). With such safeguards in place, the Department considers that it is appropriate for regulations under this clause to be subject to the negative procedure.

CLAUSE 17: RESTRICTIONS ON DISCLOSURE OF INFORMATION

CLAUSE 18: ABOLITION OF CLINICAL STANDARDS ADVISORY GROUP

CLAUSE 19: CO-OPERATION BETWEEN NHS BODIES

CLAUSE 20: CO-OPERATION BETWEEN NHS BODIES AND LOCAL AUTHORITIES

121.  Clauses 17-20 contain no delegated powers.

CLAUSE 21: PLANS FOR IMPROVING HEALTH ETC.

122.  Clause 21 imposes a statutory duty on each Health Authority to prepare a local plan which sets out a strategy for improving the health of, and the provision of health care to, people for whom they are responsible.

123.  Subclause 5(a) provides that the Secretary of State may direct Health Authorities who are preparing and reviewing the plans to consult, or to seek the participation of, such persons as he directs. Such directions must be given in writing. The statutory bodies which must participate in the preparation or review of the plan are set out in subsection (4). Health Authorities may involve such other persons as they consider appropriate (subsection(5)(a)). The power in subsection (5)(a) provides the flexibility to direct individual Health Authorities to involve other persons in the process should that prove necessary to safeguard the interests of certain groups, for example voluntary organisations.

124.  Subclause (6) enables the Secretary of State to give directions (which must be in writing) in relation to the preparation and review of the plans. The directions may deal with matters of procedural and administrative detail which would not be appropriate for primary legislation. The use of directions also provides the flexibility for the procedural requirements to change over time, to reflect changing circumstances or in the light of experience. The intention is that any requirements should be kept to a minimum to enable Health Authorities and their partners to develop local arrangements.

125.  Subclause (8)(b) provides that the Secretary of State may specify in directions those people outside the Health Authority's area for whom the authority are responsible for the purposes of preparing the local plan. The directions must be given in writing and the intention is that the directions will align Health Authorities' responsibilities as regards the plans with their responsibilities regarding the commissioning of health care.

CLAUSE 22: PAYMENTS TO NHS BODIES BY LOCAL AUTHORITIES

126.  Clause 22 does not provide for any new delegated powers. It does however extend the powers in section 28A of the 1977 Act to enable Primary Care Trusts to make payments to local authorities and to extend the functions with respect to which such payments may be made by Health Authorities and Primary Care Trusts. The Secretary of State's power to give directions in section 28A(5) imposing conditions relating to such payments will apply to the extended functions. The directions presently provide that payments may only be made where such payment would represent a more effective use of public funds. They also set out a number of detailed procedural requirements.

CLAUSE 23: PAYMENTS BY LOCAL AUTHORITIES TO NHS BODIES

127.  Clause 23 inserts a new section 28BB into the 1977 Act which makes similar, but reciprocal, provision to section 28A. Subclause (1) enables local authorities to make payments to Health Authorities or Primary Care Trusts in connection with the performance by the authority of functions which are to be prescribed in regulations made by the Secretary of State. The regulations will be subject to negative resolution procedures. NHS functions are provided for in primary legislation in the broadest terms and the intention is to prescribe NHS functions only to the extent it is appropriate for a Local Authority to make such payments. The power will ensure that maximum flexibility is retained to make amendments in the light of experience as local partnerships develop.

128.  Subclause (4) of section 28BB provides that the Secretary of State may give directions imposing conditions relating to payments under this section. It mirrors the provision in section 28A to this effect. It will enable the Secretary of State to ensure that, for example, any payment is a more effective use of public funds.

CLAUSE 24: ARRANGEMENTS BETWEEN NHS BODIES AND LOCAL AUTHORITIES

129.  Clause 24 provides that the Secretary of State may make provision in regulations enabling NHS bodies and local authorities to enter into certain kinds of arrangements as respects the exercise of health and health-related functions. They may do so only if the arrangements are likely to lead to an improvement in the way in which those functions are exercised. Which authorities, functions and arrangements are to be prescribed in regulations. Regulations made under clause 24 will be subject to negative resolution procedure.

130.  Subclause (2) sets out examples of the arrangements which the regulations may include. Subclause (2)(a) enables the creation of a pooled budget arrangement and subclauses (2)(b) and (c) the arrangements whereby an NHS body exercises health-related functions on behalf of a local authority, or a local authority exercises NHS functions of behalf of an NHS body. Subclauses (2)(c) to (e) enable any necessary consequential provision. Subclauses (3) and (4) set out in more detail the kinds of matters which may be prescribed in regulations. They include matters such as the circumstances in which the flexibilities may be used (such as client group for example the elderly or type of service for example mental health services), the requirements for consultation on proposals to use the flexibilities, procedures for obtaining Secretary of State approval and requirements as to the management of the arrangements.

131.  The arrangements, which will enable significantly different approaches to the exercise of NHS and local authority functions, are untried and untested, and it is thought that, at least initially, the use of the new flexibilities will require some safeguards. There is a need for a regulation-making power, therefore, in order to establish the framework within which potential partners must operate. For example, regulations may be used to ensure that appropriate provisions are made locally for management of staff and resources, accounting and audit procedures, withdrawal from the arrangement etc. Over time, however, the need for such safeguards may reduce, as NHS bodies and local authorities gain appropriate expertise and best practice is shared. Regulations also provide the flexibility for changes to be made to the legislative requirements in the light of such development. The nature and content of any consequential and supplementary provisions including necessary amendment to primary legislation may not be apparent until after the Bill is in force. Without the provision in 48(3) any such amendments would have to be effected by a separate statutory instrument, ie order under clause 49. Clause 48(3) removes the need for two separate instruments.

CLAUSE 25: JOINT CONSULTATIVE COMMITTEES

132.  This clause does not provide for any new delegated powers.

CLAUSE 26: POWERS RELATING TO VOLUNTARY SCHEMES

133.  Clauses 26 to 29 provide for a number of powers in relation to the control of prices of medicines and profits. Pharmaceutical companies' profits from the sale of branded prescription medicines to the NHS are at present controlled by the Pharmaceutical Price Regulation Scheme (PPRS). The current PPRS is a voluntary, non statutory agreement between the Government, represented by the Department of Health, and the industry, represented by the Association of the British Pharmaceutical Industry (ABPI). It has operated in various forms since 1957. The current agreement commenced on 1st October 1993. Negotiations are taking place between the Government and the ABPI with the objective of agreeing a successor agreement.

134.  Some companies covered by the scheme are not complying fully with the current agreement. The existing power, section 57 of the 1977 Act, enables the Secretary of State by order to control maximum prices for medical supplies. The provision does not provide power to regulate profits. Accordingly, it cannot be used to ensure compliance by companies with the current PPRS or a similar successor scheme. Powers are needed to ensure that prices are fair and reasonable to the NHS and to companies.

135.  Clause 26 gives the Secretary of State powers, after agreeing a scheme with the industry body (in practice the ABPI), to make regulations or give directions to a particular manufacturer or supplier (as provided for in clause 31). The powers are only exercisable in relation to manufacturers or suppliers to whom, with their consent, the voluntary scheme is applicable.

136.  Regulations or directions made under clause 26(3) may require the recording, keeping and provision of information. Some companies currently fail to provide timely information under the existing PPRS agreement, and one major company has refused to provide information since 1990. This significantly detracts from the effective operation of the scheme. The power is necessary to ensure that the voluntary scheme operates effectively.

137.  Regulations or directions made under clause 26(4)(a) may prohibit any manufacturer or supplier within the voluntary scheme from increasing the price of relevant medicines without the agreement of the Secretary of State. Under the existing PPRS scheme there have been occasions where the prices of certain health service medicines have been increased without the agreement of the Secretary of State and in ways contrary to the rules of that scheme. Clause 26(4)(b) provides that the Secretary of State may require payment of sums representing increases charged in contravention of any prohibition imposed under subsection (4)(a).

138.  The regulations under these clauses will be made by negative procedure. The Department considers this procedure is appropriate given that the powers can be exercised only in relation to companies that consent to the scheme agreed with the industry body (as modified in their case) applying to them. Directions (as defined in clause 31(6)) will not be subject to Parliamentary procedure. This is appropriate because they will cover issues specific to the affairs of individual manufacturer or supplier and may be commercially confidential to that company.

CLAUSE 27: POWER TO CONTROL PRICES

139.  Clause 27 (with clause 31) empowers the Secretary of State after consultation with the industry, by regulations or directions, to limit any price which may be charged by any manufacturer or supplier for any health service medicine and to require payment to the Secretary of State of sums charged in excess of that limit. This power replaces section 57 of, and schedule 11 to, the 1977 Act. It is broadly drawn because it is not possible to anticipate all the circumstances in which its exercise may be necessary. Any regulations will be subject to the negative resolution procedure. The negative procedure for regulations is consistent with the procedure provided for in section 57 of the 1977 Act. The power can only be exercised after consultation with the industry body. The power to give directions, which is not subject to any Parliamentary procedure, enables the Secretary of State to provide for the circumstances of individual manufacturers or suppliers. Again, the lack of any Parliamentary procedure is to protect the confidential nature of the individual manufacturer's business.

CLAUSE 28: STATUTORY SCHEMES

140.  Clause 28 provides power, after consultation with the industry body, to make a statutory scheme for the purpose of limiting the prices charged by manufacturers and suppliers of health service medicines and limiting the profits which may accrue to such manufacturers or suppliers in connection with supply of health service medicines. Subclause (2) provides that such a scheme may in particular require the keeping, recording and provision of information. Subclause (4) and (5) provide for recovery of sums charged in excess of the limits and for recovery of profits accruing in excess of the limits determined under the scheme. Subclause (6) also provide power to prohibit manufacturers and suppliers to whom the scheme relates from increasing prices without approval and to provide for payment to the Secretary of State of sums charged in contravention of the prohibition. The power may be exercised by regulations subject to negative procedure, or by giving directions to a particular manufacturer or supplier.

141.  The powers to make a statutory scheme will only be used if the Government and the ABPI are unable to agree a new voluntary scheme or companies covered by this scheme fail to comply with it. The powers provide for that eventuality. The power to give directions is necessary to provide for the circumstances of individual manufacturers and suppliers and deal with the number of products covered by such a scheme. Subclause (4) provides that the powers are exercisable only with a view to limiting prices or profits to those that are reasonable in all the circumstances. The negative resolution procedure is considered appropriate because consultation with the industry body is required. Again, the possible confidential nature of directions necessitates that they are not subject to any Parliamentary procedure.

CLAUSE 29: STATUTORY SCHEMES: SUPPLEMENTARY

142.  Clause 29 (with clause 31) empowers the Secretary of State to make provision by regulations or directions which he considers necessary or expedient for the purpose of introducing the statutory scheme or for determining the provisions to be made in such a scheme. Such provision may, for example, require a person to require information before he becomes subject to the statutory scheme. Such provision may only be made after consultation with the industry.

CLAUSE 30: ENFORCEMENT

143.  Clause 30(1) enables the Secretary of State to regulate for the payment of penalties by a person who contravenes regulations or directions made under sections 26 to 29. The penalty may be a single penalty or a daily penalty. A single penalty may not exceed £100,000 and a daily penalty may not exceed £10,000. Clause 30(3) enables regulations to provide for amounts payable in respect of prices charged in excess of one of the price limiting provisions to be increased by not more than 50%. Clause 30(6) enables the Secretary of State by order to increase on further increases the sums set out in Clause 30(2). The power to make detailed provision for penalties in regulations is necessary so that the penalties for contraventions reflect the scheme as made in regulations made under clauses 26 to 29, and the power to increase penalties is necessary to ensure that real value can be maintained. It is intended that the level of penalties will be set with regard to the level of companies' sales to the NHS under the schemes. The negative resolution procedure is considered appropriate because clause 30 sets out the maximum penalties that may be imposed and any amendment to the penalties under clause 30(2) would be a short and transparent measure that could be prayed against if Parliament considered this appropriate.

CLAUSE 31: CONTROLS: SUPPLEMENTARY

144.  This clause states how the powers in clauses 26-29 (already referred to above) may be exercised.

CLAUSE 32: EVASION OF CHARGES ETC

145.  Clause 32(2) extends the existing powers in section 37 of the 1977 Act and section 17 of the National Health Service (Primary Care) Act 1997 to confer functions on the Dental Practice Board. The extension would allow functions to be conferred relating to the prosecution of offences concerning charges for dental treatment and appliances. Powers would be conferred by regulations subject to negative resolution procedures. While no decision has been made, it may be appropriate for the Dental Practice Board to carry out such functions, as the Board is expected in future to conduct checks of claims to exemption from dental charges; and to employ staff with accredited counter-fraud skills.

CLAUSE 33: DISQUALIFICATION ETC. OF PART II PRACTITIONERS

146.  Delegated powers included in section 46(4)(a) and (b) correspond in general terms with those which already exist for the purposes of the NHS Tribunal under its current powers. The new power in section 46A(1) and (2) extends the remit of the Tribunal beyond the NHS to other health services provided out of public funds, eg the Prison Medical Service. The regulations will be subject to negative procedure.

CLAUSE 34: HIGH SECURITY PSYCHIATRIC SERVICES

CLAUSE 35: PROVISION OF INFORMATION BY REGISTRAR GENERAL

147.  These clauses create no new delegated powers.


 
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