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Baroness Cumberlege: I support both noble Lords who have spoken. I thank the Minister for sending me the NHS Plan implementing the performance improvement agenda, the consultation document to which reference has been made. I have read it and I found it of great interest. It explained to me clearly how the system will work. The figure of 25 per cent is mentioned as regards "green" organisations--those which are perceived to have succeeded. What measurements were taken on that? I assume that there is consultation on the "must dos" and the performance indicators. But what is so magic about 25 per cent--a quarter? What evidence was taken in order to choose that figure; or was it plucked out of the air?

I assume that there has been much consultation with selected people in order to draw up the consultation document. But for health authorities alone there are 10 "must dos", 38 major priority areas, with 39 associated performance indicators. That is something like 87 suggested targets. I think that that is demoralising. It is a straitjacket. With those figures and targets, there is no room for local autonomy and local decision making or for local priorities to be set on local needs. Surely health authorities are meant to look at local needs and reflect them in local priorities.

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I understand the view that there are too many performance indicators, "must dos", targets and so on. I hope that the Minister will be able to tell us what they will be cut down to. In my experience, if one wants to achieve something one needs a slimmed down version that people will want.

I echo what my noble friend Lady Carnegy said. I believe that if progress is to be made, if services are to be improved, then local people have to be allowed to be creative, to use their imagination, to take risks and, above all, to be forgiven when things go wrong. Forgiveness is lacking in the health service. That is why some of us have strong reservations about this traffic light system. I accept what the Minister said about the Secretary of State, his ministerial team, officials within the department and the NHS executive providing leadership. But if everyone has to achieve this rigid grid, it is demoralising and will not work. People will not have ownership of it. There will not be enough room for manoeuvre. When it goes wrong, they will be beaten over the head again.

Beaten over the head is the right phrase, because they will be in the hands of the Modernisation Agency. I have not met the Modernisation Agency, but it does not sound like a friendly, cuddly helper. It sounds like a remote quango that comes in to take over the management of a local trust and health authority. Why does the Modernisation Agency always succeed when local people fail? Where do these people come from? How did they come to be supermen and superwomen who know how to manage brilliantly something that may be hundreds of miles away? How does the system work? It looks pretty frightening to me.

Where does the agency's accountability lie? Why does it have an amazing capacity to micromanage when local people cannot do so? This is a big brother approach to something that could be sorted out in another way.

Lastly, I should like to know how this brilliant agency is going to manage all these wonderful things so cleverly. It will have to keep an eye on around three quarters of the NHS body. That is an enormous task. How does the Minister think that it will all work?

Lord Hunt of Kings Heath: We come again to this fascinating issue, which is crucial to the future success of the running of the huge organisation called the National Health Service in a way that discharges proper accountability to Parliament. I have been a Minister answering questions in your Lordships' House for nearly two years. Very rarely am I asked to give away control or decentralise. The emphasis of the parliamentary debate and focus is on Ministers taking more control, regulating more and having more information. That is one pressure that is always on health Ministers. I agree with everything that has been said about the need to allow for local determination, flexibility, growth and leadership. It is difficult to get the balance right.

We already use the traffic light system in a number of areas. Winter planning is a good example. We have developed a process of identifying those parts of the

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country that look as though they are not going to succeed. That results in greater intervention and help for those places. The system has proved outstandingly successful. The health and social care services have coped magnificently this winter with the pressures put on them. As with earned autonomy, those health communities that are doing well and are seen to have things sorted out are left alone, but intervention is necessary for places that look as though they are in trouble.

The second part of our approach is based on our experience in the past three years. When authorities or trusts seem to have specific problems, often the best form of intervention is to send a team of people who are experienced in working at the front line to help the poorly performing organisation sort the problems out. That answers the point made by the noble Baroness, Lady Cumberlege. That is how we should approach poorly performing organisations. We need rapid identification of the fact that they are in trouble and then help to allow them to get out of trouble. That help comes not from academics or people sitting in an office in Richmond House, but from people who have done the job successfully at local level. In other words, we have a learning organisation.

I again stress that the proposals for the working of the traffic lights system have been the subject of consultation. No final decisions have been made. There are three band definitions for the traffic lights system. First, the green organisations will meet what could be described as the "must do" core national targets that will be set, which we think will initially involve about 20 per cent of all organisations, but that has to be a fluid figure. As we gain experience in developing the system, it will be reconsidered and changed if we think it appropriate.

For a health authority, the examples in the consultation paper of core (or "must do") national targets may be waiting targets, emergencies, reduced levels of delayed discharges, financial balance or clinical quality measures. In addition, there may be other performance indicators on a second list, which for a health authority may involve programmes aimed at reducing smoking, preventing the illicit use of drugs and teenage pregnancy. The consultation paper explores those options in some detail.

I accept the point made by the noble Baroness, Lady Cumberlege, that it would be very difficult for the health service to respond to a huge number of different targets. I agree that the challenge for us is to try to keep those targets to as limited a number as possible. The noble Baroness will understand that that is not always easy because of the natural pressure on government to ensure that every area of concern or every client group is included in those targets. We shall have to balance those two conflicts, which I believe will be quite difficult.

The yellow organisations will meet their core national targets, but they will not be in the top 25 per cent of performers overall. They will succeed in the "must dos" but may be weaker in some of the other performance targets that are set. I can tell the noble

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Earl, Lord Howe, that the intention is to encourage more and more organisations to become green light organisations. I agree with him that it would be demotivating if over the years we had very arbitrary percentage figures for one category and another category; but that is not the intention.

I can also tell the noble Earl that I very much hope that the number of red organisations will be limited. I do not agree with him that it necessarily becomes a wholly demoralising situation for an organisation to be classified as red. I believe that there are examples in the NHS of organisations having patently been seen to fail, which has acted as a spur to people to improve their performance and get their act together. That surely must be the aim of these arrangements.

The Modernisation Agency is not a draconian arm of central government coming down to hammer local NHS organisations. It is very much a helping agency--helping people to make change and design new services--and a centre of excellence using people with practical skills who have succeeded at local level. Linked to the Modernisation Agency is our Leadership Centre, which is designed to give much greater support to people in leadership positions, whether clinicians or lay managers. It will play a much more proactive role in ensuring that we have the kind of people, mentioned by the noble Earl, Lord Howe, whom we will need to lead change and particularly deal with red performing organisations.

From the explanation that I have given, I hope that Members of the Committee will see that we are going to adopt a sensible, sensitive approach. There is a clear need for ownership by the NHS in these arrangements in order to ensure that they work effectively. The whole purpose of consultation is to ensure that that ownership is put in place. Of course, we shall learn by experience and shall make changes as necessary.

Earl Howe: I wonder whether I may ask the Minister to comment on the point that I made at the outset. I could not see how the clause, as drafted, caters for yellow and red light organisations because it is expressed in terms of satisfying objectives and performing well against criteria. By definition, yellow and red light authorities do not satisfy objectives and do not perform well against criteria, yet they will still receive extra funds. I do not understand how the clause works.


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