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Baroness Hanham: I am worried about which end of the telescope we are standing at with these proposals. It seems that the Bill and this amendment are trying to construct a body. What is that body for? It has not been spelled out in the Bill. If the answer is in this deficient publication that has been made available, it would be helpful to have it for the next stage. I am not clear why we are trying to construct a body about which everyone is very perplexed. This amendment makes it even more perplexing. What is the nature and purpose of the board of governors?

To be absolutely clear, an acute hospital is there to deal with acute patients and provide medical services laid down by the Government and by the need of the population for those medical services. There is not a strategic overview of how the hospital runs. It must be run for the people who need it against the services that it provides. If the board of governors is able to dictate what the hospital can do in terms of the services it provides, what will the board say? Perhaps it will say, "Today, we don't really think that cardiac services are the thing. The local population wants diabetics so we will therefore move into diabetics. No, that is not a good idea, it would be much better if we were concentrating on rheumatology".

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That conjecture may sound fanciful, but it is not. By definition, an acute hospital must provide what is required to treat more than only its local community—because of patient choice, that community will be very wide. It will include patients from wherever they choose to come. With acute hospitals in London, the community will be nation-wide, because that will be its constituency.

At some stage, could we "bottom out" what the Government believe this body will do? It will be set up with a constitution but who will provide that? Will it be the trust that will draw it all together? That is fine, but if it were my trust and I were going for a foundation I would leave it with nothing to do because that would resolve a huge amount of problems. However, that seems to be an awful waste of everyone's time and will not attract anyone to do anything. There must be a rationale. If there is none, let us abolish and abandon the plan now.

Lord Warner: The amendments would remove the provisions setting out how the board of governors should be constituted and replace them with an entirely different system without any role for the members of the public constituency and which restricts NHS foundation trusts' flexibility to develop arrangements that best suit their local circumstances. Effectively, the new arrangements for appointing members of boards of governors involve staff, PCTs and local authorities making up the bulk of appointments between them—up to one third of the board's members each—as set out in Amendment No. 40.

The removal of representatives elected by members of the public and patients of NHS foundation trusts is totally unacceptable as it cuts right across the principal objective of the policy on NHS foundation trusts, which relates to devolution of power and responsibility for NHS services to the people who operate and use them. In reply to the noble Baroness, Lady Hanham, in a sentence, that gives us a summary of the purpose of the changes. The amendments show a surprising lack of trust in local communities' ability to participate in running their local health services, although I will not go over ground covered in the previous amendments.

The noble Baroness, Lady Barker, asked why we did not just snip and paste from companies legislation and charities law, but that would not have been appropriate. We are trying to establish a new corporate form for which, although trusts have some things in common with companies limited by guarantee and industrial and provident societies, we could not set them up in that form. We are trying to design around locking the assets into public benefit objectives around the particular needs of foundation trusts. If we return to this subject again, there may be difficulties around whether companies legislation in this field would be appropriate under European Union obligations. So, it was not that we were just ignoring those other provisions; we were trying, as we have done all along, to design something that was fit for the purpose.

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Amendment No. 40 would require only that "at least one" patient be co-opted as a member of the board. That is unacceptable. It would shift the balance of power on the board away from local people and patients. Patients and public representatives should be in a majority on the board of governors, to reflect the fact that they form by far the largest stakeholder groups.

The amendments would also provide for up to one third of the members of the board of governors to be appointed by local authorities. If the amendments are intended to replace the arrangements for public representation on the board of governors, I question their validity. We want to build on the sense of ownership that people often feel for their local hospital and give them an opportunity to be involved directly. Local authority representation is not a substitute for patient and public representation. Turnout in some recent local elections calls into question any reliance on that source of membership to speak for whole communities on health issues.

The amendment shows a misunderstanding of the role of local authorities with respect to NHS providers. They will have influence through commissioning contracts and agreements on joint working and through local authority representation on the board of governors. They will have powers of scrutiny through the overview and scrutiny committees, on which NHS foundation trusts will be under a duty to work in partnership with local authorities. Moreover, the level of representation proposed in the amendment is disproportionate, considering that the Bill already provides mechanisms for local authorities to influence and scrutinise the activities of NHS foundation trusts.

Amendment No. 40 would also provide for up to one third of the members of the boards of governors to be appointed by primary care trusts, which commission services. Although we have, of course, accepted all along that it is important that commissioner interests are represented—the models set out in the Bill provide for that—it would be inappropriate to give those organisations, as the main customers of NHS foundation trusts, such a large role in their running. Good commissioning in the public services involves standing back a little from service providers, not dominating their management.

The amendments would be backward steps in public service management. They show an unwillingness to trust local people to play a full and effective part in the running of local health services. They should be withdrawn or rejected, as should the consequential amendments in the group.

7.30 p.m.

Lord Walton of Detchant: In Amendment No. 40, the Government's own wording is repeated at sub-paragraph (5), which says:

    "If any of the corporation's hospitals includes a medical or dental school".

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Is that Government-speak? In fact, not many hospitals include a medical or dental school. They will be closely associated with or work in collaboration with them. A few hospitals include medical school premises, but, in many places, the hospitals used for teaching are separate from the buildings of the medical and dental schools.

Will the Minister consider whether it might be better if, in Schedule 1, where the same wording is used, it said, "If any of the hospitals includes or is closely associated with for teaching and research purposes a medical or dental school provided by a university, at least one member of the board is to be appointed by that university"? The Minister should carefully consider that as a proposal for a possible amendment at a later stage.

Baroness Hanham: Before the Minister responds, I should like to know whether he would be kind enough, before we go too much further, to answer the question that I asked. He stuck to his brief and did not get round to saying what the boards of governors were going to do.

We will be at a huge disadvantage in the rest of our discussion on this part of the Bill if we do not know what the Government have in mind. If the Minister tells me that it is in the document to which my noble friend Lord Howe referred, I would be glad to have a copy. However, until that is available, I will keep asking the Minister the same question. It is the kernel of what the boards of governors are about, who is on them and why.

Lord Warner: This is not the occasion on which to have a debate about the details of the boards of governors in this context. We are discussing some specific amendments tabled by those on the Liberal Democrat Front Bench. I am happy to discuss the matter outside the Chamber with the noble Baroness and, if necessary, write to her, setting things out. We thought that the role of the boards of governors was clear from the Bill. If there is uncertainty, we shall clarify things, but it would not be appropriate to detain the Committee any longer on the issue. The amendments are unacceptable for the purposes of running NHS foundation trusts.

I am happy to consider the points made by the noble Lord, Lord Walton of Detchant, but I am not sure that we would want to lift wording from the amendments.

Baroness Barker: It has been a useful debate, not least because of the points that have been raised and not answered.

I forcefully thank the noble Baroness, Lady Hanham, for raising the critical question of the role of the boards of governors. It is clear that the supposition behind Amendment No. 40 is that there will be a need for some strategic governance of a foundation trust. I take the noble Baroness's point about acute services, but acute services must be planned and the need for such services predicted within an overall health economy and changing patterns of health. That is the thinking behind the amendments. According to the Minister, that

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thinking was not correct. I believe that it has a coherence far greater than that on offer from the Government about the role of the boards of governors.

As I said, the management of foundation trusts will not happen in isolation. Management in social services and local authorities will, increasingly, work alongside them. One of the key questions that the Minister did not answer related to the strategic relationship of trusts to local government. There is a possibility that, down the line, there will be a great deal of fragmentation in the governance and planning of services. The Minister did not pick up that important point.

I take the point made by the noble Lord, Lord Walton of Detchant, about the wording relating to dental and medical schools. I take the opportunity to say that one of the underlying intentions of the approach that is set out—perhaps imperfectly—in the amendments was to create an informed strategic working relationship between local government, the voluntary sector and the acute sector. That has never been satisfactorily done. In all the areas of my working life, I stumble across people in one of those sectors who never quite understand what the others are talking about. That will bedevil healthcare provision across the board and contribute to the creation of healthcare needs that may have been avoidable.

I accept that the amendments are not perfect, but it has been useful to have the debate. I hope that we have made it clear that the Minister's one-line answer about the role of the board of governors was not adequate. We will have to return to this fundamental matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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