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Baroness Finlay of Llandaff: I support this group of amendments, particularly the amendments outlined by the noble Lord, Lord Clement-Jones. The functioning of a health economy in an area always demands a relatively delicate balance.
The networks for provision of services are reliant on partnership agreements between current trusts. One hopes that foundation trusts would continue to sign up to such partnership agreements; to work with other providers of healthcare to ensure that there was stability of provision; and to provide this seamlessness which people fear may be threatened by the advent of foundation trusts.
The difficulty with healthcare is that new technologies and techniques emerge, some of which can be extremely expensive. Changes in delivery of healthcare can dramatically alter the way that facilities are used. We have seen that rapid changes, such as keyhole surgery, have altered the face of surgery and increased short-stay surgery. There is also the example of day surgery. So changes that a foundation trust undertakes will have an impact on other providers in the area.
My concern, and the reason that I have added my name to the amendments, is to ensure that such developments occur for the benefit of patient care. Furthermore, in the process of a development, or a planned decrease in services by a foundation trust, consideration must be given to the impact on the whole. My other concern is that this involves public money. If a large amount of money is being used, for example on the electoral processes, that inevitably will divert finance away from clinical care and may in itself destabilise the delivery of services. Therefore, there must be complete openness and transparency about how health economies are being handled.
Baroness Greengross: I also support the amendment. I am worried about balance in a local area of the work of the foundation trust and the work of other perhaps badly funded local hospitals. Somewhere, and I am not sure that this is the right place, the word "equitable"or "equitability", I think it has been calledneeds to be inserted, so that groups of people who are perhaps quite expensive and difficult to care for are not left out. That is particularly relevant to mental health patients, elderly patients and others with chronic illnesses, who may, if the word does not appear anywhere, be neglected in this exercise.
There is the balance of groups of patients and there is the balance of funding, which will come up again later. The capping arrangements mean that more money will go to the foundation trust because it is doing its job very well and will take money away from the poor hospital down the road. If we could get that word inserted here so that the whole annual evaluation looks at the local community and at whether everyone who needs access to healthcare is getting it, then we could measure whether the foundation trust is of benefit to the whole community. I feel it is very important that that is part of this arrangement.
The Lord Bishop of Worcester: Amendment No. 78, like the later Amendment No. 143, would allow the concept of the foundation trust to be regarded as the experiment which it undoubtedly is. Being fairly agnostic about the value of the Government's new policy on this matter, it seems to me that it would be much better to create a culture in our society where massive structural change is evaluated and undertaken gradually. Therefore, those points in the Bill and the amendments about those points seem to be very much worth taking seriously.
I speak in the context of a diocese that has been through the massive controversy surrounding change in medical provision in the form of Kidderminster Hospital, which will be well known to Members of the Committee. I was never persuaded that the policy carried out was a mistake; but I was certainly persuaded that the culture of enactment that allowed for so little public scrutiny, examination and reflection had a major effect on making the project unacceptableeven to the electoral embarrassment of the Government. So the amendments are well worth serious consideration.
Baroness Cumberlege: I, too, support this group of amendments. They refer to issues raised earlier, when we discussed the balance of the health economy. I do not want to go into all that again, because time is getting on, but I support what the noble Baroness, Lady Finlay, and the right reverend Prelate said.
The health service is very complicated; moving one piece of it greatly affects other parts in the local economy. The primary care trusts are now getting under way and there are the new government proposalswhich I supportfor patient choice, under which patients will be offered up to five providers of healthcare when the GP decides to refer them. All those things will change the face of the health service considerably and may introduce a degree of instability that we have not yet experienced.
I am all for excitement and changeit is good to be pioneering new thingsbut the right reverend Prelate is absolutely right that we must be absolutely certain what their impact will be. Reporting mechanisms are a modest way to try to assess that.
Lord Hunt of Kings Heath: I fear that I am not in sympathy with the amendment tabled by the noble Lord, Lord Clement-Jones. It would be a drag on each foundation trust to have to go through the motions of writing up a report on that basis, especially as it is ill conceived. From some comments made by Members of the Committee, there appears to be an assumption that foundation trusts will somehow enjoy more favourable financial benefits than non-foundation trusts.
I can see no way in which that will happen. The financial benefits that will accrue through the choice mechanism will apply to all trusts that can offer more services to the public. I do not see how foundation trusts will gain financially over non-foundation trusts. The key advantage has nothing to do with financefor me, it never has; it has to do with governance. That is why I am so concerned about how the policy has started to develop. The whole point of foundation trusts was to get out of micro-management, because
I know that there have been arguments about finance and access to capital but that was never an issue that I found especially attractive. We should not think that foundation trusts are about access to more finance, because that is unsustainable and is clearly not going to happen. I worry that if we accepted the amendment tabled by the noble Lord, Lord Clement-Jones, a report would have to be made to the regulator. Surely we are looking for light-touch regulation. We are not looking for a regulator to replace the Secretary of State. The noble Lord wants each foundation trust to report to the regulator annually. That is an open invitation for the regulator to get involved in the minutiae of a foundation trust's activities. We have safeguards. The Bill provides a duty of co-operation, a commissioning process and CHAI. For goodness sake, let us not weigh down the new foundation trusts by having to engage in the bureaucracy of writing a completely unnecessary report.
I have more sympathy with the noble Earl's amendment. I am sure that the breakdown of the costs will be open to public scrutiny. But the noble Earl draws attention to the issue of the costs of the election and membership management. I have always believed that it will cost money. The noble Earl's estimates seem about right. They are certainly the sort of figures that I have heard from prospective trusts. Some foundation trusts have talked about thousands of members, which we would encourage, but there will be a cost for each member. That is inevitable because members will want to engage in communication and meetings, and the elections themselves will cost a great deal.
The noble Earl asked whether it was worth the candle. It was always the intention to create strong community-based organisations. That, for me, would be worth the candle. If, however, the boards of governors are simply to be souped-up patients forums to advise, one must ask about the cost-benefit analysis. The answer to that question must come on Report. The Government need to listen to the debate and come forward with a much more definitive view on what the organisations are about. It is to be hoped that they will confirm that the organisations are to be community-based with a governance structure that allows the community not to advise, but to be part of the decision-making process.
Lord Warner: Before responding to the amendments in detail, I shall comment on costs and support for applicants for NHS foundation trust status. I have already tried to bring out, particularly in our debate on Amendment No. 35, the extent to which support such as the government sourcebook was being developed to help people as they trod the path towards foundation trust status.
It is worth bearing in mind that applicants have already received #100,000 in direct financial support and an additional #75,000 will be made available shortly for the next stage of work. We have given categorical assurances that NHS clinical services are
In response to the right reverend Prelate, we are doing nothing to suggest that we do not wish to operate on the basis of reflection and thoughtful learning from experience. I am sure that the regulator will take account of the experience of first-wave trusts in the guidance that he gives for future waves of applications. I indicated a willingness to review the governance arrangements in respect of the experience of this first wave. It is not necessarily to this Government's advantage to dwell too long on the Kidderminster election, but if there had been a board of governors in place in Kidderminster we may not have got into that situation and there may have been a happier outcome for all concerned. It is not that such situations do not arise, but a question of whether the new governance arrangements make the handling of those situations easier for local communities.
On Amendment No. 77 moved by the noble Earl, Lord Howe, we agree in principle that the costs of the elections and managing membership should be clear, but the annual reports of each NHS foundation trust, which will be laid before Parliament, will clearly set out those costs. We do not, therefore, believe that the amendment is necessary.
We believe that Amendment No. 79, which would require annual reports to relate to a financial year, is also unnecessary. Of course it is sensible for the annual reports to be prepared over the period of the financial year. However, the regulator has the discretion to ensure that that is the case under paragraph 24(3)(c) of Schedule 1. It is conceivable in the future that a new wave trust has a part year set of arrangements. That is not impossible, so we want to give the regulator some discretion to behave sensibly.
On Amendments Nos. 80 and 81, which would provide for the regulator specifying the content and time period of forward business plans, I have sympathy with the principle that the regulator should he able to specify what information he requires in NHS foundation trusts' forward business plans, but do not think that needs to be set out in legislation. The regulator could already specify his information requirements either by issuing guidance on the content of plans or through requirements in terms of authorisation.
On the time period that forward business plans are to cover, the current legislation ensures that each foundation trust prepares a plan for each financial year which must be drawn up in consultation with the board of governors and which must be made publicly available. That is a minimum requirement to ensure that governors are involved in the annual planning process and that there is accountability to the public. It does not preclude the preparation of plans covering a longer time period for strategic purposes. Indeed, as
We believe that foundation trusts are likely to continue preparing strategic plans to cover mid to long-term strategy development. It would be reasonable for these plans to be drawn up in consultation with the board of governors. Therefore, we do not believe that those particular amendments are necessary.
On Amendments Nos. 78, 83 and 107, which relate to the local health economy and about which several noble Lords have expressed concern, I will briefly take noble Lords through the arguments, which have been touched on in previous discussions. The creation of trusts will support the development of NHS services in the local health economies. My noble friend Lord Hunt brought out some of those points. Foundation trusts will exist to provide and develop healthcare services for NHS patients in a way that is consistent with NHS values. More than 95 per cent of their income will continue to come from NHS commissioning. They are not an island, but are part of that local economy. As my noble friend said, they will be under a statutory duty to work in partnership with other local NHS organisations and social services to deliver integrated packages of care, centred on the needs of patients.
Foundation trusts will be expected to use new freedoms in a way that fits with key NHS principles and does not undermine the ability of other providers in the local health economy to meet their NHS obligations.
Under Clause 3, the regulator will be required to exercise his functions in a manner that is consistent with the Secretary of State's general duties, including the duty to promote and provide a comprehensive health service and to provide clinical facilities to universities with medical or dental schools. CHAI will be able to carry out reviews and inspections of all NHS organisations, including foundation trusts. It will be an independent source of information on healthcare provision across the NHS, including information on the quality and effectiveness of healthcare, availability and access to healthcare and economy and efficiency. CHAI will build up a rich volume of knowledge that will be available to everybody.
Moreover, any review that a trust carried out on another organisation, something that is touched on in one of the amendments, would be unlikely to be welcomed by that organisation. Nor is the NHS foundation trust well placed to carry out such a review. Its reports would not be seen as independent, and their efforts would be better expended in furthering co-operation. The review idea does not seem to be well conceived.
Strategic health authorities have been touched on. I have described them as the local headquarters of the NHS. They will continue to have a significant role in shaping the overall development of services in their area, backed by the commissioning decisions of primary care trusts.
Against that background, Amendments Nos. 78, 83 and 87 are disproportionate. Creating NHS foundation trusts will not destabilise the local health economy. The amendments are ill conceived: foundation trusts would not be best placed to carry out a review of other NHS organisations. Finally, the amendments are unnecessary because CHAI will carry out reviews of healthcare for all NHS organisations.
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