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Baroness Finlay of Llandaff: I hope that I may interrupt the Minister for a moment. I thank him for

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giving way. Will he clarify the line of communication that will be established between the National Assembly for Wales and the regulator when a trust applies for foundation status which has a contract to provide a service which is not provided within Wales? I am concerned about whether there is a formal line of communication in that regard.

Lord Warner: It is for the Secretary of State to consider applications for trust status. No doubt he will take account of the kind of considerations that the noble Baroness mentioned when an application is made. In my experience, if the National Assembly for Wales has concerns about anything it is usually able to find a way to express its concerns and put its points across to all those who need to receive the relevant messages.

Although I applaud the sentiments of the amendments spoken to so eloquently by the noble Baroness, Lady Barker, their inclusion in the Bill is largely unnecessary and would considerably confuse the situation. I do not wish to take a long tour through discrimination legislation but it is worth bearing in mind that we already have on the statute book a Human Rights Act. Section 6 provides that it is unlawful for a public authority to act in a way that is incompatible with human rights. Such public authorities would include the independent regulator, NHS and independent health and social care bodies, CHAI and CSCI, as by definition at Section 6(3) of that legislation "public authority" includes,

    "any person certain of whose functions are functions of a public nature".

The effect of that is when making decisions such bodies must act in a way which is compatible with the convention. The Sex Discrimination Act, the Race Relations Act and disability legislation provide very particular protections for particular groups. Those Acts incorporate processes for dealing with discrimination and apply both in employment situations with particular individuals and to the actions taken by a particular public body.

I suggest that the regulator, CHAI and CSCI are also being created for specific reasons. The regulator is being established to regulate healthcare provided by a foundation trust; CHAI is to be responsible for the inspection of NHS bodies and the regulation of independent healthcare providers; and CSCI will have a similar remit in relation to social care. Clearly the primary considerations of those bodies will need to be the inspection and regulation of the services with which they are concerned. Of course that does not mean that the regulator, CHAI and CSCI, or the bodies with which they will be concerned, will not take account of the need to promote equality and combat discrimination. But as I said, anti-discrimination legislation of the kind I have mentioned already exists and it provides clear mechanisms for dealing with those kind of issues. The legislation will apply to NHS foundation trusts, the regulator and the new inspectorates, just as it currently applies to NHS and social care bodies. We have not changed the obligation on bodies related to the NHS and social care to take

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account in their behaviour and conduct of anti-discrimination legislation. The amendments are unnecessary.

Baroness Barker: I thank the Minister for that reply, which I rather suspected would be along those lines. It is therefore important to explain that, while I understand that equality legislation as it stands has not been changed, one reason why the amendment was tabled in such a form is that there is some doubt about the extent to which that legislation applies to healthcare. That is why the much tighter and neater form of expression of how equality legislation needs to cut across the whole of the health service—it is right to include the regulator, CHAI and CSCI in those functions—is important. The drafting of the amendment makes much clearer what the outcomes of that should be, without recourse to other legislation.

That said, I accept in part some of the Minister's comments about how existing legislation will be binding on some functions of some of the new offices. I shall study his reply in detail, and may come back to the matter at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 [Applications by NHS trusts]:

[Amendment No. 117 not moved.]

Earl Howe moved Amendment No. 118:

    Page 2, line 10, leave out from "trust" to end of line 11.

The noble Earl said: I shall speak also to Amendments Nos. 123 and 130. Amendment No. 118 is very simple. It is designed to ask the Minister why, when a hospital applies to the regulator for authorisation to become a foundation trust, it is necessary for the Secretary of State to endorse the application in advance. That amounts to a duplication of the application process. I imagine that a trust would have to put a detailed case to the Department of Health for the Secretary of State's consideration. We do not know what form that case will have to take; the Bill is silent on that, and silent on the criteria that the Secretary of State will use to make his decision. We do not know how much time that element of the application process will add to the process as a whole.

I cannot see why that duplicated approvals process is needed, or why it is necessary to dilute the autonomy and independence of the regulator, in whose hands the decision is supposed to rest. The Bill lays out quite clearly the matters on which the regulator must be satisfied before issuing an authorisation. Why cannot the regulator simply decide whether an application by an NHS trust is appropriate and worthy of approval?

One is driven to think that, in reality, the decision will rest not with the regulator but with the Secretary of State. After all, that is the position with the first wave of foundation trust applicants. It is Ministers who will decide which of the current applicants are to become foundation trusts in April 2004. The regulator does not yet exist. If the Secretary of State decides that he can support an application, are we really meant to imagine that the regulator will turn it down?

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Conversely, if the regulator approves an application and the Secretary of State disagrees, what happens then? A veto in advance by the Secretary of State would be a very considerable blow to a hospital trust, but there is no way that it could then look to the regulator for any comfort, as the decision would have been removed from it.

If my criticisms of the Secretary of State's involvement apply to applications from NHS trusts, they apply with even greater force to applications from non-NHS bodies. I find it quite difficult to imagine a private or voluntary-sector body applying of its own volition to become part of the NHS. Be that as it may, I simply do not see why the regulator should not be entrusted with the responsibility of assessing and authorising such applications. The Secretary of State's prior involvement makes the whole decision-making process politically based rather than merit based. It takes political interference too far.

The Minister may well say that the Secretary of State has a legitimate interest in the decisions taken by the regulator in the authorisation of foundation trusts. I see that that is so, which is why I have tabled Amendment No. 130. It would allow the Secretary of State to object to an application if he had reasonable grounds for doing so. That is different from what the Bill states, which is that an application cannot even be made to the regulator without the Secretary of State's prior blessing.

My formulation represents a better balance and respects rather more clearly the autonomy and independence of the regulator as the person who takes the lead on authorisations. I beg to move.

5.15 p.m.

Lord Clement-Jones: On these Benches, we have very considerable sympathy with the amendments spoken to by the noble Earl. However, the focus of Amendments Nos. 122 and 128 is rather narrower than that put forward in his amendments.

What exactly is intended by Clauses 4(4)(b) and 5(7)(b)? Clause 4(4)(b) suggests that, after the NHS trust has made an application to become a foundation trust, it,

    "may do anything . . . which appears to it to be necessary or desirable for the purpose of preparing it for NHS foundation trust status".

Similarly, Clause 5(7)(b) suggests that, after the certificate has been issued,

    "the corporation may do anything . . . which appears to it to be necessary or desirable for the purpose of preparing it for NHS foundation trust status".

In our previous debates, the Minister has been reluctant even to contemplate that CHAI has a role to do with foundation hospitals. Obviously, that will remain a bone of contention between us. However, what limits are there on the foundation trust doing anything, such as making changes to clinical services and how it performs them? For that reason, we would add CHAI to the Bill. That would be a way at least to establish that in the run-up, before the trust has even

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started the process of performing as a foundation trust, CHAI has some handle on how it will perform its clinical services.

Our amendments are probing. The paragraphs are very wide and need some testing.

Lord Peyton of Yeovil: Once again, I find myself in cordial and warm agreement with my noble friend. I do not always find myself in that position, but this afternoon I do. One feature of modern governments that I profoundly dislike is the habit of mistrust. Having made an arrangement that on the face of it is perfectly justifiable, they then double-bank it.

The arrangement in the first instance is made, partly at any rate, for the Secretary of State's protection. If anyone comes to him and says, "I hope that you will give me permission here", he can say, "That is really a matter for the regulator". Now he will require some applicants to go through a previous hoop to gain his own approval. What is the point of that? If he approves an application, surely the regulator will not say, "I do not approve of that".

The provision is ridiculous. I hope that the noble Lord will take the amendment seriously. We all know that at the bottom of his brief will be the single word "Reject". I hope that the noble Lord is capable on occasion of some measure of disobedience to those monotonous requests. I hope that my noble friend will go so far—and he will have my support if he does—to say that the matter will be raised again on Report and thereafter and that we will certainly press it to a Division. I find hideous the idea that a Secretary of State can appoint a regulator and then say, "I have to allow for the possibility that he might screw everything up and make a hideous mistake and I have to stop him". It is nonsense and I hope that the noble Lord opposite has sufficient crumbs of candour left in him to admit it.

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