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Earl Howe: The reason that other regulators are able to act in a much more independent fashion is that they do not have the Secretary of State round their necks in precisely the way that the Bill will lead to with the regulator of foundation trusts. If, to be worth his salt, the regulator wants to assert his independence, he can do that by disagreeing with the Secretary of State. He would not do that flippantly or without cause, but it is not clear what scope he has to do that. Once the Secretary of State has examined the proposal in detail, presumably the process will have been gone through in a thorough and effective way and the regulator will be left standing there saying, "I agree".
Baroness Andrews: In simple terms, the regulator sets the terms of the authorisation as well as deciding whether to authorise. That is his critical role and the Secretary of State has no role in that.
Earl Howe: That is helpful. I thank the noble Baroness and shall reflect on that distinction. It is quite a nice distinction, but the noble Baroness is a very nice lady and that is an illuminating point to have made. In view of the progress we need to make today, I do not think that we should spend longer on the point. I beg leave to withdraw the amendment.
The noble Earl said: Amendment No. 119 raises a concern prompted by Clause 4(4)(a), which relates to the actions that an NHS trust may take once it has submitted its application for foundation status. It seems to me that an applicant for foundation status is likely to take its cue from this clause to rush ahead and set up membership lists, run elections and establish boards of governors. In doing so, clearly it will anticipate approval of the application by the regulator. But what if the application is not approved? In that event the trust will have gone to enormous trouble and expense for no benefit. In the process it will have raised public expectations only then to have to dash them.
I am concerned that the Bill gives explicit permission to trusts to jump the gun in that sense. Perhaps the Minister can explain what lies behind this provision and how he believes, if he does, that it will not lead to a waste of public money in those cases where applications are turned down. I beg to move.
Amendment No. 119 would prevent NHS applicants from effectively setting up shadow governance arrangements in preparation for authorisation as NHS foundation trusts. However, it is clear that they will need to do that in order to be ready for NHS foundation trust status. In our view it would not be acceptable for there to be a gap between the removal of the powers of the Secretary of State over the trust and the setting up of the local accountability mechanisms which replace them.
Furthermore, the regulator will need to see an applicant's proposed governance arrangements before he issues an authorisation in order that he can satisfy himself that they are in accordance with Schedule 1 and are otherwise appropriate.
I understand that the noble Earl may be concerned about wasted effort. However, I reassure him that he should be aware that there is nothing to prevent an NHS trust resubmitting an application. So, if a trust has done the work and the application fails, the work is not wasted because it can be taken forward in a resubmission.
We have discussed issues concerning the cost of governance and I see no need to repeat the arguments and assurances I have given. Amendment No. 119 could create a hiatus in those trusts which are ready to move forward to foundation trust status and we think that it should not be proceeded with.
The noble Lord said: The wind has been somewhat taken out of the sails of Amendment No. 124 by Amendment No. 9 tabled by the noble Lord, Lord Blackwell, on which we had an interesting debate. We on these Benches agreed with the response but it was probably not quite to the taste of the noble Lord, Lord Blackwell.
Amendment No. 124 concerns the issue of whether the status of foundation trusts is accordable under this legislation to bodies other than acute hospital trusts. It has been clearly indicated that in future mental health trusts will be able to benefit from this legislation. However, from the response given by the noble Lord, Lord Warner, on the first day of Committee at col. 188 of Hansard, it seems clear, although there does not appear to be a bar under the Bill, that it is not the intention of the Government to accord foundation status to primary care trusts at this stage under this legislation. Indeed, the noble Lord went as far as to say that he did not think this model was appropriate for primary care trusts.
Not only is the model set out inappropriate for acute hospital trusts, as is well known and as we have made clear throughout discussion of the Bill, it would be even worse when applied to commissioning bodiesprimary care trusts. We seek reassurance from the Government; indeed we want them to agree to such a bar in the Bill. I beg to move.
Baroness Andrews: I am grateful for that explanation of the amendment, which I initially found rather puzzling. It would, first, remove the requirement for applicants other than NHS trusts to obtain the Secretary of State's support. On previous amendments, we discussed why it is appropriate for the Secretary of State's support to be sought before any bodywhether an NHS organisation or otherwiseapplies for NHS foundation trust status. Although such organisations do not yet exist, as a later amendment will allow me to say in a little more detail they should be treated exactly the same and subject to the same criteria.
We had a good debate on Amendment No. 117 on the position of PCTs, which I do not want to rehearse. We have designed the modelI cannot think of a better wordin the Bill with provider organisations in mind. We are not opposed in principle to applying democratic or foundation principles to PCTs, but the time is simply not right.
I know that the noble Lord has been exercised during the past 18 months about capacity issues in PCTs and will agree that they are embryonic organisations. They are in development and have a way to go before they are doing the job that we want them to do. They are simply too new at present to be able to cope with another set of demands and requirements. So we cannot accept the amendment, and I hope that the noble Lord will agree that there are reasonable grounds for our not doing so.
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