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Baroness Carnegy of Lour: The noble Baroness certainly need not write to me, as she would just reiterate what she has been saying—she expressed a point of view. In this instance, as I have thought on several occasions, the Government should accept the spirit of the amendments and return with something like them. They should provide that a voluntary organisation must be able to show that its financial position is consistent with what will be its continuing responsibility if its application is accepted, and that it can meet the thresholds required—because they have already done so or they will be able to in the future. Those are good points. Could not the noble Baroness accept the spirit of the amendments?

Baroness Andrews: What we would expect of the NHS organisations putting themselves forward to be foundation trusts is no more nor less than we would expect of the non-NHS organisations. Clause 5 specifies the provision of goods and services and the ability to provide the constitution in accordance with Schedule 1. It conforms with what we expect NHS trusts to do. On that basis, I hope that the noble Baroness will accept that we are opening every possibility for these organisations to come forward when invited.

Earl Howe: I could not be more grateful to my noble friend Lady Carnegy for her support. However, there are two stages for a non-NHS body wanting to become a foundation trust. First, it should receive a certificate of incorporation as a public benefit corporation. Without that it cannot become a foundation trust. Uncharacteristically, the Minister did not give me a very good answer to my "may"/"shall" amendment because Clause 5(3) relates to the process leading to gaining a certificate of incorporation. When I first read that subsection, it appeared that (a), (b) and (c) were likely to be enough to gain a certificate—they were the necessary and sufficient conditions. However, the only trouble is with the word "may".

The Minister explained the inclusion of that word by saying that there may be wider considerations such as the way that approval of the certificate may affect the wider NHS. However, that is surely a consideration for stage 2, when the regulator considers the application for NHS status. It does not make much sense to deny a certificate of incorporation for extraneous reasons not contained in the subsection. Therefore, I am not particularly happy with the Minister's answer.

The Minister also suggested that my Amendment No. 126 was not necessary. I had understood that star status and the standards that CHAI will assess apply to NHS bodies. CHAI will be involved in the process of acute healthcare bodies. All sorts of other bodies may apply for foundation status that CHAI will not have to assess. It is entirely appropriate that we insert something in this clause to say that those bodies should achieve equivalent standards to those achieved by NHS bodies. That was the reason for the amendment. Again, the Minister did not answer that point as fully as I had hoped. Nevertheless, we will have the

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opportunity to return to this matter on Report. Time is moving on and it is right for the Committee that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 126 to 128 not moved.]

Clause 5 agreed to.

Lord Clement-Jones moved Amendment No. 129:

    After Clause 5, insert the following new clause—

(1) The Secretary of State shall—
(a) by regulations require that an NHS trust proposing to make an application under section 4(1) or any person proposing to apply under section 5(1), shall first consult prescribed persons;
(b) by regulations prescribe persons to be consulted which shall include—
(i) the NHS trusts and Primary Care Trusts in the area in which are resident all or any of the persons to whom the applicant NHS trust has provided goods or services for the purposes of healthcare, or to whom the applicant person (as the case may be) intends to provide such services if its application is successful,
(ii) the Patients' Forums for those NHS trusts and Primary Care Trusts, and
(iii) local staff side trade unions and such other persons as the Secretary of State considers may be affected by the application.
(2) In section 7 of the Health and Social Care Act 2001 (c. 15) (functions of overview and scrutiny committees)—
(a) in subsection (3) (matters to be covered by regulations) at the beginning for "may" substitute "shall";
(b) in subsection (3)(b) at the end insert "which shall include all matters prescribed under subsection (3)(c) below,";
(c) in subsection (3)(c) at the end insert "which shall include any application or proposed application under section 4 of the Health and Social Care (Community Health and Standards) Act 2003"."

The noble Lord said: In moving Amendment No. 129 I shall also speak to Amendments Nos. 139 to 142 and 200. Clearly, as Committee Members will see from the Marshalled List, we on these Benches feel so strongly about consultation that we have tabled one amendment twice, just to confuse the department in replying.

The new clause set out in Amendments Nos. 129 and 200 would require the Secretary of State to regulate for public consultation on applications for foundation trust status. Many of us have now seen quite a bit of material emanating from foundation trusts. I have personally seen material from two of my local hospitals and other material from Moorfields Eye Hospital, all of which differs considerably between hospitals and is probably constructed in different ways. I have also read the guidance on foundation trusts that is available, which is, in a sense, a precursor of the regulations due to be made under the Bill.

A quiet aside to this debate is that the Government seem to jump the gun on these matters. We are debating a very important aspect of the Bill, yet all the

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time the steamroller moves forward. Only recently, the noble Lord, Lord Warner, announced a large number of additional trusts to the ones already earmarked that had made their applications. The juggernaut rolls on despite the fact that the Government do not know at this point whether the legislation will actually pass.

Be that as it may, the intention of the amendments is to set out the process of consultation in a much clearer fashion than would otherwise be available by regulation. I recognise the intention is to have provisions by regulation, but as the Bill goes through the House, there is no guarantee that the draft regulations will be available to us. All that we have is the guidance made available to those current applicants for foundation trust status.

The new clause would require the Secretary of State to require public consultation on applications for foundation trust status. Both the NHS trusts and non-NHS bodies applying—this is one of the most important points in this set of amendments—must consult relevant patients forums. In the case of NHS trusts, any relevant local authority overview and scrutiny committee must also be consulted. That is because existing legislation only requires consultation with such committees by local NHS bodies. The amendment would also ensure that the overview and scrutiny committee's right of referral to the Secretary of State will apply if it is unhappy with the merits of the NHS trust proposal. That would ensure that local people would have a say through the local democratic process in whether or not an NHS trust in their area applies for foundation trust status.

In the case of non-NHS applicants, overview and scrutiny committees do not have rights of referral as these apply only in respect of local NHS consultations. As under Clause 5, as we discussed earlier, any body can apply to be a foundation trust, even if not an NHS organisation. The amendment would also require the Secretary of State to require consultation by such organisations with all local patients forums. As patients forums—and indeed CHCs, if the Bill goes through and they still exist—have broader referral powers than overview and scrutiny committees, which may not exist in every area, that would ensure that there is a local mechanism to refer to the Secretary of State an unwelcome application for foundation trust status from a non-NHS organisation.

The amendments integrate, therefore, the foundation trust application process with the new system of patient and public involvement that this Government have been at such pains to introduce—the word pain is what springs most to my mind when I think about the long and convoluted way in which the patient and public involvement system that we now have was introduced.

On Amendments Nos. 139 to 142, the first amendments of the group require the regulator to take account of the outcome of any public consultation in giving an authorisation to foundation trust status. The second amendment suspends the application process if an overview and scrutiny committee for a patient's forum exercises referral rights under new Clause 5.

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Until the Secretary of State has responded to any referral under the new clause and confirmed his continued support for the application, the regulator may not proceed.

We believe passionately that devolved structures such as the foundation trusts must have the wholehearted support of the local community. That is exactly what the amendments are designed to achieve. I beg to move.

6.30 p.m.

Baroness Finlay of Llandaff: I strongly support the amendments. They insist that the local population should have an involvement and a say. There may be groups in the local population that would not come forward to register themselves as members of any body and may not know the routes by which they can make their voice heard. That is why there must be an active process of consultation.

The other reason why I believe strongly that a local consultation process is required is that there may be local intelligence, particularly about new bodies that may come forward later, apart from the standard NHS hospitals. That local intelligence may be crucial to the regulator to inform the decision. There may be issues that are not well publicised but are well known on a local grapevine. That grapevine will be tapped into only by a rigorous consultation process.

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