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Baroness Andrews: I shall deal specifically with the terms of the amendment. It invites us to explore the relationship between SHAs and foundation trusts. It is an opportunity to make clear that, while foundation trusts are firmly within the NHS and subject to national standards of performance, they will not be overseen or performance-managed by SHAs. Each NHS foundation trust will take full responsibility for the outcomes that it achieves as regards volume, quality and responsiveness to patients. So they will not be required to obtain permission from, or to provide information to, any SHA. The amendment is not necessary.

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I shall attempt to answer the noble Earl's other questions. Strategic health authorities—the local headquarters of the NHS, if you like—will continue to have a significant role in establishing and implementing the vision of the local health economy, the long-term plan and the shape of the overall development of services in their area, backed by commissioning decisions of primary care trusts. In addition, we expect that SHAs, together with higher and further education institutions, will continue to be involved in making arrangements for education and training through workforce development confederations. So, however the foundation trust programme evolves, there will be a continuing role for the strategic work to be done by SHAs.

The noble Earl also asked about commissioning arrangements. The strategic health authority has responsibility for specialist commissioning. We know that those 37 areas of specialist commissioning are very important aspects of the NHS's work because they deal with some very rare conditions with very small groups of people who need to be thoroughly protected—for example, aspects of renal care or paediatric services. The relationship between SHAs and foundation trusts in relation to commissioning will be as it is now. It will be contracted in the same way, and the same arrangements will apply to the relationship that now obtains with the trusts. But the nature of the contract will change. Contracts will be binding and legal. We are making those for foundation trusts because we want greater transparency so that we know exactly what will be delivered. We want better security in innovation and development. The changing nature of the contract should enable us to deliver that. There will be no change in the capacity to commission or the trust's ability to commit to delivery.

The noble Earl made a point about the role of the modernisation agency and the position of SHAs. To the extent that any public funds are made available for any central initiative—for example, the national framework initiatives—foundation trusts should have access to an equitable proportion of those funds, wherever the source is. Such funding might be paid by way of a grant or injection of public dividend capital from the Secretary of State under Clause 11. That could be distributed by SHAs for that purpose.

The noble Earl also raised the question of CHAI. It will continue to have a role in the inspection of foundation trusts. Its functions will closely mirror its functions in relation to other NHS bodies. It will encourage improvement, carry out annual reviews, publish performance ratings and carry out value-for-money studies. But the main difference is that they will report those aspects, not to the Secretary of State, but to the independent regulator.

I confirm what the noble Earl said about the duty of partnership. It is in the Bill for a purpose. That duty of partnership is very much to ensure that, although foundation trusts are a different animal, they are firmly within the NHS and will work with SHAs in the appropriate way. For example, they will be able to continue to provide much of the information that they

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provide to SHAs at present, as part of their own commissioning arrangements. We look forward to that partnership flourishing in the future.

Baroness Cumberlege: In the past, we have looked at SHAs as holding the ring in the local economy. We know that in the future some people will be outwith the ring—foundation hospitals. If a foundation hospital finds that a specialist service such as neonatal intensive care, for example, will be uneconomic, or that it cannot attract the necessary staff, and decides to discontinue the service and not to seek a contract with the primary care trust, the regulator can come in and look back at something that has already taken place, but he cannot prevent something happening. What happens in those situations?

Baroness Andrews: As I understand it, the SHA will have a view on that. What we expect to happen is largely what happens now: people, including the other commissioning bodies, will get around the table to discuss the needs of the local community and how they can best be met. There may be another contract for specialist commissioning with another hospital in another area that can offer an even better service. I would expect such discussions to happen just as they do now.

Baroness Finlay of Llandaff: Perhaps I may explore further the information flow that will be available to a strategic health authority. If I heard the Minister correctly, the foundation trust will not have to report to the strategic health authority. So the strategic health authority will be able to invite information, but it will be up to the foundation trust to give or withhold whatever information it might perceive to be in its best interest. On the basis of the information it receives, the strategic health authority will take a decision on specialised commissioning. I am concerned that they will then be able to ask CHAI for information founded on only an inspection that it might have carried out some time ago. Changes that might occur in the local health economy could be disguised in the name of commercialism. I do not see how the strategic health authority will be able to obtain detailed information if the foundation trust decides that it does not want to disclose it and just wants to have the contract continued.

I am sorry to push the Minister further, but I am worried about an information gap appearing between those responsible for highly specialised commissioning and those who will provide the services. Until now, as the noble Baroness, Lady Cumberlege, said, the strategic health authority has had a duty to hold the ring on services in an area, and has done so.

Baroness Andrews: One of the points that I did not make in response to the noble Baroness, Lady Cumberlege, was that the regulator can also protect specialist services essential to the NHS, because he can require the provision of certain services under Clause 14. That extra security is built in.

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In response to the very detailed question about information flow, I understand that the SHA cannot require the trust to provide information, for the reasons that I explained. But the sort of information coming forward from the trust at present, which informs its commissioning process and delivery, will obtain and continue to flow in the same way. I do not share the noble Baroness's concerns about an information gap. But, if it would help, I will write to her to try to spell out, for the purposes of the debate and for other Members of the Committee, how we see the process working. As the noble Baroness must know, the contracts between the trusts and commissioners are quite detailed. The changing nature of the contract may involve more information being exchanged than at present. We will certainly write to noble Lords and set that out in a little more detail.


Baroness Masham of Ilton: As there are queries and concerns about specialised services, will the Minister spell out to us all, rather than just to my noble friend, the exact duties that strategic health authorities will perform?

Baroness Andrews: Yes, I am happy to do that for the noble Baroness, Lady Masham.

Earl Howe: Not for the first time, the Minister has given the Committee a full and enlightened reply, for which I am very grateful. In many ways, her reply covered even wider ground than my own remarks and we should be grateful for that. Nevertheless, the points raised by my noble friend Lady Cumberlege and the noble Baroness, Lady Finlay, were extremely well put. They are not alone in feeling unease about specialised commissioning and quite what power and leverage the strategic health authority will have in those circumstances. I heard what the Minister said about the power of the regulator, but this is one instance when her offer to enlighten us further by way of a letter will be gratefully received. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 185 not moved.]

Clause 18 agreed to.

Clause 19 [Information]:

Earl Howe moved Amendment No. 186:

    Page 8, line 41, leave out from first "the" to end of line 2 on page 9 and insert "regulator requires"

The noble Earl said: Once again, in Clause 19 we see the phenomenon of the independent regulator being elbowed aside by the Secretary of State. Subsection 1(a) specifies that an authorisation,

    "must require an NHS foundation trust to disclose such information as the Secretary of State specifies to the regulator".

Once again, why is it necessary for the Secretary of State to specify anything at all in this context? Why is not the regulator able to specify the information that he requires? Why does the Secretary of State also need

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to receive information? I fear that foundation trusts will find that they are supplying the same amount of information as they were before they became foundation trusts. This time, however, they will be sending it in two directions at once. They may actually find that they are churning out even greater amounts of paper than before if the Secretary of State and the regulator do not make a concerted effort to avoid duplication of data collection. That does not conjure up a happy picture because, although data collection is a necessary fact of life in any public service, I thought that the aim was to reduce bureaucracy to foundation trusts not to perpetuate it at current levels.

Nor do I fully understand why it is necessary in Subsection (2) to empower the regulator to ask any other health service body to deliver to him any information that he may request. That provision is extremely sweeping. For a start, it seems to ignore common-law rights of patient confidentiality. I hope that the Minister can reassure me on that particular issue. However, the provision also suggests that the regulator will be able to demand information from PCTs and non-foundation acute trusts that they may already be sending to the Secretary of State. Again, that is a recipe for duplication. To the extent that the information requested by the regulator is not information to which the Secretary of State has access, one has to ask why such an additional burden needs to be imposed on health service bodies. I beg to move.

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