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Lord Warner: I share the noble Earl's pleasure at moving to Part 2 of the Bill. It is appropriate that we should celebrate with such a bumper group of amendments to discuss. Phonetically, the amendments would mean that CHAI would become "itchy" in shorthand. I wonder whether Sir Ian Kennedy and his colleagues would thank us if we agreed to such amendments. In particular, as I shall suggest, they would add nothing in legislative terms. A name does not guarantee independence. The Bill ensures that both CHAI and CSCI will be more independent of government than the bodies from which they are formed; namely, the Audit Commission, CHAI and the National Care Standards Commission. The acid test of CHAI and CSCI's independence will be how independently they behave in the discharge of their functions and how they report to Parliament.

On Amendments Nos. 211 and 235, we have made it clear that we are committed to ensuring the independence of CHAI and CSCI. I am grateful to my noble friend Lord Hunt for his excellent statements in support of our position, which, I think, accurately describe what we are about. However, the Secretary of State must continue to be accountable to Parliament for the work of both inspectorates. In keeping with that principle, the Bill must provide for the Secretary of State to have limited—and I emphasise limited—checks and balances on how both organisations perform their functions.

The Bill currently contains powers in Clauses 51 and 78 to require CHAI and CSCI to carry out an inspection of any particular body or service. The Bill gives the two inspectorates a high level of discretion about how they exercise their functions, so the Secretary of State will not be able to influence how they exercise them day to day. However, the Secretary of State remains responsible for the health and social

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care services that they are inspecting and might need to ask them to carry out a review of a particular authority or service if concerns are raised. For example, such a power would be used when there were considerable concerns about a local authority's child protection services, such as those raised by the case of Victoria Climbie. It is therefore important for the Secretary of State to be able to exercise this function in a speedy manner when the need arises.

CHAI and CSCI will be markedly more independent than other inspectorates with a like remit. In particular, most other NDPBs, such as the Audit Commission, can be directed by Ministers about any matter. The Bill does not include such a power for CHAI or CSCI and instead gives both inspectorates a very wide discretion on how they exercise their functions, allowing the Secretary of State to direct the inspectorates only in certain limited circumstances. For example, it would be unprecedented for legislation setting up an NDPB not to include direction-making powers that the Secretary of State could use if the organisation were seen to be failing to exercise its functions properly—hence the specific rather than general provision in Clauses 130 and 131.

It is important that the Secretary of State can give a general direction on matters of government policy to which the inspectorates must have regard—a requirement to comply with proper procedures of good government accounting, for example—hence, again, the specific provision in Clauses 128 and 129. The same power to make directions to have regard to government policy applies to Ofsted, and I doubt whether noble Lords would regard Ofsted as a body that lacks independence.

Finally, it is important that the Secretary of State can ensure that the criteria and standards which the inspectorates will use to review NHS and local authorities are fair to the bodies being inspected and reflect national standards, to which we will come at a later stage. Hence the specific requirements for the Secretary of State's consent to the inspectorate's criteria in Clauses 49, 59, 77 and 83.

The Bill includes other provisions that will emphasise the independence of the bodies, including provisions to: enable the Secretary of State, or the National Assembly in Wales, to delegate the function of appointing the chair and other commission members of both inspectorates to the NHS Appointments Commission working to Nolan Principles; give the chair and commissioners considerable security of tenure so that they may be removed only when they are deemed unfit or unable to perform their functions; and to provide for the appointment of CHAI and CSCI chief executives by the commission members themselves. I recall that, in the case of the Audit Commission, there must be government approval of the chief executive. There are therefore real differences between the new bodies and some existing bodies that are accepted on all sides of the House to be perfectly independent.

Other provisions require both commissions to make an annual report direct to Parliament, or the National Assembly for CHAI, on the state of health and social

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care in England, or Wales in the case of CHAI. The only direction and regulation-making powers in the Bill are those that we believe to be absolutely essential, for the reasons I have given. Noble Lords will have the opportunity to scrutinise any regulations when they are laid before Parliament.

Members of the Committee have expressed concern about the regulation-making powers that will allow the Secretary of State to approve the criteria that CHAI and CSCI draw up. It is important to be clear that the commissions themselves will be fully responsible for drawing up the inspection criteria. However, it must be right that the Secretary of State, who retains parliamentary responsibility for the work of the commissions and for drawing up national standards, ensures that the criteria and standards themselves fit together. We do not want to create a situation for the NHS in which the standards and criteria do not fit. That would cause a great deal of difficulty for people throughout the country who are being inspected against criteria that measure performance against national standards.

We would not wish to place a specific duty on CHAI to have to consider requests to undertake reviews and inspections at the behest of all and sundry, which is effectively what Amendment No. 292 would require. We would want CHAI to concentrate on its core job. Within that, it is appropriate for the Secretary of State to be able to request CHAI to undertake additional reviews or investigations when there are serious concerns.

Turning to the issue of appointments, I remind Members of the Committee that Clause 183 enables the Secretary of State to delegate responsibility to the NHS Appointments Commission for all or part of his function of appointing members to public bodies that have functions relating to health and social care or the regulation of professions associated with health or social care—including CHAI and CSCI. In addition, Clause 183 and Schedule 12 also permit the appointment of lay members of health profession regulatory bodies. In that context, as we have already said, there are good reasons for deciding that public appointments are not automatically delegated.

Some of the differences expressed by Members of the Committee have arisen because we have not given an undertaking to delegate everything. We have created a capacity to do that, but we are reserving appointments or certain aspects of appointments in particular cases to the Secretary of State. The Government believe that that is sensible.

In some cases, Ministers may wish to delegate the initial selection and sifting processes but not the final appointment itself, or Ministers may wish to retain direct responsibility for certain appointments, or take back responsibility for appointments. We have tried to create some flexibility to take account of all sets of circumstances. However, I repeat what I have said on previous occasions. The Government envisage that the overwhelming majority of national appointments for which the department is responsible will be delegated

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to the NHS Appointments Commission, with only a small proportion of appointments being made directly by the Secretary of State.

Examination of what the Government have been doing shows that they have moved in this direction far more than previous governments were willing to do. If noble Lords need to judge us in terms of our future behaviour, our past behaviour should be examined, and that has been to give away a great deal more of the appointment functions in the health service than previous governments have been prepared to do. The position regarding CHAI and CSCI has already been made quite clear. The Government are committed to delegating all stages of the appointments processes for both bodies to the NHS Appointments Commission for both chairs and non-executive members. Ministers will not be involved, other than—this is important—in setting the criteria against which candidates are judged.

Some of the amendments would confer inappropriate functions and powers on the NHS Appointments Commission, rather than on the Secretary of State. In particular, Amendment No. 243 would require the Secretary of State to obtain the consent of the appointments commission before making any regulations for the appointment of the chairman and other members. It would be inappropriate for the Secretary to State to have to ask the appointments commission whether he could make any regulations.

The function of the appointments commission is to make appointments to CHAI, CSCI and others and to remove persons from office in specified circumstances. It is not a function of the commission to become directly involved in the making of detailed regulations about the conditions of appointment. We should not seek to burden a body that is intended to carry out recruitment and appointment in that way. Amendment No. 242 would allow the commission to make the regulations. That is neither legally possible nor appropriate.

Amendments Nos. 220, 244 and 245 would place the decision about whether an individual should be suspended from office in the hands of the appointments commission, rather than the Secretary of State. It is consistent in a wide range of bodies that that function is in the hands of the Secretary of State. It is he, not the NHS Appointments Commission, who will be responsible for CHAI and CSCI and will, therefore, be held accountable to Parliament for their actions, if there is a problem. In special circumstances, it may be necessary to act quickly. We have discussed those issues before.

Amendment No. 468 seeks to make it clear in the Bill that appointments to CHAI and CSCI can be delegated. That is not necessary, for the reasons that I gave.

Amendments Nos. 223 to 230, 249, 251 and 252 would have the effect that the appointments commission, not the Secretary of State, would be responsible for determining the remuneration, other allowances and pension to be paid to the chairman and

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other members of CHAI and CSCI and any compensation payable, if there were special circumstances that made it right for a person for hold office. The noble Earl made much of the importance of those functions. It is proper that the functions should belong to the Secretary of State, as he sets the overall budget for CSCI and CHAI and, in consultation with the inspectorate, can ensure that the remuneration paid to the chair and other members is appropriate and proportionate. What is being asked for is simply not normal practice for such bodies.

I should have responded to the noble Baroness, Lady Howarth of Breckland. I do not think that, at this stage, we want to bring the Secretary of State into protocols on joint working. The convention with inspectorates of all kinds is that Ministers do not engage themselves in the joint working arrangements between bodies. That is best left to the good sense of the bodies themselves, in which we have great confidence, to organise joint working protocols.

4 p.m.

Earl Howe: I am not sure that the Minister has quite answered the question asked by the noble Baroness, Lady Howarth of Breckland, about the definition of "independence". In my book, it simply means "free from political interference"; that is what I think of as independence.

Nothing in my remarks was intended to impugn Sir Ian Kennedy or anyone else. That was not the point. My point was that the Bill was formulated in such a way that, when it suited the Government—this Government or any other—CHAI would be allowed to get on with its job and, when it did not suit the Government, the Bill allowed Ministers considerable scope to interfere. The powers are widely drawn.

Individual appointments—current or future—are not the issue. The Bill sets out legally binding ties to government. The Minister went through several of them. I see no virtue in anticipating debates on subsequent clauses—for example, Clauses 128 and 130, which relate to CHAI, or Clauses 129 and 131, which relate to CSCI. We will come to those, and they are important. Similarly, we should reserve for a later moment our debates on performance ratings, standards and criteria.

We have suggested that the word "independent" should be added to the names of the bodies. If the word is so superfluous, one must ask why the Government thought it a good idea to have "independent" as an epithet for the regulator. I imagine that the Government's intention was to make a declamatory statement, as it were, about what the post of regulator was all about. I have no problem with that. The Minister said that CHAI and CSCI would be more independent of government than the current bodies are. We will need to test that proposition as our debates proceed. To my mind "more independent of government" is not the same thing as "independent of government".

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It has been a useful debate, and I thank all noble Lords who took part. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 210 to 212 not moved.]

Clause 40 agreed to.

Schedule 6 [CHAI: Supplementary]:

[Amendments Nos. 213 to 218 not moved.]

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