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Lord Lipsey: My Lords, I rise briefly simply to remark that I think that if the composition of the board of governors were right and did not have all the flaws that I have pointed out, then this would be an extremely good amendment. Certainly it provides a means of moving forward. In fact, the reconciliation is that if you had the right people on the board of governors—representatives of primary care trusts and so forth—it would be all the more important that regard should be given to their views than if the board is merely elected by a very small electorate.

Lord Warner: My Lords, we are always willing to listen to good argument. My noble friend has done that and we are pleased to accept his amendment.

Lord Hunt of Kings Heath: My Lords, I am most grateful. In response to my noble friend Lord Lipsey, I very much agree that we do want to attract a high quality membership to the board of governors; that must be the aim of all foundation trusts.

On Question, amendment agreed to.

Lord Clement-Jones moved Amendment No. 97:


On Question, amendment agreed to.

Clause 2 [Independent Regulator of NHS Foundation Trusts]:

Lord Warner moved Amendment No. 98:


    Page 1, line 11, leave out "an officer" and insert "a body corporate".

On Question, amendment agreed to.

[Amendment No. 99 not moved.]

Lord Warner moved Amendment No. 100:


    Page 2, line 1, leave out subsection (2).

On Question, amendment agreed to.

[Amendments Nos. 101 to 105 not moved.]

Schedule 2 [Independent Regulator of NHS Foundation Trusts]:

Lord Warner moved Amendment No. 106:


    Page 115, line 6, leave out from beginning to end of line 15 and insert—

"Membership

(1) The regulator is to consist of a number of members (but not more than 5) appointed by the Secretary of State.
(2) One of the members is to be appointed as chairman and another as deputy chairman.
(3) The deputy chairman need not be appointed before the end of the period of six months beginning with the establishment of the regulator.
Tenure of office

(1) A person is to hold and vacate office as a member in accordance with the terms of his appointment.

6 Nov 2003 : Column 979


(2) But—
(a) he may at any time resign his office by giving notice to the Secretary of State,
(b) the Secretary of State may at any time remove him from office on the ground of incapacity or misbehaviour.
(3) A person is not to be appointed as a member for a period of more than four years.
(4) A person who ceases to be a member is eligible for re-appointment."

On Question, amendment agreed to.

[Amendment No. 107 not moved.]

Lord Warner moved Amendments Nos. 108 to 119:


    Page 115, line 17, leave out from "The" to end of line and insert "regulator is to pay to the chairman".


    Page 115, line 20, at end insert—


"( ) The regulator is to pay to the members (other than the chairman) such travelling and other allowances as the Secretary of State may determine.". Page 115, line 21, leave out "regulator" and insert "chairman"


    Page 115, line 22, leave out second "Secretary of State" and insert "regulator"


    Page 115, line 29, leave out "appoint" and insert "employ"


    Page 115, line 31, leave out sub-paragraph (2) and insert—


"(2) The terms may include—
(a) provision for the payment of pensions, gratuities or allowances to, or in respect of, any person who has ceased to be a member of the staff, or
(b) provision for contributions or payments towards such provision.

Superannuation".

Page 115, line 38, leave out "regulator" and insert "chairman or as a member of the staff"


    Page 115, line 40, leave out "regulator" and insert "chairman or employment as a member of the staff"


    Page 116, line 3, at end insert "or 3(2)"


    Page 116, line 3, at end insert—

"Procedure

(1) The regulator may regulate its own procedure and make any arrangements it considers appropriate for the discharge of its functions.
(2) The validity of any act of the regulator is not affected by any vacancy among the members or by any defect in the appointment of any member." Page 116, line 6, leave out "a member of his staff" and insert—


"(a) the chairman or deputy chairman or any committee,
(b) any member of the staff," Page 116, line 7, at end insert—

"General powers

(1) The regulator may do anything which appears to it to be necessary or desirable for the purposes of or in connection with the exercise of its functions.
(2) That includes in particular—
(a) acquiring and disposing of property,
(b) entering into contracts,
(c) accepting gifts of property,
and co-operating with other public authorities.

6 Nov 2003 : Column 980

Specific powers

(1) The regulator may with the consent of the Secretary of State borrow money temporarily by way of overdraft, but may not otherwise borrow money.
(2) The regulator may conduct, commission or assist the conduct of research."

On Question, amendments agreed to.

4.30 p.m.

Baroness Noakes moved Amendment No. 120:


    Page 116, line 10, at end insert—


"( ) The regulator shall report each year in his annual report whether the contributions paid by the Secretary of State under paragraph 5 allow him to discharge his functions adequately."

The noble Baroness said: My Lords, Amendment No. 120 is on the theme of the independence of the regulator. We talked briefly about independence of appointment—a subject to which we shall doubtless return at a later stage. However, of perhaps more importance is de facto independence. A crucial element of independence in fact is whether or not the regulator has enough money to do the job properly.

When we debated this matter in Committee, the noble Baroness, Lady Andrews, helpfully suggested that the regulator would be able to include in his annual report his views on whether he had been adequately funded. That would now not be a "him" or a "her" but an "it". I was so taken with the suggestion of the noble Baroness, Lady Andrews, that I have paid her the compliment of drafting that into Amendment No. 120. I hope that the amendment's pedigree will lead to instant approval by the Minister. I beg to move.

Lord Warner: My Lords, in speaking to Amendment No. 120, it may be helpful if I restate the Government's view that it is right that the Secretary of State should be able to set the level of contributions for the office of the regulator. There is no doubt that, as part of their negotiations with the Government about their funding, arm's-length bodies and non-departmental public bodies can, and do, raise concerns about what they are expected to deliver within that funding. Indeed, I believe that some often make public their concerns about funding.

There is clearly a place for robust discussions about what the regulator can be expected to deliver within funding levels, but that place is not in the annual report. In our view, the amendment would reduce the annual report of the regulator to the level of a political football, detracting from the real purpose of the report, which is to provide feedback to the public on the work of the regulator. We consider the amendment to be inappropriate.

Baroness Noakes: My Lords, I am extremely disappointed that the Minister has repudiated the suggestion made by his noble friend Lady Andrews. I shall, of course, think again about what he said, but I register my disappointment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 Nov 2003 : Column 981

Lord Warner moved Amendments Nos. 121 and 122:


    Page 116, line 13, leave out "he" and insert "it"


    Page 116, line 13, leave out "his" and insert "its"

On Question, amendments agreed to.

Lord Warner moved Amendment No. 123:


    Page 116, line 14, at end insert "and,


(b) prepare a report which provides an overall summary of accounts sent to it by NHS foundation trusts during the year."

The noble Lord said: My Lords, in moving Amendment No. 123, I shall speak also to government Amendments Nos. 123 and 126. The Bill, as drafted, does not provide for the presentation of a summarised account of NHS foundation trusts to Parliament as that is normally carried out by an accounting officer. The independent regulator is not the accounting officer for NHS foundation trusts as he is not responsible for their expenditure or operational management. Instead, each NHS foundation trust has its own accounting officer, who is responsible for laying the trust's audited accounts before Parliament.

Therefore, we were concerned that requiring the independent regulator to present a summarised account of NHS foundation trusts to Parliament was potentially misleading. However, in Committee, the noble Baroness, Lady Noakes, put forward a strong and persuasive argument for the importance of a summarised account of NHS foundation trusts in providing a financial overview across this new sector of the NHS. We therefore propose in Amendments Nos. 123, 124 and 126 that the independent regulator should prepare a report, summarising the accounts of NHS foundation trusts, to be submitted to Parliament alongside the regulator's annual report.

Given that we have tabled these amendments, which I believe have the intended effect of Amendment No. 127, I hope that the noble Baroness will not move that amendment. I beg to move.


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