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The Deputy Chairman of Committees (Lord Brougham and Vaux): My Lords, good afternoon and welcome to the Grand Committee. If there is a Division in the House, the Committee will adjourn for 10 minutes.
That the Grand Committee do report to the House that it has considered the Police (Collaboration: Specified Function) Order 2012.
The Minister of State, Home Office (Lord Henley): My Lords, the order concerns the arrangements for providing air support to the police forces of England and Wales. It specifies the provision of police air support as a function that must be carried out through a collaboration agreement applying to all police areas in England and Wales.
Sections 22A to 23I of the Police Act 1996 make provision for police collaboration in England and Wales. Section 22A provides for the making of collaboration agreements involving policing bodies and chief officers of police. Section 23FA enables the Secretary of State to specify police functions that must be the subject of collaboration. The order is to be made under Section 23FA. Orders made under this section must be approved by both Houses beforehand; this procedural requirement is imposed by Section 23FA(4). This is the first order made under Section 23FA.
The scope of the collaboration agreement to be made under the order will include the operation of aircraft, staffing, equipment, airbases, ground control facilities, and maintenance arrangements, facilities and other resources necessary for such air operations. The order establishes the required outcome-a national collaborative agreement for the provision of air support-but the detailed terms are a matter for policing bodies and forces to agree.
The background to the order is a review of police air support completed in 2009. The service-led review identified scope to save £15 million per year by reducing the number of police aircraft and bases while providing a more consistent service. Since 2010, proposals for a collaboratively organised national police air service-
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Discussions between the NPAS project team, police forces and authorities have continued, but full agreement has not been achieved. In January 2012 my right honourable friend the Minister for Policing and Criminal Justice announced the Government's intention to make the order. The Government consulted the Association of Chief Police Officers, the Association of Police Authorities, the Mayor's Office for Policing and Crime and Her Majesty's Inspectorate of Constabulary on the proposed order. Responses were also received from other police authorities and police organisations.
No responses directly opposed the order. Some suggested that it was premature and some expressed concerns about financial and operational aspects of the business case for the national police air service. The concerns expressed by respondents about the governance and management of the proposed NPAS service and about precise costs and savings were important. The Government's view is that the best way to resolve the concerns is through the detailed negotiation of a collaboration agreement by all forces and policing bodies. Therefore, it is timely and not at all premature to make the order. It will ensure that all forces and policing bodies will focus on reaching an agreed set of terms, conditions and governance arrangements for collaboration.
A feature of the proposals for collaborative delivery of a national police air service is that a single police force should take the lead. Several respondents to the consultation noted that any force, and its policing body, taking lead responsibility would require reassurance regarding the continuing commitment to collaboration by other forces and policing bodies. The order will provide that reassurance by ensuring that there is a collaboration agreement in place to which all forces and policing bodies must be party.
Baroness Doocey: I hope that noble Lords will forgive me; I am losing my voice. I have no problem in principle with the order. As a former chair of finance of the Metropolitan Police Authority, I am very much in favour of anything that can be done to make economies of scale and efficiencies. However, I have a number of concerns. Wearing the hat of somebody who sat for eight years on the Metropolitan Police Authority, I emphasise that my knowledge and experience is of the Met rather than of police forces nationwide. Therefore, with that caveat, I know that there are various concerns in the Met, and I wonder if the Minister can help to allay some of those concerns, particularly about the issues of governance and structure as set out in the draft agreement.
The strategy board has got quite a lot of power: it can approve annual capital budgets and determine the direction of the service. However, there is no representation on the board for PCCs-and in the case of London,
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I appreciate that the Minister talked in his introduction about issues being resolved locally. However, I have a slight concern that if there is not quite a good steer from the Government on how these issues can be resolved, that might be a major problem down the line. I think that it would be helpful to address those issues now.
I have another concern. Although having an integrated strategy for the air service is clearly sensible, how will this affect the local accountability of local police forces? I wonder if the Minister could address that point as well.
Baroness Smith of Basildon: My Lords, I am grateful to the Minister for his explanation. Like the noble Baroness, Lady Doocey, I welcome the principle of what the Government are seeking to do here-I do not think that there can be any disagreement on it. However, like her, I have some concerns. I am sure that the Minister can help allay those concerns when he addresses the questions.
I was interested when the Minister spoke about the consultation that took place. He quoted the parts that were in the impact assessment, which was very helpful. As I mentioned to the noble Lord previously, I tried to access the Home Office website to get more information on the consultation responses. I hope that my complaints about the website do not become a familiar theme in these Committee sittings or when I discuss Home Office matters. However, I find it the most difficult website to access that I have ever used. It has crashed on me something like six times in the past week, which is as long as I have been in this post. I therefore felt at a disadvantage on this order by not being able to read the consultation responses. I take on board entirely, and accept the Minister's explanation, that none of the responses was directly opposed.
However, the situation with the website makes this slightly more difficult. I would have liked to know the difficulties that have prevented voluntary implementation from taking place. The noble Baroness, Lady Doocey, has been very helpful in using her experience with the Metropolitan Police to outline some of the issues.
The Minister says that there have been discussions for some time, that no one is directly opposed to it and that everybody seems to think that it is a good idea-and yet it does not happen. So, what is the precise nature of the difficulties? One wonders whether those difficulties, depending on how practical they are, can be removed simply by implementing legislation. If they are practical difficulties which the police are trying to resolve, putting legislation in place will not make them go away. One question-if we can legislate to change things-is whether he thinks that the police are simply being difficult by not reaching a voluntary agreement on the issues of concern which have prevented voluntary collaboration to the degree that the Minister would like. As the police, presumably, will still have to agree
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I appreciate that savings have to be made-I am not querying that. I would never deny the need to make savings. Indeed, I am one of those who look for genuine efficiencies to save money. However, when police forces are fully under the budgetary cosh in many ways, collaboration can become more difficult for them-understandably, it makes it that little bit harder to co-operate. If the Minister can say something more about the agreements that need to be put in place, and the discussions taking place to make that happen, that would be welcome.
Perhaps I may also say something briefly about savings versus efficiency. Where crime prevention and crime detection are concerned, efficiency savings are one thing, but cuts in service, or reduction in the quality of service, is another.
I am seeking assurances from the Minister, because the impact assessment is perhaps slightly woolly on this. It says that in some areas it is expected that the collaboration will be resolved by some increases in response times for air support. It goes on to state the positives, including that a 24-hour service will be available to all forces. Will the Minister quantify what those increases in response times will be? Will they be significant? Which areas will be affected the greatest? Assurances from the Minister on that would be most welcome. In principle, the direction of greater co-operation and collaboration between police forces is welcome. I should be grateful if the Minister will address the issues that I have raised.
Lord Henley: My Lords, first, I apologise to the noble Baroness, Lady Smith, for the failings of the Home Office website. We have to admit that it is not the most perfect website. No doubt it can be improved, and in due course we will look to improve it to make sure that the noble Baroness can access information as and when she would like. That is why my noble friend Lord McNally and I made it clear when we met yesterday to discuss other matters that we would provide hard copies of certain information, to ensure that she does not have to go through this problem again.
Baroness Smith of Basildon: My Lords, I appreciate the noble Lord's offer. However, as I said to him yesterday, he might not appreciate a call on a Sunday afternoon when I am working at home. I appreciate his going back to the Home Office to try to resolve this matter.
Lord Henley: I certainly would not appreciate a call from the noble Baroness on a Sunday afternoon. I might not be available and I would not have access to the papers either. Obviously we have to improve this website, because we all want to use it on a Sunday afternoon. That is the point of having an efficient website. It is why all of us, in a whole range of departments, have been subject to such complaints. We take that on board and will look at the website to see what we can do.
As regards the noble Baroness's request for access to the consultation responses, my understanding is that it was a very limited consultation and the responses were not published on our website. Therefore, that is probably one of the reasons why the noble Baroness could not get them. If they are available, I will make sure that she gets them.
I should have made clear in my opening remarks how much I welcome the noble Baroness to Home Office matters. I saw her dealing with that rather extraordinary debate we had on the Queen's Speech, which covered a whole range of departments. On that occasion, I did not have the opportunity-
Lord Henley: In whatever way, I am at fault in that I have not welcomed the noble Baroness to the Home Office brief. I do so with great warmness and I look forward to many debates. She also asked about having to look at the savings that are coming about and what we are trying to achieve. Perhaps I may remind her that the exercise goes back to 2009 when her own party was in government. It sensibly started because police forces-some 43 of them plus the British Transport Police-vary in size enormously from the Met to, say, in my own area, Cumbria, which is a very small police force. Therefore, it is very difficult for some police forces to provide the same coverage as others. That is why we are looking at much more working together of all police forces and rationalisation of the services provided, and into which individual forces could buy in as necessary.
As a result, quite obviously, one would be able to find appropriate savings and produce a better service for the different police authorities. In the process, I would be able to guarantee that even a force such as Cumbria, which obviously would not be able to afford such a thing on its own, could provide helicopter coverage 365 days a year, 24 hours a day, in a way that the Met, which obviously is a much bigger police force, would be able naturally to do on its own. That is what we hope we will be able to do. Obviously, it is very difficult for all of them to get together. That is one of the reasons why it was important to give a general shove to the forces, to try to deal with these matters. The noble Baroness particularly asked what exactly had impeded that agreement. I can say that there has been general agreement on the principle. The order provides the imperative since my noble friend announced his intention to make the order. It gives that extra shove from the centre, just to make sure that the things asked for will happen in due course.
Turning to the questions asked by my noble friend Lady Doocey, I welcome her intervention in this debate, particularly with the expertise that she brings. She has served eight years on that police authority and we are grateful for that. As regards local accountability, I can give an assurance that it will not be compromised at all. Chief constables remain accountable to their PCCs,
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That the Grand Committee do report to the House that it has considered the Misuse of Drugs Act 1971 (Temporary Class Drug) Order 2012.
The Minister of State, Home Office (Lord Henley): My Lords, this order was laid before Parliament on 3 April-that is, if it is to remain in force. The order was made on 29 March and came into force on 5 April 2012. It makes-I have to stress that this is one of those words that I find difficult to say-methoxetamine, and its simple derivatives, temporary class drugs under Section 2A(1) of the Misuse of Drugs Act 1971 for up to 12 months.
The Government identified and monitored methoxetamine, through our drugs early-warning system, in 2011. In light of the available evidence, I referred methoxetamine to the Advisory Council on the Misuse of Drugs for advice in relation to temporary control in March. I thank the advisory council profusely for the quality of its advice, which was provided within 15 working days, allowing a decision to be made within a matter of days rather than weeks as has previously been the case. It is the first time that the power to make such an order has been used since it became available to the Secretary of State on 15 November 2011. It was also the first time that we invoked our drugs early-warning system to this effect.
The Home Secretary was satisfied, in consideration of available evidence, that the ACMD's initial advice that the conditions to make a temporary class drug order were met. Methoxetamine is a drug being misused, and much misuse is having sufficiently harmful effects to warrant temporary control. The ACMD likens the effects of methoxetamine toxicity to those of acute- class C-ketamine use, including hallucinations, catatonia and dissociative effects. It further indicates cardiovascular
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The order applies UK-wide to protect the public while the ACMD prepares full advice on methoxetamine. It enables enforcement action against traffickers and has already had an impact through self-regulation of the online trade. We know that at least 70 websites previously offering methoxetamine for sale-the number of which increased from 14 to 52 in early 2011-have ceased this activity.
The order also sends out a clear message to the public, especially young people, that methoxetamine is a harmful drug. Of course, we will continue to monitor data on the drug to measure the impact of the order through all available channels, and share this information with the ACMD.
I take this opportunity to bring to the Committee's attention the recent publication of a cross-government action plan to tackle new psychoactive substances, as an annexe to the first review of our drugs strategy. We also published our response to the ACMD's advice, which helped to inform the action plan, and the 2011 report of the Home Office's forensic early-warning system, on the Home Office website, which I hope the noble Baroness will find easier to access in due course.
Baroness Doocey: My Lords, I will be very brief. This is clearly a sensible precaution. It is very necessary and I very much welcome it. In view of the very nasty and harmful effects of what is known of this drug-which I am not even going to try to pronounce-it is, if anything, overdue, and I think it is a splendid idea.
Baroness Smith of Basildon: My Lords, again I thank the noble Lord for his explanation. We welcome and support the order. The purpose and the benefits are quite clear. I will not follow in his footsteps and try to pronounce it. I am told the street name is "mexxy"-MXE-and I will stick with that because it is far easier to pronounce.
I have a couple of concerns, not around the specific action taken here but about the process and time it takes to get to this point. Both Switzerland and Russia have already banned MXE. I have a slight concern over whether the processes in place are quick enough to respond to the changes that are made. I know that the Minister is aware of the European Monitoring Centre for Drugs and Drug Addiction, which has a key role in detection and assessment of new drugs within the EU. There is a recognition that these "legal high" drugs require very rapid action across Europe.
Since the Government came to power, the EMCDDA has identified 90 new substances during 2010-11, but I am concerned that the Home Office early-warning system has only identified 11. I am not clear why there would be a discrepancy between the two. If the Minister was able to say something about that, it would be helpful. It may be that the processes that we employ here in the UK mean there are others in the pipeline-perhaps they are with the ACMD, I do not know.
It would also be useful to know when the Home Office became aware that MXE was a drug on which action should be taken. If the Minister can say anything about the work with the EMCDDA, that would be helpful. It seems quite clear that the EMCDDA is very much ahead of the game as to what is happening across Europe as a whole.
I was quite shocked when reading about this SI-and the Minister reiterated the point-by the easy availability of these drugs via the internet. That does not confine itself to national boundaries. Also, the number of internet stores selling MXE increased in a very short space of time. In January 2011 there were 14 online stores; by July, within six months, this had risen to 58 online stories selling MXE. Any delay in banning such drugs allows them to become established very quickly. How is it possible to monitor such internet sites? Is this the responsibility of SOCA, which is to become the National Crime Agency? How are these sites monitored to ensure that they do not take hold in the same way?
One of the things that the impact assessment said was that there was a risk that a minor chemical change in the drug could make a new drug that would then be legal and unaffected by the order being made today. Are the Government looking at this issue? If they are not, we could have a constant flow of temporary orders each time there is a minor chemical change in the drug.
Finally, the impact assessment and briefing notes from the Home Office highlighted the importance of education in drugs awareness. Young people hear about the drug, but think that it is a legal high and do not realise the quite devastating implications and consequences. At the moment, we have the Drug Education Forum, which brings together 30 high-profile, high-quality and knowledgeable organisations across the UK, including ACPO and the NSPCC. Unfortunately, the Department for Education has withdrawn the funding from this body. My colleague Diana Johnson, Member of Parliament and shadow Minister for the Home Office in the other place, has written to the noble Lord about this and I think that it would be helpful if the Government were able to look at this again. Clearly, by their own analysis, education is key to young people understanding the dangers of such drugs. It would be very sad to see good action in one part of the Government being undermined by action in another part that makes it more difficult to tackle this problem. We certainly support the order but would be grateful for responses to these questions.
Lord Henley: My Lords, I thank both my noble friend and the noble Baroness, Lady Smith. I reiterate that this is the first time that we have used this new order. The point behind it is to act much more quickly than we ever could in the past when we see new drugs being developed. That is why we created this system, which allowed me to refer this at a relatively early stage to the ACMD, get its advice and then bring in this temporary order, which will remain in effect for a year while the ACMD does further work on deciding whether this is right or proper.
As the noble Baroness, Lady Smith, will know from some of the questions that were put to my honourable friend in the debate in the Commons, there is this faint danger, particularly with the way these things are developing, that we are constantly chasing after new drugs as new things develop. That is particularly the case when, as she put it, you can have a very minor change in something that creates a new drug that is not covered. We therefore obviously have to consider whether some more generic approach might be more appropriate in the future.
As to education, it is my privilege and honour to chair an inter-ministerial group on drugs, which has representatives from a large number of departments. The Home Office chairs it but all the other departments come in. The Department for Education, along with others, has always been involved and we are grateful for that. We take its involvement very seriously and look at everything that it can do. We certainly recognise that the Drug Education Forum, which the noble Baroness referred to, has a very valuable role to play. Getting all Ministers together to work on this has had a very beneficial effect and will, I hope, lead to further thoughts about how we deal with these very difficult problems. Sometimes, some of them seem to be almost insoluble. Certainly, the Department for Education is fully committed to that process and Education Ministers come to that meeting, for which I am very grateful.
The noble Baroness seemed to imply that the temporary ban had not had much effect on sales on the internet. As far as we are aware, we have seen a reduction. The 70 or so websites that were offering MXE have now ceased selling the drugs. To put that into context, the European Monitoring Centre for Drugs and Drug Addiction, the EMCDDA, reported that in the first half of 2011 some 52 websites were offering MXE for sale. So we are making progress. We want to see how this works. Obviously, we will want to see whether we can use this process in the future.
I assure the noble Baroness that the Government are doing as much as they can to tackle the much wider trade in legal highs, the new psychoactive substances or whatever they are called. "Legal highs" is a rather dangerous term to use. It could encourage some young people to think that if they are legal they must be okay and not a problem. We believe that tough enforcement should be a fundamental part of our NPS action plan. Action to restrict the drug supply, including illegal new psychoactive substances, is a priority for all law enforcement agencies. We certainly will work closely with SOCA, the United Kingdom Border Force and others on that matter. We will also make sure that the information getting out to individuals, particularly young people through FRANK, continues to be at the best possible level to make sure that they know that, even if these substances are referred to as "legal highs", it does not mean that there are not serious dangers about them.
As I have said, this is the first order that we have brought in under this process. It obviously has all-party support and I hope that all parties agree that it will allow us to move much more quickly than we have in
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That the Grand Committee do report to the House that it has considered the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2012.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, I am pleased to introduce this instrument, which was laid before the House on 26 March. I am satisfied that it is compatible with the European Convention on Human Rights.
The original qualifying earnings band was set out in the Pensions Act 2008. We amended the Act last year to insert the automatic enrolment earnings trigger but these figures are now up to six years old. It is essential to keep the automatic enrolment thresholds up to date and relevant.
The original figures are subject to a mandatory annual parliamentary review. This first review needs to catch up with six year's worth of change. Our task is to consider the outcome of this year's review-the revised rates that will apply when the largest companies start to implement automatic enrolment from July of this year. This is an important and much anticipated debate. I am glad to see that we have the benefit of having pensions experts and champions of automatic enrolment with us this afternoon. I have been grateful for their expertise in the past and I remain grateful now. I look forward to what I am sure will be a robust and thorough examination of these thresholds.
The power to revise the automatic enrolment threshold is a broad, flexible power. Flexibility is important. Rather than a lock-in to a set formula with a short shelf life, flexibility safeguards the interests of savers, employers and the public purse. Flexibility enables this and future Governments to react to the changing financial landscape, the number of people saving and the amount they are saving, all set against the backdrop of the shape of state pensions.
However, flexibility and the degree of discretion that Parliament has allowed makes the task of setting the automatic enrolment thresholds for private pension saving more challenging and perhaps more contentious
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Persistent low earners tend to find that state pensions provide them with an income in retirement similar to that in working life, without the need for additional saving. For these individuals, it will very often not be beneficial to direct income from working life into pension saving. If we are to meet the challenge of pension undersaving, we have to get the pension-saving message out into the workplace. We are about to see a revolution in workplace provision. We are asking employers, payroll providers and the pensions industry to take on significant additional responsibility.
Workers will need to understand how pension saving will work. They will need to know how automatic enrolment will affect them, when it will affect them and how much it will cost. We know people will see their employer as a first port of call. We have to make automatic enrolment simple for employers to understand, administer and explain. The automatic enrolment rates for this year need to balance complex interactions between targeting, simplicity, affordability, costs and savings, and take account of equality issues. The problem is that simplicity and pensions are not natural bedfellows. The Government felt that the best way forward was to have a full consultation on the proposals for the first year of live running. Up to now employers and the pensions industry have been working with figures that are unlikely to be the ones for live running. We wanted to share our thinking and the evidence we took into account as part of the review process.
We needed the views of employers who will have to make automatic enrolment work in practice; of the companies who will provide pension schemes; and of the representatives of people who will be brought into pension saving, possibly for the first time. The Government have now reviewed this evidence from the public consultation and weighed the costs, savings and low-earners issues carefully in arriving at the figures that I present to your Lordships today. Targeting is critical but the level of the trigger is a difficult judgment because everyone's personal circumstances will differ and will change over their lifetime. When household finances are under pressure, we do not believe it is right to encourage low earners-whatever their gender-to save at a time when they may need to use all their income to meet their family's present living costs.
We propose an automatic enrolment earnings trigger of £8,105, aligned with this year's personal tax threshold. Tax relief is a core part of the automatic enrolment deal. We believe that automatic enrolment should target people once they earn enough to pay income tax and therefore qualify for tax relief, and should exclude the low paid who will have a high replacement rate from state pensions alone. This exclusion is from automatic
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The results of the consultation were powerful and persuasive. Simplicity is critical to the success of automatic enrolment. It is best supported by aligning the automatic enrolment thresholds with existing payroll thresholds to give employers and individuals figures that they are familiar with and can explain.
I turn now to the qualifying earnings band. The headline message from the public consultation was that the band should maximise pension saving. This suggested that the right direction was to set the lower limit fairly low-and nor should we set the cap so high that it significantly increased employers' minimum costs.
I am acutely aware that your Lordships' views were mixed about the point at which we should pitch the lower limit of the qualifying earnings band. There was some residual support for not having an earnings band at all. The previous Administration ruled this out on the grounds of cost, and we continue to do so.
There is a good case to be made that pensions saving should rise as earnings rise, and that the original thresholds in the Pensions Act 2008 should be revalued by the rise in average earnings. That proposition was put in place by the previous Administration. There is also a logical argument that the automatic enrolment thresholds that will drive minimum pension saving levels should rise in line with the consumer prices index, for consistency with the Government's wider policy. Price inflation affects affordability. It has a very direct bearing on how much people can afford to pay into their pension, and a direct bearing on employer costs. However, neither price nor earnings inflation produces a figure that aligns with existing recognisable payroll thresholds, and the consultation rejected them.
The work on the development of automatic enrolment and the early legislation, led so ably in this House by the noble Lord, Lord McKenzie, gave us another solid canon to work with. Private pension saving should build on the foundation of state pension entitlement. The Johnson review gave us a solution to the de minimis level of pension contributions, via a gap between the automatic enrolment trigger and the earnings level from which contributions are collected. The lower limit of the qualifying earnings band must work hand in hand with the automatic enrolment earnings trigger to deliver the policy intentions.
The consultation rejected alignment of the lower limit of the band with the national insurance contributions primary threshold because it increased substantially this year to £7,605. We, too, rejected it. It would not deliver the policy intentions. It would be a logical point of alignment and is a recognisable payroll threshold,
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We looked for a point of alignment for the lower limit of the qualifying earnings band that would deliver simplicity and maximise pensions saving. We looked for a threshold that worked in conjunction with the trigger to solve the problem of penny-packet contributions. This happens at the national insurance lower earnings limit. A worker will start to build up a basic state pension on earnings above the national insurance contributions lower earnings limit. This is £5,564 for this tax year. The national insurance lower earnings limit is a figure that will be familiar to employers. It is similar, in today's price terms, to the original proposition of the Pensions Commission and to the original figure in the Pensions Act 2008.
We had originally proposed to revalue the upper limit of the qualifying earnings band by earnings to arrive at a figure of around £40,000 to cap employer costs, rather than track the national insurance upper earnings limit, up to £42,475 this year. The evidence from the consultation suggested that at these earnings levels, people are likely to be in a good-quality scheme already and the cap on minimum contributions had little practical relevance.
Only the largest employers are staged in this tax year. Medium-sized companies that may have a greater proportion of their workforce on median or average earnings will not come under the employer duty this year and will be less affected by the upper limit. Most of their people will be earning much less.
The conclusion was that the difference between a figure of around £40,000 and the national insurance upper limit of around £42,000 was not a large enough gap to justify building a random figure into payroll processing, given the profile of the employers going live this year. For that reason, our final proposal to the House is that the value of the upper limit of the qualifying earnings band should be £42,475 for the 2012-13 tax year.
Baroness Drake: My Lords, starting positively, it is most welcome that auto-enrolment will really commence in October 2012, and this order is obviously an essential part of getting to that position. The pay reference periods in the draft order and the corresponding earnings values in respect of the relevant sections of the Pensions Act 2008 are sensible. We can understand why, for example, a daily pay reference period could deliver results that were not the policy intent.
It is also pleasing that the Government have held to the definition of qualifying earnings that reflects the common pay components that make up the pay packet. Aligning auto-enrolment triggers and thresholds with tax and national insurance thresholds in the interests of simplicity for employers wherever possible would
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Aligning the upper limit of the qualifying band of earnings with the NI upper earnings limit provides simplicity, complements the policy intention and, by extending the range of earnings, increases savings a little. Similarly, setting the lower limit for the qualifying earnings band to the NI lower earnings limit provides simplicity and maintains contribution levels when auto-enrolment is triggered. That is the positive.
However, our concern is that the level of earnings that triggers the automatic enrolment of a worker is set for 2012-13 at £8,105, the PAYE threshold. This further rise in the trigger excludes yet more women, and places simplicity above enabling millions of women to increase their savings pot. We remain concerned for the reasons we have rehearsed previously: raising the earnings trigger has a disproportionate impact on women and the Government are repeating the errors of the past in designing a second-tier pension system that does not work for the life pattern of many women. In 10 years' time, the error will be obvious, particularly to women themselves. I have no doubt that action will be taken to amend it, but by then thousands of women will have lost out unnecessarily.
The Government's response to the automatic enrolment earnings threshold consultation reports that the main focus of consumer organisations was on equality issues, particularly the impact of higher thresholds on low-paid workers, the majority of whom are women, but clearly their views are not a dominant influence in setting the trigger. Millions of women have a life pattern in which periods of full-time work are interspersed with significant periods of part-time work when their caring responsibilities are at their greatest.
On the Government's figures, of the workers eligible for auto-enrolment, two in five-39%-are women. Raising the trigger from £5,035 to £7,475-the 2011-12 PAYE threshold-excluded 600,000 individuals, 78% of them women, most of them part-time, but that decision was made. However, raising it to £8,105 excludes another 75,000 women, on the grounds of simplicity. If, over time, that earnings trigger rises even further in real terms, tracking proposed increases in the tax threshold, the number of women excluded from the benefits of auto-enrolment will grow even more.
The effect of excluding these women is, first, that they may not start to save when the reforms are introduced. Secondly, when they transition from full to part-time jobs they may face increased charges on their pension pot accumulated as a result of becoming an inactive member. Thirdly, ceasing to be auto-enrolled when they become part-time workers could break the persistency of the savings habit they built up when working full-time.
The Government sympathise with the view that only those who benefit from tax relief should be auto-enrolled. This ignores the working of the tax credit system. For example, household income brought to account when calculating universal credit disregards 50% of that income paid in pension contributions.
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"Many or most very low earners are women, who live in households with others with higher earnings and/or receiving working tax credits. These may well be exactly the people who should be automatically enrolled".
Those excluded women also suffer a loss in lifetime pay, albeit deferred pay, because they do not have access to the employer's 3%-and for some employers the figure is higher. However, they will still lose out from any lower wage growth that flows from the cost of automatic enrolment.
If policy is predicated on the belief that most people will not begin to save unless the power of inertia is harnessed through auto-enrolment then it cannot be the case that the right of those below the earnings trigger to "opt in" will seriously mitigate the risk that many women will face lower incomes in retirement as a result of the level at which the trigger is put. As to persistent low earners, the argument that they should not save because they get state pension and benefit means yet again that there will be no "asset accumulation strategy" for low earners. If 100% of pension contributions were disregarded for universal credit calculation, this would reduce the risk of a fall in people's welfare prior to retirement.
Furthermore, if the Government accelerate the move to a single flat-rate pension, depending how that is done, together with the more generous crediting arrangements for carers introduced by the Labour Government, then the incentive to save can increase for significant numbers. As the Johnson review again observes:
A make-weight argument for the higher earnings trigger is that it reduces the number of small pots of pension saving, which are disproportionately expensive for the insurance industry to administer. But of course that argument is totally contrary to the policy intention. The answer to that problem is the public service obligation of NEST not to increase the numbers of workers excluded from auto-enrolment.
Much is made by large employers-though having read the review, one sees that not many of them directly make submissions-of certainty and business planning from linking the earnings trigger to the PAYE threshold, so setting the direction of travel. In 2012-13 the Government are rolling out to the large employers and are raising the earnings trigger in order to simplify the process. However, these are large firms well versed in dealing with complexity. Surely we should not be trading fairness for women, which they need, for an alleged simplicity which these companies do not require.
Many large employers have already been given the simplifying benefit of an alternative certification test. Many use salary substitution, managing the complexity of employees opting both in and out of salary substitution. They are experienced in deploying often complex measures to manage their pay and tax liabilities and frequently
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To return to the positive: while we welcome the commencement of the new employer duty, and recognising some of the positives in this order, we remain concerned about the position of many women that is created by raising the earnings trigger.
Lord German: My Lords, I recognise in the consultation document and in the response from the Government that three-quarters of the respondents supported the trigger that is now being set by the Government in this legislation. Of course, this is not an exact science; one cannot say that a specific figure is the level at which people will benefit from coming in to automatic enrolment. However, we should recognise that for many low earners, investment in pensions is potentially unsuitable, and that it is not suitable for persistent low earners. I will come back to that point in a moment.
When the Pensions Commission did its initial work, it stated that low earners might aim for a gross replacement rate of 80% or more of their income when they retired. The Johnson review-which I, like the noble Baroness, will quote from-stated:
Individuals who are low earners throughout their lifetime will receive a relatively high income-I stress "relatively"-in retirement, without private pension saving. Paul Johnson quotes the example of an individual earning £10,000 a year from the age of 22, who would see a replacement rate of around 97% from the state alone. Therefore, the question is where the target trigger should be set. Surely the objective must be to maximise pensions saving where that saving is valuable and minimise it for people for whom it will not be worth while.
There is no doubt that this will have a disproportionate effect on women, but the question is whether potentially it would not be worth their while to invest in this manner. Would they benefit from the savings? The question that is being asked here is about what the threshold should be and whether it should be somewhere in the region of the figures that Paul Johnson quoted in his review for the Government. Individuals who are low earners throughout their lifetime will receive a relatively similar income without private pension saving. The question is: does the trigger enable people to come back in when their earnings level rises above the tax threshold? The question that the Minister might like to answer is: what will be the procedure for people who have been low earners, who are underneath the trigger, who have not chosen to opt in but who reach that figure to be automatically enrolled? If they are in the category of persons who will occasionally fall back below and then rise above the trigger level, how will their re-enrolment occur? Will there be encouragement, and will they be tracked so that the re-enrolment will occur seamlessly, without them losing out?
The other way in which people's choices could be made is through opting in. I note that the consultation response from the Government states that people will
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Perhaps my noble friend the Minister can tell us a little bit about the reviewing mechanism, particularly the opt-in and opt-out rates that will be used to understand where we are going in the future with this quite large group of people who are currently low earners. We are at the beginning of a long process here and will understand more as time moves on, but predicting behaviour from where we are at the moment is somewhat difficult. Is the Minister considering a general review of the areas that are to be considered?
The other issue that relates to this is whether the trigger will remain at the tax threshold. I notice that the Government said in their response that it was not set in stone and that they would review it on an annual basis. Of course, the Government have already announced that they intend to introduce a single-tier pension. In his report, Paul Johnson said that,
a single-tier pension approach. Clearly, when the new single-tier pension is enacted, it will be important to review the trigger level, and it might be sensible to do that once the Government have determined the nature of the legislation that they intend to bring forward on the single-tier pension. If they do that, clearly the trigger will have to be thought about again, as there will be some tax benefit for low earners when the basic state provision is made up to the level of £140 or more at the current rate, because tax relief will be provided even though people will not have reached the tax threshold. That might be an important feature in understanding how we move forward.
With those questions to my noble friend, I am pleased to support the order. We will need to return to this matter with a review and further thinking as time progresses-and certainly within the next year or two.
My noble friend Lady Drake set out our position with her usual precision and focus, so I will be brief. Auto-enrolment goes live in a few months and we should take this opportunity to reflect on the tremendous efforts that have been brought to bear, not least by my noble friend, to make it a reality. Although we do not have an identity of view with the Government on all aspects of its implementation, we acknowledge their role in taking this forward in challenging times. The introduction of auto-enrolment may not be preceded
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Appendix A to the Explanatory Note sets out the impact of changing the earnings trigger and the upper and lower limits of the qualifying earnings band. My noble friend Lady Drake focused on our major concern: the impact of the raised earnings trigger. As she explained, far and away the biggest number of losers are women. There seems to be an implicit assumption-which was in a sense reiterated by the noble Lord, Lord German-that these would be persistent low earners. I would be interested to know what evidence there is for that. If we wanted to align it with something that had a PAYE component, what about the primary threshold, for example?
I looked at the Government's response to the consultation. The reason given for excluding the primary threshold was that there was no tax relief at the lower end. How much work have the Government done on this? I went to the HMRC website to remind myself of the rules on tax relief for pensions. It states:
"Usually, your employer takes the pension contributions from your pay before deducting tax (but not National Insurance contributions). You only pay tax on what's left. So whether you pay tax at basic, higher or additional rate you get the full relief straightaway. However, some employers use the same method of paying pension contributions that personal pension scheme payers use-read more in the section on 'Personal pensions'".
"If you don't pay tax you can still pay into a personal pension scheme and benefit from basic rate tax relief ... on the first £2,880 a year you put in. In practice this means that if you pay £2,880 the government will top up your contribution to make it £3,600. There is no tax relief for contributions above this amount".
So the assertion that there is no tax component available simply because you are below the tax threshold is not true. I recall that the proposition was that NEST would adopt that alternative means of generating tax relief for people who went into the NEST scheme. Will the Minister outline in some detail the extent to which that issue was factored into the considerations; and confirm what the position of NEST is intended to be in relation to the routes by which people may get tax relief when it is introduced?
It is a great pity that the issue of the trigger has left us apart. The noble Lord, Lord German, instanced the fact that the tax threshold may rise to £10,000-part of a wider deal, I understand. We will see whether and when that comes to fruition, but it will simply exacerbate the problem that my noble friend Lady Drake outlined in such detail. I hope the Minister can deal with that point.
Lord Freud: My Lords, I said I was expecting a robust debate. It has been short but typically robust. What has clearly come through is that the figures
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The rise in the value of the trigger takes us to the impact on the low paid. As noble Lords pointed out, on balance many more women are in this category-in particular years, though it may not be a continuous position. I should put on the record that the rise from the £7,475 threshold to £8,105 excludes does not exclude 75,000 women; the figure I have is 100,000. We might as well get that on the record. Of those affected, my information is that 82% are women. We recognise that women are more likely to work part time or work less than men, and that they will be disproportionately represented in the group excluded from automatic enrolment by the increase in the trigger.
With the trigger, and automatic enrolment generally, we are talking about soft compulsion. We have developed a system that aims to capitalise on inertia-the default is saving, but we have left people who are new to pension saving to opt out if they consider that they really cannot afford it. Automatic enrolment with an employer contribution is an incentive to save. For the first year, certainly, we do not want to encourage people who do not earn enough to pay tax to divert wages into a pension pot unless their circumstances mean that it makes financial sense.
A question was asked based on reading three pages of the HMRC site, which was very assiduous. Tax relief was one of the factors considered, but not the only one. Maintaining an adequate gap between the trigger and the bottom of the earnings band was also relevant. We also needed to make sure that the right people-those who could afford to save-were enrolled.
There are two ways for a pension scheme to access tax relief for individuals. As the noble Lord, Lord McKenzie, said, schemes using relief at source can get tax relief at the basic rate even if the individual is not a taxpayer. However, where a scheme uses a net-pay arrangement, individuals can get tax relief only if they have taxable earnings. To answer the specific question, NEST will use the former, so that all members can get that tax relief.
Lord McKenzie of Luton: Does that mean that the tabulation in the Government's response-which says that if the trigger is set at the primary threshold, it is not tax relievable at the lower end-would only run in some circumstances and would not run for many scheme members, particularly if they were members of NEST?
Lord Freud: Yes, on the basis of what I have just said, that is quite clear. For those saving in NEST, the figures would not work, while those saving in some other way, as the legislation currently stands, would not get the relief. NEST: yes; others: no. I think the
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With the gently-gently approach of phased contributions starting at a modest level, we hope that we will not trigger a rush to the exit, but we do not know. We know what people tell researchers when they are asked. We can look at the opt-out rates in those countries that have similar systems. However, in the end, the evidence shows that if people feel they cannot afford it they are more likely to walk away, and the whole issue of pensions stays in the "too difficult to think about" pile. We are feeling our way here and there will be chances to make adjustments.
I will pick up some of the other points raised. The noble Baroness, Lady Drake, asked what our intentions are as the tax allowance rate goes up-if it were to go up, and clearly I am not making any presumption either way. My answer also incorporates an answer to the question from my noble friend Lord German. The earnings ban and the trigger are subject to annual review-so we are talking simply about the rates for this year-and we will have a look at where the rates should go for 2013-14 on the basis of a number of factors, including the economic conditions, and indeed what reactions we get from the early run in experience. You will all be pleased to know that this is subject to affirmative debate every year, so we can look forward to many enjoyable afternoons over the years on this matter.
The noble Baroness, Lady Drake, also raised the issue of pots. Clearly that is an issue that we are looking at separately. It is not an easy issue, as we build up these very small pension pots, and I know that it is a matter of concern all around the House. We have been looking at this issue, and we plan to publish a response on that this summer.
Baroness Drake: I appreciate that the Government are looking at the whole issue of the transfer of small pots. The point that I sought to concentrate on was that it is very likely that the market will apply a differential charging structure to inactive members and to active contributing members. Even though the Government have taken powers to control that, those powers will not stop differential charging. If a woman is full-time, then takes on a part-time job with another employer and is not auto-enrolled-and so becomes an inactive member-one of the consequences is that the charges on her remaining pot start to rise, because inertia is not turned into a positive. It is that narrow point. I appreciate that the wider review of pension pot transfers is coming up.
Lord Freud: I will stand my ground a little bit on this, because these are some of the issues that really come into consideration when we look at the broader issue of pension pots. My colleague Steve Webb has said a few things about this in public, and I know that he is looking in private at this differential charging issue, so it is something that he is considering.
My noble friend Lord German asked a related question about the opt-in/opt-out rates. Those will be monitored on an ongoing basis. He also asked about people coming in and going out as their earnings change, perhaps going from full-time to part-time. These people will continue to make and receive contributions according to the rules of the scheme that they end up going into when they go in, but if earnings dip to the extent that no contributions are due in a particular period, they will restart immediately when their earnings are high enough, so there is no waiting period.
I will now return to two issues to deal with them precisely. I only touched on the differential charging that the noble Baroness was concerned about. We have powers under the 2008 Act to set a cap should charges become inappropriately high. We recently extended those powers to cover deferred members. Therefore, we have all the necessary powers, and my colleague is aware of the issue. We are monitoring the charges with rolling research and will continue to do that as enrolment is brought in.
I will close my answers by doing justice to the point about tax relief made by the noble Lord, Lord McKenzie. We will continue to take that into account. The matter is not entirely straightforward, as we established. At this stage we do not know how many people will get relief at source as opposed to making net pay arrangements. We will keep that matter, too, under review.
This is our first review. It took a major consultation effort to decide on the trigger and the earnings band. We would have preferred to come out with this earlier, and I will try to do better on timing next year because early certainty is important, for employers in particular. It was right to consult this time, and to gather the views of people who will need to make automatic enrolment work in practice: those who will have to administer pension schemes, employers who will have to deal with all the questions from their workers, and people who represent those workers. The one message that we got from all of them was that we should keep this simple. I shall take that to heart for the future. Of course, it chimes with the Government's Red Tape Challenge.
That the Grand Committee do report to the House that it has considered the Criminal Justice and Police Act 2001 (Amendment) Order 2012.
Baroness Northover: My Lords, the order seeks to add the following offences listed in the Royal Parks and Other Open Spaces Regulations 1997 to the penalty notice for disorder-PND-scheme. Regulation 3(3) covers the dropping or leaving of litter or refuse; regulation 3(4) covers illegal cycling; and regulation 3(6) covers dog fouling. If Parliament agrees the order, the penalty levels for the new offences will be made by a separate statutory instrument.
Currently the three offences in question may be dealt with only by a magistrates' court, so much offending in Royal Parks goes unenforced as prosecution is costly and disproportionate for what are relatively trivial offences. Offenders therefore tend to be formally reported or verbally warned. The police advised us that each report takes approximately two hours to complete. Therefore, in most cases there is no effective deterrent for those dropping litter, for irresponsible dog owners and for illegal cyclists, and there is increasing concern from many Royal Parks users about the lack of enforcement action. For a number of years, the Department for Culture, Media and Sport, Friends of the Royal Parks and a number of MPs have expressed support for these Royal Parks offences to be added to the PND scheme.
It is right that the Royal Parks should no longer be outside the ambit of the law. Adding the offences to the PND scheme is the most efficient way to address the lack of enforcement. It will enable the police to deal with offending in an effective and proportionate way, in order to maintain the safety and enjoyment of the Royal Parks. This will be valuable all year round, and particularly ahead of and during the Olympic and Paralympic Games when the parks expect many more visitors.
The purpose of the PND scheme is to provide the police with a swift financial punishment to deal with low-level misbehaviour on the spot. The PND is a type of fixed penalty notice established by the Criminal Justice and Police Act 2001, and may currently be issued for a specified range of 26 minor offences, such as being drunk and disorderly in a public place.
By adding the offences to the PND scheme, offenders against whom little or no action is taken will be sent a clear message that offending will not be tolerated and they will receive a financial punishment for their behaviour. The offenders who are currently prosecuted for these offences will no longer be clogging up the magistrates' courts and will instead be dealt with in a proportionate way out of court. It will also significantly free up police time for additional patrols and provide a more effective deterrent to persistent offenders. Issuing a PND takes an officer approximately 30 minutes, whereas a formal report takes approximately two hours to complete. The police have advised that following the investment of two hours in completing the report, the majority do not result in a summons.
In addition, adding the offences to the PND scheme will correct the current anomaly whereby the police have the option to issue an environmental or road traffic fixed penalty notice for similar offending outside the Royal Parks but not within them. It was not practical to amend the legislation governing those
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We have consulted on this proposal with interested parties, including DCMS, the Home Office, the Metropolitan Police, MPs, councillors and cycling groups. The majority of respondents were in favour of adding the offences to the scheme. Some concerns were raised regarding the offence of illegal cycling. Let me be clear: we are not targeting cyclists; we are tackling illegal cycling, which can be dangerous and intimidating. Illegal cycling outside the Royal Parks can already be dealt with by a road traffic FPN and we think it is right that a similar disposal is available inside the Royal Parks.
With regard to music events held in the parks, where people may be more likely to drop litter, whether to issue a PND will remain an operational decision for the police. They will use their professional judgment and discretion to determine what is the most appropriate and proportionate response to offending based on the circumstances of the case. Ample bins and recycling facilities are provided at events.
It may be helpful for me briefly to set out how PNDs will be issued for the new offences. A fixed penalty of £50 will be issued where a police officer has reason to believe that a person has committed any of the three new penalty offences while inside the Royal Parks. Once issued with a PND, the recipient has 21 days to either pay the penalty or request a court hearing. If the recipient fails to take any action, a fine of one and half times the penalty amount-that is, £75-is automatically registered against them by the magistrates' court.
Visitors to the Royal Parks will be made aware of the new penalty offences through effective signage and markings. We will be working with the Royal Parks Agency and Metropolitan Police to ensure that these are clear and unambiguous. The Government are supportive of adding these offences and see the benefits to the public as well as to the Royal Parks Agency and Metropolitan Police of having an effective means of tackling this kind of offending in the Royal Parks.
Baroness Doocey: My Lords, I support this order and I am very pleased that cycling is included. On more than one occasion, I have seen people cycling in the park in a very irresponsible manner, which can have devastating effects. However, I should like to mention parks and dogs. I love both and am in the wonderful position of living in an area where I can use Bushy Park and Richmond Park.
It never ceases to amaze me how people who are completely and utterly responsible about their dogs and would not dream of not cleaning up after them in the street will take a very different view in a park. They also take different views between different parks. Bushy Park is a wild park which does not have manicured lawns in most places. It always surprises me that
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I believe that everyone should be able to use our parks. We are very lucky to have such wonderful Royal Parks and open spaces. But enjoyment for children, animals and adults should not be ruined by the very small minority of people who just cannot be bothered to clean up after their animals. It is not the fault of the animals. It is the fault of the owners. Therefore, these orders are particularly welcome and I am very pleased that this behaviour will be subject to PNDs in the future.
Lord Beecham: My Lords, it is a privilege to be involved in such a momentous change to the country's criminal law. I support entirely the Government's objectives, particularly the observations made by the noble Baroness, Lady Doocey. She has referred to a matter which is of considerable risk to health and clearly cannot be tolerated. The Explanatory Notes refer to the fact that the impact of the order will be reviewed in 12 months. I assure the Minister that the Opposition will not press for such a review, unless Cabinet Ministers are seen to be depositing papers otherwise than in the litter bins in the Royal Parks, which would make a welcome change. It is hardly necessary to go to those bureaucratic lengths for such modest matters as these.
However, I wonder whether at some point the Government propose to review the general issue of fixed penalty notices outside the Royal Parks. There may well be other matters concerning the Royal Parks that might be raised. But there might be other issues that would be worth discussing with, for example, the Local Government Association, the national parks authorities and organisations of that kind to see whether there needs to be general updating of the system. As the Minister has made clear, this is a cost-effective way in which to deal with relatively low-level matters that nevertheless cause offence and inconvenience, and occasionally create risks to public health and safety. Having said that, we certainly support the order.
Baroness Northover: My Lords, I thank my noble friend Lady Doocey and the noble Lord, Lord Beecham, for their support. I agree absolutely with what my noble friend said about dogs fouling parks. From many years' experience of small boys in particular playing in the parks where I lived, not just the foulness but also the important health risks involved in dogs fouling was of great concern. I welcome this support and note what the noble Lord, Lord Beecham, asked about whether this might be reviewed and applied to other areas. I will take that back, given that I have no pointer at the moment on what we might be thinking of doing.
Now, fortunately, I have some inspiration. We are currently developing a new framework for the use of out-of-court disposals, including PNDs, and revising
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That the Grand Committee do report to the House that it has considered the Greater London Authority Act 1999 (Amendment) Order 2012.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, the order before the Committee gives the Greater London Authority the ability to spend money on activities that protect or promote improvements in public health in London.
The Health and Social Care Act 2012 confers important new public health duties on upper-tier and unitary local authorities in England. They include London borough councils and the City of London but not the GLA. From April 2013, those authorities must take appropriate steps to improve the health of their populations. The Act also confers on the Secretary of State for Health the new duty of taking steps to protect public health, and allows him to delegate his functions to local authorities either by prescribing them in regulations or by entering into other arrangements. Local authorities will be supported in their duties by a new grant, based on the current NHS spend on the equivalent activity, ring-fenced exclusively for public health. They will employ directors of public health and other specialist staff who will act as local champions for health improvement both within their authorities and beyond.
It is fair to say that the Act's provisions pave the way for the most fundamental reform of public health services for some decades. They were broadly welcomed by both local government and the public health community. There is widespread recognition that in many ways local authorities are the natural home for action on public health, given their closeness to their local communities, their direct democratic accountability and the responsibility they share already for a wide range of services that have an impact on health, such as social care, leisure and education among many others.
The public health challenges in Greater London are exceptional. London has a complex population that is ethnically diverse, relatively young, mobile and transient,
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Individually, the 33 boroughs are ready and able to address these challenges. There is, however, currently no agency with the power to plan and act across borough boundaries, and to take an overview of what can be done most effectively and efficiently for London as a whole. We believe that such an agency would have considerable potential. For example, it could be asked to commission pan-London services for smaller minority groups which may otherwise be at risk of slipping beneath the radar in some boroughs. We have consulted organisations representing minority groups in London, which agree that this would be a significant benefit.
A cross-London agency could reduce administrative costs and obtain economies of scale, freeing up more resources for public health services. If, for example, the boroughs agreed that it would be appropriate for them to run cancer awareness campaigns, it would be far more effective, and less costly, to commission one campaign for London than 33 separate campaigns each confined to a single borough.
The Government propose to fill this gap. In the gracious Speech on 9 May, Her Majesty announced that we will publish a draft Bill to modernise adult care and support in England. Subject to parliamentary approval, we also intend to use this Bill to require the Greater London Authority to establish a London health improvement board, bringing together the GLA, the mayor and the boroughs to produce and implement an annual plan for public health in London, funded by the boroughs from their ring-fenced grants.
I am delighted to say that the idea for this proposal came from the boroughs and the GLA themselves, in response to an invitation from the Secretary of State, which I think sends us a very positive message about their commitment and enthusiasm. In fact, the board is already up and running, albeit in a limited and non-statutory way.
This brings us directly to the matter of today's debate. The boroughs will acquire new duties and the related funding from April 2013. The NHS in London is keen to work with the London health improvement board on public health right now. However, it will not be possible to establish the board on a statutory basis before 2014 at the earliest.
Eager as the Board is to make its full contribution as soon as possible, it faces one particularly severe constraint during this intervening period. The GLA is currently prevented by Section 31(3)(d) of the Greater London Authority Act 1999 from spending money on providing any health services that can be provided by a local authority or other public body, such as a primary care trust.
This means that even if funds are contributed voluntarily by the boroughs or the NHS, the GLA and therefore the board cannot currently use them to
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The objective we want to achieve now, ahead of more comprehensive primary legislation, is simply to allow London boroughs to work in partnership with the board from the outset as one way of effectively fulfilling their duties. This order removes the obstacle that the 1999 Act presents. It is made under Section 31(9) of that Act, which provides that the Secretary of State may make an order to remove or restrict any prohibitions or limitations imposed by Section 31.
The order inserts a new Section 31(5A) into the Act, which from July will allow the GLA to spend money on providing services or facilities that protect or promote improvements in public health. This new power will be exercised consistently with the GLA's principal purposes as set out in Section 30(2) of the Act.
With this new power, the GLA will also be able to spend funds on public health activities that it raises from external sponsors other than the borough councils and, until April 2013, allow it to work with primary care trusts and the strategic health authority in London if they commission the GLA to deliver public health services on their behalf.
From 2013, the GLA, if commissioned, will be able to work with London boroughs and clinical commissioning groups, either individually or en masse, to deliver public health services on their behalf. I should perhaps stress that final point. The decision to fund the GLA or the board will be for the boroughs, and they will take that decision only if they see it as an appropriate step for them to take in improving their own population's health. In other words, the boroughs will need to be sure that funding the board offers them good value for money. They will remain accountable for that to their local population.
I hope the Committee agrees that this measure, modest as it may seem in some ways, opens up genuine possibilities for public health across London that would not otherwise be available unless and until we are able to introduce primary legislation that Parliament approves. I am happy to commend the order to the Committee.
Lord Hunt of Kings Heath: My Lords, I thank the noble Earl, Lord Howe, for explaining the intention of the order to the Committee. I declare an interest as chairman of an NHS foundation trust and as a consultant and trainer in NHS and health issues. As the noble Earl explained, this will enable the GLA to spend money on improving or protecting public health in Greater London. It has a specific relevance to the London Health Improvement Board, and is consistent with the enhanced role to be given to local authorities in the rest of England and in the London boroughs.
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The case the noble Earl put forward for a pan-London approach to public health is persuasive. My understanding is that-as he said-it will tackle the major health problems in the capital, including cancer, childhood obesity and alcohol abuse. I particularly note the comments of Dr Simon Tanner, NHS London regional director of public health, who explained that:
"Health issues in London are both complicated and specific to the city. The capital's biggest health problems such as obesity, cancer and alcohol abuse are often interrelated and cannot be tackled in isolation".
I listened carefully to the noble Earl's explanation of the relationship between the London boroughs, the GLA and the improvement board. He was careful to make clear that the London boroughs are the principal public health bodies for London. In essence, the LHIB will depend on the support of the London boroughs to be able to take the necessary action. I entirely understand that, but I will ask the Minister a question. He mentioned the issue of campaigns. He said that it would be much better to co-ordinate a public health campaign across London, and that the board could have an important role to play, which is self-evident. However, I imagine that it would depend on all the London boroughs signing up to a particular programme and committing a budget to it.
What will happen if the board is not able to get all the London boroughs to join a campaign? When statutory legislation is brought to Parliament, will it enable the board to take account of that in some way? Presumably, one would not want one borough to be able to veto an action that all the others had agreed to. I would be grateful if the noble Earl would also indicate when he thinks legislation will be brought forward to put the board on a statutory basis. I do not know whether it will be primary or secondary legislation. It would be helpful if he could explain that, too.
My final question is slightly outwith the issue, but I hope that the noble Earl will not mind me asking it. We are all agreed that local authorities, whether inside or outside London, should have a stronger role in public health. The appointment of a director of public health by first-tier local authorities, and the establishment of public health departments in those local authorities, is clearly very important. Noble Lords will be aware that there has been concern in the public health community about the extent to which the ring-fencing of budgets will actually hold. If the noble Earl is not able to explain this, perhaps he might write to me in due course.
I am also picking up some concerns that local authorities are being less than sensitive to the debates that we had on the Health and Social Care Bill about
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There are some signs that local authorities have not taken that message on board. It would be a great pity if local authorities, almost at the starting gate of assuming greater responsibility, did not recognise the need to ensure that public health has a very strong voice at the top table. Frankly, local authorities are on trial. There is no guarantee that the arrangement will stay for ever if they are not able to accept the responsibility that is placed on them. I realise that this matter goes slightly wider than the order, but any words of comfort would be much appreciated.
Earl Howe: My Lords, I am very grateful to the noble Lord, Lord Hunt, for his support for the order. He asked me a number of questions. First, he asked whether, if the London borough councils cannot unanimously agree on a plan, that would affect their ability to commission services from the GLA or through the board. The board can and will be able to deal with the boroughs individually if necessary. The draft Bill that we are bringing forward will make clear in primary legislation how the board will agree plans on a statutory basis. For example, if a group of boroughs wished to get together, excluding other boroughs, there is no reason why they should not do so and commission the GLA to deliver services solely on their behalf.
As I said, the establishment of the board as an NDPB will require primary legislation. Unfortunately, I cannot tell the noble Lord when that will be brought forward, but the draft legislation will be published soon. We published baseline allocations based on the NHS spend for public health, and our intention is to move gradually to a more needs-based formula over a period of years. To move more suddenly would prove destabilising, as I am sure the noble Lord appreciates. That addresses his point about the ring-fencing of budgets, and whether they will hold. I was not aware of concern about that. Of course, some boroughs wish that they had more money than they do, but it is necessary to start from a logical place, and we believe that the baseline allocations reflect current reality.
I was concerned to hear what the noble Lord said about the status of directors of public health and the extent to which they will or will not have access to their respective chief operating officers within a local authority. I will take that concern away with me, and I am grateful to him for flagging it up. If there is anything I can say to him in writing, I will be very happy to do so.
That the Grand Committee do report to the House that it has considered the Health and Social Care Act 2008 (Regulated Activities) (Amendment) Regulations 2012.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, the regulations that are before us today make a number of changes to the registration system for providers of health and adult social care services operated by the Care Quality Commission.
The changes that we are proposing fall into three broad categories. First, they make some changes to the extent of registration, removing some providers from registration where the risk to service users does not justify regulation by the commission, or there is little or no potential for regulation by the commission to mitigate these risks. Secondly, they make some slight technical amendments to the regulations; and thirdly, they make some clarifications to the regulations. I shall say more about the purpose of the instrument a little later, but I would like to reflect on the progress that the commission has made since it was set up three years ago.
As the independent regulator of health and adult social care services in England, the commission plays a key role in providing assurance that patients and service users receive the standards of care that they have a right to expect. All providers of "regulated activities" in England, regardless of whether they are public, private or voluntary sector organisations, are required to register with the commission. Providing a regulated activity without being registered is an offence.
In order to be registered, providers have to comply with a set of registration requirements that set the essential levels of quality and safety. Where providers do not meet these essential levels, the commission has a range of enforcement powers that it can use to protect patients and service users from unsafe care. This includes, in the most extreme cases of poor care, closing down services. The commission has registered around 22,000 providers in a number of waves. The final round will be the registration of 8,000 providers of NHS primary medical services in April 2013.
During the passage of the Health and Social Care Act 2012, we made it clear that we would strengthen the role of the commission. As our reforms to health and social care services are implemented, the commission's focus will remain on its core function of registering providers against the essential levels of safety and quality, and taking action against those providers that do not meet these standards.
The commission has taken on a challenging workload in bringing a large number of new providers into a new registration system in a short period of time, and in merging the work of three former regulators. I believe that it should be commended on the progress that it has made. The early years of the commission's operation have been comprehensively reviewed over the last year. This has included reviews by the Public Accounts Committee, the Health Select Committee and the performance and capability review undertaken by my own department.
The regulations before us now were consulted on and drafted before the findings of those reviews were available. I assure the Committee that my department will consider whether further changes to the regulations that underpin the registration system are required in the light of these several reports. We are now commencing a further review of the regulations and aim to consult on any further changes, if they are needed, at the end of the year.
Next, I should like to outline briefly the effect of the regulations before the Committee. Our aim in reviewing the regulations has been to adhere to the original principles underpinning the registration system. These are that there is a fair playing field, regardless of the type of provider; that the requirement to register with the commission is based on the risk to people who use services and the extent to which regulation can mitigate that risk; and that all types of providers must meet the same registration requirements.
In the autumn of 2011 we consulted on a number of proposals to changes to the regulations underpinning the registration system. The proposals that we put forward were not designed to remove the safeguards provided by the registration or to dilute the impact of registration. Rather, they were designed to ensure that the registration system was focused on the right places and was addressing areas where services posed a risk to patients and service users that could be mitigated by registration with the CQC. In addition, we identified anomalies and inconsistencies in the regulations. In the light of the consultation, we made some changes to the proposals and decided that others required further consideration before we could proceed. For example, the regulation of personal care away from home will now be taken forward in the next stage of our review of the regulations.
One of the key changes to the regulations, and the one that is most pressing, is to put in place an exemption from registration for activities provided on a temporary basis solely in relation to the Olympic or Paralympic Games. The short-term nature of these services, combined with the security arrangements around the Games, mean that the potential benefits of registration are limited. Other changes made by these regulations relate to partnerships and diagnostics, both of which reduce the burden of regulation in these areas.
On partnerships, we are changing the fitness requirements so that the necessary qualifications and experience are held by the partnership as a collective body, rather than having to be held by each partner as
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The final change that I should like to mention in some detail relates to the regulated activity of diagnostic and screening procedures. Our review identified a number of relatively low-risk diagnostic procedures that would currently require registration but where this is not justified by the risk to patients. As a result, we are amending the regulations so that these lower-risk diagnostic procedures-for example, the taking of urine samples without further action attached-do not of themselves require registration with the commission. Providers of other, higher-risk diagnostic procedures will still be required to register with the commission.
Other changes relate to the definition of medical devices, arrangements for securing consent where patients are not themselves able to give consent, and a change to clarify the defence that is available to providers against the offence of failing to meet the registration requirements.
In addition, there are changes to the scope of the activities which require registration. Personal care, where it is arranged by a parent, carer or trust, will no longer require registration with the commission; nor will the activities of second-opinion appointed doctors working under the Mental Health Act. Suppliers of blood-related products where there is no contact with patients or donors will no longer require registration; nor will the providers of ambulance services where these operate only within the confines of a cultural or sporting event. Providers of air ambulances will also not be required to register where they are registered with the Civil Aviation Authority and they do not provide the treatment component. In a single case, the scope of registration is being extended to include sterilisation and sterilisation reversal in the surgical procedures regulated activity.
Finally, we are amending the exemption that applies to some private practice of medical practitioners. In future, this will apply wherever a medical practitioner is employed by a registered provider and they are either on the performers list of a designated body for professional appraisal or employed by a designated body.
The overall impact of the changes that we are making is deregulatory, removing from registration with the commission some activities where the burden of registration is not justified and, at the same time, freeing up the commission's resources to focus on those higher-risk activities where regulation is justified. Our assessment of the impact of the changes is that they will deliver a net benefit of more than £100 million over 10 years.
These changes to the registration regulations ensure that the Care Quality Commission can operate a system of regulation that is focused on addressing the risks associated with the provision of health and adult social care. I commend the regulations to the Committee.
I thank the noble Earl, Lord Howe, for his very extensive explanation of the regulations. Although the instrument is mainly technical in respect of the scope and definition of regulated activities, I do not think that it can be divorced from more general issues facing the CQC and its turbulent history over the past few years.
It is clear that the CQC faces some fundamental challenges over leadership, sense of direction and the confidence that both the public and the sector it seeks to regulate have in it. The noble Earl, Lord Howe, mentioned the Public Accounts Committee report of 12 March, which stated that the commission had more responsibilities but less money than its predecessor organisations. It pointed out that, none the less,
"We have serious concerns about the Commission's governance, leadership and culture. A Board member, Commission staff, and representatives of the health and adult social care sectors have all been critical of how the Commission is run".
The review points out that since 2009 it has not only brought together three different organisations and developed a new regulatory model but has brought 21,000 providers into the new regulatory regime and carried out more than 14,000 compliance inspections and reviews. I also understand from the capability review that:
Looking forward, the review states that there are important issues that need to be addressed. First, the CQC should become more strategic; and, secondly-this is very telling in view of my later comments-accountabilities are unclear. The review says that there is a blurring of the boundary between the board and the executive team, with the board only recently moving to take on a stronger role to constructively challenge
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I have now had the opportunity to read the Treasury minute responding to the PAC report, in which the Government agreed with the PAC's recommendation on the need for an action plan to secure the changes that are required. I also note from the Treasury minute that, on governance, the Government promise that a new board structure will be in place by October 2012. When the noble Earl responds, perhaps he will say a little more about this governance structure. Can I take it that there will be a process of reappointing non-executives? It would be helpful to know whether that is intended.
On the role of the commission, the Treasury minute refers to the comment made by the PAC, which stated that there was at least uncertainty about the core role of the commission. My understanding from the Treasury minute is that the Government accept the challenge of setting this out with measurements of quality and impact to assess the CQC's effectiveness.
Having seen the reports from the PAC and the Health Select Committee, and the department's own review, we now have an understanding of some of the actions that will be taken. Does the noble Earl consider that they will be sufficient to ensure confidence among the public? I invite the noble Earl to reflect on that because, however worthy many of the CQC's actions were, one should not underestimate the knock to public confidence that has occurred in these turbulent years.
Perhaps I can tempt the noble Earl to gaze into the future and say a little about how the CQC might fit into the new NHS architecture. In our debates on the Health and Social Care Act we considered the relationship between CQC, the NHS Commissioning Board and Monitor. There is some built-in tension there, and I am interested to know how the noble Earl thinks the whole thing will fit together.
We also await the second Francis report, which I gather is now due in the autumn. Inevitably, this will have something to say about the CQC and, I suspect, the regulatory architecture. Again, I cannot anticipate what the inquiry will say, but will the noble Earl say a little about what process the Government intend to adopt following receipt of the report? Clearly it could have an immediate impact on some of the changes that the Government are making as a result of legislation.
On the burden on the CQC, it was a mammoth task bringing three organisations together and, essentially, increasing the responsibility but reducing the resources. One should not underestimate the task that was placed on the CQC, which was expected to take on new responsibilities. The noble Earl mentioned the responsibility of embracing the registration of providers of NHS primary medical services. This has now been delayed until April 2013 but, none the less, is a major additional responsibility. The Public Accounts Committee commented on this and said that in the past the commission's inspection work suffered when it had to register large groups of providers. The committee said that it shifted its focus to registration and carried out far fewer inspections than planned. What guarantees
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I note that the PAC also recommended that the commission review and set out how it will make sure that the assessment of GP practices is meaningful. In the Treasury minute the Government have said that they agree with that recommendation. I am sure that that is useful but, in order for it to be effective, one has to be reassured that the CQC has the capacity to cope with this new responsibility. How successful does the Minister think the CQC has been in focusing on areas where it is likely to have the greatest impact and where the burden of regulators on providers can be justified?
This is not an easy task. The scale of the sector is huge-it ranges from a plus £1 billion foundation trust not a million miles away from here, to a single-handed GP or to a small care home. It is a huge responsibility and deciding the priorities on a risk basis is a tremendous challenge. Over the fullness of time, it would be good to know how the CQC is able to deal with this.
I am tempted to say to the noble Earl that, of course, the CQC has not always been helped by interventions from his ministerial colleagues. I refer to the intervention of the Secretary of State in launching spot checks on more than 300 abortion clinics. Let me make it clear that I accept that the Secretary of State should have intervention powers. From our debates on the former Bill, the NHS Commissioning Board will know that I very much uphold ministerial interventions. The Secretary of State must always have an ability to say, "Here is a concern. You as regulator need to go into it". I do not have a problem with that.
I am not sure that the Secretary of State got his priorities right and I draw the noble Earl's attention to the comments of Stephen Dorrell, the chairman of the Commons Health Select Committee, who thought that the Secretary of State's approach might have been better if he had drawn the CQC's attention to the fact that the subject of abortion clinics was an issue in the media and invited it to consider this in the context of its priorities. The question that Mr Dorrell put was whether the CQC, as an independent regulator, should determine its own priorities or have its priorities determined for it.
I fall somewhere in the middle. I do not go as far as Mr Dorrell. As I have said, there will always be occasions when the Secretary of State, in upholding the public interest in the health service, should have a right of intervention. Of course, the way in which the regulator conducts its inspection must be entirely a matter for the regulator and should not be subject to political interference. My concern is about priorities and whether the Secretary of State, in taking the action that he did, thought carefully enough about whether that would have a negative impact on the resource availability of the CQC to do the other things that it needs to do.
I note that because of issues of capacity and complexity the PAC recommended that the CQC should not take on the functions of the Human Fertilisation and
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Returning to the issue of whistleblowing, which I mentioned earlier, whistleblowers have to be a key source of intelligence in helping the commission to monitor the quality of care. The Public Accounts Committee was concerned with the closure of the dedicated whistleblowing line that the Healthcare Commission had previously used. I see from the Treasury minute that the department believes that that was a justified decision. That is open to debate. I respect the views of the Government on that but there is an issue around whistleblowing.
I am concerned at the potential treatment of a non-executive board member of the CQC, Kay Sheldon, who gave evidence to the Francis inquiry and whose membership of the CQC board is apparently at risk. She developed substantial concerns about the way in which the board was operating and believes that she raised those concerns about the management, culture and leadership of CQC over a sustained period. She says that she repeatedly raised these issues internally but her experience was that other members of the CQC board, and the senior management of the organisation, failed to engage on the issues she was raising.
I would again draw the noble Earl's attention to his own capability review, which seemed to suggest that there was a confusion of roles on the board and that the department is now satisfied that the non-executives are providing the scale of challenge necessary. It is quite significant that Ms Sheldon clearly found it difficult to get her concerns treated seriously. She raised issues with the noble Earl's department and the National Audit Office but felt that those were not treated seriously. In the end, she approached the Mid Staffs public inquiry team and gave oral evidence on 28 November 2011.
"Both today's witnesses, I should make it clear, have come forward to this inquiry of their own volition, and I suspect it has required great courage on their part to do so. So far I have seen nothing to suggest that they have acted other than in good faith, and without intending to refer in any way to the technicalities of current whistle-blowing legislation, it seems to me that both these witnesses are properly called whistle-blowers".
I understand that on the day Ms Sheldon gave evidence to the public inquiry that the Secretary of State had set up, the chair of the CQC wrote to the
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Following the letter from the chair of the CQC, which requested that the Secretary of State exercise his powers under paragraph 3(3) of Schedule 1 to the Health and Social Care Act 2008 to remove Ms Sheldon from her position as a non-executive member of the CQC board, I understand the Secretary of State appointed Ms Gill Rider, the director-general of leadership and people strategy at the Cabinet Office, to investigate the background to this request. Ms Rider prepared a review, which was coincidentally released on the same day that the Public Accounts Committee reported- 12 March 2012. The essential conclusion of the Rider review, as I understand it, is that the public airing of concerns by Ms Sheldon caused a fundamental breakdown of trusting relationships between Ms Sheldon and the other members of the board. Therefore, she recommended to the Secretary of State that he exercise his powers to remove Ms Sheldon from the board.
I understand that the Secretary of State has written to Ms Sheldon, inviting her to make a full response to Ms Ryder's review, indicating that she may have met the grounds for termination set out in the Health and Social Care Act 2008.
I do not know how much the noble Earl can respond to me today, but I use this opportunity to express some concerns that I have. I would have thought it clear that Ms Sheldon acted in the public interest and I want to take the noble Earl back to the conclusion of the capability review. I was very struck by the comment that there had been a blurring of the boundary between the board and the executive team, and only recently has the board moved to take on a stronger role to the constructive challenge of the executive team. My argument would be that, in those circumstances, surely Ms Sheldon should not be penalised for taking her concerns to the Francis inquiry, having already raised them at the CQC, the department and the National Audit Office and feeling that they were not dealt with effectively.
It is very important that whistleblowing should be supported. I use this opportunity to make it clear to the Minister that the decision of the Secretary of State in relation to Ms Sheldon will have a profound effect on whistleblowing generally within the National Health Service. I urge a great deal of sensitivity when it comes to making any such decision.
Finally, I in some ways replicate the comment that the Minister made at the beginning of his remarks. I do not underestimate the CQC's achievements and the commitment of its people; I believe that Dame Jo Williams, the chairman, and Cynthia Bower, the chief executive, are people of the highest integrity and I have very great respect for them. However, very searching questions have to be asked about the CQC and its performance and future, and they deserve to be answered. As we have an extensive statutory
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Earl Howe: My Lords, I am grateful to the noble Lord for his comments. I begin by thanking him for the expressions of support that he gave to Dame Jo Williams and Cynthia Bower. I am sure that they will read those with gratitude.
The noble Lord made a number of points around the capability of the CQC to undertake the duties placed on it. The performance and capability review found that in its early stages the CQC was understandably focused on operational priorities. However, the achievements of the CQC should not be underestimated, and I was glad to hear the noble Lord acknowledge that. The review also acknowledges that the CQC leadership could have done more to manage operational risks and provide better strategic direction. We are clear that the CQC leadership is now demonstrating greater confidence and challenge. The recommendations are aimed at building on performance over the last 12 months, which I think has been noticeable, to further strengthen capability and improve accountability, including within the department.
We were very frank in our assessment of our own role-that is to say, the role of the department-in this. The capability review recognised that the department and the CQC underestimated the scale of the task of combining three regulators into one organisation while developing and implementing the new regulatory model. Even so, the review found that the CQC could have done more to manage the difficulties that it faced in its first few years.
We need to address those points but, at the same time, to look ahead. The department is committed to supporting and strengthening the CQC. We are clear that the CQC should continue in the future to focus on its core role of assessing whether providers meet the essential levels of safety and quality through its registration function. We have every confidence in the CQC's ability to provide effective regulation of providers of healthcare and adult social care in England. The performance and capability review found that the CQC has made significant progress in the last nine months and is clearly focused on its core tasks.
The review has already made recommendations to strengthen the board and the board's structures, which was a matter raised by the noble Lord, including changing the board so that, instead of comprising only non-executives, it becomes a unitary board of majority non-executives, with senior executives on the board where they can be better held to account. It also recommended that the CQC reviews and reinstates the board's support and development programme and strengthens capability at executive team level with greater strategic capability and more and wider sector-specific expertise. The department will oversee the implementation of those recommendations.
The noble Lord mentioned in particular Kay Sheldon, who is a member of the board. I hope that he will understand that I do not want to comment on the
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Based on the capability review, the CQC will now be expected to set out as part of its business plan for 2012-13 an agreed action plan providing details of how the recommendations will be taken forward. These recommendations are intended to make the CQC more strategic and responsive to risk, to set out more clearly what success looks like, to clarify accountability arrangements, including strengthening the membership and structure of the CQC board, as I have mentioned, and to provide greater consistency and coherence in the development and delivery of regulation. Those three things will run through the business plan.
The noble Lord spoke about the various new roles that the CQC will be undertaking. The roles that we are asking the CQC to take on are intended to strengthen its existing role as the independent regulator of health and adult social care. At the same time, in line with the Government's regulatory reform agenda, we are looking at ways to reduce the regulatory burden on the system for providers. The functions considered for the CQC are those that have a natural synergy with the commission's primary functions. That is where the registration of GP practices comes in. As the noble Lord knows, we took the decision, in response to a request from the CQC, to defer the registration of around 9,000 providers of NHS primary medical services. That decision will give the CQC additional time to improve the registration process for this tranche of registrants. The CQC is overhauling its online application process so that providers will be able to start completing their applications sooner than in previous application rounds. The website will contain full information on the registration process. It will provide updates on the progress of an application and on how long it is anticipated it will take for key decisions to be made. That is a very welcome development.
The CQC will also put in place a central team to handle applications, reducing the risk of the registration of NHS primary medical care providers impacting on the CQC's ability to monitor compliance for other registered providers. The CQC is working to put in place a different system for CRB checks for the registration of providers of primary medical services that will be effective, but simpler, and should avoid the delays experienced in the registration of dentists.
The noble Lord mentioned the Mid Staffs inquiry and the report that we expect in October from Robert Francis QC. All I can say at present is that we will consider Mr Francis's recommendations when they are published. I hope that the noble Lord will understand that it is difficult for me to anticipate what we will do before we read those recommendations.
The noble Lord also mentioned the CQC's recent activity in conducting spot checks on abortion clinics. He asked whether it would have been more appropriate for the CQC to direct its own priorities. The central point I would make here is that the CQC needs to take into account any relevant information it receives within
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The noble Lord also asked me about the plans to transfer the work of the Human Tissue Authority and the Human Fertilisation and Embryology Authority to the CQC. As he knows, our report from the review of arm's-length bodies nearly two years ago set out the work that the department is doing to reduce bureaucracy and improve efficiency in its arm's-length bodies, and indeed throughout the NHS. We have not accepted the PAC's recommendation that the CQC should not take on the functions of the HFEA at this time. The Department of Health has made a commitment to conduct a public consultation on the transfer of HFEA and HTA functions and the abolition of those bodies. We will publish the consultation shortly and we of course welcome responses to inform our thinking. We are pleased that the PAC recognises that we will be consulting on this proposal and considers this to provide a "welcome pause".
Lord Hunt of Kings Heath: I am grateful to the noble Earl, Lord Howe. Perhaps I may make just a couple of points. On the consultation on the HFEA, all I should like to say to him is that it might be useful if there were some time for parliamentary discussion in your Lordships' House around the consultation-not to second-guess the consultation process but, I should have thought, in view of our previous debates, to allow for some discussion among parliamentarians about the consultation document.
Secondly, as regards Kay Sheldon, I fully understand that the noble Earl is not prepared to comment on any individual case. He went on to make the point that the department was concerned to ensure that the board of the CQC was well functioning and effective. One could take that both ways. I understand, in a sense, the ambiguity of the noble Earl's expressions in relation to that. All I would say to him is that I would ask the department to walk very carefully in this area. I know that he has debated the issue of whistleblowing many times in the past few years, and he has always upheld the rights of whistleblowers. Although it might be argued that a board member is a little different from a member of staff, there will sometimes be circumstances when board members themselves can become frustrated that they have raised concerns that are not then dealt with. Taking action against a board member who has actually given evidence to a public inquiry will send unfortunate signals to the NHS about how strong collectively we are in supporting whistleblowers. I do not expect the noble Earl to respond to that but hope that it will at least encourage the department to think very carefully about their actions in this case.
Earl Howe: My Lords, on the noble Lord's first point, I would be very willing to take part in a debate on the issue involved in our proposals to transfer the functions of the HFEA and the HTA to the CQC. I can only say that I will ensure that the noble Lord's suggestion is fed into the usual channels.
On the second issue that he raised, I appreciate his understanding that it would not be appropriate for me to comment on the position of individual members of the board. I am sorry if my remarks appeared ambiguous; that was certainly not my intention. All I intended to say was that the CQC will be facing significant challenges over the coming months, as we have been discussing,
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