Health and Social Care Bill

Public Bill Committee, 1 February 2001.

Standing Committee E

Clause 29 - Pilot schemes

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 206, in page 30, line 1, leave out from `Chapter' to second `services' in line 2 and insert `—

``pharmaceutical services'' means services of a kind which may be provided under section 41 of the 1977 Act, or by virtue of section 41A of that Act; and

``local pharmaceutical services'' means such pharmaceutical services (other than practitioner dispensing'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to discuss the following amendments: No. 39, in page 30, line 2, leave out `(other than practitioner services)'.

Government amendment No. 207.

No. 280, in page 30, line 4, leave out from beginning to end of line 8.

Government amendment No. 220.

John Denham (Labour, Southampton, Itchen)

Clause 29 is the first of 13 clauses dealing with local pharmaceutical services. It may be helpful if I briefly set out how those clauses relate to each other.

Clause 29 establishes a pilot scheme for a local pharmaceutical service. Clause 30 introduces schedule 2, which deals with the process by which health authorities develop pilot schemes and submit them for approval. Clauses 31 and 38 deal in different ways with the relationship between local pharmaceutical services pilot schemes and existing arrangements. Clause 32 deals with the review of pilot schemes, and clause 33 with their variation and termination. Clause 34 deals with the legal basis under which pilot scheme agreements can operate, while clause 35 makes provision for meeting preparatory costs.

Clause 36 deals with prescription charges, and clause 37 with the status of pilot schemes in relation to other NHS legislation. Clauses 39, 40 and schedule 3 deal with establishing local pharmaceutical services as a substantive and permanent part of NHS arrangements following the pilot stage. Clause 41 provides powers to make further provisions in relation to that.

Many of the provisions in those clauses are modelled directly—sometimes word for word—on the equivalent provisions for personal medical and dental services introduced under the National Health Service (Primary Care) Act 1997. Local pharmaceutical services are a key element of our programme for pharmacy set out in ``Pharmacy in the Future'', which we published in September.

I think that the Committee may agree that, for too long, the NHS has underused the skills and expertise of pharmacists. ``Pharmacy in the Future'' demonstrates for the first time that the Government are committed to putting that right. Community pharmacies provide a necessary and well-valued service throughout the country. Studies have repeatedly shown that patient satisfaction with dispensing services is high. People have a growing recognition of what else community pharmacists can do, not least in helping people to deal with minor illnesses and make better use of their medicines.

Philip Hammond (Conservative, Runnymede and Weybridge)

Will the Minister place on record the value to local communities of GP dispensing services in areas not served by pharmacies?

John Denham (Labour, Southampton, Itchen)

Dispensing GPs do indeed provide a valuable service, particularly in areas where community pharmacy services are not available. Although the general preference is for the full range of pharmacy services to be available, dispensing GPs provide a service valued by patients that would not otherwise be available.

It is generally recognised that the current contractual framework for community pharmacy needs improvement. The national framework fails to provide sufficient incentive, and does not properly reward good quality and service at the expense of those who provide only the bare minimum. We want to reform that national framework. At the same time we want to provide a more flexible alternative. There are already many good examples of local projects under which pharmacists provide extra services on top of the national requirements. What is missing at the moment is a proper framework for local agreements to bring all the elements into a coherent whole, tailored to specific local needs. Local pharmaceutical services pilot schemes will provide that.

As with personal medical services, the legislative framework in the Bill is deliberately flexible and open. The emphasis is on local imagination and innovation, free from the constraints of the rigid national contractual framework.

Philip Hammond (Conservative, Runnymede and Weybridge)

We are very supportive of the idea of local flexibility, free from the constraints of rigid national contracts. Will the Minister assure the Committee that the local pharmaceutical services pilot scheme will not go along the route followed by personal medical services. The latter started by emphasising local flexibility and freedom from the rigidity of national contracts, and has moved in the direction of more rigid—or, as the Government would say, more uniform—national contracts. Can he assure us that it will remain a locally flexible scheme?

John Denham (Labour, Southampton, Itchen)

PMS has been a significant success for the Government, with 22 per cent. of all GPs operating under PMS from April and with more to come forward next year. As our experience of PMS, and that of GPs, grew, we were able to combine local flexibility with some essential core elements in the PMS contracts, and it is interesting that that did not dissuade GPs from signing up to them. It would be wrong to rule out core elements in local pharmaceutical services contracts. We must proceed in the light of experience, and the emphasis will be, as it is with PMS, on the development of schemes that are appropriately tailored to local needs and to providing additional local services.

We look forward to schemes that combine traditional dispensing services with greater levels of pharmaceutical care. Pharmacists in such schemes would not just supply medicines, but actively manage them. They would work with GPs and primary care services to help to ensure that patients get the right medicines and the help they need to make the best use of them. That could include the periodic review of individual patient's medication or even domiciliary visits to discuss and assess any problems they are having with their medicines. It could involve a continuing role in therapeutic monitoring for people taking warfarin, for example, or help for asthmatics with inhaler techniques. In many local schemes pharmacists provide enhanced services, and there are opportunities for many more.

By allowing pilot schemes to include other services, pharmacists may be used as a base for other activities. Health authorities are already involving pharmacies in health education campaigns. For example, pharmacists provide smoking cessation counselling or particular services for drug misusers. Some pharmacies could be a convenient local centre for chiropody or similar services.

The Government have been deliberately open about who may be parties to pilot schemes. Although existing independent contractors will no doubt be at the forefront, we have not ruled out others being involved if that is the best way of meeting local needs, including NHS trusts and primary care trusts. We could also have schemes in which the pharmacy owner contracts for the dispensing service to provide the facilities, but it is a named individual pharmacist who contracts directly to provide the associated pharmaceutical care.

Participation in pilot schemes will be voluntary and discretionary. For pharmacists and health authorities that choose to make use of the new framework, LPS means exciting opportunities to provide better and more cost-effective services to patients. We have shown what can be achieved with personal medical services and with personal dental services, the time is right to achieve the same in pharmaceutical services.

Our amendments to the clause improve the drafting of the definitions. Amendment No. 206 makes it clear that local pharmaceutical services means services that may be provided under the existing legislative framework with one exception: that is, dispensing by doctors and dentists to their own NHS patients. That exception does not imply any desire to exclude dispensing doctors from the opportunity to take part in innovative local contracts. It is simply that the opportunity to do so already exists within personal medical services, and it would be confusing to include that in local pharmaceutical services as well.

Amendment No. 207 clarifies that the exception applies to all GPs, whether performing general or personal medical services. In the same vein, amendment No. 220 ensures that the definition in paragraph 1(3) to schedule 3, which deals with post-pilot arrangements for LPS, is consistent.

I shall anticipate amendments Nos. 39 and 280 tabled by the rt. hon. Member for North-West Hampshire (Sir George Young), which would put dispensing doctor services back within the scope of the local pharmaceutical services pilot schemes. I hope my explanation of their exclusion will reassure the rt. hon. Gentleman that the amendments are unnecessary. The Government have sought to avoid confusion and duplication of provision rather than exclude dispensing doctors from innovative approaches to dispensing.

George Young (Conservative, North West Hampshire)

I shall speak to my amendments Nos. 39 and 280, and also respond to some of the more general points that the Minister made. Amendments Nos. 39 and 280 are about equality of opportunity between different groups of GPs. Deleting ``other than practitioner services'' and subsection (9) on the definition of practitioner services would give GPs providing general medical services the same opportunity to take part in LPS as GPs who provide personal medical services. I do not see any reason to create a differential between the two types of practitioner. It would be perverse for the opportunity to be made available to one group of GPs, but not to the vast majority.

Under the clause, it will be possible to provide additional services such as diagnostic testing and investigative procedures in an LPS scheme. A GP may wish to apply to provide those services, and it is important that a patient's care is properly co-ordinated and integrated. I was not wholly persuaded that because GPs could apply under a different scheme, they were excluded from taking part in this one. To avoid any future problems LPS pilot schemes should be introduced with care, to ensure that there is equity in the way in which rules are applied. The Minister's amendments have dealt with some of the concerns of the British Medical Association's general practitioner committee, and we will discuss amendment No. 219 later.

I would like to touch on the issue of GP dispensing, which was raised by the Minister and which my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) mentioned in his intervention. My amendment is about the ability of GPs to take part in the new arrangements. The Government seem to overlook the importance of GP dispensing. Some 3.5 million people get their prescriptions not from the local pharmacist, but from their GP. There are 4,400 dispensing doctors in the UK. Committee members may know that there has been a long history of conflict between pharmacists seeking to establish new community pharmacies, and GPs who act as dispensing doctors, as well as between pharmacists with established pharmacies and GPs seeking to become dispensing doctors. Progress has been made between the professions towards stability.

The reason for my interest in the matter, and for my amendment, is something that happened in my own constituency in north-west Hampshire. In Tadley, 2,000 patients used to get their medicines dispensed at the Woodland GP practice. There were clear advantages in that for them. It avoided the need to visit a chemist as well as a doctor. All the patients lived at least a mile from a chemist. The area, which is predominantly rural, was designated a controlled area, which allowed the GPs to dispense. The GPs and their patients were happy.

Then someone in the health authority, who apparently had nothing better to do, decided to re-designate part of the practice area as urban rather than rural. There is no definition of a rural area—it is a subjective exercise. However, the notion that because someone in the health authority re-designates the area, my constituents put down the White Paper on rural affairs and pick up the White Paper on urban matters, is optimistic. The important thing is that, without the patients or the community health council being consulted, the machinery was activated to stop the GPs dispensing. That had implications for all the patients, because the income from dispensing funded additional equipment such as an ultrasound scanner.

In a rather Kafkaesque process involving the pharmacy application board, Baughurst Common was designated as urban and not rural. That was that; the area was no longer controlled and chemists could then dispense there, because they can dispense in both controlled and uncontrolled areas. However, GPs can dispense only in controlled areas. I took the matter up with the then Minister of State, who is now the Secretary of State, and shared my problem with him. He wrote back on 27 May 1998. His letter states:

I am sorry to hear that the change of classification of Baughurst from a controlled to an uncontrolled area, may jeopardise the number of services the Woodland Practice currently provide to patients at their surgery. However, the statutory responsibility for handling applications for the provision of pharmaceutical services rests with the Health Authority and, on appeal, to the Appeal Authority. Ministers have no power to intervene, and indeed, it would be inappropriate to do so for individual cases.

The Minister may have had a good alibi then, but with the fresh measures and the relevant clauses now before the Committee, he has no alibi. If he believes, as I do, that in the circumstances that I have set out it was wrong to deprive patients of a one-stop shop because someone wanted to open a new pharmacy, I ask him to say so and to undertake to amend the Bill if it does not have the flexibility that I want.

I yield to no one in my admiration for community pharmacists. As the Minister said, their skills have for far too long been undervalued, their informal advice can save people a visit to a GP and the dispensing income can keep open a chemist's shop that would not be viable without that income flow. We need a balance, but the Department's literature on this point is unbalanced. The Minister referred in his opening remarks to ``Pharmacy in the Future''. I could find no reference to dispensing GPs there. A reference at paragraph 2.9 misses the point. It states:

``Patients find it convenient to have a community pharmacy very close to their GP's surgery.''

Yes they do, but they might find it even more convenient if the GP did the dispensing. Paragraph 1.8 comes close to my ideas in referring to ``one-stop primary care centres'', with the pharmacist and GP ``under one roof''. I am in favour of that, but it is not quite the same as GPs doing the dispensing.

Paragraph 1.4 of the document states that people should get their medicine

``at a place of their choosing'',

but, as I have explained, the present system does not permit that, if the place of their choosing is withdrawn.

I am slightly more worried about paragraphs 4.13 and 4.14. Perhaps the Minister will reassure me when we consider schedule 2. A free for all is apparently envisaged. I do not mind pharmacists opening businesses if they want to, but I object to a pharmacy opening with the consequence that a GP must stop dispensing. The omission that I am concerned about also occurs in the document that the Minister circulated to the Committee, ``The Health and Social Care Bill: Local Pharmaceutical Services''. There is a passing reference at the end, at paragraph 4.12.1, but paragraph 4.12.3 states:

``The Government has decided not to include dispensing doctor services within LPS schemes themselves.''

The explanatory notes state at paragraph 142:

``The parties to pilot schemes may therefore include, amongst others, individual pharmacists, retail pharmacy businesses and dispensing appliance contractors.''

There is no reference in the explanatory notes to GPs. It would appear that they cannot play the game in question.

I should like a clearer response from the Minister to the question put to him by my hon. Friend the Member for Runnymede and Weybridge. What is the role of dispensing doctors within the Government's vision of local pharmaceutical services? Can we have an assurance that there will be no repetition of what I described happening in my constituency? Will there be a level playing field between GPs who want to take the route that I have outlined and others? Perhaps the Minister can bring us up to date with the proposed regulation changes. I understand that the Pharmaceutical Services Negotiating Committee and the general practitioners committee of the BMA have been engaged in discussions to try to resolve the long-standing disputes. However, I understand that the regulations need to be changed to bring stability to the world of rural dispensing.

I hope that, if not in response to the present debate, then at some time in our proceedings, we shall be told more about dispensing doctors than we have so far and be given a clear assurance about what happened in Tadley.

Philip Hammond (Conservative, Runnymede and Weybridge)

I draw the Committee's attention again to my registered interests in relation to commercial property since, self-evidently, many pharmaceutical services are provided from commercial property. I am grateful to the Minister for providing some background to part II of the Bill. It will not have escaped his notice, or that of his grateful officials, that there are a relatively modest number of Opposition amendments to part II. That does not mean that there are not important issues to discuss, but it is fair to say that this part of the Bill contains no burning political matters likely to cause huge divides. Instead, we want to explore a series of technical and operational issues.

We have not seen a deluge of representations from the relevant establishment, which tends to suggest that it is broadly happy with the direction that the Bill proposes. It is our duty not only to represent the concerns of the establishment, be it medical or pharmaceutical, but to consider issues that may affect people who do not have powerful bodies to articulate their interests. I hope that over the next few hours we can probe the Minister on the issues and have a genuinely constructive debate, exploring what will happen as a result of the clauses. They set out a framework, but they are not precise—they cannot be expected to be—about what will happen in practice.

We support the concept of broadening the way in which pharmaceutical services can be provided. We all agree with what the Minister said about pharmacies being an under-used asset in the primary health care delivery system, whether we are objectively considering the professional capacity of pharmacists, which is so evidently not being used, or models of the role of pharmacies in other European countries.

Has the Department of Health undertaken any formal work to gather evidence of specific failures in the current arrangements? The Minister said in his opening remarks that the new arrangements would enable the focus to be on quality rather than the provision of bare minimum services. The explanatory notes and other documents give a slightly different emphasis, suggesting that the changed arrangements will enable pharmaceutical services to be extended into areas in which coverage is inadequate.

How does the Minister perceive the balance between the need to achieve greater coverage and the need to improve the quality and depth of services offered? He might say that both are important, but there would need to be different arrangements to extend coverage into inadequately covered areas. Several of my remarks this morning will go to the heart of the distinction between encouraging existing providers with premises and facilities to change how they work—they will have financial incentives, as that is what private sector players respond to—and achieving provision of services where there is currently inadequate provision. I will deal with that more specifically later.

Will the Minister tell us how the provisions fit into the long-established and broad debate about the role of dedicated small community pharmacists versus the role of large multiple retailers, especially in supermarkets? I also want to know about retail maintenance of over-the-counter medicine. The Minister did not touch on the matter, but I am sure that he would acknowledge that the pharmacy contract underpins the viability of many retail pharmacies, which provide a broad range of services, such as over-the-counter medicines and baby products. We must explore how to ensure— as the financial incentives currently delivered through the part II arrangements are replaced by the local pharmaceutical arrangements—that we do not discourage people who currently deliver, as incidental to their dispensing contract, an over-the-counter service. We need to be careful that they do not become more of a service provider and less of a retail operation because of the different nature of their operations.

It would be useful if the Minister said something about the retail price maintenance and the issues of community pharmacy versus supermarket, and the cross-subsidisation between over-the-counter products protected by retail price maintenance and the services provided by community pharmacies. Implicit in the Bill is the notion that health authorities will pay for the incidental benefits of community pharmacists and for the role they play in the primary health care system. At present, to some extent, that role is financed by cross-subsidisation from the retail price maintenance on some over-the-counter products.

I appreciate that the Minister has talked about local flexibility and that different models will exist in different areas. However, I hope he will not shelter entirely behind that and claim that he has no idea how those matters will operate in practice. That would alarm the Committee. The Government must have some models in mind. Does the Minister envisage a system of direct negotiable payments—as it were, contracted amounts over and above the remuneration pharmacists receive for their routine dispensing activity? That might be the way to secure provision in areas where it is sparse and to some extent that is already reflected in the essential small pharmacies premium arrangements.

Can the Minister tell us what role he envisages for NHS trusts and primary care trusts in the model? There is a competition issue here. At the moment, pharmaceutical services are provided almost entirely by private sector contractors. If in future NHS trusts and primary care trusts are to have a significant role, the issue will arise of the appropriateness of public sector bodies competing—perhaps head on—with private commercial providers. The Minister must recognise that the Bill could lead to competition issues and practices that are incompatible with the open and free competition that we expect to see in a retail market. The consequences could be that NHS trusts and primary care trusts that dip their toes in the local pharmacy market end up, perversely, driving out commercially based providers. If those public sector bodies then found themselves unable or unwilling to continue providing the service, the result would be gaps in the market.

Perhaps I have not been diligent in doing my homework.

David Jamieson (Labour, Plymouth, Devonport)

Hear, hear.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Government Whip is, I think, rather uncharitable. This is the first clause of the morning. My mugging up might be a little scanty on the later clauses, but I pride myself on usually reading the background notes to at least the first clause of the day.

Will the Minister clarify who is the relevant authority? I assume that it is either the Secretary of State of the Welsh Assembly. The Minister nods. My right hon. Friend the Member for North-West Hampshire spoke about the Secretary of State having an alibi. The alibi in this case is the relevant authority. It will be the Secretary of State in England; but I cannot find a definition in the Bill. It would be useful for the Minister to point us to the place—it may be in other legislation—where relevant authority is defined. I assume that it is not defined in the base statute because the Welsh Assembly had not been created then.

I should place on record that we warmly welcome the idea that a community pharmacy could provide a wider range of services than the simple dispensing of medicines. The Opposition have had many discussions with bodies representing community pharmacy and pharmacy retail chains about what they might be able to do. It is clear that their walk-in capability would far exceed the Government's most optimistic ambitions for their own walk-in centres programme. Thousands of High street walk-in centres are waiting to be used, admittedly for a limited range of activities, although diagnostic testing is an obvious one that springs to mind. We have also had discussions with one or two pharmaceutical chains about the practicality of undertaking PSA prostate screening tests at retail pharmacies if the test proved effective and if it were decided to introduce a broad screening programme along those lines.

We envisage an increasing role being placed upon general practices in the overall scheme of health delivery. It is, therefore, important that the process passes on down the line. As we try to move procedures out of the secondary sector into the surgery, we shall have to help GPs shed some of their more mundane tasks. If pharmacists can take some of the load, it would be a sensible way to proceed.

In conclusion, I share the concerns expressed by my right hon. Friend the Member for North-West Hampshire when speaking to amendments Nos. 39 and 280. He said that we have no reason to draw a distinction, in terms of their ability to participate in such arrangements, between doctors delivering PMS and doctors delivering GMS. I was not persuaded by the Minister's response and I hope that he will reflect further on the matter. He might admit to the suspicion that the Department of Health has, at official level if not at ministerial level, shown a sense of hostility towards dispensing doctors, perhaps because they were thought to be more expensive because of a propensity to dispense at a different rate from non-dispensing doctors, although I have seen no evidence to support that. It would help if the Minister answered the debate in the context of his Department's corporate view on dispensing doctors and their place in the overall scheme.

Peter Brand (Liberal Democrat, Isle of Wight)

We very much welcome this part of the Bill. The change is long overdue. Primary care does not mean general practitioner services but a team in which pharmacists play an important role, as do the other professions mentioned later, with their extended prescribing rights. We need to discuss accountability, but I imagine that we will do so on clause 42.

I welcome the implied flexibility of pilot schemes. As the hon. Member for Runnymede and Weybridge pointed out, it is important that the arrangements to provide a broad range of services can be truly local. Some of the reward structures may have to be tailored to specific pharmacies in specific locations. Supermarkets, which can cross-subsidise with ease, are not alone in having different requirements. The large pharmaceutical chains have much greater opportunities to absorb losses and are less dependent on such contracts than the community pharmacies that for too long have subsidised the NHS with shopkeeping abilities. Some community pharmacies that provided excellent services have been lost to the NHS as they did not have the opportunity to expand their commercial activities.

Pharmacists—the dispensers of drugs—are important members of the clinical team. Although I appreciate the fact that it is impossible or impractical to have a separate pharmacist from the prescribing GP in some parts of the country, such an arrangement should be encouraged as the norm. My practice is three miles away from the nearest pharmacies, but we deliberately decided not to dispense because we value the second opinion, the safety check and the extra professional input that one can receive from pharmacists having a fresh look at prescriptions.

One of the problems that we faced—I hope that it can be tackled under the private schemes—was that we effectively had to act as an agent for pharmacies. We have provided a pick-up and delivery service for our patients on the pharmacies' behalf, the cost of which comes out of scant staff resources. In this new, joined-up age, it would be useful if the Government were to consider how the services are delivered, so as to promote flexibility.

I should like the Minister to tell us what will happen when pilot schemes become permanent. Those who go to sea often use pilot services, but when they arrive they dispense with their pilots. I hope that we will not be in a state of perpetual flux, as is implied by the term ``pilot schemes''. The Minister suggested that some of the schemes will become permanent, but we might consider the terminology. Any provider of health services needs to be able to plan and needs a degree of confidence in the future that is not necessarily implied by the term.

The hon. Member for Runnymede and Weybridge touched on the issue of who else could dispense. Although I recognise his concerns about the primary care trust or an out-of-hours co-operative not undermining the commercial activities of pharmacists, that is a two-way process. When I was last on call for our local co-operative on a bank holiday I found that only two pharmacists, 20 miles apart and open for an hour a day, were dealing with the medical needs of 200,000 people. That was clearly unacceptable.

Philip Hammond (Conservative, Runnymede and Weybridge)

Just to be clear, my concern was that if public sector bodies providing dispensing services were to drive out of business community pharmacies that, in addition to providing dispensing services, had provided a wider range of over-the-counter and non-medicinal provision, that would be a considerable loss to some isolated communities.

Peter Brand (Liberal Democrat, Isle of Wight)

I take that point. My example concerned the need to explore the provision of out-of-hours pharmaceutical services if it was not possible for them to be guaranteed locally through contracts with pharmacies—perhaps through a hospital-based pharmacy. Our out-of-hours call-in centre is based on the local hospital pharmacy. It seems ridiculous to send people who live at the other end of the island 10 miles for their pills.

The details need to be explored. I suspect that most of them will be dealt with by regulations. However, I hope that the Government will take the opportunity to secure the future of community pharmacies, although I appreciate that there is a significant problem in their negotiation. Providing support for all pharmacies is a bit like the common agriculture policy. I should not like one set of subsidy regulations or one type of contract to be made available, to suit both Boots the Chemist, with its enormous range of activities, and my local man in the high street of Sandown, who must struggle on his own. I hope that we shall aim not for administrative convenience but for true local flexibility.

John Denham (Labour, Southampton, Itchen)

We have had a useful and constructive debate and I shall try to reply to all the points that have been raised. I am sure that right hon. and hon. Members will pick me up on any that I miss.

We shall of course discuss later the way in which existing pharmacies need to be taken into account in the development of LPS schemes. I hope that the Committee will agree to focus on that when we reach the relevant Government amendment. The key consideration must be to ensure that services to patients are protected and enhanced. In practice, broader issues may need to be taken into account, but that must be our starting point.

It was suggested during the debate that pharmacies subsidise the national health service. I am not sure that I accept that. In our view, pharmacies are fairly and appropriately remunerated for the NHS service that they provide. The number of pharmacies providing such services has remained pretty stable for more or less a decade. There has been some shift in distribution. Relatively few pharmacies open or close each year, but those that open tend to be more than 500 m from the nearest pharmacy, which suggests some opening out of distribution and less concentration in a few small areas. The trend is slight but probably in the right direction.

Peter Brand (Liberal Democrat, Isle of Wight)

Does the Minister recognise that although there may not have been a shift in numbers of pharmacies, quite a number of licences have been transferred from community pharmacies to superstores, which has distorted the relevant pharmaceutical market considerably? I am sure that the Minister will recognise too that pharmacists have extended their role without a contract to do so, and that that activity, outside their purely dispensing responsibilities, is subsidising the national health service to a great extent.

John Denham (Labour, Southampton, Itchen)

I shall come later to the issue of additional services, which was also raised by the hon. Member for Runnymede and Weybridge. However, I would not necessarily accept that that was a NHS subsidy; it is part of the operation of the community pharmacy. The patterns of ownership may change, but the basis of our approach must be on whether the patient is receiving a quality service.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister seems to have missed the point made by the hon. Member for the Isle of Wight (Dr. Brand). The current arrangements remunerate a pharmacist for dispensing. Whether he spends his time giving good advice to patients who may then buy nothing or whether he refuses to do so does not alter his remuneration.

John Denham (Labour, Southampton, Itchen)

No member of the Committee would accept the unfortunate caricature that pharmacists, with their professional training and responsibilities, simply dole out medicine without giving advice. The royal society guide makes it clear to pharmacists that it is their professional responsibility to give advice. We need to be careful not to caricature them.

Philip Hammond (Conservative, Runnymede and Weybridge)

They are not paid for it.

John Denham (Labour, Southampton, Itchen)

Remuneration is linked to dispensing, but that does not obviate pharmacists, who are paid as professionals, from their professional responsibilities.

Michael Jabez Foster (Labour, Hastings and Rye)

Will my hon. Friend give way?

John Denham (Labour, Southampton, Itchen)

I shall give way when I have completed the point.

We have signalled in the pharmacy strategy document that we want to address the shape of the national contracts. That is common ground across the Committee. We would all like more direct emphasis on the quality of services. I want to avoid our going down in history as the Committee that somehow agreed that pharmacists are not bothered professionally about quality. We need to change the way in which the contract operates.

Michael Jabez Foster (Labour, Hastings and Rye)

Is that not a matter for the market? In Hastings, one pharmacist failed to give advice and now people do not go to him. Pharmacists who give good advice they build up their trade and do well as a consequence.

John Denham (Labour, Southampton, Itchen)

My hon. Friend is right. Many of the additional services provided by pharmacists have the beneficial effect of building up customer loyalty.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to the Minister because I would not like to be recorded as suggesting that pharmacists do not provide advice. The hon. Member for Hastings and Rye (Mr. Foster) made a good point. Not everybody has access to competitive pharmacists and can decide where to take their business.

The point relates not to medicines being dispensed against prescription, but to the advice—for which they are not remunerated—that pharmacists give in relation to minor ailments and over-the-counter products, including medicines. The fact that they give advice freely and that becomes part of the local culture relieves to a significant extent the burden on GPs of dealing with minor conditions. I would be grateful if the Minister acknowledged that. If he does, I in turn will acknowledge that the Government amendments seek to address precisely that point, so there is no difference between us.

John Denham (Labour, Southampton, Itchen)

Of course, the hon. Gentleman is absolutely right. It is acknowledged more effectively than anything I can say in the Committee by the winter campaign that was run by the Department together with the professionals—including pharmacists—urging patients to make full use of community pharmacists for minor ailments in order to avoid unnecessarily visiting their GPs. Millions of pounds were invested in that campaign precisely to recognise the skills of pharmacists, so we are at one on that.

We must be clear about the Government's approach on the important issue of dispensing doctors. We acknowledge the valuable role of dispensing doctors in areas where a pharmacy service are not available. The hon. Member for Isle of Wight, who is a GP, made the point—more tellingly than I could—that typically, dispensing doctor services do not directly employ the skills of a pharmacist. We would prefer patients to have the full range of primary care skills, including those of pharmacists, available to them. Dispensing doctors rarely employ qualified pharmacists. Indeed, they do not usually sell over-the-counter medicines or offer general advice on health or health care in the way in which a pharmacist would. Our view is that wherever it is sensible, patients should have access to GPs and community pharmacists, so that they can benefit from the complementary skills and expertise of both professions.

As the right hon. Member for North-West Hampshire has noticed, nothing in the Bill will directly change the existing rules for the award of dispensing rights in rural areas. It is, as he has said, a separate, complex and hotly debated subject in its own right. I am advised that the rules date back to a compromise between the professions that was worked out in 1911. The most recent change to the rules was made in the late 1980s. We are reluctant to make changes to those rules that would simply renew the dispute between the two professions, particularly when we are focusing on getting them to work together. The right hon. Gentleman asked me about the current state of play on the issue. The pharmacy and medical professions have, on their own initiative, been discussing joint proposals for changes to the rural dispensing rules. We have said that we will consider those proposals very carefully, but, at the request of the two professions, I shall not go into any further detail on that matter.

The hon. Member for Runnymede and Weybridge asked about the reference to ``coverage'', and whether it was geographical or service-based. As he said, it includes both those considerations. Where services are unavailable, LPS may well be the best vehicle for delivering new services. Last week we discussed the need to get more doctors into under-doctored areas. It is possible that an LPS scheme would be an appropriate way of working with the PMS measures to get new pharmaceutical services into deprived estates. There are other areas, such as new housing developments, where that might be the right way forward.

Geographical coverage is good in most of the country, but we want to improve the quality of pharmaceutical services in many places. That might mean coverage through measures such as medicines management, prescribing reviews or the development of better out-of-hours services. It could mean the development of targeted services. For example, under LPS a narrow and specific service could be provided for drug users. All of those services come under ``coverage''. It is a matter of delivering better services to new people.

Philip Hammond (Conservative, Runnymede and Weybridge)

There is a conflict between the objectives of the legislation. I do not want to jump ahead in the Committee's consideration of the Bill, but clause 33 deals with the ability of the relevant authority to direct a health authority to wind up or modify a scheme. That implies that the schemes cannot be based on firm, long-term contractual arrangements with private sector parties. While the scheme might be fine for improving quality and remuneration arrangements, it is difficult to tell how it could be used to provide a physical presence—premises for dispensing—in an area that lacks one.

John Denham (Labour, Southampton, Itchen)

We are slightly anticipating a later debate. It will be necessary to make provision for the return of an LPS scheme to the national contract arrangements, rather as assurances have been given about the return of personal medical services GPs to general medical services. Different approaches will be necessary, because we would not want LPS to become a loophole in the current entry requirements for pharmaceutical services. Someone might set up an LPS scheme, and then three months later abandon it and go back to the national contract, having evaded the rules. LPS will require a slightly different approach to that for PMS. The hon. Member for Runnymede and Weybridge makes a telling point. We cannot expect anyone to make a fairly substantial capital investment in scheme that might run for only three years—or, as proposed in one of the amendments, for only two years. We shall need to address that point.

I turn next to resale price maintenance. The current hearing on the subject is being led not by the Government, but by the relevant competition authorities. The Government are not involved. The matter was first dealt with by the Office of Fair Trading, and it is now in the hands of the restrictive trade practices court. Our view is that the court is best placed to weigh the matter. What effect, if any, the ending of resale price maintenance will have on pharmacy provision cannot be considered until the court has reached its decision. I understand that the original court proceedings were halted and a new hearing is set to start on 24 April. Once the court has made its ruling, we shall need to consider its implications for the organisation of NHS pharmacy services. It would be premature to speculate on the outcome of the hearing.

Peter Brand (Liberal Democrat, Isle of Wight)

I hear what the Minister says, but it would help if he were to acknowledge that resale price maintenance pays for some of the professional services that are provided by pharmacists. An acknowledgement would help pharmacists, who are anxious about the outcome of the case, because it would be a recognition of the fact that action may have to be taken by the Department rather than by the Office of Fair Trading.

John Denham (Labour, Southampton, Itchen)

I acknowledge those concerns, but in view of the imminent restarting of court proceedings, a ministerial statement of the sort that the hon. Gentleman suggests would probably be unhelpful. Resale price maintenance is a matter for the court to consider, and we shall have to wait for the court to make its decision before considering the implications.

A number of remarks were made about the various knock-on effects of the provisions. I was asked about additional services that are not directly remunerated. It is a voluntary and discretionary initiative, and health authorities are responsible for handling the development of LPS pilot schemes. We shall discuss later the wider factors that they will need to take into account, including the implications for existing pharmaceutical services, but I do not see why the proposals should lead to anything other than an enhancement of services to patients. Health authorities will be clearly have a role in ensuring that LPS is used effectively as a local strategy.

Philip Hammond (Conservative, Runnymede and Weybridge)

How much additional cost will the change impose on the public purse if resale price maintenance is not abolished—and how much if it is abolished? Clearly, its abolition will reduce in aggregate the income of community pharmacists, and that money will have to be made up from other sources.

John Denham (Labour, Southampton, Itchen)

I cannot give the hon. Gentleman the answer that he seeks.

Philip Hammond (Conservative, Runnymede and Weybridge)

Cannot, or will not?

John Denham (Labour, Southampton, Itchen)

I cannot. It clearly is not sensible to try to predict in detail the possible consequences of a court hearing that is not due to start until 24 April. Our long-standing system of remuneration is based on the price that the NHS pays for a set of services. I do not think that it is helpful to speculate or anticipate that a different system might be needed in future.

If an LPS scheme were developed, one would expect the health authority to receive an appropriate sum for the cost of providing the core services through the national contract, with additional services to be paid for by the health authority. However, it is difficult to put a firm figure on the likely costs, because it is difficult to predict the pace at which the schemes will develop. Even two years ago, few would have estimated that PMS pilots would have achieved the popular support among GPs that they have done.

It is critical that the health authority contribution to the LPS scheme comes out of the unified budgets at local level. Thus the decision on the sum to be appropriately invested at local level in the development of pharmaceutical services is made locally.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister said two things that I may have confused. A few moments ago, he talked as though a grant would be attached to the approval of a pilot, but he then talked about costs coming out of the unified budget. Will specific grants attach to the approval of pilot schemes?

John Denham (Labour, Southampton, Itchen)

We must keep three sums of money in mind. When schemes are running, part of the funding will, appropriately, be money that would otherwise have been in the global sum for pharmaceutical services, as the global sum would have covered the costs of the schemes. A second sum will be provided by the health authority in respect of the local agreement about additional specialist services to be offered. The third sum will be the additional funds that could be put into the initial approval process or set-up costs of LPS. On a later clause, we will discuss the power to make specific provision for the set-up costs of a local pharmaceutical pilot scheme.

The hon. Member for Runnymede and Weybridge invited me to detail our estimate of the shape of an LPS contract and the system of remuneration at local level, saying that the issue had caused the Committee alarm or distress. He suggested that it may have an element akin to the dispensing fee in the current system, and that there may be specific payments to social services. That is certainly possible, but we have not yet sketched out a model LPS contract. We want to see the proposals of health authorities and the potential providers of the services, and work with them on the details of the schemes. That is prudent and practical.

The next issue concerned the role of trusts, especially primary care trusts. The issue of principle is that we should not rule out primary care trust or NHS trust involvement in LPS schemes. In some places, that may be the best way to give local people access to high-quality services on which they would otherwise miss out. Patients will remain free to choose which pharmacy they want to go to, so patient choice is in the system. It is possible, however, to imagine circumstances in which the involvement of an NHS trust or the primary care trust would be the best way of providing a service. For example, a pharmacist post could be based partly in a community pharmacy and partly in an NHS trust. That might make recruiting to a particular geographical location more attractive for a pharmacist than coming into a traditional community trust or working in an NHS trust or primary care trust setting.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister made the specific statement that patients will retain the choice of which pharmacist to go to. Will he be clear that that is an absolute commitment, because I could sketch out what may look like logical and plausible pilots, but which would involve electronic transmission of prescriptions, so patients would not have the choice to take their prescriptions to any pharmacist they wished.

John Denham (Labour, Southampton, Itchen)

Patients will be able to go to the pharmacy of their choice, although an LPS scheme might design a particular type of service so that it would make sense, and be more convenient, for the patient to go to a particular pharmacy scheme. That is obviously possible in the design of LPS schemes, but the fundamental position is that patients should be able to take their NHS prescription to the pharmacist of their choice. The hon. Gentleman is perhaps thinking of a system in which an LPS pilot is providing sufferers of a particular condition services that are not generally available. Under those circumstances, it might well make sense for the patient to take advantage of the service that would not be available to them elsewhere. However, that is not the same as saying that they can obtain their NHS prescription from only one specified pharmacist.

We have made it clear, and no doubt we will discuss this issue again when we deal with electronic transmission of prescriptions, that patients must be able to retain the final choice of pharmacy to dispense their prescription.

The hon. Member for the Isle of Wight asked me to deal specifically with GP expenses and whether they adequately cover the type of relationship between a GP practice and a pharmacist that he would like to see. This is not a matter that I have previously been invited to consider in any detail. If he would care to drop me a line, I will do so, but I make no promises, given the usual thorny issues of GP expenses. He is certainly welcome to raise the matter with me.

The hon. Gentleman asked me also whether it is our intention that pilots should become permanent. The later clauses deal with that. It is certainly envisaged, as it has been with PMS and PDS, that both individual pilots and the general provision of LPS should become permanent arrangements, so the early pilots may became permanent arrangements, subject to review and evaluation.

Similarly, the ability to use LPS would become part of the local health authority's armoury, without the need to refer to the Secretary of State, as in the pilot scheme process. That is some way down the line. The hon. Gentleman will know that we have not reached that stage with PMS yet, although we are using pilots quite widely and it is envisaged in the Bill.

Peter Brand (Liberal Democrat, Isle of Wight)

I raised a small point about the role of hospital pharmacies, especially in out-of-hours prescribing. I should like the Minister to respond to the anxieties that have been expressed. Will that facility no longer be available, or should it be encouraged?

John Denham (Labour, Southampton, Itchen)

Certainly we are keen to see better and more sensible means of access to out-of-hours dispensing. It is a bizarre part of the NHS that the approved method of finding out which pharmacy is open out of hours is to ring the police. The fact that that was the best we could come up with caused some surprise the other day among some American visitors to this country who a member of the Conservative party put in touch with me. In the near future, NHS Direct will be able to play that role, which is rather more appropriate—[Interruption.] If the hon. Member for Runnymede and Weybridge rings 999 to find out whether the pharmacy is open, perhaps he is not making the best use of the emergency services—unless he does so in an emergency, of course.

If the hon. Member for Isle of Wight was suggesting that an aspect of the provisions that we are considering would lead to a reduction in the service provided by hospitals, I cannot see his point.

Peter Brand (Liberal Democrat, Isle of Wight)

The point is that at present it is assumed that pharmacies will volunteer to provide adequate out-of-hours cover. That is done on an ad hoc basis and no health authority can require them to open, yet alternatives are not readily available. Perhaps the Minister should deal with that issue.

John Denham (Labour, Southampton, Itchen)

Two issues arise from what the hon. Gentleman has said. One is that LPS provides a way of improving out-of-hours services. Clearly, we should discuss those services with the profession as part of the wider discussion of the national contract, in which we want improvements.

Peter Brand (Liberal Democrat, Isle of Wight)

Theoretically, would it be possible for a pharmacist employed by a primary care trust to apply to operate as a limited pilot in the provision of out-of-hours services?

John Denham (Labour, Southampton, Itchen)

It would certainly be theoretically possible for an NHS trust to enter into an LPS contract with the health authority to provide an out-of-hours service.

It should be acknowledged that in the past two years the co-ordination of out-of-hours provision, particularly in winter, has greatly improved. Local pharmacists have often been actively involved in local winter planning groups, which did not happen previously. However, there are still aspects of the system that need to be sorted out.

George Young (Conservative, North West Hampshire)

The Minister has been helpful in sketching in details of how the brave new world will operate. However, in a 20-page document a passing reference could have been made to the role of dispensing GPs, from whom 3.5 million people receive their prescriptions. An issue of joined-up government is involved. The Department of the Environment, Transport and the Regions is doing all that it can to minimise the number of journeys. The preferred model outlined by the Minister involves a medical centre underpinned by a range of community pharmacists. The hon. Member for Isle of Wight told us that the nearest pharmacist to his practice was three miles away. Inevitably, the approach that has been identified will lead to more journeys.

Peter Brand (Liberal Democrat, Isle of Wight)

I also said that we arranged a collection service for our patients, so that while the prescriptions and pills had to travel the three miles, the patients could stay in their home village.

Sir George Young: I am not sure whether that desirable service is available to all the hon. Gentleman's patients, or whether his explanation fully deals with my point about the number of journeys. I still maintain that if medicine were dispensed where it was prescribed, fewer journeys would be made overall. However, underpinning that is another point, which is that many patients prefer to collect medicine from the doctor. A journey of three miles might be inconvenient to them.

An even better model than that outlined by the Minister is one in which there are medical centres and a range of community pharmacists, and doctors can dispense if they want to. That choice, except in a controlled area, is not available to them in the model before us. Nothing that the Minister said raised my hopes about the prospect of change. I have heard many reasons for a Minister's inability to respond to a Committee. Normally, the Minister does not know the answer. In this case, he told us that he knew the answer, but that the parties involved had urged him not to give it, which is a new and ingenious response.

The Minister explained that GPs cannot apply for LPS, because they can knock at another door: they can apply to provide pharmaceutical services under PMS. That raises the issue of how the two schemes are to be integrated. In a given area, there may be a pharmacist who has read ``Pharmacy in the Future'' and the Bill and wants to apply for a pilot scheme and provide a range of services, and a GP who has read the Bill, but despite the powerful speech by Sir George, is not allowed to apply for LPS. The GP knocks on the door of PMS and undertakes to provide a range of services similar to those that the pharmacist is planning to provide under LPS. How will those two be integrated? How will we ensure that we do not get two pilot schemes in the same area, operating under different regimes? It would be tidier to allow the GP to apply under LPS to provide pharmaceutical services, rather than under PMS.

The Minister did not really answer the question about integration and how one avoids overlap and confusion caused by having two separate routes to the same destination. I hope that he is both able and allowed to respond to my point. The proposed system is untidy, and may lead to allegations of a less-than-even playing field if GPs are denied the right to apply for a pilot scheme under LPS.

John Denham (Labour, Southampton, Itchen)

I hope that I will not appear in ``Erskine May'' as having invented a new kind of response for Ministers. The disputes between the professions have been rumbling on since 1911. If they are working closely together towards a solution, I would rather respect their wishes and find a satisfactory way forward.

We would like patients to have the full skills of a pharmacist available to them, as well as those of a doctor. However, we acknowledge that there is support for dispensing practices in areas where full community pharmacy services cannot be made available.

GPs who are trying to develop innovative services can do so under PMS. A PMS practice may employ a pharmacist under a PMS contract. The issue of duplication will have to be dealt with when both PMS and LPS are moving towards a permanent regime. However, the current piloting system--especially given the central role of the health authority in both PMS and LPS schemes--provides an adequate mechanism to ensure that there is no duplication of activities in a given area. Although I understand the fears raised by the right hon. Gentleman, I am not convinced that they are quite as powerful as he has suggested.

Amendment agreed to.

Amendment made: No. 207, in page 30, line 4, leave out from beginning to end of line 8 and insert—

`( ) ``Practitioner dispensing services'' means the provision of drugs, medicines or listed appliances (within the meaning of section 41 of the 1977 Act) by a medical practitioner or dental practitioner to a patient of his pursuant to arrangements made by virtue of section 43(1) of the 1977 Act.'.—[Mr. Denham.]

Clause 29, as amended, ordered to stand part of the Bill.

Clause 30 ordered to stand part of the Bill.

Schedule 2 - Pilot schemes

John Denham (Labour, Southampton, Itchen)

I beg to move, amendment No. 218, in page 60, line 19, leave out

`as to the circumstances in which a Health Authority must'

and insert

`requiring a Health Authority to'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take the following: Amendment No. 219, in page 61, line 17, at end insert—

`( ) Sub-paragraphs (3) to (6) of paragraph 2 apply in relation to an application for preliminary approval of proposals under this paragraph as they apply in relation to proposals under that paragraph.

Effect of proposals on existing services

. —(1) Proposals for a pilot scheme submitted under paragraph 2, or included in an application for preliminary approval of proposals under paragraph 4, must include—

(a) an assessment by the Health Authority of the likely effect of the implementation of the proposals in the Health Authority's area on the services mentioned in sub-paragraph (2);

(b) any assessment supplied to the Health Authority by another Health Authority under sub-paragraph (4).

(2) The services are—

(a) pharmaceutical services (within the meaning of section 41 of the 1977 Act);

(b) local pharmaceutical services provided under existing pilot schemes or LPS schemes (within the meaning of Schedule 8A to the 1977 Act);

(c) general medical services provided under arrangements made under section 29(1) of the 1977 Act;

(d) personal medical services provided under arrangements made under section 28C of the 1977 Act or under pilot schemes made under section 1 of the National Health Service (Primary Care) Act 1997.

(3) If it appears to a Health Authority that the proposals would, if implemented, affect any of the services mentioned in sub-paragraph (2) provided in the area of another Health Authority, they must consult that other Health Authority about the proposals before submitting them under paragraph 2 or including them in an application for preliminary approval under paragraph 4.

(4) A Health Authority consulted under sub-paragraph (3) must prepare an assessment of the likely effect of the implementation of the proposals on those services and supply it to the Health Authority which consulted them.'.

Amendment (a), at end of amendment No. 219, insert—

`(e) the provision of retail pharmacy services for the supply of non-prescription medicines.'.

John Denham (Labour, Southampton, Itchen)

This schedule deals with the detailed arrangements by which proposals for pilot schemes are to be developed and approved. It also covers the steps to be taken once schemes have been approved. For the most part the provisions are modelled on those that have been successfully used for personal medical and personal dental services. However, there are some noteworthy differences. First, we have decided that prospective providers of LPS services should not have an absolute right to demand that health authorities work up and submit their proposals. That is because anyone can own a pharmacy, so in practical terms the potential pool of applicants was too large for the PMS approach to be viable. Health authorities could be swamped with propositions from all over their area and all over the country. There was also a risk that people would see this as a way of getting round existing control of entry rules, rather than as an exercise to develop genuinely innovative schemes.

We believe that there should be a safeguard against health authorities that deliberately or inadvertently hold back good ideas. That is why we have included specific powers for the Secretary of State and the National Assembly for Wales to require health authorities to provide details of ideas put to them by prospective pilot scheme participants. If necessary, health authorities could be directed to work up and submit such ideas.

Government amendment No. 218 clarifies that such directions may deal either with particular cases or impose a more general requirement.We have also introduced the concept of preliminary approval. Health authorities could identify situations in which an LPS pilot scheme would be an ideal way of filling a gap or otherwise promoting access to high-quality services, such as the opening of a new one-stop primary care centre. It could also be part of the strategy to develop new services in areas of social deprivation.

Preliminary approval will allow health authorities to work up proposals for LPS schemes without having definitely identified a particular person or organisation to provide the services. Having received preliminary approval from the Secretary of State or the National Assembly for Wales--the relevant authority as identified in clause 62--they would be able to seek offers from people wanting to participate. Whether or not they go through the preliminary approval stage, we expect all proposals for pilot schemes to be the product of full local involvement and discussion. We are taking a specific power to require health authorities to conduct formal consultations in paragraph 2(4) of the schedule.

We will naturally expect the proposals to be accompanied by a full and honest assessment not only of the likely benefits, but of the effect on existing services, especially pharmacy and GP services. I know that the pharmaceutical services negotiating committee and the general practitioners committee of the British Medical Association were both keen to see a provision in the Bill to that effect, and we have introduced Government amendment No. 219 in response to their concerns. It explicitly requires health authorities to assess the effects of their proposals on the overall provision of pharmaceutical services and on general and personal medical services. They must consult with neighbouring health authorities if necessary, to ensure that the assessment is not arbitrarily restricted by administrative boundaries. The assessment must then be included in the proposals submitted for approval by Ministers. Naturally, we will pay close attention to the assessment, and we will expect health authorities to consult widely and thoroughly in drawing up their assessment.

Amendment No. 219 also clarifies that requirement, and the other direction-making powers in paragraph 2 apply to both full and preliminary applications.

Opposition amendment (a) to Government amendment No. 219 would add to the matters to be covered in health authorities' assessments the effect of the provision of retail pharmacy services on the supply of non-prescription medicines. I am happy to acknowledge the importance of people having ready access to retail supply of non-prescription medicines. That aspect of the role of community pharmacists was highlighted in ``Pharmacy in the Future''. Pharmacists are well placed to help people to cope with everyday health problems. As I mentioned earlier, the ``ask your pharmacist'' message has been a strong part of the Government information campaigns during the past two winters.

We want more medicines to be available for retail sale where this is safe and appropriate, so we expect that pharmacies will have a growing range of medicines to offer people. The Medicines Control Agency will shortly be holding a meeting with interested parties to consider how that can best be achieved. We are developing the links between NHS Direct and community pharmacy, and by 2002 all NHS Direct sites will be able to refer callers to their local pharmacy where appropriate.

I listed those measures to reassure the Committee that I have no quarrel with the sentiments behind amendment (a). However, it is unnecessary. A few pharmacies do not provide NHS dispensing services, but in the overwhelming majority of cases pharmacies both dispense and sell medicines. Any assessment of the impact on pharmaceutical services as currently provided and on local pharmaceutical services as provided for in the Bill will inevitably deal with the availability of over-the-counter non-prescription medicines. Given that some pharmacies exist without NHS business, the only danger is that assessments will exaggerate any undesirable effects on that aspect of community pharmacy.

Clearly a balance must be struck between patients having ready access to their medicines after they have seen their GP—nobody would dispute that patients value that—and ready access to over-the-counter medicines when people are out shopping for other things. That will be covered by any assessment of the impact on pharmaceutical services, as that will look into the effect on existing service providers and possible changes in the pattern of services. Therefore, I am not convinced of the need for the amendment, and I ask the Committee to resist it.

Philip Hammond (Conservative, Runnymede and Weybridge)

So far we have taken an hour and 25 minutes to cover two clauses. We have 19 clauses to cover today, but thanks to the Government's timetabling arrangements we do not have much time to do it in, so I shall attempt to be brief.

David Jamieson (Labour, Plymouth, Devonport)

We can go to 10 o'clock tonight.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Government Whip says that we can go to 10 o'clock tonight. Is that a formal proposal that the Programming Sub-Committee should sit and change the timetable that has been imposed on the Committee? I am happy to give way to the hon. Gentleman if he wants to put that proposal, but my understanding is that we have to finish at 5 pm under the terms of the programming resolution.

The Minister has outlined what our proposed amendment to the Government's amendment No. 219 seeks to do. I spoke earlier about our concern that arrangements under the Bill could, by allowing dispensing to be handled by a hospital pharmacy, have an unintended negative impact on the availability of over-the-counter medicines and non-medicinal products typically sold in pharmacies. We sought to write into amendment No. 219 a requirement to assess the impact on the provision of those services. The Minister says that the amendment is unnecessary because the required assessment of pharmaceutical services would cover that. I do not agree. The required assessment is an assessment of pharmaceutical services provided under section 41 of the National Health Service Act 1977, which does not include the provision typically made in retail pharmacies incidental to their principal activity of dispensing prescription medicines.

It is not clear that a health authority would be required to measure the impact of any proposal on the loss of over-the-counter sales. If a health authority was able to show that the provision of pharmaceutical services as defined in section 41 of the 1977 Act would remain unaltered, there is nothing in the schedule as drafted that would require them to make an assessment of the impact on non-section 41 services, such as the provision of non-prescription medicines.

The Minister acknowledged that we would need to know whether the reconfiguration of services would result in the loss of over-the-counter retail opportunities for consumers. He said that it would not necessarily, but I ask him to reflect on that, in the light of the definition of the pharmaceutical services that have to be assessed. We may return to the question in future.

Paragraph 4 of schedule 2 deals with preliminary approvals. It provides that even though a health authority has obtained a preliminary approval, it must re-submit the final project proposal for approval by the relevant authority. I gather from the explanatory notes that the process is likely to be one of structuring an outline of the intended pilot and inviting bids from commercial partners to operate the pilot, perhaps from Boots and Sainsbury.

It seems inappropriate that the health authority should have to go through a proper, arm's length, objective evaluation process with competing commercial promoters if the relevant authority has the power of veto over what should be an objective commercial bidding process that is undertaken in open and transparent competition. It suggests that closed-door negotiations are more likely than what I would consider to be the proper process, in which the health authority would structure the pilot that it wanted to see in operation, without reference to particular individuals or companies. It would then invite those who are in a position to do so to make bids to provide those services on a non-preferential basis and evaluate the bids objectively. The import of paragraph 4 is that the Government do not intend that. Will the Minister clarify that point?

Peter Brand (Liberal Democrat, Isle of Wight)

This is an interesting schedule. I wonder why it has been determined that the Secretary of State or the Welsh Assembly should have to give permission for that work rather than that the health authority should make its own proposals, with the Secretary of State or the Assembly acting as the court of appeal should a party feel aggrieved by the authority's decision. I fail to see how the Secretary of State can better judge than the health authority what is needed locally. The health authority's commissioning function will be undermined by the authority becoming a mere agent of the Secretary of State.

George Young (Conservative, North West Hampshire)

I welcome both Government amendments. They bring some order to the almost free-for-all envisaged under paragraphs 4.13 and 4.14 of ``Pharmacy in the Future''. I have one specific request. Amendment No. 219 provides that the health authority should make an assessment of the likely effect of its proposals on existing services and that a copy must be sent to the Secretary of State. Will the Minister ensure that a copy is sent also to the local medical and pharmaceutical committees, so that they too can be confident that a thoroughly informed assessment that takes account of all the local circumstances has been made of the impact of the proposals? I see no reason why those committees should not have a copy. It would enhance confidence in the decision-making process.

John Denham (Labour, Southampton, Itchen)

I shall answer first the hon. Member for Isle of Wight. In common with other personal family health services legislation, it was thought that all pilot schemes should be agreed by the Secretary of State. Both sides in the previous Parliament thought that to be a sensible balance when bringing new elements into established national contractual arrangements. It seemed to provide adequate safeguards on all sides. If everything is successful, as we hope and intend, it is envisaged that permanent arrangements will enable the health authority to take the decisions at local level. We are being prudent, having borne in mind the element of innovation and experiment.

The hon. Member for Runnymede and Weybridge talked about preliminary approval and the Secretary of State's approval. It is unlikely that there would be changes between the outlying specification set out at preliminary approval stage and the final scheme as a result of discussions from providing parties. We do not envisage that, at preliminary approval stage, the health authority will have a final, detailed and complete specification for every element of the service, against which providers simply submit commercial bids as though it were, say, a building project. That will allow the Secretary of State to pick up significant or problematic variations between preliminary and final approval.

In answer to the right hon. Member for North-West Hampshire, there is no reason why health authorities should not share the results of their assessments with local medical committees and pharmaceutical committees. We should deal with the matter in guidance in due course. It is important that people have confidence in the system.

The crucial question is whether we need to accept the amendment. Typically, 70 per cent. of the business of a community pharmacy is NHS business. The only danger of our current system is that if it were interpreted as narrowly as the hon. Member for Runnymede and Weybridge suggested, we would consider that 70 per cent. as though it were 100 per cent. of the income, and so overstate rather than understate the impact of an LPS contract to provide NHS services. The LPS contract is, of course, for the provision of NHS services, and we shall consider the impact of the new NHS service on the existing NHS service.

The hon. Gentleman said that everything would be okay if one could show that there would be no detrimental effect on NHS business. Obviously, we intend there to be no such effect, but in considering the wider issues of public health interest, the availability of over-the-counter medicines and so on, health authorities would in practice take stock of whether the new LPS provision for NHS services would have any impact on the wider provision for the local community. Although I understand where the hon. Gentleman is coming from, I believe that he is wrong.

The hon. Gentleman asked me to consider various matters. I once said that we would consider some matter and was told that, under parliamentary convention, that meant that I would table an amendment about it on Report. Having been caught like that before, I shall not be so caught again, although, as a reasonable man, I shall have a think about these matters. That is no commitment to table amendments on Report.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister has accepted that there needs to be an assessment of the impact on over-the-counter sales opportunities. The only issue is whether that needs to be clear in the Bill. I should be grateful if he had a think about that, as it is simply a different interpretation of the narrow duty placed on health authorities by his own amendment.

John Denham (Labour, Southampton, Itchen)

There is nothing further for me to say.

Amendment agreed to.

Amendment made: No. 219, in page 61, line 17, at end insert—

`( ) Sub-paragraphs (3) to (6) of paragraph 2 apply in relation to an application for preliminary approval of proposals under this paragraph as they apply in relation to proposals under that paragraph.

Effect of proposals on existing services

. —(1) Proposals for a pilot scheme submitted under paragraph 2, or included in an application for preliminary approval of proposals under paragraph 4, must include—

(a) an assessment by the Health Authority of the likely effect of the implementation of the proposals in the Health Authority's area on the services mentioned in sub-paragraph (2);

(b) any assessment supplied to the Health Authority by another Health Authority under sub-paragraph (4).

(2) The services are—

(a) pharmaceutical services (within the meaning of section 41 of the 1977 Act);

(b) local pharmaceutical services provided under existing pilot schemes or LPS schemes (within the meaning of Schedule 8A to the 1977 Act);

(c) general medical services provided under arrangements made under section 29(1) of the 1977 Act;

(d) personal medical services provided under arrangements made under section 28C of the 1977 Act or under pilot schemes made under section 1 of the National Health Service (Primary Care) Act 1997.

(3) If it appears to a Health Authority that the proposals would, if implemented, affect any of the services mentioned in sub-paragraph (2) provided in the area of another Health Authority, they must consult that other Health Authority about the proposals before submitting them under paragraph 2 or including them in an application for preliminary approval under paragraph 4.

(4) A Health Authority consulted under sub-paragraph (3) must prepare an assessment of the likely effect of the implementation of the proposals on those services and supply it to the Health Authority which consulted them.'.—[Mr. Denham.]

Schedule 2, as amended, agreed to.

Clause 31 - Designation of priority neighbourhoodsor premises

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 208, in page 30, line 24, leave out from beginning to end of line 25.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take Government amendment No. 221.

John Denham (Labour, Southampton, Itchen)

The clause provides a power to make regulations that allow health authorities to designate neighbourhoods and premises for the purpose of local pharmaceutical services pilots. The idea is that the development of LPS is not undermined by the operation of existing national arrangements for pharmaceutical services. If a health authority and its local partners wanted to discuss and prepare pilot schemes, they should have the breathing space to do so, without constantly being faced by the pressure that someone else might apply to open a pharmacy in the same place under the national arrangements.

Under existing national arrangements, health authorities are obliged to consider applications from people wishing to provide pharmaceutical services in their areas. If the application satisfies certain tests, health authorities have no choice in practice but to grant it, so there clearly could be conflict and disruption between the desire to develop a local pharmaceutical services pilot and an application from a scheme under the national arrangements.

With LPS, we want something much more proactive. We want a two-way process in which existing contractors and other prospective pilot scheme participants come forward with ideas that they want to discuss with health authorities, while health authorities will look for opportunities of their own to develop pilots. It would be wasteful if health authorities had to do that and deal with applications to open pharmacies under the national arrangements.

There must be limits to such designations. We have no desire to see deliberate or inadvertent planning blights. The clause provides for us to make regulations, rather than conferring the power directly on health authorities. The regulations will be able to set limits on which places may be designated and the period for which designation may be maintained. The clause also ensures that we can take timely action should the designation system be misused. If necessary, the Secretary of State and the National Assembly for Wales will be able to direct a health authority to cancel a designation.

On reflection, however, we think that one part of the clause is unnecessary. Its purpose is to allow health authorities to defer part II applications. That is stated explicitly, so we do not think that the further reference to health authorities giving priority to LPS schemes in some other unspecified way is necessary. Amendments Nos. 208 and 221 delete that unnecessary power by deleting the relevant paragraphs.

That is probably sufficient introduction for the amendments.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am delighted that the Government tabled the amendment, as the idea of health authorities prioritising pilot services in some unspecified way was alarming. By tabling the amendment, the Minister has saved me working out how to attack paragraph (c).

Will the Minister to acknowledge the fact that the process of designation causes concern in the same way as paragraph (c) does? Alarmingly, he proposes to interfere with commercial freedom by preventing certain businesses from setting up in an area. Although it is unnecessary to do so, it would be easy to paint a picture of circumstances in which it would be sensible to defer part II applications while the structure of a pilot was put in place. The Minister must recognise the danger of a health authority choosing as its preferred partner a large national pharmacy chain, capital-rich and perhaps proposing a complex deal involving all sorts of glamorous additional benefits to the health authority. The health authority would then be in a position effectively to trade off in a deal with the provider monopoly exclusivity in a particular area. The real concern is that if ``Shoes the Chemist'' makes a deal with the health authority, all potential entrants to an area will be blocked out.

I am sure that that is not what the Minister has in mind, but he will have to draft the regulations to ensure that health authorities do not abuse their powers—although I am aware that he has given himself the power to deal with abuses of the system. It would be helpful if he assured the Committee that health authorities would not be allowed to designate an area. He used the term ``breathing space''. In my experience of bureaucratic organisations, their idea of breathing space is a little longer than that of commercial organisations. One can well envisage a health authority breathing a sigh of relief and saying, ``We will designate our entire area, so that we can think about it for two or three years without having to process all the tiresome part II applications, and then see if we can come up with a pilot scheme''. I am sure that the Minister does not intend that to happen, but he must make sure that the power to designate cannot be used as a blocking mechanism or to create blight. We must bear in mind—and this is a familiar theme—that it will have an impact on the provision of services other than pharmaceutical services within the meaning of the Bill because it could prevent retail pharmacies from opening and therefore limit access to over-the-counter products.

John Denham (Labour, Southampton, Itchen)

The hon. Gentleman makes a fair point, although I am sure that he would not suggest that health authorities should be unable to take advantage of the opportunity of significant investment in the development of pharmaceutical services in a particular area if that was to the benefit of patients. However, he is quite right to stress that the power should be used carefully. Health authorities should not prolong designations any longer than necessary nor should they designate a location in the first place unless they are actively considering an LPS scheme. If the scheme came to nothing, we would expect them to cancel the designation.

It is difficult at present to be sure what the length of designation is likely to be. It will depend to an extent on the cycle in which we invite applications for LPS schemes, so central Government will have an influence on that if we proceed as we did with PMS in inviting several waves of applications. It is unlikely that the period from applications being formally invited to schemes coming into effect will be much more than a year and could well be less. If substantial capital investment is involved, the time scale might be different, but as the hon. Gentleman recognised, we have taken extensive powers to act if there is any evidence to suggest that health authorities deliberately—or otherwise—are misusing the power.

Philip Hammond (Conservative, Runnymede and Weybridge)

I am grateful to the Minister for reassuring the Committee about the Government's intention. There is a slight contradiction between what he said about patients continuing to have the choice as to which pharmacy they take their scrip and the scenario that I outlined that implies that a health authority might effectively make a deal to give one provider predominance in an area. The Minister said that he was sure that I would not want to suggest that anything that produced beneficial investment should be blocked, but that is the argument of the budding monopolist, who would say, ``If you give me a monopoly, I can make a bigger investment.'' I ask the Minister to bear in mind when he makes the regulations that although investment is good in terms of absolute provision, choice is also a good thing.

John Denham (Labour, Southampton, Itchen)

I have said nothing to contradict what I said earlier. If there is an opportunity to get the best possible service—subject to all that I said earlier—it is reasonable that a health authority developing a LPS scheme would want to obtain the best possible service for patients rather than a second-best service.

Amendment agreed to.

Clause 31, as amended, ordered to stand part of the Bill.

Clause 32 - Reviews of pilot schemes

Philip Hammond (Conservative, Runnymede and Weybridge)

I beg to move amendment No. 277, in page 30, line 37, leave out `three' and insert `two'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take amendment No. 276, in page 31, line 4, at end add—

`(5) The review referred to in this section must include a review of—

(a) the impact of the pilot scheme on patient services, and

(b) the cost effectiveness to the NHS of the pilot scheme, and

(c) the impact of the pilot scheme on retail competition.

(6) A report detailing the conclusions of every review under this section shall be published by the health authority concerned not less than three months after the completion of the review.'.

Philip Hammond (Conservative, Runnymede and Weybridge)

Clause 32 provides for reviews of pilot schemes. That is progress indeed and has saved me the trouble of drafting an amendment requiring a review and the publication of its results. We are particularly sensitive, as the Minister will know from previous debates, to the speed with which NHS Direct was rolled out, without proper appraisal of its strengths and weaknesses. The review requirement is a good one. Does the Minister expect reviews to be conducted by outside bodies or by health authorities?

Amendments Nos. 277 and 276 would have quite different effects. Amendment No. 276 would extend the review to cover various areas, one of which we have already discussed—the impact of the pilot scheme on retail competition. It would also require an examination of the cost effectiveness to the NHS of the pilot scheme and its impact on patient services. As guardians of public services and the public purse we would all reasonably expect the review to cover those points. I hope that the Minister will agree in principle that that is necessary. Perhaps he will propose another way to achieve that objective.

Amendment No. 277 would reduce from three to two the number of years after which a review should take place. The review might take a little while to complete; amendment No. 276 proposes that a report should be published not less than three months later. If the review process did not start until three years into the scheme, publication might not happen until four years after the scheme got under way. It seems reasonable that the review should begin after the scheme had been in existence two years. That should provide enough data.

Peter Brand (Liberal Democrat, Isle of Wight)

Are we to assume that the retail competition referred to in amendment No. 276 would be restricted to over-the-counter medicines, rather than the wider retail activities of some pharmacists, which should not be of concern to the Committee?

Philip Hammond (Conservative, Runnymede and Weybridge)

No. It is important that we consider the impact of schemes on wider retail competition. If a scheme resulted in the closure of a corner pharmacy that had also been in the habit of providing, say, milk and bread for the local community—although that might be unusual—it would be relevant and would need to be taken into account, because it would affect the community. Many pharmacists provide items ancillary to their principle business, such as baby care products. For someone in an isolated area, the closing down of the only place that sells babies' nappies will be a material consideration.

Peter Brand (Liberal Democrat, Isle of Wight)

I am grateful for, but surprised by, that intervention. I thought that markets would be able to cope with the supply of photographic equipment, sandwiches, clothes or suntan lotions and I do not think that that is a matter for the Department of Health or a local health authority. In view of the hon. Gentleman's clarification, I do not think that I can support amendment No. 276. Amendment No. 277 is probably not necessary.

John Denham (Labour, Southampton, Itchen)

It is important to point out that our approach in clause 32 of reviewing every pilot scheme at least once within three years of its commencement is modelled virtually word for word on the equivalent provisions on personal medical services in the National Health Service (Primary Care) Act 1997. I do not see a fundamental reason to depart from the precedent that has been set for other family health services. The clause leaves the procedure to be determined by the Secretary of State or the National Assembly for Wales, except that it requires the health authority and pilot scheme participants to be offered the opportunity to make their views known, as part of the review. That is clearly only a minimum requirement.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee E

Clause 32 - Reviews of pilot schemes

David Madel (Conservative, South West Bedfordshire)

I remind the Committee that with this we are taking amendment No. 276, in page 31, line 4, at end add—

`(5) The review referred to in this section must include a review of—

(a) the impact of the pilot scheme on patient services, and

(b) the cost effectiveness to the NHS of the pilot scheme, and

(c) the impact of the pilot scheme on retail competition.

(6) A report detailing the conclusions of every review under this section shall be published by the health authority concerned not less than three months after the completion of the review.'.

John Denham (Labour, Southampton, Itchen)

Before lunch, I was about to set out our views on the review procedure that should be adopted. The clause leaves the procedure to be determined by the Secretary of State or the National Assembly, except that the health authority and the participants in the scheme should be able to make their views known. That is only a minimum requirement. We will need to develop our approach to the review in the light of experience. We shall want to learn continuously from experience, so that we can apply those lessons to later pilot schemes and, in due course, to the substantive arrangements for local pharmaceutical services when we are satisfied that the pilots have demonstrated that LPS works. We will build reviews of individual schemes into an overall programme of review and evaluation.

Amendment No. 276 illustrates some of the difficulties of trying to put all the review criteria in the Bill. It is interested in retail competition in the widest sense, but not in the effects that the pilots have on people's health, which is an intriguing factor. Cost-effectiveness has been mentioned, but not reductions in inequalities between different sections of the community. I am not saying that the hon. Member for Runnymede and Weybridge (Mr. Hammond) is not interested in such wider issues, but it is difficult in practice to put in the Bill a comprehensive list of all the factors that should be taken into account in the review. We might want to look at others, such as the effect on the recruitment, retention and motivation of pharmacists or the relationships between different parts of the national health service.

One issue that we would want to consider is the extent to which the pilot had achieved its stated aim as set out in the original LPS contract. That will be a good starting point in many reviews. The personal medical services legislation on which we based the measure did not set out the evaluation criteria, for the good reason that it was considered then—as we consider now—that we need to build up our idea of what the review should contain in the light of experience.

As for whether reports should be published on all pilot schemes, there is no such requirement in connection with each and every PMS scheme and I am not persuaded that we need to treat pharmaceutical services differently. Of course, we shall want to learn lessons from pilots, make them widely available and disseminate them. In the case of personal medical services, we have commissioned a continuing evaluation of PMS pilots, which is published from time to time. It has informed our thinking on the third wave of PMS pilots. I am sure that there will be continuous feedback about LPS, but I do not believe that it would be a good idea to put into primary legislation a particular way of doing so or that a report should be published on every individual pilot.

Under amendment No. 276, the review would be undertaken within two years. I understand the hon. Gentleman's argument, but in reality it may take some time for a new pilot to build up to its full effectiveness. If we said that the review had to be completed within a couple of years, there may be only a year or a little longer on which to base it. The wording of the current clause, which is the same as that on personal medical services, is the probably the best route to take.

Philip Hammond (Conservative, Runnymede and Weybridge)

The Minister has outlined the case for not including the detailed requirements of the review in the Bill. I understand the logic of that, but there is not even a provision for the making of directions by the Secretary of State or the relevant authority on what the review should cover. It seems to be entirely at the discretion of the health authority.

John Denham (Labour, Southampton, Itchen)

In this case, the relevant authority is the Secretary of State. I do not know whether it makes the hon. Gentleman feel better to know that the Secretary of State would ultimately determine the procedure.

Philip Hammond (Conservative, Runnymede and Weybridge)

It makes me feel better in the sense that the Secretary of State making regulations to guide the review clearly would not add anything. I would have preferred a provision in the Bill; the Minister will understand why we routinely plead for more detail in the Bill, but I accept that he has made a case for retaining the flexibility that exists in the PMS and PDS review mechanisms. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.

Clause 33 ordered to stand part of the Bill.

Clause 34 - NHS contracts and financial provisions

Philip Hammond (Conservative, Runnymede and Weybridge)

Perhaps we are rushing through the Bill just a little too fast, Sir David.

David Madel (Conservative, South West Bedfordshire)

The hon. Gentleman can always stop me.

Philip Hammond (Conservative, Runnymede and Weybridge)

Thank you, Sir David. That requires me to have my wits about me.

In relation to clause 34, I should like to address the broader issue of NHS contracts versus conventional commercial contracts. Although we have now agreed that clause 33 stand part of the Bill—no amendments were tabled to it and no one objected to it—there is an issue to explore, which I touched on earlier, about the nature of the contracts that will be involved when a pilot scheme takes the form of an arrangement between a health authority and a private sector partner, typically a pharmacy chain or a supermarket chain.

In the normal course of events, the contracts would give the private partner the ability to make the necessary investment. The Minister acknowledged that there would be a problem if the termination provisions allowed for the contract to be terminated by a health authority on a whim or by direction of the relevant authority as no private sector partner would be able to raise the funding or be prepared to risk capital.

Clause 34(1) provides that a company or private body that wishes to enter into a pilot scheme may apply to be treated as a health service body. I understand the reason for the provision—they would then be party to an NHS contract, which, as with so many double speak exercises in the health service, is not a contract, but simply an arrangement that exists so as long as it reflects the will of the Secretary of State. It is not a contract in the legal sense or in the sense in which any commercial entity would understand the term; nor would any banker or financier lend for investment in such a project.

I cannot imagine that the Minister is seeking to undermine his own scheme first by providing in clause 33 that contracts may be terminated at the will of the Secretary of State and, secondly, by suggesting in clause 34 that people who would usually expect to enter into normal, legal, binding contracts should for these purposes become health service bodies and enter into arrangements that are not contractual or binding. Those provisions seem to undermine the principle that the Minister has outlined in mapping out the possibility of a partnership between health authorities and private sector entities particularly in relation to developing services in areas where they do not exist or where they are under-provided and require investment. Will the Minister address what will happen in those circumstances?

If a pharmacist who is currently providing part II services enters into a pilot scheme using existing premises, facilities and assets and the pilot scheme can be terminated in accordance with clause 33, and there is a return-ticket provision allowing them to go back to providing part II services under the 1977 Act, I accept that there is no particular problem and that in those circumstances it may make perfect sense to allow private pharmacists to become NHS bodies for the duration of the LPS pilot. However, that will not bring in the new resources and the new capital to which the Minister referred. Can he reassure the Committee that, where it is appropriate, there will be an opportunity within the pilot schemes for proper contractual arrangements that are bankable and will allow capital to be invested, that there will be a mechanism for effectively contracting them out of the provisions of clause 33 in order to make them bankable and that in those cases it would not be necessary for pharmacists to become health service bodies in order to enter into NHS contracts, which are rather less attractive from a banker's point of view?

George Young (Conservative, North West Hampshire)

My eye was attracted to the explanatory notes on clause 34 as paragraph 156 deals with the issue that my hon. Friend has just raised. It states:

``NHS contracts are not normally enforceable in the Courts.''

It is some time since I was a Health Minister, and I may have been aware of that, but had temporarily forgotten it. The NHS is a major employer. Is it really the case that those contracts of employment are not enforceable in the courts? Is it really the case that the major contracts that the NHS enters into with the private sector are not normally enforceable in the courts and the whole thing rests on the good will of the Secretary of State?

The next sentence says:

Instead, any disputes can be put to the Secretary of State ... for resolution.''

Will the Minister shed some light on that rather astonishing statement that the whole legal principle on which the NHS is founded rests ultimately on the mood of the Secretary of State as to whether or not he finds for the appellant. I assumed that it was subject to the rule of law and that was where disputes were resolved, but that sentence has somewhat undermined my faith in that concept. Perhaps the Minister can now put my mind at rest?

John Denham (Labour, Southampton, Itchen)

I have been in the House long enough to be nostalgic for the days when explanatory notes were every bit as obscure as the clause that they sought to explain. There were never any such difficulties then. Clearly the attempt to express matters in more colloquial terms introduces a wider debate. I will try to reassure the right hon. Gentleman.

The reference here is to what in the legislation are referred to as the contracts entered into between NHS bodies—for example, a commissioning arrangement between a primary care trust and an NHS trust—rather than the whole panoply of NHS contracts. I apologise if the explanatory note is not as clear and comprehensive as it might have been.

I can reassure the hon. Member for Runnymede and Weybridge that it is entirely a voluntary option for potential LPS providers to apply for health service body status. There is no question of anybody being required to go for health service body status in order to take part in LPS. If a provider did not wish to enjoy the health service body status, he or she would not need to do so in order to take part. Clearly, though, there will be circumstances—the hon. Gentleman identified one—where the ability to be treated as an NHS contract holder will be a more convenient way of arranging services and remuneration than a formal legal contract. There is a mechanism for the resolution of disputes and that, ultimately, is enforceable in the county court. It is a voluntary option and a significant number of LPS providers will probably wish to take advantage of it, but it is not a compulsory option. Therefore, the situation that the hon. Gentleman was concerned about—someone being forced to go down such a route, and the viability of the scheme being called into question—should not arise.

Philip Hammond (Conservative, Runnymede and Weybridge)

Does the Minister not recognise that there could be a problem in relation to termination?

John Denham (Labour, Southampton, Itchen)

The common sense answer is that the parties to the agreement and the provider would have to consider what would happen in the event of a termination before applying for the health service status. As it is a voluntary option, it only arises if somebody chooses to go down that particular route.

Philip Hammond (Conservative, Runnymede and Weybridge)

I think that the Minister slightly misunderstood what I said. Someone who chooses not to go down that route will still not have the assurance of an enforceable contract, because of the possibility of the contract being terminated by a direction of the relevant authority. The only practical route for a private sector party would be to build in to the contract cancellation provisions that recompensed that body for its investment. The health authority would then be exposed, because it must follow a direction given by the Secretary of State to terminate a scheme. However, it is not conceivable that a private sector investor would invest substantial sums unless the contract were phrased in such a way that the investor would be compensated in such an event.

John Denham (Labour, Southampton, Itchen)

That is an issue in relation to clause 33, which we discussed briefly, rather than clause 34. The reality is that we cannot disapply clause 34. The Secretary of State must have the power to terminate a pilot in circumstances, which I am sure will be rare, in which a scheme proves to be totally unsatisfactory. The various parties will need to consider the consequences of that before deciding to enter into the scheme.

Question put and agreed to.

Clause 34 ordered to stand part of the Bill.

Clause 35 ordered to stand part of the Bill.

Clause 36 - Charges, recovery of payments and penalties

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 209, in page 32, line 29, leave out 'piloted' and insert 'local pharmaceutical'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take Government amendments Nos. 210, 211 and 223.

John Denham (Labour, Southampton, Itchen)

The clause has a simple policy intention—that there should be no difference whatever between existing services and LPS pilot schemes in terms of prescription charges. The consequences should be the same for a patient who pays the prescription charge, or who makes a declaration to say that they do not need to do so, in all pharmacies, whether or not they are LPS pilots. Equally, the consequences should be the same for not paying a charge, which is why the clause provides the power to make regulations to apply penalty charges when exemption from payment is wrongly claimed. In serious cases, prosecution will be possible under section 122C of the Health Act 1997.

Government amendments Nos. 209 to 211 ensure that the status quo on prescription charges is maintained. The amendments alter subsections (1), (2) and (3) to make sure that the powers apply only to pharmaceutical services. The original drafting would have given schemes the power to charge for all services provided under pilot schemes, which was not our intention. By adding a further paragraph to schedule 3, Government amendment No. 223 provides the same regulation-making powers for substantive LPS schemes once they are introduced.

Amendment agreed to.

Amendments made: No. 210, in page 32, line 35, leave out `piloted' and insert `local pharmaceutical'.

No. 211, in page 23, line 38, leave out `piloted' and insert `local pharmaceutical'.—[Mr. Denham.]

Clause 36, as amended, ordered to stand part of the Bill.

Clause 37 ordered to stand part of the Bill.

Clause 38 - Control of entry regulations

Desmond Swayne (Conservative, New Forest West)

In many respects, my constituency is patchy with respect to the coverage that can be had from pharmacists—we are certainly talking about many more than the three miles that were mentioned this morning by the hon. Member for Isle of Wight (Dr. Brand). That position would be much worse if one or two strategically placed independent pharmacists were to find themselves in greater difficulty because of current trading conditions.

My constituency is served by independent pharmacists. Although the total number of chemist shops in the United Kingdom has remained stable at approximately 10,000, the composition of those shops has changed significantly. Over the past 10 years, the proportion of chemist shops that are part of a chain of more than five shops has risen from approximately 25 per cent. to 40 per cent. There has been quite a concentration in the market with the growth of chains at the expense of independents.

The smaller independents inevitably face various disadvantages, such as the fact that a flat fee is paid as part of the system, whereas in the past, fees took account of the low volumes used by smaller independent outlets. The national health service expects pharmacies to negotiate discounts with wholesalers, and reimbursement is based on that. It does not take account of the differential ability of small independents to negotiate significant discounts with wholesalers. There is the additional question of the high-cost item for which the fee fails to reimburse the small independent for the cost of his borrowing while he waits 90 days to be reimbursed for the cost of the item.

It is for those reasons that many independent chemist shops have disappeared. I believe that the change in the structure of the market because of the disappearance of the independent can profoundly alter the relationship with the pharmacist. It is precisely because of the informal circumstances in which people meet their independent local pharmacist that they are able to obtain more information from the pharmacist than from their doctor. I would argue that local pharmacists provide a different quality and level of service.

The provisions in the Bill offer greater opportunities for independents. There is every prospect that the LPS arrangements will play to the strengths of the independents in the quality of the service that they offer. It would be tragic if at the same time, the control of entry criteria were changed to the extent that competition knocked many of those independent suppliers over the edge and drove them out of business. I am essentially seeking reassurance from the Minister. Will he describe the circumstances in which the control of entry criteria will be changed or removed in their entirety so as not to bring about a faster change in the structure of the market, with the disappearance of independents, than has already been the case, most regrettably, over the past 10 years?

John Denham (Labour, Southampton, Itchen)

I think that I can give the hon. Gentleman the reassurance that he seeks. We have already discussed the relationship between proposed LPS pilots and existing contractors. Clause 38 seeks to deal with the relationship between LPS pilot schemes that are already in operation and new applications under the national arrangements. If a pharmacy moves from national arrangements to an LPS pilot scheme it will typically still remain in competition with other pharmacies, and it would be odd if such pharmacies were afforded less protection than they had before.

Clause 38 is designed for the circumstances that the hon. Gentleman described. If a pharmacy takes advantage of LPS and believes that it has particular strengths to move in that direction, it should not lose the protection that it would have had under the national arrangements. Clause 38 will ensure that pilot scheme pharmacies are taken into account when health authorities decide whether existing services in the neighbourhood are adequate.

George Young (Conservative, North West Hampshire)

Can the Minister give a similar assurance in respect of the circumstances that we discussed this morning where pilot schemes are provided not under LPS but under PMS? Will they be similarly safeguarded?

John Denham (Labour, Southampton, Itchen)

We discussed the role of PMS in providing innovative services. There is conceptually a difference between a PMS pilot or any other service that is restricted to dispensing to the patients of a particular practice and a LPS scheme or general national contract pharmaceutical service scheme that provides dispensing services to all the patients in the area who hold an NHS prescription. We are doing nothing to change the existing provisions, but the right hon. Gentleman's example is not analogous to the provision for local pharmaceutical service schemes, which is particularly to ensure that a pharmacy that enters into a pilot scheme is afforded the same protection that it would have had under the national contract.

George Young (Conservative, North West Hampshire)

I am not sure that I have fully understood the Minister. Is he saying that what can be provided under PMS is more restrictive than what is provided under LPS? The final sentence of paragraph 4.12.3 of ``The Health and Social Care Bill: Local Pharmaceutical Services'' implies that the same services can be provided under either PMS or LPS.

John Denham (Labour, Southampton, Itchen)

I confess that I am not quite sure to what the hon. Gentleman is referring.

George Young (Conservative, North West Hampshire)

It is the document that has helpfully been provided called ``The Health and Social Care Bill: Local Pharmaceutical Services''. I will read out paragraph 4.12.3 in order to give the Minister's officials time to concoct a response. It says:

``The opportunity for innovation within a local contract therefore already exists, and it is likely simply to become confusing if the same services could be provided under either PMS or LPS.''

I took that to mean that it did not matter that a general practitioner was precluded from applying for a pilot scheme under LPS because he could apply under PMS and do exactly the same. However, in his response a few moments ago about the protection provided under clause 38, the Minster was unable to give me the assurance that I was seeking, that somebody who provided exactly the same services under PMS would receive protection under clause 38. I wanted an assurance that whichever door one knocked at to provide the services, one would receive clause 38 protection.

John Denham (Labour, Southampton, Itchen)

I set out in earlier discussions the distinction that we draw between dispensing doctor arrangements and pharmaceutical services and the reason why we do not apply the same entry criteria and competition criteria to the two. On the question of how that affects the PMS service, I accept that there is a contradiction between what I have just said and the document that I circulated previously. It may be helpful if I write to the right hon. Gentleman to clarify that point.

Question put and agreed to.

Clause 38 ordered to stand part of the Bill.

Clause 39 - Assessing pilot schemes

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 212, in page 33, line 21, at end insert—

`(within the meaning of section 128(1) of the 1977 Act)'.

The amendment is purely technical. It simply corrects an oversight by adding a definition of the term ``health service'' used in subsection (1).

Amendment agreed to.

Clause 39, as amended, ordered to stand part of the Bill.

Clause 40 ordered to stand part of the Bill.

Schedule 3 - LPS schemes

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 222, in page 63, line 19, leave out `of a prescribed description' and insert—

`determined in accordance with the regulations'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take the following:

Government amendment No. 284.

Government new clause 12—Premises from which piloted services may be provided.

John Denham (Labour, Southampton, Itchen)

We are moving at such a rate that I am losing track.

Amendment No. 284 and new clause 12 deal with the movement of people from national arrangements to LPS and vice versa. New clause 12 deals with pilot schemes, while amendment No. 284 deals with the substantive, post-pilot arrangements, by adding further sub-paragraphs to paragraph 3 of schedule 3.

In both cases, the amendments provide powers to prevent people from providing services under both LPS and the national arrangements from the same premises. That is only sensible. In most cases it would be virtually impossible to tell when a prescription was being dispensed under LPS and when under the national contract. To let the two run side by side would be a recipe for confusion and—conceivably—fraud.

However, as with the equivalent provision for PMS, we do not think there should necessarily be a blanket ban. It is possible to imagine circumstances in which it might make sense for LPS to be provided from premises where services under national arrangements are also provided. For example, an LPS scheme might focus on out-of-hours services. In that case, there could be a clear distinction between LPS and the national arrangements, even though the same premises were used. Regulations will be able to make exceptions to the general rule.

The amendments provide a basis for regulations about transfer to and from pharmaceutical lists—the lists held by health authorities of the people with whom they have arrangements to provide services under the national contractual framework. When pharmacies move into LPS schemes, they will generally stop providing services under national arrangements, and so will need to be removed from pharmaceutical lists. The amendments provide for that.

Rather more significant for pharmacy owners will be the question whether they will be able to return to the national arrangements if, for any reason, their LPS scheme does not work out. The arrangements will be similar to those for PMS. Before people start providing LPS, they will be told whether they will have a preferential right to return—or in the case of new providers, transfer—to the national arrangements. Such a right will mean that they do not have to go through the normal control of entry procedures when they apply to go back on to the pharmaceutical list. Decisions about rights of transfer and return will be taken by the Secretary of State for pilot schemes and by health authorities for the later substantive arrangements.

Amendment No. 221 removes a small inconsistency in the drafting of the regulation making powers in paragraph 3(3)(a) of schedule 3.

Amendment agreed to.

Amendments made: No. 284, in page 63, line 28, at end insert—

`( ) prevent (except in such circumstances and to such extent as may be prescribed) the provision of both LP services and pharmaceutical services from the same premises;

( ) make provision with respect to the inclusion, removal, re-inclusion or modification of an entry in respect of premises in a list under section 42;'.

No. 223, in page 63, line 42, at end insert—

`.—(1) Regulations may provide for the making and recovery, in such manner as may be prescribed, of charges for local pharmaceutical services.

(2) The regulations may, in particular provide for—

(a) exemptions from charges;

(b) the liability to pay charges to be disregarded in prescribed circumstances or for prescribed purposes;

(c) section 122A of this Act (recovery of certain charges and payments) to apply also in relation to local pharmaceutical services (with or without modification);

(d) section 122B of this Act (penalties) to apply also in relation to local pharmaceutical services (with or without modification).

(3) The regulations must secure that the amount charged for any service is the same as the amount that would be charged for that service if it were provided under Part II of this Act.'.—[Mr. Denham.]

Schedule 3, as amended, agreed to

Clause 41 - Application of enactments

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 281, in page 33, line 39, leave out from beginning to end of line 2 on page 34 and insert—

`( ) The relevant authority may by regulations make, in relation to Schedule 8A arrangements or persons providing or assisting in the provision of services under such arrangements, provision corresponding (whether or not exactly) to enactments containing provision relating to—

(a) arrangements made under section 28C of the 1977 Act (provision of personal medical or dental services); or

(b) pilot schemes made under Part I of the National Health Service (Primary Care) Act 1997,

or relating to persons who provide or perform services under them.'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take Government amendments Nos. 282 and 283.

John Denham (Labour, Southampton, Itchen)

The clause is intended to provide the power to make regulations so as to apply to local pharmaceutical services other aspects of the existing legislation about PMS and PDS that are not explicitly covered in the Bill. As there is already a well-established model to follow in the NHS (Primary Care) Act 1997 and elsewhere, it does not seem necessary to go into the same exhaustive detail in the Bill. The main elements of LPS arrangements are covered in the clauses with which we have already dealt. This regulation-making power will allow us to deal with the remaining details by applying the existing model, with modifications where necessary. For example, it will allow us to extend the role of local pharmaceutical committees to representing those LPS providers who want such representation.

On reflection, we concluded that the powers originally drafted did not meet our requirements. Government amendment No. 281 replaces subsection (1) with a more extensively drafted and clearer provision. Government amendments Nos. 282 and 283 make consequential changes to subsection (2). The resulting power will remain limited to mirroring legislation that applies to PMS and PDS, but it will be expressed rather differently. The amendments make it clear that the Bill covers provisions not only about PMS and PDS arrangements, but also about the people providing and performing them.

Amendment agreed to.

Amendments made: No. 282, in page 34, line 4, leave out `provision' and insert `such enactment'.

No. 283, in page 34, line 4, after `modifications', insert `, if any,'.—[Mr. Denham.]

Clause 41, as amended, ordered to stand part of the Bill.

Clause 60 - Extension of prescribing rights

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 217, in page 54, line 7, at end insert `;

(h) any other description of persons which appears to the appropriate Ministers to be a description of persons whose profession is regulated by or under a provision of, or made under, an Act of the Scottish Parliament or Northern Ireland legislation and which the appropriate Ministers consider it appropriate to specify.'.

David Madel (Conservative, South West Bedfordshire)

With this it will be convenient to take Government amendments Nos. 213 and 216.

John Denham (Labour, Southampton, Itchen)

It may be helpful if I explain briefly how the next few clauses relate to one another. Clause 60, together with clause 44 and parts of clause 42, deals with the extension of prescribing rights. The remainder of clause 42 and clause 43 deal with the remote provision of NHS pharmaceutical services--home delivery, mail order and internet services. The genesis of these clauses is the final report of the ``Review of Prescribing, Supply and Administration of Medicines'', which was published in March 1999.

The review, by Dr. June Crown, made a number of recommendations relating to the prescribing and supply of medicines. One of its major recommendations was that legal authority to prescribe in the United Kingdom, including authorising NHS expenditure, should be extended beyond the current prescribers--doctors, dentists and some nurses. It also recommended that legal authority for new professional groups to prescribe should normally be limited to areas within the expertise and competence of each group. Two types of prescriber were recognised: independent prescribers, who would be responsible for the assessment of patients with undiagnosed conditions and for decisions about their clinical management, and supplementary prescribers, previously known as dependent prescribers, who would be responsible for the continuing care of patients who have been clinically assessed by an independent prescriber. The review also recommended that Ministers should receive advice on granting prescribing rights to new professional groups from a UK-wide advisory body, set up under the Medicines Act 1968.

The provisions in clauses 60, 44 and parts of clause 42 help us to implement the review's most important recommendations. Clause 60 amends section 58 of the Medicines Act 1968, and deals with the prescribing of prescription only medicines, whether privately or dispensed as a cost to the NHS. Clauses 42 and 44 make like changes to the National Health Service Act 1977, in respect of ordering drugs and other items on the NHS.

We consulted the NHS and relevant professional organisations before agreeing to implement the main recommendations of the review. A strong majority of the organisations consulted on the review's recommendations were in favour of extending prescribing rights to other health professionals. That is why we are now taking powers that will enable us to implement those recommendations through orders. I

was glad that on Second Reading the proposals were supported by both sides of the Chamber. Action to extend the rights to prescribe medicines will help to break down the divisions between health professions and play an important role in the introduction of more flexible team working throughout the NHS.

I shall give one or two examples of the potential benefits of extended prescribing rights. Physiotherapists may be able to prescribe non-steroidal anti-inflammatory drugs and analgesics rather than having to refer their patients to a GP, and optometrists could prescribe medicines for the treatment of conjunctivitis and other eye infections. However, the proposals will also mean better and speedier access for patients to the medicines they need, as envisaged in the NHS plan.

Clause 60 does not confer any prescribing rights. Instead, it makes it possible for Ministers to extend by order such rights to members of any recognised and regulated health profession. Patient safety will, of course, be paramount during implementation, particularly when considering whether to grant prescribing rights for specific medicines to a professional group. An advisory body under the Medicines Act will take account of concerns when considering the granting of prescribing rights to any specific group of health professionals. That advisory body will make recommendations to Ministers. More detailed proposals for granting prescribing rights for specific medicines to a particular group of health professionals will be subject to both informal and formal consultation with relevant organisations.

The Government amendments are related. Clause 60(3) lists the registered health professionals who may be considered for prescribing rights. Government amendment No. 217 extends that list to ensure that health professions, regulated under separate Scottish and Northern Ireland legislation, have the same potential right to prescribe as health professionals regulated under the specified Acts of Parliament.

Clause 42(3) lists the registered health professionals whose prescriptions may be dispensed under the NHS in England and Wales. Government amendment No. 213 extends that list to ensure that prescriptions of Scottish and Northern Irish regulated professionals will be able to be dispensed in England and Wales.

Finally, clause 44(3) lists the registered health professionals whose prescriptions may be dispensed under the NHS in Scotland. Government amendment No. 216 amends that list to make similar provisions in Scotland for health professionals regulated under Northern Ireland legislation.

Desmond Swayne (Conservative, New Forest West)

I have a number of questions for the Minister. First, how will the advisory body be constituted? Will it comprise members of the professions that are to obtain prescribing rights under the regulations? The Royal College of Nursing wants to know why midwives and nurses are not included in the list in amendment No. 213. He will be aware that the limited content of the current nurse prescribers formulary has proved frustrating, and that the royal college wants the full British national formulary to be accessible to all licensed nurse prescribers.

The electronic mail message that I received from the royal college states:

``The RCN calls on the Government to ensure that nurses who have specialist training can prescribe controlled drugs as well as having access to an increased range of other prescription only medicines. This would mean, for example, specialist pain control nurses could prescribe controlled drugs such as diamorphine for patients with a clinical need.''

That description seems consistent with what the Minister said about different groups with different expertise being able to prescribe in a particular way. Will he respond to that point when he answers the debate?

Concern has been expressed about the degree of restriction that regulations may place on legitimate prescribing powers. If regulations are to specify in detail what drugs can be prescribed and in what circumstances, they will rapidly become cumbersome and out of date. It will be difficult for dispensing pharmacists to keep abreast of changes in products and what is available for patients. The benefits that those patients may obtain from those products, and the most up-to-date clinical practices will be constrained by regulation . How quickly can we expect the regulations to be reviewed to accommodate pharmaceutical developments?

There must be absolute clarity about where clinical responsibility lies. Perhaps the Minister will say something about that. Will it lie with those who gain the new prescribing rights? The Minister commented on the independence of those people, but the implications were not clear. Will the new prescribing rights be independent of the existing prescribers—general practitioners and consultants—or will they be dependent on an existing prescriber, who will take full responsibility?

What safeguards does the Minister plan to provide to ensure communication between multiple prescribers, to avoid interactions between the drugs prescribed for a patient by several eligible professionals?

Peter Brand (Liberal Democrat, Isle of Wight)

The Minister is right to attempt to outline the professional groups that should have prescribing rights and to consider specific drugs in relation to those groups. I also invite him to consider the specific settings or circumstances under which prescribing takes place. I share some of the concerns expressed by the hon. Member for the nicer bit of the New Forest—the hon. Member for New Forest, West (Mr. Swayne)—as accountability and teamwork should be strengthened rather than confused by the provisions.

Let us deal with dependent prescribers—that is not a happy term—in a hospital. I imagine that a specialist diabetic nurse would prescribe according to protocols accepted by the diabetic team, which would include a consultant. If so, there should be shared accountability within that team for what happens to the patient. If prescribing occurs outside that unit, the nurse practitioner would become responsible by himself or herself.

It would be nice if the Minister gave some thought to the possible conflicts within a team. A specialist asthma nurse may be keen to follow the guidelines of the British Thoracic Society--which are excellent, although some eccentric asthma physicians do not hold by them. The nurse prescriber would have a good basis to act independently as a prescriber, but would be in a difficult position if the consultant, who was part of an asthma team in a hospital, was not prepared to back up the prescriptions that had been issued.

In primary care, teamwork has probably evolved more than in hierarchical, hospital-based structures. However, there is sometimes wooliness as to who is a member of the core primary care team and who is an adjunct, and therefore important but not integral. Where does the definition of dependent and independent prescriber begin and end?

Clearly, independent practitioners—physiotherapists, ophthalmologists and others who rightly have wider prescribing rights—would not necessarily fit into a primary care team on a day-to-day basis. It is more difficult for them to share local protocols on how to deal with particular diseases. In the relevant circumstances, the practitioner would be totally responsible for the prescribing, in the same way as a practitioner, a nurse practitioner or a pharmacist in a walk-in centre should be responsible for a prescription that he or she has issued. I am, however, slightly concerned about the lack of a clear mechanism by which the responsibility could be passed on to members of the team caring for the patient.

General practitioners are worried about the case law covering what could happen once a hospital pathology department or diagnostic imaging department had obtained abnormal results, in a process that had been initiated by a hospital consultant, and had sent a copy to a general practitioner. If the hospital failed to act on the abnormal results, and things went amiss, and if the GP had not acted on the results that were copied to him or her, there would be joint liability. I am slightly concerned, given the proliferation of agencies that are now involved with the care of patients, that that could become an increasing problem.

Out-of-hours co-operatives have established a fairly tight regime of information sharing and handing over of responsibilities. When an out-of-hours service ceases to operate at 8 o'clock in the morning and passes over the notes of the events of the night, liability for the patients transfers immediately back to the GP with whom the patient is registered. In a walk-in clinic matters are not so clear. The GP may not receive notification. There is no statutory responsibility to share information.

Information may be shared in the form of a fax that arrives at 11 o'clock on a Saturday morning, which may not be seen until 11 o'clock on a Monday, after the Monday morning rush, when people begin to look at the faxes that have arrived. In the meantime, for a day and a half the patient concerned may have been on inappropriate treatment, or may have needed further treatment, without follow-up. Would that situation impose a liability on the practitioner, who had not sought the information but on whom it had been thrust? Would responsibility be thrust upon the practitioner?

My difficulty with clause 60 is that all such matters are left to regulations. Issues of accountability are very important, and I wonder whether the Government are being unwise in not specifying in the Bill where responsibility will lie for the actions of the professional groups that they are rightly including in the provisions. The need for insurance and legal accountability can of course be discussed under amendment No. 278, which will no doubt be moved by the hon. Member for New Forest, West, but I should like the Minister's response on the general points.

John Denham (Labour, Southampton, Itchen)

Hon. Members have raised wide-ranging issues, which I shall deal with as succinctly as possible.

The hon. Member for New Forest, West first asked about the nature of the advisory committee. The power is given under the Medicines Act 1968 either to create a new committee or to ask an existing committee, such as the Committee on Safety of Medicines, to make recommendations to Ministers on which medicines may be prescribed by new groups of prescribers. The Bill allows a committee to be established or an existing committee to be given that responsibility before clause 60 comes into force. We shall not decide until later this year whether to build on the experience of existing committees, such as the Committee on Safety of Medicines, or to establish a new committee. However, the existing body has a great deal of relevant expertise, and I hope that the hon. Gentleman will accept my assurance that a newly established body would be based on the experience of relevant health professionals.

The second issue raised by the hon. Gentleman was about prescribing by nurses. The Crown report, which will be implemented under the Bill, drew a distinction between independent prescribers and supplementary prescribers. Under the Medicinal Products: Prescription by Nurses etc Act 1992, nurses are already able, under certain circumstances, to act as independent prescribers, which means that they take on the full clinical responsibility for their prescriptions. The Bill also allows nurses and other professions to act as supplementary prescribers. One reason why nurses are not included as independent prescribers is that they already have that power.

Between October 2000 and the beginning of 2001, the Department consulted on proposals to extend nurse prescribing over a wider range of medicines and a wider group of nurses. We received hundreds of comments and are examining them carefully. That consultation, in part, explored the issue raised by the hon. Gentleman. We could work through the entire formulary, saying that some drugs could be prescribed and others not, but about 17,000 different items are listed. We would either have to start again whenever new drugs came into the formulary or issue a more limited list. We may identify other ways of setting out the categories of drugs appropriate for nurse prescribing. The consultation document raised that issue: from memory, it set out five options, but we have not formed a firm view about which one to pursue.

Desmond Swayne (Conservative, New Forest West)

Can I edge the Minister towards a view? The royal college put its view forcibly that the whole formulary should be available to nurses, and that it should be up to them to use their professional discretion not to prescribe outside their areas of expertise. Nursing is, of course, a professional organisation and is regulated as a profession. We should expect nurses to take that responsibility.

John Denham (Labour, Southampton, Itchen)

I understand that that is the view of the Royal College of Nursing; it will have been reflected in responses to our consultation. However, counter views have been expressed that must also be taken into account; some have argued that only those who have gone through a full medical training should automatically be assumed to have the ability to prescribe freely from the entire national formulary. We consulted on that issue, and Ministers will have to consider it and bring forward recommendations in due course.On the hon. Gentleman's original question, nurses have independent prescriber rights and will be able to have supplementary prescriber rights under the Bill.

The hon. Gentleman raised an important point, which we shall need to address through guidance, about communications between people who may be prescribing under different circumstances. We shall obviously have to get that right. The investment that we are making in the development of the electronic patient record should ease that considerably. It should also deal with some of the issues raised by the hon. Member for the Isle of Wight about the transmission of information from NHS Direct, out-of-hours services or walk-in centres to a GP. We will need to ensure that there is an appropriate flow of information between one prescriber and another.

That is likely to be particularly important for independent prescribers who are exercising full clinical responsibility for the decisions they take about the prescriptions that they write. It is obviously an issue for supplementary prescribers, too, but they will be prescribing under the oversight of independent prescribers. For the supplementary prescriber, it is the independent prescriber who retains overall clinical responsibility.

The hon. Member for the Isle of Wight raised a wide range of issues, some of which go to beyond the provisions of clause 60. Currently, two independent prescribers, such as a GP and a hospital doctor, may take decisions about the same patient.

Peter Brand (Liberal Democrat, Isle of Wight)

The Minister is right, but accountability in that case is absolutely clearcut. Responsibility for the overall care of a patient in a hospital is taken by the consultant through clinical governance, and eventually by the chief executive of that hospital. As soon as the patient comes out of hospital, unless on leave as a patient under the mental health legislation, the responsibility becomes totally that of the general practitioner. There may occasionally be a dispute when patients have their pills changed between hospital visits and coming out, and vice versa. That system may not be desirable, but the accountability is clear, whereas in the Bill it is not.

John Denham (Labour, Southampton, Itchen)

The principle must surely be the same as it is now, so by extension accountability must lie with the prescriber and the organisation to which they are responsible. The hon. Gentleman has highlighted the need to work closely with the professions when we implement the clause so as to deal with the practical issues arising from the extension of prescribing powers and to ensure safety and clear accountability. The hon. Gentleman said that we should have provided for that in the Bill. I suspect that it is better to try to achieve that outcome through the regulations, rather than attempt to anticipate or predict every possible eventuality in the Bill. I know that the hon. Gentleman supports the broad thrust of Government policy, and I am sure that he will be the first to scrutinise the more detailed proposals as they are introduced. He obviously has great knowledge and expertise in this area.

Peter Brand (Liberal Democrat, Isle of Wight)

In that process, will the Minister also consider the requirements for clinical governance and re-accreditation of prescribers in exactly the same way as doctors are, quite rightly, required statutorily to undergo re-accreditation and to audit their work through clinical governance?

John Denham (Labour, Southampton, Itchen)

Re-validation of doctors, re-certification of dentists and the equivalent process in other professions are the responsibility of the professional bodies. Just as for consultants' contract we have tried to ensure that NHS appraisal of consultants directly ties in with, aligns with and is supportive of the General Medical Council's re-validation process, we will want to ensure that we are supportive of reasonable measures by other professional organisations to make sure that their members are fulfilling their proper professional responsibilities. We work with the professional regulatory organisations in the area of professional regulation. Clearly, the narrower area of prescribing in the NHS, to which this provision largely applies, must come within the NHS's own clinical governance arrangements. We should bear in mind the fact that not all the prescribing rights under discussion would be exercised within the NHS as full professional responsibilities. We must co-operate with the professional organisations for all the professionals in that category, and ensure that we have the right clinical governance arrangements in the NHS, where most of those people will be working.

Desmond Swayne (Conservative, New Forest West)

Could I bring the Minister back to the problem of the regulations becoming over-prescriptive, so that it would be difficult to revise them to keep abreast of pharmaceutical developments? How will the regulations work? Will they be general, enabling regulations, or will they specify, in detail, who may prescribe what? If the latter is the case, the effect may be to deny patients some of the most up-to-date developments simply because of the limitation of the regulations.

John Denham (Labour, Southampton, Itchen)

All that I can say is that I do not have the answer to that today, but we will have to get it right for the extension of nurse prescribing. It is reasonable to assume that nurses will have a wider range of prescribing responsibilities than the other health professionals who will be covered by the legislation. The options that we put forward in our consultation document range from the ability to prescribe absolutely anything to the ability to prescribe from a list of five permitted items. There are various options in between those two extremes, ranging from building up an approved list to ruling out certain types of prescribing. We have not yet completed our response to that consultation.

Eventually, we may need to take different approaches to different professional groups. Some of those mentioned in the legislation may have a very limited formulary available to them, certainly in the early days. Having a list of approved items may be the way forward—I do not know. For others, we may need a more flexible approach. I acknowledge the relevance of the hon. Gentleman's point, but we should examine the matter in detail in the context of the current consultation on nurse prescribing rights. We must ensure that we get it right.

Peter Brand (Liberal Democrat, Isle of Wight)

The Minister is right in saying that most of the work will be done by members of NHS-based teams. I support the plea of the hon. Member for New Forest, West that we should not restrict members of those teams by sheer formulae, because that has been so frustrating in nurse prescribing. Everyone should be able to work within their competence to the benefit of patients. There is often a shared approach, and perhaps the question of who should prescribe what should be determined locally.

I would be worried if the Minister were suggesting that membership of a professional group would determine what a person could prescribe. The Minister has a real problem. Presumably, once an item is allowed for those belonging to a professional group, from that point on it would be allowable on the basis of only two criteria: the specificity of drugs and membership of that professional group. Such an arrangement would give scope to independent practitioners, some of whom are wonderful and invaluable, and join in with the teamwork, but a number of whom have exiled themselves from teamwork in the NHS, because they have eccentric ideas. It is important to recognise the different pressures on people who are not part of a therapeutic team. Audit and control of those groups is important. This part of the Bill greatly extends not only responsibilities, but opportunities for doing harm.

As the Minister acknowledged, I support the widening of prescribing powers. The present powers are demeaning to professionals. That is nothing to do with teams having to be doctor-led or anything like that; it is about protecting the patient, which is best done through teamwork and shared responsibility. However, the Minister must recognise that we are opening the door to people working in isolation, and to people not being prepared to link into the NHS network—or into private networks that work for the benefit of patients rather than practitioners.

John Denham (Labour, Southampton, Itchen)

I did not intent to give the impression that clause 60 provides that this group must have the same power under all circumstances. For example, it is necessary for prescribing nurses to be specifically trained in prescription before they can prescribe. Clearly, location and function is important, not just the membership of a profession or a wider policy. The hon. Gentleman is right about that.

Amendment agreed to.

Desmond Swayne (Conservative, New Forest West)

I beg to move amendment No. 278, in page 54, line 12, at end insert—

`(1C) An order under subsection (1A) may specify requirement as to indemnity insurance which must be maintained by a person exercising any rights conferred upon him by such order.'.

The amendment would provide a useful power for the Secretary of State when making orders under subsection (1A). It would enable him, but it does not require him, to specify that indemnity insurance should be maintained by those exercising rights conferred on them by such orders. In other words, those who have acquired the new prescribing rights may, at the discretion of the Secretary of State, have to take out indemnity insurance.

It is a probing amendment, to try to put pressure on the Minister to explore what should happen when something goes wrong and where liability should lie. It would also have the useful function of providing a means of redress through indemnity insurance. However, I caution the Minister, because indemnity insurance is not a cheap option—I am sure that he already knows that. Such insurance is, by custom, relatively expensive, and Ministers may wish to protect professionals from that requirement and allow the NHS to continue to pay out rather than have the professionals paying out through insurance. That is an entirely proper consideration.

Peter Brand (Liberal Democrat, Isle of Wight)

It is a useful amendment. Indeed, I hope that the Government will consider tabling a similar amendment on Report. Some members of the national health service family are already covered through national health service indemnity arrangements, but it is vital that those who are not otherwise covered—especially those working independently—should carry indemnity insurance or be a member of an association that covers them, otherwise patients will be left without effective redress should things go wrong.

3.45 pm

John Denham (Labour, Southampton, Itchen)

The amendment raises a series of interesting issues. As the hon. Member for New Forest, West said, it would give Ministers the power by order to require new prescribers to carry indemnity insurance. It is possible to see both sides of the argument. In some cases, legislative powers already exist—for instance, the Health Act 1999 provides the power to regulate new professions. On the other hand, the vast majority of registered health professionals already carry indemnity cover through their membership of professional organisations or trade unions. For example, physiotherapists and chiropodists carry indemnity insurance through their membership of their professional bodies, the Chartered Society of Physiotherapists and the Society of Chiropodists and Podiatrists. The UKCC, which is the statutory regulatory body for nurses, midwives and health visitors, strongly advises all nurses in practice to have indemnity insurance through one of the professional organisations or trade unions. Of course, where new prescribers are employed by an NHS trust or primary care trust, NHS employers' liability will apply.

As Committee members will know, the Health Act 1999 gave us the ability to require indemnity insurance for general medical and dental practitioners and the facility to extend that requirement to optometrists or pharmacists, the need for which we are keeping under review. For other professions, it is currently a matter for guidance and strong recommendation by the existing regulatory bodies.

I have thought carefully, and I think the issue is whether clause 60 is the right place for the provision and whether it should be specifically in relation to prescribing, or whether at some point it should be addressed more generally under the law relating to professions. My feeling is that this is not the appropriate place to take this measure although I recognise the arguments—and the reasons for them. The hon. Gentleman expressed some awareness of the dilemmas that are involved. If we were to be persuaded, however, that there was a need to enforce professions to have liability insurance, we should apply such a measure to the professions and not necessarily just in relation to clause 60 of this Bill.

Desmond Swayne (Conservative, New Forest West)

I thank the Minister for his comments and I concur largely with the analysis he has give, although I think that this is an that is worth considering further and we may do so. Meanwhile, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 60, as amended, ordered to stand part of the Bill.

Clause 42 - Dispensing of NHS prescriptions and provision of pharmaceutical services

Clause 43 - Remote provision of pharmaceutical, etc. services

Desmond Swayne (Conservative, New Forest West)

I do not wish to be a Luddite, but I do have reservations about remote prescribing. I would like the Minister to say a few words about what safeguards there will be because it strikes me that the advantage of the local pharmaceutical services is that they provide a higher-quality service. Many people may have become accustomed to that level of service and have enjoyed it, and the LPS scheme allows greater scope to develop that high quality of service to provide the added value that those pharmacy services can make available to the public.

I wonder whether that added value is available by electronic mail. It is only by consulting the pharmacist that the medicine management that we have discussed today would allow the exploration of the interaction between a medicine that has been prescribed against medicines that were bought over the counter for other conditions. If pharmacy services are provided via electronic mail, is that added value to be had? The danger is that the provisions for remote prescribing have every possibility of denying patients the advantages of local pharmaceutical services. I am looking for reassurance from the Minister on that score—that the problems have been thought about and that safeguards will be in place.

John Denham (Labour, Southampton, Itchen)

We are discussing an appropriate and sensible development. Clauses 42 and 43 remove legal obstacles to patients having their NHS prescriptions dispensed by mail order or by internet-based e-pharmacies. A small number of pharmacies in the United Kingdom sell medicines and, to a limited extent, dispense prescriptions. I said earlier that we do not intent to tell patients how they should have their prescriptions dispensed. Freedom of choice has always been at the heart of NHS dispensing. I do not see why NHS patients should be denied choices that are open to people with private prescriptions.

The key factor is that mail order and on-line pharmacies must meet the same legal and professional standards as any other pharmacy. That means that all pharmacy and prescription-only medicines must be supplied only from registered pharmacy premises, and such premises are regularly inspected by the Royal Pharmaceutical Society of Great Britain. In addition, pharmacy and prescription-only medicines may be supplied only by, or under the supervision of, a registered pharmacist. For prescription-only medicines there must also be a prescription. Breach of any of those rules is a criminal offence.

As well as legal controls, there are professional controls. Pharmacists and e-pharmacists must have the same professionalism and ethical conduct as other pharmacists. They must also acknowledge the special issues that may arise when dealing with patients at a distance.

The Royal Pharmaceutical Society of Great Britain's code of ethics includes a standard for the provision of on-line pharmacy services. That standard requires on-line pharmacies to observe British Standards Institution standard BS7799 to ensure the confidentiality and integrity of patient information. It requires on-line pharmacies to ensure that people requesting a pharmacy-only medicine complete a questionnaire appropriate to the product concerned before a decision is made to supply it. If the request or the patient's answer suggests that he would better served by a face-to-face consultation, the pharmacist is required to refer the patient to a convenient pharmacy.

The standard also requires on-line pharmacies to keep records that identify the pharmacist who authorises every supply of a pharmacy or prescription-only medicine. For sales of pharmacy medicines, the records, which must be kept for two years, must give details of the transaction and the information upon which the decision to supply was based. Failure to comply would form the basis of a complaint of misconduct the statutory committee of the Royal Pharmaceutical Society of Great Britain, which has the power ultimately to strike off pharmacists found guilty of misconduct. In the case of a pharmacy company, the company's pharmaceutical superintendent be liable, as he would have personal responsibility for the management of the whole company's pharmacy business as well as for the pharmacy in question. Our view is that if those legal and ethical safeguards are met there is no reason why e-pharmacy should not safely provide patients with new choices in obtaining their medicines.

Clause 43 makes further amendments in consequence of the provisions in clause 41 that allow for the provision of pharmaceutical services by remote means. For consistency, it makes explicit that additional pharmaceutical services may include activities carried out away from the contractor's premises and across health authority boundaries. Additional pharmaceutical services are certain extra services that help authorities arrange with pharmacies under directions given by the Secretary of State rather than regulations. The clause makes a number of other essentially technical changes.

Amendment agreed to.

Clause 43, as amended, ordered to stand part of the Bill.

Clause 44 - Dispensing of NHS prescriptions

John Denham (Labour, Southampton, Itchen)

I beg to move amendment No. 215, in page 37, line 23, leave out first `and'

The amendment removes an extraneous ``and''. I assure the Committee that it is a purely technical amendment.

Amendment agreed to.

Amendment made: No. 216, in page 37, line 47, at end insert

`(i) any other description of persons which appears to the Scottish Ministers to be a description ofpersons whose profession is regulated by or under a provision of, or made under, NorthernIreland legislation and which the Scottish Ministers consider it appropriate to specify.'.—[Mr. Denham.]

Question proposed, That the clause, as amended, stand part of the Bill.

George Young (Conservative, North West Hampshire)

I have a short question: what on earth is the clause doing in the Bill? The clause amends the National Health Service (Scotland) Act 1978. Health matters have been devolved to the Scottish Parliament. As we shall discover when we reach clause 45, Scotland has enormous powers to do what it wants with health and social care without any reference to the United Kingdom Parliament. Despite that wide power to do what it wants, apparently it cannot vary the community of pharmaceutical services in Scotland without primary legislation in Westminster.

I have looked at the back of the Bill to see who is supporting the legislation. The Minister and the Secretary of State for Health are, as is the Secretary of State for Wales, but the name of the Secretary of State for Scotland does not appear. There are no Scottish Labour Members on the Committee to help us with this difficult clause and—goodness me—there are not many Committees considering Bills on which Scottish Members can now serve, as they do not apply to Scotland. The Bill applies to Scotland, but there are no Scottish Members serving on the Committee considering it.

The explanatory notes state that they

``have been prepared by the Department of Health, with assistance from the Wales Office''.

There is no mention of the Scotland Office. Has some terrible mistake been made?

Lorna Fitzsimons (Labour, Rochdale)

Is it not true that the right hon. Gentleman is among those who have sometimes been caught saying that there are too many Scots in Parliament?

George Young (Conservative, North West Hampshire)

The hon. Lady makes my point. There are a large number of Scottish Members of Parliament, whose presence is greatly appreciated. We would have welcomed one of them in the Committee today to help us through the clause.

How much power rests with Westminster on Scottish health? Will we find that primary legislation in Westminster is required when other relatively minor changes need to be made to the health service? Did the draftsman made the mistake of not devolving the powers to Scotland in the Scotland Act 1998, and does the clause put that right? Will we come across a host of other anomalies in the months ahead?

John Denham (Labour, Southampton, Itchen)

I can reassure the Committee that the parliamentary procedure surrounding devolution is so superbly designed that it allows the convenience of the measure being adopted in this way. The Scottish Parliament could adopt the measure but, under the Sewell convention, parliamentary procedures now allow it to agree that the Westminster Parliament can amend legislation that will apply to Scotland in this way. The Scottish Parliament has been through the necessary procedures under Sewell to allow that, so we are effectively responding to a request from the Scottish Parliament to amend its legislation.

George Young (Conservative, North West Hampshire)

I do not understand why the Scottish Parliament has to consult Westminster and needs us to change primary legislation for such a relatively trivial matter when it has enormous discretion, as we shall discover when we reach the next part of the Bill.

John Denham (Labour, Southampton, Itchen)

As I understand it, it is simply more convenient for the Scottish Parliament to make use of Westminster's legislative powers in this way, as agreed under Sewell. It has happened in various pieces of legislation.

We were worried this morning that we would not have time to complete the scheduled business today, but we seem to have nearly an hour left. We can therefore expect a lengthy discussion on devolution matters to take us up to 5 o'clock.

Clause 44, as amended, ordered to stand part of the Bill.

Desmond Swayne (Conservative, New Forest West)

On a point of order, Sir David. I wonder whether you could throw any light on the extraordinary exchange that took place in this Committee at 5.39 pm on 30 January 2001, when someone called Golf Whisky 1 said

``I think all this procedure is right—log's a bit confused and so am I'',

to which Tango Mike Bravo 2 replied,

``Unable to find a note on this''.—[Official Report, Standing Committee E, 30 January 2001; c. 265.]

David Madel (Conservative, South West Bedfordshire)

I need notice of points of order, and that is a matter for Hansard.

Further consideration adjourned.—[Mr. Jamieson.]

Adjourned accordingly at one minute past Four o'clock till Tuesday 6 February at half-past Ten o'clock.