Health Bill [Lords]

Public Bill Committee, 23 June 2009.

Written evidence to be reported to the House

Robert Key (Conservative, Salisbury)

Good morning. It is amazing what some people will do to avoid chairing the Committee.

Clause 11

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 16 , in clause 11, page 8, line 29, after ‘Trust’, insert

‘and may also provide for an appeals process’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss the following: amendment 190, in clause 11, page 8, line 29, at end insert—

‘(4A) Any overpayment made by the Secretary of State shall not be recoverable under subsection (4).’.

Amendment 191, in clause 11, page 8, line 29, at end insert—

‘(4A) The regulations may make provision for the use of any surplus arising from the direct payment by—

(a) the patient; and

(b) the Secretary of State’.

Stephen O'Brien (Conservative, Eddisbury)

Good morning, Mr. Key. Somewhat to our surprise, but great pleasure, we find ourselves serving under your chairmanship. Thank you for stepping into the breach to ensure that we have a continuing, uninterrupted consideration of the Bill. We look forward to making good progress.

Amendment 16 aims to protect individuals from the unwarranted removal of money from them by the Secretary of State. We have seen how the Government are not beneath top-slicing PCTs to bring them into line, both financially and politically, to generate a central war chest. I am concerned that this provision could be used to do the same to those with direct payments, and I hope that the Minister will reassure us on that.

Amendment 190 comes in the light of the Government’s tax credit and other fiascos. Will the Minister confirm that if overpayments are accidentally made, the Government will bear responsibility and not the individual, and, above all, that the individual will not be at risk of the cost for such error, inadvertency, incompetence or plain negligence?

Amendment 191 questions what plans the Government have for surpluses in the direct payment. Will the patient be able to transfer some of it for personal use? That might reward and incentivise the efficient use of resources. Would it roll over to the next year, or would it be clawed back by the PCT or the Department? If so, how would efficiency be incentivised? The Minister half covered that, somewhat affirmatively, in the reply he gave last week. So I look forward to his confirming and amplifying that.

I am concerned by paragraph 136 in the explanatory notes, which states that new section 12B(2)(h) means that the Secretary of State

“may or must require all or part of direct payments to be repaid, for example, when a significant surplus has accumulated.”

No cause is given for that, just the fact of accumulation. What does the Minister classify as significant? Surely the circumstances in which the surplus accumulated should be taken into account. The reverse is, of course, when there is not enough money in the tin; in the other place, Baroness Masham pointed out that it had happened to her in social care. I hope the Minister bears that in mind when he responds.

Mike O'Brien (Labour, North Warwickshire)

May I welcome you to your post, Mr. Key? It is a great pleasure to serve under your chairmanship and I hope that we make speedy progress under your tutelage.

Amendment 16 provides for creating an appeals process where money given in direct payment needs to be reclaimed by the NHS, such as in the event of fraud or abuse. I support the principle that if money given through a direct payment is to be reclaimed, then the process for doing so should be fair and transparent, and the individual should—and does—have the right to redress. That right is clearly set out in the NHS constitution. Any complaint about NHS services should be dealt with efficiently and investigated properly. The NHS complaints procedure has recently been reformed to make it more efficient and robust.

A complaints procedure would apply to any decision to reclaim a direct payment. Moreover, if not satisfied by that procedure, a patient may ask the health service ombudsman to look into the case. Clause 12 expands the role of the ombudsman to cover services delivered through direct payments precisely to ensure that people are suitably protected. It is worth reiterating that PCTs providing direct payments are still providing NHS services, and patients are still covered by all safeguards protecting them and their dealings with PCTs.

Amendment 190 would exclude repayment of a direct payment where the Secretary of State has made an overpayment. We think that if a certain amount of money has been applied, it is for achievement of a particular purpose. If that purpose is achieved, a review will need to be taken into the surplus. This case is different from care cases in that an amount of money has been agreed for a person with a prolonged illness or condition and they would be expected to use that money to manage their condition. If they are able to do that more efficiently, effectively and cheaply than the PCT, that is fine—the money should be deployed in maintaining and improving that condition. Provided it is for that purpose, it should be possible to negotiate and agree to it. However, it may be that the amount of funding initially agreed is in excess of that required and a mistake has been made, and it is right that a review should take place at that stage and that a determination should be made about whether the appropriate figure was or was not calculated at the beginning. We want to ensure that those who use their funding efficiently are able to retain it for a similar purpose within the context of their care and budget. We do not want a situation where, should there be a miscalculation or an issue arises that should not have arisen, somebody ends up not deploying money for their care.

There is broad agreement that that is the outcome that we want. With regard to the Secretary of State recovering money to build up a war chest, we are not talking about amounts that would make a big difference to the national health budget one way or the other. Initially we are looking at 70 or so projects, which would assess whether the process of direct payments can be refined and expanded or whether we want to change it in some other way. Building up a war chest is unlikely and I assure the hon. Gentleman that the Government would not contemplate that. Frankly, it would be pointless given the sums involved.

Regular monitoring will ensure that any surpluses or shortfalls in budget are identified quickly. It is important that we not only deal with surpluses but also budgets that are underfunded, where the money is insufficient to remedy that; it needs to work both ways. That is the objective and I hope with those assurances that amendments 16 can be withdrawn by the Opposition.

Stephen O'Brien (Conservative, Eddisbury)

I have listened to the assurances and I am glad to say that my concerns are somewhat assuaged. I still have a concern about the building up of a war chest, which the Minister sought to dismiss. Clearly, while we are in the pilot stage, what he says in terms of the sums of money must be right, but if the pilot is to mean anything—we are about to come on to this—when it is rolled out throughout the country, the cumulative amounts of money will be potentially significant. We need to get the principle and the ideas right now; that is the purpose of this scrutiny.

If there is a surplus that can be applied effectively in support of the purpose for which it is given, it is in effect one of the motivators to efficient procurement and the necessary contestability for getting higher quality services. I think that we are at one on that. My remaining concern, which might need to explore on Report, is how one defines purpose, given that at the moment the word “significant” is used. As part of his answer, the Minister sought to distinguish “purpose” from “miscalculation”. In practice this could be important because there will be residual worry for people in receipt of payments that they could suddenly be clawed back. People make their dispositions on the understanding that they have the amounts that they have been granted.

Mike O'Brien (Labour, North Warwickshire)

Just to reassure the hon. Gentleman, it is not our intention to claw back funding where people have made dispositions and, as a result, created a surplus through efficiency. This is provided that the surplus is to be deployed for the purpose of the health budget. If, for example, the person’s condition had ceased, that might be a factor that would need to be reviewed. The aim is not to claw back moneys that, because of efficiency, had arisen as a surplus.

Stephen O'Brien (Conservative, Eddisbury)

That added assurance is helpful, and I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 192, in clause 11, page 8, line 29, at end insert—

‘(4A) The maximum period permissible in regulations made under subsection (3) is three years.’.

This deals with limiting pilot length. New section 12C subsection (3) reads:

“A pilot scheme must, in accordance with the regulations, specify the period for which it has effect, subject to the extension of that period by the Secretary of State in accordance with the regulations.”

This is a far-reaching power that would enable the Secretary of State to prolong the pilot, even indefinitely, if he wanted to. The noble Lord Darzi in the other place said:

“We intend the personal health budgets pilot programme to run for at least three years, with direct payments being used for at least two years.”—[Official Report, House of Lords, 2 March 2009; Vol. 708, c. GC251.]

This was in response to a reverse point by Baroness Barker about the individual budget pilots. In some places the Government organised those—we would argue—so badly that people had been using them for only a few weeks or months before they came to be assessed. This was admitted by researchers in the IBSEN report. If Lord Darzi is content that three years is the time taken to run a pilot, it seems sensible that it should be on the face of the Bill at least as a benchmark expectation, if nothing else.

Mike O'Brien (Labour, North Warwickshire)

The hon. Gentleman is right, but my noble Friend Lord Darzi had suggested in the other place that it is our intention to pilot health care payments. The maximum limit will be a period of three years. Most projects with direct payments will take around two. The system will take some time to set up, so we will have a set-up time, the running time and then an evaluation period. The aim is that we should be able to have a three-year block area where about 70 projects can be properly evaluated. They will have slightly different start-up and finish times.

The drafted provisions require the period for which a pilot would run to be defined and we expect most sites to be authorised within two or three years. However, it may be the case that a site takes longer to report than anticipated, either due to local circumstances or an unforeseen complication. We would therefore need flexibility to extend the period of the pilot to more than three years if necessary, in order properly to evaluate that site. The Bill allows for this but the amendment would prevent that from happening, so I hope the hon. Gentleman will feel able to withdraw it.

Essentially, in terms of getting this done, we need to have a block of time where we can set it up, ask for the various bids to be examined and allocate the funding. Then, we can start to run the projects, provide the level of support that they need, get to the end, evaluate it and have an outturn date which is within approximately three years of the start of the pilot schemes. That is why there is a difference in terms of two to three years.

Stephen O'Brien (Conservative, Eddisbury)

I will not press this to a Division. This exchange is on record, so those who are concerned about understanding the way forward have a clear idea that the maximum limit is expected to be three years, with most taking two. The Minister will be aware that our concern arises because of the Government’s track record in relation to pilots. We have often had pilots without the follow-through, so we now want to ensure that there is a clear programme that is expected not only to evaluate them well, perhaps with this reserve power that if one or two stray over the time they can have their evidence captured for the general application, but above all to make sure that there is an expectation of roll-out. On that basis, I beg to ask leave to withdraw the amendment.

Sandra Gidley (Liberal Democrat, Romsey)

I beg to move amendment 171, in clause 11, page 9, line 14, at end insert—

‘(4A) The regulations must make provision that the pilot schemes are fully completed before a recommendation is laid before Parliament.’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss the following: amendment 172, in clause 11, page 9, line 17, at end insert—

‘(aa) for a review to be carried out that involves patients, staff, voluntary organisations and representative bodies.’.

Amendment 132, in clause 11, page 9, line 26, at end insert—

‘(d) the impact of direct payments on health inequalities.’.

Sandra Gidley (Liberal Democrat, Romsey)

I extend my welcome to you in the Chair, Mr. Key. Amendments 171 and 172 aim to ensure that any pilots of direct payments are completed and would be reviewed, not only by an independent person, but also by patients, staff and voluntary and representative bodies. The number of amendments that have been tabled around review reflects a concern that, very often, pilots are not properly evaluated before they are implemented in the NHS. With regard to amendment 132, about which I shall talk briefly, it is right to consider the impact on health inequality, but all the evidence shows that most public health projects are poorly evaluated and there is little evidence about what works and what does not, although there are lots of well meaning projects out there. This is an attempt to focus attention on the review methodologies beforehand—we need to have in place, at the outset, some idea of what impacts we are looking for from direct payments.

In the other place Lord Darzi said:

“Our general intention is that the pilots should be clearly defined from the start”—

the Minister has just confirmed that—

“I can put on record our intention to evaluate all the direct payment pilot schemes, not just some of them...We intend the personal health budgets pilot programme to run for at least three years with direct payments being used for at least two years. The one-year requirement is surpassed by our policy”.—[Official Report, House of Lords, 2 March 2009; Vol. 708, c. GC252.]

The Minister did not commit, however, to completing the pilot project, or formally to reviewing, or consulting upon, the outcome of the pilots. The consequences of such a major change to the delivery of health services, especially to the intended group of direct payment recipients, should really not be rushed. A number of concerns have previously been raised about that. Direct payments for social care have been in place for some time, but there are many differences between health and social care, which were highlighted in a previous sitting.

It would be useful to hear from the Government that there will be proper evaluation before a final recommendation is made to Parliament. The reason for including voluntary organisations and staff organisations is that there may be significant unforeseen impacts on NHS staff. It is always useful to consult with user groups—I hate the term “service user”, but it seems to be the current jargon—because they will be aware of the real-life implications that affect people on the ground, which are not always picked up using formal methodologies. These amendments are an attempt to seek the Minister’s reassurance that all these factors will be taken into account.

Stephen O'Brien (Conservative, Eddisbury)

I am happy to support amendment 172, which relates to points that we have made before on LINks, and the hon. Lady includes staff groups and so forth. On amendment 171, we clearly have to get the balance right between making sure that the evidence base is there and that we are not unduly complicating things. I hope the Minister will give us an assurance that the pilot schemes will have a significant period to run before they are reviewed, because of the example we have had. To some degree, it is the mirror image of what we discussed on the last point.

Our amendment 132 concerns the Government’s figures on health inequalities. The reason I am very anxious to include the effect that direct payments have on health inequalities is partly because I think it is common sense that they will have a major effect and it would be something of a dereliction of duty if that were not properly taken into account and measured. We are conscious, as we consider the Bill, that the inequality gap in infant mortality rates has not reduced sufficiently to meet the Government’s target. The inequality gaps in male and female life expectancy at birth have both increased since the baseline, by 2 per cent. for men and 5 per cent. for women. If trends continue, the Government’s targets will also not be met. The relative gap between the routine and manual groups in the population has widened over recent years since the target baseline, and the number of sexually transmitted infections has doubled over recent years. Because of this inability to address the inequality and poverty that have affected areas even beyond health policy—health is a key weather vane in respect of inequalities—a proper measure of effectiveness of direct payments will be the impact that they make on this poor record.

John Horam (Conservative, Orpington)

Further to the point made by my hon. Friend the Member for Eddisbury on health inequalities, the Minister will be aware that there are considerable differences. Even in an affluent borough such as Bromley, there are areas where health is much worse than the average for the country, never mind for Bromley. This may reflect my ignorance, but what is the size of this pilot project? Does it cover the whole Primary Care Trust or is it a much smaller area? Is it a group of patients attached to one general practitioner? What size is it? This is important. Will the number of pilots reflect the health inequalities throughout the country. Clearly, we need to take bad areas and good areas and average areas in order to get some sort of feel about how direct payments will work.

Mike O'Brien (Labour, North Warwickshire)

It is our intention that we should properly evaluate all these trials. These pilots are enormously important for assessing the impact of direct payments and it is right that we should have a full and comprehensive evaluation of them. The Liberal Democrats’ amendment would mean that we could not move forward with direct payments until all of the pilots had been completed. Some of the pilots may be delayed for all sorts of reasons. They may go beyond three years. They may have to carry on because of the health condition of individuals. Therefore we want some flexibility in the way in which we deliver the evaluation. We also need to make sure, however, that this evaluation is comprehensive. This is why we have a spread of 70 projects across a range of types of income, area and condition, so that we can have a proper assessment of where these projects would bring benefits from direct payments and where they would not. The hon. Member for Romsey is right to say that we need fully to evaluate this and that therefore we cannot try to rush through the evaluation. The evaluation, however, will be going on alongside the pilot. We do not necessarily always have to wait until the end before much of the work on evaluation takes place. One of the things we have to evaluate is how we get applications in. How well is it done? Who gets them? This can be done early on therefore and it can be evaluated well within the initial year. Therefore, we have a process of evaluation that evaluates the different stages of the pilot and identifies what works and what does not work. The main evaluation, however, will have to wait until the end so that we can look at the impact it has had on individuals.

We want to ensure that we involve all the key stakeholders—the patients, the staff, the voluntary organisations, the representative bodies—in looking at how direct payments work. It will be important in evaluating the impact of direct payments on particular conditions how not only individuals react to the handling of funding for direct payments but also how the various patient groups see the implications of direct payments on that condition. We may end up with an outcome that says that for particular conditions direct payments are beneficial, while for other conditions they are not. That is probably where we will end up, but let us see where it goes. We need to have a broad spread of the various types of direct payment pilots. We then need to have a full and proper evaluation of them. We need to involve the various patient groups, and that is our intention—it is not necessary to spell it out in the Bill. This would not be an effective evaluation of an important step for the NHS unless we involved the patient groups. In our policy statement “Personal Health Budgets: First Steps” we have specified that one of the principles of personal health budgets is to tackle inequalities and protect equality. Our advertisement for the evaluation, which was published in April, specifically asked research teams, who are now being recruited to conduct those evaluations, to consider how the impact of personal health budgets differs between patient groups, looking not only at health conditions but also socio-economic groups and patient characteristics such as ethnicity. The advertisement also asked teams bidding for the evaluation to consider how easily individuals from different groups can access personal health budgets and the support that they would need to do so. We are in the process of selecting the evaluation teams to do that. They will be responsible for ensuring that the views of all relevant stakeholders are considered in the evaluation process and that the impact of direct payments on health inequalities is comprehensively reviewed.

In summary, we want a broad spread in the size and nature of the different pilots. We want to ensure that we are looking at the different characteristics of both income and condition and that we have a spread, where we are able to get that, of particular conditions.

John Horam (Conservative, Orpington)

How many people will be involved in one particular pilot? What is the normal number that you would expect?

Mike O'Brien (Labour, North Warwickshire)

The broad concern would be to target direct payments at individuals who have a particular medical condition to see if they can manage the budget in a way that best delivers for them. We are also looking at small groups of people who want to work together to evaluate their budgets to see how that would operate. We want to look at a spread of different types of project to see what works. I suspect that we will find that certain things work and others do not. Unless we have a wide enough spread, geographically and otherwise, we will not be able to carry out that evaluation at the end of the three-year period.

John Pugh (Liberal Democrat, Southport)

What would constitute a good result of a review of a pilot? A valid point could be made that the socio-economic groups exploit private payments in different ways, some to greater benefit and others lesser, and, as has been suggested, that may accentuate health inequities. If there is an improvement in how NHS resources are used, if there is a wholesale uplift in health care and the efficiency in which provision by the state affects health outcomes, the Government could reconcile themselves to that—presumably in the same way that people sometimes argue for tax arrangements that may not produce more equity but produce greater productivity and benefits for the state as a whole. What is a bad outcome for a review? A degree of inequity could be introduced by the wholesale introduction of direct payments alongside a wholesale improvement in the efficient use of resources and perhaps wholesale improvements in health outcomes.

Mike O'Brien (Labour, North Warwickshire)

That is a perceptive and important question. If direct payments accentuate inequalities, then they have failed. It is likely that some individuals will be better able to manage budgets than others. That may well be attributable to their level of education and various attributes of their medical condition. We will have to evaluate this with care. Our aim is to ensure that we do not accentuate inequalities, particularly social inequalities, and also that we have an efficient use of resources, but the primary reason we are introducing this is to see whether we can better ensure that the treatment of individuals is carried out so that they will get the highest benefit. It is not either to save money or to spend more. The amount of money is not the key issue; the key issue is, what is the real benefit? If we can, as a result of this, ensure that health service provision for groups of people or individuals, because of the nature of a particular long-term condition that they have, is improved, then we are looking at a success.

The evaluation will be quite tricky; I do not hide that from the hon. Gentleman at all. We will need to balance a number of factors, and at the end of the process we will have to make some judgments as to how and in what circumstances to proceed. That will be the result of the evaluation, which will be open and published and engage the various groups, and then Parliament will have to make a decision about whether it wishes to extend beyond the pilots, and if so, in what form. I hope that with those explanations, the amendments can be withdrawn and we can proceed with direct payments.

Stephen O'Brien (Conservative, Eddisbury)

I was particularly interested in the intervention by my hon. Friend the Member for Orpington, who was asking, in effect, what the scale of the pilots will be. I understand from the Minister that there are about 70 projects currently in mind, of which some will be individuals, some will be groups and some could even be quite large groups. The issue, which I think the Minister was hinting at, is not only that there is an effort to ensure that these pilots have a proper, realistic and tough research-based evaluation—which will be difficult, as the Minister made clear—but that it will be difficult, scientifically, to get a proper statistical distribution that will look across all the various types, conditions, circumstances, socio-economic backgrounds, and levels of educational attainment, and that will make a big difference. The big issue as I see it, which is why our amendment 132 is germane—I shall not press it to a vote, but we may want to come back to it on Report; it may even be something that the Government want to consider in order to improve the Bill on Report—relates to the answer the Minister gave. He confirmed my motive, which was that this is not intended to exacerbate, but to help to address health inequalities, although the primary purpose is on an individual basis, where the ultimate test will be whether this helps to improve patient health outcomes, rather than detract or be high-differential in terms of cost. That is the important area, and a secondary benefit would be to help to address health inequalities.

Mike O'Brien (Labour, North Warwickshire)

I agree with most of what the hon. Gentleman said, but he said that the pilots can apply to a group of people, even a large group; that is not the intention. They are primarily for personal budgets, but they might extend, say, to a couple of people with a particular medical condition living together, or a group of people with a particular medical condition, who would be able to manage personal budgets and are, perhaps, living in the same accommodation. We are not talking about large groups here; we are talking primarily about personal budgets for individuals and those who might want to work together as part of a personal budget project. I do not envisage that a large group of people would decide to have the money and run their own health system; that is not where we are at all.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful for that answer to my question. It was the question I was asked on Friday when I visited an excellent care and nursing home in my constituency—Prospect House in Malpas. As there is a large collection of people there suffering from the same age-related conditions, there was a question mark as to whether there would be a pooled set of direct budgets, which would slightly defeat the aim of basing help on a personal needs-based assessment.

I am grateful for that intervention because it is clear the Minister has in mind that help is effectively to be directed at the patients on a personal basis. I hope that will clarify the matter for my hon. Friend the Member for Orpington. I will not press the amendment at this point, but I hope the Government will listen carefully and think about how to address this better in the final shape of the Bill.

Sandra Gidley (Liberal Democrat, Romsey)

The Minister seems to be saying all the right things and there clearly is an intention to evaluate. Lessons could be learnt from social care because some of those early direct-payment trials were not terribly successful. It was only by continuing and modifying that we eventually ended up with a model that is acceptable to more people.

Some key questions have been asked today. My hon. Friend the Member for Southport hit the nail on the head—if you are improving health generally that must be a good thing, but if you are further improving the health of people with a longer life expectancy, is that quite such a good thing? It is an argument we can bat around all day. What I am not clear about is the criteria for these pilots. Although I am happy to withdraw the amendment, it would be helpful if the Minister wrote to us outlining the methodology that will be used for evaluation. It seems that many of the pilots could have been set up in different ways. I am not quite sure how one would compare 70 different pilots, all of which apparently have small numbers of people—something I had not realised. That is difficult. It would be helpful for the Committee to have more information about that before Report. It would also be useful to know how many patients are involved in these pilots. Fundamentally, if—as the Minister indicated—the numbers are small, we could be making some quite significant changes to the NHS in the future with a small evidence base. If the Minister can provide us with that information it will be helpful. However, at this stage I beg to ask leave to withdraw the amendment.

Sandra Gidley (Liberal Democrat, Romsey)

I beg to move amendment 173, in clause 11, page 9, line 33, leave out lines 33 and 34.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 142, in clause 11, page 9, line 34, after ‘this’, insert ‘Part of this’.

Sandra Gidley (Liberal Democrat, Romsey)

The amendment would delete the entirety of paragraph (8)(b) from new section 12C, which allows any other provisions of the National Health Service Act 2006 to be amended, modified or repealed—for example, where it has become apparent that this is necessary for a general roll-out of direct payments. The reason for tabling the amendment was that new section 12C(8) contains a wide-ranging power to amend or modify the NHS Act. The Delegated Powers and Regulatory Reform Committee commented on that during its examination of the Bill. They described this as a “Henry VIII power” and concluded that it was

“limited to facilitating the exercise of the powers to make direct payments.”

Other organisations have raised concerns that in fact this may not be the case and there is no sunset clause here. Given that the Government would like to start pilot projects this year, it is somewhat surprising; the inclusion of a sunset clause would reassure people that the power was only limited to the direct payments. This is to seek clarification on the Government’s intentions, because it is a wide-ranging power and could have been restricted if that was the sole purpose of its inclusion in the Bill.

Stephen O'Brien (Conservative, Eddisbury)

Both amendments seek to limit the apparently wide-ranging powers introduced for the Secretary of State over the 2006 Act. Subsection (9) clearly limits those powers, but the power is still vast, as the Secretary of State needs only to be able to state that the action is in regard to direct payments to wield it. It is, though, subject to the affirmative resolution. In terms of the amendment, this is a Henry VIII power, although Lord Justice Laws suggested—I think in the 2002 metric martyrs case—that it was unfair to attribute such powers to His late Majesty, who reigned 100 years before the civil war, and longer yet before the establishment of parliamentary legislative supremacy. I hope the Minister can confirm whether the power could be used to remove the measures that restrict this to pilots as much as to remove the pilots from the 2006 Act altogether.

Mike O'Brien (Labour, North Warwickshire)

Allowing the Secretary of State to make an order repealing the limitation that direct payments may be made in pilot schemes only is the aim of new section 12C of the 2006 Act. It provides a power, effectively, to extend direct payments nationally should the pilots be successful. That is the objective of the exercise. Amendment 173 would remove that provision and amendment 142 would significantly restrict its scope. So the amendments would be made to part 2, and not the other 13 parts of the 2006 Act.

I can assure members of the Committee that the provision is not intended to, and does not, give the Government free rein to rewrite NHS legislation by order—and I am conscious that the words I use can be prayed in aid in any subsequent interpretation. It is intended that the provision would simply allow us to make any consequential amendments to the NHS Act that might be necessary to facilitate the wider roll-out of direct payments following the pilots that are being undertaken. It is not intended to go beyond that, or to create a general power to make any substantial changes beyond making a national provision of direct payments, should that be possible, in a limited number of cases where those limits are constrained by the nature of the condition and the outcome of the evaluations that will take place at the end of the pilots. The provision is reasonably clear and is aimed at enabling us to do what works as a result of the pilots and spread it throughout the country. We do not intend to give the powers wider application.

As the hon. Member for Eddisbury said, the affirmative resolution procedure would be used in relation to this. That provides a significant safeguard and ensures appropriate accountability to Parliament. That said, I hope that the hon. Lady will withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

On the basis that it is almost 30 years to the day since I last learned statutory interpretation rules—and given that I believe the Minister is right that what he has said is on the record and can be prayed in aid—I am confident that the limitation now rests as written. I am happy not to press the amendment.

Sandra Gidley (Liberal Democrat, Romsey)

There is little more to add and I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 17 , in clause 11, page 9, line 42, leave out ‘Secretary of State’ and insert ‘patient’.

As we canter to a close on clause 11, in this amendment to proposed new section 12D we return to where we started at the top of the clause, putting the patient at the heart of the legislation and indeed the care. I can see that the Secretary of State might want to commission information and support services, but will the Minister explain why legislation is necessary to support that? Surely it comes under the normal general duty and remit of the Secretary of State. The question the amendment poses is whether the individual will be able to commission support and information services as part of his or her care plan.

Mike O'Brien (Labour, North Warwickshire)

The aim of the power, which would be delegated from the Secretary of State to PCTs, is to allow the NHS to work with other organisations to develop direct payments. A PCT may choose, for example, to commission a voluntary organisation to undertake an assessment and agree a care plan for patients, or it may arrange for a social enterprise to offer support or brokerage services. For example, if a budget is provided to an individual, that person may want to use another organisation either to manage the budget itself or to provide access to particular kinds of care. An example is agency nursing, for which a brokerage may well broker on behalf of a patient.

There are different ways therefore in which we need to have provision for organisations beyond the NHS itself to be able to deal with some of these issues around the budget, but also to make sure the NHS’s finances are safeguarded during that process. It enables us therefore to have some degree of budgetary control overall but also to ensure that the way in which these personal budgets are used gives a degree of flexibility to individuals to handle the budgets in the way that they feel best suits their needs and their element of health care.

Stephen O'Brien (Conservative, Eddisbury)

I am happy with what has been put on the record. I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

New section 12C(6)(c) states that provision as to the review of a pilot scheme may in particular include such matters as

“the effect of direct payments on the behaviour of patients, carers or persons providing services in respect of which direct payments are made.”

The word “behaviour” is the key to the whole section and it is important that we state here that we must re-engage the patient with the whole process of commissioning health care and with the fact that it is a service rightly paid for by the taxpayer. Direct payments should lead to better and more efficient commissioning behaviours and they will also hopefully have beneficial ramifications for lifestyle and wellbeing.

Clause 12

Stephen O'Brien (Conservative, Eddisbury)

I have a few questions concerning the health service commissioner. What assessment have the Government made of any increase in work load and how have they resourced that? I discovered during proceedings on the Health and Social Care Act 2008 that although the Government are able to adjust the responsibilities of the ombudsman through legislation such as this, the resource of the ombudsman is not delivered through the money motion of the Bill but must be voted directly by Parliament.

Can the Minister confirm that the ombudsman will not be limited to maladministration in this area? When one talks to the ombudsman, one finds that they do not believe that they are. It is important, however, given that most MPs who deploy the ombudsman on behalf of their constituents tend to think that the ombudsman’s remit is limited to maladministration. We must be clear about the expectation here, given that there is no alternative appeals process.

The Under-Secretary of State for Health, the hon. Member for Brentford and Isleworth (Ann Keen), told me earlier this month, in response to a written parliamentary question:

“The scope and remit of the parliamentary and health service ombudsman to consider complaints has not been changed by the abolition of the Healthcare Commission.”—[Official Report, 9 June 2009; Vol. 493, c. 839W.]

Will the patient in receipt of a direct payment be able to complain about anything in the care package—the commissioning and providing, or overpayment and underpayment, for example—rather than simply the administration of that package?

Thirdly, what is the hierarchy of complaints? Last year saw the removal of the complaints function from the Healthcare Commission, now the Care Quality Commission, which removed people’s ability to push complaints about things other than maladministration beyond their own trust. In the case of direct payments, if the patient is the commissioner, do they lose the right to complain through the PCT? Is their only recourse to complain to themselves, and to the ombudsman? I hope the Minister can give us more clarity about how this will work.

Mike O'Brien (Labour, North Warwickshire)

The clause expands the jurisdiction of the Parliamentary and Health Service Ombudsman as set out in the Health Service Commissioners Act 1993. It allows the ombudsman to investigate people providing services funded by direct payments for health care, but who are not health service bodies. In particular, it allows the ombudsman to investigate matters relating to commercial or other contractual transactions arising from arrangements for the provision of direct payment services. So this will not just be about maladministration; it will be somewhat wider than that, so that we can have a proper investigation of problems that arise, which may well result from legitimate disputes that come out of the provision of direct budgets to individuals.

By expanding the ombudsman’s scope in this way, we can ensure that people who receive these services have a similar degree of protection to other NHS patients. It is not identical—for example, the NHS complaints system will not apply—but this is consistent with the principle that services procured by direct payments remain NHS services. So where a third party has provided various levels of service, the NHS ombudsman would be able to look at how that third party provided those services. The ombudsman will have discretion about which complaints she wishes to investigate and we expect that she will continue to operate in a sensible and proportionate manner. Neither we nor the ombudsman expect these changes to add significantly to her work load and the ombudsman is supportive of our approach.

We are not aware of any significant resource implications, to deal with the point raised by the hon. Member for Eddisbury, but should that resource implication arise, we will listen to representations from the ombudsman to ensure that these things can be properly looked into in a proportionate and appropriate way. The resource issue is not a major one and we will look at how this develops in the future. As I have indicated, it is not just maladministration and we want to ensure that the health service ombudsman, in particular, will be able to look at matters more broadly than merely disputes between a PCT and someone who has a budget—for example, to look at how the budget was deployed by the individual. Reports from the ombudsman can help us in the longer term to evaluate how these budgets are being dealt with.

Stephen O'Brien (Conservative, Eddisbury)

The last point is important, because it might establish patterns of behaviour as a result of the way things are being done, which, without LINks or, indeed the former community health councils being specifically involved, could be a very valuable way of assessing the collective experience. It will be very important to those who have a concern about the use of the direct payments—people in vulnerable situations may be worried about taking a complaint to the very body from which they need continuing support. There is always an anxiety about using a complaints process which is effectively like a parked arbitration process without affecting their relationship with the continuing support that they need. This is a very important area in terms of trust and confidence and why the independence is valued.

The Minister has helpfully identified the expectations, particularly as regards resources, and that confirms what I have heard myself from the ombudsman, but the issue will be whether there is an ability to access the ombudsman, given that ombudsmen have a full panoply of recommendations open to them, but, as we all know, no teeth. The best they can do is issue another letter suggesting that the recommendation has not been carried out, as we know from the Equitable Life debacle. If this is to work properly, in the interests of patients, it is important that the ombudsman be given the full remit. I am satisfied with the reply so far.

Schedule 1

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 140, in schedule 1, page 38, line 32, at end insert—

‘(za) regulations under section 12B’.

Amendment 140 would bring all regulations in new section 12B under the affirmative resolution process. These are the regulations we discussed at length concerning the nature of the direct payment pilots. Unless this amendment is made, neither this House nor the upper House will have the chance to debate the substance of the pilots. It is unlikely that we would want to vote down the regulations supporting the pilots by praying against them. It is likely that we would want to see them amended, depending on how the Government act in the debates we are about to have.

On Tuesday the Minister suggested I was presumptuous in moving an amendment directly referring to the NHS board, something the country is crying out for. Here I offer him the chance to make the life of Health Ministers in the next administration, whoever they may be, more difficult in the interests of Parliamentary scrutiny. I will not repeat the debate we had about new section 12B, but I think there are significant concerns about these issues and we should consider asserting an affirmative power regarding them.

Mike O'Brien (Labour, North Warwickshire)

We do need to develop regulations to set up the pilots. It is likely that these would have to be amended in light of the review of the pilots if a decision is made to roll out direct payments nationally. We would expect to hold a public consultation on draft regulations for the normal 12-week period. It is our intention to control direct payments with the regulation-making power and that these should be subject to the negative resolution process. I reassure the Committee that it is our intention to use the affirmative resolution procedure for any order either extending direct payments nationally or abolishing the power to grant them. The big issue would come back to the House through the affirmative resolution procedure. If any decision is made to abolish direct payments or to extend them nationally, that would be via the affirmative resolution. As that would be a significant decision for the NHS, we think it is vital that before an order is made it should be approved after a proper discussion in both Houses. We think that many of the rules would be very detailed and although we want to give discretion in the way direct payments are piloted, we do not want to have a level of unnecessary pedantry involved in looking at the detail of what could be mundane rules. Applying the affirmative resolution procedure to all of that would be quite likely to clog up this place for a significant period of time.

With the assurance that any large-scale decision about national roll-out or not proceeding with direct payments would come back under the affirmative resolution procedure, but the detailed regulations would be subjected to a negative resolution procedure after a 12-week consultation with the relevant stakeholders, I hope the hon. Gentleman feels that amendment 140 can be withdrawn.

Stephen O'Brien (Conservative, Eddisbury)

I have listened to the Minister and it was semi-reassuring. However, there is an issue of principle here about making sure that Parliament has the opportunity to look at these regulations, particularly as we will want the opportunity, not just in terms of regulations, but to hold the Government’s feet to the fire in converting pilots into action. This is an opportunity to state our earnest on this and therefore I would like to press the matter to a vote.

Stephen O'Brien (Conservative, Eddisbury)

After the excitement of that vote, I would like to make the point that, in looking at the 20 May memorandum from the Department of Health on health budget pilot programmes and provisional pilot sites, I am pleased to see that the first one on the alphabetical list is the Secretary of State’s constituency. That will be piloting NHS continuing health care on life care, learning disabilities, mental health and physical disabilities. That will be helpful to give him an insight. I am also pleased to see that Western Cheshire, which covers part of my Eddisbury constituency, is also looking at continuing health care on motor neurone disease, multiple sclerosis, neuro-degenerative conditions and Parkinson’s disease as well as end-of-life care. I shall do my best to follow that closely.

I urge the Minister to see whether he can get something in North Warwickshire included, because the more of an insight we have from our own constituents’ point of view on the way this is working, the more helpful it will be as we try to move pilots into a roll-out.

Mike O'Brien (Labour, North Warwickshire)

I am not sure whether I should deliberately seek to land these in my constituency, but I will certainly bear in mind the urgings of the hon. Gentleman. It is important that we look at the way in which these pilots proceed and that we make sure that if we are to have a national roll-out it is in the interests of patients everywhere.

Clause 14

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 18, in clause 14, page 10, line 37, at end insert—

‘(za) work in any field relevant to the NHS;

(zb) work conducted by any individual, group(s) or organisation(s) employed by the NHS or affiliated to it’.

Robert Key (Conservative, Salisbury)

With this we may discuss the following: amendment 136, in clause 14, page 10, line 40, at end insert—

‘(c) work done promoting innovation.’.

Amendment 137, in clause 14, page 10, line 40, at end insert—

‘(2A) A prize may be paid in instalments relating to subsections (2)(a), (2)(b) and (2)(c) above.’.

Stephen O'Brien (Conservative, Eddisbury)

We now move away from direct payments into innovation, and in particular this one-clause provision in chapter 4 on innovation prizes. I welcome attempts to aid the spread of innovation in the NHS and recognise that this is not only an area in need of improvement but an area with a large amount of potential. Innovation in the NHS, if given the chance to flourish, can motivate and incentivise staff to drive forward improvements to services and it can also furnish British business and industry with opportunities to develop NHS innovations, many of which may have been inspired by the ideas of NHS staff. In that respect, I declare an interest as the parliamentary adviser to the Manufacturing Technologies Association, who manufacture some extraordinarily precise, very small instruments which are used as part of NHS innovations. Through amendments 18, 136 and 137, I want to address gaps in the legislation concerning the scope of the prizes. I will address my queries on the prizes themselves later on.

The amendments seek to ensure that the innovation prizes are open to all NHS employees and to any groups or organisations affiliated to that service. They broaden the scope of prizes to include the promotion of innovation, and enable them to be paid in instalments so that staff can develop a long-term strategy for the uptake of their ideas.

Amendment 18 addresses Lord Darzi’s clarification on the fourth day of the Lords Grand Committee, that the prizes could be awarded to

“people working in the health service but not necessarily employed by it.”—[Official Report, House of Lords, 5 March 2009; Vol. 708, c. 324.]

He said he was aware of

“many people with university appointments who do full clinical work in the health service on honorary contracts.”—[Official Report, House of Lords, 5 March 2009; Vol. 708, c. 324.]

I can confirm that in a non-remunerative position. I am the vice-chairman at the Liverpool School of Tropical Medicine. I also sit on the board of the Innovative Vector Control Consortium, a research organisation trying to find an alternative molecular structure to DDT. The research going on there will have a direct impact if there is success. The Liverpool School of Tropical Medicine is already having an impact on many things in the health service and there is a fantastic collaboration between it and the university hospitals in Liverpool.

Lord Darzi was right to cite these people as a potential source of innovations, but there is a danger that they could be discriminated against if it is not overtly stated in the Bill that prizes are open not only to NHS employees. The British Medical Association expressed its support when it said that amendment 18 would clarify that medical academics are eligible for the prizes.

I am also concerned that the challenge of an innovation prize decided on by the committee might limit the pool of applicants to a particular field of specialism, and in so doing, discriminate against other NHS staff. By emphasising the breadth of the prize in primary legislation through the amendment, I hope to guard against its application to a specific group of NHS employees or a particular field of expertise. The prize’s potential would, therefore, be maximised to inspire everyone in the NHS to innovate. Will the Minister give an assurance that the Committee will not limit the scope of applicants to the prizes by defining too stringently the discipline from which the innovation must originate?

By extending the remit of the prizes to award the promotion of innovation through amendment 137, NHS staff who play a significant role in generating uptake of innovative ideas, and encouraging others to innovate, may be rewarded through the prize. While promotional work will be harder to define, its inclusion in the prize will encourage not only potential innovators, but those with the potential to facilitate the spread of innovation across the organisation. In the next group of amendments, I hope to have the opportunity to discuss the idea that the problem facing the NHS is not so much the dearth of innovative ideas, but their uptake across the service. Promotional activities can greatly aid the spread of innovation, which is why I propose to include them in the scope of innovation prizes. In parenthesis, from my own experience in the manufacturing industry, there is a great concentration on the word “innovation”, but people readily forget that a lot of that comes through developments of existing technology and building on prior innovations. There is often a great problem in giving the developments the same weight as blue-sky thinking innovations. We need to recognise that often 90 per cent.—in most fields—of what is regarded as innovation is in fact a development of an existing practice or idea.

There is a good example of how promotional activities can be fundamental to the spread of innovation in my own constituency at Leighton hospital near Crewe—the Leighton exposition. Since 2004, Mid Cheshire Hospitals NHS Foundation Trust has used its research and development office to set up an effective information dissemination forum to provide opportunities for local clinicians and researchers to network with one another and discuss their practices, ideas and collaborations. The event also showcases the work of local health care research and audit. I attended the last evaluation and am grateful to David Cade and Sasi Willmott, who always produce a brochure with everything set out and documented. There is a prize for the winning entry that is judged by three external, high-powered academic adjudicators. The 60 innovations that were exhibited at the 2008 event bear witness to the fact that innovative ideas are alive and kicking in the NHS. Events such as the Leighton exposition help innovators to promote those ideas among colleagues and, therefore, generate uptake.

The Leighton exposition also demonstrates that it is the clinicians and researchers who are best placed to identify the challenges across the NHS. Innovations at the exposition included identifying reasons for delays in in-patient ultrasound scans, improving access to community services for elderly people after discharge from hospital and an analysis of whether proposals from the National Institute for Health and Clinical Excellence are useful in clinical practice. All these topics originated from staff who identified independently an area of research or a problem in need of a solution. If innovative events such as these are going ahead in trusts such as Mid Cheshire, and if innovators are succeeding in identifying areas of the NHS that are in need of innovation, it questions why the Government are investing in costly prizes that might inadvertently rob innovators of their role. By identifying a challenge for innovators to tackle, the innovation prize committee may be meddling unnecessarily in the innovation process. I hope to seek an assurance from the Minister that the creation of a national prize for innovation will not detract from home-grown, grass-roots initiatives such as the example I have outlined from my constituency—at Leighton hospital, near Crewe.

Amendment 136 would enable the organisers of events such as the Leighton exposition to apply for innovation prizes as the promoters of innovation. I hope the Minister will acknowledge that the promotion of innovation at a local level can be as effective in aiding the spread of innovation as rewarding the innovators themselves. The example of Leighton raises questions over whether innovation prizes will really overcome the obstacles that inhibit innovation in the NHS. The Secretary of State identified the problem with NHS innovation on Second Reading. He said that

“the NHS is good at invention, but it can be slow to adopt new technologies and treatments, and the spread of new ideas is variable.”—[Official Report, 8 June 2009; Vol. 493, c. 542.]

I wholeheartedly agree with the diagnosis of the problem but I question the remedy. Prizes may reward innovation that has already taken place—which, if I understand it correctly, is the main legislative purpose of the Bill—but I fail to see how this change in the rules will encourage the spread of innovation. The problem is surely one of morale. The uptake of innovation is negligent because morale among staff is low. Too often staff have seen their ideas go nowhere, which is disheartening and dispiriting. A recent report by the NHS Confederation called “Future of leadership: Leading innovation” highlighted the lack of uptake of ideas as a source of low morale among staff. It pointed to the preponderance of risk-averse middle managers in the NHS whose work loads are orientated towards short-term targets, rather than encouraging and championing innovative ideas among their staff. It also emphasised the overly bureaucratic mechanisms through which innovators must pass before they can generate uptake for their innovation. The requirement for the clinician to write a business case was seen as a significant obstacle: it is perceived by staff as a way of saying no to innovation rather than as a vehicle to secure funds and uptake.

Amendment 137 aims to aid staff in generating uptake of ideas by allowing prizes for innovative ideas to be paid in instalments. Each instalment could be dependent on a new stage of implementation, thereby encouraging staff to support an innovative idea and see it through to completion. The problem facing the NHS with regard to innovation runs much deeper than generating ideas. A prize is a great way of rewarding the few innovators who have made it through the gauntlet of securing the support of their colleagues and managers. Only a small number of people can successfully negotiate a heavy target-driven work load to find the time and resources to innovate. However, for the majority of NHS staff, an innovation prize in and of itself will not enable them to overcome these barriers.

I hope the Minister will mention in his response the newly established innovation funds held by the SHAs. He may well say that the prizes are designed to work in conjunction with these funds to spread innovation. I welcome that funding and I hope it will provide much-needed capital for those seeking to develop their innovations. I hope he will also take the opportunity to give an indication of how he intends to change the culture of resistance amongst managers and other NHS staff—a culture that, we would argue, is hampered through a somewhat target-centric NHS. This is an issue that runs much deeper than simply the cash that comes with the prize.

Sandra Gidley (Liberal Democrat, Romsey)

I welcome these amendments because they give us a chance to probe where some of this money may be going. Before I progress with my arguments I was a little concerned by the closing remark of the hon. Member for Eddisbury, who talked about a culture of resistance in the health service. My experience of a lot of workers in the health service is—

Stephen O'Brien (Conservative, Eddisbury)

It was managers.

Sandra Gidley (Liberal Democrat, Romsey)

And managers. My experience is that they are not averse to change, although the hon. Gentleman may have spoken to different people from me. There is a lot of innovation out there, but sadly it is not recognised by many people, including politicians, it would seem.

One of my concerns about the Bill relates to clause 14(1), which states:

“The Secretary of State may make payments as prizes to promote innovation in the provision of health services in England”,

but says nothing whatever about the NHS. I therefore welcome amendment 18, which makes it clear that the prize may relate to

“work in any field relevant to the NHS”.

However, it occurred to me that a team employed in the private sector could do work relevant to the NHS and apply for a prize. It would be a concern to many of us if public money could, as a result of the way in which the Bill is drafted, be diverted to the private sector. I hope the Minister can reassure us on that. Where do independent sector treatment centres come into this? What would happen if a team was doing something in such a centre?

I have another concern. When we talk about the NHS, innovation and prizes, we focus almost exclusively on secondary care. If we are serious about moving care towards the primary sector, we need a mechanism to ensure that that happens. For example, optometrists or dentists could have good ideas for prizes or innovation. My concern is that worthy committees full of specialists in secondary care will be set up and will focus automatically on secondary care, biasing what is done. Innovation is not just about the flashy new procedures, and it is not necessarily about the research; sometimes, it is just about thinking outside the box and coming up with a new way of delivering services that is more convenient for patients and the public and which could probably reduce some of the strain on the secondary sector.

When the fine detail is worked out, I very much hope that the prizes will not just be a means of congratulating those who already have quite a number of areas in which to show off their expertise. I hope that they will truly embrace all the NHS.

Mike O'Brien (Labour, North Warwickshire)

This has been a helpful debate, and the hon. Member for Romsey has made some thoughtful points, to which I will return in a moment.

The aim of the prizes is to reward breakthroughs in the provision of health services in England, so the provisions relate to the NHS. The challenges will be designed to tackle some of our major health issues and bring about not only radical breakthroughs in the prevention and treatment of lifestyle diseases, but changes in the way in which things are managed and delivered. That includes secondary and primary care.

I strongly take the point from the hon. Member for Eddisbury that innovation could mean the development to a new level of existing ideas—he is absolutely right about that. The nature of the process makes it difficult to assess the quality of what is being done and to draw attention to it.

We will have to handle the prizes properly, and to some extent the hon. Member for Romsey is right that there will be a committee of the great and the good—there always is in such things. We will have to make sure that we have the right distribution of responsibilities on that committee, so that it not only focuses on the obvious issue of developments in secondary care, but includes management and delivery.

I agree with the hon. Member for Eddisbury, although I would not quite put it in the way that he did, that there is a lack of reward and recognition in the NHS system. The prizes are a way to incentivise people and focus minds. They are a way to reward people and to recognise that some people are anxious to make changes.

Unlike the hon. Member for Romsey, I agree with the hon. Gentleman that sometimes in management there is a culture of resistance, inertia or lack of innovation about the way things are done. If we can provide incentives such as this to organisations to be more innovative, to show that we are prepared to put resources behind new ideas that can improve patient care, then we will truly feed into that emphasis on quality that came out of the review by my noble Friend Lord Darzi. That review focuses on ways that we can improve the quality of the NHS and the quality of delivery and recognise that we have passed the stage where we just need to focus on raising minimum standards. This is not just about minimum standards; we have to have a continued focus on that, but we now need to move to a higher level and look at how we improve the quality of what the NHS delivers at the top—make the best better, make the mediocre the best and ensure that we improve quality throughout the NHS.

The scheme is primarily focused at ensuring that people working in the NHS are able to see the benefits and recognition for their work in making a breakthrough. This is not restricted to the NHS; it is available to those working in academia. We want to ensure that there is a regional focus. The £220 million regional innovation fund has been launched and we will target resources at helping front-line staff to develop, grow and spread new ideas, delivering real improvements in the quality of the care people receive. Academic health science centre status has been awarded to five partnerships following the process of peer review by an international panel of experts. Academic health science centres will bring together world-class research, teaching and health care delivery, so that developments in research can be more rapidly translated into improvements in patient care in the NHS and around the world.

We are not restricting the award of prizes to those in the NHS, but we are ensuring that there is a focus on NHS workers knowing that they are available to them, that a challenge is being set and that if the challenge is met internationally or in another sector, a prize may be awarded. That will happen only if the idea is demonstrated to be replicable in the NHS. On amendment 136 we would not expect to award a prize simply for the promotion of innovation in itself. There needs to be an actual breakthrough and it needs to be replicable in the NHS; promotion of a project is one element of that. We need to be able to show that this idea, wonderful breakthrough that it is, can produce a wider benefit, not only in the NHS but, we hope, in some cases beyond that and possibly around the world.

On amendment 137 we are not intending to make payments in instalments. The challenge prizes are not about giving money in the form of grants for work to be undertaken, which the amendment seems to suggest. This is about rewarding work that has been done—we have got an innovation, we award the prize and then that money can be used to replicate or extend the innovation or move it to the next stage. We are going to award prizes for what has been done.

The hon. Member for Eddisbury asked whether this is meddling in innovation. Innovation often happens anyway; this is an encouragement of innovation. In that encouraging innovation and the development of new ideas is meddling, yes it is. It is trying to provide a prize for those who excel and to reward excellence. That is something that we should be doing. We do not want to detract from those in the NHS pursuing innovation; on the contrary, we want to encourage it.

The hon. Member for Romsey in her thoughtful speech asked whether this money would go to the independent sector were it to provide an innovation or breakthrough that helps patients. It will, if it helps patients and if it is replicable throughout the NHS. If we can take the innovation from a private sector organisation and transfer it to the NHS, or if we can find ways in which it will benefit patients in the NHS, it will go to a private sector organisation. It is to reward something from which the NHS will benefit.

I hope that I have dealt with most of the points that were raised by both the hon. Members and that the amendment will be withdrawn.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to the Minister for addressing the matter carefully. As he recognises, we are concerned about this area. There will be significant benefits from getting this right. It has been helpful that he has clarified that the intent that lies behind this, which flows from the Darzi report, is that it is intended to reward breakthrough and reputable innovations or innovations upon developments. It is a post facto reward, so the question will be whether that is a sufficient pull-through incentive and motivator to influence people to shoot for the prize and to make sure that this inculcates more of a culture of innovative activity.

The Minister’s last answer was helpful because it is the equivalent of reaching a commercialisable stage in the private sector but absolutely focused on the public sector ethos of the NHS. With that clarity, I can see that the amendments may not wholly fit with that intent. The debate has been helpful, however, and I dare say the Committee of the great and the good, as the Minister described it, may find our exchanges useful in setting their own terms of reference and the expectations that are going to be laid upon them. I beg to ask leave to withdraw the amendment.

Robert Key (Conservative, Salisbury)

It may be helpful to the Committee in the interests of progress if we do not to have a separate debate on clause stand-part because the amendments seem to cover fully the substance of the important clause 14. Although the clause is important, it is very short.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 19, in clause 14, page 11, line 3, at end insert—

‘(4) The committee shall advise on—

(a) the selection of candidates for innovation prizes;

(b) the payment awarded to each prize winner.’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to take amendment 20 in clause 14, page 11, line 3, at end insert—

‘(4) The Secretary of State and his appointed committee may not determine the field, discipline or sector in which candidates for innovation prizes must develop their innovations.’.

Stephen O'Brien (Conservative, Eddisbury)

Thank you, Mr. Key. These amendments cover the rest of the subject, so the absence of a stand part debate is not an issue.

Amendments 19 and 20 lead on from the issues that we have just discussed in the last group. There is a concern that, by allowing the Committee to identify challenges—a word that the Minister picked up in his last response—for innovators to tackle, the Government will be undermining the entire concept of innovation. Amendments 19 and 20 aim to define more precisely the role of the Committee and to ensure that they do not determine the field, discipline or sector from which the innovation must come.

One example is the case raised by Lord Darzi himself as an example of NHS innovation—the introduction of drug eluting stents in angioplasty. This innovation came about directly as a result of the experiences of interventional cardiologists who were involved in angioplasty procedures on a daily basis and familiar with the use of stents and catheters in heart surgery. These clinicians identified a need for the innovation after witnessing first hand the cases of patients who would have benefited from a drug eluting stent in their artery. It was the clinicians as opposed to the authorities who identified the need for an innovation or the challenge that needed solving. If innovation is about finding solutions to the problems we encounter in our everyday experience, why should we have these problems defined for us by the powers that be? Surely the prerogative to innovate and decide where to innovate should lie with the NHS professionals and staff themselves, not with a small committee that will inevitably have a more limited capacity to understand the scope for innovation in every specialism in the NHS.

I hope the Minister will take this opportunity to assure the Committee that the committee that is set up will be wide-ranging enough in its areas of expertise to identify sectors where innovation is required. On the subject of the committee’s composition, in its brief to me the BMA raised the interesting proposition of placing patients and members of the public on the panel. Not only would this create public interest in NHS innovation, it would also give an incentive to applicants to ensure that their innovations directly impact upon patient care. When I asked the Minister prior to the Bill for an evidence base for the use of innovation prizes, he gave the example of the X Prize—a $10 million award for innovation across the globe. The X Prize website states:

“Rather than awarding money to honor past achievements or directly funding research, an X Prize incites innovation by tapping into our competitive and entrepreneurial spirits.”

If the Minister is using this prize as his model for NHS innovation, I have to ask why he is proposing to award prizes retrospectively for research and other innovations. I hope that he has some evidence base for awarding prizes retrospectively, a point which was confirmed in the previous group of amendments.

I also question the need for legislation when the impact assessment states that the Secretary of State’s existing powers already allow him to backfill the costs of research. It also states that the first round of prizes will be launched in 2009, while the legislation itself will not come into play until 2010. I assume, therefore, that the Bill is not actually the source of the power that the Secretary of State needs in order to get this going.

Sandra Gidley (Liberal Democrat, Romsey)

I note your desire not to have a clause stand part debate, Mr Key, so I shall try to incorporate my extra comments into the points I am about to make. Amendment 19 mentions what the Committee shall advise on. We have some very vague criteria. It would be helpful if those criteria were pinned down a little more. One thing that concerned me was the setting up of yet another committee.

Mike O'Brien (Labour, North Warwickshire)

I am sorry, I didn’t catch the point that the hon. Lady was making. Someone coughed and I did not hear it.

Sandra Gidley (Liberal Democrat, Romsey)

We are setting up yet another committee, but presumably an existing committee could advise on these prizes. Clause 14(3) says:

“The Secretary of State may establish a committee...and may pay remuneration”.

This also worried me slightly. It is fair enough to remunerate someone from an outside body, but I suspect that most people on this committee already work for the NHS in some capacity. I seek some reassurance that they will not receive extra payments for their work on this committee when, presumably, their time on the committee will be at the expense of their other work.

It would also be helpful if the Minister could clarify whether these payments are going to go to individuals, heading teams or other teams, or whether they will go to the trust that will be implementing the work. I am not entirely clear who will benefit from these prizes. I am comfortable with the concept of prizes, because it is always nice for the work of staff to be recognised, it gives people an impetus and a feel-good factor and NHS workers need some of that, but I am not entirely clear who will benefit from these payments.

Amendment 20 seems to want to ensure that the Secretary of State or the committee do not

“determine the field, discipline or sector in which candidates for innovation prizes must develop their innovations”.

I understand the thought behind this, but bearing in mind my earlier comments, there is another way to look at this problem. I raised concerns earlier that primary care may not receive its share of the prizes. Concerns were raised on Second Reading , including by the hon. Member for Eddisbury, that the right sort of research may not necessarily feature highly. Is there a case for ensuring that at least some of the money is allocated to each of these sectors? One would not wish to be too prescriptive, but this would help the committee to concentrate its thinking on ensuring a breadth of awards across primary and secondary care and embracing what is regarded as the more pure research arena. It would be helpful to know whether there is any thinking on that.

My final comment is, again, about money. Things will get very tight, so will this be a new pot of money, or will resources be diverted from an existing awards scheme?

Mike O'Brien (Labour, North Warwickshire)

I am grateful to hon. Members for the way in which they have dealt with the issue. Let me deal with some of the questions that have been raised.

The idea is that the prize should be paid retrospectively. However, it could be paid after a successful outcome in a challenge that was set upfront. The committee of experts could receive applications from individuals or organisations that wished to pursue a particular idea. Those individuals or organisations would then, in effect, be approved for that challenge, but they would get the funding only if their work successfully delivered.

Research conducted as part of the NHS next stage review demonstrated that challenge prizes in other sectors have led to investments of up to 10 to 16 times the cash value of a prize in relevant research to meet the objectives. In a sense, therefore, there is a kudos to the prize—there is a recognition that organisations, groups, teams and individuals strive for. The prize gets excellence out of those who might otherwise feel that they would not be recognised if they work really hard. We want the team of experts to stimulate innovation and excellence and to ensure that we have the best delivery.

We want a broadly based expert panel that includes leading medical scientists, hospital staff, managers, academics and others and which will look broadly at the way in which the NHS operates. As the hon. Member for Romsey said, a number of committees already exist. Indeed, there are several important awards recognising innovation and outstanding performance by health care practitioners and organisations, such as the health and social care awards awarded by the NHS Institute for Innovation and Improvement. However, we want to go beyond the performance achievement recognised by current prizes and to award cash prizes that are linked to predefined challenges and which will have a significant impact on the population’s future health.

Professor Sir John Bell, the president of the Academy of Medical Sciences, has been appointed as the expert panel’s interim chairman, and there will be a call via the NHS Appointments Commission, for expressions of interest in membership of the panel. That is the way in which we intend to go about this.

Whether payments will be made to individuals or teams depends on the nature of the challenge that has been set. A challenge may be set for an individual or a team. The challenge may for a PCT to develop a new way of delivering health care. There will therefore be a degree of flexibility in terms of the response to the challenge. The committee of experts will be given the flexibility to determine that.

Will particular sectors be identified? Yes, groups or individuals will be able to write in to say, “We wish our research to be considered for a challenge prize.” The committee of experts will then examine the application together with others and take a view, on the basis of the resources available to it, as to which could really benefit the NHS and be replicated throughout it.

The hon. Member for Romsey hinted that there are all sorts of innovations and new ideas, but it will not be possible easily to replicate some of them. They might be good for the private sector, but not the public sector, and they might have just a limited, narrow objective that will not have large-scale applicability. The committee will therefore need to examine whether something will benefit the NHS as a whole—that is the objective. It will have the criteria, and it may say, “This is such an important area that we need to award a challenge prize, even though only a very small number of patients will benefit from a breakthrough in this narrow area. However, the aim is that the NHS would be able to benefit more broadly from an innovation.

The panel of experts has a fair degree of flexibility in its response. We hope that it will be able to frame a challenge and incentivise a solution in such a way that efforts and funds are multiplied by teams striving to compete and win a prize. The innovation challenge prizes’ purpose is to focus minds by putting significant challenges into the system. They are a first for the NHS and we continue to work with a range of stakeholders to make sure we get this right. Once the panel has been appointed, these conversations would really have a starting point. Challenges could be laid down to innovators from across the country to tackle issues such as childhood obesity, Alzheimer’s, dementia, addiction, or chronic obstructive pulmonary disease. The prizes would reward only those ideas that could be replicated and diffused quickly across the NHS, accelerating the time it takes for ideas to move from, in effect, the bench to the bedside. We want to move excellence forward as quickly as possible. I hope with those reassurances the amendment will be withdrawn.

Stephen O'Brien (Conservative, Eddisbury)

I think that the Minister has done extraordinarily well to get as far as this point in our proceedings before coming out with the first big soundbite: “from the bench to the bedside.”

We have had a helpful debate. Lying behind this innovation and prize process is clearly a model of being focused against an identified challenge. This is an inelegant analogy but, within the NHS, we have an equivalent to the Manhattan Project. On the prize, I can see that the Minister hopes that the leverage through the kudos will excite people to apply the research capacity to come up with a successful solution. It will be important that we retain the idea of this committee or panel of experts—although in recent days, the news coming out of Iran about the Council of Experts has been very unhelpful, not least as it involves the only thing that can put any constraints on the Supreme Leader. That said, the nub of this will be how the panel calls for ideas for challenges, from which it will, after a sifting process, come up with what will be put out there.

For what it is worth, arising from my work on malaria, I draw the Minister’s attention to the fact that there is already a model that might be effective for the new committee: the Medicines for Malaria Venture, which is based in Geneva and partly funded by Bill and Melinda Gates. It works well by taking ideas from various sources that might be able to come up with innovative solutions to combat malaria. It has done a tremendous job and, through the sift, has identified where the effort needs to be made. That model is probably worth looking at.

Following a discussion that is useful to have on record, especially as the committee sets about its work, I am happy to beg to ask leave to withdraw the amendment.

Clause 15

Mike Penning (Conservative, Hemel Hempstead)

I beg to move amendment 177, in clause 15, page 11, line 36, after ‘it’, insert ‘necessary and’.

It is a pleasure to be dealing with this part of the Bill under your directorship, Mr. Key. You must have done a fair bit of homework in the last 24 hours to be assisting us on the Bill.

This important part of the Bill deals with trust special administrators. The whole area of failure within the NHS is something that needs as much transparency as possible. The good news is that I will not move all the amendments on the amendment paper, not least because I want to listen to what the Minister has to say. Perhaps we can come back to some important areas on Report.

Amendment 177 is important because at the moment the Bill says that the Secretary of State should appoint a trust special administrator only if they consider it

“appropriate in the interests of the health service.”

The amendment would insert the word “necessary” so that it would be not only appropriate for the whole NHS for the Secretary of State to approve such a measure, but necessary.

Those of us with experience of local trusts bringing in turnaround teams and so on have concerns about who these administrators will be. It seems that there is an assumption under the Bill that the administrators will mainly cover fiscal problems within foundation trusts, but that might not be the case. Will the Minister not only address whether he is happy for the word “necessary” to be inserted, which I think would improve the Bill, but give an indication as to who these administrators might be, where they might come from, and the cost implications of their appointment?

Sandra Gidley (Liberal Democrat, Romsey)

I wonder whether the amendment would restrict inspectors too much. If we think of recent examples, it took quite a time in some cases for a body of evidence to become available indicating that there were problems. By inserting the word “necessary”, presumably there would have to be some sort of test, but I wonder whether that would restrict the possibility of proper investigations taking place. I am also keen to hear what the Minister says.

Mike O'Brien (Labour, North Warwickshire)

By using the word “necessary” as well as “appropriate”, as the amendment proposes, a higher standard would be imposed on the Secretary of State when appointing a trust special administrator. I agree with the hon. Lady that that would restrict the ability of the Secretary of State to deal with problems that could arise. These problems could relate to finances, but they could be much broader than that, as we have seen in recent cases. Perhaps this is not the place to discuss those, but I think that we are all aware that there needs to be an appropriate ability to deal with problems that arise in not only finance, but the provision of health care.

If we inserted the word “necessary” and it were argued that other options should be canvassed, the Secretary of State would not be able to take the appropriate action that was needed. The appointment of a special administrator could not be said to be necessary if there was any other option. This would apply even if appointing a trust special administrator might be the best outcome. We do not want to be prevented from using a regime when it is most needed and could be the best possible outcome. For that reason, I cannot accept the amendment.

We envisage that the Secretary of State would use the power rarely. Interventions will be made through the new NHS performance framework or Monitor’s compliance framework. In the very rare cases when these interventions are unsuccessful, or the strategic health authority is not able to get plans agreed on how to address the situation, it would be appropriate to appoint a trust special administrator. The trust special administrator would need to be an individual or a body with the skills and knowledge to work collaboratively with staff, patients and local and national bodies. They would require significant experience of the NHS and would not be in any way described as not appropriate to carry out the role assigned to them.

A degree of flexibility would be necessary when establishing exactly who a special administrator would be. It would depend on whether the key issue was primarily finance, in which case a special administrator would need to have considerable experience in that area, or the management of health care, in which case the expertise would need to be in management. Those are primarily the key issues. However, the requirement that the special administrator should have a clear understanding of the way that the NHS works is enormously important.

John Pugh (Liberal Democrat, Southport)

I have some sympathy with the amendment. While the Minister was speaking, I was thinking of scenarios in which, for example, the Secretary of State might judge that decisions are not being made for the best configuration of health services. For instance, there might be a need to close down a maternity wing because it is not sufficiently subscribed to by local mums. The hospital might decide to preserve the maternity wing in response to local opinion, but the Secretary of State could take a harder line, and he would obviously be free politically to do so. While the Secretary of State might deem it appropriate to intervene in such a scenario, I get the sense that the general intention of the measure is to deal only with conditions of chronic failure, not to override local autonomy. It might be helpful if the Minister put that on record.

Mike O'Brien (Labour, North Warwickshire)

I can certainly confirm that the measure is intended to be used only where there is a chronic failure—a serious collapse in administration, health care or the finances of an organisation. It is not intended to deal with the types of disagreements that happen on a not irregular basis because we have local autonomy. There will be disagreements within organisations, between different groups and between the view of the Government and the view of a local PCT, but it is not intended that the measure will be used in such cases. It is designed to deal with very serious situations. I hesitate to use the word “crisis”, but it would certainly be used in a situation that was bordering on a crisis when there was a serious or even chronic failure that required intervention that was proportionate but substantial.

John Horam (Conservative, Orpington)

To what extent do the arrangements give the Minister powers that he does not already have? For example, he might be aware that, in my constituency, the Bromley Hospitals NHS Trust had accumulated debt of £100 million as well as an operating debt. As a consequence, there was a turnaround directive and an independent accountant examined the figures from the previous four or five years to find out how the trust had got into that position. The non-executives were sacked and the whole situation was turned around. Frankly, the process was not wholly satisfactory, but we reached a new situation as a result of Ministers’ existing powers. That purely financial situation is being dealt with satisfactorily, so why does the Minister need these further powers, given that he already has substantial powers in his existing remit?

Mike O'Brien (Labour, North Warwickshire)

As far as the areas of intervention are concerned, to some extent this depends on whether a foundation trust is involved. If that is not the case, it is possible for the PCT to carry out the sort of intervention that has been described to ensure that appropriate people are in place to deliver a local health service in an organisation. If the PCT itself is at fault, the SHA might well have the ability to intervene. However, when we get to foundation trusts, the situation is somewhat different. In that situation, Monitor and its compliance framework are the key criteria, because foundation trusts are much more independent and they have a greater degree of autonomy. An intervention in that situation would be much more restricted, so Monitor would be required to intervene and would have responsibility for taking the appropriate action.

A question then arises of whether, if that action fails, foundation trust status should be withdrawn. Monitor would have to take a view on that. If foundation trust status was withdrawn, the foundation trust would move into the category of being a trust, which could be intervened on by the Secretary of State or the person appointed by the Secretary of State as a special trust administrator. That is the straightforward process. Yes, there are existing powers, but the clause gives the Secretary of State additional ability to intervene and to appoint special trust administrators.

Mike Penning (Conservative, Hemel Hempstead)

I thank the Minister. There are other aspects of how the special administrators will operate. He might wish to intervene on me, because he did not indicate where the cost burden of the special administrators will fall. Certainly when turnaround teams went into the constituency of my hon. Friend the Member for Orpington and mine, the cost burden was taken up by the trust, although the contract for the turnaround team had been agreed by the Department of Health and the SHA. If the Minister cannot reply now, perhaps he will write to me. I listened carefully to his comments, and I think he has taken on board what hon. Members said. I beg to ask leave to withdraw the amendment.

Mike Penning (Conservative, Hemel Hempstead)

I beg to move amendment 178, in clause 15, page 12, line 10, at end insert—

‘( ) the staff of the Trust.’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss the following: amendment 179, in clause 15, page 13, line 5, at end insert—

‘( ) the staff of the Trust.’.

Amendment 180, in clause 15, page 13, line 5, at end insert—

‘( ) the trustees,

( ) the board of governors.’.

Amendment 181, in clause 17, page 18, line 5, at end insert—

‘( ) the staff of the Trust.’.

Mike Penning (Conservative, Hemel Hempstead)

This group of amendments addresses the fact that there is no requirement in the Bill for staff to be consulted before special administrators are appointed. The Government’s impact assessment says that it should be a priority to ensure that staff are engaged in the process. Retaining staff and maintaining morale within an organisation is crucial, but nothing in the Bill indicates that such consultation would be required before a trust special administrator was appointed. That is the reason behind these four amendments, and I hope that the Minister will explain why such a requirement is missing from the Bill.

Mike O'Brien (Labour, North Warwickshire)

The hon. Gentleman makes a good point. I entirely agree that staff engagement is a central principle of such a regime. When such intervention is triggered, it will understandably be unsettling for staff, so we designed the process to produce a swift resolution while ensuring that staff are engaged throughout. In Grand Committee in the other place, my noble Friend Lord Darzi of Denham said that staff should be engaged throughout the process, and that staff engagement would be further strengthened by statutory guidance, which we will produce. With that assurance, I hope that the hon. Gentleman will withdraw his amendment.

Mike Penning (Conservative, Hemel Hempstead)

The assurance on the statutory guidance addresses the point that it is important that staff have confidence in the system, so I beg to ask leave to withdraw the amendment.

Mike Penning (Conservative, Hemel Hempstead)

I beg to move amendment 93, in clause 15, page 13, line 43, at beginning, insert ‘Immediately’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss the following: amendment 95, in clause 15, page 15, line 24, at beginning insert ‘Immediately’.

Amendment 96, in clause 17, page 19, line 7, at beginning, insert ‘Immediately’.

Amendment 97, in clause 17, page 20, line 18, at beginning insert ‘Immediately’.

Mike Penning (Conservative, Hemel Hempstead)

I decided not to move amendments 182 and 101 to give me a bit of extra time—[Interruption.] Just joking.

This important group of amendments addresses the fact that the Secretary of State is ultimately responsible to Parliament, and would require the Secretary of State to place before Parliament the report on the failing trust as soon as it was available. The report could be presented to Parliament or to a scrutiny Committee, such as the Health Committee.

When there are problems in the NHS, transparency is vital. I am sure that you agree, Mr. Key, that it would not be right and proper for the Secretary of State to have on his desk a trust special administrator’s report on how bad a situation was when Members of Parliament for the constituencies involved and, more importantly, the public and local involvement networks did not have a copy of the report. The amendments would require the Secretary of State to place the report on a failing trust before the House.

Mike O'Brien (Labour, North Warwickshire)

In practice, we anticipate that the draft report will be published and sent to the Secretary of State by the trust special administrator simultaneously. The Secretary of State will then lay it in Parliament as soon as is reasonably practicable. The amendment would therefore be problematic if, for example, the House was not sitting. There are procedures, but they take some time. However, there would be no reason in such circumstances for the Secretary of State to delay laying the report before Parliament, because it will have been published.

The TSA would need a good reason to send a draft report prior to publication to the Secretary of State. For example, they might have to intervene in a particular way if the Secretary of State needs to be informed about something that need to be dealt with that could involve confidential patient information. It might be possible to produce a draft report, but the aim is for the trust administrator to publish a broad report and for the Secretary of State to make it available to Parliament at the earliest appropriate opportunity.

Mike Penning (Conservative, Hemel Hempstead)

I listened carefully to the Minister, and he has now placed on record that the report will be published simultaneously. I still have concerns about why a draft report will not be available and under what circumstances the Secretary of State would hold it back from public and parliamentary scrutiny. I said at the outset, however, that because I would not move some amendments and I was going to listen to the Secretary of State, I might return to some of my remaining concerns at a later stage of the Bill. I emphasise again that there is an absolute necessity for as much transparency as possible, and that there is also a need for a regime. As yet, we still do not know how much the special administrator will cost, but on the basis of the Minister’s comments and reassurance, I beg to ask leave to withdraw the amendment.

Clause 17

Andrew Turner (Conservative, Isle of Wight)

I should like to ask the Minister to be clear about clause 17, because there are no trusts—only primary care trusts—on the Isle of Wight. Will he explain the position?

Mike O'Brien (Labour, North Warwickshire)

I will write to the hon. Gentleman about the problems and issues in relation to the Isle of Wight. I hope that he will be satisfied with that.

Clause 19

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 21, in clause 19, page 23, line 15, at end insert—

‘(1) The Secretary of State may issue guidance on the suspension of NHS and other health appointments. These may include—

(a) details of appeals processes for suspended appointees; and

(b) details of parliamentary accountability.’.

Let me rein in the horse a little. We turn to suspension, but not the suspension of one’s breath. The clause gives effect to schedule 3, which amends various enactments to provide for the suspension of non-executive board members. To make it absolutely clear what we are discussing, the Government already have the power to suspend NHS trust and PCT non-executives. The clause will extend the power to strategic health authority non-executives and those of other NHS bodies. Paragraph 1 of the evidence base mentions social care, and I hope that the Minister can tell me to which non-executive position that applies.

It seems right that the power to suspend should be available as a halfway house between keeping someone in post and firing them too hastily. Equally, it must not be abused as a way of threatening a good person whom the Department does not like or preserving unduly someone who ought to be sacked. Given the almost pre-Runnymede powers the Bill looks to bestow on the Secretary of State, amendment 19 would hold the right hon. Gentleman more accountable for such decisions than the current legislation allows.

The first safeguard is that the suspended person be given details of appeal, while the second safeguard would be that the Government bring some parliamentary scrutiny into the process. Obviously, I worry about their motives in that particular regard. As the explanatory notes make clear, such action arises from events at the Maidstone and Tunbridge Wells NHS Trust. In its summary, the regulatory impact assessment said that the first key non-monetised benefit is maintaining public confidence. The table at paragraph 12 states that the public perception that nothing was being done could be damaging to the organisation and that the first considered monetised cost is public perception—somewhat tellingly, media handling. I put it to the Committee that the Government are not legislating to save the blushes of hospitals, but to help manage the process of public perception and image for themselves.

As the explanatory notes state at paragraph 35, the power to suspend will rightly be devolved to the Appointments Commission. Will the Minister clarify how the suspension process will, as a matter of practice, work? Will suspension be on full pay? We must remember that the Appointments Commission does not yet seem to have succeeded in getting appointments without political bias. Last year, 8 per cent. of applicants were affiliated to the Labour party, as were 10 per cent. of appointees, whereas 4 per cent. of applicants affiliated to the Conservative party resulted in only 2 per cent. of appointments. We had the whole rather damning issue about the resignation of the former Minister of Health from her post at the Department of Health over the appointment of Sir David Henshaw. It would be somewhat pejorative of me to read into the record the full quote of what she said, as I dare say all members of the Committee remember it well.

According to the submission to the Delegated Powers and Regulatory Reform Committee, the powers fulfil—although that might be too strong a word—a commitment in developing the NHS performance regime. The document was a result of something of a struggle between David Nicholson and Anna Walker. Baroness Young has now taken on the responsibility as chairman of the Care Quality Commission, whether it is the Department or, as it should be, the independent regulator who has the responsibility for performance management. I hope that the Minister will explain what role the CQC will have in the suspension process.

Mike O'Brien (Labour, North Warwickshire)

As for suspension, we would have to be in a position when there was an issue of considerable importance. The Secretary of State would then delegate his powers of public appointment to the Appointments Commission, an independent organisation accountable to the Secretary of State. To ensure that the relevant bodies are ready for implementation of the powers, the Appointments Commission’s draft guidance was included in the consultation exercise when introducing new powers of suspension, which ran from July to October last year. An updated version was published with the Government’s response in January this year.

The guidance set out how the Appointments Commission will manage resignations, termination of appointments and suspensions of non-executives lawfully and in the best interests of the public, and respecting the rights of the office holders. I was asked whether suspension would be on full remuneration, and the answer is yes. I was also asked about the process for suspending senior appointments. The Secretary of State will delegate his power to the Appointments Commission. Cases would usually be referred to the commission by the person to whom the appointee is accountable for their duty in bringing evidence to its attention. In the referrer’s opinion when it does not lead to the suspension of the appointee from office, the commission’s role will be to work with the referrer as necessary to establish whether there is a case for suspension. In the case of a vice-chair or other member, the referrer would usually be the chair of the organisation. In the case of the chairperson, the commission would have to take a view. We would expect any body with which the commission is not involved to follow good practice.

Essentially, the process of dealing with such suspensions has been published. We want to ensure that the Appointments Commission is operating within the procedures it has set down publicly. When difficulty arises, a key requirement is that public confidence in the NHS must be maintained. That confidence must always remain one of the key priorities for those who run the NHS in ensuring that such issues are dealt with. In the end, it is the taxpayer who funds the NHS and to whom the NHS is ultimately responsible as taxpayers and patients.

The CQC’s role will depend on whether there is a need for a quality examination of the way in which the organisation involved operates. If the issue is financial, the CQC’s involvement will be limited. If it relates to patient care, as in a recent case, the role of the CQC or its equivalent will be important.

I will write to the hon. Gentleman about which organisations relate to social care.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful for those reassurances and I beg to ask leave to withdraw the amendment.

Schedule 3

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 22, in schedule 3, page 42, line 13, after Ministers’, insert ‘after consultation’.

This galloping through can be quite catching, Mr. Key. However, I am afraid that a number of amendments have been tabled to schedule 3. We will try to rattle through them, but from page 42 of the Bill, there is a lot of detail that must be looked at carefully.

The amendments on this schedule relate to the terms of office of members. We want to explore aspects of the new suspension powers and how they will bite on various bodies. What consultation does the Minister plan to undertake before making these regulations? Why will this power be created through regulations in relation to this Bill and not the other Acts that are listed in the schedule? Will the Minister confirm which bodies the power applies to, other than the Commission on Human Medicines?

Mike O'Brien (Labour, North Warwickshire)

The amendment would place a duty on the Minister to undertake consultation prior to any ancillary provisions being made by regulations relating to the Commission on Human Medicines, committees or expert advisory groups. The provision extends beyond the commission to various committees and expert advisory groups. The Secretary of State will work jointly with the Minister for Health, Social Services and Public Safety in the Northern Ireland Executive to enact any regulations. It is important that they have the flexibility to react swiftly to changing circumstances. Consultation on the technical detail of this essentially administrative process would take time and could delay essential appointments.

Formal consultation on the proposed suspension powers and processes has already been undertaken. The devolved Administrations and the non-executive communities support the proposals. I hope that the hon. Gentleman will withdraw the amendment because the consultation on the processes has already taken place and has secured support.

Stephen O'Brien (Conservative, Eddisbury)

I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 23, in schedule 3, page 43, line 9, at end insert—

‘(9) The Secretary of State may by regulations make provision for compensation if the suspension is revoked under sub-paragraph 8(a).’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 24, in schedule 3, page 44, line 42, at end insert—

‘(9) The Secretary of State may by regulations make provision for compensation if the suspension is revoked under sub-paragraph 7(a).’.

Stephen O'Brien (Conservative, Eddisbury)

Amendment 23 would make provision for compensation if a suspension from the Alcohol Education and Research Council is revoked by the Secretary of State, and amendment 24 would make a similar provision in relation to the Human Fertilisation and Embryology Authority.

The amendments would prevent the Secretary of State from wielding his power lightly. An improper suspension could not only bring unnecessary heartache to a hard-working non-executives and those around them, but it could be detrimental to the boards that they serve. I reserve a particular concern about the HFEA. Given the failure of the Government to give a free vote on that legislation last year, I am concerned that the Secretary of State is able to hang the threat of suspension over non-executive members of the authority with whom he might disagree. Obviously, in the rare case that the suspension is justified but revoked, no compensation would be a suitable option, hence leaving the Secretary of State free to make regulations.

Mike O'Brien (Labour, North Warwickshire)

A decision to suspend an individual is intended to be a neutral act taken to further an investigation and does not indicate grounds for permanently removing an appointee from office. That would be determined through a formal termination process, so evidence would have to be sought, an investigation undertaken and a decision made.

Allowing compensation payments to be made in such circumstances would be inconsistent with the sentiment of the proposed suspension policy. The policy is already accepted within the NHS and indeed, such a provision would probably have implications for wider employment law. When someone has been suspended on full remuneration, it does not indicate guilt or produce a requirement for compensation to be paid.

Suspended appointees of the HFEA would continue to receive any remuneration to which they are entitled throughout the period of suspension, but members of the AERC are not currently remunerated. The Secretary of State would have to take action in an appropriate, formal investigatory way and reach an appropriate determination in any investigation. There are protections within the process that enable any abuse by a Secretary of State or anyone else to be dealt with appropriately.

Stephen O'Brien (Conservative, Eddisbury)

The Minister is of course completely right that a suspension is intended, and must be seen, to be a neutral act, and it must always be presumed that someone will be retained and confirmed in their position as much as it is presumed that they might lose their position as a result of a period of suspension in which they have had an opportunity to answer questions that might be put to them. Indeed, they might find that there is no question to answer. Therefore, with those assurances, I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 183, in schedule 3, page 44, line 42, at end insert—

‘(9) Where a person is suspended under paragraph 5A, in relation to a condition under paragraph 5(5)(c), the Secretary of State shall make a statement to Parliament.’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 30 , in schedule 3, page 47, line 35, at end insert—

‘(3) Where a person is suspended under paragraph 2(2)(c), the Secretary of State shall make a statement to Parliament.’.

Stephen O'Brien (Conservative, Eddisbury)

Amendment 183 would introduce further safeguards against the Secretary of State’s power and bring the matter within the ambit of parliamentary scrutiny. The Bill gives the Secretary of State the power to suspend a non-executive using the same grounds on which the power to terminate employment rests. Those grounds, which are outlined in paragraph 5 of schedule 1 to the Human Fertilisation and Embryology Act 1990, are that a person

“(a) has been absent from meetings of the Authority for six consecutive months or longer without the permission of the Authority, or...(b) has become bankrupt or made an arrangement with his creditors, or, in Scotland, has had his estate sequestrated or has granted a trust deed for or entered into an arrangement with his creditors, or...(c) is unable or unfit to discharge the functions of a member”.

Paragraphs (a) and (b) are obviously discrete categories, but paragraph (c) is more subjective. It therefore seems fitting that suspension on the ground of paragraph (c) should be put before Parliament.

Amendment 30 refers to the suspension of monitors and non-executives in the same terms. Under paragraph 2(2)(b) of schedule 8 to the NHS Act 2006, the Secretary of State can fire a person on the grounds of incapacity or misbehaviour. If an individual is fired, the Secretary of State would have to consider whether those grounds would stand up in court. Suspension is much less likely to end up in the courts, so the amendment seeks to mitigate the breadth of the power by giving Parliament a role. The question is how it would have such a role. That could be a matter under the ambit of a form such as the Select Committee.

Mike O'Brien (Labour, North Warwickshire)

I have some concerns about the amendment. There may be personal circumstances, perhaps ill health or other issues, that we should have cognisance of when making decisions about whether statements should be made to Parliament. Details would be in the public domain under all circumstances where a public employee of a body accountable to the Secretary of State is suspended; the awareness of that suspension would become public. It is not necessary for a separate statement to be made to Parliament when a public employee is suspended from monitor or the HFEA. However, we need to consider matters case by case to identify the most appropriate way of passing on information that ought to be communicated to Parliament. It is not usual for statements to be made under these circumstances. It is difficult to know, if personal issues were involved, whether the Minister would be able to detail those. In some cases it might be appropriate to do that, in others it may not. Given the variability of cases and the circumstances that apply, we should not be too prescriptive about the way in which matters should be dealt with. To some extent—and much as it may go against the grain—this is an area where there must be an element of trust that the Ministers and Secretary of State will make appropriate decisions about how much a particular individual’s circumstances can be put into the public domain. With those reassurances that we intend Parliament to be as informed as it should appropriately be, I hope the hon. Gentleman will withdraw his amendment.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful. I acknowledge that the Minister recognises that this is tricky territory that carries with it the potential sensitivities of human circumstances. He talked about that in terms of illness, but it also interrelates—if there is a parliamentary opportunity—with operation of the sub judice rule. That may or may not be invoked at that point, depending on whether there is something before the courts, or indicated to be.

To some degree, the thinking that lay behind the amendment came from frustration about the accountability and timing that arose as a result of wanting to discuss what happened at Maidstone and Tunbridge Wells—particularly in relation to the former chief executive Rose Gibb. That became a subject that was impossible to question, given there were such deep anxieties, not least for the patients and their families who were in the catchment area for that hospitals trust. The thinking was to try to find a way of making sure there was an opportunity to air some of the issues, despite suspension and the operation of the sub judice rule under “Erskine May”, and such things. It has been useful to air the amendment, but I do not wish to press it. I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 27, in schedule 3, page 47, leave out lines 14 to 16 and insert

‘the Commission must have regard to the Secretary of State’s advice regarding the appointment of the vice-chairman’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 26 , in schedule 3, page 47, line 19, at end insert—

‘(c) make provision about the appointment of new non-executives, and of one as vice-chairman in the event that all non-executives are suspended.’.

Stephen O'Brien (Conservative, Eddisbury)

Briefly, amendment 27 breaks the convention that the legislation carries the Secretary of State as the actor, but, as has been confirmed, action is devolved to the appointments commission. This part of the schedule addresses the Appointments Commission itself. Given the power the appointment has, and the Government’s tendency to meddle in appointments—as we have argued—it is even more essential that the Secretary of State is kept on a tight leash. I hope the Minister can tell the Committee how the Appointments Commission appoints its own non-executives and the Secretary of State’s role in that.

Amendment 26 is merely a probing amendment to find out what happens in the, admittedly, unlikely but not implausible event that all the non-executives are suspended.

Mike O'Brien (Labour, North Warwickshire)

Suspending the chairman of a board or the entire non-executive team is a drastic action. In such circumstances, it is essential that the Secretary of State can provide for someone to lead the commission during such a challenging period. Schedule 4 to the Health Act 2006 already allows the Secretary of State to appoint non-executives to the commission, so amendment 26 is not necessary.

If the chair alone were suspended, the full expectation is that the vice-chair appointed by the commission’s board would, in most cases, be well placed to remain as vice-chair. Where that is not the case, it would not be appropriate for the commission to elect its own vice-chair, even with the benefit of the Secretary of State’s advice.

Although the commission is an impartial organisation, it must remain accountable to the Secretary of State, who is accountable to Parliament. That requires that the Secretary of State has the power to make provision for appointing the leadership of commission’s board.

That is the way in which we would seek to proceed. With those reassurances, I hope that the hon. Gentleman will withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 28, in schedule 3, page 47, line 22, leave out ‘for paragraph 9(d) substitute’ and insert

‘at end of paragraph 9(d) insert’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 29, in schedule 3, page 47, line 26, leave out ‘for paragraph 5(d) substitute’ and insert

‘at end of paragraph 5(d) insert’.

Stephen O'Brien (Conservative, Eddisbury)

Amendment 28 refers to the provision in schedule 3, paragraph 10, to replace paragraph 9(d) of schedule 2 to the National Health Service Act 2006, which makes provision for regulations regarding

“the circumstances in which a member of a Strategic Health Authority who is (or must be regarded as) an officer of the Strategic Health Authority may be suspended from performing his functions as a member”.

Similarly, amendment 29 refers to the provision in schedule 3, paragraph 11, to replace paragraph 5(d) of schedule 6 to the Act, which makes provision for regulations regarding similar points.

I hope that the Minister can explain why those changes have been made. Given that the Act is from 2006, it is strange that the Government did not get it right the first time.

Mike O'Brien (Labour, North Warwickshire)

This is a great Government, but we are not infallible. We live and learn—[Interruption.] We will live for quite a while longer. One never knows.

The Bill replaces paragraphs 9(d) of schedule 2 and 5(d) of schedule 6 to the 2006 Act, both of which refer only to officer members of strategic health authorities or special health authorities. The replacement paragraphs include chairs, vice-chairs and other members.

The amendments would serve only to duplicate the regulation-making provisions for members. With that clarification, I hope that the hon. Gentleman will not press his amendments.

Stephen O'Brien (Conservative, Eddisbury)

On the basis that the Minister has said that the Government are not infallible and that he has tried to put a human face on them, I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 143, in schedule 3, page 47, line 35, at end insert—

‘(d) In assessing whether there are or may be grounds to remove him from office under paragraph (b) the Secretary of State may consult—

(i) the Care Quality Commission;

(ii) Strategic Health Authorities; and

(iii) the Audit Commission’.

The amendment would balance the Secretary of State’s powers regarding Monitor’s non-executives. Given the Government’s swings on foundation trusts, we need to ensure that we understand the issues carefully, as my hon. Friend the Member for Hemel Hempstead has highlighted elsewhere.

The amendment would allow the Secretary of State to consult the other players in the regulation of the NHS—the Care Quality Commission, strategic health authorities and the Audit Commission—before taking action against Monitor’s non-executive directors.

Mike O'Brien (Labour, North Warwickshire)

Suspension would be used only on rare occasions, when serious concerns raised about performance or conduct required further investigation. The Secretary of State intends to delegate his power to suspend members of Monitor to the Appointments Commission. The commission is independent and expert, and it has established a clear policy for determining whether there is a case for suspension.

Where there are allegations of incapacity or misbehaviour, the commission will undertake a swift initial investigation to assess whether are there sufficient grounds to bring suspension proceedings. The commission will therefore take the action. Its chair could use emergency powers to suspend someone following consultation with her executive or, in her absence, the deputy chief executive, and with at least two of the commission’s appointed commissioners.

Stephen O'Brien (Conservative, Eddisbury)

I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 31, in schedule 3, page 48, line 10, leave out from ‘so’ to the end of line 12.

I am pleased to be back under your chairmanship, Mr. Key. We will try to make as much progress as we managed this morning, when we rattled along.

Amendment 31 again refers to the suspension of Monitor’s executives. The Secretary of State will not be obliged to undertake a review of suspensions until three months have elapsed from the time of suspension, and the amendment would remove that obligatory delay while preserving the opportunity for review. Why was that apparently arbitrary period chosen? Given, as I have said before, that suspended non-executives are unlikely to have recourse to the courts, surely they should be allowed a review as soon as is practicably possible.

Mike O'Brien (Labour, North Warwickshire)

We wanted to allow reasonable time for investigations to take place; it is as simple as that. Investigations may be concluded more quickly, but, depending on the circumstances, they make take longer. The Secretary of State would not want to be in a position whereby he was unable properly and fairly to conduct a review of the suspension if requested to do so in an unrealistically short time.

Stephen O'Brien (Conservative, Eddisbury)

I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 184, in schedule 3, page 49, line 36, at end insert—

‘(2) The amendments made by this Schedule apply to a condition occurring at any time in the person’s appointment which satisfies the Secretary of State as a condition for suspension.’.

Here we arrive at the exciting point about paragraph 19, establishing that the changes here are retrospective in that they impact on anyone appointed at the time the Act comes into force, regardless of when they were appointed. This is a probing amendment to find out whether the legislation will operate retrospectively on grounds for a suspension that may have arisen in the past but may no longer be present, or will suspension be an option only on grounds for suspension that arise after this legislation comes into force? The related question is whether the Minister currently has any non-executives in his sights for when the provision comes into force.

Mike O'Brien (Labour, North Warwickshire)

The transitional provision in paragraph 19 as drafted ensures that the measures will apply to persons appointed at any time. This already enables us to investigate any issues or allegations about events that happened in relation to persons appointed at any time prior to the Act coming into force. In answer to the final question, I have no one in my sights at the moment.

Stephen O'Brien (Conservative, Eddisbury)

That clears up the question about the retrospective provisions, and clearly there is nobody in the Minister’s sights. The slight question that survives, which perhaps the Minister could pick up at a later point, is whether the actual grounds for suspension need to have arisen before the legislation in order not to be caught or whether they can be caught retrospectively. Does the Minister want to intervene on that point?

Mike O'Brien (Labour, North Warwickshire)

My understanding is that this enables us to deal with any issue that arises at any stage, whether retrospective or not. That seems to be the basis on which we are proceeding. If there is anything different, I will write to the hon. Gentleman.

Stephen O'Brien (Conservative, Eddisbury)

I am most grateful. I think the important point on the record is that there is a degree of retrospection that needs to be well understood by everybody who might be affected by it. On that basis, I beg to ask leave to withdraw the amendment.

Clause 21

Mike Penning (Conservative, Hemel Hempstead)

I beg to move amendment 89, in clause 21, page 24, line 16, leave out ‘requested’.

The Committee will realise that we have reached a clause that, to be frank, is controversial. There are many different views across the House about how a product that is legal in this country can be sold while, at the same time—and I say this from a personal perspective—we cut the number of people, especially the young, who take up smoking and continue to smoke.

I was a member of the Health Committee when we looked carefully at evidence relating to the legislation to ban smoking in public places. I began that evidence session feeling very sceptical about banning smoking selectively. By the end of it, on the basis of the evidence, I was a signatory, with other hon. Members of the Committee, to the idea of a total ban on smoking in public places. It is probably obvious that I have no side with the tobacco industry. I would be happy if everybody ceased smoking tomorrow morning. It would be great for their health and great for the NHS, but probably not so great for the Treasury.

With that in mind, I emphasise the term “evidence based”. I have said to the organisations lobbying brilliantly on behalf of this legislation that my concern is not that I want fewer people to smoke—particularly children—and to have access to tobacco. That is a no-brainer for everybody, I am sure. It is that I wonder whether the legislation will work and whether it is too onerous on legal organisations that sell tobacco as part of their income stream.

I also wonder whether the legislation would provide more of a driver for the black market. Currently, at least one in five cigarettes is either counterfeit or sold on the black market with no duty paid and no one taking the slightest bit of interest in the age of the person buying that product. Age is something that I believe newsagents, tobacconists and clubs should take notice of, and in most cases they do.

That said, I will not press any of the matters related to tobacco to a vote in Committee. That is a matter for the whole House to decide on. Her Majesty’s Opposition will have a free vote, so they can express their personal views. I hope that the Government take a similar view, as, to be fair, they did on the legislation to ban smoking in public, when we had a free vote.

This is a probing amendment, which deals with the prohibition of tobacco displays. I said earlier that I doubt not the Government’s intentions, which I think are honourable, but the evidence base behind the provision. It is, perhaps, a bit early to use some of the evidence that the Minister has sent out in her letters—today, for instance. That, sadly, has left no option for her to be open-minded, as we all were about the previous legislation. Instead, it is dismissive of evidence counter to that being used by the Government.

Amendment 89 seeks to provoke the debate on the statutory definition of a requested display. For people who sell tobacco on their premises, what that means is of great concern; they want to know when and if they are breaking the law. “Requested display” relates to retailers and staff as set out in the Bill, but it is very vague. It needs to be defined, I am sure the Minister will agree. It needs a bit more tweaking, even if the legislation is passed, so that people have confidence that their display is not breaking the law under new section 7B.

An individual who wants to see the legal product that they are going to buy may have a child with them in the shop. Under the clause, is it going to be illegal for them to see the product? I hate to think that we will have a situation where mums and dads who, sadly, still smoke leave Johnny or Mary outside the door unaccompanied while they go in and purchase their cigarettes. It will not always be possible for people to accompany the children while their parents are in the shop purchasing their cigarettes, which are a legal product. My point is that the parents—and the tobacconists—will be concerned about whether they are breaking the law if an under-18 is with them during that purchase. That needs to be set out and defined carefully, because, if we are not careful, people may unintentionally break the law or put their children at risk.

Someone may, for instance, ask to see a new brand at a tobacco kiosk in the middle of a large supermarket with significant footfall. If the new brand is presented to them before they purchase and a minor walks past, will that be an offence under the Bill? Under the wording at present, it appears that it will. People will commit an offence unintentionally, and the effect on the proprietor will be onerous, whether it be a large supermarket or a smaller corner shop.

There is a whole debate to be had as to whether it is physically possible for someone who is the only person working in a shop at a particular moment to know what is happening out of their eyeshot when someone asks to see a product. Shoplifting is a real problem for small businesses, and the Association of Convenience Stores asked me to look into that.

The arguments about the content of the amendment are for the Floor of the House. What I am trying to probe with my comments now is what is actually an offence in respect of a requested display. It is difficult to see from the wording of the Bill exactly what is an offence.

John Pugh (Liberal Democrat, Southport)

I thoroughly appreciate the attitude taken by Conservative Front-Bench Members on how to deal with this issue. It is such a big topic for parties, and people within parties, that it is probably best discussed largely on the Floor of the House. Therefore, fewer amendments will be put to the vote during debates in Committee. In fact, there are variations within parties and even within health teams. One of the reasons I am on this Bill is that I reduced the variation that might otherwise have occurred if other personnel had been put on it.

When the ban on smoking in public places was introduced, the argument was largely about secondary or passive smoking, and the rights of people not to be affected by other people’s smoke, but I think that there was a sub-text to it. I was well aware of a definite attempt to marginalise smoking as an activity. That is what the legislation succeeded in doing, and I do not think that it was necessarily a bad thing, but it would be more honest when people are presenting their argument to do so in precisely those terms. The more that smoking is seen as a rather strange activity that people engage in in little huddles outside buildings on cold days, the less people will smoke, the better public health will be, and the less cost there will be for the NHS.

This clause and successive clauses largely set out the possibility of regulation that is justified by the suggestion that we can stop children smoking by altering displays, or that we can stop people who have given up smoking restarting. Evidence has been amassed to that effect, but, as the hon. Gentleman just said, there is evidence moving in both directions. Frankly, some of it looks a bit flaky; at any rate, it is inconclusive.

I do not think that one buys cigarettes on impulse. Someone might walk into a service station and suddenly buy a packet of crisps, a chocolate bar or a drink they had not expected to buy, but they would not suddenly come out with cigarettes, not having previously intended to go in there for that precise purpose. I think that the public health arguments are not as honestly or as plainly put here.

That being said, the definition of “requested display” as an entity in law is a little obscure to me. I share some of the reservations of Conservative Front-Bench Members about it and would support the amendment.

Gillian Merron (Labour, Lincoln)

It is a pleasure to serve under your chairmanship, Mr. Key.

I thank hon. Members for their comments because it is helpful to probe the intent behind the clause, and certainly the considerations that have been put are useful. Perhaps I could clarify that the amendment, if passed, would allow retailers openly to display tobacco to all adults, which of course is not the intention of the Bill. It would also require shops either to create separate adult-only areas just to display tobacco or to remove tobacco displays entirely. I am seriously concerned that that would put small shops at a serious competitive disadvantage. They would be far less able to afford to create such areas, whereas supermarkets and superstores would have no such problem. Even if we put aside the competitive disadvantage, the amendment would ignore the second and important part of our policy, which has perhaps not been aired, but which is to support those who already smoke but want to quit.

Mike Penning (Conservative, Hemel Hempstead)

I completely agree with the Minister that we must make every effort to help people who want to quit smoking. May I take her back to what she said about display? I understood that the Bill’s purpose was to prevent young people from seeing tobacco advertised in a shop in a display, and then illegally purchasing it on impulse. The Minister has just said that its purpose is to prevent adults from seeing tobacco advertised in a display. That is an imbalance. Is the purpose of the legislation to prevent under-age people from smoking, or not?

Gillian Merron (Labour, Lincoln)

Of course, it is both, and we will discuss that. It is important not to ignore the second part, which is that we have a duty to support those who want to quit, but we also have a huge duty not to allow young people to be recruited into the ranks of smokers, which is what the tobacco industry wants.

A range of research studies has considered the effect of tobacco displays on people who are trying to quit. Cancer Research UK’s 2008 report—I have placed a copy in the Library— summarised some of the published papers. Based on previous research, Cancer Research UK says that display

“stimulates impulse purchases and undermines the efforts to quit.”

If hon. Members want more evidence, I refer to the youth tobacco policy survey, which was set up to measure the impact of restrictions on tobacco advertising on children in the UK. The study began in 1999 and took place five times over seven years with nearly 6,000 adolescents with an average age of 13 taking part. Several papers have been published based on the data collected. The survey showed a decreasing level of awareness of tobacco among young people where tobacco advertising has been banned.

Mike Penning (Conservative, Hemel Hempstead)

I referred at the outset of our discussion on this part of the Bill to the work of Cancer Research UK, Action on Smoking and Health and other contributory organisations that are working so hard. However, it is obvious that they will be selective about the evidence that they put forward and will choose what supports their argument. They will not choose evidence that contradicts what they are trying to do, which would be ludicrous. Quoting one side of the argument does not give a balanced view.

Advertising has been banned for a considerable time, and we do not want to go through the Formula 1 debacle at the outset of the Labour Government. The Minister is referring to evidence about advertising, which does not exist in this country, unless the display of a legal product in a shop is deemed to be advertising, in which case it is covered by existing legislation.

Gillian Merron (Labour, Lincoln)

Perhaps I may make myself clear. I was referring to studies by MacFadyen et al in 2001, who studied 15 and 16-year-olds in the north-east of England, Grant et al in 2007, and a range of others. Information is widely available, and I am happy to provide it. The Cancer Research UK report pulls together a range of surveys. I could refer to international evidence, but I thought it best to stick to UK evidence on this occasion.

I turn to the more general point about why we allow requested displays. As the hon. Gentleman rightly said, tobacco remains a legal product, and those who smoke should be able to see or handle the product before they agree to buy it. The requested display provision means that shopkeepers may show tobacco products to people who want information or who want to buy the products. However—this is the key—workability is important, and showing tobacco to one person, as the hon. Gentleman has said, may mean that others catch sight of it. I am well aware of the concerns about that. I reassure the hon. Gentleman and other members of the Committee that we will use regulations under new section 7B (3) to make sure that no offences are committed when shopkeepers are selling, or showing, tobacco to a customer and other people see it.

We are working closely with retail organisations such as the Association of Convenience Stores, the National Federation of Retail Newsagents and others—for example, the local authority co-ordinators of regulatory services—to develop practical and workable regulations, which will keep the cost of covering up displays to a minimum. It is quite appropriate for those details to be made through regulations, because we need to work through them, and work with stakeholders to develop regulations that will be both effective and workable. We need to talk to the retailers and to the trading standards officers about how the provision will work in practice and what detail should be in the regulations for consultation later this year.

The requested display provision is needed to make sure that people can see a legal product before they buy it, but it needs to be requested only to give power to those adults who want to quit smoking. I hope that with this clarification of why we need to cover up tobacco displays for everyone, and why requested displays need to be part of the Bill, that the hon. Gentleman will, as he indicated at the beginning, not press the amendment.

Mike Penning (Conservative, Hemel Hempstead)

I have listened to this short debate and suggest that the debate on Report is going to be much longer than the Minister expects. [Interruption.] From a sedentary position I hear the hon. Member for Bristol, North-West saying, “You can say that again”. Yes, that will be from both sides of the argument, to be fair, and I hope—hint, hint to the Government Whips—that there is sufficient time on the Floor of the House to have a sensible debate about the whole issue and the effects of the legislation on law-abiding citizens who are going about their lawful business. With that in mind, as I indicated at the start, I will withdraw the amendment at this stage, but will return to it on Report. I beg to ask leave to withdraw the amendment.

Clause 22

Mike Penning (Conservative, Hemel Hempstead)

I beg to move amendment 91, in clause 22, page 26, line 3, leave out ‘may’ and insert ‘shall’.

Amendment 91 would flush out more of the concerns that we, or rather I—we are on a free vote so I had better say “I”—have with the legislation. The evidence published to date, and the evidence produced by the Minister today, is insufficient to support a ban on point of sale displays. It is also clear that children use vending machines. I am not just speaking from the evidence produced by Cancer Research UK and ASH in videos showing young people going into licensed premises—close to where we are standing here today—putting coins in the machine and buying the product. In recent weeks, I, too, have seen young people come into licensed premises and purchase tobacco from vending machines. The important thing here is whether the existing legislation has been enforced correctly, because many of the premises in which I saw this taking place, and some of the premises in the recent DVD and video, were licensed premises, so those young people should not have been unaccompanied in the first place. We need to address that point.

We encourage more and more young people to come into the family-oriented pub or bistro. I am a keen supporter of the British pub industry and do everything I can to support pubs. At the same time, it is the responsibility of those running such establishments and providing vending machines to do everything that they possibly can to preclude young people from purchasing cigarettes. They clearly cannot get them from anywhere else at that time, otherwise they would not be paying such huge amounts for cigarettes through vending machines. There are myriad premises where that happens.

The legislation is already in place, and the assumption is that the proprietor and those working in a bar or a pub should be able to see the vending machine and whether a young person is approaching it. That is fine if they are serving only one man and his dog occasionally. But, in a busy, vibrant pub, which I am sure we all want our pubs to be, or a leisure facility, similar to Jarman Park in my constituency, which has myriad services from bowling to skating and swimming to nightclubs and cinemas, it is physically impossible for the administrators and owners to guarantee that every time under-18s walk to a vending machine to purchase cigarettes they can be stopped.

After considering the evidence, I have moved my position. I do not want vending machine operators to go bankrupt. I used to be a smoker, and given that it is so expensive I have no idea why anybody would buy cigarettes from a vending machine. However, it is a choice that people can make if they are over 18 and wish to purchase cigarettes. As is suggested, in a lot of places there are no alternatives.

Proprietors of public houses in particular do not want loose stock to sell across the counter. If they lose one packet of cigarettes—stolen or misappropriated by a member of staff or a customer—that is the profit margin on about two packets of cigarettes gone. They do not want that and we moved away from it some time ago. I want the vending machine manufacturers to have an opportunity to sell their legal product in such premises without young people having access to them. That can be done in numerous ways, but I do not think that it is the purpose of the Committee to stipulate to manufacturers and proprietors of vending machines how it should be done. It can be done with a token or an electronic key system, so a person has to go to the bar.

You will be surprised to hear me say this, Mr. Key, but I think that we need to look at our European friends and take guidance from them. Some 22 countries in Europe do not permit the sale of tobacco from vending machines at all. That is too draconian; it is a legal product and people should have the right to purchase it, but it should not be available to under-18s. The industry itself needs to come forward with proposals.

Patrick Hall (Labour, Bedford)

The hon. Gentleman referred to 22 European countries having banned tobacco sales from vending machines; why is this country different from others? Clearly the conclusion has been that devices to limit access by minors to tobacco products in vending machines have failed.

Mike Penning (Conservative, Hemel Hempstead)

The hon. Gentleman raises a good point. If you look at the evidence, which we are all doing, you see that when those bans were imposed there was not the technology to do it another way. I was living in some of those countries when bans came in. When I was a British soldier in Germany in the ‘70s, the vending machines were still on the streets. That had been banned in this country years before. Interestingly enough, they took them off the streets in places where the British military were only because the old 5p was the same size as the deutschmark and they were losing a fortune from British soldiers spending 15p to buy a packet of cigarettes—that is the gospel truth. Frankly, as cigarettes were 25p in the NAAFI at the time, it seemed immaterial; I think that soldiers did it for the joy of doing it.

The situation has changed, and other countries in Europe and around the world have moved to the technology that we are talking about. We have to address whether we are going to stop law-abiding businesses selling their legal product to British over-18s. If we can do that, there is no need for a total ban. If we cannot, I will be one of the signatories to the amendment on a subsequent Health Bill, but I want to give businesses the opportunity, with the technology that we have today, to keep going and sell their legal products. If they cannot do that, we may have to go down another avenue.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

Some hon. Members had the opportunity earlier this afternoon to see the British Heart Foundation film that showed young children going into pubs and buying cigarettes. It was clear in some cases that it was done, if not with the active encouragement of the staff, with their knowledge. They clearly did not think that it was their responsibility to stop it. Even if there are safeguards, they can be got around. As the example involves machines, if the staff who are responsible for the machines do not feel any responsibility, will that not stand in the way of the safeguards the hon. Gentleman is describing?

Mike Penning (Conservative, Hemel Hempstead)

I have seen the video and think that the British Heart Foundation is doing some effective lobbying. I did not need to see it, however, because I have seen that happen in real life.

Two aspects of the hon. Gentleman’s comments must be addressed. First, it is a criminal offence to allow that to happen. If people are allowing children to purchase cigarettes, we should check whether they are also allowing them to drink, because they probably are. Such people should not have licences and should be dealt with by existing legislation, rather than by passing more legislation. Secondly, the vending machine, or a smaller version, could be behind the bar. That way, checks would have to be made. Rather than saying, “Slap! Bang! You’re out of business,” we should look at measures that were not available when most European bans came in.

We know that people do not want to ban tobacco sales altogether—we should be honest about that. I agree with the Liberal Democrat spokesman that we did not have an honest debate on the legislation on smoking in public places. Other Committee members served with me on that Public Bill Committee. Health and safety legislation was used as a back-door method to ban smoking in public places. It was not designed to preclude people from smoking, but to protect people from passive smoking in their place of employment. We should be honest about that.

Stephen O'Brien (Conservative, Eddisbury)

My hon. Friend is giving an important introduction to this broad area that will be discussed again on Report. For those of us who have both smoked and given up twice, the only thing that keeps us from starting again is the prospect of having to give up again. I started relatively late, but it is clear that vending machines are an easy source for those who are too young to buy cigarettes. At that stage, people are not fussed about whether they are getting value for money; they just want access to cigarettes.

My hon. Friend is making the important point that we should consider measures to ameliorate the problem, rather than be draconian and impact on the freedom to choose. Vending machines tend to be on the corridor on the way to the gents, which is out of sight of almost everybody. That means that people are able to get cigarettes without any kind of penalty or fear.

Mike Penning (Conservative, Hemel Hempstead)

I thank my hon. Friend. I started smoking when I was 16 years old, as did the rest of the battalion I was serving with in the British Army. Cigarettes in the Army are still almost tax-free, particularly when one is serving abroad. On the ships of the Royal Navy, people are given a quota and still encouraged to use it. Under the previous smoking legislation, we considered why we continue to allow people to smoke in prison, even though there are already so many public health risks and it is a place of work for prison officers. There are a couple of other amendments on these issues, Mr. Key, but I will not discuss them for so long.

The key is accessibility. If people are breaking the law or ignoring existing legislation, they are sure to get around this legislation as well. Such people earn money when people purchase cigarettes because they get a percentage of the profits. If people are happy to sell cigarettes to under-18s, they will do so under the counter in future, if they do not do so already. That would certainly be true in the part of Northern Ireland that I come from.

According to Government figures, one in five cigarettes sold in this country are counterfeit or sold on the black market with no duty or safety measures. Do we really want to drive that market even further before we give vending machine manufacturers and operators the opportunity to sell their products legally to people of the correct age? That is why I have put forward this proposal. I stress that I will bring the amendment back on the Floor of the House and push it to a vote.

John Pugh (Liberal Democrat, Southport)

The problem with the amendment is that it does not go far enough. The line that we will take both on Report and in Committee is that cigarette vending machines are out of order and that we support the British Heart Foundation’s attempt to eradicate them totally. Let me briefly explain why.

Cigarette vending machines are anachronistic and date back to the times when shops closed at 6 o’clock, and desperate smokers looking for a cigarette could only get them from a vending machine. On Sundays, too, it was hard to get a supply of cigarettes. As a result, the machines came into being.

Mike Penning (Conservative, Hemel Hempstead)

I apologise for taking up the hon. Gentleman’s time, but what a load of tosh. I have never heard so much rubbish in my entire life. If someone goes into any pub in this country, they are highly unlikely to be able to purchase cigarettes in any other way. To say that it is something to do with the machines being used late on a Saturday night and that they are an old-fashioned anachronism is completely wrong. Whether we like it or not, it is the only way in which cigarettes can be purchased in most premises these days. That is because of the stock issue, to which I alluded earlier.

John Pugh (Liberal Democrat, Southport)

Clearly, it would be a disincentive for people to smoke if they had to leave the premises to get cigarettes. On a personal note, my son recently gave up smoking. The most difficult situation for smokers when they have given up is after they have had a few pints and they are relaxed, so if we are looking at a measure that will prevent people from going back to smoking, banning the machines is probably the best one.

The machines are not just anachronistic, but slightly odd—after all, we do not have alcohol-dispensing machines with controls on them. There must be some reason why the Europeans, having explored the logic, have gone down the route of largely abolishing them. We were talking about flaky evidence and evidence pointing both ways, but the evidence here is entirely clear cut. The machines represent a small section of total cigarette sales, but one in six child smokers use them. There is no doubt that the evidence shows that children disproportionately use them. The evidence also shows that attempts to get round that by having token systems or monitoring and other such measures simply do not work.

We have talked about displays before. One of the great arguments for not having displays is that it will stop people from going back to smoking and it will stop children from smoking. Vending machines encourage people to go back to smoking because, in the pub, they can be found very easily. They are clearly used by children and will continue to be used no matter what controls are brought in, because children, when they want to smoke and get round legislation, are very canny at doing so.

Gillian Merron (Labour, Lincoln)

I appreciate the points that have been made, but I will answer them under the next set of amendments or on clause stand part, should debate on that.

The direct effect of amendment 91 is that it would compel the Governments of England and Wales to regulate vending machines. I can confirm that it is the intention of this Government to introduce new regulations on vending machines to ensure that under-age sales are prevented. The Department is already working with key stakeholders in the vending machine business and enforcement agencies to develop draft regulations that will allow practical, effective and cost-effective solutions to the problem. We will have the draft regulations ready for consultation as soon as we can, and we are committed to commencing them from October 2011.

I confirm that Welsh Ministers will consult with relevant health and business organisations and with members of the public in Wales before determining how detailed regulation on the sale of tobacco products from vending machines will be taken forward under their jurisdiction. The effect of the tobacco provisions in the Bill is to devolve powers on tobacco displays and vending machines to the relevant national authorities. We note that the amendment will cut across that intention, thereby imposing a legislative imperative on the Welsh Assembly Government. Under the principle of devolution, we believe it is appropriate to leave it to them to decide how and when to use their powers. I therefore hope that the hon. Member for Hemel Hempstead will not pursue the amendment.

Mike Penning (Conservative, Hemel Hempstead)

Reading through the other amendments, this is almost a stand part debate. I appreciate your leniency, Mr. Key, in allowing it to happen.

Having listened to the Minister, I think that my probing amendment has done its job. We have heard more from the Minister in the past five minutes than is written anywhere on the face of the Bill about the Government’s proposals. On the next set of amendments I shall tease out a fraction more, but I beg to ask leave to withdraw the amendment.

Robert Key (Conservative, Salisbury)

I am of the opinion that we have explored the matter fully and it will not be necessary to have a clause stand part debate.

Clause 25

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 34, in clause 25, page 28, line 6, after ‘area’, insert

‘including an assessment of local needs for the services of dispensing doctors.’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to take the following: amendment 35, in clause 25, page 28, line 9, at end insert—

‘(za) placing a duty on primary care trusts to consult patients, Local Involvement Networks and members of the public on local needs for pharmaceutical services.’.

Amendment 33, in clause 25, page 28, line 16, at end insert—

‘(e) requiring the Secretary of State to implement pilot schemes for primary care trusts in carrying out pharmaceutical needs assessments before they are rolled out nationally; and for those pilot schemes to be evaluated 12 months after they commence.’.

Stephen O'Brien (Conservative, Eddisbury)

Amendment 34 would place a duty on PCTs to take into account the services of dispensing doctors in their assessment of local pharmaceutical needs. We have now moved on to the clause dealing with pharmaceutical services in England and the needs assessments as they are proposed in the Bill. Amendment 35 would ensure that patients are consulted as part of each pharmaceutical needs assessment. Amendment 33 proposes pilot schemes for PNAs.

Amendment 35 would ensure that each PNA includes patient consultation. The principal purpose of the PNA should be to enhance local pharmaceutical services for patients and ensure that the area covered by the PCT is adequately provided for. We agree with the concept of giving PCTs local control over the provision of pharmaceutical services, but we want to make sure that patient choice is enhanced rather than overruled. At present, the Bill does not make any provision for patients to express their views in the assessment—an odd omission, given that patients are the users of the services provided under a PNA. Will the Minister confirm that the regulations will make provision for patient consultation? My amendment would ensure that PCTs include the results of such a consultation in their published PNAs, so that patients can be assured that their views were taken into account. If a PCT goes against the wishes of patients, the general public will be able to see that that is the case by examining the consultation.

Accounting for the views of patients in PNAs is particularly relevant in rural areas, where pharmaceutical services are less abundant. Many patients have to travel long distances to access services, and consequently people make extensive use of dispensing doctors, so that they can combine their visit to the doctor and the collection of their medicines. There is nothing in the Bill to prevent PCTs from cutting those services. As my noble Friend Lord Howe argued in the other place, many of the pharmacy community are concerned that the current PNAs are

“disproportionately focused on cost-effectiveness and not enough on health need”.

That means that these services face a real risk of being axed.

I have already fought a real battle on the subject in my constituency—with some success, I am glad to say. It revolved to some extent around the definition of what is rural and what is associated with an urban or suburban environment. Having said that, if any sort of assessment militates against the extension of dispensing doctors, it would be a very real threat to the rural community. Amendment 34 would ensure that the services of dispensing doctors are taken into consideration in PNAs, along with the views of patients, the majority of whom want to keep the services of dispensing practices.

On the management of dispensing practices, I am sure that the Minister will come back to me with the same assurance that his colleague the Minister of State, Department of Health, the hon. Member for Corby (Phil Hope), gave in December 2008: that the Government do not intend to make any changes to the current arrangements for the dispensing of medicines to patients by GPs. However, I am slightly less inclined to trust the good will of the Government, given that they made that pledge last year before the publication of the Bill but they have clearly left a gaping hole in the legislation on that matter.

It is of more concern that the Government appear to be ignoring the wishes of NHS patients. Some 62,675 patients registered with a dispensing practice responded directly to the pharmacy White Paper consultation to express their support for no change to GP dispensing. However, the Bill makes no provision for PCTs to consider the services offered by dispensing doctors in their needs assessment. What firm and evidence-based assurance can the Minister give that patients who are registered with dispensing practices will not see those services axed by their PCTs?

It is fair to say that many of the satellite surgeries of doctors’ practices are, particularly in rural areas, cross-funded because they have a dispensing practice. Far from doctors seeking to increase the drawings from their own practice, it is cross-subsidy that enables them to have a satellite service to reach out into the more remote rural areas. The dispensing practice enables that.

Amendment 33 proposes pilot schemes, which would enable the PCT and the Government to investigate whether the local assessment of pharmaceutical needs results in adequate provision of services. It would also give PCTs a chance to experiment with the format and content of the PNA to ensure that any complications are addressed and that the assessment is wide ranging enough to be taken into account when a provider applies to the pharmaceutical list.

The Government’s own White Paper on pharmacy concedes that

“there is considerable variation in the scope, depth and breadth of PNAs”.

It also states:

“The structure of and data requirements for PCT PNAs require further review and strengthening to ensure they are an effective and robust commissioning tool which supports PCT decisions.”

Although I realise that the Government see the Bill as the occasion for review and strengthening, a pilot programme would be the opportune moment to examine and trial the content of PNAs in a practical setting. PCTs would also be able to adapt to producing more rigorous PNAs. Examples of best practice could be disseminated before the scheme is rolled out across the country.

Anne Galbraith’s 2008 review of NHS pharmaceutical contractual arrangements, which was published alongside the White Paper, made the point that

“Pharmaceutical Needs Assessments...should have a consistent structure across all PCTs and have national comparability in breadth and depth.”

One potentially negative consequence of localisation is that there will no longer be a framework for ensuring that PCTs maintain that comparability across the country. Of course, the regulations will seek to qualify the information contained in the PNA and the manner in which it is conducted. However, we have not had sight of those regulations, so we do not know the extent to which they guide PCTs on the form and content of a PNA. If the Government were to run a pilot scheme and report back to Parliament with the results in 12 months’ time, they would have a solid evidence base from which to move forward. In addition, PCTs would have increased knowledge of how best to utilise the PNA to gain the best possible access to pharmaceutical services for their patients.

John Pugh (Liberal Democrat, Southport)

I have to apologise for the fact that my hon. Friend the Member for Romsey is not here, because she is the expert on this subject and would have a great deal more to say than I have. I have no problem with the general tenor of what the Government are endeavouring to do. Public authorities have always had to strike a balance so that naked commercial interests do not dominate the pharmaceutical world. The needs of the community are paramount, and there has always been a need to structure the market publicly in some way. Anybody who has been an elected councillor or any sort of elected representative will have been lobbied at some point by a pharmacy or a dispensing physician about their position, their share of the market and the placing of other facilities close to them.

I agree with the hon. Member for Eddisbury that whatever is done needs to be properly and thoroughly evidence-based, and if it is not evidence-based everywhere, it will not be well done. It cannot be lobby-based, because there are plenty of powerful interests in the pharmaceutical world and many prosperous commercial practices that will weigh in heavily to get their way if left to their own devices. I therefore warm to the amendments because they would preserve the rights of dispensing practices, particularly in rural areas, and they make clear that the market must serve patients rather than simply appear by accident and as a result of commercial happenstance.

Mike O'Brien (Labour, North Warwickshire)

I, too, represent a rural area where dispensing doctor’s practices exist and operate, and I very much understand the concerns of some GP practices that, in order to maintain satellite practices, they sometimes have to have funding from a dispensary. Indeed, a dispensary provides a facility for local people in such communities. At the same time, there is always a concern where doctors both prescribe and dispense, and it is right to exercise caution when dealing with that. Dispensing clearly offers an income, so we need to be careful that we deal with the issue appropriately. I believe that, in most cases, doctors act with a professional integrity on which we can broadly rely. However, we need to be continually aware that individuals may not always act with such integrity; the appropriate disciplinary procedures for doctors will deal with that.

On Second Reading, the hon. Member for Eddisbury said:

“The move to pharmaceutical needs assessments is welcome.”—[Official Report, 8 June 2009; Vol. 493, c. 612.]

I am glad that he said that. I make it clear that, as we announced before Christmas, we will not change the current system for determining whether doctors can dispense to their patients. On primary care trusts in rural areas where most dispensing by doctors takes place, it is important that such services are considered within their overall assessments of needs.

It has been asked whether services by dispensing doctors could be at risk from bad PCT decisions on new applications. The current regulations already contain provisions to take into account any prejudice to existing service providers in rural areas from new applicants, and I stress that that safeguard will continue in the new regulatory system.

The clause requires PCTs to undertake and publish their assessments of pharmaceutical needs in accordance with regulations. The Department will work closely with interested parties, including NHS and contractor representatives, as well as doctors, on drafting the requirements. I announced last Thursday the formation of an advisory group for that very purpose. However, not all PCTs need to resort to the services of dispensing doctors. It is important that such services are available for the patients who use them in rural areas, but they have little relevance, if any, in non-rural PCTs across the country. We need to get the issue right, and I hope that my reassurances have been satisfactory and that the amendment will be withdrawn.

John Pugh (Liberal Democrat, Southport)

The Minister may be able to assist me. He has pointed out the obvious conflict of interest that can exist when one is both dispensing and prescribing medicines. That needs to be addressed. He has suggested that the only way in which it would be addressed is via the ethics committees of local GPs and so on. The issue will, of course, be assessed, determined and established by the PCT, but is there not provision in the legislation, particularly in relation to where a prescribing practice differs radically from what one might expect, to do things other than relying entirely on doctors’ panels judging themselves?

Mike O'Brien (Labour, North Warwickshire)

The hon. Gentleman asks whether there are other provisions in this legislation. I am not aware of any. I shall consider the matter and in due course confirm in writing whether that is the case. It is a reasonable question, and I shall write to him.

Stephen O'Brien (Conservative, Eddisbury)

The Minister seizes the point, not least because his constituency has the same characteristics of rurality, at least in part, as no doubt many of ours do. That factor has a big effect on the availability of services and access to them in relation to how the cash flows work for both doctors and dispensing operations.

I was pleased at the way in which the Minister put the Government’s case; he did not go down the same track that was used in defence in the other place by Baroness Thornton, who took issue with the proposal of pilots on the basis that it would delay the national roll-out of PNAs for at least two years. I thought that argument spurious, and I welcome the fact that the Minister did not deploy it. Given his assurance, I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 145, in clause 25, page 28, line 24, after ‘assessment’, insert—

‘(e) for appeals to the Secretary of State or a body in relation to the content of the statement made by PCTs.’.

The amendment would enable pharmaceutical services to challenge the content of the PNA. It would ensure that when a PCT was failing to reach standards in its PNA, a potential provider or other body could challenge the statement. That sort of scrutiny will help to ensure that the PNA meets a standard that allows sound decisions to be made on new applications to provide pharmaceutical services.

At the moment, the Bill does not guarantee that PNAs will contain reliable and accurate data. I cite Earl Howe, who said in Grand Committee in the other place:

“We do not know how effectively PCTs will use PNAs, especially given their record to date of disinvesting in enhanced services such as out-of-hours opening and local delivery”.—[Official Report, House of Lords, 11 March 2009; Vol. 708, c. GC477.]

I have been in touch with the pharmaceutical services negotiating committee and I pay tribute to it for its thoughts on the benefits of being able to appeal to PCTs should they carry out the PNA negligently.

It would not be appropriate for a negligent PNA to form the basis of granting applications, and I am concerned that, regardless of the PNA standard, it will still be used as the unequivocal method of determining applications. The National Pharmacy Association said:

“It should be understood that if a PNA identifies an unmet need, then there is an obligation on PCTs, under normal circumstances, to secure provision sufficient to meet that need.”

We must therefore ensure that PNAs provide a rigorous assessment of needs, and that they are kept up to scratch so as to avoid applications being granted on the basis of negligent assessments.

The adequacy of a PNA might cause concern to all those affected in cases when the PCT has been classed as poor by the world class commissioning assessment. Will the Minister clarify whether a pharmaceutical needs assessment would still be used as a basis for granting applications if the PCT that conducted it fell into the category of poor under the WCC assessment?

As the Bill stands, there is no mechanism by which applicants can question a PCT’s assessment, even if it is perceived to be negligent. Although the regulations prescribe some of the content of the PNA, what is to stop a PCT from disregarding local needs in order to prevent a particular service from succeeding in its application? I hope that the Minister will respond to that query.

Mike O'Brien (Labour, North Warwickshire)

Allowing appeal rights would be fundamentally flawed for a number of reasons. I recognise the concerns of the Pharmaceutical Services Negotiating Committee, which has raised questions, but I shall also tell the Committee of some of my concerns.

An appeals system would lead to endless appeals from dissatisfied and potentially conflicting local interests. There will always be some who take a different view, and many of them will find that their commercial or other interests are affected by an assessment. They will have many different views on how that assessment might affect them. It is therefore likely that a multiplicity of concerns would be expressed by a significant number of individuals and businesses. We do not intend to create some kind of lawyers’ charter where we can have a massive set of new bureaucracies to try and deal with it. We need to avoid that. There is always a balance to be struck between creating new bureaucracy and ensuring that people have the right to make representations. They can make their representations when the assessment is carried out. The assessment will take account of them—or not—and the outcome will be there. Constant appeals over an assessment, which could go on for years, could get expensive.

Secondly, PCTs would potentially incur huge costs defending their decisions under appeal. That is never justifiable in terms of NHS funding at the best of times, and certainly not in the current economic climate.

Thirdly, as a consequence, appeal rights could undermine the principle of pharmaceutical needs assessment as set out in the Bill. This is supposed to be a clear, robust view from the PCT. It is not supposed to be the view of others. Lots of people will have different views and commercial interests of their own, with particular views in terms of their locality or many other things. This is supposed to be an assessment carried out by those required to deploy the NHS funding as to what their priorities are.

There is a fourth objection. I am not aware of any corresponding appeal rights in respect of other strategic commissioning documents such as the joint strategic needs assessment which PCTs carry out. Where there are concerns about a final pharmaceutical needs assessment or where there are grounds to believe that the PCT has not complied with the forthcoming regulations about PNAs, we expect much more straightforward processes.

The proposed legislation already requires us—under subsection (2)(d) to proposed new section 128A—to set out in regulations the circumstances in which a PCT must carry out a new pharmaceutical needs assessment. How every assessment is determined will be a matter for those regulations. For example, it would be triggered in prescribed circumstances such as where a PCT has not complied with the forthcoming regulations which set out how a PCT is to construct its assessment. It might also be applied in circumstances where an assessment has resulted in the PCT making faulty decisions about individual applications which are then upheld on appeal.

I understand the concerns expressed on this issue and on the capacity and capability of PCTs in this area. I refer to earlier amendments under this clause and the comprehensive support programme we are putting in place for PCTs. We need to continue that work. However, I am not persuaded that in this case, the appropriate way to proceed is to create an entirely new and somewhat bureaucratic appeal process. I therefore ask the hon. Gentleman to consider whether it is appropriate to withdraw these amendments.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to the Minister for his response, as much to me as it is to the Pharmaceutical Services Negotiating Committee and others, who I am sure he has had representations from. In effect, that was the response to the position that has been put forward.

In light of what the Minister said I am not minded to press the point—not least because I am equally anxious to ensure that we do not introduce any further levels of bureaucracy; he knows I am genuinely concerned about that. However, at the same time there is the issue about ensuring that there is not just a simple draconian process which means that some people’s interests could be cut off rather than pursued. If there were some perverse experiences over a couple of years, representations would flow into Government to suggest that there might be a need for some form of appeal. However, on that basis, I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 135, in clause 25, page 28, line 24, at end insert—

‘(e) as to differing assessment criteria for urban and rural needs.’.

This is very much linked to the subject matter of our debate on the first group of amendments under this clause. It should be recognised that patients in rural areas may have needs that differ from those of patients living in towns and cities. The amendment seeks to serve that purpose. The area of a PCT may well span both urban and rural geographies. There is no guarantee that it will take into account both areas. We need to ensure that a PCT’s PNA acknowledges the potential requirement for different services among different populations.

As I discussed under the earlier group of amendments, patients in the country make extensive use of dispensing doctors, as do the elderly, who appreciate the convenience of being able to combine the collection of medicines and their visit to the doctor without the burden of an extra trip to the pharmacy. The Minister identified precisely that service on behalf of some of his constituents.

I must express an interest in the issue, as 24 per cent. of England’s dispensing practices are in Western Cheshire PCT—the main PCT of my constituency—and a further 13 per cent. are in Central and Eastern Cheshire PCT, the other one that serves my constituents. Cheshire GP Dr. Nigel O’Callaghan—himself a dispensing doctor—recently outlined the crux of the matter on the Chemist and Druggist website by saying:

“Why not let patients vote with their feet and choose between GPs and Chemists?”

The Dispensing Doctors Association similarly observed in its meeting with me that patient choice was at risk of being restricted if appropriate safeguards were not put in place to maintain a variety of services.

Having not seen the regulations for PNAs, I can only judge the assessments on their track record to date, which, as I have already discussed, is poor in places and far from consistent. It is a worry that once again, the Government may be jeopardising patient choice in rural areas by not ensuring in primary legislation that PNAs cover a breadth of services, of views, including those of patients, and of patient choice. We support PNAs, but they must not limit choice as that defies their objective. I therefore hope that the Minister is able to guarantee that the PNAs will provide for rural and urban populations in their PCTs.

Mike O'Brien (Labour, North Warwickshire)

There are many different criteria by which assessments will need to be made. The first is, of course, the rural-urban one, but “urban” is not a single category—it deploys many different kinds of urban areas. There are inner cities and suburban areas. There are different ways in which categorisation can take place. Remember that the criteria of choice and access are different. The hon. Gentleman seems to propose that we should, in some way, create a two-tier assessment system, which discriminates in the criteria to be adopted between rural and non-rural areas. I do not think that that is the right approach to take.

Further, regulating to differentiate between the criteria to be adopted risks imposing on PCTs criteria that may not match their assessment of the needs locally—or worse, risks omitting criteria that are crucial to PCTs locally, of which we know nothing at the centre. In our view, PCTs are better able to differentiate for themselves the mix of cities, smaller towns, villages and remote rural areas, and are better able to locally reflect the way in which they feel it is appropriate to do the assessment, rather than seeking to impose—as the Opposition now seek to do—central top-down criteria, by which they tell PCTs what to do. Let the PCTs get on with it and do it themselves. Do not apply this bureaucratic centralisation on them. I say to the hon. Gentleman that I think it is time he withdrew the bureaucratic and unnecessary amendment.

Stephen O'Brien (Conservative, Eddisbury)

I think we have reached a point in this Committee where just because the Minister says it, it does not mean that it is. On this particular issue, I do not think that it invokes a high degree of bureaucracy in quite the way he seeks to tease. The main point is to emphasise the need to make an assessment that takes fully into account the difference between rural and urban. I accept that to some degree there is difficulty with the rather all-embracing word “urban”, which can include not only suburban, but even associated villages with an urban centre. I think of the villages that immediately surround Chester; they are only as far from the main part of the outer edges of Chester-urban as they are from the next village, which under the current criteria, is counted in the rural area.

Indeed, such matters lay at the heart of a dispute that was eventually happily resolved, but not until a long and tense campaign had been fought to get the local PCT to recognise the value of a dispensing doctor in the rural area. That doctor was funding a satellite operation in a village close to the edge of where a village would be regarded as being connected with an urban, not rural, environment. As a sign of our earnest approach to the matter and to make sure that we put it on the record how important we consider such matters to be, I wish to press the amendment to a Division.

The issue is something to which we shall necessarily have to return for reassurances, but I drafted the amendment to gain a guarantee from the Minister that pharmaceutical needs assessments will apply to rural and urban populations. Even given his qualification about the imperfection of the word “urban”, it is a useful point by which to demonstrate the determination on the part of the Committee not to let that little aspect of the Bill rest and to show that it has large consequences for many of our constituents, not least those who live in combined rural, urban and semi-urban areas.

Clause 26

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 175, in clause 26, page 28, line 37, at beginning insert ‘pharmaceutical’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 176, in clause 26, page 28, line 37, after first ‘the’, insert ‘pharmaceutical’.

Stephen O'Brien (Conservative, Eddisbury)

After the excitement of a Division in which so many of my hopes were dashed by the votes cast, by way of introduction clause 26 changes how applicants seeking to provide pharmaceutical services gain entry to a PCT’s pharmaceutical list. The Bill proposes that local PCTs should use their pharmaceutical needs assessment to determine entrance to the list. Before this legislation the Government operated a “control of entry” policy whereby the number of pharmaceutical services was determined centrally.

Amendments 175 and 176, grouped together, may appear to the naked eye to be a technicality, but they raise the pertinent question of whether a PCT can grant applications to provide services from privately arranged services or aspirational services that the PCT is not in a position to commission. “Services” does not exclude those categories of applicants and there is a danger that, if they can prove that they meet some or all of the needs included in the PNA, the PCT will be duty-bound to grant the application.

While the regulations for PNAs will set out the minimum information that must be included in the needs assessment, there will be no statutory limit on the inclusion of other matters. If a PCT’s needs assessment referred to matters other than pharmaceutical services, and an applicant undertook to provide some or all of those other services, the PCT could be forced to grant the application. While there exists a clear definition of “pharmaceutical services” in the National Health Service Act 2006, there is no such definition for “services”. Clause 126(8) states:

“The services provided under this section are, together with additional pharmaceutical services provided in accordance with a direction under section 127, referred to in this Act as ‘pharmaceutical services’.”

As the maintenance of a list is part of the arrangements for the provision of pharmaceutical services, the PCT should be required to grant the applications only if the services that the applicant is undertaking to provide, and that are included in the needs assessment, are “pharmaceutical services”.

That is not to say that pharmaceutical services cannot apply to the list with a view to providing extra services, such as the smoking cessation clinics and extended hours options mentioned in the explanatory notes. We are keen for the role of pharmacies to be expanded, so that the public can benefit more extensively from the skills of our pharmacists across the country. In fact, the Pharmaceutical Services (Advanced and Enhanced Services) (England) Directions 2005 define “pharmaceutical services” as covering the medicines use review service—our advanced service—and the locally commissioned enhanced services, which would include smoking cessation services, the supplementary prescriber service and the prescriber support service.

The Pharmaceutical Services Negotiating Committee has helpfully provided some examples of how PNAs could have an unintended effect on local services. I shall briefly touch upon one of those illustrations—I dare say that the Minister has also had the benefit of what the PSNC has provided to the Committee and to the Department.

There are many excellent private services used by the public, such as the Lloyds pharmacy service, which caters for men attending football matches. It enables a hard-to-reach group to gain access to health-care and lifestyle advice—interestingly, the topic was raised in Health questions this afternoon. However, if the PCT inadvertently said that it would aspire to provide such a service in its area when a service specification is prepared and the funding is available, then an applicant might apply and offer to provide that as a private service. Since it is mentioned in the PNA as a gap in provision, the PCT may, under sections 129(2)(c) and 129(2A) be duty-bound to grant the application. The service is granted by the PCT but out of its control, as there may not exist an NHS service specification for the service. It can neither halt the service nor control its quality.

One other example may help. A home help service may be commissioned locally but it is commissioned by social care and not by the PCT. If the PCT stated in its PNA that a high proportion of people in its area are housebound and that those people may have difficulty in accessing pharmacies, that could raise concerns about the extent to which social services commission home help. A new applicant could then apply to provide such a service, citing the PNA as evidence of the local need. The PCT could again be obliged to grant the application under section 129(2)(a) and (c) of the National Health Service Act 2006, even though it is not in a position to commission the service and despite the fact that it has no control over that part of the service.

The amendment betrays the need for clear guidance in regulations concerning the content of the PNAs. I hope that the Minister is considering these issues as he drafts the regulations. By limiting the services whose applications can be granted through PNAs to those services that seek to provide essential services, advanced services and enhanced services that are lacking in an area, we can avoid situations of the sort that I have outlined.

To demonstrate the range of services that would be provided under these terms, all of the following services come under the category of pharmaceutical services in the 2006 Act: care home services, out-of-hours services, medication review services, schools services, and screening. That list is in no way exhaustive.

I hope the Minister will acknowledge that the PNAs should be driven by the need to provide a service that is formally absent and that, as the Bill is drafted, there is too much wriggle room for PNAs to be exploited.

Mike O'Brien (Labour, North Warwickshire)

The amendments appear to be fairly straightforward and they look innocuous. However, by insertion of the word “pharmaceutical” they would limit artificially the ability of PCTs to carry out the duties that we want them to carry out.

Clause 26 replaces the current provisions in the 2006 Act that govern whether or not an applicant can provide NHS pharmaceutical services. For the last 20 years or so, that has been determined by the regulatory system known as “control of entry”. An application will succeed only if a PCT considers it necessary or expedient to grant it, in order to secure adequate provision of NHS drugs services locally. Over the years, that test has been subject to considerable review by the courts.

The “control of entry” provisions are set out in section 129 of the 2006 Act. Clause 26 of the Bill amends that section to enable PCTs to determine whether a new prospective provider will be admitted to a PCT’s drug list or an existing listing would be amended, by reference to or determined against its PNA.

Opposition Members argue that these amendments would clarify the working of that particular provision. I understand that they have the support of the Pharmaceutical Services Negotiating Committee, as they have indicated. However, although the amendments appear to be sensible, the new powers will only ever be exercised in relation to an assessment of pharmaceutical needs and the services that are then offered.

I am not persuaded that we need to say how the new powers will work in practice. The primary intention of the clause is that the applications will be determined by reference to pharmaceutical services and not by reference to some other services. We have already established in our debate on clause 25 that PCTs will be required to assess needs for particular pharmaceutical services in their area. The provisions in clause 26 are directly related back to clause 25, so in our view it will not be possible for a PCT to determine an application under clause 26 unless the services provided are pharmaceutical services, as defined under the 2006 Act.

I might add that the current wording in the 2006 Act, which the new subsection replaces, makes no mention of the word “pharmaceutical”, nor has the absence of that word caused problems for the courts in determining the regulations that flow from these powers. Therefore, I see no advantage in inserting words that the courts will have to assess, to see whether they have a meaning that goes beyond the court cases that have already examined this issue and lay out a very clear set of criteria that need to be applied. In other words, all that the amendments would succeed in doing is muddying the water for the courts. As a result, they would muddy the water for pharmaceutical services and ensure that the NHS has to go through a series of new court cases to determine exactly what these new words mean, because, in the view of any court, they would not have been inserted unless they were meant to bring about a change.

Stephen O'Brien (Conservative, Eddisbury)

The Minister makes a powerful point. The courts would, through statutory interpretation of rules, inevitably regard inserting a word as having a genuine intent, and therefore intended consequences. I fully appreciate that argument. To some degree it is helpful that the Minister has put on the record that the provision ties back to clause 25.

That said, the PSNC has clearly demonstrated concerns, and the Minister will have been briefed about them as well. I know that he has sought to address them. Having researched the matter, it is interesting to note, even without the addition of the word “pharmaceutical”, the breadth of services that are established by law in the phrase in the Bill. That is accepted. As the Minister rightly says, there is a wide amount of case law and interpretative law—that is the nearest we get in this country to administrative law, which would be more familiar to those who practise law on the continent—so effectively, there has been an interpretation already, so I buy the Minister’s argument.

However, the intention of the amendment is by no means to muddy the waters. That would not be helpful in any circumstances. Equally, it would be wrong to press the amendment to a Division, given that I suspect this exchange will be re-examined by the PSNC. If it wants to make any further points, I am sure that we will be briefed in advance of Report. Rather than press the amendment to a Division, I leave open the option to raise any issues that the PSNC feels have not been dealt with satisfactorily on Report, and I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 147, in clause 26, page 29, line 5, after ‘application’, insert

‘including a duty for Primary Care Trusts to consult patients on the decision to grant the application’.

I admire your ability to sound as though you enthusiastically welcome the arrival of amendment 147, Mr. Key.

Robert Key (Conservative, Salisbury)

I do indeed, Mr. O’Brien.

Stephen O'Brien (Conservative, Eddisbury)

That gave me a chance to find the right page.

I am pleased to say that I need not spend too long speaking to this amendment. I am simply reiterating the case I made when speaking to amendments 33, 35 and 34 in relation to clause 25, when I outlined the need for patient consultation in PNAs. I am merely seeking an assurance from the Minister that the manner in which the PCT determines whether to grant an application to the pharmaceutical list will, under regulations, take account of the views of patients. Will the Minister confirm that the regulations on local decisions concerning applications will contain provision for patient consultation?

I am sure that I do not need to reiterate in full the reasons why patient consultation is necessary. To summarise, I can put them into three brief points. First, PNAs should be for the benefit of patients and not focused on cost-effectiveness. Patient consultation will ensure that PCTs acknowledge the reason for the PNA.

Secondly, patients are often best placed to identify local needs for services and can offer valuable insights into the services that work and those that do not. Perhaps this is a good point at which to raise demographics. When there is an ageing population in an area, mobility could be a pertinent issue, even if the area is not rural. Right hon. and hon. Members on both sides of the House have such demographics in their constituencies and have raised those issues.

Thirdly, consultation will help to safeguard services that are used and preferred by patients, so PCTs will be less inclined to cut popular services.

Mike O'Brien (Labour, North Warwickshire)

Under the 2005 NHS pharmacy regulations, patient and other local community interest groups are already notified of applications and have the right to make representations to the PCT. I have no plans to change those rules. They ought to have been consulted already.

Stephen O'Brien (Conservative, Eddisbury)

Such a brief reply makes me think that perhaps I need to be slightly cautious before I roll over humbly yet again. We need to bear in mind what we truly mean by the word “consultation”. Allow me to explain as best I can: in a previous life, I had to tackle the European works councils. The right to consultation in the United Kingdom applied only to those with operations right across European Community member states, which the company that I partly ran had. Interestingly, in every language other than English, and by almost every worker representative, whatever European country they came from, consultation was regarded as a right to attend a forum for an exchange of views—after which they could take the wife for a jolly good jolly in some beautiful part of Europe. However, they absolutely respected management’s right to make the final decisions.

Only those who represented people in this country were not satisfied with that. To them, consultation meant the need to identify their influence in a decision and the final output. They wanted to know that they had made a difference and that the initial management proposals were amended accordingly. The way in which consultation is used is quite interesting. If we are following the continental European model, the Minister’s answer was perfectly satisfactory, but if we are using the definition traditional in this country, it was probably less than satisfactory. On this occasion, I shall assume that he was being a good European and, therefore, I beg to ask leave to withdraw the amendment.

Robert Key (Conservative, Salisbury)

Now we come to the one that we have been waiting for—amendment 36.

Stephen O'Brien (Conservative, Eddisbury)

I am very pleased that you, Mr. Key, have been waiting for it. I did not have quite that much enthusiasm—but now I do!

I beg to move amendment 36, in clause 26, page 29, line 5, at end insert—

‘(aa) the terms by which an applicant to the pharmaceutical list is deemed to be compliant with the adoption of a computer system accredited with the Electronic Prescription Service.’.

I wish to probe the Government about measures taken to ensure that pharmaceutical services granted under the PNAs are compliant with the electronic prescription service. The Minister will be aware that I have become, contrary to my normal inclination, something of an anorak when it comes to IT and anything relating to electronic aspects of the NHS. Before I turn to the amendment, allow me briefly to inform Committee members unfamiliar with the EPS of the background to the initiative—it is really very significant.

GPs were producing electronic prescriptions in primary care years before the Government launched their EPS. Primary care systems even had the capacity to pick up prescribing errors and report them to staff. Currently, GPs enter the prescription into the patient’s electronic medical record, when an alert will notify them of any prescribing errors. The prescription is then printed on paper and taken to the pharmacy by the patient. The EPS will make this transfer to the pharmacy electronic, which will bring about administrative, but not clinical—that point needs emphasising—benefits to the NHS. Why, then, is it so long overdue? If the software that it intends to provide offers a relatively simple functionality, I simply do not understand why it is not being delivered to schedule.

On 23 March 2009, EPS was being used for only 24 per cent. of daily prescription messages, with only 6,440 GP practices actively using the service. Furthermore, since only Release 1 has been implemented, the prescriptions require a paper version to be issued, thus completely undermining the purpose of the system and the intended administrative benefits. That is not to mention the fact that the EPS is part of the national programme for IT, which is four years behind schedule and destined to exceed its £12 billion budget. The Minister will be aware of the context to all this. If the Government could not be relied upon to implement the EPS on time, a big question remains about their record, intent and competence in implementing the rest of the national IT programme.

It is a case not just of delayed results, but of wrongly allocated resources. It is difficult to see what direct clinical benefit to patient care the EPS will bring to primary care, as it performs only an administrative function. My amendment would help to abate some of the delays facing the EPS, should the Government push ahead with the completion of the programme. I want to raise through it the pertinent issue of EPS compatibility as a factor for the pharmaceutical needs assessment to consider. In order to deliver the functionality proposed under the EPS, GP and pharmacy systems have to undergo accreditation to ensure that they are compatible. If the PNA considered the compatibility of pharmaceutical systems before applications to provide services were granted, it could save time and money spent on upgrading incompatible systems to comply with the EPS.

I hope the Minister will concede that, if PNAs do not take into account EPS compatibility, more money could be wasted on making pharmacy systems compliant. Presently, there is nothing in the Bill to prevent a PCT from granting applications from services that do not have the capacity to link up to the EPS. One might regard that as obvious—and the failure to do so as patently crass.

If PCTs are given the appropriate tools to assess whether a pharmaceutical service could comply with the EPS, the regulations for the PNAs could include EPS compatibility as a condition for granting an application. I know the Minister has become slightly fond of this response during our exchanges, but I hope he realises that the intention is to get a net gain from bureaucracy, and above all to ensure a sense that the centre—top-down, if he wants to throw that point at me again—can help facilitate best practice. However, responsibility and implementation is situated locally, and in the procuring and commissioning process.

This approach would no doubt speed up the roll-out of the EPS programme at the pharmacy end—I would be first to cheer that—as it would incentivise applicants to adopt a compliant computer system before applying to provide a service. Is the Minister willing to consider that option? I hope so, and that on this occasion he will accept the amendment.

Mike O'Brien (Labour, North Warwickshire)

I am grateful to the hon. Gentleman for raising this issue in such detail. The EPS system would mean that PCTs need to be satisfied that an application is EPS-compliant when considering whether it would be granted on the basis that it secures improvements or provides better access to pharmaceutical services—at least, that is the intention of the amendment.

I do not accept that the amendment would be helpful or particularly improve the available services. Let me take a few moments to explain the background information to the EPS. I am grateful to the hon. Gentleman for the points he has made, but to use the EPS, pharmacy contractors must have IT systems that have gone through Connecting for Health’s rigorous assurance process. Connecting for Health leads on the delivery of the national programme for IT, and its assurance process is made up of a number of key stages, including clinical safety testing and initial implementation in limited numbers of GP and pharmacy sites. Patient safety is obviously paramount. We do not want suppliers to cut corners in order to reach the start of the assurance process faster, only to lose time in the longer term as they fail to meet Connecting for Health’s exacting standards.

Authority to deploy Release 1 and Release 2 of the EPS is given separately. While much progress has been made on deploying across the country Release 1 of the EPS, which releases technical infrastructure, I know that Release 2 will be of greater interest as it brings a number of functional changes and associated benefits for patients, prescribers and dispensers. Those include the option for patients to select or nominate a dispenser for their electronic prescription to be sent to their chemist and electronic repeat dispensing produced. [Interruption.] Just a moment—let me run through some of the benefits.

What are the benefits of Release 2 for patients? The first benefit is a more convenient service, with a reduction in trips to the GP practice just to collect a paper prescription—a point particularly relevant to patients on repeat medication. Some 70 per cent. of prescriptions nationally are issued for repeat medication. The second benefit is greater freedom of choice, making it simpler for patients to use a pharmacist convenient to them. The third benefit is potentially reducing pharmacy waiting times, as, with a phone call, prescriptions can be prepared in advance of a patient arriving. In effect, the information is already there, and they do not have to wait for the piece of paper.

However, what are the benefits for GPs and pharmacies? First, there will be a reduction in the work load in GPs’ practices generated by patients collecting individual prescriptions from surgeries, particularly repeat prescriptions. Secondly, the ability to sign prescriptions electronically is much more efficient for GPs. Thirdly, GPs will be able to cancel prescriptions electronically at any point until they are dispensed, leading to greater confidence in GPs to use repeat dispensing. Fourthly, there will be a reduction in the need for pharmacy staff to re-key prescription information into pharmacy systems, which is quite a problem in bureaucracy terms—I had to get that point in. In time, this will remove the need for pharmacy staff to collect prescriptions where they offer a prescription collection service. Those developments provide significant benefits.

Stephen O'Brien (Conservative, Eddisbury)

I appreciate the list of benefits, but what is interesting in the Minister’s answer so far is that he accepts that we have only managed to get to Release 1 implementation at this stage, and he was relying on where we will get to with Release 2. That said, if Release 2 delivers to that degree and soon, that is a partial answer. Given the track record to date of the progress of the programme’s delivery and implementation, particularly Release 2, the Minister might at least want to think about—this could be a compromise—postponing implementation of this element until after Release 2 has taken place and proven itself.

Mike O'Brien (Labour, North Warwickshire)

Much progress has been made on delivering Release 1 against the background of competing priorities for IT systems suppliers. EPS Release 1 deployment is virtually complete. All GP and pharmacy suppliers have completed the compliance process. The cumulative prescription volume is 207,195,907 as of 11 June—a relatively up-to-date figure. Some 95 per cent. of GP services are technically enabled to deploy the EPS, and 80 per cent. of GP practices are business-enabled. Some 92 per cent. of community pharmacies are technically enabled to deploy the EPS, and 82 per cent. are business-enabled.

On Release 2, all central components have been delivered. There are eight pharmacy systems suppliers delivering nine pharmacy systems for community pharmacies in England. Currently, seven pharmacy systems suppliers are developing EPS Release 2 systems. Initial implementation commissioning is under way at a GP and independent pharmacy, using synthetic patients to conduct technical and clinical assurance activities. We expect nearly all suppliers to have full roll-out approval by the end of 2009, according to the information given to us by systems suppliers.

Quite a lot of progress has therefore been made on Release 2, and we need to continue to monitor it with great care. We know that deploying any computer system has its problems. Over the years, Governments of all persuasions have found that computer systems can cause difficulties. That is also the case in the private sector where large-scale computer projects have been introduced. However, with careful monitoring they can also bring enormous dividends and benefits to users.

We do not feel that the amendment would contribute significantly to delivery leverage for EPS. EPS is an essential component of a modern pharmacy service, and we intend that it should be provided by all NHS community pharmacies. EPS is on everyone’s agenda—it is not just an issue for applicants to pharmaceutical lists. We do not agree with the amendment because a successful applicant to a pharmaceutical list currently has up to 15 months to open. In that time, the parameters for EPS compliance may change, so a PCT’s compliance assessment at the time of application may be out of date or irrelevant by the time the pharmacy opens.

If we find in future that IT systems are compliant with Release 2 of the EPS but pharmacies are still not delivering the service, we have scope in clause 26 to make provision as to what matters the PCT must or must not take into account for the purpose of determining whether to grant the application. I therefore ask the hon. Gentleman to consider withdrawing his amendment.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to the Minister for seeking to address my point. I hope he realises that I raised it in a genuine attempt to be constructive. In resisting the amendment, he prayed in aid the 15-month time period between when the choice is effectively made and implementation. He also prayed in aid the fact that due to the nature of technology, the programming, the system and the compatibility could change during that period.

This is one area where we must be extraordinarily cautious. To the extent that I have found myself dragged, somewhat reluctantly, towards the NHS IT programme, I understand that one will never catch up with the leading edge of technology. One must set a point at which one is trying to achieve a certain standard and say, “That’s the standard to be met,” and not always worry about things such as the 15-month period. The Minister is absolutely right: the technology may well move forward. The issue is compatibility with a standard that will work to deliver the service.

I will not press the amendment, because I think that the issue requires continuous careful and vigilant monitoring, as the Minister accepted. We need to watch it carefully, as there are fantastic benefits to be gained—he sought to highlight some—but it could easily trip on the basis that implementation is flawed or time-lagged and there is a lack of capacity for, let alone understanding of, the standards to be applied to achieve compatibility. Although the amendment is the sort that one might want to press to a vote in a somewhat virile way, to demonstrate that one means it, on this occasion I will withdraw it. However, we need to highlight the issue and ensure that the Minister, the Department and the Minister’s advisers keep it as a high priority in order to make it work. I beg to ask leave to withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 37, in clause 26, page 29, line 8, at end insert

‘including the impact that granting an application would have on existing services.’.

I am delighted that somebody, in a sedentary position, regards it as a signal victory to have reached amendment 37.

I intend to consolidate some of the issues that have been raised so far. We have discussed the need to consult patients and highlighted the potential impact of the pharmaceutical needs assessment on the services that dispensing doctors offer patients. We have also discussed the different needs of rural and urban populations—however one wants to describe them—and I have sought to ensure that the Minister takes all those matters into account in setting regulations for the PCTs.

In many respects, amendment 37 would solve the problems raised by the Dispensing Doctors’ Association with regard to offering patients a choice of services. If PCTs were duty-bound to assess what impact granting an application to the pharmacy list would have on existing services, they would have to ensure that the new service would complement and enhance existing services, thereby safeguarding patient choice and potential patient preference for existing services, such as those of dispensing doctors, be they in the Minister’s PCT or my own. Hopefully, the PCT would then avoid cutting services unnecessarily or granting applications to provide services that do not add to patient choice or increase patient access to pharmacies or dispensers. PCTs would, of course, still have the right to cut services in circumstances where they breached a term of arrangements under new section 150A of the National Health Service Act 2006.

The amendment is simple. I hope that the Minister’s thoughts will turn towards accepting this worthwhile amendment to the Bill.

Mike O'Brien (Labour, North Warwickshire)

The amendment aims to oblige PCTs to consider the impact that granting an application would have on existing services. I can see the importance of doing so, but it is also a key concern that the new arrangements for determining entry to a pharmaceutical list should not be used simply as a basis for PCTs to refuse all or any new applications without some clear, robust and objective ground. Just as we saw when the matter was raised in the other place, I am concerned that the consequence of the amendment would be unwittingly to restrict new entries, so it would constrain competition and could undermine new businesses’ ability to enter the field. The hon. Gentleman looks quizzical, but if he looks at this he will see that it could well be the consequence.

Each and every application will have some impact and effect on contractors; that is unavoidable, but how much is a question of degree based on local factors and circumstances. It is impossible for us, from the centre, to understand the exact impact in every case. We must strive to achieve the right balance between adequate PCT controls and the freedom of contractors to operate without creating disproportionate burdens or costs. When we consulted on this proposal last autumn, we recognised the need to strike that balance. We proposed to use existing factors introduced in the 2005 regulations to the current control of entry tests. These factors are the level of access, the choice and diversity of providers, innovation in service delivery, the services available to specific populations to meet specific health conditions or disease needs and the overall longer-term impact of approving new applications.

We intend to include the criterion of longer-term impact that this amendment proposes in the new regulatory regime. We have not determined that this criterion should have pre-eminence above all other criteria. It is one of a range of factors that PCTs need to consider when determining whether, against its assessment of local needs, an application should be approved or not. PCTs will have to weigh up the facts, look at the evidence carefully and determine the plus and minus points accordingly before reaching their decision.

I also make the observation on the amendment that I think it is equally important that PCTs should consider the longer-term impact when they are minded to refuse an application, not just when they are minded to grant one. Refusing an application may have implications for other businesses and competition in the area. My concern is that the result of this amendment would be to restrict competition, to inhibit business, to prevent new entry of businesses into this area and, in effect, to restrain the market in a way that I did not think the Conservative party believed in. It seems that, in response to lobbying, it is disposed to do that unless the hon. Gentleman decides, as I hope he will, that he will not press this amendment to a vote.

Stephen O'Brien (Conservative, Eddisbury)

We do not favour any kind of protectionist approach. When the Minister suggested that I might be quizzical—I was not quite sure who he was indicating as I had my head down—I was writing a note.

Mike Penning (Conservative, Hemel Hempstead)

I think he was looking at me, but I was yawning.

Stephen O'Brien (Conservative, Eddisbury)

I shall move on swiftly. The Minister has over-egged his case. If one looks carefully at the wording of this amendment, it says that, where primary care trusts have determined to make any kind of recommendation, the regulations may make provision for the manner in which they determine that grant and matters that the primary care trust must and must not take into account for the purposes of determining whether to grant the application, including the effect that granting such an application would have on existing services. Far from restraining competition or inhibiting new business, the fact that they would have to acknowledge that they have taken into account the effect that granting such an application would have on existing businesses might result in their granting an application because it increased competition. They might be concerned that a particular area had no competition, and consider that granting the application would ensure that an efficient service was delivered, prices were kept keen and customers would receive first-class customer services.

The Minister has overplayed his hand, as he has exaggerated what the amendment actually states. It makes explicit what is set out and is referred to in the justification by a primary care trust. A trust must ensure that it has taken into account the effect that granting an application would have on existing services. To be frank, in light of cases that have arisen in my constituency and I dare say in others, the problems have arisen precisely when it appears that there has been no explicit justification to make a recommendation without reference to the effect that it might have on existing services—not that it would inhibit new business or restrain competition.

Mike O'Brien (Labour, North Warwickshire)

I do not disagree with the point that the hon. Gentleman has just made. When PCTs make these decisions, it is important that they weigh appropriately the impact that a decision will have on local services, and that means the impact on other pharmacies in the area. He may well be right that, in some cases, PCTs have failed to give the appropriate weight to that criterion when they make a decision.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to the Minister, because our dialogue has brought us back to where we need to be. We want to ensure that that consideration is made explicit and that we do not end up having unnecessary concerns, disputes or even campaigns locally because there has not been a sufficiently explicit explanation of what lies behind the thinking of a PCT and its recommendations.

On that basis, I do not need to press the issue to a vote. However, it was very important to have clarity in terms of what the amendment was intended to say and, given the way that the Minister provided the counter-argument, I also wanted to make sure that the record was absolutely straight.

Mike O'Brien (Labour, North Warwickshire)

The points that the hon. Gentleman has made during his closing speech have made me think a little further about these issues. In due course, as I consider some of the points that he has raised, I may write to him on this matter.

Stephen O'Brien (Conservative, Eddisbury)

I am most grateful to the Minister. I think that that has been a very satisfactory exchange.

I beg to ask leave to withdraw the amendment.

Clause 28

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 133, in clause 28, page 30, line 12, after ‘period’, insert

‘and in consultation with the professional and regulatory bodies for pharmacists.’.

Robert Key (Conservative, Salisbury)

With this, it will be convenient to discuss amendment 134, in clause 31, page 31, line 36, after ‘period’, insert

‘and in consultation with the professional and regulatory bodies for pharmacists in Wales’.

Stephen O'Brien (Conservative, Eddisbury)

I am sorry that nobody else is getting up to speak at the moment; I feel that I have talked enough already. [Laughter.] Do not all agree.

Happily, we have now reached clause 28, which is on the second page of the second list of grouped amendments and not on today’s list of grouped amendments. Amendments 133 and 134 would place a duty on PCTs to consult the regulatory and professional bodies for pharmacists in England, in relation to clause 28, and in Wales, in relation to clause 31. They seek to probe the Government about where the power to suspend pay should lie.

Earl Howe raised the issue of a PCT’s powers of intervention in matters concerning pharmacists’ professional conduct in the other place. However, he did so with regard to another clause in the Bill. I want to address some of the issues that he commented on with respect to clause 28, as I question whether it is appropriate for a PCT to suspend the pay of a pharmaceutical service. The power to suspend pay could be detrimental to patient care if it is not strictly controlled. If the payment of pharmaceutical services is suspended, those services could deteriorate rapidly and that could severely hamper services to patients. As the National Pharmacy Association put it:

“Pharmacies’ day-to-day financial outlay cannot usually be deferred, so withholding payment would have an immediate and dramatic effect on cash flow and the consequent ability to provide core services.”

We must ensure that the measure is used as a last resort and that the power to suspend pay is not exploited in inappropriate circumstances. What assurances can the Minister give that the use of this power will not have a detrimental effect on local services?

Another reason that I tabled my amendment is that PCTs may not understand the nuances of the pharmaceutical sector and therefore may not be in a position to make a judgment as to whether they have breached the arrangements for service delivery. However, I believe that the principle behind clause 28 is right. I merely wish to query whether the decision to suspend pay should be a collaborative one rather than one that is made solely by the PCT.

Perhaps the Minister can specify in his response the measures that he will put in place to prevent PCTs from abusing the power to suspend pay. If a PCT has commissioned a pharmaceutical service, it is perversely in its interest to suspend pay while still reaping the benefits of that service. In extreme circumstances, the system could be abused to bring about cost savings. An arbiter in the form of a pharmaceutical regulatory body could prevent such a situation from arising and ensure that the case of the accused pharmaceutical service is sufficiently represented.

To quote Earl Howe:

“The natural question that arises is who regulates pharmacists. Is it PCTs or is it the Royal Pharmaceutical Society of Great Britain? If it is in effect both, which body takes precedence?”

In her answer to Earl Howe, the Minister, Baroness Thornton, stated:

“The GPhC will be the new regulator for pharmacists, pharmacy technicians and pharmacy premises, taking over the role currently performed by the Royal Pharmaceutical Society of Great Britain”.

She assured Earl Howe that the Government will

“strive to demarcate in the regulations”

of clause 24

“the respective responsibilities of the new regulator and the responsibilities of primary care trusts.”—[Official Report, House of Lords, 11 March 2009; Vol. 708, c. GC481-482.]

However, her reply does not answer my question on the suspension of pay in clause 31. Should the council, with its new responsibilities, be given a role in deliberating whether the actions of a pharmaceutical service warrant the actions outlined in clause 31? I would be grateful for the Minister’s reply on that point.

Robert Key (Conservative, Salisbury)

The question is that the amendment be made. I call Mr. Stephen O’Brien.

Mike O'Brien (Labour, North Warwickshire)

Too many O’Briens, Mr. Key.

First, I should like to make it clear that we see the use of the powers as a matter of last resort, not of first resort. They will be part of a progressive series of steps to ensure that contractors achieve acceptable quality standards, and PCT decisions will be appealable. The same provisions are proposed in clause 31 for Welsh Ministers.

The amendments would place a duty on PCTs in England and on local health boards in Wales to consult professional and regulatory pharmacist bodies before deciding whether to withhold NHS contractual payments that are due to a person when there are continuing concerns about poor or inadequate performance. I am not convinced as to why that is necessary. As a general rule, we strive to keep NHS contractual matters and professional regulatory matters distinct. The amendments would confuse and integrate the two.

I reassure the hon. Member for Eddisbury that there is no intention to penalise individual pharmacists for poor performance. In that respect, the aim is to look at the practitioner as the person as set out in the pharmaceutical list. The list is published by the PCT of persons who are authorised to provide pharmaceutical services by the PCT. In other words, it is essentially a list of contractors. They may be sole traders, partners or companies and it is not a list of individuals.

The aim is to ensure that when absolutely necessary, we are able to intervene to deal with something when it gets to such a poor state that the quality of provision being made available to local people deteriorates unacceptably. If we accepted the amendment, it might leave professional and regulatory bodies rather baffled as to what they would be expected to do if a PCT consulted them. That is not the remit of those bodies, nor would they be equipped to take on such a role. They are not really in a position to take a view on a PCT’s responsibilities. For that reason, Welsh Ministers and I cannot accept the amendments, and I ask the hon. Gentleman to withdraw.

Stephen O'Brien (Conservative, Eddisbury)

Obviously, I listened to the Minister and he said early in his reply that the powers were last resort powers, which is important. He also made the point that there was a degree to which the regulatory bodies would be baffled. Whether or not that is the case, I made it clear that my amendments were probing and that I did not intend to press them to a Division. The Minister’s response went a long way towards clarifying the question of the demarcation of responsibilities for regulation, and I beg to ask leave to withdraw the amendment.

Clause 29

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 150, in clause 29, page 31, line 7, leave out ‘prescribed circumstances’ and insert

‘accordance with regulations issued by the Secretary of State’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss amendment 151, in clause 29, page 31, line 7, at end insert—

‘(2C) The regulations under this section must make provision—

(a) as to the circumstances under which a Primary Care Trust may provide local pharmaceutical services.

(b) as to a duty placed on Primary Care Trusts to report any plan to provide such services to the Secretary of State.’.

Stephen O'Brien (Conservative, Eddisbury)

The amendments address my fear that parts of clause 29 are too loosely worded to merit the circumstances in which the Government claim that they would apply this legislation. I guess that all Committee members can follow that we have left pharmaceutical services in England and moved into chapter 5A, “Notices and penalties”. Although we have left the part of the Bill that dealt with them, we are now back to the question of local pharmaceutical services. I just wanted to make sure that we are all clear what we are talking about.

In the explanatory notes, the Government state that PCTs should be able to provide their own pharmaceutical services in the case of an emergency or an exceptional circumstance. The Bill will

“remove the restrictions in NHS legislation on PCTs providing local pharmaceutical services...or to other PCTs, in certain circumstances, for example, in the event of any emergency such as a flu pandemic or where there was no alternative provider.”

The clause is topical as well as important.

The impact assessment makes a similar statement by noting that PCTs will

“provide services themselves in an emergency or where there is no suitable alternative”.

It goes on to state:

“At this stage the Department has not identified a significant impact arising from these proposals, as the use by PCTs of these new provisions would be expected to be of limited duration and only in exceptional circumstances”.

That admission is at least a bit surprising, given that we are on the brink of a flu pandemic that could sweep across the nation at any moment. The Department obviously had swine flu in mind when drafting the Bill, as it referred to the flu pandemic in the impact assessment, yet it has not assessed the provisions’ impact in advance of an outbreak, which is a serious concern. Perhaps the Minister will address that matter in his response.

In a case where a PCT decides to provide a local pharmaceutical service, I understand that the strategic health authority would become the commissioner in order to prevent a situation from arising in which a PCT is performing the roles of both commissioner and provider. In clause 29, the Government amend legislation from the National Health Service Act 2006 to make provision for such circumstances.

My concerns with the Government’s amendments to the 2006 Act are twofold. First, there is an issue of accountability. If PCTs are to carry out the function only in an emergency, surely the circumstances in which they are permitted to provide pharmaceutical services should be prescribed on the face of the Bill; otherwise, there is nothing to prevent PCTs from providing services on a whim or in normal circumstances that do not qualify as an emergency.

What parties will define an emergency? Patently, that is the threshold. My amendments would allow for that by permitting the Secretary of State to publish in a series of regulations the circumstances in which a PCT could provide such a service. The amendments would also place on PCTs a duty to inform the Secretary of State of their intentions if they believe that circumstances allow them to provide a service.

The Minister may argue that at a time of emergency, he does not want so-called bureaucracy or red tape getting in the way of PCTs becoming pharmaceutical providers, and I am pretty sympathetic to that. However, it is only fair to argue that the Government must also make adequate provision for the times when we are not facing an emergency and prevent PCTs from providing the services unnecessarily. It seems ludicrous that under the proposed legislation, a PCT could conduct a PNA, identify a need and then seek to provide for that need itself, all within the bounds of the Bill. What is to stop a PCT deliberately identifying a need it knows that it can satisfy, purely for financial gain? I accept that that is an extreme form of analysis but it is not implausible, particularly if there were any real pressure on a PCT and it was looking to gain from the situation. I accept that we are discussing extreme circumstances, but as it is our job to point out significant pitfalls in the Bill, it is right and appropriate that I have raised such matters, without casting any aspersions on the current management and composition of boards of any PCT in the land. I hope that I have given a good explanation of why the amendments have been tabled. Obviously, the Minister’s reply will be both interesting and important.

Mike O'Brien (Labour, North Warwickshire)

Clause 29 amends section 144 and schedule 12 of the National Health Service Act 2006 to enable the Secretary of State to authorise PCTs to provide local pharmaceutical and drugs services in certain situations. There is no intention to enable PCTs to have a long-term role in providing drugs directly. Let me be clear. We want to enable PCTs to provide services in local situations, such as in an outbreak of pandemic flu or when there is no suitable alternative provider. The Bill would enable the strategic health authority or another PCT to become the commissioning body, in effect, of the providing PCT. That role and distinction will be maintained.

We propose these changes because it is prudent for a PCT to have the power to act as a service provider. The emergencies that we are describing are those in cases of a serious pandemic of, say, flu. We are aware that the current swine flu condition has been described by the World Health Organisation as a pandemic and that its impact so far on individuals has appeared in the vast majority of cases to be relatively mild. A dose of flu is never completely mild, but we must compare it with some of the strains that we have experienced over the decades. Flu can happen in waves; it can, in effect, pass through and come back again. We need to make provision for not only flu, but other eventualities, so the provision is very much seen as a precautionary step to enable us to put in place the necessary legal infrastructure, should the need for it arise.

The last thing that we want is to take certain steps to ensure that people have access to drugs, but not have the legal basis to do so. That would be wrong. It would be not thinking ahead. There could be circumstances in which we need to have such a provision, so let us be sure that it is on the statute book. We can make the necessary regulations to enable safeguards. Section 175 of the 2006 Act defines prescribed as being prescribed by regulations made by the Secretary of State. The provision would not enable the PCT just to make a decision. I appreciate that the hon. Gentleman was stating an extreme case, but that could not arise because Parliament would have passed a regulation enabling such powers to be exercised.

There will be limited circumstances. There will be no long-term role as a provider of pharmacy services for PCTs. Their role will be to ensure continued provision in emergencies or when there is no suitable alternative. We envisage the powers being used in emergencies and used only as a temporary measure until the normal service can be resumed. Having given those reassurances, I hope that the hon. Gentleman will withdraw the amendment.

Stephen O'Brien (Conservative, Eddisbury)

I am grateful to the Minister. He has made it absolutely explicit that, in addition to what he describes as normal safeguards, there is no intent behind the provision for there to be a long-term role for PCTs to deliver such services. It is important to recognise that, perhaps in a less extreme example, there could be a temptation, particularly in the local human-to-human transmission flu pandemic that we are technically now in. I accept that the Minister was right to temper that approach by saying that we are now dealing with relatively mild and short-lived episodes.

None the less, there is a transmission taking place and we have rising numbers. No doubt the Government are taking advice, just as we do, but according to all the expertise the likely profile of pandemic flu is one wave, most probably followed by a larger wave in a second phase, and possibly even a third phase. Even if no long-term role is intended, in the case of the current pandemic—not the swine flu epidemic—there is a danger that we might say, “We had better keep the position going in case we need it for the second wave,” and therefore prolong it beyond what would be the normal intent of there being no long-term role.

It needs to be recognised that the profile of flu pandemics might make the body hesitate to get out of making the provision and therefore turn it from a short to a medium-term role. With that caveat it is clear where the intent lies. I do not think that the amendment needs to be pressed to a vote, but it has been useful to ensure there is absolute clarity. Given the current flu pandemic, it helps to have that in mind when one thinks about where a true emergency lies in such circumstances, and where therefore we need to ensure that there is a proper restraint on the ambitions of those who might want to set up services where they are not the best people to do so. I therefore beg to ask leave to withdraw the amendment.

Clause 33

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 40, in clause 33, page 32, line 32, leave out ‘adult’.

Robert Key (Conservative, Salisbury)

With this it will be convenient to discuss the following: amendment 41, in schedule 5, page 53, line 12, leave out ‘adult’.

Amendment 138, in schedule 5, page 53, line 13, leave out ‘adult’.

Amendment 42, in schedule 5, page 53, line 14, leave out from ‘interpretation’ to second ‘social’ and insert ‘social care provider” and’.

Amendment 43, in schedule 5, page 53, line 16, leave out ‘adult’.

Amendment 63, in schedule 5, page 53, line 17, leave out from ‘2008’ to end of line 18.

Amendment 44, in schedule 5, page 53, line 19, leave out ‘adult’.

Amendment 45, in schedule 5, page 53, line 21, leave out ‘adult’.

Amendment 46, in schedule 5, page 53, line 25, leave out ‘adult’.

Amendment 47, in schedule 5, page 53, line 30, leave out ‘adult’.

Amendment 48, in schedule 5, page 53, line 32, leave out ‘adult’.

Amendment 49, in schedule 5, page 54, line 1, leave out ‘adult’.

Amendment 50, in schedule 5, page 54, line 2, leave out ‘adult’.

Amendment 51, in schedule 5, page 54, line 17, leave out ‘adult’.

Amendment 52, in schedule 5, page 54, line 32, leave out ‘adult’.

Amendment 53, in schedule 5, page 56, line 8, leave out ‘adult’.

Amendment 54, in schedule 5, page 56, line 35, leave out ‘adult’.

Amendment 55, in schedule 5, page 58, line 25, leave out ‘adult’.

Amendment 56, in schedule 5, page 58, line 44, leave out ‘adult’.

Amendment 58, in schedule 5, page 59, line 18, leave out ‘adult’.

Amendment 59, in schedule 5, page 59, line 28, leave out ‘adult’.

Amendment 60, in schedule 5, page 59, line 42, leave out ‘adult’.

Amendment 61, in schedule 5, page 59, line 47, leave out ‘adult’.

Amendment 62, in title, line 5, leave out ‘adult’.

Robert Key (Conservative, Salisbury)

And amendment 57, in schedule 5, page 59, line 9, leave out ‘adult’.

Stephen O'Brien (Conservative, Eddisbury)

All I would say, Mr. Key, is that if you were testing whether we were awake and paying attention to your every utterance, I am glad to say we have all passed the test admirably. One could say that you left out 57 because it is all the varieties. At this stage, any humour is better than no humour. Those of us who come from the north-west are very proud of the fact that the 57 varieties come from the Wigan factory, which one passes on the M6.

This tranche of amendments—a good fistful of amendments—will be deceptively short in its proposition. It is simply to ask the Minister why the complaints avenue is limited to adult social care, and what is the equivalent available to children? That is something that we spent a huge amount of time on in the Health and Social Care Bill, which was roundly rejected at the time by one of the Minister’s predecessors. However, it would be a shame to let the Minister off the hook too quickly and easily. Therefore, with your permission, Mr. Key, anticipating that you might wish to suggest that we do not delay on a clause stand part debate, I might set the context in which all the amendments can sit.

Robert Key (Conservative, Salisbury)

I would be very content with that.

Stephen O'Brien (Conservative, Eddisbury)

I am happy to have your assent, Mr. Key. I will touch on some of the general points, which will enable us to avoid that lengthy stand part debate, and then trot through the amendments.

We welcome the measure, although there is little excuse for the two years that it has taken since the former Health Minister, the hon. Member for Bury, South (Mr. Lewis) first promised it in 2007. As we have so often pointed out, it could easily have been part of the Health and Social Care Act 2008. During the passage of that Act, the right hon. Member for Exeter (Mr. Bradshaw) denied our amendments to it, saying

“self-funders can, of course, take their custom elsewhere. They can choose civil remedies through the courts”.——[Official Report, Health and Social Care Public Bill Committee, 17 January 2008; c. 348.]

Apparently the Government have no qualms about people frail enough to be in nursing care moving every two weeks, with occasional trips to the witness box. We were quite angry with the Government for denying us what was a constructive approach at that time, so we are glad that the Government have come forward with this measure, albeit in a slightly face-saving way. Common sense seems to have prevailed at last, and I am glad that our arguments have won though.

Paragraph 303 of the explanatory notes states:

“The Government expects that in the majority of cases the complainant would raise the complaint with the provider first”?

On what basis did the Government make that assumption? We are clearly legislating for complaints that are unsuitable to be made to the provider, or that the provider has failed to deal with, so that will not impact the baseline.

It is a shame that we are debating such matter before the publication of the Green Paper. I dare say that all members of the Committee witnessed what I would call a sleight of hand from the Minister today—not this Minister, I hasten to add, but his colleague, the Minister of State, Department of Health, the hon. Member for Corby (Phil Hope). We have been calling for the Green Paper on adult social care for many months and the Government have been promising it for many months—the former Health Minister, the hon. Member for Bury, South (Mr. Lewis) promised a new settlement for some years. We were told that the Green Paper would definitely be out by the spring, but by every test in the book, spring finishes on either 21 June or 25 June. We had anticipated that it might be published on 29 June. We understood that the Government might not want to affect the time that the Committee was sitting, but now we are told that it will be July, so there is yet more slippage.

Many people are extremely anxious to see what this Green Paper will contain because it will set the framework for this debate, which is vital. It would have been helpful to have had the Green Paper before considering the Bill, because it may—I think that it should—have major ramifications for the shape of social care in this country.

Lord Darzi told peers in another place that the Green Paper would be published in early 2009,but as I have just explained, it now looks like July. I would also caution the Minister on the rhetoric that seems to have been used in the regulatory impact assessment. The summary states that this will create a level playing field between privately and publicly funded users. That is a vital area, which again was discussed at length during the debates on the Health and Social Care Bill. The hon. Member for Hendon (Mr. Dismore), who chairs the Joint Committee on Human Rights, has made a large contribution to the debate on the distinction between privately and publicly funded users being diminished to nothing, so that there are equal rights. As all of us know, it is invidious that two patients can be in neighbouring beds, one of whom is completely publicly funded while the other is privately funded. That causes anxiety and issues—often for the relatives as much as for the patients, but also because of the human rights issues and who can enforce the legislation.

Paragraph 24 of the regulatory impact assessment points out that

“the policy does not include private health care.”

How have the Government ensured that by opening the door to private funders in social care, they do not open the door to private funders in health care as well? I do not for a second underestimate the complexities. We need to keep the debate on sensible grounds. We started the scrutiny of the Bill discussing the NHS constitution, which is totally focused on public provision and the use of public money for NHS services. When looking at this kind of complaints procedure we absolutely butt up against the difficulty of a mixed economy of health care, which, whatever its merits or demerits, exists. We therefore need to make sure that to the best of our ability is, as we push through any new legislation in this area, there is real acknowledgement of the need to seek and find equity in the process.

Moreover, I remind the Committee that although the Government have closed the loophole by which publicly funded individuals in private care were not covered by the Human Rights Act 1998—I alluded to that a second ago—the individuals we are discussing today, private funders of private care, are still not covered by the Act. I am not suggesting that they should be, because of the way the Act works in relation to public bodies, but it leaves an area uncovered in terms of the potential for rights and enforcement. I dare say that all of us at least need to be cognisant of that, even if this is not the right vehicle to try and address that.

The RIA says that social care services, unlike health services, have developed under a funding model under which a sizeable proportion of services pay their own way—some 300,000, or 35 per cent., according to the RIA. I asked the Minister whether the passive really is a suitable voice for a system that the Government have failed to reform, despite many promises to date. I also question an odd line in paragraph 30 of the RIA, which states:

“we do not foresee the need to enter into a formal public consultation because the policy is a ministerial commitment made in Parliament.”

I hope that the Minister will be able to ensure that that position is put in context.

At this stage, the amendments all go to the same point—why do the provisions cover only adult services, and not children’s care services? Why is the proposal limited? When will the Green Paper, which will have ramifications, be published? July is the nearest we can get to at the moment. Will the Minister inform the Committee of the basis for the Government’s estimate of numbers? What ramifications may this have for private health care funders and for all those still not covered by the Human Rights Act? Do the Government need to consult on statements made in Parliament and will the Minister credit the Opposition with holding the Government’s feet to the fire? It would be rather nice to have that acknowledgement.

Mike O'Brien (Labour, North Warwickshire)

I am not sure whether my feet feel held to the fire, or I am just left cold, but I have rarely heard the words in an RIA described as “rhetoric”. I suspect that Martin Luther King will not have to feel challenged about that. In answer to the question of how long the wait will be for the Green Paper—not long. On private care, it is not our aim to provide a new system, it is about NHS care and recognising that sometimes it can be provided by private sector organisations. However, where public money is involved there should be appropriate safeguards for those using the service.

I can understand the thinking behind the amendments, but I would like to explain why I do not believe that they are actually necessary. One of our main objectives in creating the new scheme is to give people who arrange or fund their own adult social care services, access to independent consideration of their complaints comparable to that enjoyed by people with access to local authority adult health services complaints procedures. We have designed the new scheme so that its scope is limited to service providers who actually carry out regulated activity within the meaning of part 1 of the Health and Social Care Act 2008—in other words, adult health services. There are good reasons for that. There is not only a different system for complaints about children’s social care services, but a different system of regulation under separate legislation. I therefore believe that it makes sense to keep adults’ and children’s complaints processes separate. For many years there have been separate arrangements for children’s complaints about social care services under the Children Act 1989. These arrangements are different in many ways from adult procedures as they reflect the specific needs of children. I hope that deals with that point.

In terms of the need to consult, the policy has already been discussed during the passage of the 2008 Act and is the subject of ministerial commitment. In addition, we believe this is an uncontroversial measure that is widely welcomed and any alternative approaches are not realistic. We prefer a reference group approach, which can focus on the practicalities of implementation rather than the issue of whether or not the policy should be carried through. We seek engagement with the stakeholders regarding implementation. We need their advice and input on the way we engage, but the issue is clear. I assume there will be broad support for the way in which we are giving these additional rights; indeed, the support is so broad that the Conservative Opposition appear to be claiming credit for it. I do not mind where the credit is taken, provided this Government continue to deliver for people.

Stephen O'Brien (Conservative, Eddisbury)

As long as the Minister is not trying to put a time on that, we can all have our own thoughts as to how long that may be. As he referred to Martin Luther King, we can all have our dreams.

Mike O'Brien (Labour, North Warwickshire)

In your dreams.

Stephen O'Brien (Conservative, Eddisbury)

The Minister has sought to satisfy us why this measure has been limited to adult social care. There is a genuine anxiety that, for whatever reasons and whatever the merits and demerits, children’s social care and adult social care are effectively dealt with by two different arms of Government. As with all such issues, there is both a desire and an anxiety on the part of the Government and those who scrutinise it, that this above all is an area that should be joined up. An absence of joined-up thinking in relation to children is always of grave concern, particularly when so many social services are produced from the same source within the local authorities with whom we as hon. Members have to deal. That is notwithstanding the fact that this has been put under the banner of children’s services and that the onset shortly of children’s trusts will be key. Although I cannot see an immediate solution to breaking down that barrier in the way that legislation is approached because of departmental responsibilities, there is a need to recognise that the issue of complaints, particularly with regard to children, is effectively the same as in the courts. There one has an advocate appointed by the court or some kind of friend to enable an approach to be made. I hope the Government will give that active consideration.

Having listened to the Minister I will not press these amendments to a vote, but it is important to recognise the issue. In seeking to introduce this series of linked amendments it took me a long time to find amendment 62 in the documentation as it is right at the back and had just been linked with this subject. It merited discussion and I hope some more thinking will take place. I beg to ask leave to withdraw the amendment.

Schedule 5

Stephen O'Brien (Conservative, Eddisbury)

I beg to move amendment 104, in schedule 5, page 53, leave out lines 25 to 35.

Unlike in the previous clause, the amendments to this one are sequential rather than grouped. We had some discussion on that but, given that we are not under so much pressure, it will be easier to take them separately as I have prepared them.

On amendment 104, the Bill as drafted suggests that an action is to be treated as an action taken by the legal person of the provider. In other words, in terms of liability, an action is to be treated as an action taken by the provider if it is taken either by a person employed by the provider, a person acting on behalf of the provider, or a person to whom the provider has delegated functions. Those are quite common legal concepts. The provisions suggest that the conduct of individuals will not be considered or commented upon, which seems odd, both in itself and if and when we move to a fully registered work force.

We need to be clear that one of the potential key benefits of the process is that it is able to ensure that lessons can be learned from its findings on complaints. We are dealing with potentially extremely sensitive and vulnerable situations, and it behoves all of us to ensure that lessons are quickly learned. One of the most shocking recent absences in relation to adult social care is what has taken place at Stafford hospital, and the Mid Staffordshire NHS Foundation Trust was prayed in aid by some of the earlier amendments tabled by my hon. Friend the Member for Hemel Hempstead. It is absolutely vital that we keep in mind how quickly we need to ensure that lessons are learned.

I also need to know, if I may press the Minister, what happens if a provider goes bust but the management team continue trading under another name. I assume that the body remains accountable, but there must be a question mark on the concept of being able to pierce the corporate veil. As a lawyer, I will not go into the detail of that, because I dare say that other members of the Committee are familiar with the concept at a legal level. While that is not a completely happy analogy, it helps promote my point, and I would like the Minister to comment on how far one can get behind the legal person of the incorporated or unincorporated body actually to get to some of the individuals involved.

The amendment raises the important principle of liability, and I hope that the Minister will clarify the schedule as drafted. I do not for a moment suggest that the amendment is particularly elegant or happy, but it has given me the opportunity to raise a point, and I hope that the Minister will offer some analysis and comfort on the issue.

The rest of the debate is in Hansard.