Health and Social Care Bill

My Lords, Clauses 30 and 31 abolish strategic health authorities and primary care trusts and remove the relevant parts of the NHS Act 2006. Let me start by addressing the noble Lord, Lord Warner by setting out where I feel we have consensus, because I think there is some consensus. There is agreement that decisions in the NHS need to take place at different levels and we need to ensure that decisions take place at the appropriate level. I agree with the noble Lord that these levels do include an intermediate tier and there are decisions which should happen. However, where we differ is on how best to facilitate these decisions. We do not feel that the best solution is to have separate statutory bodies to play this role. Instead, we propose flexible arrangements that will best meet the changing demands of what needs to happen at this level—hence the board’s field force, which noble Lords have spoken about, which will be adaptable in the future to grow and evolve in partnership with CCGs. That is the background to our approach. As we have already discussed, many of the necessary functions and duties SHAs currently undertake will, in future, be undertaken by the NHS Commissioning Board or by clinical commissioning groups. Where existing functions or duties are unnecessary, we are removing them, making the system more streamlined and reducing administrative burdens. The amendments in this group would prevent the abolition of strategic health authorities until such time as the Secretary of State is satisfied that all of their functions and duties have been transferred to other bodies. I understand the importance that noble Lords place on getting the timing of the transition right. As the NHS Future Forum pointed out following its consultation exercise, some people felt that the changes were proceeding too quickly, while others were concerned that the pace of change was not fast enough. The forum recommended further changes to phase the transition, and the Government responded by postponing the abolition of SHAs by a year. I believe this allows enough time for a safely managed transition. The NHS Commissioning Board is due to take on its commissioning responsibilities in April 2013, and we believe that it is vital that SHAs and PCTs do not continue beyond that date. There are two main reasons for that. A key aim of the Bill is to ensure that the functions and duties of all bodies within the system are clearly defined. To have a confusion of responsibilities would be a retrograde step. The second reason is that allowing SHAs to run beyond the current proposed deadline for their abolition would also incur extra costs and hinder the Government from meeting the efficiency targets set by the quality, innovation, productivity and prevention programme. I will say more about that factor in a moment. Turning to primary care trusts, we expect PCTs to retain commissioning responsibility while clinical commissioning groups develop and establish themselves. Once clinical commissioning groups are able to take on their commissioning responsibilities, we intend that PCTs should be abolished, and this will occur in April 2013. I understand that the noble Lord, Lord Rea, has concerns about this approach. I would like to make it clear that clinical commissioning groups will not be authorised to take on any part of the commissioning budget in their local area until they are ready to do so. Where a clinical commissioning group is not able to take on some or all aspects of commissioning by April 2013, the NHS Commissioning Board will commission on its behalf, and in this role will be subject to the same duties of transparency and engagement. All clinical commissioning groups will have the right to take on full responsibility once they have demonstrated that they are ready. I also hope that my statements regarding strategic health authorities and primary care trusts address the concerns of the noble Lord, Lord Beecham, and the noble Baroness, Lady Thornton, in relation to Amendment 245AA. There are a host of consequential amendments contained in Schedule 4 to the Bill which aim to ensure an effective transfer of responsibilities from PCTs and SHAs to the proposed new organisations. To remove these would result in legislative confusion and would also risk important functions not being picked up by the new organisations. This leads on to Amendment 236AA, which would establish the sub-national functions of the board as separate, statutory, local NHS commissioning boards, each with its own full board of directors—in other words, a reinvention of the regional tiers in the NHS. I believe that this approach, recreating a statutory layer of management, would be not only unnecessary but also inefficient. It would almost certainly make it impossible to cut the overall costs of administration by a third, as our existing proposals will, creating savings to reinvest in frontline services. I cannot see how the new bodies that the noble Lord, Lord Hunt, proposes would add to accountability in the way that he suggested. The board will carry out a range of functions that will need to be carried out at both a national and a local level. We think it is best that these are carried out by a single body, with the autonomy and flexibility to design its own infrastructure, in a way that meets the needs of the local health service yet provides consistency nationally. Turning to Amendment 256A tabled by my noble friend Lord Mawhinney, let me first say that I agree that it is vital to ensure a smooth transition of commissioning responsibilities to the newly established CCGs and to ensure that there continues to be proper governance of PCTs and PCT clusters in this initial period. I appreciate my noble friend’s anxieties on this score. However, we continue to believe that PCTs and PCT clusters are best placed to do this by retaining their current structure and ensuring they continue to have governance arrangements in place. I will elaborate on that in a second. Where CCGs commission services for patients during the initial period, they will be doing so on behalf of PCTs through arrangements made under paragraph 11 of Schedule 6, rather than through exercising the CCG’s own statutory functions. Until CCGs are able to carry out their commissioning responsibilities independently, the PCT will remain statutorily responsible for those functions. My noble friends Lord Mawhinney and Lord Newton, to whom I apologise for my own extravagance of language last week, raised serious questions over PCT clusters. PCTs have been brought together into clusters precisely to ensure that accountability is maintained. Without clustering, the NHS would have seen PCTs being overseen by incomplete and patchwork teams of interim appointments as people in posts anticipated the abolition of PCTs and moved on to different organisations and roles. That would have led very definitely to unclear lines of accountability. Our view was that it represented a risk to ensuring that PCTs were able to continue effectively to carry out all their possibilities. Through clustering we have ensured that every PCT, through the cluster, will have a complete and able management team until, subject to Parliament, they are abolished. I would say to my noble friend Lord Newton that my clear legal advice is that clustering has a firm basis in terms of the use of legal powers and, furthermore, it is a reasonable use of those powers. My noble friend spoke about conflicts of interest and the lack of proper representation on clusters. There is always the potential for any board member to come across a conflict of interest, and that is particularly true for non-executive positions, which are generally part-time and where people often have other roles outside of their non-executive responsibilities. It has therefore always been necessary for PCT boards to manage potential or actual conflicts of interest as they arise. We expect them to continue to do that in their new clustered states. We expect all board members effectively to work in the interests of the people served by all of the PCTs in the cluster and for non-executives and chairs to act in a manner that is in keeping with the Nolan principles. We do not believe that, in effect, increasing the geographic scope of PCT board members by asking them to discharge their responsibilities on more than one board raises greater risks than may have existed with PCTs that were already very large. Some, as my noble friend knows, were already very large—all of Norfolk and all of Suffolk, for example. I hope that that explains at least the rationale for clusters and gives my noble friends some reassurance about the legal basis on which the clusters have been formed.