Health and Social Care Bill

My Lords, at last we move to Part 3. I hope the House will tolerate a longer speech from me than I normally make. I have made just a series of very short speeches so far on the Bill. There are many amendments in this part in my name and that of my noble friend Lord Beecham. I would like to take this opportunity to explain the rationale behind the suite of amendments that we have put before the Committee today. I thought the Committee might prefer one longish speech rather than 10 short ones, which will almost certainly save time. Our amendments are largely in this group, which addresses the role and powers of Monitor, and the next two groups, which address Monitor as a licensing body and its accountability. Later today, in groups eight and nine, there are the issues of pricing and the failure regime. On these Benches, we decided some time ago that this was the heart of the Bill. Over all the debates we have had in the last 11 days, it has become abundantly clear that the reason we have this mammoth Bill, bringing about the expensive and risky reorganisation of our NHS, is to create a regulated market in the NHS. On these Benches, we have always believed that fundamentally, this Bill was conceived and constructed around Part 3. Even after the pause for reflection and the report from the Future Forum, that remains the case. Version 1 of the Bill was at least honest in being the embodiment of what Andrew Lansley had promised to do to our NHS back in 2005. He is at one with his colleagues Oliver Letwin and George Osborne. Mr Lansley wants markets and is against a communally owned and publicly run public sector. Like his Conservative colleagues, he believes that competition solves every problem and is a cure-all. Indeed, Mr Lansley’s background in establishing regulated utilities in his five-year preparation as the shadow Health Secretary makes it clear that he wants to treat our healthcare just the same as gas, water and electricity. That was version 1. That finally collapsed when people including the Liberal Democrats actually read and understood the White Paper and the Bill. I will not trouble your Lordships’ House by picking over the corpses of versions 2 and 3 of the Bill, but we now have version 4, and I suspect that we are still far from finished. This Bill is a mess. It is now a catalogue of compromises, except, it has to be said, the framework that we have on offer in Part 3, which would, over time, allow Mr Lansley’s vision to be fulfilled. He must be hanging on to that for dear life. We believe that Monitor is being asked to fulfil too many functions and set too many priorities, and that some of these are potentially, if not actually, in conflict with each other. We hope the House will appreciate that, on these Benches, we have done the House a big favour. We have rewritten Part 3 to make it simpler and more coherent. We have taken out the nonsense parts, such as the voting system in Clauses 116 to 121, which as it were bring the X Factor system into the NHS. Why not have phone-in votes for CCG chairs, for example? We have taken out the convoluted and bureaucratic ideas around levies and risk pooling. After all, that is part of what the NHS is for—to pool the risks. Our advice is to keep it simple. We believe that the attempt to define the rules-based system for the NHS was always doomed. The idea that, like a true regulated market, we can set out the rules in primary legislation and contracts and then let the courts decide everything is just plain daft—unless you are a lawyer, of course. They must be salivating at the business coming their way if this Bill becomes an Act in its current form. Does the presence of excessive legality and constant contracting sound familiar? It should, because essentially that is what happens in the United States healthcare system. We have, like Monitor, suggested that instead, the principles and rules for co-operation and competition—PRCC—that we put in place when we were in government should be left as the basis for the system. We also suggest that the Co-operation and Competition Panel should retain its role of advising on complaints about any breaches of the rules, which was at one time the Government’s position, and it may still be. For us, a defining characteristic is that the pinnacle of such a system is that there is a Secretary of State who sets the framework through the PRCC. I would like to dispel the myth that Labour is against reform. In 1997, we came in to rescue the NHS after many years of neglect. On everything worth measuring, the NHS of 2010 was far, far better than in 1997. It is only in 2011 that we have seen it start to go backwards again, as waiting times get longer and access is restricted. Our track record on reform is there. Clearly, we did not get everything right, but we learnt. The current Administration have launched the biggest reorganisation of the NHS in its history, despite the promises that they would not and despite all the evidence that reorganisations set the NHS back two to three years, and despite the costs and risks involved—except, of course, that we are not allowed to know exactly what those risks are. Labour introduced independent regulation of quality to the NHS. We support the continued role for Monitor with regard to foundation trusts, which we put in place. We accept the idea of extending tough financial regulation over all providers in the NHS through the use of a licensing scheme. But we do not accept the handing over of economic regulation of the NHS to a quango. We wish Monitor to retain its powers to oversee foundation trusts, and, like Sir David Nicholson, we see the value in retaining the possibility of de-authorisation of a foundation trust into a safe haven to permit restructuring and reconfiguration. But more on FTs later. We have never been against the idea of competition. Indeed, we set out the principles and rules basis on which it could operate. We have never been against using the private sector where this adds necessary capacity or provides expertise not available within the NHS. Our experience, good as well as bad, informs our response to the Bill. There is a place for competition. It is not, and never should be, the main driving force for reform of the NHS. We are against the promotion of competition for its own sake, as this Bill originally intended. We believe the balance between co-operation and competition is a matter for the Secretary of State to determine, in the best interests of patients, not for a quango to determine in the interests of some ideological bias. Further along in the consideration of our amendments, we set out the process by which major reconfigurations could be proposed, consulted on and determined. We set out for the first time the idea of a rules-based failure regime. We do not see failure as a desirable feature of a market system; we see it as a failure of planning and commissioning and as something to avoid, not welcome. But if all early intervention efforts are insufficient, then an orderly rules-based administration process is necessary, so we set one out. In all these areas, we do not oppose development of the NHS or reform. We simply fundamentally disagree with the approach being used by this Administration, which is highly disruptive and expensive and takes focus away from the Nicholson challenge. Along with the Liberal Democrats of old, we oppose the change to a regulated market at the expense of democratic control. These are the wrong reforms at the wrong time and, we add, for the wrong reason. Healthcare is not another utility to be regulated and privatised. Our NHS has at its foundation the twin principles of universality and social solidarity. It is not a candidate for conversion into a fully fledged market. We introduced regulation to give the public some independent reassurance. We introduced external assessments of quality in the NHS. The role of the quality regulator, the CQC, is unchanged by the Bill. We support the CQC, but only if it is properly resourced. We set up NICE, which is acknowledged as a world leader in its field. We set up Monitor and we think it is too early to evaluate its success, as the move to an all-FT system has taken far longer than envisaged and proved more complicated than was assumed—a lesson not yet learnt by this Government. The job is really only half done. What we do know is that there is no miracle transformation tool. The evidence is that foundation trusts do not progress any faster than non-foundation trusts. There is little, if any, evidence that foundation trusts are more innovative, more risk-taking or more competitive than their non-FT colleagues. It is a mix. Given the more powerful role for Monitor, we are proposing two developments to its governance. It should meet in public, like the NCB will do, and we should end once and for all the farce of shared chair / chief executive posts, which is totally against good practice. After the Mid-Staffs issues, further changes to governance for regulators are on the cards. None appears to have come out of such an intense and comprehensive investigation with any credibility. The amendments about accountability are in the third group today. We brought some forms of competition into the NHS, but we never forgot the overriding duty of co-operation. We understand that competition takes many forms. Some services might be amenable to an any-provider model, although we think that it rarely means any provider, but is more like a range of providers. Anyway, for years we have known that such a model can be considered only if five things exist: the service is easily defined; the service is discrete and not interdependent on other services; it is easy to determine the quality of what is provided; there is good quality comparative information accessible to the consumer; and there is good quality information to allow the right price to be set. So in this category, we might find eyes, teeth, pharmacy and perhaps some cold surgery, but vast tracts of the NHS do not and, we believe, never will fit in to this model. Where these conditions do not apply, there can still be competition in the market, or even for the market, but only with a lot of downside issues to consider. We need to be clear and honest and say that, at least for the foreseeable future, for a whole swathe of services that are not amenable to any form of competition, why waste limited NHS resources on promoting competition in areas where it will not benefit patients, when those resources would be far better spent on direct patient care in a managed system? Rather than some ideologically inspired imposition of competition for its own sake, why not continue with what we started, allowing the Secretary of State to determine the boundaries for competition after due consultation and deliberation. The idea of a choice mandate is propounded by the Future Forum. The Minister might comment on why this particular offering from the Future Forum was not progressed. We know of good examples where competition did work for patients in the area of heart surgery. Here, the collection and dissemination of good quality information on outcomes shows wide variation leading to competition between peers, but peer support and exchanges around good practices are the key to clinical changes, and so better outcomes. Equally, we know where clinical quality of better patient outcomes was achieved without any competition, though clinical leadership, strategic planning and co-operation. London’s stroke care improvements are the best argument yet for not having a wholly market-driven system. The other key confuser here is that choice and competition are not the same thing. For the Government, competition is about choice of providers. For the patient, choice is between treatment options. Yet all the drive in terms of information systems is about league tables of organisational performance, not the key priorities for patients. Many argue for an NHS where patients and their carers are fully engaged in their own care. We know from good evidence that this brings better outcomes. The ideas of co-production are developing and featured in the responses to this Bill, but this is not about competition and choice of provider at all. Increasing competition among providers could have the opposite effect of putting barriers in the way of integrated care as an option for the patient. Reform here is not about markets or competition, but about changing clinical attitudes. Here again we have another major departure from the ideological approach for pushing competition. For the patient, we know that integration around their needs is desired. For us, integration means bringing services to bear in such a way that it eliminates organisational boundaries, like a single care plan. But the Government see integration in terms of supply chains. We have suggested one form of what integration means for patients in an amendment, and others might do better. The Government bang on about co-operation and competition not being opposites and use examples of how, within a market, competitors may co-operate on developments, for example in Japan. Again, this misses the point that the NHS is not a set of tradable commodities where it is irrelevant who provides the goods. For us, the key is the patient, not the organisations. These tensions lie at the heart of our fundamental difference with the coalition Government’s approach. Health is not a commodity to be traded, patients are not consumers and choice is not about shopping. Where we might agree is on the need to continue to collect and use good quality outcome data, not just across organisations but across forms of treatment. We might also agree about the concept of contestability. Those who commission services are spending large sums of public money. We need to ensure that they do this wisely, yet we have a National Commissioning Board commissioning £20 billion of treatment with no obvious accountability and performance-managing itself. We argue that commissioners should be required to demonstrate that they periodically review all the services that they commission and make the results publicly accessible. Indeed, they should involve the public—patients as the users of the service—in the reviews. This is very like the route followed by local authorities and many parts of central Government. They embraced contestability rather than simply opening every service to competition. For our crucial public services, this has to be a better and more flexible system. As long as we have commissioners who are properly accountable and the information required to deliver this accountability is in the public domain, we can have robust processes for commissioning and we do not need to make them fear legal action if they fail in some duty to promote competition properly. I now move to the detail of the amendments in this group. Amendments 260EA and 263 specify that Monitor is to continue as the regulator of NHS foundation trusts. Amendment 261 says, "““The main duty of Monitor is to exercise its functions to support the duties of the Secretary of State””," to promote a comprehensive health service. It also says that Monitor must protect and preserve the interests of users or potential users of the health service and seek improvement in quality and outcomes. Amendment 262A adds to the other duties on Monitor the requirement to exercise its functions to promote the provision of a health service that, "““is based on the principles of universality and social solidarity””." Amendment 265 leaves out the subsection stating the Monitor must exercise its functions with a view to preventing anti-competitive behaviour. We believe that the extent to which competition is appropriate is a matter for the Secretary of State, through regulations or a mandate to the board. Amendment 265ZZA would put Monitor under a duty of co-operation that would entail it promoting efficient and effective co-operation between the providers of healthcare services that further the objective of improving quality and reducing inequality of access and outcomes. The Secretary of State shall publish guidance and may issue regulations relating to this duty of co-operation. Under Amendment 267, Monitor would have to exercise its function with a view to promoting integration of healthcare, health-related and social care services, not simply enabling it. Clause 61 relates to the power to give Monitor functions relating to adult social care. We would like to explore whether this is a good idea. We are undecided, but in the light of Southern Cross, we would like to ask whether this should be done through a specific Act, not through regulations activated at a later date. Amendments 270B and 274ZZZA seek to simplify the role of Monitor. We would leave out some of the factors that this clause advises Monitor to have regard to. That is covered by Amendments 261 and 265ZZA. The use of resources promoting investment, research, education and training are not the main point to argue against so many other powers. Amendment 274ZAB avoids conflicts between functions. Monitor must be set up in two separate parts: one to exercise its functions as a regulator of financial trusts; and the other to exercise its function as the licensor of providers of healthcare services. Amendment 274XAA relates to Monitor having no role in determining prices—an issue that we will be discussing later today. Amendment 277A is a new chapter that reinserts the idea of the pre-eminence of co-operation. It keeps the current system, using the principles and rules of co-operation and competition, to specify which services are to be commissioned through specified forms of competition, the Co-operation and Competition Panel to support the delivery to patients and taxpayers of the benefits of co-operation and, where appropriate, of competition, and to advise the Department of Health and Monitor on potential breaches of the PRCC. Clause stand part debates on Clauses 68 to 70 are to debate the functions referred to Monitor concurrently with the OFT and under the Competition Act 1998 and the Enterprise Act 2002. Amendment 277C would add a safeguard that before Monitor takes any actions under Clauses 68 or 69, it must have regard to the regulations made by the Secretary of State, including the PRCC, consult CCGs and the health and wellbeing boards, and obtain the consent of the Secretary of State. Amendment 277D would ensure that in relation to procurement, patient choice and competition, the Secretary of State sets the rules, which will be the PRCC. Regulations dictate that procurement exercises can be undertaken only if the administrative cost of doing so is justified by the anticipated improvement in the service and is affordable, given the resources. Regulations require the board and the CCGs to discharge their functions in a way that would promote co-operation, and regulations shall not allow or require the board or CCGs to replace any existing provider that is delivering services via contract in a form approved by the Secretary of State, unless that contract has been lawfully terminated due to a breach by the provider. Clauses 72 and 73 refer to Monitor on various powers of investigation, declaration and direction related to procurement, patient choice and competition requirements. We argue that these functions can be left to the existing Co-operation and Competition Panel. On Clause 75, we argue that the Enterprise Act 2002 should not apply to mergers involving FTs. The Co-operation and Competition Panel should apply the PRCC, not the Enterprise Act applying competition law. On Clause 76 stand part, we argue that a review of competition is unnecessary, especially if there are not equivalent powers to review co-operation and integration. We fear that this provides a disproportionate incentive on Monitor to develop competition. Clauses 77 to 79 all apply to competition law and the role of the Competition Commission. We argue for the Co-operation and Competition Panel and the PRCC rules instead. On Amendment 288EA, guidance published by Monitor relating to its enforcement must include information on the regulations issued by the Secretary of State. Amendment 288GA and Clauses 110 to 112 are about keeping the role of Monitor in relation to authorisation and oversight of foundation trusts the same and are very similar to Amendment 288G, tabled by the Liberal Democrats. We argue that there should be no cut-off date or transition period. I beg to move.