Health and Social Care Bill

My Lords, I start by congratulating noble Lords on making it through this day of debate. We are ending the day with this large group on failure, and the smaller group on pre-failure, tabled by my noble friend, in a moment or so. In the NHS of 20 years ago, the trusts that got into problems were helped, although the help may have been brutal, with chief executives removed or moved on and nasty phone calls to trust chairs. The system gave powers of intervention from the Secretary of State through local strategic bodies, as they became. Financial help was grudgingly provided, usually for a recovery plan, sometimes delivered and sometimes not. The relationships were not defined by legal contract, and NHS contracts could not be enforced in the courts, so there was a system of arbitration within the NHS. Those days have gone, and we now have an NHS as a network of many sub-organisations, some with linkages through real contracts. With FTs came the idea of a real contract, although in reality, of course, disputes are still sorted out long before reaching a court. We know that services, and even whole organisations, can fail as the impact of demographic, technological and behavioural changes shape our NHS. In reality, we have to deal with trusts that get into severe difficulties and may be technically insolvent, at which point a real organisation may not be allowed to trade. Then we have to accept that a whole trust might need to be shut down. Indeed, how should that be done? How should the continuity of services be maintained, how should the staff be dealt with, and how should the assets, most of which are owned by the state, be dealt with? We know that this is the tail end of a bigger and important issue of reconfiguration. So how do we ensure that we can adapt services that show poor quality or that need to be delivered in different ways in different settings? Maybe, as with an increasing array of subspecialities, we have to accept regionalisation. Maybe we need network solutions. Is the market the way to do this? In other markets, innovations lead to changes in demand, and the organisations that cannot adapt close down. Is that what we want for our NHS? Those who might be so inclined might like to wander through the delicate prose of Simon Burns MP in Committee in the Commons. He loves failure. The idea that you have competition is inextricably linked to having failure. It facilitates the market, brings in the innovators and drives out the inefficient. He believes that failure is a measure of market success, not failure. It is true that in government we introduced a failure regime as we came to realise that, even after all the support and changes of management team, there may be organisations that are simply not viable. However, it is not so much that they were not viable; it is what that means, that continuing to support them is not giving value for the NHS, however much we adjust that value to include non-financial aspects. Indeed, we also wanted to bring out into the light the murky transactions used within the NHS to support organisations, through means such as brokerage loans. The tendency was for bad performers to be bailed out by the good—the opposite of a reforming system. The way NHS accounts were done also had to be changed to make this kind of smoke-and-mirrors accounting more open. Issues around failure are more likely to operate at service level than at a whole-organisation level. To take a recent example, a well known and respected financial trust is having issues around its 18-week performance. Its general quality is good but it has signalled that it needs help, and it is indeed getting it from a Department of Health team. The question that we need to ask is: would this kind of support be available in the new world? Presumably, it would not; and even if it were, might that help be deemed anticompetitive? Would that good trust be allowed to fail? The link here to reconfiguration is inescapable. We know and even admit in our rational moments that reconfiguration on a grand scale is what the Nicholson challenge is really about. The need to move services into community settings and to reduce dependency on the district generally hospital model is widely recognised. However, we also know that reconfiguration is beset with political problems. In the run-up to the election, about one-third of constituencies had some kind of campaign to keep open a hospital, a surgery or whatever. One felt sometimes that even if there was no threat, one was invented. We had Andrew Lansley and David Cameron claiming that they would prevent any closures. I think that the Government are learning the hard way that promises made in opposition, especially during election campaigns, may turn out to be millstones when the real burden of decision-making passes to them. The examples of broken promises will continue as reconfigurations gather apace. This is the issue to which our suspicions should be addressed. Is it part of the rationale to put the blame for nasty politically damaging decisions on others? This abdication of responsibility is characterised by the way that Ministers are trying to give away the key roles of the Secretary of State. This is in part a failure of process but is also a failure of leadership. The leadership should be accountable for delivering answers and necessary changes within a reasonable timescale. If we get reconfiguration right, the failure regime would look less necessary. This is far better for patients than the trauma of seeing their local facilities under constant threat or even being closed down. There are examples of where this has been done, and done well—and we need more of them. In Committee in the Commons, the Conservatives in particular appeared to believe that these unpopular local changes would be less likely under the Bill—if changes in organisations are branded as failures, then those MPs would be well clear of any responsibility. In fact, we have years of evidence because every reconfiguration has to go through a clinical and management review at an early stage—so we know what works and what does not. We could use that evidence, rely on a robust process and stop opportunist politics. However, we know that the market will not bring about these changes any time soon. In our NHS, the best interests of patients are served by good information that allows early intervention to improve failing services. CQC inspections are also of value in raising the prospect that poor services will be detected early. If you rely on competition, how long does it take for the public to react to the information that a service is bad and for them to choose to go elsewhere, or for that to impact on the finances to the extent that the service is closed down? In our view, using choice and competition to detect and close poor services takes too long and the cost for patients is indeed too high. That is what this suite of amendments aims to tackle. The amendment sets licensing criteria to ensure that private providers meet standards around financial stability and probity. We need to supply regular financial information for the good providers. This is, in other words, a sort of Southern Cross test. Amendment 249MBA brings into effect the remaining inactivated arrangements for trust special administration from the 2009 Act, as amendments to the 2006 Act. I remember those well. Amendment 353ZZA is a commencement provision for that. Amendment 295 states that health special administrators must exercise their functions to ““protect the interests of patients””. As to the Questions that Clauses 125 to 130 stand part of the Bill, this would create a regime for private companies that provide services to the NHS to have special procedures that augment the normal company provisions under the Insolvency Act. It arguably implies that we need stronger protection from the risk of private provider failure. It should be the commissioners to factor in the risk of using private providers and contract to ensure that arrangements are in place for contingencies. The licensing regime needs to be tough enough to prevent Southern Cross-type failure through active monitoring. Risk pooling is what the NHS does. We do not need new risk pools, with the costs that they involve. That is why we think that the clauses should be deleted. Clauses 131 to 143 inclusive allow Monitor to set up the regime to provide special administration for both private and public providers to levy charges on providers and commissioners and to manage the finances of a risk pool. We argue that none of that is required; it just adds extra complexity and cost. Clause 170 is about FTs and failure. The clause removes the ability to deauthorise a foundation trust. We argue that that power should be retained, along the recognition that some NHS provider trusts may need to be directly managed under the powers of the Secretary of State. The new clause in Amendment 303ZA makes clear that the initial effort, in context of failure, should be remedial action rather than going straight for a failure regime. My noble friend has a similar idea behind his amendment. On Amendment 303ZB, the new clause is intended to reinforce and strengthen how reconfiguration is carried out. Under Amendment 303A to Section 65A of the 2006 Act, bodies to which trusts’ special administration regimes apply should remain, so that the special administration regime applies to FTs and NHS trusts. Again, we are shortening the Bill and making it simpler and probably taking out quite a lot of cost. I beg to move.