Health and Social Care Bill

My Lords, I have listened with great interest to the points that have been made. I feel it would be useful if I first set out how this clause would work and the series of events that it would allow. Then I will try to explain why we believe that the powers it provides are an appropriate and constructive lever within the new system. The method of intervention set out in Clause 285 needs to be considered as one of a range of intervention powers and levers available to the Secretary of State in order to ensure that the system operates in the best interests of patients and that he complies with his duties in relation to the health service. These include the proactive setting of objectives for the health service through the annual mandate to the board and setting requirements through the standing rules. The Secretary of State also will have a duty to keep the effectiveness of arm’s-length bodies under review. In addition, the Secretary of State will have more extreme intervention powers such as the ability to remove the chair of an organisation, where they have failed adequately to perform their functions, and the ability, under specified circumstances, to give directions to an arm’s-length body where the Secretary of State considers it has failed to discharge those functions, or has failed to discharge them properly. Clause 285 should be viewed as an additional power alongside the others conferred on the Secretary of State by the NHS Act and this Bill. Of course, should the Secretary of State employ his powers as set out in Clause 285 and the problem persists, then where he considers that one of the bodies is failing to discharge its functions properly, he would be able to exercise his powers of direction. The Bill places new duties to co-operate, in addition to modifying existing duties, so as to ensure that all of the arm’s-length bodies in the system, such as the Commissioning Board and Monitor, are required to co-operate with one another. We wanted to do more to encourage co-operation in the new system, partly out of recognition that the current system would benefit significantly from greater co-operation, but also because the new arrangements will create an even greater need for co-operation given the strongly autonomous and interdependent arm’s-length bodies that will be created. The clause sets out powers for the Secretary of State to take action in response to a breach of the relevant duties of co-operation. It provides a mechanism for pressing organisations to resolve disputes in the unlikely event—we hope and trust that it will be unlikely—that two or more organisations covered by the clause fail to co-operate. If the Secretary of State believes that the duties of co-operation listed in this clause have been or are being breached, or are at significant risk of being breached, he will have a new ability to write formally and publicly to the organisation in question. If the bodies continue to breach the duty following the notice and the breach is having a detrimental effect on the performance of the health service, as the noble Baroness, Lady Finlay, pointed out, then the Secretary of State will have a further ability to lay an order, specifying that each body could take certain actions only with the approval of the other body. This measure would be subject to affirmative approval by both Houses of Parliament and could last for up to a year. That means that organisations in dispute would be strongly reminded of their interdependence as part of a national system. As a matter of last resort, if agreement could not be reached, either party would be able to invoke independent arbitration under Arbitration Act arrangements. In this way, the organisations in question will be pressed to resolve their difference without recourse to the Secretary of State and the Department of Health. This is an important element of our policy. We want arm’s-length bodies to focus on the functions conferred on them by Parliament, the objectives set for them by Government and the relationships with other organisations that will help them to achieve their goals. We do not want them placed in a position where they are trying to secure relative advantage in the system by using the Secretary of State as a means of determining the outcome of disputes. The existence of the order-making power will both help to preserve the autonomy of organisations and encourage them to work constructively with one another. I emphasise that this is a precautionary power and we expect it to be used only in very exceptional circumstances. It is also important to note that the powers and duties described in this clause are about co-operative behaviours. They do not in any way undermine the independence of Monitor or the CQC to make specific regulatory decisions in relation to another arm’s-length body. For example, the Secretary of State could not use the provisions to constrain Monitor from taking action against anticompetitive purchasing by the NHS Commissioning Board.