My Lords, I shall also speak to the other amendments in my name in this group. The trust special administrator regime is of course not revolutionary or new, but was set up by the previous Government in 2009 as a way of dealing with exceptional and intractable failure at NHS provider trusts. Your Lordships will also know that, since the addition of provisions for a single failure regime, which we have discussed previously, a foundation trust could be placed into special administration both for quality as well as financial failures, in the same way that an NHS trust could be. We are strengthening the regime through changes made in the Bill but this does not change the fact that it is only to be used in cases of significant failure.
There are various actions that could happen before the regime is even considered. For minor concerns at an NHS trust or foundation trust, the CQC will use its inspection reports and ratings to highlight concerns and to call for improvement. Breaches of fundamental standards could lead to a trust being prosecuted, or a penalty notice in lieu of prosecution. Where there are serious failings, the CQC will issue a new warning notice, requiring the trust to make significant improvement within a specified time. Monitor and the TDA also have a range of intervention powers; for example, Monitor is able to remove, suspend or replace foundation trust governors or directors. Monitor and the TDA can also place trusts into special measures, which includes partnering with a high-performing hospital, regular publication of improvement plans and a full leadership review.
Also, providers and their commissioners are expected to review the way that local clinical services are configured in the best interests of patients and in the context of quality and financial challenges. While a locally led service reconfiguration is not a panacea for all the challenges facing a provider, we would none the less expect options for reconfiguration to have been rigorously assessed. Ultimately, however, if it is impossible for a trust to turn itself around, it will be necessary to place it into the special administration regime, in order to safeguard taxpayer funding and the interests of patients. Trust special administrators would be appointed—and I make this point emphatically—only when all other suitable processes to develop sustainable, good healthcare have been exhausted.
That is the background to these amendments. I turn now to the amendments made in the other place. Amendment 41 would require any trust special administrator to consult formally other trusts, their staff and commissioners, who may be affected by his or her draft recommendations. This would match the extended remit of the administrator under Clause 118 with an express wider consultation requirement, ensuring that the final recommendations are informed by a proper understanding of the issues facing the entire local health system. Amendment 41 would also strengthen public and patient representation in the regime by requiring the administrator to consult local authorities in whose areas affected trusts provide services and local Healthwatch organisations in those areas. Amendment 43 is a minor and technical amendment. I hope that noble Lords will agree that the changes made in the other place further strengthen the regime and will offer the amendments their support.
I turn now to Amendment 41A tabled by the noble Lord, Lord Hunt, and Amendment 43A tabled by the noble Baroness, Lady Finlay. I hope that they will forgive me for addressing these amendments before they have been spoken to. The key underlying aim of these amendments is one with which I have complete sympathy, and I am grateful for the opportunity to make that clear in your Lordships’ House. It is absolutely the Government’s intention that essential services at other affected trusts should be respected during the process of trust administration just as much as the essential services at the failing trust. However, both amendments seek to achieve that aim by adding additional statutory objectives for the trust special administrator. I hope it will be helpful if I explain briefly why that is unnecessary and unworkable in practice.
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The trust special administrator’s regime must necessarily be focused on finding a solution for the trust in administration. That is its central purpose, and is why the statutory objective of trust special administration is for the administrator to secure the continued provision of the essential services of the failing trust. There is an important practical point here. When an administrator is appointed to a trust, he or she cannot anticipate at the outset which other trusts, and therefore which other commissioners, may be affected by the draft recommendations. It would therefore be impractical to divert the administrator at the outset to new objectives beyond the trust for which he or she is appointed.
Nevertheless, he or she is expected to engage from the outset with other commissioners and providers in the wider area and if—I emphasise that word—the administrator decides that action in respect of other trusts is,
“necessary for and consequential on”,
action in relation to the failing trust, the administrator would have to take active steps to determine what their commissioners reasonably identify as being essential services. Our clear aim here is that such wider recommendations from the administrator must not harm those essential services.
I am therefore today moving Amendments 40A to 40E and 42A to 42C, which would put beyond doubt the Government’s position in this area. Those amendments would ensure that recommendations by an administrator at a foundation trust that affect other trusts must not harm their essential NHS services. Legislation already requires commissioners of a foundation trust in administration to agree the trust special administrator’s reports on the basis that the recommendations achieve the statutory objective of the special administration. Clause 118 already extends that agreement to affected commissioners of other trusts.
The amendments I am moving today would ensure that agreement was obtained from any commissioner of affected services provided by another trust that the TSA’s recommendations meet the objective of the trust in special administration, and do so without harming essential NHS services at the other affected trust. Therefore, essential NHS services would be equally protected under the regime, irrespective of where they are provided. Essential services at other affected trusts would be defined by reference to the same legal criterion that applies to commissioners of the trust in administration, thereby ensuring parity between all relevant commissioners. For the NHS trust regime, Clause 118 already requires the Secretary of State to produce guidance on seeking commissioner support and involving NHS England, and we will ensure that the key principles of parity between affected commissioners and the essential services they commission are captured in the guidance.
I am grateful to the noble Lord, Lord Hunt, and the noble Baroness, Lady Finlay, for tabling these amendments, which have enabled me to set out our intentions. I hope that I have been able to reassure them and the House that we are committed to ensuring that commissioners are treated equally under the trust special administration regime. I beg to move.