Well done. You need Baronesses to do this: they get to the point and get it done.
I thank noble Lords for explaining these amendments. As they may recall, in 2012 we abolished the private patient cap while clarifying that the foundation trusts’ principal purpose is
“the provision of goods and services for the purposes of the health service in England”.
This means that foundation trusts must make the majority of their income from NHS activity and must always have as their primary purpose the delivery of NHS services. We also retained the requirement that additional income should be used to benefit NHS patient care, and it has been used across the system to offset such things as maintenance costs, to finance alternative transport such as park and-ride and to fund patient care.
This amendment would introduce a new cap by requiring foundation trusts to agree with their ICB and ICP their income from non-NHS sources. However, this would be a significant bureaucratic burden on foundation trusts and would require them to forgo raising additional income or seek agreement via a multi-stage process before doing so. It would also mark a significant new restriction on foundation trusts’ freedoms and autonomy.
Similarly, Amendment 233 would restrict the freedom of NHS organisations to decide locally the most appropriate structures they need to support their operations. There are multiple reasons for trusts setting up subsidiary companies, including providing services for other trusts and being able to attract staff from the local employment market. Creating a subsidiary can also be an alternative to outsourcing services to the private sector, thereby maintaining its staff within the NHS family. Importantly, in November 2018 NHS Improvement issued guidance to trusts about forming or changing a subsidiary. Under that guidance, all subsidiary proposals must be referred to NHS Improvement for review. NHS England and NHS Improvement paused their update of the guidance to trusts on subsidiary companies to allow the sector to focus on supporting the response to Covid-19 and the recovery of services. However, we remain committed to the review and the publication of this updated guidance is now set for early summer 2022.
I hope I have given the noble Baroness sufficient reassurance for her to withdraw the amendment.