Health Bill [HL]

My Lords, these amendments address a fundamental omission in the foundation trust regulatory regime. The omission recently came to light following the events at Mid-Staffordshire NHS Foundation Trust. The amendments were introduced to the Bill on Report in another place. Given this late introduction I am pleased that the debate on these amendments will take place under Committee rules, allowing your Lordships’ House the chance to debate them. NHS foundation trusts are a key part of the Government’s health reform programme and are proving to be a success. The autonomy afforded to a foundation trust offers the best model for improving the provision of healthcare, allowing greater freedoms and autonomy to those who can demonstrate high performance. However, the events at Mid-Staffordshire Foundation Trust demonstrated clear failings to its patients, the public and the NHS. The Government are committed to learning the lessons of these events to ensure such events cannot happen again. My honourable friend the Minister of State for Health, on introducing these amendments in another place, said that they acted on two of the many lessons we have to learn. First, Monitor, the independent regulator of foundation trusts, should have the power to remove foundation trust status where a foundation trust fails to live up to the high standards. Secondly, transparent democratic accountability is vital when a foundation trusts fails. The amendments need to be viewed in the context of the existing powers of intervention. The National Health Service Act 2006 provides the independent regulator, Monitor, with a range of powers of intervention in foundation trusts. These can be used in the event of a significant breach of the terms of authorisation or requirements in legislation. Monitor’s powers include the removal of any or all of the directors of the board or requiring the board of a foundation trust to do, or not do, specific things. As noble Lords will be aware, the Bill also contains clauses relating to trust special administrators, which would enable Monitor to trigger deauthorisation of a foundation trust that is no longer sustainable in its current form. This is as a preliminary to the deauthorised trust coming under the control of a trust special administrator as part of a prescribed six-month process. The proposal presented for consideration today is the final missing option between those extremes. It would enable Monitor to trigger deauthorisation for a sustainable foundation trust. Foundation trusts are authorised on the basis of being high-performing organisations. It is logical that, should they fail to live up to the required standards and lose public confidence, powers should exist to remove their foundation trust status. A power to deauthorise provides a clear message that foundation trusts must maintain the high standards that are expected of them, and provides the public with the confidence that organisations must continue to earn the right to continue as foundation trusts. The new Section 52B provides that triggering deauthorisation will be a decision for Monitor. Under the proposals, when a foundation trust has breached any term of its authorisation, or requirements in legislation, and the breach is so serious that it justifies deauthorisation, Monitor may trigger deauthorisation. Triggering deauthorisation will be a complex decision. The new Section 52C establishes a framework requiring that Monitor considers four factors: the health and safety of patients; the quality of services that are provided; the financial position of the trust; and the way it is being run. To ensure transparency, new Section 52C also requires Monitor to consult on and publish guidance setting out the detail of the factors that it will take into account. Before triggering deauthorisation, Monitor must consult with key stakeholders to get their views. Accordingly, Monitor will be required to consult, as a minimum, the Secretary of State, the trust itself, the appropriate strategic health authority and relevant commissioners of the trust’s services. This mirrors the clauses relating to trust special administrators. Having done this, if Monitor gives a deauthorisation notice, the Secretary of State must make an order deauthorising the foundation trust, which will take effect within five working days of the order being made. The new Section 52D provides that the deauthorised foundation trust would then become an NHS trust under Secretary of State powers of direction. In common with the clauses relating to trust special administrators, Schedule 2 to the Bill means transitional arrangements will be put in place to allow the continuation of commercial arrangements entered into using foundation trust freedoms and to ensure continuity of services for local people. Along with this new process, the amendments will also strengthen democratic accountability. While Monitor is responsible for the regulation of foundation trusts, the Secretary of State is ultimately accountable to Parliament for the overall provision of NHS services. Monitor’s operational independence is a vital part of the regulatory framework, and one that we should seek to maintain. Only Monitor can trigger the deauthorisation of a foundation trust, reinforcing Monitor’s independence, and ensuring that its authority is not undermined, but when considering the most serious risks to patients, the Secretary of State should be able to formally express his view. To enable this, the amendments propose that the Secretary of State should be able to formally request that Monitor consider deauthorising a foundation trust. In any such situation, it will be vital that the Secretary of State and Monitor are able to act quickly and transparently. We therefore propose that if Monitor believes that a differing course of action is preferable, it will be required to publicly explain its decision, either within a default of 14 days, or within such further time as the Secretary of State deems appropriate to the particulars of the case. Finally, I turn to Amendment 6. It corrects a minor drafting error in Clause 18(8)(b), which lists orders that are not subject to any statutory procedure. The other orders made in connection with trust special administrators are not subject to any statutory procedure and an order made under new Clause 65L(5) should also have been included in this list. This makes the drafting consistent with the Government’s original intention, which was approved by the House of Lords Committee on Delegated Powers and Regulatory Reform. The Government believe in strong, independent regulation of foundation trusts, and that foundation trust status should continue to be earned. I hope that noble Lords will agree that these proposals give Monitor a useful further regulatory power, while formalising a method for the Secretary of State to have a transparent dialogue with Monitor concerning the most serious of foundation trust failures. I am glad that we will now have the opportunity for a full debate on this issue, and I beg to move. Amendment to the Motion Moved by