Health and Social Care Bill

My Lords, I recognise the problem that has been described so ably by the noble Lord, Lord Warner, but I wonder whether he is not being a little pessimistic about the possibilities of the architecture providing the right framework to do what he wants to do. If we look at the role of the economic regulator, it must, as it has under the more restricted role of Monitor, include a very serious analysis of how financial management is happening in provider trusts, or foundation trusts, and has led to the growth of the service level management system, which for the first time has given people an idea about which services are making money, which are losing money, which are loss leaders and so on. These are terrible terms when one is talking about human services and I do not like them. Nevertheless they are business terms and we understand what they mean in this context. They have also led to a much more fundamental understanding of the capital assets of each foundation trust. It has led to better use of capital assets at the moment, but that is largely because at a time of massive growth people do not look to make best use of their capital assets. At a time when money is shrinking or staying the same, as it will be over possibly the next 10 years or more, people will be looking to use their capital assets more effectively. We must look to the economic regulator to encourage the sort of use of assets that we have so often wanted to encourage in the younger Monitor—to use those assets more effectively and to ensure that we can look across the totality of both community and acute hospital providers at how entrants into the system are using their assets. That would be possible under the new Monitor. I am not sure that we should set up another body to do that although I can see it might have a short term job to make sure that everybody is using the same monitoring mechanisms and is putting in the same sort of systems of financial accounting. With the new architecture we should be able to do that through Monitor.