I beg to move amendment 130, in clause 56, page 48, line 39, leave out ‘may’ and insert ‘must’.

With this it will be convenient to discuss the following:

Amendment 132, in clause 56, page 48, line 44, at end add

‘including the charges levied on the provider by other services regulated by the Commission and their impact on the financial sustainability of the provider’s business.’.

Amendment 129, in clause 56, page 49, line 4, at end insert—

‘(8) Where this section applies to a registered care provider, the provider must disclose in full any relevant information that the Care Quality Commission considers it necessary to have in order to make an assessment under subsection (1), including information relating to any holding companies or other associated corporate entities.’.

At the end of the previous sitting, we were talking about the Care Quality Commission’s role in trying to prevent or deal with the consequences of provider failure, and I was saying that one thing that we had learned from the Southern Cross case was that there are often very complicated financial structures behind not just the care providers, but their owners or parent companies. There is increasing involvement of private equity and venture capital companies and others.

Amendments 129 and 130 would ensure that the CQC could gain access to all the financial data that it needed, including from parent or holding companies, to make a proper assessment of the financial sustainability of a care provider. The CQC may have been able to get hold of information from Southern Cross, for example, but what if it had wanted information from Blackstone, the private equity company behind it?

I point the Committee towards the comments that David Prior, chair of the CQC, made to the Select Committee on Health. Yesterday, that Committee published a very useful report on the CQC, including its new roles, and the Clerk helpfully forwarded it to us. In his evidence to the Committee, David Prior said that there were very complicated financial structures behind some care providers.

Amendment 129 states that a registered care provider

“must disclose in full any…information that the Care Quality Commission considers…necessary…in order to make an assessment” of whether the provider is in financial difficulty. That includes information from

“any holding companies or other associated corporate entities.”

Amendment 130 is designed to toughen the Bill’s language, so that rather than saying that regulations “may” enable the CQC to obtain information that it considers relevant, it says that the regulations “must” do that.

I have tried to understand what powers the CQC currently has to require care providers to co-operate with it, and my understanding is that under the Health and Social Care Act 2008, the previous Government gave the CQC two powers to get care providers to co-operate—not specifically on finances, but generally. One is the power to issue a fine of up to £2,500, and the other is the power to suspend or cancel the licence. Let us be brutally honest. A fine of £2,500 will not put off any company the size of Southern Cross, let alone a private equity company such as Blackstone. The CQC needs to have the power to threaten to suspend or cancel a licence, but in this case, if it is worried that a provider might end up failing, cancelling or suspending its licence might precipitate its going into that situation. Therefore, I do not think that the CQC’s powers to get people to co-operate are sufficient, particularly on financial information. I have no doubt that many companies will not want to give over all their financial data; they will say that the information is commercially confidential.

Our amendments are clear. We are not saying that all the information should be published in the public realm. This is about giving the CQC all the information that it thinks is relevant in order for it to make its assessment of whether the care provider is financially sustainable. That is why we tabled those amendments.

I want to come back to a couple of points that I raised on Tuesday, if the Chair will allow me, on the CQC’s wider role. That is because we now have the Health Committee’s report on accountability and the CQC. That report came out only yesterday and it is relevant for the Committee to consider its recommendations before we leave this part of the Bill.

David Behan, the chief executive of the CQC, told the Health Committee—this was the point I was making on Tuesday—that for the CQC to fulfil its obligations under this part of the Bill, it will need to

“buy in skills from organisations that do insolvency work”.

Rather interestingly, David Prior, the chair of the CQC, said that it was highly unlikely that the commission would want to have the financial skills permanently in-house. In other words, he was saying, “We don’t want to bring in permanent staff to do this; we just want to keep buying it in.” My question for the Minister is this: how much will it cost for the CQC to buy in the skills? Is he convinced that it is value for taxpayers’ money to continue doing it on a consultancy basis, rather than taking on teams permanently? Why would the chair of the CQC not want those skills permanently in-house if this is to be a long-standing function? I do not understand that and I do not understand how that provides best value for money for the taxpayer.

More importantly, on page 24 of the Health Committee’s report, paragraph 57 states that

“the Government should reconsider its decision to allocate this responsibility to CQC and that it should ask Monitor to undertake this role.”

The report states that because Monitor already has several in-depth skills in the financial oversight of foundation trusts. The Health Committee questions why that role should go to the CQC. If the CQC is just  going to keep buying consultants in, how is that value for taxpayers’ money? I hope that the Chair and the Minister will forgive me for returning to those points, but having seen the Health Committee’s report, it is only right that the Minister responds to them as we scrutinise this part of the Bill.

I will speak about amendment 132, which does not deal with any of the issues that the shadow Minister raised. It is intended as an opportunity to probe the Government on a separate issue that came to my attention in the past couple of weeks. It relates to an important interaction between different regulated services and how the actions of one regulated set of services—in this case, primary care and GP practices—can have an impact on some of the costs of another regulated set of services, which in this case is care homes. I do not necessarily expect the Minister to be able to give me a full response today, but I ask him to reflect on what I say.

The amendment is based on a recommendation, again from the Health Committee, that dates back a long way, to an inquiry that it did in 2003-04 into a range of issues around elder abuse. One of the things it found when it took evidence was that a number of care home providers expressed a concern about the variability of supply and access to primary care services. An argument was made about the inappropriate use of retainer fees to retain the services of general practitioners, and the Health Committee made a clear recommendation that that practice should be abolished.

The Government of the day simply responded by saying that there were circumstances in which additional or enhanced services might be provided outside what a general practitioner would have a contractual obligation to provide to the public at large, and that there was therefore a reason for retaining such fees. However, the English Community Care Association undertook a survey in 2008 on the use of retainers. It found that the cost of retainers over the course of a year could amount to as much as £24,000 and that in a number of cases there was nothing to suggest that the retainer was being paid for more than the services that the GP had already been contracted to provide.

More recently, Care England, as it has become following the merger with the care home association, has surveyed a number of its members. One survey received 34 responses —not a big sample—of which 30 said they paid retainers and the other four did not. The survey showed that the amounts being paid ranged from £1,000 to £2,400 a month and several of the organisations responding said that if they did not pay the retainer, the in-house GP service would be withdrawn and all residents other than totally immobile residents or those in emergency situations would need to go to the surgery.

That cannot be right. It is unacceptable that GPs should use their relationship with care homes as an additional source of income to provide the service they are contracted to provide. That is why I am raising this issue now and why I raised it as a member of the Health Committee in 2004. I made the same recommendation then and I still feel strongly about it.

I support that point. My mum, when she lived near Watford, used to help in a care home. The home had a real struggle trying to get GPs to come in  and do some preventive, up-front tests, to make sure that everybody was okay. There were a couple of examples of where something had gone wrong and they had to ring 999, when they thought it would be much better if the incident had been prevented in the first place. GPs refused; they said they would do it only if the home was charged. My mum rang me and I said, “They are surely on the patient register, they should not be doing that.” The home went to the clinical commissioning group, which said there was nothing it could do about it; it was up to the GPs. This happens, and it is not right. I absolutely support what the right hon. Member for Sutton and Cheam has said.

I agree with the hon. Lady. Obviously, the Government are concerned about this because they said that they were in the White Paper on care and support. They said that the evidence also showed that there is currently considerable variation between primary care trusts, as they were then, in the primary care services provided for care home residents. Of course, NHS England has a primary responsibility here, but the amendment seeks to suggest that, when one looks at viability, another regulated organisation levying additional charges that increase a home’s costs is not an irrelevant consideration. That is the basis on which I have tabled this amendment.

Will the Minister raise this matter with the chief inspectors of adult social care and general practice and ask them how they might satisfy themselves that, in health and care economies around the country, this practice is not being used as a way of topping up the incomes of general practices?

Perhaps I should state for the record that I never received any such fees in my time as a GP. There is a serious issue, but it is only fair to raise the problem of the real work force shortages in general practice. If GPs are to do the very valuable work that my right hon. Friend the Member for Sutton and Cheam mentions on prevention, we can use other vehicles—perhaps through the better care fund—to make sure that that happens, and that GPs have the time to prioritise it.

That is a good point which I hope the Minister will pick up. There are clearly issues around the work force that it is entirely right to raise.

I ask the Minister to raise the issue with the two chief inspectors so that they can act in concert and satisfy themselves and the public that the use of retainer fees is appropriate, that there is clarity about when they can be used and that there is greater consistency about the level at which they are set, if they are to continue to be set in the first place.

That was the purpose of the amendment. I hope that the Minister, either in his response or correspondence, can offer some reassurance. I know that Care England and a number of its members are concerned about this issue, and the public would be concerned, too.

In tabling amendments 129, 130 and 132, my right hon. Friend the Member for Sutton and Cheam  and Opposition Members bring to the Committee’s attention the important issue of ensuring that the CQC can access appropriate financial information to oversee effectively the finances of registered care providers.

First, I will deal with the shadow Minister’s concern about the approach that the CQC will take and the comments of its chairman, David Prior. By way of giving some background, I will point out that he was the Member of Parliament whom I defeated to end up in this place. I feel that I was releasing him to do this very important job and he is an extremely good chair of the CQC.

That is not what the Minister said in “Focus” at the time.

I have a high regard for David Prior and I am delighted he is doing that job. None the less, we were head to head for six years, trying to win the North Norfolk seat.

David Prior has made some comments, I think to the Health Committee. The first point to make is that if one makes a body independent of Government, one has to respect that independence in the way that it goes about its business. However, I will meet him soon and independence does not mean that we cannot talk to each other. I will certainly raise this issue with him on behalf of the shadow Minister. It is a legitimate issue for discussion, and I am happy to raise it with him.

The shadow Minister also raised the issue of CQC versus Monitor. I think that I am right in remembering—forgive me if I am wrong—that the shadow Minister indicated at the last sitting that she thought that the judgment was probably right. Obviously, the Health Committee has since given its view, but that alignment of financial stability and quality of care is incredibly important. This is one of those issues where there is no right or wrong answer; a judgment call is needed. However, in having to reach a conclusion, I felt that having the organisation that is responsible for the quality of care looking at the sustainability of organisations is hugely important. It is important for us to recognise that a financially unstable organisation undermines the quality of care, and that people who play fast and loose with structures to make a fast buck undermine the quality of care. Having one organisation looking at those issues is the right way forward.

I make an observation that I hope is incontrovertible: it is unacceptable for care users to be left without the services they need, in particular where the interruption of those services, or the worry that they might be interrupted, could badly affect care users’ well-being, and place unacceptable stress on them, their families and their carers. The financial performance of a provider, whether exceptionally good or exceptionally poor, can be a leading indicator of serious quality failings.

During the past 20 years, the care market has obviously evolved massively. Today there are several medium and large providers of care operating across large parts of the UK, on a significant scale. The impact of such a provider failing would affect many parts of the country and it is not reasonable to expect individual local authorities to manage such a situation without central co-ordination.  In the previous sitting, my right hon. Friend the Member for Sutton and Cheam made the point that, when the horror of Southern Cross happened, there were no tools available to manage the process, or even to have warned us prior to the crisis happening that it was imminent.

We are therefore placing a duty on the CQC to assess the financial sustainability of the providers that would be most difficult to replace. It will support local authorities in ensuring continuity of care when providers fail, by informing them when it considers that such a failure is likely and providing information that they need, such as details of individuals receiving services from the provider in their area.

In amendments 129 and 130, the Opposition raised the important issue of ensuring that the CQC, in assessing the financial stability of registered providers, can obtain appropriate information from organisations in a registered care provider’s group. Some providers have ownership structures that complicate the assessment of their financial sustainability. For that reason—this is the critical point in answering the shadow Minister—clause 56(5) provides for regulations to require the CQC to require information from other organisations that would assist it in assessing a provider’s financial stability.

As the CQC develops its framework for implementing its regime and its approach to assessing financial stability, we will work with it and stakeholders to consider how the regulations should work in practice.

What is the estimated cost of outsourcing to financial experts to advise the CQC?

I do not have an estimate; it must be for the independent CQC to manage that process. The duty that the Bill places on the CQC is clear, and it must comply with it in such a way as to allow the arrangements to work effectively. I do not know whether we can find out about the likely cost; if I can provide that to hon. Members, I shall be happy to, but the matter is ultimately for the CQC.

Draft regulations will be developed through collaboration between the Department of Health, the CQC and stakeholders. The objective of the market oversight regime is to provide early warning to local authorities, to support them in ensuring that no one will suffer because the failure of a provider leaves a gap in the service on which they depend. That cannot be achieved if the CQC cannot make a fully informed assessment of a provider’s financial situation, so I reassure the Opposition that we fully intend to make the regulations. The shadow Minister wanted the word “must”, not “may”, in the provision, but we will make the regulations: we are absolutely committed to that. I hope that reassures her.

I would not want to tell the Minister what to do. Nevertheless I should not underestimate the difficulty of getting some of the detail about financial arrangements from companies based overseas. They are often offshore. HMRC cannot get information about what tax they pay, let alone the CQC.

I am serious; I have spoken to the CQC about the issue. I do not think that the provision is tough. The Minister is saying that a bod in the CQC will be able to  say to a private equity or offshore overseas company, based who knows where, “Give us the details we need about your background deal for the care provider.” I cannot consult a crystal ball, but I think that the company would not do it. This will not be easy. The issue is serious. If HMRC cannot get information, how will the CQC?

I understand and share the hon. Lady’s concern. It is incredibly important to get the information; that is why regulations will absolutely require it—not just from the specific company, but from other organisations.

In the aftermath of Southern Cross, while we have not had the legislation it has been for the Department to maintain an informal monitoring process. There has been quite good collaboration with the larger industry players where a collapse might have a significant impact in a particular area of the country. My clear understanding from officials is that that collaboration has worked well. Such collaboration is in the interests of both sides, because whatever people’s motivation in terms of making money, nobody actively wants the organisation to go bust.

The Care Quality Commission is responsible for registering those companies and must be satisfied on registration that a company meets the fundamental standards of care and can sustainably provide good quality care. There is an alignment of interest in getting financial information and continuing to monitor stability to facilitate the work of the CQC.

I agree with the Minister’s analysis. Will he support my ten-minute rule Bill to extend FOIs to private health care companies? Does he agree that that would make life much easier for the CQC and others trying to achieve the same ends?

I offer the hon. Gentleman a discussion on the matter. If he sends me his ten-minute rule Bill, I will be happy to have a chat with him about it one afternoon in the Tea Room. I would really enjoy that. We will have to find somewhere mutually agreeable to sit together in the Tea Room, given the demarcation in that place.

Will the Minister sit at our table?

I greatly appreciate the hon. Gentleman’s offer. He is clearly a peacemaker. We ought to get back on track. I apologise for the ill-discipline, Mr Bayley—not only mine, but that of others.

Order. That is perfectly orderly. As always, the Minister has been generous to other members of the Committee—something I thoroughly approve of.

I am relieved to hear it.

In amendment 132, my right hon. Friend the Member for Sutton and Cheam rightly emphasises the importance of ensuring the effectiveness of the new system of financial oversight of care providers that will be run by the CQC. Before I give the formal response in my  speaking note, I want to address directly the concern that he has raised. He is right to pursue the matter, and the Government are right to have expressed concern about the practice. The steps that the Government are taking will help break through the unacceptable practices that sometimes occur.

Nowhere will there be a greater concentration of people who may need hospital treatment than in a care home, and those people often have multiple morbidities and require proactive care. In the Secretary of State’s work, and in the work I am doing within my portfolio, the whole emphasis is on shifting towards proactive care and having an accountable clinician. We are reforming the GP contract, which was—this is just a tiny political point—deeply flawed in its make-up. [Interruption.] Mr Bayley, that is outrageous.

I did not hear anything, and neither did Hansard.

The reform of the GP contract frees up time from this box-ticking exercise to allow GPs to concentrate on proactive care. Alongside that, the emerging vulnerable older people’s plan will focus on maintaining the well-being of those individuals, preventing crisis admissions to hospital, which are so often completely disruptive to their well-being and care and enormously expensive to the system. Care homes and the role of the GP are critical to that. Those patients in that care home will have to be part of the vulnerable older people’s plan. There will have to be an accountable clinician who will be responsible for their care. This is a significant advance.

The Minister referred to appropriate care. One example that comes to my mind is people with brain injuries. Sometimes they are pushed to a care home which, let us be honest, is an inappropriate place for them. It does not give them the correct chance for rehabilitation, which is so important. There are specific ailments, injuries and diseases where people need to be in the appropriate place. Can the Minister confirm that after these proposed legislative changes, decisions will be taken to ensure that those with brain injuries are sent to the right place and not somewhere inappropriate for a short stay?

This all comes down to good care and addressing the issue of accountability. As for being sent off to an inappropriate care home, in future under the vulnerable older people’s plan, there has to be a named clinician—a GP—who is responsible for the care of that individual. That does not half focus the mind. So often at the moment, people fall through the gaps in a horribly fragmented system. The whole emphasis of the Government is to move towards a joined-up, integrated system that ensures good, proactive care to prevent those people from facing crises that are horribly disruptive to their lives.

An important step has been taken around much better co-ordination of care, particularly for those with complex multi-morbidities. It is key to getting the best results for them. Will the Minister  consider sharing this little debate about retainer fees with the chief inspectors for social care and for general practice so that they are aware of the concern and can take appropriate steps to address it in their work inspecting those two different parts of the system? They interact and they have an impact on the bottom line of care homes. There is a question whether those fees are always appropriate.

I am grateful to my right hon. Friend for raising the issue. It is important. On his specific point, I am happy to write to Steve Field, the chief inspector of primary care, and to copy in the chief inspector of social care, to raise the issue. There must not be barriers in the way of proactive care of people in care homes. My hon. Friend the Member for Totnes, with all her experience, raised exactly this concern and the importance of that very good proactive care.

The point I was trying to make and did not mention in my earlier comments was that if someone is in the right centre for rehabilitation—the right residential home, the right care home—there is a massive financial saving. Whether we like it or not, we have to focus on the financial savings, too. There are good savings to be made by putting the right person in the right home at the right time.

I agree. That is the whole purpose behind our integrated care pioneers. The hon. Gentleman should visit some of these brilliant parts of the country—Islington, Greenwich, Barnsley, Torbay or Cornwall. Those fantastic leaders are demonstrating a much more effective way to manage people’s care: shifting the emphasis to preventing ill health; preventing a deterioration of health; and critically, using the money more effectively.

Beyond the pioneers, we now have the incredibly important better care fund that has the potential to deliver that proactive preventive care across the country. I encourage the hon. Gentleman to visit some of those great places because there is a lot we can learn.

The Care Quality Commission will oversee the financial stability of these providers, assist them in mitigating any financial challenges to continuity of care and provide assistance to local authorities in managing continuity of care if a provider does fail. Where there is a significant risk to the financial stability of the provider, the CQC can arrange an independent business review.

It will be important that the way that the CQC assesses the financial viability of providers in the regime takes account of the wide range of different provider types and different business models. The information required to assess the viability of a corporate plc may be completely different from that required to assess a charitable trust.

I want to return to the CQC’s ability to monitor care providers. I accept the Minister’s good intentions to ensure that that happens, and I hope the regulations will be strong enough. However, I am still not persuaded that the CQC has the financial capacity, in particular the financial penalties, to hold these companies to account. Will the Minister look  again at the financial penalties available to the CQC? Could they not be higher in future, to ensure that there is transparency from the companies about their financial management? That would be a good way to improve confidence that we are going to get the right outcome.

That was a legitimate intervention. I will write to hon. Members about all matters relating to the CQC. I hope that encourages the hon. Gentleman.

In carrying out such assessments of financial sustainability, we would expect the CQC to take into consideration a range of factors, including not only any risks to the business, but the reasons behind those risks. Those might include, as the amendment suggests, debts or charges owed to other individuals or organisations. I can see the point that my right hon. Friend the Member for Sutton and Cheam is making through the amendment, although I do not think it necessary to specify such a requirement in the Bill. I suspect that his amendment is a probing one.

Paul Burstow indicated assent.

My right hon. Friend’s nodding reassures me.

I assure my right hon. Friend that the CQC intends to develop its methods through consultation to take account of the wide diversity of providers, and I hope I have given enough reassurance for him not to press his amendment. I hope, in a similar spirit, that the shadow Minister will not press her amendment.

I remain concerned about this matter. I understand that regulations are to come forward. I will not press the amendments at this stage; we have put our concerns on the record. However, I think the issue needs to be looked into in far more detail. If the Minister will write to hon. Members about the issue, we can keep it under scrutiny, which is our job. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 56 ordered to stand part of the Bill.

Clauses 57 and 58 ordered to stand part of the Bill.