I beg to move amendment 151, in clause 118, page 101, line 31, at end insert—

‘(A1) In section 65H of the National Health Service Act 2006 (Chapter 5A of Part 2: consultation requirements), in subsection (7) after “Secretary of State;”, insert—

“(c) any overview and scrutiny committees in whose area the affected trusts have hospitals, establishments or facilities; and”

(A2) In section 65H of that Act (consultation requirements), in subsection (8) leave out

“(a) an overview and scrutiny committee of any authority to which section 244 applies;”.’.

With this it will be convenient to discuss the following:

Amendment 153, in clause 118, page 101, line 31, at end insert—

‘(A3) In section 65H of that Act (consultation requirements), at the end of subsection (4) insert—

( ) The Trust Special Administrator must hold at least one meeting with overview and scrutiny committees in whose area the affected trusts have hospitals, establishments or facilities.”.’.

Amendment 170, in clause 118, page 101, line 31, at end insert—

‘(A4) In section 65KB of the National Health Service Act 2006 (Secretary of State’s response to regulator’s decision), after paragraph (1)(b), insert—

“(ba) that in the discharge of its functions the trust special administrator has reasonably sought and considered responses from any affected trusts, staff of any affected trusts and such persons as the trust special administrator may recognise as representing staff of any affected trust, and any person to which an affected trust provides goods or services under this Act that would be affected by the action recommended in the draft report.”.’.

Government amendments 135 to 138.

We move on to another subject that, I am sure, will not prove controversial. I say that with a sense of irony as I suspect it will be exactly the opposite. The trust special administrator regime has been controversial since it was first proposed in the Health Act 2009. It is an area where we come into direct conflict between the legitimate interests of the general public to be fully involved in decisions that shape and affect their health care, and the scenario in which, as a very last resort, actions are needed to protect the public’s interest by maintaining a continuity of service for an organisation that is financially unable to operate. That is what the clause seeks to develop further—because the clause is not the beginning of this story of trust special administration and its power to intervene in the event of an organisation’s being under severe financial pressure and in sustained financial difficulty. It is a consequence of the recognition by successive Governments that there needed to be a mechanism in place.

The clause amends the trust special administrator regime that was set out in the previous Government’s 2009 Act. The aim was good. As I said, it was to protect the public’s interest through maintaining continuity of health services. The trust special administrator regime was there for rare cases, and Ministers in the previous Government emphasised that it was to deal with rare and unusual circumstances. I hope that the Minister will confirm today that that remains the underlying policy intention. It concerns those organisations—the NHS trusts and foundations trusts—that find themselves at financial breaking point. It is, by definition—at least, I hope it will continue to be by definition—very much a last resort after all other steps have been taken. The amendments explore what that might mean in practice.

The 2009 Act sets out the process for appointing administrators and how they do their job. It has been a given now for some years. The Act was designed to ensure that speed would be of the essence when making recommendations to secure health care for local people. However, it had a flaw, which was dramatically exposed in the court case regarding the role of the special administrator in Lewisham.

The way in which the trust special administrator regime was set up in the 2009 Act took an entirely institutional view. It looked at individual trusts as though they were islands, but we all know that a local hospital is part of a complex web of relationships and services. It is an interdependent organisation. It does not stand on its own, and sometimes financial difficulties are not caused by its actions, but by those of others in the local health economy. As the Government make progress on their agenda for integration, those interdependencies will become even more profound and important. If we see the emergence of integrated care organisations, that will be even more profound in terms of understanding those interdependencies. That is recognised in the clause, but the Government amendments take it further, and that is welcome.

The Government amendments—I look forward to the Minister’s setting this out in more detail—would ensure that the administrator, once appointed, had to engage with and consult affected areas and trusts. That picks up the point that trusts are not islands, but interdependent. It is right to ensure that those who could be affected by the administrator’s recommendations  have their say. The amendments cover involving staff as well as those who manage and lead the organisations. However welcome that is, it still leaves some people on the outside, looking through the window, wondering whether they are going to be let into the process. Dealing with that is the role of local authorities as elected representatives of their area. They, particularly local authority members who are involved in health overview and scrutiny, can use their insight to contribute to the administrator’s work. It seems odd that the original provisions in the 2009 Act left it to the Secretary of State’s discretion to decide whether overview and scrutiny committees should be involved in the process.

Amendments 151 and 153 ask the Government to remove the Secretary of State’s discretion and make it a requirement that overview and scrutiny committees, like other health organisations in the area, are consulted and engaged with during the work of the special trust administrator.

I also hope that the Minister will say more about the obligations that apply to the special trust administrator on public engagement and involvement. The quality of the engagement at this last resort stage is very important in trying, to some extent, to mitigate the sense of alienation that the public will have about a process that they feel is taking power away from them. It is very important that that is clear and I hope the Minister will say something about that.

Secondly, in the Health and Social Care Act 2012, we debated at length whether there should be a duty on the Secretary of State to respect the autonomy of NHS organisations. The 2012 Act requires the Secretary of State to have regard to his obligation to step back and allow organisations in the NHS empowered to do certain things, to do so unmolested by him on a day-to-day basis. That is a good idea, which needs to be thought through in the context of trust special administration. Will the Minister say how the Secretary of State, in taking a recommendation to start a trust special administration process, takes into account his duty on autonomy under section 5 of the 2012 Act?

Amendment 170 relates to some comments made by the NHS Confederation and the Foundation Trust Network. They are calling on the Department and, I suspect, by extension NHS England, to have a clearer strategy for stepping in ahead of the need to trigger the unsustainable provider regime—the missing piece of this puzzle. Surely that involves making sure that, to avoid the need to trigger a trust special administration regime, there is good quality engagement with all the stakeholders—all those in the local community who have an interest in the future of health care for their area. That is not simply a box-ticking exercise or about paying lip service.

When we look at research on public engagement on commissioning and reconfiguration decisions, there are few examples of world class change management in the NHS. The example that is often cited is stroke care changes in London, but when one looks for other examples, they are few and far between. The NHS does not do this very well very often. Stroke care is an example where it did it very well. It brought stakeholders with it and explained why the changes were necessary, and that went through remarkably peaceably, considering the level of change that was taking place.

I do not want to test the Committee’s patience, but could that be something to do with the National Institute for Health and Clinical Excellence intervention committee not meeting for three years, so that there has not been the opportunity to look at evidence-based policy, and the fact that so little research money has been spent on health systems approaches?

That may or may not be part of it, but there is also a flaw in the way in which we train those who manage and lead our NHS organisations. We do not train for patient involvement and engagement. It is learnt on the job and sometimes bad habits are transferred from one organisation to another as a consequence. That has to change and I hope it is one of the things that Health Education England can address. It seems to be a very important key that can unlock much better dialogue between the public and the NHS about how their NHS is organised. That will be necessary, because we will see change in our health services. If we are to dissolve boundaries between organisations and integrate health and social care, it will require changes.

Some of those changes need good, world class change management to help people through them and help them see the benefits that can make a difference to them and their families. That is why I also hope that the Minister will respond to amendment 170. It simply says, on behalf of the Foundation Trust Network, that, when the Secretary of State receives the report from the TSA, he should demonstrate that he is satisfied that the requisite amount of consultation has taken place and that the views of those affected have been sought and considered.

Will the Minister confirm that, as under the previous Government, the powers are a last resort? Will he spell out the obligations for public engagement and consultation? Triggering those powers would surely be an admission not just of the financial failure of an individual organisation, but of the wider system, if the situation had been spotted but the necessary action had not been taken. That would be a failure for all in the system. Surely prevention is better than having to sort out these things in a rush. That is why engaging the public meaningfully from the outset, not simply as lip service, is key to securing consent to change.

I hope that my amendments prompt a debate on those points, and that the Minister can at least accept that overview and scrutiny committees should be able to bring their expertise into the process, ensuring better outcomes.

I have been asked for a stand part debate on the clause. I am inclined to grant that as long as people in their stand part speeches raise matters that have not been previously covered on the amendments. They will have to make that case when they speak. It therefore makes sense to invite the Minister to speak about his amendments. Then we will have a wider debate, if the Committee desires, on the amendments, reach a decision on them and move on to stand part.

I fully agree with the sentiments and points made by my right hon. Friend the Member for Sutton and Cheam. The TSA process is one of last resort that also needs to respond and recognise—and will recognise as a result of Government amendments—that  a foundation trust does not operate in isolation. It is part of a broader and wider health care economy. He described it as a complex web of interdependent relationships. That was a good way to put it and that is the context in which we have to view the TSA regime, when it is triggered as a last resort to deal with quality failure or sustainability issues at a trust or foundation trust.

Amendment 135 is a minor and technical amendment that would ensure that the provision in clause 118 to extend commissioner sign-off for the recommendations of a trust special administrator at a foundation trust to include commissioners of other affected trusts can be commenced following Royal Assent.

Amendment 136 would further improve the changes we are making to strengthen the regime under clause 118. It relates to the administrator’s statutory consultation on the draft recommendations to secure sustainable services in a local health system. I remind the Committee that Lord Darzi told the House of Lords during the Committee stage of the 2009 Act that the regime was intended to ensure that the

“final decision on the future of services is informed by an independent process involving evidence-based judgments, underpinned by accountability to the public and patients”.—[Official Report, House of Lords, 5 March 2009; Vol. 708, c. GC336.]

The amendment would ensure that decisions about affected trusts were soundly based. It would require an administrator at an NHS trust or foundation trust to consult other NHS provider trusts, their staff and commissioners who may be affected by the draft recommendations. The amendment would complement the extended scope of an administrator under clause 118. Amendments 137 and 138 are technical and consequential on amendment 136.

Representations made to the Government have shown a clear expectation that an express wider power for an administrator should be matched by an express wider consultation requirement. We are therefore responding positively to a strong view from key stakeholders who represent NHS providers—some of those stakeholders were outlined in my right hon. Friend’s speech—who believe it is logical and necessary to widen the scope of a TSA remit. The amendment is a proportionate extension of the current consultation requirements. It would ensure that an administrator’s final recommendations are formed by a full evidence base and deep understanding of the issues facing the entire local health system and local health economy. It would help the administrator to recommend the right long-term solution.

Amendments 151 and 153 would require a TSA, during the consultation, to receive a written response and to hold at least one meeting with any overview and scrutiny committee in whose area any provider trust affected by the administrator’s proposals has hospitals, establishments or facilities. I agree entirely with the principle that a TSA should consult relevant overview and scrutiny committees. I am sympathetic to the desire for such requirements, but we believe that it is important not to have an entirely prescriptive process in statute about whom an administrator must consult, beyond certain legal minimum requirements. It is right that current minimum legal requirements for consultation include consulting the public.

The National Health Service Act 2006 already allows anyone with an interest to provide views on the administrator’s proposals and for the administrator to hold at least one meeting to seek responses from anyone who wishes to attend. The legislation does not confine or constrain that requirement for public consultation. Equally, it is right that minimum consultation requirements include staff of the failing trust and its commissioners. Our amendments to extend the minimum requirements to other provider trusts, their staff and commissioners are, in our view, important in complementing the extended scope of an administrator’s remit. I believe that my right hon. Friend the Member for Sutton and Cheam strongly supported that point in his remarks. Beyond minimum legal requirements and the ability of the Secretary of State and Monitor to direct an administrator to whom else they should consult, statutory guidance from the Secretary of State and Monitor is clear that administrators must be able to use their judgement in choosing who else to consult to ensure meaningful and effective engagement. In practice, it is hard to conceive of an administrator not wanting to engage with the local authority, given the importance of developing the best possible proposals.

It might be helpful if I quote from paragraph 53 of the statutory guidance issued by the Secretary of State to administrators appointed to NHS trusts:

“legal requirements are a minimum and it is expected that Trust Special Administrators will use their judgement in choosing to consult other organisations or persons…Trust Special Adminstrators must exercise discretion about who they should consult to ensure there is…effective engagement during…consultation on their draft report.”

An annex to the guidance suggests that relevant overview and scrutiny committees, including joint overview and scrutiny committees, are among the organisations and individuals an administrator might wish to consult. Paragraph 84 of the statutory guidance issued by Monitor to foundation trusts is almost identical.

I hope that my right hon. Friend finds my remarks somewhat reassuring. I would like to reassure him further by saying that we will look again at the issue and our statutory guidance, to convey in clear terms the importance of local authority involvement in any special administration process. We will ask Monitor to do likewise with its statutory guidance for administrators at foundation trusts. I further reassure him that I am sympathetic to the arguments he made about overview and scrutiny committees. We will reflect on what has been said here today, in advance of Report.

The Minister is keen on examples, so will be reflect on what happened at Lewisham? He talks about altering the statutory guidance— he refers to paragraph 53. If there had been one meeting of the overview and scrutiny committee, even involving neighbouring authorities, does he think that would have been enough to assuage public concern and win back public trust?

In discussing the amendments, I will not discuss issues of the past. The Bill is not retrospective, but prospective. It will ensure that we improve the trust special administration regime, which the previous Government established in 2009, and make it more fit for purpose. Our amendments would provide for a broader duty of consultation, with broader duties for  commissioners and broader consultation with wider affected providers. The hon. Member for Easington may have missed the remarks I made immediately before I gave way, but I have already committed to looking at the issue of overview and scrutiny committees before Report.

Is the Minister aware that Andy McKeon, the new chief executive of the Nuffield Trust, says that the Minister’s amendments inviting the public to give their views are not enough? He says that, even with the changes that the Government propose, the time scales are far too curtailed and the standard rules on consultation should apply. I am sure that the Minister knows that Mr McKeon and the Nuffield Trust are pro-changes to hospital services where they can be shown to work, but they are very clear that full public consultation must take place, if a trust that is not failing gets drawn into the process of reconfiguration. That is what Mr McKeon says; what is the Minister’s response?

The hon. Lady says that there is a very tightly curtailed timetable. We have actually extended the consultation time for the TSA process under clause 118. I do not want to return to the debates that we had on clauses 82 and 83 about single failure regime, but I am sure the hon. Lady recognises that, when we are dealing with quality failure of trusts, it is important that action is taken quickly to protect patients and the public.

It is not acceptable to put more delays in the system. We are increasing the amount of consultation in this process by a number of weeks, but the process in its entirety can take between six and eight months to go through. That is a fairly lengthy process and a lot of consideration is done. I am sure that the hon. Lady would not want to endanger patients’ and the public’s lives by extending it further. That is the risk if we make these processes too lengthy.

If a trust is not failing, but has been brought in to look at how the whole health economy is dealt with, why should there not be the same standard process and standard length of time for a consultation?

The previous Government set out a strong and robust process in the 2009 Act. Our amendments extend the timetable for the TSA process and the consultation to affected trusts and commissioners. We are already consulting the public. There is a very robust system in place that was envisaged originally by the right hon. Member for Leigh (Andy Burnham), so I am surprised that the hon. Lady is taking exception to the process. We recognise that there were deficiencies in the 2009 legislation. That is why we have extended the scope for consultation to additional providers, to other affected providers and to additional commissioners. We have also made sure that there is proper engagement with the public and we are looking at the issues that my right hon. Friend the Member for Sutton and Cheam raised about the wider health and social care economies, on which health overview and scrutiny committees had a very strong view.

Will the Minister confirm that the same standard period of consultation does not apply to a trust that has been brought into the reconfiguration and has not been failing? What is the justification for less  time? I am not talking about the Minister extending the period from the original proposal. The Government have made a move in their amendments. Why should the period be any shorter than the standard process and rules for consultation that apply to other trusts?

This is a process of last resort in dealing with deficiencies in the health system. The first process of dealing with failures in quality or financial sustainability is—

The trust is not failing.

Order. The hon. Lady is not listening to responses. It is possible for her to make a speech about the Minister’s amendments or, indeed, those of the right hon. Member for Sutton and Cheam, later in proceedings.

The hon. Lady is misinterpreting my points—I am sure not wilfully—and has perhaps inadvertently misled herself in her interventions. It is clear that there is a process for when a serious failure of sustainability of the trust or a quality failure occurs. That is an important step that we included through triggering the TSA regime in clauses that we discussed earlier. It is important that that process is dealt with relatively rapidly. Even so, we are extending the process for broad consultation. However, the first step when there are concerns about quality in a trust—when the CQC issues a warning notice or raises concerns—is the one taken by this and the previous Government: for discussions to take place with local commissioners about the quality of services at that trust. That is the first step in dealing with concerns about quality in a trust. There is also strong oversight from Monitor and the Trust Development Authority to intervene and exercise their powers where appropriate when a trust has sustainability or financial problems.

Those are the first steps that will need to be taken. Part of the process, for example through the special measures criteria now being used, is about involving other trusts in the health care economy in helping facilitate solutions where appropriate. That happens every day, right here, right now. It is happening on the back of the Keogh review, thanks to what we have done on putting special measures in place for trusts. There is a comprehensive process that works well and takes into account the broader health economy. Sometimes, when things get to that extreme stage and other mechanisms have been exhausted, it is important that there is a TSA process, and that has broad consultation built into it.

I will try once more. I am sure that the Minister is not wilfully misinterpreting my question. I am referring to a trust that has not failed on quality or finances, but has been brought into a process being used to deal with another trust that has failed on quality or finances. Why should the trust that has not failed be subject to less consultation than the standard public consultation process for those trusts that have?

There is a point that the hon. Lady is not wishing to address. I took pains to explain the process  as part of our discussions on clause 80 and again now. The TSA process is a last resort. Before that process is implemented, we expect all other measures and options to have been exhausted. There will be discussions with local commissioners if the CQC raised concerns about the trust. Those commissioners would work with that trust, and potentially others, to address those quality concerns.

Similarly, on the financial sustainability of trusts, we would expect commissioners, the TDA and Monitor where appropriate to work with the trust in question and more broadly across the health care economy. Those changes are at the heart of the Secretary of State’s approach to putting trusts in special measures. That is pairing trusts together where there are concerns and problems and taking that broader look at the health care economy. Implicitly, other health care trusts and providers are involved, as are other commissioners, in dealing with solutions at an early stage.

Then, if necessary, in extreme circumstances due to quality failure or other issues around financial sustainability, the TSA process is triggered. At that point there is a process for consultation again across the broader health economy, and that is relatively lengthy. The TSA will take that broad look across the health economy in accordance with our amendments. That is a robust process. However, when the TSA is triggered because things are so serious, we will get to a conclusion; if there are issues of patient care at stake, they will be dealt with quickly.

The Minister is generous in giving way. Will he respond to a point arising from one of his remarks? He said the TSA would be an infrequent and rare occurrence. Are not 30% of non-foundation trusts and about 11% of foundation trusts forecasting that they will run a deficit for this financial year? This is a major change that may be very important if more and more trusts are forecasting deficits.

The hon. Gentleman may remember that the last time that trusts got into major deficit was when the hon. Member for Leicester West was a special adviser in the Department. [ Interruption. ] There is no point chuntering from a sedentary position. We are not in a position at the moment whereby we have changed in any way what the previous Government envisaged. The TSA process is a last resort, and because patients’ lives may be at risk, it cannot be an open-ended, incredibly lengthy process.

Even so, we have a robust process in place for broad consultation as part of the TSA regime. We have slightly extended the process of consultation to ensure that the views of other commissioners and providers are taken fully into account. For those reasons, we have made sure that we are putting a strengthened regime in place. It is about protecting people’s lives when there is a quality failure. I am sure the hon. Member for Easington would not want that to be an open-ended ticket; it needs to be resolved quickly.

Ordered, That the debate be now adjourned.—(John Penrose.)

Adjourned till this day at Two o’clock.