‘(1) At the end of section 223B of the National Health Service Act 2006 (funding of the National Health Service Commissioning Board) insert—

“(6) Where the mandate specifies objectives relating to service integration, the requirements that may be specified under section 13A(2)(b) include such requirements relating to the use by the Board of an amount of the sums paid to it under this section as the Secretary of State considers it necessary or expedient to impose.

(7) The amount referred to in subsection (6)—

(a) is to be determined in such manner as the Secretary of State considers appropriate, and

(b) must be specified in the mandate.

(8) The reference in subsection (6) to service integration is a reference to the integration of the provision of health services with the provision of health-related services or social care services, as referred to in sections 13N and 14Z1.”

(2) After section 223G of that Act (meeting expenditure of clinical commissioning groups out of public funds) insert—

“223GA  Expenditure on integration

(1) Where the mandate includes a requirement in reliance on section 223B(6) (requirements relating to use by the Board of an amount paid to the Board where mandate specifies service integration objectives), the Board may direct a clinical commissioning group that an amount (a “designated amount”) of the sums paid to the group under section 223G is to be used for purposes relating to service integration.

(2) The designated amount is to be determined—

(a) where the mandate includes a requirement (in reliance on section 223B(6)) that designated amounts are to be determined by the Board in a manner specified in the mandate, in that manner;

(b) in any other case, in such manner as the Board considers appropriate.

(3) The conditions under section 223G(7) subject to which the payment of a designated amount is made must include a condition that the group transfers the amount into one or more funds (“pooled funds”) established under arrangements under section 75(2)(a) (“pooling arrangements”).

(4) The conditions may also include—

(a) conditions relating to the preparation and agreement by the group and each local authority and other clinical commissioning group that is party to the pooling arrangements of a plan for how to use the designated amount (a “spending plan”);

(b) conditions relating to the approval of a spending plan by the Board;

(c) conditions relating to the inclusion of performance objectives in a spending plan;

(d) conditions relating to the meeting of any performance objectives included in a spending plan or specified by the Board.

(5) Where a condition subject to which the payment of a designated amount is made is not met, the Board may—

(a) withhold the payment (in so far as it has not been made);

(b) recover the payment (in so far as it has been made);

(c) direct the clinical commissioning group as to the use of the designated amount for purposes relating to service integration or for making payments under section 256.

(6) Where the Board withholds or recovers a payment under subsection (5)(a) or (b)—

(a) it may use the amount for purposes consistent with such objectives and requirements relating to service integration as are specified in the mandate, and

(b) in so far as the exercise of the power under paragraph (a) involves making a payment to a different clinical commissioning group or some other person, the making of the payment is subject to such conditions as the Board may determine.

(7) The requirements that may be specified in the mandate in reliance on section 223B(6) include requirements to consult the Secretary of State or other specified persons before exercising a power under subsection (5) or (6).

(8) The power under subsection (5)(b) to recover a payment may be exercised in a financial year after the one in respect of which the payment was made.

(9) The payments that may be made out of a pooled fund into which a designated amount is transferred include payments to a local authority which is not party to the pooling arrangements in question in connection with the exercise of its functions under Part 1 of the Housing Grants, Construction and Regeneration Act 1996 (disabilities facilities grants).

(10) In exercising a power under this section, the Board must have regard to the extent to which there is a need for the provision of each of the following—

(a) health services (see subsection (12)),

(b) health-related services (within the meaning given in section 14Z1), and

(c) social care services (within the meaning given in that section).

(11) A reference in this section to service integration is a reference to the integration of the provision of health services with the provision of health-related services or social care services, as referred to in sections 13N and 14Z1.

(12) “Health services” means services provided as part of the health service in England.”.’.—(Norman Lamb.)

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss amendment (a), line 74 after ‘regard to’, insert ‘the duty to promote wellbeing in section 1 of the Care Act 2014, and’.

New clause 2 establishes the better care fund, to promote joint working between the NHS and care and support services. Disjointed care causes frustration for people who receive it and for their carers, and wastes resources on delays, repeated assessments and avoidable admissions. It is not a sustainable way for the NHS or, indeed, care services to meet the needs of an ageing population living with complex conditions. I suspect that we all agree about that basic principle.

Looking at my hon. Friend the Member for Strangford reminds me that I once visited Northern Ireland as the shadow Liberal Democrat Health Secretary to see their integrated boards and integrated trusts for health and care and to ascertain what lessons we could learn in England from what I thought was a more enlightened approach, which has existed for some time in Northern Ireland. The trend internationally is for recognition that integrated care, as a model of care, is best for a more preventive approach to health care. Joined-up services can transform people’s experience of care and increase quality and value.

I recently visited Greenwich, one of the 14 pioneers in integrated care. They have a fantastic community-based emergency response unit, joined up between health and care, to ensure that people do not go unnecessarily to hospital when, with better support in the community, it could be avoided. Since establishing that, they have managed to save 2,000 people going to hospital unnecessarily. We can imagine the impact that that has on the individuals concerned, and also the savings to the system, which can be very substantial.

We can look also at Torbay, which has built an integrated care economy—some of my hon. Friends will be very familiar with the great work that is under way there—and is now experiencing savings and reductions in admissions. I know that my hon. Friend the Member for Totnes will be very familiar with that, as will my hon. Friend the Member for Truro and Falmouth. One reason that there are not more examples like Torbay is because the NHS and local government have separate budgets and objectives, limiting their incentive to work together. In a sense, we have a situation whereby great people, as in Torbay, do brilliant things despite the system, rather than because of it.

In this Parliament, the NHS has transferred more than £2 billion of funding for care and support that benefits health. This has helped protect services and encouraged integration, recognising the importance of care and support to the NHS. It is now time, it seems to me, to go much further. The better care fund combines £3.8 billion of NHS and local authority funding, which will be jointly invested in integrated care. Pooled budgets are a recognised way of improving integration and overcoming traditional silos. They are one of several measures that the previous Government introduced to facilitate joint working. Unfortunately, they were never translated into mainstream use and that is what we are now trying to do.

Both the Dilnot commission and the Health Committee recommended encouraging more areas in which to pool resources. We agree and the new clause will ensure that every area has a pooled budget for integrated health and social care. In every part of the country, the NHS and local government are already sitting down together and agreeing how they will join up services. The plans that they develop will commit to fundamental principles of personalised, integrated, joined-up health and social care. That includes: first, ensuring that health, care and support work together, sharing data critically and improving continuity of care; secondly, acting earlier so that people can stay healthy and independent at home and avoid going into hospital or to accident and emergency; and, thirdly, delivering care that is centred on individual needs, for example, NHS and social care staff working together to provide seven-day services, ending this ridiculous five-day mentality that means that people are more at risk over a weekend than on a weekday if something happens to them, and having a named care co-ordinator.

Chris Ham, from the King’s Fund, describes the fund—contrary to the mean-spirited description by the Opposition—as a,

“much more ambitious approach to delivering integrated care and a real opportunity to improve the co-ordination of services for patients and service-users”.

It is not the fund that is the problem, but the fact that it is top-sliced from other budgets.

Welcome back to the hon. Lady. I am not sure which side of the bed she got out of this morning. I hope it is her constructive side, whereby she contributes so brilliantly to debates in Committee, rather than on the one occasion when she got out on the slightly grumpy side, which was less constructive.

Which side did you get out of?

Order.

We have tried to make the point repeatedly that, yes, of course, this is not new money. It is utilising the existing resources within health and social care so much better. As the hon. Member for Leicester West rightly said, when I intervened on her in one of our early sessions to ask whether it was about new money, it is about using the existing resources to better effect by bringing them together in a more effective way.

The criticism we have heard from the Opposition is that somehow pooling £3.8 billion does not go far enough. I disagree: the fund is the largest financial incentive, by any Government, to ensure that everywhere gets to grips with integrated care. It is not necessary to integrate the entire budget to deliver this change. Remember this is new for most areas. We want to start with an ambitious but realistic amount. We are clear that pooled budgets will be an enduring feature of the health care system. 2015-16 is the first year, the foot in the door that will establish the relationships and framework for integration in every part of the country. We can build upon it in the future. If we talk to people who are doing this at a local level, there is a sense of ambition that people want to  take advantage of the opportunity and that it has triggered discussions that have not happened up until now. That is wholly to be welcomed.

We all welcome the move towards joint working and pooled budgets, but the point about the £3.8 billion is that it has been taken from somewhere else, in this case in the NHS. It is the lack of assessment and analysis of the impact of that change on what that money is being spent on at the moment that concerns us.

In a sense, I come back to the challenge that I made earlier. If the Labour party is saying that it will give a whole load more money to the NHS, we need to hear it. I have not heard it so far. Indeed, the shadow Chancellor recently made it clear that there would be spending strictures on a possible future Labour Government. It needs to be more than rhetoric about challenging our ambition. If the hon. Gentleman is saying that there needs to be a whole lot more money, he needs to say where it is coming from. For us, as the shadow Minister said, it is about better use of the resources to achieve more from the resources that are available.

Local authorities will have the flexibility to share additional funding. There are signs that this is happening. The London triborough is exploring pooling some £450 million of funding—five times the amount we have asked it to pool—to have integrated residential, domiciliary, community, primary and emergency care. New clause 2 creates the legal framework for NHS involvement in the better care fund by ensuring that clinical commissioning groups pool budgets with local government for use on integrated care. It is primarily enabling legislation because the mandate will include objectives and requirements for how the fund operates.

The new clause enables the mandate to specify what funding the NHS should contribute and the need to work with local government. NHS England will ensure that the pooling happens between CCGs and local authorities. It would have powers to tell CCGs what amount to include in the pooled budget, and would release the funding only once satisfied that there was a robust, locally agreed integration plan. It could also attach conditions to the funding, including performance objectives, such as improved patient experience and reduced emergency admissions so that we achieve something tangible for patients as a result of the pooling arrangement.

A new duty would require NHS England to use those powers in the combined interests of health and social care. My right hon. Friend the Member for Sutton and Cheam tabled amendment (a), which would link that to the duty on a local authority in clause 1 to promote individual well-being. I sympathise with his intention. Joined-up care is fundamentally about personal well-being, and local plans must deliver an improvement in patient experience.

However, when we debated similar amendments earlier this month, I assured him that NHS England and local government have duties to promote well-being that arise from the NHS Act 2006, from the NHS constitution and from part 1 of the Bill. I make the same argument as before, namely that the amendment is not necessary to put well-being at the heart of the better care fund.

I am grateful to the Minister for setting out the Government’s position on my amendment. Can he tell me where in the Bill the new clause will be inserted?

I hope that in time, perhaps after my right hon. Friend has spoken, I will have an answer for him. I will ponder the matter and seek guidance from on high.

There is a risk of confusion because the well-being principle in the Bill applies to individuals, whereas NHS England, to which the new clause relates, will assess need for services at population level. I hope, therefore, that my right hon. Friend will withdraw the amendment.

The better care fund is a real opportunity to make integrated care business as usual rather than the exception in every part of the country, which would make better use of public resources for the interests of patients and those who use services. The new clause would make that possible, and I encourage hon. Members—

The Minister wants local NHS bodies and councils to pool their resources and make them work properly for local people. How does he square that with the fact that the Government are taking money out of the better care fund to set up the new metering system for the cap on care costs? What if local organisations decide that their priority is to improve care for people right here, right now?

It seems to me that it is all part of one whole. Our work on the better care fund is part of the same objective as the reforms in the Bill, which include the Dilnot reforms. We will achieve the objectives of better care, better use of available resources and a fairer funding system than we have had hitherto only if we act on all those aspects of the sum total. It is sensible to pool all those resources in the better care fund because they are all aimed at the same objective.

I can see how a full and proper assessment of somebody’s needs, which considers their well-being and that of their family, is absolutely part of improving the quality of care and support. As I understand it, however, £50 million capital funding is coming out of the better care fund to set up the care accounts, with which people will simply keep a check on how much they have spent on care. How is that central to the better care fund’s objectives regarding quality of care? It is essentially an accounting system that allows people to check how much they have spent on care, so that they know when they have hit the cap. Why will the funding for that system come out of the better care fund?

Because that is all part of the investment that is required to achieve a much better system. We cannot ignore the need for investment in IT to deliver better care and achieve the objectives in the new clause, in the Bill and in the better care fund proposals.

I am all for IT to help people manage their long-term conditions at home and to help check if older people are falling, but this is just an account to check how much has been spent on care. Why are the Government taking that out of the better care fund?

Sometimes boring things have to happen in the back office to facilitate great things.

If there is to be a cap, people will need to clock up how much it will take to hit that cap. Our concern, however, is that although the Government are right to bring budgets together, they are delving more and more into the better care fund for doing things that it is not designed for. This is about care, not about an accounting system—[ Interruption.]

My hon. Friend the Member for Weston-super-Mare asks from a sedentary position where the money could come from if not there. I repeat—[ Interruption.]

Order.

Thank you, Mr Rosindell, for leaping to my defence in the face of the aggressive challenging from a sedentary position by the Opposition. Sometimes, tedious back office things have to happen to facilitate great things. We cannot just will the investment in IT to allow the reforms to happen. They need to be paid for and it is sensible to pool all the resources to achieve all these aims, because they are part of a whole.

I can now give an answer, having thought about it for a while, to my right hon. Friend the Member for Sutton and Cheam. New clause 2 will eventually be inserted as a new part 4 of the Bill. I hope that helps.

That does, because it underlines the need for the amendment. I will explain that need a little further and, while doing so, continue to reflect on what the Minister said on why the amendment should not be the subject of a Division.

The new clause establishes the mechanism for the better care fund to develop and grow over time. We are having a debate about one important year: the year in which we start implementing the new system in the legislation that we are debating. It is, therefore, hardly surprising that any Government, faced with a finite amount of money—no matter how much that might be—would decide that the changes should be funded partly in this way. That poses the question: if not in this way, where would the money come from? It cannot be knitted out of thin air; it must be accounted for and this is the vehicle by which it can be made transparent and delivered to local authorities.

The point I wanted to make by tabling the amendment is that while the Minister argued that well-being is part of the way in which the NHS works and an inherent part of the NHS constitution, I do not believe that that is as clear in its practice and organisation as it needs to be. The benefit of the Bill is that it makes explicit for the first time what is meant by individual well-being. That is a principle, purpose and way of organising public services that ought to affect and inform the way in which the NHS works. That is why, certainly when budgets are being pooled and allocated in the way in which the new clause intends, that makes sense.

My right hon. Friend knows that I am completely with him in what we are trying to achieve. An individual’s well-being is at the heart of decisions  taken, once we pool the funds and the money is committed to new ways of working at a local level. I also agree with his comments on the interventions from the Opposition. This is investment in social care information systems. It is clear to me that in order to facilitate joint working and effective sharing of information and data there has to be investment in IT. If that is not there we will not realise the potential of this incredibly exciting development.

I agree with the points the Minister has made. Having listened and given further thought to what the Minister said, I will not press the amendment. However, the agenda needs to be returned to, either by this Government or a future one. We will need to legislate to make it clear that the NHS is bound by a well-being principle, just as social care will be in future.

I want to put a question quickly to the Minister. First, I welcome the fact that the Minister has been to Northern Ireland. I knew he had been there to see the system we have that works. It is good to exchange thoughts and ideas on how to do it better. That is good news.

I want to ask about the integration fund. Is there full visibility of the cumulative impact of cost pressures on providers in the system and the level of risk to a financially and clinically sustainable service? The better care fund, with the transfer of money away from NHS services, requires a supported transition. What protection is there for providers who will run into financial difficulties before they realise the benefits of integration?

I am grateful to the hon. Gentleman for that question. I very much welcome opportunities for more shared thinking. One thing we are trying to do with the integrated care pioneers is establish international links. The challenges we seek to address with the better care fund and the pioneers face every health economy across the world. All of the best countries in health policy terms are moving in that direction, to a model of joined-up, integrated care, recognising the fact that the greatly increased challenge for the health and care system is that people now live for many years with multiple chronic conditions.

At the moment we have 1.9 million people living with three or more chronic conditions. That figure is likely to rise to 3 million people by 2025. We have a system that we know is under quite a lot of strain now in terms of resource. That is why we are trying to make better use of the resource. Imagine the increased pressure on the system of moving from 1.9 million with three or more chronic conditions to 3 million.

The need for this reform and change is overwhelming. It is absolutely imperative that we find better ways to use the resources available. I say to the hon. Member for Strangford that if we carry on with business as usual, the providers of care will inevitably suffer a greater and greater squeeze. That in turn will pose risk to quality of care. We need to make better use of the resources available, focusing on keeping people out of hospital and reducing the need for people to go into care homes and nursing homes in the first place. Hon. Members who have been to Truro will have seen that the number of people who need to go into care homes and nursing homes has been reduced because they are kept in better  health. The focus is on people’s well-being, which my right hon. Friend the Member for Sutton and Cheam has rightly talked about repeatedly.

If the number of people going into care homes and nursing homes is reduced, resource is freed up, which can be spent on helping providers to deliver good quality care. To coin a phrase, there is no alternative but to move away from the traditional ways of working. Care workers should get proper terms and conditions. It is unacceptable that under the traditional approach some of the lowest-paid workers are getting squeezed and many who work in the sector are not paid the minimum wage.

We need to free up resources to properly fund care from providers. Whether they are from the public sector, the private sector or the third sector, we must ensure that we always get high quality care. Good care does not come on the back of exploiting the work force or by putting providers under financial strain. That is an extraordinary existential challenge to the system, which any party in government will face. These changes are therefore essential.

The Minister is right that business as usual is unconscionable and the status quo is not acceptable. He, like every other Committee member, will have seen the BBC News reports today about providers refusing to be involved in local authorities’ provision of adult social care services because they do not want to be associated with 15-minute slots. They think that that time period is shameful and not adequate to cater for people’s needs.

The Minister is absolutely right that what we do here today has to be tangible to patients. Like me, he will know that local authorities are concerned that the £130 million that the Government intend to spend on adult safeguarding boards and assessments for carers will come from the better care fund. I would appreciate some clarity on whether that is right; I believe that point came out from the Joint Committee on the draft Bill.

Despite our exchanges this morning, there is still some confusion about exactly where the money for the fund will come from. We need precise details on where the £3.8 billion will come from, and unfortunately that detail has been absent to date. In the long run, as we have said this morning and over the course of the Committee, the Opposition want to go much further on integration. Given that £1.8 billion has been cut from adult social care since 2010, there is a fear that the reality of the Bill will not match the rhetoric surrounding it, notwithstanding the Minister’s laudable ambitions. That is a fear not only of care providers, care users, local authorities and the Opposition, but of the Department. NHS England’s medical director, Sir Bruce Keogh, said that there is a need to be “absolutely clear” about how the money will be spent. He said that there is “great scepticism” about the fund meeting the needs it is claimed it will be used for. We share Sir Bruce’s scepticism, so we seek absolute clarity on this issue. If the Minister cannot provide it today, I hope he will write to us before Report.

I thank the shadow Minister for raising those issues. I want to come back at him gently on his challenge about the scale of the ambition. Before  2010, I repeatedly made the case for integrated care and for joining up the system, and it fell on stony ground; I got no reaction from the Labour Government. Yes, there were isolated examples of great practice. As I said earlier, great people were doing brilliant things despite the system, not because of it. I absolutely acknowledge that that Government provided for the opportunity to create care trusts and to pool budgets, both of which were good things, but there was no central commitment or drive to integrated care.

Over the 13-year period of the previous Labour Government, if anything, the fragmentation of the health service grew stronger. The creation of very strong—[Interruption.] Let me make my case; I am concerned for the welfare and well-being of the hon. Member for Sheffield, Heeley—she is looking anxious. Very strong foundation trusts were delivering mental health services completely separately from the rest of the health system. From the individual’s point of view, it makes no sense institutionally to fragment mental health from physical health. It seems to me, as the shadow Secretary of State now acknowledges, that we should look at the whole health of an individual, rather than seeking to look at their mental health entirely separately from their physical health.

The Government’s move to take the biggest ever step to join up the system, in terms of financial incentive, is massively overdue. I acknowledge that good things happened under the shadow Minister’s Government, but they were limited. On the big ambition, when I made the case, I got no response suggesting a commitment to that from that Government.

I have to say for the record that there were many bold initiatives under the previous Government, including an entire White Paper, “Our health, our care, our say”, which was the first time that such a thing had been set out in Government as a broad strategy, covering a whole range of hospital, primary, community and care services. It is simply wrong for the Minister to wipe that off the record. How did he come up with the figure of £3.8 billion? Why is it not more?

My comments were in response to the shadow Minister’s suggestion that what is proposed is not particularly ambitious. It is incredibly ambitious and really challenges a traditional system. I completely agree that great things were happening in lots of different places, such as in Torbay and north-east Lincolnshire, and there was the brilliant social enterprise in Central Surrey Health. In terms of whole-system change, however, nothing significant happened. Of course, we have to start with small acorns, but the point I am making is that this Government are seeking to implement whole-system change to create the momentum for the entire country to move decisively towards joined-up working.

It is such nonsense to trash the record not only of the previous Government, but of the Conservative Government back in the late ’80s and early ’90s. This goal has been sought for a long time. I could perhaps put up with some of what the Minister is saying if the proposals were the perfect answer, but they are not. They are flawed, and that is our concern. People tried to do a great deal. They had ambition for integration in the late ’80s and ’90s and throughout the  Labour Government, but rewriting history is something that the Liberal Democrats do incredibly well, as we know.

Oh dear. I have clearly upset the hon. Lady, and I apologise for that. I tried to acknowledge that good things happened under the previous Government, but when I tried to raise the case for whole-system integrated care, it fell on stony ground. It is just a matter of record that there was not the response I was looking for at that time. My comments are about resisting the claim that the objective lacks ambition. It is extraordinarily ambitious and of course, the amount of money that we have committed to it is a result of the discussions on the spending review. I am delighted that we have managed to secure that amount of money. I say again that that is as a minimum.

Interestingly, Sandie Keene and others in the Association of Directors of Adult Social Services and elsewhere have reported that, in many areas, there is an intention to be more ambitious; people see the measure as a starting point and will potentially go well beyond it. Time will tell whether that becomes fact. It seems that, whoever is in government after the next election, that is here to stay. That is the way of the future. It is something to build on to create a much more rational use of available resources.

Not that the Minister needs advice, but I have perhaps a word of warning. The clause will give NHS England quite a lot of power to direct people how to spend the budget. Speaking from my experience of how the Department and NHS management work, the clause could become a top-down measure. It could end up being prescriptive about exactly how the money is to be used. The Minister wants to ensure that the money is spent on integration and change, but I warn him: I think that the measure is a top-down amendment. He and any Minister will need to keep a close eye on NHS England to see that it does not just take over the money; that would stop local players from working together if they were ordered to do something from above, rather than allowed to figure out together how to do it. The risk is that the amendment is a top-down directive.

I take the hon. Lady’s point. I suspect that she would agree that there is always a tension between seeking to encourage and facilitate change and creating incentives for it from the centre, and empowering local areas to do great things. The clause seeks to get the balance right between ensuring that the fund is there—there has to be a mechanism requiring NHS England to deliver on the Government’s objective—and allowing discussions, which are happening at this moment, in local areas between health and social care on developing a local plan with clear objectives in mind, rather than there being prescription about how objectives should be achieved. Take the criteria that I outlined: seeking to reduce avoidable readmissions and delayed discharges, and to improve the experience of service users and patients. Setting clear criteria about good objectives for patients, but allowing the local area to come up with plans on how they achieve them, is the right way forward.

However, I totally accept the warning. The clause is an innovation; it will be a new way of working. Of course, lessons will be learned in the first year, and whoever is in power after 2015 will have to adapt and grow the initiative. I suspect that, despite our debate this morning, we are all agreed on what we are trying to achieve; that this is the way of the future; and that it has to develop further. Of course, lessons will be learned, but the clause is the right way to start. Incidentally, we have resisted the temptation to threaten to remove money from areas that do not achieve the objectives of improved patient care. Areas will not lose money, but will have assistance in improving how they work to achieve those objectives.

The Minister is being accommodating in taking so many interventions. His latest contribution demonstrates what we are trying to get at: his thinking is far more advanced than that laid down in the clause. Can I tempt him further? He may come on to answer this point, but can he provide in writing, before Report, the clarity that we and Sir Bruce Keogh seek?

I was going to say—I have written it down—that I am happy to write to the shadow Minister and other Committee members setting out the breakdown of how the money is made up. [Interruption.] Lots of pieces of paper are arriving that I need to look at. I hope I have not said anything wrong.

The shadow Minister mentioned the intervention from Professor Sir Bruce Keogh—wonderful to have two different titles to your name. There is strong support among CCG leaders for our approach. The Health Service Journalsurveyed commissioners and found strong support for the initiative. There will of course be concerns among acute providers, due to the financial pressure on the acute system, but I suspect that we all agree on the payment-by-results system. I entirely understand why it was introduced. We touched on it earlier. It introduced a degree of transparency in accounting for how money was spent. It was introduced, to start with, because people were waiting a long time for treatment and it created an incentive to get people through to treatment. Ultimately, it created an incentive for more activity in acute hospitals, which is not rational in a system that seeks to prevent ill health and prevent deterioration of health. We must change the system to create an incentive to prevent deterioration of health.

There will be concerns about the financial pressures on acute providers, but they must be involved in the discussions at local level. The impact of different ways of working on the acute sector must be considered to ensure that the system works rationally. The great initiatives for joined-up integrated care by the 14 pioneers have involved the acute trusts, and are in many cases redesigning incentive and payment systems. Monitor and NHS England have given a clear licence for areas to move away from payment by results, to deliver better, more rational payment systems to achieve better prevention of ill health. The acute trusts in those areas are very much part of that reform.

I am enormously proud of this brilliant initiative. There are of course risks in everything ambitious one seeks to do, but if we proceed and are committed to  building on its foundations, we can see a vision of a better health and care system that is better at preventing ill health and maintaining people’s well-being—something that my right hon. Friend the Member for Sutton and Cheam repeatedly and rightly focuses on—and better at using the resources available to us.

Question put and agreed to.

New clause 2 accordingly read a Second time, and added to the Bill.