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Health Bill [HL]

Volume 710: debated on Tuesday 28 April 2009

Report (1st Day)(Continued)

Clause 9 : Direct payments for health care

Amendment 23

Moved by

23: Clause 9, page 6, line 17, after “patient’s” insert “prior and informed”

My Lords, I beg to move Amendment 23, which is designed to address a very straightforward issue, one raised with me by Diabetes UK. In Grand Committee, the noble Lord, Lord Darzi, spoke about personal health budgets and emphasised the Government’s intention that these should always be voluntary and that exactly the same principle applied to direct payments. The question I want to raise with him is whether the wording in the Bill provides a sufficient safeguard against abuse of the voluntary principle. New section 12A says,

“make payments with the patient’s consent”,

which, at first blush, seems all right, but, if taken literally, the consent could be read as applying to the narrow issue of how the money in someone’s direct payment budget is applied and spent. It might not necessarily prevent a situation arising in which a patient does not really want a personal budget at all but, against his better judgment, he is persuaded or pressurised into accepting one. There is a difference between the right to refuse treatment and the right not to choose a personal budget of any kind. The Minister’s comments up to now have appeared to conflate the two. I have sympathy with the point made by Diabetes UK that the legislation should make it clear that personal health budgets of any kind—notional, third-party or direct payments—should remain voluntary, whether at the pilot stage or in the event that they are rolled out more widely. I am sure that the Minister will say that the wording in the Bill is adequate in this sense but, nevertheless, I would be glad if he would look at the matter again. I beg to move.

My Lords, I wish to speak to Amendments 25 and 31 in this group. As this is the first group of amendments on the subject of direct payments, perhaps I might reflect on the discussion in Committee. It would be accurate to say that we had an extensive debate—almost a full afternoon of one of our sittings in Grand Committee—during which the Minister was bowled question after question about direct payments, individual budgets, the principles underlying them, what the Government’s intentions are, the extent to which individual health budgets might be brought into play in respect of different patients and different conditions and the limitations of the proposed pilots.

I thank the noble Lord, Lord Darzi, for his letter of 18 March in which he restated, to a large extent, the answers that he gave in Committee. However, detail is lacking and that continues to be a source of considerable concern to many of us on this side of the House who are supportive of the principle of direct payments but have considerable concerns about how they might be introduced and about the potential detrimental effects which they might have on the National Health Service and particularly on the provision of services.

Since the Committee, the noble Baroness, Lady Campbell, has been kind enough to arrange a meeting for all Peers, attended by the noble Baroness, Lady Thornton, at which she and several people from the disability organisations with which she has long been associated and academics such as John Glasby from Birmingham University set out the experience of disabled people. They talked at considerable length about what they consider to be the potential benefits to service users of individual budgets. It seems to be my misfortune throughout this Bill to refer to the noble Baroness, Lady Campbell, when she is not in her place and I regret that I have to do so again. It would not be inaccurate to say that although there was considerable support for the potential for direct payments at that meeting, again, when Members of your Lordships’ House raised issues and asked questions, there were no answers. I find that deeply troubling.

That meeting gave rise to the tabling of Amendment 31, which, as noble Lords will see, bears a resemblance to an amendment tabled by the noble Baroness, Lady Greengross, in Committee in which she set out a list of conditions and services to which individual health budgets might apply. The purpose of both these amendments is to probe the Government’s intentions on the extent to which direct payments will be introduced in the NHS. It is of considerable interest and should give rise to a degree of concern that many of the organisations that have supported the principle of direct payments or individual health budgets have expressed their support on the understanding that they will be available to a small minority of patients who suffer from long-term conditions, and that there will be adequate advice and support for any person who has an individual budget. Neither of those two statements can be made with any certainty, given what is in the Bill and our discussions so far.

Amendment 31 refers to two particular conditions, both of which, in different ways, highlight some of the potential issues associated with individual health budgets. In Committee some noble Lords expressed the view that palliative care services, given their place in the National Health Service and the fact that they are largely supplied by independent organisations, principally charities, should be funded through direct payment. But the major providers of hospice care in the country have a very different view. By definition, palliative care—end-of-life care—is provided to individuals but it cannot be predicted when any particular individual will need it. At the moment part of the function of the NHS is to study populations and the incidence of conditions, and to make an assessment of the level of service needed to deal with them. That process runs right through to budgeting. There is an attempt at the heart of the NHS to address issues such as pooling of risk and equity of service. If palliative care came to be primarily funded by direct payments, the ability of providers to predict and provide a certain level of service would be extremely difficult. It might signal the end of the provision of palliative care within the NHS and I want to establish whether the Minister can envisage that as a consequence of the introduction of this policy.

At the meeting arranged by the noble Baroness, Lady Campbell, noble Lords who were interested in the subject discussed at considerable length the benefits of this service, and there are benefits. In Committee we discussed the fact that services can be more personalised and more effective for individual patients, and can contribute to greater health outcomes. At the meeting noble Lords—particularly the noble Baroness, Lady Cumberlege, who, I am sorry to see, is not here to take part in this debate, although she talked in Committee—saw that maternity services would be a good candidate for individual health budgets. Maternity services are required, usually, with about nine months’ anticipation of the need for them arising. They are planned on the basis of population studies. Thinking about the matter in greater detail, within the NHS there is at the moment a considerable move towards midwife-led units, on the basis that the majority of deliveries are uncomplicated and routine. However, there are always births that do not go according to plan and in which there is a sudden and urgent need for a woman to be referred to a consultant obstetrician.

The reason for suggesting that maternity services should be included in the pilots for individual health budgets is to test the point that I raised in Committee. To what extent has the Department of Health analysed the risk of turning some services, which may be elective, over to individual health budgets, and to what extent might they then jeopardise acute services because of the coexistence of the two? Amendment 25 suggests that it is the responsibility of the department to set out much more clearly than it has done to date those conditions and circumstances under which direct payment may, must or must not be made available. It is essential not only to the future of the policy but to the expectation that will be placed on it by NHS staff and, most particularly, by users. Both amendments signify a degree of frustration on my part that, having had detailed discussions about these matters over the last three months, we are no further forward in understanding just how radical this policy is intended to be and just what its potential implications are for NHS providers and patients.

My Lords, this set of amendments deals with consent and the services and circumstances in which direct payments might be used. I turn first to Amendment 23, moved by the noble Earl, Lord Howe. It would require that a patient’s consent to receiving a direct payment is “prior and informed”. It is important to emphasise that personal health budgets, including direct payments, will be entirely voluntary. That is one of the core principles outlined in our policy document, Personal Health Budgets: First Steps. Of course, consent is enshrined in the very first sentence of this legislation for direct payments. No one should be forced to have direct payments if they do not want to, and I do not believe that anyone could be forced to accept such payment.

More generally, I agree with the noble Earl that people should give valid consent before they receive any form of care. If they are not able to do so, the consent should be obtained from someone acting legally on their behalf. That is fundamental to healthcare, and a legal right, as we have made clear in the NHS Constitution. However, the notion of consent already implies that the person is informed. Expanding the definition of consent will not, in practice, increase the protection that this Bill already offers. I remember debating this in Committee. Although I take the point that the noble Earl is concerned about, I cannot find a better word to cover this being a voluntary scheme. That is well known to the people coming into it. Finally, before even accepting it, they have to obtain consent. I hope I have provided reassurance to the noble Earl on his amendment.

Amendments 25 and 31 were tabled by the noble Baronesses, Lady Barker and Lady Tonge. Amendment 25 seeks to limit the services for which direct payments may be made and Amendment 31 would promote the use of direct payments for maternity services but would rule out end-of-life care. I hope to persuade the noble Baronesses that these amendments are not necessary.

It may be helpful if I start by giving an update on how the pilot programme has developed since these clauses were last discussed in this House. In Personal Health Budgets: First Steps we invited PCTs to submit expressions of interest in becoming a pilot site to test personal health budgets. Since then, we have received more than 70 applications from every strategic health authority area, covering a range of services and conditions. Many PCTs want to focus on people with long-term conditions, people who are receiving NHS continuing healthcare or people with mental health needs. We have also received proposals to explore how personal health budgets could be used, for example, to support carers for stroke services. Around a dozen applications included proposals for end-of-life care, while one PCT expressed an interest in using personal health budgets for maternity services. I am sure that will please the noble Baroness, Lady Cumberlege.

My Lords, I am not entirely sure. I shall be more than happy to come back and say unless my noble friend knows which one it was. We felt that it was a creative proposal and I have no doubt that it will be looked at quite carefully.

It is too early to say exactly which proposals will go ahead. We are delighted by the enthusiasm and the range of innovative ideas that we have seen. We are looking forward to working with as many sites as possible to develop viable proposals and we intend to feed back shortly to all PCTs that have applied.

Initially, the pilots—and I remind the House that these are pilots—will test only the models of personal budgets that are allowed under current powers. Subject to the passage of this Bill and the making of necessary regulations, there would be a further stage in the process to decide which pilot site would be authorised to use direct payments.

As I said in Committee, we are looking to build on the enthusiasm for personalisation in the NHS, so we do not intend to set too many prescriptive limits on the circumstances in which people could use direct payments. The Bill already gives power to exclude services or groups of people. This is something that we might consider where there is a particular risk of abuse: for example, for people who are under compulsory drug or alcohol treatment orders. As I said in Grand Committee, we intend to consult on this in the normal way with draft regulations.

However, across the NHS there are, of course, many services, such as accident and emergency and other acute services, where direct payments will not be appropriate. I do not think it is necessary to list these and exclude them all in regulation. We want personal health budgets and direct payments to be used where they make sense, relying on the judgment of local PCTs, individuals, patient groups and the voluntary sector.

On the specific questions about end-of-life care, clearly this is an area with particular sensitivities. However, there may be great potential for personal health budgets, although not necessarily delivered through direct payments, as per the applications we have received recently. For example, some PCTs have suggested that personal budgets might allow patients to receive a more flexible range of support, or allow a quicker and more responsive way of adjusting a care package to a patient’s changing needs. It is also worth remembering that another person—for example, a carer—can receive direct payments on behalf of the patient. This would mean that people could have the extra flexibility of direct payments while not creating an additional burden at a very difficult time.

I am sure the noble Baroness will agree that some of the policies that we have come up with over the past 18 months are all to improve quality and caring on the end-of-life pathway, in relation to the national strategy. This could be one enabler in relation to that pathway. Rather than making conclusions now about which services are suitable or unsuitable for delivery through direct payments, we would prefer to explore a range of proposals and to build the evidence base through those pilots. If evaluation reveals the need to rule out a specific service, the Bill already provides the power to do that. With these reassurances, I hope that the noble Baronesses will not press their amendments.

My Lords, before the Minister sits down, does he agree that there are legitimate reasons, other than the incapacity of individual patients, to rule out particular services from individual health budgets? If, because of this policy, it is possible that provision of a particular service within an area would cease and that that can be predicted now, is it right that that particular area of service should not be included in a pilot? That is the point I seek to make. For example, that could apply on specialist services such as palliative care, where there are only small numbers of people and the level of need for that service cannot be predicted regularly. The Minister’s answer is important. I feel so strongly that this is of importance, not just to these pilots but to the future of the NHS, that I would be willing to test the opinion of the House on it.

My Lords, I am not entirely sure what the question is. If it is whether a highly specialised service might be destabilised by the concept of direct budgets, I do not think that will change the demand to affect the supply. At the end, the demand will remain the same. It is about the method of payment, and whether the PCT is paying a provider or the patient is holding the direct budget. In my experience of those rare diseases, most patients feel much more empowered to buy their own services—because they are, first, expert patients—and that is the purpose of that. If this might be a reassurance, I do not see the situation arising where the supply of a service could demise because the payment method had become direct payment rather than being a direct commission from a PCT. If that were to happen, I can reassure the noble Baroness that the providers of such services will remain, because the local demand will be the same.

My Lords, this has been a useful debate, and I thank the Minister for his reply. His assurances were welcome. He may like to know that it is not only Diabetes UK that has expressed concern to me about the voluntary principle of direct payments; the RNIB is equally concerned. Its worry is that PCTs might make certain long-term healthcare services available only via a direct payments route. In other words, the patient would have no choice in the matter. Whether that is likely is a matter for debate, no doubt, but the RNIB is clearly worried about it. In those circumstances, the proposed constitutional rights that the Minister has referred to would not be easily enforceable. The RNIB would be much reassured to see the right to refuse direct payments explicitly expressed in the Bill. However, while I have sympathy with that I do not propose to press the point tonight, unless other noble Lords think differently. I beg leave to withdraw the amendment.

Some Lords objected to the request for leave to withdraw the amendment, so it was not granted.

Amendment 24

Moved by

24: Clause 9, page 6, line 36, at end insert—

“(7) Health care provided in accordance with this section constitutes a function of a public nature for the purposes of section 6 of the Human Rights Act 1998.”

My Lords, I am a member of the Joint Committee on Human Rights, and this amendment stems from some work that the committee has done, which we published in our 11th report on 15 April. The issue is again about payments. Under this Bill, the Secretary of State is enabled to discharge various statutory functions under the National Health Service Act 2006 by making direct monetary payments to patients in appropriate cases, initially through pilot schemes. As the Explanatory Notes say:

“This gives patients receiving direct payments for health care similar rights to those enjoyed by patients accessing services from NHS organisations or from private sector organisations commissioned by PCTs”.

So far, that is good. The issue is whether the provider of these services would constitute a public authority under the Human Rights Act 1998. Why is that in doubt? It is in doubt because a number of court cases culminated in a judgment by the House of Lords in YL v Birmingham City Council and others in June 2007. As our report says:

“By a majority of 3 to 2, the Law Lords ruled that the person concerned could not bring a claim against her private sector care home under the HRA, in relation to the infringement of her right to respect for her private life and home under Article 8 ECHR”.

As a result, the Government introduced an amendment to the Health and Social Care Bill in the last Session to put that right, but the question is whether the new arrangements on payments are also covered. The report of the Joint Committee on Human Rights states:

“In their joint evidence to us, Help the Aged and Age Concern argued that private bodies providing health services funded by direct payments should be considered as providing public functions, but”—

and here is the key point—

“‘it is not clear whether in practice they will be’. They recommended that legislation should clarify the position, given ‘the overall uncertainty about the HRA status of private healthcare providers’.”.

I think that is a reasonable doubt, given the previous House of Lords case.

The Government have argued that it is unnecessary, and there is a straight conflict of view there. We on the Human Rights Committee believe that it is necessary and that there should be an amendment to this Bill for the avoidance of doubt. The recommendation is,

“that the Bill be amended to make it absolutely clear that it is intended that NHS services funded by direct payments and provided by independent bodies are functions of a public nature for the purposes of the HRA 1998”.

I beg to move.

My Lords, there may be a small question about what the status of such a person would be in terms of the European Convention on Human Rights. The Human Rights Act is domestic legislation and there is, ultimately, the possibility of going to the court in Strasbourg. I am not sure that this would necessarily be sufficient. I may be wrong about this—I am not sure—but I raise the question whether this would be sufficient to make the provider a public authority within the meaning of the European Convention on Human Rights, which is a different document in some substance from the Human Rights Act.

My Lords, the amendment tabled by my noble friend Lord Dubs on behalf of the Joint Committee on Human Rights would highlight the fact that NHS services funded by direct payments—whoever provides them—are functions of a public nature for the purposes of the Human Rights Act 1998. I hope to persuade my noble friend that there is no need to make this explicit in the Bill; and furthermore that to do so might cause confusion and have an adverse effect on how other health services are provided. This is not to deny the need for greater clarity about what constitutes a public authority under the Human Rights Act. The Government are aware of concerns raised by the committee on this matter, and remain committed to consulting on the issue in due course.

The committee previously sought clarification on whether the Government considered that private providers of health services funded through direct payments were to be treated as public authorities under the Human Rights Act. I will reiterate the Government’s position. We do consider independent providers of healthcare to be public authorities, for the purposes of Section 6 of the Human Rights Act 1998, when they are providing services under the National Health Service Act 2006. The duty of the Secretary of State to continue to provide a comprehensive and free health service under the Act is a core public function. The Government consider that all independent providers of healthcare that provide services in fulfilment of that duty are carrying out a public function, and therefore that they are all public authorities for the purposes of Section 6 of the Human Rights Act.

The Government do not consider that any distinction can be drawn between the situation where the Secretary of State directly enters into a contract with an independent provider of healthcare services—as permitted by Section 12 of the National Health Service Act 2006—and the situation where a patient enters into a contract with an independent provider of healthcare services under the proposed legislation. In both cases, the services will be provided under the National Health Service Act 2006, and in fulfilment of the Secretary of State’s duties. Similarly, an independent provider of after-care services under the Mental Health Act 1983, whether commissioned by a primary care trust or providing the services under a direct payment arrangement, will be covered by the Human Rights Act.

The Government also note that the costs of services provided under the proposed direct payment arrangements would still be met from public funds. The Government note that there would still be a strong public interest in ensuring that the services were properly provided. The Government do not, however, believe that it is necessary to state this in the Bill, which is what the amendment seeks to achieve. To state explicitly that providers of healthcare procured by direct payments were carrying out public functions for the purposes of the Human Rights Act could cast doubt on whether independent providers of health services acting under other relevant sections of the National Health Service Act were exercising functions of a public nature.

The judgment in YL v Birmingham City Council 2007 does not alter the position. It did not determine the position of any function other than those specifically considered by noble and learned Lords. For example, the noble and learned Lord, Lord Mance, explicitly stated that he,

“would leave entirely open the position of those operating in different areas of health and education services”.

The provision made in Section 145 of the Health and Social Care Act 2008 was necessary only because of the judgment in the YL case. It was intended to ensure that, notwithstanding the judgment, some social care and accommodation that is publicly arranged under the National Assistance Act is a public function subject to the Human Rights Act. The approach was deemed sensible by a range of stakeholders at the time, and no subsequent court judgment has led the Government to consider that independent providers of national health services are not public authorities for the purposes of the Human Rights Act.

In the light of these explanations, and of the Government’s intention to consult on the issue of what constitutes a public authority under the Human Rights Act, I hope that my noble friend will withdraw his amendment.

My Lords, I am grateful to my noble friend for that explanation. What the Government seek to achieve and what I seek to achieve are clearly the same. The question is whether I share the Government’s confidence that, if the matter were to be put to the test of the House of Lords in its judicial capacity, the House would come down on the side of the Government or take the same view as it did in the YL case. I am not a lawyer: I am not qualified to answer some of the detailed legal questions, but my understanding is that there is a little doubt about that. If there is no doubt, that is fine and I hope that I am proved wrong. However, given the persuasive nature of my noble friend's arguments, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.

Amendment 25 not moved.

Amendment 26

Moved by

26: Clause 9, page 7, line 16, at end insert—

“( ) as to the mechanisms by which a patient, or (if different) the payee may appeal against the amount of direct payment or how it is calculated;”

My Lords, the amendment would insert into Clause 9 something that is omitted from new Section 12B. That is a provision for the Secretary of State to make explicit the mechanisms by which a patient, someone on a patient's behalf if they lack capacity or the payee can appeal against the amount of a direct payment or the method of calculation. The Bill provides that the Secretary of State may in regulations make provision about the amount of a direct payment, but there is no indication anywhere that an individual person may have recourse to a means of appeal.

That absence of a means of appeal puts individual health budgets on to a different basis from the provision of direct healthcare services. If a patient is provided with a particular course of treatment under the NHS, they have a means within the current system of raising the issue of their treatment and questioning it. The amendment asks not that individual budget holders be able to determine the level of their payment but that they have a means of appeal. There are a variety of reasons why that should be so. In the new world of a plethora of providers of services to individuals and individual providers of individual services, it could be that the level of costs goes up. That which may be deemed to be a reasonable amount in order to provide a service that has hitherto been a direct provision by the NHS may simply not be possible when it is provided on a small scale without some of the efficiencies and economies of scale—one of the things that NHS patients currently benefit from.

This is a reasonable amendment. It is a matter to which we have not hitherto paid any attention and I therefore beg to move.

My Lords, I will speak to Amendment 29, which is grouped with the amendment moved by the noble Baroness, Lady Barker. In Committee, there was much debate about direct payments and the impact that they may have. While I appreciate the assurances provided by my noble friend about the safeguards that will be put in place, I have remaining concerns that the fundamental impact that direct payments will have on health services and staff delivering those services has not been fully realised.

UNISON, the union with which I have a non-pecuniary relationship and which I support in amendments in this House when I agree with its positions, recognises and supports the need for National Health Service services to be responsive and able to provide more tailored support to some patients. However, there are still concerns within the union that the introduction of direct payments may have a damaging impact on the delivery of health services to the wider population that have not been fully considered.

During consideration of the Bill in Committee, noble Lords raised their concerns around the potential circumstances that could arise if a direct payment budget ran out and a sufficient safety net was not put in place.

This is a concern both in dealing with the patients who might be turned away from essential care if their direct payment runs out and in relation to the risk that the NHS might be left to foot the bill in situations where a patient spends their direct payment inappropriately. This would, in effect, leave the National Health Service, in the view of UNISON, having to pay twice for the same person’s care.

I welcome the Minister’s comments in Grand Committee, where he provided some reassurances about safeguards to avoid such scenarios occurring; we debated these issues at some length at that stage. However, concerns still remain. It remains the case that there is no detail on this in the Bill and no firm mechanism to reassure those of us with concerns that it will be addressed within regulations. There is a real possibility that, if a patient exhausts their budget, they will either have to pay to top up their care, which I am told is wrong in any event under the Bill, or the NHS will be left to foot the bill. My concern is that, without the inclusion of any safeguards in the Bill, the risk remains that such scenarios could arise. This amendment would provide some security to those of us who are concerned that this significant change to the delivery of healthcare has yet to be fully scrutinised.

My Lords, Amendment 27 in my name follows on from the remarks made by the noble Lord, Lord Campbell-Savours. It indeed brings us back to the issue that we debated in Grand Committee, which is the need to guarantee that nobody is denied access to NHS treatment purely as a result of having a personal budget or being in a direct payment scheme. When he replied to me in Grand Committee, the noble Lord, Lord Darzi, assured me that the worry about someone running out of money and therefore not being able to access the care and treatment that he needed was not well founded. The situations that he described were ones where either there was inadequate resource allocation in the first instance for the defined care package or a personal health budget might turn out to be inappropriate. However, those situations are not the only ones that are relevant to the underlying concern.

The noble Lord referred to the safeguards outlined in the department’s guidance document, Personal Health Budgets: First Steps, but we know that this is not a definitive book of rules; it is, as he said, a framework within which the policy can develop further. The guidance states:

“Setting the budget at the right level will be one of the major challenges to be addressed during the pilot programme”.

I do not doubt that that is right, as we know the process for budget allocation is still under development. It goes on to say:

“Once at least an indicative budget is set, the next step is to draw up a detailed care plan designed to meet the individual’s agreed health and well-being outcomes”.

With all due respect, that seems to address the problem from the wrong starting point. Unless a detailed care plan is developed prior to resource allocation, how can one identify an appropriate budget?

My worry on this score is underlined by the Explanatory Notes, in the part that covers new Section 12B(5). This makes it clear that goods and services purchased by the patient directly should nevertheless be regarded as goods and services provided by the Secretary of State. It then says:

“This means that in prescribed circumstances, but only in prescribed circumstances, the Secretary of State could be considered to have fulfilled his duty to provide a service described at new section 12A(2) by making a direct payment”.

This caveat suggests that there may be circumstances in which a service user would not be able to access services through the NHS if their budget had proved insufficient. I should be grateful if the Minister could reassure me that this is not an interpretation that should be placed on those words.

It is perhaps not difficult to see why these issues are causing concern for organisations such as Diabetes UK, because, in that instance, diabetes is not a condition that would appear to lend itself readily to a direct payment scheme. The Minister will know about the Year of Care programme. Its aim is to define the differing needs of diabetic patients across the spectrum and then to pin down how much it would cost to deliver different packages of care that will enable each of those patients to manage their own care in an appropriate way. Evidence from the Year of Care pilots indicates that the task of calculating the allocation of personal budgets for people with diabetes will be difficult. A lot of work has to go into assessing and costing out different needs, but the key concern is unpredictability. Even if someone’s diabetes appears to be well managed and stable, there is always a chance that something will happen that throws everything out of kilter.

Diabetes is complex and progressive. Having a personal budget or receiving a direct payment that is meant to cover the entire package for your diabetes runs the serious risk that the budget may run out, thus exposing you to having to put up with a level of care that simply does not meet your needs. It really is a case of saying that what should come first for diabetic patients—indeed, all patients of any kind—is making the right choice of treatment for an individual, based on that person’s clinical needs and preferences. The budget allocation should follow on from that.

That is why there is a fear—here, I return to Amendment 23—because patients need to understand exactly what they are letting themselves in for when opting for a personal budget or signing up to a direct payment scheme. Some conditions and some patients will be tailor-made for both, but others decidedly will not be. I shall not ask the House to vote on my amendment, but I should like the Minister to consider whether we need to beef up the Bill by building in an explicit statutory duty on the NHS to ensure that no one is denied treatment simply because they have opted for a personal budget or direct payment.

My Lords, Amendment 26, tabled by the noble Baronesses, Lady Barker and Lady Tonge, proposes that there should be a way for people to appeal against decisions on their direct payments. I agree with the sentiment behind this amendment that people should be able to complain and seek redress if there are problems with the services that they receive. Indeed, the NHS Constitution sets out the right to have any complaint about NHS services dealt with efficiently and investigated properly. However, I would be concerned by the idea of setting up an additional complaints or appeals system specifically for direct payments.

In the first instance, we hope that concerns can be resolved locally and informally. We would expect PCTs to discuss any concerns that people have, either about the size of the budget or the mechanism used to set it. We would encourage PCTs to be flexible to meet individual needs, while ensuring the fairness of the system as a whole. If a patient still has concerns, they are entitled to make a complaint, just as with any other NHS decision about which they are unhappy. NHS complaints procedures have recently been reformed to make the system more efficient and certainly more robust. Ultimately, patients may also ask the Health Service Ombudsman to look into their cases. Clause 10 extends the role of the ombudsman to cover services delivered through direct payments, precisely to ensure that people are suitably protected. It is worth reiterating that services paid for by direct payments are NHS services; patients are covered by the complaints procedure protecting patients receiving traditionally commissioned services. It is, therefore, unnecessary to create a new route of appeal or complaint, which might also prove costly and burdensome.

I turn now to Amendment 27, tabled by the noble Earl, Lord Howe, and Amendment 29, tabled by my noble friend Lord Campbell-Savours. These deal with the related situations of whether patients can receive other services alongside a direct payment and what happens if a direct payment budget has run out. I understand these concerns that people might be turned away from the NHS if they have exhausted their budget, or that the NHS should be forced to spend more money inappropriately. However, I assure noble Lords that this should not happen. As I have said before, and as we said in our Personal Health Budgets: First Steps, no one should ever be denied the care that they need. That is a core principle of our policy.

In addition, direct payments will often be for just one aspect of a patient’s care, or even one element of that patient pathway. Patients will still be able to use other traditionally commissioned services where that is appropriate. Direct payment should be used only when there is a likely benefit and it will be wholly voluntary.

In Committee, I emphasised that there were several safeguards in place to protect against the budgets running out. First, the personal health budget would be offered to people only in circumstances where their needs could be assessed and the budget calculated for them. Clarity on how we calculate such budgets is one of the requirements. Getting the calculation right will be important. We were pleased to see that a large number of the pilot applications that we received contained proposals for designing resource allocation systems. Many PCTs are aiming to build on the approaches already developed by local authorities. Others intend to develop their own mechanisms for assessing individual needs. There is a long way to go, but the pilots should produce valuable learning.

The second safeguard that we intend to have is a pre-agreed care plan for how the money would be spent. I take the point raised by the noble Earl, Lord Howe: the care plan must come first, before you calculate the budget. I could not agree more, although, in reading the Bill, I am not entirely sure whether there is an order that might be, in a way, adding confusion. The clinician, in partnership with the patient, must decide on the care plan and then calculate the budget.

Thirdly, there should be regular monitoring and review so that the budget can be adjusted in line with a significant change in the person’s conditions. Diabetes is a good example. It would be very unfortunate to see a diabetic patient progress in their illness into some of the morbidities of diabetes that we are ultimately trying to prevent. If the patient’s condition changed and they required an ophthalmologist to check their retinopathy or a renal physician to check their nephropathy, the budget should be adjusted to accommodate that. Alternatively, the patient may opt out and receive these extra treatments without a direct payment. I am confident that these safeguards will avoid problems arising for the recipient of direct payments or for the other patients and services.

I remind the House that these are pilots. The purpose of having pilots is to learn from them. We will certainly be empowered by the knowledge base from them. These are very innovative areas and I strongly believe that we need to be the leaders in innovations and in empowering patients through direct budgets. I hope that I have reassured noble Lords and that they will feel able not to press their amendments.

My Lords, I thank the noble Lord, Lord Campbell-Savours, and the noble Earl, Lord Howe, for their support on this theme. It was immensely helpful that the noble Lord, Lord Darzi, made the statement that he did about clinical assessment having to come first and having to be a wholly separate process from financial assessment. It is a point that was the subject of extensive research by CSCI in the report that it produced earlier this year into individual budgets in social care. It wrote extensively about the need to have, first, an assessment of need as it is found in social care followed by a separate assessment of files. That is not a new issue. It has not arisen simply because of the existence of individual budgets; it has been a running issue throughout health and social care for some considerable time. However, given the way in which individual health budgets and direct payments are going to come in, I think that there is potential for great confusion.

I must admit that I am slightly disappointed with the noble Lord’s response to my amendment regarding appeals. I cannot help but think that, by their very nature, individual health budgets and direct payments will bring questions of cost and expense to the direct notice of patients in a way that has not happened before. By and large, with the exception of some areas such as NHS continuing care, discussions on financial transactions have not been conducted with patients, although they will be now. I hesitate to suggest that it may be naïve to think that this issue will not arise, but I think that not having an obvious system by which it can be addressed is another flaw.

I bow to the more extensive experience of the noble Lord, Lord Darzi, but I shall be astonished if the NHS complaints procedure is capable of handling the fallout from the introduction of individual budgets. Nevertheless, I note what he said and, in due course, we will see what happens. On that basis, I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendment 27 not moved.

Amendment 28

Moved by

28: Clause 9, page 7, line 23, at end insert—

“( ) as to the conditions that must be met to protect staff providing services which direct payments are used to secure”

My Lords, we know that the impact that the proposals for direct payments will have on staff is significant. In particular, the introduction of this more individual-centred delivery of healthcare will have a significant impact on workforce planning, especially where a patient embarks on a course of treatment that conflicts with professional opinion. Furthermore, if in the future direct payments create circumstances in which staff are employed directly by patients rather than by healthcare providers or the National Health Service, it is important that they are offered the same workforce protection and support to which other staff are entitled.

This amendment is a retabling of one from Committee stage. It calls for provision to be made in regulations to provide a level of protection for staff involved in providing services. UNISON has thousands of members working in the health service. Perhaps I may draw the House’s attention to the fact that it represents more than 450,000 healthcare workers and 300,000 social care workers employed in the National Health Service and local government and by private contractors, the voluntary sector and general practitioners. Many of those thousands of members working in the health service will be in the front line of implementing these proposals, and therefore clearly they will be affected in a major way by this legislation.

In Committee, the Minister recognised that the success of personal budgets and direct payments will depend on staff and that,

“the development of personal budgets will require significant cultural changes at all levels of the NHS, which should not be underestimated”.—[Official Report, 2/3/09; col. GC 237.]

Given the extent of this culture change, surely there needs to be a level of protection in the Bill. We need something greater than a reassurance that, if staff engage during the pilot process, they will be properly protected and supported during such a period of change. We need regulation if staff are to be fully protected. I beg to move.

My Lords, this amendment aims to ensure sure that implementation of direct payments for healthcare is fair for staff. Clearly, there is no argument here in principle, but I am not convinced, as I said in Committee, of the need for setting this out in the Bill. Amendment 28, tabled by my noble friend Lord Campbell-Savours, deals with the issue of protecting staff who provide services funded by direct payment. As we discussed in Grand Committee and set out in Personal Health Budgets: First Steps, the successes of personal budgets and direct payments will depend on staff, those who support, agree and monitor care plans and budgets and those who deliver such services. This is a lesson that came across clearly from the evaluation of individual budgets in social care.

It is vital for all staff that they have terms of employment that are legal, reasonable and fair. All of those who directly employ staff will need to understand their responsibilities. Several PCTs have already been considering ideas to ensure that individuals and carers have the information and support they need to manage staff responsibly. We are keen to support that. While most staff would not argue with the aims of personalisation, its delivery will require a significant mindset shift. We have already touched on the cultural change, as pointed out by my noble friend. Staff should be involved and engaged as much as possible in steering the implementation of personal health budgets and direct payments and in developing appropriate training. In our assessment of the pilot proposals so far, we have therefore been looking for evidence that frontline staff and unions are directly engaged.

It is vital that the pilots help us to understand fully the implications for staff, including around their employment status, their conditions of work, and the skills they need. I have no doubt that my noble friend will agree that these pilots will provide us with wonderful learning opportunities that we can take back to our stakeholders, such as the trade unions, and work out a reasonable proposal for the future. I want to reassure noble Lords that our evaluation programme will specifically look at the implications for staff of personal health budgets, including those involving direct payments, and if there is a case for putting specific safeguards in place, the legislation already gives us the power to do so. Therefore, I do not believe at this stage that an explicit provision in the Bill is necessary.

I hope that the explanation I have given, including the fact that further safeguards could be set out in regulations, will provide enough reassurance that my noble friend will agree to withdraw the amendment.

My Lords, I am grateful to my noble friend for the recognition he has given to the role of staff in the National Health Service and I know that the unions appreciate the value of the dialogue that he has with them on matters of this nature. However, I am sure they will want to consider his comments further prior to Third Reading. On that basis, I beg leave to withdraw the amendment.

Amendment 28 withdrawn.

Amendment 29 not moved.

Amendment 30

Moved by

30: Clause 9, page 7, line 23, at end insert—

“( ) as to the production every three years of an independent research report into the effects of direct payments on provision of health services and health outcomes”

My Lords, in moving Amendment 30, I want to turn again, in a slightly different way, to what was the theme of our discussion at Committee Stage and has been again today. This is the fact that individual payments and their potential effects on healthcare systems, on the level of healthcare services and healthcare outcomes are all great unknowns. I hope, as do other noble Lords, that they are a positive benefit, but there are a great many uncertainties about the principles and practice that will surround their introduction.

Much of the supposition made by the Department of Health is based on very limited evidence of pilots which have been run in social care. It is worth pointing out that the pilots for direct payments and individual budgets in social care happened at a time when health and social care funding was at an unprecedented level of growth. That is unlikely to be the case when these services are introduced within the NHS.

I also want to direct noble Lords’ attention back to the IBSEN research which we quoted extensively in Committee. It is one of the most tentative and circumspect research reports that I have ever seen. In Committee, I drew noble Lords’ attention to the cost and cost-effectiveness of individual budgets in social care. The cost and cost-effectiveness of services in social care is very largely determined by salary level and the availability of staff. Given the change in the economy, the availability of social care staff may increase. There has been a horrible shortage of them for several years. Salary levels may go down, which might mean that this becomes a much more cost-effective way of delivering services. For those and similar reasons, which could bear repetition although I do not wish to detain the House, it is reasonable to say that this policy, even on a pilot basis, is built on a whole series of assumptions for which, as yet, there is very little evidence.

My amendment is worded deliberately. It talks about,

“the effects of direct payments on provision of health services and health outcomes”.

It does not talk about the provision of those health services which will be funded by individual budgets. I return to a point that I have made several times before. Services for those with long-term and chronic conditions may be provided by the providers of acute services. By changing the funding patterns for part of what they do, one may potentially jeopardise the funding for the acute service. I make it clear that I am not talking about the impact on those conditions for which people are eligible to receive an individual budget; I am talking about the wider impact on health services and health outcomes.

Why should I propose that there be research every three years? First, I think that that is a long enough period in which to detect changes. Secondly, it is a sufficiently long period of time in which the effects of other relevant policy changes can be thrown up. It is also a similar timescale to that of a Comprehensive Spending Review. The position of health spending and the overall effects on the health service is a direct contributory factor to determining how people will have to use their individual budgets. Finally, a three-year timetable would take the process of research out of the political timescale as regards a change of Government. I believe that this is potentially one of the policies which will have the biggest impact on the provision of health services and health outcomes. It is therefore only right that it should be subject to regular independent review. I beg to move.

My Lords, I will be very brief but I think this is quite an important amendment. I did not think it was so important as little as three or six months ago but it is particularly important now. This Bill was born in a time of relative affluence when the National Health Service saw huge increases in expenditure. We are going into a period which may be very different indeed. There are going to be all kinds of new pressures exerted on health service budgets with people crying out from every section of the health service for an increased share of the cake. A matter of only months ago we may not have thought that this would be a problem in the future. This needs regular review over and above pilots. Over the next couple of weeks before Third Reading additional consideration should be given to the principle behind this amendment. I know my noble friend will have to reject it now, but I appeal to him to ask his civil servants and his department to consider the period that we are going into and the new pressures which none of us, at this stage, is able to predict with any certainty.

My Lords, Amendment 30 tabled by the noble Baronesses, Lady Barker and Lady Tonge, would create an expectation that direct payments would continue to be independently reviewed every three years, even after the pilot phase has concluded. Let me try to convince noble Lords why I do not believe that is necessary. I would be the first to say that any innovation such as this has to be evaluated, and I could not agree more with the noble Baroness that it needs to be a rigorous evaluation. It could have a tremendously positive impact on the patient and also on the health service. We will be speaking later about how we are calling for bids for independent evaluation. The question here is how long we keep evaluating something once we have had an independent evaluation of the pilots. We do not evaluate anything else independently in the health service. It all comes under our normal evaluation of our commissioning structures. If these pilots are successful, direct payments will be evaluated through the performance management of PCTs and their commissioning function will be evaluated as part of the world-class commissioning programme.

Maybe I misunderstood what the noble Baroness, Lady Barker, was suggesting. I will take back the issue of the behavioural change that might arise from providers and patients in relation to direct payments. That should be considered by the independent evaluating committee. I will never accept the idea of an independent rigorous academic evaluation without taking into account the behavioural change that the noble Baroness referred to.

The area I do not agree with is the impact of direct budgets on healthcare funding. This is innovation and innovation can save money. If we look at the evidence base of small pilots run in the US and from talking to stakeholders, including patient groups and the voluntary sector, we are constantly reminded of the amount of waste in the system. If the patient is empowered to make these decisions and have control of the payment, what cost savings might arise from that? Remember the wonderful example told by the noble Baroness, Lady Campbell, about her mattress. Let us remember the mattress story. The PCT was encouraging her to spend £3,000 and she found the same brand on the internet for about a tenth of the price. Let us have an open mind about this, which is the purpose of the independent evaluation. I hope I have made the case for why the Government see independent evaluation as important. Once we evaluate this independently, we have to make a call. Are direct payments going to benefit patients or do we need to decide what suits who based on our evaluation of the pilots? I hope I have reassured the noble Baroness enough to allow her to withdraw the amendment.

My Lords, I thank the Minister for one of the politest and most thoroughly considered responses that I have ever had to an amendment. I thank the noble Lord, Lord Campbell-Savours for his response, too. I hope the Minister will accept that I accept that individual budgets can bring about cost savings and be more efficient. I am not as convinced as he is that they will automatically be more effective and efficient. Even the noble Baroness, Lady Campbell, who was a bit embarrassed about the example of her mattress, had the grace to concede that a physiotherapy service in which the physiotherapist goes to somebody’s work to provide physiotherapy at a point and place convenient to the person receiving the service might have a higher unit cost than one that is run for the benefit of several people from a traditional NHS facility. Let us not take one example and from it extrapolate savings that may or may not arise across the NHS.

I want individual budgets to succeed. A critical part of their success will be their being subject to full, rigorous and independent review. I suspect that the process will have to carry on way beyond pilots. Pilots are carried out by people who are enthusiastic and work extremely hard to make sure that they are a success. That may not be the case when they are rolled out, as I am sure that they will be, throughout the whole of the NHS. I thank the Minister and beg leave to withdraw the amendment.

Amendment 30 withdrawn.

Amendment 31 not moved.

Consideration on Report adjourned.