Skip to main content

National Health Service (Licence Exemptions, etc.) Regulations 2013

Volume 747: debated on Thursday 25 July 2013

Motion to Approve

Moved by

That the draft Regulations laid before the House on 4 July be approved.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments.

My Lords, the regulations that we are now considering, which were laid before this House on 4 July, exempt some types of providers of NHS services from the requirement to hold a licence from Monitor. Providers who will not be required to hold a licence are as follows: NHS trusts; providers which are not required to register with the Care Quality Commission; small providers of NHS-funded healthcare services whose annual turnover from the provision of NHS services is less than £10 million; providers of primary medical and dental services; and providers of NHS continuing healthcare and NHS-funded nursing care.

The Health and Social Care Act 2012 gave Monitor a new role in regulating providers of NHS services, and the licence is a key tool for Monitor in carrying out its new functions. The Act strengthens sector regulation by building and improving on Monitor’s previous role as the regulator of foundation trusts and makes sector regulation more comprehensive by extending Monitor’s role to all providers of NHS services. While the 2012 Act allows licensing to apply to all providers of NHS services, these regulations provide for exemptions to this requirement for certain types of provider where the licence would not give additional protection for patients or would impose an unfair burden on providers.

Regulation 2 defines a licence holder as the legal entity responsible for delivering NHS services to patients, the body receiving NHS funding and providing care directly to patients. This approach mirrors that for CQC registration. Regulation 2 also ensures that, where a provider has subcontracted elements of a service, the subcontractor is considered a separate entity and thus in need of a licence.

Regulation 3 confirms that no exemptions apply to foundation trusts. This is consistent with the position under the 2012 Act that all foundation trusts must hold a licence.

Regulation 4 provides that NHS trusts will not be required to hold a licence. This is because directions from the Secretary of State require the NHS Trust Development Authority to set and enforce requirements on NHS trusts similar to those set by Monitor's licence. The NHS Trust Development Authority must seek and consider advice from Monitor in setting these conditions to ensure that the requirements for NHS trusts will provide similar protection for patients’ interests compared with those set by Monitor through the licence.

Under Monitor’s licensing regime, a commissioner may request that a service be subject to additional regulation to ensure patients’ continued access to that service. Any provider of such commissioner-requested services will not be eligible for an exemption under the regulations even if the provider otherwise qualifies for an exemption. Where commissioners have designated a service as a commissioner-requested service, Monitor must be able to intervene in order to secure continuity of that service. I should highlight to the House that this particular override would not apply to NHS trusts because the NHS Trust Development Authority will be able to undertake similar interventions on an NHS trust which becomes unsustainable. Regulation 9 provides for this.

Regulation 5 provides for an exemption from the requirement to hold a licence for providers of primary medical or primary dental services under contractual arrangements made under Parts 4 and 5 of the National Health Service Act 2006 with NHS England. NHS England will ensure that such providers comply with requirements that will ensure equivalent protections for patients.

Regulation 6 ensures that providers of nursing care, which is defined in the regulations as,

“NHS Continuing Healthcare or NHS funded nursing care”,

will not be required to hold a licence. An increasing number of providers of adult social care attract NHS funding for nursing care as part of a social care package. This avoids pre-empting the proposals in the Care Bill for market oversight of providers of adult social care. This exemption is time-limited to 31 March 2015, and the department will review it and determine whether it should continue to apply beyond that point.

Providers that are not required to register with the Care Quality Commission will not be required to hold a licence. Providers are prioritised for registration by the CQC on the basis of potential risk to patients. The department will keep this position under review; in particular, we will consider potential changes to the scope of CQC registration.

Regulation 8 exempts providers with less than £10 million annual turnover from the provision of NHS services. It is the Government’s policy to avoid regulatory burden on small and micro enterprises. Regulation 8 also defines applicable turnover for the purposes of the £10 million threshold as turnover from the provision from NHS services. Consistent with the exemptions provided for by Regulations 5 and 6, turnover from the provision of primary medical and primary dental services provided under Parts 4 and 5 of the NHS Act 2006 and from nursing care is not considered applicable turnover.

Regulation 9 provides that, where NHS England or a clinical commissioning group considers that a service is a commissioner-requested service, the provider ceases to qualify for an exemption under Regulations 5, 6, 7 or 8. Regulation 9 also sets a condition on exemptions conferred by Regulations 5, 6, 7, or 8 and provides for the Secretary of State to withdraw exemptions from a provider that does not comply with the conditions.

These regulations allow Monitor to carry out its regulatory duties through the licence in a targeted and proportionate way, while ensuring that patients’ interests are always the overriding factor. I commend the regulations to the House. I beg to move.

My Lords, I am sure that the whole House is indebted to the noble Earl for his lengthy explanation of the order before us. I just want to ask him three or four questions.

I noticed in the Explanatory Memorandum that there is an intention to review how licences are working and that it is to take place during the next Parliament. I must say that I thought it was rather presumptuous of officials to assume that this will be done. Of course, it is for me to point out that Governments cannot bind their successors to action to be taken, so I look forward to a Bill that will perhaps do away with some of the requirements that will be necessary.

The noble Earl will not be surprised if I ask him a question about the NHS Trust Development Authority. Reference was made in his remarks and in the Explanatory Memorandum to the relationship of the NHS TDA to the other regulatory bodies. Can he update the House on how long he now thinks that the NHS TDA is likely to be in existence? Of course, this relates back to the question we debated in the Bill, which is: what is his expectation in relation to non-foundation trusts and the pipeline, if you like, towards foundation trust application? Can he also give an indication of which services are likely to be designated as commissioner-requested services?

Paragraph 7.15 of the Explanatory Memorandum says that Regulation 7,

“exempts any provider that is not required to register with the CQC from the requirement to hold a licence from Monitor … This exemption would cover, for example, providers of ophthalmic services”.

Can the Minister tell us the rationale for why ophthalmic services are excluded? Is it to do with the fact that they are regulated in a different way?

The Explanatory Memorandum, at paragraph 7.16, says that NHS England is,

“well placed to enforce standards in relation to primary medical and dental services”.

As there has been a considerable amount of debate in the last few months about the quality of primary medical services and out-of-hours performance, can the Minister say anything about how NHS England will go about its business in ensuring standards in primary medical services? There are questions about whether it has the capacity to do that, and any reassurance on this subject would be welcome.

Finally, on exemptions, as I understand it, CCGs, when commissioning services from GP practices, are not exempted by Regulation 5. However, if the practice is large and goes over the £10 million threshold under Regulation 8, it may be covered, whereas if its turnover is below £10 million it is exempt under Regulation 8. The Minister will know that when we debated the Bill that became the Health and Social Care Act 2012 we had a great deal of debate about conflicts of interest. I have never been satisfied that that problem has been resolved satisfactorily. If, under these arrangements, CCGs are commissioning services from GP practices—remember that those practices are members of the CCG, so there is always a potential conflict of interest—I would have been more reassured if there had not been an exemption for practices with a turnover of less than £10 million. I would have thought that most traditional GP practices would fall below that threshold.

I understand the rationale for not wanting to catch small businesses under the regime, but does the Minister accept that when CCGs are commissioning services essentially from themselves—in the sense that GP practices make up the CCG—greater safeguards should be built into the regulations?

Other than that, these regulations are unexceptionable. I should, of course, remind the House of my interests in health, as president-elect of GS1, chair of a foundation trust and a consultant and trainer with Cumberlege Connections.

I am grateful to the noble Lord for his questions, some of which I shall write to him about. He first asked me about the review of licensing exemptions that the department plans to carry out in 2016-17. He is, of course, right to say that no Government can commit their successor, of whatever colour, and it will be open to a successor Government, if they are of his party, to revise that aspiration. However, we think it right that after such an interval, the department should look to see whether the exemptions are continuing to prove appropriate, and if they are not it should propose amendments. I do not think that is a very controversial aim.

On the working life of the NHS Trust Development Authority, it will not have escaped the noble Lord’s notice that the original lifespan that we marked out for the TDA will now be exceeded. We have quite consciously, and rightly, determined that the process for approving foundation trusts should be extended, bearing in mind the outcome of the Francis review and the need for trusts, some of which by their very nature will prove more difficult to bring to foundation status, to focus on those aspects of the Francis report which need to be addressed if they are to be worthy of foundation trust status. Therefore, the length of life of the NHS TDA will undoubtedly extend into 2015. I cannot be more specific than that at this stage. It is a special health authority established by order. We will review that order in the normal course of things in three years’ time to assess whether there is a need for the authority. That is mentioned in the Explanatory Memorandum to the establishment order.

The noble Lord asked me why ophthalmic services are exempt. It is because they are not subject to registration by the CQC. We will of course keep those exemptions under review, as I have said. If evidence emerges to suggest that we should extend the licensing or make further exemptions, we will do so. When I spoke to the ophthalmic sector, it said that it did not see the need for a licence from Monitor, and we have taken account of its views.

The noble Lord asked me for some examples of commissioner-requested services. It is difficult for me to do that because they will be services which commissioners deem are in need of additional regulation to protect patients’ interests. Monitor has published guidance for commissioners to help them determine the considerations around commissioner-requested services. It will very much depend on the needs of the local population and what services are considered to be indispensable in a particular area.

The noble Lord asked me why GPs and dentists are exempt. As he knows, providers of primary medical services and primary dental services under contract to NHS England will be exempt from the requirement to hold a licence. As NHS England holds the contract with providers of those services, it is clearly well placed to place requirements on those providers that are similar to some of those in the licence. An agreement between Monitor and NHS England will underpin the arrangements. Monitor and NHS England are currently working on that. GPs and dentists sometimes provide other types of services under contracts with commissioners other than NHS England, such as minor surgery clinics or diagnostic testing services. They will be subject to licensing in respect of these services but at the same time be eligible for the de minimis threshold exemption. In addition, all providers of designated commissioner-requested services will require a licence, even if they would otherwise qualify for an exemption. It is therefore conceivable that a service provided by a GP practice might be considered a commissioner-requested service, but that is a speculative assumption on my part.

The noble Lord referred to conflicts of interest when such services are commissioned from GP practices by clinical commissioning groups. As I am sure he knows, there are clear rules around conflicts of interest. While GP practices are, by definition, members of a clinical commissioning group, the commissioning process must be done as much at arm’s length from an individual GP practice as possible. If someone in the clinical commissioning group has a direct personal or professional interest in the decision being taken, he or she must follow the rules surrounding that conflict.

The noble Lord asked me how NHS England is going to maintain standards in primary medical services. I have largely covered that point. NHS England will monitor the quality of care being delivered under the contract via the local area teams. Clinical commissioning groups are themselves engaged on peer-review exercises of their member practices which will, in turn, inform NHS England’s assessments.

I think I have answered all the noble Lord’s questions, but if I have not I will follow up in writing.

Motion agreed.