I move amendment No. 6:

In page 10, lines 32 to 34, to delete subsection (3).

This amendment proposes to delete subsection (3) of section 14 which provides that a chief executive officer of a health board shall be eligible for reappointment upon the expiration of his or her contract. I am advised this subsection could be interpreted as conveying in the case of an outgoing chief executive officer an entitlement to reappointment by means other than as a result of open competition through the Local Appointments Commission and irrespective of age or performance; in other words, that it would impose a statutory obligation on the board and the Minister to reappoint him or her regardless of circumstances.

That was never the intention and such a scenario would be completely at odds with that which prevails elsewhere in the public service, for example, in local authorities. The position in relation to the expiration of local authority managers' contracts is that it is open to them to compete in the normal way through the Local Appointments Commission for a second term, provided they fulfil the appropriate age requirements. By deleting this subsection we will be applying the same conditions to health board chief executive officers as apply to local authority managers.

I included in my amendment the provision that the chief executive officer should be eligible for reappointment. I was not aware that could give him or her a technical entitlement to reappointment, which was certainly not what I meant. I agree with the Minister that such an entitlement should not be written in unless the Government decides after consultation with the Local Appointments Commission that the person should be re-appointed, which I presume it would only do in very specific circumstances. We have no difficulty with the amendment.

Amendment agreed to.

I move amendment No. 7:

In page 10, subsection (6), line 41, after "appointment" to insert "pursuant to a recommendation by the Local Appointments Commissioners".

This amendment is required to make it clear that the selection of suitable candidates for appointment as chief executive officers of health boards will be the responsibility of the Local Appointments Commissioners. This has been the practice since the establishment of the health boards and I see no reason to depart from it. Chief executive officers will be appointed by the health boards following a recommendation of the Local Appointments Commission. The amendment was tabled to ensure that the present practice prevails and that no ambiguity arises from the manner in which the section was drafted in the first instance.

Who sits on the Local Appointments Commission for the specific appointment of chief executive officers of health boards?

There are different panels.

Would an existing chief executive officer of a health board or the retiring chief executive officer of the particular health board sit on the panel to appoint his or her successor?

That is not the norm but the Secretary or an Assistant Secretary of the Department of Health would sit on the panel. There would also be an outside nominee such as an ex-Secretary of another Department.

I am concerned about it because situations sometimes arise in public bodies where the outgoing boss has a pet favourite on the staff whom he or she decides is the most suitable person to be appointed to the newly vacated position. We are trying to ensure in the Bill that we get new blood and fresh thinking in the health boards with a cross fertilisation of ideas. I would not like the outgoing chief executive officer — I do not have any particular person in mind in saying this — to have considerable influence over the decision on his or her successor.

The Local Appointments Commission consists of the Ceann Comhairle, who chairs it, the Secretary of the Department of the Health and the Secretary of the Department of the Environment. That triumvirate has the authority to set up the boards. The Secretary of the Department of the Environment normally takes a personal interest in the appointment of a county manager and is usually a member of such an appointment board. The Secretary of the Department of Health would take a personal interest in the appointment of a chief executive officer to a health board and would go on the board himself or nominate an assistant secretary. It is not the normal practice to put the chief executive officer of a neighbouring health board on the appointment board. It is so long since we appointed a chief executive officer by public competition that we are talking from memory rather than current practice.

One of the areas which needs attention is the development of managers with modern management skills. The health boards now have huge personnel functions and budgetary controls, given their large staffs and the enormous amount of money going into the health services — over £2.3 billion. Some 66,000 people are employed by the health services. I am not averse to the idea of developing managers and ensuring at an early date that we have one manager per health board rather than the duplication we have at present. I take the point which was made about getting the best quality managers. Deputies may be interested to know that the hospital manager appointed to the new hospital in Tallaght is a medical doctor.

I heard about it on the radio. He will be earning £80,000 — more than his Minister.

Nearly everybody gets more than the Minister. He is a medical doctor with experience of hospital management in Canada. He is an Irish graduate of the Royal College of Surgeons. Many of us have argued for a long time that it would be a good idea if people with medical qualifications got involved in management. This is a very good example as he will be in charge of the biggest investment in a hospital ever made in the State. We will see how it works out.

Amendment agreed to.

I move amendment No. 8:

In page 10, after line 48, to insert the following subsection:

"(8) A person appointed to be the chief executive shall hold office for such period not to exceed seven years and he or she shall be eligible for reappointment.".

I realise the second half of the amendment cannot be accepted because the Minister has already deleted subsection (3). I have very strong views on this. I supported the proposed contracts for Secretaries of Departments. Why should a Department Secretary be appointed for only seven years while it is not also specified in the statute that the period of appointment of someone who is answerable to the Secretary should be not any longer than seven years?

Public bodies felt for years that staff should be appointed forever. For example, Bord Fáilte and Aer Lingus had staff in North America one of whom had been there for 20 years. When I was Minister I incurred the wrath of those organisations by saying that was not correct and that the policy of bodies such as the IDA and the Department of Foreign Affairs should be adopted whereby staff spent a period abroad and then returned. That is much better and more efficient.

I strongly agree that Secretaries of Departments should have contracts, which has resulted in a cross-fertilisation of ideas between Departments. We are introducing a statute with many good, progressive sections and we should not provide that the chief executive officer could conceivably be in office until the age of retirement. I would much prefer the Minister to accept the amendment — it may not be possible for him to do so today but between now and Report Stage he should specify that the officer should be appointed for a certain number of years. I have provided that it should not exceed seven years because that is our experience with Department Secretaries and I would not like the chief executive officer of a health board to be longer in his position that the Secretary of the Department of Health.

This brings the best out of people managing large organisations — which health boards are, as the Minister said. People introduce new and fresh ideas when first appointed but if someone was left in the same job for seven years — for instance, if the Minister was Minister for Health for that long — he would pass his sell-by date in the Department and the same is true of chief executive officers. I feel strongly about the amendment but I will not press it today because I have faith that, if the Minister does not accept it now, he will have it examined seriously in his Department between now and Report Stage and by then he may be able to put forward an amendment himself.

I will accept a seven year contract in the Department of Health at any stage if it is put in front of me and I will not look for one month longer. I understand the arguments put forward by Deputy Geoghegan-Quinn. The main purpose of the amendment is to provide that a person appointed as chief executive officer of a health board shall hold office for a period not exceeding seven years. This section of the Bill provides that, in future, chief executive officers will be appointed on a contract basis, as is already the case with city and county managers. What is not specified is that the duration of the contract will not exceed seven years. We need to continue with discussions we are having with staff interests to see what the length of time will be but I would not envisage that the contracts would be for periods in excess of seven years. I fully accept the principle of the amendment.

It is difficult to draft these amendments in Opposition, as I know from my long periods there. This draft has some technical difficulties which it is not necessary to go into but I accept the spirit of the amendment and I will come back on Report Stage with an amendment from the draftsman which will meet the Deputy's request. It is an important issue and it should be specified in the legislation.

Amendment, by leave, withdrawn.
Section 14, as amended, agreed to.
Section 15 agreed to.