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Health Services (Expenditure)

Volume 928: debated on Monday 21 March 1977

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asked the Secretary of State for Social Services what rate of inflation is assumed in the allocation to regional health authorities for 1977–78.

The forecasts used in the calculation of the final cash limited revenue allocations notified to health authorities are based on the following assumptions:PAY.—For settlements before end-July 1977, all employees are assumed to have settlements under the stage 2 policy; that is, increases of 5 per cent. within the upper and lower limits on the weekly cash supplements.For settlements after July 1977, pay increases within a range of 5 per cent. to 6 per cent. have been allowed for in the calculation in respect of that part of the year which falls after the settlement dates.Allowance has been made for the April 1977 increase from 8·75 per cent. to 10·75 per cent. in employers' national insurance contributions and the related raising of the earnings ceiling up to which contributions are payable.PRICES.—The increases in prices generally between the average level during 1976–77 and the average level during 1977–78 has been assumed to lie in the range 10 per cent. to 15 per cent.; correspondingly the increase between November 1976 and 1977–78 has been assumed to lie in the range 8 per cent. to 13 per cent. These assumptions are consistent with the Goverment's counter-inflation policy and its aims.

asked the Secretary of State for Social Services whether, in connection with the 1977–78 allocations to regional health authorities announced on 2nd March he is allowing a further relaxation of the powers to carry over unexpended balances from one year to the next.

Health authorities have been informed that a net underspending in current expenditure in 1976–77, up to a maximum of 1 per cent. of the 1976–77 regional cash limit, will result in a corresponding addition to the 1977–78 regional cash limit. These arrangements for the carry forward of underspending apply to the adjustments in 1977–78 arising from the 1976–77 outturn. I place considerable importance on health authorities having financial flexibility between years and the present arrangements will be reviewed in the light of the experience of their operation and further guidance will be issued for 1977–78 and future years.

asked the Secretary of State for Social Services whether he intends to allow health authorities greater flexibility to spend as between capital and revenue allocations.

Health authorities have been informed that with effect from 1st April 1977 up to 1 per cent. of the regional revenue cash allocation may be transferred to the capital cash allocation and conversely up to 10 per cent. of the total capital cash allocation may be transferred to revenue.