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Allocation Of Resources

Volume 164: debated on Thursday 11 January 1990

The text on this page has been created from Hansard archive content, it may contain typographical errors.

To ask the Secretary of State for Wales whether he has now reached decisions about the allocation of resources of hospital and community health services in Wales for 1990–91; and if he will make a statement.

I announced on 19 December, columns 161–62, that, subject to parliamentary approval, I propose to provide £1,055·8 million for the hospital and community health services in Wales. Excluding the cost of the artificial limb and appliance service (which is administered on my behalf by the Welsh health common services authority) £962·6 million will be provided for current purposes and £86·9 million for capital spending.For current spending this represents a cash increase of £72·8 million over estimated outturn for the current financial year and together with the additional £12 million which Welsh health authorities are expected to realise, as a minimum target, from new cost improvements and income generation schemes, provides an effective total increase in resources over 1989–90 of 9·5 per cent. This is on top of the extra funding which is being provided to meet the recurrent effect of the supplementary provisions made available in 1989–90 for the review body pay awards and also as a contribution toward the cost of implementing the White Paper "Working for Patients".£57·6 million of this sum will be made available to health authorities for their discretionary use, which represents a cash increase of 6·5 per cent. over this year's provision. £7·5 million will be allocated to fund the balance of the full-year cost of developments which are being funded centrally in 1989–90 including those associated with the implementation of "Working for Patients". £7·7 million will be allocated to new centrally-funded developments. These developments, which are listed in the table, will considerably assist authorities in meeting future service requirements.

£ million
Regional Services and Centrally-funded developments2·0
Project 2000 including nurse education and support worker training and facilities1·2
Consultant Expansion Programme0·3

£ million

New Developments arising from the implementation of the White Paper "Working for Patients"3·2
Other1·0
7·7

Of the capital provision, £45 million will be made available to health authorities for their discretionary use. This amounts to a cash increase of almost 14 per cent. over last year's capital allocation. The balance is required for the all-Wales capital programme, including provision for developments associated with implementation of "Working for Patients" and further developments to be undertaken under my Programme for the Valleys initiative. Further details will be announced in due course.

Authorities will be able to retain all the proceeds of their cost improvement programmes and income-generation schemes. They will also retain the income which they raise from charges for private treatment and the receipts which they obtain from the sale of surplus land and buildings. Property sales are expected to generate a further £5 million in 1990–91. In total, I will expect authorities to achieve additional savings, income and receipts amounting to at least 1·3 per cent. of their recurrent revenue allocations.

The current and capital allocations to individual authorities will be as shown in the table. These allocations do not take into account the further sums which will be allocated when decisions have been taken on the distribution of the funds available for centrally-directed developments.

£ million

Allocation current element

Capital element

Clwyd116·5846·277
East Dyfed74·8973·205
Pembrokeshire28·3791·968
Gwent137·9686·184
Gwynedd69·1641·710
Mid Glamorgan161·4468·054
Powys33·3931·113
South Glamorgan188·9557·938
West Glamorgan119·2638·072

These current and capital allocations provide for a real increase in spending by health authorities after taking into account the level of general inflation forecast by the Chancellor of the Exchequer in his Autumn Statement. They more than fulfil the resource planning assumptions which were issued to authorities last year.

The current allocation, as in previous years, have been weighted in favour of those authorities which are shown by the latest revenue formula assessment to be furthest below their target shares of available revenue resources (which are based on the catchment populations for the services which they provide).

The revenue formula has been subject to further refinements this year to include a weighting for the effects of sparsity of population on community health services and, in accordance with allocations in England, to adjust the allowance which South Glamorgan health authority receives in respect of the medical teaching service that it provides.

The effect of the new revenue formula assessment is to weight the distribution of the 6·5 per cent. cash increase to be made available to health authorities, in favour of the Clwyd, East Dyfed, Pembrokeshire, Gwent and Powys health authorities in such a way as to bring all these authorities to within 1·4 per cent. of their revised revenue formula target shares. This represents a continuance of the Government's longstanding commitment to the progressive equalisation of resources between health authorities in Wales.

It also provides a firm foundation for moving towards an allocation system based directly upon shares of the population served as set out in "Working for Patients". The joint Welsh Office-NHS resources allocation working group is currently considering how resource allocation arrangements in Wales might best be changed to achieve the objectives of the White Paper, and I look forward to receiving its recommendations and the comments of health authorities during 1990.

The capital allocations have, accordingly, also been determined in accordance with the existing allocation procedures, using the second revise of the original capital formula assessment, which, as in previous years, includes an allowance for the progressive equalisation of capital stock between authorities.