To ask the Secretary of State for Health whether the proceeds of the sale of (a) Rossendale General Hospital and (b) the hospital site would be (i) additional to the operating budget of the East Lancashire Hospitals Trust and available to the trust to spend on health provision in Rossendale at their own discretion and (ii) netted off against current or future capital allocation. (111407)

Under the current national health service capital regime, if a trust sells a fixed asset, then the value of the asset held in the books must be reinvested in fixed assets such as buildings and clinical equipment. It may not be used to fund the day to day operating costs of services.

Asset sale proceeds enhance a trust's capital spending power and there is no netting off against future capital allocations. If the trust makes a profit on disposal, in cases where the sale proceeds exceed the value of the asset held in the trust’s books, then the profit is available to be reinvested into health provision. Conversely if the trust makes a loss on disposal, the trust must make the necessary decisions to absorb the impact on the overall financial position.

There are plans at the trust to reinvest part of the land sale receipt into supporting the development of the new health care campus.