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NHS: Finance

Volume 462: debated on Wednesday 11 July 2007

To ask the Secretary of State for Health what the Capital Challenge Fund Scheme funding allocations are of (a) University Hospital, Birmingham NHS Trust, (b) Frimley Park NHS Foundation Trust and (c) University College London NHS Foundation Trust; and if he will make a statement. (147457)

For NHS foundation trusts (NHSFTs), the Capital Challenge Fund offered a potential addition of £300,000 to public dividend capital. In order to receive the addition funding, NHSFTs had to meet the general rules for entitlement to public dividend capital. University Hospital Birmingham NHS Foundation Trust drew down new public dividend capital of £300,000 from the Fund. Frimley Park NHS Foundation Trust and University College London Hospitals NHS Foundation Trust did not draw down any public dividend capital in 2006-07.

To ask the Secretary of State for Health what the reasons were for the increase in the gross deficit in the primary care trust sector between 2005-06 and 2006-07. (147578)

The primary care trust (PCT) sector reported a £633 million gross deficit at the end of 2006-07, which is a £17 million deterioration from the position reported at the end of 2005-06. However, the proportion of PCTs reporting a deficit has reduced from 36 per cent. in 2005-06 to 27 per cent. in 2006-07.

From 2006-07, we have stopped the movement of money round the national health service through brokerage or planned support. As we anticipated, this reform of the NHS financial regime has exposed deficits which might otherwise have remained hidden. As part of the strategy to manage the financial position in their overall economy in 2006-07, strategic health authorities (SHAs) were able to top-slice PCT allocations to create SHA reserves. Although this top-slice may have contributed to the less than 3 per cent. increase in the overall PCT gross deficit, this money is not lost, but held by the SHAs on behalf of the NHS. PCTs are entitled to repayment of their contribution over a reasonable period which should not normally exceed the three-year allocation cycle.

A clearer measure of PCT financial performance is shown by considering the in-year financial position, as this excludes both the Resource Accounting and Budgeting (RAB) adjustments in respect of prior year performance and the impact of the top-slice of PCT allocations. The in-year deficit of the 55 PCTs that recorded a deficit in 2005-06 was £326 million. This underlying position improved significantly to a £348 million in-year surplus by the end of 2006-07.

To ask the Secretary of State for Health when he expects to publish the long-term plans for the 17 NHS trusts which cannot service and repay loans over an acceptable period, as referred to in his Department's report NHS financial performance quarter four, published on 6 June 2007. (147580)

Departmental officials are working closely with strategic health authorities to identify long-term solutions for these 17 trusts. It is intended that the review work will be concluded in the autumn, and that solutions will be prepared in the context of the operating framework for 2008-09.