(2) pursuant to the answer of 15 May 2008, Official Report, columns 1672-3W, on departmental public expenditure, what capital plans his Department has agreed for 2008-09; how much was allocated for each in 2008-09; and what the indicative allocations are for (a) 2009-10 and (b) 2010-11 for each;
(3) how much has been set aside in (a) 2008-09, (b) 2009-10 and (c) 2010-11 to cover the costs of the arrangements to fund the local investment plans of (i) primary care trusts, (ii) foundation trusts and (iii) NHS trusts.
The amounts allowed on page 148 of Departmental Report 2008 for primary care trusts (PCTs) and strategic health authorities (SHAs) capital expenditure and that of national health service trusts and foundation trusts (FTs) are £0.8 billion and £2.7 billion respectively.
As explained in my answer of 15 May 2008, PCTs and NHS trusts are no longer subject to the formulaic capital allocations of recent years. Under the new capital regimes established for them, capital for investment by PCTs and NHS trusts is allocated in response to plans that they submit at the start of the year, as part of their annual planning process.
The process for 2008-09 is not yet complete, as had been anticipated in the answer of 15 May 2008. It is however well advanced, with individual NHS trusts, and PCTs, plans having been checked for accuracy by SHAs and with the position across most SHA patches validated by the Department. The SHAs and Departmental officials are now broadly satisfied with the majority of the plans and should be able to approve them in the next few weeks.
As capital plans have not yet been approved, none of the capital funding identified for expenditure by PCTs or NHS Trusts in 2008-09 has so far been formally allocated. For the NHS trusts and FTs, however, approaching £1.8 billion of the cash that is spent on capital investment is provided through the cash-funding of depreciation in their revenue income. NHS trusts have had confirmation that they may invest this capital funding, which equates to about 65 per cent. of the £2.7 billion that is stated on page 148 of the Departmental Report 2008 as being available to fund capital investment by NHS trusts and FTs.
FTs are not subject to capital allocations or required to submit financial plans to the Department in the same way as PCTs and NHS trusts. Under their capital regime, the majority of their investment is funded with cash retained from their operations and any property disposals, and through borrowing from the departmentally operated FT financing facility.
Included in the £0.8 billion identified in the Departmental Report 2008 for SHAs and PCTs was a total of £0.497 billion for expenditure on PCTs, own local investment plans in 2008-09, of which £0.097 million was expected to be released through the PCTs’ own property disposals. The remaining £0.4 billion of capital resources that was to be provided by the Department had already been notified to PCTs in ‘The Operating Framework For the NHS in England 2008-09’, which was published in December 2007. This document also advised that the Department would contribute £0.48 billion towards PCTs’ local investment plans in 2009-10 and £0.565 billion in 2010-11. The £0.48 billion and £0.565 billion do not include any anticipated contribution from PCTs' property disposals. Copies of this document are available in the Library
The £2.7 billion identified in the Departmental Report 2008 for NHS trusts and FTs capital expenditure included £2.165 billion for expenditure on trusts' local capital investment plans, of which £0.159 billion was expected to be released through the trusts' own property disposals. There is no fixed split of the £2.165 billion into a budget for NHS trusts and FTs. This is because the expenditure of each of these sectors will depend on the number of trusts that achieve foundation status in the year.
The allowances for the local capital investment priorities of PCTs and NHS trusts in 2008-09 may be adjusted as part of the process referred to above of validating and signing off the plans of local NHS Trusts and PCTs.
Capital budgets to cover the local investment plans of NHS trusts and FTs in 2009-10 and 2010-11 and indicative capital allocations for NHS trusts and PCTs for those years have not yet been agreed or announced.