Clause 7 - Funding of strategic health authorities
NHS Reform and Health Care
10:00 am
Mr John Hutton (Minister of State, Department of Health; Barrow and Furness, Labour)
I am grateful to the hon. Gentleman for spelling out the purpose of the amendment and so dispelling the confusion. The amendment would require the Secretary of State to pay the strategic health authority the full amount of its allocations, whether or not it requested the full payment of those allocations. That would not be sensible. The clause carries over the precise wording of previous legislation as it applies to the funding of the NHS organisations. It is not a device to allow financial subterfuge or the withholding of moneys that have been identified for NHS use and are needed for NHS patients.
The Government intend to fund the new strategic health authorities in precisely the same way as Labour and Conservative Governments have always funded health authorities. Strategic health authorities will be able to draw down funds up to the level of their allocation as they need them during the year, but it has never been the practice of any previous Administration to make their allocations before the money is needed. That is essentially what the provision would allow the Secretary of State to do.
It is true, as the hon. Gentleman says, that strategic health authorities might want to spend less money—perhaps to finance a project in a subsequent year. The Government intend to allow strategic health authorities the flexibility to carry forward such planned underspends into future, but if the strategic health authorities, rather than the Exchequer, had to hold the money themselves from the beginning of the year, it would not necessarily represent good value for money for the taxpayer. There is no subterfuge.