Clause 17 - Financial powers
Health and Social Care (Community Health and Standards) Bill
4:30 pm
Mr Chris Grayling (Epsom and Ewell, Conservative)
Welcome back to the Chair after recess, Mr. Atkinson. Those two points of order have given me the opportunity to pick up where I left off this morning, because a moment ago the Room was lacking Liberal Democrats, but now the hon. Member for Oxford, West and Abingdon (Dr. Harris) has arrived, so I can finish answering the point that he raised in an intervention just before we broke for lunch.
To recap briefly, the amendments to which I was speaking concern the powers and abilities of trusts to borrow and how they report such borrowings. Amendments Nos. 18 and 19 are designed to change the basis on which borrowing limits are applied to foundation trusts. Amendment No. 146, which the hon. Gentleman questioned me about, is designed to ensure that foundation trusts that have in recent years been part of major PFI schemes, perhaps to build a new hospital or new wing or to develop a new dimension of their services, are not disadvantaged when the new arrangements are put in place.
If current PFI financing is set against a trust's total liabilities when its right to borrow further is assessed, a significant number of our leading hospitals may be unable to take advantage of the extra borrowing rights. The odd situation might arise whereby hospitals with new buildings would be able to borrow no more for extending services, and those without new buildings would not be able to take on the substantial financing that they would need to build them, so there are some contradictions in the provisions. The amendment's purpose is to ensure that if a hospital had just opened a brand new PFI wing that took it over the borrowing limit that I expect to be set out in the prudential code, it would not then automatically be subject to a total moratorium on buying new scanners, for example.