Health and Social Care (Community Health and Standards) Bill

Part of the debate – in the House of Lords at 10:15 pm on 13th October 2003.

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Photo of Baroness Noakes Baroness Noakes Conservative 10:15 pm, 13th October 2003

I shall speak also to Amendment No. 159. Amendment No. 158 was prompted by the fact that Mr Hutton, a Health Minister in another place, said in Committee on 22nd May:

"We have asked applicant trusts to make a case where they believe historical deficits should be written off before they achieve foundation trust status".—[Official Report, Commons Standing Committee E, 22/5/03; col. 360.]

If those deficits are written off, some part of the trust's public dividend capital will need to be written off. Will the Minister say under what power the write-offs referred to by Mr Hutton will be made?

I am well aware that deficits sometimes need to be written off. There are many trusts with accumulated deficits, and doubtless they would all like their balance sheets cleaned up. For example, the Comptroller and Auditor-General, when he reported on the last set of summarised accounts—a most useful source of information, as I have told Members of the Committee several times today—noted that 46 trusts, which is 15 per cent of the total, were managing significant financial difficulties.

The purpose of the amendment is to make such write-offs subject to parliamentary approval where they precede the setting up of a foundation trust, so that a level playing field exists. We do not want to see the favoured few—the NHS foundation trust applicants—having their accounts polished up so that they look bright, shiny and successful if the same treatment is not also available to the NHS trusts that languish under direct Secretary of State control. Parliament will surely want to satisfy itself that the write-offs do not conceal financial weakness and are otherwise properly made.

Amendment No. 159 is a probing amendment related to Clause 13(3), under which it appears that the Secretary of State can make a retrospective alteration to the terms on which PDC has been issued. In what circumstances do the Government believe that such a power might be exercised, and why is there no provision for the consent of the foundation trust to the alteration? Is it possible that the terms could be worsened from the foundation trust's perspective without its permission? I beg to move.