Clause 10 - Expenditure of NHS Bodies

NHS Reform and Health Care Professions Bill – in a Public Bill Committee at 4:45 pm on 29th November 2001.

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Question proposed, That the clause stand part of the Bill.

Photo of Oliver Heald Oliver Heald Shadow Spokesperson (Health)

Will the Minister outline the effect of the clause?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

Schedule 12A of the National Health Service Act 1977 defines the expenditure of health authorities and primary care trusts. It also provides health authorities with the authority to apportion drug costs to primary care trusts. Clause 10 will amend schedule 12A so that PCT expenditure mirrors that of the current health authorities and will give the Secretary of State the authority to apportion drug costs between the PCTs. He must have that function because the resources will pass directly from him to the PCTs. There is no longer any residual role for the health authorities in that process because of the way in which the transfer of resources will be carried out in the NHS. The clause also allows the existing health authority position to be preserved in Wales and defines expenditure for local health boards.

Photo of Oliver Heald Oliver Heald Shadow Spokesperson (Health)

I understand the apportionment of costs for medicines, but will the Minister explain how it operates in the terms of the relationship between England and Wales?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I suspect that I shall have to write to the hon. Gentleman about that.

Photo of Oliver Heald Oliver Heald Shadow Spokesperson (Health)

I am grateful. I am sorry to hark back to this, but if the all-Wales medicine strategy group issues guidance that allows beta interferon to be prescribed in Wales and a prescription is subsequently presented to an English pharmacist and is accepted, what will happen to the allocation in the authority areas?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

I am not sure that I shall be able to answer every point that the hon. Gentleman raised. However, it might be helpful if I explained one or two points by way of background.

Clause 10 deals with two issues. The first is the division of PCT expenditure between that which is subject to resource and cash limits and that which is funded on a demand-led basis. The second is shifting expenditure on prescribed drugs from the PCT that is responsible for dispensing them to the PCT that is responsible for prescribing them. Once upon a time, all family health service expenditure fell outside the scope of the main allocations made to health authorities, and were funded separately on a demand-led basis. However, as a matter of policy, elements of family health services have been brought within the scope of health authority allocations and the discipline of resource and cash limits.

Present schedule 12A of the NHS Act provides the legal basis for dividing the expenditure of health authorities into two principal categories. The first is main expenditure, which is the legal term for expenditure that falls within the scope of health authority allocations. The second is general part II expenditure, which is the legal term for family health service spending that falls outside the scope of health authority allocations and is still funded on a demand-led basis.

Currently, health authorities are responsible for arranging the provision of pharmaceutical services. Accordingly, the cost of prescriptions initially hits the health authority responsible for the chemist that dispenses the prescription. The cost of drugs is included in the allocations of health authorities on the basis of the need of their populations to have drugs prescribed for them. The present schedule 12A provides the legal means of transferring the cost of drugs from the health authority where they were dispensed to the health authority where they were prescribed. As PCTs are taking over responsibility for family health services, including pharmaceutical services, clause 10 must amend schedule 12A, so that the cost of drugs can be transferred from the PCT that is responsible for the dispenser to the PCT that is responsible for the prescriber.

I know that that is not an answer to the hon. Gentleman's point, but I hope that it explains some of the processes involved more fully than my original remarks did. The hon. Gentleman asked me for more information about the exact nature of the process for apportioning costs, and I am happy to write to him about that.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

I should like to pursue a similar theme with the Minister and to raise the relationship between England and Wales. Whatever happens in that relationship will presumably happen later in the relationship between England and Scotland. That would affect me because my constituency borders Scotland.

New paragraph 6C(3) states that

''in any financial year any remuneration referable to the cost of drugs for which a Local Health Board is accountable is paid by another Local Health Board, the remuneration is to be treated...as having been paid by the first Board in the performance of its functions.''

I understand how that will work perfectly well within Wales, but what happens if a health authority across the border is involved? Will money be transferred from one country to another to repay an English health board that pays for drugs?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

The hon. Gentleman will be aware that arrangements are in place to cover that eventuality, and I shall write to him with the details. However, the Bill does not and cannot change the legislation on the operation of any part of the NHS in Scotland because that is a fully devolved issue. The hon. Gentleman is right to say that part of the clause relates to Wales. It

allows Wales to preserve existing health authority arrangements. Those arrangements define part I and part II expenditure for local health boards, which will mirror the definition used by current Welsh health authorities.

Photo of Richard Taylor Richard Taylor Independent, Wyre Forest

Can the Minister allay my concerns? Is there any change in the range of measures that will be subject to cash limits?

Photo of John Hutton John Hutton Minister of State, Department of Health, Minister of State (Department of Health) (Health)

No.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill

Further consideration adjourned.—[Mr. Fitzpatrick.]

Adjourned accordingly at seven minutes to Five o'clock till Tuesday 4 December at half-past Ten o'clock.