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Clause 11 - Power of Secretary of State to give

Part of Health and Social Care (Community Health and Standards) Bill – in a Public Bill Committee at 10:30 am on 22nd May 2003.

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Photo of George Young George Young Chair, Standards and Privileges Committee 10:30 am, 22nd May 2003

We now come to financial matters. Clause 11 gives the Secretary of State powers to provide financial assistance to foundation trusts. It would be helpful at this stage if the Minister were to set out the framework for the debate on this part of the Bill, which is at the heart of the arrangements for foundation trusts. That would provide a framework in which to consider some of the other amendments.

The question that I want to pose on clause 11 is quite simple. The whole point of becoming an NHS foundation trust is to access capital through the prudential borrowing code and from the private sector. A foundation trust would no longer get its capital allocations from the Treasury; that is the whole point. Under clause 11, the Secretary of State may give financial assistance to any NHS foundation trust. Can the Minister explain how the regime will work?

It cannot be the case that trusts would continue to get the capital allocations that they would have received had they not become foundation trusts. I understand that that flow of capital would cease and that trusts would then turn to the private sector—the City—to borrow what they could. Against that background, we need to know in what circumstances the Secretary of State could continue to give financial assistance to foundation trusts. Presumably they cannot have their cake and eat it, in that they cannot

continue to get what they would have received in addition to whatever they can borrow from the City.