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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 10:45 am on 22nd May 2003.

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Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 10:45 am, 22nd May 2003

I do not want to go on at length, but as clause 11 introduces the provisions on financial matters, it would be useful if the Minister could give us some indication of the nature of the capital regime within which NHS foundation trusts are going to operate before we discuss the borrowing powers and classification of capital as provided to NHS foundation trusts.

I confess that my understanding of this is perhaps less than that of other members of the Committee. I am aware that hospitals receive capital from the Exchequer through a range of sources: there are strategic capital schemes, through which, following the approval of a business case, the Department provides three-star trusts with discretionary capital for particular purposes; operational capital is allocated by way of a formula rather than by approval of specific projects; the access fund is the provision of funds to hospitals following the achievement of certain activity targets; and the Modernisation Agency provides modernisation funding.

For the year ahead, £1 million—a three-star reward, as it were—has been built in to the external capital provision for Addenbrooke's. However, I am not sure that that money can be relied on for subsequent years. I would leave the Committee this morning with a spring in my step if I knew that the Department planned to provide an equivalent additional bonus for three-star trusts for the years beyond 2003–04.

I do not for a minute suggest that the availability of those sources of capital means that there will not be any requirement for additional borrowing. As I understand it, the point of the system is that we should be able to put additional capacity in place. Reading about the capital available to Addenbrooke's for 2003–04, I found it interesting that its proposed allocation of £7.5 million to capital projects was related to capital bids from the trust for £22.5 million. Indeed, to those of us who have been in business, the idea that a growing organisation with a projected turnover of £230 million in the year ahead should be growing, modernising and improving with £7.5 million of capital expenditure a year does not seem feasible.

My hope is that we will discuss how trusts will be able to access capital above and beyond that which is available through Exchequer sources. Before we discuss other aspects of capital, it might be useful to understand whether each of the sources of capital available to existing NHS trusts will be available on the same or similar terms to NHS foundation trusts.