NHS Finance (Hospitals)

Health written question – answered on 24th April 2006.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

To ask the Secretary of State for Health what account is taken of the variation of fixed capital costs in the formulae for funding NHS hospital trusts through payment by results.

Photo of Liam Byrne Liam Byrne Parliamentary Under-Secretary (Department of Health) (Care Services)

The national tariff is currently based on average reference costs, which are calculated from individual returns from every national health service trust, NHS foundation trust and primary care trust which provides services. NHS reference costs are based on a full absorption methodology and therefore include cost of capital. In addition, the annual tariff uplift includes an assessment of the increase in statutory capital charges payable and charges payable on new private finance initiative investments.

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