Health written question – answered at on 24 July 2006.
To ask the Secretary of State for Health pursuant to the written statement of 11 June 2006, Official Report, column 64WS, on the NHS Litigation Authority, for what reasons the NHS Litigation Authority achieved an underspend of £205 million in 2005-06; and whether she expects the change in the discount rate in 2005-06 to lead to additional costs for the Authority in future years.
The NHS Litigation Authority (NHSLA) forecasts in advance the likely claims expenditure and number of new claims reported to the schemes, neither of which is controlled by the NHSLA. The major impacting factor on the NHSLA's resource limit is the level of claims reported to the schemes. In 2005-06 fewer claims were made than forecast, meaning fewer new provisions and therefore an underspend in resource terms. As a consequence, NHSLA actuarial advisors reviewed the incurred but not reported provisions which led to a reduction in the resource requirement in year.
The additional costs to the NHSLA, which result from the change in the discount rate for provisions, have been taken into account in setting the departmental expenditure limit for the Department for 2006-07 and future years and in setting the budgets for the NHSLA.
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