Hospital Capital Expenditure (Non-Exchequer Funds) (Hansard, 11 March 1954)

35 Dr. Bennett
asked the Minister of Health his policy on projected hospital capital works which are to be financed from non-Exchequer funds.

§ Mr. Iain Macleod
Yes, Sir. The position has been reviewed and I am glad to say that it is no longer necessary for me to require that capital expenditure from non-Exchequer funds should count against capital allocations made to hospital boards. It will, of course, still be necessary for me to scrutinise proposals to incur such expenditure by reference to any Exchequer maintenance expenditure that may be involved, the effect on the development of the hospital concerned and the needs of the hospital service.

Dr. Bennett
Does my right hon. Friend appreciate that this reply will give the greatest possible pleasure and relief to every hospital and regional board and authority in the country because of the privilege of once more being allowed to spend money which is, after all, their own? Could he give any indication of what will be the total amount involved in the course of one complete financial year?

§ Mr. Macleod
I cannot quote the exact figure. It depends to a great extent upon the class into which the applications that come forward will fall. As I indicated in my answer, it will clearly be much easier on general grounds to approve capital expenditure which may not increase, and may even save, maintenance costs in future, rather than capital expenditure which may carry a heavy maintenance burden in future years.

§ Mr. Bevan
As the statement of the Minister is singularly obscure, may I ask if it is now the intention that funds which originally belonged to the voluntary and teaching hospitals, and which were to be put into a special classification for research, experiment and amenities for patients, are to be raided for those forms of expenditure directed by the Treasury?

§ Mr. Macleod
No, Sir, there is no such suggestion. There is no intention, of course, of raiding the capital of the Hospital Endowment Fund, but there are three sources from which hospitals have money. The first is the endowments of teaching hospitals, the second the comparatively small amount issued annually as income from the Hospital Endowment Fund to non-teaching hospitals and the third is gifts which they may have accumulated since the Act came into force under the provisions made by the right hon. Member, including such possibility, for example, as the use of funds made available by the King Edward Hospital Fund, or anything like that. But there is no intention at all of raiding the capital of the Hospital Endowment Fund.

§ Mr. Bevan
As the situation still is very obscure, may I be allowed to ask what changes the right hon. Gentleman proposes to make? At the moment these funds are available only for the amenities of patients and the other uses I have described. What changes precisely does the right hon. Gentleman propose to make?

§ Mr. Macleod
No, that is not so. The only funds that are available in that sense are those covered by the second category to which I have referred. The moneys for this sort of expenditure will be those coming in either the first or the third of the categories I have indicated. They have, in fact, been used from time to time but, as my predecessors know, it has always been insisted, as a matter of Government policy, that any moneys so used for capital investment shall count against the total allocated to the Ministry of Health and sub-allocated to the regions. It is that provision which has been removed.