SCOTTISH HOSPITAL TRUST (Hansard, 23 February 1972)

§ The Under-Secretary of State for Health and Education, Scottish Office (Mr. Hector Monro)
I beg to move, That the Scottish Hospital Trust Regulations 1972, a draft of which was laid before this House on 3rd February, be approved. With permission, I will deal at the same time with my following Motion, That the Scottish Hospital Trust Scheme 1972, a draft of which was laid before this House on 3rd February, be approved. Since the Hospital Endowments (Scotland) Act, 1971, received the Royal Assent just over a year ago a good deal of preparatory work has been done. In particular, the Scottish Hospital Trust was constituted on 1st September, and has since appointed its secretary and investment adviser. What we are doing now is, firstly, to set up the arrangements under which the relevant endowments—that is, those given to Scottish Health Service hospitals up to 5th November, 1946—will be transferred to the trust on the appointed day.
My right hon. Friend proposes to make an Order appointing 1st April, 1972, for this purpose. From that day, the trust will hold and manage these endowments, 1450 and distribute the income to hospital authorities under schemes to be made by the Secretary of State from time to time. These, the House will recall, are the principal provisions of the Act, which, as the hon. Member for Glasgow, Woodside (Mr. Carmichael) will remember, was a largely agreed Measure.
I hope the House will agree that it is sensible and convenient to debate these two instruments together. Although they are quite distinct in their purpose they really form one package. Essentially, the regulations cover the transfer arrangements and the questions of future as well as outstanding borrowings. The Scheme lays down how the Trust is to distribute the income and how it is to be used.
We have consulted hospital authorities about these proposals. On the whole, their reaction has been favourable. The Scottish Hospital Trust, which will have to deal with the practical effect of the instruments, is quite happy about them.
I turn now to the detailed provisions, and first to the regulations.
In regulation 4, two main groups of endowments are excepted from transference. Two hospital boards are excluded altogether because of special circumstances applying to them. Also excluded are a number of heritable properties which we have decided, having considered them under Section 2(4) of the Act, should be left with the boards concerned. These are set out in the Schedule.
Regulation 5 prescribes special conditions attaching to two particular endowment funds. Each of these boards has, as part of its relevant endowments, a fund which it can spend on certain purposes without the normal obligation to replace the capital. We are simply continuing these arrangements.
1451 Regulation 6 lays down the arrangements for valuing the endowments transferred. This is important in connection with income distribution, as I shall be explaining in a moment. There is provision for stating each board's share in the Trust's capital initially and for revising this in certain circumstances.
Regulation 7 deals with borrowings. It has always been open to boards to use their endowment capital for hospital or specialist services or for medical research, subject to certain approvals where it was proposed to spend more than £1,000, and provided they replaced the capital within 30 years. Section 6 of the Act continues this facility, and this Regulation fills in the details.
I now turn to the Scheme. It provides how the net income of the trust is to be distributed to hospital authorities. In the first place each hospital board of management—except the two excluded—and also the Committee of the State Hospital, will receive £3 per bed per annum and regional hospital boards will receive a fixed sum. The balance of the Trust's income will then be shared among all hospital boards in proportion to the value of the endowments which they have transferred to the Trust. The Browning Working Party, which was set up by the previous Government. and for whose report I am most grateful, estimated that the total income per bed represented by these endowments would, for the poorest endowed hoard, rise from about £1.70 to about £3.75 per bed.
We are continuing the previous provisions with regard to the use of endowment income. Paragraph 4 expresses these in detail. Quite simply, the money must be used for hospital or specialist purposes or for medical research. For capital or research purposes certain clearances are required if the expenditure will exceed £2,000—this figure is being raised from the present £1,000. Finally, certain special purposes of a memorial nature are provided for. These are existing conditions of specific endowments which the boards have asked us to retain. Some of these purposes would not be legitimate if they were not included here, because they do not constitute hospital or specialist services or medical research.
1452 I should perhaps add something about the effect of health service reorganisation on these arrangements. The 1971 Act will remain in force, but amendments to the Act and revision of the Statutory Instruments will be necessary. Our intention, however, is that their effect will not be altered, and that health boards will be required to use the income for hospital purposes, and indeed, so far as practicable, to devote it to the same hospitals in their area as would have benefited previously.
I end with a brief apology. The House may have noticed that in two places—one in the regulations and one in the Scheme—the regulations are referred to as being of 1971. This is an obvious slip and will be corrected when the instruments are made.
I hope the House will approve the two instruments.

§ Mr. Neil Carmichael (Glasgow, Woodside)
It is evident from the mass exodus when the Minister rose that this subject is not so dramatic as the subject we have been discussing for the last few hours, but it is nevertheless fitting that we should pay tribute to the people who many years ago gave money to hospitals to make the lives of patients easier and to help research. The reputation of Scottish hospitals has benefited greatly from the generosity of the Scottish people, which has enabled hospitals to undertake specialist research and to raise their standards.
The Hospital Endowments (Scotland) Act, 1971, was basically an agreed Measure, and the Browning Working Party was set up by the previous Government. I am glad that provision has been made to preserve the memorial nature of some of the endowments, as this will give a sense of continuity. This applies particularly to prizes for nurses and internees at certain hospitals. I am also glad to know that, in general, hospital boards are in agreement with the purpose of the Instruments.
Paragraph 5 of the Trust Regulations begins: At the request of the Board of Management for the Astley Ainslie, Edenhall and Associated Hospitals, the Secretary of State may direct …". 1453 Is this a convenient way of proceeding, a request having been made to the Secretary of State?
How much is involved in the value of the capital of the funds of Astley Ainslie and Associated Hospitals and the Edinburgh Royal Infirmary? Why, in this case, are the funds allowed to meet only capital expenditure, whereas the funds of the trusts normally meet revenue expenditure and further powers are required to meet capital expenditure in those other cases?
I am glad that the Minister has reached the point of being able to bring these regulations forward. We hope that in future the trust funds will operate as in the past and that the endowment system applying to Scottish hospitals will prove as productive for the hospitals system.

§ Mr. Monro
I thank the hon. Member for Glasgow, Woodside (Mr. Carmichael) for his acceptance of the regulations and the Scheme. I wish also to express my gratitude to the people of Scotland for the funds they have provided. They have been of enormous help to our hospitals.
I agree with the hon. Gentleman about the importance of the memorial provision. This will enable prizes to be given, particularly at teaching hospitals. It is important to look after the grave stones and property bequeathed to hospitals, often many years ago.
The capital funds of the Astley Ainslie and Associated Hospitals total about £200,000, and for the Royal Infirmary the sum—this is only in respect of the Sir Robert McVitie Grant Dermatological Fund—is £10,000. Both of these funds were set up so that the capital could be used when required, and this is why special provision for them is being made in these instruments.

§ Mr. Deputy Speaker (Miss Harvie Anderson)
Order. I propose to suspend the Sitting of the House and, for the convenience of the House, the Division bells will ring when the Sitting resumes.

§ Mr. Deputy Speaker (Miss Harvie Anderson)
I have to acquaint the House that a message has been brought from the Lords by one of their Clerks, as follows: The Lords have agreed to the Northern Ireland Bill, without Amendment.