TRANSFER OF PROPERTY, RIGHTS AND LIABILITIES TO NHS TRUST (Hansard, 27 June 1990)

§ The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell)
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
With this it will be convenient to take Lords amendments Nos. 9 to 13, 20, 47 to 52, 69, 123 to 128 and 146 to 149.

§ Mr. Dorrell
This group of amendments completes the provisions relating to the financial and other working arrangements for NHS trusts in England and Wales and in Scotland. The amendments build on the financial structure for NHS trusts which was endorsed in Committee and on Report.
The amendments raise four issues. Amendments Nos. 123 to 125 and their Scottish equivalents deal with the funding of NHS trusts before their operational date. They give the Secretary of State power to require health authorities to meet expenses of trusts incurred during this period, in other words before income starts to flow in from NHS contracts. Such expenses are not expected to be substantial, but they will cover key issues such as the pay of a few senior staff who transfer to the NHS trust at an early stage.
Amendments Nos. 10 to 13 and their Scottish equivalents alter the definition of NHS trusts' originating capital debt. They allow all relevant assets to be included in the calculation of the debt. They also allow the Secretary 387 of State to leave out certain assets and liabilities from the calculation of the originating capital debt. This will enable the Secretary of State to exclude donated assets, for example, from the calculation. These amendments will ensure that the originating capital debt of NHS trusts reflects the true value of their net assets. They mean that the interest payments on the debt will correspond accurately to the capital charges to be paid by directly managed units, putting all provider units in the NHS on an equal financial footing.
The new clauses introduced by amendments Nos. 20 and 69 allow the Secretary of State to establish schemes for meeting costs of claims for clinical negligence and other liabilities incurred by health authorities, NHS trusts and, in Scotland, health boards and the common services agency. At present, health authorities bear their own risks and do not insure. However, many regions hold back funds for districts to meet the costs of particularly large clinical negligence claims. In Scotland and Wales, pooling arrangements to share the cost of high-value liabilities are operated by the Secretary of State. The Bill as it stands will not allow NHS trusts to participate in any pooling arrangements or other risk-sharing schemes. Trusts would have to meet their own liabilities without the option of spreading the risk. I do not believe that trusts, which will remain fully part of the NHS, should have to meet liabilities on a different basis from health authorities. These clauses will enable NHS trusts to participate alongside other health service bodies in risk-sharing schemes established by the Secretary of State.
Amendment No. 128 gives National Health Service trusts powers to purchase land compulsorily in certain circumstances subject to the Secretary of State's prior consent. Again, this amendment is designed to put National Health Service trusts in an analogous position to health authorities, for which the Secretary of State is able to purchase land under the procedure set out in the Acquisition of Land Act 1981. Compulsory purchase orders made under this new power will be subject to the Secretary of State's confirmation. As an additional safeguard, the amendment specifies that no such order may be made without the Secretary of State's prior consent to the proposed acquisition. These provisions will, I am sure, guarantee that this power is used only exceptionally and when it is in the wider interests of the National Health Service.
The other amendments in this group are all minor, technical amendments, and I do not propose to detain the House by describing them. I commend the amendments that I have described, and the minor ones, to the House.