SCOTTISH HOSPITAL TRUST SCHEME 1972 (Hansard, 7 March 1972)

§ THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE)

My Lords, I beg to move that the Scottish Hospital Trust Regulations 1972, a draft of which was laid before the House on 3 February, be approved. With permission, I will deal at the same time with the draft Scottish Hospital Trust Scheme 1972, laid on the same date. These two instruments, although quite distinct in their purpose, are complementary to each other.

The Hospital Endowments (Scotland) Act 1971 was passed just over a year ago. In the interval, preparations have been made to carry out its provisions. The Scottish Hospital Trust was constituted on September 1, and has been getting ready to take over the relevant endowments—that is, those given to the Scottish Health Service hospitals up to November 5, 1946—on the day to be appointed under the Act. We propose—and an Order will be made for the purpose 32 —that the day appointed shall be April 1, 1972. From that day, the Trust will hold and manage these endowments and distribute the income to hospital authorities. The Regulations which we are now considering cover the arrangements for the transfer of the endowments to the Trust, and questions concerning borrowings against these endowments; the scheme prescribes the arrangements for the distribution of the income and the purposes for which it is to be used.

I will deal first with the Regulations. Regulation 4 provides that two main groups of endowments are excepted from transference. Two hospital boards are excluded altogether because of their special circumstances; the other exceptions are certain items of heritable estate which are being left with the boards concerned. This proposal follows consultation with the boards, as provided for in Section 2(4) of the Act.

Regulation 5 relates to two particular funds, held as part of the relevant endowments of the boards concerned. We are providing that these funds may be realised and spent on certain purposes, without the obligation to replace the capital. In the case of the Astley Ainslie Development Fund, which is much the bigger of the two, this represents a relaxation of the existing position. Regulation 6 prescribes the arrangements for calculating the value of the endowments transferred. This is especially important in connection with income distribution. The Regulation lays down how each board's share in the Trust's capital is to be stated, and provides for this being revised in certain circumstances. Regulation 7 contains the detailed provisions on borrowings against relevant endowments, which Section 6 of the Act makes possible. In effect, existing facilities are being continued: as before, endowment capital may be used for hospital or specialist services or for medical research, provided the capital is replaced within 30 years.

The scheme contains two main provisions. The first, in paragraph 3, deals with the distribution of income. 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 a fixed sum will be paid to each Regional Hospital 33 Board. The balance of the Trust's income will then be distributed among all hospital boards in proportion to the value of the endowments which they have transferred to the Trust. The Working Party on hospital endowments, under the Chairmanship of Professor Robert Browning submitted in 1969 the Report on which this legislation has been based, and it was estimated that the income per bed represented by these endowments would, for the poorest endowed board, rise from about £1.70 to £3.75 per annum.

Paragraph 4 of the Scheme deals with the purposes for which the income received from the Trust is to be used by hospital authorities, and in effect continues the provisions under which boards have held these endowments in the past. The money must be used for hospital or specialist purposes or for medical research, apart from a number of special purposes of a memorial nature which, at the request of the boards concerned, are being continued. The amount of expenditure which is permitted for capital or research purposes without clearance by the Regional Hospital Board or the Advisory Committee on Medical Research in Scotland respectively is increased from the present level of £1,000 to £2,000.

The reorganisation of the Health Service in Scotland, which your Lordships are considering, will not alter the effect of these arrangements. Amendments to the 1971 Act are incorporated in the Bill in Clause 39 and Schedule 5, but we intend 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.

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 obvious slip, which I regret, will be corrected when the instruments are made. Drafts of these instruments were sent to hospital authorities for their comments, and I am glad to say that, on the whole, they have expressed agreement with them, as has also the Scottish Hospital Trust, which will have to put these arrangements into operation. I hope that the House will approve this Order.