HL Deb 09 May 1974 vol 351 cc663-8

4.50 p.m.

LORD HUGHES rose to move, That the Draft Scottish Hospital Trust Scheme 1974, laid before the House on April 2 be approved. The noble Lord said: My Lords, I hope your Lordships will agree that I may at the same time deal with the draft Scottish Hospital Trust (Amendment) Regulations 1974, which were laid on the same date. These two instruments cover different aspects of the work of the Scottish Hospital Trust in connection with endowments to which the Hospital Endowments (Scotland) Act 1971 refers, and can most conveniently be considered together They are a consequence of the reorganisation of the Health Service on April 1 and are necessary in order that in general, the arrangements which were in force in the days of the hospital boards can continue to apply to health boards. There are a few minor changes to which I shall make special reference.

It may be convenient if I start by saying something about the previous provisions. Under the 1971 Act, the Scottish Hospital Trust took over on April 1, 1972, endowments which were originally held by voluntary hospitals at November 5, 1946, and vested in the hospital boards from July, 1948. The Trust was a new body set up with the duty of holding and managing these funds and distributing the net income from them in accordance with schemes made by the Secretary of State. The Trust was given other powers in connection with endowments; for example, it could receive new endowments in its own right and add the income from these to be distributed with the income from the endowments transferred by the hospital boards. It was also given power to provide a management service to hospital boards, in respect of the endowments which the boards had received after November, 1946, and still retained.

The Scottish Hospital Trust Scheme 1972 was the instrument which prescribed how the income from the endowments transferred to or given to the Trust was to be distributed. At the same time, the Scottish Hospital Trust Regulations were made to provide for exceptions from the transfer, valuation of endowments transferred, and borrowing by hospital boards against the capital of the endowments.

It is now necessary to replace or amend these two instruments. As I mentioned, there is a primary need to do this because, apart from the State Hospital, the authorities mentioned in the previous instrument no longer exist. Their rights in these endowments have been transferred to the new health boards by Section 38 of the National Health Service (Scotland) Act 1972, which came into operation on April 1 this year. The same section also contains certain provisions relating to distribution of income, and I should now like to say a word or two about this.

The basis of income distribution is contained in paragraph 3 of the Scheme and is the same as before: that is, each board will receive £3 per bed per annum plus a balance based on the value of the endowments which were transferred to the Trust by the hospital boards. The new health boards will be credited with the value of the capital which was transferred by the hospital boards from which they have taken over, and arrangements have been made for these rights in endowments to be appropriately apportioned in cases where the areas or responsibilities of the former boards have been divided by the effect of reorganisation. The State Hospital, also, will continue to receive its £3 per bed—that is all it receives because it did not contribute any capital to the Trust.

There are two new features in the Scheme. The first is contained in paragraph 3(a)(i) and will enable Health Service beds in local authority institutions to be counted for the £3 per bed payment. The other is in paragraph 4 and is a little more complex. In this paragraph we are giving effect to the requirement of Section 38(3) of the 1972 Act that regard should be had to the former arrangements for income distribution.

Accordingly, the health boards, although they are administering an integrated Health Service, will be required to use this endowment income for hospital purposes or medical research; and, further, groups of hospitals, corresponding to the hospitals previously managed by the respective boards of management, will receive approximately the same level of income as they did before—health boards will be required to allocate 90 per cent. of the income in this way. These arrangements are embodied in paragraphs 4(3) to (5), and your Lordships will note that we shall be able to deal with the opening of new hospitals and the closing of old ones without having to make a new scheme each time. Paragraph 5 of the scheme makes the same provisions for the use of accumulated income from these endowments which was left with the hospital boards in 1972.

The Schedule contains a small number of special conditions which originate from the wishes of donors and are still acceptable to the boards concerned. Section 7(2) of the 1971 Act, as amended, requires that hospital boards and now health boards should be consulted about these schemes. We have done this and the draft scheme has been accepted with very few comments. My Lords, there is little I need say about the draft regulations. They do not alter the effect of the 1972 regulations other than to omit provisions no longer required; they merely introduce references to health boards in place of those to hospital boards, and transfer to health boards the rights and obligations which the 1972 regulations placed on hospital boards.

When these two instruments were debated in another place, it was pointed out by a spokesman for the Select Committee on Statutory Instruments that, although we were proposing to make a new Scottish Hospital Trust Scheme, we had not taken any action to repeal the 1972 Scheme, so that two statutory instruments which were to some extent contradictory would still be in operation. It was suggested that Section 61 of the National Health Service (Scotland) Act 1972 provided a means of obviating this situation by an Order repealing the earlier scheme. My right honourable friend the Secretary of State proposes to make such an Order at the same time as he makes the new scheme. It is accordingly for me to express gratitude to the Select Committee for their assistance in this matter. I hope that the House will approve the two instruments. My Lords, I beg to move.

Moved, That the Draft Scottish Hospital Trust Scheme 1974, laid before the House on April 2 be approved.—(Lord Hughes.)

4.58 p.m.


My Lords, the House is very much obliged to the noble Lord, Lord Hughes, for giving us such detailed information about both the Scheme and the amended Regulations. My remarks will be directed in the first place towards the Scheme itself; and, in particular, to paragraph 5, "Application of accumulated income held by Health Boards". In the present financial climate, this is of great importance, and the noble Lord has already advised the House that 90 per cent. of the income must be applied by boards within the year, with a 10 per cent. retention. Therefore, I looked with some interest at paragraph 5(3) but I found it extremely difficult to interpret. Subparagraph (3) is a relatively long one running to 140 words between full-stops. I hope, with the assurance that the noble Lord, Lord Hughes, has given us, that this will be satisfactory for the health boards to operate. But in these circumstances one looks, as a trustee, to the assistance of the Charity Commissioners; and their assistance may further be required in regard to the application of certain small matters in the Schedule, referred to on page 4 of the Statutory Instrument. There are certain gifts which are set out in the Schedule to which we need not refer in particular detail. But trustees are placed under a series of obligations, which may become ante-dated as time goes on, partly because of planning consequences regarding the cemeteries and churchyards, and partly because of the devaluation of the pound. In this regard I hope that the Charity Commissioners will look with favour upon the adjustment and revision of certain parts of these as is required from time to time, and bear in mind the Macnaughten Rules which Lord Macnaughten set out in 1891, "for other purposes beneficial to the community". It is very necessary that the Charity Commissioners should take a reasonable attitude, and I am sure that all noble Lords will agree with me in this regard.


My Lords, I am grateful to the noble Lord, Lord Sandys, for the way in which he has welcomed the Scheme, although I am not so grateful for the technical points he has raised. It is obvious that I am not the only one who has the benefit of expert advice in this matter. However, I can rest content on the fact that the regulations have, as I said, or rather implied, met with the approval of those concerned. I said they had met with very little comment. I have no doubt that the circumstances to which the noble Lord draws attention were within the knowledge of the parties concerned. What I am not absolutely certain about is how easy it will prove to be to change the terms of some of these bequests. I had experience a number of years ago when I was Lord Provost of Dundee of trying to get a bequest altered when it had become quite out of date and it was no longer possible to do with the money what was originally asked because the objects had all disappeared. There was a somewhat lengthy process of recourse to the Court of Session before an alteration could be made.

I would hope that the Scheme has been so framed that it is not necessary to do that, while of course taking all reasonable steps to protect the wishes of donors. I almost hesitate to use the word "donors" because of an earlier discussion this afternoon in which "donor" was almost felt to be a term of abuse, but in this context it is a perfectly respectable word which no one will criticise. If I should find that in fact the points raised by the noble Lord have not been adequately dealt with in what I have just said, I will certainly take the opportunity of writing to him to let him know, but I do not expect that that will prove to be necessary.

On Question, Motion agreed to.