HL Deb 18 July 1991 vol 531 cc278-9

3.25 p.m.

Baroness Robson of Kiddington asked Her Majesty's Government:

How many health authorities will be adversely affected by the recent revaluation of business rates, and how they will be compensated for the resulting shortfall in their budgets.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, precise figures for health authorities' business rate liabilities for 1991–92 are not available because many assessments are still provisional or are subject to appeal. We estimate that this year the majority of health authorities in Great Britain will pay business rates which are lower in real terms than in 1989–90, the year before revaluation. Just under half will pay more. The Government gave health authorities global cash limits from which they are expected to meet all costs from whatever source, including rates.

Baroness Robson of Kiddington

My Lords, I thank the noble Lord for that reply. I am pleased that not all health authorities will lose out. Nevertheless, is the Minister aware that the problem is particularly prevalent in the South East? Is he also aware that the Hampstead health authority's additional rate bill for 1991–92 is £91,000? After five years of cost-cutting exercises there is no fat left. Will the Government consider compensating health authorities which are losing out?

Lord Henley

My Lords, I am glad that the noble Baroness accepts that not all health authorities will lose out. As I said, more than half will probably gain. We estimate that this year some £255 million will be paid in rates by all health authorities compared with some £243 million in 1989. Allowing for inflation, that is a reduction overall. However, we accept that some health authorities, particularly those in the South, will pay increased rates. That ought to be put into perspective. First, it is only a relatively small percentage of the overall expenditure of those health authorities. Secondly, there is transitional relief which limits the increase that they will have to pay. Thirdly, we h Ave ensured that no regional health authority received a less than 10.2 per cent. increase in cash, which again is well above inflation.

Lord Ennals

My Lords, as the Minister has said that r early half of the district health authorities will be at a disadvantage, is it fair that they should be obliged to cui patient care as a result of decisions taken by the Government? Ought they not to be compensated in some way?

Lord Henley

My Lords, I do not believe that any health authority will have to cut patient care. As I explained to the noble Baroness, all health authorities have received a very significant real terms increase in 1991–92. We feel that no health authority should need to reduce patient care as a result, although I accept that some may have to expand more slowly.

Baroness Robson of Kiddington

My Lords, does the noble Lord agree that, as between 75 per cent. and 95 per cent. of the expenditure of health authorities relates to wages and salaries, there is very little left which can be cut without reducing staff in hospitals, and that this is an important issue for health authorities which are having to pay higher rates?

Lord Henley

My Lords, as I said, health authorities are gaining overall. I accept that some are losing but one must put this in perspective. Rates represent barely 1 per cent. of their expenditure and there has been a real increase of over 10 per cent. in their total cash resources.

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