§ Mr. RaffanTo ask the Secretary of State for Wales whether he has now reached decisions about the allocation of resources for hospital and community health services in Wales for 1989–90; and if he will make a statement.
§ Mr. Peter WalkerI announced on 21 December that, subject to parliamentary approval, I propose to provide £953 million in 1989–90 for the hospital and community health services in Wales. However, following a further review of other programme requirements, I am now pleased to amend the figure to £954.7 million. Excluding the costs of the artificial limb and appliance service (which is administered on my behalf by the Welsh health common services authority) £880.1 million will be provided for current purposes and £69.1 million for capital spending.
779WFor current spending this represents a net cash increase of £44 million. With the estimated saving of £16.3 million from the reduction in the rate of employers' superannuation contribution from 7.5 to 4 per cent. and £10.5 million from new cost improvement programmes and increased receipts from income generation schemes, the total increase in resources over 1988–89 is 8.6 per cent. This is on top of the additional funding which has been provided for the recurrent effect of this year's review bodies awards.
A total of £49.9 million will be available to health authorities for their discretionary use which represents a cash increase of 6.1 per cent. over this year's enhanced provision. £10.4 million will be allocated to centrally funded developments. These developments, which are as follows will considerably assist authorities in meeting future service requirements.
£million Regional Services and Centrally Funded Developments
2.8 Psychiatric development, joint financing with local authorities and schemes to combat the misuse
of drugs
1.6 Consultant Expansion Programme 0.3 Breast and Cervical Cancer Screening 0.6 AIDS 0.4 Revenue consequences of new capital development 1.0 Developments in information technology etc. 0.8 Waiting List Initiative 0.9 Project 2000 0.4 Other 1.6 10.4 Of the capital provision, £39 million will be made available to health authorities for their discretionary use. This amounts to an increase of almost 32 per cent. over last year's capital allocations. The balance is required for the all-Wales capital programme, details of which will be announced in due course.
Authorities will be able to retain the cash released through their cost improvement programmes and from income-generation schemes, and they will be able to retain the income raised from charges for private treatment. Authorities will also benefit from the retention of receipts from the sale of surplus land and buildings and this is expected to generate a further £3–9 million in 1989–90. In total, I will expect Welsh authorities to achieve additional savings, income and receipts amounting to at least 1.3 per cent. of their recurrent revenue allocations.
The current and capital allocations to individual authorities will be as shown in the table. These allocations do not take into account further sums which will be made available following decisions to be made on centrally funded developments for the coming year. The capital allocations to health authorities are additional to the sums which I announced on 21 December as being available under my programme for the valleys initiative.
780W
Allocation (£ million) Current element Capital element Clwyd 107.130 6.915 East Dyfed 67.871 1.967 Pembrokeshire 25.454 1.963
Current element Capital element Gwent 127.392 7.308 Gwynedd 64.002 11.741 Mid Glamorgan 149.704 7.168 Powys 30.527 1.589 South Glamorgan 172.722 3.572 West Glamorgan 110.212 6.732 1 In addition Gwynedd health authority will receive a further sum of around £1 million (to be funded from the repayment of brokerage loans entered into by authorities in 1988–89) in recognition of the effect of the Ysbyty Gwynedd litigation settlement upon capital formula calculations. The precise amount will be determined in due course following discussions with the authority.
These current and capital allocations provide for real increase in spending by health authorities after taking account of the level of inflation forecast by the Chancellor of the Exchequer in his Autumn Statement. They more than fulfil the resource planning assumptions which were issued to authorities last year.
The current allocations, as in previous years, have been weighted in favour of those authorities which are shown by the latest revenue formula assessment to be furthest below their target shares of available revenue resources (which are based on the catchment populations for the services which they provide). As a result, eight of the nine district health authorities in Wales will be brought to within plus or minus 1 per cent. of their formula targets; and the range of difference between the best and least well provided authorities will be reduced to less than 4 per cent. by comparison with over 13 per cent. only three years ago. This demonstrates the progress which the Government have made in recent years in achieving greater equality of revenue provision between health authorities in Wales.
The capital allocations have been determined in accordance with the first revise of the original capital formula assessment which includes an allowance for the progressive equalisation of capital stock between authorities. Copies of the revenue and capital formula assessments which have been used in determining these allocations will be placed in the Library of the House. Both formulae are currently under review by the joint Welsh Office/NHS resources allocation working group; and I look forward to receiving the working group's report, together with health authorities' comments on the group's recommendation during the course of the next few months.