§ Mr. John MorrisTo ask the Secretary of State for Wales what changes are taking place for capital allocation for the Health Service in Wales in 1991–92; for how long there will be transitional arrangements; and whether such arrangements will protect major schemes approved or commenced in each of the next three years.
§ Mr. GristThe NHS and Community Care Bill proposes changes in the way in which health services will be funded and charged for. This requires a new approach to determining capital allocations which will take account of health authorities' role as procurers of services and that of hospitals as providers of those services. Authorities will be consulted soon on possible future arrangements. However, it is not intended to begin changing the basis for allocating capital resources until 1992–93 in view of the lead time required to adjust service plans accordingly.
In addition, transitional arrangements will be introduced before the changes take their full effect with the aim of minimising disruption to health authorities' short term programmes and to protect existing contractual commitments. It is not possible to be specific about the length of time these arrangements will be required until the changes have themselves been agreed. For the same reason, it is not possible to confirm that all major schemes, other than those already subject to contractual commitments, will necessarily be protected under the transitional arrangements.
§ Mr. John MorrisTo ask the Secretary of State for Wales what is the level of capital allocation for the Health Service in Wales for 1990–91; and what is this in real terms after allowing for inflation in the construction industry taking 1982–83 as a base year.
§ Mr. GristThe level of cash provision for capital spending in the NHS in Wales in 1990–91 is almost £95 million. It is not possible to say how much of this will be spent on new construction work as the provision includes £44.5 million which has been allocated to district health authorities for their discretionary use and it is possible that their plans for the use of these funds may have been varied since the submission of their 10-year capital programmes in April 1989. It also has to be borne in mind that the definition of capital expenditure within the Health Service 931W does not relate only to new construction and capital maintenance of buildings. It also includes the purchase of medical and information technology equipment, the purchase of vehicles and the salary costs and travel and subsistence expenses of health service staff wholly engaged on capital works. It is, therefore, not appropriate simply to apply the construction industry price index to total capital provision in order to establish its value at constant prices. Indeed, the real-terms value of any element of programme provision is best expressed in terms of its opportunity cost to the economy as a whole and therefore adjusted by reference to actual and forecast movements in general inflation using the GDP deflator. On this basis and taking 1982–83 as the base year, the real-terms value of capital provision for the NHS in Wales in 1990–91 is some £61.9 million. This compares with £47.7 million in 1982–83 which in real terms represents an increase of nearly 30 per cent.
§ Mr. John MorrisTo ask the Secretary of State for Wales whether he proposes to increase the financial allocation for Wales for the Health Service to fund the building of two general hospital developments, while at the same time meeting normal replacement and updating requirements and the funding for major computer acquisitions.
§ Mr. GristI refer the right hon. and learned Gentleman to the reply given to my hon. Friend the Member for Cardiff, North (Mr. Jones) on 11 January when my right hon. Friend the Secretary of State, announced the revenue and capital allocations to health authorities in Wales for 1990–91.
I also refer the right hon. and learned Gentleman to the reply given to my hon. Friend the Member for Cardiff, North (Mr. Jones) on 12 February in which my right hon. Friend announced the distribution of almost £10 million for schemes to be centrally funded under the programme for the valleys initiative. This included provision relating to the development of a new district general hospital to serve the Taff Ely/Rhondda area and the development of community hospitals at Ebbw Vale and Ystrad Fechan.