Mr. Alan WilliamsTo ask the Secretary of State for Wales on the basis of financial allocations to health authorities for 1991–92, how much extra(a) West Glamorgan, (b) Clwyd, (c) Gwent, (d) Gwynedd and (e) Pembrokeshire would have received if they were allocated their full formula share.
Revenue allocations of 1991–92 prices £000s Year 1991–92 1992–93 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 Clwyd 161.035 163.092 165.126 167.066 169.023 170.999 172.992 175.004 175.795 176.589 East Dyfed 107.530 107.530 107.530 107.578 107.628 106.678 107.728 107.780 108.267 108.756 Gwent 177.167 178.105 179.160 180.661 182.175 182.703 185.245 186.802 187.646 188.494 Gwynedd 97.404 99.122 100.775 102.175 103.587 105.013 106.451 107.903 108.390 108.880 Mid Glamorgan 228.062 228.062 228.062 229.250 230.450 231.661 232.883 234.117 235.175 236.237 Pembrokeshire 43.900 44.427 44.951 45.463 45.981 46.502 47.029 47.561 47.766 47.992 Powys 56.669 56.669 56.669 55.555 54.432 53.299 52.155 51.002 51.232 51.464 South Glamorgan 166.814 166.814 166.814 165.645 164.467 163.279 162.080 160.871 161.598 162.528 West Glamorgan 152.904 152.904 152.904 153.913 153.932 155.960 156.997 158.045 158.758 159.476 I should emphasise again that these are provided for planning purposes only and assume a 0.5 per cent. per annum real terms growth in line with the resource planning assumption previously issued to DHAs.
The table includes capital charges. In 1991–92 capital charges have been allocated to authorities, as purchasers, in line with their need to pay capital charges as part of the cost of obtaining services. From next year capital charges will be redistributed as part of the total revenue resource in the move towards reaching formula shares, and no distinction has therefore been made in the table between revenue and capital charges other than to exclude capital charges from the base from which the 0–5 per cent. growth was calculated. To exclude capital charges as asked would therefore be misleading.
Any comparison of the 1991–92 and subsequent allocations (with or without capital charges included)
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§ Mr. Nicholas BennettOn the basis of the allocations announced in theOfficial Report on 21 March at columns 178–79, the increase would be as follows if the health authorities were funded in line with their weighted capitation formula shares.
£ million West Glamorgan 2.200 Clwyd 5.664 Gwent 1.996 Gwynedd 5.374 Pembrokeshire 0.840 Note: These figures have been calculated by redistributing revenue resources exclusive of capital charges in line with revenue formula shares. Capital charges were then added back in (according to authorities' liability as purchasers to meet the cost of capital charges in contracts in 1991–92) in the same way as in the actual 1991–92 allocations.
Weighted capitation will however be phased in over a period of years, being completed by 1998–99, in order to allow authorities time to adjust to their prospective capitation shares.
Mr. Alan WilliamsTo ask the Secretary of State for Wales, pursuant to his reply to the hon. Member for Cardiff, North (Mr. Jones),Official Report, 21 March, columns 178–79, taking actual financial allocations for 1991–92 as the base, what for the published table would be the financial change in revenue resources for each health authority in each year to 2000–01; what these figures would be without capital charges added back in; and how, without capital charges added back in, would they relate to 1990–91 base figures.
§ Mr. David HuntThe effect of the annual change in revenue resources shown in the table in my reply is as follows:
would be inappropriate as in 1990–91 authorities were funded as the providers of services—whereas from 1991–92 they (and GP fund holders) will be funded as purchasers of services.
Mr. Alan WilliamsTo ask the Secretary of State for Wales how much of the £143.6 million capital charges are attributable to each of the district health authorities; and whether this sum is included in the figure of £1,719 million given in theOfficial Report, 29 April, column 3.
§ Mr. David HuntThe following table shows the breakdown of estimated capital charges by the district health authorities in which the units and hospitals to which the charges are attributable are located.
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District health authority Capital charges (£ million) Clwyd 15.177 East Dyfed 18.664 Gwent 19.581 Gwynedd 9.789 Mid Glamorgan 25.204 Pembrokeshire 3.076 Powys 4.199 South Glamorgan 26.850 West Glamorgan 20.725 Total 143.265 Note
The figure of £143.265 million reflects revision to the estimates following the original estimate of £143.582 million.
Capital charges are payable to the Department by hospitals and units in respect of the assets they manage. The cost of capital charges is recovered in the charges made for the services they provide to purchasers—health authorities and GP fund holders. Health authorities and GP fund holders are funded to pay the extra cost of capital charges—over and above the other costs of services—by the Department recycling the receipts from capital charges to them. To maintain neutrality this year capital charge receipts have been recycled to purchasers in line with the extra costs. In future receipts will be recycled in line with revenue formula shares, encouraging authorities to purchase services from hospitals that use their capital efficiently and so are able to offer a higher level of patient services than less efficient providers.
The introduction of capital charging has no overall effect on public expenditure. The £143.265 million shown in the table has been deducted from provider units and reallocated to purchasers as described above. Account has been taken of the net cross border flows with England, and Welsh purchasers have additionally been funded for the capital charges, as well as the other costs of obtaining services in England. The adjustment for these cross-boundary flows was not included in my reply.