HC Deb 27 July 1993 vol 229 cc923-7W
Mr. Richards

To ask the Secretary of State for Wales if a decision has been made regarding the final allocation of resources for 1993–94 to family health services authorities in respect of general practitioner practice expenses and support costs for general practitioner fund holders.

Mr. Gwilym Jones

On Thursday 4 March,Official Report, columns 255–61, in announcing the cash allocation for 1993–94 for health authorities, my right hon. Friend indicated that further resources would be made available to family health services authorities in respect of GP fund holders' support costs. He explained also that £867,000 held back from the initial allocation to the authorities of funding for GP cash-limited expenses would be distributed following the outcome of a consultation.

The authorities will be responsible for 71 operational and 31 preparatory GP fund holders in Wales in 1993–94. In recognition of the enhanced practice management computer systems required by fund holders, funding of up to £7,000 to meet the full computer maintenance costs of each operational fund holding practice and up to £22,000 to meet the additional computer hardware and software costs involved in preparing for fund holding will be available. Allocations to authorities will be in line with the numbers of operational and preparatory fund holders in each area.

Separate funding is provided to authorities in respect of their expenditure on GPs' practice premises, practice support staff and practice computerisation—distinct from that for fund-holding practices. Prior to this year, the shares of the total annual funding for this purpose were determined largely by the extent of past investment decisions by GPs.

The period immediately before the introduction of the revised GP contract in April 1990 saw substantial growth in committed expenditure on practice premises improvement. In addition, the revised contract stimulated increased investment in practice support staff. During the period 1989–90 to 1993–94, the resources for expenditure on GP practice expenses in Wales increased by 67 per cent. in real terms.

In April, 1993, all health authorities and community health councils in Wales, plus GP professional interests, represented by the General Medical Services Committee (Wales) and, at the local level, by individual local medical committees, were consulted on proposals to allocate this funding with effect from 1993–94 on the basis of a weighted capitation formula. Copies of the consultation document are in the Library of the House.

This formula produces for each family health services authority a target share of the total resource available for Wales for GP practice premises, support staff and practice computerisation. The starting point for the formula is the resident population of each district, taken from the population estimates based on the 1991 census. This is weighted for age and sex, by GP consultation rates for Wales and by the standardised mortality ratios for the area. In recognition of the heavier costs involved in providing additional surgeries to ensure reasonable access for patients in rural areas, the formula includes a rurality component based on comparative road lengths. This component is given a 15 per cent. weighting in the formula.

It is our view that this formula meets the essential criteria for a capitation-based approach to the allocation of health care resources. In addition, the population basis of the formula is consistent with the features of the GP contract whereby age-banded capitation lists comprise the major fees mechanism in remunerating and partially reimbursing GPs, and a special subvention is given in recognition of the specific problems of rural areas.

A change of this order in any resource allocation process cannot take place overnight. It is our intention that authorities' progression, from their historical shares of funding for this expenditure to their target shares based on the weighted capitation formula, will be phased over the period from the present financial year to 2002–03. This will take place against a planning framework which recognises continued real terms growth throughout the period. The span of this transitional period should ensure that those authorities with a reducing share of the total funding will be able to plan an orderly realignment of their expenditure plans; and those with increasing shares of the total resources will be able to utilise the extra funds as effectively as possible. In both cases, the availability of resources for reinvestment—as existing cost rent schemes mature—coupled with the beneficial effect on allocations of the reduction in interest rates, should, with good management, ensure continued development of GP support staffing and facilities throughout Wales over this period.

Whilst I remain convinced that the services provided by family doctors in rural parts of Wales require a recognition of unavoidable additional costs, I am open to further suggestions on how best to do this. Therefore, during this year, there will be further consultations to discuss this aspect of the formula. During the course of the transitional period to 2002–03, the Welsh Office will remain open to opportunities and proposals for improving the formula.

As I have indicated, pending the outcome of the consultation exercise, £867,000 was held back from the initial allocations for 1993–94 for expenditure on GPs' practice premises, practice support staff and practice computerisation. We propose to use this to initiate the progression from historical shares of funding for this expenditure, to target shares, as indicated by the weighted capitation formula. The £867,000 will be divided equally between Clwyd, Mid Glamorgan and West Glamorgan, which are at present below their target shares. Taking account of this, the intended final revenue allocations for 1993–94 for this purpose are shown in table 1, together with the capital allocations. Table 2 shows each authority's percentage share of the total revenue funding for 1993–94 for this purpose, as a consequence of these final allocations, compared with the target share to be attained by 2002–03.

I envisage that the progression to target shares over the 10-year span to 2002–03 will be effected in two ways: first, by directing available growth funding each year to those authorities remaining below their target shares, pro rata with their respective distance from their target shares; and, secondly, for those authorities above their target shares,

Table 3
Annual Change in Funding as a Percentage of Previous Year's Allocation a: Constant Prices
Family Health Services Authority 1994–95 1995–96 1996–97 1997–98 1998–99 1999–00 2000–01 2001–02 2002–03
Clwyd 0.83 0.84 1.71 1.38 1.36 1.30 0.99 0.91 0.52
Dyfed 0.00 0.00 0.08 0.25 0.47 0.70 0.77 0.95 0.51
Gwent 0.00 0.00 -1.00 -1.01 -1.00 -0.99 0.00 0.50 0.60
Gwynedd 0.00 0.00 -1.49 -1.52 -1.49 -1.51 -1.48 -1.50 0.06
Mid Glamorgan 1.51 1.47 2.82 2.14 1.93 1.72 1.12 0.87 0.55
Powys 0.00 0.00 -0.99 0.00 0.00 0.50 0.77 0.85 0.58
South Glamorgan 0.00 0.01 -1.02 0.00 0.00 0.00 0.00 0.00 0.60
West Glamorgan 1.21 1.22 2.36 1.82 1.70 1.54 1.08 0.87 0.56

there will be three years of marking time—no growth funding but also no reduction in funding—followed in subsequent years by a series of annual percentage reductions in their shares. The funding thereby released will be added to available growth funding and allocated to below-target authorities. On this basis and, I must stress, for planning purposes only, the percentage changes in annual revenue funding for this purpose that authorities in Wales might anticipate over the next 10 years are shown in table 3.

For the sake of completeness, table 4 shows the final allocations incorporating funding for the additional costs of computer support for GP fund holders. As fund holding has progressed at markedly different rates in different parts of Wales, this funding element is not included in the formula shares. Authorities will also be able to draw from Welsh Office funds relating to GP fund holder management allowances within the prescribed limits.

Table 1
1993–94 final allocations to family health services authorities for cash limited expenditure on GPs practice premises, practice support staff and practice computerisation
(excluding GP fund holder support)
Revenue Capital Total
£000's £000's £000's
Clwyd 4,956 101 5,057
Dyfed 5,029 103 5,132
Gwent 5,897 120 6,017
Gwynedd 3,802 78 3,880
Mid Glamorgan 6,236 127 6,363
Powys 2,182 45 2,227
South Glamorgan 4,628 94 4,722
West Glamorgan 4,045 83 4,128
Wales 36,775 751 37,526

Table 2
Percentage Share of Revenue Funding
Family Health Services Authority 1993–94 Formula share
Clwyd 13.48 14.21
Dyfed 13.68 13.57
Gwent 16.03 14.89
Gwynedd 10.34 9.04
Mid Glamorgan 16.96 18.65
Powys 5.93 5.77
South Glamorgan 12.58 11.98
West Glamorgan 11.00 11.89
WALES 100.00 100.00

Table 4
1993–94 Final allocations lo family health services authorities for cash limited expenditure on GPs practice premises, practice support staff and practice computerisation (including GP fund-holder computer support)
FHSA Revenue Capital Total
£000's £000's £000's
Clwyd 5,075 145 5,220
Dyfed 5,071 279 5,350
Gwent 5,988 186 6,174
Gwynedd 3,809 188 3,997
Mid Glamorgan 6,285 149 6,434
Powys 2,217 89 2,306
South Glamorgan 4,656 270 4,926
West Glamorgan 4,171 127 4,298
Wales 37,272 1,433 38,705