HC Deb 28 March 1994 vol 240 cc607-8W
Mr. Morgan

To ask the Secretary of State for Wales if he will make a statement on the transfer of funding from South Glamorgan health authority to other Welsh health authorities; what consultations he has had in relation to the basis of the formula for allocating the capitation funding; what consultations he has had with the chairman of South Glamorgan health authority concerning the abatement of purchasing power; and if he will list the numbers of patients, specialties, operations and treatments affected by the alteration in the formula.

Mr. Redwood

Health authorities were consulted in January 1991 on options for a weighted capitation formula to be used to determine each authority's share of available revenue resources. After considering the responses from authorities, my predecessor informed the House on 21 March 1991, Official Report, columns 178–80, of his decision as to the most appropriate basis for this formula.

South Glamorgan HA's present share of revenue resources exceeds its formula share. It is intended that all authorities will attain their formula shares by 1998–99, with the shares of presently underfunded authorities increasing and those of overfunded authorities, including South Glamorgan, decreasing.

Although South Glamorgan HA's percentage share will decline, its cash allocation will be dependent upon the growth resources available and on inflation. The 10-year resource assumptions provided to health authorities for planning purposes show how their formula shares and cash allocations would move on the basis of annual real terms growth of 0.5 per cent.

This growth assumption was exceeded in the cash allocations for health authorities for 1994–95, which I announced on 16 March 1994, Official Report, column 698, south Glamorgan's allocation provides a cash increase of 2.05 per cent., over its allocation for 1993–94. Provided that the authority secures the minimum efficiency savings specified for all health authorities for 1994–95 and uses these savings to fund the cost of pay awards in 1994–95, there should be no abatement of its purchasing power. It will, in fact, have received a real terms cash growth of over 1 per cent. For these reasons, I have no plans to meet the chairman of the health authority.