§ Mrs. Jane KennedyTo ask the Chancellor of the Exchequer if he will make a statement on the discrepancy between the originating capital debt allocated to the Royal Liverpool and Broadgreen University Hospitals national health service trust in SI No. 350 and that set out in the Treasury minute on dissolution and reconfiguration of certain national health service trusts. [20329]
§ Mr. HoramI have been asked to reply.
The amount of originating capital debt allocated to the Royal Liverpool and Broadgreen University Hospitals national health service trust represents the excess of the valuation of the assets over the liabilities which were transferred to it on, or in connection with, its establishment. The figure in SI No. 350—£135,395,656 split evenly between public dividend capital and interest-bearing initial loan—was arrived at by aggregating the values of land and buildings provided by the district valuer, the values of equipment taken from the asset registers and the values of debtors and creditors taken from the audited books of account of the two dissolved trusts. These values were certified by auditors appointed by the Audit Commission prior to the setting of the OCD of the new trust.
The figures contained in the departmental minute on the dissolution and reconfiguration of certain NHS trusts which was presented by the Treasury on 20 February 1996 are the liabilities outstanding to the Consolidated Fund at 1 April 1995 in respect of the OCD and further long-term loans issued by the Secretary of State for Health to Royal Liverpool University Hospital NHS trust and Broadgreen Hospital NHS trust before their dissolution. These liabilities, which were transferred to Royal Liverpool and Broadgreen University Hospitals national health service trust, were left out of account in determining the latter's net assets for the purposes of SI No. 350.
The total of £114,112,928 proposed to be remitted comprises:
691W
£ Royal Liverpool Hospital Trust OCD—Initial loan 34,112,288 OCD—PDC 39,665,451 Further borrowing 7,531,600 Total 81,309,339
£ Broadgreen Hospital NHS Trust OCD—Initial loan 15,042,059 OCD—PDC 17,491,230 Further borrowing 270,300 Total 32,803,589 There need not be any direct relationship between the public debt of a dissolving trust or trusts and the OCD of any successor body. The former arises as a result of the OCD set at some point in the past, based on net asset values at that time, and subsequently changes as a result of principal repayments and new borrowing. The latter is based on the net asset values at current valuation on the date of a trust's establishment.
§ Mrs. KennedyTo ask the Chancellor of the Exchequer if he will make it his policy not to implement the Treasury minute on the dissolution and reconfiguration of certain national health service trusts—remission of outstanding debt, until he has published an explanation of the calculations of the basis contained therein. [20355]
§ Mr. JackThe explanation is as follows:
The amounts totalling £448,876,543 which are proposed for remission are the outstanding liabilities to the Consolidated Fund as at 31 March 1995 of seven NHS trusts which were dissolved on 1 April 1995. These liabilities are in respect of their outstanding originating capital debt, which is deemed under section 9(3) of the National Health Service and Community Care Act 1990 to have been issued out of moneys provided by Parliament, and their further borrowings and any issues of public dividend capital from the Secretary of State for Health which have been paid out of moneys provided by Parliament.
The figure of £494,027,365 is the total originating capital debt of the five new trusts, which were established on 1 April 1995 from mergers of the dissolved trusts with each other or with directly managed unit. The trusts concerned are listed in paragraph 7 of the minute, and their individual originating capital debt is specified in SI 350. In accordance with section 9(1) of the National Health Service and Community Care Act 1990, each new trust's originating capital debt represents the excess of the valuation of the assets over the valuation of the liabilities transferred to it on or in connection with its establishment.
The difference between the newly created capital debt and the amounts being written off reflects differences in composition and valuation between the net assets of the new trusts and those of the dissolved trusts concerned.