§ Dr. Stuttafordasked the Secretary of State for Social Services (1) what items of the East Anglian Regional Hospital Board's current revenue account have now been transferred as a charge on the capital account;
(2) when he decided that the system of acounting in regional hospitals should be changed so that items previously charged to the current revenue account should 72W henceforth be borne by the capital account;
(3) what difference in the capital expenditure the recent change in the system of accounting will make in the annual capital expenditure of the East Anglian Regional Hospital Board;
(4) what difference the recent change in the system of accounting will make in the projected capital spending of the East Anglian Regional Hospital Board over the 10 years 1972 to 1982, from the spending which had previously been planned; and what percentage this is of the total capital budget;
(5) what planned hospital buildings in Norwich will have to be discontinued as the result of the recent changes in the system of accounting;
(6) if he will increase the allowance for capital building to make up for the extra charges on this account; and what provision is being made for inflation in this respect;
(7) what was the expected deficiency on the current revenue accounts of the regional hospital boards in England and Wales when the system of accounting was changed.
§ Sir K. JosephA study in 1972 of the application of National Health Service financial resources as between capital and recurrent expenditure revealed an imbalance between provision for the continuing cost of bringing new buildings into commission and that for other priority purposes such as making improvements to the long-stay services. It revealed also that certain items had regularly been charged to revenue which in normal accounting practice would be considered as capital expenditure. By introducing a revised definition of capital expenditure from 1st April 1973 I am seeking to minimise this anomaly and to secure a better balance between capital and revenue. It would nullify this to compensate by switching additional funds to capital. The items affected by the redefinition including purchase of medical, dental and computer equipment, and of vehicles, costing £1,000 or more; improvements to buildings or engineering services costing £500 or more; and renewal or replacement of engineering plant costing £5000 or more, where repair would be uneconomic or undesirable. The 73W East Anglian Regional Hospital Board estimates that annual expenditure of the order of £400,000 would at present fall to be met from capital by the redefinition, but it is for the board to determine how much it will actually spend on these items in any year.
Capital allocations to regional hospital boards are revised annually and take account of rising prices. Boards are expected to keep their capital programme continually under review to take account of available resources, changes in priorities and progress on current building schemes. I cannot yet say what, if any, change will occur in the board's plans for Norwich because of the redefinition of capital since the latter is only one among many factors involved, but my hon. Friend will find provision made in the Supply Estimates 1973–74 for two major building schemes in Norwich to continue.