§ Mr. Ralph HowellTo ask the Secretary of State for Social Services if he has any plans to change accountancy methods used within the National Health Service in the United Kingdom and the auditing arrangements for the overall accounts of the National Health Service; and if he will make a statement.
§ Mr. NewtonThere are no plans to change accounting methods in use within the NHS in England.
There may be some technical differences in the treatment of accounts generally in the other countries of the United Kingdom, and of course questions concerning the NHS in Scotland, Wales and Northern Ireland are matters for my right hon. Friends the Secretaries of State for Wales and Northern Ireland and my right hon. and learned Friend the Secretary of State for Scotland. In England, current methods and accounting standards are closely modelled and developed in line with the statements of standard accounting practice applying within the private sector. This includes accounting for expenditure on an accruals basis, as well as accounting on a cash basis for Parliamentary Vote control purposes. Capital expenditure and income is recorded in the accounts, but there is no record in a balance sheet of capital assets, nor is there any provision for depreciation of such assets in the revenue accounts. However currently work is in hand in the NHS to develop improved methods of capital asset management, including capital accounting.
The monitoring and expenditure of health authorities that currently takes place on an informal basis will in future be reflected in the formal and regular monitoring of income, and expenditure levels and of output and activity as I announced on 16 December. This is planned to be undertaken in association with the in-year monitoring process which at present deals only with cash Vote control.
There are also no plans to change the auditing arrangements for NHS accounts, which are as outlined in my reply to my hon. Friend the Member for Gedling (Mr. Mitchell) on 13 January at columns 330–1.