§ Dr. MarekTo ask the Secretary of State for Wales whether the £8 million to be provided to the Gwynedd health authority to transform the provision of health services in the county will be wholly or partly by way of loan; and if he will make a statement.
§ Mr. GristOn the basis of the Gwynedd health authority's plan to rationalise health services within the district, as outlined in its pathfinder business plan, my right hon. Friend has offered, in principle, a loan of up to £8 million toward the capital cost of the implementation of this strategy. As currently envisaged, the loan would amount to £3.5 million in 1991–92 and £4.5 million in 1992–93; and, under existing arrangements, the expectation would be for this finance to be repaid subsequently from revenue savings. However, as a result of the reforms arising from the National Health Service and Community Care Act, resource allocation arrangements are currently under review. Authorities were recently consulted on proposed changes which would re-establish a central funding mechanism for capital schemes of strategic importance as from 1 April 1992. If these proposals are implemented, it is likely that the funding of major schemes in progress at that time—which would, of course, include those which are in prospect in Gwynedd—will be subsumed within transitional arrangements that accord with the new allocation mechanisms. In such circumstances, the strategic capital brokerage made available to Gwynedd to enable the authority to proceed with these schemes would cease to be regarded as a loan and would instead be redefined as central funding of those schemes under the transitional arrangements. My right hon. Friend intends to make an announcement on new resource allocation arrangements and transitional arrangements to apply from 1 April 1991 in January when consultations on new revenue allocation mechanisms have also been completed.