HC Deb 17 May 1994 vol 243 cc414-6W
Mr. Milburn

To ask the Secretary of State for Health, pursuant to her answer of 20 April,Official Report, column 541, regarding trusts which fail to meet their capital return targets, what action her Department has at its disposal when trusts so fail; and how often action has been taken to date.

Mr. Sackville

The regional offices of the national health service executive monitor the financial performance of trusts on behalf of my right hon. Friend the Secretary of State. Where a trust fails to meet one or more of its financial duties by a material amount it will be required to produce a recovery plan which will then be monitored closely by the regional office. Any trust which exceeds its authorised external financing limit has its limit for the following year reduced by the amount of the excess.

In some circumstances failure to meet financial duties on a recurrent basis may indicate a trust is no longer financially viable. In those circumstances the NHS executive will investigate whether the trust should be merged with another, or exceptionally dissolved, if there is no longer any demand for its services.

Appropriate action as above has been taken in each case of material failure to meet a financial duty.

Mr. Milburn

To ask the Secretary of State for Health, pursuant to her answer of 20 April,Official Report, column 541, how many trusts that (a) failed to meet and (b) succeeded in meeting their financial targets (i) borrowed finance and (ii) had loans guaranteed by her Department; and what sums of money were involved.

Mr. Sackville

All the borrowing detailed as follows was within agreed limits whether or not the trust met its financial duties. Trusts negotiate overdraft facilities with their bankers and the Department issues guarantees in support of these arrangements. Information is not available centrally about the extent to which these facilities were taken up during the year. Information for 1993–94 will not be available until the annual accounts of trusts are audited.

1991–92 (57 trusts established) Six of the trusts which failed to achieve one or more of their financial targets in 1991–92 received loans from the Department. The amount involved was £17,336,000 of which £3,100,000 was short-term borrowing repaid in year. Thirteen of the trusts meeting their financial targets in 1991–92 received loans from the Department. The amount involved was £80,567,000 of which £30,150,000 was short-term borrowing repaid in year. Seven of the trusts which failed to meet one or more of their financial targets in 1991–92 were issued with overdraft guarantees by the Department. The amount involved was £3,125,000. Seven of the trusts meeting their financial duties in 1991–92 were issued with overdraft guarantees by the Department. The amount involved was £2,550,000.

1992–93 (156 trusts established) Thirty-eight trusts which failed to meet one or more of their financial targets in 1992–93 received loans from the Department. The amount involved was £257,875,972 of which £66,663,731 was short-term borrowing repaid in year. Thirty-three trusts which met their financial targets in 1992–93 took loans from the Department. The amount involved was £186,310,425 of which £64,751,000 was short-term borrowing repaid in year. Twenty-one trusts which failed to meet one or more of their financial targets in 1992–93 were issued with overdraft guarantees by the Department. The amount involved was £7,135,000. Twenty-four trusts which met their financial targets in 1992–93 were issued with overdraft guarantees by the Department. The amount involved was £11,425,000.

Mr. Ainger

To ask the Secretary of State for Health if she will list those English NHS trusts which in 1992–93 failed to achieve a 6 per cent. return on capital in(a) percentage terms and (b) cash terms.

Mr. Sackville

[pursuant to his reply 15 March 1994 columns 560–61]: I regret that there were errors in my previous reply.

The amounts of return on capital employed for Broadgreen hospital and St. Helen's and Knowsley national health service trusts should read—£2,145,000 and £4,268,000 respectively. The percentages were however correct.