HC Deb 13 February 1996 vol 271 cc557-9W
Mr. Battle

To ask the Secretary of State for Health what consideration he has given to the need to ensure that marginal cost contracts apply only to unplanned spare capacity in the internal market for the benefit of NHS patients and not to private activity. [14510]

Mr. Malone

National health service costing for contracting guidance already disallows marginal cost contracting other than where unplanned spare capacity arises. We see no reason, however, why in those circumstances a distinction should be drawn between NHS and private purchasers.

Mr. Battle

To ask the Secretary of State for Health what consideration has been given to external and internal auditors having a specific brief to audit private patient activity within the NHS and to set compliance with Treasury rules. [14502]

Mr. Malone

External auditors are independent and exercise their professional judgement about how they carry out their responsibilities. Internal auditors review areas on a cyclical basis with the frequency determined by taking account of risk and materiality. Private patient activity will be examined as part of this process.

Mr. Battle

To ask the Secretary of State for Health what measures his Department is taking to ensure that private patient activity in the NHS is not adversely affecting NHS patients and their healthcare. [14506]

Mr. Malone

This is primarily the responsibility of national health service trusts, which must comply with the provisions of section 5(9) and schedule 2, paragraph 14 of the NHS and Community Care Act 1990. These prevent private patient activity being undertaken to the detriment of NHS patients.

Mr. Battle

To ask the Secretary of State for Health if he will make statements on the(a) change in volume, (b) costing, (c) pricing and (d) auditing of private patient activity in the NHS. [14508]

Mr. Malone

Accommodation and services are made available to private patients in national health service hospitals only when criteria set out in legislation are met. NHS gross income from private patient activity in England rose from £176.3 million in 1993–94 to £193.5 million in 1994–95, the latest year for which figures are available. Guidance has been issued to the NHS on costing and pricing. The recent report by National Economic Research Associates concluded that NHS pay beds are managed in accordance with their statutory and financial obligations, and generate a sizeable profit for the NHS to use to improve services for all patients. The accounts of NHS bodies, including income and expenditure from private patient activity, are subject to statutory audit by auditors appointed by the Audit Commission. The National Audit Office also has access rights to audit the activities of NHS bodies.

Mr. Battle

To ask the Secretary of State for Health what consideration has been given to the need for NHS trusts to adhere to the six principles governing their pay bed and private patient activities. [14507]

Mr. Malone

The six principles were set out in the "Management of Private Practice in Health Service Hospitals in England and Wales", copies of which are available in the Library. This guidance remains in force.

Mr. Battle

To ask the Secretary of State for Health what assessment he has made of whether NHS trusts should produce audited accruals-based accounts according to generally accepted accounting practices for their private patient activity. [14505]

Mr. Malone

Guidance issued last year—FDL(95)01— reminds the national health service of the requirement to maintain memorandum trading accounts for income generation schemes. MTAs are accruals based, and available for scrutiny by internal and external auditors. The guidance does not explicitly refer to private patient activity, but it is accepted good practice to apply the guidance to these also.

Mr. Battle

To ask the Secretary of State for Health if he will make a statement on his Department's policy on the use of public assets for the development of private patient activity. [14509]

Mr. Malone

Subject to the responsibilities set out in section 5(9) and schedule 2, paragraph 14 of the NHS and Community Care Act 1990, NHS trusts are free to undertake private patient activity and to capitalise it from any sources, with normal investment appraisal processes applying.