NHS Funding (Hansard, 11 March 2003)

§ Mr. Burstow
To ask the Secretary of State for Health on what basis his Department requires each NHS trust to submit a year-end cash balance that equates to the opening balance when the trust was established. [100708]

§ Mr. Hutton
[holding answer 5 March 2003]: Section 9(1) of the NHS and Community Care Act 1990, as amended by section 15 of the 1999 Health Act, requires each national health service trust to be set up with originating capital. This must be an amount that represents the excess of the value of the assets transferred to the trust over the value of the liabilities transferred. Originating capital takes the form of public dividend capital.
Under section 9(7) of the NHS and Community Care Act 1990, the Secretary of State may, with the consent of Her Majesty's Treasury, determine the terms on which public dividend capital is issued. In accordance with a Determination made on 16 November 1999, the Secretary of State may require payments from the NHS trust in discharge of part (but not all) of its initial public dividend capital and in respect of all of its additional public dividend capital.
In practice, capital repayments of public dividend capital are required, where appropriate, to reduce excess end of year cash balances to an acceptable level. Repayment is generally required where an end of year cash balance is forecast to exceed 0.3 per cent. of turnover. There is no specific requirement to reduce cash balances to the level when the trust was established.

§ Dr. Murrison
To ask the Secretary of State for Health what plans he has to(a) earmark, (b) hypothecate and (c) ring-fence funding for NHS Trusts. [97395]
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§ Mr. Hutton
Revenue allocations to primary care trusts (PCTs) for 2003–04 to 2005–06 were announced on 11 December 2002. None of the growth money has been identified for specific purposes. PCTs will be able to use these extra resources to deliver on both national and local priorities.
National health service trusts receive the bulk of their revenue funding from commissioning by primary care trusts. The remainder is linked to contracts for medical staff education services and for research and development.