§ Mr. Richards
To ask the Secretary of State for Wales what decisions he has reached regarding the allocation of resources for hospital and community health and related services in Wales for 1993–94.
§ Mr. David Hunt
I announced on 16 December my decision on the allocation of resources for the national health service in wales for 1993–94. Within the £1,974 million resources available we propose to allocate £1,465 million for hospital and community health services and the cash-limited element of the family health services in Wales.
For health authorities, the current resources within this sum which is subject to parliamentary approval to the supply estimates totals £1,290 million and represents a 253W cash increase of £47 million or 3.7 per cent. over 1992–93 estimated outturn provision. This sum, together with the additional £14 million which it is anticipated health authorities should, as a minimum, realise from further cost improvement savings and income generation schemes, will provide an effective increase in resources over 1992–93 of 5 per cent. Authorities will also benefit from further efficiency savings resulting from workload-related productivity increases through their contracts with service providers.
£8.5 million of the sum available for health authorities will be allocated to fund the continuing and full-year cost of developments which are being funded centrally in 1992–93. £8.6 million will be allocated to other centrally funded developments which will be announced in due course.
£29.2 million of the provision available will be made available for the discretionary use of health authorities. This provides for a 2.2 per cent. increase in HAs' discretionary revenue provision, or 0.4 per cent. in real terms, taking account of the 1.5 per cent. public sector pay restraint and the latest forecast of general inflation in 1993–94. In addition, authorities will be expected to generate the equivalent of at least a further 2 per cent. recurrent provision in efficiency savings from cash-releasing cost improvements and income generation schemes—1.3 per cent. minimum target—and productivity increases as throughput increase-0.7 per cent. minimum target—via their contracts with service providers.
Authorities should therefore be in a position to make further improvements in the services offered to patients in accordance with the objectives of the patients charter.
In order to continue progress toward weighted capitation funding, I have decided that all authorities will receive a minimum cash increase of 2 per cent. and that the balance of 0.2 per cent. will be provided to those
Table 1 Allocation Cash increase Remaining distance from target £ million £ million per cent. per cent. Clwyd 170.805 4.625 3.2 -3.93 East Dyfed 103.671 1.860 2.0 2.22 Gwent 180.176 3.250 2.1 -2.31 Gwynedd 101.341 2.119 2.4 -2.40 Mid Glamorgan 226.009 4.042 2.0 -1.30 Pembrokeshire 48.260 0.850 2.0 1.52 Powys 62.701 1.017 2.0 12.97 South Glamorgan 185.893 2.810 2.0 2.88 West Glamorgan 146.327 2.746 2.0 1.65
Steady progress therefore has been made toward the equalisation goal set in 1991; but the progress to date has been neither so great as to justify bringing forward the 1998–99 target date for achieving weighted capitation shares, nor so small as to require extending the process. However, the formula will be subject to further review in 1993–94 and this will focus particularly on whether any progress has been or might be achieved in distinguishing the separate effects of differential morbidity and social deprivation on relative needs; and, if so, how these effects might be better reflected in the formula. Since this further review could have an impact upon formula targets, I will look again at the target date for achieving weighted capitation funding in the light of whatever emerges from the review.254W
authorities which would otherwise be more than 2 per cent. below their capitation formula targets in proportion to their respective distances from target.
The formula targets used in determining the distribution of the 0.2 per cent. further tranche of equalisation funding have been updated to take account of 1991 census data and other changes which affect the 1993–94 revenue allocations—notably revised capital charge estimates following the revaluation of the NHS estate, a further redefinition of capital—which alters the balance of HA capital to revenue expenditure—and a decision to exclude from the formula assessment revenue provision associated with long-stay hospital services for patients with a mental handicap which will be predominantly transferred to local authorities in due course as hospital services for this group are progressively replaced by community care.
These changes together with the equalisation funding provided over the past two years have together contributed to a narrowing of the range of differences between the most over-target and the most under-target HAs. Compared with 1991–92 when the range was from Powys at 14.61 per cent. over-target to Gwynedd 6.89 per cent. under-target, the position for 1993–94 prior to the distribution of the additional 0.2 per cent. equalisation provision shows a spread from Powys at 13.04 per cent. over-target to Clwyd at 4.82 per cent. under-target; and the latter figure reduces to 3.93 per cent. after its distribution.
The resultant discretionary revenue allocations for 1993–94, the increases which they represent over their 1992–93 discretionary revenue provision in cash and percentage terms, and the consequent revised distances from authorities latest formula targets are shown in the table 1.
Under the new capital allocation arrangements which came into force on 1 April 1992, £80.1 million will be earmarked for the purpose of the Welsh major capital programme. The funding will be made available respectively via specific cash allocations or external financing limit approvals to those HAs and NHS trusts that are responsible for managing the schemes in question. Details of this programme are set out in table 2.
Table 2 Welsh capital programme centrally funded elements 1993–94 £ WHCSA salaries 4.509 Dental Hospital re-equipping programme 0.398 Psychiatric/Joint finance/Psychiatric bridging finance 0.028 Breast Test Wales 0.453
Welsh capital programme centrally funded elements 1993–94 £ Regional services Burns and plastic surgery—Morriston scheme IV 8.430 Adult cardiac services—UHW expansion 0.156 Paediatric cardiac 0.538 Club fees—United Kingdom transplant services 0.514 Blood transfusion centre 1.659 2nd cardiac unit 1.552 Sub-total regional services 12.849 Perinatal intensive care 0.269 Treatment centres 0.496 Information technology 13.351 Sub-total central programme 32.353
Health Authorities/National Health Service Trusts on-going schemes £ million Clwyd Wrexham Maelor Hospital NHS Trust -Phase 2A development 4.828 Glan Clwyd Hospital NHS Trust - Phase 2 development 0.364 East Dyfed Carmarthen and District NHS Trust - West Wales General Ward Block 3 0.937 West Wales General Ward Block 2 including day hospital 0.650 Gwent Gwent Community NHS Trust - Ebbw Vale Community Hospital - Phase 1 2.000 Torfaen Community Hospital - Phases 1 and 2 2.969 Gwent Health Authority - Nevill Hall remedial work 0.690 Gwynedd Gwynedd Health Authority - Ysbyty Gwynedd Phase 2 3.545 West Mon Community Hospital 3.157 North Meirionnydd Community Hospital 1.213 Mid Glamorgan Mid Glamorgan Health Authority - Taff Ely/ Rhondda DGH 2.200 Powys Powys Health Care NHS Trust - Brecon War Memorial Hospital Development 2.004 South Glamorgan Llandough Hospital NHS Trust - Barry Neighbourhood Hospital 3.700 South Glamorgan Health Authority - UHW Fire Precautions 6.000 UHW Energy Sources 0.355 Cardiff West (St. David's) Neighbourhood Hospital 0.800 West Glamorgan West Glamorgan Health Authority - Morriston Pathology 2.734 Neath Port Talbot DGH 3.800 Reserve For contractual claims, sundry creditors and miscellaneous rationalisation proposals 3.723 Sub-total on-going schemes 45.669
Health Authorities/National Health Service Trusts New developments £ million Clwyd Glan Clwyd Hospital NHS Trust—Ysbyty Glan Clwyd Psychiatric Unit 0.850 East Dyfed Ceredigion and Mid Wales NHS Trust—North Road Development 0.900 Gwent Gwent Community Trust—Nevill Hall MI Unit 0.700 Nevill Hall Elderly 0.400 Mid Glamorgan Bridgend and District NHS Trust—Princess of Wales—Phase 2 0.500 Powys Powys Health Care NHS Trust—Bronllys/Mid Wales Rationalisation 0.976 West Glamorgan Swansea NHS Trust—Singleton Hospital Theatres 1.500 Sub-total new developments 5.826
Note: The Welsh Capital Building Programme reflects a degree of over-programming in anticipation of slippage during the course of 1993–94.
A further £37.6 million will be made available for the discretionary minor capital requirements of HAs and the 14 national health service trusts which will be operational on 1 April 1993 as well as the minor capital needs of other 2.000 service providers which are not managed by HAs. This sum will, however, be abated by some £4.3 million which will be transferred to HAs' current provision in recognition of the further redefinition of capital expenditure which will become effective on 1 April 1993. £16.1 million of the £33.3 million balance will be allocated in the form of additional revenue provision to the prospective purchasers of national health service trusts' services. It will thus form part of the trusts' income for 1993–94 which can then be recapitalised to meet their minor capital requirements. This capital expenditure will, together with any capital expenditure on major capital schemes, be taken into account in determining EFLs. Provisional EFLs for the 14 national health service trusts in Wales in 1993–94, which are subject to parliamentary approval of the necessary estimates, are shown in table 3. They will be subject to revision during the course of the year as a consequence of national health service trusts updating their financial plans for next year to take account of the revenue allocations to their prospective purchasers that are covered in this announcement.
Table 3 Provisional EFLs £ thousands Glan Clwyd Hospital NHS trust -39 Wrexham Maelor Hospital NHS trust 4,079 Gofal Cymuned Clwydian Community Care NHS trust -160 Llanelli Dinefwr NHS trust -1,700 Carmarthen and District NHS trust 1,035 Ceredigion and Mid Wales NHS trust 916 Glan Hafren NHS trust -3,712 Gwent Community trust 6,692 Bridgend and District NHS trust 86 Pembrokeshire NHS trust -1,764 Powys Health Care NHS trust 2,680 Llandough Hospital NHS trust 1,890
£ thousands Swansea NHS trust -107 South and East Wales Ambulance NHS trust -771 (-) denotes a negative external financing limit (i.e., no new borrowing—the sum indicated being invested by the trust concerned or used to reduce outstanding debt).
A nominal capital allocation of £10,000 per authority will be allocated to HAs to cover their minor capital needs as purchasing organisations. Authorities will be able to supplement this by virement from revenue, subject to the normal 1 per cent. discretionary limit, if this nominal amount is insufficient. The £15.4 million balance of minor capital provision will be allocated between the HAs on behalf of their residual directly managed units. As was the case last year, and in order to ensure the fair distribution of this sum between service providers, it will be allocated between authorities pro rata to the revenue income which their units are expected to attract next year. In this way, capital provision, like revenue will "follow the patient".
The resultant capital allocations are set out in Table 4. Nominal sums only are included for the Pembrokeshire and Powys health authorities, since they are no longer responsible for the capital needs of any directly managed units.
Table 4 £ million Authority Capital Allocation Clwyd 0.110 East Dyfed 0.542 Gwent 0.546 Gwynedd 2.535 Mid Glamorgan 4.178 Pembrokeshire 0.010 Powys 0.010 South Glamorgan 4.560 West Glamorgan 3.056
In addition, health authorities are expected to benefit from £5.4 million which will be generated in property sales in 1993–94.
A further £1.5 million will be held in reserve to meet the minor capital requirements of various other service providers such as the dental hospital and the Welsh Health Common Services Authority.
Table 5 Allocations (£ million) FHSA management and administration costs FHSA GP practice support costs Revenue Capital Clwyd 1.285 4.673 0.095 Dyfed 1.107 5.029 0.103 Gwent 1.350 5.897 0.120 Gwynedd 0.876 3.803 0.078 Mid Glamorgan 1.650 5.952 0.121 Powys 0.619 2.182 0.045 South Glamorgan 1.425 4.627 0.094 West Glamorgan 1.117 3.762 0.077
These allocations together represent another substantial increase in provision for hospital, community and family health services. They once again underline the Government's commitment to the NHS and recognise our undertaking to increase activity and maintain downward258W
£11.8 million is to be made available to family health services authorities for their management and administration functions. The current element of this provision—£11.2 million represents a cash increase of 3.9 per cent. over 1992–93 provision and includes specific provision to finance the cost of strengthening the monitoring and accountability arrangements for GP fund holders and to buy in additional medical advice in respect of health promotion undertaken by general medical practitioners. The provision includes £0.13 million which will be differentially allocated between FHSAs in recognition of the need to make further progress toward the equalisation of discretionary resources between FHSAs. This differential distribution will result in the achievement of a good measure of equalisation in 1993–94 with most authorities achieving parity with each other and only two authorities, South Glamorgan and Powys, remaining significantly better funded than the rest.
The provision to be made available to FHSAs for the cash-limited general medical services funding for GP practice support costs is £42.7 million. This represents a cash increase of 9.6 per cent. over 1992–93 provision and includes £5.1 million for GP fund-holding practices' operating costs and preparatory fees for aspirant fund holders. This sum will not be distributed until after 1 April, when the number of participating practices in each FHSA area is known. Prospective GP fund holders have until 1 April to decide whether or not to participate in the scheme. Once the numbers are known, allocations for management support for practices operating funds, and preparatory fees for aspirant fundholders—both revenue and the capital costs associated with upgrading computer systems —will be calculated and allocated.
A further £0.9 million of the total sum available for cash-limited GMS needs has been held in reserve subject to the outcome of consultation with the service about the extension of the weighted capitation approach to this component of FHSA provision. It is anticipated that this reserve will be distributed early in 1993–94 in a way that enables a start to be made on the equalisation of this category of provision. Subject to this the allocations to be made to FHSAs are set out in table 5.
pressure on waiting times. They also serve to underpin patients charter guarantees about service availability and quality.