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The Minister of State, Department of Health (Mr. John Hutton): I have agreed with my right hon. Friend the Chief Secretary to the Treasury that, from April 2003, the National Health Service pension scheme will assume its full liability for pensions increase costs. The change, which will bring the National Health Service into line with other public service schemes, will mean an increase in employer contributions from 7 to 14 per cent. of pay. Employee contributions will remain unchanged.
The additional costs will be fully covered by a transfer of funds into the Department of Health's departmental expenditure limit (DEL) baseline. This will be extra funding, on top of expenditure plans announced in the last Budget, and is included in the Chancellor's pre-Budget Report made yesterday. This means there will be no reduction in the resources already earmarked for healthcare.
Arrangements for increasing the employer contribution rate will be phased in with costs paid centrally from the Department's DEL in the first year. It is expected that employers will be charged the higher rate from April 2004.
A Departmental working group has been remitted to develop detailed implementation plans for handling the transfer. Alongside the financial arrangements for transferring and allocating resources, it will look at the human resource aspects of the change. This will include improving recognition of the full value of National Health Service pension scheme in recruitment, retention and return to service as well as the full costs of employment.
The new 14 per cent employer contribution rate is based on the Government actuary's emerging findings in his latest valuation of the National Health Service pension scheme. The Government actuary's report is expected to be published in the new year and copies will be placed in the Library.
The Minister of State, Department of Health (Mr. John Hutton): On 13 June 2002, my noble Friend the Parliamentary Under-Secretary of State, (Lord Hunt of Kings Heath) announced a joint Ministerial review of education, training and research in the National Health Service in order to ensure that new management structures are working effectively, and committed the Government to announcing the terms of reference for this review before the end of the year.
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My noble Friend Lord Hunt, my hon. Friend the Minister of State for Lifelong Learning and Higher Education, Department for Education and Skills (Mrs Hodge), Ms Jane Hutt, Minister for Health and Social Services at the National Assembly for Wales and I have agreed the terms of reference. Prominent among the issues that led to the announcement of the review was that primary care trusts (PCTs) in their effort to deliver improved local patient care also focussed on education and research. The terms of reference directly tackle this concern and are, in the light of the National Health Service Reform and Health Care Professions Act 2002, to:
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The review will be overseen, on Ministers' behalf, by the newly formed strategic learning and research advisory group for health and social care which has been set up specifically to improve and oversee joint working at the interface between the health and social care and education sectors at central government level, and which the Permanent Secretaries of the Department of Health and the Department for Education and Skills jointly chair.
The Secretary of State for Health (Mr. Alan Milburn): Subject to Parliamentary approval of the necessary Supplementary Estimates, the Department of Health and the Food Standards Agency (FSA) departmental expenditure limits (DELs) will be increased by £602,164,000 from £55,874,091,000 to £56,476,255,000 and the administration cost limits (ACL) will increase by £8,952,000 from £370,830,000 to £379,782,000. The Department of Health DEL will be increased by £585,214,000 from £55,756,416,000 to £56,341,630,000 and the ACL will increase by £6,136,000 from £318,527,000 to £324,663,000. The Food Standards Agency DEL will be increased by £16,950,000 from £117,675,000 to £134,625,000 and the ACL will increase by £2,816,000 from £52,303,000 to £55,119,000. The impact on resource and capital are set out in the following table.
|Change||New DEL||Of which voted||Non-voted||Change||New DEL||Of which voted||Non-voted|
|Department of Health DEL 734,761||53,992,685||54,245,237||-252,552||-149,547||2,348,945||109,765||2,239,180|
|Food Standards Agency DEL 16,950||133,988||133,988||0||0||637||637||0|
|Total DH/FSA Group DEL 751,711||54,126,673||54,379,225||-252,552||-149,547||2,349,582||110,402||2,239,180|
The change in the resource element of the DEL for the Department of Health arises from: the take up of end year flexibility £404,844,000 for health authority and central allocations as set out in Table 6 of the public expenditure 200102 provisional outturn White Paper Cm 5574 published in July 2002; a change in the level of National Health Service trust depreciation £184,000,000; a net transfer from the Home Office of £3,900,000 comprising £1,824,000 for match funded social care projects, £938,000 community projects relating to assessment and treatment of people with severe personality disorder, £673,000 for a contribution towards the Victoria Climbie Inquiry, £450,000 for Broadmoor hospital pilot ward, £30,000 for a survey of smoking, drinking and drug use in young people, offset by £15,000 for a grant to Mediation UK to recruit volunteer service managers; from the Scottish Executive £385,000 for a contribution towards the Nursing Midwives Council; from the Office for National Statistics £130,000 (£127,000 administration costs) for the neighbourhood statistics programme; from the Department of Trade and Industry £75,000 (administration costs) for a contribution towards the costs of the human genetics commission.
The Department of Health's administration cost limit has increased by £6.136,000 from £318,527,000 to £324,663,000. In addition to the changes detailed above there is a transfer of £7,500,000 for education and training, offset by £1,566,000 for hospital episode statistics, the disability equipment evaluation programme, the NHS appointments commission and the standing committee for hospitals of the European Union.
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The increase in the FSA DEL is the result of take-up of end year flexibility of £16,950,000 (of which £2,816,000 is administration costs). The FSA manages it resource spend over the three year Government spending review period. This end year flexibility is needed to address future FSA and meat hygiene services funding pressures that have already been identified.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley): I am pleased to report to the House that forecasts for this year suggest an encouraging rise in farm incomes, of 11 per cent (9 per cent in real terms), in comparison to 2001.
We recognise that farmers are experiencing hard times, therefore any increase in incomes is welcome news. This is the second year running that there has been an increasea reversal of a sharp decline since 1995, although we recognise this remains £2.99 billion below the yearly average for TIFF, for the period 1989 to 1994.
These increases reflect the efforts of farmers to improve business performance. Government is playing its part by investing in the rural economy. There is a lot more to do, but we are working with the industry to create the right conditions for a sustainable and competitive future for farmers.
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