Health and Social Care (Community Health and Standards) Bill

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Mr. Hutton: I misinterpreted the right hon. Gentleman's intention. I do not wish to go on any longer; I have run out of material. This is probably a good point at which for me to stop.

Chris Grayling: I had not intended to make a significant contribution to this debate, which spread

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wider than I anticipated. I shall save some points for the amendments that are to come, but I should like to deal with some of the Minister's remarks.

The Department of Health has been setting up the special funding facility in recent weeks. Is that facility being set up with public funds rather than being sourced from the private sector?

Mr. Hutton indicated assent.

Chris Grayling: I see that the Minister is nodding. If it is ring-fenced, with access decisions that are not in the gift of the Secretary of State, what is the Treasury's role in the distribution of that money? Is it genuinely an independent pot with an independent panel that has total freedom to allocate it to whoever it wants, or does some degree of control still rest with the Treasury?

Is there a limit on the total amount of that money? Is it simply an initial amount that is available now, or is it a fund that will be expanded as time goes by? Will it be entirely dedicated to foundation hospitals, and is it the sole source of public capital moneys that foundation hospitals can access? What criteria will those distributing the money use in their lending decisions? Will they be using some of the criteria that are set out in the clauses concerning the prudential code? Will they be looking at the creditworthiness of the trusts?

A private-sector lender to an independent organisation would make judgments and set repayment rates against accepted assessments of creditworthiness. International organisations such as Dun & Bradstreet and Standard & Poor's specialise in producing such ratings. Is similar information being used in the distribution of this money? Does the Minister envisage such ratings being used in those assessments in future?

As regards this money—and, more broadly, the total borrowings that NHS foundation trusts can take on—will these funds appear as part of the PSBR? Are they official public sector borrowings or will they be purely on the balance sheets of the foundation trusts themselves? What provision is being made for any new entrants to the marketplace under clause 5? On what basis will those organisations that are not currently NHS trusts have access to that money if they apply for foundation status? Inside what time frame does the Minister envisage those organisations being in a position to access the funds available, if indeed—[Interruption.]

The Chairman: Order. I am having difficulty following the hon. Gentleman. There are too many sedentary conversations going on.

Chris Grayling: The Chancellor of the Exchequer said recently that money borrowed by foundation trusts can only come out of the total pot of money available for borrowing in the NHS. Will the Minister clarify whether that money has been taken away from a general NHS capital pool? If it has, what proportion of that pool does it represent? Will the creation of this special funding facility impact on the availability of capital to non-foundation trusts in the coming financial year or in future financial years?

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I intervened on the Minister to express anxiety that we would be creating a situation in which foundation trusts would be at an advantage, owing to their ability to retain funding, and that we would be creating a two-tier system. Will the national tariff be introduced before all hospitals become foundation hospitals? In what time frame does the Minister expect all hospitals to become foundation trusts? Will the Minister set the introduction of the national tariff in context against

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the process of expanding foundation trust status to other hospitals? If that is the case, will the Minister tell us what provision he expects to make—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

The following Members attended the Committee:
Atkinson, Mr. Peter (Chairman)
Anderson, Janet
Bailey, Mr.
Blears, Ms
Burnham, Andy
Burns, Mr.
Burstow, Mr.
Calton, Mrs.
Dowd, Jim
Fitzpatrick, Jim
Gillan, Mrs.
Grayling, Chris
Hall, Mr. Mike
Harris, Dr. Evan
Hepburn, Mr.
Hutton, Mr.
Jones, Mr. Jon Owen
Lansley, Mr.
McCabe, Mr.
Murrison, Dr.
Pound, Mr.
Russell, Ms Christine
Streeter, Mr.
Thomas, Mr. Gareth
Ward, Claire
Young, Sir George

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