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Health

Health Service Provision

The Secretary of State for Health (Alan Johnson): The Independent Sector is playing an important and increasing role within the NHS, providing high quality treatment and choice for patients, and innovation,
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dynamism and contestability for existing National Health Service providers. Alongside the hard work of staff in every organisation, the use of the independent sector is an integral part of our success in delivering dramatic falls in waiting times for patients.

That is why we have taken a number of measures to make better use of the independent sector:

As I said to the Health Select Committee in July, independent sector procurement will have to meet the local needs of patients and offer sound value for money for taxpayers. Where it meets these requirements we will increase the role of the independent sector in the provision of NHS services.

The Department has therefore undertaken a thorough revalidation of all the schemes currently being procured nationally through the ISTC programme to ensure they meet these objectives.

The Director General of the Commercial Directorate has advised that I proceed with the procurement of the following schemes:

I am pleased to announce that three of these: PET-CT North, PET-CT South and the Renal scheme have been approved to move to financial close. The Department will conclude decisions on the remaining schemes no later than the end of March 2008.


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However the director general has concluded that the following schemes should not proceed as they were unlikely to provide acceptable value for money as the local NHS has successfully improved capacity to meet patients' needs. These are:

In addition, the Director General has advised that the contract with Care UK for the provision of diagnostic services in the West Midlands should be terminated because of an unacceptably low rate of use (5 per cent. utilisation to date), and a very low prospect of the utilisation increasing which represents poor value for money to the taxpayer. In short. a significant increase in productivity by local NHS providers has substantially reduced the need for the capacity provided by this scheme with waiting times for most diagnostics reduced from more than one year to currently three weeks on average.

The reduction in the overall size of the procurement does not represent a change in policy. As I have stated before, we will continue to use the independent sector. However, as I said to the Health Select Committee, we will now move towards greater local procurement of services. This will enable primary care trusts to take procurement decisions quickly on behalf of their patients rather than waiting for a prolonged process run from Whitehall. We believe this will be a more effective route for increasing the quality of the role which the independent sector is able to provide in the NHS.

To support this move I am announcing today the establishment of an Independent Sector Procurement Forum as a means for Independent and Third Sector providers to advise the Department on policies and practices related to local procurement of clinical services in order to ensure a level playing field.

The forum will draw on a range of expertise and experience, including Ivan Bradbury of In Health Netcare and Sir Ian Carruthers of the South West Strategic Health Authority.

The forum will be advisory and act as a channel for the market to communicate and advise the Department on PCT procurement policies and practices.

We remain committed to choice, to empower patients and drive improvements in the quality of care. For choice to be truly effective, and for all providers to be able to compete fairly, it is essential that all patients are aware that they can now choose the hospital they are referred to. In the run up to the start of free choice, we will raise public awareness of choice through, for example, NHS Choices and other means, as well as encouraging local providers to inform patients about the local choices available to them, and publishing a Code of Promotion to help guide them in this.

To ensure fairness we will also,

Our approach to the Independent Sector is pragmatic not ideological. Where independent sector providers offer good value for money, innovation, and high quality patient care, we will continue to bring them in to work as part of the family of NHS providers.

Departmental Expenditure (Food Standards Agency)

The Minister of State, Department of Health (Dawn Primarolo): Subject to the necessary Supplementary Estimate, the Food Standards Agency's element of the Departmental Expenditure Limit (DEL) will be increased by £9,800,000 from £144,539,000 to £154,339,000 and the Administration Cost Limit will be increased by £4,100,000 from £52,415,000 to £56,515,000. The net cash requirement will also increase by £18,800,000 from £141,731,000 to £160,531,000 as a result of the £9,800,000 change in net total resources and additional £9,000,000 cash required to fund an expected decrease in creditors. The impact on resource and capital are set out in the following table.

New DEL
ChangeVotedNon-VotedTotal

Food Standards Agency

£ million

£ million

£ million

£ million

Resources

8.500

152.392

0

152.392

Capital

1.300

1.947

0

1.947

Total Food Standards Agency DEL

9.800

154.339

0

154.339

Depreciation*

0

-2.004

0

-2.004

Total Food Standards Agency spending (after adjustment)

9.800

152.335

0

152.335

(* )Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The increase in net total resources and capital is by a take up of End Year Flexibility (EYF) of £9,800,000. Of this £4,100,000 is an increase in near cash administration costs, which will be used to fund restructuring of the Food Standards Agency's headquarters operations and related accommodation and support services costs. Near cash programme costs increase by £4,400,000 to assist with the restructuring of the Meat Hygiene Service. The balance of £1,300,000 is an increase in capital and will be used to fund an increased investment in IT hardware and infrastructure. All of these measures will help to deliver the efficiency savings required as part of the CSR settlement.


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As a result of the change to net total resources, capital and the additional £9,000,000 cash required to fund the decrease in creditors, the net cash requirement will increase by £18,800,000.

RFR1

Following the machinery of government changes a transfer of £19,932,000 from the BERR, a net receipt transfer of £456,700,000 from the DCSF.

A technical movement of £281,970,000 from non-voted capital DEL to offset original receipt for Science, Research Innovation Fund, included as part of the DCSF MOG transfers.

RFR2

Following the machinery of government changes a transfer of £299,000,000 from the BERR.

A technical movement of £281,970,000 to non-voted capital DEL to the Higher Education Funding Council for England (HEFCE) for the Science, Research Innovation Fund.

A transfer of £32,391,000 from BERR voted capital for Science Research Investment Fund.

A drawdown of EYF of £11,969,000 for capital Science and Research Investment Fund.

Non-voted Capital DEL

The £2,064,140,000 increase in the non-voted element of capital DEL arises from:

Following the machinery of government changes a transfer of £395,569,000 from the BERR, a transfer of £1,622,962,000 from the DCSF.

A transfer of £45,609,000 from the BERR for capital provision associated with the Research councils.

Administration Cost Budget

RfRl

Following the machinery of government changes a transfer of £14,690,000 from the BERR, a transfer of £43,450,000 from the DCSF.

A classification of £5,200,000 from programme provision to administration in relation to consultancy costs.

RfR2

Following the machinery of government changes a transfer of £8,500,000 from the BERR.

Home Department

Supplementary Estimate (Home Office)

The Secretary of State for the Home Department (Jacqui Smith): Subject to Parliamentary approval of the necessary Supplementary Estimate, the Home Office's Departmental Expenditure Limit for 2007-08 will be reduced by £5,219,311,000, from £14,467,130,000 to £9,247,819,000 and the Administration Budget will be reduced by £204,151,000, from £618,291,000 to £414,140,000.

Within the DEL change, the impact on Resources and Capital are as set out in the following table:


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£000
ChangeNew DEL
VotedNon-votedVotedNon-votedTotal

Resource DEL

-3,239,669

-1,622,375

7,944,143

718,769

8,662,912

Of which:

Administration budget(1)

-168.151

-36,000

390,098

24,042

414,140

Near-Cash in RDEL1

-2,804,714

-1,636,592

7,825,226

667,764

8,492,990

Capital(2)

-555,144

-20,095

460,955

291,507

752,462

Less Depreciation(3)

215,422

2,550

-115,470

-52,085

-167,555

Total

-3,579,391

-1,639,920

8,289,628

958,191

9,247,819

(1) The total of the ‘Administration Budget’ and ‘Near-Cash in Resource DEL’ figures may ^ell be greater than total resource DEL, due to the definitions overlapping.
(2) Capital DEL includes items treated as resource in Estimates and accounts but -which are treated as Capital DEL in budgets.
(3 )Depreciation, which forms part of resource DEL, is excluded from total DEL since Capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

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