Health and Social Care (Re-Committed) Bill

Memorandum submitted by the Finance and Leasing Association (HSR 23)

1. The Finance and Leasing Association represents the UK’s providers of equipment finance through leasing and hire-purchase. Our members are banks, independent asset finance companies, or captive finance companies owned by equipment manufacturers. In 2010 FLA members provided £19.6 billion of new finance to UK businesses and the public sector. Our members lease essential medical equipment to many NHS trusts.

2. In our submissions to the Department of Health last year we pointed out that the proposed failure regime for Foundation Trusts (FTs) without designated services could lead to higher costs. Medical equipment rental charges, for example, could increase because of the risk that a FT without designated services could become insolvent during the contracted rental period. This problem did not seem to apply to FTs with designated services.

3. In its response to the NHS Future Forum report, the Government indicted it would withdraw its proposal for FTs to designate services, although there appears to be no such amendment in the re-committed Bill. If there were no designated services this could, presumably unintentionally, lead to the possibility of any FT becoming insolvent and hence wider increases in healthcare costs.

4. We recommend that the Committee request that the Government explain the status of its proposals on designated services and especially how any such changes could impact on the insolvency proposals in Clause 125.

July 2011

Prepared 11th July 2011