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Baroness Hayman moved Amendment No. 15:
After Clause 3, insert the following new clause--
(".--(1) After Schedule 12 to the 1977 Act there is inserted--
"SCHEDULE 12A
Expenditure of Health Authorities and Primary Care Trusts
Health Authorities: general Part II expenditure
1.--(1) In section 97 above and this Schedule, general Part II expenditure, in relation to a Health Authority, means expenditure of the authority which--
(a) is attributable to the payment of remuneration to persons providing services in pursuance of Part II of this Act, and
(b) is not excluded by sub-paragraph (2) below.
(2) Expenditure is excluded if it is attributable to--
(a) the reimbursement of expenses of persons providing services in pursuance of Part II which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services),
(b) remuneration referable to the cost of drugs,
(c) remuneration paid to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or
(d) remuneration of a designated description which is determined by the Health Authority and paid to persons providing general medical services in pursuance of Part II.
Health Authorities: main expenditure
2.--(1) In section 97 above, main expenditure, in relation to a Health Authority and the year in question, means--
(a) expenditure of the authority mentioned in sub-paragraph (2) below,
(b) any other expenditure of the authority attributable to the performance of their functions in that year (other than general Part II expenditure and remuneration referable to the cost of drugs), and
(c) expenditure attributable to remuneration referable to the cost of drugs for which the authority are accountable in that year (whether paid by them or another authority).
(2) The expenditure referred to in sub-paragraph (1)(a) above is expenditure attributable to--
(a) the reimbursement in that year of expenses of persons providing services in pursuance of Part II which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services),
(b) remuneration paid in that year to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or
(c) remuneration of a designated description which is determined by the Health Authority and paid in that year to persons providing general medical services in pursuance of Part II.
3.--(1) For each financial year, the Secretary of State shall apportion, in such manner as he thinks appropriate, among all Health Authorities the total of the remuneration referable to the cost of drugs which is paid by each Health Authority in that year.
(2) A Health Authority are accountable in any year for remuneration referable to the cost of drugs to the extent (and only to the extent) that such remuneration is apportioned to them under sub-paragraph (1) above.
(3) Where in any financial year any remuneration referable to the cost of drugs for which a Health Authority are accountable is paid by another Health Authority, the remuneration is to be treated (for the purposes of sections 97 and 97A above) as having been paid by the first authority in the performance of their functions.
(4) The Secretary of State may, in particular, exercise his discretion under sub-paragraph (1) above--
(a) so that any apportionment reflects, in the case of each Health Authority, the financial consequences of orders for the provision of drugs, being orders which in his opinion are attributable to the authority in question,
(b) by reference to averaged or estimated amounts.
(5) The Secretary of State may make provision for any remuneration referable to the cost of drugs which is paid by a Health Authority other than the Health Authority which are accountable for the payment to be reimbursed in such manner as he may determine.
PCTs: general Part II expenditure
4.--(1) In section 97C above and this Schedule, general Part II expenditure, in relation to a Primary Care Trust, means expenditure of the trust which--
(a) is attributable to the payment of remuneration to persons providing services in pursuance of Part II of this Act, and
(b) is not excluded by sub-paragraph (2) below.
(2) Expenditure is excluded if it is attributable to--
(a) the reimbursement of expenses of persons providing services in pursuance of Part II which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services), or
(b) remuneration of a designated description which is determined by the Health Authority within whose area the area of the trust falls and paid to persons providing general medical services in pursuance of Part II.
PCTs: main expenditure
5.--(1) In section 97C above, main expenditure, in relation to a Primary Care Trust and the year in question, means--
(a) expenditure of the trust mentioned in sub-paragraph (2) below, and
(b) any other expenditure of the trust attributable to the performance of its functions in that year (other than general Part II expenditure),
and is to be treated as including any expenditure apportioned to the trust for that year under paragraph 6 below.
(2) The expenditure referred to in sub-paragraph (1)(a) above is expenditure attributable to--
(a) the reimbursement in that year of expenses of persons providing services in pursuance of Part II which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services), or
(b) remuneration of a designated description which is determined by the Health Authority within whose area the area of the trust falls and paid in that year to persons providing general medical services in pursuance of Part II.
6.--(1) For each financial year, a Health Authority may apportion, to such extent and in such manner as they think appropriate, among the Primary Care Trusts whose areas fall within their area, the remuneration referable to the cost of drugs for which the authority are accountable in that year.
(2) Where in any financial year--
(a) any remuneration referable to the cost of drugs for which the Health Authority are accountable is paid (whether by them or another Health Authority), and
(b) that remuneration is apportioned to a Primary Care Trust under sub-paragraph (1) above,
that remuneration is to be treated for the purposes of sections 97C and 97D as having been paid by the trust in the performance of its functions.
Interpretation
7.--(1) In this Schedule--
"designated" means designated in writing by the Secretary of State (and different designations may be made for different purposes),
"drugs" includes medicines and listed appliances (within the meaning of section 41 above),
"pharmaceutical services" does not include additional pharmaceutical services.
(2) The Secretary of State shall determine what remuneration paid by Health Authorities to persons providing pharmaceutical services is to be treated for the purposes of this Schedule as remuneration referable to the cost of drugs.
(3) The Secretary of State may treat all remuneration paid by Health Authorities to such persons, so far as it is met by an NHS trust or Primary Care Trust under section 103(3) below, as remuneration referable to the cost of drugs for those purposes."
(2) Section 97 of the 1977 Act is amended as follows--
(a) subsection (2) is omitted,
(b) in subsection (3), at the end there is inserted "in that year",
(c) for subsections (3A) and (3B) there is substituted--
"(3BB) Schedule 12A to this Act (which defines "general Part II expenditure" and "main expenditure" for the purposes of, and supplements, this section and section 97C below) shall have effect".
(3) Section 103(3) of the 1977 Act (special arrangements as to payment of remuneration) is amended as follows--
(a) in paragraph (a), for the words from "the Health Authority" to the end of that paragraph there is substituted "a Health Authority so determined in respect of the whole or any part of that remuneration",
(b) in paragraph (b), for "that" there is substituted "the whole or (as the case may be) that part of the".
(4) This section has effect for the financial years 1999-2000 and subsequent financial years.").
The noble Baroness said: My Lords, this amendment was spoken to with Amendment No. 13. I beg to move.
On Question, amendment agreed to.
Clause 4 [Primary Care Trusts: provision of services etc.]:
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