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Lord Hunt of Kings Heath: The 75 per cent of the NHS budget going directly to primary care trusts is intended to cover the unified allocation for the provision of hospital and community health services, the costs of prescribing by general practitioners and GP practice infrastructure. The remaining 25 per cent of the NHS budget includes items such as funding for capital projects and for research and development, and the education and training of doctors and nurses which is not spent by primary care trusts.
The noble Baroness, Lady Noakes, said that Secretaries of State come and go as do governments. None the less, I believe that there is an interesting debate to be had as to whether it would be right to enshrine the 75 per cent in law or whether it is properly a matter for Ministers to decide what the resource allocation for the health service should be. They are accountable to Parliament.
The Government's view is that at the end of the day it is a matter which should properly fall to Ministers, who are accountable to Parliament, to make a decision as to the broad allocation of resources to the health service and the proportion that should be allocated to different tiers. On that basis, I do not believe that we are justified in going for a formulated approach enshrined in legislation.
What is not in doubt is that we are determined to ensure the commitment that by 2004 PCTs will control 75 per cent of the total NHS funds and that that will be put into practice. We also believe that primary care
trusts will have the capacity to accept that challenge. But I do not believe that a case has been argued persuasively that one needs to enact that in legislation.
Baroness Carnegy of Lour: Would the 25 per cent include the amount mentioned in Clause 8(3), which is the reward to primary care trusts for doing well?
Lord Hunt of Kings Heath: I believe it would.
Baroness Hanham: Perhaps I may revert briefly to the previous amendments on which I spoke and ask for some clarification. I was specifically referring to when these allocations would start and when the primary care trusts would be in a position to deal with them. I have two questions. First, is the 75 per cent due to be passed to the PCTs in the year 2003, or will it start in 2004? Secondly, does the Minister believe that the PCTs that will not be up and running until probably October or November this year be ready and able rationally to make the kinds of decisions they will be required to make so as not to affect the stability of funding around their trust areas as they start up?
Lord Hunt of Kings Heath: The commitment made by my right honourable friend the Secretary of State is that the 75 per cent will be directed to PCTs by the year 2004. We have some flexibility in relation to whether that will be done in the 2003-2004 or 2004-2005 financial year. Final decisions still need to be made.
With regard to the specific issue raised by the noble Baroness, Lady Hanham, we intend that every primary care trust shall be in position to accept the responsibilities laid upon them. Whatever the vesting date, we want the new primary care trusts to be in a position to do so.
I made it clear earlier in the debate that we believe that there are, at most, only two primary care groups that will not become primary care trusts by 1st April this year. In relation to October, therefore, we are talking at most about two such organisations.
Baroness Noakes: I thank the Minister for his replies. I heard him say what are to be retained—capital projects, certain developments, certain training. It appears to me that that does not amount to 25 per cent of total NHS spending. There is, therefore, perhaps a lack of ambition in the target to put 75 per cent of the funding into PCTs.
Perhaps more important is the Minister's unwillingness to accept that the Secretary of State's intention should be enshrined in the legislation. That should put a chill in the heart of every primary care trust in the land. They cannot rely on the statements already made, because the legislation will be in such a form as to allow the Secretary of State to decide how allocations are to be made, which can be changed by Ministers at will, and the primary care trusts will have nothing on which to rely. I regret that. However, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Noakes moved Amendment No. 65:
- Page 9, line 38, leave out ", in whatever way he thinks appropriate"
The noble Baroness said: In moving Amendment No. 65, I shall speak also to Amendments Nos. 67, 78 and 80, which are grouped with it. These amendments concern the discretion of the Secretary of State in relation to PCTs in England and of the National Assembly for Wales in relation to health boards in Wales.
Amendment No. 65 removes from subsection (2) of Section 97C, introduced by Clause 8 of this Bill, the words,
- "in whatever way he thinks appropriate".
Section 97C(2) specifies what the Secretary of State may take into account—general Part 2 expenditure and items that would have been general Part 2 expenditure but for an order under Section 103. The same provisions are made for Wales under Clause 9.
I am sure that the Secretary of State or the National Assembly would want to take those items into account only in a reasonable way. If that is the case, the words,
- "in whatever way he thinks appropriate"
- "during any period he thinks appropriate"
Lord Hunt of Kings Heath: Section 97C(2) confers a general power on the Secretary of State to take into account a primary care trust's non-cash-limited expenditure when determining its cash-limited allocation. Under the existing provisions for funding health authorities, contained in Section 97 of the National Health Service Act 1977, the formula, process or mechanism by which the Secretary of State determines the allocation of each health authority is left to his discretion. It has always been for the Secretary of State to decide what each health authority should receive and how that is determined, subject to the usual constraints of being answerable to Parliament and the funding process being monitored by the National Audit Office. Of course, he must also exercise his powers in accordance with the principles of administrative law. In other words, as the noble Baroness implied, the power must be exercised rationally. It cannot be exercised in a way in which no
reasonable Secretary of State would exercise it. That allows the allocation process to evolve over time, in line with policy changes. We have simply adopted the same approach in Clause 8. The alternative to a general power would have been to take a very narrow power to allow the Secretary of State to introduce a particular scheme to take into account an authority's non-cash-limited expenditure when determining its cash-limited allocation. Such an approach might limit the ability to modify our approach over time—for example, as new information or research becomes available—and could reduce Ministers' ability to determine the pace of change policy on an annual basis. A narrower power might limit a future administration's ability to make allocations in line with their policy. The words that Amendments Nos. 65 and 67 would remove simply make it clear that it is the Secretary of State who exercises that power and that he has a wide discretion to determine precisely how the primary care trusts' non-cash-limited expenditure is to be taken into account. The same arguments are also true for Amendments Nos. 78 and 80, as they relate to the funding of local health boards in Wales. Clause 9 as it stands allows the Assembly to take into account all healthcare resources that are available to meet the needs of a local health board's population when determining allocations. That philosophy is part of the National Assembly's determined drive to close the gap between the worst off and the better off in health terms. If those words were deleted, as the amendments suggest, the Secretary of State and the Assembly would retain a general power. The amendments would simply remove wording that helps to clarify the intention of the clause that the Secretary of State and the National Assembly for Wales should have a general discretion as to how they take account of a primary care trust's and local health board's non-cash-limited expenditure. We would not want to agree to any amendment that made the provision less rather than more clear. Baroness Noakes: I thank the Minister for that clear and comprehensive reply, which I look forward to reading carefully in Hansard. In the meantime, I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
10.15 p.m.
Baroness Noakes moved Amendment No. 66:
- Page 10, line 2, at end insert "; and
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