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Lord Filkin: My Lords, no one would argue against improved transparency either in company or charitable accounts. Clearly, charities also have a duty to their stakeholders. Without going into further detail, FRS 17 has been extremely challenging in its introduction.
The noble Lord made two points with regard to whether all charities are exposed. Of course not all charities have defined benefits schemes; those which do not will not be vulnerable. I understand that the intention is for IAS 19 to be converged by the ASB, but at present we are not certain exactly what IAS 19 will look like. However, we have gained a useful breathing space for reflection and, it is hoped, for negotiation and influence.
Lord Phillips of Sudbury: My Lords, does the Minister accept that this issue is a problem for charities mainly in relation to the funding of pensions? Does he further accept that many funders of charities are reluctant—to put it mildly—to contribute a fair share of the pension overheads of charities with employees in pensions?
Will the Government set a good example in this regard by demonstrating that they are willing to make a full contribution towards the pension and other employment overheads of charities when contracting with or funding them? It has to be pointed out that, at the moment, that is far from being universally the case.
Lord Filkin: My Lords, at times the issues of the funding of pensions and FRS 17 can become interconnected. Clearly there is an issue with regard to the cash funding of the pension scheme on which an employer has determined, irrespective of the accountancy treatment. As an employer, any charity must think carefully and prudently about the package of employment benefits it thinks it needs and can afford to offer.
With regard to the first question put by the noble Lord, asking whether the Government will in effect sign a blank cheque to fund all such pension schemes—perhaps that was not quite what he said—the answer is no. However, we are looking at the whole issue, both in the cost-cutting and the PIU reviews on charities. We expect to produce some interesting publications in the autumn about how policies towards charities and the voluntary sector are to be developed in the future.
Baroness O'Cathain: My Lords, can the Minister clarify the implications of the delay in the introduction of FRS 17? Is it not true that reserves still have to be shown in the accounts? Therefore, the point made with regard to the reserves held by charities is valid, irrespective of anything the Government may have done with regard to postponing the introduction of FRS 17.
Lord Filkin: My Lords, that is right. The noble Baroness has gone to the point I sought to make. Irrespective of the accountancy treatment, a company or a charity has to be able to meet its liabilities as they fall due, including pension liabilities. I understand that until FRS 17 or its equivalent is brought in, a note will be put to the accounts making a statement about the estimated assets and liabilities of a pension fund. The
information will still be available in the accounts, but it will not be quite such a painful presence on the balance sheet.
Earl Russell: My Lords, am I right in understanding that FRS 17 rests on the principle of the worst case scenario? It assumes that all liabilities will become due at once; it assumes that defined pension liabilities will all become due at the moment of entitlement; and it further assumes that charities will be able to dispose of their assets when in fact, in law, many of them will not be able to do so. Am I also right in thinking that anything that can assume such a concatenation of worst case scenarios all happening at once deserves the comment of Winnie-the-Pooh:
- "'Supposing it didn't?', said Winnie-the-Pooh, after some thought"?
Primary Care Trusts
3.16 p.m.
Lord Ashley of Stoke asked Her Majesty's Government:
- Whether the transfer of powers from health authorities to primary care trusts has been satisfactorily completed.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, on 1st April 2002, 139 new primary care trusts were established, to make a total of 303. There was only one remaining primary care group at that time. The transfer of functions from health authorities to primary care trusts is well under way and early indications are that primary care trusts are progressing well.
Baroness Finlay of Llandaff: My Lords—
Lord Ashley of Stoke: My Lords, I thank my noble friend for that reply. I welcome warmly the Government's very radical reorganisation and transfer of powers to primary care trusts because that will certainly reduce the bureaucracy involved in dealing with sick and disabled people. However, because the trusts are inexperienced, is there not a danger that they may deal exclusively with high-profile illnesses and disabilities and neglect the relatively unpopular conditions? Will my noble friend use performance indicators to ensure that that does not happen? Will he further seek to ensure that, as best he can, he will give general guidance to the PCTs on the points that I have raised?
Lord Hunt of Kings Heath: My Lords, on the question of performance indicators, the first set are due to be published later this year. It is clear that we need to strike a balance in this area. The whole point of devolving authority to primary care trusts is to ensure that GPs and other primary care staff have a much greater input into key decision-making. In many ways that is the best answer to the questions put by my noble friend. GPs experience the sicknesses of many patients day in, day out. I believe that the commissioning decisions reached by PCTs will be best informed by the experience of GPs. However, of course we shall ensure that if, through commissioning decisions, services are being missed out, we have a performance management regime to enable us to intervene where we have to do so.
Lord Clement-Jones: My Lords, the Secretary of State has pledged that primary care trusts will be responsible for dispensing 75 per cent of the health service budget. When will that become a reality?
Lord Hunt of Kings Heath: My Lords, we are aiming for that to take place in 2004.
Lord Walton of Detchant: My Lords, is the Minister satisfied that the transfer of authority and funding from health authorities to primary care trusts is preserving adequately the needs of tertiary and highly specialised treatments in our hospitals? Furthermore, is he satisfied that the problems related to teaching and research are being properly addressed now that we are increasing the number of medical students being admitted to our medical schools?
Lord Hunt of Kings Heath: My Lords, I very much accept the point made by the noble Lord on the question of specialised commissioning. We do expect some primary care trusts to take a leading role in their health communities, but we also have in place national specialist commissioning arrangements.
With regard to teaching and research, it is in the interests of everyone working in the National Health Service to support those activities. We shall not get the high-quality doctors, nurses and other staff we need unless we do so. I fully expect primary care trusts to support teaching and research programmes. The noble Lord will know that we have agreed to a joint review to be conducted by ourselves and the DfES to look at those aspects which are presently causing concern.
The Lord Bishop of Portsmouth: My Lords, the noble Lord's Question concerns local out-workings in the context of shifting responsibilities. Will the Minister comment on what many people in Portsmouth see as a disastrous scenario—that is, the possible closure of the Haslar hospital in Gosport and the redevelopment of the Queen Alexandra hospital in Cosham on an already over-crowded site with
sometimes chronic traffic problems in the vicinity? In the words of the noble Earl, Lord Russell, a veritable expedition to the North Pole.
Lord Hunt of Kings Heath: My Lords, I am grateful to the right reverend Prelate for raising the issue, which I know he feels keenly. The whole point of what we are trying to do with primary care trusts is to decentralise decisions down to local level. Within Portsmouth the local primary care trust will have much more influence in the future, informed by the experience by general practitioners, who are in turn informed by what patients think. So far as concerns the specific issue, we shall look very carefully at the points raised by the right reverend Prelate.
Baroness Pitkeathley: My Lords, does my noble friend agree that primary care trusts, with their welcome emphasis on patient and public involvement, will be well placed to monitor all the health needs of the communities they serve, including what my noble friend calls the "unpopular" ones? What are the Government's plans for evaluating and disseminating the information collected by PCTs?
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