Vol. 441 No. 3
36 Mrs. Owen asked the Minister for Health if his attention has been drawn to the fact that the health boards have been forced to seek extended credit from suppliers in the past 12 months; if the health boards are likely to receive funding from his Department to cover the costs associated with such extension of credit; and if he will make a statement on the matter.
80 Mr. J. Bruton asked the Minister for Health the manner in which he intends to allocate the £100 million identified in the 1993 budget for assisting health boards and voluntary hospitals; the extent, if any, to which such funds have already been allocated to health boards/voluntary hospitals; the conditions on which these are based; and if he will make a statement on the matter.
106 Mr. J. Mitchell asked the Minister for Health whether health boards and voluntary hospitals have delayed payments to suppliers, nursing homes and other services during the past twelve months; if these delays are in any way connected with the fact that the institutions concerned have been themselves awaiting similar payments from his Department; and if he will make a statement on the matter.
I propose to take Questions Nos.36, 80 and 106 together.
The delays in payments by health boards and voluntary hospitals were a reflection of the cash difficulties of these agencies, which arose as a result of expenditure overruns incurred over a number of years. My Department does not delay payments to agencies, and releases funds in accordance with an agreed profile of approved expenditure.
The extended credit period reflected by these delayed payments will be eliminated in the context of the £100 million refinancing package announced in the 1994 budget. In this regard my Department has contacted the health agencies outlining the terms and conditions under which each board's share of the additional funds will be released.
Each agency's share of the additional cash has been determined on the basis of reducing the agency's short term debt to a level consistent with the specific working capital criteria set out in the proposal. One such criterion is that agencies are required to ensure that all trade creditors are paid within 30 days of statement date. Other criteria include a predetermined maximum level of overdraft, and a requirement that payments to other service providers, such as nursing homes and voluntary organisations are paid when due.
The terms and conditions include an absolute requirement for each agency to manage its cash flow within the total approved cash provision notified; to maintain an appropriate level of short term indebtedness, or working capital, within a specific limit and to ensure that expenditure is within the approved allocation.
Compliance with strict reporting arrangements is also a requirement, and agencies must also observe enhanced accountability requirements which are contained in a Bill which I will introduce in the House in the near future.
My Department has sought written acceptance of the terms and conditions from each agency. It is intended to release the funding during the months of April and May 1994.
