National Health Service (Wales) Act 2006

Local Health Boards

174 Public funding of Local Health Boards

(1) The Welsh Ministers must, in respect of each financial year, pay to each Local Health Board—

(a) sums equal to its general ophthalmic and pharmaceutical services expenditure, and

(b) sums not exceeding the amount allotted by the Welsh Ministers to the Local Health Board for that year towards meeting the Local Health Board’s main expenditure in that year.

(2) In determining the amount to be allotted for any year to a Local Health Board under subsection (1)(b) (or in varying the amount under subsection (9)), the Welsh Ministers may take into account, in whatever way they consider appropriate—

(a) the Local Health Board’s general ophthalmic and pharmaceutical services expenditure, and

(b) expenditure which would have been the Local Health Board’s general ophthalmic and pharmaceutical services expenditure but for an order under section 180(2) (special arrangements as to payment of remuneration),

during any period the Welsh Ministers consider appropriate (or such elements of that expenditure as they consider appropriate).

(3) Where the Welsh Ministers have made an initial determination of the amount (“the initial amount”) to be allotted for any year to a Local Health Board under subsection (1)(b), they may increase the initial amount by a further sum if it appears to them that over a period notified to the Local Health Board—

(a) it satisfied any objectives notified to it as objectives to be met in performing its functions, or

(b) it performed well against any criteria notified to it as criteria relevant to the satisfactory performance of its functions (whether or not the method of measuring its performance against those criteria was also notified to it).

(4) “Notified” means specified or referred to in a notice given to the Local Health Board by the Welsh Ministers.

(5) In making any increase under subsection (3), the Welsh Ministers may (whether by directions under subsection (10) or otherwise) impose any conditions they consider appropriate on the application or retention by the Local Health Board of the sum in question.

(6) Subsection (7) applies where—

(a) the Welsh Ministers have, under subsection (3), increased by any sum the amount to be allotted for any year to a Local Health Board,

(b) the Welsh Ministers have notified the Local Health Board of the allotment, and

(c) it subsequently appears to the Welsh Ministers that the Local Health Board has failed (wholly or in part) to satisfy any conditions imposed in making that increase.

(7) Where this subsection applies, the Welsh Ministers may reduce—

(a) the allotment made to the Local Health Board for that year, or

(b) when the Welsh Ministers have made an initial determination of the amount (“the initial amount”) to be allotted for any subsequent year to the Local Health Board under subsection (1)(b), the initial amount,

by an amount not exceeding the sum mentioned in subsection (6)(a).

(8) An amount is allotted to a Local Health Board for a year under this section when the Local Health Board is notified by the Welsh Ministers that the amount is allotted to it for that year.

(9) The Welsh Ministers may make an allotment under this section increasing or reducing (subject to subsection (7)) an allotment previously so made; and the reference to a determination in subsection (3) includes a determination made with a view to increasing or reducing an allotment previously so made.

(10) The Welsh Ministers may give directions to a Local Health Board with respect to—

(a) the application of sums paid to it under this section, or

(b) the payment of sums by it to the Welsh Ministers in respect of charges or other sums referable to the valuation or disposal of assets.

(11) Sums falling to be paid to Local Health Boards under this section are payable subject to such conditions as to records, certificates or otherwise as the Welsh Ministers may determine.

(12) “General ophthalmic and pharmaceutical services expenditure” and “main expenditure” are defined in Schedule 8.

175 Financial duties of Local Health Boards

(1) Each Local Health Board must, in respect of each financial year, perform its functions so as to secure that its expenditure which is attributable to the performance by it of its functions in that year (not including its general ophthalmic and pharmaceutical services expenditure) does not exceed the aggregate of—

(a) the amount allotted to it for that year under section 174(1)(b),

(b) any sums received by it in that year under any provision of this Act (other than sums received by it under that section), and

(c) any sums received by it in that year otherwise than under this Act for the purpose of enabling it to defray any such expenditure.

(2) The Welsh Ministers may give such directions to a Local Health Board as appear to be requisite to secure that it complies with the duty under subsection (1).

(3) To the extent to which—

(a) any expenditure is defrayed by a Local Health Board as trustee or on behalf of a Local Health Board by special trustees, or

(b) any sums are received by a Local Health Board as trustee or under section 169,

that expenditure and, subject to subsection (5) those sums, must be disregarded for the purposes of this section.

(4) For the purposes of this section sums which, in the hands of a Local Health Board, cease to be trust funds and become applicable by the Local Health Board otherwise than as trustee must be treated, on their becoming so applicable, as having been received by the Local Health Board otherwise than as trustee.

(5) Of the sums received by a Local Health Board under section 169 so much only as accrues to the Local Health Board after defraying any expenses incurred in obtaining them must be disregarded under subsection (3).

(6) Subject to subsection (3), the Welsh Ministers may by directions determine—

(a) whether specified sums must, or must not, be treated for the purposes of this section as received under this Act by a specified Local Health Board,

(b) whether specified expenditure must, or must not, be treated for those purposes as expenditure within subsection (1) of a specified Local Health Board, or

(c) the extent to which, and the circumstances in which, sums received by a Local Health Board under section 174 but not yet spent must be treated for the purposes of this section as part of the expenditure of the Local Health Board and to which financial year’s expenditure they must be attributed.

(7) “Specified” means of a description specified in the directions.

176 Resource limits for Local Health Boards

(1) Each Local Health Board must ensure that the use of its resources in a financial year does not exceed the amount specified for it in relation to that year by the Welsh Ministers.

(2) For the purpose of subsection (1) no account may be taken of any use of resources for the purpose of a Local Health Board’s general ophthalmic and pharmaceutical services expenditure.

(3) But in specifying an amount for a Local Health Board under subsection (1) (or in varying the amount under subsection (5)), the Welsh Ministers may take into account (in whatever way they consider appropriate)—

(a) any such use of resources, and

(b) the use of any resources which would have been for the purpose of the Local Health Board’s general ophthalmic and pharmaceutical services expenditure but for an order under section 180(2) (special arrangements as to payment of remuneration),

during any period they consider appropriate (or such elements of such uses of resources as they consider appropriate).

(4) For the purpose of subsection (1) the Welsh Ministers may give directions—

(a) specifying uses of resources which must, or must not, be taken into account,

(b) making provision for determining to which Local Health Board certain uses of resources must be attributed,

(c) specifying descriptions of resources which must, or must not, be taken into account.

(5) Where the Welsh Ministers have specified an amount under this section in respect of a financial year, they may vary the amount by a later specification.

(6) Subsections (3) to (5) of section 175 apply in relation to the duty under subsection (1) of this section as they apply in relation to the duty under subsection (1) of that section; and for that purpose references to the defraying of expenditure and the receipt of sums are references to the incurring of liabilities and the acquisition of assets.

(7) The Welsh Ministers may give such directions to a Local Health Board as appear to be requisite to secure that it complies with the duty under subsection (1).

(8) In this section a reference to the use of resources is a reference to their expenditure, consumption or reduction in value.

177 Further provision about the expenditure of Local Health Boards

Schedule 8 makes further provision about the expenditure of Local Health Boards.