Q51 Greg Clark: Over the maturity of the projects what percentage do you expect to be taking back?
Mr Coates: None. Having gone, it has gone. We are not going to take it back at the centre.
Q52 Greg Clark: But you have taken £½ million back to recycle.
Mr Coates: Yes, that was in 2004-05. At the end of each year we do an application of funds test, how much money has been spent, and at the end of 2004-05 Newcastle volunteered that they had funds they could not expend on enabling work. That money was re-allocated to Plymouth on the basis that they had a need, but there is no programme to recover these funds and now they have gone out to the NHS they will stay there.
Q53 Greg Clark: Just thinking about the PCTs' additional rent subsidy, what is the total value of subsidy paid by PCTs to LIFTs so far?
Mr Coates: I am afraid I cannot answer that question. I do not have the information with me and if you want it I shall have to give you a note I am afraid.
Q54 Greg Clark: Is it in hundreds of millions, tens of millions, thousands?
Mr Johns: When you say "paid in subsidies to LIFTCos"-
Q55 Greg Clark: Yes, paragraph 2.14 of the Report says that PCTs have sometimes had to subsidise occupants of the LIFT premises in order to persuade them to go in.
Mr Coates: I think this is in relation to pharmacies in particular. This is not a particular power for LIFT, it is a power PCTs have generally to allocate funds to support pharmacies in areas. I have no idea, and I am not sure we collect the information centrally, how much is actually paid out by PCTs in this area.
Q56 Greg Clark: Sir John, did your investigators put a figure on this? This is a significant use of public funds.
Ms Leahy: No, we looked at six case studies in detail and in some of them subsidies were given, though I am not sure that we knew at the time exactly how much would be given. It was a decision in principle. My recollection is that it was relatively small amounts of money compared with the overall total.
Q57 Greg Clark: How big? How much is "small" in these circumstances?
Ms Leahy: I do not have any specific figures though I am sure that I could go and find them.
Sir John Bourn: We could, with the witnesses, let the Committee have a note on that.3
Q58 Greg Clark: We have a situation in which, in order to make the schemes work we need funds from central government, kick-starting/enabling funds. We sometimes need funds from PCTs to subsidise the operations, but we do not know how much, all of which come from health expenditure totally. We have a situation in which GPs, according to the Report and according to Dr Kohli here, are not always enthusiastic about the costs of the premises; they need to be persuaded to go in them. In fact paragraph 2.14 of the Report seems to have quite an extraordinary approach. It says "There is a common perception from these groups of prospective tenants that the higher cost of LIFT, compared to current rent payments, outweighs the benefits". But then the next line takes us into a strange realm. The response to this seems to be "The Department worked hard to address this through creation of GP champions for local areas and by hosting forums for GPs to understand the issues". Could it not be the case that actually GPs do understand the issues and they do not think these are terribly good value for money? Appointing champions is not the way to address it: we need more effective scrutiny of these costs.
Mr Coates: If GPs generally feel that these facilities are too expensive, I think the result would be that we would find it impossible to find tenants for the properties over time. The evidence is that once negotiations open between GPs and the PCTs about the benefits of a location and co-location, GPs are persuaded that any additional cost is worth the investment.
Q59 Greg Clark: Is not the truth that the reason they are persuaded is that they have to be bribed in effect, using health funds which might be spent on waiting lists. My own PCT has long waiting lists for various procedures and I should be alarmed if this was actually being spent persuading GPs to make a rational assessment of the costs, to decide that the rent is unaffordable, that these limited funds are being used to persuade people to go into bright shiny buildings rather than getting tests for people who are on waiting lists.
Mr Coates: I do not see this as a bribery issue; I see it as a case for enabling the health economy to make changes.
Q60 Greg Clark: The "enabling" word again.
Mr Stewart: One thing to point out is that one of the objectives of LIFT was to put decent facilities in deprived areas and in that sense it was addressing a market failure. These facilities are generally going to deprived areas where the third party developers were not prepared to invest. In that sense we were not dealing with an economic market situation, we were dealing with market failure and therefore in that sort of situation enabling funds are appropriate.
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