This is the text of a letter Sir George has written to the Health Secretary:
The Rt Hon Patricia Hewitt MP
Secretary of State for Health
Department of Health
London SW1A 2NS 17 August 2005
Estate Impairment Loss
The Winchester and Eastleigh NHS Trust is in the process of consulting about the future of health services in Andover. I attach a copy of the consultation document, and I am writing to you in connection with pages 32 and 33.
I was appalled to see that, if the trust disposes of surplus land and buildings and secures the best market price for these assets, they are going to be fined £½ million by the Government. This is described as the ‘net loss on impairment’. This strikes me as a wholly unjustified tax on my constituents, and I was appalled to see that this net loss gets added to the deficit for the current year, putting additional pressure on service delivery – about which I questioned you at health questions in July.
The impairment loss derives from a figure of £4.2 million which is apparently the district valuer’s assessment of the value of the site for the provision of health services. However, as the local NHS trust has taken the view that this site is not needed for health services, it is quite incomprehensible that it should carry a value of £4.2 million. Indeed, the existence of this tax on disposal can only act as a disincentive on NHS trusts to make the best use of their assets and dispose of that which is surplus. In this case, the £1.5 million that they receive is exceeded by the estate impairment loss of £2.75 million – although this is abated by some central funding.
I would be most grateful if you would take a personal interest in this indefensible and counterproductive levy, and let me know that the proposed deficit will not appear as a charge on the local trust.