Charging for capital in the National Health Service in Scotland
Charging for capital in the National Health Service in Scotland
This article evaluates the capital charging system implemented in the National Health Service in Scotland, probing its intellectual coherence and implementa‐ tion. Asset valuations may be too high because of the decision to value at Depreciated Replacement Cost (even when higher than market value) and the decision to disregard the issues raised by Modern Equivalent Asset methodology. The incentive effects of capital charges are complex: historically good maintenance may be penalised, and economic and financial appraisal of new projects may give conflicting signals. Capital charging differently affects Hospital Trusts and Directly Managed Units. Moreover, the interaction of capital charging and the public corporation status of Hospital Trusts inflates gross public expenditure on health.
57-74
Scott, David Alexander
19b5fd34-9974-4ae4-8be0-27a693639e20
Heald, David
078e1b35-f173-4f02-abad-1a2134453063
28 June 1995
Scott, David Alexander
19b5fd34-9974-4ae4-8be0-27a693639e20
Heald, David
078e1b35-f173-4f02-abad-1a2134453063
Scott, David Alexander and Heald, David
(1995)
Charging for capital in the National Health Service in Scotland.
Financial Accountability & Management, 11 (1), .
(doi:10.1111/j.1468-0408.1995.tb00396.x).
Abstract
This article evaluates the capital charging system implemented in the National Health Service in Scotland, probing its intellectual coherence and implementa‐ tion. Asset valuations may be too high because of the decision to value at Depreciated Replacement Cost (even when higher than market value) and the decision to disregard the issues raised by Modern Equivalent Asset methodology. The incentive effects of capital charges are complex: historically good maintenance may be penalised, and economic and financial appraisal of new projects may give conflicting signals. Capital charging differently affects Hospital Trusts and Directly Managed Units. Moreover, the interaction of capital charging and the public corporation status of Hospital Trusts inflates gross public expenditure on health.
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Published date: 28 June 1995
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Local EPrints ID: 441349
URI: http://eprints.soton.ac.uk/id/eprint/441349
ISSN: 0267-4424
PURE UUID: 545e5a55-8109-44f7-9e92-82fdd303d169
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Date deposited: 10 Jun 2020 16:31
Last modified: 17 Mar 2024 04:02
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Author:
David Alexander Scott
Author:
David Heald
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