Mr. Tony O'Brien:

It is not, strictly speaking, related to the proportion of funding in that a number of section 38 organisations would have separate sources of funding too. Section 38 is a reference to section 38 of the Heath Act 2004, which sets out in quite considerable detail the criteria and characteristics of a section 38 organisation. Essentially, it is one that has been classified by a formal process as being a public sector body and all of its personnel are classified as public servants, are treated as such and, therefore, are admitted to public service pension schemes of one kind or another - in most cases, it is the voluntary health bodies superannuation scheme. Therefore, they are in general entirely bound by public sector policies.

Section 39 organisations range quite considerably in terms of their size and scope. There are more than 2,500 of them and some of them are very small, such as small voluntary bodies providing an early morning call service or a meals-on-wheels service, while others are much larger entities which can be either not-for-profits or for-profits. They are simply entities providing services which are similar, or ancillary, to our activities, where we are entitled to support the provision of services through them. By virtue of section 39, we are not recognised in our capacity as an entity for the purposes of normal competition and procurement law, so it is not like procuring other general services in the way we would from other purely commercial suppliers. Those entities are not regarded as public sector bodies, their staff are not regarded as public sector staff and they are not admitted to public sector pension schemes.