Mary Harney (Dublin Mid West, Progressive Democrats)

The Finance Act 2009 provides that the schemes of capital allowances for private hospitals and certain other health facilities will be terminated, subject to transitional arrangements for projects already in development. Provided that a co-located private hospital project conforms to the requirements of these transitional arrangements and otherwise satisfies the general requirements of the scheme of capital allowances, the tax relief will apply. The value of the tax relief in each case will depend on the level of qualifying capital expenditure.

The HSE estimates that from the start of building, the overall construction and commissioning period for the projects will be about 28 to 36 months. To date, project agreements have been signed on four co-located private hospitals involving a total of 976 inpatient and day case beds and of these, planning permission has been granted in respect of the Beaumont, Limerick and Cork projects. Preferred bidders have been approved for two other projects.

The HSE estimates that the loss of private health insurance income to the hospitals in respect of the six projects would be about €100 million, or an average of €16 million per hospital. This is in the context of their combined current budgets this year of €1.322 billion in public funding. This loss of income will be mitigated in part through income from the lease of lands and a potential share of profits from the co-located facilities. The question of the net impact on the budgets of participating public hospitals will be examined at an appropriate juncture.

Net losses of income are factored into the overall cost-benefit and value-for-money analysis for each project. It always has been an essential requirement that each co-location project demonstrates clear value for money to the taxpayer. The prices charged by private co-located hospitals in respect of private patients will be a matter for the hospitals concerned.

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