Seán Crowe (Dublin South West, Sinn Fein)
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Question 153: To ask the Minister for Finance if he will terminate tax breaks for the construction of private hospitals. [10188/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The scheme of capital allowances for the construction of private hospitals was reviewed by Indecon Economic Consultants as part of the overall review of property tax incentives in 2005. Indecon consulted widely in the course of their review, including consultations with the Department of Health and Children and the Health Service Executive. Their report was published on 6 February 2006 and is available on the Department of Finance's website.

The review recommended that this scheme should continue as there was a need for on-going investment in private hospitals. The consultants observed that the construction of private hospitals could free beds in public hospitals used by private patients. It should also be noted that the consultants observed that the Government's plan for private hospitals in the grounds of public hospitals is designed to be a cost effective way of expanding supply and if properly managed will increase supply and competition.

The summary of the main findings from Indecon's analysis is as follows:

'There has been an overall increase in planning applications and approvals for private hospitals since 2000 but most have not proceeded to date.

Most of the extra investment in the sector would either not have been undertaken, or would have taken longer to come on-line in the absence of the tax incentive scheme.

While it is too early to provide detailed estimates of the impact of the scheme on the supply and on the costs of hospital beds, Indecon believes the scheme has the potential to address supply shortages in the sector and to reduce costs.'

In all of the circumstances, I have no plans at this time to terminate the scheme of capital allowances for the construction of private hospitals.