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An embarrassment of riches

20 February 2012
By James Lawford Davies
Partner at Lawford Davies Denoon
Appeared in BioNews 645

It is evident that the Human Fertilisation and Embryology Authority (HFEA) has succeeded in reducing its costs and operating with greater financial efficiency. This is in part reflected in the remarkable £3.4 million of surplus funds held by the HFEA which was discussed at the recent Authority meeting in January and subsequently reported in the media. The minutes of that meeting acknowledge that this surplus is an 'unusual size', though it has been growing steadily for some time. In last year's published accounts the surplus already stood at £2.58 million, and has clearly continued to grow. It is also apparent that the current year will be the third out of the last four in which the HFEA's cash holdings have exceeded the £0.75 million limit referred to in the minutes of January's Authority meeting.

While financial prudence and frugality in these austere times are to be encouraged, the controversy surrounding the HFEA's hoard stems from the fact that it has been generated through fees paid directly or indirectly by patients. It is true that licence fees have now been reduced significantly, and thus it may be that this trend does not continue. But it is difficult to understand how and why the accumulation of such a stash was allowed to continue when it has long been known that these fees are paid by patients. For the last two years of published accounts, licence fee income has exceeded the costs apportioned to the HFEA's regulatory activities, by 14 percent in 2009/2010 and five percent in 2010/2011.

Why then did the HFEA continue to levy this charge? In a statement to the press, the HFEA suggested the surplus grew as a result of 'prudent' budgeting: the number of treatment cycles (and therefore the income generated by fees) was expected to decline, and so the HFEA built up its reserves. In fact, the number of treatment cycles continued to rise, resulting in a growing surplus for the HFEA. This trend must, however, have become apparent some time ago: £3.4 million is a significant accrual and it is unclear why it was allowed to continue to grow to such a sum.

What should now be done with the treasure trove? There are obvious difficulties with returning the money to clinics and inevitable controversy deciding how it should be spent to 'create benefit for patients' (a proposal suggested in the media). The fertility sector would no doubt be delighted to see fees reduced further in order to save the HFEA from this embarrassment of riches, or indeed a 'holiday' from fees to absorb the surplus and benefit new patients.

The majority of patients still need to fund their own treatment, and for as long as they are levied, the HFEA's fees will continue to form part of this cost - whether overtly or not. Where treatment is funded by the NHS, cash-strapped trusts are paying the licence fees. It follows that the patient or taxpayer coughs up either way. There is no reason why patients and the public cannot now benefit from the sensible use of the HFEA's surplus to further reduce the cost of treatment.

SOURCES & REFERENCES
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