Official Report (Hansard)
Date: 15 November 2007
COMMITTEE FOR HEALTH, SOCIAL SERVICES AND PUBLIC SAFETY
Programme for Government/Budget
15 November 2007
Members present for all or part of the proceedings:
Mrs Iris Robinson (Chairperson)
Mrs Michelle O’Neill (Deputy Chairperson)
Mr Thomas Buchanan
Dr Kieran Deeny
Mr Alex Easton
Ms Carál Ní Chuilín
Ms Sue Ramsey
Mr Don Hill ) Department of Health, Social Services and Public Safety
Ms Julie Thompson )
The Chairperson (Mrs I Robinson):
Before we begin, I wish to put it on record that my husband is Peter Robinson, the Minister of Finance and Personnel. I thank Ms Julie Thompson and Mr Don Hill from the Department of Health, Social Services and Public Safety (DHSSPS) for coming along to make a presentation.
Don and Julie, Committee members will then have an opportunity to ask questions, which I hope that you will be able to answer. I hope that members will be gentle with you.
Mr Don Hill (Department of Health, Social Services and Public Safety):
Thank you very much. We are not so much here to make a presentation as to help the Committee to understand the draft Budget. We prepared what we hope was a helpful summary. However, having looked over the draft Budget last night, I thought that we could all use a wee bit of help with the figures, so I have circulated copies of the key figures in the draft Budget. If it would be helpful, I propose to talk the Committee through them.
I will begin with something that the Committee will be familiar with, because Andrew McCormick, the Department’s permanent secretary, along with other colleagues, appeared in Committee on 21 June 2007 to talk about our bids. All our bids, in priority order, are outlined in the key-figures document. I will remind members of a couple of points about those bids. First, as is always the case with health provision, the bulk of our bids tend to be inescapable, and the bulk of those inescapable bids are “pay and prices” bids. That is an automatic requirement, given that 70% of our money goes on staffing.
Secondly, there has been a change of tack in our service developments. In previous years, secondary care and acute care have had priority. There is a distinct switch of emphasis in service-development prioritisation. Mental health and learning disability are our priorities, and we are shifting the emphasis from acute care to prevention and community provision. That is reflected in the order of priority that is listed in the document.
Thirdly, it is worth mentioning the realism of the bids. MLAs who sat on this Committee in the first mandate will recall that the Department of Health, Social Services and Public Safety is quite capable of submitting service-development bids of £500 million or £750 million, and have done so in the past. However, recognising the distinct change in public-expenditure availability, this was a deliberately reasonably modest set of bids, which, if we look at the total, would require only — I say “only” — a 3% increase in real terms. It was a highly prioritised set of bids.
That leaves two issues for members to consider: “How much?” and “Who gets what?” Andrew McCormick speculated that the Barnett formula would give us 1% of our resources. We ended up with 1·2% in real terms, which is 3·9% in cash, because inflation is always assumed to be at 2·7%. The other decision that the Executive had to make — this is covered in the document — was the extent to which they added to those resources through three areas of local income. As members will have seen, the Executive have decided to defer water charges until 2009-10. Rates income stands at about £500 million; however, the Executive have decided to freeze domestic regional rates. Those two decisions reduce the amount of money that is available for Departments. The other decision was to stick with the initial Treasury proposal of 3% efficiencies, which would require us to find £118 million, £243 million and £343 million over the three years. That is the background to the information contained in our Budget paper.
Who gets what? The table in the key-figures document reflects the Department’s total resource position. Of the uplift, as the Committee would expect, we take a significant proportion of the additional resources that are available to the Executive. However, in real terms, the increase is modest — 0·8% in 2008-09, 0·5% in 2009-10 and 2·1% in 2010-11.
In order to determine our total spending capacity, the efficiency savings must be added to that, and those give us resources of £252 million, £492 million, and £797 million to spend over the three years. Those are not insignificant figures. However, when spending on the list of unavoidables and inescapables is removed, we are left with only £16 million, £32 million and £97 million for those service-development bids.
Therefore, there is certainly a measure of priority in the proposals. Our block share has increased by 0·4% and we have 51% of available resources. Those figures clearly reflect the priority that health and social care is being given in the draft Budget.
However, it is worth noting that, in previous years, we were getting 55% of available resources, and the previous comprehensive spending review uplifted our share by 2·4%. The key decision, which is reflected in the table on total planned allocations on page 120 of the draft Budget, is that the economy has replaced health as the top priority in the draft Budget. Health remains a priority, but the economy replaces it as the top priority, which means, if members look at the additions, the Department of Enterprise, Trade and Investment (DETI), the Department for Employment and Learning (DEL), the Department of Education (DE) and the Department for Regional Development (DRD) get a little bit more than DHSSPS. That is the policy change in the draft Budget.
Much is made of comparisons with England, and I am trying to set out the facts that are contained in the figures. I shall start with the Wanless Report of April 2002, ‘Securing our Future Health: Taking a Long-Term View’. I recommend anyone who has not read that report to do so, even though it is five years old, because it is an excellent document for which a degree in economics is not needed in order to understand it. The report, which included Northern Ireland in its findings, recommended real increases for the NHS of between 4·2% and 5·1%. Derek Wanless came over to talk to us. In 2007 he reviewed that report, and how England was performing, and he recommended in ‘Our Future Health Secured?’ that 4·4%, in real terms, was required for the NHS. John Appleby, in his report of August 2005, ‘Independent Review of Health and Social Care Services in Northern Ireland’, recommended 4·3%, in real terms, for the CSR period. Of course, he made many other recommendations about productivity and structures.
I mention those three reports simply to try to get across the genuine concern that existed from the early 2000s, particularly from Gordon Brown, about the escalating cost of health and social care, and the problems that we would be confronting, especially with new technologies and demographic change. Questions were raised as to whether the NHS, as we all know it, could continue as a tax-funded service. Wanless said yes, but only if we improved health status and efficiency. Even then, he said that very significant real-terms increases would be required in order for that to happen. Therefore, those three reports provide us with some important background.
In 2006-07, expenditure per head in Northern Ireland on health and social care was 9% higher, and in 2007-08, it was 6% higher. That drop is easily explained. The UK Department of Health increase in 2007-08 was 9·4%, while our increase was 6·3%. Much has been said about need, and about what the increase figure should be. The Appleby Report produced an interim figure of 7% but recommended that much more work was required, and that work has been undertaken. Indeed, a joint committee that is chaired by the permanent secretaries of the Department of Finance and Personnel (DFP) and DHSSPS has acted on all the Appleby Report recommendations. That figure has now been revised, and agreed with DFP at about 14% to 15%.
Simple arithmetic shows that a funding gap of £300 million exists. Simple arithmetic also shows that, by comparing our 1% growth in public expenditure, in real terms, with the UK Department of Health’s 3·7% growth, in real terms, there is also a CSR additional funding gap of £300 million.
Efficiencies are a key part of the Executive’s strategy. We are helping ourselves in order to resolve our funding needs. This table on efficiencies simply reflects both what we have achieved through the Gershon savings. Some £124 million cash-releasing savings were made under Gershon, as well as £124 million non-cash-releasing savings under the previous CSR. In addition to that, we imposed further cash-releasing savings on the service of up to £22 million. The new figures for CSR efficiencies come in during 2008-09. The table simply shows that, between 2005-06 and 2010-11, health and social care will have produced cash-releasing savings of £489 million. That is a significant figure.
Obviously, it is difficult for the Department to find those moneys over the CSR period. The Minister has said that he is not constrained by Paul Goggins’s proposals. He has said that he wants efficiency savings, not cuts. However, a detailed plan has still not been drawn up. The Department will press harder on pharmaceutical costs, for example. The Appleby Report’s target of £55 million has been achieved. The Department will, certainly, seek savings of that much again. It has already indicated that the review of public administration (RPA) and staffing will produce savings of £53 million. However, the bulk of those efficiency savings must to come from productivity — essentially, fewer people doing more tasks. Cash-releasing savings can not be made from a Budget that is dominated by staff without reducing staff numbers. Much of it is about re-engineering services and gaining some of the benefits of the expensive pay reforms that have taken place in Agenda for Change, such as the consultants’ contracts and the General Medical Services contract. Those reforms lay the foundations for different ways of working. Already, they have produced benefits; although, frankly, the benefits of Agenda for Change have been a bit slower to reveal themselves.
The figures for service developments are £16 million, £32 million and £97 million over the three years. The Minister must decide how that money is spent, while hoping that the figures will increase. Two ways in which those figures might increase are through the revised Budget or through closer examination of the inescapable bids. The Department believes that the figures for most inescapable bids are entirely correct. However, for some of them, there may be a possibility of reducing the requirement. The Department is, therefore, critically examining those bids. The Minister is also consulting a range of interested parties as to what the priorities should be.
I have simply listed the top 10 priorities in the key-figures document. Those priorities are based solely on what the prioritisation order was when the Department submitted its bids. The Minister is on record as saying that mental health and learning disability will be the number-one priority. However, it is clear that progress in all those areas will be slow unless the Department can improve on allocations of £16 million in year 1 and £32 million in year 2.
The position and priorities on infrastructure are a bit clearer. The Department has a pillar all to itself in the infrastructure investment pillars on page 4 of the draft investment strategy for Northern Ireland. We bid for just over £1 billion during the CSR period and got £700 million. That means that some of the Department’s new schemes, such as modernisation of Antrim Area Hospital, Craigavon Area Hospital and the Mater Hospital, as well as phase B of the Ulster Hospital project, will not be able to proceed during the CSR period. However, work on the new acute hospital in Enniskillen and the new hospital complex in Omagh, phase A of the project at the Ulster Hospital and a range of mental-health and learning-disability provision will go ahead. The Department will also invest significantly in the Northern Ireland Ambulance Service and in ICT. The infrastructure proposals are quite good — the table on infrastructure demonstrates how well the draft Budget provides for the Department. .
One will notice when examining the inescapable bids in the key-figures document that they contain a set of figures that are referred to as the “Revenue Consequences of capital investment” of £71 million by 2010-11. That important consideration has become an issue only with the advent of new accounting procedures. The Department must find significant revenue moneys in order to sustain new capital expenditure. For years 4 to 10, the Department bid for £4·6 billion and is getting £2·36 billion. The investment strategy for Northern Ireland refers to the production of infrastructure investment plans to clarify how the figures for years 4 to 10 will be allocated.
We will not be publishing any detailed plans on years 4 to 10 for six or 12 months, because we need to make a detailed evaluation of the projects. At present, we have a set of projects that are costing considerably more than we can afford, so a great deal of detailed work must be done to determine how the years 4 to 10 figures will be allocated.
That, I hope, takes the Committee through the key figures. We are happy to answer questions, on figures or anything else.
Do you wish to add anything, Julie?
Ms Julie Thompson (Department of Health, Social Services and Public Safety):
I thank Don for that presentation on the key figures in the draft Budget. Every Committee member is keen to ensure that, whatever allocations we end up with once the Budget is finalised, they provide a high quality Health Service across Northern Ireland. The Committee and the Department are agreed on that; however, every Department must work to a budget. If we can squeeze more out of the finalised Budget, that will be welcome. The Committee has the responsibility of looking at the figures and deciding whether the Department’s priorities match its own.
I have some questions. Obviously, more money is available than was previously. This is the largest budget that the Department has ever received. At least, it is if we go by the draft Budget. The expectation in the wider NHS is that the four boards will be replaced by one health authority. That was in the RPA. However, the Minister now says that he does not want to jump too soon to that new structure but wants to make up his own mind. That is fair enough — it is his responsibility. However, there is the question of almost 2,000 people wanting to retire from the National Health Service. Many have been left high and dry, wondering why the Minister has not yet taken a decision on that. Creating one structure, in place of four, may only release £1 million or £1∙5 million. However, the NHS is overstaffed at different levels. With many of the current staff willing to retire, that puts pressure on the Minister to consider the situation carefully. Comparison with the mainland Department of Health shows that the DHSSPS has higher numbers who rely on public-sector work. Moreover, it has responsibility for social services and public safety. Why, therefore, can we not deal with those who do not know what their future will entail? That situation causes considerable concern in Health Service structures.
The other matter that has come to the fore concerns GPs and local commissioning groups. I am sure that Kieran will deal with that issue. The groups have been meeting, but they have been unable to do anything. In view of the moneys that have been put into establishing those groups, after having established local health and social care groups, is the Department making the necessary efficiency savings?
Other Members will have equally important questions. However, what is our Minister doing — I do not ask that in any nasty way — to prove that he is on top of making efficiencies? Efficiencies do not necessarily mean providing a poorer service or cutting corners. They entail better use and fuller exploitation of funds for which the Department is responsible.
I do not always regard efficiencies as cuts in health provision. Will you expand on the areas to which I have referred, such as the single health authority, the local commissioning groups and the efficiencies that the Minister must put in place to ensure a better product?
I shall answer some of those points and Julie will answer the rest. To make efficiency savings of £53 million is to assume that 1,700 jobs will go. To put that in context, there are around 12,000 administration jobs in the Health Service. Half of those employees are clinical-support staff and the other half are back-room staff. The Department is proposing a 25% reduction in back-room staff and a 10% reduction in clinical-support staff. That is a significant efficiency in administration. Trust reform, which will go ahead, is the major part of the efficiency, primarily because of the large numbers of staff who are employed by trusts.
You asked about the implications of the Minister’s not taking a decision. The restructuring of the rest of the Health Service will generate more savings than £1 million — that was just the early-year assumption. Restructuring is not costing more money, because, from its beginnings, there was a policy of not filling posts. Consequently, there is a huge number of unfilled posts across the Health Service, so there is no net cost in deferring a decision. I will leave the Minister to explain his position, but he has said on record that he attaches the utmost importance to getting the top layer right — particularly performance management and commissioning. It took the Department a long time to address the proposals that pre-dated the Minister’s taking up office. He said that he will take a number of months to determine the outcome. When he does, he will take a decision quickly.
Local commissioning groups cost around £100,000 each. That is the same money that was formerly spent on local health and social care groups. My colleagues on the local commissioning groups say that it is wrong to assume that they are doing nothing. In fact, people are encouraged by the work and support that they provide in decision-making, and by the ideas that some of the groups are proposing — on out-of-hours carers, for example. The commissioning groups are doing work, albeit not to the extent that they would under normal circumstances.
The £489 million in efficiencies over a six-year period that Don mentioned is a very challenging target that the Department must meet. The Minister has said that he is committed to the delivery of those targets. The Department has already significantly reduced the amount of money given to pharmaceuticals, reduced the time that patients stay in hospitals — meaning better utilisation of beds — and begun to take beds out of the acute sector and move patients with community-care needs into the community sector. Those initiatives are already happening, and the proposals must be developed to extend them further during the CSR period. The goal is to hit all the productivity indicators to help the Department achieve the £343 million target for efficiency savings. Those are a few examples of what is on the cards.
A key outcome of the Appleby Report was its pinpointing of some areas in which health and social care is inefficient in productivity. Achieving those efficiencies will be hard, but they are essential.
I could not agree more, particularly with the Appleby Report and the importance that it placed on improving performance and increasing innovation in the delivery of service.
I have several other points to raise, but I will now allow other members to speak. I tabled a question for priority written answer that asked for details of the ranking order of bids that the Minister of Health, Social Services and Public Safety made to the Department of Finance and Personnel. I was due to receive that priority written answer today, but, as yet, I have not received it. The date for answer was today, and it will show how the Minister had prioritised the Department’s bids. I am waiting on that answer so that I can compare it with the information that I have before me.
I can assure you that the answer that you will receive will be exactly the same as the priorities listed in the tables of unavoidable pressures and services developments that the Committee has before it, because the priority written answer crossed my desk this morning.
I shall wait, and I shall not say another word on that issue.
Ms S Ramsey:
I have questions to ask at the end, so I am sorry to cut across people. It may be more useful, because we are compiling a report to the Committee for Finance and Personnel, to obtain a copy of the bids so that we know what was allocated, the shortfall, and the impact that that shortfall will have, rather than to be inundated with figures. As a Committee member, I want to humanise the impact that the bids will have on the ground, if there is to be a shortfall. Therefore, it may be useful to obtain a copy of the bids as quickly as possible. We need to know what was bid for, what was allocated to what service, and the impact that that had.
The problem is that the Budget does not allocate to specific bids but against the totality of our bids. We presented our bids as a set of inescapables, not because those were a priority, but because they were unavoidable. The balance was for the list of service developments. What we receive from the Budget does not come apportioned to a particular area of service development. It is for the Department and the Minister, acting on the advice of the Committee and others, to decide where the budget allocation is spent. It is not possible to say, for example, that, of the £16 million that is allocated to service developments in year 1, £4 million will go to learning disability. That is not what the Budget does.
Mrs S Ramsey:
I am well aware of that, Don, but the Budget is still in draft form, so the Department must have a draft idea of where the money allocated will go. In the Committee that I chair, the Committee for Employment and Learning, we have the bids, the allocation and the shortfall. We do not have the impact, but I asked for that in Committee yesterday. For example, if a bid for £10 million for children’s services were made and £1 million were received, you would have an idea that there would be a shortfall.
I am happy to talk to the Minister about that.
It is crucial for us, as a Committee, to be able to consider all the issues. We will do that over the next couple of weeks, when we will have additional meetings. This is the first time since June that the Committee has talked to departmental officials about the Budget. We must be able to see everything in order to be able to scrutinise. There is no point in our sitting here without all of the information that we require to have, we hope, a helpful input into the Minister’s decisions. It is important that we work together on that.
Ms Ní Chuilín:
In the table of unavoidable pressures, or inescapables, £53 million is equivalent to 1,700 jobs. One of the unavoidable pressures in the table is “Revenue Consequences of capital investment”. The point that has been made on many occasions is that, west of the Bann, there is likely to be a great hospital — without any services. Are the inescapables based on an equality impact assessment? Are they based on presented need? Time and time again, people have said what they feel the needs are in their area of health. Those people are not coming from a party political position; rather, there is a consistent approach taken throughout the community.
I am disappointed that mental-health provision is not listed as an inescapable, although I realise that it is listed as the priority service development. Moreover, the list of service developments contains other bids that I consider to be inescapables.
We need clarity on another issue — namely, the points that were raised by Sue and Iris about staffing. The Committee went through a protracted process about nurses’ pay; it listened to representatives from the Royal College of Nurses, who spoke about the pay increase, although I am unsure whether that process has been completed. The Health Service will ask staff to do more work but will not pay them any better. Agenda for Change has not been completed. The Committee has heard about first-stage matching before December, but no job evaluations have been conducted. Pardon me for being cynical, but I wonder whether the reason that the job evaluations and the matching have not been completed for the clerical sector is because many clerical staff will be leaving. That point must be put to the Minister.
When members talk about humanising the impact of the Budget, we do not intend that all staff should be kept simply because they are there. Experienced staff on the ground and in the community will be lost because of the Budget’s negative impact on community health provision. It will affect the support available for people in the community — particularly those in need of counselling and emotional support programmes. Provision of mental-health and health-prevention services will also be adversely affected.
We need to find out where the £53 million in efficiency savings is coming from and exactly what type of posts are involved in the 1,700 job cuts. Will waiting lists be affected? Will more people such as Charlotte Caldwell suffer? Her son needed emergency treatment, yet she had to wait six months for delivery of his medical notes from the Royal Victoria Hospital. Will essential cleaning and portering jobs be cut, putting that sector under even more pressure? I know that I am asking many questions. However, what if our hospitals are not clean enough because cleaning services are privatised, staff have not been given proper cleaning materials or there are not enough staff? What if beds are placed closer together because the available space has been reduced? Such cuts further demoralise staff and increase the possibility of cross-infections. No member of the Committee would say that there should not be efficiencies; but all of us would always say that those efficiencies should not mean cuts in services.
This is the hook that I hope you hang on the Minister: the Committee does not want efficiencies that may be efficient for some but cost the Health Service more in the long run. The cost to the service takes many forms: the human cost of MRSA to families, financial costs and the cost to essential services. We do not yet know the nature of the jobs that are to be cut.
If the Committee can have some sense of the gap that the efficiencies will leave and their impact, it can apply proper scrutiny to the Budget.
Let me start with the member’s final question, and I will work backwards. She has referred to the 1,700 jobs and the £53 million in efficiency savings. Those jobs vary from a significant proportion of senior staff — chief executive and second-tier management — down to clerical support. They are essentially the efficiencies that can be produced when 20-odd organisations are reduced to five or six. Fewer chief executives and second-tier management are needed. The Department is also bringing many shared-service arrangements into a single organisation. Those job cuts are in the administrative and clerical sectors — from chief executive down to clerical assistant. Exactly where the job cuts fall will be determined by the trusts’ detailed plans. Ironically, in proportionate terms, the biggest hit is at chief executive level.
I now turn to the question about the negative impact of the Budget on community health. There is no doubt that there is minimal provision under this assumption for years 1 and 2, although there is £97 million in year 3. However, whatever happens with those figures and whatever decision the Minister takes, a significant priority will be given to mental and community health over that period.
Progress on Agenda for Change has been slow. A big problem has been putting teams of people together to implement the programme. The Department is the guts of a year behind schedule. However, the Department has committed to a target date for completion. I understand why people might be cynical about this matter, but I really do not think that there was any influence whatsoever about the structure — that is not how the system works; our left hand never knows what our right hand is doing.
To my mind, the biggest issue that Ms Ní Chuilín raised was the category labelled “unavoidable/inescapable”. The category is so called because the issues that fall within it are unavoidable and inescapable. The Department must meet pay requirements if it is to honour its existing commitments. The Department must meet the demand for renal services, because more and more people are presenting with renal disease. There is a blood safety issue that is deemed inescapable. There are also demographic pressures, and the Department must cope with the enormous increase in the number of elderly people who are presenting with care needs. In other words, we have no choice but to deal with those issues.
The key difference between the list of unavoidable pressures and the list of service developments is that the former outlines what we must do and the latter outlines those areas in which the Department has a choice. There is a choice about mental-health issues; there is no choice about children with complex needs. When the life of a child with complex needs is saved, a very expensive package must be put in place. That is a must-do. Therefore, that is the difference between the two lists. I do not want the Committee to leave this meeting feeling that the Department has somehow made a choice; there is no choice.
That being said, when the Department drew up the figures for the GP contract arising from the Darzi Review, it assumed that it would have no choice about that proposal. In fact, it turns out that it does. If the Department were to draw up the list again, it would move the issue of GP contracts onto the discretionary list. I am not suggesting that the Department should not deal with that issue, but it is not automatically part of the UK-wide structure that outlines what the Department must do. It has a choice locally about whether the benefits of the initiatives announced in the Darzi Review should have priority over other matters. However, the remaining issues are on the list of unavoidable pressures because they are must-dos — give or take an estimating problem; the Department may not have got the figures entirely right.
Another important issue is the cleanliness of hospitals in tackling the spread of MRSA. That problem is well recognised, which is why it is included in the top 10 list that Don spoke about earlier. The quality and safety agenda is predominantly aimed at reducing the spread of MRSA and ensuring that there is the necessary investment to do that. That is a well-recognised need.
This is the first Budget with which I have been involved, so it is hard for me to scrutinise it without knowing how it will affect staff and services on the ground, and in the absence of the matters that Carál and Iris have mentioned. An issue that jumps out at me is that there is no money allocated for the Craigavon site. Is that what you said?
Several capital schemes have been proposed.
Do you mean the mental-health facility?
There is provision for the mental-health facility, and it will proceed. The acute hospitals scheme for Craigavon is not proceeding within the CSR period.
What is being cut at Craigavon?
It is not a question of anything being cut. The Department submitted a range of bids to meet the ongoing costs of existing capital and to start a variety of new capital schemes. The Department did not get what it asked for; therefore, a number of the new schemes that it had intended to start cannot do so during the CSR period. It is not a question of a cut in funding; it is a question of simply not getting the resources to do that.
The Department had intended to a start those projects in Antrim Area Hospital, the Mater Hospital and Craigavon Area Hospital at the end of the CSR period. However, those schemes will not now start until year 4. That is subject to a final decision in the investment strategy, which, as I have said, will take approximately six to 12 months to emerge.
This may be a question for the Minister, but I hope that the witnesses can answer it. The provision of healthcare for prisoners is being transferred to the Department. Has account been taken of that in the Budget?
The final details of that transfer have yet to be resolved. However, the Budget itself is not a complicating factor. The amount that has been mentioned is £500,000; therefore, the money is not the main issue. Several issues still have to be discussed with the NIO.
I do not know whether that is a clear answer.
No, it is not.
I should have left that one for the Minister.
I am not accusing you of prevarication. We were informed by a Member of Parliament at the Northern Ireland Affairs Committee that the moneys for the provision of healthcare for prisoners had been transferred in April. The Minister did not know about that and seemed quite shocked. Don, you were there when that happened. The Minister took it upon himself to come back to the Committee on that issue.
The Committee wants to know how much has been set aside for the transfer of mental-health provision for prisoners. Mental-health care in the prison regime is important, and I am not undermining the needs of prisoners who have alcohol or drug problems. The Committee is concerned that if the NIO wants the Department to take on that responsibility, it will not be appropriately financed. There is no point in giving the Department an amount of money that will not be enough to deliver the service to those prisoners with mental-health requirements.
Are you saying that funding for that is not included in the Budget, and if not, why not? What action is being taken to keep the Committee informed of what the Department is bidding for, and holding out for, to ensure that prisoners will be looked after properly and that the funding for that is not taken out of our wider budget?
It will not surprise you to hear that Michael McGimpsey said exactly what you have just said.
However, he did not seem to know that the money was in his account.
He said exactly what you have just said when that issue was discussed with him. The Department has been in discussions for quite some time with the Prison Service regarding what resources need to be transferred to simply run the service at existing levels. The Department has also had discussions about the additional resources that are needed to provide an effective service, particularly regarding mental-health provision. When I say that that is an issue that has yet to be resolved, that is exactly what I mean.
Paul Goggins accepted the proposal in principle, and made £400,000 available for it in the Budget. I was simply suggesting that the amount of money involved will not significantly affect the Budget. However, regarding reaching a decision on taking responsibility for the provision of mental-health care for prisoners, Michael McGimpsey wants certain assurances that what he is taking on is affordable and that enough funds are available in order to deliver the required standards. Those discussions have not yet been completed.
The Committee’s problem is the fact that the funding for that matter has not been included on the list of service developments.
I will try to keep my questions as brief and as simple as possible.
I like the simple questions.
To help me to understand the efficiency savings better, I would appreciate a list of all the proposed efficiencies, not just the job cuts. It would be a great help if you could provide the Committee with that information.
I believe that Agenda for Change — and the length of time it is taking to implement it — has been a disaster, especially for clerical staff. Will there be any efficiency savings as a result of Agenda for Change?
When the Committee visited the Scottish Parliament, I asked how much of its overall Budget went towards the health budget. If I remember correctly, the answer was 36%. That is considerably less than the Department of Health, Social Services and Public Safety receives from the overall pot. I asked the same question again in the Assembly, and I was given a different figure. I would appreciate it if we could, as far as is possible, be given like-for-like figures on the health budgets in Scotland, Wales and the rest of the United Kingdom. In that way, members can see if we receive more or less than other areas do, and we can compare our strategies with theirs. How does the number of Health Service employees here compare with the numbers in the rest of the United Kingdom? Do we have more such employees than the rest of the UK?
Those are the simple questions?
Wait until you hear the hard ones.
I forgot to mention arthritis drugs. More money has been allocated for those drugs, and I would be interested to hear how much more.
I will start with Agenda for Change. It has been a horrendous experience for everyone. As I said earlier, it has not progressed as quickly as it should have, and that is unfortunate for everyone involved — both for those who must find the additional resources and for those who are being paid under the system.
The objectives behind Agenda for Change were multifaceted, and part of the reason for its introduction was that the pay structures were a mess. The Department was almost certainly heading for an enormous number of equal-pay claims. Therefore, Agenda for Change could have been justified in business case terms alone — it was needed simply to avoid situations whereby the Department would have ended up in court.
As I suggested at the outset, Agenda for Change is a key baseline part of reform, because it affords flexibility in staffing arrangements. It produces different grades for staff, a means of rewarding staff and paying staff fairly for the jobs that they do. That is the theory behind Agenda for Change. Significant benefits will flow from that flexibility. It also offers significant advantages to staff, and many staff grades have benefited from Agenda for Change calculations. However, I agree that the process is very slow.
The Department will provide members with the analyses from England, Scotland and Wales. However, the Department tried to analyse the figures but found it difficult to know which figures to pull out to give a like-for-like comparison.
The pots are not the same. It is an exceptionally complicated exercise.
It is also difficult to compare staffing relationships. There are different ways to approach this matter. The Department can provide the Committee with overall indices. Benchmarking exercises have been carried out at hospital level, but, again, the complication is that we have an integrated structure, and there is nothing with which to compare that integrated structure. That makes any analysis difficult. However, we will give the Committee information on the type of analysis that we can do.
Julie may like to deal with the list of efficiencies.
Further efficiencies will be produced in pharmaceutical services, and savings of £53 million will be made through the implementation of the review of public administration. Other procurement savings will be made in goods and services. Work is ongoing, and the details on productivity efficiencies have not yet been finalised. However, `significant elements will come from the productivity side in areas such as reducing absenteeism, improving day case rates, moving from the acute side of the spectrum to the community side, and also service redesign. The entire list of efficiency savings is not yet available, but those are the areas in which efficiencies are being considered.
I am sure that in due course the Committee will want to discuss how those efficiencies will be delivered.
The Committee has earmarked additional meetings to go through the detail line by line, but all the material must be made available in order to do that properly. The Committee wants to support the Minister in what he is trying to achieve, but we cannot do that unless all the necessary material is available.
The Programme for Government states that, by 2011, there will be a 21-week waiting time for anti-TNF therapies for the treatment of severe arthritis. That is factored into the service developments.
Perhaps I should declare an interest as parliamentary arthritis politician of the year.
Ms S Ramsey:
Thank you for your presentation. The more information that I hear, the less sense it makes. Some of the questions that you have been asked today will probably give you more homework, but we are simply trying to tease out the issues. It would be useful if the Committee and the Minister were to say the same thing in future: I am not saying that that will happen, but it would be useful. We are trying to work out the health budget — to humanise it. You mentioned that 1,700 members of staff would lose their jobs, which would save £53 million. According to our papers, the Health Service employs 68,000 staff, and, by my calculations, that figure of 1,700 amounts to less than 3% of the workforce. How will 1,700 people losing their jobs save £53 million per annum? Those people must get a good wage.
Perhaps I am being cynical, but there have been some stories in the media recently about pay-offs to chief executives. Therefore, the Department may save £53 million, but it will actually lose more in year 1 because of those pay-offs.
Taking into consideration the allocation in the draft Programme for Government and the draft Budget, will the commitments from the Minister be met, or are they just pie in the sky? I am examining the bids, allocation and shortfall, but it might also be useful to get the baseline figure.
As elected representatives, we have tabled questions and motions on the Bamford Review and on issues facing children and young people; the Minister has responded to those issues. The commitments that he gave on those issues were based on this draft Budget, but will they be met?
All these figures and the lists of inescapables and service developments mean nothing to me. Am I reading the draft Budget incorrectly, or will £12 million be given to the Department in 2008-09 to implement part 1 of the Bamford Review? Is that part of the money that is to be allocated for service developments, or is it additional funding?
Let me answer your last question. The draft Budget does not give the Department £12 million, £19 million and £28 million to implement the Bamford Review. Those figures are the bids that the Department made for each year for the implementation of the Bamford Review. It made bids of £101 million for year 1, £181 million for year 2 and £302 million for year 3 for service developments. It received only £16 million for year 1. I assure you that no list of how the money will be spent has been discussed and agreed with Michael McGimpsey. Such a list does not exist. However, I will talk to him about what the Committee would like to have. I understand why the Committee wants to know what will be spent so that it can make comparisons.
Using the Bamford Review as an illustration, when Dr Andrew McCormick, the Department’s permanent secretary, came to the Committee, he gave a breakdown of the broad area of parts 1 and 2 of the Bamford Review, because the Department split the bids. Even if the Department prioritises the implementation of the Bamford Review, it is likely to put only £4 million or £5 million into it in year 1. I hope that the Minister will forgive me for making such an illustration, but I repeat that it is only an illustration.
If the Department is to press ahead with bowel cancer screening and human papilloma virus vaccination, those will come with an automatic cost. The choice is either to take those measures or not to take them. Other bids, however, have to be scaled back. In the initial paper, I said that when deciding on where to spend the £16 million, £32 million and £97 million that will be available for service developments, implementation of the Bamford Review would be in the top 10 set of priorities. The most that I would expect to be spent on the implementation of the Bamford Review would be £5 million in year 1, £15 million in year 2 and £20 million in year 3. That would allow the Department, under the Bamford proposals, to improve community provision to an extent. However, it would not allow the Department to make any inroads into the bids for funding to treat, for example, personality disorders. That is the information that Ms Ramsey requested, but I can clarify that the figures she mentioned were bids and the Department will not receive that funding.
Ms Ramsey also asked whether the commitments that the Minister and the Department made in the draft Programme for Government would be met. Those commitments were the assessed implications of the available level of resources and were reliant on year 3 money. The £97 million that is available in year 3 is a good amount for service developments. In a normal year, quite a bit of service development can be achieved with that level of funding. Therefore, many of the commitments that are in the draft Programme for Government are dependent on progress being made in year 3 and little progress being made in years 1 and 2. The discussions clearly link the two. When the documents were prepared, the assumption was that the commitments that are set out in the draft Programme for Government would be deliverable.
I am not sure whether “pay-offs” is the right term —
Ms Ní Chuilín:
Ending of contracts?
A process for redundancy is in place. The redundancy costs of the review of public administration are large. Julie will explain how large those are.
May I ask why there is a situation where chief executives, who took very nice financial inducements to step down as part of the shake-up of the health trusts, can get other jobs in the Health Service, with a higher salary than they earned when they were chief executives? I am not naming any individuals, but I have come across that situation. There is something radically wrong with that. Surely there must be a clause that prevents someone, after they have been thanked for their service and received their golden handshake, from coming back surreptitiously to a less senior post that pays more money.
Ms S Ramsey:
The Health Service employs 68,000 staff, and it gets confused about who is who.
You can understand our cynicism.
I do understand. I also understand why you use phrases such as “inducements” and “golden handshakes”. However, those are the normal rules that apply to redundancies.
I am not questioning the amounts.
The same rules apply to a teacher who leaves a school. The current rules allow people to seek re-employment, and their pensions are adjusted or delayed to reflect that. It is simply the outworking of existing rules, which have come about through complex national negotiations. It would be an interesting proposed piece of legislation for the Assembly to debate if the Committee wants to change those rules.
I understand how some people view those rules, which are great for senior staff who want to leave their posts, but not so good for senior staff who do not want to.
There is a balance to be struck. However, it is amazing that, within a few weeks of someone stepping down from one post, he or she can get another post with a better pay structure and much less responsibility. Someone could go from running an entire hospital trust to a position with less responsibility. The unions and others seem to be the people shouting the loudest that that should happen.
A large proportion of the 1,700 people who are losing their jobs are chief executives and people from the top tier of the Health Service; that is where the £53 million comes from. That obviously comes at a cost regarding the pay-offs — or whatever words that you wish to use to describe that.
In our departmental accounts for 2006-07, approximately £70 million has been accounted for those one-off costs. That is the way in which accounting works. Therefore, even though the people who leave now will be paid in the future, the Department will have already taken the hit, effectively. Therefore, it does not impact on the Budget figures with which the Committee has been provided. As I have said, some £70 million has already been set aside up until 2006-07, and the £53 million will be released on an ongoing recurrent basis.
Ms S Ramsey:
Has it cost £70 million to lay off or to retire — whatever word you want to use — 1,700 people?
Yes, it has.
Ms Ní Chuilín:
From where does the £53 million come?
The £53 million is from ongoing recurrent savings. Therefore, the Department has £70 million on the books to date, and there is probably more to come in 2007-08.
Ms S Ramsey:
Don made a point about the existing rules. From where do those rules come?
The existing rules are enshrined in pensions regulations. They are commonplace across the public sector. The health-sector pension arrangements are probably a little more generous than other areas of the public sector. However, exactly the same arrangements are in place for a teacher taking redundancy.
However, a teacher could return on a part-time basis.
The teaching sector did take some action regarding that issue. It is up to individual schools to decide who comes back to teach. Many schools have decided not to allow retired teachers to return and have chosen to employ newly qualified staff.
Ms S Ramsey:
I have no doubt that the Health Service is underfunded; I have been saying that for years. Given that £53 million will be saved through the layoff of 1,700 people, but that it will actually cost £70 million, you can understand why we are cynical. That £70 million could do a lot in my constituency. Members have referred to health inequalities west of the Bann; I am sure that the people there would love to have £70 million. That is why we are cynical.
Ms Ní Chuilín:
Do you want £70 million, Tom?
It would be spent well.
Much material has been covered. However, we must all be realistic and understand that we must live within the Budget that we have been allocated. It is clear that the budget for the Health Service has increased, despite what some people think. However, we need to find efficiencies, but not at the cost of front-line services. Efficiencies can be found, but those have not yet been tackled. If they were found, money would be freed up that could then go to front-line services. If we want to see an example of what happens in the Health Service west of the Bann, we need only look at the disgraceful way in which money has been wasted over the past 10 years in the Sperrin Lakeland Health and Social Care Trust, which covers West Tyrone. No account was held of that waste. Although public representatives from the area — including me — continually raised concerns about that waste, it still continued. Our concerns were ignored, and we could not hold those who were responsible to account. I will be the first to say that a stop should be put to that type of situation should; such a scenario cannot run on. The Department’s mismanagement of finances means that the people who need those services are not getting them. That must change — big time.
Perhaps the English healthcare services are not the best with which to compare our services, but an examination of them will show that they are 10% to 11% more efficient than ours. If our healthcare services were to reach even the standard of those in England, it is estimated that hundreds of millions of pounds would be saved. We must therefore examine them to see exactly where the Department could make savings. Further to that, what recommendations from the Appleby Report that deal with the improvement of performance have been implemented in the Health Service in Northern Ireland?
The cost of the administration of the Health Service has risen by 36·5% over the past 10 years. I am glad to see that that cost will be reduced and that it will happen at an administrative level and not at the point of service provision.
Although the Health Service employs banking nurses and Health-Media.Net is being introduced, savings can be made in those areas. Given that those cost the Health Service an absolute fortune, they must be cut out. Again, I am referring to the situation west of the Bann. Nothing is being done about that, and those issues must be tackled head on.
One other point that I must make about the report —
I ask you to be brief, Tom.
I will finish with this point. I note in the draft Budget the Department’s commitment to the two new hospitals in the south-west. Work on the hospital in Enniskillen is already under way. However, has the Department made a commitment to the new hospital in Omagh without producing a business case? Is that business case in place, but we simply cannot see it? The Committee has asked to see a copy of that business case but cannot get it. It does not seem to be anywhere in the Department. Therefore, has the Department committed a certain amount of money to a new build without having produced a business case?
I will enquire about that business case. The Department commits to no major expenditure without producing several versions of a business case.
To come back to that point, it seems that a commitment has been made — and the Minister has said that it has been made — to the new hospital. I was told that at the last Committee meeting that the Minister attended. Why is it that when the Committee asks to see that business case, it is told that it is not there? It is not in the Department. Therefore, you are saying that the Department does not make such commitments until the business case in place; however, we are told that the business case is not there. That means that there is some ambiguity somewhere.
I will take that point back to the Department and establish the position on that business case. I am saying that the Department does not — and cannot — commit to any major scheme without producing a business case.
I am not sure whether that sheds any light on the situation.
The Committee will be depending on seeing that evidence to support what is being asked for. That has been a major thorn in our side. For some time, we have wanted to know how everything had rolled out in that area.
I will deal with the issues in turn. There is an enormous problem with the cost of paying for nursing staff. It is not simply a problem with nursing staff; some of the costs of paying for medical cover are enormous. There has been a significant reduction in the figures, and aspects of the efficiency agenda that are already being pursued involve finding ways to manage workforce planning more effectively. By so doing, the Department can significantly reduce the cost of using bank nurses.
All the £53 million in savings will come from the administration side. Sue, just to be clear on your figures: the number of whole-time equivalents in the health sector is 53,000. The figure of 63,000 is not a whole-time figure. The figure of 1,700 is a whole-time figure.
Ms S Ramsey:
It was 68,000.
Julie has touched on a number of areas in which performance has improved. The improvement in waiting times is probably the greatest success story in the health sector in a long time. Improvements have also been made in a range of other areas.
The Appleby Report, and the discussions held by the group that is chaired by the permanent secretaries of DHSSPS and the Department of Finance and Personnel, focus on putting systems and arrangements in place to improve performance management. The group wants to ensure that there is stronger commissioning, and sanctions and incentives, and it wants to develop new financial regimes to examine how the tariff could play over here — it would certainly play differently than in England, but, nevertheless, the tariff plays an important part in driving through performance. Value-for-money exercises, benchmarking and reference costing exercises also have an important role to play.
A range of matters is being discussed with a view to improving performance management, and those are the type of issues that the group discusses. It is hoped that in the week before Christmas, DHSSPS and DFP will reach a joint view that all the work required by the Appleby Report is progressing satisfactorily and that the group will not need to meet again. There has been a concerted effort on all those issues, and a tremendous amount of work has been done. Again, we are quite happy to come back to the Committee to discuss all those issues.
The Appleby Report gives a target of 10% improvement in productivity levels. Initially, the figure was 20%, but it was reduced to 10%. That relates to the hospital sector, and it is a valid comment on productivity levels in Northern Ireland hospitals. It is an issue that needs to be, and will be, addressed. Believe me, when £343 million of efficiencies are taken out, productivity levels will be addressed. The targets that are now being set significantly exceed a 10% improvement in productivity. Criticism of the existing arrangements in health and social care structures is valid.
Don, I am sure that you will agree that we cannot cherry-pick simply because some parts of a report suit us and other parts do not. A figure of £400 million in productivity savings is a significant amount. I am simply thinking about what we could do with that money, particularly in the mental-health field.
Last but not least, Kieran. I do not want to restrict you, but I would appreciate it if you could be as brief as possible.
I will try to be as quick as I can. However, I am a doctor, not an economist or an accountant, and when I see documents such as the one before us today, they frighten me. I have worked in the Health Service here for 27 years, bar one year that I spent working in Australia. My concern is about patient care — it has to be, and it always will be. When I see the vast amounts of money that are allocated for health, I think that they are perhaps a matter for other people; although I will play my part in the Committee, if I can do so. However, for me, the focus must be on efficiency and value for money.
Those issues have already been mentioned. It would be helpful for the Committee to know the type of posts held by the 1,700 people who will lose their jobs, and who will be paid off when the contracts are ended.
I am concerned, because I was told a few weeks ago that cardiology services in Altnagelvin Area Hospital are declining due to a shortage of nurses, which has meant that the hospital is unable provide both a catheter clinic and inpatient cardiac services. Despite that, a fourth tier of management has just been installed. Senior medical staff — doctors and nurses — have told me that management and administration is getting worse under the RPA. Surely that cannot be the case.
The Committee is being told that the job losses will all be in administration — I want to see proof of that. I do not want to see nurses losing their jobs. Some hospitals have a suspect level of hygiene, which means that cleaners’ jobs are also very important. I am greatly concerned about trusts making decisions on what contracts are terminated, because senior managers tend to look after one other. I spoke to a senior nurse in my area last night who told me that she has serious concerns about nurses losing their jobs. I hope that that will not be the case.
I share the Chairperson’s concern about the stalling by the Department and the Minister of the RPA — no money will be saved by stalling until 2009. For example, the local commissioning groups are ready to go. I thank Don for correctly saying that those groups are already working; however, their employees are still not doing the job for which they were selected.
I want to ask about value for money of PFI projects. I hate to repeat myself, but such projects are ongoing in Fermanagh and Omagh. In Omagh, we will not get the same services that are provided in Downpatrick, despite the fact that three times more money will be spent on our project than was spent there. As a senior doctor, and consultants and nurses support this view, I can say that the proposed services for Omagh do not meet the needs of our patients, yet three times more money is being spent on the project than was spent at another hospital, which is to get the services that we need. That certainly is not value for money. I want to know who makes those decisions. Input from healthcare professionals who know the needs of their patients is essential, because, after all, the Health Service is about putting patients first.
Finally, should health projects and hospitals be undertaken through PFI? We are balancing huge budgets and submitting bids for various projects, with one taking priority over another. If experiences across the water are anything to go by, PFI projects will store up major financial problems for the future.
I shall answer your final question first. There have been many disasters involving PFI — the Committee has heard evidence from Dr Jim Livingstone, and others, on the subject. PFI is an option; it is only a path that the Department will follow if it is shown to represent value for money. Accountingspeak is necessary, because the processes that are involved in proving value for money are detailed and comprehensive. It is not in the Department’s interest to lock up money unnecessarily, so PFI is an option. The Department does not use PFI extensively — the only two major projects that we have are the two in the west. Every scheme will be assessed on whether it represents value for money, and whether the annual flow of resources is affordable. Sufficient scrutiny exists. A good PFI scheme works very well and provides services on time, so there are pluses to PFI. Each project is considered on its merits.
I have tried to cover the issue of how the RPA process might be speeded up, Kieran. It is critical for the Health Service to get the top-tier structure right, to get the commissioning arrangements right and to get the performance-management arrangements right. They are not separate areas — commissioning is also about performance management. Getting the RPA process right is the issue, not whether it takes a few extra months to do so.
As part of the efficiency savings, if we are talking about 1,700 job losses, those will be solely administrative jobs. The trusts will produce the detail that underlies those savings, and they will reveal their share of the £53 million. We must ensure that we get the trusts’ share of the £53 million, because, in the past, we have made efficiency savings, only for the costs to creep up again. When trusts present detailed proposals for the Minister’s approval, a process must be put in place to ensure that they produce a recurring saving. It may be of some comfort to the Committee to know that new performance-management arrangements will ensure tighter controls at that level of expenditure.
The efficiencies that we have discussed are not yet fully detailed, but they will become available in due course.
I hope that I am not telling tales out of school, but Michael McGimpsey’s sole criterion for judging proposals is patient care. He will consider any proposals, provided that they protect or enhance patient needs. Therefore, it is not simply a matter of securing money — it must be driven by patient needs.
The difference between this efficiency exercise and the Gershon Review in England is that the English exercise identifies, and transfers resources from, lower-priority services to higher-priority services. That would be interesting for us, because it would be a bold step to take. As attempts are made to prioritise across the Department’s budget, it is clear that every service will not necessarily benefit from increased funding. If we are serious about pouring more money into mental-health and learning-disability services — the Cinderella services — resources could be moved from what are deemed collectively to be lower-priority services. The Committee and the Minister must consider that issue.
Is it right for trust managers to decide that we need fewer managers or nurses?
Yes, it is, because that is what they are paid to do. Regardless of the structures that emerge, we have created powerful trusts, and we are paying the senior team significant money to manage effectively. Our job is to impose targets in order to ensure that procedures are in place to achieve outcomes. The skill of the manager — if I may use the words “skill” and “manager” in the same sentence — is to make that happen. That is how the system must work. It is not for civil servants who sit in Castle Buildings to make those decisions, because we do not have those skills. That is where the trusts’ skills and professional input from committees come in. That is where we need the management skills of that high-level tier to drive performance management, in whatever form Michael McGimpsey decides that will take. There are many different ways in which to meet the service.
We are behind parts of England when it comes to reforming how we work. Agenda for Change was slow, as was restructuring, which was partly due to a lack of simple political decisions being taken. Therefore, we are behind in implementing changes to how services are delivered. It is by making those changes that we believe that we can achieve the required efficiencies and improved outcomes. It is also through those changes that we can obtain a little bit more money.
I thank Don and Julie for attending the Committee today. You have taken note of all the documents and information that we require to enable us to do our job effectively.
Mental-health concerns have not simply come out of the blue. The issue of inadequacies in mental-health provision is something that people have been flagging for years. Therefore, no one should have been caught unaware that mental-health services require major funding.
We are more aware — now that we are in a post-conflict situation — of the nature of some of the problems that emanate from local communities. There are cries for help, particularly from deprived communities that require targeting of social need. There must be more financial resources for those communities in order to empower them to help themselves. They are the people on the ground, so they can help people — young people in particular. That is important given the recent spate of dreadful suicides.
Additional psychiatrists, psychologists, specialist nurses, and so on, are also needed. Those needs have not come out of the blue either, so it is not enough to come along to the Committee and say that the Minister will only allocate this, that, and the other, and that year 3 is looking good.
There are efficiencies that can be effective in Northern Ireland. The report by Professor Appleby cannot simply be cherry-picked. It has been said that £400 million could be saved through improved productivity alone. Therefore, that issue has to be addressed in an holistic manner.
I again thank you for attending. I hope that it was not too traumatic, and that we treated you with civility and courtesy. Obviously, the sooner that we get the documents that we have requested, the sooner that we will be able to scrutinise them, and that will enable us to make intelligent proposals to the Minister before we sign off on the Budget.