I must make the witnesses aware that they do not enjoy absolute privilege. Their attention is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. Notwithstanding this provision in the legislation, I remind members of long standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official either by name or in any such way as to make him or her identifiable. I ask Mr. Michael Kelly, Secretary General, to introduce his officials.
1999 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.
Vote 33 - Health and Children.
Mr. M. Kelly (Secretary General, Department of Health and Children) called and examined.
Acting Chairman
Is there an opening statement?
Acting Chairman
No, that will be dealt with later.
They are supposed to supply the committee with a written opening statement.
Acting Chairman
We did not receive one. We will deal with that shortly.
They are obliged to have one. The new Chairman introduced that rule for all Departments and I am surprised the Department is not aware of it. There should be an opening statement.
Acting Chairman
We have discussed this matter on a number of occasions. That only applies in the event of a lengthy statement. However, we will deal with that aspect shortly.
Mr. Kelly
I am accompanied by Mr. Tom Mooney, Deputy Secretary, Dr. John Devlin, Deputy Chief Medical Officer, Ms Helen Minogue, accountant, and Mr. Dermot Magan, assistant principal officer in the finance unit in the Department. I was not aware of the position regarding an opening statement and I apologise.
Acting Chairman
We will get to that shortly. Also present are Mr. Jim McCaffrey, assistant secretary, public expenditure division, and Mr. Michael Errity, principal officer, in the Vote control area in the Department of Finance. There are no paragraphs on the Vote so I will not ask the Comptroller and Auditor General to comment. However, I ask Mr. Kelly if he wishes to make an opening statement. If there is a link, the opening statement is circulated prior to the meeting. There is some ambiguity about that aspect; it is not a solid ruling.
A mistake has been made by somebody. At a previous meeting, the Chairman made it clear that he wanted an opening written statement from everybody who appears before the committee. He does not want lengthy verbal opening statements. He wants a written statement in advance and to proceed immediately to questions.
Acting Chairman
I chaired the committee for approximately six months prior to that, but I was not aware of that development. We can discuss it later. Obviously, Mr. Kelly was not aware of it either.
I accept Mr. Kelly was not aware of it, but it is odd that he was not told. There has been a falling down in communications somewhere at secretariat level.
Acting Chairman
This difficulty arose with the NRA when there was a 12 or 14 page statement. We made a ruling that statements had to be submitted in advance to allow members time to study them and to familiarise themselves with the issues involved. Does Mr. Kelly wish to make an opening statement?
Mr. Kelly
Given that there were no items regarding the Health Vote in the Comptroller and Auditor General's report for 1999, we have not prepared an opening statement. I anticipated that the members of the committee might wish to raise questions in that regard. We have not reached the second item on the agenda in relation to the internal audit report, but given that we had prior notice that it was on the agenda, I have a short statement and I am prepared to provide a copy of it to the clerk so that it can be circulated, if that is helpful.
Acting Chairman
This may be the difficulty to which Deputy Lenihan referred. There was not a paragraph on the matter - the Vote has a clean bill of health. Opening statements are usually in response to a paragraph. I intend to open the Vote for discussion. I previously raised the topical issue of the dormant accounts of patients and the money held by health boards. This may involve accounts of patients who have passed away and where it has not been possible to trace relatives, etc. Will Mr. Kelly update the committee on that matter?
Is the Chairman referring to the letter dated 10 February 1998 regarding patients' private property accounts and intestate accounts?
Acting Chairman
Yes. There is also a letter dated 6 July 2000 on the matter.
There are two separate items under that heading. Is the Chairman referring to both because I have a number of questions?
Acting Chairman
Yes. The Deputy may recall that I raised the issue of patients' private property accounts when I chaired the meeting on 25 May 2000. I want to know how the matter has progressed because much work has been done by the Department.
Are the two being taken together?
Acting Chairman
Yes.
Mr. Kelly
The Department supplied a detailed statement to the committee on the issue of patients' private property in June 2000 but I will update the members on the current position. The matter was raised by the Comptroller and Auditor General and the committee in 1998. Since then, all health boards have addressed the matter and transferred amounts to the relevant funds. The Chief State Solicitor has queried the amount paid by the Mid-Western Health Board as it was considerably lower than originally estimated by the board and amounts submitted by other boards. The Department of Finance also raised the matter with my Department. Clarification was sought by the Department and received from the Mid-Western Health Board. The Chief State Solicitor has written to each health board and requested them to update their amounts to December 1999 and standardise the procedures to deal with updating these accounts on an annual basis.
Acting Chairman
The Mid-Western Health Board seems to be operating a different system from the other seven health boards. The amount it returned from the estates of deceased patients was only £10,000. The smallest amount after that was £119,000. The amount was £390,000 for the South-Eastern Health Board and £412,000 for the Western Health Board. Has Mr. Kelly received any explanation for this? In some cases the accounts are calculated only up to 1996. Has an up-to-date account been received? Is it intended to keep an up-to-date account? There is a minimum of £2.3 million involved.
Mr. Kelly
As regards the standardisation of the procedure, that issue has been raised by the Chief State Solicitor with each of the health boards. They have been requested to update the amounts and standardise the procedures to deal with updating these accounts on an annual basis. In querying the amount paid by the Mid-Western Health Board it was noted that the amount of £10,605 was less than 10% of the next lowest amount received from a health board and also less than 10% of the board's original estimate. Clarification was sought by the Department from the Mid-Western Health Board and, to the best of my knowledge, a response is awaited. I can supply the committee with an update following the hearing.
I am a little confused about that question. It is not acceptable that Mr. Kelly is talking about a fund which belongs to the relatives of the deceased. We are talking about sums of money calculated four years ago. Assuming that those figures are now only coming to light, what has happened to the £2.351 million? Is it lying in a fund somewhere? What steps have health boards taken to establish to whom this money belongs? Are the relatives of the deceased who are owed this money entitled to claim interest on it? Have the health boards drawn up a list of people entitled to this money? Why are we discussing this issue four years later? In some cases the figures have not been completed after four years. There must be something seriously wrong. It would not be acceptable in any other business to try to identify something four years later. Perhaps Mr. Kelly could give the committee a reasonable explanation as to the reason we are discussing four years later the issue of owing £2.5 million to the relatives of the deceased. Why do we not have the moneys up to the end of last year?
Acting Chairman
Criticism, particularly by the Ombudsman, has been made of various practices. It is worrying that in the final statement the Chief State Solicitor queried the amount of the Mid-Western Health Board. The report states that clarification of this matter was sought by the Department of Health and Children from the Mid-Western Health Board on 25 May 2000 and that a response is awaited. This is July 2001. If it takes 13 months to get clarification on such an issue, it raises questions about procedures. Perhaps Mr. Kelly could comment on this.
Mr. Kelly
I emphasised in my earlier remarks that, to the best of my knowledge, that is still the current position. I am prepared to either verify or clarify that otherwise to the committee following the hearing. On the face of it, that length of time in terms of clarifying something which has been raised in a serious way with the health board gives rise to concern. On the other hand, as regards this general issue, the significant point from the point in time when this was raised by the Comptroller and Auditor General is that the methodology in relation to procedures for transferring intestate amounts to the State has been seriously addressed. We are now talking about accounting for moneys put into accounts by the boards separate from their normal business accounts in relation to the boards' own funds in respect of which accounts there are trustees. The funds were not regarded or treated as the direct property of the health boards. We regard this as a serious matter and, working with the Chief State Solicitor's office, have attempted to put order on it and get the appropriate responses from the boards to it. There is an outstanding position in relation to one board. To the extent that there is not a more up-to-date response within the Department on this issue, I undertake to pursue it vigorously with the health board.
Acting Chairman
Do you accept, Mr. Kelly, that it is unacceptable that you, as Secretary General of the Department, have to wait 13 months for a response from a health board? It says a lot about the system and how it works if you cannot get a response from it 13 months later. This report is a recent one. It does not look good for the system and does not give the public hope about getting responses.
Mr. Kelly
I cannot argue with that on this issue. There is a delay which is unacceptable. On the other hand, in defence of the health boards, we get monthly reports on the great bulk of the funding for which they are responsible and on the profile of expenditure, employment and activity. It would not be fair to argue that, in general, the health boards do not respond to the Department's ongoing requests for information. I can only conclude that there are difficulties in terms of this issue with the Mid-Western Health Board. If it was a straightforward matter of digging out the relevant information and passing it on, my experience with the Mid-Western Health Board and other health boards is that that is done as a matter of course. In relation to this particular issue, I understand one of the difficulties other health boards have got over is that of contacting next-of-kin. However, the delay about which we are talking is not acceptable.
Acting Chairman
Will you do a note for the committee within a reasonable amount of time - say, a month - bringing us up to date on that aspect of it?
I do not accept that. We get an enormous number of inquiries from relatives of deceased people or people who have wrongly been forced to pay money to subsidise relatives in private nursing homes. There are two categories here. A number of us raised this in the Dáil. I raised it with my own health board and it stated its interpretation of the regulations. Then the Ombudsman came along and proved that those of us who had followed this were right. However, a considerable period of time later, the health board still has this money in funds. I understand the Minister indicated in the Dáil this week that he has made provision for rebates to be made to people who have wrongly paid money. As far as I am aware, that has not been done by any health board. There is also the question of patients who have died in hospital. That is mentioned in the report.
I cannot see any effort being made by the health boards to establish who the relatives are and who is entitled to these funds. I have not seen any advertisements, for example, placed by health boards inviting relatives of deceased patients in public wards and in public geriatric hospitals to apply. I have not seen any, although maybe my colleagues have. I have not seen an advertisement placed by a health board inviting people to make applications for these dormant funds which are due to relatives of deceased patients. As a former secretary of the geriatric section of the North-Eastern Health Board, I believe every health board has lists of the next-of-kin of people in a geriatric hospital. Surely the next-of-kin should be acquainted with the money available in the account on behalf of geriatric patients, which is running into millions of pounds.
Mr. Kelly
In relation to this item, I take the points Deputy Bell made regarding private property. I think I have responded as much as I can in relation to the points he made as to how the health boards go about identifying and updating next-of-kin in circumstances where people may be in the care of the health board for a considerable number of years. There may be problems regarding wills following a person's death. I am not in a position to talk in detail about how health boards go about this and I would prefer not to comment further on it.
Deputy Bell raised questions which I think have to do with the nursing home subvention rather than private property which is a separate question. In relation to the return of money, or the payment of money, to the sons and daughters of people who were in nursing homes and where assessment of circumstances took account of the ability of sons and daughters to contribute, a decision has been made that money should be paid to those who were adversely affected by the circumstances provision. There is an estimated cost of £6 million based on information received from the health boards.
On the face of it, it may seem like a straightforward matter to calculate the amounts due to families or members of families. In practice, it involves reviewing a huge number of individual files and looking at the assessments that were carried out originally. It is also against the background where the Government decided to make this payment, although not under - this is the legal advice the Department had - a legal obligation to do so. It is being made on an ex gratia payment basis. Nonetheless, against the background of the Ombudsman's report, great care is being taken to ensure this is done in a fair, consistent and equitable way across the country and in each of the health boards. It is for that reason we do not want a patchy response to it.
We want a uniform response across the country given the background to this payment. That is why a group was assembled early this year, representing the Department and the health boards, to work through the detailed arrangements for making these payments. That group needed to take legal advice on a number of issues. Its work was also delayed by the disciplines surrounding meetings because of the foot and mouth outbreak. However, it has more or less done its work at this stage. We expect that guidelines would issue based on that group's work to the health boards in the next number of weeks setting out the process for making these payments. It will then be a matter for each of the boards to individually review the files on each case and to make payments as quickly as possible. There is a huge volume involved in all of this. The boards will be told that they should act with all possible speed and, if necessary, that they should get hold of the additional people and so on they will need to get it done within a reasonable period of time.
I appreciate the difficulties involved in this. There are two, maybe three, circumstances here. From dealing with this directly - I am sure my colleagues will be as aware of this as I am - patients in geriatric units can be there for a lengthy period - up to 20 to 30 years in some cases. When it comes to paying the funeral expenses, an application has to be made by a relative to the matron in the public geriatric unit. The funeral undertaker's account has to be furnished to the matron or the official in the health board. The health board, not the next-of-kin, makes the payment to the undertaker to pay all the funeral expenses. To achieve that, the health board via the matron must know the person who has paid the funds. Therefore, that must be the contact person. A health board will not pay the bill to an undertaker, which is the largest portion of the money retained on behalf of an elderly person in a geriatric unit, unless identification in writing and certification from an undertaker are given to the health board. Are you telling me that after that procedure has been gone through, there are difficulties in establishing the next-of-kin?
Mr. Kelly
I am not offering Deputy Bell a general explanation in relation to the Mid-Western Health Board. I cannot claim to have a detailed knowledge of how the precise arrangements work within individual geriatric units as that does not fall within my area of responsibility in the Department or within my competence. However, in seeking accountability from the health boards on this we look for reasons. Where difficulties are raised with us, we ask for the reasons behind them. On this issue one of the areas of difficulty identified by the health boards was identifying next of kin in certain cases. I do not say that is a general problem and that in every case there is a difficulty in identifying next of kin but it is one of the areas of difficulty that has been identified by the health boards in this area.
I appreciate that and as a result of this discussion I will advise my constituents and others residing in the North-Eastern Health Board region to use the Freedom of Information Act, 1997, to secure information directly from the health board in advance. Old age pension books must be submitted to the matron and the money to which the pensioners are entitled is held by the matron in an account controlled by the health board, not by the people's relatives. The public, therefore, should be advised to seek the relevant information on behalf of relatives, who in many cases are unable to fend for themselves, under the Freedom of Information Act, 1997, so that they will be aware of the amount held by the health board on behalf of a relative.
Mr. Kelly
We do not believe there is a difficulty with making information available. I will take the suggestion made by the Deputy and constructively feed it into the relevant area of the Department. I do not believe relatives should have to rely on the Freedom of Information Act, 1997, in such a situation and I hope that is not the case. We will certainly feed the Deputy's suggestion into the thinking on this and follow up on it.
Acting Chairman
Before we proceed with a general discussion of the Vote I refer to the report of the Ombudsman, Mr. Kevin Murphy, on nursing homes subvention. The Joint Committee on Health and Children is examining the report and I do not want us to go over the same ground. The Comptroller and Auditor General is examining the report in the context of how the health boards involved used the funding given to them to resolve the problem in the short-term and addressed the recovery of money owed to relatives and so on.
However, one overriding issue arises from the report. The Ombudsman suggested the Department of Health and Children was acting ultra vires given the reasoning behind its interpretation of the Act. It was suggested that the Department should have interpreted the regulations differently, the issue was brought to the Department’s attention and there were arguments about it. That raises a serious question about the relationship between the Oireachtas, the Department and officialdom. Will Mr. Kelly comment?
Mr. Kelly
I am happy to comment on that but given that the issue is under examination in a number of other contexts I will be more brief than I would otherwise be in terms of giving a full account. First, a charge that the Department would in any circumstances act ultra vires is being taken very seriously. There is a number of facts in this which do not bear out the charge that the Department acted ultra vires. On the other hand, I accept that the Ombudsman has the job of independently reviewing the actions of all public bodies within his purview and at the end of the day I must accept the outcome reflected in the report.
However, there is a number of important points in relation to maladministration, to which the Ombudsman referred in the report. I refer to the press statement issued by the Ombudsman's office on the day. It states:
A question must be raised as to whom or to what is this maladministration to be attributed and consideration must be given as to whether or not there were mitigating circumstances. It is the Ombudsman's view that any attempt simply to apportion blame without regard to the complexities of the framework within which Government in Ireland operates runs the risk of the central message in this report being overlooked.
There was a failure of the Houses of the Oireachtas in supervising the making of the regulations and in ensuring the accountability of successive Ministers. There was a breakdown in the accountability relationship between Ministers and senior civil servants and at the very least a distinct lack of transparency in that relationship and there was an absence of any awareness on the part of the Department of Finance, the Department of Health and Children and the health boards that people's entitlements and human rights cannot arbitrarily be put to one side in the interest of saving money.
With regard to mitigating circumstances it has to be accepted that as a result of the cutbacks of the 1980s and the rationalisation of the hospital system the Department could no longer deliver on the entitlements provided for in earlier legislation. In addition, the Department and, in turn, the health boards faced serious funding constraints. The question remains as to whether or not these difficulties could have been faced up in ways which would have involved maladministration.
The point being made in that excerpt from the Ombudsman's press statement is that to pick a single part of the jigsaw in regard to his analysis and examination of this issue is to miss the point.
However, in regard to the Department's actions on this, two serious charges are levelled against the Department. I have reviewed in detail the papers around all this at the time. The first is concerned with ignoring legal advice at the time and acting contrary to legal advice. My examination of the papers on this does not bear out the ignoring of legal advice. All the facts were shared by the Department in its response to a draft of the report and the papers I have reviewed bear out that legal advice given by the Department's legal adviser on the first draft of the regulations led to a considerable watering down of the provisions at the heart of the legal adviser's original reservations about the regulations. Subsequently, the legal adviser did not in regard to later drafts of the regulations raise any reservations and he initialled the regulations for signature by the Minister.
In the course of all that, certainly serious issues were raised both by the Department's legal adviser and by the office of the Attorney General in relation to some of the original provisions set out in the regulations which purported to put an obligation on adult members of families of persons seeking subvention in nursing homes to contribute towards the cost of their up-keep. With regard to the first issue, ignoring legal advice, had the Department knowingly made regulations which it believed were not possible under the parent Act, the Nursing Homes Act, 1990, it would have been open to a serious charge. To the best of the Department's knowledge and acting in good faith and in accordance with legal advice, regulations were made by the Minister which were initialled by the then legal adviser and there was no transgressing the norms of administrative behaviour.
The second area referred to, which is serious for the Department, was that the Department acted outside the supervision of the Ministers of the day and there were two Ministers involved in the making of regulations. The Minister formally makes the regulation and it is difficult from the papers I have reviewed to support that charge. Nonetheless I emphasise at the end of the day the Ombudsman must take a fair view of all the information put in front of him regarding such an issue. He has made his determination and that determination stands.
Acting Chairman
Before moving on, I should declare my interest as a member of the Southern Health Board. Taking the Southern Health Board as an example, was there internal conflict or did it have conflicting legal advice in the 1998 period as to how to interpret or implement the Act? Was there conflict between it and the Department regarding the advice given to the board as a unit and its argument with the Department?
Mr. Kelly
As to the specific advice given to the Southern Health Board I cannot honestly say that I——
Acting Chairman
You said you had read the files and I thought you might be up to speed on that.
Mr. Kelly
What I can say is that various legal advices were obtained by boards and others on varying interpretations of the regulations. Nonetheless, in the Department's modus operandi, the legal advice we must work is the advice we obtain through the Attorney General’s office. All of the positions taken by the Department up to the time changes were made - and the Chair will know that various provisions of the regulations over time were revoked - were based on the then legal advice given to the Department. At times in this there were alternative advices given to different parties but that is my experience of legal advice. If one asks two lawyers the same question one is quite likely to get quite different opinions from both.
Acting Chairman
Presumably you will be continuing this with the Joint Committee on Health and Children. The Comptroller is examining a specific aspect of this, the audited reports of the health boards and whether it shows the money your Department supplied to them and what happened to that. We will await that but I presume there will be a continuation of this with the Committee on Health and Children rather than us going into aspects of it. Am I right? Deputy O'Keeffe is chairman.
Yes, this has to be looked at by the committee. As a corollary to what we were talking about, regarding breaking the law and the Department not fulfilling its obligations, if one takes the enhancement the Southern Health Board is failing to pay at present, would the Department be seen by the Ombudsman in the next report? It now seems to be falling on family members to pay the enhanced subvention. Every chief executive officer can only work within the budget he is given. It seems apparent in the Southern Health Board area that there is an inadequate budget to meet the demands being placed on that board for enhanced subvention. The result is that enhanced subvention is not being paid and family members are being forced to make this payment. Are we going to have a repeat performance by the Ombudsman in his next report stating that the Department is not fulfilling its obligations in relation to families and subventions?
Acting Chairman
Before Mr. Kelly answers that, we have sent our own proposal to the Southern Health Board requesting that they make this a demand led scheme as it seems impossible with the demographics to fit this into a nice, handy category of finance given the number of people who will apply in a year. The bottom line is that if we do not make this a demand led scheme, what Deputy O'Keeffe has outlined will happen again and again. I do not want to get into policy matters but if we do not make this a demand led scheme will we see this arise again and again?
Mr. Kelly
In relation to Deputy O'Keeffe's point about repeat exercises and finding ourselves in the same hot seat, I am personally very committed to ensuring that that is not the case and that matters are attended to ensure it is not the case. What we are getting into here is trying to anticipate policy decisions that might or might not be made. There are very real pressures on the funding of the nursing home subvention scheme, even with the additional funding that has been put into it in the current year, which has allowed a significant increase in the levels of subvention.
The Minister's intention in relation to this is that against the background of the Ombudsman's report and the expenditure review report undertaken by the Departments of Finance and Health and Children on this scheme, he will bring proposals to Government in relation to changes he believes may be made to the scheme in relation to the future.
Regarding whether it should be a demand led scheme or not, that would be one of the key issues to be considered by the Government in that context.
Going back to the Vote, I see under subhead A7 that the cost of consultancy services dropped, with the outturn at £473,000. I do not want to harp on the point but the committee gave a direction last year or the year before that a list of consultants employed by the Department would be supplied to the committee in advance. That was agreed when Deputy Mitchell was Chair but we have not got the list, so Mr. Kelly might supply us with the list of consultants hired by the Department. Are there just one or two consultants for the bulk of that £473,000?
Mr. Kelly
In terms of the total amount, there are 12 items that feed into that. Some of the major items relate to the health insurance projects, which represented about £106,000 of the total. That relates to expert technical support given to the Department regarding all the work it had been doing around the health insurance amendments to legislation and the development of risk equalisation. It is a highly technical area and we have Mercer employed to support us with the technical work.
A second major category in the £100,000 category was £97,000 paid in respect of consultancy on Tallaght Hospital, which involved a particular——
Those were the three persons. Is that over now?
Mr. Kelly
Yes.
When did it finish? Is that a full year cost?
Mr. Kelly
It was Deloitte & Touche at the time but that whole process is now well finished.
That is not the Deloitte & Touche report. That are three people appointed to run the hospital or to consult on it.
Mr. Kelly
No, there was what is termed a troika, three people put in to oversee the changeover, so that whole process has long since been dismantled on the basis that there is now a whole management systems and structure in Tallaght which is on a very even keel. The hospital is very well managed.
The £97,000 then relates to follow up work from Deloitte & Touche. Is that correct?
Mr. Kelly
No, it was work done in 1999 by Deloitte & Touche. If the Deputy wishes we can——
Does the famous fabled troika follow that or would that be the year 2000? Or does it precede this?
Mr. Kelly
The troika followed this——
So it would show up. That is fine.
The next issues are subheads G3 and G4 which refer to payments to a special account established under section 10 of the hepatitis C tribunal and payments to a reparation fund. Can you explain subhead G3? There is an outturn of £47 million which has been provided for payments to a special account. Is this a provisional estimate for the cost of claims? To what does it refer?
Mr. Kelly
As regards subhead G3, the actual expenditure on the compensation tribunal was £47 million.
Is that the cost of the tribunal or the cost of compensation?
Mr. Kelly
Compensation.
To date.
Mr. Kelly
To date, up to then.
It has already cost the State £47 million. The figure for subhead G4 which refers to reparation has risen to £9 million. If you do not mind me asking, how do you distinguish between compensation and reparation?
Mr. Kelly
There was an add-on of 20% of the awards which is represented by the reparation fund. They are payments again——
It is a top-up. In other words, there is a provision of £47 million which was topped up with another £9 million.
Mr. Kelly
No, it followed a particular decision. The exact legal terminology escapes me, but it was to the effect that an additional sum of 20% would be made in the case of each award.It is accounted for separately in the reparation fund.
Was the decision made by the Government, the Department or the tribunal?
Mr. Kelly
I imagine it was made by the Government, but we can clarify the matter for the Deputy.
The total cost to date is £56 million. What is the estimated outturn——
Mr. Kelly
That was the figure to then, not to date.
Do you have the up-to-date figure? Can we have a consolidated figure?
Mr. Kelly
The bottom line figure is £321.888 million. Total administrative costs and fees of tribunal members amount to £6.726 million; tribunal awards amount to £231.855 million——
Is that an estimate or a cost to date?
Mr. Kelly
It is a cumulative figure to 30 June 2001. A total of 1,442 awards have been made which line up with the total figure of £231.855 million. The legal costs of tribunal awards are £37.203 million.
These are the legal costs to the State of being legally represented at the tribunals.
Mr. Kelly
The legal costs for people represented at the tribunal amount to £37.203 million. Reparation fund payments amount to £46.104 million. There is a 20% add-on to——
Is this the estimate within the Department? I appreciate that you have to be cautious about this as you are before the tribunal, but is there any provisional estimate as to the final outturn? The £321.888 million is the actual cost up to June 2001. What is your best estimate of the final outturn?
Mr. Kelly
We are getting to the stage where the volume of cases being processed by the tribunal is lower than before because it is dealing with more complex and difficult cases. That would suggest the amounts of awards may increase, but I would prefer not to hazard a guess as that is all it could be regarding the eventual outcome. If the Deputy wishes, I will ask those closest to this issue in the Department if they have any idea of a ballpark figure.
I accept the weaknesses in a ballpark figure, but it would be good from an Exchequer point of view to know what the final exposure will be. Are there any figures on the average size of awards? A total of 1,442 people have been awarded money.
Mr. Kelly
It is the average of the figures I have given, but the average payment is in the order of £140,000.
This question may be too technical for you, but the tax treatment of these awards seems somewhat controversial. In certain cases people do not have to pay tax on the awards. Is that correct?
Mr. Kelly
I do not know.
I have received representations from people who have ended up paying tax on the awards.
Mr. Kelly
That is a question of technical detail which I am quite prepared to clarify, but I do not have the answer.
Could you come back to me on this issue? I have been in touch with the Revenue regarding this matter, but it would be interesting to find out the exact nature of the distinction. There seems to be a distinction between cases.
Acting Chairman
I will try to assist the Deputy. Officials from the Department of Finance are present. The taxing of awards and so on is more a matter for the Department of Finance. Do any of the Department's officials wish to comment on Deputy Lenihan's point?
Mr. McCaffrey
The law is settled by the Minister for Finance and recommended to and adopted by the Government. The implementation of the law is a matter for Revenue, not for us. We have no involvement in individual cases.
All the talk is of the under-funding of health services. I have seen variations on the figure depending on GDP, GNP or whatever. What percentage of GNP or GDP do we spend on health? How much lower are we than the European average? One sees this figure debated, but the matter is never clarified.
Mr. Kelly
A general word of caution needs to be sounded, particularly regarding the appropriate level of GNP. I do not believe there is an appropriate level of GNP. The first issue regarding any of these comparisons is the reliability and the timeliness of the data used in international reports. We can stand over the figures we use regarding Irish health spending and what is included in that figure - the construct of GNP, GDP and so on. However, one is in deep water once one gets into international comparisons as it is not clear that the basis for such comparisons is pure. The OECD, the European Union and other organisations do their best with the statistical data available, but it is not an exact science.
Non-capital health spending in 2001 currently stands at 5.94% of GDP, the highest level since 1995. In 1997 the figure was 5.54%, as against 5.94% in 2001. That is in a context where GDP has uniquely increased in recent years. The yearly rate of increase since 1998 in non-capital health spending has outstripped the rate of increase in GDP by an average of 5.73%. In 1998-2001, non-capital health spending has increased by 69%. Over the same period GDP increased by 52%. Therefore, looking at national comparisons, the percentage GDP is increasing over time.
The latest international data from the OECD, "Health Data 2000", relates to 1998. I am not quite sure if it contains an average figure, but the Irish figure is 4.8% of GDP for 1998. For the purposes of comparison, the figure for Germany was 7.9%, for the Netherlands was about 6%, for the UK was 5.6%, for Greece was 4.9% and for Portugal was 5.2%. Therefore, there was quite a variation even within member states of the EU. That is why I do not think there is an appropriate level. It is a matter of what a country decides to spend as a proportion of its national wealth.
Is there not agreement that we are chronically under funded?
Mr. Kelly
Whether we are under funded or not is not an area I want to get into. I have two jobs, one to advise the Minister and the Government on what I think are needs and, when policy decisions are made by Government, to implement those decisions, and I do not want to be drawn further on that.
Fair enough.
Acting Chairman
Is there any alternative method of measuring expenditure? What about a measurement based on head of population? Is Mr. Kelly aware of any other method of measuring expenditure which he would favour?
Mr. Kelly
It is a matter of a community or society deciding on the level of investment it wishes to make across a range of areas in terms of public spending. We look at GDP and average spend in EU countries as a rough comparator in how the health system is performing in terms of what it does. The fundamental issue of how much one spends on health services must be part of the overall balance and judgment made on the distribution of public resources in general. We should decide what level of access and quality of services we want to provide for people and fund the system on that basis. That kind of question is currently under very active analysis in the preparation of a new health strategy which has been initiated by the Minister and which will stretch over the next five to seven years. How we look at the level and method of funding, etc., is very much part of that debate, and I would not like to pre-empt the outcome. That will emerge as advice to Government and decisions will be made by Government on that basis.
Acting Chairman
It is not really about how much or what percentage is spent. I am concerned with the measurements used when comparing different figures. Everybody will say they are doing better than was done five, ten or 20 years ago. Are there other methods of comparing performance in different years? GDP and GNP are perhaps fairly crude measurements given the fluctuations which have to be built in. I presume if Mr. Kelly had other suggestions he would have put them forward.
Mr. Kelly
Apart from looking at the money, one can look at the standards set, such as bed provision in the acute hospital system per 1,000 population and staffing ratios in terms of numbers of doctors, nurses and other health professionals per 1,000 population. That is part of our ongoing analysis and year on year we publish data which show the comparison of Irish provision in those areas with EU figures in particular. If the Chairman is asking what ought to be done about health care it is necessary to look at the epidemiological analysis, including the main contributors to premature death and sickness in a community. That raises things such as our arrangements for looking after people with heart disease, working to prevent its occurrence and caring for those who develop problems. The other main areas are cancers, and there is a national cancer strategy which is based on the epidemiology indicating the policy actions which were necessary. The other areas are accident prevention and putting in place arrangements in the health system to deal with that. One can take many approaches in answering the question as to how well we are doing in comparison with other health systems. My experience leads me to believe that each health system is unique and one can only get the broadest of comparative statements from analysis.
We have difficulties in terms of measurements. This week in my constituency there are two people with heart conditions sitting in trolleys in accident and emergency wards. This is a perennial problem and I wonder why it is occurring. I find it odd. Does the Department have figures for the time delay once a person has checked into the system for routine operations performed across the country? This has a bearing on whether we have an appropriate level of funding and whether we should provide further funding for the health services if we do not have the forensic information required to allocate resources.
Mr. Kelly
When it comes to delays of any kind in the acute hospital system, for example, in accident and emergency departments for emergency admissions or treatment, waiting list data or analyses of waiting times, such as that done by the ERHA and for the Department in relation to the hospital system in general, point in the direction of a hospital system in which there is very high occupancy of beds. Occupancy levels in Dublin hospitals are considerably higher than the 85% international norm in terms of safe, efficient operation. By international comparison, the length of stay in the Irish hospital system is relatively low. People are not kept in hospitals for overly long periods. The proportion of workload being dealt with in the hospitals through day work - a more intensive way of achieving higher throughput - would be relatively high, particularly in Dublin hospitals. There probably is greater scope for more day work in out-of-Dublin hospitals with greater investment in diagnostic and treatment facilities. All of these indicators point to a hospital system which works very efficiently but which is under extreme pressure. This certainly poses the question of whether there is sufficient capacity in terms of beds and treatment facilities in general.
On the specific question about the capacity of accident and emergency services to cope sufficiently given that 70% of admissions arrive into hospitals as medical emergencies, the analysis we have done to date suggests there is a need to address the hospital system's capacity both in terms of bed numbers and the medical structure - the ratio of consultants to non-consultants.
Acting Chairman
I am conscious of time constraints. We are also due to discuss the health board report and the internal audit. I would ask Deputies to be brief.
I specifically asked whether the Department compiles routine statistics on routine operations and the time delays involved in people accessing these services. Does the Department measure health boards against each other in this regard?
Mr. Kelly
I will do my best to answer that question. The Department receives data from the health boards and the hospitals on the total number of discharges and what happens in relation to each discharge. This information is analysed under the hospital in-patient inquiry scheme and reports are produced. The Department does not routinely collect detailed information on individual patient episodes.
Perhaps I am not expressing myself clearly. If we take a typical heart surgery procedure, can we establish measurable performance targets for health boards? In other words, can we establish the length of time it takes the average patient to obtain treatment in our system from the date of referral by a GP or specialist and how does that time delay break down? Can we say the average heart patient must wait nine months, two years, three years, etc. for an operation? Can we also establish the length of time people must wait for more routine procedures? Where are the bottlenecks in the system?
Acting Chairman
Would a case mix analysis cover this aspect or is it a separate issue?
Mr. Kelly
We do not compute the length of time it takes from a person visiting his or her GP to the time he or she receives an operation. Therefore, average times are not calculated.
I would have thought such information would have been useful from the point of view of analysing required funding levels and service delivery.
Mr. Kelly
A number of ongoing initiatives touch on this issue. We are currently putting in place a hospital accreditation scheme, a form of quality mark for acute hospitals, which requires the establishment of standards and the marking of hospitals in accordance with these. Work on this initiative has been piloted in the Dublin, Cork and Galway teaching hospitals. This should result in the quality proofing of hospital processes.
There is also a need to assess medical manpower requirements in the hospitals. A group has been established to examine this matter and part of its work will involve examining the organisation of work in hospitals, including clinical pathways. Deputy Lenihan asked about the length of time a patient must wait to be admitted to hospital. At present, the interface between primary care and acute hospitals is not particularly well measured. The development of a more organised interface between primary health care and the acute hospitals is one the specific targets outlined in the strategy statement currently being drawn up in the Department.
Information management in the health service generally is an area which has not received the attention it deserves. Investment in information systems over the years has not reached the desired level as a result of which we are suffering from an information deficit at health board, hospital and departmental level. This is an issue we will endeavour to address in the context of a new information management strategy for the health system.
I thank Mr. Kelly for his very helpful comments.
If members of the public were listening outside the door, I wonder how impressed they would be with the preceding discussion. In terms of value for money and delivery of services, we have lost considerable ground in the past ten years. I would contend that the satisfaction rating with the health service has decreased to ten out of 100. People are concerned that in the event of their having to resort to the health services, they will not receive a speedy response. There does not appear to be any sense of urgency about the need for the health service to respond rapidly to people's needs. I am astounded by this. Constituents regularly ask me how they can gain access to services which are supposed to be available to them. I am appalled by the sanitisation of this issue and the obvious lack of concern or alarm. I could talk about orthodontics, oncology and so on.
I was a member of a health board for 15 years and can assure the committee that when Ifirst joined the system was much more efficient, had a lot less money to play around with than it has now and delivered an awful lot faster and to a far more satisfied population than is currently the case. In terms of value for money, the public is getting a very poor response at present.
I am sure the Chairman is also frustrated because there is not a week that goes by that a mother and daughter do not come in to me inquiring about orthodontic treatment, for example. One would not have to be a consultant to figure out that urgent attention is needed. It is the same story year after year. Some patients who have been on the waiting list for five or ten years have received attention in other jurisdictions. It is amazing that ten or 15 years ago plans were afoot to resolve these problems. I am not making a political point, I am just making the point that the public is concerned. The public's confidence in the ability of the system to deliver is now beginning to flag because it should be able to respond in a much more dramatic fashion than is happening at present. I am not looking for an answer today. However, I would like to seesomething done about the issue as a matter of urgency.
I do not know to what extent the reorganisation of the Eastern Regional Health Authority services has benefited the general public and I am inquiring daily to find out. It has created three health boards in place of one, but I do not think it is delivering three times the service. It has not increased the efficiency of the service nor has it increased by three the throughput in the service. There is something very wrong about this. Before it gets any worse, someone should engage a firm of outside consultants, international experts in the area, to look at the system again. We must ask ourselves how far down this road are we prepared to go before someone shouts, "Halt."
Vote 33 relates to grants on behalf of health boards to meet the expenses of the GMSPayments Board etc. What is the level ofimprovement of services to the general public in this regard? We must deal with value for money and the level of services to the general public. The original cost in relation to the Food Safety Promotion Board amounted to £1 million, but less was spent because of delays. I do not think it is a good idea to have an under-spend in this area for any length of timebecause of the national and international focus on food safety.
Acting Chairman
As far as I know, we spent 25%. I take the Deputy's point that this is currently an important issue.
That is indicated on page 249 regarding the surrender of funds to the Exchequer at the end of the year. There is no latitude under this heading for the surrender of funds to anyone. There appears to be ample opportunity for the spending of funds in certain areas. Page 250 states, "The savings arose due to the delay in formally establishing the Food Safety Promotion Board which is one of the six implementation bodies established under the Good Friday Agreement." I honestly believe that when something is decided it should be done. Fiddling around with something for six, ten and a half or 12 months or whatever simply is not on. If a decision is made, it should be followed up. Delays waste money.
In regard to capital projects over £5 million, Naas Hospital is an old chestnut of mine. Some £40.9 million is to be paid in subsequent years out of a total of £44.2 million. That seems to have increased in the past couple of years. I played a minor role in the compilation of the original estimate for that hospital. I know I will be informed there are extra facilities and know the full extent of these facilities. However, there seems to be a very substantial increase in the cost and I would like to know the reason for this.
On EU funding, which the country voted against in terms of the Nice treaty, the various health boards received a total of more than £5 million. The Vote states, ". . . the following amounts were received from the EU by bodies which are funded directly from the Vote for Health and Children." Will any of this money be relayed to other bodies through the health boards or did it get stuck in the piping system for any length of time?
I have another question to which I want a short "Yes" or "No" answer. I do not want a ministerial speech - with no disrespect to the Secretary General - but these speeches are the order of the day in this business and we get tired of them after a while. On dormant accounts following the death of a patient, the Department of Health and Children wrote to health boards in February 1998 requiring each board to identify all State accounts held and to inform the Chief State Solicitor of the names and last known address of the deceased, date of death, amount of outstanding balance on date of death, the interest which had accrued and so on. It should also be informed where it is not possible to identify the exact interest in each case. It goes on to state that the Eastern Health Board, for example, had 4,576 records in relation to patients, some dating back to 1960. Neither the Chairman nor I is in the House since 1960 and I would not regard that to be a huge number of records in that length of time. I do not accept it is an insurmountable task to overhaul such records in a very short time. Given our discussion this morning, three years later, surely in a time of advanced technology, scanners, photocopiers, calculators, computers and electronic devices of all shapes and sizes, to review 4,500 files should not take three years.
I was a member of a health board for a long time and do not think that any institution within the health service would have to think too long or dig too deep to find out the basic details in regard to a patient. That was never my experience; in fact, the reverse was the case. Files were available to hand without any long drawn out or exhaustive inquiries. I cannot understand the reason things take so long. One area in which delays cost more is the delivery of health services. There is no other area which causes greater concern among the general public. Each of us will at some time have to rely on the health service. It is only then that the seriousness of the issue will emerge.
Acting Chairman
That may have given Mr. Kelly a fairly impossible task. It was a long question looking for a short answer. He may not be able to give it but I am sure he will try his best.
Mr. Kelly
I will try to give a brief response to the various points raised. His first point was that there was no sense of urgency with regard to the series of problems. I do not accept that. There is a huge amount of work being done as evidenced by the series of initiatives taken year on year whether in relation to additional facilities for people with an intellectual disability or additional services in relation to cancer or heart disease etc. There is a sense of urgency in terms of developing and taking action on new policies, seeking new funding and implementing what must be implemented.
We cannot satisfy all needs simultaneously. I am aware of the public frustration concerning what is seen as a lack of response within the system and realise that there are waiting lists for various services. As a Department and a health system we are fully conscious of the need to get on with it and that is very much the motivation behind the work we are doing at the moment on preparation of strategies. That is how we must make progress. It is not open to me to start opening services. I must work within the policy framework set down by the Oireachtas. As far as the Department is concerned there is a sense of urgency about the work we need to do in response to requirements.
The second point made related to value for money. The Deputy will be happy to hear that Deloitte & Touche, an outside agency with an international reputation, conducted a major exercise looking at the whole health system. The report produced will go to Government and will be published in the context of the health strategy.
I agree with the Deputy concerning the delay with the Food Safety Promotion Board. There is a need for urgency in establishing that body. The difficulty is that it is a joint North-South body established under the Good Friday Agreement and it requires a health ministerial council to formalise arrangements for the establishment of the body. All the administrative and physical arrangements have been put in place and the body is working as we speak. Some of the formalities such as the formal appointment of a chief executive officer and the board have not been attended to because of political difficulties in relation to Sinn Féin Ministers from the Northern Ireland Executive attending meetings of the North-South council.
The surrender in the 1999 accounts has to do with additional appropriations in aid and is there because of the formal accounting treatment in relation to that year. That is how it is dealt with. How they are dealt with is not open to the discretion of the Department.
I am not sure if I understood the point concerning the Naas hospital project. The extent of development in the Naas project has been expanded since 1999 and certainly in more recent times. The figure quoted was the figure at that time. I do not know if the Deputy has closer information than I have in relation to how costs are moving——
He keeps a very close eye on it.
Mr. Kelly
——in the building and construction industry at the moment but they are quite alarming. Rising costs in the entire capital programme are one of our major concerns at the moment quite apart from any adjustments made to the brief for a particular project during the course of its development.
The EU funding referred to is ESF funding which was for training for disability groups. It would have been channelled into the system here under the National Rehabilitation Board.
In regard to the delay in responding both to the private property of patients issue and the health system generally it is a fact that certain things take too long. I am not always happy with that and I make that known to health boards. The health boards deal with the delivery of health care on the front line on a day to day basis. They satisfy an enormous range of departmental requests for information such as replies to parliamentary questions, replies to Members regarding representations they make and fulfilling ongoing information requirements to the Department. In some instances responses are delayed and that is unsatisfactory but I hope the committee and the public accept that the health boards respond to information requests reasonably satisfactorily. We would like to improve that record and that of the Department. We are not always happy with our ability to respond to everything with the immediacy we would like. We look at that constantly in terms of customer service to both Members of the Oireachtas and others.
We should have another opportunity to have a look at this Vote in detail. I am not happy.
Acting Chairman
As I mentioned earlier we will now have the Comptroller and Auditor General's special report on the internal audit in health boards. In the context of our discussion and of the questions from Deputy Durkan it is very relevant. I will ask the Comptroller and Auditor General to come in and introduce the report. Deputy Lenihan has left but the statement by the Secretary of the Department of Health and Children on this aspect of it rather than the Vote is available and has been circulated.
Mr. Purcell
The report before the committee sets out the results of an examination by my staff of the operation of the internal audit function in health boards. At a time when more and more resources are being allocated to the delivery of the health services it is clearly increasingly important that the money is subjected to an effective system of financial control. In the year 2000 a total of around £3.7 billion was channelled through health boards. That includes the new Eastern Regional Health Authority and its constituent boards.
Internal audit is the mechanism through which assurance can be given to senior management within the health boards that the system of financial control is operating to a satisfactory level. On a personal level, a good internal audit also allows me, as external auditor to the boards, to place reliance on its work which in turn reduces the level of checking that I must carry out in the performance of my function. Prior to my examination, the last overall review of internal audit in the health boards was undertaken in 1995, by a firm of management consultants, as part of a review of the resourcing of the finance function in the boards. That review concluded that internal audit was under developed and generally regarded as a back water operation. My examination established that things had improved considerably in each health board in the interim. However, more was required to be done before one could state with confidence that the highly effective internal audit was operating across the sector. In this respect, it is reassuring that the health boards are taking the matter seriously, as evidenced by the setting up in May 2000, of a review group to examine how the internal audit function can be enhanced and to develop an outline structure, role, strategy and standards for consideration by the chief executives of the boards.
That group completed its work about two months ago and presented its report. I stand open to correction but I think that the chief executive officers have adopted the recommendations of that report. It is a comprehensive document which complements the recommendations in my report. Together they have the potential to become the blueprint for the development of internal audit services within the health boards sector.
To return to my report, the overriding conclusion is that internal audit arrangements need to be formalised in terms of organisation, planning, resourcing and standards. Ad hoc or half-hearted approaches to internal audit which I believe are not excusable, have no part to play when we are dealing with the scale of expenditure now being managed by health boards. Parallel with the development of the internal audit function, audit committees must be built up which reflect the distinct corporate governance structures of the health boards. The Department has a role to play by facilitating and co-ordinating efforts to standardise to the extent possible, internal audit arrangements across the sector in order to achieve greater coherence and consistency of approach.
Acting Chairman
Because of the time constraints I will take Mr. Kelly's statement as being read because it has been circulated. It is quite detailed and covers all of the aspects. The special report has been welcomed. The gut reaction would be the fear of increasing administrative costs. The public are questioning these costs. I believe they are relatively low, the last figure mentioned being quite low. Bearing in mind that there will be more than £5 billion spent this year on health care, it is essential that it is properly audited. Is it the correct spending and administration of the funds that is involved? Does the Comptroller envisage a value for money gain out of this? Would it focus on malpractice, or not even malpractice, but focus on possible improvements within the system outside of the financial aspects?
Mr. Purcell
Clearly its number one function is to provide assurance to senior management that the control framework in operation is operating to a satisfactory level. Controls are not just there to make sure that money does not fall through holes. Controls are also there to ensure that a health board is operating in an effective manner and that it is operating efficiently. In so far as it would look at those aspects of the control framework and assure that they were working correctly, in that way it can give some measure of assurance to senior management that value for money is being obtained. I do not think it should become a quasi-evaluation unit of value for money in health boards. Where there is such a function and the primary responsibility for the achievement of value for money in any organisation is with line management and with the management of particular divisions, it should ensure that the system is in place to see that they are doing their job properly and with due regard to value for money at all times. I would see that as a valid role for internal audit.
Acting Chairman
Mr. Kelly, from time to time we hear complaints from different parts of the country, from health board members and from others, about an uneven approach to different programmes, different aspects of the provision of service. Would you see this report and the full establishment of the audit units as bringing a more uniform approach across the eight health boards?
Mr. Kelly
I reiterate the welcome extended by the Department to the report by the Comptroller and Auditor General. We also welcome the initiative taken by the chief executive officers of the health boards in putting their heads together to develop a response to the recommendations made in the report of the Comptroller and Auditor General. It is very much our wish that in developing the internal audit function in the boards it would be done in a way that represents, not an absolutely uniform approach, but rather that we can expect the same outcomes in relation to the way the function is set up in each of the boards. In following their own recommendations as set out in the chief executive officers' report on the function of internal audit, the establishment of audit committees, the type of person to be appointed as internal auditor, the reporting relationships to the chief executive officer of the board, the report creates a framework within which a uniform approach could be taken forward from here.
The Department's role in this is to work with the health boards to ensure that the recommendations here are fully addressed and fully followed through. We will be determined to do that. As to whether the role would extend to areas other than propriety, if you like, it is quite clear in the role envisaged for internal audit in the health boards' report they see it being concerned with achieving things in the most economic, efficient and effective manner as well as in compliance with standards. One of the particular objectives has to do with preventing waste, safeguarding assets, securing as far as possible the completeness and accuracy of records, and adequate internal control arrangements. There is therefore scope within the role that the health boards have identified for the internal audit function to extend well beyond the propriety criterion into things like efficiency and effectiveness.
Acting Chairman
The public would need to be made aware of that and they need a reassurance on the efficiency aspects. Avoidance of duplication is one thing but a whole range of issues are being raised and if these are to assist them it would merit the establishment of the full complement of staff in each board. The last thing people want to hear is that there are more accountants when a patient is on a trolley waiting to be operated on. We must explain to the public and obviously the work has been done on this report to bring it to that point. It is important that the public would have a role. The legislation which makes the chief executive officer of a health board directly responsible to the Comptroller and Auditor General would merit the internal auditor reporting directly and spending half his time almost in the chief executive officer's office. I presume that is how it will happen.
Mr. Kelly
To respond to that latter point, the whole question of governance within the health boards and how that system works under the various Acts that ordain it is the first area of analysis within the health boards' own report. Given the chief executive officer's direct accountability in relation to the resources he or she is required to manage, the reporting relationship of internal auditor must be to the chief executive of the health board. That is nailed down very clearly in their own report and their own reproach as they have described it in the report.
Acting Chairman
Are there any recommendations on the question of availability of staff? In the Southern Health Board they seem to be short about three people. In other places they are short one or two. The Comptroller and Auditor General has made certain recommendations about promotional prospects which I accept. However do they have to apply to your Department for sanction for the employment of the extra staff or can it be done within each health board?
Mr. Kelly
I would like to say that it could. However, there will not be a difficulty about the additional posts that are required to put a working internal audit function in place in each of the boards. There is absolutely no point in having junior people traipsing through these posts and out again. They need to be trained and given the skills required to act effectively in an internal audit capacity. Within the internal audit and overall finance functions in the boards we need to ensure there is a security of supply and people are attracted to work in those areas almost as specialists. That is difficult to achieve in a context where the promotional arrangements for staff of the boards generally require open transfer across different areas. It is through the training and educational aspects along with the grading that we make this attractive for people to work, specialise and stay in this area.
Acting Chairman
It is heartening to see that since 1995 there has been a huge increase in the percentage of people with appropriate qualification. That will be of some consolation to the Comptroller and Auditor General and the people involved in trying to check this end of it.
In looking at the report and remembering back to a number of other occasions when we had the Department and the health boards individually in, I can see a very definite improvement. Certainly the report addresses many of the criticisms we had when we first started to examine the accounts.
There still seems to be a lack of co-ordination between the individual health boards. There is a difference between the criteria used by health boards in the financial control or audit area. Equally there seems to be a shortage of professional staff in that sector as is the case in all sectors of the health boards.
When a delegation from the Local Government Appointments Commission was here some months ago I said that usually public authorities advertise for staff in the local or national press well after the vacancy occurs. It seems to me that they only advertise when they have half a dozen different posts and the vacancies may have been there for some considerable time. Further time is required for people to respond and be interviewed. There may be a gap of six months or more from the time the vacancy occurs to recruitment of professional staff. That is where the deficit is created. A private company could advertise today and appoint somebody next week. That was accepted and admitted and I think it should be looked at.
The health boards are spending substantial sums on advertising and that should be seriously looked at. I know of positions advertised within my health board region where the board knew well in advance that the person concerned was leaving and needed to be replaced. Some form of pooling arrangement should be considered so that qualified people could be interviewed and available on a panel for positions in the health boards. Even the Department suffers from the same syndrome, as does every Government Department.
I am glad to see that there is movement in relation to the pricing of medicines and the price freeze. Pharmaceutical companies tend to operate on a grouping basis and are very skilful in setting maximum prices for drugs. The purchasing of drugs should be more centralised and dealt with on the basis of open competition between the industry rather than negotiations by individual hospitals and health boards. Recently this committee was abroad and we discovered that over 10% was saved in one case following centralised negotiated contracts with companies on an international basis rather than dealing individually with localised companies where there is a cartel for the control and supply of drugs which is the biggest single cost in the GMS system.
Mr. Kelly
In relation to the points about the appointments process and the efficiencies that can be made in the purchase of drugs, I will note those as points and suggestions that we can feed into.
Acting Chairman
It is an excellent point because boards seem to compete with one and other. I know it is a matter for each health board, but at times I wonder when I see the Sunday papers in particular whether the advertisements are only for people with poor eyesight because the size of advertisements seem to be way beyond what one would want to see public money spent on. However that is only an aside.
Mr. Kelly
On the skills point generally, as the Deputy has pointed out, we are all fishing in a restricted pool in trying to attract talent to the health system or other parts of the public service. The Department itself is working with a permanent vacancy rate of about 15%. We simply cannot fill our complement of staff. Starting last year we quite deliberately freed up the boards' regime in relation to the approval of posts and the appointments systems. The evidence of our success jointly in this is that by the end of 2000, the numbers of people employed in the health system exceeded the total within our control limit. In the current year, there is evidence of an increased pace at which people are being appointed. However, I will take on board the points raised by Deputy Bell in relation to that and the drugs issue.
Acting Chairman
In concluding the discussion on the special report, I compliment the Comptroller and Auditor General and his staff on their initiative in producing the report. I expect that it will add greatly to the quality of audit of health spending, which has soared. It will be an essential manual for the future on how to conduct internal audits. That concludes the business of this public session.
The witnesses withdrew.
Acting Chairman
The agenda for our meeting on Tuesday, 11 September 2001 at 2 p.m. is as follows: 1999 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, Vote 10 - Office of Public Works (Resumed) from 8 March 2001.
Before adjourning I wish to refer to the point raised by Deputy Conor Lenihan on the report. I have checked the regulations and we do have one which states that any statement being submitted should be in by 2 p.m. on the day prior to the meeting. Deputy Lenihan was quite correct on that point and the message should go out to that effect. It gives members and others an opportunity to consider the material.
The committee adjourned at 1.35 p.m.