Before I read the statement, I wish to note one correction to it, which was an error on my behalf. The submitted statement makes reference to 341 locations, but that figure should be 340. That was corrected by the Comptroller and Auditor General yesterday. I apologise for that.
I thank the Chairman and members of the committee for the invitation to attend today’s meeting to discuss chapter 15 of the Comptroller and Auditor General's 2018 report. The senior management colleagues joining me today are Ms Anne O’Connor, chief operations officer; Mr. Dean Sullivan, chief strategy officer; and Mr. Stephen Mulvany, chief financial officer. I am also joined by Mr. Jim Curran, our head of estates, who has stayed on from this morning's session. We submitted information and documentation to the committee in advance of the meeting and so I will confine my opening remarks to a few specific issues.
I will first give a financial overview of the situation. A key priority for the HSE is maximising the provision of safe services to the people we serve, while operating within the funding provided to us. This continues to be a significant challenge due to the ever-increasing level of demand on our services, which is influenced by factors such as a growing population with an ageing demographic, changes in technology and clinical practice, and ongoing societal and economic change. We have continued our intensive focus on current year financial management and financial planning for 2020. Senior managers across the organisation have been engaging with us regarding activity and expenditure and the related challenges of operating within available resources.
The latest financial position, as of September 2019, shows a variance from budget, including first charge, of €319 million or 3%. Of this, 37%, or €119 million, relates to our operational service areas. The comparable figure for the same period in 2018 was almost 100% higher at €636 million of which 80%, or €507 million, was in the operational service areas. Pension and demand-led areas account for €200 million of the variance as of September 2019. The greatest cost pressures within our operational services relate to the provision of residential placements to people with an intellectual disability and the provision of specialised emergency care within acute hospital settings, particularly in the context of an ageing population with increasingly complex needs. The costs within our pensions and demand-led areas are mostly driven by policy, legislation, demographics and the macroeconomic environment and are not generally amenable to normal in-year financial management. State Claims Agency reimbursements also fall within this area and there is a significant and ongoing focus on mitigating, insofar as is practical, the underlying risks which give rise to claims.
My monthly financial management meetings with community healthcare organisation, CHO, chief officers and hospital group CEOs will continue to year end. All areas are clear about their allocated financial limits and performance expectations up to year end to mitigate, insofar as is practical, any deviations from those limits, thereby reducing the extent of any challenge to be dealt with in 2020.
The discipline of these monthly financial meetings will continue throughout 2020.
A key focus for ongoing financial management efforts have been on improving compliance with our pay and staffing controls, including whole-time equivalents, agency and overtime. Although staffing levels will increase again in 2019, any increases must be managed in a way that is both planned and affordable. This necessary adjustment to the controls on pay and staffing is proving difficult but it must become part of our normal way of working. I acknowledge that this is a challenging process but the board of the HSE and I are committed to ensuring that there is an improved culture of delivery within the funding provided by the State. I fully believe that doing this will put us in a stronger position to secure investment for the future, which will ultimately be in the best interest of our service users and their families.
The HSE national service plan for 2020 was adopted by the board on 4 November and submitted to the Minister for consideration. The approval process is well advanced with correspondence having been received from him and replied to within the past week. I expect the plan will be published within the next week or so.
The HSE welcomes the publication of the Comptroller and Auditor General’s report on primary care centres. I note that the four recommendations in the report have been accepted and will be implemented in consultation with the Department of Health and in line with the Sláintecare plan. The development of PCCs to accommodate the HSE primary care teams and GPs in the one location is a key enabler for the delivery of primary care services. A number of years ago the primary care division of the HSE, in conjunction with HSE estates, identified 341 locations for primary care centres. In 2012, these locations were prioritised on the basis of service need, existing facilities and level of deprivation. The most suitable delivery model of the primary care centre was also identified.
The three models used for the development of PCCs are as follows: Exchequer-funded development, capital plan; PPP, the Government stimulus programme; and the operational lease. Of the 341 locations identified during the 2012 prioritisation process, 127 locations are now operational. A further 77 primary care centres are in the process of being developed. Taken together, this represents 204 or 60% of the original 340 locations identified. The HSE, in 2020, will complete an overarching review of PCCs that will include an update of the rankings of the proposed locations, and a determination of how further delivery is to be prioritised. This review will help us better understand how PCCs are currently used. It will also allow us to review the characteristics of these facilities to identify the most effective service models.
The review will consider the utilisation of centres and how this would increase as services in the community are expanded, commencing with the Sláintecare investment of €10 million that will increase to €60 million. This will result in to 1,000 additional front-line staff employed in community services. This work will also insure an integrated system among key HSE stakeholders, and a consistent process for coding primary care teams across the networks and CHOs.
Between January and September this year, the HSE provided almost 13 million hours of home support nationally, with an expenditure of more than €320 million. This service provides essential supports to more than 50,000 people to either remain at home or assist with their discharge from hospital. Demand for this service continues to outstrip funding levels and at the end of September, 7,667 people nationally were assessed as requiring new or additional services. The HSE winter plan will continue to support this service by allocating an additional 600 home care packages, targeted at both acute hospital and community waiting lists.
Regarding sections 38 and 39 organisations, the HSE recognises and supports the essential work of the voluntary sector in providing health and social services. We wish to strengthen and deepen the ongoing dialogue between our organisation and the voluntary sector, in line with the recommendations of the Day report. We acknowledge that a number of voluntary organisations are facing difficult challenges, including financial challenges. Various factors may contribute to expenditure exceeding the funding level set out in the annual service agreement signed with the HSE, and any overruns arising require careful analysis of the specific causal factors lest they undermine budgetary discipline within the overall health sector. In the first instance, dealing with any in-year or accumulated historic financial overruns within voluntary organisations, funded under sections 38 and 39, is a matter for the boards of these organisations. We know their boards take that responsibility seriously. I thank the Chairman.