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Dáil Éireann debate -
Wednesday, 5 Jun 1991

Vol. 409 No. 4

Southern Health Board Funding.

I wish to advise you Sir, that I wish to share my time with Deputy Allen.

Is that agreed? Agreed.

The Southern Health Board will pay approximately £400,000 in interest charges to the banks this year as a result of delays in receiving payments from the Department of Health. The Southern Health Board are incurring these charges in order to meet the day to day running costs of the health services in the board's area. Indeed, the bank charges have gone up from £280,000 which is the figure shown in the audited accounts of the board for 1988.

These bank charges are colossal figures and is lost money for the provision of health services in the Southern Health Board area. The Department of Health must bear the sole responsibility for this as they continually delay the payment of moneys to the board.

In my own town of Mallow we have been seeking an additional 20 beds in the local hospital since 1989. The sum of money to be paid by the board to banks, £400,000, would more than cover the cost of the additional 20 beds in Mallow Hospital. In fact, if the money was to be used for extra beds in Mallow Hospital it would be of great benefit to the people of the area instead of further inflating the swollen coffers of rich banks.

The shortfall between the allocation given by the Department of Health for the running of the Southern Health Board and what the board estimates they need is in the region of £4 million for 1991. In fact, the sum paid to the banks in interest charges is one-tenth of the shortfall that the board will have and represents a large proportion of money in terms of health services they can pay for.

Another area of expenditure I wish to highlight is the money paid by the Southern Health Board in legal fees. In 1989 a sum of £247,000 was lost by the board in legal fees and the figure for the last year stands at £138,000. This expenditure, like that to the banks, is money that is lost to pay for the running of the health services.

I appeal to the Minister for Health to make good the shortfall in funds to the Southern Health Board. It does not make any sense for the Minister to be asking the board to prepare a development service plan or a value-for-money programme until the Department make up at least the amount lost from the board in bank interest charges.

I thank Deputy Sherlock for giving me an opportunity to speak. At a time when the Southern Health Board are in deep financial crisis with long waiting lists, essential equipment breaking down and so serious a cash flow problem that suppliers are not being paid on time, it is obsence that the banks will make profits of almost £500,000 between bank charges and interest on overdraft in the coming year. I am not blaming the banks. The Minister must take responsibility. This is only part of the problem nationwide. How much money is going by way of leakage from the health funds to the financial institutions? The problem raised tonight is only part of the picture nationally. Evidence is surfacing day by day of major payments being made to the banks because the statutory bodies, health boards and local authorities, are not getting what they need to fund their activities. It is time for total assessment of how much money is leaking from the services to the banks. It is obscene and must be put right.

I ask the Minister to accept his responsibility. The £400,000 that will be lost to the Southern Health Board could be used to reduce waiting lists and provide essential services. The poorest of the poor are being screwed to the wall. Medical card holders are being pursued for debts outstanding to health boards and, at the same time, the boards are being forced to pay moneys to the banks. The Minister must accept responsibility and make good the losses to the health boards.

I am somewhat surprised at the terms of the motion and that the Deputy, as a health board member, should have brought it before the House in its current form. Two quite separate issues have been tied together here in an arbitrary manner. I am glad, however, to have the opportunity to reiterate the terms of the Government's commitment to maintaining the qualify and scope of our health services, while developing their efficiency and effectiveness.

Every health agency uses overdraft as part of their day-to-day operations. In the case of the health boards, maximum overdraft levels are set by my Department and are rigidly enforced. The maximum overdraft is a set percentage of the approved allocation, in this instance 2.8 per cent of the approved allocation. The board then use this overdraft facility as and when it is needed, in the judgment or management. The amount of interest payable is ultimately determined by interest rate levels in the economy as a whole. I stress that this a routine requirement in the financial functioning of each health agency and cannot be regarded as pre-empting funds available for services as between one year and another. There is a certain irony in the fact that only a few months ago the Opposition were urging an extension of borrowing facilities available to health agencies, a move that could only increase the interest charges.

Before moving to the question of the Southern Health Board's position I would like to make a few comments about the broader issue of total health service funding. The Government's commitment to the health services is firmly underlined by the 1991 provision. The gross non-capital provision for the health services in 1991 amounts to over £1.5 billion.

What about the £400,000? The Minister is coming in here to bluff.

I am responding to the Deputies, neither of whom I interrupted while they were making their case. I did not attempt to waste the limited time available. I am anxious to give a full and detailed reply to the Deputies who have taken the trouble to stay in the House until 11.05 p.m.

The health services share of resources has increased each year since we came into office. This year, over one-fifth of total Government expenditure on non-capital supply services is devoted to the health services. In addition, the Government have made available an Exchequer capital provision of £32,330 million. A further £9 million will be made available from non-Exchequer sources, bringing the total capital provision to over £41 million.

Underpinning the 1991 provision for the health services is a firm commitment to the maintenance, subject to normal seasonal closures, of 12,000 acute hospital beds. The Government also recognise the difficulties which certain demand-led schemes cause for the health boards. This year, the cost of these schemes has, for the first time, been identified in a separate subhead. If the cost of these schemes proves to be higher than anticipated, the full cost of the schemes will be funded from the Exchequer. The health boards will, therefore, be relieved of the burden of having to make savings elsewhere in order to cover these costs. This measure will be of significant further assistance to the health boards in the maintenance of services.

The considerable level of resources invested in the health services places a special responsibility on all agencies to ensure that there is maximum return for the taxpayer on the funds invested in the health services. To this end I have instituted a vigorous value-for-money programme in the health services. Each health board appointed a senior official to co-operate in the national programme and to exploit the full potential of the value-for-money initiatives. I fully expect that the VFM programmes will generate additional resources which will further assist agencies in maintaining services at the approved levels.

The Southern Health Board will, of course, benefit from the Government commitments outlined earlier. The board are participating in the national arrangements to promote value for money initiatives, as well as pursuing an extensive VFM programme of their own. Management in the board are also examining the scope for delivery of services in different ways so as to maximise the number of patients treated while at the same time respecting budgetary limits. We are working very closely with the board in monitoring these various elements as the year progresses and I am confident that our undertaking to maintain service levels will be delivered.

In conclusion, it is appropriate to underline the particular attention the Government have paid to tackling the complex problems present in a modern health service. The reports produced recently by the groups headed by Mr. David Kennedy and Mr. Noel Fox are particularly useful and we are working quickly to implement their recommendations. In recent days we have implemented the key recommendation of the Commission on Health Funding — that eligibility for free hospital services be extended to all regardless of income. This is a positive and constructive move, designed to eliminate anomalies in the system of eligibility and to promote the basic principle that services should be made available to all on the basis of medical need, not income.

I trust that, despite the alarmist note the Deputy has insisted on sounding in this motion, he can agree on our need to work towards this common aim.

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