Vol. 435 No. 9
16 Mr. Barry asked the Minister for Health if his attention has been drawn to the fact that many small businesses are not being paid within a reasonable time by the health boards; if he has had complaints about this from business associations; if his attention has further been drawn to the danger to employment involved; and the action, if any, he proposes to take in the matter.
73 Mrs. Owen asked the Minister for Health the steps, if any, he will take to discharge the amount of money due from his Department to the Eastern Health Board; and the time-frame for such action.
92 Mr. E. Kenny asked the Minister for Health the amount of moneys owing to creditors in each health board area; the average amount owed; the way in which suppliers to health boards will be compensated forthwith to enable them to continue in business; and if he will make a statement on the matter.
95 Miss Flaherty asked the Minister for Health the amount of money owed by his Department to the Eastern Health Board; and if he will make a statement on the matter.
221 Ms McManus asked the Minister for Health the amount of money due by his Department to each health board at 30 June 1993, and at 30 September 1993.
I propose to take Questions Nos. 16, 73, 92, 95 and 221 together.
The total amount of approved net expenditure for years prior to 1993 as yet unrecouped by my Department is £51.767 million. This was the position as at 31 October and has remained unchanged since 31 May 1993. The details for each board are as set out in the table which I will circulate with the Official Report.
Since taking office I have been acutely aware of the difficulties being experienced by health boards in relation to cash management and of the impact of these difficulties on suppliers. These problems have arisen because of excess expenditure incurred by health agencies between the years 1984 and 1992. I have received representations from individual creditors and trade associations on the matter. The problem has also been raised at the Committee of Public Accounts and by the Task Force on Small Businesses. I am also fully aware that the current position creates a number of serious difficulties for creditors, particularly for smaller enterprises.
Therefore, I am pleased to inform the House that I have now agreed a refinancing package with my colleague, the Minister for Finance, which will address the entire problem. The refinancing package will put health board and hospital finances back on a sound footing and will ensure that the agencies' business can be transacted on the appropriate fair and efficient basis. The details of the package are being finalised. I am confident that we will see a significant and permanent improvement in the position from 1994 onwards.
A number of additional measures are being put in place to ensure that the problem does not arise again.
Health Board Balances as at 31 October 1993 in respect of approved net expenditure.
|
Health Board |
Balances Outstanding |
|
£ |
|
|
Eastern |
15,044,653 |
|
Midland |
3,440,916 |
|
Mid-Western |
4,105,902 |
|
North-Eastern |
4,333,161 |
|
North-Western |
4,600,285 |
|
South-Eastern |
6,333,549 |
|
Southern |
6,845,170 |
|
Western |
7,062,991 |
|
Total |
51,766,627 |
I welcome the Minister's reply and am particularly pleased that he has undertaken an initiative in this regard. Since the Minister did not say, I put it to him that the whole basis for his initiative was that, since 1984, health boards here have been allowed to incur massive debts to the tune of £81 million. There is a message in that for the Minister to undertake a total review of the operations of the health boards' system and the manner in which their finances are organised. Having welcomed the Minister's package, I put it to him that it is extremely important that it be implemented at the earliest possible opportunity. I would ask him to accept that in this case time is of the essence. For example, is the Minister aware that certain suppliers are threatening to withdraw essential supplies from hospitals simply because they cannot obtain payment? Is he aware that health boards feature among the worse names in terms of bad debtors nationwide, that within certain health board areas payment for basic items such as bread are not being made on time; that jobs will be lost unless this matter is taken on board by the Minister as quickly as possible?
As I said, I am aware of the difficulties, and I am proposing to resolve this problem which has been continuing since 1984. I intend to have the refinancing package in place early next year so that in 1994 we will see a dramatic improvement in the solvency of the health boards. I am also cognisant of the points raised by the Deputy in relation to the general financial operations of health boards. I am considering the entire matter and may well bring forward legislation to regulate the issue.
Can the Minister define the words "refinancing package"? Do they actually mean more money? Will it mean that henceforth the Eastern Health Board, and other health boards, will be able to pay their bills to small butchers, bakers and so on within their areas, who are at present losing money, since a £3,000 unpaid bill to a butcher, baker or candlestick maker means they will go out of business? It is all very well for the Minister to say he has a "refinancing package" agreed. Will he say whether it will mean more money for the various health boards nationwide?
I am surprised that Deputy Owen would not at least even welcome the first initiative to be taken in ten years.
I want to know what it means.
It means that those creditors will be paid within a reasonable time rather than the long period they are required to await payment at present. It also means — and I shall explain in great detail — that health boards and voluntary hospitals will be enabled to be more efficient in the way they handle their affairs so that they can obtain better deals for public moneys. Of course, it means a cash injection to health boards but not on the basis of simply presenting one's bill. I have to negotiate directly with health boards and I expect a quid pro quo; I expect a great degree of responsibility on the part of health boards so that this phenomenon will not recur. I know that the Department of Finance would also expect the same response. I will unveil full details of the refinancing package as soon as I have concluded my discussions with each individual health board. But I am convinced and satisfied that it will constitute a significant step forward in allowing health boards operate on an efficient basis for the first time within a decade.
I welcome and await with interest details of the Minister's refinancing package. Did I detect a slight suggestion of a promise of legislation on the part of the Minister to ensure that the public sector, in this case the health boards, operate normal credit terms with their suppliers? I put it to the Minister that he might give serious consideration to the jobs that have been lost because of the lack of prompt payment, or even payment on normal credit terms, on the part of health boards nationwide. Would the Minister take a particular interest in the case of a Wexford man who supplied potatoes to the Western Health Board? Potatoes were to the value of £56,000 supplied to a wholesaler who, in turn, supplied all of the institutions catered for by the Western Health Board but when eight months elapsed without payment being made, the man went out of business. Even at this time that same Wexford supplier has not received payment of that £56,000; he appears to be getting it on the drip but effectively three jobs have been lost as a result? When the Minister is examining his refinancing package and when contemplating legislation would he ensure that such a small creditor will be paid on normal credit terms at present acceptable in trade generally?
I think the Deputy will be aware that Wexford creditors certainly will have——
——priority.
——a particular priority in relation to this matter. I am glad that, within the short time I have been Minister for Health, we have been able to address an issue that has been talked about for virtually a decade, to get that issue addressed and taken off the agenda. Obviously there will be negotiations in relation to funding all of this package that need to be concluded both with the Department of Finance and with the individual health boards. I do not want any misapprehension to be created, that somehow there is a Santa Claus going to present a cheque to everybody and it will be business as usual. I, and indeed the taxpayer, expect that there will be a responsible financial attitude on the part of every health board; indeed such attitude already obtains.
We have not seen the legislation.
I am looking forward to giving encouragement to those health boards who are aware of their responsibilities so that we can get the best possible deal for the taxpayers' money. We are spending a huge sum of money on health services and we are not, in every case, expending it in an efficient manner.
The suppliers are not banks.
I welcome the Minister's initiative in grasping the nettle in relation to the debts of health boards throughout the country. As a member of the Eastern Health Board I am particularly pleased that under the direction of the finance officer, Mr. Martin Gallagher, we have made great inroads in addressing some of the difficulties which health boards have experienced. Perhaps health boards throughout the country would look at the working group set up to deal with small businesses, to arrange terms and so on. I am a little concerned in regard to one or two aspects. The Minister says he may be considering legislation or putting in place an infrastructure. I presume he would still recognise the market demands whether 30, 60 or 90 days in relation to credit terms. If an invoice goes missing one can appreciate that the health board cannot pay in those circumstances. At the end of the day there are many schemes which cause serious over runs in the health budgets, such as the GMS scheme——
That is a Second Stage speech.
A question please, Deputy.
——and, I envisage, the nursing home scheme. How does the Minister intend to address over-runs in general if he is to correct the health budgets?
I am anxious that health boards should operate on a commercially sound basis without impacting adversely on small businesses and suppliers who need to be paid within a reasonable time. I am concerned that the indebtedness which existed for a number of years has prevented health boards from getting proper value-for-money initiatives going and getting proper cost efficiencies. Despite the problems faced by indebtedness there are health boards who managed to get reasonable deals. I applaud all the efforts made to date, but I want to move on to the next phase. We must come to an understanding that health boards, like every other Department of State, must live within the allocation given to them. They cannot simply trundle on at the end of the year and say: "Sorry, we are over running, here is the bill" and expect that somebody will pick up the tab. That cannot be allowed to be the culture.
Obviously there is an exception for demand-led schemes which, historically, have been separate and that is why the Department of Health produces a supplementary estimate annually. On demand-led schemes, to which people have a statutory entitlement, it is impossible to calculate requirements to the exact penny at the beginning of the year. There will always be an over-run on demandled schemes. In relation to the specific budgets of health boards I, this House and the Committee of Public Accounts would expect them to live within the allocation voted by this House.
(Carlow-Kilkenny): I would welcome the Minister's new move if I knew what he was talking about. He has said much about serious financial inputs and chats with the Department of Finance. The Department of Finance clobbers most Ministers. Would they regard £5 million as a very generous offer? The Minister might regard £10 million as a great offer, with the result that £41 million would remain outstanding. The business people who are almost out of business, because of the debts, want to know what money will be provided. Surely the Minister must have an idea as to whether he is talking about £5 million, £10 million or £25 million, which is still only half way. Can the Minister give us some idea of the amounts in case everyone goes home happy thinking this problem is solved when it is all only a smoke screen?
I know it would be very difficult for the Deputy opposite to go home happy, no matter what I said.
Tell us whether they will all be paid.
It is very hard to please the Deputies opposite.
It will please the Wexford farmers.
Please allow the Minister to answer the question.
I want the Deputies——
Would the Minister like us to quote from some of his own utterances on this side?
The Minister without interruption, please.
I was very good on that side of the House. I thank Deputies opposite for their welcome for this initiative. Once the full details are made public, following the conclusion of all my discussions, Deputies opposite will be satisfied. What I have in mind is a restructuring of the entire package of indebtedness, not making a token payment towards it. The actual payment of that restructuring is being discussed with the health boards.
Will there be extra money?
Is the Minister implying in his responses to the questions posed that health boards have not been careful in their purchases and their orders? Is the Minister saying that the restructuring is really a cutback?
The Deputy can put whatever construction her perversity allows on what I have said.
(Carlow-Kilkenny): Can the Minister not use plain language?
Let me be very clear about it. I am concerned, as was the Committee of Public Accounts and I assumed every member of the health boards, that the indebtedness of health boards for the past ten years has prevented health boards from getting the best deal. That is a fact of life. That is not a criticism of health boards.
Will the Minister clear the debt?
Perhaps the Deputy opposite will listen for a minute. It is a reality that that indebtedness has been a barrier to getting a good deal and nobody would deny that.
We agree with the Minister there.
For the Deputy to suggest that this is Machiavellian is bizarre. We are going to refinance the indebtedness of the health boards. The particular proportioning of that will be unveiled in due course. It will satisfy this House——
What does that mean?
——and the health boards will be able to operate on a commercially sound basis from next year on. That is my determination.
I want to move on to questions tabled by other Deputies. I will take two brief final supplementaries.
Arising out of the Minister's extensive but evasive replies, he seems to have confused the issue even more in reply to supplementary questions. Can he state clearly in an unambiguous fashion whether we are talking about a remortgage, wiping the slate clean, a cash injection or a loan? Can he be a little more specific regarding the restructuring or the refinancing he is talking about? I would recommend an element of caution in his activities. What plans does the Minister propose to make to ensure an element of fairness in this restructuring? I understand that a sum of £74 million is necessary under this initiative. Is the Minister aware that there are good boys and bad boys, good girls and bad girls among the health boards, that some health boards have been allowed get away with overspending of a reckless nature over the years while other health boards have been engaged in very careful husbandry involving cutbacks to the extent that hardship was caused in the community? Because they did not shout the loudest——
Brevity please, Deputy.
——they were not heard. Can the Minister build in some mechanism that will not let the bad boys off the hook?
The Deputy has made a very fair point. I have spoken twice this year to the members association of health boards and I made it clear that it will not be a simple matter of my arriving with a cheque and saying: "all your indebtedness is wiped away". Those boards who lived within their allocation should not be penalised in that way. We have seen too often in local government and elsewhere that some local authorities who neglect an area suddenly get a huge cash injection and those who do their best to live within their income are punished. That will not happen. That is why I am saying it will not be a uniform application for every health board. The Deputy opposite is right in saying that there have been those who were less efficient and less responsible than others and they will have to carry the responsibility into the future. That will be part of the entire package that will be unveiled in due course.
I would ask the Minister for a straight answer to a straight question. Can I tell the suppliers who are owed money from health boards that they will be the first priority in this so called refinancing package, that they will not have to continue to act as bankers to the health boards, that their jobs are sound and that they will get their bills paid? Does the Minister accept that the first responsibility on the health boards is to pay their bills? If I did not pay my bills I would be put in jail. Would the Minister not accept that the suppliers to the health boards who are owed money for many months, should now be the first priority for payment?
I intend to achieve the objectives to which the Deputy opposite refers.
Does that mean they will get paid?
I have worked for months to put a package together, and have had negotiations with the Department of Finance and consultations with the health boards. I believe we can ensure that people are paid on time in the normal commercial way. This will be of benefit to the health boards and suppliers and I believe it can be achieved by next year.
May I ask the Minister if he is considering legislation?
