I move: "That the Bill be now read a Second Time."
This is an important Bill which aims to modernise planning and management systems in health boards. It sets down in legislation new planning, management and accountability provisions which will change the way health boards conduct their business. It presents a challenge to everyone involved in the health sector to work within a planning framework which is linked to specific resources and clear objectives. It brings accountability much more to the fore both in planning and reporting terms. In short, the Health (Amendment) Bill is at the centre of the process to require health boards to carry out their tasks in a context which emphasises planning, strategic management and accountability.
Before dealing with the individual elements of the Bill, it might be useful for the House to consider the background to the Bill both from a strategic and financial viewpoint.
Our December 1994 policy agreement, A Government of Renewal, endorsed the health strategy as the basis for the Government's programme in the health area. The health strategy reorients our health care system and sets out a four-year action plan with targets for reductions in risk factors associated with premature mortality together with improvements in other indicators of health status. The strategy outlined a number of principles which would guide the development of our health services. These are that the Minister and the Department of Health should be responsible for the development of health policy and overall control of expenditure but should not be involved in the detailed management of the health services; greater responsibility should be devolved to the health boards and other executive agencies; the roles of all key parties, including the members of boards and their managements, must be clearly defined and greater autonomy must be balanced by increased accountability at all levels. I am pleased that all of these principles find expression in the legislative proposals now before the House.
The Health Estimate this year is approximately £2.4 billion, including £110 million to be spent on capital items. Taking account of the transfer of responsibility for funding the disabled person's maintenance allowance to the Minister for Social Welfare and allowing for certain other once-off items of expenditure in 1995, this represents an increase in the Health Estimate of approximately 4 per cent over 1995.
Within this total figure, a sum of £1.34 billion has been allocated to the health boards. Taking account of the disabled person's maintenance allowance transfer and other non-recurring expenditure, this allowed for an average increase in health board funding of just over 3 per cent on last year. This is designed to cover the full year cost of developments initiated in 1995 and includes the 0.7 per cent savings on non-capital expenditure required of each Minister in the context of the 1996 Estimates. We were fortunate to have been able to negotiate the use of these savings as a contribution towards the cost in 1996 of the further development of services in line with the Government ProgrammeA Government of Renewal and the action plan in the Health Strategy. These developments include improvements in child care services, services for the mentally handicapped, the physically disabled and the elderly, psychiatric services, dental services, acute hospitals, and services for those with AIDS-HIV and drug problems. The funding allocated for the health services this year should enable health boards to maintain services at approved 1995 levels and provide for the critical service developments in the areas I have just outlined.
Despite this level of investment, we continue to face enormous pressures in terms of the demand for services. The increasing complexity of the technology available, the new drugs continuously becoming available and the ageing of our population, all put an increasing strain on the resources available to the services. It is worth noting that during the last five years — at a time of unprecedented growth levels in our economy, the levels of non-capital expenditure on health has increased by 7 per cent in real terms.
While the economy will continue to grow, the forecast is that the rate of growth will slow down. This will have implications for the level of resources which will be available for public services generally and, in turn, for the level of public investment in health care. At a macro level, we need to start planning for the implications likely to flow from our obligations under the Maastricht criteria. We will need to develop a strategy to cope with this new discipline on the public finances and the implications can be expected to extend into all areas of public policy.
One serious message arises from all of this. It is that we can anticipate two sets of pressures in the years immediately ahead, one being the inexorable pressure for additional and higher quality services and the other will derive from the stronger discipline on public spending to which I have already referred.
Current spending on health and social services is comparable with other EU and OECD countries. If more resource is required for our health services each year, taxpayers, consumers and opinion formers will require a greater depth of information and clarity on service planning and performance. The Bill does not represent a critical or negative judgment on current management within the health boards, but rather about the establishment of a process whereby clear parameters are laid down for the future management and the conduct of performance review, among other things.
In bringing forward this legislation the House must be keenly aware of the difficulties confronting those involved in the delivery of health and social services. There is no denying that, on a day-to-day basis, workers must deal with ever increasing demand for services from a more knowledgable and informed public. They are required to deal with competing demand and priorities within the confines of the funding available. Their achievements in doing so are a testament to the co-operation, professionalism and dedication of health service workers and management. The Government recognises the contribution of all those working in the health service.
Health boards will be aware of the many conflicting demands and pressures when developing their service plans. Developing service plans will present health boards with challenges but will also help them to reflect local priorities in a manner seen to be reasoned and justified.
It is vitally important to the successful implementation of this Bill that health boards, their members and managements, accept that they are now required to deliver services in line with the determination in any year.
It is against this background this Bill has been developed. The Health (Amendment) Bill, 1996 has three main objectives: to improve financial accountability and expenditure control procedures in health boards; to clarify the respective roles of the members of health boards and their chief executive officers, and to begin the process of removing the Department of Health from detailed involvement in operational matters.
The first of these objectives is to strengthen the financial accountability arrangements in health boards. The Government is determined that the health boards will in future operate in the environment of service planning aligned to strict financial control and accountability. In A Government of Renewal, we committed ourselves to introducing legislation to improve the accountability of health boards. This Bill gives effect to that commitment. It reflects the Government's strategic management initiative with its emphasis on making the public service more responsive, more accountable and more open.
The public expect a more open and accountable system of health administration. Health boards will be required to prepare and adopt an annual report on the performance of their functions during the preceding year. This will help taxpayers to judge whether they are getting the best value possible for the money they contribute to the public finances. Services will have to be even more responsive to people's needs and more information will have to be made available about the actions and decisions taken on behalf of the people.
The second objective is to clarify the respective roles and responsibilities of members of health boards and their chief executive officers. One of the key problems identified by the Commission on Health Funding in the present structure is that it confuses political and executive functions to the detriment of both.
The Health Strategy,Shaping a Healthier Future, proposed that this be tackled by making board members responsible for policy functions e.g. determining overall levels of service and expenditure while delegating to chief executive officers responsibility for operational matters. Clear lines of responsibility must be drawn between boards and their chief executive officers. All modern organisations, whether public or private, must have clear lines so that each level understands its role. A board which interferes in operational matters cannot perform its functions in an adequate way as it will lose sight of the broader issues and strategy with which it must be concerned. A chief executive officer who moves into an arena which is proper to the board may neglect his or her main objective which is to implement the policy decisions taken by the board. The Bill gives effect to this by specifying the functions to be performed by board members and chief executive officers respectively.
The third objective of the Bill is to begin the process, signalled in the Health Strategy, of removing the Minister and the Department of Health from detailed involvement in the management of individual services by devolving greater authority and responsibility to the health boards. The development of greater expertise in the health boards in service planning and evaluation allied to the improvements envisaged in the governance role of health board members will create an environment in which greater authority and responsibility can be devolved to health boards.
While the Minister will continue to have ultimate responsibility to the Oireachtas for all health services, his Department will no longer be involved in the detailed management of individual services.
I will turn now to the main provisions of the Bill.
Section 1 contains definitions of key terms used in the Bill.
Section 2 requires health boards in carrying out their functions to secure the most beneficial, effective and efficient use of resources; to co-operate and co-ordinate their activities with other health boards, local authorities and public bodies and to give due consideration to the policies and objectives of Ministers and of the Government.
Section 3 and 4 clarify the respective roles of the members of health boards and their chief executive officers. Provision is made for certain specified functions, to be known as "reserved functions", to be carried out directly by the members of health boards. These include the adoption, supervision and amendment of service plans, the appointment and removal of the chief executive officer, the purchase and disposal of land, the borrowing of money and decisions to continue the provision and maintenance of any premises. The chief executive officer will assist the board, as appropriate, in these matters but the board will have the final say in the performance of these functions. Any function that is not reserved to the members will, subject to some minor exceptions, be a function of the chief executive officer and the staff of the board.
The chief executive officer will be obliged to provide the board with any information they might require in relation to such functions but will otherwise be autonomous in performing them. The effect of these changes will be to bring the management system in the health boards into line with the arrangements that have worked well in the local government system over many years.
Section 5 requires the Minister to specify the maximum amount of net expenditure that may be incurred by each health board in any year. The term "net expenditure" means the gross expenditure of a health board less the income of the board, other than grants made by the Minister. This amount which is referred to as a "determination" must be notified to the board within 21 days of the publication of the Estimates. There is provision to enable the Minister to make a determination in respect of a period other than a financial year.
The Minister is empowered to vary the determination at any time during the year for example, to make additional funds available to meet agreed pay increases or to develop particular services or facilities.
Section 6 requires a health board, within a period of 21 to 42 days of the receipt of a determination as the Minister may direct, to adopt a plan specifying the services to be provided by the board within the financial limits determined by the Minister. The board is required to submit a copy of its plan to the Minister.
If a health board does not submit a service plan within the relevant timescale, the Minister may allow a further period, not exceeding ten days, to enable the board to do so. If a health board fails to submit a service plan, the Minister may direct the chief executive officer to prepare and submit a plan within ten days. The Minister may, not later than 21 days after the receipt of a service plan, direct a health board to modify its plan and the board is required to comply with such a direction.
Service plans are already in operation throughout the health boards on an administrative basis and the plans of boards for 1966 have already been discussed with the Department of Health. The plans cover all the main service programmes such as general hospitals, handicapped, elderly, etc., and describe how boards will manage those programmes during the year. It is vital that plans present a coherent, integrated approach to the services and reflect the expenditure resources committed by the Minister to the agencies. The development of service plans will continue with the Department of Health to ensure that they represent a satisfactory basis to the planning and management of services.
Section 7 provides that where the Minister amends a health board's determination, he or she may direct that the service plan of the board shall stand amended accordingly or, alternatively, require the health board to submit an amended service plan. The power to direct that a plan stand amended is intended to deal with situations such as where the Minister makes additional funds available to meet agreed pay increases or to develop particular services or facilities.
The members of the board will be required to monitor expenditure to ensure that it does not exceed the amount set by the Minister. In addition, a health board may vary its plan at any time during the year provided it does not breach the financial parameters laid down by the Minister.
Section 8 provides that whenever the Minister makes a determination, he or she shall specify the amount of indebtedness that a health board may incur and a health board shall not exceed the amount determined by the Minister.
Section 9 requires the chief executive officer to implement the service plan and to ensure that net expenditure and indebtedness do not exceed the amounts determined by the Minister. Where the chief executive officer forms an opinion that a decision or a proposed decision of the board will result in net expenditure or indebtedness exceeding the amounts so determined, he or she is required to inform the Minister and the board of that opinion.
Section 10 provides that if, at the end of the year, the expenditure incurred by a health board is less than the amount set by the Minister, the savings can be carried forward into the next year. However, if expenditure is greater than that authorised, the excess expenditure will become a first charge in the income and expenditure account for the following year.
Section 11 requires health boards to keep all proper and usual accounts and to prepare and adopt annual financial statements on or before 1 April in the year following the year to which they relate. This is also the date by which health boards are required to submit their accounts to the Comptroller and Auditor General.
Section 12 provides that if the Minister is satisfied that a health board is not performing any of its functions in an effective manner or has failed to comply with any direction given by the Minister, he or she may, by order, transfer specified functions of the board for a period of not more than two years to either the chief executive officer or such other person as the Minister may specify. This provision is intended as a measure of last resort to deal with situations where a board is not being governed in a satisfactory manner, for example, where a board has seriously and without good cause breached the expenditure limits set down by the Minister.
I hope that this power will never have to be invoked and that any difficulties or disputes that might arise can be resolved without resorting to this provision. I would also point out that before exercising this power, the Minister is required to have a report prepared in relation to the performance by the board of its functions, must give the board at least 14 days' notice of the intention to exercise the power and must have regard to any representations made by the board in this regard. I believe that this process provides some breathing space to allow problems to be resolved by agreement between the Minister and the board.
Section 13 empowers the Minister to give directions in writing to health boards and requires boards to comply with such directions.
Section 14 provides that future appointees as chief executive officers of health boards shall hold office on a fixed-term contract basis, as is already the case with senior civil servants and city and county managers. The new provision will not, of course, affect the tenure of existing office holders.
Section 15 requires each health board to prepare and publish an annual report in relation to the performance of its functions during the preceding year. I see this as an important step in bringing the principles of accountability, transparency and freedom of information to bear on the activities of health boards.
Section 16 provides for the dissolution of the Dublin, Cork and Galway regional hospital boards, the local health committees and the national health council. As Deputies will be aware, all these bodies have long since ceased to function and this provision is merely giving formal effect to their abolition.
Section 17 contains miscellaneous amendments to the Health Act, 1970. Most of these are required to bring the relevant provisions of the Act into line with this Bill. Of particular interest is paragraph (g) which imposes a new statutory obligation on health boards to develop and implement health promotion programmes. The need for an explicit statutory duty in this regard was identified in the health promotion strategy, launched last year. I believe that this provision will assist in the successful implementation of that strategy.
Sections 18 and 19 dispense with the need for health boards to obtain ministerial consent to the acquisition or disposal of land and to the payment of grants to voluntary bodies; however, the Minister may give general directions which must be complied with by the boards.
Section 20 makes it an offence to carry on a nursing home that is not registered under the Health (Nursing Homes) Act, 1990. This is required to plug a loophole in the 1990 Act.
Section 21 allows the Minister to extend by order the term of office of An Bord Altranais which is due to expire on 3 October 1996. Work on the revision of the Nurses Act which will involve the establishment of new board structures is under way in the Department and it is hoped to publish the nurses Bill before the end of the year. The purpose of this provision is to enable the present board to continue in office until the new Act comes into force, I hope in the summer of 1997. This avoids Boad Altranais going to the trouble and expense of holding elections to a board which will fall to be reconstituted under the new legislation.
Section 22 amends the definition of "health service" in the Health (Corporate Bodies) Act, 1961. This is the Act that provides the statutory basis for a number of health agencies, including Beaumont Hospital and St. James's Hospital and the National Rehabilitation Board. The current definition of "health service" in the Act has a traditional medical orientation and this has prevented the establishment of bodies under the Act to perform functions in relation to personal social services. The revised definition is designed to overcome this problem.
Sections 23, 24 and 25 contain standard provisions regarding repeals, the laying of orders before the House of the Oireachtas, short title, construction and commencement.
This is an important Bill which will affect all aspects of the management, planning and accountability of health boards. It is fully in keeping with the aims and objectives of the health strategy and indeed its enactment is central to the achievement of those objectives. The Bill also reflects the Government's desire to introduce a more strategic approach to management in the public service. I commend the Bill to the House and look forward to hearing the contributions of Deputies.