I move:
That a supplementary sum not exceeding £40,505,000 be granted to defray the charge which will come in course of payment in the year ending 31 December l997 for the salaries and expenses of the Office of the Minister for Health and Children (including Oifig an ArdChláraitheora), and certain services administered by that Office, including grants to health boards and miscellaneous grants.
I am pleased to have this opportunity to bring this Supplementary Estimate before the House.
The gross additional requirement is for just over £65 million, the precise sum being £65,505,000. This figure is partially offset by additional Appropriations-in-Aid of £25 million, giving a net figure of £40.505 million. This Supplementary Estimate takes account of the fact that £30 million of the total level of funding originally provided in respect of the Hepatitis C Compensation Tribunal will not be required in the current year.
I should explain that some £26 million of the requirement is of a once-off, non-capital nature, £46 million being recurring non-capital and £23 million related to capital expenditure. When account is taken of the £30 million non-capital provision for hepatitis C which will not be required in the current year and additional Appropriations-in-Aid, the net sum required is £40.505 million.
The additional moneys sought are necessary to adequately fund a number of items within the health service which have given rise to additional expenditure not foreseen or which could not be accurately computed when the original Estimate was passed. The document circulated to Members gives the background to this Supplementary Estimate. I intend to cover a number of the main areas but, within the time at my disposal, I cannot go through all the issues.
Broadly, the items contained in this Supplementary Estimate fall into two categories. The first relates to items where there is an inevitable degree of uncertainty in forecasting the actual costs in any one year resulting in the original Estimates not providing fully for these costs. The agreed practice has been to seek supplementary funding in these areas when the actual amount needed becomes apparent during the year. The items recognised by the Department of Finance as falling within this category are medical indemnity insurance, superannuation costs, PRSI costs and demand-led schemes which consist of the community drugs schemes and certain capitation payments such as the domiciliary care allowance.
Expenditure on these items is influenced by a number of factors difficult to predict in advance. Increases in medical indemnity costs are related to growth in claims experience. As Members will be aware, in common with all developed countries, ours has experienced a significant growth in the number and average cost of civil claims throughout our health services, leading to an additional funding of £3.2 million being required for this purpose.
The additional superannuation costs for which funding is sought are occasioned by the age profile of personnel in the health sector. Agencies are experiencing an increasing number of retirements, including those opting for early retirement, leading to an increase in the annual budgetary requirement. A sum of £5 million additional funding is required for this purpose.
In relation to PRSI, modified social insurance status does not apply to workers recruited into the public service after 6 April l995. This means that health agencies experience increased costs in respect of employers' PRSI contributions when recruiting such employees to replace existing staff. This item requires additional funding of £4 million.
Expenditure on the community drugs schemes is a factor of the number and cost of claims under these schemes, again difficult to predict in advance. As the House will be aware, there is a statutory right to relief for expenditure on prescribed drugs and medicines in excess of the expenditure thresholds laid down. There is an additional requirement of £10.9 million in respect of these schemes.
The second broad category of expenditure arises from the need to meet special service needs and genuine once-off expenditure of a pressing nature. In dealing with special service needs, it must be recognised that the health services, particularly in the acute hospitals sector, are influenced increasingly by technological advances and more expensive drugs regimes. In this regard, some £3 million is sought to cover expenditure on high cost drugs, many of which are of a life-saving nature, when the cost associated with even one patient can be very significant. Similar expense is being experienced in relation to blood products for haemophiliac patients, including paediatric haemophilia treatments. Overall some £2 million additional funding is required for this purpose.
Another important matter being addressed in this Supplementary Estimate is child care, in particular the problem of homeless children and those with emotional and behavioural difficulties who require special care and education. Provision is being made for an additional £1.5 million for health boards, on a once-off basis, to cover unanticipated legal costs arising from court cases involving these children. In addition, a total of £4.5 million is being provided on a continuous basis to cover the additional costs incurred by health boards in dealing with these children. It will clearly be seen that we are providing more funding to deal with the problem rather than simply paying legal costs and are introducing specific measures intended to alleviate the problem itself. There is an urgent requirement for funding of £6.9 million to allow health boards to meet the increasing demand for subventions toward the cost of care of older people in private nursing homes. This sum will fully fund the changes in nursing home regulations introduced in l996.
The Government has also agreed to provide a package of funding, on a once-off basis, to meet pressing needs in relation to the disabled and the elderly. A sum of £4.825 million is being provided for the purchase of equipment, technical aids and appliances by voluntary organisations working with people with physical and sensory disabilities and with older people. A further sum of £4.5 million is being made available for services for people with physical and sensory disability. Most of this funding will be provided to allow voluntary organisations to eliminate historical funding deficits built up over the years.
In response to the major problem of drug abuse, the Eastern Health Board has drawn up a comprehensive service development plan to meet the objectives of the ministerial task force on measures to reduce the demand for drugs. This plan allows for the expansion of services in the areas of drug prevention and education, treatment and rehabilitation at a cost of £5 million included in this Supplementary Estimate. This funding will assist in discouraging young people from turning to drugs in the first instance and in addressing the needs of drug misusers presenting for treatment.
I mentioned earlier that expenditure in the current year in respect of the Hepatitis C Compensation Tribunal is likely to be lower than originally anticipated. A sum of £72 million was made available this year to cover the costs of claims made by the compensation tribunal, associated legal costs and those of administering the tribunal itself. The volume of cases dealt with so far this year was not sufficient to use up the approved level of funding. In order to expedite claims before the statutory tribunal which I established by order on 1 November I have made arrangements to facilitate the settlement of claims. In addition, I shall be appointing four additional members to the tribunal in the very near future. A total of £42 million is available for the remainder of this year to cover the payment of claims and associated costs, including £15 million to cover payment of outstanding reparation fund claims where payment is requested this year.
The Supplementary Estimate also provides for an additional £23 million for my Department's capital programme. The original capital allocation for l997 was £108.743 million. The need for an increased provision must be seen in the context of the serious under-investment in the past, particularly when account is taken of the considerable asset base requiring to be serviced which had been estimated at in excess of £4 billion for the health boards alone.
One of the consequences of this under-funding over the years has been that health services providers have not been in a position to invest in the replacement of hospital equipment. The demands for priority capital projects this year resulted in a further postponement of expenditure on urgently required equipment. The point has now been reached at which it is just not possible to further postpone the purchase of essential equipment without damaging the fabric of these services.
Provision is also included in the Supplementary Estimate to allow agencies undertake essential works to address the serious backlog of fire prevention and maintenance works. These are necessary to allow health agencies meet their legal obligations with regard to health and safety regulations. The proper provision for equipment replacement and maintenance works were two issues I was particularly concerned to address. I also intend making provision for these areas from the l998 capital budget.
The original capital programme did not provide for the purchase by the North Eastern Health Board of Our Lady of Lourdes Hospital, Drogheda because of uncertainty in relation to the timing of this funding requirement. In the event, the transaction was completed this year and provision must be made for the necessary funding.
Provision is also included in this Supplementary Estimate for the relocation of the Blood Transfusion Service Board to the St. James's Hospital site as a matter of the utmost urgency. Funding will be required also for the board's requirements in relation to information technology and vehicle replacement.
Since assuming office I have been conscious of the challenges with which we are faced in managing a system as complex and dynamic as that involved in the administration of our health services. Perhaps more than any other sector of the public services, health is influenced by constant technological innovation and new methods of service delivery. While there are undoubted attendant benefits to such developments, almost invariably they are very costly. This Supplementary Estimate clearly illustrates that point. I am also conscious of the genuine pressures with regard to the needs of groups such as the mentally handicapped, physically handicapped and the elderly. I am in discussion with the Minister for Finance with a view to addressing such issues in the context of the forthcoming budget and the multiannual budgetary framework for the health services.
This Supplementary Estimate will greatly assist health agencies in meeting their additional costs and in addressing the need for immediate investment in key service areas. The funding being sought demonstrates the Government's real commitment to adequately fund our health services. Accordingly, I recommend the Supplementary Estimate to the House for its approval.