asked the Minister for Health and Children if he will provide details of the £32 million which his Department returned to the Department of Finance; the original intentions for the spending of these moneys; the reasons they were not spent; and if he will make a statement on the matter. [23946/98]
Other Questions. - Health Expenditure.
I make it absolutely clear to the Deputy and to the House that I will not return £32 million to the Department of Finance nor to the Exchequer. The figure of £32 million arose from the forecast outturn for 1998 as published in the Abridged Estimates of 1999. This forecast was the latest Estimate available to the Department of Finance at the time of going to print. While this forecast figure included the major portion of the likely buoyancy in Appropriations-in-aid and, to a lesser extent, additional recoupable expenditures, the figure did not and could not include the full extent of the Supplementary Estimate required by my Department. The finalisation of the Supplementary Estimate is currently under discussion between officials in my Department and the Department of Finance. I expect that when all the outstanding issues, pay and non-pay, are agreed with the Minister for Finance, the final net non-capital funding provided for the health sector will exceed the original Estimate and allow for the implementation of agreed service plans.
Is the Minister saying the £32 million in question will be spent on the health services this year?
Yes, if we are talking about any £32 million as part of the overall expenditure of more than £3 billion in this area. Following a misreading of the Abridged Book of Estimates by Opposition Members, it was suggested I had £32 million in my back pocket that I had not given to the health services which I should give to them, but nothing could be further from the truth. All Deputies will be aware that we have never been amazed at the ability of our health agencies to not only spend the money they are given but to spend more than that. The suggestion that I am in the business of holding back moneys allocated to them would have necessitated a communication from me to all the health agencies asking them to deduct the equivalent of £32 million in total from their service plans, but that did not happen because that was not necessary. There is no question of a reduction in service plan levels as anticipated or of £32 million being retained by the Department.
As Deputies are aware, the sources of funding for the health service are Exchequer grant-aid and Appropriations-in-aid, which represent the own resources element of the health services, health levies, etc. The breakdown of those figures in terms of how we fund the total authorised expenditure decided on at the beginning of the year and which will be augmented by a Supplementary Estimate that will come before the House tomorrow is usually 90 per cent to 10 per cent. A sum of £32 million has not been held back. It has been my job over recent months to indicate to the health agencies the need for them to comply with accountability legislation to ensure they do not go over-budget. I would not ask them to ensure they are under-budget because there would be no prospect of that.
Is the Minister saying the £32 million in question has arisen because of an increased buoyancy in the health levy? If so, is that an additional £32 million that was not included in the original Estimates because of the difficulty in forecasting income that would accrue from the health levy and will that money be spent on the health services?
Yes. I want to ensure nobody gets the wrong end of the stick a second time. If the provision for health levies is approximately £300 million, which represents approximately 10 per cent of gross non-capital expenditure, the health services would be funded by 10 per cent represented by Appropriations-in-aid plus a 90 per cent Exchequer grant. The Appropriations-in-aid figure is topped up with an Exchequer grant to the value of the total level of expenditure agreed at the beginning of the year plus a Supplementary Estimate. That is a simple mathematical equation. There are two streams of funding, the level of the Appropriations-in-aid and an Exchequer grant and the level of the Appropriations-in-aid determines the Exchequer grant. That is how we have funded the health services since we introduced health levies in 1979. There is no mystery about it. If there is buoyancy one year the level of Appropriations-in-aid contribution might increase. If the figure increased by £30 million or £60 million that would represent 1 per cent for every £30 million extra. Instead of the health services being funded on that occasion by a ratio of 90 per cent Exchequer grant to 10 per cent Appropriations-in-aid, it could be funded by a ratio of 89 per cent to 11 per cent. The overall expenditure figure does not change. That is the basic point. The suggestion made by the Opposition last week that such buoyancy involves a £32 million underspend is a misunderstanding or more likely an engagement in political mischief to take from the Book of Estimates which were historic in terms of the level of public services improvements envisaged for next year.
Will the £32 million in question be spent on the health services this year?
I call Deputy Shatter.
Is not the position extraordinarily simple? Because an additional £65 million has been received in respect of the health levy over and above that which the Minister had anticipated and because he has spent approximately £30 million to £32 million of that by way of over-spend through his Department, the reality is the Appropriations-in-aid that the Department of Finance agreed to give his Department at the beginning of this year will be a sum of approximately £32 million less than the Department originally envisaged because the Minister has received far more money by way of buoyancy through the health levy than he anticipated? That £32 million Appropriations-in-aid that was available from the Department of Finance to his Department for this year is now considered a saving by the Department of Finance and will not be made available to the health services. Is that not what the Minister for Finance, Deputy McCreevy confirmed in his press conference held this day last week when the Estimates were published?
Deputy Shatter has a political agenda of trying to continue to confuse a simple position.
Will the Minister give a "yes" or "no" answer to whether what I said is the position?
No it is not the position. I will explain the position once more for him. If a fee or an outlay was in question it would be an easy matter for the Deputy to understand. This is a simple matter. The total level of expenditure for health was agreed at the beginning of the year. That is how the system works. Under good Government one decides what one will spend and one spends that amount——
Will the Minister deal with the £65 million buoyancy in the health levy?
Does the Deputy want to hear the answer to his question? He either wants to hear it or he does not.
Will the Minister deal with the buoyancy in the health levy?
I will. The level of health spend was agreed at the beginning of the year. Under the accountability legislation for the first time all moneys are sent out in time so that service plans can be drawn up on the calendar year, 1 January 1998 in the case of this year. I will send out letters of determination after the budget so that they can prepare their service plans and have money available to them from 1 January 1999 next year. There was a time when we did not give allocations until mid-March and we wondered why we could not plan our health services. We could not tell people how much they would spend.
This is blustering.
In respect of buoyancy, that merely determines the level of spend from the source of funding from which the buoyancy comes. As a general rule, there is a division of 90 per cent to 10 per cent in the health service spend. There are two separate streams of income and the overall 100 per cent figure does not change. The suggestion, therefore, that 89 per cent plus 11 per cent amounts not to 100 per cent but rather, as the Deputy claims, to 99 per cent of the total spend is not borne out by the mathematics I was taught in school.
The Minister will obtain £32 million less from the Department of Finance than it originally agreed to give him.
No. The amount of money it was agreed would be spent on the health services will be spent. Not only will this money be spent, it will be overspent because that excess will be a first charge on next year under the new arrangements outlined in an Act sponsored by the Administration of which the Deputies were esteemed members.
The Minister will receive an additional £65 million from the health levy.
The Deputy should not try to confuse the issue.
I am not confusing it.
Since last week the Deputy has tried to suggest that £32 million less will be spent on the health service which, in parliamentary language, is an untruth.
Should the Minister not withdraw that allegation, given that Deputy Noonan was asked to either leave the House or withdraw such an allegation yesterday?
I did not hear the allegation.
The Minister accused me of uttering an untruth.
Will the Minister withdraw the allegation?
I have no difficulty in doing so. I will rephrase my remarks and state that it is untrue to suggest that £32 million less will be spent on the health service than was anticipated when the Health Estimate for 1998 was agreed. Is that a stark enough appraisal for the Deputy?
That is not what I said, the Minister is changing the issue.
I call Deputy McManus.
I did not say that——
Deputy Shatter is being disorderly and he should allow Deputy McManus to ask her question.
I am sure the Minister accepts that holding ministerial office gives one a rather different perspective from that of members of the public trying to assess the situation regarding funding in the health services. I accept the point the Minister made about proportionality in the budget and I do not believe anyone is confused in that regard. Does the Minister acknowledge that, notwithstanding the change in proportionality and the fact that the original budget was agreed with the Department of Finance, circumstances have changed and that an additional £32 million, which arises out of buoyancy and which was not originally available, has come on stream? I ask this question as if I were a member of the public. Does the Minister not accept that my thesis is correct?
It is illogical to anyone looking at this issue from the outside——
The Deputy should ask a question.
Buoyancy produces a different result from the one originally perceived. Will the Minister confirm this is reflected in the change in funding, whether it comes in terms of a reduction from the Exchequer or in some other way?
Three other Deputies are offering and I ask the Deputy to conclude her questions.
It is difficult to obtain an answer from the Minister.
Will the Deputy confine herself to asking a question?
We are trying to find ways to discover the nature of the £32 million which, despite the size of the health budget, is not peanuts; it is an enormous amount of public money.
The Deputy knows it is appropriate to ask a question, not make a statement.
Does the £32 million exist and, if it does, will it be spent on the health services? Will it be merely absorbed by the costs which form part of the Supplementary Estimate?
Three Members are offering and I propose to take brief supplementary questions from each before allowing the Minister to reply.
I welcome the Minister's commitment in his initial reply not to return the £32 million to the Department of Finance. Does he accept that less than 3 per cent of the £32 million would keep open all beds, wards and theatres at University College Hospital, Galway?
Given that Fine Gael found the £32 million for the Minister, are he and the Department not embarrassed that hospital wards are closing down? In spite of his protestations, the Minister had an additional £32 million available to him which would have prevented the closure of those wards.
If the Deputy says the money is there then it must be there.
It is a disgrace that people have been prevented from entering hospital because of shortfalls in funding.
Given that an additional £32 million has unexpectedly appeared in the State's coffers and in light of the crisis in the health services, does the Minister accept this money should be spent on relieving pressures in the health services? Will he indicate the percentage of the £32 million that has been earmarked for the Supplementary Estimate relating to the area of responsibility of the Minister of State, Deputy Fahey, which is due to be introduced tomorrow?
The Supplementary Estimate to which the Deputy referred relates to the Department in its entirety. There are costs which must be met by the Department which cannot be foreseen at the beginning of the year. For example, the Department's demand-led schemes will be dealt with under the Supplementary Estimate.
People refer to buoyancy as if it relates to owned resources only. However, they conveniently seem to forget the buoyancy that relates to the spend. These things balance out. Deputy McManus asked why we cannot use the buoyancy? We intend to use it to plan developments in the health service for next year which are pay-related to the tune of more than £200 million and which include service improvements of £154 million. Members on the other side of the House must accept that when they propose legislation — I agree with such legislation — it is in the short, medium and long-term interests of the health service that we are prepared to work within the budgets allocated.
Everyone knows that health spending is constantly increasing. This year, for the first time, we will breach the £300 million barrier relating to day to day expenditure. Each week we are reaching milestones in respect of the Health budget. In the past five years, the total budget has doubled. Deputies are aware that there is an internal dynamic in operation in terms of our trying to provide services and improvements.
If we are to move away from the ad hoc situation which obtained in the past, we must realise that the purpose of the Health (Amendment) Act was to encourage the Minister for Health and Children to demand a greater capital budget from the Minister for Finance to modernise infrastructures, improve capacities and achieve throughputs in respect of the waiting lists about which everyone is complaining. We cannot have it every way. Members, whether in Government or Opposition, must realise that we have to work within some sort of credible framework which, if nothing else, imposes discipline in the interests of best practice.
I wish to raise one further point which has not been taken up by any Member of the Opposition. On the basis of a finite budget and regardless of amount of funding provided by that budget, why are hospitals exempt from budgetary discipline? It is because the impact of succumbing to that discipline would mean non-hospital services, which are equally important in terms of providing healthcare in the community for many groups which have been at the end of the queue for too long and about which the House has had many good debates in recent months——
No one inquired about these matters.
The Minister must be under pressure, he is becoming over-excited.
I am making a valid general point.
Why will people not stand up and be counted and state that if they must work within their budgets so too must the hospitals? The Deputies are stating that I should pay on demand and forget about the people who are not part of the hospital services because I do not have a vested interest in them. That is not doing justice to their argument.
No one said that.
The implication of what is being said——
The Minister has been caught with an additional £32 million in his pocket.
I will deal with Deputy Shatter in a moment. The implication of what is being said is that we should tear up the legislation introduced by the Administration of which the Deputies were members. That is not a credible position for the Opposition to take. The Deputies cannot take the heat caused by the disciplines imposed by the legislation they introduced.
That is not true.
Does the Deputy agree with the legislation? Did she support its introduction?
Yes.
In that case, what is she concerned about?
Question Time has overrun by five minutes and will now conclude.
On a point of order——
A point of order cannot be taken while the Chair is on his feet. I will take it after the Adjournment Debate Matters.
Written Answers follow Adjournment Debate.