Limerick East): This Bill has three main objectives: to strengthen and improve the arrangements governing 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. Before dealing with the individual elements of the Bill, it might be useful for the House to consider the context in which I am bringing forward this legislation.
The Government's policy agreement, A Government for Renewal, endorsed the health strategy as the basis for the Government's programme in the health area. The health strategy seeks to reorient our health care system so that improving people's health and quality of life becomes the primary and unifying focus of all involved in the health sector. It sets out a four year action plan with targets for reductions in risk factors associated with premature mortality, together with other improvements in other indicators of health status.
The health strategy outlined a number of principles to guide the development of our health services. 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 services. The roles and responsibilities of all key parties, including the members of boards and their managements, must be clearly defined. Greater responsibility should be devolved to the health boards and other executive agencies. Greater autonomy must be balanced by increased accountability at all levels. I am pleased to say all these principles find expression in the legislative proposals now before the House.
In bringing forward this legislation, I am keenly aware of the difficulties confronting those involved in the delivery of health and personal social services. There is no denying that, on a day to day basis, health workers must deal with an ever increasing demand for services from a more knowledgeable and informed public. They are required to deal with competing demands and priorities within the confines of the available funding. Their achievements in so doing are a testament to the co-operation, professionalism and dedication of health service workers and management. We are extremely fortunate in the quality and commitment of our health service personnel. I wish to place on the record of the House the Government's recognition of the contribution of all those working in the health service.
Despite significant levels of investment in recent years, we continue to face enormous pressure in terms of the demand for health services. The increasing complexity of the technology available in the services, the new drugs which continuously become available and the ageing of our population are all putting an increasing strain on the resources available. After decades in which we lagged behind other developed countries, current spending on health social services in Ireland is now comparable with other EU and OECD countries. It is worth noting that over the last five years the level of non capital expenditure on health in this country has increased by 7 per cent in real terms.
This growth in health spending took place at a time of unprecedented levels of growth in the economy overall. While the economy will continue to grow in the years ahead, the forecast is that the rate of growth will slow down. This will have implications for the level of resources available for public services generally and, in turn, for the level of public investment in health care.
In the years ahead we can expect, on the one hand, an inexorable pressure for additional and higher quality health services and, on the other hand, pressure for stronger discipline on public spending as a result of our obligations under the Maastricht criteria. We will need to develop a strategy to cope with these conflicting pressures while ensuring, at the same time, that the services currently available conform to the highest standards of quality, effectiveness and accountability.
In developing the service plans which are required of them under this Bill, health boards will also be keenly aware of these conflicting demands and pressures on their resources. It is vitally important to the successful implementation of this legislation that all the players involved — health boards, their members and managements — accept they are now required to plan and deliver services within the confines of their annual financial determination. Putting together the service plans will present them with significant challenges, but will also help them to reflect local priorities in a reasoned and justified way. Greater autonomy and more local decision making, linked with greater accountability and responsibility at local level, is the message of this Bill.
As I said earlier, the Bill has three main objectives. The first of these is to strengthen and improve the financial accountability arrangements in health boards. The Government is determined that the health boards will in future operate in a environment of service planning aligned to strict financial control and accountability. In A Government for 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, accountable and open.
The second objective of the Bill is to clarify the respective roles and responsibilities of the members of health boards and their chief executive officers. One of the key problems identified by the Commission on Health Funding in relation to 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 — for example, determining overall levels of service and expenditure — while delegating to chief executive officers responsibility for operational matters.
Clear lines of responsibility are necessary between boards and their chief executive officers. All modern organisations, whether public or private, must have clear lines of responsibility 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.
This Bill gives effect to the health strategy by specifying the functions to be performed by board members and chief executive officers respectively. Essentially, what is proposed is that the board members should be responsible for policy functions while the chief executive officer will have responsibility for the day to day operational functions.
The effect of these changes will be to bring the management arrangements in health boards into line with the position which has obtained in the local government system for many years. The "reserved functions" which will be carried out by the members of health boards 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 discontinue the provision and maintenance of any premises.
The third objective of the Bill is to begin the process, as I signalled earlier, 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. In future the role of the Department of Health will relate to policy formulation and the measurement of outcomes. There will be more attention to having systems in place which will ensure not only is policy being implemented but that we can accurately measure its effect. The development of greater expertise in the health board in relation to 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.
A highly centralised service creates an unnecessary and undesirable distance between those making the decisions and the people affected by them on the ground. Where there is local control, by way of a service plan agreed by a health board which includes local representatives, problems are likely to be addressed with more focus, unmet needs are more likely to be prioritised and services are less likely to be duplicated. The Minister must, of course, continue to have ultimate responsibility to the Oireachtas for all health services, but this process of devolution of authority and responsibility from the centre to the regional and local level is the way forward for our health services.
I now turn 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 when carrying out their functions; 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. I direct Senators' attention in particular to subsection (1)(b) of section 2, which requires a health board to have regard to the need to co-operate with voluntary bodies who provide services to people in the health board's functional area. This subsection is the result of an amendment which I brought forward following discussion of the Bill in the Dáil and following representations on the issue from, among others, Senator Gerry Reynolds. It was pointed out that this section, which required health boards to have regard to the need for co-operation with other health boards, local authorities and public bodies, should impose a similar requirement in relation to co-operation with the voluntary sector. The voluntary sector makes an enormous contribution to the provision of health and personal social services in this country, whether it be general hospital services, services for the mentally and physically handicapped, child care services, services for the elderly and for other vulnerable groups.
I was happy to give statutory recognition to that contribution by imposing on health boards a duty to have regard to the need for co-operation with voluntary bodies who are providing services to people in their area. This underlines the Government's commitment to the role of the voluntary sector. I hope that this provision will promote greater co-operation between the health boards and the voluntary sector in the delivery of our health services. I see it as the start of the process whereby the Department of Health can gradually disengage itself from detailed involvement with the affairs of voluntary bodies as they, in turn, develop deeper and stronger links with their local health boards. A fundamental change will be taking place over the next few years in the funding of the voluntary sector. In future, voluntary hospitals and mental handicap agencies will be funded by the health boards, rather than the Department. It follows that good relationships will have to be developed between the boards and the voluntary bodies. This section, I hope, will lay the foundations for those good relationships.
Sections 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 discontinue 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. The chief executive officer will be obliged to provide the board with any information they might require on 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 Book of Estimates. The Minister is empowered to vary the determination at any time during the year — for example, when making 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 time-scale, 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. The plans cover all the main service programmes such as general hospitals, services for the mentally and physically handicapped, elderly, child care, etc., and describes how boards will manage those programmes during the year. Under this Bill, service plans will become the key tool in the planning and management of services and in the control of expenditure.
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. This 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 one or more 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 also point out that before exercising this power, the Minister is required to have a report prepared on the performance by the board of its functions; he or she 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. 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 affect the tenure of existing office holders. This section was amended during the passage of the Bill through the Dáil on foot of a proposal from Deputy Geoghegan-Quinn which I accepted. The amendment means that a chief executive officer's contract shall be for a period not exceeding seven years, bringing the maximum term of office of a chief executive officer in line with that which applies to other public servants, such as Secretaries of Departments and city and county managers.
Section 15 requires each health board to prepare and publish an annual report on the performance of its functions during the preceding year. The public expects a more open system of health administration. This provision will help taxpayers to judge whether they are getting the best value possible for the money they contribute to the public finances by making more information available on the actions and decisions taken on behalf of the people. 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 Senators will be aware, all of 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 in 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 this provision will assist in the successful implementation of that strategy.
Section 18 dispenses with the need for health boards to obtain ministerial consent to the acquisition or disposal of land. It contains several important safeguards. First, all decisions on the acquisition and disposal of lands will be reserved functions of the members of a health board. Second, and most particularly, provision is made that the Minister may give general directions to a health board on any proposed sale or acquisition of land. These directions must be complied with by the board. The directions I propose to issue as soon as possible after the enactment of the Bill will set out general guidelines aimed at ensuring transparency of procedure and the attainment of maximum value in respect of the disposal and acquisition of health board land and, with regard to the application of the proceeds of sale, will ensure that they will be used for the improvement and development of the health service. Included in these directions will be a requirement that health boards consult the Valuation Office to ascertain the correct market value of any lands they propose to buy or sell.
The section also sets out particular requirements that must be followed by a health board which proposes to dispose of any land which is not required for the purpose of fulfilling its functions. Subsection (e) contains detailed requirements concerning the notification of board members regarding any proposed disposal of lands. Members must have at least ten days' notice of the proposal and must be given details of the land and the person to whom it is proposed to sell it. A positive resolution must be passed at the next board meeting after such notification in order to give effect to any proposed disposal of lands. These safeguards will ensure that health board lands are not sold without the full knowledge and consent of the board members.
Section 19 amends the Health Act, 1953, to dispense with the need for health boards to obtain ministerial consent to the payment of grants to voluntary bodies. Again, the Minister is empowered to give general directions on procedures which must be followed in such cases and these 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 close a loophole which has become apparent in the 1990 Act.
Section 21 allows the Minister to extend, by order, the term of office of An Bord Altranais which was due to expire on 3 October 1996. I amended this section on Committee Stage in the Dáil to ensure the order can be made with retrospective effect. Work on the revision of the Nurses Act which will involve the establishment of new board structures is at present underway in the Department and it is hoped to publish a Bill early next year. The purpose of this provision is to enable the present board to continue in office until the new Act comes into force. This avoids An Bord 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 Act provides the statutory basis for a number of health agencies, including Beaumont and St James' Hospitals 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 Houses of the Oireachtas, the short title, construction and commencement.
As I said at the outset, this is a significant Bill which will affect all aspects of the management, planning and financial accountability of health boards. It is fully in keeping with the aims and objectives of the health strategy and 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 Senators' contributions.
