I move:—
That a supplementary sum not exceeding £119,400, be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1960, for the Salaries and Expenses of the Office of the Minister for Health (including Oifig an Ard-Chlaraitheora), and certain services administered by that Office, including Grants to Local Authorities and miscellaneous Grants.
The need for this Supplementary Estimate arises from the fact that the costs of the health services as now calculated by the local authorities for both the years 1958/59 and 1959/60 are greater than had been estimated in November and December, 1958, when the original Estimate was prepared.
The provision under Subhead H— Grants to Health Authorities—is to cover balances of grants payable in the course of the year 1959/60 in respect of the year 1958/59 and previous years, and, also, instalments of grants payable in, and in respect of, the year 1959/60.
Deputies will appreciate that in framing the estimates of grants, which are at the rate of 50 per cent. of the local authority expenditure, my Department has to rely very much on the local authorities' statements of currents rates of costs and forecasts of future costs. The information on which the main provision for balances of grant is based is supplied in the months of October to December in respect of the year ending on 31st March following, and consists of statements of realised expenditure for the first half of the year and of anticipated costs for the second half. The provision for instalments of current grant is based on information supplied at the same time, and consisting of estimates of expenditure and receipts by local authorities in the year commencing on the following 1st April. In compiling this information, therefore, local authorities have to plot the course of their finances rather far ahead, and if a number of authorities fail to give due effect to any movement, upward or downward, in the costs of the different services the cumulative effect on the estimate of he requirements of my Department in respect of grants payable from the Vote can be considerable. In the present instance the over-all under-estimate of local expenditure was only about 0.7 per cent. of the earlier estimate of the 1958/59 costs, and about 1.2 per cent. of the original 1959/60 figure. Nevertheless, supplementary provision of £150,000 under the grant subhead is necessary.
The increases and decreases in local expenditure as between the figures on which the original Estimate was based and the figures on which the Supplementary Estimate is based followed a consistent pattern over the two years 1958/59 and 1959/60. Broadly, hospital services, other than tuberculosis hospitals, and the general medical services show higher costs than had been budgeted for, while savings appear in respect of tuberculosis services, allowances to persons suffering from infectious diseases, maternity grants and allowances to disabled persons.
In the case of general hospital services, the main increases in expenditure are in respect of payments by health authorities to voluntary hospitals for the accommodation and treatment of patients receiving services under the Health Acts. The occupancy of voluntary hospitals appears to have increased significantly over the years 1958 and 1959. Many of the additional days of occupancy are attributable to patients receiving Health Act services, and also the increasing awareness of patients of their rights under the Acts, and consequently the proportion of the services provided in voluntary hospitals which results in claims on health authorities, may be assumed to have been growing over those years, and, indeed, to be still growing.
The costs of mental hospitals show considerable increases over the original estimates for both the years 1958/59; and 1959/60. In the former year, the increase was £123,000 and in the latter, £50,000. The increases appear mainly under the headings: Food, Repairs, Maintenance, Salaries and Medicines. These increases reflect improvements in the standards of the hospitals, and, in the case of the cost of medicines, they follow inevitably on the adoption of modern methods of treatment. I feel sure that in view of the need for improvement in the mental hospital services this evidence of the raising of standards will be welcome.
Another service which in both years has proved to be more costly than has been anticipated is that described as "Hospitals and Homes for Chronic Sick, Mental Defectives etc." In 1958/59 the increase of expenditure by local authorities over estimates was £48,000 and in 1959/60, £70,000. The greatest single cause in this case is the payment by health authorities for patients maintained in voluntary institutions for mental defectives. Other factors are the generally increased costs of county homes. To the extent to which these increases reflect extensions and improvements of the services provided for mentally defective and aged or chronically sick patients I am sure that it will be accepted as a desirable development.
Under the heading of hospital services, there is only one item for which an upward revision of the estimates has not been necesary. This is the cost of tuberculosis hospitals, on which a saving of £48,000 in total expenditure is expected in respect of 1958/59, and on which no variation from estimates is foreseen in respect of 1959/60. This situation is a reflection of the fall in the number of patients needing hospital treatment.
In respect of the year 1958/59, the general medical services are now calculated to cost £46,000 more than had been provided for, and in respect of the year 1959/60 the cost as now estimated is £60,000 greater than had been estimated. These increases are attributable almost entirely to the cost of medicines. The experience of local authorities is that the prescribing of newly developed drugs, which, of course, are more expensive than the older remedies, is constantly increasing. The arrangements for the purchase of drugs by local authorities are designed to ensure that the best terms possible are obtained from the suppliers, and I am satisfied that that result is being achieved. When, however, completely new substances are produced at high cost and are adopted by the medical profession as more effective alternatives to existing medicines an upward trend in total costs of medicines is inevitable, and it is extremely difficult for the local authorities to forecast over a long period the amount of increases which they will be called upon to meet.
In respect of both the years 1958/59 and 1959/60, the original estimates have proved to be adequate for all other field services, with the exception of the miscellaneous group of items covered by the description "Other Services" which in respect of the year 1959/60 are now calculated to cost £70,000 more than has been budgeted for. This miscellaneous group includes out-patients specialist services, administration costs, superannuation charges and ambulance services, and the increase in requirements as now calculated is the result of a number of factors which happened to operate more or less simultaneously to push up costs, but which are not significant in the sense of any basic developments.
I shall now come to the cost of the 1958/1959 services and the position is that the cost, other than tuberculosis hospitals, exceeds the original estimate by £301,000, while on all other services savings amounting to £183,000 are anticipated. The net increase over the originally estimated cost is thus £118,000 which represents £59,000 in terms of the grants payable from the Health Vote to health authorities, but the original provision for 1958/59 also included a sum of £12,000 to cover grants payable on completion of the audits of the years prior to 1958/59 and it is now calculated that a saving of £9,000 will be recorded in that item. The net additional expenditure therefore necessary to meet balances of grants in respect of the years up to and including 1958/59 is £50,000.
The position in regard to the cost of the services for the year 1959/60 is that for the same services as showed increases over estimates in respect of the year 1958/59, and for the miscellaneous group of items described as "Other Services", there is an aggregate estimated increase of £290,000. The combined saving on the remaining services is estimated at £90,000, and the net under-estimate contained in the figures on which the original Subhead provision for grant instalments in respect of the year 1959/60 was based was thus £200,000. The additional sum necessary to cover the grant instalments to local authorities is £100,000 so that the total additional provision now sought under subhead H—Grants to Health Authorities—is accordingly £150,000.
I might add that this additional provision for the year 1959/60 takes no account of the added costs of the health services which will follow from the general upward revision of the pay of local authority staffs at present under consideration. The decision of local bodies on proposals for such revisions of pay will not have been taken in time to permit the consequential expenditure to be included in the accounts on which will be based the further instalment of grant payable before the end of the financial year. The additional grant in this respect will accordingly have to be met from the Vote for the year 1960/61.
The additional provision in respect of Grants to Health Authorities is offset as indicated in the Supplementary Estimate to the extent of £30,600, in part by savings on other subheads amounting to £8,600 but mainly by an increase of £22,000 over the original provision for Appropriations-in-Aid.
The savings on other subheads arise mainly as a result of vacancies on the staff of my Department which result in a saving of £6,600 on the subheads related to salaries, wages and allowances. The remaining £2,000 saving is the result of casual variation from the original provision under a number of other subheads.
The receipts to the Vote accounted for under the heading Appropriations-in-Aid include sums paid from the Local Taxation Account which vary with the inflow of licence duties and estate duty. The most recent information indicates that the amounts to be received into the Health Vote will be greater than the amounts shown in the original Estimates by £500 in the case of the Licence Duties Grant and £10,500 in the case of Estate Duty Grant.
Provision was made in the original Estimate for the receipt as an Appropriation-in-Aid of £1,770, being instalments of principal and interest on a loan of £13,200 advanced from the Vote for the year 1957/58 to the Voluntary Health Insurance Board and repayable over a period of 10 years. Early in the present year, the Board, on their own initiative, intimated that they wished to repay the full amount of the loan outstanding, and I have accepted the repayment. The amount to be received under this heading is, for that reason, increased by £11,700. I need hardly say that I welcome the continuing expansion of the operations of the Board which made the repayment possible.
The additional receipts which I have referred to, amount to £22,700. It is necessary to reduce this figure by a sum of £700 representing a short-fall now anticipated on the receipts in respect of searches and certified copies of entries of births, deaths and marriages. The receipts under this heading vary with the public demand for certificates and the experience to date indicates that the original figure of £11,200 for this item should be reduced to £10,500.
To sum up, the original provision under Subhead H for Grants to Health Authorities, has proved to be less than requirements by £150,000, while on other debit subheads of the Vote it is now estimated that £8,600 will be saved, and also that receipts to the appropriations-in-aid will be greater than originally estimated by £22,000, leaving the net supplementary sum, which I now ask the House to grant, at £119,400.