When I was in the Seanad with the Health Bill before the Summer Recess some Senators expressed a certain amount of anxiety with regard to the financial provisions and they asked me who would pay for all these new services. I told the Seanad on one of the later stages that the idea was that local authorities would not have to pay more for health services for some time to come than they had been paying in the past and whatever increase there might be on the health services by each local authority, it would be paid by the State until we would reach the stage that the State was paying 50 per cent. And the local authority 50 per cent.; from that onwards we would pay on the basis of half and half.
That is what is embodied in this Bill. As a matter of fact, this Bill is brought in to implement that idea. I should make it clear, as I did point out at the time to the Seanad, that in calculating what the health expenditure is we do not take capital expenditure into account: it is only the current expenditure on health services. So far as capital expenditure is concerned, the greater part will be financed from sources other than the local authority. The usual method at the moment of financing capital expenditure is to get 75 per cent. from the Hospitals' Trust Fund and 25 per cent. is put up by the local authority, raised by way of loan and afterwards paid back.
As regards the provisions of this Bill, they have been explained in a memorandum which was circulated, because there is a good lot of what is known as legislation by reference. The rather difficult sections in the Bill have been explained in the memorandum. In order to implement the system I have mentioned there is a standard expenditure. The standard expenditure will be determined for each local authority and that will be taken as the amount that the local authority will have to contribute for some years to come.
Section 4 provides that the State will pay whatever expenditure there is over and above the standard expenditure. Up to this there have been various State grants payable to local authorities for various specific purposes. It is proposed to abolish this and to make the financing very simple by having a lump sum paid over by the State each year to the local authority. Sections 5 to 8 deal with these State grants. These State grants have been growing over a long number of years and have been growing haphazardly. The licence duty grant was brought in in 1898 under the Local Government (Ireland) Act and that is devoted by the local authority to the payment of certain salaries and for the upkeep of inmates of mental hospitals. There is an estate duty grant which was introduced in 1888 for some of the public assistance services.
In more recent times grants were brought in: for instance, the free milk grant, maternity and child welfare grant, grants in respect of school medical services, tuberculosis and venereal diseases. Instead of having all these various grants brought into the accounts in each year, they are all being abolished and there is one simple amount being paid over which will, at any rate, save a great deal of clerical work and a great deal of calculation both by the local authority and by the State authority.
Section 7 provides that the estate duty grant will no longer pass through the Guarantee Fund. It was part of the Guarantee Fund, which Senators know was a fund to guarantee the State against loss through the collection of annuities. This will not mean a very big reduction in the Guarantee Fund, because it only amounts to about £150,000 in the year, whereas the agricultural grant is about £1,870,000, and reducing a fund of £1,870,000 each year by £150,000 will make very little difference. It is only used as a guarantee to the State that the annuities will be collected. At the present time health services are costing something over £5,000,000 per year.