Annex 1

Q. You have made clear the implications for the Health Service of the current severe budgetary constraints in terms of there being no potential for any development. However, the Department must be able to put forward convincing arguments if the Executive is to be persuaded to target more resources at the health sector in favour of other Departments' projects. We need to be able to show that all the resources are being used effectively in priority areas. Given that some 75% of the Health Budget is spent on staffing, would there be scope to make any savings within the administration manpower, which could then be redirected to frontline services? [Mr McFarland]

A. We fully accept that the Department must be able to argue persuasively for a greater share of the block grant, which is not an easy task. We very much welcome, though, the Finance Minister's identification of Health and Education as top priorities for spending. There needs to be sustained public investment because we are trying to run a modern Health Service within a cramped and inadequate infrastructure.

However, while the Department is arguing for more resources, it is striving continuously to make efficiency savings (including some £190m cash-releasing savings surrendered over recent years). Contingency and recovery planing have also resulted in savings, and a Needs and Effectiveness Study is currently being undertaken to scrutinise deployment of resources. We have discussed with the HSS Boards and Trusts how they might communicate better.

We, along with the Boards and Trusts, are constantly looking at exigencies across the HPSS and trying to make savings wherever possible. One expediency, for example, has been cutbacks in staff training, but that can only operate as a short-term measure. Naturally, our aim is to have the minimum staff needed to provide support facilities, with resources targeted at nursing and medical-related posts. We urgently need to recruit many more professional staff across the disciplines.

We regularly hear the argument about the level of support costs, but we are confident that the administration system is lean. We want to put the maximum resources into direct care, and the new primary care arrangements will release £2.5m for frontline services from fundholders' management costs. The HSS Trusts' management costs of 4% are in line with GB indicators, with Boards' total administration costs standing at just 1.8% of expenditure. These targets and performance are constantly monitored. We are also examining the potential for IT services, which could generate further efficiency savings.

Q. We should be seeking extra resources to support a strategic five-year programme to make a viable Health Service. The Department and Committee should be working together with a view to presenting a case to the Executive outlining that vision. [Mr Kelly]

A. Initial steps are being taken to develop such a plan, with a range of key strategies, as the present plan has run its course.

Q. The Minister mentioned the "modest savings" that might be generated from a reconfiguration of the HSS Boards and Trusts to produce a more streamlined system. Has any work been undertaken in this regard and could we have sight of any Departmental report(s) on the subject? [Ms Armitage] If there were a review of Health Service administration that resulted in substantial savings, would the Department be allowed to reinvest the money, or would the Treasury be the beneficiary? [Mr Berry]

A. I have not seen any such report on a reconfiguration of Health Service administration, though some work has been done speculating on what savings there might be from the amalgamation of, say, two HSS Trusts. I would be happy to give an undertaking to provide the rationale for why we think savings from such a shake-up would not be significant as compared with the scale of under-investment. Moreover, there would also be initial costs with any restructuring of administration.

But it is not just a cash issue. There may be the potential for better decision-making and efficiencies. Also, there may be arguments around whether the replacement of the current set-up with a more centralised system would affect local input and identity.

Technically, DFP could take back any savings generated from a reconfiguration and the Department would have to bid for them.

Q. I think we could be accused of defrauding the public by building up a substantial list of ambitious PfG targets for health, and then failing miserably on the significant ones such as waiting lists. We need much more realistic target, which we can then take back to the Executive in support of an argument for additional resources. Your paper refers to the budget being only just enough to "maintain services". Judging from my visit to the Ulster Hospital yesterday, I very much doubt that we have a budget that will even maintain services. Most hospitals have now stopped elective surgery. We seem to be reduced to bidding for items under EPFs that ought to be mainstream funded.

When can we expect the workforce strategy? Is there a deadline?

How quickly will we know of the "full disclosure" of the consequences for the Department's PfG actions of the lack of resources, as referred to in para 39 of your paper?

There is considerable confusion surrounding the criteria for EPFs and the bidding process itself. For example, can the Committee bring bids? We would like to be able to help people with bids. [Ms McWilliams]

A. We share your analysis of the problem. Waiting lists was the biggest single failure, and the revised target was regrettably the only realistic one.

The reference to "maintaining services" was in relation to resources being available to meet inescapable costs outside our control. Had these not been met in full, we would have had to reduce services elsewhere to absorb the costs. So financially we met the unavoidable costs; DFP did not seek to diminish those. However, we fully accept that this does not mean that it is adequate just to maintain the status quo. Clearly it does not address the problems of trolley waits and lack of community care packages, for example.

A programme of work for the workforce strategy is underway. Some parts are near conclusion such as age profiles, supply needs, training needs, nursing requirements, turnover, wastage.

The ramifications for the PfG actions will have to be dealt with as part of the final budget in December. We will prepare a paper for the Committee on the budget proposals.

The Committee is welcome to make EPF bids; indeed, the Minister actively encourages that. We can ensure that the Committee is involved in the process in future.

Q. I am concerned that our costs are tied in with England's expenditure settlements for salaries and drugs, for example, but that we are not receiving corresponding funding. Does the problem lie with how the block grant is divided? Can we expect to see the further bids against the outstanding EPFs when they are made? [Ms Ramsey]

A. Northern Ireland receives its overall budget allocation based on the population based Barnett Formula. To work out how to keep parity with England's expenditure on health is a simple calculation: increase NI's Health Service budget by applying the same percentage baseline increase to that given for England. However, it is entirely for the Executive to decide how the overall block grant is shared out among the Departments. There is no automatic read across for expenditure on health.

No bids were sought by OFMDFM for the Infrastructure Fund and the Children's Fund under the recent tranche of EPFs (one of the reasons being that the voluntary sector were not considered ready to make bids under children's services). We will be happy to share information on those bids with the Committee when the time comes.

Q. Bed blocking and waiting lists are major problems, with 96 patients waiting discharge into the community in the United Hospitals Trust. Will you ring-fence resources to enable HomeFirst Trust to provide community care packages for these patients? Is anything being done to reduce the considerable duplication within the control systems of the Ambulance Service and Fire Brigade? What is the latest position in relation to the ongoing discussions on consultants' contracts? [Rev R Coulter]

A. The potential for closer co-operation between the Ambulance Service and Fire Brigade is being explored, for example, with the use of the digital trunk radio system.

We did ring-fence moneys for community care packages. The fundamental problem is one of affordability; there are simply not enough resources to meet all the needs.

Protracted negotiations involving the BMA are ongoing across the UK on the question of consultants' contracts. The Department wants a new modernised system with better and more flexible structures that give clearer management control. No decisions are imminent.

Q. I would have some concern that there is limited local input in decisions to make meritorious awards to consultants here. Can you provide a written explanation of how the system works? There is considerable frustration about the delay in the commencement of the new Cancer Centre. Can you indicate how funding for the new build will be attained? Will you attempt to draw down EPF funds and consider selling off unused Health Estates to offset costs? What is the timescale for its completion? [The Chairman]

A. We would be happy to do so. The panels are normally made up of a local Chair (a High Court judge), a Chief Executive of a HSS Board or Trust, a retired local consultant and a number of outside experts in clinical excellence. The scope for more extensive local specialist input is often limited because the expertise base is too narrow. There is a quota of annual awards, and a detailed case must be worked up in support of each nomination.

We now have a good idea of what precisely is required in terms of the specifications for the new Cancer Centre, and the local cancer professionals support the proposed model. We hope to have a final analysis of the Business Case by next week, which will satisfy Treasury requirements. After DFP examines the Business Case, we will explore the potential for PFI involvement. We are very keen to catch up with any lost time and make all speed. Ministers will ultimately have to decide where the funding comes from for the Centre.

We are examining the scope for Infrastructure funds out of EPFs to make a contribution as well as proceeds from the possible sale of the Belvoir site. The Department is actively pursuing the disposal of unused land assets to achieve their maximum value, while remaining sympathetic to the local environment. The Cancer Centre is a clearly a strong candidate for EPFs, as it is a regional flagship project that will make a real difference to the lives of so many patients and their families.

Health and Social Services Minutes 17 October 2001