Health Department ‘must live within its budget’, says minister

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HEALTH will have to live within its budget this year and not ask for more money like it did at the end of 2022, the Treasury Minister has said.

Deputy Ian Gorst said the department – which is due to spend £250 million this year, including £17.3m of additional funding – needed to prove to Islanders that it was achieving value for money.This year’s Government Plan includes an annual 2% increase in Health budgets to maintain service standards and meet the costs of health care inflation.

Health Minister Karen Wilson is currently reviewing of the Island’s health and care costs and will bring options to the States Assembly in 2024.

At the end of last year, Deputy Gorst agreed to move £13.3m from the General Reserve – effectively the Government’s current account – to Health to deal with “unavoidable pressures” in 2022.

£6.25m of this was due to Health failing to meet its ‘rebalancing’ target – in essence, savings to be achieved set by the Treasury.

“The department has not been able to identify alternative measures (including any non-recurring measures) and have applied to the reserve to meet the shortfall,” said Deputy Gorst in a report by explaining his decision.

The Treasury had hoped to fund some of the shortfall by using the Health Insurance Fund, a pot of money ring-fenced to subsidise the cost of primary care, but States Members rejected that proposal during December’s Government Plan debate.

At the time, Chief Minister Kristina Moore described the rejection as “a full-blown massive nosebleed”.

Reflecting on Health’s bid for more money, Deputy Gorst said: “Departments must seek to live within their in-year allocation that the States have approved.

“We know that from Health’s perspective, they weren’t able to do that last year. I have to say that it’s not unusual for some departments to seek funding if they’ve not lived within their budget at the end of the year.

“So, it’s not setting a precedent but I think such was the quantum of that overspend that I’ve been very clear with Health colleagues that I will not make such a decision again. They must live within their budget in 2023.”

He added: “When we see the work of the Hugo Mascie-Taylor report and the Comptroller and Auditor General report, it’s quite clear to me that not only are there issues of culture and relationship that need addressing but also good budgetary control, and a good understanding of where money is being spent and what value you’re getting for that money.

“And so that is an important piece of work for the Health turnaround team, the new board, and for me in delivering value for money.”

The Treasury Minister said he fully appreciated the challenges that Health was facing.

He said: “It would be simplistic to say that budgetary controls in the past have not been up to scratch, but there must be an element of needing to improve that control.

“If we look across the globe, and particularly the UK, they seem to pour more and more money into their health service. And yet, the population thinks they’re getting less value.

“We’ve been putting lots of money into health and yet during the election, it was quite clear to me that on the doorstep, people don’t necessarily think that we are providing the service, and they’re getting the value out of the money that we’re putting in.

“Perhaps in Jersey, because we are very close to how government runs and we hear stories of waste, we are in a better position to recognise that there’s a global increase in the cost of health care and modernisation of provisions.

“Yet at the same time, we can do things to make sure we’re getting value for money in that budget.

“And from my perspective, although the Accountable Officer in each department is responsible for spending within their budget, the Treasury needs to have better oversight. There will also be friction between the two.

“I’ve been quite clear that, as a general rule, don’t come to me at the end of the year, or even throughout the year, without a plan, saying you just want extra money,

“Asking for more money de-values the Government Plan process. It also undermines trust, because you’ve put a bid in at the start of the year and yet you cannot live within that budget.

“It casts doubt in the public’s mind about whether you truly do understand what’s going on in your budget.”

Deputy Gorst said that December’s rejection by States Members of using the Health Insurance Fund had caused the Treasury problems but they were not insurmountable.

He said: “It will just make in-year management tighter more difficult but, from my perspective, that isn’t necessarily a bad thing.

“That’s because it means that departments really do have to be careful with their budgeting. They can’t just assume that they can come to Treasury and get additional money from the General Reserve.”

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