Brennan Report - Department of Health and Children

Appendix 4Department of Health and Children: The Secretary General of the Department of Healthand Children is accountable for the overall spend and for the evaluation and review of policyimplementation. The Health (Amendment) (No.3) Act, 1996 devolves accountability forexpenditure to the health boards. While the Department of Health and Children is notdirectly involved in day-to-day spending at health board level, it can monitor expenditure and caninfluence the level of spending by setting operational criteria (e.g. the terms and conditions ofschemes and programmes).Health boards: Under the Health (Amendment) (No.3) Act, 1996, health board members areresponsible for adopting a service plan which must be consistent with the financial limitsdetermined by the Minister for Health and Children. The chief executive officer is responsiblefor the day-to-day management and control of expenditure within his/her region - under the1996 Act, s/he must implement the Service Plan on behalf of the health board so that it stayswithin approved budget. Any excess arising in any year is treated as a "first charge" on thefollowing year’s budget. The chief executive officer of each health board is accountable to thePublic Accounts Committee for his/her financial performance.II. THE NATIONAL ESTIMATES PROCESSThe Estimates for Public Services (Abridged Version), published in November of each year, setsout the primary allocations for each Department for the following year. The focus is generallyon the cost of maintaining existing services, but the allocations may include the cost of serviceimprovements for the next fiscal year. There may also be some announcements in that regardheld over until Budget day. In 1996 a partial system of multi-annual budgets was introduced toaccompany the estimates at national level. This involves a projection of spending for a threeyearperiod - i.e. the next fiscal year for which the estimate is being negotiated and theprojected cost for the following two years, completed on an "Existing Level of Service" basis(i.e. the cost in years two and three of maintaining services at the same level as pertains in yearone). This provides a more rounded, if limited, picture of the medium term costs of policyinitiatives proposed in the context of the estimates campaign as well as being a key mechanismin identifying trends as they are likely to affect the overall Government finances.The amount of tax revenue raised on the one hand, and the level of public expenditure on theother, essentially determines Government’s overall fiscal position. As such, the estimates processis a central element in Government fiscal policy. It is a prolonged process that necessitatesdetailed costings and, sometimes, difficult negotiations.Existing Level of ServiceIn April/May of each year, the Public Expenditure Division of the Department of Finance preparesan assessment of the costs of maintaining all public services, including health services, at theirexisting level. This is done in the context of the preparation, development and agreement of theGovernment’s budgetary and economic strategy for the next three years. The Governmentdecides, based on this assessment and all other relevant considerations (economic, taxation, debtservice, etc.), on the aggregate and departmental levels of spend for the forthcoming budget yearthat is consistent with sustainable economic and budgetary development. This is the basis forthe "Estimates Circular" that is then issued by the Department of Finance to all otherDepartments, including the Department of Health and Children, asking them to submit estimatesfor the coming years consistent with the Government decision.161