Brennan Report - Department of Health and Children

Report of the Commission on Financial Management and Control Systems in the Health ServiceIn response to the circular, the Department of Health and Children submits a "bid" for thefollowing year and forecasts of the costs of continuing the services proposed in the two yearsthereafter.A priority for the Department of Health and Children in this process is to obtain sufficientfunding to continue developments started in previous years.Health Board InputHealth boards do not generally make formal submissions to the Department of Health andChildren regarding the following years funding. However, they usually discuss needs with theappropriate line division in the Department of Health and Children.These discussions are, in the first instance, based around each health board’s estimate of thecosts of continuing to provide its existing level of services. However, the discussions also dealwith proposals for new service developments within their area, taking account of national andlocal strategies and analyses of needs.This process typically includes costings on those areas giving rise to additional spendingpressures such as:●●●●Full year costs of developments begun part way through the current year;Cost pressures impacting on core funding requirements (e.g. inflation, increasingdemand/activity);Potential costs - both pay and non pay - of proposed new service developments; andFuture revenue impacts of capital developments about to come on stream.The financial aspects of these discussions are usually prepared by the health board’s centralfinance department in conjunction with care group managers (e.g. community care, mentalhealth, etc.). In some health boards, dedicated finance staff have been recruited to supportmanagers in the financial analysis and costing aspects of planning.These submissions are sent to the appropriate "line division" in the Department of Health andChildren. From that point up until each health board receives formal notification of its finalallocation in its Letter of Determination (see Section III below), communication between theDepartment of Health and Children and health boards tends to be informal. Only limiteddiscussion takes place on the core funding issues and there is no advance indication of the finalallocation. However, within the current system of incremental budgeting, health boards wouldbe aware that the previous year’s level of funding forms the baseline for the coming year’sallocation. It is not possible for the Department of Health and Children to be specific on theamount available for the following year until the Estimates for Public Services (Abridged Version)is published in mid-November.Department of Health and Children InputFollowing consultation and review with health boards and other service providers, each linedivision within the Department of Health and Children prepares a "bid" for funding setting outthe associated service implications, the costs involved and any additional posts which may result.The costing process takes account of information provided by agencies, including health boards,and details prior experience of similar proposals. The bids from the various line divisions are162