Brennan Report - Department of Health and Children

Chapter 2 Overview and Issues●●The total eventual cost is therefore in the range ¤ 45 million to ¤ 50 million.Arrears of ¤ 30 million to ¤ 34 million are also due to be paid on this deal.Figure 2.8: Childcare Workers Pay Deal 2001Costs in £ millions50454035302520151050OriginalEstimateActualCostTotalcostsSource: Department of Health and ChildrenThis is an example of how the absence of a comprehensive risk assessment procedure, whichwould examine the full effects of such a change, can have enormous consequences. Weacknowledge that this problem is not unique to the health sector.Overruns in the General Medical ServicesThe estimated spending overshoot in 2002 for the General Medical Services (GMS) is ¤ 183million on a budget of ¤ 739 million – 25%. While we acknowledge that because this is ademand-led scheme it is difficult to forecast its costs, the extent and systematic nature of theunderestimation of costs have surprised us.An analysis of the period 1997 to 2002 (Figure 2.9and Table 2.4) shows an estimated annual average increase of around 6.8% in the annualEstimates. The actual annual average increases in costs were in excess of 21% for the sameperiod. Figure 2.9 shows the problem is getting worse.31