Brennan Report - Department of Health and Children

Report of the Commission on Financial Management and Control Systems in the Health ServiceRecommendation on Service Planning (cont’d)R4.5 Service Plans of the Executive and the health boards should ideally be agreed and in place before thecommencement of the year to which they relate.4.3 REBALANCING FINANCIAL ALLOCATIONSOne consequence of the incrementally based estimates process is that individual health boardallocations are largely a reflection of their historical funding positions. There have beensignificant demographic and social changes over the years that have implications for healthservice delivery and needs but are not reflected in the Letters of Determination (e.g. changesin the size and age profile of the population within each health board region). While werecognise that the lack of investment in information systems over the years has led to asituation where this information is not always readily available, we consider that funding shouldbe determined in a manner that captures these changes in society.This means examining the relative size of each health board allocation taking account of factorssuch as population size, age profile and so on. We recognise that before such a system couldbe implemented, it would be necessary to track and account for flows of patients betweenhealth board areas. Where necessary, the Executive should reallocate funds to those healthboards that have greatest objective need. Such changes may need to be made over a phasedperiod.Recommendations on Rebalancing Financial AllocationsR4.6 Funding of regional health boards should be evidence based and prioritised across identified needs. Inparticular, in allocating budgets between health boards, the Executive should take account of a number ofnationally agreed key factors, as they apply across health board regions, such as:Demographics Specialities Client Profile CapacityServices Activity Infrastructure Socio-economic profilesR4.7 Pending establishment of the Executive, a working group representative of the Department of Health andChildren, the Department of Finance and the regional health boards should be established:(i) To conduct advance development work on defining the appropriate factors under R4.6 above;(ii) To determine the relative weighting which should be ascribed to each factor in determining each healthboard’s allocation; and(iii) To examine the phasing arrangements that are appropriate to ensure a smooth transition to the newarrangement.4.4 MULTI-ANNUAL BUDGETINGThe current estimates process, being incremental and annual in nature, is not conducive tolonger-term service planning, although there is a multi-annual planning framework in place forcapital expenditure. Funding is sought on the basis of the expenditure to be incurred in therelevant year only and does not adequately capture the full cost implications of manydevelopments.60