Brennan Report - Department of Health and Children

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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
Chapter 4 Service Planning, Budgeting and Supplementary EstimatesWe accept that a multi-annual system of budgeting would improve the planning process and, ifappropriately structured, would improve financial management within the health service andcontribute to the delivery of greater value for money. The current planning horizon (throughhealth strategies, for example) is five to ten years but there is a notable absence of financial plansto underpin these strategies. Some system of multi-annual planning, identifying the source of thenecessary funding, would support implementation of these health strategies.The introduction of multi-annual budgeting was one of the main proposals for change in thesubmission we received from the CEOs of health boards. Before addressing this request it isimportant to be clear about what multi-annual budgeting is. It does not provide an absoluteguarantee that funds will be available whatever the budgetary circumstances. Rather, it involvestaking a strategic view of service planning and development on the basis of an indication of thefunds which are likely to be available. It should more accurately be regarded as a multi-annualfinancial and service planning framework.Under existing arrangements, the “Ireland Stability Programme December 2002 Update”,submitted to the EU Commission, is based on a three-year allocation of gross publicexpenditure for 2003-05.We recommend that the Department of Health and Children issue theExecutive with indicative 3-year planning totals consistent with the Stability Programme, whichthe Executive should break down between its major organisational units. These units shouldthen be required to submit 3-year financial and service plans for approval to the Executive.Recommendation on Multi-Annual BudgetingR4.8 Service Plans should be framed on a 3 year multi-annual basis.Speedier completion of each years Service Plans, to support recommendation R4.5 above, couldbe achieved by structuring the proposed multi-annual Service Plans to allow for annualadjustments to the funding base. Each year’s Service Plan could then be more readily adjustedto fit the Letter of Determination.4.5 SUPPLEMENTARY ESTIMATESSupplementary estimates have been used over the years to cover certain categories ofexpenditure that are deemed to be outside the control of budget holders or CEOs within thehealth boards (see Appendix 4). Supplementary estimates in the health area equated to anannual average of ¤ 207 million or 4% of budget (current plus capital) over the four years from1999 to 2002, varying from 5.8% of budget in 1999 to 3.0% in 2002.We are concerned that the availability of supplementary estimates could undermine budgetarydiscipline. In this regard, we are aware of the comments of the Minister for Finance, in his Budgetspeech for 2003 that "Ministers and their Management Committees will be required to managestrictly within the allocations given to them". We also note that, for 2003, the Letter ofDetermination to the health boards specifically stated "there will be no consideration given to aSupplementary Estimate for Health and Children in 2003, without exception" 1 .Nevertheless, we make recommendations to tighten controls in this area in the event that1Source: Department of Health and Children.61
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Commission onFinancial Managementan
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TABLE OF CONTENTSEXECUTIVE SUMMARY
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6.4 COMMUNITY DRUG SCHEMES 80Medica
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Executive SummaryEXECUTIVE SUMMARYT
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Executive SummaryWe do not underest
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Page 13 and 14: Terms of ReferenceTERMS OF REFERENC
Page 15 and 16: GlossaryEstimates for Public Servic
Page 17 and 18: Chapter 1 Introduction and Backgrou
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Page 21 and 22: Chapter 2 Overview and Issues2.2 OR
Page 23 and 24: Chapter 2 Overview and IssuesAppend
Page 25 and 26: Chapter 2 Overview and IssuesFigure
Page 27 and 28: Chapter 2 Overview and Issuesother
Page 29 and 30: Chapter 2 Overview and IssuesTable
Page 31 and 32: Chapter 2 Overview and IssuesFigure
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Page 35 and 36: Chapter 2 Overview and IssuesIn 200
Page 37 and 38: Chapter 2 Overview and IssuesThe an
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Page 41 and 42: Chapter 2 Overview and IssuesProble
Page 43 and 44: Chapter 3 Managing the Health Servi
Page 59 and 60: Chapter 4 Service Planning, Budgeti
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Page 65 and 66: Chapter 5 Accountability - Hospital
Page 79 and 80: Chapter 6 Accountability - General
Page 89 and 90: Chapter 7 Accountability - Employme
Page 101 and 102: Chapter 8 Audit ReformCHAPTER 8AUDI
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Page 107 and 108: Chapter 8 Audit Reformaudit reports
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Chapter 9 External Reporting Proced
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Chapter 10 Information SystemsStrat
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Chapter 10 Information SystemsRecom
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Chapter 11 ImplementationRecommenda
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Chapter 11 Implementationbeing brou
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Appendix 1Appendix 1COMMISSION MEMB
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Appendix 1He has held this position
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Appendix 2SIPTU*South Eastern Healt
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Appendix 3Name of AgencyBord na Rad
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Appendix 3Name of AgencyIrish Blood
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Appendix 3Name of AgencyWomen’s H
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Appendix 4Department of Health and
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Appendix 4collated and assessed by
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Appendix 4The most detailed element
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Appendix 4Ratifying and Submitting
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Appendix 4changes to the Service Pl
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Appendix 4advised of their existenc
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Appendix 4Approvals Required in lin
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Appendix 5Appendix 5DIAGNOSIS RELAT
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Appendix 5Figure: Ax.1 Casemix Adju
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Appendix 6Appendix 6AUDIT OF STRUCT
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Appendix 7(vii)(viii)(ix)participat
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Appendix 8Appendix 8 - Integrated M
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ADDENDUMNumber Recommendation IT Ti
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Number Recommendation IT TimeframeR
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Brennan Report - Department of Health and Children

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