Brennan Report - Department of Health and Children
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Brennan Report - Department of Health and Children

Brennan Report - Department of Health and Children Brennan Report - Department of Health and Children

dohc.ie
13.07.2015 Views

Report of the Commission on Financial Management and Control Systems in the Health ServiceCHAPTER 7ACCOUNTABILITY - EMPLOYMENT AND PAYIn this Chapter, we focus specifically on health service employment. We detail the increase in health servicepay and employment in recent years and we examine how factors including overtime and allowances areaffecting the overall pay bill. We consider the systems for setting authorised staff numbers and how theseoperate in practice. We make recommendations in relation to negotiating and implementing pay agreementsand the operation of the Common Recruitment Pool.7.1 OVERVIEWPay is the single biggest cost driver in the health service. It accounts for over two-thirds of totalnon-capital health expenditure. In absolute terms, pay costs have risen by a cumulative ¤ 2.1billion or 69% over the four-year period, 1999 to 2002.Numbers employed in the health service increased by 37% between 1997 and 2001 – from68,000 to 93,000. For a number of groups in the health sector, gross pay rates (i.e. withovertime, call-out payments, etc. included) are significantly higher than basic pay.We believe the health service does not have adequate information to facilitate proper costingand control on issues of employment and pay.There is a lack of co-ordination in the health service in the collection and validation of basicinformation on national employment levels and pay patterns.There is an absence of manpower planning at national level on issues including conditions ofemployment, recruitment policies, rostering arrangements, flexibility requirements etc.The methods used to negotiate pay agreements have sometimes produced expensive knock-onconsequences and this aspect of the system needs to be urgently reviewed.At present vacancies within many areas of the health service can only be filled by a systemknown as the Common Recruitment Pool. This agreement, dating back to 1970, was designedto preserve the promotional outlets of certain employees within the Pool. This blocks accessfor applicants from such areas as the private sector, voluntary hospitals, mental handicapagencies and the civil service. We believe these arrangements are not appropriate and shouldbe changed.We also recommend the introduction of effective performance management systems and anaccelerated management development programme for senior managers in the health service.7.2 PAYExpenditure on PayAs can be seen below (Table 7.1 and Figure 7.1), pay is the single biggest cost driver in the healthsystem.There are, essentially, three variables that drive pay costs:86

Chapter 7 Accountability – Employment and Pay●●●Numbers in employment;Number of hours worked; andRate at which those hours are paid (basic pay, overtime/premium rates etc).In absolute terms, pay costs have risen by a cumulative ¤ 2.1 billion, or 69%, over the periodfrom 1999 to 2002.Table 7.1: Expenditure on Health Service Pay and Pensions, 1997 - 2002Year Total Pay and Year-on-Year Gross Non-Capital Pay and PensionsPensions 1 Increase Health Expenditure as a % of total(¤ m) (¤ m) (¤ m) Non-CapitalHealthExpenditure1999 3,116 4,600 68%2000 3,677 561 (18%) 5,362 69%2001 4,572 895 (24%) 6,704 68%2002 (est) 5,251 679 (15%) 7,692 68%Source: Department of Health and ChildrenFigure 7.1: Pay and Pensions as a Proportion of Gross Non-Capital HealthExpenditure, 1999-2002£ m900080007000OtherPay and Pensions600050004000300020001000019992000 2001 2002 (est)Source: Revised Estimates for Public Services 2000 – 2002; Department of Health and Children1This includes pay costs for direct State employees as well as “pay-related” costs associated with voluntary bodies/agencies fundedthrough the health boards and GP and pharmacy fees under the General Medical Service.These “pay-related” costs are not available foryears prior to 1999.87

Chapter 7 Accountability – Employment <strong>and</strong> Pay●●●Numbers in employment;Number <strong>of</strong> hours worked; <strong>and</strong>Rate at which those hours are paid (basic pay, overtime/premium rates etc).In absolute terms, pay costs have risen by a cumulative ¤ 2.1 billion, or 69%, over the periodfrom 1999 to 2002.Table 7.1: Expenditure on <strong>Health</strong> Service Pay <strong>and</strong> Pensions, 1997 - 2002Year Total Pay <strong>and</strong> Year-on-Year Gross Non-Capital Pay <strong>and</strong> PensionsPensions 1 Increase <strong>Health</strong> Expenditure as a % <strong>of</strong> total(¤ m) (¤ m) (¤ m) Non-Capital<strong>Health</strong>Expenditure1999 3,116 4,600 68%2000 3,677 561 (18%) 5,362 69%2001 4,572 895 (24%) 6,704 68%2002 (est) 5,251 679 (15%) 7,692 68%Source: <strong>Department</strong> <strong>of</strong> <strong>Health</strong> <strong>and</strong> <strong>Children</strong>Figure 7.1: Pay <strong>and</strong> Pensions as a Proportion <strong>of</strong> Gross Non-Capital <strong>Health</strong>Expenditure, 1999-2002£ m900080007000OtherPay <strong>and</strong> Pensions600050004000300020001000019992000 2001 2002 (est)Source: Revised Estimates for Public Services 2000 – 2002; <strong>Department</strong> <strong>of</strong> <strong>Health</strong> <strong>and</strong> <strong>Children</strong>1This includes pay costs for direct State employees as well as “pay-related” costs associated with voluntary bodies/agencies fundedthrough the health boards <strong>and</strong> GP <strong>and</strong> pharmacy fees under the General Medical Service.These “pay-related” costs are not available foryears prior to 1999.87

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