Official Report: Minutes of Evidence
Committee for Health, Social Services and Public Safety, meeting on Wednesday, 26 November 2014
Members present for all or part of the proceedings:
Ms M McLaughlin (Chairperson)
Ms Paula Bradley (Deputy Chairperson)
Mr M Brady
Mrs Pam Cameron
Mrs J Dobson
Mr Gordon Dunne
Mr K McCarthy
Ms R McCorley
Mr Fearghal McKinney
Mr George Robinson
Witnesses:
Mr Richard Pengelly, Department of Health
Ms Julie Thompson, Department of Health
Draft Budget 2015-16: Department of Health, Social Services and Public Safety
The Chairperson (Ms Maeve McLaughlin): From the Department of Health, Social Services and Public Safety (DHSSPS), we have Richard Pengelly, the permanent secretary, and Julie Thompson, a deputy secretary. You are both very welcome. Richard will make the opening comments, and then we will open it up to questions.
Mr Richard Pengelly (Department of Health, Social Services and Public Safety): Thanks, Chair. My comments will be very brief, if you do not mind. We provided the Committee with a briefing paper. As you are aware, all Departments are consulting on the outcome of the draft Budget in parallel with the Department of Finance and Personnel's (DFP) more strategic consultation. Both elements of the consultation process close on 29 December.
In our paper, the headlines are that our first analysis shows that we can achieve a balanced financial position for the start of the year, predicated on two core concepts. The first is that we deliver efficiency savings of some £160 million. The second is that we start the year with no plans for service development.
The £160 million is ambitious. We need to work through the detail of that across all arm's-length bodies. I emphasise that £160 million is absolutely not a cap. That is the target that we will be aiming for. Every penny that we can push the efficiency challenge beyond that, we will endeavour to do so.
We reckon that we could do about £110 million of service development next year. However, the position that we are adopting is a consequence of the wider environment changing for us. In the past, it has been a very reasonable approach, given the buoyancy of the in-year process, to start the year rolling out some service development and then using the opportunity of in-year monitoring to secure additional funds. In the current financial year, all the signals from colleagues in DFP are very clear that we cannot expect any in-year funding in the future. So we are starting the year on the basis that we will identify service developments that we can do as and when funding becomes available. That funding will either be in the unlikely event that there is some additional allocation to us or that we over-deliver on the minimum £160 million efficiency position.
The draft Budget position has a capital allocation for us of £203 million. We estimate that our need for next year is about £253 million. Of that need, 70% is amounts that are contractually committed to finish projects that we have started. That just means that it will be a very difficult capital position for starting new projects next year.
We have initiated a process with the arm's-length bodies throughout the health and social care sector to develop detailed savings proposals and refine the funding requirements and how the draft Budget scenario would be deployed at the front line. The aim of that is to have a clear plan agreed with each body before the start of the 2015-16 year. It is a challenging time frame. We will, as ever, look for the Committee's support in pushing through with that.
That is all that I wanted to say, Chair. I am happy to take any questions and provide any clarification.
Mr Pengelly: In terms of current as well as —
Mr Pengelly: The sense that we have, which we set out in the paper, is based on the position for previous years.
Ms Julie Thompson (Department of Health, Social Services and Public Safety): On the capital side, it is fairly straightforward. It is 70% of the budget that is proposed for us. For the remainder of the budget, we have analysed for the Committee — in our briefing paper, it is tabled at the end of paragraph 9 — where the expenditure falls based on 2012-13. We would not expect the position to be much different as we move forward. We have salaries and wages, and demand-led expenditure, which includes all independent sector funding, drugs funding and utilities expenditure. We then have all the family health services (FHS) work and clinical negligence. We have boiled it down to an amount of £340 million or so. That is where there are elements of choice. However, I use that word advisedly in that that also has expenditure — for example, the maintenance of the estate — and revenue. Computer, travel, postage and telephone costs are all in that category.
Within that, we are obviously looking to explore as much as we possibly can on the efficiency agenda, as Richard said. We will push all organisations to see what can be achieved. Equally, to be realistic, with salaries and wages, some elements will be incurred through the likes of agency and locum staff. Those staff provide front-line service care, but, in terms of legal commitments, you can release agency and locum staff. That is the analysis that we were given. We will concentrate blatantly on the more discretionary spend, looking to see what we can get out of procuring goods and services more effectively and looking at administration. All that will be looked at as we analyse how we go forward and get the detailed plans that support the overall paper.
Ms Thompson: In the analysis that we got, 8% is on the other expenditure line of £341 million. That is where we are with what we have analysed. As I say, there is big expenditure on the likes of drugs, which is demand-led, but that does not mean that we will not be looking for efficiencies there, because we will. In all these categories, whether it be salaries and wages or anything else, we will be looking to see what we can do to minimise expenditure and how to rein that in. That is what is behind the £160 million.
Ms Thompson: Within that 8%, we will be looking at the discretion. However, I suggest to the Committee that we are not just settling on that and focusing only on 8% of the budget. We are looking right across the budget.
The Chairperson (Ms Maeve McLaughlin): You will be aware that, at our evidence session on 22 October, the Minister indicated that there were three strategic priorities. The first was the provision of high-quality front-line care, the second was Transforming Your Care (TYC), and the third was opportunities for income generation. Can you confirm that those remain the top three priorities?
Mr Pengelly: I can confirm that nothing has changed since the Minister gave evidence to you at the end of October. Obviously, a key issue for us, in parallel with the outworking of the draft Budget scenario, is looking at those priorities. There will not be any significant change, and I am not sure that there will be any marginal change. The Minister's core position remains the provision of high-quality services, using the opportunities afforded by TYC to shift care further towards the left.
We are pursuing income-generating opportunities. That is more a tactic than a strategy, because it obviously helps. In my opening remarks, I talked about the absence of any funding for service development. With a balanced position, as we have at the start of the year, every pound that we can generate in additional charging will be a pound that can be recycled into service development. We are not at the stage of putting any firm income-generating proposals on the table.
Mr Pengelly: The first priority — to provide high-quality health care — is at the heart of how the trusts will deploy their resources. The board, through its commissioning role, and the trusts, through their provider role, will do that. It is not so much that we allocate funding to the priority, because the priority provides the very important context and backdrop for the deployment of all resources. We do not say, "We'll put 95% of our budget towards providing high-quality services and 5% towards TYC". There is so much involved in providing high-quality services: it is the policy agenda and the delivery agenda, so you cannot carve it up on that basis.
Mr Pengelly: Health care occurs at the front line, so I do not see a differentiation between the two. Within that, of course we will seek to minimise administration costs, but some form of administration is necessary to have a front line. The front line cannot exist in isolation.
Ms Thompson: In building up the figure work, we looked at existing costs, and, with the draft Budget, we have ended up in a position whereby we can afford to pay for existing services only if we meet the £160 million of savings. We are not at the stage at which we can say that money is available for new investment in optional areas or priority areas. The point you raise will apply more when we reach a point at which there is a service development pool that you can put new money into. We are not at that stage: we have only the money available to sustain the existing cost base. There simply is not any resource to finance new service developments during 2015-16. That may change as things work forward, but that is where we are at the moment.
The Chairperson (Ms Maeve McLaughlin): From that, it does not necessarily follow that you do not allocate according to your priorities. I would have thought that that would be a requirement in any budgetary process in any Department.
Mr Pengelly: The money is being allocated. The priority is to provide high-quality front-line services, and the money will be allocated with a view to providing those services. There is a whole continuum of activity below that — for example, the issuing of a prescription and the dispensing of a drug is a front-line service. Minor procedures and emergency department services are all front-line services. The prioritisation of high-quality services is done through the measures we take across that whole continuum of services. We could identify how much money we will spend on TYC and say that the balance will go to prioritising front-line services, but I am not sure whether that would help with front-line delivery in health.
The Chairperson (Ms Maeve McLaughlin): You are saying that you will look at existing services, but, given the constraints that you mentioned, has any thought been given to whether those existing services are even in line with the strategic priorities that the Minister announced?
Mr Pengelly: We talked about the £160 million in savings opportunities, which are a combination of doing the right things more efficiently and stopping doing the wrong things, if we define those as things that do not play towards the strategic prioritisation. We will be looking at that work in some detail.
The Chairperson (Ms Maeve McLaughlin): I will try this again. You are talking about existing services, and I appreciate that there are constraints. You are saying that, if you had a pot of money, you could do x, y and z. However, you are also saying that you will continue to fund existing services and that that is where the priority is. Has any thought been given to whether those existing services are in line with the three priorities that were given to us on 22 October?
Mr Pengelly: Maybe our language is confusing. When we say that we will continue to fund existing services, that is shorthand and may be inaccurate. We are saying that, at this stage, we are not putting any money into introducing new services. We are starting by maintaining what we have, but part of that involves questioning what we have to make sure that it continues to be fit for purpose and of maximum efficiency. The extent to which that releases money that will be recycled into the pot of new service development is unknown. So, we are absolutely not saying that we will continue to do what we did last year in the same way. We are saying that we have no funding to go beyond that, so we will start by examining what we did last year and making it better.
Mr Pengelly: I do not accept that.
Mr Pengelly: The strategic point is to say, "We cannot do new things that we don't have the money to do". That is a fairly sensible and strategic point. Beyond that, strategically, we are saying, "Let's look at the totality of the health service. Does it meet the needs that it's seeking to meet? Does it meet those needs in the maximum efficient way?" We are asking those questions.
On a top-down strategic basis, we are asking the trusts to look at the detail of how they provide services. We will be looking at opportunities to realign service provision to make different specialties work together. That is a very strategic approach. We have to deal with the reality of what we have: a finite budget that does not go far enough. Within that, we are operating on a strategic basis.
The Chairperson (Ms Maeve McLaughlin): I accept that, but we also want to be able to stand over the fact that the strategic priorities that were identified to us are collating themselves with the allocation of budgets. I am not hearing that.
I go back to the evidence session on 22 October. The Minister was asked:
"when is a priority not a priority?"
"When you have not got the money to pay for it."
There was a follow-up question on public health and the fact that that has been a key mechanism in the direction of our health service. The Minister talked about the importance of the Public Health Agency and about encouraging people to make particular lifestyle choices. He went on to say:
"However, again, we are back to the funding issue; we do not have the resources to give it the full status it deserves."
The Minister does not seem to recognise the importance of public health to delivering Transforming Your Care or realise that he has the right and responsibility to prioritise one aspect of health and social care over another.
Mr Pengelly: There is a risk of confusing prioritisation with discretion. The Minister is on record as saying that the public health agenda is a priority, but the reality is that that is discretionary spend. Within a finite budget, if the Minister has a statutory obligation to provide certain services that consume the vast majority of that budget, the amount left over is the amount that he can deploy to discretionary areas of spend, notwithstanding any prioritisation of it. So when a GP prescribes a drug, we have a statutory duty to pay the cost of dispensing that drug and the cost of the ingredient. We work to try to reduce those costs, but there is a whole host of areas in which we have statutory obligations to fulfil, and they have a bill. That money comes out of our budget.
The Chairperson (Ms Maeve McLaughlin): I accept that, Richard, to a point. The Minister referred to public health as a priority, but, when we look at the key spending areas in your briefing paper, we see an allocation of £21 million to public health. That does not suggest to me that it is a key priority.
Ms Thompson: The £21 million is the element of Public Health Agency spend that is going out to non-Health and Social Care (HSC) bodies. Under the headings of hospital services and even social care services, public health expenditure is being incurred. That is the way our expenditure is analysed for database purposes for DFP. The £21 million is the bit that will go outwith our bodies. The actual Public Health Agency spend is in the order of £80 million or £90 million.
The Chairperson (Ms Maeve McLaughlin): I go back to the evidence session on 22 October and the discussion on what areas of health and social care should be prioritised. Richard, you mentioned the challenge that the Minister had in trying to bring all the individual strands together and talked about a "very difficult funding envelope" and making "difficult choices". If we want to invest more money in primary care, it needs to be sourced from somewhere else within a fixed envelope. Those are the choices and issues that we will be looking at as we go forward with planning for 2015-16. I am specifically asking whether there is current thinking in the Department on how that allocation would be split across primary and secondary care. Are there any potential changes to the split of the allocation?
Mr Pengelly: The point I made was that many feel that there is an imbalance in funding between primary and secondary care. A lot of the funding in the secondary care environment is fixed and committed. As we take the high-level position today, trusts, as they work through the detail of that, will be looking at ways to maximise throughput, reduce the average length of stay and better manage bed utilisation. Those issues are ongoing, and that is primarily focused on releasing as much funding as we can from the current system of operation. There will then be a pause for the Minister to consider how best to redeploy that in the context of his strategic priorities. However, a big issue is the extent to which that is redeployed towards primary care, which is entirely in keeping with the TYC agenda. That is the direction, so it is very high on his list of things to do.
The key point is that I can give you an absolute assurance that, throughout this process, whilst accepting that there are some services that must remain in place, we are looking at any and all ways of squeezing every penny out of those services and looking at alternative and better ways to provide them. We will look for more efficient and effective working and better throughput management to release funding that can be deployed to other areas. This is the very point you make: that will have a longer-term impact in reducing demand in the secondary care environment.
Mr Pengelly: Yes. It is our desire to keep pushing in that direction.
The Chairperson (Ms Maeve McLaughlin): It is useful to know that that thinking is going on, but you indicated that that would be subject to alignment with the Minister's strategic priorities. However, in answer to the first question, you said that it is just about existing services.
Mr Pengelly: That is not what I said, and I am sorry if I was not clear enough. All money will be spent in accordance with the Minister's priorities, but we do not allocate money to priorities.
We allocate money to services in the context of the strategic priorities, so decisions about deployment are taken in the context of priorities. However, priorities do not deliver services; they are the framework and the context within which services are delivered.
Ms Thompson: The other aspect is that, further on in the process, we will then be working with the Minister around the commissioning plan direction, which advises how we would expect the service to respond with the money. It is not all just about the money and the allocations; it is about what is expected to be delivered with those allocations. We are not at that stage yet, but that will come through further on, and that is where, absolutely, the Minister will be specifying what he wants to happen with service performance. We are just not at that point at this stage.
Mr Pengelly: To supplement that point, the commissioning plan direction is evidence of the issue that you are seeking comfort on. One of the issues that I have raised on moving forward on that is that it is very much skewed towards a series of metrics about the performance of the secondary-care environment. I think that we need more recognition in that direction about the importance of primary care and the impact that it can have and the process of commissioning itself to test that it is working properly and driving the improvements in performance that we all aspire to.
Mr McKinney: I will interrogate this a little further. From what I have been hearing between two weeks ago and this week, I think that it is legitimate to ask whether there are strategic priorities at all. You have just described the income generation as a tactic. We will see Transforming Your Care funded as and when, and the rest is what a health service does.
Mr Pengelly: I used the word "tactic" on income generation because I think that we could all agree that, if the Executive were to levy a range of charges on the public and that was the end of it, that in itself would achieve nothing other than, arguably, penalising the public. The key element is what is done, and what is done with any revenue raised through income generation is how it is deployed in accordance with the priority of providing high-quality healthcare. That is where I see the subtle differentiation between income generation and providing high-quality health care. I think that income generation is a means to it, but it is not an end in itself. That is why I am trying to draw that distinction out.
Mr McKinney: I appreciate that, but when Transforming Your Care was written as a strategic priority it was about putting care into the community and, therefore, achieving some of the outcomes in strategic priority 1 and also achieving efficiencies. Therefore, when Julie said at the last meeting that we are not even at a scenario where the basics can be funded at this point, never mind identifying the top priority in service developments, it actually undermines strategic priority 2 not to be giving it a priority. It is undermining the outcome with front-line services in the community.
Mr Pengelly: Forgive me if anything that we have said has caused confusion up to this point, but TYC remains a priority. However, the point that Julie made at the last session, and which I am trying to make today, obviously in a clumsy way, is that discretionary priorities can proceed only where the funding is available. That absolutely determines the pace.
Mr McKinney: Sorry if I am interrupting you. Just to be clear, this was the first question that the Minister was asked: what were his strategic priorities? One assumes that, if that is a strategic priority on the top page of the paper, things flow from that. I am not accepting or rejecting what you say; I am just listening to what you are saying about priority 1 being a tactic. Clearly, you are not funding TYC. That will be as and when. How can those two be strategic priorities at all?
Mr Pengelly: TYC is being funded; the issue is about the pace of funding. However, the simple reality is that, where we have statutory obligations, the pace of TYC is a discretionary choice. The Minister has no choice in legislation but to fulfil his statutory obligations first, and if that consumes all available funding and he has no money left for a discretionary priority —
Mr McKinney: Yes, but it is our job to work out also where the strategic priorities are and to ask the Minister, and you, whether your key decisions are being informed by the strategic priorities. Are they being informed by the strategic priorities, or is it just a matter of, "Let us fund what we can"?
Mr Pengelly: They are absolutely informed by the strategic priorities. The strategic priority is to provide high-quality health and social-care services, and that is what we are doing. We are putting money into fulfilling statutory obligations, and, in parallel, we are undertaking programmes of work to make sure that the fulfilment of those statutory obligations is done in the most cost-effective way. For all discretionary spend, we are testing whether it adequately contributes to the provision of high-quality health and social care in the way that we want it to. The real choices are in that discretionary piece between TYC and other discretionary spends. So, on the one hand, it is about maintaining statutory services and, on the other, releasing as much as possible to be realigned towards the strategic priority of TYC.
Mr McKinney: So, the strategic priorities are only in relation to decisions on what new services are available, for example, not in relation to ongoing front-line work.
Mr Pengelly: Where the front-line work is a statutory obligation, we have no choice but to do it. We have discretion on how we fulfil that statutory obligation, and that is the key point about, on the one hand, fulfilling that obligation and, on the other, doing so in a resource-effective way. Where resources are released from that, they can be recycled with that strategic prioritisation. Julie, you have been trying to come in to correct me, I think.
Ms Thompson: Maybe an example of that is how we have been working with the smaller arm's-length bodies outwith the trusts. They have been asked to plan around a range of planning scenarios of budget reductions of 5%,10% and 15%, seeking to understand, if you like, what can be reduced and removed from those bodies and then reapplied across back into, as you say, priorities and front-line service care. We are working through that. We do not have all the answers yet, but it is expected to be, if you like, an example of what Richard is talking about where we look at whether we can take an existing cost base of what we have, look to see what we can change on that and then shift that resource into front-line service care.
Mr McKinney: To be clear, is that exercise being done against the strategic priority or against a 5%, 10% and 15% mathematical exercise?
Ms Thompson: Each organisation has been given a 5%, 10% and 15% calculation of what it means. Blatantly, they are then considering that against what they as an organisation are set up to deliver. We will then reflect on that. We are doing that organisation by organisation by organisation. That will then be pulled back through into a corporate consideration across the whole health and social-care piece, because you may get to a better position by doing a slightly higher amount in one body and a slightly lower amount in another or by taking a different approach across several bodies. That is the second phase of looking at that material. It is all designed to ensure that, whatever the Minister's decision, it is about meeting his priorities and ensuring that we are moving resources into front-line care. Yes, it starts off against a mathematical target, but it will be driven by what the bodies themselves are there to do and what the health service is there to do in its entirety. That is one example of how you do that shift from an existing cost base into doing things in a different way.
Mr McKinney: I will finish on this point, as I want to come back in on some other stuff. If they are doing it on that basis, will there not be a danger that some service provision will fall through the calculation, if you like, and that we will miss out on essential services by virtue of the fact that you are doing a mathematical and financial exercise?
Mr Pengelly: Julie can provide the detail on this. The key point about the 5%, 10% and 15% scenarios is to give us a sense of what a niche organisation at the 5% end of the spectrum would be able to deliver and the important things that it would like to deliver but which it cannot. We want to know that at the two ends of the spectrum, 5% and 15%. When we look at all those issues put together across all organisations, we will then make judgements. For one organisation, we could say that the things that you would like to do but are unable to do on a 15% reduction are more palatable than what an organisation would be unable to do with a 5% scenario. So, it will be putting together all those pieces of evidence. It will not be mathematical — you, you and you will be 5%, and you will be 10% — it will be based on the implications of those scenarios as presented by each organisation.
Mrs Dobson: In the Finance Minister's statement to the Assembly on 3 November on the draft Budget, he said:
"If past performance is any indicator, it is likely that many Ministers will seek to make the savings required by their Departments by way of an identical percentage cut across their services. This, in my view, is the wrong approach in these circumstances ... these savings and this process may involve the cessation of some lower priority services in Departments."
What lower-priority services is the Department planning to reduce or stop in 2015-16?
Mr Pengelly: That is the very reason that we have asked all organisations to do the 5%, 10% and 15% scenarios: so that we can see what the implications of various scenarios for each organisation would be. It is only that analysis that allows you to compare the relative merits of service and organisation A with service and organisation B, which, in our environment, are both competing for the same limited pot of funding. We will see that analysis as we go through the development of the final Budget process.
Mrs Dobson: But you are bound to have an idea, currently, with that analysis.
Mr Pengelly: No, because I absolutely want to make any decisions on it based on the evidence that is produced about the actual implications. I am deliberately trying to avoid it. My starting point is that, as a minimum, everything must become more efficient and we must ruthlessly question all service provision to make sure that it remains valid in the current context.
Mr Pengelly: I want to run an evidence-based budget process, so I am awaiting the evidence and I will review it. Then we will provide advice to the Minister.
Ms Thompson: It is simply a timing issue about where we are in the process and all the procedure that you are talking about for working up the detail, understanding what that means and being able to clarify the implications that the Minister is prepared to accept in the circumstances and those that he is not. That is the process that we are working through at the moment. Until you see it in the round and see where every organisation sits, you could make a judgement about one organisation that is then undermined by where another organisation sits. That is part of normal processing at this point in the year.
Mrs Dobson: You appreciate that that causes fear and angst.
Mr Pengelly: It would surely cause more fear and angst if we took decisions about what we were going to stop before we saw the evidence about what things really meant.
Mrs Dobson: It is more the uncertainty that causes the fear. The evidence definitely needs to be taken, but it is the uncertainty around it. It may sound like an obvious question, but, when you look at budgets, whom do you put first — patients or the Department and the health service?
Mrs Dobson: The patients, always. It is just that, this week in particular, it was not a patients-first approach with Dalriada; it appeared to be a finances-first approach. How can you give us and the public the confidence that future budgets will not continue to reflect that approach and that it will be patients first?
Mr Pengelly: I am not sure how I can give you something that would provide the comfort that you want from me, other than to say that the Minister is absolutely committed to putting the patient first in the services that we provide. The Minister was absolutely clear with the Northern Trust on the Dalriada issue that the alternative forms of service provision must be of a high standard. Indeed, I was speaking to the chief executive of the Northern Trust earlier this week, who has visited some of the sites of alternative service provision with the MS Society and some of the service users. He told me that they were very impressed with the alternative service provision being made available to them. That is about putting the patient at the centre of what we do.
Mrs Dobson: I do not think that the campaigners for Dalriada will agree with you, Richard, but I do not want to get into an argument about the consultation on Dalriada and where we are with it now.
Mr Pengelly: Sorry, I think that your question is about putting the patient first. Sixty-nine people used the service.
Mr Pengelly: They are the people who sought to use it; the facility was there if more people had wanted to use it.
Mrs Dobson: It was not there widely across Northern Ireland. We know that the service was not wide. Contracts were not there with, for example, the Southern Trust in my area.
Mr Pengelly: The service is there if they choose to use it. They chose to put in place their own forms of provision. Sorry, I am not trying to get into an argument on that point. I am just making the distinction that, when we talk about putting patients first, we absolutely talk about the patients and the users of our service. They are the people whom the chief executive of the trust took to see the new facility. I understand that other people will be unhappy with the differential model of service provision, but it is very much focusing on the views of the patient and those who actually do use the service.
Mrs Dobson: I do not want to get into an argument now, Chair. I think that the 4,200 MS sufferers across Northern Ireland definitely do not want to get into an argument.
Mrs Dobson: At point 28 on page 36 you estimate that £143 million is needed to meet contractual commitments, including Banbridge health centre and new paediatric units at Craigavon and Newry, among others . You say that commitments will have to be met. Is there a note of disappointment in that phrase because are you saying that if you could delay those projects, you would? That would be a bitter blow to everyone who has lobbied hard for those facilities.
Mr Pengelly: No, that is absolutely not said with a heavy heart at all. It simply reflects that those commitments will have to be met; therefore we have no capacity to exercise any discretion not to do that to allow us to start something new. We must finish what we have started before we start something else. Apologies if it reads other than that.
Mrs Dobson: No, I am glad of your reassurance because I was thinking of the campaign.
Mr Pengelly: No, absolutely.
Mrs Dobson: The £143 million is, obviously, an estimate. Do you expect those projects to be delayed in any way if it is an underestimate?
Mr Pengelly: Those projects have started, so we are confident that that is a good estimate of the amount that will be needed to take them forward.
Ms Thompson: Things can always change, depending on how the contractors get on, but this is based on the profiles of those individual contracts. Therefore, that number is a relatively hard number at this point, subject, as I say, to things moving as you go through.
Mrs Dobson: So, they will not be affected if it is an underestimate.
Ms Thompson: No. Those schemes are already in contract and already in profile being built. Therefore, what you are doing there is profiling the spend for 2015-16 against the contract that you have currently. The only thing that would swing that is if something happened in a contract to cause an unforeseen delay. Other than that, that £143 million will be spent on those contracts in the round.
Mrs Dobson: If you need more money to finish the contracts if the £143 million is an underestimate —
Ms Thompson: A lot of those schemes will go on into 2016-17; indeed, some could go beyond that. What we have reflected in this paper is the spend expected in the 2015-16 year.
Mrs Dobson: But it will not affect the outcome. They will continue if it is an underestimate.
Mr Pengelly: If a scheme for which we have a figure of £10 million turns out next year to be £11 million, all experience says that in managing a portfolio of schemes, some will experience delay because the builder will not have done as much work, so that will be manageable. I do not think that the £143 million will not under any circumstances change; however, any change at individual project level will be managed, and estimating figures will not be a barrier to those projects proceeding as planned.
Mrs Dobson: So if it is over budget, some of them will continue.
Mr Pengelly: Some of them will continue.
Mr McKinney: How much has been spent to date on implementing TYC out of the substantial millions that were originally estimated?
Ms Thompson: Nineteen million in the first year, I think; another £6 million in the following year; and this year, I think, we are heading to £13 million or something of that order. That is where I think it is.
Mr McCarthy: That is what you told me last time you were here, Julie. If it is really £13 million, at least we are moving forward.
Ms Thompson: So, £19 million plus £6 million plus the £13 million is where we are at. That is by the end of the year.
Ms Thompson: The end of 2014-15.
Mr McKinney: If I could just hark back to our previous meeting and the fact that you said that significant elements of funding needed to be addressed before we got to any additional funding. It is back to the issue of prioritising. Why should existing services be prioritised over the implementation of TYC? Why are you approaching it that way?
Mr Pengelly: I am struggling to find a different way to say this: where those services are enshrined in legislation and there is a statutory obligation to provide them, no Minister can decide not to do that and do something discretionary instead. That is the short answer.
Mr McKinney: Yes, but, in an ideal world, if you had invest-to-save money, you could provide it. That is on one hand, and what you are doing is on the other hand. Why are you not exploring further ways of doing that, with the potential for savings and for greater and more efficient delivery in the community? Why are you not doing more of that?
Mr Pengelly: We do not have any invest-to-save funding. The Executive —
Mr McKinney: I understand that, but TYC, because of how you are approaching it, will always be the poor cousin fighting for some kind of funding without ever getting to a tipping point where it will meaningfully deliver. What is the logic of your approach? Is there another way to do it differently that would deliver in the community?
Mr Pengelly: I would be more than receptive to any suggestions that you have as to a different way to do it; it is not that I am not prepared to look at alternative mechanisms. However, when a huge proportion of a finite budget is consumed by the provision of statutory obligations, the discretionary balance is spent in accordance with priorities. We have not allocated as much as was in the original 2011 report, but bear in mind that, when you produce a report that sets out an ideal scenario, you are not constrained by a difficult financial environment. The report identified £70 million of transitional funding over a three- to five-year period of implementation. We are only at the tail end of three years in. We need to fulfil statutory obligations, but I am receptive to anyone giving us ways of dealing with that.
Mr Pengelly: The vast majority of our services are enshrined —
Ms Thompson: Our services are so demand-led that if anybody turns up at a GP or hospital A&E requiring assistance, there is an obligation to assist and treat them. However, there is discretion in elective care. You will see that on the list, alongside TYC and a range of other issues whereby we can put an element of resource to that but not necessarily everything wished for in that expenditure area. You are looking at understanding where, effectively, services are currently being implemented and where patients require assistance and support. That applies right through the social-services side as well.
An awful lot of risk assessments are going on in that side to ensure that vulnerable people are assisted through social-care services. When that is done, how you change what you are doing and move resources and provide more opportunities around those strategic priorities is about looking at what we can stop doing and what we can do more cost-effectively. That is behind the essence of the £160 million. We have £160 million in that analysis. Increasing that amount would enable us to move into the space of putting further resource into the discretionary areas. At the moment, we are in effect saying that the current services have a certain cost, and we have to look at how we can manage and reduce those costs. Maybe that means stopping doing certain things. That is driving the £160 million. As Richard said, if we can increase the £160 million, which will be a challenge, it would enable us to put more resource into invest to save and all the opportunities around service developments —
Ms Thompson: At the moment, we have a top-down approach. When the trusts are developing detailed plans to support this, we absolutely expect them to analyse and understand where the discretion is, what can be done better and what the proposals are around potentially changing and doing things differently.
Ms Thompson: The expenditure and the detail around understanding individual contracts are for individual organisations. If you have organisations of £500,000 million or £1 billion, the trusts need to understand their cost bases and their contracts and what they can stop and when contracts come to an end. I have already said about the flexibility around salaries and wages, which tends to be in the areas of agency and locums, but you cannot necessarily take that expenditure away without having an impact on the front-line service that you are talking about. Understanding all of that is very much driven from the trusts presenting that information back through. We can give them advice about avoiding implications for front-line services, targeting administration and procurement, rationalisation of the estate and back-office functions. They are all expected to be maximised in the proposals that they will work up. That process will go on between now and the new year to get to a viable detailed savings plan where we can be confident, both in those individual organisations and as the Department, that those proposals have been interrogated and ask the questions that you are asking, but we cannot do that from the Department. That has to be done from the individual organisations.
Mr Pengelly: Can I give one example, which, I hope, illustrates that we are doing the things that you are rightfully asking us to do? In the current year, with our in-year funding, however we describe the services, when people are ill, we seek to fix them and make them well. There is an issue about timing and, hence, waiting times for some elective procedures. That is where the element of discretion comes in. Ultimately, we will provide the service and an environment when it happens, but there is a consequence of not having all the funding. You will recall that, in the session on the allocation of additional in-year funding, we could have put all that funding to additional elective capacity to try to reduce waiting times, but there was a judgement call about the importance of continuing with TYC. So some money went to reducing the elective issue, and some went to TYC. Those issues are examined and, where there is discretion, the Minister exercises it.
Mr McKinney: There appears to be less discretion available for investing. After all, TYC is about delivering cost-efficient services in the front line in the community, so that is the direction, but there is more discretion about cutting services. I do not really want to get into it, but the recent round is cutting some of those community services and undermining the strategic priority.
Mr Pengelly: You were probably tired of me making my points at the last session, but the current contingency measures are short-term measures to get us to the end of the year in a difficult financial position. TYC is still proceeding. We could have completely stopped any work on TYC or incurring any expenditure this year on TYC and marginally reduced the need to implement the contingency measures, but the judgement was taken that some of the contingency measures — and I understand that people in different parts of the community will have different views — were seen as being more palatable than a complete cessation of progress on TYC. That is the view that the Minister took. It is proceeding in difficult circumstances.
Mr McKinney: If TYC is proceeding in that way — let us call it a fledgling — we are in danger of cutting away at those young shoots and community availability and undermining the project. Who is thinking about that? Should the cuts and further consideration not be slightly further up the tree?
Mr Pengelly: The best way that I can answer that question is to say that the only way that we could have accelerated TYC this year — in an ideal world, we are all in exactly the same place and would want to do that — would have been to spend more money on it, which would mean spending less money on dealing with elective procedures and allowing waiting times to extend even further or introducing additional contingency measures and contemplate closing more units. That is ultimately a judgement call, and the position that we arrived at —
Mr McKinney: Yes, but nothing that you have told me today makes me think that you are going to change that thinking next year.
Mr Pengelly: What I have said today is that we are starting the year with a balanced financial position. The main reason for that is so that we absolutely avoid the scenario where, halfway through or two thirds of the way through the year, we need to implement contingency measures that have the sort of noise that we are hearing in the system now. In that context, we are allocating funding to continue to take TYC at the pace that is short of what is absolutely desirable but is affordable in accordance with a parallel assessment of other priorities. That is all that we can do.
Mr McKinney: But it leaves it in danger of being a rhetorical priority as opposed to a strategic priority.
Mr Pengelly: It is absolutely a strategic priority. Money is being spent on it, but the reality is that we cannot and will not spend money that we do not have. Accelerating beyond the current pace would require more money. If we do not have the money, we need to make choices. That is what will happen as we get the evidence through from the trust and other arm's-length bodies.
Ms McCorley: Thanks for the presentation. On the same issue, when the Minister was at the Committee on 22 October, he was asked whether he had considered providing more money for TYC in the baseline for 2015-16. He said that, in an ideal world, he would like to do that, but it would mean taking money out of budgets for cancer, elective care, pharmacy and things like that. Can we get clarity on what that statement means? Does it mean that the Minister is prioritising a range of existing services above the implementation of TYC?
Mr Pengelly: It is difficult to give a definitive answer. I have said about many services that the only valve available to us to create the capacity to deal with issues is the waiting time. For some areas, such as orthopaedics, arguably a longer waiting time is more palatable to the Minister and the public, but in areas like cancer we have set very short targets, and the Minister puts in place a requirement for 100% compliance with that target. In those cases, the Minister is putting existing services above TYC. I want to be careful about not speaking for the Minister, but my sense is that his view is that for areas like cancer treatment, it is arguably more important that anyone who goes to their GP and gets a red flag about potential cancer is dealt with, diagnosed and treated than taking forward the TYC programme.
For other areas, the Minister would say, "Maybe we can afford a bit of a stretch in the waiting time to access that treatment because taking forward TYC is a greater strategic priority". So, it is all those sorts of judgements against a whole range of services that need to be made. It is not a simple yes or no in terms of the totality of it.
Ms McCorley: It sounds like Transforming Your Care will never be implemented because there will always be other more demanding priorities, so it will be the poor cousin.
Mr Pengelly: I genuinely hope that it does not. When the TYC report was produced, three to five years was always talked about. That was in a fundamentally different financial environment. I suspect we will slip beyond that; we are already at the three years. However, there will be an end point to it. We will get there. It remains a priority, and we will be submitting bids in all future monitoring rounds. To the extent that we are not taking forward TYC at the pace we want to, we will be bidding for resources.
Ms Thompson: There will still be spend going through on TYC, supporting all the initiatives that have been put in place to date. It is not that there will be no expenditure on TYC in 2015-16. What the analysis is saying is that we support all that is currently there, and then we have to look at how we fund any new service developments in this particular area. In order to do that, we are identifying £160 million of savings that we need to achieve first and foremost, to deal with the current pattern of services, and then we can look to see what more can be done in order to increase that. That would provide an element of resource, potentially, for the likes of TYC looking ahead. In terms of saving money and moving it, we have to first ensure that we can deliver the £160 million, and then, if possible, increase that to provide more funds available. We will be looking at any and every area to try and achieve those savings, and that gets to the essence of where the Committee is at: potentially you would stop delivering a particular thing which would allow you to provide resources for new service developments. That point is where everybody would like to get to, but there is £160 million worth of proposals that have to be developed in order to get to that place, and that is not easy to do in the context of increasing demands and expectations on an ongoing basis for both acute and community services.
Ms McCorley: Which initiatives have still to be commenced or implemented in Transforming Your Care? Has everything started?
Ms Thompson: There is a programme of work that we would like to take forward, particularly through the integrated care partnerships and trying to build on the pathways that we have already looked at. We absolutely want to do more work on that, about ensuring that people are on constant and consistent pathways — for the frail elderly, for example — and that that work is spread right across Northern Ireland. We also want to work on outpatient reform and how we deal with how people currently go to outpatients and whether there is a more effective way of dealing with that.
So there are a range of initiatives, driven in particular by the integrated care partnerships, which we want to put in place, aimed at managing demand and ensuring that people still get the appropriate care that they need. In terms of priorities, the issue is that we need to be able to fund the ones that are currently in play — the initiatives that are already there — and then consider how the new initiatives will sit alongside them. However, the only way that we can finance those new initiatives is by effectively stopping, or doing differently, something that we currently do. We are absolutely open to that, and the Minister is too. The issue is about identifying what those proposals are, understanding their implications and weighing up whether the new investment — for example, in TYC, elective care or whatever the service is — is preferable to stopping doing something else, somewhere else in the system. That process is ongoing at this stage.
Ms McCorley: How do you monitor the partnerships to ensure that they are working as efficiently and effectively as they can?
Ms Thompson: There is a reporting mechanism through the transformation programme board, which is chaired by the chief executive of the Health and Social Care Board. Through that, there is a mechanism whereby each ICP provides information on what it has been delivering. As I understand it, benefits have been assigned to a considerable number of those initiatives, and those will be tracked and monitored as well. It is early days in some of those initiatives. I know that the Committee has been interested in the past about the extent of shift left within that, and is looking for more to be done. We appreciate that, and we absolutely have mechanisms in place to monitor it. However, you have to do that sensibly and proportionately, otherwise what you do is create a considerable level of bureaucracy around it.
Mr G Robinson: My question is also about TYC. One of the objectives of TYC, as set out in the Programme for Government, is, by 2014-15, to have shifted £83 million — you may have answered some of this before — from hospital-based services to primary community-based services. In 2012-13, the amount shifted was £11·4 million, and in 2013-14 it was £13·6 million. Will the officials outline the predicted shift for 2014-15 and 2015-16? You may have answered some of that already.
Mr Pengelly: I suspect that we have not answered it. We will have to come back to you about that. You are asking about 2014-15, but today we are focused very much on the issue of 2015-16, so I do not have that information with me. How much will be shifted in 2015-16 depends on the final outworking of the Budget, so we do not know how much will be shifted in that year as yet. As to how much should be shifted in 2014-15, we can come back to you in writing on that, if that is OK, Chair.
Ms Thompson: We are scheduled to have a Programme for Government session next week.
The Chairperson (Ms Maeve McLaughlin): Again, I suggest that, if we do not know that, how do we influence things? If you are saying that you have not quite decided the size of the shift in 2015-16 for TYC, how is the Committee to scrutinise, influence or impact on it?
Mr Pengelly: The point of today is to look at the evolution of the final budget for 2015-16. The sum that will be shifted in 2015-16 depends on how much investment we make in TYC in that year. Those decisions have not been taken. This is the first stage in that process. We launched the public consultation today and we are asking trusts and all the organisations to work through the detail. When we reach that final position, we will know how much shift left that planned investment will facilitate. However, we do not know that until we go through the process of planning for it. It is not that this is something we know about and we are not telling you, or we asking you not to hold us to account for or comment on. That work still needs to happen.
Mr Pengelly: For the year 2014-15, we can come back fairly quickly. For 2015-16, I suspect that it will be in the new year.
Ms Thompson: It will be further through the process. We need to have clarification on the final Budget and then do a further round of liaising with all the bodies. So, as Richard said, we aim to have a clear plan on everything before we go into the new financial year. It will be the springtime before we are able to answer that question with the clarity that you would expect.
The Chairperson (Ms Maeve McLaughlin): I have to come back on that. We are out to consultation. Never mind the role of the Committee, we are asking the wider public to respond to a draft Budget consultation and we have not even put a figure on the key benchmark of the delivery of health.
Mr Pengelly: The totality of the health budget approaches £5 billion. I cannot remember the exact date when we received the draft Budget scenario; it was some time in October. It is simply not possible to work through the detailed allocation of every pound in that period of weeks. The consultation is about setting out the broad direction of travel and asking a series of questions of the public to let that come back and influence the Minister's final decisions on allocations. This is not peculiar to the health service; it is a situation similar to that which my colleagues across all the Departments are in. This is the process that we operate.
The Chairperson (Ms Maeve McLaughlin): Yes, but the broad direction of travel is Transforming Your Care, and we have all accepted that. However, we are now being asked to consult on how a budget supports a strategic departmental priority without knowing what that allocation is, or whether it is good, bad or indifferent.
Mr Pengelly: In this early stage, the consultation process is more about getting the sense of the relative weight of that, and for the Committee to state the scale of the ambition that it holds out for the investment in TYC next year. As I said, this is not unique to the health service; it is the way that public-sector budgeting is undertaken. The Executive set out a very high-level position; each Department takes a high-level position with respect to its own environment; that goes out to public consultation; the analysis and evidence comes back; and Ministers and the Executive make final decisions. We expect that those decisions will be made early in the new year.
Ms Thompson: It is about, I guess, informing the final Budget across all Departments. That is effectively what the consultation is about. It is early in the planning process. We need to understand what that looks like, and then work back through it with the bodies concerned in all its detail. It is a complex piece of work, and we need to have the confidence that that has been worked up with all the savings proposals identified, so that we can all say: "Yes, that is what is being delivered", and there is clarity in terms of service performance around that. That is the detailed planning that will go on, from now right through to the start of the new financial year.
The Chairperson (Ms Maeve McLaughlin): I think that Kieran wanted to speak on this same issue. From the information that we have been looking at in our financial scrutiny, I gather that it will be too late by then. People must respond to this consultation by 29 December. They are being consulted on, say, for example, a priority, which is TYC, which does not have an allocation. When you decide that you have an allocation for it, what does the wider world do in saying whether that is right or wrong? People cannot influence it then; we cannot influence it then.
Mr Pengelly: I think that this goes to the basic constitutional point. The point of the consultation is to get the views of the public, and the views of the public are about the relative priorities in this and the scale of investment. Ultimately, it is for the Minister to decide, and he is awaiting the relevant inputs from all those key stakeholders and the analysis that we talked about earlier from the various arm's-length bodies in the organisation. The pace that this is working at is how the process works.
Mr McCarthy: I see in the paper that Transforming Your Care transitional costs for 2014-15 are £8 million. That was your question to our guests. Is that the figure that we are talking about?
Mr Pengelly: I think the question was about the shift left in 2014-15, not the level of investment for 2014-15.
Mr McCarthy: It is the difference. What is that £8 million for, then?
Ms Thompson: I think I understand the paper you are looking at. The £8 million is out of the £80 million that was made available from the monitoring round. However, we expect the total spend on TYC in 2014-15 to be in the order of £13 million. An element of it will be paid for within existing resources.
Mr McCarthy: Chair, we have already spoken about this. The Department has received the additional £200 million for 2015-16. DFP wants to ensure that that is spent on front-line services. We fully support that ideal. How does the Department define a front-line service?
Mr Pengelly: I do not have a ready definition. A front-line service, inevitably, involves some patient or client contact. The term is shorthand to differentiate from administrative structures which support the provision of health and social care, as opposed to the absolute provision of health and social care. It becomes a bit grainy. Public health initiatives, such as the good promotional work on lifestyle choices and healthy eating are, arguably, front-line services because they are trying to get a message to patients and clients, although it is not sitting in the same room with a stethoscope round your neck, dealing with a client. There are a range of front-line services. It is about the differentiation between administrative support and back-office work.
Mr McCarthy: Will you, internally, ring-fence the £200 million, or do you plan to absorb it into the programmes of care?
Mr Pengelly: We will not specifically ring-fence the £200 million, but, going forward, particularly through the 5%, 10% and 15% scenarios, we will ruthlessly squeeze down on all forms of non-front-line services — the administrative support and back-office work. We expect that, in overall terms, the health budget will increase in cash terms between 2014-15 and 2015-16. It is our intention that we will reduce administrative costs, or certainly that they increase at a rate lower than that headline increase, which will mean more than the £200 million additional
Ms Thompson: The draft Budget has a savings target of £49·5 million assigned to our budget against that £200 million, but we are working to a much, much higher number than that. We are working to over £160 million. The commitment within health at £49·5 million would not be sufficient in order to address the pressures that we have got. Therefore we are looking at a much, much higher number than what the draft Budget originally indicated.
Mr McCarthy: Do you have any further info from DFP on how it is going to oversee all of this?
Mr McCarthy: Chair, can I move on to efficiency savings and income generated —
Mr McKinney: If the PHA could be represented as a front-line service, and the definition, albeit vague, involves some form of patient or client contact, surely the Fire Service is a front-line service.
Mr Pengelly: The Fire Service is a front-line service. I thought the question was about front-line health and social care services. The Fire Service is a front-line service. There is no question about that.
Mr McKinney: In that sense, then, is the funding ring-fenced?
Ms Thompson: No, we are looking at the funding scenario for the Fire Service around the 5%, 10% and 15%. The Fire Service has been asked to articulate what that means for it. We are working to receive that information. The Fire Service has started on that journey. As we have described, we need to understand the implications of that and how that plays alongside all the other priorities.
Mr Pengelly: The key point is that, in the broader context, many more front-line services take place in Northern Ireland than happen in my Department.
The Executive position on allocations has been to protect health and social care, not front-line services generically. The draft Budget position for health is very good compared with that of our colleagues in other Departments, most, if not all, of whom provide fundamentally important front-line services. They are having to ask their organisations to look at a series of reductions. The expectation on us is that the Executive have set out their stall to protect health and social care. We need to ask the question of the Fire Service.
Mr McKinney: Yes, but going by the Minister's definition, part of the other consideration is that we provide efficient and safe services. If certain cutbacks are made, that could raise the spectre of safety being compromised, particularly for the Fire Service. Therefore, given its role, should it not be exempt from the range of potential cuts?
Mr Pengelly: I do not think that there is anything between us on the end point. The Minister is absolutely clear that he will not preside over unsafe service provision. At this stage, we have asked the Fire Service to tell us what the 5%, 10% and 15% scenarios would mean for it. Based on its input, the Minister will take decisions. He will not allow unsafe services.
I emphasise that what you ask is no different from the question that has been posed to the police, Translink and all the other fundamentally important public services. We are asking the Fire Service questions, as opposed to giving it automatic protection, because the Executive have been clear that the protection for us is to be in health and social care, not any other service.
Mr McKinney: You will agree, however — sorry, you may not — that the Fire Service involves itself very much in linking with the Ambulance Service, freeing patients from cars, and so on, and it needs to keep that capacity. There is a health consideration in the role.
Mr Pengelly: I agree, but I suspect that the PSNI would say exactly the same. It is not getting the protection that we are getting. Ultimately, where we end up will come down to the safe provision of services. As I said, the Minister is absolutely clear that safety is paramount. I think that his position regarding his Executive colleagues is that, if the Executive have decided to provide funding to protect health and social care, at a first pass, he will be uncomfortable using some of the funding for health care to support fire services, in contravention of the Executive's wishes. I think that he needs to look at that. On the question of what the scenarios mean, the final position will be dependent on the information that the Fire Service provides and the analysis of that. As I said, the key point is that the Minister will not preside over unsafe services. He absolutely recognises the importance of the Fire Service and the service that it provides to the whole community.
Mr McKinney: OK. Thanks for that. I know that I dropped down to specifics on that issue.
Mr McCarthy: Your paper states that you intend to make £113 million of efficiency savings in 2015-16 in the trusts. You detail a range of possible measures. What direction will the Department give trusts on where and how those savings should be made?
Mr Pengelly: The headings in paragraph 17 of our briefing paper give trusts a steer on the sorts of areas in which we feel savings could be made. We will want to ensure that dialogue happens with the board as commissioner and all trusts to ensure that, where we identify best practice and opportunities in one area, they are cascaded to all trusts. It effectively is the starter for 10 with the trusts. We feel that there is particular potential in those areas. However, we are absolutely not saying to trusts that, if they do what is on this list, they do not need to look any further. We will ensure that there is good, cohesive dialogue, that each individual trust looks at its own area and that every opportunity that it identifies is flagged to colleagues in other trusts so that we can maximise good practice.
Ms Thompson: We will also ensure that they articulate what, if any, service implications there may be from those proposals and confirm that they are viable and achievable in the 2015-16 year and that they have a plan that drives the proposal. There is a range of things. Obviously, and as I have already said, there is a focus on back-office functions — procurement, and whether we can buy things cheaper and better — and on estate services and how those are done. Therefore, there is an expectation that trusts will look at those areas, but they will have to look much broader. You will not get £160 million out through back-office functions alone. That just would not be possible. We expect them to look right across their services. There will be learning between one trust and another on where they are and what their proposals are. That is the work that will happen between now and the early part of next year.
Mr McCarthy: Will there be sufficient communication between everyone involved, right down to the public? The last thing that we want is to hear, at the end of a busy week, that something will be slashed from this hospital, that hospital or whatever. Communication is important.
Ms Thompson: Absolutely, but we need to get the plans worked up.
Mr McCarthy: At the evidence session on 22 October, the Minister stated that exploring opportunities for income generation was his number three strategic priority, as the Chairperson mentioned earlier. However, no concrete proposals were provided to the Committee, and income generation is not factored into the figures in the paper provided to the Committee today. Does the Department have any concrete proposals for income generation for 2015-16, and, if so, what are they and how much income will each of them generate?
Mr Pengelly: At this stage, we do not have any concrete proposals. It is an area that we want to focus on and do some analysis.
Mr Pengelly: Nothing at this stage, no.
Mr McCarthy: OK. Finally, this is something that is always close to my own heart: what are you doing to address the historical underfunding of mental health and learning disability services? Do you not agree that proper investment in those cases would improve health outcomes and probably save money all year around?
Mr Pengelly: Yes, it is an issue. Again, I think, from memory, that it is an issue that the Minister touched on and indicated his personal support for it. It is clearly an area for which we will look at the appropriate level of investment as we finalise the budget position.
Ms McCorley: I have a couple of other questions, but I am not sure —
Ms P Bradley: Thank you, Chair. Paragraph 9 of your paper looks at salaries and wages. The figures are for 2012-13. We all fully understand that we have committed expenditure. We have no choice there, really. That has to be there. Do we have figures yet for 2013-14?
Ms Thompson: No. Those will be available certainly this side of Christmas. They are nearly ready.
Ms P Bradley: OK, so we will know then whether there is any difference in spend. Do you expect there to be much difference?
Ms Thompson: We would not expect it to move significantly, given that it is £2·3 billion there. It will not move significantly as a proportion of the overall health budget.
Ms P Bradley: Julie, you talked earlier about flexibilities in staffing. You mentioned locums, agency nurses, and the impact on savings. Paragraph 17, under "Staff Productivity", states:
"Reduction in backfill, whilst maintaining safe staffing levels".
I know that a lot of that backfilling is being done by agency staff and locums. Realistically, do you think that that will pose great difficulty to flexibility?
Ms Thompson: Part of that is about looking to see whether you can take your level of agency resource down and bring in permanent staff, and, by doing so, maintain the service and also potentially do provide at reduced cost. If we can take agency numbers down, you are looking at what those agency staff support and is there a more cost-effective way of doing things. It may well be that bringing in a permanent member of staff is a better option. That is what that is asking the question about. We want trusts to consider that.
Ms P Bradley: Coming from a hospital background and from visiting hospitals, I know that a lot of the agency staff are staff from that hospital who go into bank nursing. It is the same with locum doctors. There are people out there who would like permanent positions. That sounds like a much better plan to have.
Ms Thompson: Absolutely. Certainly, the trusts would wish to encourage the use of bank rather than agency staff as a first call. To be fair, there will always be an element of agency or bank staff. You need to maintain an element of flexibility in the workforce. It will never reduce completely.
Ms P Bradley: We need to allow for sickness levels and any number of things that can happen that cause you to have to pull in staff.
On another point, at the previous meeting, you mentioned the medical excellence awards. That one is a bit of a sticking point with a lot of us. You mentioned the consultation being launched. Has it been launched yet? Is there a date for the launch?
Ms Thompson: It has not been launched yet, but I understand that it is very close to being launched.
Ms P Bradley: OK. Do you have a time frame yet of how long the consultation will last and when we are likely to get a result on that?
Mr Pengelly: We will check that.
Ms P Bradley: Has that been included in your estimated budget for 2015-16? I assume that it goes into salaries as well.
Ms Thompson: To be fair, some people will be contractually entitled to them. You can then look at new awards. We will most definitely be looking at that as an opportunity, but it needs to be set alongside other proposals as well. There will be an element of contractual entitlement, where, like anything else, you have to pay what you are contractually entitled to pay.
Ms P Bradley: Therefore, the contractual part is included in what we are budgeting for, but, as you say, any new awards are not. That is something that we will discuss at a later date.
Ms Thompson: We will certainly look at that to understand what we can do in that space.
Mr Dunne: Thanks very much, Richard and Julie. Will you clarify a couple of points on the £80 million that you have received this year to keep services going? We talked about that £80 million and got a quick breakdown at the previous meeting, but we did not get an awful lot of detail. Do you have any further information? Issues such as the safety and quality initiative were raised. What does that mean?
The Chairperson (Ms Maeve McLaughlin): If it is useful, there is a response in the tabled papers from the Department and the Minister on the breakdown, which we will come to. What we are dealing with today is 2015-16. We can come back to that as the meeting goes on.
Mr Dunne: OK. There is £4 million in there for safety and quality. What does that mean?
Mr Pengelly: Sorry, Chair —
The Chairperson (Ms Maeve McLaughlin): We can pick up on that as the meeting moves on. The tabled paper will be coming up under "Correspondence" or "Matters arising" on the agenda, so we can pick up on it then.
Mr Dunne: It is £80 million that we heard so much about. There was £20 million and then £60 million. Do you have anything further on that, Julie, or do you not know what the money is for?
Mr Pengelly: I do not want to be unfair to the Committee and take a stab at answering your question.
Mr Dunne: You do not know what it is for, then.
Mr Pengelly: We do not have the information with us because we prepared to come today to talk about 2015-16.
Mr Dunne: It was on the agenda at the previous meeting. We got very little information on it.
Mr Dunne: I will move on. I will raise a few points that I mentioned last week. One was on the proposed closures at Bangor Hospital. Have you any further thoughts on that? I know that you probably have not come to talk about that either, but you are responsible for the budget, and, obviously, that is budget-driven. The proposal for Bangor is to save £67,000 from closing —
Mr Dunne: Can I just ask a question, Chair? After all, I am elected.
Mr Dunne: Have you had any further thoughts about the —
Mr Dunne: — reduction of expenditure in the South Eastern Trust?
The Chairperson (Ms Maeve McLaughlin): I have made my views known, Mr Dunne. I am standing over this: the Department is not here to discuss that today. I am giving flexibility. We can certainly pick up on the monitoring round issues later, but they are not within the remit of the Department today to discuss. That is final. I am going to move on.
Rosie, this is on the capital budget and the change fund specifically.
Ms McCorley: Go raibh maith agat, a Chathaoirligh. My question is on the capital budget. The paper details a list of high-priority projects that you would like to progress but that are not yet contractually committed. How were those projects determined as priorities? Who selected them?
Mr Pengelly: I am sorry, but I missed the last bit of your question.
Ms McCorley: The paper details a list of high-priority projects that you would like to progress but that are not yet contractually committed. How were those projects determined as priorities? What was the process? Who selected them?
Mr Pengelly: Do you want to talk about that, Julie? It is quite a long process.
Ms Thompson: Priorities are gathered together through talking to all bodies, including, obviously, the trusts, about what they wish to happen in their area. There are then discussions with the commissioner, and those are brought together in the Department, and then there are discussions with the Minister. With capital, you will appreciate that there is normally a long lead-in time for the projects. Therefore, the high-priority projects that are not yet contractually committed will probably be well into the process. For example, business cases will already be well done, but the point in the procurement process at which the contract is signed will not yet have been reached. For example, projects such as the children's hospital will have an outline business case already signed up to and agreed. We then work through the process that I described of how a priority is identified. The projects are effectively ready to go, ready to get into contract and ready to be signed off on. That is where we are at. They are running through the various procurement processes.
Ms McCorley: Do you see anything happening that might change that process?
Ms Thompson: The point that I will draw to the Committee's attention is that, for 2015-16, there is not a huge amount of resource available, if any, to take forward new priorities that we do not already know about. Therefore, we work right across the system to understand how capital can support and best deliver services and to understand where those priorities are. We have reports available around the state of the estate and where we are at with understanding our buildings and what needs to happen. It will be a combination of an assessment of the status of the building alongside how you potentially provide services in a new world as you move forward and try to move services to a different place or location. The process itself works, but the problem for 2015-16 is that there is not a huge amount of money, if any, available to start new projects that we are not aware of at this point.
We are working, as we have discussed, around the contractually committed projects. Those will happen. We then have to manage the other high-priority projects for which we already have business cases in place. We need to get those kicked off. If, and only if, resources are available, will we tackle new projects from the prioritisation process.
Mr Pengelly: There is only one other point at which it might change. All experience tells us that, across the block, some Departments struggle to deliver capital projects. When we finish the process, there will be projects that we would like to take forward but are unable to. We will keep those warm in the event that, halfway through the year, DFP indicates to us that a big project somewhere else has stalled, as happened last year with DRD and the A5, and happens quite frequently. A lot of money is then available for reallocation. In that case, we want to make sure that we can move quickly if the opportunity arises in-year to capture any available funds and then move quickly on some of the projects. If there is anything that we cannot start, we will not be putting it into cold storage but will have it ready to go quickly.
Ms McCorley: Who makes the final decision on the priorities?
Mr Pengelly: The Minister.
Ms McCorley: It is the Minister's choice at the end of the day on what will be a high priority.
My final question is on the change fund. As we know, the Executive have agreed to allocate £30 million to a change fund. Is the Department intending to submit bids to that? What will be the deadline for submitting bids?
Mr Pengelly: A note has just out from colleagues in DFP. Is it 5 December?
Ms Thompson: No, I think that it is 12 December. The guidance came out only at the tail end of last week, and, yes, we intend to submit bids. We are not at that point, as we have only just got the guidance. The fund is focused on proposals that are about reform and where you are potentially working in partnership with other bodies that have preventative-type approaches. We are absolutely keen to submit bids to that process, but we have only just got the guidance and are starting to commission a process around what that will mean for us and how the bids will play through.
Ms Thompson: When we consider the criteria against TYC, if we can make a bid on that basis, we will.
Mr McKinney: Is that not right up TYC's street? Do you have a raft of stuff that you could put in a bid for?
Ms Thompson: I think that we have quite a few proposals that we could put forward to the fund. We need to work through the process, establish what the proposals are and then submit them.
Ms Thompson: The Committee has mentioned quite a few of them already. The likes of TYC and public health are in the category of preventative measures, and I am sure that some children's services would see themselves as being reforming and working in partnership.
Ms Thompson: We will look to the integrated care pathways (ICPs) and the processes that we have to identify which of the initiatives that the trusts would like to put in place best fits against the criteria, but, as I said, we got the criteria only at the tail end of last week.
Mr Pengelly: The criteria are out, and there is only £30 million available across the block. It will be very competitive, and so we want to make sure that the bids that we select to put in are as competitive as possible. One is partnership-working with others. We need to think about that to make sure that we give our bids the maximum chance of success.
Mr McKinney: I am guessing that there should be a shelf-load of stuff sitting in the TYC boardroom. I am not being facetious.
Mr Dunne: Chair, am I allowed to ask questions?
Mr Dunne: I want to clarify a point that I think is important about the role of the trusts in this. How do you evaluate the trusts' proposals?
Mr Pengelly: They are first looked at by the board in its commissioning role. The board will form a view, and we will then have heavy dialogue. It is not that we do it by numbers and apply weightings to every criteria. We look at proposals in the round, including the issues that the trusts want to hit in the context of Programme for Government commitments, the Minister's priorities and a whole range of implications. There is a lot of detailed analysis and dialogue between us and the board, and some considerable scrutiny of the proposals. Assessing is perhaps more of an art than a science, because quite a volume of material comes from them. Lots of it is more qualitative than quantitative in nature. To use that dreadful phrase, it is an iterative process — looking through it and having dialogue and discussion.
Mr Dunne: How do you assess the impact of change? Front-line services are ones that affect the patient and our constituents and that have a huge impact on our communities. The media likes to latch on to front-line services. Do you assess all of that in the difficult processes that you go through? It is important that you look closely at it, because a lot of the good work that is done by the trusts and the Department in the delivery of health care is lost in all this. The media tries to change things, and the impact is that things are totally out of proportion. It is important that, in the future, you, the board and the trusts look at those issues closely and scrutinise them before such decisions are put forward to the Minister, the Assembly and Committee members here.
Mr Pengelly: I do not want to leave you with the sense that there is anything other than a fairly heavy measure of scrutiny, particularly in each trust area, because the reality is that each trust area knows the local make-up of its population and the service configuration. In the context in which we have talked today at length, as we did previously, about the need to ensure that the maximum amount of funding goes to the front line as opposed to administration, there needs to be some element of trust. We cannot create a structure whereby the board re-performs and second-guesses each and every decision and piece of analysis by the trust and we do likewise. There is a measure of mature engagement, but issues put forward by trusts are challenged, and assumptions are looked at by the board and the Department. The other bit that is relevant is that it is not just about any individual proposal but about looking at what the alternative arrangements are. Alternative proposals that are never put out as things that will happen are often not put out for very good reasons. They are even more painful than the proposals that we have to implement. I do not want to minimise the impact of difficult and uncomfortable choices, but they are choices that have to be made, given the financial environment.
Ms Thompson: Some of that is about understanding, particularly where patients are involved, the alternative places where care is provided. First and foremost, we need to understand whether the demand is there, because it may be that the demand is not there, and, therefore, you can adjust the service appropriately. Where the demand is still there, an alternative provision has to be made, and people need to be clear about how they access that service and what it means. Therefore, absolutely, it is about understanding, for a particular patient, what is going on and what the impact will be on services as you make the change. You also need to make sure that, if there is an alternative, it has been worked through, understood and will be in place at the right time.
The Chairperson (Ms Maeve McLaughlin): Thank you both for that. We will reflect on the information provided today. It is important, because, for the first time, we were talking about the discretionary and statutory obligations, and that will be an important conversation going forward. I think that it is irregular that we do not have a definition of front-line services when we aspire to protect them, but we will reflect on what we heard today. I thank you both for your time.