Official Report: Minutes of Evidence

The Chairperson (Ms Kimmins): You are all welcome back.

Ms Brigitte Worth (Department of Health): Thanks.

The Chairperson (Ms Kimmins): In attendance today are Brigitte Worth, director of finance; Danielle Mallen, head of financial management; Preeta Miller, investment director; Brian Dunlop, capital resources unit; and David Keenan from the financial planning unit. We are delighted to have you here today. We have about 45 minutes for the session. If you are happy to make some opening remarks, I will then open it up for questions. Thank you.

Ms Worth: I will start by making a few opening remarks on the January monitoring position and the 2025-26 resource budget. I will then hand over to Preeta to cover capital.

As you are aware from our session before Christmas, the Department faced a £100 million shortfall following the October monitoring round compared with what was needed to fully match the pay rises that were given in England. At that time, I indicated that we were undertaking a full review of our position with a view to bridging the gap as far as possible but that, given the scale of the challenge on top of the £200 million of savings that have already been delivered this year, I expected that further Executive support would be required to meet the pressure in full.

As reported in our paper, we have managed to narrow the gap to £35 million through a combination of changes in our estimates for demand-led expenditure, taking some additional risk around anticipated year-end underspend and a full review of accounting treatments. We have also had a windfall from some additional immigration health surcharge funding. I am aware that it is unlikely that sufficient funding will be available at January monitoring to meet the £35 million bid in full. An additional £10 million of funding at that time would enable us to get 11 months of back pay to our Health and Social Care (HSC) workers in their March pay. Beyond that, we will continue our internal efforts and hope that the Executive might support us by allocating any further year-end slippage to enable us to make up the remaining difference as soon as possible.

Turning to the 2025-26 budget, when you compare the resource allocation with that in 2024-25, you see that the allocation for Health is essentially an additional £200 million of funding. I know that you saw our equality impact assessment (EQIA) and budget assessment only recently, but you can see from the list of pressures in that document that £200 million will go only so far in covering those inescapable pressures, if we are to continue to run the health service in its current form. For example, £65 million is needed to meet our obligation to pay the national living wage; £36 million is needed to ensure that GPs and other providers of health and social care services have the funding that they need to afford the increase in employers' National Insurance; and £150 million is needed for a 2·8% pay rise, which is the increase that the UK Government recommended to the pay review bodies. That is £250 million already before we even touch on price inflation and the need to address growth in demand for our services.

We will, of course, continue to look for savings to enable us to fund some of those pressures, but the capacity for real cash release in savings is much reduced by the efforts that we have made this year to deliver the unprecedented £200 million that we have needed to bridge our 2024-25 funding shortfall. Many of those savings were not repeatable, which means that new measures need to be delivered even just to get us back to the level of savings delivered last year.

The reality is that the budget does not provide us with the investment that is needed to make the kind of difference to our services that we would all like to see. Our funding relative to England's is now at a 10-year low at 1·5%. It is significantly below the 4% to 7% that, the Fiscal Council estimated, was required to meet our additional need, so we need to be realistic about what can be delivered within the envelope that we have been given. I accept, of course, that other Departments are also struggling to manage with the allocations that they have been given, but, if we accept that more funding for Health cannot be prioritised over the allocations that are given to other Departments, we also have to accept the consequences that that has for the delivery of our health and social care services.

I now hand over to Preeta, who will give you an overview of the capital position.

Ms Preeta Miller (Department of Health): Thank you, Brigitte. For January monitoring, the Department submitted three bids for capital totalling £32·8 million, including £20·5 million for the pandemic preparedness stockpile of PPE and hygiene consumables and £6·7 million for replacement medical equipment across trusts, such as, for example, a CT scanner, obstetric probes, a vascular ultrasound scanner and a mobile radiography unit. The bid also included funding to assess health and safety risks, including replacement windows and locks; upgrade works to the helipad at Craigavon Area Hospital to comply with new standards; refurbishment works that will enable the creation of a urology outpatients' hub in the South Eastern Health and Social Care Trust; and vehicle fleet replacement. There was also £5·6 million to refresh existing IT infrastructure, which is networks and servers across the HSC, and to fund new software licences. In the event that the bids are not met, those pressures will carry forward into the next financial year and add to an extremely difficult financial outlook.

The Department's proposed allocation for 2025-26 is £391 million. That is less than what we require to fund our committed projects and critical ICT and to maintain our existing services. It does not provide the funding that is required to progress new capital investment.

Brigitte outlined how the overall funding position relative to that in England is now at a 10-year low. The comparison for capital alone is even more stark. Our investment is lagging behind, at about 5% less in 2024-25 and almost 16% less going into 2025-26. Without additional investment, it is inevitable that the estate will continue to deteriorate while the pace at which we can deliver the new estate facilities that we require will have to be slowed down to fit within our Budget allocation.

That concludes my opening remarks. We are happy to take questions.

The Chairperson (Ms Kimmins): Thank you, Brigitte and Preeta. I appreciate that.

This is more of a comment than anything else: your point about our funding position being at a 10-year low in comparison with England really reinforces the point that we need Westminster to step in. I think that the Minister has talked even this week about the need for increased overall funding. I hope that the Minister will make that case. Brigitte, you said that the allocation in this monitoring round is around £10 million. That tells me that the Executive Budget is stretched beyond capacity and highlights the fact that Health was given as much as possible. We would have expected there to be more slippage, but there has not been, because all Departments are really to the wire.

Coming to year end, does the Department have concerns that there might be any underspend or overspend? Are we content that the full budget will be spent?

Ms Worth: Obviously, with regard to the resource budget, we await the outcome of January monitoring; indeed, by the time that this evidence session finishes, we may know the outcome of January monitoring. My expectation is that, as we move into year end, we will still be looking for every penny of slippage that we can find to attempt to bridge what, I anticipate, will be a remaining gap on the pay settlement. If that funding does not come this year, I think that the Minister has made the commitment to fund it out of next year's budget. In that context, I expect that we will be in a position to break even, but it is a question of how much more we can push to get that full pay settlement to our HSC workers as soon as we can.

The Chairperson (Ms Kimmins): That was going to be my next question about pay. It was welcome that an agreement was reached. I would hate to think that there would be any delays that could be avoided. Given the time frame that we are talking about — we are two months, essentially, from the end of the financial year — is it likely that that payment can still be made in a timely manner, even with the extra slippage, if it comes?

Ms Worth: Our expectation is that a payment will be made in people's March pay. At the moment, we are still on target for that. The question is about how much of the 12 months' arrears we will be able to pay in March. It looks to me as though it is most likely that we will be in a position to make a payment for 11 months. We are looking at enough funding for a 10-month payment already. We need to see what the outcome of January monitoring is, but I am hopeful that, by the end of January, which is roughly when we need to make the call on that payment, we will be able to say, "Yes. OK, go ahead with the 11-month payment", and we will then just continue, as I say, to look for slippage. Hopefully, if other Departments had slippage that they could return to the centre and if the Executive agreed that that could be passed over to Health, we would hope that it might be enough to make the final month's payment now. That would then have to be processed through payroll, so it would not actually be paid for a while after that, but, obviously, we would want it to be paid as soon as possible.

The Chairperson (Ms Kimmins): I am not sure whether you can answer this, but are the Minister or the Department continuing to engage with the trade unions on that matter in particular so that they are kept abreast of what is happening?

Ms Worth: I am sure that they are. I know that there has been continual engagement between our workforce policy colleagues and trade unions.

The Chairperson (Ms Kimmins): Diane previously asked questions about the bid for PPE. Given the continuing pressures that we have seen over the winter period, particularly in recent weeks, can we get an understanding of the current stock of PPE, what that looks like and what the additional £20·5 million will provide?

Ms Miller: OK. I will try to explain it in a way that can be digested. The capital budget requirement for the stockpile is linked to the revenue budget position. The PPE is being held in the Business Services Organisation (BSO) warehouse. It will not purchase the PPE, but the correct accounting treatment for any PPE that you hold, rather than treating it as a consumable, is to have it capitalised. If we get that funding to capitalise the PPE, there will be a corresponding easement in the revenue budget that will obviously assist the revenue budget position.

The Chairperson (Ms Kimmins): Does that PPE consist of items that are used all year round or of items that are used in the event of, for example, a flu outbreak?

Ms Worth: I will take that one. Effectively, it is both. We still have a significant stock in our warehouses from pandemic times, so we are overstocked, effectively, in the warehouse compared with the normal usage pattern. That will change as that stock expires and has to be disposed of. At some point, we will have to purchase contingency stock, but, at the moment, we still have quite a lot from the peak of the pandemic, when we were purchasing and the rate of usage was much higher. I do not know the statistics, but I know that the rate of use of PPE was much higher during the pandemic than even over a bad winter period, for example. A stockpile was needed, because, in a time of pandemic, particularly during COVID, we went through it multiples of times more than we would during normal times. Preeta, do you know if that —.

Ms Miller: No, I know no more than you do.

Ms Worth: The guys from BSO would be able to give you chapter and verse on that.

The Chairperson (Ms Kimmins): Yes, it was just to get an understanding of it.

Miss McAllister: I want to ask a supplementary question about that. This might seem like a stupid question, but, in other areas of the health service, things sometimes become unusable. Does that come into account here? I do not think that the wording is "out of date", but is —

Mr David Keenan (Department of Health): No, it is.

Ms Worth: It is. [Inaudible.]

Some of our PPE has a use-by date.

Miss McAllister: Is there a lot of waste?

Ms Worth: There is some, yes. There has been some waste, with some PPE needing to be written off. I do not have the full detail, but we certainly have had to —.

Miss McAllister: What figures were there for that?

Ms Worth: I have forgotten the number from last year. We wrote off most of the surplus at the end of the 2023-24 financial year. I cannot remember off the top of my head how much that was, but it was tens of millions of pounds. We did not dispose of it all at that time, but we basically ran a model that said, "If we continue using our PPE at the current rate, how much will we use before its use-by date?". At that time, that was the assessment of the amount that would be surplus.

We continue to look for alternative uses for it. Some of the stuff does not go out of date for a year or for two or three years. We continue to work with the other four nations to see whether somebody else needs it for their pandemic stock, and we continue to look for alternative ways to dispose of it. Again, I am not the expert on that, but we do our best. That goes back to the time during the pandemic when you would rather be looking at it than for it.

Miss McAllister: Absolutely.

The Chairperson (Ms Kimmins): Diane wants to come in on that point, and then I will move to other questions.

Mrs Dodds: I will come in briefly. I submitted a question for written answer on PPE that is going out of stock. In 2024, £13,061,000 worth expired. This year, almost £50 million worth will expire. Next year, we will add almost another £22 million to that. To clarify, are you saying that the bid for more PPE is an accounting mechanism?

Ms Worth: Two things are happening there. First, in accounting terms, there is a difference between writing something off and writing it down. The write-off happens when something has reached its use-by date, but most of the numbers that you quoted would have been written down, in accounting terms, in 2023-24, because, at that point, we would have known that it was going to expire without being used. In budget terms, most of the stock that expired hit the 2023-24 budget, so the figures that you quoted will not hit the future budget.

On the capital side, some of the stock that —.

Mrs Dodds: The stock that is due to expire in 2025 is worth £49,670,215, according to the response. That is the figure that came back. It is due to expire in 2025.

That is almost £50 million. How will that be treated, and what are we saying about it? Is that £50 million simply lost? For those of us who are not accountants and do not know how it will work, is that sum lost?

Ms Worth: That £50 million was lost in 2023-24 —.

Mrs Dodds: Even though you are writing it down in 2025?

Ms Worth: We are writing it off in 2025. In 2023-24, we would have said, "We know that we are not going to use this in time. For accounting purposes, we will write the value of it down to zero, because we know that we will not use it — it will expire in 2025 — and we know that we are not using PPE at such a rate as to use it by then. We are not going to get rid of it — we will not throw it out — until it reaches its use-by date in 2025". That is the point at which we formally write it off. If you asked the question about write-off, you will have got an answer on the basis of the point at which the material reaches its expiry date. Does that make sense?

Mrs Dodds: OK. What I asked for was a breakdown of the cost of the PPE that will expire between 2024 and 2028. The total is £96,797,000. That is incredible. It is here in the answer to the question.

Miss McAllister: Written down or written off, it is money wasted.

Mrs Dodds: It is £96 million.

Ms Worth: It is a cost, but, at the same time, remember that, during the pandemic, we were really scared that we would run out of PPE —

Mrs Dodds: I accept that entirely, Brigitte, but that is an enormous cost to the health service.

Thank you, Chair, for letting me in.

The Chairperson (Ms Kimmins): No problem. It is an important conversation, because it is good for the Committee to understand those nitty-gritty points. Is it fair to say, now that we are past the pandemic, that you would not see those figures in normal times and that we can even look at that and learn from it for future stock planning?

Ms Miller: It is so difficult, because, given that there was such a long lead-in time, in all the conversations that we had with colleagues, there was the fear that you would not even get the PPE. It is difficult to say that there is a definitive set of rules that you could apply to a future pandemic. Everyone was making the best call that they could with the information that they had at the time. Now we are, basically, living through the writing down and writing off.

Ms Worth: In normal times, there would always be a low level of write-off, but it would be nothing like —

The Chairperson (Ms Kimmins): Nothing like that.

Ms Worth: — that kind of level. I do not have a history of it. I would be surprised if it hit £1 million in a normal year, but do not quote me on that.

The Chairperson (Ms Kimmins): I understand what you say. It is good to have that information. We probably want to keep an eye on that to make sure that we get the best use of the stock that is still in date rather than ordering reams of stuff that means that we will have huge wastage in the time ahead.

In the past year, £100 million was needed to cover the pay ask. I know that those issues are not comparable, but, essentially, it is about money that we had that we did not spend — you understand where I am coming from. It can be easy to look at where money could be better used, but we are dealing with something that was completely unforeseen. Thank you for that.

To finish up, I have one or two short questions about next year's budget. We have talked in the past about the use of agency and locum staff. Are there any targets to reduce spend in those areas?

Ms Worth: We have not set targets yet, but we are certainly looking at that. Agency spend reduction is one of the real success stories of the past year or so. We are forecasting in 2024-25 to have reduced agency spend by £57 million over the base year of 2022-23, which is an additional £40 million compared with last year. Our attention is turning more towards medical locums now. That is a lot more complex, obviously, because a lot of specialisms are involved, but we are talking about whether it is feasible and what target we might set for the reduction of locum spend into 2025-26. We have just not yet got to the point of having worked out what a reasonable target might be.

The Chairperson (Ms Kimmins): I am keen to hear more about that when information is available and about how you ensure that, where possible, savings are invested in stabilising the services that use locum and agency staff.

This is my final question. Given the recent pressures in hospitals, I assume that a lot more agency staff have been needed to alleviate them, particularly as staff may have had to go off sick with the flu or one of the other things that have impacted on them. At the Committee's meeting last week, the Minister and the Public Health Agency (PHA) said that the numbers of people in hospital were much higher than predicted. I imagine that some agency staff were factored into the moneys for the winter preparedness plan. Did we see a jump in what was needed to cover that, or are we not at that stage yet?

Ms Worth: I do not know yet.

The Chairperson (Ms Kimmins): OK.

Ms Worth: We will not get financial returns for the period ending December until towards the end of this month. I am not hearing from trusts that they have used more than they expected or that they are concerned that they are starting to go off-plan and that that is causing them to have concerns about breaking even. I am not suggesting that the use of agency staff was not higher, but it maybe was —

The Chairperson (Ms Kimmins): Still within budget.

Ms Worth: — not significantly causing trusts to go off-plan, at least not to the extent that they are flagging major problems to me.

The Chairperson (Ms Kimmins): Anything coming back from that would be useful for us to hear, if possible. Thank you.

Mr McGrath: Thank you for the presentation. I have just a couple of quick questions. There has been more than one reference over the past number of days and again today to comparison with the English model. There are just two little elements to that. Has any influence come from the costs for the transformation that has taken place in England and Wales at pace but has not taken place here? Has that had additional impact on the finance that is made available to health services in England, meaning that we need more because we have done no transformation work? Has there been any impact on the connectivity between health and social care? I remember that the point was raised that social care is part of councils' work in England and Wales and that, if there are higher costs, the councils are able to adjust their income levels via local rates. Here, however, we do not really have any ability to raise revenue to cope with that, and it just has to come out of the budget. Do those matters impact on the budgets in any way?

Ms Worth: I will take the second bit of your question first. The percentage that I am quoting is based on health spend only. As you rightly point out, because social care is treated so differently in England, it is difficult for us to get a comparator of social care spend to understand the extent to which we are or are not spending on social care in line with England. It is a lot less easy to get at that comparator, and it is certainly a lot less transparent in what comes across as Barnett. You can see health Barnett clearly, but it is difficult to see social care Barnett because all that you can see is local government Barnett. You do not know how much of it is social care and how much is not. There is definitely something in what you say, but it is incredibly difficult to quantify it, if that makes sense.

Your first point was on transformation. I think that we all accept that there is room for our system to be more efficient and that some transformation can help with that. The difficulty in the context of a funding gap is that, a lot of the time, that transformation and greater efficiency will treat more patients with the same amount of money but will not contribute to releasing cash towards a funding gap. The transformation itself will not reduce health cost. It will slow the rate of growth of health cost and mean that we can do more with what we have. Does that answer your question? Kind of?

Mr McGrath: Yes. I heard you mention the report today, and I heard the Minister mention it on the radio this morning and in a press statement yesterday, so it sounds as if it is now becoming a sound bite from the Department. I want to interrogate it a little. Can you take the two systems and compare them? The systems are so different that it is difficult to draw a direct comparison and say, "They're getting more than us, and that's not fair", although, that said, if I can help in any way to shout and argue for more money from England, I will certainly do that. The point was just to acknowledge that a direct comparison between the two services is nigh on impossible.

Ms Worth: Yes, I suppose so, but it still gives us a sense. We are saying that our system, if it were running as efficiently as that in England, would still need 4% to 7% more to deliver the same outcomes. We are now at a point where, even if our system were as efficient as England's, recognising that it is not, we would still struggle to deliver the same outcomes. That is the point that we are trying to make. Obviously, if our system were more efficient, we would be getting closer to English outcomes.

Mr McGrath: I appreciate that.

My final question is on January monitoring, which is what you are here for. Was a bid made for waiting list initiatives, and to what level was that? What level is projected for that next year? We have seen an incredibly powerful report today from the Royal College of Nursing (RCN) on corridor care, and the statistics about how normalised corridor care is becoming in our health service are mind-blowing. Obviously, if we can make waiting lists more efficient and we can try to clear the backlog there, that will assist the system in trying to reduce the need for corridor care. Was a bid made as part of the January moneys, and is there any increase in next year's budgets to tackle waiting lists?

Ms Worth: We made a bid for £1·5 million in January monitoring. Obviously, that is a relatively modest amount, but the reality is that we are so close to the year end that our ability to get money spent in the last weeks of the financial year is limited. That is what we have bid for this year in January monitoring.

The combined total of our bids for next year was around £300 million. The funding that we have received will not enable us to get to that, but we have set out in our EQIA, under the financial planning scenario that we are starting to work to and work on to see how feasible it is, that we will be able to maintain the level of funding that we put in as additional money in 2024-25, so we are looking at £76 million of that £300 million in the financial planning scenario that leaves us with that £400 million gap.

Mr McGrath: I will leave my point on doing whatever we can in the North/South scheme whereby people can get their operations in the South and then claim the money back. In our constituency offices, we all have queues out through the door of people who want to avail themselves of that. It would help. It does not require extra staffing; it is just a direction of funding, and it would be useful. If there were any way to encourage the development of that scheme as part of the North/South health initiative, it would be really appreciated.

Thank you for your answers and for your presentation.

Mr Donnelly: I have a couple of questions. You mentioned the £65 million that was saved: can we get a breakdown of that? You gave us a couple of headlines as to where it came from. You mentioned a windfall from immigration and a couple of other headlines of where that £65 million was made up: can you break that £65 million down for us and explain the immigration part of it?

Ms Worth: The immigration health surcharge is an amount that comes to us from the Home Office. It is our share of the visa money that people pay when they come into the UK, and we are reliant on Home Office estimates for that. We were not expecting the revised estimate that came in, which was that we were getting £7 million more than the previous estimate that we had been given, so we said, "Thank you very much. We'll take it".

Some other things have happened that contribute to that £65 million. We have £25 million from engaging with trusts around what more can be done to bridge the gap. Most of that came from reduced demand for high-cost drugs. It is not denying people drugs; it is just that you estimate, at the start of the year, how much you will need and how many people will come forward for certain treatments, and the reality can come in at a lower level than was forecast. There is a significant amount from that. Also, drug prices have been coming down in recent months, which, again, we were not expecting. There is a contribution from that too.

Mr Donnelly: Those are all fortunate things.

Ms Worth: They are. It is a big budget, and we have to make assumptions at the start of the year. A lot of our services are demand-led and are driven by pricing that is outside of our control. You make assumptions on the basis of experience, the previous year's spend, what you expect to happen in a year and whether demand is growing or falling. As you say, we have been fortunate that some of those estimates were on the high side, and, as the year has gone on, we have started to see those easements coming out.

Mr Donnelly: They are not exactly savings that have come from efficiencies or anything like that; they are because of a set of fortunate circumstances.

Ms Worth: Yes. That is a fair comment.

Mr Donnelly: It could go the other way next year.

Ms Worth: It could, indeed, go the other way. We all hope that it does not go the other way between now and the year end, but there is always risk. The closer you get to the year end, however, the less risk there is, because there is a shorter time frame in which something can change.

Mr Donnelly: OK. Out of the £65 million, £7 million was from the immigration.

Ms Worth: That is correct, yes.

Mr Donnelly: OK, no problem.

I wanted to dig a bit deeper into the PPE. As someone who worked in the hospitals during COVID, I am aware of how important it is to have PPE. At the start, particularly, we were very thin on PPE, and it was a worrying time, so it is right that we have stock. How is the stock required calculated? Is there a national level that you have to keep to for certain emergencies such as a pandemic? Are you able to answer that first?

Ms Miller: Models were applied around the amount that was required to be capitalised. I am not close to what modelling was done. Emergency planning in the Department looks after that. There are metrics that emergency planning used, and it ran several models and came up with the amount that we needed. The recommendation came nationally, on a four-nation basis, to have a pandemic preparedness stockpile. That was a learning from the previous pandemic.

Mr Donnelly: Is the level of PPE that we have based on population?

Ms Miller: Yes.

Mr Donnelly: Do we meet that level safely at the moment? Is there a required level?

Ms Miller: We have the PPE. The bid was largely to reflect the correct accounting treatment of that PPE stock as a stockpile.

Mr Donnelly: I want to dig into what Diane was saying. To have PPE worth £100 million that, effectively, will not be used is shocking. That is incredible.

Lessons from the pandemic absolutely have to be learned. We need a PPE stockpile: that is important. Is there no system of managing that? The trusts will buy PPE for normal daily use. Do we know how much the trusts regularly spend on PPE ?

Ms Worth: I do not have that figure off the top of my head, but what is happening in the warehouse is that the PPE that is closest to its use-by date is going to the trusts for their day-to-day use.

Mr Donnelly: Is that happening?

Ms Worth: Yes, absolutely. The amount that we were using during COVID was so many times in excess of what we use in normal times that there was more than we can use in normal use. That is what is happening. We have not put that PPE in a separate warehouse and said that it cannot be used for general use.

Mr Donnelly: It is continually being used at the moment.

Ms Worth: It is continually being used. It is just that there is more of it than we can use. We do not want to start using it for the sake of using it, for example.

Mr Donnelly: No, absolutely. Some of it will have to be disposed of: is that the case?

Ms Worth: Yes.

Mr Donnelly: Previously, we disposed of — how much did you say in 2023-24?

Ms Worth: Diane was the one who had the numbers on that, I am afraid. [Laughter.]

Mrs Dodds: The way in which it was written for me is that just over £13 million worth of PPE expired in 2024. In 2025, it is £49,670,215. In 2026, it will be £21 million. It is decreasing, obviously, because the stock is decreasing. It will be £12 million in 2027, and there will be none by 2028. By 2027, we will have finished, potentially, with expired PPE. It will not be all of that, because we are using the PPE as well. That was an answer at a point in time. I put the question down in September 2024, so it is not that out of date.

Ms Worth: I imagine that they will have taken account of what they expect to be used in the meantime in giving you those figures for future years.

Mrs Dodds: So you think that those figures may be more accurate than I thought. I was giving you some leeway on it, but there you go. That is very upright of you.

Ms Worth: Obviously, it depends on usage levels. Those usage levels can fluctuate, but I guess that they will have taken expected usage off those numbers.

Mr Donnelly: You mentioned that PPE is still being used and in circulation. Are the likes of GP surgeries or nursing homes able to access that as well?

Ms Worth: I do not know the answer to that question, but I know that BSO is exploring all avenues that it can to ensure that all of it is used rather than going to waste.

Mr Donnelly: Absolutely.

Miss McAllister: Does BSO not do that? Is it not a regular thing? Surely, that is something —.

Ms Worth: BSO buys for the health service. It does not buy for the independent sector, and GPs are independent practitioners.

Miss McAllister: All healthcare should be free at the point of entry, so, at some point, there will be a saving elsewhere if we are trying to [Inaudible.]

Ms Worth: That is the practice. I know that, during COVID, systems were put in place to enable care homes and GPs to take PPE, but they routinely buy for themselves. As I say, BSO is exploring all those avenues, so I am sure that that will have been looked at.

Mr Donnelly: It is certainly good to hear that, if we have a stockpile that is about to go out of date, care homes, GP surgeries and places like that might be able to avail themselves of that. I am sure that BSO is looking into it, as you say.

Ms Worth: I know that BSO is exploring every avenue. I just do not know the detail.

The Chairperson (Ms Kimmins): We should maybe get that information.

Mr Donnelly: I have one last question, and it is about the pay deal. I appreciate that it was going to be 10 months and two months. That is my understanding.

Ms Worth: Yes. I await the outcome of June monitoring and next month's figures, but I hope that we will be in a position to make that 11 months and one month.

Mr Donnelly: When would the 11 months be paid?

Ms Worth: We are currently on target to pay it in the March pay.

Mr Donnelly: It will be in the March pay. Will there then be a subsequent payment of one month's back pay? When will that be?

Ms Worth: It depends on the point at which we are looking at the funding. The sooner we get the funding, the sooner we will be able to get it into pay, but there is a two- or three-month lead-in time to get it into pay packets, and that is because of payroll processing.

Mr Donnelly: Given the earlier suggestion of what the pay recommendation will be this year, will there be a subsequent payment within the next 12 months for this year's pay deal?

Ms Worth: For 2025-26 pay? Obviously, we do not know when that pay recommendation will come through. We are looking at a £400 million funding gap in the Department, so our plan, which we have set out in the EQIA, is looking at whether we can make savings to deliver that 2·8% estimated level in full. However, we know that delivering another £200 million in savings on top of the £200 million delivered last year will be incredibly challenging for trusts, so there will probably come a point when we may have to make a choice between services and pay.

Mr Donnelly: The recommendation was made in July last year, and the payment was made in GB in October, I think. If the recommendation is made earlier this year, there could be another period when staff in Northern Ireland will fall out of parity.

Ms Worth: I know that that is not what the Minister wants, but, given the financial position, I have concerns that we will not know that we have the funding for it in that timeline. However, obviously, it will be up to the Minister to decide what to do at that point.

Miss McAllister: Thanks for coming today and for the briefing. I have a few questions. Forgive me if they seem like simple questions, but I just want to make sure that my understanding is correct. One question will focus on procurement, and the other will follow on from what Colin said about the spend here.

My understanding is that we spend more per head in Northern Ireland than is spent in England and that we have had 10 years where we have fallen behind in the level of spend, not per head but the amount of spend compared with England.

I know that I am simplifying that a lot, but it is still more per head here than in England, despite our falling behind over 10 years with regard to the percentage of spend. I want to understand that a bit more. I want to understand why we spend more per head in Northern Ireland but, ultimately, our outcomes are no better.

Ms Worth: I will do my best. The Fiscal Council's report estimated that we would probably need to spend between £4 and £7 per head more than is spent in England to get the same outcomes. In the past, yes, we have had premiums in excess of that, and it has probably been because there are inefficiencies in our system compared with the system in England. Some of those are capable of being driven out. Take "Did not attend" (DNA) levels, theatre usage or the number of operations done per day: some of those are capable of being changed, and colleagues in the Department and the trusts are constantly taking action to achieve that. However, there are inherent inefficiencies that would be well-nigh impossible to drive out, because we do not have the economies of scale that England has, given the number of people who are treated and the population size. There will always be inherent inefficiencies in the Northern Ireland system compared with that in England.

Miss McAllister: Can you give examples?

Ms Worth: I will try. Our regional hospitals have a lower throughput of operations. Some of that can be addressed, perhaps, through the reorganisation of our hospital network, but think about the overhead of our policymaking: we are making policy for a population of 1·9 million, and you need broadly the same number of people to make policy for that number as you do for a much bigger population. There are some inherent inefficiencies in our system because of its size. I have not done a particularly good job of explaining.

Ms Miller: I have an example, although I do not have the exact numbers. You see that a bit with the digital platform — for example, when you procure software licences. The NHS is so much bigger that the unit price per licence is much lower. We are then negotiating with contractors and trying to get on board with some of those agreements. I know that my digital colleagues try to do that, although it is not always possible. The buying power is so much greater in GB than it is here for things like that. We suffer a bit from that.

Miss McAllister: You are talking about digital. Is that buying power reflected in health hardware? I use the word "hardware" because you were talking about software, but I mean medicines, tools etc. Is it the same for that?

Ms Worth: With medicines, I think, there is a national drug tariff. We take part in national agreements on drugs, so the question of buying power is not as prevalent with drugs.

Miss McAllister: Is there another angle? What about getting access to it? Is it difficult for the drugs to come over and be supplied in Northern Ireland?

Ms Worth: I do not know, sorry. I will not attempt to answer that.

Miss McAllister: Fair enough. That is not where I was going anyway.

You mentioned the waiting lists, and there are other things, such as winter pressures and annual pressures. This year seems to be particularly bad, but we also hear the national news. GB's waiting lists are bad. In some areas, its waiting lists are extremely bad, and we have seen that its winter pressures are also bad. Those issues are not unique to Northern Ireland, so I struggle to understand why we continue to spend more. If my maths is correct — I say a massive "if" — it is £155 more per head for Northern Ireland rather than the £4 to £7 that you mentioned. When we did our last research, spend per head was £2,272 for England and over £2,400 for Northern Ireland.

There is a massive gap between the extra £150 per head and £4 to £7 per head. It is about how we can match our policy to our financial decision-making so that we can reach that space. Do you feel that that is being done by the Department, the strategic planning and performance group (SPPG) and the trusts?

Ms Worth: We have lots of concrete examples, particularly in the elective care space, of good work to maximise theatre capacity. The Getting It Right First Time (GIRFT) team has been in to look at a lot of specialities and at how we can improve our pathways and become more efficient in our delivery. The Minister's three-year plan set out the potential to have an additional 46,000 outpatient assessments and 11,000 additional treatments by 2027, primarily by reducing the number of instances of patients not attending appointments. That work is absolutely ongoing. The more we can get from each pound of investment, the better.

Miss McAllister: It is important to highlight the elective care hubs that you mentioned as one of the prime examples of doing well that could be built up even more over time.

You raised another issue as well as the waiting lists. You briefly mentioned people who make decisions here for our population and compared them with other authorities across the UK. What exactly did you mean by that? Did you mean that we still have the same size of management in Northern Ireland as others and that that is completely unnecessary? I do not know what you meant by that, and I do not want to misunderstand it.

Ms Worth: I have forgotten exactly what I said. Do you mean when I talked about policymaking?

Miss McAllister: You said that we have a population of 1·9 million and that we have the same number of people who make those decisions as elsewhere.

Ms Worth: Sorry, I probably tied myself in knots a bit there. My point is that, broadly, policymaking for a population of 1·9 million is the same as policymaking for a larger population, but we do not have the same economies of scale for the policy teams here. We do not have a proportionately smaller policy team, although I am not suggesting that we have the same number of policymakers as there are in England.

Miss McAllister: Why do we not work better and more collaboratively so that that does not happen? I mentioned the likes of bowel cancer screening, and I understand why we have not reduced the eligibility age to 50. I can be unhappy about that and understand it at the same time. There are other issues like that on the preventative side. Why do we reinvent the wheel and copy other people's homework rather than collaborate on a greater scale? That is probably a question for the Department, not you. We will pick up on it.

Ms Worth: We cannot have policy teams that are the same size as those in England. A lot of collaboration goes on, though I cannot give you specific examples off the top of my head. This might not have been a particularly good example, but it illustrates the fact that it takes the same amount of effort to make policy in the two jurisdictions. As you said, part of the way to get around that is by working closely and collaborating with colleagues across the water.

Miss McAllister: We should collaborate with our colleagues in the Republic as well. Before I move on to my final question, I will mention the cross-border healthcare directive and the reimbursement scheme. I worry that not everyone across Northern Ireland has the same cash flow and that waiting for that reimbursement could drive up poverty levels even more. Whilst it should be open to people, we would not hail it as an outcome that is better for everyone, because it simply is not. I understand that the Department probably feels the same way about allowing those who have the means to get there in the first instance, given our poverty levels. It is about mechanisms that can help all rather than a few. I am not putting a question on that to you, because it is not your decision, but I wanted to put it on the record.

My last question is on procurement. There was an article last week about the fact that there is limited assurance on the procurement of independent nursing home contracts. It noted that there was limited assurance provided. My understanding is that that means that there is a low level of confidence in independent nursing home contracts between Health and Social Care and independent nursing homes. We are talking about £619 million. Can you feed any more detail into why there is limited assurance?

There has been a lot in the media in the past few days and weeks about ensuring that those who are medically fit to leave hospital are able to move to care homes or in with family. The people in hospital are being targeted. That is not a great look, because people would not be in hospital if they did not need to be there. They do not want to be there. If they were not sick, they would go home or into a care home. We have an issue in a lot of care homes in the independent sector in Northern Ireland. We have a lot of issues with transfers to care homes. I am not saying that there are issues with staff, but issues have been raised in Regulation and Quality Improvement Authority (RQIA) reports, and there are issues with confidence levels. At what point does finance meet policy meet best patient outcomes, given that over £600 million has been spent on social care but we have not seen better outcomes? I understand that that is a big question.

Ms Worth: Is that from a trust's internal audit report or an RQIA report? Apologies, because I am not familiar with it. Something that we all struggle with all the time is striking the balance between patient safety, outcomes and finance. It is about trying to balance those things against each other. We all try not to let financial constraint have a detrimental impact on patients, but we know that the system is such that that is not possible in all cases at the moment.

Miss McAllister: I understand that completely, but the fact that over £600 million was spent does not sound like there was any financial constraint. The figure was in annual reports published by the health trusts at the end of 2023-24. A spend of over £600 million is not financial constraint. A review was supposed to be carried out — that was recommended in 2018 — and it still has not been done. It seems to be a large sum of money for a low level of confidence and the patient outcomes that we see. That feeds into the current winter pressures, so it is relevant.
I do not expect you to give the answers today. I am content for the issue to be followed up afterwards. Perhaps we can liaise directly with the Department, because I understand that, if you are not aware of it, it is unfair to ask you to answer the questions.

Ms Worth: It will be the health and social care trusts. The trusts are primarily responsible for addressing the recommendations, although I know that there is a need for some regional enablement of that as well. I am not sufficiently familiar with it to comment at the moment.

Miss McAllister: That is fine. I understand. I will follow it up in writing.

Mrs Dodds: Thank you for the presentation. I was a little delayed at another meeting, so my apologies for being a little late.

I have a few questions that veer from the presentation on January monitoring to some planning that you may or may not be doing for next year's budget. In your planning for next year's budget, what amount have you set aside, presumed or estimated for a potential new health tsar, which the Minister announced this morning?

Ms Worth: I am sure that you will appreciate that that is impossible for me to answer at the moment.

Mrs Dodds: OK. I presume that you have an amount in mind. Some of us were taken aback a little, in that the chairs and the chief executives of the trusts earn a significant amount, and we would be adding another layer on top of that if were to go ahead with a health tsar. You are bound to be planning for it. No?

Ms Worth: I do not have a specific figure that I can give to you today.

Mrs Dodds: OK. That is fine. I had to ask that. I was a bit taken aback by the news, as we are trying to make the best use of money.

It will be good to get to a position where we have 11 months' back pay paid in one month. We are always at you about things that are going wrong, but that is very good, although, had we been able to, it would have been better to do it earlier. I spent last Thursday morning in A&E in Craigavon Area Hospital. The conditions that the staff are working in are quite brutal. It is really important that we acknowledge the work they do.

I want to talk about the end of this year's accounts. I have seen figures that say that Health had a £32 million underspend in 2018-19; a £69 million underspend in 2019-2020; a £25 million underspend in 2021-22; and a £27 million underspend in 2022-23. I do not have a figure for 2023-24. Those are hefty underspends, given the issues in health. I understand that the budget is huge and that it is difficult to make all the assumptions that are necessary when you start to plan for the budget. Are we anticipating an underspend or an overspend this year?

Ms Worth: It is impossible to land a budget the size of Health's exactly on zero. I think that the underspend last year — 2023-24 — was in the single-figure millions; it was less than £5 million. We are always conscious that, in a normal year, there is the ability, through the Budget exchange scheme, to carry money forward into the following financial year. We would, obviously, much rather do that than spend money on something unnecessary just to use it up at the end of the financial year.

This year, we will still be looking for that remaining month, all the way up to the end of the year. On that basis, I do not expect us to have a significant underspend this year or, indeed, an overspend, but the balance will not be zero.

Mrs Dodds: OK. To be fair, I heard the Health Minister stress the importance of not having an overspend. That is massive for the whole spending picture in Northern Ireland. However, it is important that we are utilising the budget.

On the £1·5 million for waiting lists, do you have you any sense of the level of activity that that money will bring, or could someone write to the Committee with that information?

Ms Worth: I think that that information is in the bid details that you have received. Off the top of my head, I think that it will equate to 125 procedures. I will just check that. Yes, that allocation, if it is received, will fund primary joint replacements for 125 patients in the Western Health and Social Care Trust.

Mrs Dodds: That is hips and knees, that kind of thing.

Ms Worth: Yes.

Mrs Dodds: OK. That is fine.

On how you account for money, I received a response to a question for written answer that I had submitted that is important, given the issues with the maternity hospital. In the critical care building, the Belfast Health and Social Care Trust had to spend an additional £14 million after the handover. That would have been phase 2 of the critical care building, with the helipad and medical records store. Where would that money have come from? Is that capital expenditure by the Department or trust expenditure?

Ms Miller: Ultimately, it will all be from the block and from the Department's allocation. I do not have the exact details on where that £14 million was from. When we allocate the budget every year, we give the trusts a pot of money. Each trust gets a pot of money for general capital, and they generally use that to replace equipment and things that are at the end of their life. They will also use that for minor estate works. I do not know exactly where the amount that you referred to came from, but it could have been a combination of two things that they funded from their general capital allocation and bids that were submitted to the Department, defined within the wider capital budget.

Mrs Dodds: Will you write to me with the detail on that, Preeta? I would appreciate that.

Ms Miller: Yes

Mrs Dodds: It is important that, after a building is handed over, additional money is not required. By that I mean a lot of additional money: I accept entirely that something will be required, as is the case with everything that we do.

Ms Miller: Did you say £14 million for the critical care building?

Mrs Dodds: Yes, £14 million.

Ms Worth: Do you have an AQ reference number?

Mrs Dodds: I do indeed: it is AQW 16684/22-27. It would be useful to have that detail.

I think that is it, Chair. Thank you.

The Chairperson (Ms Kimmins): Thanks, Diane.

Mrs Dillon: I have a couple of points. The first is on the cross-border healthcare directive and the reimbursement scheme. Was there specific reference to that scheme in any bid that was made to Finance? I know that it was potentially going to be part of the overall waiting list initiatives: is that still the case?

Ms Worth: That is still the case. To pick up on Nuala's point, I am not sure that our policy colleagues would see that as the highest priority, because they are trying make sure that funding is diverted to the areas of greatest need, but that avenue could certainly be explored if we had funding.

Mrs Dillon: I agree. For all the reasons that Nuala gave, you would not want it to be the highest priority, because we want to make sure that the people who need it get it and that it is not based on whether people can afford to front up and rely on the money coming back. Often, people who cannot afford to front up will borrow money from anybody that they can in order to get surgery for all sorts of reasons, such as to get back into work.

You mentioned the difficulty with spending money late in the financial year. Sometimes you have to be innovative and look at how money can be spent quickly. In that respect, everything should be looked at. I regularly talk to voluntary groups and organisations and tell them to be shovel-ready. That is not always about capital funding; it is just an expression that means, "Be ready to go. Have something ready, and, if the money becomes available somewhere, we might have a chance at the end of the year". That has happened on loads of occasions. It is about trying to be as innovative as we can and trying to spend every penny to make sure that best use is made of it. To clarify, that is not to say that we should waste money or spend it on things just for the sake of spending.

This is more of a point than a question. Efficiency is different from redirecting how we spend our resources. In fairness, you are here to give evidence on the budget, and the policy decisions are not yours: I get that. However, the point needs to be made that not everything is about efficiency. Spending less is not always about efficiency; sometimes, it is about a better use of resources. For example, we know what causes winter pressures; we have been told time and again that they are because of A&E departments' front doors being open all day, every day, with people coming in and beds being blocked, but no back doors being open, so people cannot get out. At what point do we say that we will invest money in social care, knowing full well that, if we invest in it properly and really take it seriously, we will end up not needing additional beds in the hospitals next year, because we will be able to get people back out into the community? Is the Minister having those conversations with you on the budget?

Ms Worth: I think that the Minister has said that he is looking at moving to the real living wage in 2025-26 as part of his determination to invest more in social care.

Obviously, that will not be without its challenges given our budget environment, but it is certainly factored into the financial plan that we have put forward for consultation.

Mrs Dillon: He has said that, and I really appreciate it. It is really good news for the staff. However, everything comes with the phrase, "We need additional money". Do not get me wrong: I am not for one second saying that we do not; we absolutely do. However, there will be massive savings if we can get people out of hospital on time. There needs to be a bit more thinking and conversation. I know that that is risky. I do not underestimate the challenges and difficulties that you have. It is a massive issue. Health has the budget that it has because of its immense responsibilities. I understand all of that. I absolutely accept the difficulties that you have, but we need to start investing in social care. We will absolutely do what we can to support the officials, the Department and the Minister in that regard. People are telling us what the solutions are, and we need to listen to them. That point needs to be made.

This is my final point. We talked about BSO in relation to PPE. I am sure that BSO is doing everything that it can, but is it reaching out to others for ideas? There are lots of charities out there. The first ones that come to my mind are those that do street work with people who have drug and alcohol addictions. A lot of those charity workers have to wear PPE. Often, those charities are unfunded — they are not given funding from any government sector — and their workers have to wear PPE because they deal with people who have all sorts of complex issues. Those charities are reaching out, yet they are begging and borrowing in order to buy PPE. Is BSO helping in such cases? Is it reaching out to the charitable sectors that are not funded by Health and do not necessarily have a funding relationship with it? If it has PPE that could be used by those charities, they should be able to use it. Do not let it be disposed of unnecessarily.

Could BSO widen the range of people with whom it has conversations? Maybe it is already doing that. We can say, "I'm sure", but none of us can be sure unless we get that information. The Chair said that we will ask for some information back on that. Again, we want to be helpful in that respect. I say, "widen", but only so that we can make suggestions. If you are sitting in a room with two people, you may not think of something that you would think of if you were in a room with 10 people, no matter who the two or 10 people are or what they know. It will always be better to have more heads thinking about those things. I make that recommendation. I would hate to see PPE being disposed of.

Nuala and others referred to the GPs and the care homes. That is an area that BSO will definitely think of — I would be really worried if that was not in its head immediately — but maybe it does not think about the wider issue. Are there opportunities to send the PPE to other places, other countries or bigger charities? I am not just talking about local ones. I am just throwing that in as an idea. Perhaps we can get feedback on how that is happening and what work is being done in that sphere. I do not mean from you; I am talking about BSO.

Ms Worth: You could get that from BSO. I have not had any direct conversations with BSO for some time on the things that you are talking about, but it was thinking about them when I was having those conversations. Nevertheless, you are best to get the briefing from BSO.

Mrs Dillon: That is helpful, Brigitte. I think that some of those things were raised with you before, even before the Assembly was restored. I know that some work was being done in that area.

Mr Robinson: In next year's budget, there is a £400 million funding shortfall or projected gap. Brigitte, you indicated that £76 million of that was for waiting lists: is that correct?

Ms Worth: It is not quite as straightforward as that. We have a list of additional funding requirements, and then we have a certain amount of funding. There is a difference between our list of requirements and the amount of funding that we have. That £76 million is in our list of requirements; it is not necessarily in the £400 million. The £400 million is the difference between a longer list of requirements and the funding that we have been allocated.

Mr Robinson: Fair enough. I may have missed it, because we get a wealth of paperwork every week, but what is the breakdown of that £400 million? How much of that is a result of the National Insurance increase?

Ms Worth: There is a longer list in the EQIA document that, I hope, you have been sent. I can give you the figure for the National Insurance contributions of third parties. That covers GPs, pharmacists, care homes and a range of other organisations and is in the plan at £36·5 million.

Mr Robinson: Is there any more detail about the rest of the £400 million?

Ms Worth: We have a list of pressures that brings us to a projected funding requirement of just over £1 billion and we have around £600 million of funding, so £400 million is the gap. I have a list of 10 or 15 items, which is in the EQIA that you should have.

Mr Robinson: We will leave it for now, because I am conscious of the time.

Ms Worth: If that is not clear in the EQIA, feel free to write to us, and we can provide clarification.

Mr Chambers: Brigitte, at the beginning of your presentation, you used a phrase that I am familiar with from the grocery trade — I think that you stole it from us — which is, "Better looking at it than looking for it". That is our mantra when we do our ordering. During the crisis, PPE was a big issue, and we were encouraging officials to reach out around the world to obtain supplies. We were probably paying top dollar for the PPE and were probably involved in bidding wars to get it, but the encouragement was certainly there for the Department to get it at any cost because we needed it; it was a life-or-death situation. My recollection is that the emergency planning was coming from a collective within the Executive, so the pressure to bring in emergency supplies of things like PPE would probably have been coming from there rather than directly from an individual in your Department. If you had run out of PPE during the COVID crisis, might the conversations in the Committee on the topic have been coming from a different angle?

Colin referred to the North/South reimbursement scheme. That has been hugely successful, and a lot of people in Northern Ireland are out of pain because of it and are grateful for it. My understanding is that it ran out of funding and ceased. Will you confirm that, when the Assembly returned last year, a bid of £31 million was made specifically for hip and knee replacements but was not accepted?

You will have noticed recently that a lot of motions directed at Health are being debated in the Assembly. Many of those are sponsored by Members from parties that sit on the Executive and would, I am sure, understand the budget pressures. Yet those motions still come through, asking for new services and the enhancement of existing services. That is all commendable — we would all love to see those things — but I struggle to see where the funding for all those wish lists will come from. Can you help me with that?

Ms Worth: I will try to unpick that, Alan. I used the phrase, "Rather look at it than look for it", because we took the attitude that we had got into the position of having a significant stockpile that is now expiring. As you said, that need to get PPE was supported universally at the time because we did not want our Health and Social Care workers or, indeed, the wider health system to go unprotected. In hindsight, it is easy to say that we should have bought less.

Mr Chambers: It was a heck of a good investment at the time.

Ms Worth: At the time, it was. It was about knowing that we had it there and, indeed, securing the supply into the future, because we did not know how long the pandemic would last. Had it taken longer for a vaccine to be developed, we had secured that supply into the future.

Your second point was about waiting lists. I am afraid that I do not recall the specifics of our bids, but we certainly bid for a significant amount of money in the 2024-25 Budget. An allocation was made of around £34 million, which was ring-fenced money from the Westminster Government. That was the only specific allocation that we received for waiting lists. We supplemented that from within the general allocation, which was, perhaps, at the expense of other things that we would otherwise have done.

In answer to your final point, we are struggling with this budget to fund what we are currently doing. As you alluded to, I said in my opening remarks that the increase in the cost of delivering what we are currently delivering is outstripping the pace of the increase in our budget, so it is hard to see how we can fund additional services on top of that.

The Chairperson (Ms Kimmins): OK. Thank you to all of you for coming today. It is always helpful to us to get the detail that we need. We look forward to hearing updates on anything else that we have raised today.

Mr Donnelly: I just want to comment on something that you said that really stayed with me. You said that we may be approaching a time when the Minister has to choose between services and staff: that is a shocking thing to hear. That is not a choice: without staff, there is no service, and we should keep that in mind.

Ms Worth: I completely accept that point.

The Chairperson (Ms Kimmins): Thank you.