The speech I made in the general debate on the budget.
Sir, As is customary will begin by commenting on the budget in so far as it affects HSC and then speak more generally.
The headline summary of HSCs submission does not reflect the wide range of challenges and considerations that are taken into account and that result in the budget figure build which was submitted to P&R. We will therefore be publishing it on our webpage in order that those interested can get an idea of the various factors involved and Deputy Green and others can find out the considerable transformation that has occurred at HSC and what is being planned.
Actually I hear about Deputy Fallaize say Deputy Green has been appointed the resident pessimist but I think being a new Dad and the loss of sleep that goes with it may have something to do with it.
Anyhow, Whether or not transformation is going on elsewhere I will not accept in any way shape or form any attempt to throw seeds of doubt as to what HSC has achieved. We have made millions in bottom line cash savings and considerably more in terms of cost avoidance.
Regarding capital spend and in answer to Deputy Green, like Deputy Fallaize I want to give a boost to capital infrastructure which is why HSC has been focused on the PEH modernisation and expects to get a policy letter to the States early next year which will likely make a sizeable dent in the Capital reserve. At least I expect it to happen before Jersey get a spade in the ground on a new hospital.
Now just looking at specific aspects of HSC’s budget.
The ageing population is real and hitting us like an express train. The immediate post war baby boomers are in their 70s and the numbers over pension age are expected to increase 2% pa over the the next few years. This has been calculated to drive a 1.4% increase in demand, all other things being equal. At the other end of the age range, whilst less children are being born many more are surviving with conditions that would not have been viable just a few years ago. Rising obesity is also causing increased demand on a number of services and that is why we need the Health Improvement Commission to do its bit as the current increase is causing pressures that will be costly to resolve.
Recruitment of skilled staff has become increasingly difficult in all disciplines. In recent months these issues have worsened considerably reflecting the Brexit uncertainty but also the short sighted decision of the UK resulting in declining numbers of nurses and allied health professionals.
To strategically reduce agency, recruitment and retention costs we propose to considerably increase the intake of trainee nurses each year and have budgeted for this accordingly. This will strengthen nursing resilience in the bailiwick and provide a clearer career development path.
We have also included funding for free cervical screening, support for additional gastroenterologists and oncologists and for the Carers’ Action Plan. The pressure on the drugs bill is rising and using the NHS inflation projection of 4.1% that equates to a cost pressure of £213,000. It is quite likely the reality will be greater.
However, members should also know that the budget incorporates planned savings of £945k. Thinking differently working differently is real and happening every day. So, whilst the headline is of £2m being given to HSC, it would be far more if weren’t focused on cost and service improvement which is now becoming business as usual. Because of that I think at some stage we need to consider whether instead of those resources coming out of the transformation and transition fund they should form part of HSC’s budget.
The one item that has come out of the budget altogether is routine capital, which used to appear at the bottom of the Committee budgets. This approach was approved by members earlier this year. However, it does appear to me that the process now completely sidelines Committees and is exclusively an officer driven process, with authorisation having to be given by a group with a title that only government could come up with: the Property Minor Capital Oversight Board. Indeed, few members here will have an idea as to how minor capital is being spent and won’t until, I presume the accounts are presented next year.
This is a concern as operating capital may seem just business as usual but such spending can have a transformational element and I don’t think that has been properly considered as part of the process.
I believe that P&R should advise members how the Property Minor Capital Oversight Board operates, its membership and the criteria used to determine what is and what isn’t approved.
Sir, more generally, the budget these days is so broad ranging and encompasses items that in the past might have been dealt with under a separate policy letter. Lots of different bits and pieces seem to have been incorporated, making it a very unwieldy beast. I think it results in certain items not being given the attention they deserve.
And to be frank I think a lot of time is spent focused on allowances, fuel and TRP which I totally understand as they are easy to relate to and they impact directly on the pound in the pocket. But there is so much more than that in these pages that relate to significant items of revenue and expenditure.
The number of pots have been multiplying and as they expand, the harder it is to really understand the bigger picture. General Reserve, Capital Reserve, Core Investment Reserve, TransTF, Corp Housing Prog, General Reserve Account reserve, Future Guernsey Economic Fund, Bond Reserve, Brexit Transition, Participatory Budgeting, Overseas Aid Impact Investing and then £15m of other apparently minor funds.
All have different purposes and different means of accessing them and they are all controlled by P&R. Which of course they should be, or rather a separate Treasury function should be. Something which I think, although not certain may be addressed in the new structure, which is good.
It was such concerns that led to the amendment I was proposing to lay with Deputy Yerby.
The financial structure now is incredibly complex. I thought it interesting listening to Deputy Green about his concerns over delegated authority to P&R and in the part of his speech that wasn’t as President of the Scrutiny Management Committee. Personally, I think the financial scrutiny function has been diluted under the new machinery of government, which I thought would be the case.
But even if the structure is ok, the scrutiny function is not big enough. I was expecting that this was going to be one of the first things SMC would address this term. The opportunities were provided in the policy letter he referenced in his speech. I know as I put that in, as well as the opportunity to increase it’s annual budget quite substantially. However, we see next year’s budget will be less than this years.
I think it does ring warning bells when P&R are quoted in paragraph 8.39 as saying they commend the continued responsible financial approach being taken by SMC. That if they needed money for an unplanned review they can apply for funding. I think, given the transfer of considerably more functions into P&R, such as IT, HR, Finance and Procurement, this way of doing things really does have to change.
Sir, there is so much more in this budget that deserves more scrutiny. Another eye watering £866,000 for the Data Protection Authority which is far more than we were led to expect when the policy letter came to the States, temporary overdraft of £15m to Aurigny and more fundamentally, just whether the Medium Term Financial Plan is fit for purpose. The latter is the key here and no a requete is not appropriate, but a properly considered and informed debate in the Policy & Resource Plan next year and something I look forward to.