Budget 2020

The 2020 budget debate wa very different from 2019 which has been dominated by the public sector reform changes made by the Chief Executive. This year the focus was around the unsustainability of the current finances. My speech was centered around what had been achieved by Health & Social Care to live within its budget but also to make it clear – again – that there are growing challenges and demand that need to be funded in the future.

Sir, normally and in past years I’ve covered off a range of items in the budget. BUT the truth is I can’t see anything more important in respect of the States finances than the cost of health and care – what we provide and how we pay for it.

The development of this year’s budget has been incredibly difficult for the Committee for Health & Social Care. Over the last 3 plus years, HSC has improved its financial controls, financial reporting and financial analysis. Processes have been introduced to ensure that all recruitment requests are scrutinised before approval. A framework for the pricing of agency staff has been introduced to control such expenditure. A prioritisation process has been implemented to ensure that all service redesign initiatives are properly costed, reviewed and assessed and positive steps have been taken to agree clear contractual arrangements with NHS providers, enabling more reliable off-island services for patients at more predictable, stable costs. HSC is more efficient than ever before.

We have made savings and underspends totalling £8m as a result of service improvements and wider transformation. Indeed, we are the only Committee that has already made the recurring savings we identified we could for 2019, totalling £945k. Without these collective actions, HSC’s quarterly expenditure would be over £5 million more than it is today. We have consistently made more savings than any other Committee this term, such savings that have helped out other parts of the States undertake initiatives that would have not been possible otherwise.

However, growing demand, growing medical advances and growing expectations are putting real and huge pressures on the service. In my last update to the Assembly I stated that we would overspend our budget this year by £5m not due to lack of financial control but because of real and tangible increases in demand. 

Given one amongst us wrote a letter to the Guernsey Press saying he didn’t believe it, I thought it would be worth providing a few examples. Occupancy in the PEH has increased by 10% in the last year alone. The critical care unit has been full to overflowing this summer, which is unprecedented. Radiology has seen an increase in demand of 25% in the last 12 months. We are forecasting a 23% increase in Emergency Department attendances since 2017. Mental health services and community services are all seeing increased demand for their services.  We have had to employ agency staff in adult community services whilst we wait for an additional 43 permanent staff we have recruited to become available to meet growing and complex needs. 

Off-island care has seen a 10% increase in cases translating into an increased spend of £1.5m

In addition, successful recruitment efforts across acute services, combined with the introduction of super-numerary posts to help retention, as well as unpredictable events requiring expensive locum cover have meant we have eaten into the vacancy factor that has been used in the past to keep the budget down and enable funds to be freed up for other Committees. 

It is against this backdrop that HSC’s 2020 Budget needs to be understood and the requested increase not be seen as unexpected. 

Our submission totalled £130.5m, representing £12.24m over the indicative adjusted cash limit. It is proposed that we receive £124.7m, with £2m of separate annualised service developments. Now, it has to be said that the development of the budget is something of a black art and it took some time to reconcile one with the other. I’m not going to explain it in detail right here, but the upshot is, the proposals are £3.6m less than we applied for, or £2.1m excluding items which we have been advised can be funded from elsewhere.

Our submission covered £10.4m of what we consider essential funding. That is funding required in order that current services could be maintained and current demand met, with £1.8m of items we believed should be funded to meet gaps in service provision.

In the event, the cash limit increase, excluding service developments and alternative funding, totals £6.6m. This covers £1.1m inflationary increases, with the remaining £5.5m mostly reflecting an adjustment to our base staff costs to reflect their true cost. Yes, that is right, to reflect their true cost. Various adjustments have had to be made, reflecting prior year under-budgeting as well as the elimination of the vacancy factor for frontline staff which is no longer justified. So basically our cash limit just covers off maintaining what we have. It does not deal with increases in demand or any gaps in provision which are both, oddly,  defined as service developments.

It is proposed that we receive £2m in annualised service developments, which is £1.5m less than expected. 

Let no one think that this was a speculative wish list. It is a carefully considered submission which has been subject to extensive assessment, review and prioritisation by both officers and the Committee. From an initial list of over 60 proposals with total costs of around £8 million, we brought that down to £2.1 million essential bids, and a further 14 requests totalling £1.1m which we believed could be delayed but would put strain elsewhere in the system. These are pro-rated costs, not full annual costs by the way.

Every proposal has been subject to extensive internal scrutiny. HSC’s Finance Business Partner has a simple phrase pinned prominently above his desk; “Every pound wasted is a patient’s lost opportunity”. This message encapsulates the approach taken to financial management across HSC, recognising the need to maximise the value of every pound available to the community.  

And here’s the proof – [raises budget papers] what that’s about 7cm of paper and I can assure members there are plenty more documents on this laptop as a result of the whole summer being spent trying to arrive at a realistic budget.

I don’t intend to go through in detail each of the prioritised requests in turn but will provide a few examples which will, subject to members’ approval, be funded in 2020;

  • The initial stages for a Mental Health and Wellbeing Centre. The need for an accessible,  community-based service for those experiencing stress and distress was identified as part of the gap analysis of all mental health and wellbeing services provided across the Guernsey and Alderney;

My Committee is determined to ensure that when we made a priority of the P&R Plan that Mental health be given equal priority and consideration as physical health that this should not be hollow words. 

  • An improved diabetic retinopathy screening programme designed to increase the number of service users accessing it;
  • A Consultant Community Paediatrician to cover services such as Safeguarding, Autism Assessment, neurodisability services, school clinics, and support for the Child Development Centre. This is an essential post if we are to abide by one of the central tenets of the Children and Young People’s plan that every child should be safe and nurtured.

However, those areas that, at this stage, will be unfunded, include;

  • The expansion of the Community Speech and Language Therapy team to respond to the 75% increase in out-patient referrals and increased complexity of the caseload;
  • The recruitment of a Falls Practitioner to work across HSC to provide support in reducing falls and ensuring effective treatment and rehabilitation for those who have fallen;
  • the development of Health and Care Regulation to provide independent assurance around safety and quality of public, private and third sector services. 
  • And Increased provision for the Children’s dental service to manage increased demand.

We do appreciate the difficult decisions that P&R had to make in developing the 2020 Budget. We have not wanted to make it difficult for them. HSC has done its bit over the last few years to make their life easier and continues to do so through transformation which I will spell out in my next statement. But whilst a focus on prevention and improving the general health and wellbeing of the population may reduce the scale or complexity of future demand, and earlier intervention and more integrated care will improve efficiency and effectiveness, the overall costs will continue to rise. KPMG made it very clear that, even making transformational changes, there will be a funding gap in health and care of £20m by 2027. It should therefore not be a surprise to anyone that we are where we are.

Whilst we can be more efficient and are always seeking to improve, anyone who still thinks that the funding gap can be managed by cutting out waste clearly has no comprehension of the pressures currently being faced. In any event, any multi-million pound savings are really only likely to be achievable through digital transformation and that isn’t going to happen overnight.

Sir, We are very lucky to have the breadth and depth of health and care provision that we do in the Bailiwick and my Committee is proud to represent all those who provide such an amazing service. But this Budget indicates that the time has come for a wider conversation over what the community is able and willing to pay to maintain our services. The current arrangements are unsustainable if we are to meet growing expectations, be it in how long we have to wait for surgery, how much we have to pay to see a GP, the drugs and treatments we want or the level of care we desire in the community. Something has to give.

All the savings that HSC has made over the last 3 years have been made without cutting services. We’ve done it through thinking differently and working differently. The time has come for all of us to think and work differently and think and work together to find the best solution for the people of the Bailiwick because decisions need to be made and made now.

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