Treasury and Resources
(Health & Social Services Department)
Ministerial Decision Report
TRANSFER OF £6.131M FROM THE HEALTH INSURANCE FUND FOR HEALTH AND SOCIAL SERVICES PRIMARY CARE SERVICES
- Background
The savings and growth proposals from Health and Social Services were considered by CoM as part of the 2011 Business Plan process and early phase of the CSR. The levels of growth required exceeded the funding available within target cash limits. It was suggested that as the longer term pressures on healthcare are likely to require an expansion of the use of the Health Insurance Fund (HIF) then an early transfer from the available surplus may provide a solution.
The proposals in the 2011 Business Plan were to fund £4.9 million of necessary growth in Health and £0.9 million of the department’s required savings from the HIF. This increased to £6.1 million as an alternative to introducing a £0.3 million user pays proposal in 2011 in respect of diabetic supplies and dietary, oxygen and continence products.
2. Business Plan 2011 and P125/2010
The proposal for a £6.1 million transfer was included within the 2011 Business Plan and an amendment from Senator Ferguson resulted in a debate on whether it was appropriate for such a transfer to take place ahead of a full review of primary healthcare services. The amendment was defeated with reference being made to the debate of P36/2010 and P125/2010. P125/2010 from the Minister for Social Security proposed an interim arrangement for two years until such time as a full review of primary healthcare services and the use of the Health Insurance Fund could be completed. This is now being progressed as part of the Strategic Review of Health and Social Services from which funding proposals for 2013 and beyond are anticipated. A further proposition to agree the level of funding for 2012 will need to be brought, ideally alongside the 2012 Business Plan debate.
During the debate of P125/2010, the Minister for Social Security clarified that the actual transfer of funds would be for primary care services currently provided by Health and Social Services. The effect of this would be to free up funds within the department’s existing cash limit to fund the necessary 2011 growth and the balance of savings and user pays which were required. The report to P125/2010 included a schedule of the likely primary care services that the HIF funding would be used for.
The Minister for Treasury and Resources committed to manage the transfer from the HIF to the Consolidated Fund and to only release funds on receipt of clear evidence from Health and Social Services confirming expenditure in respect of primary care services.
P125/2010 was approved on 3 November 2010, subject to review by the Scrutiny Panel. On the 16th November 2010 the Scrutiny Panel decided not to undertake a detailed review and the amendments to the Health Insurance Fund Law are currently with Privy Council. No funds are able to transfer until Privy Council approval and an appointed day is determined, this should be in the first half of 2011.
3. Proposed Process
The intention is to follow a similar process for close monitoring and control of other centrally allocated funds as has been operated with both Pandemic Flu and Fiscal Stimulus. Both have involved a review by Internal Audit to check the evidence of expenditure claims.
The process would operate on a quarterly basis and Health and Social Services have identified a schedule of primary care services and estimated spend during 2011. This schedule will become the template for a quarterly invoice for the provision of services and is attached as Appendix A.
Quarterly a transfer would be made to the income of Health and Social Services Department to the value of the claim but not exceeding a quarter of £6.1 million.
Internal Audit would review the claims and before the final quarter’s claim is paid, Internal Audit would report on the accuracy of the evidence to support the expenditure. Any adjustment required as a result of the Audit Review would then be made in the final quarter transfer.
Payment approval of the quarterly invoice from Health and Social Services could be delegated to the Treasurer of the States and this report proposes a Ministerial Decision be prepared to agree the proposed process and appropriate delegation.
The Minister for Health and Social Services has confirmed her agreement of the proposed process and the Minister and Chief Officer for Social Security have had the opportunity to comment on the process.
- Recommendation
The Minister for Treasury and Resources is recommended to agree:
- the proposed process for control and monitoring of the HIF transfer via the Consolidated Fund to the income of the Health and Social Services department
- the delegation of the payment approval of quarterly Health and Social Services Invoices to the Treasurer of the States
- Health and Social Services have the permission and ability to spend the additional income transferred.
- Reason for Decision
The proposal for a £6.1 million transfer was included within the 2011 Business Plan. During the debate of P125/2010, the Minister for Social Security clarified that the actual transfer of funds would be for primary care services that are currently provided by the Health and Social Services Department. The effect of this is that existing funds within the department’s cash limit would be available to fund the necessary growth and the balance of savings and user pays proposals. The report to P125/2010 included a schedule of the primary care services delivered by the department that would be funded from this source.
The Minister for Treasury and Resources committed to manage the transfer from the HIF to the Consolidated Fund and to only release funds upon receipt of evidence from Health and Social Services Department confirming expenditure in respect of primary care services.
The Minister for Social Security and the Minister for Health and Social Services have both agreed the process.
- Resource Implications
The process itself will reduce the Health Insurance Fund by £6.1 million and increase Health and Social Services Departmental income by an identical amount
Health and Social Services will have the permission and ability to spend the additional income transferred.
Report author : Assistant Accountant – Financial Planning | Document date : 22nd March 2011 |
Quality Assurance / Review : Head of Financial Planning H&SS Report - Director of Finance Health & Social Services | File name and path: |
MD sponsor : Treasurer of the States |
Appendix A
Areas of Primary Care Services currently funded by Health and Social Services Department
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