Belfast Telegraph

Friday 22 August 2014

Striking right balance for a healthy economy

Health spend is set to rise to £4.4bn, the highest level ever in northern ireland, says finance minister peter robinson in defence of the draft budget

Ed Curran in his open letter to me, published in last Monday's Belfast Telegraph, sets out some comments on the Executive's draft Budget. I welcome this engagement.

A benefit of devolution is not simply that locally elected politicians are accountable for the proposals put forward but, additionally, that public consultation is meaningful, and ministers reflect upon it before final decisions are taken.



However, it is important that this is based on informed debate and not simplistic analysis. While a number of Ed's comments are predicated on rather a dubious basis, I nonetheless welcome his contribution to the debate.



However, I am disappointed that the impression has been given that the Executive's draft Budget proposals represent an attack on the Health Service. This allegation does not stand up to scrutiny.



While I would have liked to provide more funds to our Health Service, as for other public services, the simple fact is that there is no scope to increase funding significantly beyond that set out in the draft Budget.



Over the period to 2010-11, total health spending will increase to £4.4bn, the highest level ever allocated, an increase of £800m, once efficiencies have been factored in. Over this time DHSSPS will receive 51% of the additional resources available to departments and hence will account for an increasing share of total departmental spend - this is the true indication of the priority given to health by the Executive.



In addition, it has been suggested that health spending is presently behind English levels but the reality is that per capita spend on health and social care is 10% greater than in England and will remain higher over the Budget period.



Although the growth in spend for DHSSPS is lower than that for the Department of Health (DoH) in England, direct comparisons are misleading, given differences in the functions provided. In addition, the growth in spend for health and social care in Northern Ireland is greater than that recently announced for Wales and only marginally lower than in Scotland where, Mr Curran indicates, health is a high spending priority.



To achieve the same level of growth as DoH for the DHSSPS would require the budgets of other local public services to be reduced by more than 5% in real terms. Alternatively, the domestic regional rate would need to treble. The resources released from a reversal of the rates freeze, as suggested by Mr Curran, would barely have an impact on the funding gap identified by the Health Minister. In fact an inflation increase in the domestic regional rate in 2008-09, if all allocated to DHSSPS, would represent 0.2% of the whole health budget. Indeed, in light of the proposed introduction of water charges and the 62% increase in the regional rate over the last five years, I believe the Northern Ireland householder has paid enough in recent times.



Mr Curran also suggests that the lower proportion of total spend on health services locally implies that it is less of a priority. However, this ignores some obvious differences with England including that Northern Ireland has 20% more school pupils per head of population while agriculture accounts for a larger share of our economy. Does Mr Curran want spend per pupil to be reduced by almost a fifth or support to farmers to be cut by more than a half so that we can replicate what is happening in England? Devolution is about making our own choices, not simply replicating others.



While the focus has been on the level of funding, of even greater importance is how those resources are used.



Through weaknesses in the system, productivity in the local health care sector is over 10% lower than in England, while we are paying 10% more per item in terms of prescription drugs. These issues, and others, were examined in an Independent Review by Professor John Appleby of the Kings Fund who highlighted a number of areas where effectiveness could be improved with the conclusion that "¿ current problems in the Northern Ireland health and social care sector relate to the use of resources rather than the amount of resources available".



Additional funding would, of course, make a difference but real change will only occur once we have made the difficult decisions in terms of reforming the system. Simply pumping funds into an unreformed system, as happened under the previous Executive, will not resolve the issues facing the sector.



Although Mr Curran raises the spectre of job losses, the broader question is whether the primary role of the health sector should be to provide employment for staff, or services to the public. In addition, the resources released from efficiency savings will be available to fund more staff and better services. The danger is that, by exaggerating the funding position, this will provide those opposed to change with the perfect excuse to resist the path to a better health service.

However, as has been seen with waiting times and the costly pay reforms, money is not the only answer and not always the right answer.



Public Consultation on the draft Budget will close on January 4, 2008. I would encourage everyone in Northern Ireland to put forward their comments on the Executive's draft proposals.

I believe that the proposals strike the right balance between increasing the funds for public services and reducing the burden on households through the rates. However, it will be for the Executive as a whole to agree the final proposals, based on the response to the public consultation.

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