Savings rollover leaves HSSD with a cost-cutting headache
Tuesday 5th November 2013, 5:00PM GMT.
HEALTH and Social Services has a financial headache and the pressure on it to deliver next year is immense.
As HSSD is the biggest-spending department, the success or failure of the States-wide cost-cutting drive known as the Financial Transformation Programme rests heavily on its shoulders.
Which is why the speech given by its minister Mark Dorey during last week’s Budget debate deserves some scrutiny.
It is also why the speed with which it condemned an independent report that identified up to £9m.-worth of potential savings at the hospital is so alarming.
Last year, the department overspent its budget by £2.2m. This year it is on course to overshoot by £1.3m.
It has been playing catch-up on making its FTP savings already, having failed to produce in the past. And now it has to save the largest amount next year.
An overspend led to the last HSSD board losing their seats, but that was primarily motivated by the actions taken in closing wards to try to stem the flow of cash, and the lack of communication with the rest of the States.
That this board has also produced an overspend but faced relatively little criticism may be a consequence of a feeling that it is taking the right kind of action – and the reassurance from Treasury that it is satisfied with what is happening within the department.
HSSD has identified potential savings – but this still does not go far enough to hit the FTP target required.
In 2013, it has made £2m. of recurring savings – it had an FTP target of £3.3m. – so, as in the previous year, it will be carrying forward the shortfall, making the 2014 target even bigger. It now needs to find some £6m. between now and the end of next year.
‘We have identified FTP projects worth between £3.9m. and £4.8m., which will start this year or early next,’ said Deputy Dorey.
‘This leaves us with an overall shortfall of between £1.1m. and £1.9m. still to find, but we have identified a number of opportunities which have not yet been fully examined or costed, and we are working through these at present.’
And while HSSD are still playing catch-up, there is no absolute commitment from the minister that it will deliver. Perhaps he is wary of having words spoken now used against him in the future.
‘Next year’s FTP target is undoubtedly a major challenge for HSSD, and we recognise that there is still some way to go before we can have the confidence that we will achieve it fully,’ said Deputy Dorey.
‘But we are not standing still. The department continues to identify new opportunities, and to set aside those which on closer examination turn out not to be viable.’
There is little in the way of concrete proposals coming out of the department at the moment.
This has been a problem with the FTP of late – ever since the programme moved away from the opportunities published in 2009 there is no way for the public to know what has or has not made the grade and why.
That creates an accountability deficit.
HSSD stresses that its savings approach is not about cutting front-line services – but remember that is different from not cutting services at all.
‘This is primarily about seeking efficiencies in delivery costs and staffing. It’s about introducing effective controls on highly variable expenditure. And where service cuts or new charges are considered, it’s about taking decisions that weigh up the clinical evidence and that take into account the impact on the people involved.’
On-island treatment of age-related macular degeneration, and the withdrawal of the subsidy for GP visits to residents in the Lighthouse wards were the two examples he gave.
HSSD’s off-island spending has long been in the spotlight – and the department has recognised this again.
‘Financial recovery at HSSD will be a long journey, and not without difficulty,’ said Deputy Dorey.
‘The board and staff of HSSD are fully committed to an approach which seeks to maximise efficiency and control costs, without damaging vital front-line services.
‘We are also committed to an open approach. Where our decisions might have wide-ranging consequences, we will refer to the States with a report on the issues before we move ahead.’
So lessons, as the cliche goes, have been learned from the ward closures fiasco here at least.
HSSD’s 2014 budget is £104m.
It has problems to solve with its FTP target, but some of them are of its own making by not acting early enough.
The new board has picked up the legacy of that inertia.
‘Next year’s budget is ambitious, especially in terms of the size of our FTP target,’ said Deputy Dorey.
‘There is still some way to go before we can feel wholly confident that we will achieve it, but I am confident that we are taking the right approach.’