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Health and Social Services Department - Budget Challenge Minister's Statement

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Thursday 29 November 2012

Statement by the Minister of the Health and Social Services Department, to the meeting of the States of Deliberation on Thursday 29 November 2012.

As you will all be aware, the Health and Social Services Department is currently under significant financial pressure. In recent months, there has been a substantial increase in demand for services, including mental health, children's and hospital services, especially for the over-65s. In addition, the cost of providing services has increased, and the Department has faced difficulty in covering sickness and maternity absences among skilled staff and in recruiting to specialist services.

Due to ongoing budget reductions, as part of the Financial Transformation Programme, my Department no longer has the flexibility it needs to respond to peaks and troughs in demands for services, which are faced by health and social care providers everywhere. The demand-led nature of health and social care costs is evidenced by the fact that my Department recorded a £1.7 million under spend last year, while in 2010 we faced a similar size overspend to this year.

You will all know that I tabled an amendment last December, to ask for a less stringent budget reduction. This amendment was rejected, and my Department has been forecasting an overspend since May of this year. Staff have been working very hard to contain costs within existing budgets, but because of the demand-led nature of services, this has not been possible. Therefore, my Board launched the Budget Challenge at the start of this month, to explore how costs associated with rising demand could be further contained. At that time, we anticipated an overspend of around £1.5 million. Due to unavoidable pressures on services, it now looks like this overspend will be closer to £2.5 million.

When we launched the Budget Challenge, we promised quick action to make sustainable reductions in our budget. We have already begun to explore some of our most challenging areas, and changes will be made before the end of 2012 - but it takes time for savings to be realised, and these will not have an impact before early 2013. In the meanwhile, the Health and Social Services Department have had to make some very tough decisions in order to try and contain the overspend before the end of the year.

It is with great reluctance, therefore, that I have to announce that the Health and Social Services Department will be taking the following action with effect from 1 December 2012:

1. Deferring all non-emergency and non-urgent off-island treatment until January.

2. Close a surgical ward and a theatre, and postpone all elective, contract surgery until January.

3. Close Divette Ward and relocate patients to other appropriate placements.

4. Cease recruitment to vacant posts, unless the post is demonstrated to be essential for patient, service user or public safety, and a business case is approved by all Directors.

5. Minimise the use of agency staff to provide cover, and increase the use of bank and part-time staff wherever possible.

6. Minimise weekend overtime duties and defer weekend work to week-days wherever this is clinically appropriate.

All emergency surgery will proceed as normal, and nothing will be done to put patients' safety at risk. All islanders who are booked in for on- or off-island procedures will receive a letter from HSSD by Friday 7 December notifying them of any changes that will affect them, and will be given a contact number to call if they have any questions. Islanders will also be advised to contact their consultant if they have any concerns about their health.

The planned actions are for the month of December only, and will be reviewed in the New Year. However, it is already clear that these actions will have a significant impact on in-patient waiting times in 2013.

All HSSD staff are working very hard to provide good quality services in the light of ongoing financial pressures and staff shortages. I want to thank them publicly for their professionalism and commitment in the face of these challenges, which are not of their making.

Members of the Assembly will recall that HSSD faced a similar position in 2010. At the time of the Budget announcement for 2011, the Department was forecasting an overspend of £1.6 million, and the final outturn was £2.2 million. The Minister for Treasury and Resources, at that time, stated that "whilst the Treasury and Resources Department is, of course, disappointed that an overspend is predicted, it is reassured to note that actual 2010 net expenditure is expected to be less than the 2009 actual outturn of £105.3million despite the Department incurring an additional £3million of cost relating to increased employers superannuation contributions."

In the 2010 Accounts, published in May 2011, the Treasury and Resources Department asked the States to approve a proposition to sanction a £2.17 million overspend by the Health and Social Services Department, to be funded from General Revenue. Following discussion with the Treasury and Resources Department this year, my Department will now be adhering to the procedure set out in Billet VIII of 1991, and directly requesting the authorisation of the States for the 2012 overspend. As such, I will be asking the Presiding Officer to allow the Health and Social Services Department to present a report to the December States Meeting, requesting authorisation for a £2.5 million overspend.

Ends

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