Examination of witnesses (Questions 60 - 79)
WEDNESDAY 17 JUNE 1998
MR
GEOFF SCAIFE,
DR PETER
COLLINGS and MR GERRY
MARR
60. I understand. I was
just curious to see if you were able to throw a little more light
on that but there we are, you clearly cannot and I accept that. Can we move on to note 26, pensions.
The Chairman was asking you questions and he referred, I think,
to paragraph 6.4 in the text which was about irregular severance
payments. There is an interesting item here in note 26 to those
accounts, because it says that £10.777 million, nearly £10.8
million, was paid out in enhanced pension payments on early retirement.
Can you throw a little more light for the Committee on the policy
on early retirement? Here we have people some of whom are earning
large sums of money. You have a pension scheme which, if note
26 is to be believed—and I believe everything the C&AG
tells me—last was subject to an actuarial evaluation in
the years 1984-89, so by the time you come to 1996-97 we are a
long way from the last actuarial review, yet somebody, unless
I am mistaken, is spending money like it is going out of style,
paying people who say, "I want to retire early." Where
does that leave the taxpayer and can you enlarge upon what note
26 tells us?
(Mr Marr) Chairman, if I may, the rules on early
retirement are actually generally contained within general Whitley
Council national terms and conditions. The detail of the kind
of work that that would attract, in some ways with the change
in hospitals it may be a staff nurse, it may be a charge nurse,
it may be a porter. It is not necessarily managers or people in
the top ranks of the service.
61. No, but it adds up to £10.8 million?
(Mr Marr) Yes, and when Trusts are making an assessment
of a service change, they clearly have to make some kind of financial
assessment of whether that is a reasonable value-for-money solution.
As they move from, in the case of mental health, closing a large
institution into social care, the options available to them are
redeployment and retraining and early retirement is only one of
those options.
62. That is helpful, Mr Marr, but there
is something that I do not understand. I said earlier that I am
not an accountant, as you may perceive by an enthusiasm for what
accounts may or may not tell us, but if there is an additional
cost over and above what would normally be charged to a pension
scheme for one individual, will the incremental amount be charged
to the pension scheme or will it be charged against your profit
and loss account (for want of a better expression)?
(Mr Marr) There has been a specific change in
the rules in Scotland on superannuation and how you treat pension
costs. I think Dr Collings is best able to answer that technical
question.
63. And perhaps the C&AG could add to
it, but it is my last question, Chairman.
(Dr Collings) In general the costs of early retirements
fall on the NHS body, the costs of those over and above the costs
of retiring at normal age.
64. Could I then ask the C&AG, who is
responsible for these accounts, whether it is appropriate that
the figure is in here, because reading it quickly I would have
assumed that meant that it was charged to the pension scheme,
which in theory, particularly in a scheme which has not been actuarially
valued for quite a while, might diminish the resources available
to everybody else who was hoping to retire later on, or am I not
understanding it?
(Mr Le Marechal) On the point of responsibility,
as it were, Mr Wardle, this material is provided by the NHS in
Scotland and we audit it so we are not responsible for the text.
Of course, if it were misleading then it would be our job as auditors
to draw attention to that. I think the purpose of including that
figure is simply to identify the amount of money which the NHS
in Scotland spent on enhanced pension payments, without necessarily
implying——
65. The key word is "enhanced"?
(Mr Le Marechal) Yes. It is over and above the
amount that they would normally incur.
Mr Wardle: Chairman, I think the question is
left dangling there and that is fine for now. Thank you very much.
Mr Leslie
66. Mr Scaife, I am curious because I am
looking at the fuller appropriation accounts, class XIII, vote
4, and right now section A2, looking at the amounts of money that
hospitals and community health services in Scotland are given
in grant and then comparing that with the actual expenditure figure,
and I notice that for the financial year 1996-97 there is an underspend
of over £35 million. Can you explain that, please?
(Mr Scaife) Yes, Chairman. The underspend is termed,
I think, by the NAO as a technical deficit. Sorry, I think I have
the wrong reference.
(Dr Collings) The underspend, which is—I
do not have it in front of me but it is approximately 1 per cent.
of spend—is a mixture of various amounts. One of the things
that we have to cover for are the demand-driven expenditure, the
drugs bill and primary care payments. As a result of that, we
have to keep a small amount back during the year until we are
clear what the outturn will be on those payments. There are also
on occasion slippages, I think, with capital expenditure.
67. We will come on to that later.
(Dr Collings) The amounts involved under both
those headings can be carried forward into the next year under
the end-year flexibility arrangements.
68. In the 1995-96 year you were also underspent
by a similar figure, so you underspent in the last two years in
a row by over £30 million?
(Dr Collings) On total spending of the order of
£3,000 million.
69. Certainly, I realise that, but it is
still £30 million?
(Dr Collings) It is a small margin within which
to try to operate the vote given the absolute requirement not
to overspend on the amount that Parliament has granted.
70. What is the comparative waiting list
situation comparing Scotland with, say, England? How well does
Scotland compare or is worse off?
(Mr Scaife) The size of the waiting list in Scotland
pro-rata to England is smaller. We have a little under 89,000
patients on our waiting list. The figure in England is over 1
million.
71. What is that per thousand or per capita?
(Mr Scaife) For any figure, if you take Scotland
it would be about 10 per cent. of England, so you would expect,
taking my figures, the English comparator to be about 900,000
and it is over 1 million, and the length of time people have to
wait for treatment is shorter in Scotland than it is in England.
For example, in Scotland we have guarantees and a determination
that no-one should wait outside those, and generally we keep within
it.
72. I am just interested that, looking at
other health services, which I think are referred to as C2 in
the same accounts, class XIII, vote 4, similarly there is an underspend
there of around £4.2 million and, as was mentioned, capital
grants and transfers for NHS Trusts of £18.7 million. Can
you explain those before we go on?
(Dr Collings) For the other health services the
underspend is largely on welfare foods, which is a scheme where
there is an entitlement, and it is the level of take-up of that
entitlement, and we over-estimated the take-up. It is a limited
item and we provided sufficiently for what we expected. It was
over-provision and in subsequent years we have provided less.
73. I have a separate amount for welfare
foods, but actually other health services is simply to do with
a reduced amount of teacher preparation within the National Board
of Nursing, Midwifery and——
(Dr Collings) My apologies. You were referring
to that. That is a separate body that would look after that subject
and that would be the underspend in that year.
74. So there is another underspend there.
Explain the capital grants and transfers of 18.7?
(Dr Collings) The capital is simply slippage on
capital programmes, where the money was allocated, indeed over-allocated,
for capital projects but there was slippage in the timing of some
of those projects, which meant it was not spent within the year
but carried forward to be spent in the year after.
75. I am getting a picture of amounts of
money voted to you and not entirely spent up by you, money that
is actually carried forward sometimes used for advance payments
I suppose to defray costs in future years. Tell me about these
advance payments. When you are doing this are you simply carrying
forward money and buying up a thousand more truckloads of bandages?
What is the strategy there? Is there a strategy for these advance
payments in a clinical medical sense or is it the case that you
find yourselves at the end of the year with this amount of money
unspent and you decide to spend it somehow on whatever can be
most quickly purchased?
(Dr Collings) We do not have a strategy. We have
now issued guidance reminding Health Service bodies of their responsibilities
in that area and the rules governing this.
76. How would you counter the argument that
maybe the amount voted to you is comparatively, relatively, too
large? If you are not spending it that is obviously what it looks
like. If you are not spending the money—I do not say this
but some people might well say—you do not need necessarily
it as much as others.
(Mr Scaife) Chairman, I would be saying that we
are voted money by Parliament and we are very clear that we have
got to stay within the amounts that are voted. Obviously the money
is accounted for in strict financial years. If we take the example
of capital where there was an underspend of some 17 million, obviously
you do not pay the bills until you receive the certificates to
confirm that the work has been done. We do the best that we can
to profile expenditure based on estimates of the rate at which
work will be done and payments will be submitted. We certainly
do spend the money that is allocated to us. The size of the overall
underspend at the end of the year, as Dr Collings was saying,
is well within the tolerances that one might expect, less than
one per cent, and dealing in vast amounts of money.
77. I would not want to criticise you for
underspending too much because too often we see overspends on
this Committee and of course then we have a go at them on the
other side. I am just keen to bottom out this argument that some
people might say you are getting money that perhaps you cannot
use. The next point I have is a different point. I want to ask
you about whether you have figures for health spending per capita
for people in Scotland and people, say, in England and the rest
of the United Kingdom?
(Dr Collings) If I can refer you to the Treasury
publication, Public Expenditure Statistical Analyses, this
shows that on health and personal social services expenditure
per capita in 1996-97 was £833 in England and £1,019
in Scotland.
78. Which is a difference of £186 or
thereabouts.
(Dr Collings) Yes.
79. What is the percentage difference per
head for people in Scotland and people in England?
(Dr Collings) Roughly 22 per cent.
Mr Leslie: I do not have any further questions.
|
