Health funding in Northern Ireland Contents

Introduction

Health and Social Care in Northern Ireland

1.Health and Social Care (HSC) is the publicly funded health service of Northern Ireland. The HSC grew out of the Health Services Act (Northern Ireland) 1948 which made provision for a comprehensive health service in line with that introduced in England, Scotland and Wales the same year. Northern Ireland’s health service came to be modelled differently to that implemented in other parts of the United Kingdom. Responsibility for service procurement fell to a number of statutory bodies while the authority of the Ministry of Health and Local Government (later to become the Department of Health and Social Services under direct rule; the Department of Health, Social Services and Public Safety in 1999 following the return of devolution; and finally the Department of Health from 2016 onwards) was restricted to the coordination of services. In December 1969, against a backdrop of increasing unease with the structures of local government, a review body was appointed to examine proposals for reshaping these structures. This culminated in the Macrory report of 1970 which advocated “a great reduction in the number of decision-making bodies and of the levels of executive power.”1 Its recommendations laid the groundwork for reforms implemented in 1973 shortly after the introduction of direct rule whereby the existing health authorities and committees were abolished and replaced with four new health and social services boards. The reforms incorporated the integration of health and social care, a model justified by then Minister of State Lord Windlesham at the newly created Northern Ireland Office on the basis that:2

In many fields the health of a community and its social needs are inter-related. The elderly, the handicapped and the mentally ill, for example, are particularly vulnerable groups in need of both medical and social care. The combined administrative structure will enable the health and social services for these groups to be fully co-ordinated.

The integration of health and social care is now widely advocated as a desirable model and remains a long-term ambition of the National Health Service.

2.Following the signing of the Belfast/Good Friday Agreement in 1998, the newly constituted Executive’s Programme for Government called for the development of “a cross-cutting public health strategy which maximises, across all sectors, our efforts to improve health and well being and reduce health inequalities.”3 The resulting strategy Investing for Health was launched in 2002 and advocated a cross-disciplinary and multi-sectoral approach aimed at addressing the wider social determinants of health. In 2003, the Review of Public Administration concluded that the four health and social services boards would be dissolved and their functions assumed by regional organisations that would better facilitate the aims of Investing for Health. These were brought forward by the Health and Social Care (Reform) Act 2009 which established the Health and Social Care Board, Public Health Agency, Regional Business Services Organisation and the Patient and Client Council. The restructuring aimed at a more streamlined and accountable model that would maximise resources for front-line services, place greater emphasis on prevention and provide support for vulnerable people to live independently in the community for as long as possible.4

3.Northern Ireland’s public health system under the direction of the Department of Health is currently structured around:

4.In March 2016, the Health Minister announced that the Health and Social Care Board would be abolished with all commissioning powers transferred to the Department of Health and a new group established to hold the five Trusts to account.5 However, since the collapse of the Executive this has not happened.

5.The HSC serves a population of over 1.8 million people of which 308,200 people (16.4 per cent) are aged 65 or over.6 Rising demand from increasing numbers of older service users with complex needs is projected to place unsustainable pressure on the health service as it is modelled currently. Health policy, in response, has aimed at diverting care away from hospitals and towards community-based services. The ‘transformation agenda’ has received cross-party support on the basis of “an unassailable case for change”7 but while some progress has been made towards a realignment of services the agenda continues to be hampered by the collapse of the Northern Ireland Executive.

Funding following the collapse of the Northern Ireland Executive

6.In January 2017, following the resignation of the Deputy First Minister, the Northern Ireland Executive collapsed. There has been no devolved government in Northern Ireland since this date and consequently no Minister of Health. Departments are unable to lawfully deploy funds until funding has been appropriated to them and an Appropriation Act can not be passed until a Budget has been set. In usual circumstances the Minister of Finance would present a Draft Budget to the Northern Ireland Assembly for debate and approval. However, this is not possible in the absence of a functioning Executive and by the time the Executive collapsed a Budget for 2017–18 had not been set.

7.Section 59 of the Northern Ireland Act 1998 authorises the Northern Ireland Civil Service to issue 75 per cent of the previous year’s Budget out of the Consolidated Fund of Northern Ireland if an Appropriation Act has not been passed three working days before the end of the financial year, rising to 95 per cent if an Appropriation Act is not in place by the end of July. In March 2017 the Permanent Secretary at the Department of Finance exercised these powers, stating this would “enable cash to continue to flow to maintain the provision of public services” but that they were “not a substitute for a Budget agreed by an Executive” and that “the prioritisation and allocation of financial resources is a matter for Ministers.”8

8.The Civil Service advised the Secretary of State for Northern Ireland that November was the latest point at which a Budget could be set before funds would begin to run out.9 To avoid this, on 16 November 2017 the Government passed the Northern Ireland Budget Act 2017 which authorised Northern Ireland Departments and other bodies to incur expenditure and use resources as if it were a Budget passed by the Northern Ireland Assembly. The Secretary of State remarked that the Departmental allocations set out in the Bill were those “recommended by the Northern Ireland Civil Service” which “sought as far as is possible to reflect the priorities of the previous Executive.”10

9.In anticipation of the need for a 2018–19 Budget, the Department of Finance published a briefing paper in December 2017 setting out broad strategic issues that would inform an incoming Executive’s decisions on setting a Budget for 2018–19 and 2019–20. Its assessment was that for an effective Budget to be delivered it should be agreed no later than early February 2018 and that, were Departments to continue spending on current profiles, particularly in health and education, “the available Budget for 2018–19 would be significantly exceeded.”11 The briefing paper highlighted the rising cost of existing models of health service provision and the need for transformational change.12

10.In March 2018 the Secretary of State set out Budget allocations for 2018–19. In addition to capital and resource allocations the Secretary of State set out the allocation of funds drawn from the financial annex to the Confidence and Supply Agreement between the Government and Democratic Unionist Party. This included £80 million to support immediate health and education pressures; £10 million for mental health; and £100 million to support transformation of the health service along with £4 million to “prepare the ground” for transformation.13 The Government subsequently passed the Northern Ireland Budget Act 2018 which authorised, with some adjustments, those appropriations set out in the March statement. The Explanatory Notes to the Bill stated:14

This Act is a minimal step to ensure that public services can continue to be provided in Northern Ireland for the full financial year. It leaves in place the requirement for devolved spending decisions to be made by the Northern Ireland Executive or, in the ongoing absence of Ministers, the Northern Ireland Civil Service.

11.On 28 February 2019 the Secretary of State announced Budget allocations for 2019–20. These allocations included: a real-terms increase in resource funding for the Department of Health along with a further £100 million for health service transformation; £4 million to “prepare the ground” for transformation; and £10 million for mental health drawn from the financial annex to the Confidence and Supply Agreement. These allocations also allowed for £130 million of existing 2019–20 capital funding to be used to address public service resource pressures and up to £85 million of resource and £8 million of capital funding to be carried forward from 2018–19 into 2019–20. In her statement to the House the Secretary of State remarked:15

In the absence of local Ministers, and given the proximity of the next financial year, it would not be appropriate for the UK Government to seek to take fundamental decisions about service delivery and transformation. Those are strategic decisions that should be taken by locally elected and accountable Ministers in a new devolved government. Yet we must act to secure public services and enable Northern Ireland departments to meet urgent pressures in health and education and protect spending to other departments with core front line public services. That is what this budget settlement will do, by protecting and preserving public services within challenging fiscal constraints.

Decision-making in the absence of Ministers

12.Article 4 of The Departments (Northern Ireland) Order 1999 requires that “the functions of a department shall at all times be exercised subject to the direction and control of the Minister.”16 Northern Ireland Departments had interpreted this as only applying while Ministers were in post and continued to take decisions “reluctantly and only after taking legal advice”17 following the collapse of the Executive.

13.In September 2017 the Department for Infrastructure granted planning permission for a residual waste treatment facility at Hightown Quarry in County Antrim.18 A judicial review was subsequently instigated by a local resident and on 14 May 2018 Mrs Justice Keegan ruled that the Department had acted unlawfully, stating that “the provisions of the 1999 Order are clear. The language is expressed in mandatory terms by inclusion of the word shall” and “I do not consider that Parliament can have intended that such decision making would continue in Northern Ireland in the absence of Ministers without the protection of democratic accountability.”19 An appeal against the decision was dismissed by the Court of Appeal on 6 July 2018.20

14.In September 2018 the Secretary of State remarked on a number of examples where a lack of Ministerial decision making was holding Northern Ireland back, announcing her intention to bring forward legislation that would “include provisions to give greater clarity and certainty to enable Northern Ireland Departments to continue to take decisions in Northern Ireland in the public interest and to ensure the continued delivery of public services.”21 In November 2018 the Government passed the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018, of which Section 3(1) states:22

The absence of Northern Ireland Ministers does not prevent a senior officer of a Northern Ireland department from exercising a function of the department during the period for forming an Executive if the officer is satisfied that it is in the public interest to exercise the function during that period.

The associated guidance on decision-making issued by the Secretary of State clarified that:23

Any major policy decisions, such as the initiation of a new policy, programme or scheme, including new major public expenditure commitments, or a major change of an existing policy, programme or scheme, should normally be left for Ministers to decide or agree. [ … ] NI departments should then consider whether there is a public interest in taking a decision rather than deferring a decision during the period for Executive formation.

The guidance goes on to list a set of principles that senior officers should take into account when considering whether a decision can be taken in the public interest. These include:24

Our inquiry

15.The absence of MLAs at Stormont has meant that representatives in Northern Ireland have not been able to scrutinise budgets set by Westminster or decisions made by civil servants at the Department of Health. We agreed that there was a pressing need for scrutiny of these decisions and in July we launched our inquiry into health funding in Northern Ireland. The inquiry aimed to examine whether funding was sufficient to sustain and improve services; how Confidence and Supply funding earmarked for health was being spent; and how funding could be best deployed to ensure value for money.

16.We began our inquiry with a call for written evidence and received a large number of submissions from a range of statutory, community and voluntary healthcare providers, professional associations, pharmaceutical companies and healthcare charities. Starting in September we held oral evidence sessions with the Health and Social Care Board and Public Health Agency; cancer charities; social care providers and associations; mental health charities and professionals; service users; the Chief Medical Officer; and the Department of Health. Healthcare is a broad subject and, due to limits on time and the evidence made available to us there were some areas that our inquiry was unable to cover. However, the conclusions of this report are based on the evidence we received and we would like to thank everyone who engaged with the inquiry, particularly Melanie Kennedy, Catherine O’Reilly and Rev. Dr. Scott Peddie for sharing their experiences as service users with the Committee.

17.In the absence of elected politicians the Department of Health has continued to take decisions on healthcare. We recognise that many of these decisions have been difficult in the context of mounting pressures on services, limited resources and the pressing need to bring about transformational change across the system. Our inquiry consequently deals with many matters that are ordinarily devolved. However, many stakeholders welcomed the Committee’s engagement with these matters and, though the preferred solution remains a restored Assembly and Executive, there was a clear desire from the people we spoke to for effective decision-making and the urgency of many of the decisions that need to be taken. Where we have made specific recommendations to the Department the Committee has been mindful of the Secretary of State’s guidance on when decisions should be taken in the public interest, in particular that priority should be given to maintaining the delivery of public services as sustainably and efficiently as possible; working towards the previous Executive’s stated objective of improving wellbeing for all; following the priorities and commitments of the former Executive and Health Minister; and the principle that the consequences of deferring decisions should be considered and significant detriment avoided.


1 Patrick A. Macrory, Review Body on Local Government in Northern Ireland, June 1970, paragraph 12

3 Northern Ireland Executive, Draft Programme for Government (2000), page 30

4 Department of Health, Social Services and Public Safety, Framework Document, 30 September 2011, page 3

6 Northern Ireland Statistics and Research Agency, 2018 Mid-year Population Estimates for Northern Ireland, 26 June 2019, page 9

8 Department of Finance, Department provides Budget clarification, 28 March 2017

9 House of Commons Library, Northern Ireland Budget Bill 2017–19 [Bill 123], Briefing Paper No. CBP 8122, 9 November 2017, page 3

11 Department of Finance, Briefing on Northern Ireland Budgetary Outlook 2018–20, 18 December 2017, page 7

12 Ibid., pp. 71–71

18 Department for Infrastructure, Planning permission granted for arc21 Residual Waste Treatment Facility, 13 September 2017

19 High Court of Justice, Buick’s (Colin) Application (ARC21), [2018] NIQB 43

20 Court of Appeal, Buick’s (Colin) Application as Chair Person of NOARC 21, [2018] NICA 26




Published: 2 November 2019