Department of Health Budget: briefings

Meeting report

SOCIAL SERVICES SELECT COMMITTEE
24 May 2002
DEPARTMENT OF HEALTH BUDGET: BRIEFINGS

Documents handed out:
Department of Health Budget Presentation
HIV/AIDS and TB Powerpoint Presentation

Chairperson: Ms L Jacobus (ANC)

SUMMARY
The Committee expressed concern that funds allocated for poverty relief projects were rolled over. The Department explained that the cluster of Departments dealing with poverty alleviation was to blame for the rollovers since most of the Departments concentrated on their core functions whilst the poverty relief agenda was relegated to the periphery.

MINUTES
The Chair reminded members that the Committee was preparing for the policy debate on the 4 June 2002 on the overview of provincial budgetary allocations. The report from the Portfolio Committee on allocations to various provinces would be made available to the Committee for this purpose.

Department of Health Presentations
The National Health Department delivered a briefing aimed at informing the committee about the uses and criteria for various grants allocated to the provinces. Mr Muller drew attention to the HIV/AIDS grant in particular which increased drastically this year from R34 million to R157 million, and to R266 million in the next year and R380 million in the final year of the MTEF. This gave an idea of the importance with which HIV was being viewed. Two studies were conducted, one of which was on the cost pressures and structures related to HIV/AIDS, which convinced Treasury of the need for such an increase.

The other study was on hospitals, with particular attention being paid to equity issues. This grant consequently was set to grow very rapidly in the next few years. The training and development grant was also set to grow at a steady rate. The rehabilitation and revitalisation grant would grow more slowly, but this was because it had grown very rapidly since its inception. They had proved that they could spend the money, and consequently could use this as a way of reassuring Treasury that additional monies were needed. Mr Muller briefly explained the Hospital Management Grant, saying that this was aimed at improving management capacity. The control of the grant had shifted from the provinces to the National Department.

Mr Sibeko, Chief Director of Hospital Services, delivered the briefing on grants related to hospitals. Previously, there had been two grants, the Training and Central Hospitals Grant was flawed, as was the Redistributive Grant. For this reason, a review had been conducted into where tertiary services were located and what volumes were handled. The data had been gathered from 529 specialised services, in 62 hospitals throughout the nine provinces.

The majority of tertiary services was delivered in the Western Cape, Gauteng and KwaZulu Natal, and they had historically received grants. However, it was also found that the Free State, the Eastern Cape and the Northern Cape were also delivering such services. Services were being rendered in line with the goal of increasing day visits and decreasing long-stay care. This situation meant that these provinces were using their own revenue to fund the tertiary services, and this was also true of KZN, but Gauteng and the Western Cape were not because of the size of their conditional grants.

This led to the idea that the grants should strive to improve equity, since Northern Cape and Eastern Cape received no funds, and the Free State and Natal received insufficient funding. Thus all provinces now received some funding for tertiary services through the National Tertiary Services Grant. The Health Professional's Training and Development grant had been decreased to enable more funds for the provision of tertiary services.

Dr Simelela's Presentation on HIV/AIDS and TB
Dr Simelela, Director HIV/AIDS Programmes, informed the Committee that the Department ran three projects on HIV/AIDS. These projects were Voluntary Counselling & Testing; Home Based Care Programme and Mother to Child Transmission. She said the Province of Kwazulu-Natal received most of the grants due to the high HIV/AIDS prevalence rates in this area.

Dr Simelela said that the North-West Province had spent very little on the Mother to Child Programme and that on the other hand the Mpumalanga had not yet accessed the funds for this programme. She added that the variation in Provincial allocations depended on the available infrastructure and the capacity to manage programmes. She pointed out that her Department was proud to report that it had spent all the money allocated to it this year which is a great achievement in view of the history of roll-overs witnessed in previous years. She concluded that the Department had received a substantial additional allocation this year and that some donor funding supplements areas of deficiency.

Discussion
Mr Lucas asked if the Department tried to offer assistance to the Provinces to help them unlock available funds so as to avoid the notorious incident of under-spending.

Dr Sibeko noted that there was a constant trend in the history of spending in provinces, which was determined by resources and capacity to manage projects. She contended that some provinces were historically disadvantaged in terms of infrastructural capacity and hence were unable to rollout programs in good time. She noted, however, that there had been some significant improvement over the years and that this positive indicator is set to continue.

Mr Lucas asked if the Department partners with the Department of Agriculture in the area of food production and security.

Dr Sibeko replied in the affirmative and explained that the Department networks in the area of food production and security not only with the Department of Agriculture but that it incorporated a cluster of other departments like education, Social Development. She revealed that a Strategic Plan around food security had been launched and efforts in this area were set to continue.

Dr Simelela said that a steering committee on the Agriculture Plan had not received funding from treasury to commence operations.

Mr Toro asked for clarification on the total rollovers from the previous year. Provinces complained that the National Department only released funds to them when they were about to close their books and that was why they were unable to spend. He asked for the Department's take on this allegation. Had the Department devised any measures to address under-spending?

Dr. Sibeko admitted that in the past the transfer of funds to the provinces had not been properly managed but that this area had seen tremendous improvement in the recent past especially with the enabling framework of the PMFA legislation. There was at present full-time managers who monitored the disbursement of funds and intervened where problems were noted. Such efforts were futile without the necessary back-up structures at the provincial level.

Mr Toro (ANC) inquired why Mpumalanga had not accessed funds for the Mother to Child HIV/AIDS prevention funds.

The Chair also asked why there was no expenditure on the Home Based Care program by Mpumalanga.

Dr Simelela said that more than 60% of the NGO that conducted Home Based Care programs in the province did not have viable business plans and that the Department was trying to strengthen them before they could be funded to commence operations.

Mr Sogoni (UDM) observed that the Department had made reference to "under-spending" and "savings". He sought for clarity on this terminology usage.

Mr Muller clarified that he used under-spending and savings interchangeably, which was incorrect. He said that what he meant was under-depending and not savings.

Mr Sogoni (UDM) lamented that every departmental presentation was loaded with hefty programs yet when one looked on the ground there was virtually nothing running. He asked if the Department had any indicators to determine how funds were spent and if such funds accomplished programs for which they were budgeted.

Mr Muller said that the allocation of conditional grants depended on business plans presented by the provinces. He pointed out that in actual fact the risk of over-spending was slowly coalescing into that of under-spending.

Dr. Nel (NNP) asked about the huge bad debt write-off the Department alluded to as being the reason for the Free State's over-running its budgetary allocation last year.

Dr. Muller replied that the Free-State bad debt write-off was only one of the reason for over-spending its budget and added that there were other reasons, which he would provide later in detail.

The Chair noted with concern that R6.5 million for poverty relief alleviation had not been spend pointing out that this had been a disturbing trend with other Departments as well. She asked why this problem was persistent and requested for documentary reports, if any were available, to show what the Department was doing to address this malady.

Dr Sibeko admitted that it was greatly embarrassing to see unspent funds when there were areas of abject poverty. The reason for failure in this area was that the nature and strategy of poverty alleviation programs was not integrated. The real obstacle was the fact that each Department tended to recoil and lay focus on its core functions thereby relegating the crucial item of poverty alleviation to the periphery. She added that even where a joint strategy had been formulated pressure to move quickly on the core function deviate attention from this important endeavour.

The Chair asked why the Department was spending less on nutrition programmes for the HIV/AIDS component.

Dr Sibeko said that with regard to nutrition, the Department realized that it could not go it alone without networking with the Department of Education then later it became necessary to accommodate Social Development a situation that caused all the delays. She however noted that after the advent of Nepad and the Rural Integrated Program a new impetus to address these issues is coming out and that this would need to be rolled into a strategic plan.

Dr Simelela said that the department's interface with Social development appeared to have under-estimated the magnitude of the problem on the ground. She expressed doubt about the sustainability of the programs especially as rates went up and poverty escalated together with the unemployment.

The Chair said that when the Committee had paid a visit to hospital facilities in Kwazulu-Natal Province, they were presented with a long list of facilities identified for revitalization. She asked if these projects had been implemented.

Dr Muller said that way in 1996, the Department undertook a program to revitalize its hospitals and that R8 billion was accordingly made available for this purpose. He said that the grant for this item had grown steadily to the point of maturity. Kwazulu-Natal had a well-established program for hospital revitalization but that this was a massive task that weighed heavily on the limited Provincial budget.

Dr Sibeko said that even after revitalizing these facilities they would continue to deteriorate and that the list of expected projects would continue to grow longer.

The Chair said that rural areas had the greater need for funding than urban areas. Why was there a low per-capita expenditure in the poverty invested rural areas.

Mr Muller said that the issue of per-capita spending had been discussed at the Portfolio Committee on various occasions. Research that was carried out in this area revealed that the treasury's fiscal formula needed to be reviewed. Treasury started to address this problem last year but that they were too slow.

The Chair said that she would speak to the Portfolio Committee about this issue and see if there was a possibility of holding joint hearings. She however called on the Department to try and harmonize its policies so that Provincial priorities reflected national priorities.

The meeting was adjourned.