ATC200716: Report of the Portfolio Committee on Health on the adjusted Budget Vote 18 of the Department of Health, Dated 15 July 2020
Report of the Portfolio Committee on Health on theAdjusted Budget Vote 18 of the Department of Health, Dated 15 July 2020
The Portfolio Committee on Health (the Committee), having considered the 2020/21 Adjusted Budget of the Department of Health(the Department), reports as follows:
On 24 June 2020, in response to the effect of COVID-19, and the measures taken to contain the spread of the pandemic, the Minister of Finance tabled the Adjustment Budget (hereinafter referred to as the Supplementary Budget). The Supplementary Budget has a dual purpose, namely to report on the COVID-19 fiscal measures and the resultant adjustments to the Division of Revenue and the Departmental allocations, as well as to set out Government’s commitment to strengthen public finance and position the economy for recovery and growth.
The purpose of this report is for the Portfolio Committee on Health to report on its deliberations, considerations and make recommendationson the Department of Health’s Adjusted Budget.
The Committee’s consideration of the Adjusted Budget Vote 18 involved an engagement with the Department of Health on 8 July 2020.
- Department of Health Adjusted Budget 2020/21
The Department of Health’spreliminary costed plan (budgetary implications) was submitted to National Treasury on 17 April 2020 following a special Chief Financial Officers Forum involving National Treasury on 15 April 2020.
The plan presented two scenarios, the optimistic scenario with anestimateof R14 billion and the pessimistic scenarioestimate ofR26 billion. Exclusions of other critical costed COVID-19 elements or need were made.
Following the President’s announcement of the relief fund of R20 billion for healthcare, the Department’s costing model was recalibrated and the middle ground scenario was opted for the Supplementary Budget submission which was submitted to National Treasury on 27 May 2020.
- Reprioritisation Focal Areas
The following areas are expected to be fully or partially funded through the new COVID-19 component under the HIV Grant (Direct Grant):
- Personal protective equipment (PPE);
- Contracting of private critical care beds where needed;
- Laboratory tests performed by National Health Laboratory Services (NHLS); and
- Procurement of thermometers for Community Health Workers and the Cuban Medical Brigade.
The total allocation for the new COVID-19 component is R3.45 billion, which comprises of R604.7 million reprioritised funds within the HIV Grant; R29 million reprioritised from Indirect Grants to the COVID-19 component; and R2.8 billion new National Treasury funding.
The following national priorities will be funded from earmark funds (R411 million):
- COVID-19 communication;
- Information Communication Technology (ICT) for COVID-19;
- Buffer stock;
- Port Health Services; and
- Cuban Medical Brigade.
- Programme Analysis
This section provides detail on the revisions and reallocations within the programmes. It must be noted that no funds in the Department were suspended for COVID-19 purposes.
Table 1, below indicates the original budget allocation made in February 2020, as well as the amount by which the budget allocation is adjusted, and the resultant adjusted allocation. In February 2020, the Health Department was allocated R55.5 billion. After downwards revisions and reallocations, the total net changes proposed equals an additional R2.9 billion. The proposed total allocation for Health totals R58.4 billion, an increase of 5.2%.
Table 1: Revised Programme Allocations
Source: National Treasury (2020), adapted.
Increased Allocations: In terms of nominal amounts (that is, without taking inflation into account), Programme 3: Communicable Diseases and Non-Communicable Diseases receives the biggest adjustment allocation with an increase of R3.1 billion. This is followed by Programme 6: Health Systems Governance and Human Resources with an increase of R108.9 million, and Programme 4: Primary Health Care receives an increase of R50.6 million.
Decreased Allocations: The three remaining programmes’ allocations have been reduced. Programme 5: Hospital Systems allocation is reduced by R220 million, followed by Programme 2: National Health Insurance, which declines by R86.8 million and Programme 1: Administration which declines by R6.8 million.
Programme 1: Administration was allocated R672.2 million in the February budget allocation. R6.8 million is viremented from Programme 1 for COVID-19 purposes. No new funds are allocated, nor are any funds viremented to the programme (no increase). The net effect is a reduction of this programme’s budget by R6.8 million or 1% to R665.5 million.
Programme 2: National Health Insurance was allocated R1.4 billion in the main budget. R141.2 million is viremented from Programme 2 for COVID-19 purposes; and R54.4 million is viremented to the programme. The net effect is a reduction of R86.8 million or 6.2%, to anadjusted allocation of R1.3 billion.
Programme 3: Communicable Diseases and Non-Communicable Diseases was allocated R25.2 billion in the main budget. R681.8 million is viremented from Programme 3 for COVID-19 purposes; while R2.8 billion is reallocated; and R932.4 million is viremented to the programme. The net effect is an increase of R3.1 billion or 12.2%, to an adjusted allocation of R28.3 billion.
Programme 4: Primary Health Care was allocated R238.3 million in the main budget. No virement effected from Programme 4 for COVID-19 purposes; whileR50.6 million is viremented to the programme. The net effect is an increase of R50.6 million or 21.2%, to an adjusted allocation of R289 million.
Programme 5: Hospital Systems was allocated R21.8 billion in the main budget. R1.8 billion is viremented from Programme 5 for COVID-19 purposes; and R1.6 billion is viremented to the programme. The net effect is a reduction of R220 million or 1%, to an adjusted allocation of R21.6 billion.
Programme 6: Health Systems Governance and Human Resources was allocated R6.3 billion in the main budget. R17.8 million is viremented from Programme 2 for COVID-19 purposes. While, R96.7 million is allocated to for COVID-19 purposes, and R30 million is viremented to the programme. The net effect is an increase of R108.9 million or 1.7%, to an adjusted allocation of R6.4 billion.
- Committee observations and findings
Having considered the Adjusted Budget of the Department of Health, this section summarizes the Committee observations and findings:
- The Committee welcomed the Adjusted Budget of the Department as presented to the Committee.
- The Committee noted with concern the surge in COVID-19 cases in the country confronted by shortage of staff, exacerbated by the rise in the number of infected healthcare workers, andthe shortage of PPE and ICU beds in health facilities.
- The Committee observed that R21 billion will be allocated to provinces for COVID-19 response and raised concern on whether provinces will be assisted in the planning and reprioritisation to ensure that funds are notmisallocated.
- The Committee noted its concern around the consolidated budget allocation to provinces and indicatedthe need for provinces to be funded equitably to bolstertheir COVID-19 response.
- The Committee raised concern in relation to the delays in finalizing the Service Level Agreements with the private health sector in order to augment the bed capacity for COVID-19.
- The Committee noted with concern the severe shortagesof Emergency Medical Services (EMS) personnel and ambulances insome provinces.
- The Committee raised the need for training of EMS personnel and ambulance operators in dealing with COVID-19 cases.
- Given historicalpoor spending patterns on the Infrastructure Grant by provinces, the Committee was concerned on whether provinces will properly spend their allocations on infrastructure.
- The Committee noted a concern in relation to the lack of field hospitals in some provinces,with the Eastern Cape having only one field hospital.
- The Committee noted that the infrastructure budget will be reduced by R220 million and was concerned about the impact of this reduction on the provision of isolation facilities and quarantine sites.
- The Committee welcomed the budget allocation to the Cuban Medical Brigade in light of the long standing relationship between Cuba and South Africa.
- The Committee noted the reduction of the HIV Grant by R604 million and raised concern regarding apotential surge ofother health issuesas a result of thereprioritisation.
- The Committee raised concern in relation to the shortage of condoms.
- The Committee was concerned on whether infected healthcare workers are being offered psychological support.
- The Committee raised concern regarding companies and businesses that are not compliant with COVID-19 regulations.
- The Committee reflected on the impact of the adjusted budget and reprioritisation on the implementation of the National Health Insurance.
The Committee recommends the following to the Minister of Health:
- Provincial financial planning: Assist provincial departments to strengthen financial management planning and develop mechanisms to prioritise their budgets accordingly.
- Emergency Medical Services: Priority should be given to addressing challenges relating to the provision of EMS services in provinces, including the training of EMS personnel.
- HIV, AIDS and STIssubprogramme: The Department should derive plans to source more condoms in order to mitigate potential spikes in other health issues which may overwhelm the health system in future.
- Infrastructure spending:Assist provinces to prioritize suitableisolation and quarantine facilities for COVID-19.
- Preventative healthcare: The Department should prioritize health promotion and disease preventionrather than hospital-based curative approach.
- Field hospitals: The Department should address the shortage of field hospitals as a matter of urgency and ensure that these are appropriately equipped with staff, oxygen, ventilators, required medication and facilities for COVID-19 patients.
- Psychological health of healthcare workers: The Department should strengthen and invest in the psychologicalhealth of frontline healthcare workers.
- Industry compliance with COVID-19 regulations: Provincial Departments of Health should ensure that all businesses and companies comply with COVID-19 regulations to curb further transmission of the COVID-19 in workplaces.
Unless otherwise indicated, theDepartmentshould respond to the recommendations in one month from the day the report is adopted by the House.
Report to be considered.
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