Chronically underserved rural populations will bear the brunt as a result of embargoes on hiring staff, maintaining infrastructure and upgrading equipment
At the beginning of the 2015/16 financial year the North West Provincial Government placed the provincial department of health, along with other key service departments such as public works and education) under financial administration. In essence, for the next 18 months the provincial Treasury will be responsible for overseeing day-to-day financial management within the department and the strengthening of financial management systems.
The reasons given for this action were that these departments had been unable to effectively manage their budgets and were no longer able to pay all their creditors, including critical service providers. This had resulted in massive accruals (unpaid invoices to service providers) that had put departmental budgets under severe strain and posed a significant risk to service delivery.
Over the last few months the RHAP has received a number of reports from partners working in the province on the developing budget crisis and its implications for the health system. Specifically we heard that by the end of the 2014/15 financial year the health department’s accruals were in excess of R600 million and that this amount would need to be covered from this years budget.
In an effort to manage this expected budget deficit, the NWDoH has implemented a number of cost saving measures. Many of these measures focus on improving efficiency but worryingly some measures are aimed at limiting spending in critical areas. In this regard the department placed embargos on:
- On all appointments of new staff, including in funded but vacant posts
- On normal maintenance of physical infrastructure
- On the purchase of equipment
Placing strict embargos on these critical areas of expenditure will have obvious consequences for access to health care in this largely rural province. An inability to hire staff, maintain infrastructure and upgrade equipment will inevitably mean that the department will not be able to sustain, let alone expand, services to chronically underserved populations.
The RHAP does broadly support the intervention of the provincial government. It demonstrates the seriousness of the budget crisis and signals that the provincial government is dedicated to addressing it. Department’s do not function in isolation and generally are unable to resolve issues such as these without assistance from other structures within government, particularly the treasury.
The RHAP does, however, remain concerned that interventions of this kind in provinces such as Limpopo, the Eastern Cape, Gauteng and the Frees State have not necessarily resulted in improved financial management and service delivery in the long-term. In many instances it has added a layer of bureaucracy, with little clear buy-in and participation from existing management, has actually made service delivery more difficult.
Our position has always been that effective financial management that results in greater access to care for the most underserved populations depends on two primary factors: the first is that provincial departments must receive budgets that are able to progressively meet the need for care in the province. The second factor is that provincial departments should be central in any intervention. The provincial government’s role should be to provide the institutional capacity and support to spend what is available more effectively and efficiently to ensure maximum benefit from limited resources, particularly in a rural province.
While we tentatively support the provincial government’s intervention, its primary focus should be to strengthen the health system and improve access to services for the most vulnerable. This means that embargos on the appointment of staff to critical positions and the supply of basic goods and services must stop with immediate effect.
For additional comment or information on this statement and the situation in the North West Province, please contact Daygan Eagar at 072 249 3873 or Daygan@rhap.org.za