Western Cape Adjustments Appropriation Bill 2022: Health

Health and Wellness (WCPP)

28 November 2022
Chairperson: Ms W Philander (DA)
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Meeting Summary

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The Standing Committee in a hybrid meeting deliberated on the Western Cape 2022 Adjusted Estimates of Provincial Revenue and Expenditure for Vote 6: Department of Health and the Western Cape Adjustment Appropriation Bill [B3-2022]. Compared to the main 2022/23 Health Budget of R29.094 billion, this appropriation focused on shifts, rollovers and realignment to an amount of R702 000. The Department had utilised savings from the COVID-19 money to mitigate against the additional three percent salary compensation that was awarded, which was the reason for the several shifts and virements. The R702 000 adjustment was taken to ensure that the right amounts of money were shifted and to manage the financial risks of both this year and the next. In 2023/24 the budget reduction will be twofold as there is going to be a reduction in the Provincial Equitable Share and the Health sector would also have a cut, which would mean a double cut for the Western Cape Department of Health (WCDoH).

Committee members expressed dissatisfaction with the budget cuts; about progress in the rebuilding of GF Jooste Hospital and the budget for this; and how much of the COVID-19 funds were still available in the Department.
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The Committee approved its Committee Report on Vote 6: Health in the Schedule to the Western Cape Adjustment Appropriation Bill [B3-2022]. The ANC and the EFF minority view not to support the Vote was recorded.

Meeting report

Opening remarks
The Chairperson invited the Health MEC to provide a five-minute overview of the Health Adjustment Appropriation budget and the Head of Department could make additions thereafter.

MEC’s briefing on the budget
Western Cape Health MEC, Dr Nomafrench Mbombo, said when comparing the main budget of R29.094 billion and what was currently being appropriated, this appropriation was focused on the shifts, rollovers and alignment with an increase of about R702 000.

Western Cape Health HOD, Dr Keith Cloete, said the R702 000 adjustment was a combination of multiple imbalances and in line with the Department’s sound financial governance, they had taken due care to ensure that the right amounts of money were shifted from one place to another. On the balance, they managed the financial risks of the Department for the current year and the next. He commended the Department’s finance team for the good work.

Discussion (pages 97-106 of Adjusted Estimates of Provincial Revenue and Expenditure)
Mr D Plato (DA) noted the shifts, rollovers and adjustments and supported them. The Department was doing sterling work under difficult circumstances and he applauded the Western Cape Minister and HOD and the rest of the Department officials.

Ms R Windvogel (ANC) expressed the ANC’s concern and dissatisfaction about the Department’s equitable share. If was not for the rollovers, the Department budget would have been cut by nearly R100 million, which was highly deplorable, especially in a province where hundreds of patients continue to sleep on hospital floors. She asked for an update on the expenditure of the rollovers and if there were any that had not yet been spent.

On subprogramme 1, she noted that R159 million of contingency reserve funds were prioritised to augment funding in service programmes that were experiencing pressure. She asked for what the contingency funds were earmarked . Which facilities would benefit from them and by how much?

She cautiously welcomed the allocation of nearly R30 million to alleviate service pressures at Ceres, Mitchell’s Plain and the Khayelitsha District Hospitals as stated by the MEC in answer to her written question. This was a good starting point. She emphasised the need for more funding towards those hospitals as the current allocation was not enough. She asked if the Department could commit to making more allocations to the hospitals in the future.

Department’s response
Mr Simon Kaye, WCDoH CFO, replied that the Department had utilised some savings from the COVID-19 money to mitigate against the additional 3% compensation that was awarded, which was the reason for the several shifts and Virements in the Adjustment Budget. This was done to be able to utilise that money to augment the budget shortfall WCDoH was going to get in 2023/24 because there will be a budget cut from national government against the Health Sector, and there will also be a reduction in the equitable share allocation to the Western Cape. WCDoH had used the current year’s savings to be able to continue with most of its planned operations next year. They were staring down the barrel of a cut of about R400 million in 2023/24 and the Department was also going to receive less money in conditional grants next year.

The Department kept the R159 million because it saw what was happening to the health budgets and kept that amount as a permanent budget allocation for facilities as the money was not permanent. They looked at the facilities that had the most accruals and budget pressures and allocated the R159 million in a rational proportion. They gave it to the sector managers, who then allocated the funds to the specific facilities. Where facilities felt they did not need the money, they returned the money so that it could be allocated to the facilities that needed it. WCDoH had hoped to make permanent increases to the baselines because the reality in the health funding envelope over the Medium Term Expenditure Framework (MTEF) was that there would be no additional money allocated in February 2023 as used to happen previously.

Mr Kaye repeated that the reduction is twofold. There is going to be a reduction in the Provincial Equitable Share and the Health sector would also have a cut, which would mean a double dipping for the Western Cape Department of Health.

MEC Mbombo said this was probably the first time that the Department did an Adjustment Budget without additional funds and what they were trying to do was to maintain the baseline to be able to survive. The Department would argue its case in the Minister’s Committee on the Budget Technical Committee (MTEC).

Ms Windvogel asked for more clarity on the COVID-19 funds that WCDoH said it was using.

Mr Kaye replied that additional funding came through from National Treasury over the MTEF starting in 2022 for three years which was for COVID-19 and service pressures. The money allocated for 2022/23 was R777 million, and for 2023/24 it would only be R385 million. There was a differential between the two amounts, but because the Department had integrated a lot of the COVID-19 activities, it had not used the full amount of the service pressures money in the current year to mitigate against COVID-19, so it had a fairly substantial under-expenditure. The Department had a saving, and instead of surrendering that money and getting money for the salaries, it used the savings to defer the increase in salaries for the year to look to use that funding to mitigate against pressures in the following year.

The Chairperson reminded Members of the time constraints and asked that follow-up questions be in written format to the Department.

Ms Windvogel asked for one last follow-up question which was permitted. She asked how much of the COVID-19 funds were still available in the Department.

Mr Kaye replied that the Department still had the PPE stock which was worth about R100 million and it still continued to run the Brackengate as well as Sonstraal Intermediate Care Facilities and there was sufficient money to continue to fight COVID-19. There were no longer high hospitalisation numbers and WCDoH was saving a lot on testing.

Discussion (pages 107 to 128)
Ms Windvogel's first two questions were inaudible as her microphone was off. She also asked if the GF Jooste Hospital would be revived in the near future and the progress thereof, as well as to where the money budgeted for that hospital was shifted.

Response
MEC Mbombo replied that the Department of Public Service and Administration (DPSA) process in terms of the ODI staffing and categories needed to be followed, and the Department had completed the determination of who would be staffing the Violence Prevention through Urban Upgrading (VPUU) as it could not be head office-bound since the whole district had to be considered. The Department would not be able to pay or appoint staff without the completion of the process, but the work relating to the data dashboard was ongoing in contributing to the transversal in collaboration with other government departments.

On infrastructure, the Department had spoken about the catalytic projects. This includes the Tygerberg Central Hospital, which also accommodates a Level 2 regional hospital. Part of the catalytic projects was to make the Central Hospital a new stand-alone hospital through public-private partnership (PPP). The Belhar Hospital, which is also called the Tygerberg Regional Hospital, was also part of the catalytic project and the plan was to remove this regional hospital from the main Tygerberg Hospital. Luckily, the site belonged to the Department of Human Settlements.

For the Platfontein Regional Hospital, which is the GF Jooste Hospital, the Department of Public Works and Infrastructure (DPWI) appointed a professional group responsible for the hospital, and the Department was still in the developmental phase on what needed to be done with the hospital. The other catalytic project was the HHH, which is the Helderberg Hospital, but it was not necessarily a priority like the other three.

The completion of these hospitals in the worst case scenario would be in the year 2030, but it must be considered that the completion of three hospitals at the same time might not be possible, so the completion of other hospitals must be completed before 2030, if by the same implementing agency or not. The GF Jooste Hospital will be finished before 2030 and the funding was committed by National Treasury through the seed funding for the Belhar and GF Jooste Hospitals, which was used for professional services as required for the infrastructure.

The Chairperson asked Members to raise questions on pages 129 to 152 but there were none.

Concluding remarks
MEC Mbombo thanked her team for their inputs on the Adjustment Budget and congratulated them on their fourth clean audit. She thanked the Committee for the continued support and appreciated that Members did not make the Department account only when in the chamber but also through phone calls, oversight visits and in the facilities.

Dr Cloete noted that the Department valued its engagement with the Committee. The Department takes its financial management and governance very seriously and was managing the financial risks as they come. They knew they will face financial risk in the next financial year and the Adjustment was in part to start mitigating against that risk. “We undertake to be as responsible as we possibly can be to make sure that we have continuity of services. We do what we need to do to be able to live within the budget allocation so we do not have any interruption of services to the people that need it the most in this province”, he said.

The Chairperson thanked the Western Cape Department of Health and Wellness delegation and excused them from the meeting.

Committee Report on Western Cape Department of Health: Vote 6 in Western Cape Adjustment Appropriation Bill [B3- 2022] Schedule
The Chairperson read out the report: The Standing Committee on Health, having deliberated on the subject of Vote 6: Health in the Schedule to the Western Cape Adjustment Appropriation Bill [B3-2022] reports that it supports the vote.

Ms Windvogel said that the ANC’s minority view did not support the vote in line with Rule 90, mainly due to the reduction in the equitable share as well as the reduction in the infrastructure budget, especially for the rebuilding of the GF Jooste Hospital.

The Chairperson noted the minority view of the ANC.

Mr Plato expressed the DA’s support for the vote and this was seconded by Mr C Fry (DA).

The Chairperson said the vote stands supported. In terms of Rule 90, the ANC’s minority view to not support the vote was duly noted and recorded.

Mr M Xego (EFF) asked to note the EFF’s minority view to not support the vote.

The Chairperson said it was duly noted.

 and asked for a mover for the adoption of the report.

Mr Plato moved for the adoption of the Committee Report and was seconded by Mr Fry.

Committee resolutions
The Chairperson said if Members had resolutions, they had until the end of business that day to send them to the Committee Secretary in writing. They would not be part of the Committee Report but they would be part of the Committee minutes.

She thanked Members for their participation and adjourned the meeting.

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