Jersey’s ageing demographic will have “a significant impact” on the island’s Health budget within the next two decades, the Minister has warned – adding that considering how the service can achieve “longer-term sustainable funding” is a key priority this year.
Deputy Tom Binet made the comments while responding to a letter from Deputy Louise Doublet, Chair of the Health and Social Security Scrutiny Panel, who raised “serious concerns” about ongoing overspending in the Department.
Health exceeded its budget by £28 million in 2024, with a deficit of 18m also forecast for this year.
The issue was recently acknowledged by the Government CEO Andrew McLaughlin, who told the Public Accounts Committee that Jersey will face a “historic policy choice” in deciding what to do with the service.
What is driving the overspend?
Dr McLaughlin explained that several factors driving Health overspending – including reliance on agency staff, increases in the price of drugs, as well as “tertiary costs” incurred procuring off-island care – “don’t look like they’re going away”.
Responding to Deputy Doublet’s letter, Deputy Binet also cited an “above inflation rise” in the cost of social care packages and mental health placements, as well as reduced surgical income due to medical patients needing to be accommodated in surgical beds amid “high winter demand pressures”.
Additionally, the Health Minister pointed to “exceptional” one-off costs, such as doctors’ back-pay and charges from previous years, due to problems encountered following the implementation of a new payments system.
And he said that private accommodation income had reduced “due to higher levels of public activity”.
“It is a key priority for FY25 to consider a longer-term sustainable funding settlement, and HCJ is supporting this GoJ policy project with activity, operational and cost information,” Deputy Binet noted.
But also said that Health would be taking “a more robust and evidence-based approach” to budget planning.
The Minister explained that this would build on a number of “foundations”, listed below:
- Continuous improvement
- Activity we deliver
- Demand we face
- Capacity available at our disposal
- Productivity in the way we do things
- Availability of accurate information, BI/Analytics
- Delivery resources
- Led by budget owners and accountability
- Engaged with by staff
Deputy Binet added: “This will provide the basis of evidence-based conversations between ourselves, Government of Jersey, and Treasury colleagues about running and funding a sustainable health service, providing high quality care to islanders that is affordable, and delivers against political objectives and health policy.
“The alternative is to prioritise by reducing the breadth and depth of services provided to fit within the current budget funding.”
However, the Health Minister also said that the island’s ageing demographic will have “a significant impact” on the Department’s budget over the next 10 to 20 years, “requiring significant investment in new approaches to prevention”.
“Work is underway to update earlier modelling of future health costs and bring this forward for ministers to consider,” he added.