Finance Committee, 19 Nov 2002

Meeting date: Tuesday, November 19, 2002

Official Report 151KB pdf

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Draft Budget 2003-04 (Amendment)

Agenda item 1 is consideration of a proposed amendment to the draft budget. I welcome Nicola Sturgeon to speak to her proposal.

Members will be aware that the committee has the right to suggest to the Parliament an alternative set of spending proposals at stage 2 of the annual budget process. Subject committees are asked to consider whether any alternative arrangements in departmental budgets should be suggested. Although the financial issues advisory group sought a direct role for individual members as well as for committees in the budget process, today will be the first time that we will have had a proposal from an individual member.

Knowing that it is unprecedented for an individual MSP to make a submission to the Finance Committee, I am grateful for this opportunity to do so. I hope not to take up too much of this morning's agenda.

Let me give a brief background to my proposal. Most members will be aware that, following a Health and Community Care Committee report earlier this year that recommended financial assistance for those who had contracted hepatitis C from national health service treatment, the Minister for Health and Community Care established an expert group to examine the issue in more detail.

On 6 November, the expert group published an interim report that recommended the establishment of a discretionary trust to make payments to hepatitis C sufferers on a sliding scale. I have included an extract from the expert group's report in my submission to the committee, which has been circulated to members.

The expert group estimated that the cost of implementing the recommendation would be between £62 million and £89 million. That would be a total payment from the Executive, not a recurring year-on-year payment, although the discretionary trust's payments could be made over a period of time.

Early indications from the Minister for Health and Community Care are that he will not implement that recommendation, as he does not consider that there is money available in the budget to do so. My proposal to the committee today would, over a three-year period, provide the funds that are necessary to implement the expert group's recommendation.

In detail, the proposal is to transfer the required amount of money into the health budget as a special line item to cover the amounts required to implement the recommendation. Specifically, I propose that £30 million, £30 million and £29 million, for the years 2003-04, 2004-05 and 2005-06 respectively, should be transferred from the departmental expenditure limit capital budget and allocated to the health budget.

That would represent a 2 per cent reduction in the capital budget for those years. It is important to point out that the proposal would still leave those budget heads with substantial increases over the years concerned. The other benefit is that the 2 per cent reduction would be spread evenly across the capital budget for the relevant departments that are listed in the draft budget instead of being borne exclusively by the health budget.

I dare say that there are alternative ways in which the money could be made available. One proposal that occurred to me is that end-year flexibility could be used to make the payment. However, decisions on EYF will not be taken until well into next year. In my view, the small but worthy group of people who have hepatitis C deserve a decision in principle from the Parliament now. That is why I have made what I believe to be a constructive and helpful proposal, to which the committee can give some consideration.

The final point to make is that it would be open to either the Executive or the Opposition parties to move during next year's debate on EYF that the money removed from the capital budget should be replaced. That would certainly be an option. That is all that I have to say at the moment. I hope that the committee will give consideration to my proposal, which has been put forward very genuinely. I am happy to answer any questions.

Before I invite questions from members, I advise the committee that consideration of Nicola Sturgeon's proposal will be taken in the context of our report to the Parliament, which we expect to publish around 10 December.

I think that I am right in saying that, on 11 December, the Minister for Health and Community Care will come to the Health and Community Care Committee to discuss compensation for sufferers who acquired hep C through NHS infection. I presume that the Health and Community Care Committee will come to a view at that stage. Am I correct in that assumption?

Yes.

Is there any reason why you are not waiting until the full committee of which you are a member meets to discuss the matter with the minister?

It is a question of time scales. I understand that making my proposal to the Finance Committee today is the appropriate way to use the budget process to deliver justice for hepatitis C sufferers. If I were to wait until the Health and Community Care Committee meets on 11 December, we might miss the boat in trying to persuade the Finance Committee to consider the proposal in the round of its report on the budget process. That is the reason why I have not waited.

Obviously, I cannot speak for the minister, but the early indications that the minister has given, both privately and publicly, are that he will not implement the recommendation of the expert group. I am anxious to use every means that is open to me to try to secure what I believe to be the right decision for this group of people.

You are aware that time is constrained by the fact that the Health and Community Care Committee meeting will not take place until 11 December. Have you raised the issue with that committee and discussed it with other members of that committee?

No, I have not done so formally. I will discuss the proposal with the Health and Community Care Committee at the next opportunity. I recognise that it is unprecedented for an individual MSP to make a budget proposal and that it might have been better had the proposal been part of the Health and Community Care Committee's submission to the Finance Committee, but time militated against that. The minister published the expert group's report and made his views known on 6 November. The Health and Community Care Committee signed off its budget report to the Finance Committee last Wednesday, which was 13 November. Things worked out in such a way that it would not have been possible for the Health and Community Care Committee to have a substantive discussion on my proposal. That is why I find myself before the Finance Committee as an individual today.

This committee is required to consider the Health and Community Care Committee's report on the budget this morning. I do not know when Nicola Sturgeon's paper was submitted, but has the convener had any contact with the Health and Community Care Committee to see whether that committee could bring forward its meeting with the minister to fit the budget process? Ideally, we want today's proposal to be part and parcel of that committee's report on the budget.

No, I have not contacted the Health and Community Care Committee, as I thought that it would be better to get the views of members before taking that option.

I seek clarification on one point. My understanding is that the expert group's findings are contained in an interim report, to which the minister has not responded quite as categorically as has been suggested. Is that accurate? Do we know when the interim report is likely to be followed by a final report?

It is anticipated that the final report will be published by the end of this year. However, as the interim report was published some three months late, I anticipate that the final report may not be delivered timeously either.

Although the report that has been published is an interim report, the expert group was asked to report on the specific case of hepatitis C within the interim report. As I understand it, the final report will not add anything further about hepatitis C but will go on to consider and make general recommendations on what happens in cases of negligence and non-negligent fault in the NHS generally. I understand that the interim report is what the expert group has to say on hepatitis C in its entirety.

I ask for one other point of clarification. When the issue was considered by the Health and Community Care Committee, were issues raised about the impact that the scheme's implementation might have through the reduction in the social security payments that are paid to the victims? Did that committee discuss the implications in terms of Treasury spend versus Scottish Executive spend?

The Minister for Health and Community Care has already flagged up the possibility that compensation or financial assistance payments that are made to hepatitis C sufferers might result in clawback of their benefits. The minister is negotiating on that issue with UK ministers. The issue will require to be resolved if any scheme is given the go-ahead. There is a precedent: the Macfarlane Trust was set up to compensate people who contracted HIV through the NHS and the issues that we are discussing were resolved in that example. Perhaps we can learn from that.

You gave us an idea of the total sum of money that might be involved, but what number of patients are involved? Will the compensation or financial assistance—whatever label we give it—be worked out on a per capita basis or in terms of damage, loss of earnings and the other usual factors?

I will answer the last point first. Members will note from the extract from the expert group's interim report that different categories of financial assistance are proposed. Everybody who can prove that they contracted hepatitis C through the NHS would get an initial payment of £10,000 and people who developed chronic hepatitis C would get an additional £40,000. Further damages for those who developed the most severe consequences, such as cirrhosis of the liver or liver cancer, would be assessed on a common-law basis.

Brian Adam asked how many people are involved. My best estimate, which is similar to the estimate with which the expert group worked, is that around 1,000 people in Scotland are affected. Between 300 and 500 haemophiliacs—perhaps several hundred more—might have contracted hepatitis C from, for example, blood transfusions. The Executive has expressed the view that the figure might be considerably higher than that and that up to 4,000 people might be affected, but, despite my best efforts, I have not worked out where that figure comes from. Everybody I have spoken to who has some knowledge of the issue would agree that the lower estimate is accurate.

I presume that, given that no non-heat treated products have been given since 1987, reasonably accurate figures must be available. I do not think that it takes 15 years for the symptoms of hepatitis C to show.

I agree.

Why has a difference arisen between people who are infected with HIV, who receive payments from a trust—although I am not clear whether that is funded by the Government—and people with hepatitis C?

The reasons are purely historical. On the same day, in the same hospital and from the same batch of blood, one person could have contracted HIV and another person could have contracted hepatitis C. HIV sufferers were compensated as the result of a political decision of the then Conservative Government, which decided to fund a discretionary trust. At that time, the reason given was that to be diagnosed with HIV was virtually a death sentence and that the severity of the condition justified compensation. Hepatitis C was thought to be a less serious illness that did not justify compensation. That might be the case, although the difference in severity between the two illnesses is in some cases less now than it was then.

If there is a difference in treatment, it should be one of degree that is reflected in the amount of money that is paid rather than having a situation in which one group of people are compensated, but nothing at all is done to help another group. [Interruption.]

Members of the public are not allowed to contribute to the meeting.

Does Des McNulty's question about social security payments apply equally in the case of the HIV sufferers?

It would have done, but the matter was resolved when the Macfarlane Trust was established.

I have a couple of technical questions about the proposal. First, why do you think that the money should be taken from the overall departmental expenditure limit capital budget and not from the health DEL capital budget, which is roughly £300 million for 2003-04?

I think that we, as a society, have a moral obligation to people who were infected with an illness by the health service. Therefore, it is fair that the burden of paying that moral debt should be shared among everybody and not simply be taken from the health budget. I understand that one of the reasons the Minister for Health and Community Care has given for not implementing the recommendation is that he does not want the health budget to have to bear the burden.

My proposal is that the burden should be shared across the Executive budget. I think that that is the fairest way. I said at the outset that I am not pretending that that is the only way to make the money available, but I think that that way would work and is equitable.

Do you have any information about how much of the DEL capital budget is committed and whether the sums that you seek to utilise are available?

As I understand it, my proposal would mean a 2 per cent reduction in the budget for each of the next three years. I understand also that the DEL capital budgets have not been allocated to the extent that a 2 per cent reduction in those budgets would not be bearable. It is also worth stressing again that those budgets would still increase substantially over the next three years by 2 per cent less than is currently allocated.

I suppose from the Finance Committee's point of view the health DEL capital budget is probably the biggest of the capital budgets available. Therefore, although the burden might have a 2 per cent impact across the board, that impact might be greater for some of the smaller capital budget areas where commitments might already have been made.

That is a fair point. I do not know what discretion the Finance Committee has to vary a proposal such as mine, but I have no doubt the committee will want to discuss the matter.

Are cases like the hepatitis C case likely to come forward in other parts of the public services? We must consider the budget in the round and not just focus on a good case, regardless of the department in which it lies.

I do not know, but I can reasonably assure you that I will not be sitting here in six months' time arguing the case for another group of people. Other groups of people might think that they have a special case. My view is that the hepatitis C sufferers are a special case, mainly because of the analogy with HIV sufferers. I once met two brothers who were haemophiliacs. One got hepatitis C through contaminated blood; the other got HIV through such blood. One brother was compensated, but the other was not. I do not think that that is equitable.

To give assistance to hepatitis C sufferers would right that wrong. Other groups of people might feel that they are entitled to compensation for wrongs that they have suffered through the NHS. However, I am sure that none can argue as strong a case as the hepatitis C sufferers.

There are no further questions, so I thank Nicola for her presentation. As I indicated at the start, we will consider your proposal as part of our report to Parliament, which we expect to publish around 10 December.

On David Davidson's point, I will take soundings from the Health and Community Care Committee to see whether it can present a view to the Finance Committee prior to our finalising our report. However, that might not be possible.

We might require a view from the Health and Community Care Committee because Nicola Sturgeon's proposal is at direct variance with the Health and Community Care Committee's report.

The time scale might be against us, but I will ensure—

What is the time scale for our report?

We need to consider our draft report at our meeting on 4 December, which means that the report must be ready for issue to members by the end of November. Therefore, that might give us problems in starting a dialogue today with the Health and Community Care Committee.

That makes it difficult.

I will take all reasonable steps to ensure that we seek the views of the Health and Community Care Committee.

Thank you.