Minister Prevents Payment

Press, Volume CIV, Issue 30760, 26 May 1965, Page 1

Minister Prevents Payment

f.V.Z. Press Association)

DUNEDIN, May 25. Refusal by the Minister of Health (Mr McKay) to allow the Otago Hospital Board to pay a bill of £77,000 to the University of Otago drew angry comment today from university council members. The £77,000 is the deficit which has accumulated over the last four years for the running of the diagnostic laboratory services in the Medical School for the board. “It is high time we stopped allowing ourselves to be pushed around by Government departments,” said the Chancellor (Dr. H. J. Ryburn). “It is time the university stood up and fought.” In normal business when; one sent out an account fori services rendered one expec- j ted to be paid. Apparently) this code of ethics did not apply to Government depart-; ments “If there has been a mis-

understanding, then it is a culpable misunderstanding. Someone is just too lazy to look in the files. “We should make it clear to the Hospital Board that we expect payment in accordance with the agreement entered into.” Sir Carl Smith, chairman of the finance and general committee, said that for many years the Medical School had provided diagnostic services to the Hospital Board at a nominal cost. The demand for the services grew to such an extent that in 1960 the chairman of the University Grants Committee advised the Minister of Education that the committee had instructed the University of Otago not to include these costs in its estimates for the next five years. At the same time, he asked the Minister to advise the Minister of Health that in the quinquennium submissions of the University Grants Committee from April 1, 1961, no amount had been included to represent the cost of the diagnostic services, and that other means of financing these services would need to be gran-

ted to the university if they were to continue.

At a meeting with the Health Department in 1961 it was agreed the Hospital Board would pay £28.000 a year for the services, the sum to be adjusted as required. Sir Carl Smith said the services were now costing £60.000 a year, but the university had never received more than £28,000 a year. The accumulated deficit was £77,000.

Last month the Hospital Board informed the university council that the Minister of Health had turned down a request for this amount on the ground “there appeared to be no justification tor the payment of such a substantial sum retrospectively at the end of the quinquennium period.”

The letter also said that as from April 1, 1965, £5OOO a month would be paid with final settlement later.

“As the university year starts on January 1, not April 1. there will be another £15,000 to be added to the £77,000 already owing,” Sir Carl Smith said. “I can see no reason why we should make a present of

£92,000 to any Government department. Sir Carl Smith suggested a misunderstanding had arisen because Mr McKay had not seen the earlier letter.

A telephone call received during the meeting from Mr McKay’s secretary confirmed that he had not seen the letter.

He gave an undertaking that he would reconsider the matter if the council would advise him of the circumstance of the agreement, which the council later decided to do. Dr. J. Fulton, chairman of the Otago Hospital Board, and its representative on the council, said the board had protested tn Wellington about the failure to pay the debt. It had been informed the request for the money had been refused at ministerial level. “The department has been billed annually for the deficit, but the money has not been paid.” The Vice-Chancellor, Dr. A. Beacham, said: “I doubt if we can make '■ur way through to the end of this quinquennium anyway. Non-payment of this sum could be completely ruinous.”