Board overspends by $1M a month

Press, 26 October 1989, Page 4

Board overspends by $1M a month

By

DEBORAH McPHERSON

The Canterbury Area Health Board is continuing to overspend by about $1 million a month, but is expecting an improvement soon.

The new board has ended its first financial quarter, from July to September, overspent by about $3.2M, or about 3.5 per cent over its total budget of 584.5 M.

Maintenance, including salaries and wages, takes up about $2.7M of that, as', well as part of SSM in overspending carried over from last year. The board’s general manager, Mr Ron Parker, said he expected the trend to improve after the new corporate managers took up their positions in a week. They would be responsible for holding spending in their areas, he said. The board had already done a “tremendous amount of work in arresting overspending,” and this had made a significant impact on its budget. Several hospitals had had cuts of up to 10 per cent in their budgets, but some were continuing to significantly overspend, including Christchurch Hospital, Sunnyside Hospital, Princess Margaret Hospital and Christchurch Women’s Hospital.

An increase in GST of 2.5 per cent would effectively account for 2.5 per cent of the board’s overspending, said Mr Parker.

Canterbury could not be compared with the financially troubled Wellington Area Health Board, he said. Canterbury was $11.5M underfunded according to the national funding formula, while Wellington was about S9M overfunded.

Canterbury had also made early moves to put its house in order by submitting a preliminary budget estimate to the Health Department, and had initiated the expenditure reduction-task force, said Mr Parker. The Minister of Health, Ms Clark, had said last week she did not think it would be fair to saddle the new Wellington board with the old board’s debts, which was why she had imposed the deadline on estimates that expired this week. A spokeswoman for her office said she did not think Ms Clark had aimed her speech at Canterbury, because it was not subject to the same deadline.