HEALTH’S financial reserves have depleted to such an “extraordinarily low” level that the department would be declared bankrupt if it were a UK council, according to an adviser and senior manager.
The department has already used £3.1 million of its reserves to deal with additional pressures between August and September this year.
And according to its own predictions, by the end of the year Health will have £1.78 million left for emergencies.
Carolyn Downs, a former chief executive of Brent Council in London who now sits on the Health Advisory Board as a non-executive director, told the board this month that, “I would have to issue a bankruptcy notice if we (Brent Council) were running like this”.
She stressed that Jersey’s Health Department was in “a completely different system”, but described its reserves as “extraordinarily low”.
Obia Hasan, financial recovery director and change team finance lead, called the bankruptcy analogy “reasonable” as it described “the gravity of the situation” that Health was facing.
Mr Hasan said reserves were “very low”, which was “not a comfortable place to be”, as legacy issues – including contracts with private care homes and high incidences of certain diseases – created unforeseen costs late in the year.
The way the department planned to tackle this issue, he said, was through its Financial Recovery Plan – which was developed this year and entered the “delivery” phase in September. It aims to improve quality of care while also bringing the department’s finances back on track.
Mr Hasan added: “I think we are getting more of a handle on it through the FRP. I think that’s the only mitigation I can offer here.
“We are where we are. We’ve got to be realistic. We’ve had to use reserves for it. But what we are planning for through this FRP programme is that all these issues are visible to us or become visible to us and have over time.”
The FRP acted as evidence that Treasury funds would be used wisely, according to Mr Hasan.
Treasury Minister Ian Gorst warned in February this year that Health would have to live within its budget and not ask for further funds as it did at the end of 2022. Deputy Gorst said the department needed to prove to Islanders that it was achieving value for money.
The department’s goal is to deliver £3 million in savings in those three months between the start of the “delivery phase” by the end of the year.
By the end of 2025, the goal is to save £25 million – without compromising on quality of care, which the department said it was on track to achieve.
The cost of the Health Advisory Board, of which Ms Downs is a member, was singled out for scathing criticism last weekend by Constable Andy Jehan, who resigned from his Assistant Chief Minister position citing concerns over an “indefensible misuse of taxpayers’ money”.
The JEP also revealed on Saturday that Health was forecast to spend over £25 million on agency staff this year, a significant increase on the year before (£18.7 million).
