Board's finances look healthier
After a year of tight budgeting, the Nelson Marlborough District Health Board is finally back on the right track, but that doesn't mean it is easing up on the pressure just yet.
Nelson Marlborough District Health Board chief executive Chris Fleming said that rather than relaxing its emphasis on austerity, the board will continue to pursue savings with the same fervour it has done since his appointment in February last year.
The board was placed under intensive monitoring due to ongoing budgeting challenges.
It has $418 million funding and at the end of the 2012-2013 financial year it was looking at an $8.2m deficit.
The board had committed to reducing this to $3m by the end of that year.
It has now achieved its target for this year, which was to break even.
The board is now running a surplus of $1.461m - the first time it has been in surplus for more than three financial years.
At the same time last year, the board was running an overall deficit of $1.16m.
The savings plan has resulted in some staffing and quality issues.
At December's board meeting, Mr Fleming said it was falling short of targets set by the Ministry of Health for elective surgeries.
He said one of the strategies the board pursued to make savings was to manage leave balances by getting staff to take time off.
The resulting increase in absences of staff had reduced the hospital's surgical capacity, which, combined with other factors, caused it to lag behind by 7 per cent in December and this month.
Last year the board also made cuts in office and management staffing and its annual report showed it paid out a total of $874,006 to 37 employees who had their employment terminated, mostly in redundancy or retirement gratuities.
This month, he said he was still focused on a conservative approach. "While the financial outlook remains favourable, we are concerned about some of the savings initiatives that are not yet delivering."
He said the board was likely to meet its 2013-14 financial targets without the proceeds from these initiatives.
But he hoped to spend the income on investments, such as the looming redevelopment of Nelson Hospital, which will need to be carried out within the next 10 years.
Mr Fleming said it was important to make sure the board was in a solid position before this expensive project began or the organisation could be tipped back into deficit.
"Every saving missed will mean we are unable to invest in new initiatives and priorities."
Mr Fleming said there was a much better atmosphere at the board now that it was out of the "fiscal mire".
He said the savings culture over the past year had been tough on staff as their belt-tightening did not result in any visible change, but with more visible investment goals ahead, staff now found the financial climate more compelling.
He said he wanted to relax the controls on recruitment, discretionary spending on courses, conferences and travel, and capital spending, as much as possible.
- © Fairfax NZ News
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