Ring-Fence Protection Project
A joint Ministry of Health / Mental Health Commission Report
Date of Publication: January 2003
The Ring-Fence Protection Project was a joint project between the Ministry of Health and the Mental Health Commission with terms of reference agreed with the Minister of Health. The purpose of the project was to validate the extent to which DHBs are protecting the ring-fence around mental health funding.
Following a lengthy history of government funding injections specifically to strengthen and develop mental health services, there is a clear government expectation that funds intended for mental health be fully applied by the funder, and that in both funding and provision mental health resources are not diverted to other uses. This is the concept of the mental health ‘ring-fence’.
DHBs are still relatively new in their roles, especially as funders. The intention was to approach this project as a positive partnership between the Mental Health Commission, the Ministry of Health and DHBs that would support DHBs in developing capability as robust funders.
Six DHBs were selected for the project: Waitemata, Auckland, Counties Manukau, Waikato, Capital & Coast, and Canterbury.
The Ministry of Health collated service delivery and financial information supplied previously by each of the six DHBs. The DHBs were asked to verify the collated information and complete or amend it, if necessary, as well as to provide some new information. Consultants Deloitte Touche Tohmatsu conducted on-site checks of selected material to determine the integrity of this information and establish the appropriateness of the overhead costing methodology.
Staff of the Ministry and the Commission assessed the information in order to answer the questions intended to meet the project objectives and provided each DHB with an interim report with results specific to the DHB. Each DHB verified the relevant findings and provided further information, where required, as well as comment on some issues that had arisen. The verified findings from individual DHBs were collated into this composite report.
Overall, the review team was assured that in 2001/02 funds provided for mental health were applied to mental health services. However, the review team did not have the same level of comfort as to whether DHB planning for 2002/03 provides adequate assurance that allocated funds will be applied to mental health. Four of the six DHBs have yet to complete the approval processes for their district annual plans. These plans are the authoritative documents for determining the ring-fence. One DHB is, as at 31 January 2003, planning to allocate less funding to mental health services than expected to ensure sustainability of existing services.
In the correspondence around the project, a number of the DHBs noted that the project had uncovered issues with their internal processes, and they indicated that steps are being taken to address these. They also recorded their views on a variety of ways in which the Ministry processes or the interface between the Ministry and the DHBs could be improved.
The project threw up a wealth of information regarding the complexity of the current planning, funding and monitoring processes. Some of these systems issues will be followed up outside of this project.
The findings, against the project objectives, are summarised as follows:
Objective 1: To assess the extent to which 2001/02 funds designated for mental health have been used for the delivery of mental health services.
- All funds provided to the six DHBs in 2001/02 were applied to the funding of mental health services in 2001/02 or made available for spending in 2002/03.
- In addition, all six DHB provider arms made losses on their provision of mental health services in 2001/02.
- Some services were not delivered to contracted levels, particularly services for children and youth.
Objective 2: To assess the extent to which in 2002/03 it is planned that:
- the baseline funding is to be maintained All six DHBs identified their intention to maintain the base funding level of 2001/02 contracted services in 2002/03.
- Blueprint resources are to be used for expansion of mental health servicesAll six DHBs intend to fully apply new Blueprint funding to the expansion of mental health services to be delivered in 2002/03.
- future funding track, demographics and other adjusters are to be applied to mental health.
As at 31 January 2003, only Waikato and Capital & Coast DHBs amongst the six have agreed 2002/03 district annual plans. These DHBs are applying adjusters to mental health funding in line with expectations.
Auckland, Counties Manukau and Canterbury DHBs have uncompleted plans but signal intentions that would meet expectations for protection of the ring-fence.
Waitemata DHB’s intentions are, as at 31 January 2003, $0.660 million below minimum expectations. However, as a provider of regional services, Waitemata DHB does not agree that the expectations in relation to demographic adjusters are fair.
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Related information
The Mental Health Commission website
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