For discussion
on 7 June 1996
FCR(96-97)19
ITEM FOR FINANCE COMMITTEE
HEAD 177 - SUBVENTIONS : NON-DEPARTMENTAL PUBLIC BODIES
Subhead 977 Hospital Authority - plant, vehicles and equipment (block vote)
Subhead 978 Hospital Authority - information systems (block vote)
Members are invited to approve increases in the limit by which the approved provision under the following subheads may be over-committed in each financial year with effect from 1996-97 -
- for Subhead 977 Hospital Authority - plant, vehicles and equipment (block vote), from 50% to 90%; and
- for Subhead 978 Hospital Authority -information systems (block vote), from 50% to 70%.
The standard limit of 50% by which approved provision may be over-committed under capital account block vote subheads is not adequate to enable the Hospital Authority (HA) to spend fully the approved provision under Subhead 977 for the purchase of plant, vehicles and equipment, or under Subhead 978 for the purchase of information systems.
2. The Secretary for Health and Welfare proposes to increase the over-commitment limit from 50% to 90% for Subhead 977 and from 50% to 70% for Subhead 978 in each financial year with effect from 1996-97.
3. To cater for the lead time required for the procurement of medical equipment and the planning of computerisation projects, Members in the last three years approved increases in the over-commitment level for Subheads 977 and 978 as follows -
|
Subhead 977
|
Subhead 978
|
|
Financial year
|
Approved provision
($'000)
|
Over-commitment limit
|
Approved provision
($'000)
|
Over-commitment limit
|
|
1993-94
|
257,1001
|
90%
|
126,9001
|
95%
|
|
1994-95
|
204,000
|
90%
|
130,000
|
70%
|
|
1995-96
|
215,434
|
90%
|
135,000
|
70% |
4. These higher limits of over-commitment have proved to be useful in enabling HA to fully utilise the approved provision. In the last three years, HA spent over 99% of the approved provision under Subheads 977 and 978. This was a great improvement over the preceding years. For example, in 1992-93, HA only spent 46% and 73% of the approved provision under Subheads 977 and 978 respectively.
5. Having regard to the procurement experience and the effectiveness of the higher over-commitment limits in the last three years, we consider that there is an established need to raise the over-commitment limit to 90% for Subhead 977 and 70% for Subhead 978.
6. As the proposed increases in the over-commitment limit for Subheads 977 and 978 are to enable HA to utilise fully the approved provision, there would not be any additional cost to the Government arising from the proposal.
7. The approved provision under capital account block vote subheads is limiting on both commitments and expenditure. As the procurement of plant and equipment under these subheads usually requires some lead time, Members approved in 1981 a standard limit of 50% by which the Administration may enter into commitment over the approved provision in order to utilise fully the provision in any one year. In individual cases where there is a proven need, we have obtained Members' approval for a higher level of over-commitment.
Health and Welfare Branch
May 1996
1 Members approved in July 1993 [FCR(93-94)47] supplementary provision of $77.1 million for Subhead 977 and $18.9 million for Subhead 978 to meet outstanding payments which HA had not made in 1992-93. The revised estimates for these two subheads were $257.1 million and $126.9 million respectively.
Last Updated on 2 December 1998
