Chaos reigns in funding for regional hospitals, but no one seems to care

Saturday August 23 2014

 

By Jason Lakin

At the end of last month, Kenya’s National Assembly and Senate finally resolved their squabble over the Division of Revenue, which should have led to the release of funds to counties for the 2014/15 financial year.

That has still not happened, but we are getting close. The Senate recently passed the County Allocation of Revenue Bill, which, when approved by the National Assembly, will at last allow counties to receive funding. 

I have finally got hold of a copy of the Senate’s legislation. It is revealing in any number of ways that have received no attention so far in the media.

First, let us recall that the reason that the Senate and National Assembly could not agree was because the Senate wanted a conditional grant for regional hospitals (serving multiple counties) to be maintained.

The National Assembly rejected this position. In the end, they agreed to settle in the middle: The grant was retained, but at just over half the original amount.

Unfortunately, the original amount was already less than half of what we think it costs to maintain these hospitals last year, so we are continuing to tighten the screws on Kenya’s largest hospitals outside of Nairobi.

The total size of the conditional grant, Ksh1.87 billion ($22 million), has been known since July. What has not been known is how much each hospital is getting.

We might be excused for assuming that each hospital would get about half of what they got last year, since, as I said, the grant is about half as large (54 per cent, to be exact). That assumption would be wrong, however.

Without any explanation at all, the distribution of funds was changed radically. Thika hospital is the big loser; its grant is only 24 per cent of what it was last year. Kisii and Meru also lost out, with grants that are 35-40 per cent of last year.

On the other hand, Machakos saw its allocation increase above last year by over 40 per cent! No other county saw an increase. Embu managed to retain over 70 per cent of last year’s allocations, while Kakamega, Kisumu, and Garissa all beat the average of 54 per cent. The remaining counties (Nyeri, Mombasa and Nakuru) hover just below the average. 

As far as I know, we lack good information to justify last year’s figures, so changing them is not necessarily catastrophic. But we also lack good information (any information) about why these changes were made.

There is no explanation in the legislation, nor in the mediation team report itself that recommended the compromise figure of Ksh1.87 billion. No one has reported on this matter, and no one has bothered to ask.

At a time when people seem to have decided that a referendum is the solution to what ails the country, it is disappointing to note the radical imbalance between the attention given to politics and the attention given to public policy in Kenya.

Both the opposition and the governors have called for referenda with increased funding for counties as a central plank. We are meant to believe that all other avenues for influencing allocations to counties have been tried and have failed. 

Yet the fact of the matter is that, by and large, we have not engaged at all in the actual discussions about revenue sharing in parliament. How many have bothered to follow the details of the negotiations that led to this distribution of funding to hospitals? To demand an explanation for it?

How many made evidence-based submissions to parliament this year when the Division of Revenue was being debated? How many could justify 45 per cent (or any other number) to go to counties based on any analysis at all?

We are not serious about policy. There is a brilliant amendment in the Senate Bill to the PFM Act that postpones the requirement for counties to prepare programme-based budgets until next year.

That is an amendment I could have got behind… four months ago. Back when the counties were actually preparing the budget, and before the Controller made them all revise their budgets to a programme format (which they have no clue how to do). Were we serious about policy, that is when we would have debated such an amendment.

Were we serious about policy, we would focus less on increased money for counties, and more on issues like how to reform our institutions to ensure that regional services, such as water, electricity, infrastructure, and yes, health care are delivered.

This isn’t just about money; it’s about structures that encourage co-operation across counties and with national government.

Giving counties the money that Water Service Boards currently hold, for example, won’t solve our water problems, because water is shared among counties and requires a regional approach. 

But we prefer to talk about the money first, and sort out the policies later. Unfortunately, policy delayed is policy denied.

Jason Lakin is a senior programme officer and research fellow at the International Budget Partnership. E-mail: [email protected]

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