Last November, Kenya’s Standard newspaper ran a major series on county health budgets. The alarmist headlines indicated that more than half of the counties had “slashed” their health budgets.
The analysis was based on a comparison of 2013/14 county allocations for health with estimates of what the national government had been spending in each county in 2012/13, the year before counties came into existence.
I criticised this series at the time because it was based only on county development budgets, and ignored recurrent spending. That is a major flaw in any analysis of health spending, because a substantial share of health funds (in Kenya, but also globally) goes to pay health workers.
My major concern about the first year of devolution was that counties would not budget enough to cover the running costs (including salaries) of health facilities. If, on the other hand, counties did not budget enough to build new facilities in the first year, that would not be a catastrophe.
Moreover, development spending tends to fluctuate every year depending on project cycles for infrastructure. It is quite likely that it will be high in one year, then drop in a subsequent year as a project ends, and then rise again later.
A drop in a single year in development spending should not cause alarm. A drop in recurrent spending, however, is almost certainly going to mean firing health workers or slashing access to drugs.
Why didn’t the Standard look at recurrent spending? One reason was probably because many counties made a big blunder in their initial budgets: They pooled all of their salary costs under a single item, often called “executive services,” so that it was impossible to know how much of this expenditure was going for any particular sector, such as health.
As I pointed out at the time, health salaries were the largest component (80 per cent) of devolved salaries, so almost certainly a big share of “executive services” was for health workers, but it was impossible to determine how much. It therefore remains an open question whether counties slashed their health budgets or not.
It is an unfortunate fact that there is no central repository for county budgets. We believe that the Controller of Budget should serve this function, but the office has not made county budgets available widely to the public. Further, many counties have failed to put their own budgets online or to make them readily available to the public.
Nevertheless, I have copies of 17 revised county budgets from the Controller of Budget. These are the budgets that were approved by the Controller last November after most counties were forced to revise them to eliminate deficits. I have reviewed these 17 budgets to see whether it is possible to tell if counties increased or decreased their recurrent budgets. What did I find?
First, although these are revised budgets, several still suffer from problems related to their classification of wages. For example, Nyamira’s recurrent budget for health is Ksh354 million ($4.11 million), but of this, only Ksh14 million ($162,790) is for salaries, and it is all for temporary employees. This cannot be correct.
It is not possible to tell how much Laikipia has allocated for health salaries, but it appears that there is a very large allocation (Ksh1.2 billion or $14 million) for wages under “county executive services,” which may well include some health workers.
Of the 17 budgets, I find that nine have increased their health allocations above 2012/13 figures, and eight have decreased their allocations.
However, of the eight that have decreased, there are at least four (including Laikipia) where it is not possible to tell if the apparent decrease is caused by the fact that the health worker salaries are not actually under the health budget.
I conclude from this the following: First, the evidence that counties slashed their health budgets is thin. A number of counties clearly maintained or increased their health budgets in the ways that matter most.
Second, there is a serious transparency problem around both the county budgets as a whole, and the contents of these budgets. In other words, it is a problem that I have only 17 revised budgets (and had to beg for these), and the contents of these budgets is opaque.
The Controller must take steps to set up an online repository of all county budgets, but must also insist that approved budgets have sufficient information about wage costs to be useful. Counties will table their 2014/15 budgets in just a few weeks.
These budgets must be better than last year, with clear narratives, consistent treatment of wages (broken down by sector), and coherent estimates for last year, the current year and the next three years.
Jason Lakin is senior programme officer and research fellow with the International Budget Partnership. E-mail: [email protected]