Financial adviser to join health board

An independent advisor has been appointed to help Auckland District Health Board sort out its financial crisis.

The board is "$60 million plus" in deficit - a figure higher than expected - and some are warning it could get much worse.

Gordon Davies, deputy director general DHB funding and performance for the Ministry of Health, said Graham Aitken had been appointed as independent advisor for a term of one year.

"The position will see Mr Aitken help the DHB and the Ministry of Health understand and work through the issues that have led to Auckland's larger than expected financial deficit," Mr Davies said.

Mr Aitkin, who was appointed by the ministry, had held several senior hospital management positions. It was possible his position would be terminated before the year was up or it could go longer.

The announcement follows a claim by Act health spokeswoman Heather Roy last month that Health Minister Annette King was considering a commissioner to replace the board after a "$70 million deficit blowout" .

Ms King dismissed the claims and said a meeting with the board to discuss the final stages of its 2004-2005 annual plan had been successful.

A spokesman for the minister said yesterday it was not the first time an independent advisor had been appointed, it was "common practice". They had previously been appointed to Otago and Southland district health boards.

He said Ms King was not "frantic" about the situation and would not have reappointed chairman Wayne Brown if she was concerned.

Yesterday Mr Brown said he had no problem with an independent advisor being appointed.

Asked if it was an indication the board could not do its job Mr Brown said: "Not necessarily. He's there to help both the board do its job and the Government to understand some of the implications of its policy."

Mr Brown said the deficit , which he described as "$60 million plus", needed to be put in perspective given the board's $1.2 billion turnover.

Yesterday Mrs Roy said the appointment of an independent advisor was a step closer to a commissioner being appointed.

"It's only because of Helen Clark and Annette King's deception around the DHB's operational funding that the board finds itself with a $67 million deficit blowout - sources have told me that the deficit will actually be much worse by the end of the financial year," she said.

Mrs Roy said an increase of $32.4 million on last year's $702.6 million represented a 4.6 per cent increase in the board's budget but equated to no increase when population growth and health inflation were taken into account.

The board's chief financial officer, Michael Boerson, resigned last month. In a statement the board said Mr Boerson, who had worked for the board for four years and "demonstrated sound financial leadership", had left to work in the private sector.

Warwick Russell, formerly the chief financial officer of Vector and Tappenden Holdings, had been appointed interim chief financial officer.