The Department of Public Expenditure pressed the Department of Health during the start of the year to ensure that the health system functioned within the assigned allocation, given the unprecedented exchequer funding of €22.8 billion. Despite this, Secretary General Robert Watt of the Department of Health reported to an Oireachtas committee in early May that health expenditure exceeded the budget by over €500 million in the first quarter alone, necessitating additional funds. This didn’t come as a shock to many.
Sinn Féin’s health representative, David Cullinane, expressed that his party had flagged inadequate health service funding back in October of the previous year, resulting in the issue quickly becoming a reality. Similarly, Bernard Gloster, the HSE chief, did not shy away from expressing his belief last fall that the 2024 health budget fell short and signalled that the HSE might face a deficit possibly reaching €1.5 billion.
Health Minister Stephen Donnelly reportedly sought an additional €2 billion. However, he only received just over €700 million after budget negotiations. The Department of Public Expenditure reportedly raised concerns that spending levels recorded in the initial months were typically associated with year-end spending increases due to the approaching winter. However, such a view was contested by senior figures within the health sector, arguing that the highest unscheduled system demand generally occurs post-Christmas.
As anticipated, tensions persist between those controlling the budget and those responsible for managing one of the largest government expenditure sectors. Ten years ago, disputes arose between the minister for public expenditure, Brendan Howlin, and the minister for health, James Reilly, over health funding. The Department of Public Expenditure also managed to derail Reilly’s primary health reform programme, universal health insurance, citing affordability issues.
The Ministry for Public Spending has regularly maintained that the health service needs to take more firm command over its expenditures, something which has eclipsed the planned budget in eight out of the past nine years, as well as recruitment. Donnelly, the Health Minister, has openly confessed that the HSE recruited around 2,000 employees last year without an authorised budget, causing the current freeze on hiring. The heads of the Coalition party are now tasked with devising strategies for rectifying this unapproved hiring issue.
Last week, Paschal Donohoe voiced at a media briefing that unapproved recruitment was always “a pressing problem because it lacks the funding for the year it happens, and for ensuing years”. He further stated that it only adds difficulty to decision making and planning expenditure.
However, there has been a prevalent notion within health departments that the Ministry for Public Spending fails to comprehend the costs involved with caring for an expanding, ageing demographic, the demand for increased staffing, and pricier pharmaceuticals. These departments make the case that the investment has led to a rise in average lifespan in Ireland, exceeding 82 years.
In November of the previous year, the government agreed to an additional €1 billion to address a health overrun. However, late January communications from the Ministry for Public Spending to the Health Department imply ongoing disputes concerning managing the budget. The HSE’s attempts to control the surge in administrative staff were labelled as “ineffective” and it stated that focused savings on agency staff and overtime had “not materialised”.
Notably, it held that “in spite of a governmental mandate, presenting clear terms and expectations”, the Health Department did not present spending memorandums for the second and third quarters of last year. It claimed that there were two postponements of the Health Budget Oversight Group’s (HBOG) sessions as critical documents weren’t submitted beforehand.
The joint Q2, Q3, and Q4 memorandum was announced to the government, due to delays in approving the Q2 and Q3 memorandums. It stated that monthly financial reports were delivered to HBOG and frequent updates were presented to other entities such as the Cabinet Committee on Health.
The HSE’s capacity to furnish complete documents to the HBOG was impeded due to industrial actions, as stated. Nonetheless, the department maintained regular monthly financial narratives, leveraging resources like weekly cash withdrawals and monthly sales returns from the HSE, in addition to data gleaned from monthly performance conversations with the HSE’s finance division.