Stephen Donnelly admits to shortfall in health budget for next year

Minister for Health Stephen Donnelly has said that there will be a shortfall in the health budget next year.

Just a day after budget allocations were announced, Mr Donnelly has admitted that the funding estimated by his department to be required by the health service for next year was not granted in the budget.

He told The Irish Times: “Like this year, it is entirely likely that a supplementary budget will be required next year because of healthcare inflation and patient demand.”

The Government has already indicated that a €1.1 billion supplementary estimate will be brought before the Dáil this year to meet the funding shortfall for the health service this year. Now Mr Donnelly has said clearly that there will be another shortfall next year, requiring another bailout.

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The Department of Health sought more than €2 billion extra funding in budget negotiations with the Department of Public Expenditure, estimating that this figure was necessary to maintain the level of services provided this year due to increased costs and demand.

However, the Department of Public Expenditure rejected the request and instead granted just €708 million extra for existing services, bringing the total health budget to €22.5 billion. Minister for Public Expenditure Paschal Donohoe also announced a “health resilience fund” of €1 billion in the budget, which he said was part of “non-core”, or non-recurring, expenditure. But that money is also earmarked for the health costs associated with post-Covid pressures and services for Ukrainian refugees.

It is understood the Department of Health argued strongly in pre-budget negotiations that the health service was not actually overspending – rather, its budget was too low from the outset. That view was rejected by public expenditure officials in a series of sometimes bad-tempered meetings.

[ Irish health service heading for choppy waters despite record funding in budget ]

[ Health service recruitment freeze to be extended in response to budgetary pressures ]

There is now considerable unease in the Department of Health and the Health Service Executive about budgets for next year. One senior source said: “We sought north of €2 billion. They gave us €700 million.”

But there is also considerable anger across the highest levels of Government with Mr Donnelly and the Department of Health, which other departments view as having eaten up resources that could have been used elsewhere.

The budget squeeze will mean that measures will have to be taken in the health service next year to control spending. A recruitment freeze is being introduced in parts of the service, Mr Donnelly told a press conference, while there will be no dedicated funding for new drugs next year.