Differences on health budget savings expose coalition tensions

Tue, Apr 15, 2014, 01:01

Budget 2014 requires overall savings of €666 million in health spending to be made. However, less than four months into the financial year two key Ministers already disagree on whether that target can be met. The Health Service Executive, bolstered by a report commissioned from a consultancy firm, is claiming that a €186 million gap exists between cuts sought in some spending areas, and what is likely to be secured. Minister for Public Expenditure and Reform Brendan Howlin disagrees. And he insists the savings agreed in the health budget can be met.

It is unusual for ministers, who are bound by collective cabinet responsibility, to disagree so publicly on a policy issue – one that Government has already decided in the budget. Disagreements in private between ministers are not unusual. But when those differences are aired in public, this is a worrying development. It sets a dangerous precedent, and also raises some concerns for the stability of Government.

Mr Howlin has said the HSE agreed all the health savings proposed in Budget 2014. But the HSE, having done so, later commissioned a report that, unsurprisingly, now claims some of the promised savings will not materialise. The Department of Health in recent years has all too often failed to meet its annual budget targets. The result has been significant overruns in its spending estimates, which must either be financed by increased borrowing, or mitigated by lower capital spending elsewhere.

For a Government that is proposing to introduce Universal Health Insurance (UHI), its failure to manage annual health spending augurs badly for the success of a far more ambitious project. Mr Howlin’s department has been sharply critical of aspects of the UHI proposals, claiming the scheme was unaffordable and even suggesting the cost could put the public finances at risk. Dr Reilly’s failure to control spending in his department has inevitably raised questions about the viability of UHI, about which, as yet, far too little is known – not least the cost.