UK demands cuts in bill for treatment of citizens in Irish hospitals

THE BRITISH government has demanded cuts worth hundreds of millions a year in the bill Ireland charges for treating people in Irish hospitals who are covered by British social insurance.

In the last five years, the British have paid €2 billion to the Department of Finance.

This is to pay for the social and medical needs of Irish people who have returned to Ireland after working and paying social insurance for years in the UK, and for British people who have moved to live in Ireland.

This year, the Department of Finance had intended to levy a €450 million bill on the British exchequer, but the British side made it clear that that would not be acceptable.

The British have long bridled at the sums charged by the Irish Government.

In 2003, the British paid €310 million; in 2004 it rose to €348 million and to €448 million in 2005.

In 2006, the figure dropped to €397 million, but jumped again to €450 million last year. Faced with its own budgetary difficulties, the British government adopted the toughest line yet this year.

Last night, the British department of health said negotiations have been under way with the Government over the last 18 months. "As a result of new evidence around how much the UK and Ireland should pay each other under these rules, it has been agreed that payments the UK makes to Ireland will reduce significantly in future years," it said.

Privately, the British say ample evidence now exists that the Irish bills have been for "higher than they should have been".

In July, the British failed to pay a demand for €125 million of the bill, and there has been no sign of payment coming from them since.

Senior officials from the Department of Health and the HSE are to travel to London next week for talks with the British department of works and pensions.

Despite the British declaration of an agreement that future payments will be smaller, the Department of Health insisted that the final sum due for this year has still to be calculated, and could higher or lower than the €450 million Department of Finance estimate.

The payments are based on a 1971 bilateral agreement, buttressed since by EU regulations.

Under EU rules, both countries reimburse each other for the cost of providing healthcare to each other's tourists, workers, pensioners and their dependants.

The annual sum due to Ireland from the UK is the net difference between the costs to Ireland of providing care to those with UK entitlements and the cost to the UK health services of providing services to those with Irish entitlements - a far smaller number.

One British source said: "There is also now robust data which challenges previous assumptions around the rate the UK should pay."

"The UK position is not about refusing to make payments: it is about reflecting the fact that evidence shows that payments in previous years were higher than they should have been," the source said.

Last night, the Department of Health said a British payment for 2008 has not been made, "pending the normal process of exchange of this information . . . Therefore, the UK has not refused to make a payment but has indicated that the scheduled discussions will inform the outcome.

"This process is scheduled to conclude in the coming weeks. The process can involve payments that can be greater or lesser than the original estimate," it said.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times