Health overspend the elephant in the room in Dáil budget speeches

Health, once the source of many a Government boast about increased funding, was something of an elephant in the room at this year’s budget speeches.

Minister for Finance Michael McGrath managed to get through his speech without once referring to the State’s biggest spending sector, while Minister for Public Expenditure Paschal Donohoe only briefly referred to it.

There is an extra €800 million in core funding for health, or €1.2 billion in overall funding, which sounds good. But because of increasing demand for services and wider inflation, the service has to run very hard just to stand still – this is unlikely to provide scope for innovating or dealing with emergencies such as another wave of flu this winter.

Most of the extra funding will be swallowed up dealing with demographic pressures; just €100 million is available for new measures, down from €250 million last year.

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The tensions around health funding in the run-up to Budget 2024 have been well trailed over recent weeks. Its budget was one of the last to be finalised. There is clear annoyance in other areas of Government that health has once again run up a massive deficit, leaving less money overall to spend on new (ie, vote-catching) measures in the run-up to the next general election.

The Health Service Executive is expected to need a €1.1 billion supplementary budget in December, but don’t be surprised if the final figure is even greater than that. It pleads that three-quarters of its overspending is down to factors beyond its control, such as increased demand, inflation and national wage agreements.

Whatever the cause, overspending this year is no one-off; the extra money needed now has to be provided year-on-year to meet future demand. The HSE spending ship gets ever more difficult to turn around.

Mr Donohoe in his speech majored on what the Government has done in health over the past 3½ years rather than its future plans. He talked of the creation of 2,500 hospital beds and the recruitment of 22,000 additional staff. Unfortunately, one of his officials thought this was a promise for the future rather than a recitation of previous actions and boasting of future expansion. Embarrassingly, his department was forced to delete the tweet.

The Department of Health will have to perform the miracle of the loaves and fishes to make the meagre funding available for new measures stretch to meet huge expectations. A little bit here, a little bit there; like the proposal to expand free contraception to women but only by a year – to those aged 31.

More money has been promised for areas such as mental health and tackling waiting lists, but it remains to be seen if these allocations keep pace with rising demand.

Mr Donohoe also promised to create a “health resilience fund” to fund increased output and meet the escalation in patient demand.

He made familiar noises about the need for better management, by warning that record investment in health “needs to be fully realised with a focus on productivity, better financial governance and consolidating funded capacity”.

“Accordingly, this resilience funding will be accompanied by a programme of initiatives to improve financial oversight across the health system, as part of the progressive reform agenda. This programme will be finalised by year end.”