Department of Health seeks €1.4bn bailout as Covid costs soar

About 85% of the supplementary estimate sought by the department relates to additional pandemic costs

The Department of Health is looking for a €1.4 billion financial bailout, due largely to higher-than-expected spending related to the Covid-19 pandemic.

The department will seek approval for a supplementary estimate of €1.39 billion when officials appear before the Oireachtas Health Committee on Wednesday, The Irish Times understands. This is in spite of a record allocation of €21 billion for health in Budget 2022.

About 85 per cent of the extra spending – €1.18 billion – was incurred on Covid responses.

Sources say the department initially sought much more Covid funding in the Estimates process for 2022, but the final settlement was €750 million.

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This amount reflected assumptions that Covid impacts would diminish as the year progressed so that, as a result, the spend would be considerably lower. However, the large surge of Omicron variant cases at the start of this year drove high levels of testing.

Other factors driving up expenditure included the costs of the pandemic recognition payment, which were not provided for in the health estimate, and the purchase and delivery of Covid boosters and therapeutics.

The department’s spend was also driven up by other decision taken at or after Budget 2002, which were not provided for in the estimate for this year. This includes the public sector pay deal, the restoration of Haddington Road Agreement hours to health staff, once-off energy supports for voluntary bodies in the health sector and the expansion of efforts to limit the spread of the winter flu.

The HSE has experienced massive cost overruns for most of its existence, save for a short period when funding was increased during the Covid pandemic.

Paul Cullen

Paul Cullen

Paul Cullen is Health Editor of The Irish Times