Ministers will be warned on Thursday of a growing “financial risk” to the Department of Health’s budget, with the Health Service Executive now planning to slow down recruitment.
Minister for Health Stephen Donnelly will bring a memo to the Cabinet outlining HSE expenditure up until the end of March this year, with a projected deficit in the health service budget now emerging.
At the end of 2022, the department needed a €1.4 billion financial bailout, due largely to higher-than-expected spending related to the Covid-19 pandemic. The rest of the sum was made up of other post-budget decisions including the Covid-19 pandemic payment.
Ministers will be told that a report on spending for the first three months of this year will show “some financial risk to the health vote in 2023″. Sources said that it was too early to speculate about whether another financial bailout would be needed this year.
It is understood that there will be a budget deficit for the first three months of 2023. This is mainly because of higher demand for services, such as attendances and admissions in emergency departments, more inpatient and day cases, as well as inflation and pay pressures.
The Cabinet will also be told that as part of a financial review to control costs the need for a continued Covid-19 response will also be reviewed.
In relation to pay pressures, Mr Donnelly will tell Ministers that recruitment for the remainder of 2023 will be slowed. The HSE’s chief executive has also put in place a temporary pause on senior management and administrative grades across the HSE.
Meanwhile, it has emerged that one in 10 staff left the health service last year as emigration and retirements accelerated in the aftermath of the Covid-19 pandemic.
The 10.2 per cent staff turnover recorded last year was 2.5 percentage points up on 2021, HSE board members have been told.
Staff churn has increased considerably over recent years, the board heard, due to “the reopening of travel for emigration and the recommencement of delayed decisions to retire or leave”.
With board members querying what a “healthy attrition rate” is for the HSE compared with other organisations, senior managers say they plan to start surveying departing staff for the first time on the reasons why they are leaving.
The HSE needs to recruit about 11,991 whole-time equivalent (WTE) staff this year but estimates the labour market will supply only 6,010 net additional WTE staff, board members were told.
Board members warned the health service would come under “significant financial pressure” this year if “appropriate additional funding support” was not provided.
They also expressed concern that these financial pressures could be perceived as an “unplanned budget overrun or interpreted as mismanagement by the HSE”.
“Concerns were also expressed about any potential impact on the delivery of services [due to] the delay in having a NSP approved with operating budgets established and adequate communications to managers.”
The HSE service plan for 2023 provides for non-capital spending of €23.7 billion, a record figure. However, it includes a warning of possible additional “financial issues” being incurred, amounting to more than 10 per cent of the budget – well over €2 billion.
Although the Department of Health does not accept this figure, the HSE claims both organisations are “fully aligned” on the need for any mitigation measures to ensure patient services are not adversely impacted.