The Government is to provide an additional €1.5 billion in health funding this year and to allocate a further €1.2 billion next year to maintain existing levels of services.
Senior health figures said on Tuesday that the move was likely to mean there would be no need for a supplementary estimate for the health service later this year.
The Department of Health has set a target of generating savings of about €400 million this year.
Informed sources said the Government’s decision would provide funding to regularise the situation regarding the large number of personnel recruited by the Health Service Executive last year without authorisation.
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The initiative on Tuesday, sources said, would ease the controversial embargo on hiring many staff in the HSE which has been in place since late 2023.
However, the department said the HSE had committed to the introduction of strict new controls on recruitment in the future.
Minister for Health Stephen Donnelly told the Dáil in May that a record number of funded posts, about 6,000, were created last year but that the HSE had actually hired more than 8,000 people. He said this “left more than 2,000 posts that had been either hired or committed to for which there was no funding”.
It is understood that the additional €1.5 billion provided by the Government this year will go into the “base funding” of the health service and will be recurring.
The provision of the additional money also vindicates, to some degree, the argument of the HSE that it received insufficient funding in the budget last October.
The health service received €22.5 billion in funding in the budget for 2024. However, Mr Donnelly and HSE chief executive Bernard Gloster argued that this was not enough.
The Health Service Executive forecast at the time that its budget allocation for the year would lead to a significant overrun this year.
Last week it emerged that the health service had overrun its budget by about €1.1 billion in the first six months of 2024.
Mr Donnelly said on Tuesday: “Our health service is experiencing much greater demand and treating many more patients. Significant progress is being made in tackling hospital overcrowding. Even though there has been a 10 per cent increase in presentations to Emergency Departments, this year alone overcrowding has fallen by 14 per cent.
“While I will continue to fight for increased investment in our health service, we must also continue to ensure that our investment and existing resources are maximised. This is to ensure we treat as many patients as possible and can expand services. I have introduced a strong focus on productivity and the need for stronger performance management and accountability. I have made it clear to the HSE that it needs to demonstrate greater progress here.”
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