Health service managers around the country have been directed to put in place “immediate corrective measures” and cost-saving plans after the HSE recorded a €150 million deficit in the first two months of the year.
Anne O’Connor, the newly appointed HSE chief executive, on Thursday described the health service’s financial position after January and February as “extremely concerning”.
The HSE said O’Connor had directed management in its various regions to produce plans to tackle the overspending, which coincided with a very busy winter period for the health service.
The measures are expected to focus to a significant degree on reducing expenditure on temporary workers provided through agencies, who are more expensive to employ than regular staff.
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Under new official spending rules, the provision of additional or supplementary State funding to cover overruns in the public service has been banned. The Government has maintained that departments must live within their official budgetary allocations.
There is already concern within the Coalition about a potential overrun in the Department of Education, which could reach between €600 million and €700 million this year.
On foot of queries from The Irish Times about its financial position in the early part of the year, the HSE said: “We can confirm that the HSE chief executive officer has written to senior HSE leaders asking them to prepare immediate corrective action to deal with a significant spend above budget in the first two months of 2026.”
The HSE confirmed the deficit recorded in the first two months was approximately €150 million. It said this was driven by overspending in non-pay areas and on agency staff costs.
“It coincides with the busiest winter period for the health services, which saw substantial demand growth in our urgent and emergency care services, with increases in admissions of 4.65 per cent and a 17 per cent increased use of surge capacity.”
At her first meeting as chief executive with the organisation’s senior leadership team last week, O’Connor asked the six regional executive officers to provide “detailed plans on corrective measures in relation to agency expenditure and cost savings plans in order to achieve target spending and savings for 2026”.
In a statement, O’Connor said: “While it is early in the year, the financial position for January and February is extremely concerning. I am determined to work with our regional executive officers and senior leadership team to bring spending back on track as soon as possible.”
The measures that may be considered to tackle the overspend are understood to include accelerating an existing policy of taking on more regular staff rather than relying on agency personnel to fill rosters. A ban on the use of agency personnel in management and administration roles is also likely to be strictly enforcedy.
