The health service had “a significant underlying financial imbalance” entering this year, which has contributed to its serious financial difficulties, the HSE chief executive Anne O’Connor has told staff.
In a Tuesday bulletin, she maintained this included “very substantial” savings earmarked originally for last year which were not delivered and were carried forward into 2026 along with a requirement to generate additional efficiencies.
O’Connor told Health Service Executive personnel that at the end of August the HSE was €681 million over budget, equivalent to approximately 4 per cent of expenditure.
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The Dáil’s Committee of Public Accounts heard last week that the deficit could reach €1 billion by the end of the year.
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It is understood that O’Connor’s comments about the “underlying financial imbalance” refer to unrealised financial savings dating back to last year.
The national service plan for the year says the HSE had been set a target of delivering savings of €633 million in 2025. However, it suggests that €327 million in these proposed pay and non-pay savings were not realised last year on a permanent basis.
The national service plan maintained that these outstanding savings from 2025 would have to be found in addition to €181 million in new savings earmarked for this year.
Earlier this month the Government removed spending autonomy from four of the six HSE regions countrywide and introduced tighter controls.
Minister for Public Expenditure Jack Chambers strongly criticised overspending in parts of the organisation and indicated that previous attempts to rein in expenditure had been unsuccessful.
“What we saw in the August figures was a worsening of that [overspending] and essentially completely ineffective management of the control system by the HSE and really poor performance by certain regions when it comes to financial management, when it comes to upholding the staff allocation that they were given,” Chambers told The Irish Times Inside Politics podcast.
O’Connor in her message to staff sought to place the overrun in the context of surging demand and a difficult budgetary situation even as the year began.
She said rising demand had contributed to the €681 million deficit at the end of August, “as has the significant underlying financial imbalance with which we entered 2026, including a very substantial amount of savings planned for 2025 that were not delivered and therefore carried forward into this year. These factors provide important context. But ... our focus must be on stronger financial management,” she said.
