Health service expected to seek cutbacks of €300m

NEW HEALTH service cutbacks of about €300 million are expected to be announced in the weeks ahead, it has emerged.

It is understood that the chief executive of the Health Service Executive (HSE) Prof Brendan Drumm signalled that a further "tightening" of services would be required to allow the organisation to meet its budget for the year.

Prof Drumm made the comments to trade union leaders at a meeting of the steering group of the new health service forum, according to sources.

A spokesman for the HSE last night declined to comment and said it had to observe the confidentiality of the forum process.

The HSE has already publicly described its financial position for the year as "challenging". But figures provided at the forum meeting on Monday are the first to signal the extent of the cutbacks being considered.

Last week it emerged the HSE in the northeast had drawn up cost-saving proposals including the possibility of closing the A&E unit at the Louth County Hospital in Dundalk and reducing elective surgery and outpatient clinics by about 20 per cent in some hospitals.

Meanwhile, an internal Department of Health letter reveals that the HSE had complained that its exchequer funding this year was significantly less than the amount it needed to maintain services.

In a letter to Prof Drumm in mid-January the secretary general of the Department of Health Michael Scanlan wrote: "The financial framework which accompanied the [HSE] national service plan suggested that the level of funding made available to the HSE for 2008 was some €450 million less than what the HSE estimated would be required to maintain 2007 services".

Mr Scanlan said the Government in deciding on health spending took into account information provided by the HSE as well as the priorities of the Minister for Health.

"Accordingly at this stage the essential point is that we are all agreed that your 2008 national service plan has been prepared on the basis that the planned level of services can be delivered with your allocation," he said. Mr Scanlan wrote that funding provided in this year's the estimates should have allowed for the delivery in 2008 of a "demographically adjusted existing level of service".

"However, it was always clear also that the 2007 out-turn, and the fact that the HSE eventually had to have recourse to the long-stay repayment scheme funding, would have implications for 2008.

"On the other hand, the measures taken under the break even plan should help to mitigate the impact of the 2007 out-turn in 2008 and your national service plan also includes savings on drug costs and a value for money target of €120 million," he said.

Mr Scanlan said it was against this background that Minister for Health Mary Harney had decided to approve the HSE's national service plan for the year.