HSE looks to pay and pensions to save €619 million

Reduced expenditure on pay and pensions account for the bulk of the €619 million in savings which the health service is expected to generate next year under the new HSE service plan which will be published today.

However, hospitals will have to continue to implement in full a €56 million cost-containment programme introduced this year to deal with a separate underlying HSE financial deficit of over €400 million at the end of this year. The service plan will also set out nearly €180 million in investments.

About €1.5 million will be earmarked for upgrading maternity services on foot of the HIQA report into the death of Savita Halappanavar. Just over €3 million will go towards the development of cochlear implant services and just over €500,000 for narcolepsy services.

The plan also contains provision of €37 million for the introduction of free GP care for children under six. The scale of health cuts originally proposed will be eased as a result of the reallocation by the Government yesterday of €46 million previously given to the Department of Social Protection. This will mean cuts of €23 million on medical card services will now be required rather than the original target of €113 million. In dealing with the €619 million cuts for next year, the plan says the Haddington Road deal will be central to achieving its budgetary targets.

It says total pay and flexibility savings of €268 million are required next year. Of this €108 million is attributed to “unspecified savings”. A total of €80 million in Haddington Road savings will not be assigned on a pro rata basis across the health service but rather will be earmarked to “individual services following an assessment of the most appropriate allocation of the measures”.

To fill the gap left after the abandonment of the original plan to cut medical card spending by €113 million, the HSE will use the €46 million provided yesterday as well as €63 million it had previously intended to use to make lump sum payments to staff who retire next year.