Sacking people not the answer to dealing with health overspend, Minister says

HSE imposes cap on overtime and agency staff as first quarter deficit exceeds €103m

Sacking people is not the answer to dealing with the issue of overspending in the health service, Minister for Public Expenditure Paschal Donohoe has said.

Asked if people should lose their jobs as a result of the financial crisis in the health service, Mr Donohoe said the Government had just appointed Paul Reid as HSE chief executive and that he had shown a commitment to managing spending in a new way.

“I do not believe the answer is to sack people from the HSE,” he said. “We have just appointed a new chief executive and he has indicated his commitment to managing the spend in the health service in a new way by the indications that he has given the organisation and by the work that is under way now in relation to how we manage recruitment.”

Mr Reid told the Dáil's Public Accounts Committee on Thursday that the HSE had recorded a deficit of more than €103 million in the first three months of this year.

Mr Donohoe said that up to April health spending had been on track but that the financial position had since deteriorated.

“It changed in June. In June health expenditure grew by nearly 9 per cent versus June a year ago. That, as I indicated in the Dáil, was a cause of real concern to me,” he told reporters at the National Economic Dialogue.

Spoken regularly

Mr Donohoe said he had spoken regularly with Minister for Health Simon Harris and senior HSE leaders about "how we can manage health expenditure in a different way to what we did last year", when an additional €600 million had to be provided to the HSE.

“We need to and we will do better this year,” Mr Donohoe added.

The Irish Times understands that the HSE has put a cap in place on all spending on employee overtime and on the use of agency staff in an attempt to control expenditure.

Mr Reid told senior managers in an internal memo this week that spending on agency staff and overtime was to be limited to 95 per cent of the levels recorded in October last year.

Restrictions on employment in the HSE, which were introduced initially last February, are expected to remain in force.

Mr Reid said the Government’s message to him was clear, that the HSE was required “to deliver effective and safe services within and not beyond the funding allocated to us”.

Strong pressure

Meanwhile, the Government came under strong Opposition pressure on Thursday about the future of billions of euro in planned investments in hospitals and health service infrastructure in the light of the growing price tag for the national children’s hospital.

The Irish Times reported that the HSE had warned the Department of Health in May that it would be almost impossible to deliver projects set out in the Government's €11 billion national development plan for the health service.

Mr Reid told the committee the overspend on the children’s hospital could have an impact on the HSE’s spending plans in the coming years. He said the HSE was in discussions with the Departments of Health and Public Expenditure regarding the publication of its capital plan and the potential impact of the cost overruns on the children’s hospital project.

"If at the end of this there's a significant contribution beyond what we planned, there would be an implication in terms of projects," Mr Reid told Sinn Féin TD Jonathan O'Brien.

He said the outcome of the discussions “will clearly determine for us if we have to curtail any projects”, and that the HSE has not had to do so to this point.

Clear warnings

Fianna Fáil deputy leader Dara Calleary accused the Government of continuing to claim there would be no delays with the delivery of major health projects despite clear warnings from the HSE that it would be almost impossible to deliver them because of children's hospital issue.

He asked how Tánaiste Simon Coveney could say "with a straight face" that the HSE capital plan was being finalised for this year when we were six months into 2019.

Mr Coveney said work was ongoing to ensure projects that had been committed to would be completed.

“The new children’s hospital is a vital and much needed project and the Government has examined the funding pressures associated with delivering this important project,” he said. “Projects in construction and contractually committed projects will not be affected, as the Minister [for Health] has said many times.”

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent