The State's largest children's hospital has been warned by the Health Service Executive (HSE)that it is facing a deficit of over €16 million at the end of this year unless it curtails spending.
The HSE has also told Our Lady's Hospital for Sick Children in Crumlin, Dublin, that it has more than 100 employees above the limit allowed under its employment ceiling, and it must bring its number of staff down to approved levels.
In a letter to the hospital, seen by The Irish Times, the HSE said it was acutely aware that reducing employment numbers at the hospital will have implications for service delivery but it is imperative that the hospital takes action now.
But the hospital, in a replying letter to the HSE just over a week ago, said if it were to live within its budgetary allocation for 2007 - which it argued is completely inadequate - it would have to close wards, theatres and intensive care unit beds, leading to cancellation of planned surgery and waiting lists for children with cancer which would be inappropriate.
The hospital's chief executive, Michael Lyons, said in his letter that this would "not seem to be tenable or desirable from the ethical or risk viewpoints".
Furthermore he said the 2007 financial allocation for the hospital of €122.4 million has been an effective decrease in real funding equivalent to 9 per cent. He argued the budget should be about €139 million.
"The hospital was fully funded in 2006 by the HSE to the amount of €121 million and for this it provided services agreed with the HSE.
"When pay awards and specific service developments, which we were specifically requested by the HSE to defer until 2007 (eg cystic fibrosis service developments) are added to last year's agreed expenditure, the base minimum requirement for 2007 would be €132.6 million. When the full-year cost of service developments in 2005 and 2006 and inflation etc are accounted for, the basis of the funding requirement for €139 million was established," he wrote.
"In order to operate within such a severely depleted allocation of €122 million for 2007, service at the level of 2006 could not have been provided . . . the hospital in 2007 has complied with HSE policy that patient services should not be reduced and at all times has clearly stated that the effect of this was that the current depleted allocation would be insufficient," he added.
He also claimed in his letter that the hospital's staff ceiling had been set too low and was not adjusted to take account of new service developments. He proposed an independent, fundamental review of the hospital's required employment levels by outside experts.
At the end of March the hospital had the equivalent of 1,570 whole time staff, which is 159 above its employment ceiling.
Mr Lyons told the HSE the hospital would endeavour to reduce staff numbers but he wrote: "It would not be possible to reduce our staff numbers by 159 whole time equivalents by year end, even if the hospital placed a total ban on all recruitment between now and December 31st next.
"Attempting to reduce our whole time equivalent numbers by 159 would simply be impractical with massive service implications, unacceptable safety risks and inefficiencies."
It emerged last month that all hospitals and voluntary organisations, as well as the ambulance service, had been ordered by the HSE to try to reduce their staff numbers by 1,000 before the end of the year.
