Increase in health spending likely despite declining budget surplus

The Department of Health will get an above average increase in December's Budget despite the Government's tightening economic situation, senior figures including the Taoiseach have indicated.

Earlier, a news report on RTE had alleged that the Minister for Finance, Mr McCreevy, was refusing increases to the Minister for Health, Mr Martin, unless major reforms were imposed on the health service.

But this link was described as "nonsense", by a number of quarters. "The situation is tighter this year than last. You don't have to be a rocket scientist to understand that. But the Government will prioritise," Mr Martin told The Irish Times.

Speaking earlier, the Taoiseach, Mr Ahern, said health spending had doubled over the last four years to over £35 billion. "(It) has come out better than most. I am sure that it will do so again," he said.

Asked if Mr McCreevy and Mr Martin were in conflict, Mr Ahern, speaking shortly after he opened a new wing to the Mater Private Hospital, said: "That is certainly not the case."

Exchequer return figures due from the Department of Finance today will show that the Government's budget surplus will slip to between £600 million and £700 million this year - down from £2 billion previously.

Mr McCreevy has made it clear since the Cabinet held a special one-day meeting in May about the health service, that major reforms are necessary: "I am not happy with how it's being spent," he said then. There will be even more demand for extra spending this year because the Government's five-year health strategy, due to be published within the next fortnight, will create its own bill.

The strategy is expected to recommend more hospital beds, cuts in waiting list queues and the creation of local medical centres to ease the pressure on accident and emergency units.

The Labour Party spokeswoman on health, Ms Liz McManus, said it was clear Mr Martin has been unable to secure the reforms demanded by Mr McCreevy.

"All of this indecision and lack of leadership comes at a time when waiting lists continue to increase and people continue to lie on trolleys in hospital corridors," said the Wicklow TD.

The Progressive Democrats have already suggested the State should pay for private health care to anyone left on a public waiting list for more than three months.

Meanwhile, senior government sources insisted that the Government would not deliberately hold up road construction.