Department of Health will not need a bailout for first time in many years

One reason for the underspend is that the hiring of new staff is proceeding slower than expected

The Department of Health will not need a bailout this year for the first time in many years, a document presented to the Cabinet on Tuesday reveals.

Huge funding increases allocated last year appear to have solved the perennial problem of running out of cash and needing extra funds, which has dogged the department. It is now expected that the Department of Health will not spend its full allocation this year.

An expenditure management report presented to Cabinet on Tuesday – itself a device to control chronic overspending in the health sector – reveals the Department of Health is currently underspending its budgets for both capital and current spending.

Current spending is running at €656 million below the expected level, while capital spending is at €76 million below profile.


It is understood one of the reasons for the underspend is that the hiring of new staff is proceeding at a slower level than expected due to the pandemic and the data hack suffered by the HSE before the summer.

While the HSE has hired more staff than ever before it is expected that the organisation will fall far short of the targeted 14,000 additional staff it had hoped to recruit this year. Sources say it expects to be able to complete the recruitment of 7,000–8,000 staff by the end of the year. It has hired just over 4,000 additional staff at this point.

The ending of the long succession of overspends in the department reflects tighter budgetary management, which has been a goal of administrators for many years. Robert Watt, formerly the top civil servant in the Department of Public Expenditure and a long-time critic of the inability of the health service to stay within its budgets, joined the Department of Health as secretary general earlier this year.

However, it also reflects the massive increase in funding allocated to the department in last year’s budget, when an additional €4 billion was voted, bringing its total budget to about €22 billion for this year.

About half of that sum was allocated for Covid measures, but the other half was considered a “step change” in funding for the department, which it had long sought.

However, Tánaiste Leo Varadkar said at his party conference earlier this year that the department should retain all the extra €4 billion in funding in its future budgets, and use the additional €2 billion in Covid funding for other measures.

Tough budget negotiations on this question are understood to be under way between officials and Ministers at present.

Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times