Health service expected to get bailout this year of over €300m

Reports of Government tensions over next year’s education budget due to costs of pay, pensions

Minister for Finance Paschal  Donohoe will have €2.8b   to spend on budget day, although €2.1bn   has already been committed. Photograph: Getty Images

Minister for Finance Paschal Donohoe will have €2.8b to spend on budget day, although €2.1bn has already been committed. Photograph: Getty Images

 

The health service is expected to receive a financial bailout of over €300 million this year.

The exact scale of the supplementary estimate is expected to depend on the amount of additional funding earmarked by Government to tackle additional winter pressures on the health service. However, highly placed sources said it was now likely to be over €300 million but less than €400 million.

In 2018, the health service received supplementary funding of more than €600 million. The Irish Times reported on Wednesday that the HSE had recorded a financial overrun of €281 million to the end of July.

Talks are ongoing between Fianna Fáil and Minister for Finance Paschal Donohoe in advance of the budget, which is being framed to deal with a no-deal Brexit and will be unveiled next Tuesday, October 8th.

Mr Donohoe is also continuing bilateral negotiations with Ministers, and met Minister for Justice Charlie Flanagan on Wednesday.

Sources said there are some concerns about spending in the Departments of Health, Housing, Education and Justice.

A social welfare package has yet to be agreed, with Fianna Fáil’s Willie O’Dea and some members of the Independent Alliance insisting on €5 welfare increases – against the wishes of many senior members of Government and Fianna Fáil.

Mr Donohoe will have €2.8 billion to spend on budget day, although €2.1 billion has already been committed. He will increase spending if needed to support sectors of the economy affected by a no-deal Brexit. This extra spending will be paid for through increased borrowing.

Tensions

There are also reports of tensions within Government over the education budget for next year due to the rising costs of pay and pensions.

It is estimated that upwards of 1,000 teachers are retiring this year, which some say could cost the State an additional €150 million to meet pension costs and projected gratuity payments.

Disagreements between the Departments of Public Expenditure and Education have previously focused on underestimation of the funds required to pay for these retirements.

In addition, the growing school population and demand for special education is leading to the overall pay bill rising.

One source said the precise number of teachers required has been a source of tension. Latest figures show there are almost 800 additional teachers at primary and secondary level for the 2019/20 academic year, which appears to be more than had been originally forecast.

Last year the bulk of the Department of Education’s allocated €11 billion went to pay and pensions.

Martin Heydon, the chair of the Fine Gael parliamentary party, said Taoiseach Leo Varadkar had told the weekly meeting of TDs and Senators that the budget was “coming together”, but that negotiations in the last few days were, as usual, the most difficult.

Mr Varadkar added that the centre piece of the budget would be supports for agriculture, business and trade in the event of a no-deal Brexit.