Last-minute dispute over healthcare spending as budget day approaches

A last-minute budget row has broken out over healthcare spending in advance of what is expected to be one of the largest non-Covid budgets.

The Department of Health has been offered a total increase of €1.1 billion, which would take the healthcare budget to just over €22 billion — but would have to cover the cost of providing existing measures as well as any new spending.

Sources said the budgetary package on offer would leave little money for Minister for Health Stephen Donnelly’s priorities, such as expanding free contraception, building a State-funded IVF service, or further reducing or eliminating hospital charges.

The cost of standing still in terms of service provision — maintaining Existing Level of Service (ELS) — would use up the “vast, vast majority” of the €1.1 billion, a source argued, with Mr Donnelly seeking more to fund his policies.

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New exchequer figures released on Friday indicated a surplus of tax over spending at just over €4.4 billion, meaning a package of once-off measures topping €3 billion is now almost certain. A contingency fund will also be set aside for next year.

Despite the size of the budget, senior sources warned the room for permanent increases is tight, with many healthcare measures unsuited to once-off spending.

There are concerns elsewhere in Government over progress in health, including over the pace of hiring in the HSE and the absence of a deal on a new consultant contract.

With another utility, Flogas, hiking prices by 17-23 per cent on Friday, and a large cost-of-living protest march planned on Saturday, pressure is growing on the Government to meet voter expectations in advance of a winter when the crisis will dominate.

On Friday Ministers were in negotiations with the Department of Public Expenditure and Reform with talks expected to conclude on Saturday.

Final decisions on the shape of the budget and cost-of-living package — including the level of welfare increases, mooted at up to €15 — will be made on Sunday when Mr Donohoe and Mr McGrath meet Coalition leaders. Officials expect to be tying up loose ends until Monday evening. Mr Donohoe said once-off measures would be funded by the surplus but it was “appropriate to keep part of [it] in reserve to respond to other challenges that may yet come”.

Mr Donohoe will seek to budget for a surplus next year, with a €500 million contribution to the rainy day fund also due to be resumed.

Payments expected to amount to about €600 per household to assist with utility bills this winter are to be staged in several payments across the heating season and the Government will make targeted welfare payments, including a double child benefit payment.

The finishing touches to a new scheme to support businesses were being worked on this weekend, with one senior source saying most businesses in the country would be eligible for payments. However, the precise details are still being nailed down.

Figures in the pre-budget White Paper show that before any budget measures, a large budget day surplus of €11.8 billion is expected next year. This will be sharply reduced by a budget day tax and spending package which had been signalled to be about €6.7 billion and could be slightly higher. The exchequer is being supported by soaring corporation tax revenues, expected to top €21 billion this year.