Ministers left red-faced over inability to predict scale of HSE overspend

Ministers were left red-faced last night as they admitted being unable to predict the scale of the spiralling HSE overspend as the IMF fired a warning shot over the crisis engulfing health finance.

Brendan Howlin, the public expenditure minister, could only say he did “not expect” the medical spending black hole to hit the €500m mark some experts predict.

The failure to get a grip on health spending has caused major tensions within the Coalition as well as conflict between Health Minister James Reilly and the former head of the HSE Cathal Magee.

Mr Magee resigned last July after repeatedly warning Mr Reilly that urgent action was needed to address the financial crisis.

Despite demands from the troika, Mr Howlin could not give a forecast for the year-end overrun.

“The expenditure target is the expenditure target, and we won’t know until the end of the year where that is. Both Minister Reilly and my department will work night and day to address the current overspend and to bring it down to the smallest number possible. The troika is interested in the ceiling of expenditure — the cash ceiling across all departments.” he said.

Despite Mr Howlin’s attempts to downplay the troika’s concerns, the IMF’s Irish mission chief, Craig Beaumont, made a clear point of blaming “structural” failings in the health budget for the overspend.

“Within the budget there have been some overruns in health and social welfare. The overruns in social welfare mostly reflect higher than budgeted unemployment but there are more structural issues in the health sector and the Government is committed to take durable measures to bring health spending back within a ceiling in 2013,” he said.

The troika, which has completed its latest examination of Irish government bookkeeping, singled out Mr Reilly and demanded that he strengthen the financial management of his department.

Meanwhile, Mr Noonan said a joint blueprint on how Ireland could exit the bailout programme would be published with the troika before Christmas.