Health service faces crisis budget

Embattled Health Minister James Reilly received a fresh blow to his credibility last night as it emerged his department will need emergency intervention to tackle chronic overspending.

In an embarrassing about-turn, a crisis supplementary budget was announced to deal with a health deficit which is racing towards €400m at year’s end, despite repeated Government claims such a move would not be needed.

Dr Reilly, already facing intense criticism over his botched handling of the HSE inquiry into the death of Savita Halappanavar, met Public Expenditure and Reform Minister Brendan Howlin last night to discuss urgent ways to tackle the overspend. Mr Howlin did not give details of the funds involved, but said it would be “a tiny, tiny, tiny” fraction of the health department’s €13.5bn budget.

“I can confirm it is likely there will be a supplementary budget for health,” Mr Howlin told the Dáil.

His spokesperson would not give details, but it is known the supplementary budget will be separate to measures to be announced in the Dec 5 Budget.

The mounting overspend in health has been a source of continued tension within the Coalition. When Mr Howlin wrote to the health minister demanding he get a grip on the situation, he was met with comments about the Croke Park Agreement.

The health minister’s failure to control the overspend was a source of concern for the outgoing head of the HSE last July, and cited as a problem by Roisín Shortall when she quit the Government in September in anger at the direction of policy.

Sinn Féin’s deputy leader Mary Lou McDonald described the situation as “bizarre”, with a crisis budget needed just a fortnight ahead of the full Budget.

Fianna Fáil said Dr Reilly’s financial judgement could not be trusted.

Meanwhile, FG TDs are expected to seek clarity on plans to extend the Croke Park deal up until 2016.

Mr Howlin has invited unions to talks next week in an effort to save €1bn over the next three years in the public service pay and pensions bill.

Any deal is not expected to cut pay or force redundancies across the public sector. Some allowances will be abolished, others will remain in place.

Any planned savings are expected to focus on increased working hours without any extra pay.

One Fine Gael backbencher said last night that there will have to be “major concessions if this is to wash” with the party, including the freezing of increments.

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