Documents reveal dispute over out-of-kilter Department of Health budget plan

Documents reveal dispute over out-of-kilter Department of Health budget plan

Secretary-general at the Department of Health Robert Watt.

The Department of Health was told that budget estimates it submitted were so out of kilter with what had been agreed that they could not even be considered for ministerial engagement.

In the run-up to last year’s budget, the under-fire department had submitted a seven-page summary of its financial needs to the Department of Public Expenditure.

However, public expenditure officials said the figures submitted were “not in line with the fiscal parameters” that had been set out in correspondence to them or preliminary discussions.

An email from the Central Expenditure Policy and Reporting Division said: “These are certainly not the basis for ministerial engagement.

We would ask that you reconsider the bid over the weekend and submit a revised bid in line with the fiscal parameters.

In response, the department presented a more detailed 37-page pre-budget submission, according to records released under Freedom of Information.

The Department of Public Expenditure said the new estimates were welcome and that they were the basis of “positive engagement”.

However, officials warned that Minister Michael McGrath “cannot countenance” a supplementary budget given the level of resources already allocated to health in Budget 2021.

It also warned that allocations for healthcare capacity development and implementation of Sláintecare must be used for the purposes for which they were intended.

An email said: “If for any reason this does not turn out to be the case, the corresponding allocations will not necessarily be repeated in 2022.”

Officials from the Department of Public Expenditure also wrote of an “information deficit” on expenditure last year, particularly over promises on staff.

“We need information on what has been delivered and what has not,” said an email between the departments, “and we consider that there are significant savings which have not been quantified, for example in relation to the latest outturn projects that recruitment will be 7,000 below target”. 

The email also said fiscal parameters had been clearly set out in a letter to the Department of Health Secretary-General as early as July of last year.

The department had been asked to deliver existing services in 2022 within those budgetary guidelines.

However, the email said: “Despite this, the ELS [disability service] allocation sought is far beyond (double) the total allocation allowable under the SES [Summer Economic Statement] and leaves no provision for new developments or for Covid.” 

The Department of Public Expenditure sought a wide range of clarifications including the possibility of double-counting in disability services and other areas, and the overestimation of other likely costs by using average figures.

In the pre-budget submission, the Department of Health had warned of considerable “pay cost pressures” that would arise this year.

It said a combination of national pay agreements, salary increments, and industrial relations issues were likely to lead to significant extra bills.

The heavily-redacted document said as well that there was a shortfall for pension provision with underfunding carried forward and likely increases in payments and volatility around lump sums.

It also warned acute hospitals were likely to face record day cases, inpatient cases, and emergency presentations throughout this year and last.

In a statement, the Department of Health said “robust discussions” had taken place in advance of the budget.

A spokeswoman said: “Proposals for health expenditure for the coming year were discussed and considered by the two departments.” 

She said monthly engagement also takes place between the Department of Health, the HSE, and the Department of Public Expenditure as part of the Health Budget Oversight Group.

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