Dept of Health accused of massive overruns 'against backdrop of poor delivery'

Then public expenditure minister Michael McGrath said it was a 'particular concern' that budget overruns were notified so late, especially when there had been a 'significant shortfall' in recruitment of additional staff. Picture: Jim Coughlan

The Department of Health has been accused of tallying massive overruns in health expenditure “against a backdrop of poor delivery on new developments”. 

In pre-budget discussions, the Department of Public Expenditure said there would be an effective 20% increase in core health spending with spending overruns only being notified at very late notice.

The department said it had six “key spending concerns”, including the fact it had only been made aware of a major deficit on core spending “in the last month or so”.

In a submission prepared for then public expenditure minister Michael McGrath, officials said the time available to tackle the “gross overruns” in budget was already running out.

It said these high levels of overspending would put the health budget in a “difficult position” for this year.

“It would also mean that additional funding has been embedded within the system without the delivery of planned capacity in terms of staff and beds,” said the submission.

It said officials had also just become aware of a “cash acceleration request” from the HSE for an extra €235m last summer.

The submission said: “The potential scale of cash need is very concerning against a backdrop of an outstanding expenditure plan as requested by [our minister].” 

A letter from Mr McGrath to Health Minister Stephen Donnelly detailed a “high level of concern” about spending.

Mr McGrath wrote: “I would like to reiterate the critical importance of you formulating a plan to manage expenditure appropriately for the remainder of [the year].” 

He said it was a “particular concern” that budget overruns were notified so late, especially when there had been a “significant shortfall” in recruitment of additional staff.

In an earlier letter, Mr Donnelly sought assurances on €40m in funding for 'reforming care pathways', which he said was key in 'avoiding bottlenecks' in hospitals. Picture: Gareth Chaney /Collins

Mr McGrath said given delays in recruitment, it would have been expected there could have been savings of up to €500m.

He wrote: “In this context, a breakeven position on core expenditure for 2022 would represent a significant risk as we look towards Budget 2023 and is not accepted by my department.” 

Mr McGrath said he understood the Omicron wave of Covid-19 had required significant levels of expenditure.

However, the minister said he needed assurances that the Covid response was being managed in a “sustainable way”.

He concluded the letter saying: “It is imperative that actions are taken to ensure that the health allocation is managed within the agreed parameters and that an overall plan in this regard is completed as soon as possible.” 

In an earlier letter, Mr Donnelly sought assurances on €40m in funding for “reforming care pathways”, which he said was key in “avoiding bottlenecks” in hospitals.

Mr Donnelly said: “Without a broad commitment that this funding will be available in 2023 and beyond, given the lead time associated with recruitment, it would not be possible to get the proposals off the ground immediately.” 

Asked about the records, a spokeswoman for the Department of Public Expenditure said: “It is normal practice that there is cross departmental engagement on expenditure management issues and funding priorities for following years.

“The funding allocations for waiting list initiatives are outlined in detail in the 2022 and 2023 expenditure reports.”