HSE services in Cork and Kerry face spending cuts after €37.7m budget overspend

HSE South West ordered to submit urgent savings plan after overspending by 7.6% in first quarter

Nationally, the HSE is facing a deficit of €250m up to the end of March, prompting spending reductions across the organisation. File picture

HSE services in Cork and Kerry overspent their budget by 7.6% between January and March this year, recording a deficit of €37.7m, and the region is now facing significant spending cuts.

The measures include tighter controls on spending for temporary agency staff and a recruitment freeze across non-clinical roles. The region has also been warned that further cuts may follow if spending is not brought under control.

This year marks the first full year in which HSE regions have operated independently of central HSE offices.

Nationally, the HSE is facing a deficit of €250m up to the end of March, prompting spending reductions across the organisation.

Region records significant overspend 

HSE chief executive Anne O’Connor has written to the HSE South West regional executive officer, Dr Andy Phillips, requesting an urgent high-level spending plan by Thursday, May 7.

In correspondence dated April 29 and seen by the Irish Examiner, Ms O’Connor said spending on agency staff was of particular concern.

Agency workers are temporary staff hired to fill roster gaps, and the HSE had previously planned to offer many of them permanent positions.

However, Ms O’Connor said the scale of the overspend meant “the indicative savings plans submitted to date are not of sufficient quantum or specificity to close the gap”.

Recruitment and agency controls introduced 

Dr Phillips was instructed to pause recruitment across all non-frontline, non-critical posts, which could include clerical and managerial roles.

He was also told that spending on agency staff must now receive written approval either from himself or a designated manager. According to the memo, delegated approval can only apply at sites where there is “good control” of spending.

In addition, the region must introduce tighter controls on discretionary non-pay spending categories, with details subject to assessment.

Dr Phillips has also been directed to produce a plan outlining how HSE South West will break even by the end of the year.

The plan must include “a credible, fully quantified savings plan” detailing monthly spending reductions.

“The savings plan is to be submitted by 7th May 2026. The schedule of discretionary spend to be paused or curtailed is to be submitted by 14th May 2026. The updated year-end projections are to be submitted by 15th May 2026,” the memo stated.

Weekly action-tracking reports must also be submitted to Ms O’Connor in her role as chief executive.

Further restrictions possible 

The current measures are described as Tier 3 restrictions, but Ms O’Connor warned that Tier 4 controls could be introduced if spending does not improve.

These include, she said: “amendment or withdrawal of current financial delegations and the transfer of specified decision-making powers to the HSE Centre.”

The Irish Nurses and Midwives Organisation (INMO) has sought clarification from HSE South West on whether the recruitment freeze could extend to nursing roles.

Industrial relations officer Liam Conway said the union had been told further details were not yet available.