HSE plan to cut agency staff spending by €250m may hit services

Key health services may be hit by plans to cut €250 million from spending on outside staffing agencies. The cuts are being considered by health officials and the Government.

Pay costs will also be cut by €80 million through the conversion of agency staff to Health Service Executive (HSE) employees, according to the HSE service plan for 2024.

It is understood that proposals put forward for inclusion in the plan in recent weeks envisage a commitment to cut €250 million in spending on pay with outside staffing agencies.

The attempt to rein in the health budget by making severe cuts to agency spending increases the risk of interruptions to key services, especially next winter.

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Tensions over spending in the health service led to sharp divisions within the Coalition last autumn, which have not been resolved. The plan says the cost of running the health service at its current level is likely to exceed the funding allocation for this year, according to one source, though the size of the shortfall is not specified.

The Government was due to consider the HSE’s National Service Plan (NSP), which lays out its annual roadmap for spending and service provision, as soon as Tuesday’s Cabinet meeting.

The plan will outline a range of measures to manage the risk around the expected spending pressures this week, including the agency staffing measure, while also promising improved productivity through a new taskforce being jointly run by the Department of Health and HSE.

A report by the Parliamentary Budget Office published last year showed the costs of hiring staff from agencies increased by 139 per cent over the 2015-2022 period to €619 million.

The plan warns of the impact of demographics on the cost of delivering health services, given a predicted 22 per cent increase in the number of over-65s over the next seven years and a tripling in the number of over-80s in the coming decades.

While there is provision for the appointment of 2,200 additional staff, this is a sharp drop on the almost 7,000 staff added by the HSE in 2023.

It is understood the NSP will also outline that the numbers on trolleys in emergency departments fell 8 per cent last year when compared with 2022, and by 22 per cent in the second half of the year compared with the same period the previous year. It outlines that waiting lists fell in both 2022 and 2023, and will set out measures to bring them down again this year.

Separately, the HSE is planning a major reorganisation of top management in the health service as moves to transfer responsibility for many functions to the regions gather pace.

Key posts in the senior management executive of the HSE are being terminated as part of plans by chief executive Bernard Gloster to halve the number of top managers in the organisation.

While this is not expected to happen immediately, existing posts such as chief operating officer and chief strategy officer will no longer exist at HSE headquarters in Dublin.

Six regional executive officers, each responsible for public health services in their areas, were appointed in late 2023. Reporting directly to Mr Gloster, they will run the promised HSE Health Regions, which are due to start operating this month.

While hoping to “shrink the centre”, Mr Gloster anticipates the regionalisation process will have a “net zero” impact on headcount in senior management.

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