HSE warned on budget overrun consequences

Planned new health service initiatives could be put on hold and hospital building programmes might have to be deferred if the Health Service Executive fails to live within its budget next year.

The HSE needed a €600 million supplementary estimate this year after overrunning its budget. There have been overruns in most years recently.

HSE director general Tony O'Brien has told senior managers there will be no supplementary estimate next year to bail it out and they should run their services on the basis of the budgets they receive – not the budgets they wished to receive.

Minister for Health Leo Varadkar said the best way to avoid running out of cash was for hospitals and health agencies to stick to their budgets. He said, however, there were no plans to cut services.

He said options for dealing with any overspending that emerged next year included reapportioning money within the existing health budget, deferring new health programmes or delaying capital projects. “That is something no one wants to contemplate but it is an option.”

Mr Varadkar said another alternative was for the health service to go to the Government and see if it could be given any savings that were generated in other departments.

“Then there’s the option under multi-annual budgeting of having a first charge on next year’s budget.”

Spending plan

He told senior HSE staff at the launch of the organisation’s spending plan for next year the best way of avoiding any of these options was “to stick to the budget as best you can”.

The main health service capital projects scheduled to be funded next year are: the new national children’s hospital, assuming it receives planning permission; the new national maternity hospital; and the upgrading of public nursing home facilities.

The health service has received an increase of about €817 million in additional funds for next year but the vast bulk of this will go on maintaining existing services.

The Irish Times reported earlier this week the HSE had warned of a funding shortfall next year of about €100 million in acute hospitals.

Minister for Public Expenditure and Reform Brendan Howlin insisted there could be no supplementary estimates in 2016.