Unknown overrun by HSE delays agreement on budget

Delays in arriving at an exact figure for the overrun on health spending this year have led to internal tensions in the Coalition as Ministers enter the crucial final week of negotiations before the budget next Tuesday.

The exact amount by which the HSE's financial allocation of €13.4 billion for 2013 has overrun has not been identified. The absence of a precise figure has affected negotiations on cuts, not only within the Department of Health, but in relation to other major spending departments, including Social Protection and Education.

The two key Government figures in the process, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin, will present a memo to colleagues at this morning's Cabinet meeting outlining the overall budget adjustment figure.

It is expected to be less than €2.8 billion, and could be less than €2.7 billion.

While negotiations on the overall framework have gone smoothly, people close to the process confirmed that not enough headway has been made in negotiations with individual departments because of the uncertainty over figures.

“Less progress [than anticipated] has been made so far and it has a potential knock-on effect for everybody,” said a senior Government source last night, referring to the absence of a figure for the health spending overrun.

A spokesman for Minister for Health James Reilly last night confirmed that the overrun had not been finalised yet. It was claimed that a Sunday newspaper report of a €400 million overrun was wide of the mark and that Dr Reilly had said as recently as last Friday he was still hopeful of delivering a figure as close to the targets as possible.

Demographic costs
The health budget was affected by a 1 per cent increase in demographic costs (the effect of an ageing population) as well as a 3 per cent increase in the number of people being referred into hospital from emergency departments.

It is expected that a further Cabinet meeting will be held on the budget on Thursday and a final meeting may take place next Monday, the day before Mr Noonan delivers his budget speech in the Dáil.

Senior Government officials outlined the budget’s framework to EU officials over the weekend. According to sources, no issues or red flags were raised about the Government’s proposals.

The other key negotiations involve a €440 million reduction in the budget of Minister for Social Protection Joan Burton and a €110 million adjustment in the Department of Education budget.

Minister for Education Ruairí Quinn and and Ms Burton have sought some easement on the overall adjustment but any change will be contingent on the final figures for health spending.

Speaking in Co Sligo yesterday, Taoiseach Enda Kenny said the Government had been very consistent about the need to achieve its targets while any flexibilities “that may arise” would be used to help with job creation.

He added that the scale of that adjustment would be finalised, in the next week or so by the Government. “That is the issue now,” he said.