A government that cannot budget credibly is not a credible government

The fundamental function of government is to deliver a budget and run the state accordingly. The budget announced on October 10th is precedent-making for the wrong reasons. The Government does not share collective responsibility for it, and the civil and public service have in-part said it cannot do what it provides for with the money allocated. The Minister for Health, Stephen Donnelly instantly resiled from a health budget for 2024, which cannot deliver existing levels of service or ELS in government speak. The CEO of the HSE, Bernard Gloster, doubled down on that.

The Taoiseach’s claim in the Dáil on Wednesday that the Government “accepts collective responsibility for the budget” is palpably untrue. This is a moment of unprecedented institutional incontinence on an issue that goes to the heart of government’s capacity to lead. He as much as gave the game away when he said, “there will almost always be a requirement for a supplementary” and 2024 is “not going to be any different”.

By calling out the blindingly obvious it may be impossible for the HSE to sign off on a service plan for 2024 that is legally required to indicate the type and volume of services provided, in circumstances where it doesn’t have sufficient funds for its plans and won’t cut its cloth to measure. This is a moment of inflection for our public administration and a moment of consequence politically. The system of budget-making we inherited at independence is visibly fractured.

There are layers of dysfunction behind this situation. It goes back to last year’s budget for 2023 and the contested but unresolved narrative that the health budget then was fit for purpose. That contest was hard fought between the Department of Health and the Department of Public Expenditure, between the Department of Health and the HSE, within the HSE board and between the political and official actors in those institutions.

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Though one member resigned, the HSE board buckled to accommodate financials which, as predicted, were fiction. That is the origin of an accrued deficit of €1.5 billion for 2023

There were starkly different views about how much money was required to deliver what was planned. It was maximalist in the HSE and minimalist in the Department of Public Expenditure. The HSE, however, can have no service plan except one approved by the Minister for Health. Though one member resigned, the HSE board buckled to accommodate financials which, as predicted, were fiction. That is the origin of an accrued deficit of €1.5 billion for 2023.

It was an indictment of all concerned but paradoxically a splendid example of the system working as it should. With the unfortunate exception of a right-thinking member of the HSE board who resigned, everyone else kept their head down and their mouth shut so the system could trundle on, with its authority but not its credibility intact. Care was taken nonetheless to provide an exit strategy. On pages 72 and 73 of the National service plan 2023, financial risks were itemised to the tune of 10.1 per cent of a €21 billion budget, more than covering the deficit for this year. It sensitively said in the plan that it is “not practical to provide the usual level of assurance around the extent and overall affordability of likely 2023 activity”. This was explicitly signed off by the Department of Health and implicitly by Public Expenditure. It bridged the gap between accountancy and abstract art and left a trail of breadcrumbs.

[ Q&A: What’s the problem with the health service budget? ]

All might have been well if the usual civilities were maintained, but they were not. Months late, the 2023 plan went unpoliced, in a system where the HSE and both departments meet regularly in the Health Budget Oversight Group. Curiously, its minutes after May 2023 remained unpublished at the time of writing (however, the minutes for June and July went online subsequently.)*

Just as a government worthy of the name must pass a budget that is credible, the health service must be able to live within its allocation. That requires willingness to pull back on activity from early on in any year. There was neither the will nor capacity to do so and therein lies the shattering of credibility.

The HSE can’t control the voluntary hospitals. The Department of Health can’t control the HSE, the Department of Public Expenditure can’t control the Department of Health and the Government can’t exercise the self-control of collective responsibility

All this was business as usual, or at least the usual dysfunction. Beating up the HSE and Department of Health in media briefings in the run-in to Budget 2024 was both partly justified, and a serious political mistake. Told by megaphone that there was no room for them in the lifeboats on budget day, which were full of money for other causes, they fended for themselves and, led by their Minister, swam for shore. Having cooked the books together, there was dismay at the lack of solidarity on budget day.

The budget story is now about health. A lot of money was spent on universal entitlement for political gain, but the political shine is gone. It leaves the Department of Public Expenditure diminished. It ruptured traditions of compliance with the pieties of budgetary compliance, if only as fiction. I have no qualms about cutting services to stay in budget, but the Government won’t dare and in the health system there is no fear.

The HSE can’t control the voluntary hospitals. The Department of Health can’t control the HSE, the Department of Public Expenditure can’t control the Department of Health and the Government can’t exercise the self-control of collective responsibility. A government that cannot budget credibly is hardly a credible government at all.

* This article was updated to add a link to the newly published minutes of the Health Budget Oversight Group