Drip-feeding funding: The politics of not budgeting for runaway health spending

Perhaps Róisín Shortall was trying to be charitable.

“We have a situation now where it is easy to point the finger at the Minister for Health,” the Social Democrats health spokeswoman and Dublin North-West TD told the Dáil on Thursday afternoon during a debate on health funding.

“I understand the Minister’s disappointment. It is quite obvious irrespective of the speech he read out. I share that disappointment but, more than anything, the public shares the disappointment in the Government’s failure to adequately fund our health service.”

God love him, Shortall was saying. It’s not Stephen Donnelly’s fault. He’s only the Minister. Actually, maybe she wasn’t trying to be charitable.

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There’s history there. Donnelly was one of the founders of the Social Democrats with Shortall and Catherine Murphy. But they fell out, spectacularly. Donnelly joined Fianna Fáil and became Minister for Health. This is the job that Shortall, who was once a junior minister at the Department of Health and one of the principal architects of the Sláintecare reform plan, would most like in Government. There is an edge there.

“Didn’t she run out of the department when she was there?” asked one Donnelly supporter, a reference to Shortall’s resignation as a Labour junior minister in 2012.

On the day after the budget, while the Dáil was still discussing its merits, Donnelly spoke to The Irish Times and admitted that the health budget for next year would not be sufficient

“He’s not up to it. Everyone can see it,” sniffs a Donnelly critic in response. Even in the debate over healthcare funding – technocratic, multilayered, expensive – personality clashes are never far from the surface.

The Dáil exchanges were hardly the first arguments about the health budget since it was announced last week. The interventions of HSE chief executive Bernard Gloster, it was reported that morning, had infuriated ministers.

Gloster has been saying since last week that the health service he runs was not given enough funding in the budget for next year. But he was hardly on a solo run. On the day after the budget, while the Dáil was still discussing its merits, Donnelly spoke to The Irish Times and admitted that the health budget for next year would not be sufficient.

In fairness to Donnelly, to have said anything else would have been ridiculous. In pre-budget negotiations, he asked for substantially in excess of €2 billion extra, saying this was the minimum necessary to maintain existing services. He received €800 million. In other words, he was criticising the budget he had agreed as a member of Government just the day before. This is, on any level, extraordinary.

“Stephen would want to be careful,” said one Government insider, “that he doesn’t talk himself into a situation where he has to resign.”

The political fallout has been predictable. Within Government, there has been an outbreak of finger-pointing at the Department of Health in general and Donnelly, along with some of his senior officials, in particular.

[ HSE freezes recruitment of junior doctors and other support staff due to shortfall in budget funding ]

Outside Government, the criticism from opposition, interest groups and health unions has been growing.

Sinn Féin health spokesman David Cullinane said: “The truth is, the HSE and the Department of Health have already estimated what is required to pay for existing levels of service next year. And the Government made a deliberate decision not to provide the adequate funding.

“This will have catastrophic consequences including planned new hospital beds sidelined, vital frontline posts scrapped, clinical strategies unable to even stand still and very few new developments to tackle waiting lists and the crisis in emergency departments.”

There is little doubt that health will get more money. At present, the expectation is that a supplementary estimate worth something in the region of €1.1 billion will be allocated to the Department of Health

But Minister for Public Expenditure Paschal Donohoe, one of the two Budget 2024 ministers, has let it be known that he is not for moving – not yet anyway. The message has been that everybody has to live within their budget. Even health.

So what happens now?

There is little doubt that health will get more money. At present, the expectation is that a supplementary estimate worth something in the region of €1.1 billion will be allocated to the Department of Health to cover partially the overspend this year. This is effectively a bailout, but it’s one that senior health sources say they warned last year would be needed. Just as they are warning this year – albeit rather more publicly – that they will need a bailout next year.

But wherever the numbers land, it’s clear that health will be squeezed for money all next year. That will be a political problem.

But what is the alternative? “They can’t get two billion extra every year. They just can’t,” says one senior Government figure.

The pretty widespread suspicion is that the Department of Public Expenditure is keeping health on a short leash by constantly needing supplementary estimates. They will overspend the budget anyway, the argument goes. So why not have them overspend a smaller budget than a larger one? Health sources respond that this approach is entirely indifferent to the effect on patients. The HSE is not, after all, spending the money on lollipops for itself; it is spending it on providing services to patients.

Donnelly’s relationship with Donohoe is not difficult; Pleasant Paschal, as Government insiders attest, gets on with everyone, even when he’s saying no to them

But this row is not just about numbers. There’s always a personal element in politics, and the politics of healthcare budgets is a congested mosh pit of jostling personalities and their priorities. Donnelly is not, it is said, overly popular with his Government colleagues, nor with his party. Ministers have been complaining that the Department of Health’s overspending is responsible for the relative tightness of their own spending settlements – a feature of the budget that was overlooked in the splash of one-off giveaways last week.

But Donnelly’s relationship with Donohoe is not difficult; Pleasant Paschal, as Government insiders attest, gets on with everyone, even when he’s saying no to them. What is true, however, is that Donnelly has few allies in Government and no constituency in his party. Nor does he have the unqualified confidence of his party leader Micheál Martin, who thought long and hard about replacing him in last year’s reshuffle.

The relations between senior officials are said to be worse. Robert Watt, the top civil servant in the Department of Health, formerly headed up the Department of Public Expenditure, where he was a celebrated hardliner on health budget overruns. The irony of his current stance is lost on absolutely nobody in Government. David Moloney, the secretary general of the Department of Public Expenditure who has rebuffed many of the health requests, is a Department of Health old boy. All that has added a certain frisson to the pre-budget exchanges, insiders say.

Is the health budget simply going to keep growing at this pace every year? “The short answer is yes,” says Brian Turner, a UCC economist who specialises in healthcare. “We have a growing and ageing population, new medical technologies are more effective but more expensive.”

He estimates that “just to stand still” will cost an additional 5 to 7 per cent a year – and that’s before any new services are considered.

“Can they just keep on giving more and more money to health? If they want services to stay as they are, they’re going to have to,” says Turner.

There is only one thing everyone agrees on: this row will be repeated many times in the future. We won’t have long to wait – the supplementary estimate for health will come before the Dáil in December.

[ Era of f***-you budgeting and health overspends must end ]