I thank the Deputy for his words of congratulations.
Vote 39 for the Health Service Executive, HSE, is showing a net current deficit of €260 million against profile at the end of September. However, receipts from the United Kingdom which were profiled for November were received in September and when they are excluded, a net current deficit of €432 million emerges.
In income and expenditure terms, the HSE is reporting a year to date net expenditure figure of €7.039 billion to the end of July against a budget of €6.754 billion, leading to a variance of €285 million. The acute hospital sector accounts for €160 million or 57% of the overall deficit. Employment agency costs were €194 million, up €63 million on the figure for last year, a significant element of which was incurred in acute hospital services. The primary care division had an overall deficit of €54 million, with local demand-led schemes a key area experiencing excess expenditure.
Undoubtedly, 2014 is proving to be a financially challenging year for the health service. While the budgetary targets this year are particularly constrained, it is important to recognise that demanding financial and resource constraints have applied in each of the past number of years as a direct consequence of the crisis in the public finances. The cumulative impact of this unprecedented period of financial and resource restraint has resulted in reductions in the health service budget of €1.5 billion since 2008, with numbers employed reduced by 14,000 over this period.
These challenges come at a time when the demand for health services is increasing each year which, in turn, is driving costs upwards. Despite these resource reductions, the HSE has managed to support increasing demand for its services arising from such factors as population growth, increased levels of chronic disease, an ageing population, increased demand for prescription drugs and new costly medical technologies and treatments.
Currently, it is anticipated that a Supplementary Estimate in excess of €500 million will be required to support services in 2014. This is based on costs to the end of July and takes account of the HSE’s best estimate of likely expenditure to year end, mitigated by ongoing cost containment plans and income generation. It is important to stress that, as with any forecast, there is some degree of uncertainty, particularly given the scale of the overall HSE cost base, the complexity of the services and the lack of a national financial system. This forecast deficit excludes any overrun on the State Claims Agency, which relates to medical negligence payouts.
The HSE continues to work closely with my Department to mitigate the projected deficit to the greatest degree possible.