Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach debate -
Tuesday, 14 Nov 2023

Budget 2024 Expenditure Ceiling and Resource Allocation for the Department of Health and HSE: Discussion

An Cathaoirleach

Apologies have been received from Senator Higgins. In today's session the committee will examine the expenditure ceiling and resource allocation to the Department of Health and HSE in the context of budget 2024. We are joined by Mr. David Moloney, Secretary General, Department of Public Expenditure, National Development Plan Delivery and Reform; Mr. Eoin Dormer, principal officer, health Vote; and Ms Niamh Callaghan, principal officer, expenditure and policy unit.

I draw the witnesses' attention to a note on privilege. Those participating on the campus of Leinster House will have full privilege. Those not on the campus may only have limited privilege. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite the Secretary General to make his opening statement.

Mr. David Moloney

I thank the Chairman and members of the committee for affording me the opportunity to make an opening statement. The Department of Public Expenditure, National Development Plan Delivery and Reform plays a key role in developing and monitoring overall expenditure in line with Government objectives and agreed fiscal policy. The Government expenditure ceiling, which includes all gross expenditure funding allocated to all ministerial Vote groups and any funding to be allocated for in-year developments, is decided on by Government by request of the Minister for Finance. These ceilings are set and monitored as part of the whole-of-year budgetary process.

In spring each year, the Minister for Finance, in consultation with the Minister for Public Expenditure, National Development Plan Delivery and Reform, submits the annual update on the stability programme to the European Commission. The stability programme update, SPU, on the basis of existing policy, sets out fiscal projections and the policy position in advance of the annual budget. Following the SPU, the national economic dialogue is held in June. It provides a valuable forum for an open and inclusive exchange of views on the competing economic and social priorities facing the Government today and in the future.

In summer, the summer economic statement, SES, and the mid-year expenditure report, MYER, are published. The SES is a key milestone in our budgetary timetable. It sets out the Government’s fiscal and expenditure strategy for the year ahead and provides an outline of the resources that will be available in the context of the budget. The MYER, published by my Department following the SES, provides more detail on the expenditure strategy and sets out the baseline position for ministerial expenditure ceilings ahead of the budgetary process.

Throughout the period until October, my Department engages with all Departments across government to deliver the budget in line with the parameters set out in the summer economic statement. This is achieved through engagement with the individual Departments on their requirements and plans for the year, and results in the ministerial expenditure ceilings. These are then agreed by the Government and the Dáil in due course as part of the budget and Estimates process, of which members are aware.

In terms of budget 2024, a number of events over the past few years continue to have a real impact on our public service and those living in Ireland. In setting out this year’s budgetary package, as part of the summer economic statement, the Government took a balanced and responsive approach, including increasing the level of core expenditure growth from 5% to 6.1% and providing an additional package of €4 billion of non-core expenditure to address external challenges, including those impacted by the war in Ukraine and the legacy impacts of the pandemic. This planned and careful management of our public expenditure allows the Government to smooth out the impacts of elevated inflation and protect core public services, deliver significant and essential infrastructure projects through the national development plan and respond to short-term external challenges, while limiting the potential to add to inflationary pressures. Following the Estimates process, budget 2024 set out €91.2 billion in core expenditure to deliver the everyday public services. In addition to this figure, an increased allocation of €4.5 billion was made for non-core expenditure to address the externally-driven challenges. This allowed for the allocation of €1 billion of non-core expenditure to the Department of Health.

The Department of Public Expenditure, National Development Plan Delivery and Reform engages on an ongoing basis with all Departments and will continue to monitor and develop our budgetary process with a view to ensuring that value for money is delivered across Government projects and programmes. Managing the delivery of public services within budgetary allocations is, of course, a key responsibility of each Minister and his or her Department. My Department is in regular communication with all Departments to ensure expenditure is managed within the overall fiscal parameters. There are a number of supporting processes and procedures in place, including the monitoring of drawdowns from the Exchequer. Key data and information are published monthly with the Exchequer returns as part of the fiscal monitor and quarterly reporting to the Government is provided by the main spending Departments.

For health expenditure, the Department works closely with the Department of Health through a series of interlinked oversight arrangements.

These include monthly financial performance reports, quarterly expenditure memos to Government, meetings of the health budget oversight group and regular engagements across all areas of health service delivery. This oversight takes full account of the Health Acts, which set out the legal framework for health expenditure. Under these Acts, the Minister for Health sets the expenditure levels for the HSE, that is, the net determination, and the HSE is required to manage services in line with that net determination.

In recent years, there has been a prioritisation of health with overall health spending doubling since 2016. According to the OECD, in 2020, Ireland ranked first in the EU for expenditure on healthcare as a proportion of our national income and as a proportion of total Government spending despite our relatively young population. The total health allocation in budget 2024, as agreed by Government, is €22.5 billion, which is an increase of €1.142 billion, or 5.4%, on 2023. The non-core allocation I have mentioned provides both time and funding for the Department of Health and the HSE to address specific acute sector funding pressures, to improve the resilience of hospitals and to improve financial governance in the acute sector. Department officials are working closely with our colleagues in the Department of Health and the HSE to agree an approach for the use of these funds for ministerial approval.

I assure the committee that the Department of Public Expenditure, National Development Plan Delivery and Reform is fully focused on working with all Departments to manage public expenditure within the overall envelopes set by Government. I thank the committee for its attention and I am happy to take questions.

Deputy Pearse Doherty

I welcome the Secretary General and officials to the committee. I appreciate them coming before us to deal with issues in respect of health. While I am conscious that we are talking about percentages, existing levels of service, ELS, and, in some cases, billions, the real impacts of the decisions taken by Government just a couple of weeks ago are now being felt. They are being felt in the recruitment ban for nurses who want to return from Australia and people who had been offered permanent positions within the health service and who have now had those offers withdrawn. That is on top of the fact that we have far too many on waiting lists and trolleys every day.

I will start by seeking some understanding of the dispute within Government between the Minister for Health and the Minister for Public Expenditure, National Development Plan Delivery and Reform. I understand that, at the end of the day, Deputy Donohoe made the recommendation. What is the ELS provision in the budget for next year?

Mr. David Moloney

As the Deputy will know, budget outcomes are agreed by all of Government. The ELS provision for the Department of Health in 2024 is €708 million.

Deputy Pearse Doherty

The ELS provision for last year was €796 million. Is that correct?

Mr. David Moloney

It was in the order of €900 million last year.

Deputy Pearse Doherty

Would Mr. Moloney accept that a higher percentage of ELS funding was provided last year than will be provided next year?

Mr. David Moloney

With regard to the comparison with last year, disability services were included in that figure last year. This year, disability services have been moved over to the Department of Children, Equality, Disability, Integration and Youth, which affects the comparison.

Deputy Pearse Doherty

Does Mr. Moloney accept that, even when disability services, the ELS provision for which was €131 million this year, are included, a higher percentage of ELS funding was provided for health last year than will be provided this year?

Mr. David Moloney

Of the lower base, it would have been a higher percentage.

Deputy Pearse Doherty

Even though we have an aging population and more people, as a percentage, less is being provided for ELS next year than was provided last year.

Mr. David Moloney

The ELS figure reflects a number of things including changes in prices and pay rates and run rates in particular areas. One of the factors that had an impact on the ELS last year in particular was the allocation of pay. When we talk about the ELS figure of €708 million for 2024, that does not include an allocation for pay under a new pay deal. There is an allocation for the existing pay deal, the extension to Building Momentum, but there is no allocation for a potential replacement to that deal, which ends at the end of this year. Among other factors, that has an influence on the ELS figure.

Deputy Pearse Doherty

What did the Department of Health request as regards ELS for 2024? We know the Department provided it with €708 million but what was the ask?

Mr. David Moloney

I do not have the figure to hand for the ELS on its own but I recall the Secretary General of the Department of Health telling the Joint Committee on Health that it was about €2 billion.

Deputy Pearse Doherty

I believe that is the figure he gave the committee. The Minister for Public Expenditure, National Development Plan Delivery and Reform obviously did not agree with that figure.

Mr. David Moloney

The process is that the health team and officials from the finance unit and other areas of the Department of Health sit down and work through the numbers during the period between the summer economic statement and October. The go through each of those areas. That happens for every area. The ELS estimates provided by Government Departments are generally higher than the figures that are finally agreed. It is fair to say that is part of the process and that happened with the Department of Health this year.

Deputy Pearse Doherty

I accept and would expect that, in some cases, Departments ask for a higher level of funding for ELS than might be required or granted but, in this case, the ELS provision the Department of Health asked for was three times what the Minister, Deputy Donohoe, eventually provided. We are talking about a difference of €1.3 billion. No other Department would have seen as great a divergence from what it asked for in terms of ELS provision.

An Cathaoirleach

I will have to interrupt the Deputy. There is a vote in the Chamber and we will have to suspend the meeting.

Sitting suspended at 2.47 p.m. and resumed at 3.04 p.m.

An Cathaoirleach

Deputy Doherty may resume.

Deputy Pearse Doherty

I apologise to Mr. Moloney for the disruption. We were talking about existing levels of service and the provision in this regard by the Minister, Deputy Donohoe, in the health Vote. Does Mr. Moloney acknowledge that of the requested €2 billion, his Department provided €708 million? I have made the point that Departments would normally, I imagine, ask for more than what they get. Do many Departments ask for a difference of €1.3 billion? Did Mr. Moloney accept the bona fides of the CEO of the HSE and the Secretary General of the Department of Health when they went into negotiations? I presume there was a period of negotiations in which they outlined what underpinned their request.

Mr. David Moloney

In terms of the scale of difference, the reality is that it is not that unusual for Departments to ask for much larger numbers than what is proposed. The difference of €1.3 billion reflects the scale of the health budget. It is a huge proportion of Government spending and equates to the largest proportion of government spending in the EU. Obviously, it has a big impact. I do not have the comparison on ELS alone but, in terms of core asks, the core ask of the Department of Health, which is ELS and new measures, is 12%-----

Deputy Pearse Doherty

I do not want to go there because, in my view, it is a bum argument. Departments would not be doing their job if they were not looking for new measures to enhance services. ELS, that is, what is needed to keep things standing still, should be something we are able to calculate. The Department of Public Expenditure, National Development Plan Delivery and Reform and the Minister are saying that what the Department of Health needs to stand still next year is €708 million, while the CEO of the HSE and the Secretary General of the Department are saying, "No, it is not." Indeed, everybody else outside the Government is saying the same. They are saying the health service is seriously underfunded and that a crisis is going to emerge as a result, which has started, in the provision of healthcare to citizens across the State. I do not want to go into new measures because they are a completely different ball game. When it comes to the provision for keeping things the way they are, there is a difference of €1.3 billion in what has been asked for and what is being given. Has the CEO of the HSE corresponded with, been in contact with or been involved in the negotiations with the Department of Public Expenditure, National Development Plan Delivery and Reform during the period of calculating what ELS provision was required?

Mr. David Moloney

No, we negotiate the Estimates with the Department in question, which in this instance is the Department of Health.

Deputy Pearse Doherty

We learned from RTÉ that Bernard Gloster wrote to his line Minister before the budget outlining his concerns regarding the allocation that was to be made. He said there would be "significant and punitive risks to the public" and that it was "imperative" that the Government should be "in no doubt as to the position". This was in respect of a Government decision being taken to provide €708 million for ELS and €100 million for what are called new measures. Mr. Gloster wrote to his line Minister making it very clear that this would result in "significant and punitive risks to the public" and that there should be no lack of clarity on the part of the Government about the position ahead of the budget announcement. I understand the Minister for Health passed that correspondence on, with his own commentary, to Mr. Moloney's line Minister, Deputy Donohoe. Has Mr. Moloney seen that letter?

Mr. David Moloney

I have not seen that letter. It may have been passed to the Minister but, to the best of my knowledge, I have not seen it. It is important to point out that the Irish health service is one of the best-funded health services in Europe on any measure that might be used. We measure health funding on a euro per capita basis and as a share of Government spending, reflecting the priority the Government gives it. The health service has had an extra €7.4 billion since 2019 and 22,000 additional staff have been appointed. We have made provision in 2024 for a further €806 million, plus €1 billion in non-core funding. That €1 billion in non-core provision is to deal, in particular, with issues that have been identified by the health sector. The position in 2023, as the sector sees it, has been impacted by a number of factors, among which was a non-anticipated impact of the pandemic in the form of a kind of pent-up demand in certain areas of acute services.

Deputy Pearse Doherty

With respect, I appreciate there is a non-core allocation, which is a one-off allocation, the majority of which is made up of measures relating to the Covid pandemic and the war in Ukraine, but after next year, that money will no longer be there. The CEO of the HSE came before the health committee and made the point that the deficit this year is being driven by demand and inflation. He pointed out that three quarters of that will be unavoidable next year. Does Mr. Moloney accept that is Mr. Gloster's stated position?

Mr. David Moloney

I cannot speak to his position. He did not make that point to me but I accept what the Deputy says if that is what he said at the health committee.

Deputy Pearse Doherty

I understand from Mr. Moloney’s previous question that he had no engagement with him whatsoever in terms of these negotiations.

Mr. David Moloney

No, none.

Deputy Pearse Doherty

There were none. That is what he said to the committee. From a process perspective, were Mr. Moloney and the Minister completely unaware of the views of the HSE CEO during this period?

Mr. David Moloney

No, I do not think so. The Department of Health would reflect on various occasions during the discussions the views of the HSE. Of course, it is a matter for the Department of Health to form a view on that and to represent it in the Estimates process.

Deputy Pearse Doherty

I am quite taken aback that the CEO of the HSE wrote to the Minister about what was about to be agreed at budget and the Minister, we are told, with commentary, passed that on and that Mr. Moloney, as Secretary General of the Department, was not aware of the views of the CEO who was asked to implement this budget. The CEO made it very clear that this deficit is, in the main, recurring, that this is underfunding and that if an attempt is made to bring this in line, it would have significant and punitive risk to the public. In some cases risk to the public in the health service means deaths and people not being treated in time. It is significant and punitive. It is imperative that the Government is in no doubt about the position. I just do not understand how Mr. Moloney would have been unaware of that position before he signed off on the budget.

Mr. David Moloney

The Minister for Health negotiates the budget for the HSE and the Department of Health. The HSE Vote is within the Department of Health Vote. The Accounting Officer is the Accounting Officer for the Vote. It is not that I was unaware of what the HSE wanted in terms of money. The Department would reflect that. That is part of the negotiating process. That is not different from many other years in terms of the negotiating process. I cannot speak to the assessment of risk because that conversation has not been had with me. The assessment of risk has to be seen in the context of 24,000 extra staff and €7.4 billion extra spending.

Deputy Pearse Doherty

A spokesperson for the Minister of Health gave the following to the media in the last number of days. He said that he immediately sent Mr. Gloster’s letter with comments to the Minister for Public Expenditure, National Development Plan Delivery and Reform. As Secretary General of that Department, Mr. Moloney is saying he had no knowledge of that, no sight of that letter and that the Minister for Public Expenditure, National Development Plan Delivery and Reform did not discuss with him the contents of that letter, including the Minister’s commentary. Is that the case?

Mr. David Moloney

As I said, I do not recall that being discussed with me. I think I did know the Minister for Health had forwarded a letter. I do not think I knew what its contents were. It is not how we negotiate. We negotiate with the Department. We negotiate with the Minister.

Deputy Pearse Doherty

When the CEO of the HSE is telling the Department of Public Expenditure, National Development Plan Delivery and Reform that what it is about to do by significantly underfunding health will have a significant and punitive risk to the public, and he is saying it is imperative the Government is in no doubt as to this position before it signs off on it, does Mr. Moloney not believe it should be brought to his attention?

Mr. David Moloney

That is a matter for the Minister for Health to consider and bring into the Estimates process if that is what he feels.

Deputy Pearse Doherty

He did by sending it to the Minister for Public Expenditure, National Development Plan Delivery and Reform.

Mr. David Moloney

The decisions I have taken, as the Deputy knows, are Government decisions.

Deputy Pearse Doherty

Okay. We know that €708 million has been provided in ELS. What will the deficit be this year? From the information that Mr. Moloney has to hand, and we understand that may move in the coming weeks, what is his best estimate of the deficit in the HSE-Department of Health this year?

Mr. David Moloney

As the Deputy knows, that is a matter that is being discussed at the moment. It is also the subject of negotiation and discussion. The discussion is at a very advanced stage. There will clearly be a significant supplementary for the health Vote this year but we are not at liberty to talk about a number at this point. The Minister hopes to bring a supplementary proposal to the Government very shortly.

Deputy Pearse Doherty

What is very shortly?

Mr. David Moloney

The number has not been fully agreed. If the number was to be agreed, hopefully it would be next week.

Deputy Pearse Doherty

It is being suggested it is €1.5 billion. Would I be wide off the mark in suggesting that number?

Mr. David Moloney

The Department of Health has proffered an initial number that is not at that level.

Deputy Pearse Doherty

It is not at that level. The HSE has said that the figure will be €1.5 billion. Does Mr. Moloney accept that?

Mr. David Moloney

It has not said that to me. I am aware of public commentary around €1.5 billion which I understood to be a figure based on an accruals methodology rather than a cash-based figure but I have not been involved in that discussion with the HSE.

Deputy Pearse Doherty

Is it the Department’s view at this time to fully fund the deficit within the HSE this year?

Mr. David Moloney

Sorry.

Deputy Pearse Doherty

Is the position within the Department of Public Expenditure, National Development Plan Delivery and Reform to fully fund provide for the deficit in the HSE this year?

Mr. David Moloney

The purpose of the supplementary would be to ensure that the health service has the money it requires in 2023.

Deputy Pearse Doherty

At this stage, even though the Estimates will come in next week, Mr. Moloney cannot tell the committee which oversees his Department what that number will look like and the range it will be in. Can he provide us with a figure closest to €200 million? Will it be in excess of €1 billion?

Mr. David Moloney

It is a matter to be agreed by Ministers in government and that agreement has not been reached yet.

Deputy Pearse Doherty

The HSE has said that number is €1.5 billion. There are questions as to whether the Department will underfund the deficit. Does Mr. Moloney accept the HSE has made it clear that two thirds of that is recurring and that the drivers of this are demand and inflation. Does Mr. Moloney accept that?

Mr. David Moloney

I do not talk to the HSE directly; I talk to the Department of Health and we have not yet had that conversation.

Deputy Pearse Doherty

That is just crazy stuff. We have just dealt with the budget for next year and Mr. Moloney is saying that he has not discussed with the Minister in Health how much of the deficit this year will be recurring for next year. That is the whole problem. The whole problem is that there is about €1.5 billion of a deficit and the HSE is telling us the drivers behind this is inflation and demand. Those two drivers are not going away. They will be there in 2024 and, therefore, we needed at least two thirds of that deficit next year into the base, which is €1 billion on top of ELS. However, what the Government gave was €708 million and that is why there are punitive risks to the public where posts for which there was supposed to be recruitment are being withdrawn as we speak. As we speak, offices all across the State are writing letters telling people that they must withdraw the offer that was made to them because there is an embargo in terms of recruitment. They will not say, although they should, that it is because the Government has deliberately underfunded health next year.

Is Mr. Moloney genuinely telling me that of the deficit this year, he, his Department or Minister has not had a conversation on how much of that will recur next year? The HSE is very clear that it is at least two thirds.

Mr. David Moloney

I think we need to be really clear that there is no underfunding of the HSE or of the Department of Health. It is one of the best funded health services in Europe. As a proportion of national income or government spending, by the Department’s own measure, which is per capita funding on a purchasing-power parity basis, it is 20% above the EU average. There is no underfunding. That is not to say there are not challenges from year to year but in 2024, in addition to the €806 million, there is a €1 billion non-core. The only major change in the summer economic statement that was made and the budget parameters was to add €500 million to ensure the Department of Health could get an extra €500 million into its non-core, bringing it up to €1 billion. The purpose of that €1 billion is to deal with the kind of issues the Deputy is raising. It is that kind of difference in numbers in terms of what is required on an ongoing basis. It gives us time to unpack what the real drivers are. I accept that at some points they have been pointed at price and demand but in other parts of the conversation we have had over the Estimates process, in our ongoing engagement, it has been identified as a legacy of the pandemic. We are unpacking that.

There is a commitment by the Department of Health and, as I understand it, the HSE to improved budgetary management to a more reliable and robust pay and numbers strategy. That speaks to the Deputy’s point about recruitment. In the context of a strong and robust pay and numbers strategy, this kind of stop-start approach to recruitment will not be necessary. Those commitments are made.

On our part there is a commitment that as the data becomes available and we understand more what the key drivers are, we will continue to work with the Department of Health.

Deputy Pearse Doherty

I understand that the Department has its point of view but from my point of view the health services are seriously underfunded. The Secretary General of the Department of Public Expenditure, National Development Plan Delivery and Reform, Robert Watt, has made it clear that two-thirds of the drivers of the deficit this year are inflation and demand and that they are not going away. The CEO of the HSE has said the same thing. What the Department and the Minister, Deputy Donohoe, have done is provide ELS that as a proportion of core expenditure is less than last year. The Department is hoping that the underfunding and the deficit we will have this year will magically disappear. None of that base has been provided. What is health inflation running at?

Mr. David Moloney

It is hard to say. When we look at the health budget it is comprised of a number of elements. Some 40% or so of it is public service pay. We have funded the existing pay agreement and the costs of the next pay agreement have not yet arisen. There are big movements in what kind of contracts are there and what length of time the contracts are for. There are price pressures within parts of the health sector.

Deputy Pearse Doherty

Would it be fair to say that health inflation is running at 17%?

Mr. David Moloney

Absolutely not.

Deputy Pearse Doherty

Parts of health inflation are not at that level?

Mr. David Moloney

There may be some elements-----

Deputy Pearse Doherty

If we take out the non-pay element of it.

Mr. David Moloney

There is no reason to suppose that all of non-pay is running at 17%.

Deputy Pearse Doherty

Bernard Gloster and Robert Watt both told the Joint Committee on Health that 17% was the figure for health inflation.

Mr. David Moloney

I am not aware of what that is based on. I will get it checked.

Deputy Pearse Doherty

There is a deficit of €1.5 billion, or maybe it will be €1 billion. We will see when the figures are announced next week because the Department will not tell the committee that oversees it. I understand that the Cabinet may have to agree and all of that. Is the Department expecting that to just disappear? Let us say it is €1 billion; it might be less and it might be a bit more. How much of that €1 billion will be recurring? Surely to God the Minister, Deputy Donohoe, understands that at least a portion of that is recurring. Why is it not being provided for?

Mr. David Moloney

The reason the Government has agreed €1 billion in non-core expenditure is to provide for the uncertainty, the data we need and the ability to respond to this post-pandemic issue. That will be the main means. There is no deficit. There is €1 billion in non-core expenditure and there is €806 million in core expenditure. That is the core figure for 2024 that has been decided and agreed by Government, as have the non-core provisions. These things have been agreed by Government and Government has also made it clear that we will contain it-----

Deputy Pearse Doherty

Non-core means one-off. Does it not? It means it will disappear at some stage.

Mr. David Moloney

It disappears at some stage. In the case of Covid-----

Deputy Pearse Doherty

The question I put to Mr. Moloney is how much of the overspend this year is recurring or is the view within the Department and the Minister's thought process that none of this is recurring? That is the only logic to what was presented on budget day because not a penny of the deficit has been provided for in the base. Inflation is running at the levels it is, demand is going up and there is an aging and increasing population but somehow we think we can provide less, as a percentage of core expenditure in comparison with previous years, just to keep our services standing still.

Mr. David Moloney

Less of an increase than previous years.

Deputy Pearse Doherty

Yes.

Mr. David Moloney

That was affected by the non-allocation of the pay amount.

Deputy Pearse Doherty

The full effect of the pay agreement this year will be felt next year. Is that not right? There were two pay agreements and increases, one in the spring and one in the autumn. That will factor into ELS so there is a portion-----

Mr. David Moloney

That has been provided for.

Deputy Pearse Doherty

-----of pay in ELS.

Mr. David Moloney

The new pay agreement, yes. The reason the Government agreed the €1 billion in non-core expenditure is that it gives us time to work with the Department of Health to see what is and is not needed on an ongoing basis. If we look at Covid expenditure from 2020 to now, it has gone from €15.4 billion to maybe €1.3 billion that was provided in 2024. That has not just been reduced; there are elements of that Covid expenditure that have gone into the Department of Health's base over time to reflect changes that are permanent. There is still a lot of discussion to be had between ourselves and the Department of Health about any pressures within the health system in 2023 and the extent to which they represent either temporary or permanent changes within the health sector.

Deputy Pearse Doherty

I find this baffling. We are putting one-off expenditure of €432 million in there so that we have a bit of extra time. That does not even come close. By the way, that plus ELS is still half of what the Department and the HSE were looking for to stand still. Let us make that point first. The second argument is that we need this because the Minister, Deputy Donohoe, needs more time to speak to his colleague in government to figure out what is going on. That is despite the fact that there is monthly monitoring by the Department of Public Expenditure, National Development Plan Delivery and Reform of health expenditure, quarterly reports into the Department and other mechanisms for doing this. This did not drop from the sky today.

The issue is as follows. I am shocked that the Minister and the Secretary General are not discussing serious warnings from the head of the HSE about the risk to public safety from decisions that the Department is about to carry out. I am shocked that is the case. I am shocked that there seems to be no basis for the differing figures from the Department of Health and the Department of Public Expenditure, National Development Plan Delivery and Reform on this. In the middle of all of that are people. Mr. Moloney says there is no underfunding of healthcare, and we can splice and dice this as many ways as we want, but when I am talking to a constituent and they cannot get a bed or see a consultant, or when I am talking to the management in my services in Letterkenny University Hospital today, tomorrow and all the rest and ask about the person we have been trying to recruit for the last six months they will tell me they had to rescind the offer. Why? It is because of what we are discussing. The need is there and this is what Robert Watt and Bernard Gloster have said. What is driving this is need and inflation. We can point out what is being provided but if you do that then you have to close the doors, turn off the tap and say we can do no more. Patients will suffer and people will die if timely and appropriate healthcare are not provided in a reasonable time. I will leave it at that.

Deputy Jim O'Callaghan

I thank the witnesses for coming before the committee. There is a group called the health budget oversight group and it is made up of members of the Department of Public Expenditure, National Development Plan Delivery and Reform, the HSE and the Department of Health. Who is on that group from the Department of Public Expenditure, National Development Plan Delivery and Reform and what is the purpose of it?

Mr. David Moloney

Mr. Dormer is on the group so I might get him to answer that.

Deputy Jim O'Callaghan

Mr. Dormer is on the group.

Mr. Eoin Dormer

The purpose of the group is to review and monitor health expenditure on an ongoing basis. It meets every month and the members are the Vote expenditure team in our Department; members of the finance and HR teams in the HSE; and colleagues from the Department of Health's finance team, and depending on the theme of the meeting, other colleagues in that Department.

Deputy Jim O'Callaghan

I would have thought the purpose of the group is to ensure the Department of Public Expenditure, National Development Plan Delivery and Reform is aware of the expenditure that is ongoing in the Department of Health and the HSE. Would that be correct?

Mr. Eoin Dormer

Among the inputs to discussions are the ongoing monthly expenditure against budget trends in staffing and challenges as the year develops.

Deputy Jim O'Callaghan

The Department would be aware if there was increasing expenditure by the HSE and the Department of Health. Is that not correct?

Mr. Eoin Dormer

Increasing spending would feature in the monthly reports and then it would get discussed. The situation changes over the year as the year develops.

Deputy Jim O'Callaghan

I note that the group publishes minutes of its monthly meetings and the most recent minutes we have are for the meeting of 6 June 2023. Presumably there were meetings in September and October, whether or not there was one in August. Is that correct?

Mr. Eoin Dormer

There was a meeting in late August or early September. The minutes for that are being finalised and they will get published shortly. Often during the Estimates process, because officials are tied up engaging on the budget, there may not always be a meeting in September or October.

Deputy Jim O'Callaghan

Was the last meeting in August?

Mr. Eoin Dormer

No. There was a meeting last week.

Deputy Jim O'Callaghan

Presumably at that meeting the minutes of the August meeting were agreed. Were they?

Mr. Eoin Dormer

We received amendments at that meeting so we are closing that off in the next couple of days.

Deputy Jim O'Callaghan

We will shortly see the minutes of the meeting in August being published.

Mr. Eoin Dormer

They will be published this week.

Deputy Jim O'Callaghan

I am just looking at the minutes I have here from the meeting that took place on 6 June and approved at the meeting on 25 July. Under the heading "I&E - Core", it is stated:

Discussions took place on the significant rises in non-pay costs. The HSE informed DoH and DPENDR that there is significant inflationary pressures, in tandem with a backlog in the increase of non-pay costs, as fixed contracts have expired. The HSE is seeing more contracts with price increases where it has held back new arrangements as long as possible.

I would have thought it was clear from this minute that Mr. Dormer's Department was aware of the increased expenditure on the part of the Department of Health and the HSE as a result of inflationary pressures.

Mr. Eoin Dormer

It is fair to say, as is evident from the minutes, that pressures on non-pay costs were beginning to emerge and there was a discussion on that. With regard to the detail of the non-pay cost base and what drives it, including what are the procurement arrangements across the variety of hospitals in particular, that level of detail is pretty complex. As the Secretary General has said, there is still a good bit of work to do to unpack all that. We were made aware of trends but we have not yet received all of the detailed data underpinning that, which in fairness to colleagues in the HSE are very complicated.

Deputy Jim O'Callaghan

I would have thought that as of from June of this year, the Department of Public Expenditure, National Development Plan Delivery and Reform is aware that expenditure in the Department of Health and in the HSE is subject to significant inflationary pressures and there have been significant rises in expenditure. That seems to be clear from the minutes.

Mr. Eoin Dormer

We would have been aware that the non-pay cost base was under pressure and was driving some of the spending trends but at that stage, we would not have had the detail of the interplay between the activity and the demands facing the system, just the extra activity, versus the impact of non-pay cost and unit prices.

Deputy Jim O'Callaghan

In the minutes for the meetings on 2 May and 17 May, it was recorded that very significant levels of overspend were incurred in the acute hospitals sector for the first quarter of 2023. What is Mr. Dormer's understanding as to why there was this significant overspending in the acute hospitals sector? What is Mr. Dormer's understanding of why that occurred?

Mr. Eoin Dormer

If I recall, the discussion at the health budget oversight group and the material we received on a monthly basis pointed to pay and non-pay pressures across the hospitals. The Deputy has mentioned some non-pay pressures. There are staffing costs, including agency and overtime, which would have been part of the pressures as well that the HSE signalled.

Deputy Jim O'Callaghan

Is Mr. Dormer the most senior official from the Department of Public Expenditure, National Development Plan Delivery and Reform who is part of the oversight group?

Mr. Eoin Dormer

No. There is an assistant secretary with specific responsibility for the health Vote and he leads in those meetings for our Department.

Deputy Jim O'Callaghan

In the minutes for 6 June it was recorded that:

DPENDR flagged that the Minister for PENDR has strong concerns on Expenditure Management. It is difficult to understand how expenditure has run so far above profile.

Does Mr. Dormer recall who it was that communicated this on behalf of the Department of Public Expenditure, National Development Plan Delivery and Reform? Was it Mr. Dormer or was it the assistant secretary?

Mr. Eoin Dormer

I cannot recall that at the time. It certainly would have been a member of the health Vote team.

Deputy Jim O'Callaghan

Was Mr. Dormer aware that the Minister had flagged his strong concerns on expenditure management at that stage?

Mr. Eoin Dormer

There are engagements during the year on health spending. Concerns about spending, regardless of the Vote, would be brought to the attention of the Minister.

Deputy Jim O'Callaghan

Would Mr. Dormer or the other officials from the Department of Public Expenditure, National Development Plan Delivery and Reform on the health budget oversight group apprise the Minister that the reason for this increase in expenditure is because of factors such as pressures in acute hospitals and inflationary pressures? I presume the Department would have that information from attending the group.

Mr. Eoin Dormer

We would have that information from attending the group and from the material presented, and the material they provide on a monthly basis to the Department explaining the movements in actual spend versus budget. Over the course of the year, there will be periodic updates of senior management as well as the Minister on the trends in spending as part of the monthly figures.

Deputy Jim O'Callaghan

I thank Mr. Dormer. I will go back to Mr. Moloney. We know the budget for 2024 is €22.5 billion.

Mr. David Moloney

That is correct.

Deputy Jim O'Callaghan

The budget for 2023 was €21.3 billion. Is that correct?

Mr. David Moloney

Yes.

Deputy Jim O'Callaghan

We know there is going to have to be a supplementary budget. I am aware that we cannot identify the full amount of it as yet but it appears it will be somewhere in the region of €1.3 to €1.5 billion. When we take into account the money that will be put in by way of the supplementary budget, it looks like the budget for next year is going to be less than what we are spending this year.

Mr. David Moloney

We have to wait for the supplementary. Until the end of the year and the appropriation account, we do not really know the actual spending because sometimes spending is provided but areas will underspend and money is returned. My best assessment at this point is that this will not be the case. It will not be the case that funding plus supplementary funding is less than the 2024-----

Deputy Jim O'Callaghan

Is this because the Department is taking into account the €1 billion in the non-core funding for 2024?

Mr. David Moloney

The €22.6 billion number account of the non-core, yes.

Deputy Jim O'Callaghan

Okay, so it takes account of that €1 billion.

Mr. David Moloney

Yes.

Deputy Jim O'Callaghan

Then I would have thought that it is very clearly the case the expenditure assigned for 2024 will be less than what is in fact spent in 2023.

Mr. David Moloney

But the 2023 spend includes both core and non-core spend on health also, so a like for like comparison-----

Deputy Jim O'Callaghan

What does Mr. Moloney believe will be the total spend in 2023 for core and non-core?

Mr. David Moloney

That will depend on the Supplementary Estimates.

Deputy Jim O'Callaghan

Let us assume it is €1.3 billion. What would this bring it up to?

Mr. David Moloney

That would bring it up to the allocation of €22.6 billion.

Deputy Jim O'Callaghan

And we have €22.5 billion allocated for 2024.

Mr. David Moloney

With the assumption of a €1.37 billion supplementary.

Deputy Jim O'Callaghan

If we look at the reason for the supplementary budget, are Mr. Moloney aware, or is Mr. Dormer aware, from his membership of the health budget oversight group, what percentage or proportion of that is a result of the greater costs coming in the acute hospitals sector?

Mr. David Moloney

The large majority of the Supplementary Estimate required comes from the acute hospitals sector. There are some other elements that come from the State Claims Agency and pensions.

Deputy Jim O'Callaghan

Mr. Moloney mentioned the State Claims Agency, pensions and the acute hospital sector, but we will have them again in 2024. There is no reason they would evaporate from the budget bottom line.

Mr. David Moloney

Certainly not but the percentage changes and varies from year to year.

Deputy Jim O'Callaghan

So it is likely that we are going to have these again next year. The State Claims Agency provision will not go down.

Mr. David Moloney

Long term the tendency is that it will not, but it does vary from year to year.

Deputy Jim O'Callaghan

Will the pensions figure go down?

Mr. David Moloney

That is unlikely.

Deputy Jim O'Callaghan

Will expenditure in acute hospitals go down?

Mr. David Moloney

The expenditure in acute hospitals is very germane to the discussion we are currently engaged in with health and around the non-core funding and the nature of that.

Deputy Jim O'Callaghan

Has the Minister been apprised of these obvious recurring costs that will continue to be present under the health budget?

Mr. David Moloney

The Minister is very aware of the components of the health budget. Obviously the Government agrees the expenditure ceiling for health every year and the expectation is that the health budget will be delivered within that ceiling. Where that does not happen we need to look at why it has not happened. Whereas clearly there are some inflationary pressures in the non-core area of health they need to be quantified. At the health committee, the Department of Health and the HSE also talked about budget management and a more robust pay and numbers strategy. In our discussions with them certainly the pandemic legacy was mentioned at that committee as well.

The greatly increased allocation in non-core funding of €500 million added to non-core funding overall will allow us to quantify those pressures better and have a better understanding of them.

Deputy Jim O'Callaghan

Would Mr. Moloney agree that the likelihood is that if we are all lucky enough to be physically and politically alive this time next year, we will be talking again about a supplementary budget for health?

Mr. David Moloney

When one looks back over the last 15 to 20 years, one sees regular supplementary budgets for health. It is not a completely predictable area. Events happen and the impacts of the pandemic obviously really exacerbated that. If one looks back over the years at the quantum of the health supplementary spending, sometimes reflecting in-year decisions, it has varied enormously over time.

Deputy Jim O'Callaghan

Would it not be better politically if there was an acceptance and a realisation that the cost of the health service, specifically for next year, is going to be greater than what has been allocated by the Government in the budget?

Mr. David Moloney

As I explained to Deputy Doherty, we have a really well-funded health service. It is one of the best-funded services in Europe. It is natural that the Department and the Minister would want to spend as much as they can on health services but it is equally natural that we would want a sustainable overall fiscal position. In that context, it is desirable that health spending remains within the ceilings that are set by the Government.

Deputy Jim O'Callaghan

Thanks very much.

Deputy Bernard J. Durkan

I welcome our guests. The issue of overruns was raised with the Secretary General of the Department of Health and with the head of the HSE recently. When overruns occur on a regular basis in a Department, does the Department of Public Expenditure, National Development Plan Delivery and Reform have a system that triggers an alarm? I have raised questions about this in the House every year, as far back as I can remember. Where an overrun takes place fairly regularly, is there not some mechanism which identifies the cause or causes within the Department itself? Does Mr. Moloney's Department inquire of the Department in question, whichever one it may be, as to what is the cause?

We were told at the Joint Committee on Health that it was demand led and that one could not predict but that is not true. Everybody has to predict, the prediction has to be fairly accurate or some reason given as to why it is not accurate. Does that process apply? Does the Department require that process to take place in all Departments, including the Department of Health?

Mr. David Moloney

I thank Deputy Durkan for his question. When we look across Government, one of the ways we have of monitoring expenditure is by requiring each spending area to produce profiles of the spend at the start of the year. It is against that profile of spend that we monitor. Once those profiles are built up based on an understanding of what is going to change in the year and an understanding of historical practices and previous experience, then they ordinarily provide a very accurate assessment, particularly of current day-to-day spending, that is, the spending that one has to do to hire people, payments that one makes, regular wages and so on, but maybe a little less so for capital and other types of lumpy spending which is a little more difficult to predict in terms of when, during a year, it might land. All Departments create those profiles and we maintain oversight of how accurate they are. Where the profiles are not accurate, we question that. Mr. Dormer might wish to talk specifically about health. Of course, in the case of health, particularly in recent years, we have had extraordinary events that have caused very significant in-year decisions, among other things.

Mr. Eoin Dormer

In the case of health, part of the ongoing monitoring process is to take in the profile, to look at the spending against that profile and to try to understand what is driving any variances, if spending is either under or over profile. One of the challenges, because it is such a complex area with lots of different spending lines across different areas, is making sure we get an understanding of what is actually driving each line. That can be difficult, which is why the health budget oversight group was set up in the first instance back in 2018 or 2019.

Deputy Bernard J. Durkan

In the course of a year there are regular reviews of expenditure in each Department, as our guests have already mentioned. Given that the Department of Health is demand-led, is special attention paid to the trends if and when they develop? At the beginning of the first quarter of the year, for example, is it clear that there is a problem arising, or one that could arise by the end of the year or during the second half of the year? What indications has the Department of Public Expenditure, National Development Plan Delivery and Reform been able to glean from any such appraisal?

Mr. David Moloney

Provided the profiles are robust, we can see overspends from quite early in the year. It is probably fair to say that in 2023, there was a sense of an overspend from very early in the year. That was raised and discussed at the health budget oversight group and the Department was asked to take corrective actions during the year in order to maintain expenditure within profile.

Deputy Bernard J. Durkan

Could it have taken action at that stage?

Mr. David Moloney

Yes. There were actions that could have been taken in terms of budget management vis-à-vis pay and staffing. On the other hand we recognise, outside of budget management and practices, that there are also other events, pandemic-legacy events, and extra demands on the health sector in particular. Our assessment is ongoing.

Deputy Bernard J. Durkan

Were they accurately quantified?

Mr. David Moloney

The evidence given to the health committee emphasised the commitment of the health sector to provide better data in order that we understand those issues better.

Deputy Bernard J. Durkan

It would appear to me that it should not be impossible to identify the full extent of any legacy issues. For example, recruitment took place within the Department of Health and the HSE in the last nine or ten months. To what extent did it take place and has the Department of Public Expenditure, National Development Plan Delivery and Reform ascertained the degree to which recruitment has happened in areas that would avert the likelihood of a similar overrun in subsequent years?

Mr. Eoin Dormer

On the recruitment during the year, as the Secretary General mentioned, there is a pay and numbers process in which colleagues in the Department of Health engage with the HSE in relation to the funded level of recruitment during the year, how that is profiled or planned on a monthly basis and what staff will be recruited in what categories, be it doctors, nurses or administrative staff. There is reporting and monitoring of that during the year. They engage in that process on a monthly basis to match what has been recruited in different categories versus what was planned. As with a lot of other areas and sectors, however, that is also subject to the challenges in the labour market. It is a difficult area to manage, in fairness to them.

Deputy Bernard J. Durkan

Mr Moloney mentioned earlier that the Department of Health and the HSE are the best funded in Europe. Is that correct?

Mr. David Moloney

Yes, as a proportion of national income.

Deputy Bernard J. Durkan

That would be the normal measurement in any other country. Why are we ahead of everybody else? Why are we more expensive than anywhere else?

Mr. David Moloney

It can be difficult to say. We live in a country with a high cost of living. Some of the international studies around the general cost of living would reflect that. When we look at comparative pay rates across the health sector, they compare favourably. We attract high-quality health workers through high-quality terms and conditions. Those factors feed in. It is also important to remember the quality of the health system itself.

A recent OECD report referenced the very rapid improvements in life expectancy, which speaks to the ability of the health sector to perform very well under many of the criteria set out in the OECD assessment of these things. We are a high-income country. We fund a good-quality health service and we invest in it. We have invested in it over the past number of years in particular, as I said, with €7.4 billion and 24,000 extra staff since 2019.

Deputy Bernard J. Durkan

Somebody recently mentioned to me that it looked as if there was no reining in of expenditure in the Department of Health, and that it was a question of "ongoing". At what stage does it go beyond the limits of all the European countries and becomes what he suggested would be one of the most expensive health services in the world?

Mr. David Moloney

In its evidence to the health committee, the health sector has demonstrated a commitment to improved budget management, which is absolutely necessary in order to rein in health spending to be more in line with the parameters set by the Government. On the other hand, as I said, we are very conscious that the health sector still faces pandemic legacy challenges in the current context. We are very conscious that over the past number of years it has not operated on a business-as-usual basis in the context of the pandemic and, therefore, there is a sense in which robust financial management and budgetary systems need to be re-established. Perhaps in the crisis of Covid these were not foremost. It is a question of re-establishing budgetary management in the health sector. There is a commitment to that, among other things.

Deputy Bernard J. Durkan

Is Mr. Moloney saying that it would appear the brakes were off and there was a headlong rush to recruit, for whatever reason, without going through the necessary and normal constraints?

Mr. David Moloney

I am not really saying that so much as in a context where the health sector, especially the acute sector, was engaged in managing an enormous public health crisis with the pandemic, the role of financial management is probably not the same as it would be in a more normal context. There is a commitment to ensuring that budgetary management is strengthened.

Deputy Bernard J. Durkan

During the Covid pandemic, it was entirely understandable that certain measures had to be taken that would not normally be taken. On recruitment, given the very serious strains the health services had to work under, which they did very well during the pandemic, to what extent could the projected expenditure have been measured more carefully in the aftermath of that pandemic and crisis, in comparison with other European countries and near neighbours?

Mr. David Moloney

We have not done a detailed study of others' experience. In general terms, it seems to us that everyone faced the pandemic in the same way. It obviously became very urgent. As I look across public services generally, in many areas our assumption was that as soon as society opened up again, we would be post pandemic and there would not be any further expenditure implications. In fact, however, the pandemic has had a slightly longer tail as regards its impact on the labour market, on supply chains and on demand for health services, potentially because of the lack of access to those services during the pandemic for people who might otherwise have availed of them. All those pieces are shared in other countries but that last piece in particular is the one we are grappling with in 2023.

Deputy Bernard J. Durkan

Will the Department suggest to the Department of Health and the HSE any particular areas where they might be able to get involved to prevent overruns such as the one we are having now? When was the last time that expenditure in the Department of Health came in at, or under, budget level? How does that compare with other Departments?

Mr. David Moloney

It is very clear that the key sets of issues are around the acute sector and budget management in that sector. That is the focus of our discussions with our colleagues in the Department of Health. There is a joint commitment to make progress in relation to that. I did not get the second part of the Deputy's question.

Deputy Bernard J. Durkan

What I am getting at is the extent to which the Department might find it possible to flag difficult areas in future and, instead of having to cease recruitment, whether a means might be found whereby recruitment as required could continue, although it could be done strategically. How strategic was the recruitment over the past 12 months? Mr. Moloney seemed to suggest that it could have been done better.

Mr. David Moloney

The health sector has committed to a more robust pay and numbers strategy. Such a strategy would provide a stronger and more strategic framework for health recruitment into the future. That has been committed to at the health committee.

Deputy Bernard J. Durkan

Will that mean that those on the front line will be able to depend on the continuation of funding to the end of the year? This year has obviously still to be dealt with, but can that happen in subsequent years?

We have had this discussion with the Department of Health. Again and again, and I have seen this and raised it every year after the budget, the question arose whether sufficient funding was available to the Department of Health, in the context of the budget, to ensure the delivery of health services as required. Every year I was told "Yes". This goes back a long time, more than ten years, but it does not always apply. The question continues. Have we got, or will we get to, a situation whereby we can be assured that the Department of Health is entirely in control of expenditure and the expenditure that takes place, and which must take place at any given time, depending on the various contingencies that arise? They do arise and it is important that at the beginning of the year each Department identifies exactly the most likely area such overruns can come from. Mr. Moloney seemed to indicate that is now being dealt with. We hope that it is because it is bad for the Department of Health and its morale. It means the Opposition spends its time indirectly criticising that Department for an alleged inability to provide services. That is worrying from the point of view of the population.

Mr. David Moloney

Certainly. I take the point completely. I think we will get to that point. That is the commitment, bearing in mind, as the Deputy said, there are contingencies that will arise.

Deputy Rose Conway-Walsh

I remind Deputy Durkan that it is not only the Opposition but all the Government parties' county councillors and backbench Deputies throughout the country who are critical of this funding and were critical of this budget. It was a shock to so many people, be they staff, patients or the wider public. Not since 2017 have we seen a lower level of additional funding being allocated to health. I went back as far as 2016 and could not find an example of a year when so little was allocated for new measures. No year was even close to it. That is before we look at it in real terms, or as a share compared with the size of the budget, which has increased each year.

I want to check the figures with Mr. Moloney. What is the figure for the allocations for the new measures this year?

Mr. David Moloney

Of the €806 million provided in core funding, €100 million was assigned to new measures.

Deputy Rose Conway-Walsh

This is what I am trying to get at. Last year, that figure was €254 million, the year before that it was €311 million and the year before that it was €149.1 million but we had the Covid pandemic at that time. Before that again, it was €643 million and it was €554 million in 2019, €269 million in 2018 and €266 million in 2017. Why was the figure so low this year?

Mr. David Moloney

The structure of the budget changes year to year. This year, as we explained, we are still discussing the pressures on the health service with the Department of Health. In addition to the €806 million, it is important to emphasise the €1 billion non-core funding. We are unpacking what the pressures on the health service are and to what extent they are inflationary, related to budget management or a result of the post-pandemic legacy. There is a commitment to work with us on the data to back up a lot of that. It is the unexpected acceleration in spend in 2023 that has in some ways informed the budget outcome.

Deputy Rose Conway-Walsh

Are the figures for new measures I just mentioned, comparing year on year, even though things have changed in the budget? There are new advances in medicines all the time. Is the figure €100 million this year as opposed to €254 million last year? If anything, given advances in new technologies and so on, we would expect it to increase.

Mr. David Moloney

I cannot really speak to the allocation of the new measures because that is really a matter for the Department of Health. The overall budget figure is an increase of more than €1.1 billion in 2024. The extent to which that allows for new policy innovations in any given year may vary but in any year, as well as accounting for pay and price increases, it also accounts for increases in activity related to increased health services. The new measures funding is about new policies but even within the-----

Deputy Rose Conway-Walsh

That is why the figure stands out as being an anomaly. In 2017, the budget was not nearly the size it will be 2024, yet we only have €100 million for new measures. Are red flags built in for the Department of Public Expenditure, National Development Plan Delivery and Reform to indicate this does not look right because it is so small compared with other years? Who does the checks and balances? Is this what the Department asked for in terms of new measures?

Mr. David Moloney

The Department's request in terms of new measures was in or around €400 million.

Deputy Rose Conway-Walsh

The Department obviously based that €400 million figure on something. It looked at innovation and new medicines that were available. This has nothing to do with savings that could be made. The Department projected that it would need €400 million to be able to keep up with innovation, the supply new medicines and so on but it got a quarter of what it asked for and thought was necessary.

Mr. David Moloney

The funding for new measures is for new policies. In a situation where the Department with responsibility for the health sector has overspent in respect of its current position, the scope for new measures is very limited.

Deputy Rose Conway-Walsh

How can we have an innovative, forward-thinking health service if just a quarter of what is requested is given? The Department would obviously be asked for a justification. I am just trying to get at how this all adds up or works. It does not add up to me. We are constantly talking about how we have Sláintecare and new innovations in health and then funding for new measures in the health budget is a quarter of what was deemed to be necessary for 2024.

Mr. David Moloney

This outcome is an outcome of a negotiation. As I said, there has been a €7.4 billion additional allocation since 2019 and there are 24,000 extra staff, with another 2,200 staff funded for 2024. All of that allows for change and innovation. There is a really large health budget where there is the capacity to change and innovate.

Deputy Rose Conway-Walsh

I have concerns about innovating as otherwise the Minister is not a very good negotiator. That is what this is pointing to. Mr. Moloney, in his opening statement, noted, and the Minister often says this too, that "Ireland ranked first in the EU for expenditure on healthcare as a proportion of our national income and as a proportion of total government spending despite our relatively young population." This is based on OECD data from 2020. Again, the Minister for Health, Deputy Stephen Donnelly, stated in the Dáil after the budget that of the 15 western European countries, "Ireland comes 11th in terms of the amount we invest in healthcare per person". That is the defence that is used all of the time in terms of our investment. The Minister went on to say:

Germany, the Netherlands, Austria, Belgium, France, Sweden, Norway Switzerland, Luxembourg and Denmark spend more than we do per person for healthcare, when we adjust for local prices. Of the best comparator countries we have, we are in the bottom third.

In terms of the comparisons we make and the figures the Department gives us, it is important to recognise that if we are to approach this in a neutral manner, even the OECD cautions about the comparability of the figures. One of the reasons it warns about the comparability of national figures on health expenditure is that it relies on countries to produce their own data. Is it still the case that in Ireland payments to family carers are included in the healthcare expenditure we report to the OECD? Is it the norm among OECD countries to include such payments in their expenditure?

Mr. David Moloney

I would have to check as I do not know off-hand. There is a challenge with comparable data across health sectors because so many people include different things in their definition of health. The separate definitions of health and social care vary hugely from country to country. As for the numbers we use, we relied on the OECD data for those. As for the preferred measure from the Department of Health for per capita spend on a purchasing power parity basis, as I understand it, even those numbers show Ireland as being 20% above the EU average in terms of expenditure.

Deputy Rose Conway-Walsh

We can see the problem with the figures that are given out. Does the figure for Ireland include private healthcare?

Mr. Eoin Dormer

The figures, as a proportion of national income, are for Government spending. The other point to make is that when the OECD looks at all of the different comparisons and then comes up with a narrative or conclusion, what it said in the 2022 report was that Ireland is a high spender on healthcare, especially bearing in mind that it has a young population. Taken in the round, the OECD formed that conclusion.

Deputy Rose Conway-Walsh

It is fairly significant. Does the figure on expenditure on healthcare given to the committee include private healthcare?

Mr. David Moloney

I will check that for the Deputy. Our sense is that it does not but some OECD figures include private healthcare and out-of-pocket expenses.

Deputy Rose Conway-Walsh

It does, and I know that.

Deputy Pearse Doherty

It is in the ESRI report.

Deputy Rose Conway-Walsh

Yes, it is in the ESRI report that it does. It does not seem relevant to me, in a discussion about funding for public healthcare, to put out figures for private healthcare. Does Mr. Moloney see what I am trying to say? We really need to get away from this approach of "What are you complaining about when we spend more as a Government?" We need to look at a number of things in terms of the cost of delivery here and what is included in the package that is compared with other countries. Otherwise we are not telling a truth.

Mr. David Moloney

I accept that point completely. It is very difficult to use valid comparisons for healthcare. However, we also want to get some sense of where we stand relative to other countries and that is not easy. When we look at spend as a proportion of Government spending, we get a fairly convincing sense of the priority of health spending in Irish Government spending. That speaks to a slightly different point, however.

Deputy Rose Conway-Walsh

The issue is that we do not know. If we do not have all these variables and everything else to be able to do the measurements properly, do we really know where we are in respect of health spending? We bandy about a line - I am trying to be helpful – that the overall spend is whatever in proportion to whatever. However, the devil is in the detail regarding how the money is spent and where it is spent. If it is spent on private healthcare, it should not be included. Sláintecare is our agreed cross-party plan for healthcare. That is what we need to look at. If social care is included here but not in spends in other countries, how can we have anything that will match up to give us a measurement?

Mr. David Moloney

The OECD tries to pull together a system of health accounts that tries to disentangle some of that. It is extremely difficult. We are working on a paper, because we are aware of some of these issues, that tries to identify what the most valid comparison internationally is. We hope to publish it in the next couple of months and have a discussion.

Deputy Rose Conway-Walsh

Apparently, the problem is that international evidence tells us that such a system with private, for-profit healthcare provides actually drives up the healthcare costs. We are driving up the costs of healthcare and then we are measuring but we are leaving out whatever does not fit a narrative. Are we trying to make things fit into a narrative here? Mr. Moloney does not create the policy but-----

Mr. David Moloney

That does tend towards policy. The point the Deputy made about trying to get as valid a comparison of public spend on health as we can is absolutely taken.

Deputy Rose Conway-Walsh

Where does Ireland rank compared with other OECD countries on public expenditure on healthcare?

Mr. David Moloney

The OECD figures quoted by the Department of Health say that on a per capita spend on a purchasing power parity basis, we are 20% above the EU average. That is what those figures say. I take the caveats that the Deputy suggests around those. They arise in all international comparisons but they are particularly difficult in the health area with public and private spending and out-of-pocket expenses.

Deputy Rose Conway-Walsh

We do not know what our actual expenditure is on public healthcare delivery here and the outcomes we get for it. We talk about life expectancy, and that is fair enough and I agree. However, I would like to see the what the life expectancy is for those at the bottom decile compared with life expectancy as a whole. We are moving further and further away from a delivery of healthcare – this is not Mr. Moloney’s issue as he is not the Minister for Health – based on need rather than ability to pay. Does a person live longer because they have more money? Are we becoming more of a country where the more money we have, the longer we live and the less money we have, the less chance we have of living longer? Again, I know that is a policy issue.

Mr. Moloney rightly said that in any Department, savings can be made. How did he calculate the savings that can be made across agency spending and consultancy? The HSE estimates that a maximum of one third of the deficit could be covered through maximum efficiency. However, this is not realistically achievable, is it? How do we calculate what savings can be achieved-----

Mr. David Moloney

We have not calculated a particular figure for savings to be achieved. Obviously, there is a trade-off - one would expect there to be one - between agency and recruitment. That is not always the case. It is one of those issues that is important in the discussion on what drives an excessive expenditure.

Deputy Rose Conway-Walsh

Which areas have been identified? The Department has identified use of agency staff in terms of consultancy; I do not mean medical consultants but other consultancy. What is calculated there with respect to the deficit?

Mr. David Moloney

It is a matter for the Department of Health to calculate the deficit. It is clear that of the three drivers, the largest is within the acute sector - as the Deputy said, recruitment and agency within the acute sector is relevant – and then it is State Claims Agency and pensions. Those are the three areas identified by the Department.

Deputy Rose Conway-Walsh

I wish to move to capital expenditure before I finish. The Department of Health has been allocated €24 million less in this year’s budget than what was outlined in the NDP for 2024. This is even including the non-core capital expenditure. We have talked about the high levels of inflation since the NDP review was presented. This means that it does not go anywhere near as far as was expected when the plan was made in 2021. What does that mean for capital projects that are already in the pipeline but have not begun construction?

Mr. David Moloney

I will check why it looks that way but we did not change the NDP allocations for capital in the budget process this year. If there appears to be a deficit, we will check perhaps what agency it applies to. I will check it. There must be a technical reason because there was no reduction from the NDP ceilings.

Deputy Rose Conway-Walsh

There is one across the board in the different Departments. Is the Department of Health capable of delivering those projects with far less in real terms and even slightly less in nominal terms? Many projects are promised.

Mr. David Moloney

There are huge challenges across the system with supply chain difficulties. We have tried to bring in changes to the public works contract to make it a bit more flexible. The change that was announced in the summer economic statement in respect of capital profiles was an extra €2.25 billion from windfall capital receipts over the years 2024, 2025 and 2026. It is absolutely a challenge to deliver in an inflationary environment. The challenge is compounded by the skills shortage in the labour market.

Deputy Rose Conway-Walsh

I will tell Mr. Moloney what I am trying to get at. We need honesty in respect of what will and will not be delivered. Projects were announced before the budget over the past number of months and there are expectations. When we decide these figures in the budget, I cannot see how the money is there to be able to deliver many of these projects in terms of capital expenditure.

Mr. David Moloney

We have been talking about overspends in the HSE and that is on the current side. In reality, because of the challenges in getting construction projects off the ground in a full employment labour market, the Department of Health is behind in its capital allocation; it is underspend. There are a variety of challenges. Part of it is the inflationary environment and that things cost more and partly it is also that things are hard to get through and get done.

Deputy Rose Conway-Walsh

I know what Mr. Moloney is saying. The key question when he says “overspend” is whether we are overspending or underfunding. That is why the OECD figures and all those other figures, how we are driving things and the private and public healthcare divisions are so important to answer the question. Are we underfunding or overspending?

Deputy Peadar Tóibín

Tá mé buíoch de na finnéithe as ucht teacht isteach. On Deputy Conway-Walsh’s point, has anybody ever got fired from the senior level of the public services for overspending or delaying a capital project in the history of the State?

Mr. David Moloney

I cannot speak to the history of the State but not to my knowledge.

Deputy Peadar Tóibín

It is interesting. In the private sector, if an individual staff member were to overspend by €1.4 billion and delay a project by six years, the terms and conditions of their contract would be measured against their output. I imagine there would be a negative outcome in terms of that person's job in that scenario. I am getting at the idea of accountability and responsibility at senior levels of the public service. It is a critical element in keeping both current and capital expenditure in check, is it not?

Mr. David Moloney

I think that is a fair point. The Accounting Officer is responsible for maintaining the expenditure ceilings and ensuring that the expenditure is delivered within them.

Deputy Peadar Tóibín

What happens when that does not happen?

Mr. David Moloney

The Accounting Officer is generally brought before the Committee of Public Accounts, which is the main mechanism for holding him to account for that function in respect of the legal provisions and laws that are there.

Deputy Peadar Tóibín

There is no higher censure than being brought before the Committee of Public Accounts.

Mr. David Moloney

That is the practice that is set out in the relevant legislation. In terms of higher censure, civil servants are employees like everybody else. The highest echelon of the Civil Service, the Secretaries General, are employed by the Government. For any perceived malfeasance, the Government is capable of dealing with it.

Deputy Peadar Tóibín

They do not do it, obviously.

Mr. David Moloney

I suppose, though, when we think about overspending in particular areas, what we often get is overspending in areas that are under particular pressure. Maybe policy decisions are taking within the year or services to be delivered that are absolutely key. There is a mix of things in a public service context. We do not want to deny people services.

Deputy Peadar Tóibín

On the capacity of the health service at present, in the last five years there have been 500,000 adverse incidents in the HSE. Some 500,000 people have been injured as a result of an action taken in the HSE. In that five years, approximately 3,150 people have been killed in the HSE as a result of some kind of accident or something that was done wrong in the HSE. The previous Minister for Health, Deputy Harris, got a research document written to say there was a direct correlation between understaffing, pressure on staff and negative outcomes in terms of people's health and so on. It is understandable that in respect of the 3,157 people who have died in the HSE over the last five years, a significant contributor to those deaths was staff being unable to deliver their proper job because of the pressure they are under.

Last year, 115,000 people were sick enough to go to an accident and emergency department but had to wait so long that they left without being treated. That is an incredible thing when we think about it. Someone so ill presented, sat in an accident and emergency department for hours, and because it was such a long wait time, left and went home. That is a reflection on the capacity issues we have in the hospitals. In 2019, 757 people died before an ambulance got to them. Last year it was 927 people who died before an ambulance got to them. The figures for the wait time of an ambulance waiting at a hospital, trying to deliver patients to the accident and emergency department are going up all the time, because of the pressures in accident and emergency departments. About 34% of ambulances now spend over an hour waiting to deliver their patients before they can go out. In Drogheda last Christmas, there were 11 ambulances waiting outside the accident and emergency department, some of them for five or six hours. As a result there were no ambulances available for the whole region during that period.

There are approximately 830,000 on hospital waiting lists at the moment. Their illnesses are getting worse, they are less able to live their lives, they are in more pain. They need more invasive treatment which is more costly in the long run. It is fair to say that while there is wonderful work happening for those who manage to get into the HSE and get treatment, the HSE's delivery of health services, because of capacity constraints at least, is a disaster. Those capacity constraints exist either because there is not enough funding or because there is waste and bureaucracy. Mr. Moloney's Department is saying it has enough funding to do this. Is the Department saying we need to get rid of waste and bureaucracy to achieve the capacity we need to deliver for the sizable cohort of people who are on the wrong side of that capacity constraint?

Mr. David Moloney

I can certainly speak to the resourcing piece of that. Obviously, I just do not have any oversight of the operational piece at our remove. Some of those figures are worthy of examination but we do not have any capacity to do so. It would have to be the Department of Health and the HSE. In terms of the capacity constraints as such, I have spoken to the broad numbers, the additional investment. We have spoken to the increase in numbers that is far in advance of the population increase. We would feel that the capacity has increased and we would feel, notwithstanding the discussion we had earlier, a good discussion which we need to flesh out more, we would feel that as we look at euros per head of population in a relatively young country, we have a well-funded health service.

Deputy Peadar Tóibín

The Department has done comparative analysis of the funding. Has it done comparative analysis of productivity?

Mr. David Moloney

Outcome measures are difficult but some analysis papers have been done on post-operative outcomes in specific areas.

Deputy Peadar Tóibín

Per euro, then, what is the difference between ourselves and the European average in terms of productivity?

Mr. David Moloney

I do not-----

Deputy Peadar Tóibín

Can Mr. Moloney give us any productivity comparative analysis?

Mr. David Moloney

I do not think there is. We spoke about the difficulty of international comparisons. I do not think there is a table of international productivity----

Deputy Peadar Tóibín

It does seem amazing because when we are talking about funding, comparative analysis in terms of funding is regularly used as one of the answers. The flip side of the experience is the productivity of the system and the Department does not have comparative analysis on productivity in terms of the HSE and other European countries.

Mr. David Moloney

For whole-system productivity, I am not aware of anyone measuring that productivity.

Deputy Peadar Tóibín

Any system.

Mr. David Moloney

We know the number of GPs per head of population. We know the number of doctors and consultants per head of population. We have some data.

Deputy Peadar Tóibín

Do we know how many layers of management exist per head of population in each country in Europe and where Ireland stands on that? Many people feel that the HSE is phenomenally bureaucratic. It is opaque in terms of its management. It is virtually impossible to have a decision made sometimes at certain levels of the HSE. That is a key issue that I do not believe is being analysed sufficiently within the Department of Health or within Mr. Moloney's Department. I feel that funding should be empirical. We decide as a State how to fund a system on the basis of exactly how much we need to deliver fair systems to every citizen. I do not get a sense at all that the Department's decision in respect of capping funding at a certain level for the HSE is empirically based in terms of need or at least in terms of productivity. That does not seem to be there.

For example, if I was to fund the HSE or decide on a particular budget, I would run modelling to understand how many people will be treated and what kind of levels of investment are needed. Bernard Gloster says €2.4 billion will be needed in additional funding while the Irish Fiscal Advisory Council, IFAC, says €1.5 billion is needed in additional funding. If the Government does not provide that, is modelling done to analyse what effect the shortfall will have on capacity? Has the Department done that?

Mr. David Moloney

IFAC has set out how it reached its numbers. They are based on very broad assumptions rather than detailed modelling because we do not have as much data on health inputs and outputs as we would like. I appreciate that we have an oversight role in terms of value for money and we are fully prepared to accept that. Going back to the health committee, the Secretary General of the Department of Health spoke quite directly to the productivity question and undertook to put a greater emphasis on productivity.

I think that will be in particular areas. Deputy Tóibín spoke about drug costs and the layers within the HSE. One of the discussions we have had is the recruitment of management and administrative staff as opposed to clinical staff. We monitor that and it is one of the issues that is discussed.

Deputy Peadar Tóibín

Would Mr. Moloney be able to give this committee information about management employment levels in recent years? How many people, for example, have been employed within management? I think Mr. Moloney gave a figure of 24,000. What proportion of that total was essentially management?

Mr. David Moloney

We will get it for the Deputy from the Department of Health and the HSE. We are happy to provide it.

Deputy Peadar Tóibín

One of the problems in terms of productivity I have with the HSE currently is that I know of hospitals where, for example, because of lack of funding or overcrowding in accident and emergency they shut down elective surgery for long periods. It is not that the theatre goes away or that it and the staff who work there do not have to be paid for. Most of the costs are still inherent within the budgets for the health service, yet the services are closed down. That would not happen in a private enterprise. The private enterprise would be paid for the level of activity it provides. If we set up hospitals on the basis that they get paid for the level of consultations, treatments, operations and outputs they actually have on an annual basis, would that not ensure a closer tie between the investment and the productivity?

Mr. David Moloney

I think the Department of Health has at different stages tried to implement ways of doing that. I think there was a casemix system and targets at one point. I think there have been efforts made to do that. I think the inherited structure of hospitals in the acute sector has made that challenging for them but ultimately the idea of paying for performance is a policy matter. That is a decision that would have to be taken by the Government.

Deputy Peadar Tóibín

I understand that. All I am saying is that when we ask these questions we get fairly nebulous answers, with all due respect, similar to that answer. It astounds me that when we go into a hospital at this stage that most of the documents are in hard copy and they are shifted around the whole system. We do not have a proper ICT system. During Covid we had a major crisis because people did not have patient numbers and therefore different GP lists and hospital lists were being used. There is a major ICT productivity mess. There is a massive dependency on agency staff, which again is a phenomenal cost to the system. There are incredibly high salaries for certain people within the HSE. Some people are earning nearly €1 million. All of these are concrete identifiable productivity elements. All I am asking is whether there is any evidence from the HSE or from the Department of Public Expenditure, National Development Plan Delivery and Reform that they are ever going to be tackled in terms of making sure that we get better value for the investment that we make and that we will get to treat more patients in the long run?

Mr. David Moloney

Certainly. As I said in the health committee, the issue of productivity was very much a feature and I think it will form part of our discussions this year.

Deputy Peadar Tóibín

Okay. It is interesting that the Minister for Health, Deputy Stephen Donnelly, said that the majority of last year's overspend was due to patients presenting for emergency treatment. Is the Minister right? Is it the fault of the patients who presented for emergency treatment that caused the overrun?

Mr. David Moloney

I did not hear the comment. I suppose a lot of the entry to the acute sector is through the emergency department.

Deputy Peadar Tóibín

This is my final question. It was reported in the Daily Mail recently that Mr. Moloney was involved in negotiations with Robert Watt. Some of the reports said that Mr. Moloney became very angry and that there was shouting going on and voices raised, with people being personally insulted, etc. What is the relationship between Mr. Moloney and Robert Watt in the Department? Is that report a fair characterisation?

Mr. David Moloney

No, I do not think so. I do not accept that is a fair comment. I might look a bit pink the odd time but we have a very good relationship. I have worked closely with Robert Watt. I have worked to him for over ten years. We know each other well and we have a good relationship. There are no problems there. There is a very good relationship between the teams in the Departments and a very constructive one. It must be said that sometimes the reality behind a public expenditure Ministry is that we value the fiscal policy and sticking to it and, naturally, people in the Department of Health value increasing services for people and there is always a tension between those two things.

Deputy Peadar Tóibín

Okay. If I can, there is just another point that I missed. How many people leave the HSE every year?

Mr. David Moloney

I do not have that information. We can get it for the Deputy from the HSE and send it to him.

Deputy Peadar Tóibín

If there is going to be recruitment freeze, and I imagine that thousands of people are retiring every year, what we are talking about is a net decrease in numbers. Even if a recruitment freeze is not completely across the board and only certain elements within the HSE will be affected by it, will there be a net decrease in staff as a result of the budget Mr. Moloney has provided to the HSE?

Mr. David Moloney

As I said earlier, the budget funds an extra 2,200 posts. That is part of the evidence given to the health committee. That is an increase not a decrease.

Deputy Peadar Tóibín

That is not a net increase though.

Mr. David Moloney

It is a net increase of 2,200. That is my understanding of it.

Deputy Peadar Tóibín

How do we have a net increase if there is a recruitment embargo or freeze in an organisation that is going to shed about 5,000 staff this year?

Mr. David Moloney

The pause in recruitment is a temporary pause. It is there to ensure that the level of recruitment aligns with the level of resources.

Deputy Peadar Tóibín

When will the pause cease?

Mr. David Moloney

That is an operational matter. I do not know when they will align but it is not a permanent measure.

Deputy Peadar Tóibín

Okay. Gabhaim buíochas le Mr. Moloney.

An Cathaoirleach

Mr. Moloney's Department is the Department of Public Expenditure, National Development Plan Delivery and Reform. I have listened carefully to the conversation between the members and witnesses in response to the questions that were asked. I must say that it would not happen in the private sector. Some of the questions that were asked were reasonable questions and neither Mr. Moloney nor Mr. Dormer were able to give the answers. I will go back to Mr. Dormer. He is on the health budget oversight group that meets every month. Could he tell me if the HSE has one single financial control piece governed by the best of technology in terms of reporting systems?

Mr. Eoin Dormer

What I do know is that the HSE is spending money on a new integrated management system to try to address the problems we have had in the past.

An Cathaoirleach

I do not want to get into this discussion again in the sense of hearing comments such as "I am not sure" and "It is an operational matter for them". Mr. Dormer is managing his Department and the funding that it allocates. He spends a lot of time with this budget oversight group. He should know whether the HSE has a fully integrated management system in place. Mr. Dormer tells me that it has not but it is working on it. That is okay. That is a straight answer. How then can he rely on the various monthly financial performance reports, for example? Why would he rely on them? Are they manual reports? Do they come in from each hospital?

Mr. Eoin Dormer

I suppose to an extent they are the product of information gathered across the different systems the HSE has. There is not one overall system so, as I understand it, there is a degree of manual work by colleagues in the HSE.

An Cathaoirleach

Can Mr. Dormer rely on it? Can the information the Department is getting from the manual systems across all sorts of areas within the HSE be relied on? How does the Department know the information is good?

Mr. David Moloney

I think the issue-----

An Cathaoirleach

I am asking Mr. Dormer because he is on the committee.

Mr. Eoin Dormer

It is a fair question, but I suppose we have to rely on the best information that is made available to us.

An Cathaoirleach

But Mr. Dormer does not know whether it is accurate or not. It would seem to be inaccurate when we compare what Mr. Dormer seems to be getting monthly with what the outturns are and then what the shortfall is. If we go to the quarterly expenditure memos to the Government, what are they based on?

Mr. Eoin Dormer

I have two points. As the Secretary General said, those monthly financial performance reports are based on the accruals methodology, whereas the more regular monthly reports we receive are based on cash.

An Cathaoirleach

Is the accruals methodology then not really best practice in terms of accountancy as we know it in the private sector?

Mr. David Moloney

The difficulty is that we run a cash-based public expenditure system and a cash-based government accounting system. There is a difficulty in translating legacy systems from accruals into cash. Accruals-based accounting is the standard in the private sector, by and large. The difficulty we have then is that the legacy systems are not equipped to give equivalent cash information. We can rely on the information they give but the problem is that the information they give is often at too high a level and does not have the level of detail that would be required to properly manage the system-----

An Cathaoirleach

Is the Department of Public Expenditure, National Development Plan Delivery and Reform happy with that?

Mr. David Moloney

Absolutely not. We have been pushing for-----

An Cathaoirleach

What did the Department do about it over the past 20 years to change it?

Mr. David Moloney

Over the past more than ten years, we have been part of a group to establish that financial management system in the HSE. It is my understanding that it has gotten to a stage where it has been at least piloted. It is a very big change and a very big system, so bringing it on board and rolling it out will take some time. My understanding is that will take another couple of years.

An Cathaoirleach

Let us take as an example Aldi, Lidl, Dunnes Stores or some other business that is represented all over the country, has a huge number of staff, has thousands of different products on its shelves and has different moneys coming in from different quarters and staff to control. How do they manage, but the Department of Public Expenditure, National Development Plan Delivery and Reform cannot?

Mr. David Moloney

First, the health system is a very complex set of systems. It still has health board legacy systems-----

An Cathaoirleach

When were the health boards abolished?

Mr. David Moloney

Was it in 2005?

An Cathaoirleach

Yes. It was 2005. That was 18 years ago and the Department is still talking about them. This is shocking because it oversees reform.

Mr. David Moloney

Yes, and we have been pushing for the single financial management system. I think there is a commitment to that-----

An Cathaoirleach

Mr. Moloney thinks.

Mr. David Moloney

There is a commitment to it. I can be fairly sure, but again, these are-----

An Cathaoirleach

Is that commitment coming from the Department by way of demanding better accountability from the HSE or is it coming from the HSE or the Department of Health? Who is more concerned? Why are we in this every single year? It has been like this every single year for 25 years.

Mr. David Moloney

The project is an agreed project.

An Cathaoirleach

Twenty-five years ago, an issue was raised at the Committee of Public Accounts. It was all about a technology system that would report on everything to do with the management of the health boards, the HSE or whatever it was. There must be systems available in the commercial world that can manage big business operations, stocks, staff, you name it. Yet, the officials do not know how many bandages are used in a hospital. They do not really know what is going on in the hospitals except through some manual reporting that goes on. They do not seem to have gotten deep enough into any aspect of the HSE to say where the problem is and what they would recommend doing to change it. That is what shocks me about the conversation we have had. It is all a matter of, "I think", "I do not know", "I did not get that number", "I can get that number for you" and "It is big and complex". It is not complex, actually. There are companies as big as the HSE. These are profitable companies that operate and they know where everything is. If they are not doing it right, they will not be profitable and they will not be in business. That is essentially what is wrong with the HSE.

It falls then to Mr. Dormer and his committee to kick a bit of shape into the HSE and the Department of Health and that does not seem to be happening either. There are therefore blockages somewhere along the way. Those may be political, with the Minister for Public Expenditure, National Development Plan Delivery and Reform, Deputy Donohoe, the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, or with Mr. Moloney and Mr. Watt. They are in this together, the whole lot of them, for the country. Instead of saying, "the Government makes that decision", "we make that decision" or "I do not talk to him, but we talk to this guy over here", is it not about time that someone told them all to sit down and work out the differences between them to provide a see-through, transparent and accountable budget? Is that too much to ask in dealing with the HSE?

Mr. David Moloney

The financial management system is being done. The Government have agreed on a budget, so we do have a budget for 2024. We have been very clear about what is involved in that budget.

An Cathaoirleach

Does Mr. Moloney know what I would do with the Department? I would put it on a budget of zero. I would ask the officials to prove every figure that they are asking for because they do not deserve to get the €22 billion based on what they have told me. This is how I measure things.

Mr. Moloney said to the committee that we have the best-funded health service in Europe. Deputy Conway-Walsh took issue with him on that, and correctly so, and this is why. There are two measurements. How is my company being run and is it profitable? No, it is not. How are my customers doing out there? Are they happy with me and my product? I would say about the HSE that no, it is not.

The Caredoc nurses are wondering why they have not been part of the negotiations and why they are being left outside, when actually at one stage, they were inside the tent. Here is a note from the parent of a patient:

We presented at the accident and emergency department three weeks ago with our 14-year-old daughter who was suicidal, self-harming, paranoid, depressed, anxious, seeing and hearing people that were not there. The staff in the hospital were great with her. She was told she would have to wait for a CAMHS service from Friday to Monday.

For three nights she sat with her child and was worried about what was going to happen and what services would be available. No services came on Monday and nothing much has materialised since. That is just one case. There is another case where a 14-year-old went to accident and emergency department and they were told that there were no services. The child was sedated over the weekend. No CAMHS staff have turned up to help that woman; none.

Then, there is the carry-on with the section 42 report, which apparently cost €42 million. It was agreed at the Workplace Relations Commission, WRC, that the Department of Public Expenditure, National Development Plan Delivery and Reform was to find a method to pay it. The WRC met on 3 November to see how the management parties would arrange to pay the €42 million. Mr. Moloney's officials did not even turn up. They did not turn up and I think that is shocking. I ask Mr. Moloney to provide this committee with a report on that issue and tell us why they did not turn up.

Constituents have been writing to me about high-tech medications. They read in the paper that zero allocated in budget 2024. They are now in a state of panic because they are on these medications for life. What are they to do? People are coming to me who have medical cards who are telling me that because they are getting replacement medicines, they are not covered by the card. They are being asked to pay at the pharmacy for medication to replace the medication that is simply not available now. These are people on hormone replacement therapy, HRT, and people with asthma who are not able to get their medication in the way they did before and no one seems to be responding. To me, that shows that the system, Department of Health and HSE are in crisis. Mr. Moloney's Department is as much to blame because it is over them.

The Department is supposedly delivering oversight and is insisting on reform. I want to know what it is doing about those issues.

Mr. David Moloney

I am happy to furnish the Chairman with a report on that issue. The WRC negotiations were conducted by the Department of Children, Equality, Disability, Integration and Youth in the first place, but we can-----

An Cathaoirleach

Sorry, representatives of the Department of Public Expenditure, National Development Plan Delivery and Reform were not there.

Mr. David Moloney

The negotiations were conducted by the Department of Children, Equality, Disability, Integration and Youth.

An Cathaoirleach

Representatives from Mr. Moloney's Department were not to be there?

Mr. David Moloney

I do not know why we were not to be there, but I will check.

An Cathaoirleach

Mr. Moloney is the Secretary General.

Mr. David Moloney

It was a discussion that was led by the Department of Children, Equality, Disability, Integration and Youth.

An Cathaoirleach

But representatives of Mr. Moloney's Department were meant to be there. It says here that management parties were to be there.

Mr. David Moloney

The management parties in that case would have been the HSE and the Department of Children, Equality, Disability, Integration and Youth.

An Cathaoirleach

Representatives of the Department of Public Expenditure, National Development Plan Delivery and Reform were not there.

Mr. David Moloney

I will get the report for the Chairman. Obviously, where I sit in the Department of Public Expenditure, National Development Plan Delivery and Reform is quite distanced from the service delivery issues the Chairman is talking about, although I appreciate that those issues exist. In terms of what we do, it is about the level of funding being made available.

An Cathaoirleach

I am here as a legislator, chairing this committee. We are all very busy people, whether we are Senators or Deputies. Joe Bloggs can stop me on the street and tell me that we are not delivering in the health service. I am given these examples and therefore I have to take them to Mr. Moloney. If I was in the HSE, I would expect the managers to understand that this is the case. Anyone listening today can hear about the supposed negotiations that were ongoing between Mr. Moloney, Mr. Robert Watt, the Minister for Public Expenditure, National Development Plan Delivery and Reform, the Minister for Health and the Government making decisions. Mr. Moloney is making it appear as if it is the Government that we should be talking to about this, but we all know that the people behind the scenes, the civil servants, are the ones that are crunching the numbers. I would say that Mr. Moloney does not even know what numbers are being crunched in the HSE because they are not there. There is no reporting. Mr. Moloney mentioned the State Claims Agency earlier. What does that cost the HSE every year?

Mr. Eoin Dormer

The allocation for this year was €435 million.

An Cathaoirleach

That is generally for mistakes, is it not? It is for issues within the service.

Mr. Eoin Dormer

Yes, it is for payments that are made where people have taken cases based on adverse incidents that occur in hospitals and cases of catastrophic injury.

An Cathaoirleach

I do not want to belittle it, because it could be the result of an error, but it could also be bad management. It is an area that should be looked at. It is an area that companies should look at and ask why it is happening. Is that what the Department does with the committee?

Mr. Eoin Dormer

I understand that there is a separate group that the Department of Health has set up to look at that. It is working on that at the moment.

An Cathaoirleach

For the future, for this year up to December and into next year, will all of the acute services be able to function to deliver the services they are expected to deliver, or will there be a problem? Have they enough money to do everything that needs to be done in the services in the acute settings?

Mr. David Moloney

Yes. The health service is a well-funded health service. It has enough money to deliver the health service.

An Cathaoirleach

That is not the question I asked. I asked specifically about the acute services.

Mr. David Moloney

That includes within the acute sector.

An Cathaoirleach

So, the Department is happy that they have enough money to do that?

Mr. David Moloney

Yes.

An Cathaoirleach

Does the Minister for Public Expenditure, National Development Plan Delivery and Reform share that view?

Mr. David Moloney

The Government shares that view. It is a collective decision.

An Cathaoirleach

I did not ask about a decision. Before it goes to a decision, there has to be some sort of discussion between the Department and the Minister, surely. Does he share Mr. Moloney's view that the service is well-funded and can deliver?

Mr. David Moloney

It is a Government decision. The expenditure ceiling for health in 2024 is a Government decision.

An Cathaoirleach

I know that.

Mr. David Moloney

All members of Government share that view.

An Cathaoirleach

Did Mr. Moloney discuss with the Minister whether or not the acute services delivered by the HSE will be delivered without pause or any difficulty in terms of the money that goes to fund them? Perhaps Mr. Dormer could answer the question because he deals with the committee. Does he know if the HSE has enough money to deliver the services in the acute settings for 2023 and 2024?

Mr. Eoin Dormer

The purpose of the group is to look at expenditure during the year. For this year, the purpose of the Supplementary Estimate negotiation process is to see what additional resources are necessary to fund the acute sector to the end of the year.

An Cathaoirleach

Next year then, in the context of the allocation of €22.5 billion, will the acute services be able to deliver a fully rounded service in the course of 2024? Does Mr. Dormer know?

Mr. Eoin Dormer

I suppose the next step in that would be the service planning process that the HSE is going through now. It produces its service plan for the money it has been allocated and sets out the services it will deliver next year for that money.

An Cathaoirleach

The process for negotiating on this, for me anyway, seems to be flawed. There is too much finger-pointing going on between Ministers and Departments. It is the customer, or the patient, at the end that I feel sorry for, because they really do not know whether they are going to get the services or not with the spat that is going on, according to the reports that we hear from the newspapers.

Deputy Pearse Doherty

I want to briefly raise a couple of issues. Earlier on when I was questioning the level of the shortfall this year, Mr. Moloney said that the HSE or the Department are talking in accrual and cash terms. Let us park the jargon. The numbers are well established in the media, while the Department may not accept them at the minute. The HSE is very clear that the overrun this year is in the region of €1.5 billion. That is on an accrual basis. On a cash basis, that is €1.1 billion this year.

Mr. David Moloney

Those are the figures in the public domain and in the newspapers.

Deputy Pearse Doherty

Therefore, a Supplementary Estimate for this year would be in the region of €1.1 billion in that case. Is that what we are looking at?

Mr. David Moloney

We cannot run a budget on the basis that the HSE gives us a number and that is the number. The number is looked at and examined by the Department of Health. It comes to us with a proposal and we discuss that proposal. That is what is happening now. There will be a final number very soon, hopefully.

Deputy Pearse Doherty

Okay, but it is in that ballpark. Would it be fair to say that it is in that ballpark?

Mr. David Moloney

It is reasonable to think in those terms.

Deputy Pearse Doherty

If, next week, the Department provides a Revised Estimate and a supplementary budget for the Department and the HSE this year of €1.1 billion, and we can accept that it may be a bit less or a bit more than that, then there is a shortfall that the HSE will have of €400 million that it will have to carry into next year. On an accrual basis, it has entered into the contracts and the invoices are there, but it is just not owed yet. That is what it means. It is owed in January sometime, but it was for services into and ascribed to the HSE this year. Is that not the case?

Mr. David Moloney

It depends on how you view the €1.5 billion figure and whether you agree with it.

Deputy Pearse Doherty

I am talking about the difference between cash and accrual.

Mr. David Moloney

The difference between cash and accruals is when the payment becomes due, yes.

Deputy Pearse Doherty

So, Mr. Moloney acknowledges that there is an overrun - or a deficit, sorry, because the reality of it is that there is an underfunding. Mr. Moloney acknowledges that there is a deficit this year, probably in the region of €1.1 billion.

Mr. David Moloney

I have not given a number,-----

Deputy Pearse Doherty

Okay, but it is in that ballpark. He has acknowledged that it is in that ballpark, on a cash basis. On an accrual basis, that number will be significantly higher. It will be €100 million higher. It will not be provided for in the Supplementary Estimate and therefore it has to be carried forward, and the Department has provided no money for it in next year's budget. Is that not the case?

Mr. David Moloney

We have provided €806 million in core funding and €1 billion in non-core funding for next year's budget.

Deputy Pearse Doherty

Hold on a minute.

There is €708 million in ELS funding and €100 million for specific new measures. The €708 million is made up of numerous parts. I ask Mr. Moloney, as Secretary General, to provide this oversight committee with great detail on how he and the Minister, Deputy Donohoe, arrived at the figure of €708 million. For example, how much of this funding is for public pay and the carryover of the two pay increments introduced this year? How much relates to various inflationary pressures? How much is the full cost effect of recruitment that took place? What are all the component parts of this €708 million?

I do not accept for one second what Mr. Moloney is trying to suggest, which is that the €400 million deficit this year that will have to be carried over into next year can be addressed from that funding. It cannot. Everybody knows that. It just cannot be provided from that funding. The Department has come to the conclusion that this deficit that is here this year will somehow just - poof - disappear next year when the Secretary General of the Department of Health and the CEO of the HSE are saying it will not. They are saying two thirds of that deficit is recurring because it relates to inflation and demand. We are not seeing deflation and demand is not decreasing. It is actually increasing. Has the Department of Health, which the Secretary General has made very clear is the body he is in negotiations with rather than the HSE, changed its position? My understanding is that its position was the same, which is that two thirds of this deficit will recur next year. Has it changed its position? Has it deviated from what the CEO of the HSE is now saying in the conversations the Secretary General is having with him?

Mr. David Moloney

Those conversations are about to be had. We will discuss with our health colleagues the challenges in 2023 in the context of the €1 billion non-core allocation and their implications going forward. By providing this €1 billion non-core allocation in the budget, we have provided room to have that discussion because, at the moment, there is not a common understanding of the different elements of that. We accept that some elements relate to inflation, that some Covid-related costs are being carried forward and that some elements relate to budget management but these conversations will shed more light on those issues.

Deputy Pearse Doherty

On this €1 billion in non-core expenditure, Mr. Moloney is the Secretary General of the Department of Public Expenditure, National Development Plan Delivery and Reform. As an Opposition finance spokesperson, am I supposed to pretend that the €550 million allocated for Covid-related expenditure is not really for that - nod, nod, wink, wink - and that it has actually been allocated because the health service has been underfunded for next year and that the €50 million for Ukraine is not really for that either? With respect, it is nonsense to suggest that €1 billion has been allocated for non-core expenditure as if we had not allocated money for those same purposes the year before. There is a reason that money is there. It is a line item relating to particular expenditure that is unique and that has been recurring for a number of years, although it is now reducing.

Mr. David Moloney

We have been told by the health people that a part of that has to do with increased pent-up demand as a result of the Covid pandemic and people's inability to access services during that period leading to an unexpected spike in requirements for services here and in other countries.

Deputy Pearse Doherty

Mr. Moloney is willing to accept the HSE's position on that matter.

Mr. David Moloney

We do not have the numbers behind it.

Deputy Pearse Doherty

He is willing to accept the position of the HSE and the Department on that but, when both of them say that the deficit this year is €1.5 billion and that, regardless of what they do, two thirds of that will be recurring, he and the Minister, Deputy Donohoe, say no, that they will give them €708 million and that they will have to introduce a recruitment embargo. We talk about inefficiencies in health. This is a prime example. We can see the nonsense going on now as regards people who have made applications. First, all the recruitment that is taking place is being cancelled. That does not come without a price tag. In some cases, we are talking about international recruitment and headhunting people to come into the HSE, which is done at a significant cost. All of that has now been cancelled in respect of the grades to which the suspension applies. There is also the administrative process we have now created wherein arguments must be made for specific derogations and so on. If you want a good example of an inefficient system, there it is. If you underfund a service and force it to run at a crisis point, that is what you get. You get a waste of money. That is where the waste is. The waste is not in allowing patients to come in and be seen in an emergency department and treating them with the drugs they require. This is the type of waste we have now.

Mr. Moloney has said the conversations are ongoing. I want to understand exactly where they stand because we have this Estimate coming next week. Has the Department of Health resiled from its position, which was that it was in lock step with the HSE on two thirds of this year's deficit being recurring? Has that position changed?

Mr. David Moloney

That position has never been presented to me. I do not know-----

Deputy Pearse Doherty

Robert Watt has never said that to Mr. Moloney.

Mr. David Moloney

It would not have arisen at this stage. At this stage, what we have is-----

Deputy Pearse Doherty

Hang on.

Mr. David Moloney

-----a Government decision on the expenditure ceiling, which is what this stage of the budget process is about.

Deputy Pearse Doherty

Is Mr. Moloney trying to tell me that, during the budget process, the Department of Health did not tell him that it was going to run a deficit this year, that it could not stop most of that and that it is going to repeat itself next year? Why were Robert Watt and the Minister, Deputy Donnelly, asking for €2 billion? It is because of that exact fact, that this is recurring.

Mr. David Moloney

I will once again say that it is part of the conversation around the €1 billion in non-core expenditure. We have not agreed any proportion or amount in that regard. We are going to look at the data and at what stacks up in terms of price and budget maths.

Deputy Pearse Doherty

Let us move to another question because, if my understanding of the issue is correct, it makes a mockery of the budget. Is the €550 million allocated for health expenditure related to Covid really for Covid expenditure or is Mr. Moloney saying it is for something else?

Mr. David Moloney

What I have said several times is that the health people have told us that there has been an increased level of demand on the acute sector because of pent-up demand relating to Covid.

Deputy Pearse Doherty

Is that demand going to disappear?

Mr. David Moloney

If it is pent-up demand relating to Covid, it will reduce because the pent-up element will reduce as people get treated.

Deputy Pearse Doherty

The presentation Mr. Moloney is giving here is not the presentation the Department of Health and the head of the HSE has given the Joint Committee on Health. They were crystal clear and could not be clearer that they are sticking to their guns on this issue and saying that the deficit is €1.5 billion and that two thirds of this is recurring. They are not looking for one-offs; they are saying this demand will stay here. A bit of the demand might relate to Covid and all the rest but two thirds is here to stay. It relates to inflation and demand and, if the Department decides to make the Department of Health and HSE come in on budget, it will have dire consequences for health and safety.

That brings me to my next point. The chief executive officer of the HSE has also been very clear. He is going to present a service plan with a built-in deficit, which is unheard of, because of the decisions the Minister, Deputy Donohoe, took and presented to Government. In the view of the Department that oversees public expenditure and reform, is that acceptable?

Mr. David Moloney

The Oireachtas enacts the legislation that governs that process under the Health Act. I have no part in that. It is clearly not the case that no service plan has ever before pointed to elements of financial risk. That has happened before. The decisions taken by the Minister and the Government are very clear on the fact that one of the things we want to do is to work with the health sector on where we go from here. However, these things are managed by the Department of Health in the first instance under the existing legislation. We have had experience before of a level of financial risk being identified in a service plan and having to be managed over the course of the year.

Deputy Pearse Doherty

Mr. Moloney talks about financial risk. That is recognised in most plans, especially in a Department or agency of this size. That is not what Bernard Gloster is talking about. He is saying he is going to present a plan with a built-in deficit and that this will be first time he can remember that happening. He is saying that, with the money Mr. Moloney's Department has provided, it is not possible for him, as head of the HSE, to provide services to the public in a safe way and that he is therefore going to build a deficit into the plan because the Department has decided not to provide him with the money required.

I did not even get into the reasons. There is a political rationale for why this happened but I am not even getting into it. That is the point Bernard Gloster is making. In his time, has Mr. Moloney seen an in-built deficit in the HSE service plan?

Mr. David Moloney

There have been service plans that identified levels of financial risk before.

Deputy Pearse Doherty

I am not talking about financial risk. There is going to be a deficit. In service plans-----

Mr. David Moloney

I have not seen this year's draft service plan, so I do not know what is or is not in it.

Deputy Pearse Doherty

Is it acceptable to Mr. Moloney, as General Secretary in the Department of Public Expenditure, National Development Plan and Reform, that the head of the HSE presents a plan that will have an in-built deficit before we even open the doors in January of next year and that he is saying there will be an in-built deficit?

Mr. David Moloney

One has to look to the legislation and see what is compatible with the legislation.

Deputy Pearse Doherty

Explain it to me.

Mr. David Moloney

The legislation requires the HSE to deliver a service plan consistent and aligned with the letter of determination that it received from the Minister for Health.

Deputy Pearse Doherty

Is Mr. Moloney saying that an in-built deficit would be incompatible with that legislation?

Mr. David Moloney

That is a judgment for the Minister for Health.

Deputy Pearse Doherty

Mr. Moloney would advise the Minister for Public Expenditure, National Development Plan and Reform who oversees expenditure.

Mr. David Moloney

Yes.

Deputy Pearse Doherty

In relation to that, would it be compatible in Mr. Moloney's view with the legislation?

Mr. David Moloney

As I said, my advice to the Minister for Public Expenditure, National Development Plan and Reform would be that it is not unprecedented that a level of financial risk is identified. The Minister already indicated that we want to work with the health sector to deliver an outcome in line with the budget consistent with services being delivered.

Deputy Pearse Doherty

I am not talking about financial risk. I appreciate that is where Mr. Moloney wants to take me. I am not talking about that. Bernard Gloster did not say he was going to present a service plan with a financial risk. He said he will present a service plan to the Government with an in-built deficit.

Mr. David Moloney

I do not know what it is. I do not know what an in-built deficit is in the service plan.

Deputy Pearse Doherty

Mr. Moloney has not engaged with the Department of Health but does he believe that an in-built deficit is compatible with the law?

Mr. David Moloney

I believe the law states that a service plan should be produced consistent with the letter of determination.

Deputy Pearse Doherty

Therefore the funding that is available is what is expended in that year and there cannot be a deficit. Would that be Mr. Moloney's interpretation?

Mr. David Moloney

That is an interpretation but we have to wait and see what is in the service plan.

Deputy Pearse Doherty

I will make a last point. In fairness Deputy Conway-Walsh dealt with this in detail but it is important because it is the Government's response to this. It said we spend the most money in Europe in relation to health and Mr. Moloney came here and repeated that. Ireland ranks first in EU expenditure on healthcare as a proportion of our national income. Please acknowledge that that includes private healthcare.

Mr. David Moloney

We will confirm that.

Deputy Pearse Doherty

I am reading from the ESRI report from 2020, so there are updated figures. It is a study in regard to Ireland's healthcare in international terms. I am sure Mr. Moloney is familiar with this, or maybe his colleague is. It says Ireland's total healthcare expenditure as a share of national income ranks first in the EU 15. That is what Mr. Moloney said. Obviously across the EU it would be no different because we are talking about eastern European if we take in all EU countries. It says Ireland's healthcare expenditure per capita, if adjusted for relative price, ranks ninth in the EU 15. It is now ranked 11th with updated data. It actually says that Ireland's rankings for public and private expenditures are quite different. As a share of national income Ireland for public expenditure ranks fifth, and when adjusted for relative prices it ranks ninth. It is now 11th, based on newer data which the Minister put on the record. However, even with that information, it goes on to say that this still is not clear because Ireland includes payments to family carers in healthcare expenditure and it comprises 4.3% of all healthcare expenditure. It says a majority of ten of EU 15 countries do not include social care expenditure in healthcare expenditure, while Ireland allocates all of it. Therefore, this is a misrepresentation of fact because it creates the impression that we are talking about public investment in healthcare. When private healthcare is stripped off, it is clear that is not the case that we have not the highest expenditure in Europe. When you look at it per capita, adjusted for relative prices, we are eleventh. It could even be a lot worse because we include expenditure in social care which ten of the other 15 European countries do not include when they are comparing with us.

I could have taken any one of those lines and said this is where Ireland ranks, but Mr. Moloney did not qualify this at all because this is a suggestion that Ireland is well-funded in terms of our healthcare but the Minister is right, and it is not often I would say the Minister, Deputy Stephen Donnelly, is right, when he says when we compare ourselves to western European countries, which is a fair thing to do, there are ten other European countries out of 15 that spend more per capita on healthcare than we do. Why is that important? That is important because in this context the Government has made a conscious decision to underfund health on a massive scale. This is not small amount, or a couple of hundred million euro here or there. We are talking about billions of euro. What was needed was about €2.4 billion. The HSE got about €708 million and a bit of a one-off. The consequences of this will be dire. It is not acceptable.

Mr. Moloney can accept or reject the points I made in terms of his presentation of the expenditure. Will he provide a detailed note in regard to how his Minister, himself and his Department agreed that the existing levels of services for the health service next year would be €708 million, breaking it down in terms of the components? Will he add a note explaining to us how the Department of Health and the HSE have got their numbers so wrong?

An Cathaoirleach

I mentioned the Workplace Relations Commission, WRC. Talks at the WRC broke down on the basis that management, Department of Health and HSE efforts to progress the matter were completely blocked by the Department of Public Expenditure, National Development Plan and Reform, which did not send a representative. The breakdown represents a complete breach of the WRC agreement of 19 May 2023, which requested the management side, including the Department of Public Expenditure, National Development Plan and Reform to agree a mechanism to pay the award. Because of the breakdown, I ask Mr. Moloney to give me the report.

Mr. David Moloney

I will write a note.

An Cathaoirleach

On the freeze, I had an email from a lady which I do not have time to get into. She emailed me to tell me that she got a job in the HSE, a fairly senior, responsible position. She gave in her notice where she was working. Now she is being told there is no job. Mr. Moloney might check the transcripts of the meeting and let us have replies to the questions that perhaps were not answered or not answered fully, and give the further information that the members requested. Deputy Durkan will chair the meeting now. I thank Mr. Moloney.

Mr. David Moloney

I thank the Chair.

Deputy Bernard J. Durkan took the Chair.

An Cathaoirleach Gníomhach (Deputy Bernard J. Durkan)

A couple of comments come to mind. When the budget was first announced, the total expenditure for the year was an increase of 5% to 6.1%. Numerous economic commentators raised a red flag at the time. Is that not true?

Mr. David Moloney

It is true.

An Cathaoirleach Gníomhach (Deputy Bernard J. Durkan)

Did that percolate down through all Departments? Was a warning issued to all Departments that we might be going in a direction that was not advisable?

Mr. David Moloney

It was made clear to all Departments that the budget was to be done within the parameters of the summer economic statement that the Government had agreed.

An Cathaoirleach Gníomhach (Deputy Bernard J. Durkan)

The Government and the Departments decided to err on the side of trying to meet the needs of the people. Two issues arise. First of all is it being suggested, and I am not saying Mr. Moloney suggested it, that other Departments should have cut down on expenditure in order to allow the Department of Health to get an increased level of expenditure.

That is against the background of Covid having been managed - and managed well - with the only things remaining being legacy issues that could be dealt with in one, two, three or whatever number of years. That is one side. The other side is that I have felt for a long time that there is a need for some kind of dead reckoning where expenditure in the Department of Health is concerned. While I am aware that the health service is demand-led, with construction projects such as the national children's hospital, the message given to the public was wrong. The presumption in the case of the children's hospital was that it was going to be built for between €500 million and €600 million, but that was never the case. The quantity surveyors had never given any indication of that but somebody plucked the figure out of the air for their own reasons and decided to run with it, with the result that members of the public were astounded by the level of overrun. There has not been a level of overrun. There has been cost exactly in line with what the quantity surveyor decided. A recognition that one cannot speculate and then decide to paint the picture according to the speculation is needed because it does not work that way.

The Department over which Mr. Moloney has control is a very important one and I agree with the reasons for that. It is not so many years ago that we got into a terrible tizzy and had a financial crash due to not watching what was happening. There are still warnings on the horizon that it could happen again because of a shift in circumstances. I do not agree with the suggestion that the public and the Department of Health are astounded. The Opposition claims to have superior knowledge but its members do not. I mean no disrespect to them but their knowledge is based on propaganda and that does not always work. We could serve this country with propaganda during the financial crash and immediately afterwards. We should not forget where we were after the financial crash. Everybody had sympathy for us but nobody had the answer. There were various speculators from at home and abroad who put forward theories to solve our problems that were never called upon. We need to take a rain check and a deep breath.

The last point I will make is on deficit budgeting in the Department of Health while the national budget records a surplus. Is it not true that much comment has focused on the idea that because the money is there, we have to get it and pay for it? That is crazy economics. Wherever one goes, that approach has crashed in the past. The growth and development polices in the EU were ignored not only by this country but in several others as well and we all paid a price. My advice, therefore, is that we be realistic about it. If we go down the road of saying we can get the money by running a deficit instead of a surplus, the Opposition or the Government must explain where it will get the money, which Government Department will have its budget curtailed and whether taxation will be imposed. The wealthy will be mentioned immediately but we know about the wealthy. Venezuela had them but it does not have them now. As a Member of these Houses, I have heard various speculation over the years but none as bad as some of the ventures we entered into in the past ten years or more. We need to avoid that and ensure we do not have a recurrence. The message to be taken from this is that we must demand more accurate budgeting than we have been getting and that we need answers to that. The association of the public and private sectors has to be separated.

We should evaluate where value for money is being achieved as well. Deputy Doherty made the point that people are waiting at accident and emergency departments. I have had that experience with a family member. When one makes a complaint, the answer given is that the patient was triaged. The patient was not triaged. The patient was partly triaged and went home because they were waiting five, ten or 11 hours. Why were they waiting? It was because there was a minuscule number of staff available and that is before one goes into the system at all. If there are not sufficient staff to ensure a through-flow of patients, then we are not dealing with the situation at all. Does Mr. Moloney have any final remarks to make?

Mr. David Moloney

No. We will be very happy to look at the issues that have been raised. Obviously, I reject any association of misrepresentation. When we use data we quote our data sources, so we are very clear and upfront on that. I completely agree with the Vice-Chairman. For the second year in a row, we have exceeded the 5% spending rule in order to provide and protect public services. That has drawn criticism but the Government is of the view that it is the right thing to do. All spending obviously has to be sustainable and all spending allocations are created within that. There is, as the Vice-Chairman said, very little alternative to that approach in our view.

An Leas-Chathaoirleach

I thank Mr. Moloney and the other officials, as well as members, for their contributions.

The joint committee adjourned at 5.26 p.m. until 1.30 p.m. on Wednesday, 22 November 2023.