Dáil Éireann Debate, Wednesday - 11 February 2015
2. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the process by which the most recent comprehensive review of expenditure was conducted and by which agreement was achieved on the multi-annual expenditure ceilings for 2015-17, including the number and nature of his contacts with ministerial colleagues, in particular with the Ministers for Health and Social Protection. [5860/15]
View answerMy question pertains to the comprehensive review of expenditure. We addressed some of the issues arising from the review in committee. The review document sets out a three-year expenditure path. The Minister has described it as a robust and evidence-based framework which will enhance the transparency and structure of the overall budgetary process. While such a framework is welcome, my question seeks to get under the skin of the review process by asking the Minister about the number and nature of his contacts with ministerial colleagues, including in particular the Ministers for Health and Social Protection.
The comprehensive review of expenditure process was designed to provide the Government with a complete set of options ahead of the budget to allow decisions to be made to realign spending with the priorities set out in the programme for Government, meet overall fiscal objectives, and explore new and innovative ways of delivering Government policy in a reformed public sector. Under the process, Ministers and their Departments had primary responsibility for evaluating their own spending programmes, including programmes delivered by agencies under their aegis. Each Department put in place its own internal administrative arrangements to ensure delivery of its detailed report within a challenging timeframe. The review built on the previous analysis carried out as part of the first comprehensive review of expenditure in 2011 and on the evaluations carried out by my Department in the intervening period.
My Department subsequently engaged with each Department on its expenditure report and on the expenditure ceilings needed for 2015, 2016 and 2017. My Department also prepared separate sectoral analyses which informed the engagement. All of this analysis is available on my Department's website. As a result of this review process, the Government considered the expenditure and policy options in the period before the budget. Budget decisions were taken by the Government. As the Deputy is aware, this was the first budget in six years which did not involve reductions in overall spending. The Government was able to make some targeted increases in priority areas identified through the review process, including social housing and some welfare supports, in particular. The Government's deliberations and final decisions on the expenditure priorities for 2015 to 2017 are reflected in the comprehensive expenditure report which was published on budget day.
For the purpose of clarity, the line Minister is ultimately responsible for his or her Department but the Minister, Deputy Howlin, has responsibility for public expenditure and reform, and the review document was published by him. In respect of the health budget, does he stand over the figures set out in page 77 of the review in respect of 2015, 2016 and 2017? We are told that the purpose of this exercise is to develop a realistic, evidence-based budgeting framework. I presume this also means presenting realistic, evidence-based figures and budgetary allocations for essential public services. It is strange that the figures for health represent an increase of 0.5%, if even that much, year on year. In the previous budgetary cycle, there was a need for a huge Supplementary Estimate for health. Our hospitals have overcrowded emergency departments and high trolley counts, if people are fortunate enough to be on a trolley. These figures do not tally with such evidence.
The HSE published its service plan subsequent to the budget. Its service plan for this year sets out expenditure of more than €12 billion, which it estimates will meet the needs of the health service for this year. It is interesting, and I referred to this previously, that the conclusions of the European Council published last year indicated that even though Ireland has a relatively young population, our public health expenditure was among the highest in the European Union in 2012, at 8.7% of GNI. This was significantly above the EU average of 7.3%. We have maintained that. We are actually spending more. Part of the task before us is to drill down to make sure that expenditure is going where it is required. I have never viewed this as simply an issue of money because it is also a question of what we are getting for the money. This is why we have changed the budgetary process to focus on outcomes as well as inputs. There is a view that the response to everything, and I listened to "Morning Ireland" again today, is more money as opposed to an analysis of how we are spending money.
In regard to the Supplementary Estimates, our greatly improved fiscal position at the end of last year gave us the capacity to deploy more resources. As I have stated in this House, if we have more resources to meet real pressures across all sectors, I am happy to discuss that with colleagues to see whether we can deploy them.
That is to be welcomed. We could have a long debate on the level of health expenditure. I acknowledge that we spend a lot on a per capita basis. Our method of funding and the system itself are irrational and need to be completely transformed, but that is a debate for another day. I also agree with the Minister on the question of efficiencies and that it is not simply a matter of throwing money at a problem. None the less, every year we find ourselves in a situation whereby health services are crippled. I cite the dilemmas facing accident and emergency departments in particular because these are writ large across the State. The Minister will be aware that people are left sitting on chairs, never mind lying on trolleys, and he will be aware of the loss of dignity and everything else that entails. While I grant that arguments can be made on efficiency and the method of service provision, there is also a big black financial hole. Although I will always commend the Minister on channelling additional resources to public services, the reason we introduced a Supplementary Estimate for health was not so much because additional resources became available but because the system was so strained that the additional money had to be provided.
I would love to think the review presents an accurate picture of what is required but I do not believe it does. This raises questions about the credibility of the document and, indeed, the process of engagement between the Minister, Deputy Howlin, and line Ministers.
The Deputy raised the fundamental question of how much we should spend on health. I went to the OECD to ask experts who had examined health expenditure across every OECD country what model we might consider using. There is no optimum model, however, and the pressures on accident and emergency departments in this State are replicated in Northern Ireland and the UK. The question of the appropriate amount of money to spend on health will be an ongoing challenge, particularly as expensive new drugs and treatments become available. As the Deputy is aware, people who are ill will demand such drugs and treatments. The capacity of the health system to absorb any amount of money is a real pressure and cause of debate in every state. We have to consider these issues in a balanced way. Some 70% of total hospital sector outlay goes on pay.
When there is pressure in terms of pay, do we engage with that or do we have more people? Can we look at pay rates internationally? Can we have a different skills mix delivering? We need to be innovative rather than simply replicating what we have done in the past to address an issue.
