Stephen Donnelly
Question:614. Deputy Stephen S. Donnelly asked the Minister for Health the reason health spending has overrun to a large extent since 2014; and if he will make a statement on the matter. [45155/18]
View answerTuesday, 6 November 2018
Questions (614)
Written answers
In any given year, the Government has a finite amount of money for allocation in the Budget, and has many competing priorities.
During the fiscal crisis, as with most areas of public spending, significant reductions in health funding were experienced. Including 2014, the budget provided for Health was less than that provided in the previous year, with significant targeted savings through pay reductions and efficiency.
2015 saw the first modest increase in the health vote for a number of years, and whilst welcome, proved insufficient, given the erosion of the base funding during the financial emergency. The supplementary estimate that year was required to meet ongoing running costs in the sector, new initiatives commenced during the year and some demand led services, and was provided on a once off basis. Thus, whilst 2016 saw a further budgetary increase, the majority of the funding merely met the existing costs within the system, along with pay rate increases. In recognition of the difficulties facing the system, the Minister for Public Expenditure and Reform approved a further €500m for health in the REV, this sum remaining in the base for 2017. This allowed for services for older people to be maintained at the previous year's levels (€30m), met shortfalls in the State Claims Agency (SCA) and PCRS (€200m) and provided for a Winter Initiative at €40m.
Additional funding of €450m was provided in the 2017 budget, along with a further supplementary estimate of €195m. Of the original funding, 39% was required for pay rate and pension costs with a further 6% supporting the SCA. In relation to the supplementary estimate that year, a 38% or €75m related to the acceleration of the restoration of pay under the Lansdowne Road Agreement, with a further 25% or €50m required for the SCA.
For 2018, 45% of the additional funding provided in the budget was required for pay restoration, resulting in very modest increase for services, and the consequent need for a further supplementary estimate. When account is taken of pay restoration, costs associated with the SCA and other demand led areas, there is a reason for the level of increased expenditure year on year. Further, the nature of the health services is such that the normal budget management levers available to other sectors, such as reduction of services, are simply not available to us and consequently, overruns can and do occur. External factors, such as the actions of the Private Health Insurers, can also drive the need for additional funding.
During the period 2014 to 2018 the reasons for the receipt of supplementary funding are as follows:
|
Government/DoH Policy Implementation |
Demographics, Complexity, Capacity |
Demand-Led |
Other |
|
Emergency Department Taskforce Action Plan |
Acute Hospitals |
State Claims Agency |
Private insurer campaign |
|
Waiting List Initiative |
Disabilities - Emergency Placements and Regulation |
Local Demand Led Schemes |
Appropriation in Aid shortfalls |
|
Winter Initiative |
Home Supports |
Pensions |
First charge |
|
Accelerated Pay Awards |
Overseas Treatment |