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 years, with significant targeted savings through pay reductions and efficiency.
From 2015 onwards, funding began to be increased on a gradual basis to meet existing costs within the system. In recognition of the difficulties facing the system, in 2016 a further €500m was approved 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 years’ levels, met shortfalls in the State Claims Agency (SCA) and in PCRS, and provided for a Winter Initiative.
Additional funding was provided for health from 2017 onwards, including supplementary estimates, to cover pay and pension costs, and the SCA. Overall, since 2017, increased funding has been allocated to these and other demand-led areas, and for service-led developments. During the period 2014 to 2018, therefore, supplementary funding was provided for the areas outlined above, and to meet demographic and demand-led requirements in acute hospitals, disability emergency placement and regulation, home supports, local demand led schemes and other areas.
The HSE National Service Plan (NSP) sets out annually the services to be provided by the Executive and the budget provided for that purpose across all health programme areas. The NSP is finalised following an extensive process of engagement between the HSE and my Department. The annual health budget is set within the parameters set out by the Government in its approach to planning for the annual budget. The improving economy has enabled the health service to achieve much needed budget increases in the last three years.
It is clear that there are areas where further improvements are required and my Department continues to work closely with the HSE to optimise service provision within the constraints of available funding. In this regard, the Department provides oversight of the performance of the HSE in relation to the delivery of services set out in the NSP, including ongoing monthly performance management against agreed targets set out in the NSP. In 2019, significant savings are profiled to be achieved in line with these targets. On present trends, taking account of the pressure in certain areas, the HSE would have a deficit at the end of 2019. This is a matter of concern for the Government and my Department is working closely with the HSE to gain further clarity on the position and to mitigate the deficit is so far as is possible, in co-operation with the Department of Public Expenditure and Reform.