Dáil Éireann Debate, Thursday - 26 October 2023
1. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to outline the process for determining the appropriate amount of funding under existing service levels, ELS, as a whole and for individual Departments, including where budget deficits exist; and if he will make a statement on the matter. [47037/23]
View answerI would like the Minister to outline the necessary funding to maintain ELS to the assigned Departments, how it is determined and how much is needed for standstill costs, namely, those relating to demographics, inflation and other pressures. This is particularly important following the Government's decision to allocate far less to health to meet standstill costs than what seems was necessary.
I thank the Deputy for her question. The summer economic statement and the mid-year expenditure report published in July outlined an estimated amount of €2.3 billion in respect of the additional costs arising in 2024 to deliver ELS. This amount equated to approximately 3% of the core current expenditure base. This provision took into account the additional amount required for ELS in previous budgets. In recent years, the overall provision in this regard has been in the region of 3% of the expenditure base. Setting out the estimated overall amount required for ELS in the summer economic statement provides greater transparency in respect of the amount that is available for new policy measures well in advance of discussions on budgetary measures.
The ELS provision is a significant element of the budget package and does not represent new policy decisions. However, it is often used to deliver more supports and more services for our population. It includes adjustments in expenditure as the size and demographic composition of our population changes, it allows for the provision of funding for additional benefits to service users for measures rolled out and decisions taken in previous budgets. It also makes provision for the costs of existing public service pay deals. While the summer economic statement set out an overall provision of 3% of the core current expenditure base in respect of ELS, the actual requirement by Department varies, with discussions in relation to the ELS requirements for the following year being a core component of the Estimates process.
ELS are extremely important. Let us be clear, we are talking here about the amount of money a Department needs to continue to provide services at the same level. If a Department is given the correct amount of money, it can stand still. Services will be maintained. If, however, a Department is not given enough money, one of two things will happen- either there will be cuts or the Department will run a deficit.
Budget 2024 provided only €708 million to maintain ELS in the health budget. The Minister and I both know that this is not the standstill cost of health. The head of the HSE, Mr. Bernard Gloster, on Tuesday, confirmed to the Joint Committee on Health that unless he makes cuts there is an in-built deficit in the health budget for 2024. Does the Minister disagree with the head of the HSE? Is it not irresponsible and reckless of the Government to knowingly underfund health for 2024 and to force those involved to run a budget deficit?
I certainly acknowledge that there is a risk of a deficit for 2024. It would not be credible if we were to fail to acknowledge such a risk in light of the recent history of Supplementary Estimates being needed for the Department of Health over many years and those Supplementary Estimates being in the context of either deficits or new policy measures being taken by the Department with, of course, the support of the Government. From a funding point of view, however, I would make the case that the level of funding that we are now investing in the health service, at €22.5 billion, is exceptionally high. To put it in context, in 2016, the equivalent figure stood at €11.8 billion. We have seen a huge increase in funding that is needed for health service in recent years.
The summer economic statement outlined €3.2 billion in what are known as the budget decisions. Essentially, money was set aside to meet ELS and other existing commitments. On budget day, that had been reduced by €500 million. We have been given no explanation as to how this was possible or what was done. This is no way to manage a budget process. The level of transparency is simply not good enough, especially when we see Departments, such as the Department of Health, not being given enough money to meet the standstill costs.
The Minister has an opportunity to bring more clarity to this issue. The money was clearly identified as being needed at that time, in July, to meet existing commitments. What allowed the Minister to reduce the budget decision allocation by €500 million from when the summer economic statement was published in July to the budget day in October and how can we take seriously the information present in the summer economic statements in the future if €500 million can be removed without explanation?
What the Deputy is referring to is the funding that was made available for ELS in the summer economic statement. That is a standard feature of the Estimates process. I would have indicated this when the summer economic statement was published - if not at the recent committee meeting - and certainly on many other occasions.
A standard feature of the Estimates process is that the amount of money that is needed for ELS changes during the Estimates process. Mostly, the ELS figure goes down. I can remember one occasion on which it went up. The reason for that, and how that happens, which I can be very transparent about, is that when I engage with each Department and Minister, the amount of funding they believe is needed for ELS can differ during the Estimates process as we look into what costs will be for the following year and at they new decisions the Ministers involved may want to make. It is very much a standard feature. That figure has moved in either direction over a number of years.
