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Dáil Éireann díospóireacht -
Thursday, 26 Jan 2006

Vol. 613 No. 2

Vote for the Health Service Executive 2005-06: Statements.

The Minister for Finance brought to the attention of the House yesterday a possible change to the estimated carryover of capital to 2006 for the Vote of the Health Service Executive. There has been justifiable concern but also considerable confusion and misunderstanding about this matter. I propose to set out what is fact and what is fiction, what the facts mean and what happens next. I want to avoid financial jargon to the greatest extent possible and to concentrate on substance over form, which is the basis of good accounting in any case.

The facts are as follows. The Oireachtas has provided for two Votes in the health area, Vote 39 for the Department of Health and Children and Vote 40 for the Health Service Executive. There are two Accounting Officers for the Votes, the Secretary General of the Department of Health and Children for Vote 39 and the chief executive officer of the Health Service Executive for Vote 40. The political responsibility for both Votes is mine, as Minister for Health and Children. The role of the Minister for Finance, as was evident yesterday, is to propose the Appropriation Bill to the House which includes provisions for carryover of capital funds from one year to another. It was entirely appropriate for him to make his statement to the House yesterday in that context and given that the Seanad is today hearing statements on the Appropriation Act.

The matter raised by the Minister for Finance yesterday relates solely to Vote 40, the HSE Vote. Throughout last year the HSE provided expenditure reports to the Department of Health and Children of spending against its budget, both current and capital. Last December, as is normal, the HSE provided an estimate of what spending would be for the year that was nearing its end. These were the forecast outturn figures for 2005. They indicated that they expected capital savings of approximately €56 million and current savings of approximately €12 million, that is a total gross saving of €68 million. Provision was, therefore, made in the Appropriation Act for a carryover of €56.4 million capital into 2006.

I apologise for interrupting; is a script to be circulated?

Yes, a script is to be circulated. I hope the Department officials will bring it to the Chamber. In January, as is normal, the HSE prepared a report of what it estimated spending actually had been for the year that had just ended. These were the provisional outturn figures. These figures show a capital underspend of €57.5 million and a current overspend of €53 million, that is, a total gross saving of €4.5 million rather than €68 million as earlier forecast. This change gave rise to the need for the Minister for Finance's statement to the House yesterday. The HSE is continuing to work to prepare its own appropriation account, which must be submitted to the Comptroller and Auditor General by the Accounting Officer by 31 March. The final, definitive statement of spending in 2005 will appear in this account. They are the facts regarding financial reporting.

In his statement the Minister for Finance said: "on the basis of the preliminary outturn figures for 2005 from the HSE, the capital savings anticipated by the executive in December may have been used to meet similar sized costs under the current expenditure heading." The Minister could not be definitive at this time because the final accounts are not ultimately signed off until the deadline of 31 March. The suggestion has been made that somehow the HSE had misappropriated money from a capital budget and spent it on current needs. In plain terms, this would have meant someone in the HSE taking money meant for purchasing medical equipment, such as buildings or wash-hand basins, and using it to pay staff or buy drugs. This would be a breach of very basic financial discipline in any part of the public service. The HSE has assured me this did not happen.

It is part of the normal, continual financial oversight on the part of Ministers and Accounting Officers to ensure that every aspect of spending is properly allocated and reported as between current and capital. However, to suggest a deliberate misappropriation of a capital account to meet current expenses is something altogether different. If it remains the case that there was an overspend on current spending last year, savings on the capital side can offset it. This situation is provided for in public financial procedures. The HSE will be following the standard Government accounting rules. It will seek any necessary sanction to transfer capital savings to cover a current excess in respect of 2005. This request will be considered in the normal way by the Department of Finance. The Dáil approves the total net allocation for the Vote. It does not approve individual subheads or the division between current and capital spending. There is no question of any funding having been spent without authorisation or without Dáil approval.

Deputies may ask why should there be any variation between a forecast of spending near the year end and an estimate of actual spending just after the year end. We expect that financial systems in the public service should be capable of tracking spending accurately and making reasonable forecasts relative to overall budget.

In the case of the HSE, I will mention a number of points. It is bringing in cash accounting for its Vote to go alongside income and expenditure accounting. It was acknowledged from the start that it would take some time for the HSE to put in place financial systems that would deliver maximum integration of these two systems. As this work is done, the HSE will be in an even better position to deliver robust financial management. The cash accounting basis is providing more transparency, notwithstanding the challenge of transition it poses to the HSE. There is no question of the HSE having failed to manage its Vote or not knowing what is going on. The HSE got a total gross allocation of €11.5 billion and its provisional outturn figures are practically the same. I stand over my decision, approved by Government and enacted by the Oireachtas, to give the HSE its own Vote and appoint the CEO as an Accounting Officer. I stand over the policy of having financial responsibility go with management responsibility.

Opposition Members hear the sound of the wind blowing through the trees and declare it is a tornado bringing destruction on our houses and our land. Despite what they would like, this is no tornado. The Minister for Finance made clear yesterday his determination to avoid any adverse impact on HSE capital spending plans in 2006. He also made clear today in the Seanad that there is no change to the multi-annual capital investment programme for health. No health service provided to the public was affected by this last year and no service is currently affected by it. No planned service or planned capital project will be affected by this. It does not mean that some hospital, community centre or other health service will not now be built, commissioned or refurbished.

It is not correct to say that money was used for current spending when it was intended for capital. It is not correct to say that there is a major fault in the Department of Health and Children's financial reporting. The full Estimate has been accounted for. There is no hole in the accounts. There has been no misappropriation of funds. No one can suggest taxpayers' money has gone missing. I repeat that the 2005 outturn figures have yet to be finalised by the HSE. Depending on the final figures, it may be the case that the HSE will be able to carry forward some or all of the €56 million.

I do not believe the Tánaiste's statement that she would try to avoid accountancy terms in her contribution. The credibility of the Government is on the line in this matter. Before Christmas the Tánaiste announced a surplus of €1.6 million, when that was due to over-taxation of the people, something the Government got wrong in regard to the economy in general. We are now hearing that the Government is not spending taxpayers' money properly. The Tánaiste might say it makes no difference as this money was for the HSE. However, there was a major problem between current and capital spending.

In December we were told that €12 million was overspent on the current side. This has now jumped to €56 million to balance the books between current and capital spending. This is otherwise known as creative accounting, which is what has happened.

It was expected that €56 million would be left over from capital spending by the end of 2005, which is 10% of the capital budget that the former health boards and the HSE have tried to keep back every year for the past six or seven years to carry over into the following year. The figure allowed to be carried forward was 10%.

The HSE got it wrong on the current side of its spending. It overspent by €50 million and the Tánaiste is now trying to rejig matters in January so that it does not really matter whether the money is spent as current or capital, so long as the money is spent. Commentators from the Department of Health and Children and the HSE's Financial Officer were not sure whether the money was missing, had been spent or so forth. We have heard this over the past 24 hours. The matter seems to have suddenly exploded from out of nowhere and, for some reason, we are getting the information now.

What happened last June when the Department of Finance wrote to the Department of Health and Children to say it was unhappy with the practice of spending money dedicated to capital projects on current day to day spending? Was the Tánaiste informed in June that this was going on? What happened between June and December or January that meant the Tánaiste did not know about this issue until two weeks ago? This is bad practice when one spends €12 billion per year. It is bad practice for the HSE, the Accounting Officers and the Minister responsible for managing the taxpayers'€12 billion spent on health services. More issues will come out.

Mr. Kevin Kelly told us at the beginning of 2005 that he would need an extra €200 million if he were to deliver his corporate plan in 2005. We saw what happened, that is, cutbacks in services and home help hours in 2005. Services were not delivered until the end of 2005. This is the next problem we must begin exploring in respect of how Governments spend their money. How much is spent towards the end of the year? How much capital and current spending occurs at a profound rate in the HSE in order for people to balance the bottom line? It is not about the delivery of services or proper accountability, rather balancing the bottom line for the Tánaiste to tell the House that there was no problem. This year, there was clearly a problem and someone made a serious mistake. The Tánaiste does not know what is happening within the service.

We should get a clearer statement from the Department's Accounting Officers if they are keeping the Tánaiste informed on what is happening. It would be important for her. When the Tánaiste stood in this Chamber to debate the Health Act 2004 establishing the HSE, she said there were two reasons for proposing the legislation and two ways in which Government policies should be judged, namely, better outcomes for patients and better value for taxpayers' money. We do not know whether we are getting better value with this sort of carry on, when money is put aside for capital projects. The Tánaiste seems to be saying that this 10% is nothing more than a slush fund if a booboo is made on the current day to day spending in the health services.

As Deputy Kenny pointed out this morning, we do not know how many people work for the HSE or where millions of taxpayers' money is being spent. I often hear anecdotal information about end of year spending and how health authorities run out to buy computers, televisions and pieces of equipment that they are not sure they need. We never know whether this really happens as it is very difficult to trawl through the accounts to determine what is happening unless someone tells us what is going on.

One cannot get a speech therapist in north Dublin.

The Tánaiste made another mistake this morning when she stated that €200 million was overspent in the establishment of the HSE and no one in this House cared less about it. I raised that issue during the debate on the Estimates for the public service in 2006 and asked whether it cost approximately €200 million to establish the HSE in 2005 and, if it were true, whether the Department could clarify the figure. Interestingly, an official present contacted me within a number of days to say there was an issue of overspending in the health authorities among other matters, which he did not go into at the time. As we were approaching the end of the year, I decided to raise it in the next round of parliamentary questions. I submitted a parliamentary question to the Tánaiste before 11 a.m. yesterday and I hope she will give me a nice, clear answer now that she has raised the issue. Five hours before the Minister for Finance, Deputy Cowen, appeared in the House, I asked about where the €200 million went. I hope the Minister will give a clear answer as it is important that we know what is happening with money spent on the health care service.

Why did this happen? The Tánaiste is not right when she says it is a big pot into which authorities can dip when they need millions of euro to spend. I was under the impression that finance officers were told to rigidly stay within budget, whether they were in health boards or the HSE. The practice about which the Tánaiste spoke, of holding back major capital projects and spending until the end of the year, came about as a result of the idea that authorities were told not to overrun on their budgets. Will the Tánaiste explain what is happening in this respect?

The health care service has a significant number of problems but the Tánaiste put her name on the line in terms of the efficiency and financial accountability the HSE is supposed to bring to it. Nothing we have seen throughout 2005 or the beginning of 2006 gives us any confidence that the HSE is getting its act together. Why did the finance officer appointed at the beginning of 2005 stay for only four or five months? Did he have any comments to make on this matter? Are there other issues concerning financial accountability and the HSE that we should hear about before we must trawl through freedom of information requests to find out the information ourselves? Will the Tánaiste make a clear statement on whether there are difficulties regarding financial accountability within the HSE and health care services?

Within certain sections of the HSE there is a lack of confidence that the organisation is working as intended. If that is the case, the Tánaiste may have greater issues to face than the €56 million, the €150 million spent on PPARS or as yet to be exposed money wasted on other matters throughout the health service.

While this was happening, services were denied to patients. Operations were cancelled, there was no home help or speech therapy services and a whole range of elements were denied to patients across the health service. The House needs clear answers. I will wait to hear the contributions of others and then ask the Tánaiste something else during the questions and answers session.

Here we are on the second day of the new Dáil session and it is already groundhog day. Nothing has been learned by this Government. Despite PPARS, the leaking tunnel, dodgy Luas tracks and electronic voting, nothing has changed and here we are, yet again, dealing with money that has been misspent and waste and incompetence that could only lie at the door of the Government.

It is clear the Government has known for some weeks that this money has been mismanaged, to put it kindly, within the HSE but we are only hearing about it now. This is the Tánaiste who made the great claim to be outspoken, to tell it as it is and when it happens. However, these attributes seem to disappear the longer she stays in her brief. Even though the Tánaiste is responsible, it was the Minister for Finance who sneaked in here yesterday, told his sorry tale and sneaked out again. The Government has been trying to spin and obfuscate its way out of this matter ever since, as it has done in the past.

The facts are plain. It is clear that the Tánaiste and Minister for Health and Children is floundering. Far from being in charge, she is flailing around and trying to spread a bit of the blame for the latest debacle in a chaotic health system, a chaos that is largely her own responsibility. Even with her latest speech she is unable to answer legitimate questions asked about her stewardship of the health service.

Let us examine the record since she has been in that office. She failed to deal with the accident and emergency crisis despite her grand promises. Her medical card scheme has fallen apart and the scheme for repayments to the elderly is still on ice, yet this is the Minister who insisted on forcing through the establishment of the new regime, the HSE, last January despite the advice of civil servants and the urging of people like myself. She insisted on pushing through legislation and making the Accounting Officer of the HSE the CEO of the administration. At the time, there was no CEO on the horizon, there was only the sight of Professor Halligan scampering away as quickly as he could. The Minister forced through the legislation without debate, leading to a new regime that did not have the preparation and planning necessary for such a major regime change.

In Britain, when changes of that type occur, much more time was given to preparing the transition from one system to another. We are now reaping the whirlwind of a health service managed by two systems, the old and the new. This has led to much bewilderment from people operating the system. I recall the assistant CEO stating that since the establishment of the HSE he had six different job titles. One cannot manage a health service in a professional way when there is such administrative chaos.

The incoherence in the system was not eliminated but exacerbated by the Minister's actions. She overlaid an old system with a new, unfamiliar one. Millions of euro have been lost or unspent as a result. Before we get too tangled up in issues of financial management, let us recall that elderly patients are lying on trolleys in accident and emergency units, hospital wards are filthy and cancer patients have difficulty accessing desperately needed treatment.

The clear message that comes back is that we must build capacity. The pressures on our health service are so great that capacity building is crucial yet €56 million that could have provided new beds, built accident and emergency units or increased capacity in operating theatres remains unspent. The Minister must explain why it was unspent. Why does Professor Drumm point out that the capital programme was not agreed until July? I believe the Minister bears responsibility for delays in delivering the capital programme in 2005. Had there been political leadership to drive the capital programme, no money would have been left in the kitty.

From year to year the capital programme is not spent and this suits the Government as it appears more money is put in each year. Money remains unspent on the most important project in the health service, namely, building capacity. Our population, the elderly population, and our health needs are all growing fast but the element that is not growing fast is capacity. This debacle is further evidence of this lack of growth and this is deeply disturbing to people dependent on the health services.

The Taoiseach has no perception of how deep is the crisis in the health service. He speaks of people being unintelligent if they ask why a relative is lying on a trolley in an accident and emergency unit. This reflects his understanding of the seriousness of the situation.

The simple rules of good governance should be ones this Minister would espouse and understand. The HSE was warned by the Department of Finance last June about the issue of transferring money from capital to current spending. Why did it not heed this warning? What must the Minister tell the HSE so that it understands what is happening? What are the pressures on the HSE that lead to it paying bills for day-to-day spending, even though the Minister cannot tell us which bills these are?

The central point is that a high price has been paid, going back as far as the establishment of the HSE, for the pig-headed approach of the Minister, who drove this project without thought, preparation, foresight or understanding of the implications of bad management. One year later, a little humility would not go astray even if, during the Minister's watch, some €56 million has gone astray.

The Tánaiste promised efficiency, accountability and value for money when she became Minister for Health and Children. The Minister cannot tell us how much the HSE has spent, where the money is gone, how many people are employed in the health service and how much this costs, even though €160 million has been spent on a computer system to find this out.

She has been successful at apportioning responsibility and blame. The Secretary General of the Department is gone and the previous Minster is responsible for so much. This latest incident has happened during her watch and reflects a lack of understanding of how the health system works. We all accept that a change was required in terms of streamlining the system.

The HSE was established without a CEO, which does not make sense at the most basic level. One does not have to be senior management to realise that this creates difficulty. The director of finance vanished very early in the life of the HSE. The disappearance of the director of the hospital authority received much publicity but we do not know why the director of finance left. What are the difficulties in the management of finances in the HSE? I regret we do not have more time as this subject requires much more attention and detailed investigation. I hope the Minister will accept the invitation of the Joint Committee on Health and Children to attend a meeting to address this in more detail.

I propose to share time with Deputies Gregory and McHugh.

In the 200 seconds I have to speak on this issue I wish to hold the Minister to account. The Minister has indulged in some creative accounting. Yesterday the Minister for Finance told us we would have, in the Government's term, a carry over of €56 million. This is public money and the public wants to know what is going on in the Department of Health and Children. Can the Minister state what is going on? I believe she cannot because it is a Department that is out of control.

Other speakers referred to a litany of incompetence, and we have seen a scandalous waste of money, including PPARS, the nursing homes, the Dunne inquiry, MRSA and the accident and emergency units crisis. All this has happened on the Tánaiste's watch, a shocking litany of unparalleled and abject failure. The Tánaiste promised greater efficiency and value for money. Where is the value for money? Where is the efficiency and accountability? Where is the world class health system the Tánaiste promised this House? It was suggested by some that we ought to give this Government a pocket calculator. That might stretch its capabilities. I suggest we give the Government an abacus that will allow simple subtraction and addition. The Tánaiste is getting her figures so badly wrong that at this stage we are discussing gross incompetence and bungling on an unprecedented scale.

Who will take responsibility for this? Is it the Tánaiste or the HSE? Will anybody resign? It seems that under the administration of Fianna Fáil and the PDs nobody takes responsibility. That is the difficulty. The figures shows a capital underspend of €57.5 million. The Tánaiste misspent public money in the past and she suggests that the underspend will not make any difference to services. Try telling that to the hundreds of people on trolleys this evening. It certainly would make a difference.

It is time the Tánaiste and the Government got their act together regarding health. The people will hold them to account. The Tánaiste may feel the people will forget about it. She stated in the past that people have short memories. They are wising up to this Government and the Tánaiste will be found out.

The revelation yesterday of a massive accounting blunder by the Health Service Executive came eight days after the HSE told the Department of Health and Children it wished to alter the figures previously presented in the Dáil in the context of the Appropriation Bill. This is how the matter came to light according to the Minister for Finance yesterday. The question must be asked as to why it was not announced as soon as it became known. Why was it not put before the Dáil in a proper manner by way of an appropriate motion, amending legislation or Supplementary Estimate? As was pointed out earlier, the use of a personal statement by the Minister for Finance for this purpose is clearly contrary to Standing Orders. If a member of the Opposition attempted to do this, he or she would be ruled out of order.

The bigger question is how such an error could have occurred and what it says about health service governance in this State. It is shambolic to say the least. It is another blow for the credibility of the Government and its health policy and management, and for the credibility of the HSE which was established with such fanfare. The Government used the HSE as a shield to deflect criticism from itself over the rolling crisis in our public health services. Today that tactic has come back to haunt the Government, which has used the HSE to reduce its own accountability to the Dáil on the health services. As I stated this morning, we now have a situation, as exposed in reply to a Dáil question I asked, where approximately 46% of Dáil questions tabled to the Tánaiste as Minister for Health and Children are referred to the HSE. That compares to a figure of less than 30% to the health boards when they were established.

Coming on top of the PPARS scandal, this blunder further undermines public confidence. This is dangerous at a time when the Government is in alliance with the private health business, clearly to the comfort of the Tánaiste, and is pursuing a privatisation strategy in our health services. There are those who will use blunders such as this to undermine the principle of public provision of health care. That principle must be maintained, despite the efforts of the Tánaiste and her colleagues to shift the entire emphasis in our health care structure.

I want to nail the spin put on this situation, that €56 million is a small amount of money when taken in the context of the €11 billion budget of the new Health Service Executive. It is true to say it is a small percentage in the context of the HSE's overall budget, but anybody or any Minister who feels that €56 million is a small amount of money has completely lost touch with reality.

Apparently what happened was that €56 million allocated for capital projects was not spent for that purpose but was instead used on day to day spending. The question must be asked as to what capital projects suffered as a result. Was it the Tuam community hospital promised by the Taoiseach four years ago and not delivered to date? Was it the ambulance base for Tuam to serve north-east Galway, south Mayo and west Roscommon that has not been delivered, resulting in patients' lives being put at risk on a daily basis? Was it the primary care unit for Tuam promised but not delivered? If it was any of those projects, will the Tánaiste assure us during the question segment of this debate that the Tuam projects will be included in this year's capital projects programme.

My colleague from Clare, Deputy James Breen, who was anxious to speak on this debate but was unable to do so due to time constraints, is equally concerned about Ennis General Hospital, where funding was allocated but not spent. Perhaps the Tánaiste will take the opportunity today to explain why that funding was not spent and what she proposes to do about Ennis General Hospital. In the later part of this session will the Tánaiste outline what projects have suffered, particularly whether Tuam or Ennis suffered? The total amount for those projects is the same as the amount that was misappropriated.

In the context of the delay in the capital programme for 2005 I want to raise the urgent need for a decision on the future of Temple Street Children's Hospital. The plan for a new modern children's hospital on the Mater site has been ready to go to final tender since last year. Despite many inquiries by the Temple Street Children's Hospital authorities, there is still no indication of approval from the HSE to allow the new children's hospital to progress. This is despite several commitments, including from the Taoiseach, that work would start this spring and be completed by 2009. Who is taking responsibility for the health services? Is it the Government and the Tánaiste or is it the new bureaucrats of the HSE?

Temple Street Children's Hospital desperately needs new modern facilities. It has some of the busiest accident and emergency departments, wards and theatres in Ireland, with queuing, a lack of privacy, an extremely dedicated staff and grossly inadequate facilities. The children of the northside of Dublin need Temple Street Children's Hospital and deserve better treatment than this. They deserve the new facilities this Government has promised for so long. Apparently that promise has now been broken. Will the Tánaiste honour the commitments already given on Temple Street Children's Hospital? Will she act like a Minister for Health and Children and get this project back on the rails and back on the timescale promised to start in the spring of this year?

The Tánaiste should specifically answer this question when she replies. It is not only the dedicated staff and the parents of children in the hospital who are dependent on this new modern facility. The entire future of the northside of Dublin is also dependent on it. The facility has been given commitment after commitment and promise after promise. A total of €45 million has already been spent on developing the proposal, which was put on hold at the final critical stage when it was ready to start. I want a full explanation for this. The people and children of the northside of Dublin deserve an answer to these questions. I ask the Tánaiste to take whatever steps she can to ensure the HSE responds to the requests from Temple Street Children's Hospital and get the project moving. It is urgently required.

Questions will now be put to the Tánaiste and Minister for Health and Children.

The matter of the €56 million is not the only one that indicates a cavalier attitude towards accountability in Government spending. The Minister for Finance has questions to answer regarding this issue. The June memo was discussed earlier. It is quite clear that the Department of Finance told the Department for Health and Children that it was unclear how the costs were and continued to be appropriated as between current and capital spending, that current items were treated as capital and that it must stop. That is what the Department of Finance stated in June.

Another meeting was held in September for the Department of Finance relating to what was happening at the Department of Health and Children. It stated that no sanction had yet been given for any IT spending in the HSE for 2005. However, it was aware that substantial moneys continued to be spent, despite the lack of sanction. For PPARS and FISP, it had informal indications that this could amount to €1.75 million per week.

This appears to indicate that although no sanction was given for such expenditure, up to €1.75 million was being spent every week within the Department of Health and Children. I want the Tánaiste to clear this up——

While the Chair is reluctant to intervene, perhaps Members, particularly those who have had an opportunity to make a contribution, will confine themselves to questions.

The Tánaiste should clear that up.

Many Members who did not make a contribution wish to ask questions.

Questions can be asked later.

This is question time and I ask Members to confine themselves to questions——

I am making a point in respect of expenditure.

——and then we will be able to facilitate them.

The Department of Finance's role in this regard is also important. This took place between June and September. Another important issue is that Professor Drumm did not get his capital budget until July.

In fairness to a number of Deputies who are waiting patiently and have not yet contributed——

I have a final question. Will the Tánaiste repeat her remarks regarding the sum of €12 million? Apparently, an over-expenditure of €12 million was indicated in December, which appears to have increased to €56 million by January. How did the figures change over the months? What happened?

I hope it will not sound arrogant to state that there appears to be a complete misunderstanding as to what happened. First, I will reiterate the point in my speech that there was no misappropriation, no money was misspent and no money went missing. It was not the case that any capital money was used on the revenue side. I wish to make it clear that that did not happen.

As for Deputy Twomey's comments in respect of the Department of Finance——

The Minister for Finance said so yesterday.

No, he did not. As for the Department of Finance memorandum dated 28 June, it stated that it would be wrong to spend any capital money on current expenditure or vice versa, and it would have been wrong had it happened in this case. However, I will reiterate my earlier remarks. On 22 December, the HSE gave the Department a forecast. Each month the HSE meets the Department and we align expenditure with budgets. It’s forecast stated that it had an underspend on the capital side of approximately €56.4 million for the year and an underspend on the revenue side of €11.9 million. The appropriation account was drawn up on the basis of that forecast and the figure of 10% was carried over. It was an estimate of what the HSE thought the outturn for the year would be.

On 17 January, the HSE informed the Department that it appeared that the forecast might change in that while it still had an underspend on the capital side of €57.4 million, it might have an overspend on the revenue side of €53 million, and that it would not have the final outturn until 31 March, when it is obliged to so do under legislation.

The HSE did not use capital funds on the revenue side. If the HSE's estimate turns out to be the position in March, we will seek the Department of Finance's permission to use the surplus on capital to make up the deficit on the revenue side. However, it is not the case that the HSE——

It is exactly the same.

No, it did not spend capital money.

It will simply wait until March to have it approved.

We are discussing possible outcomes. The outturn will be revealed on 31 March. Lest Members do not understand, we have moved from an accounting system based on income and expenditure under the old health boards. Under that system, one measures what is spent, what is raised, what income has been generated that has not yet been received and what expenditure has been incurred that has not yet been paid. While we must continue to use that system, we have also moved to what is called an accrual system, which is an exact picture in time. As the Department of Finance informed the Committee of Public Accounts in February, this is a significant transition and will take some time to complete. However, I reassure the House that there was no question of the HSE using capital funding on the revenue side. It has given us details of what the picture looks like as of January and we will know the final and true picture on 31 March 2006.

Moreover, with regard to my statements this morning on the Order of Business, Deputy Twomey should be aware that the old health boards were able to maintain overdrafts. If the old health board regime was still in operation, this transparency would not exist and we would know nothing about this matter. Hence, in 2005 we were obliged to pay off the old health boards' overdraft of €130 million and were obliged to pay €90 million in pay and PRSI as a once-off measure. Effectively, this covered the pay and PRSI for the month of December of the previous year, which was included in the 2005 budget. This explains the sum of €216 million about which I understand the Deputy has tabled a question.

The Minister has not answered the question which has been asked by several Deputies. Why was the money not spent on the capital programme? What was lost as a result? Where was the money spent, which is almost equivalent — the Tánaiste is simply playing with words at this stage — to the amount overspent on the revenue, or the day to day expenditure side. On what was it spent? Why was there such an enormous divergence, of more than €50 million, between a forecast in the middle of December and the middle of January? Allowing for Christmas, this was period of a couple of weeks.

Who has been the Accounting Officer from 1 January 2005? Surely the Tánaiste now accepts that she was far too hasty in establishing a new authority to take over the entire management of the health service without a CEO and without proper preparation.

Kevin Kelly was the Accounting Officer from 1 January. He was the acting CEO of the organisation and I believe that Professor Drumm became the Accounting Officer on 14 August, when he took over as CEO. With regard to the capital side, clearly capital projects are scaled or phased. The capital budget was not approved until July 2005 because of the transitional arrangements from the old health boards. This year, the capital budget will be approved in February. Clearly, a capital budget that has not been approved until July poses major problems for an organisation. We always knew, as I have acknowledged in the House, that there would be transitional issues in 2005, given that, effectively, we moved from 11 organisations to a single organisation.

As the Deputy will acknowledge, the forecasts and estimates do not enable me to ascertain how the overspending might have taken place. This will not be known until we see the final set of accounts, which this House and the Comptroller and Auditor General require to be produced by March 31. In no accounting arrangement in the world — I know this even from an example such as running an organisation like a political party — and in no commercial organisation does one finalise one's accounts exactly on 31 December. Everyone has a couple of weeks or months into the new year to finalise their accounts and their position.

As for the figure given on 17 January, Professor Drumm was being cautious and prudent. He stated that this might now be the position and immediately we alerted the Department of Finance. As the Minister introduced his Appropriation Bill, he correctly informed the House of the potential issue regarding the final outturn in March. I stress that while there may be an issue, equally there may not.

The Tánaiste has used an interesting phrase, namely, "transitional issues". For how long will we experience these transitional issues? In other words, for how long will the position get worse before it gets better? The Tánaiste has repeated her assertion that it is not correct to state that money was used for current spending when it was intended for capital purposes. However, does she not understand that this is how it appears when one examines these figures and sees a capital underspend of €57.5 million with a current overspend of €53 million? Are we not examining this sufficiently carefully or has the Tánaiste explained it in a different way? She mentioned the manner in which people do accounts, even in political parties, but is it not the case that one can bandy around figures and make them look as one wishes?

Deputy Gormley should take a lesson from Deputy McManus and confine himself to questions.

I have just asked a question.

If we are going to answer questions about this issue, it is important that we deal with reality rather than with perceptions. It is not the case that the HSE had a sum of capital funding available, intended for all kinds of capital projects, which it decided to switch over to spend on salaries, wages or other current expenditure, such as the items mentioned by Deputy Bruton earlier when he referred to home helps and medical cards. Both are examples of current rather than capital expenditure. The HSE did not do that. Its position is that, as of 17 January, it appears as though it has a €57 million underspend on the capital side and an overspend of €53 million on the revenue side. If that is the case, it will only be able to offset one against the other subject to the permission of the Department of Finance. If that permission is not forthcoming, I will come before the House with a Supplementary Estimate for the overrun on the revenue side. The HSE has not done that. It has simply totted up both sides and given its position. However, it did not use money identified for capital expenditure on the revenue side.

Subject to approval.

Of course it would be subject to approval. If it did what has been suggested, namely, to use capital money for current expenditure, it would be a serious breach of the rules.

It knows it will get permission to so do.

No, there may have to be a Supplementary Estimate. It does not know that it will get permission to do so.

That is what will happen.

The reason we moved from the income and expenditure basis for accounting to the accrual method is to have an exact picture, greater transparency and greater accountability. I strongly stand over the decision of the Government to make the chief executive officer, who has responsibility for delivering services, also financially accountable. I stand over that because one cannot have responsibility without accountability.

How long before it happens?

The Department of Finance stated in a memo to the Committee of Public Accounts that it would take some time to make the transition from 11 financing systems into one. They are doing extraordinarily well. Among the staff at the HSE level are people who worked formerly for the Comptroller and Auditor General. The HSE has much expertise in this area.

This is the largest change management process ever undertaken in this country——

That is why it is dangerous.

——and one of the largest ever done in the world. That is a fact. It is being done for good reasons, to provide a more streamlined effective delivery of health care.

It is not happening. Was any of the €56 million underspent on the capital side used to pay administrative staff?

When the Health Service Executive was set up and the 11 health boards were abolished, what happened to the chief executive officers and all their staff? None of them was sacked or anything like that. What are they doing now and what are they being paid to do now?

On the cutbacks in home help, I received a letter from the Health Service Executive in late December stating——

Would the Deputy confine himself to questions because there are a number of Deputies offering?

This is a question. I want clarification on this. The letter stated that there are people in Clonbur who would take up the post but there is an embargo on the recruitment of staff at present. In reply to a parliamentary question yesterday, the Minister stated that her Department has not imposed any limits on the recruitment of staff.

It is a matter appropriate to Question Time.

Is there an embargo on the recruitment of staff for home help? I am aware of cases where home help has been cut back from eight to four hours and the Health Service Executive informs me it cannot appoint anybody. If the money available were released, we would be able to keep people in their own homes rather than put them into institutional care.

The answer to the first part of the Deputy's question is "No". The answer to the second part is we have invested substantial new moneys in home help for 2006. It is not a question of there being any——

Why is there an embargo on the recruitment of staff?

There is not. There are ceilings in the health system. It does not apply to home help, to accident and emergency services or to the packages for disability and the elderly. We have appointed more than 40,000 new staff to the health service in the past seven years. Clearly we must be prudent and sensible in the areas where we recruit new staff. It would be mainly in the area of front-line workers where the additional staff would be recruited. The home help service is not affected. On the contrary, it will be greatly expanded during 2006.

What happened to the CEOs?

As the Deputy will be aware, most of the CEOs have retired and are in other jobs.

They are pushing paper in offices. What are the former CEOs doing?

That is a good question.

Was the Tánaiste and Minister for Health and Children serious when she stated in her speech that there is a gross saving of €4.5 million rather than a non-capital spend of €56 million, a figure which, incidentally, was given to the Dáil in November when the Estimates were published just before the budget? She states that, by running the €56 million and the current overspend of €53 million together, she is creating a saving of €4.5 million? She just stated that the distinction between capital and current spending is critical and it would be wrong to confuse them. I put it to her that the spin in her speech is designed to mix them even more than the Taoiseach's syntax. Would she respond to that? As the Department's current expenditure figure is wrong by €53 million and there is a €56 million carryover, is the error in the Department's account nearly €112 million?

In the budget before last, the Tánaiste and Minister for Health and Children will recall that the Minister for Finance's great invention was the 10% capital carryover. She is now playing ducks and drakes with it. It was published in the Estimates and it was confirmed by this House as part of the budget package. Why is the Minister for Finance not sitting beside her to account for his great budget reform of capital carryover permission when she and the HSE have made a shambles of it?

Did somebody in the HSE go to Enron and look at that company's accounting practices because it is precisely this kind of sleight of hand that usually lies at the bottom of financial misrepresentation? The statement the Tánaiste and Minister for Health and Children made today is a disgrace. It is unworthy of her.

Deputy Burton is an accountant and no doubt understands, perhaps more than most, the difference between income and expenditure and accrual accounting etc.

Fiddling figures.

She accuses me of getting involved in creative accounting by stating there is a €4 million surplus and yet she goes on about €112 million. In order not to confuse people — Deputy Burton is a member of the Committee of Public Accounts — the outturn for 2005 must be clear by 31 March when the CEO signs off on the accounts and presents them to the Comptroller and Auditor General. That would be the true picture but the CEO, to be cautious and prudent, stated on 17 January that this is what it looks like: a €57 million underspend on capital and a €53 million overspend on revenue. When one takes the overspend from the underspend, one still has a surplus of €4 million in the health system. That is not——

Rubbish.

No. All day we are being accused of overspending, mismanagement and misappropriation.

That is Enron accounting.

No, it is not.

Yes, it is.

Nobody misappropriated any money or misspent any money.

Except the service was cut back.

I have total confidence in Professor Drumm and the management of the HSE. It is being suggested that this is a major scandal and somebody did something terribly wrong. That did not happen. If we had not changed the accounting system, we would not even be having this debate. As I stated, I was not asked many questions and people were not screaming in the Dáil last January when the health boards ran an overdraft of €130 million.

The Tánaiste had a means of stopping that, there and then.

If the HSE could run an overdraft, we would not be having this debate either but we will not do that anymore. More transparency, a clearer picture——

What happened to the carryover?

Deputy Burton had her opportunity. I call Deputy Ó Caoláin.

As the Minister for Finance stated and as I quoted in my speech, there will be no loss to the health system as a result of this.

No, I asked what happened to the carryover. It is abandoned.

I have called Deputy Ó Caoláin.

I am conscious that the time is flying and others wish to contribute. Why was the matter not announced when the information was given by the HSE to the Department last Tuesday week? When exactly did the Tánaiste and Minister for Health and Children become aware of this matter? As the information was known well in advance of the commencement of yesterday's business, the first day of the Dáil following the recess, why was this matter not put on the Dáil schedule for this week in the normal course? Is it not ironic the that HSE has imposed penalties for alleged inefficiencies on hospital sites, including on Monaghan, Cavan and Navan hospitals in my region to the tune of €1.5 million, and yet has itself overseen such gross inefficiency to the tune of €56.4 million? Surely this will not be sold at local level.

The Oireachtas votes the total sum for the HSE and the Department and switching money from one subhead to another does not require the approval of the Oireachtas. When the HSE informed us on 22 December, the Secretary General of the Department informed me. I remember him telling me the position on the day, and again on 17 January.

I am not being told I should have made a statement on 22 December to the effect that the situation is so one day and otherwise the next. The reason the Minister correctly brought it to the attention of the House was because of the implications for what he had done in the appropriation accounts, but even he made it clear yesterday that it may be the position. Equally, it may not be the position when we see the final accounts. That is a fact.

It is important to stress here that there is no question of any impropriety, mismanagement or misappropriations of money from the capital to the current account. That did not happen.

Mismanagement.

That did not happen.

There is the potential.

Many of the people commenting on this are trying to create the impression that something which should have been used for equipment and buildings was used for day-to-day spending. That did not happen.

I call Deputy James Breen. A number of Deputies have not spoken yet.

The Minister and the two Ministers of State have made a shambles of the health service.

Does the Deputy have a question?

I have a question. The Tánaiste and Minister for Health and Children met the Ennis hospital action group 12 months ago. Will she now confirm whether Ennis General Hospital will remain an acute medical and surgical unit, with a 24-hour accident and emergency service?

I do not know what this has to do with the HSE accounting issue. Commitments made by the HSE during 2005 regarding facilities at Ennis hospital will be fulfilled.

The Minister indicated all that was required was the authorisation of the Department of Finance in a case like this but that is not true. Will she confirm that in respect of a deviation such as this the practice followed by the former health boards was that the accountancy department in the section concerned had to authorise the over-expenditure in the first instance and the non-expenditure under the other heading? Following this, authorisation was provided by the Department of Finance, not the other way around.

The Minister referred to overspending of €200 million several years ago by the former health boards. Will she confirm that the then Minister and the Department knew of the overspending well in advance, it was monitored on a regular basis, the Minister was kept up to date and it was not a surprise by any stretch of the imagination?

With regard to overall expenditure on health services, this is a new but dangerous system. Will she confirm that, normally, clear indications were given at regular intervals throughout the year regarding expenditure under capital and current headings and any deviation from that had to be immediately authorised by the Accounting Officer with health board staff and members being notified at an early date?

The Minister is saving up for the election.

Switching from one subhead to another and balancing the position is a matter for the Department of Finance and if the Department did not approve it, a Supplementary Estimate would be required. That is the technical procedure.

Precise detail is not provided week by week when a Department is spending €11 billion. Estimates close to budget are provided, as people try to forecast demand. Many of the schemes under the aegis of my Department, similar to other Departments, are demand-led and they can vary.

While it was known the former health boards had overdrafts, I was not aware of the extent of the overdrafts. The precise amount was not known until early 2006 and that was when the figure of €216 million emerged, comprising €90 million for staff and PRSI and approximately €130 million for the overdrafts.

Why does the financial year of the HSE not coincide with the Department's financial year? That would be logical. Even the Revenue Commissioners changed from an April to April financial year so that they could reconcile accounts. The same scenario could emerge next year if there is not certainty regarding the conclusion of the financial year.

The Minister stated "No planned service or planned capital project will be affected by this". A sum of €56 million will not be available for capital projects. Will the Minister have to introduce a Supplementary Estimate to replace this sum, if it has been expended elsewhere?

The capital budget surplus had not been spent on revenue, which cannot happen without approval. The Minister for Finance confirmed in the House yesterday and in the Seanad earlier that there is no question of the capital budget suffering a loss of €56 million.

The financial year is the same. While the accounts will be produced by 31 March, they will relate to the calendar year, 1 January to 31 December 2005. That is the same as the Department.

Yesterday the clear impression was given that money would be transferred from the capital budget to a day to day spending budget but the Minister has said this is not true. Can she guarantee the sum of €56 million will carry over from last year to this year's capital programme? That is important because the money is desperately needed.

Will a Supplementary Estimate be introduced because there is overspending on day to day spending? If the Minister is to guarantee the carryover in capital spending, such an Estimate will have to be introduced.

Yes, in accordance with the Minister for Finance's contributions in the House yesterday and the Seanad earlier, there will be no loss to the capital programme and, therefore, if the situation that emerged on 17 January pertains when the accounts are signed off, what the Deputy is suggesting will have to happen. The 2005 accounts will be balanced and the shortfall will have to be made up so that the capital budget will not suffer.

Why is it then that the briefing that was given——

I am sorry. Other Deputies are offering.

Yesterday's briefing stated the carryover amount specified in the Act will not be available for spending as carryover in 2006. That was the purpose of the statement yesterday.

I ask the Deputy to give way to Deputy McHugh.

How is it the statement by the Minister——

There will not be a carryover. It will have to be an additional sum.

The Minister cannot have it both ways.

The amount cannot be carried over if it is not there. Let us not play games.

Where is it gone?

I ask Deputy McManus to give way to other Members who are waiting.

This is an important point.

The Deputy has made three contributions. No other Member has been in as often.

The Minister said a sum of €56 million in capital funding has not been used for day to day spending but that it is gone. Where has it gone?

I am not saying it is gone. If the position on 17 January turns out to be the final position for 2005, there will be a surplus in capital funding of €56 million and an overspend on revenue. One of the options in reconciling this is to balance one against the other with the permission of the Department of Finance.

The Minister cannot guarantee that.

No. If that turns out to be the position, the Minister of Finance is on record in both Houses that there will be no overfunding of the capital programme as a result of this matter.

The carryover is dead.

I did not intend to use the word "misappropriated" in my earlier contribution. Perhaps "mismanagement" might be a more accurate description.

The Minister stated, "If it remains the case that there was an overspend on current spending last year, what will happen is that savings on the current side can offset this. This situation is provided for in the public financial procedures". Why does she continue to insist there is no question of the capital budget being used for current spending? Is she concerned about the underexpenditure of the capital budget when people are crying for money for a variety of capital projects?

In view of the underspend on capital funding and the Minister's statement that no planned capital project will be affected, does this explain the unexpected decision last December not to grant permission to Temple Street Hospital to proceed with a capital project, despite the necessity for the hospital to meet its agreed start date of spring 2006 and completion date of 2009?

When did the Minister find out the amount of the overdrafts? When did this information become public? I do not recall hearing a figure of €120 million in 2005. I only heard about it when a departmental official got back to me in November 2005.

The overdrafts were in the Revised Estimates published early last year.

With regard to Deputy Gregory's question, the Mater-Temple Street project will cost almost €500 million. It will comprise a major proportion of the HSE's capital programme for several years. Tertiary paediatric facilities in the Dublin area are provided at Crumlin, Tallaght, Beaumont and Temple Street hospitals. Paediatricians, therefore, are spread around the four hospitals to look after sick children. That does not make sense for tertiary treatment in the city or the State. Every paediatrician to whom I have spoken has voiced this opinion.

The review of tertiary paediatric services established by Professor Drumm will be completed by 31 January. The Mater and Temple Street hospitals have sought approval to proceed with the construction of a carpark. Professor Drumm recently met the hospital authorities and informed them that this application is on hold pending the outcome of the paediatric review. There is no point spending €200 million of taxpayers' money on a tertiary facility if it is not appropriate to our needs.

So the commitment is gone for Temple Street.

There is no commitment gone to do the development. It is just on hold for the moment.

The Taoiseach announced it.

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