I propose to take Questions Nos. 312, 313 and 317 together.
The health service budget has been reduced by €2.5 billion over the last three years. The number of health service staff has fallen from a peak of 111,000 in 2007 to less than 103,000 now. As we are all aware, the country still faces serious challenges in respect of the public finances, and in order to meet the targets agreed with the Troika, there will be further reductions in the level of resources allocated to the health sector.
The 2010 Budget for the health services provided for €659m in pay savings and €400m in non-pay savings. The pay savings of €659m took account of general pay reductions, and higher reductions for those on higher pay on foot of the Report of the Review Body on Higher Remuneration along with savings associated with the moratorium on recruitment and promotion. The non-pay savings of €400m concentrated on areas which would not have a significant impact on front-line services, such as reductions in drugs costs, further economies in areas such as procurement, and improved private income collection by public hospitals. In 2011 further price reductions were applied in relation to pharmaceuticals, to achieve full year savings of €200 million in the cost of drugs. Further reductions in GP fees under the Financial Emergency Measures in Public Interest (FEMPI) Act 2009 were applied, and the charge for treating private patients in public hospitals was increased by 21%. Along with further procurement economies, and reductions in pay as a result of the voluntary exit schemes, the objective was to mitigate as far as possible against affecting front-line services.
Expenditure plans for 2012 were set in the context of stabilising the fiscal situation whilst protecting services to the greatest degree possible. As with other sectors, the Health sector incurred a reduction in the resources allocated to it. The gross current budget for the Health Sector for 2012 was some €183m less than the 2011 allocation. However, the underlying reduction was greater because of the need to provide for unavoidable cost increases in areas such as superannuation, demand-led schemes and Fair Deal. There was also a need to commence implementation of some priority commitments in the Programme for Government. The HSE's National Service Plan indicated that in order to meet the Government's targets and to provide for unavoidable pressures, savings of €750m will need to be achieved in 2012.
The HSE is overspent by €374m to the end of September. There is intensive engagement between my Department and the Health Service Executive to address the excess expenditure. In the short term, to address the 2012 position, I have instructed the Executive to impose cash limits on agency and overtime. Furthermore, there will be more rigorous management of absenteeism, travel and subsistence will be limited, and stock management will be intensified in order to better manage cash. Other measures are also being undertaken in order to achieve a balanced budget, including the use of capital to fund revenue and the transfer of Department funds to the HSE on a once-off basis.
As I have outlined in this House on previous occasions, I have instructed the HSE that efficiencies must be achieved in the first instance before patient services are affected and in this regard, patient safety must be paramount.