Dáil Éireann Debate, Tuesday - 21 November 2023
587. Deputy Róisín Shortall asked the Minister for Health the figure provided by his Department to maintain existing levels of service in 2024, under his respective remits ahead of Budget 2024; the figure granted by the Department of Public Expenditure, National Development Plan Delivery and Reform in each case; and if he will make a statement on the matter. [51181/23]
Amharc ar fhreagraIn advance of Estimates 2024, officials in my Department engaged with the Health Vote section of the Department of Public Expenditure, National Development Plan Delivery and Reform in relation to the funding requirements of the Health Vote in 2024.
On 8th September 2023, as part of initial preparations for preliminary discussions on Estimates 2024, my officials submitted, by email to officials in the Department of Public Expenditure, National Development Plan Delivery and Reform, a draft forecast of the Existing Levels of Service (ELS) requirement for the Health Vote for 2024. This forecast identified an ELS requirement of €2,421 million for 2024 above the base budget allocation for 2023.
The 2024 requirement for €2,421 million comprised €1,201 million to meet existing 2023 cost pressures likely to be carried forward into 2024, and €1,220 million for additional cost pressures in 2024.
Of the €1,201 million for existing 2023 cost pressures, €1,044 million related to non-pay pressures due to price/inflation increases and demographic/demand increases (primarily in Acute Hospitals), €154 million related to the pay funding gap in respect of existing pay agreements (primarily Haddington Road Agreement hours restoration), and €4 million related to other pre-committed cost increases.
Of the €1,220 million for additional 2024 cost pressures, €675 million related to non-pay pressures due to price/inflation increases and demographic/demand increases, €241 million related to the full year pay costs of existing pay agreements in 2024, €376 million related to other pre-committed cost increases (primarily funding for COVID measures to be retained on a permanent basis), €30 million related to the ELS requirements of non-HSE agencies, and these costs were offset by a €102 million savings target for agency/overtime expenditure and management consultancy expenditure in 2024.
The figures contained in the submission of 8th September 2023 were for maintaining Existing Levels of Service only, i.e. they excluded any new service developments, and any non-core funding.
Following this submission by my Department to the Department of Public Expenditure, National Development Plan Delivery and Reform, officials in both Department's engaged in further discussions with a view to finalising the Health Vote funding to be allocated in Estimates 2024. This process culminated in the funding allocation announced in Budget 2024 on 10th October 2023.
The final allocation for the Health Vote to maintain Existing Levels of Service in 2024 has been set at €708 million. This comprises €700 million for the HSE, with the remainder for the Department of Health and non-HSE Agencies. The HSE allocation of €700 million comprises €386 million related to non-pay pressures due to price/inflation increases and demographic/demand increases (primarily in Acute Hospitals), €231 million related to the full year pay costs of existing pay agreements in 2024, €117 million related to other pre-committed cost increases, with these costs being offset by a €34 million savings target for management consultancy expenditure in 2024.
The difference between the additional funding initially requested by my Department for ELS in 2024 of €2,421 million and the final allocation for ELS in 2024 of €708 million is €1,713 million. It should be noted that in addition to the ELS Core funding of €708 million allocated for 2024, non-Core funding of €1,034 million was also allocated to the Health Vote for 2024, comprising €901 million for the HSE and €131 million for non-HSE agencies (primarily the National Treatment Purchase Fund). This non-Core funding, while being allocated on a non-recurring basis in 2024 only, will be utilised by the Health Vote to address many of the cost and demand pressures identified in my Department's original ELS submission. The remaining funding challenges will be actively managed throughout 2024 by my Department in conjunction with the HSE and in consultation with the Department of Public Expenditure, National Development Plan Delivery and Reform. A number of savings and efficiencies projects are currently underway or planned to commence shortly, with the aim of achieving cost savings in the targeted areas without negatively impacting on patient outcomes. These projects will be monitored and reported on through the Health Budget Oversight Group during 2024.
