Saturday 18 January 2020

'No HSE chiefs for the chop', says Paschal over €400m overrun fears

Minister Paschal Donohoe
Minister Paschal Donohoe

Finance Minister Paschal Donohoe will not sack any chiefs in the HSE despite fears of another year of mismanaged budgets in the health service.

It comes amid concern that cost overruns in the health service could amount to €400m this year.

Despite expressing "real concern" at overruns so far this year, Mr Donohoe said: "I do not believe the answer is to sack people from the HSE.

"We have just appointed a new chief executive and he has indicated his commitment to managing the spend in the health service in a new way."

The Government had to bail out the health service with a €700m supplementary budget last year.

HSE boss Paul Reid faced his first grilling by the Dail's public spending watchdog, when he came under pressure over large revenue deficits that have already arisen this year.

Mr Reid insisted the HSE is in a stronger position compared to last year, but conceded the deficit to the end of May will be more than €100m.

Public Accounts Committee (PAC) member and Fianna Fail TD Marc MacSharry put it to him that it could be €400m this year.

Mr Reid said if the first quarter figures were extrapolated "it would certainly be that".

Mr MacSharry asked when a supplementary budget for the health service could be expected.

Department of Health secretary-general Jim Breslin insisted health chiefs were not saying there will be a €400m overrun, and they expect the situation to be "much better" than in 2018.

Mr MacSharry said that while it may not be their intention, it is likely "we're heading for supplementary budget territory".


"I am not planning on it," Mr Reid said, and outlined how he is focusing on the €12bn of the HSE's €16bn budget where costs can be controlled.

Mr Donohoe said health spending is "a cause of real concern to me".

Every effort will be made in the second half of the year to ensure the HSE ends up in "a significantly better position on health expenditure than we did a year ago".

At the PAC, Mr Reid said no capital projects have been stopped as a result of the spiralling costs of the National Children's Hospital (NCH).

However, he would not be drawn on whether projects will be delayed as a result of the cost overrun for the €1.7bn facility.

The issue was raised after it emerged that HSE official Anne O'Connor wrote to the Department of Health in May raising concern over the implications of the additional NCH costs on other capital projects from 2020 to 2022.

Mr Reid said he expects the HSE's delayed capital plan to be finalised in the coming weeks.

He welcomed Mr Donohoe's announcement in the Summer Economic Statement of an additional reserve of €200m for the NCH and National Broadband Plan.

He also said: "We haven't stopped any project we've planned to do." He added that the capital plan will determine "if we have to curtail any projects".

Mr Breslin said Ms O'Connor's letter raised fears that the HSE would have to carry all increased costs for the NCH in 2020, but he added that as a result of Mr Donohoe's announcement "that concern is now gone".

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