Business The Budget

Sunday 21 September 2014

Reilly's last-ditch bid for €1bn Budget bailout

Published 22/10/2013 | 02:00

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Health Minister James Reilly said it was ‘a bit rich of the architect of the HSE’ – FF leader Micheal Martin – to call on him to quit

HEALTH Minister James Reilly made a last-ditch demand for an extra €1bn bailout to reduce cuts and expand services – just five days before the Budget.

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The revelation will add to the growing view that Dr Reilly has lost control of his department and that his tactics coming up to the Budget were naive.

The bizarre request to Public Expenditure Minister Brendan Howlin for another €1bn, when every other minister's estimate was finalised, was regarded as utterly lacking in credibility.

But Dr Reilly is dismissing calls for his resignation, saying he has "no intention" of stepping down.

The minister was even able to quip about his concerns about his weight yesterday.

"I'm not happy with the profundity of my rotundity," the minister joked at the launch of a Safefood campaign against childhood obesity.

Sources close to Dr Reilly insisted there was no outright demand for €1bn.

But they conceded the minister did set out a package of measures which came to about €1bn.

Since the Budget, the figures in the Department of Health estimate have been subjected to immense scrutiny, with doubts cast over their reliability.

Senior government sources say the minister looked for an extra €1bn in a bilateral meeting with Mr Howlin just days before the Budget.

The meeting is understood to have taken place on October 10 in the Department of Public Expenditure on Merrion Street.

Dr Reilly needed the funding to deal with "serious pressures, managing implementation of budgetary policies and demographic issues".

In other words, the minister was claiming that funding was needed due to pressures in the health service, the failure to achieve savings and a larger number of old people being treated.

Essentially, the minister was demanding the funds to cover overruns this year, reduce the level of cuts next year and provide some extra services.

"The Thursday before the Budget, he went into a bilateral meeting and looked for €1bn. Seriously? A €1bn package wouldn't have cleared the Cabinet," a senior government source involved in the budgetary process said.

"If he (Mr Howlin) hadn't settled with health over the weekend, then this Budget would have been in serious jeopardy. The ramifications for the country go far beyond the HSE."

Sources close to Dr Reilly have denied the minister demanded €1bn from Mr Howlin.

"No, that didn't happen. There was no point at which Minister Reilly sat down and said, 'I need a billion euro'," said a source.

Critical

However, the same sources concede that Dr Reilly and his officials did set out what it would cost to cover the underlying deficit, demographic pressures, Programme for Government commitments, spending on optional extra services and critical service pressures.

The bill for the various items comes to €1bn.

"What we did do was set out the cost of the provision of the service next year," said a senior source.

"We thought it was important that people (in the Department of Public Expenditure) understood what it did cost.

"It wasn't trying to be flaky. It wasn't trying to be smart. What we were trying to convey to the system was there was no more waste left."

Dr Reilly also came up with €800m worth of potential cuts, some of which were taken off the table for being too unpalatable.

Tensions are also mounting between Mr Howlin and Dr Reilly over the ability of the health service to meet the savings under the Haddington Road Agreement.

Doubt

Some people in Fine Gael are casting doubt on the public sector pay savings achieved by Mr Howlin and criticising the "phoney" Budget targets given by him to Dr Reilly.

But Labour sources say the HSE and Department of Health signed off on the Haddington Road Agreement and its figures only a few months ago.

"The idea that they can resile from it is a nonsense. There is a pattern here," said one source. "You wouldn't like to be looking at Haddington Road in isolation.

Mr Howlin's supporters are also hitting back at suggestions from Fine Gael that Dr Reilly was unfairly treated and are reacting angrily to the "phoney" targets accusation.

Fionnan Sheahan Group Political Editor

Irish Independent

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