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Blow for HSE as it hoped to save €150m from payroll

The rejection of Croke Park II has left the health service €150m worse off at a time when the troika is demanding monthly updates on its financial management.

The HSE – which has to make €721m in savings this year – expected that around €150m of this would be generated from its payroll.

Under Croke Park II, the HSE, which has over 100,000 staff, would have benefited hugely from the proposed cuts in pay and allowances.

Around seven out of every ten euros from its budget goes on its payroll so any reduction in costs would be significant.

HSE chief Tony O'Brien has previously admitted the money will have to be found elsewhere if the deal does not go through – this would have implications for services.

Its January report showed the HSE was already €12m in the red in the first month of the year.

This included a €10.9m deficit in hospitals.

The troika is keeping a watchful eye on the HSE and demanding it does not repeat its financial performance of last year when it had a €360m overrun and had to go back to the Department of Finance for a €245m bailout.

It is facing into a year of unknown pressures which will make it even more difficult to balance its books.

In the first three months of this year the number of people on waiting lists for hospital treatment for more than nine months went up to over 3,000, although the target is to have no patient facing that kind of delay.

It has yet to see proposed legislation allowing for more prescriptions of cheaper generic drugs bearing fruit.

Changes aimed at getting nursing-home residents to pay more for their care are also not in place yet.

Hospitals and community services would not be able to sustain the impact of any industrial action from unions, in response to any forced pay cuts.

Many of the services are also struggling because of under-staffing due to the moratorium on recruitment.

Irish Independent