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False economy as HSE pays €235m for redundancies

PAC report set to stoke Croke Park tensions

A draft report of the Public Accounts Committee (PAC) of the Oireachtas has revealed that while the HSE saved €60m in payroll costs with its "early retirement scheme" it paid out more than €235m in lump sums to departing staff.

In a summary of its findings the draft report noted that the ending of any real difference between the pay costs of agency and permanent staff meant it was "questionable whether early retirement packages and other inducement packages are cost effective''.

The report warned that simply cutting jobs is not a particularly cost-effective exercise, noting that the only effective way the HSE can make savings is through further major job losses or actual pay cuts.

It said "the other main way of lowering payroll costs is to reduce rates of pay'' but this is currently "prohibited under the Croke Park Agreement''.

The preliminary findings are likely to stoke further tensions between the Fine Gael and Labour wings of the Government over the ongoing viability of the agreement.

Tension is also likely to be increased by the decision of the draft report to rap James Reilly on the knuckles over the "unrealistic expectation'' that the HSE would secure savings of €100m through reduced use of agency staff.

Significantly, it said that "greater care should have been taken'' in that regard.

Meanwhile, the report also revealed that eight hospital consultants have been paid more than €175,000 for unpaid historical rest days and that one consultant alone was paid more than €200,000 when they left the health service.

The PAC is expected to recommend that in future consultants' "rest days should be used within a three-year cycle or otherwise lost'' and "no allowance should be paid for untaken rest days at retirement''.

The draft report is also expected to recommend that a "simple benchmarking exercise'' could be undertaken to compare the conditions Irish hospital consultants enjoy with conditions in other EU states and that this might represent "a starting point in replacing the 2007 contract''.

The report discovered that in 2010 GPs were over-paid to the tune of almost €20m for medical cards that had expired or for medical card holders who had died.

Astonishingly, the HSE also admitted that when it came to the legacy of medical cards for dead people "the HSE had not pursued the doctors for this money as it calculated doctors were owed a similar amount in respect of babies who are not registered at birth''.

The report also expressed concern that the "number of people entitled to a medical card had increased by 67 per cent over 2005 levels'' and now stands at "almost 1.9 million card holders".

Payment in respect of medical card schemes came to €2.6bn in 2011.

Speaking to the Sunday Independent, John Deasy, the the Fine Gael TD who led the PAC cross-examination of the Health Department in June, said that "James Reilly was correct in his analysis that pay is the issue. In fact he may have even under-estimated the percentage spent on salaries, which is closer to 80 per cent than 70 per cent."

The FG TD added that unless the HSE "deal with the issue of pay you won't resolve the underlying budgetary over-run" and warned the problem was so acute "this is actually a decision that may need to be taken at Cabinet level".

Sunday Independent