Saturday 24 August 2019

Minister won't sack HSE chiefs amid new fears of cost overruns

Paul Reid. Photo: Tony Gavin
Paul Reid. Photo: Tony Gavin

Kevin Doyle and Cormac McQuinn

Finance Minister Paschal Donohoe will not sack any chiefs at 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 some €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 in 2018.

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

Mr Reid insisted the HSE was in a stronger position compared with 2018 but conceded that the deficit to the end of May would certainly be more than €100m.

Public Accounts Committee (PAC) member Fianna Fáil TD Marc MacSharry put it to him that it could be €400m by the end of the year.

Mr Reid said that if the first quarter figures were simply extrapolated out, "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 that health chiefs weren't saying there would be a €400m overrun and they expected the situation would be "much better" than 2018. Mr MacSharry said that while it may not be their intention, there's a reality that care had to be provided based on the current figures and it was likely "we're heading for supplementary budget territory".

Mr Reid replied: "I certainly am not planning on it."

He outlined how he is focusing his attention on the €12bn of the HSE's €16bn budget where costs can be controlled.

Elsewhere, Mr Donohoe said health spending was "a cause of real concern to me". This month alone it has risen by 9pc compared with a year ago.

Mr Donohoe said: "In the run-up to that happening I have been meeting intensively with Minister [Simon] Harris, with the senior leadership of the HSE, to look at how we can manage health expenditure in a different way to what we did last year."

He added that every effort would be made in the second half of the year to ensure the HSE's balance sheet ended up in "a significantly better position on health expenditure then we did a year ago".

Meanwhile, at the PAC Mr Reid said no capital projects had 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 would be delayed as a result of the cost overrun for the €1.7bn facility.

The issue was raised after it emerged that senior HSE official Anne O'Connor wrote to the Department of Health in May raising concern over the implications of the additional NCH costs on capital projects over the years 2020, 2021 and 2022. Mr Reid said he expected the HSE's delayed capital plan to be finalised with the Department of Health 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 added: "We haven't stopped any project that we've planned to do," and said that the capital plan will determine "if we have to curtail any particular projects", adding: "At this point in time we haven't."

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

Irish Independent

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