Thursday 18 January 2018

Spending on health to be €300m over budget by end of year

Public Spending Minister Brendan Howlin said
Public Spending Minister Brendan Howlin said "challenging targets still remain for the last quarter".

Fionnan Sheahan, Ailish O'Hora and Brendan Keenan

The Department of Health is almost certain to be over budget at the end of the year, leaving the Government open to a reprimand from the bailout team.

The Coalition will balance the books through under-spends elsewhere, particularly on capital spending, and a higher than expected tax take. But spending in health and social welfare are most likely to go over the allocation.

On the plus side, the tax take for the nine months to the end of September was €26.1bn, €385m ahead of expectations, new Exchequer Return figures show.

Three of the four main tax sources -- income, corporation and VAT -- were ahead of target with excise duties below for the third consecutive month.

The Exchequer deficit was just over €11bn, compared with €20.6bn last year, due mainly to the settlement of the IBRC promissory note payment.

Despite the recent round of controversial cutbacks, spending at the Department of Health is still heading towards a €250m-€300m overrun for the year.

At the moment, social welfare spending is heading about €150m over budget, due to higher rates of unemployment.

The spending overruns in health are spread across a number of areas, including substantial additional spending on medical cards, hospitals and the disability sector.

Officials in the Department of Finance conceded yesterday the prospects of health coming in on budget were slim.

Department principal officer Ronnie Downes said every department is expected to manage within their budgets.

No department has the authority to run over-budget, but Mr Downes said there were "particularly acute pressures" in health and social welfare and he didn't rule out an overrun.

"I can say they are expected to but, no, I can't say they will," he said.

The overrun in health puts the Government on a collision course with the EU-IMF bailout team. Spending at the department over the nine months to September was almost 3pc higher than had been expected, with an increase of €254m.

Public Spending Minister Brendan Howlin said "challenging targets still remain for the last quarter". But he was confident the overall tax revenue target for 2012 will be met.

Pressures

Mr Howlin added that departmental expenditure remains less than 1pc above expectations "with pressures on health and social protection areas".

The figures also show that the Government is set to meet the general budget targets set out by the bailout.

"The tax base is growing... and September 2012 is the third month this year that the Exchequer revenues exceeded expenditure -- this last happened in 2007," Finance Minister Michael Noonan said.

Mr Noonan added the return by the National Treasury Management Agency, which manages the country's debt, to the bond markets this year was proof that action being taken by the Government to fix Ireland's finances is being recognised by investors.

Brendan Keenan

Irish Independent

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