Donohoe ‘confident’ reforms of health spending will be implemented

The Public Expenditure Minister is “confident” health overspends will be reined in, despite warnings from the State’s fiscal watchdog.

Overruns in current health spending were at an unprecedented level of 1.4 billion euro at the end of July this year.

The Irish Fiscal Advisory Council (Ifac) warned that the health overspend could go above two billion euro this year.

Minister Paschal Donohoe said the exceptional level of health overspend in the first half of the year necessitated a different response to previous years.

As part of the Summer Economic Statement, the Government agreed to provide the health sector an additional 1.5 billion euro for the health sector in 2024.

In addition, a further 1.2 billion euro will be allocated in 2025 for existing level of service costs.

The HSE and the Department of Health have agreed that this additional funding will provide an opportunity to strengthen financial planning and governance.

However, Ifac has previously warned that if overruns continue to mount, they could exceed two billion euro this year – substantially more than the 1.5 billion assumed in the Summer Economic Statement.

Speaking to reporters on Thursday, Mr Donohoe said: “I expect and I’m confident that their current spending will be inside (the 1.5 billion) level.

“We only made the agreement with them in July, so I always expected that it would be in the second half year that we would begin to see the implementation of that agreement, and that’s what I am confident will happen.”

Mr Donohoe was speaking at a press conference following the publication of the Mid-Year Expenditure Report (MYER) for 2024, which provides context around the expenditure decisions in the upcoming budget.

Budget 2025 will see a total of 105.4 billion euro in expenditure being made available.

Through this spend, the Government said it will continue to build on and improve public services and key infrastructure requirements to support a growing population and growth in our economy, while also continuing to fund measures required to respond to external shocks through a Contingency Reserve.

The Budget includes an additional 6.9 billion euro in expenditure next year. Of this, 5.1 billion euro will cover the costs of meeting existing level of service requirements in 2025 including 1.2 billion euro in pay deal costs) and decisions already taken around funding the National Development Plan.

A key element of the overall expenditure amount for next year is agreement around the health allocation for 2025.