Mr. Stephen Mulvany:

On the question of the agency costs or the agency element of the deficit, as the Senator stated, the deficit in acute hospitals at the end of April was €80.4 million. The increase in agency costs in hospitals year-on-year is €26 million. Certainly, that €26 million is a major part of the €80.4 million. I do not have to hand the specific figures for the overall expenditure on agencies in the first four months but it is in excess of €60 million. While one cannot say that comprises all of the deficit, in total we are spending in excess of €60 million on agency costs within this year's total expenditure and, obviously, that is driving the deficit. It is important to state that in the majority of cases, this growth of agency costs arises in medicine, that is, in doctors. Moreover, the bulk of that is in price, not volume. It is not that there is a huge number of additional doctors on the ground but that the cost, because of recruitment difficulties, is getting more challenging for us. There is obviously also an element of additional costs associated with the working time directive. The bulk of the agency costs are in that area and while the Haddington Road agreement obviously has given us significant savings opportunities in respect of many grades for agency and overtime, because the junior doctors were already on 39 hours, it did not provide additional hours for junior doctors. Nor did it provide additional hours for the other area associated with the biggest increase in agency costs, namely, support staff, who again were already on 39 hours. Consequently, there are huge savings coming from that, as well as huge budget cuts to go with those savings, but it does not assist in those areas. This is one of the big drivers of the overall acute hospital deficit.

As we stated, we are working to reduce that deficit as safely and by as much as we can. However, one must look at the overall reduction in expenditure in hospitals over the past four or five years and the reduction in budget, which are without comparison internationally in a system that has not fully hit the wall. Looking at one or two years obviously is relevant and year-on-year comparisons are relevant but we stress that from 2009 to 2013, hospital expenditure reduced in net terms by approximately 11.5%. It has grown between 2011 and 2013, marginally, by approximately 1.3% and will grow again slightly this year. However, even allowing for that, over that period of six years it will still have reduced in net terms by approximately 10%. As I stated, that is fairly unparalleled in the general Western world in terms of hospitals, as these were real cash reductions. Most international economies, when they talk about hospital costs and indeed community costs in health, talk about how they have a reduction of 2% or 3%. What they mean is that costs are growing by X, their governments are only able to fund them by Y and the difference, while they are getting an increase, is what they call a cut.

In this economy, generally speaking, what we are talking about over that long period is an absolute net reduction in the cost and the cash, which is different than most other western developed economies.