James Reilly (Dublin North, Fine Gael) | Oireachtas source

Is it the old adage of "Up the west and ... the rest."? On a serious note, I will deal with the questions as they were posed. Deputy Kelleher keeps alluding to a budget deficit of €360 million but I have pointed out that from within our own resources, the budget deficit is at €245 million. That is what is being sought. The Deputy mentioned the previous chief executive of the HSE, indicating that he spoke about the accounts before this committee, referring to two issues in particular. The first was that money from insurers had not been collected but at this stage, in excess of what was intended to be collected has been recouped. The second issue was the need to get cheaper drugs. A deal has been done which far exceeds what was originally envisaged, although not all of it will come this year.

Deputy Kelleher argued there was a complete lack of negotiations but intense negotiations were ongoing all year. The Deputy knows that the pharmaceutical industry is a major employer in this country, with over 20,000 people in the sector and 100,000 people indirectly dependent on it. There are billions of euro in exports and income to the State from this area. It is difficult to ensure that we continue to support the industry in the research, development and innovation in new drugs while at the same time making it very clear that we need much better value for money for existing drugs and many drugs that will be going off patent. We have reached a good deal from the perspective of the taxpayer and patient who will consume the pharmaceutical agents.

Many agents have described the problem but very few give us a remedy. PA Consulting has done that and I will elaborate on that presently. There was no reduction in the run rate until the new acting chief executive, Mr. Tony O'Brien, took over; there has been a reduction in September, October and November. That process will continue and I have absolute faith in the new director general designate.

Nobody with a disability had personal assistance hours cut. There was some reduction in home help, as mentioned by others. The issue has been of considerable concern to people. I have read to this committee on a number of occasions the list of issues that I sought to be addressed during the course of any reduction of hours. This was not done initially.

That is why I instructed that methodology to be put in place and no hours to be reduced unless people had been fully assessed. That has slowed things down considerably so that instead of saving in excess of €8 million, the savings achieved are around €3 million. As I have said before, however, I am more interested in people having the service which they are assessed as being in need of than I am in saving money.

The Deputy said he heard it all before, and he certainly did. His own current leader had €668 million of supplementary budgets during his tenure in the Ministry of Health at a time when the budgets were increasing and the country was awash with money. I do not accept any criticism from Deputy Kelleher or his party on a modest Supplementary Estimate of 1.8% of budget against a background of €2.5 billion having gone out of the health budget in the last three years and more than 6,000 staff having gone. Deputy Kelleher alleges we should have know precisely how many. The figure anticipated was 3,500. Neither Deputy Kelleher nor anyone else had the information about the number of people who had taken leave of absence or, for one reason or another, had not been at work and decided to take the retirement package when it became available and before things changed.

The issue of agency staff arises time and again. It can be addressed through a successful conclusion by the Department of Public Expenditure and Reform, supported by my Department, of a new Croke Park agreement.

I am pleased to give positive news about another initiative that will improve the situation. The Department of Public Expenditure and Reform has agreed to a proposal from my Department that will encourage newly qualified nurses to stay in Ireland and be available to give care to our citizens. This will result in up to 1,000 graduates being recruited over the next two years. The recruitment will commence as early as possible, and possibly in January 2013. Graduate nurses and midwives will be able to gain valuable work experience after graduation, benefiting from mentoring and skills development. Their pay rate will be 80% of the starting pay for a staff nurse. With shift pay and so on, this is estimated to come to €25,000 or €26,000 per annum. It is estimated that the scheme could result in net savings of €10 million in 2013 as these additional nursing resources will enable the use of agency staffing and overtime working to be much reduced.

This is a good news story, creating 1,000 extra jobs over the next two years and giving much-needed experience to nurses who might have been considering leaving the country next year. They can now give consideration to staying here and working in our health service to gain further experience.

For Deputy Ó Caoláin to describe today's Supplementary Estimate as bizarre is astonishing. Health has, more times than not, needed a Supplementary Estimate. To find it bizarre is to indulge in a little hyperbole.

The further staff reductions the Deputy alluded to present a serious challenge. We acknowledge that. We have to seek real change in the new Croke Park agreement to accommodate this reduction in staff. It is about changing the model of care, consultants not doing what GPs should be doing, GPs not doing what nurses should be doing and nurses not doing what health care assistants and others should be doing. That requires flexibility under the new Croke Park arrangements which we seek to put in place.

Deputy Seamus Healy talked about many issues that have nothing to do with the Estimates. They relate to next year and I will answer them at that time. I would be grateful if the Deputy would give me details of the lady who has had her home help hours reduced and which the Deputy feels is inappropriate. If he does that, I will look into the matter. There is supposed to be an appeals process. I have asked that it be put in place and that appeals be dealt with by a senior manager in the area and not by other staff. I will look into the matter if the Deputy is good enough to give me the details of it.

Deputy Healy asked for more detail about the PA Consulting report. I am happy to give him that. The key findings of the PA consultancy report were not different from several others, or from the Ogden report. The report says:

The HSE's current budget difficulties are a consequence of systemic failings in financial management over a number of years. Monitoring and evaluation of HSE performance by the Departments of Health and Public Expenditure and Reform is not supported by the financial management and reporting processes in place. The existing governance and controls framework lack clarity. The systems and processes in place do not deliver an integrated financial performance framework. Limited financial management capability exists among the staff and the system.

I have made the following statement before. Fewer than 10% of the people dealing with money in the HSE have the training to do so. That did not happen overnight. It has been the case since the HSE was put in place.

The report recommended that we gain control of HSE spending and re-establish credibility in its financial and operational management practices. We have done that by putting in place six senior people with long experience in finance and accountancy.

The report recommended the development of a revised budget process for 2013 based on activity based budgeting principles. If I begin to deal with that recommendation, we will have to discuss next year's Estimates, and I do not propose to do that. I ask Deputies to accept that this year's Estimates will be very different.

The report proposed that we commence targeting intervention in poorly performing hospitals, which we have done. That is why the issue the Chairman raised is being dealt with in the way it is. It will be based on last year's outturn and not the budget. The budgets given to hospitals over recent years have not been realistic. We will start from a hospital's outturn and reduce from that point.

The report recommends a revised financial control and governance framework, and a skills and capability analysis of existing finance staff, which is ongoing. It says performance management is essential to drive change, and the establishment of a finance improvement programme will put the necessary infrastructure in place to support successful project delivery. That is being put in place.

For the first time, we have a report that tells us not what the problem is but what to do about it, and we are doing it. I have confidence for next year. It will be very difficult. Some of the new things that have to be done will be contingent on a new Croke Park agreement.

Deputy Robert Dowds asked whether all the home help hours will be restored to all the people who lost them. Obviously, that is not going to be the case. To answer Deputy Dowds, and also Deputy Ó Caoláin's question, the home help and home care budget with which we started 2012 is being restored for 2013. What does that mean? We spend €320 million providing home help to 50,000 clients and home care packages to up to 15,700 clients. That is a large sum of money. Not only will we seek to protect it but we will see how to get better efficiency out of it in providing care to people to allow them to stay at home for as long as is humanly possible.