Oireachtas Joint and Select Committees

Tuesday, 14 January 2014

Joint Oireachtas Committee on Health and Children

Health Service Plan 2014: Minister for Health and HSE

7:20 pm

Mr. Tony O'Brien:

With regard to the €108 million and the €63 million, the €63 million is derived from a transfer of €63 million from our original pension provision in order to offset the gap between the Supplementary Estimate and the original target for medical card probity. The €108 million relates to the unspecified payroll savings. I will ask Mr. Barry O'Brien to come in on this and when we get to patient safety, I will ask Mr. Crowley to say a word, if that is all right.

If the €108 million saving is not achievable, it will not be capable to state that it is a failure of the Haddington Road agreement. The Haddington Road agreement has a certain design specification. It produces certain savings for us. For those earning in excess of €65,000 per annum, it produces straightforward banded pay cuts, which are easy to achieve and easy to bank. The other main savings come from flexibility, from extra hours which enable us to displace agency and overtime, and in services where there are no agency and overtime but the totality of the extra hours mean that there is more staff than needed, through the redeployment mechanisms available under the Haddington Road agreement and its predecessor, they enable us to reduce costs in other locations. We believe €140 million is within that design specification. We have not allocated our €80 million of that because of wanting to ensure that we allocate it to exactly the right places and do not ask some services to do what they cannot do and let others off the hook.

In relation to the €108 million, it is considered possible that the displacement of other cost in excess of €140 million could be deliverable to contribute to the €108 million. That does not ask more of our staff but asks more of our managers in the way they use the flexibility and the extra hours to displace cost.

I will ask Mr. Barry O'Brien to talk about the verification process, but, as the Minister has outlined, we will within the next period be completing the evaluation process that Barry will describe. If at the end of the evaluation process it is clear that some part of that €108 million is not deliverable and if it is clear that the pension provision will be underfunded as a result of the move of €63 million, there is a process available to us within Government to have those issues addressed. There is no mandate to translate those issues into service cuts. The Haddington Road agreement is not about service cuts. It is about reducing the cost of services. That is an important point I should make. I will ask Barry to add something in terms of the process.

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