Simon Harris (Wicklow, Fine Gael) | Oireachtas source

It is relatively short but we have copies on the way. I am pleased to have an opportunity to provide the joint committee with an update on the mid-year review of my Department's Estimate for 2017. We have provided a comprehensive briefing to Deputies and Senators giving detail of the Vote position to the end of July, a summary of health service expenditure by service area to the end of June, performance information by divisional area to the end of June, and details of the HSE's performance and accountability framework.

Last year, the health Vote did not technically require a Supplementary budget to cover deficits. This was a direct result of the provision by the Government and Oireachtas of an additional €500 million in funding for the health Vote to improve the baseline funding of health, as well as of management efforts to remain within budget. The gross current budget for the health sector for 2017 is €14.152 billion, which is an increase of €457 million over the 2016 allocation.

The health Vote, as members will appreciate, has increased significantly in the past three years, reflecting our commitment to try to provide a health service that seeks to improve the health and well-being of our people. The additional funding provided since 2015 has provided me with additional resources to try to invest in acute issues facing patients, such as winter initiatives, in addition to meeting commitments in the programme for Government. However, there are still real fiscal challenges facing the health service and we must continue to focus on effective financial management to ensure that services are delivered in line with the national service plan and within budget.

Actual expenditure for the entire Vote for the first seven months of the year to the end of July is €8.29 billion, against a budget profile of €8.25 billion, suggesting an overspend in Vote terms of €40 million. The Department and non-HSE agency spending is below profile on current expenditure of €27 million. This largely relates to a timing issue on payments under the hepatitis C compensation tribunal and profiling issues relating to payments to directly funded agencies and is expected to reverse substantially by year end. There is a positive variance of €32 million on capital spending due to timing issues on the progress of a number of projects. Expenditure is expected to progress steadily as construction now begins, and the 2017 capital allocation will all be spent. Against these underspends the HSE subheads are €100 million over profile. There are a number of contributing factors to this overrun, including extra activity, costs relating to bringing forward the pay restoration under the Lansdowne Road agreement to April of this year, which were not profiled for and are as yet unfunded, and a higher level of settlements by the State Claims Agency than profiled. Overall, based on the position to the end of July and known financial challenges, we anticipate a level of overspend by the HSE linked to the 2017 pay agreements, the State Claims Agency settlements and expenditure in a number of service areas being over budget. The HSE, through its performance and evaluation framework, is undertaking action to reduce the level of this final potential overrun. My Department and the HSE are operating and planning on the basis that additional funding will not be available for any overspend in delivering the commitments set out in the national service plan, and I differentiate there from the other areas. However, we are discussing with the Department of Public Expenditure and Reform the situation regarding the funding requirement arising from decisions made subsequent to the national service plan, particularly central wage agreements, and any overrun in settlements by the State Claims Agency.

In terms of performance of the health services so far in 2017, it is clear that there are areas of good performance within our health service where activity is on target, while challenges clearly remain in other areas. The outpatient department waiting list action plan is focused on reducing the number of patients who would be waiting 15 months or more for outpatient appointments by the end of October 2017. Since the beginning of February to the week ending Friday, 2 June, nearly 42,000 patients had come off the waiting list under this plan. At the beginning of this month, almost 76,000 patients had come off the list. The inpatient and day case waiting list action plan is being delivered through a combination of normal hospital planned activity as well as additional funded activity utilising the funding provided in budget 2017. Between early February and the week ending 1 September, almost 21,000 patients had come off the list under this plan, and we will have seen in last month's published National Treatment Purchase Fund, NTPF, figures a significant decrease of more than 2,000 in the total number of people waiting for a hospital operation or hospital procedure in this country, showing the work of the NTPF beginning to kick in. While elective discharges in hospitals remain on target for 2017 and at the same level as 2016, day case discharges are up against the 2017 target and up on the same period last year. Cancer screening services metrics are showing positive performance improvements. For example, the national screening service for bowel cancer, BowelScreen, shows an increased client uptake, and the number of people completing the home test for bowel cancer is 19% ahead of expected activity, while the number of women having smear tests and mammograms through CervicalCheck and BreastCheck are also ahead of target. While many challenges remain throughout the health system, there are some positive stories to relay where progress is being made on the ground through the hard work and dedication of many people working throughout our health services.

There are obviously service pressures being experienced, and these are seen particularly in our acute hospital sector and our disability services. In the case of the hospital sector, this is substantially reflected in non-pay categories and comprises increased complexity of activity, non-achievement of savings targets and a shortfall in income, while the pressures in disability services largely arise as a result of regulatory compliance and emergency placements. In the recently published mid-year expenditure report, the issue of health funding is highlighted as a major policy challenge, not just in this country but internationally. Despite a welcome increase over recent years, a financial challenge remains as we continue to deal in this country with a larger and older population, with more acute health and social care requirements. We also deal with increased demand for new and existing drugs - we have seen many examples this year whereby the Government made decisions regarding the provision of new drugs - and the rising cost of health technology. I wish to flag to this committee, as I have done on previous occasions, that the cost of payments under the State Claims Agency is continuing to rise, increasing the cost of health above that necessary to meet the health demands of a growing and ageing population, which remains a challenge. In fairness, this issue is outside the HSE's control; these decisions regarding how much compensation someone is paid or how much someone is paid through a claim are made in the courts.

Budget day is drawing closer and is of great interest not just to those in these Houses, but also to patients right across the country. My Department is in regular contact and engagement with the Department of Public Expenditure and Reform regarding the increased costs and the additional health priorities in 2018. Budget 2018 cannot just be about funding the health service as it currently is. It must be about funding new developments and new reforming measures. Many of the Members in this room sat on the Sláintecare committee and I am struck by their own recommendations in this regard. The discussions include the funding required to maintain the existing level of services, but also funding for priorities included in the programme for Government and funding to allow for the delivery of our capital programme in 2018. These discussions are taking place in the context of the fiscal constraints, which everyone is well aware of, and we are particularly conscious of our desire to reach a balanced budget in 2018.

With regard to funding for new developments, I assure the committee that the priority areas will reflect the commitments outlined in the programme for Government, many of which are also highlighted in the Sláintecare document. There are 132 commitments in the programme for Government in respect of health, and many of these have a financial cost. It will be necessary to prioritise and phase these initiatives carefully, conscious of the budgetary constraints within which we must operate. I would genuinely welcome the input and views of this committee as to where it feels the priority areas should lie, particularly in the space of what we call new developments.

For capital, notwithstanding the challenges arising from the impact of inflation, we will see major initiatives such as the national children's hospital, the new mental health hospital in Portrane and a substantial number of more modest and necessary projects proceed across the country. Many of these are already under way. In addition, the HSE has developed an ambitious eHealth programme which, through the Department and the Office of the Chief Information Officer in the HSE, has built significant momentum and support, and we need to build on that further.

While we have secured a significant increase in funding for the health services for this year, I do not underestimate the challenges involved in the delivery of a safe, efficient health service for the people. We must maintain our focus on improving the way services are organised and delivered and on reducing costs in order to maximise the ability of the health service to respond to growing needs. In order for the Government to have the confidence to prioritise additional investment in our health services in 2018 and beyond, it is essential that those managing our health services and delivering the service demonstrate good practice by delivering the best possible health care within the limited resources that have been made available by Government each year. The Taoiseach has made the point, which is worth re-emphasising, that we pump an awful lot of taxpayers' resources into our health service. We need to grapple in these Houses and in Government with the question of how that money is spent and ensuring it is spent on the priorities we set in these Houses. I genuinely believe the work done by many Members on Sláintecare is extraordinarily helpful in this regard.