Stephen Donnelly (Wicklow, Fianna Fail) | Oireachtas source

I thank the select committee for the opportunity to bring this Supplementary Estimate for Vote 38 before it. I am seeking total additional funding for this year of €1.392 billion. This request is primarily driven by Covid-19 expenditure, which makes up €1.181 billion, or 85%, of this supplementary. Members will recall that Estimates 2022 assumed that Covid-19 impacts would diminish significantly during the year and, as a result, Covid-19 spending would be considerably lower. A total €200 million was set aside in contingency funds, held centrally for the health Vote in the event that additional funding was required. Unfortunately, the Omicron surge in early 2022 drove higher levels of testing and tracing activity than anticipated and there was a consequent need to deliver Covid-19 vaccination booster programmes. The nature of Covid-19 meant that both acute and community settings needed to continue to manage services in line with public health advice. Consequently, expenditure did not reduce as expected this year.

The second major strand of the Supplementary Estimate is made up of costs associated with post-Estimate decisions, excluding Covid-19 decisions, totalling in excess of €500 million. A further ask of €600 million for non-Covid-19 expenditure and €90 million for capital projects has been mitigated by savings within the non-HSE elements of the Vote, totalling €70 million and an expected reduction in the cash holdings of the HSE of approximately €409 million. As the committee will be aware, for the first time in a number of years, the health Vote did not require a Supplementary Estimate this year. This reflects investments made by Government last year. The drivers behind this year’s supplementary are different from previous years and arise primarily as a result of post-Estimate Government decisions and Covid-19 expenditure. I am committed to strengthening the performance management relationship between the HSE and my Department and to improving overall financial performance. In this regard and in the context of the emphasis in next year’s budget on delivery of a range of strategic capacity and reform measures, it is appropriate we have a renewed focus on ongoing modernisation of how we plan for and fund our health services into the long term. It is also critical we continue to support the HSE in the delivery of its ongoing financial reform programme. I will now set out the items making up this year’s Supplementary Estimate.

Under subhead 1, which is net pension costs of €116 million, €99.1 million is required to fund projected pension spend to year end and a further €17 million is required as a result of the public sector pay deal. Under subhead J1, which concerns the HSE, including service developments, an additional €39 million is required. HSE core current expenditure requires a Supplementary Estimate of €448 million, of which €328 million relates to post-Estimate sanctioned expenditure, including €215 million for the new pay deal, €108 million for the once-off energy inflation package, and €102 million for the cost of the Haddington Road agreement hours restoration as a consequence of Government policy. Projected reductions in HSE cash balances from the end of 2021 to the end of 2022 partially offset the Supplementary Estimate requirement in 2022.

Under subhead J2 on HSE Covid-19 action plans, a net €1.18 billion additional is required. Covid-19 expenditure requires a Supplementary Estimate of €1.18 billion. This was driven by the fact that the assumptions underpinning Estimates 2022 that Covid-19 impacts would diminish and, consequently, spend would be considerably lower. This did not transpire for a number of reasons: he Omicron surge in early 2022, which drove high levels of testing and tracing activity; the need to deliver Covid-19 vaccination booster programmes; and the fact it was necessary to maintain Covid-19 measures within acute and community health services during 2022. This included, for example, infection prevention and control measures, safety net arrangements and significant costs relating to staff absence. It was important that front-line staff who bore the brunt of the country’s response to Covid-19 were acknowledged for their sacrifices, so this figure also includes €189 million for the pandemic recognition payment. It should be noted that the overall projected spend of €1.878 billion on Covid-19 is lower than the €2.5 billion spent on Covid-19 in each of the years 2020 and 2021.

Under subhead K4 on payments to the State Claims Agency regarding clinical negligence, €95 million is required to fund the total cost of claims which will be settled in respect of 2022. Under subhead M4 on capital Covid-19 actions, €90 million is required from the €100 million set aside in the contingency for Covid-19 related capital projects.

It was acknowledged when the original Estimate for this year was approved that there was a risk associated with Covid-19 and how it might impact the Vote if, as transpired, we were hit with another wave. The Supplementary Estimate seeks to address the additional funding requirement to allow the health service to continue to take appropriate measures in responding to the Covid-19 pandemic. The amount sought is significant in monetary terms. The supplementary funding requested represents 6.5% of overall health expenditure in 2022 and brings total expenditure for this year to €22.575 billion. While the financial impact is significant, the value of this investment in protecting our citizens in the face of this global pandemic is immeasurable. The Government is steadfast in its commitment to protecting the citizen and to enhancing the resilience of our health service. This commitment is not only evident in the level of funding made available this year but also by the actions in this year’s Estimates to increase permanently the size and capacity of our public health service and workforce. The HSE has increased its workforce by more than 16,275 whole-time equivalent staff since the pandemic. We have delivered 25% more critical care-ICU beds and we have added 924 more hospital beds. These are significant achievements during a global pandemic. While some measures, including recruitment of additional staff, could not be fully delivered, I am pleased the Government has made resources available to enable this to take place in 2023. I now seek the committee’s approval of the Supplementary Estimates of €1.392 billion for Vote 38.