Mr. Tony O'Brien:

Part of the explanation for the variability lies in the base position of the budget and its relationship with costs. Hospital budgets have developed over time in a way that is not entirely related to the demands hospitals face. There is still some residual impact on the way funds were allocated by health boards. I offer a good example. The North-Western Health Board was particularly strong in its community services but not so strong in its hospital services and its funding bias reflected that. When we did the moderate rebalancing that we carried out in 2013 in respect of hospital budgets it was necessary to make a significant adjustment in respect of Letterkenny and Sligo hospitals. Part of the story is that the underlying resource allocation is not demand-related. This is why the money-follows-the-patient initiative is so important because it will progressively enable the funding provided to hospitals to more closely relate to their demands and therefore to their costs.

Let us consider the Limerick group as an example. I imagine it is not a group that is overly burdened with administrative back-office functions. Much of the work is done externally now through health business shared services. It is probably a hospital that could do with more administrative staff rather than less, having regard to the impact on front-line services of clerks and so on who would fundamentally be able to change some of the workflow processes and skills mix. It would be unfortunate if the impression were gained that the hospital sector is administratively overly burdened. I reckon the reverse is probably true after the five or six years that they have been through.