Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 1 and 2 together.

I thank Deputy Kelleher and Deputy O'Reilly for their questions. We had an opportunity to engage extensively on this matter yesterday. The meeting involved myself and the director general of the HSE. Anyway, I welcome an opportunity to engage again this morning.

As I said yesterday, the need for effective financial management remains crucial as the health service deals with a larger and older population, more acute health and social care requirements, increased demand for new and existing drugs and the rising costs of health technology. The costs associated with these service pressures will increasingly need to be managed not solely through increased Exchequer allocations but through improved efficiencies, productivity and value from within the funding base in 2018 and beyond as well. This is the norm in other health services. It is probably the norm in most businesses and public services. People are asked to ensure they get value for money. If anything, it is more important at a time when we are increasing budgets that we do not get back into the Celtic tiger spiral of taxpayers' money being spent without ensuring that it delivers decent outcomes for our patients.

The 2018 national service plan set out a budget of over €14.5 billion for the HSE, the highest budget ever allocated. The health budget was increased by over €600 million on 2017, a substantial additional level of funding by any objective standard. The amount allocated follows an extensive process of engagement between my Department and the HSE that considers the funding requirements as submitted by the HSE and the fiscal position available to the Government. These engagements are a normal part of the budgetary process and occur with agencies throughout Government.

As I remarked yesterday, it is simply that the process for health is more transparent since the director general and myself write to each other. I imagine someone may wish to find out whether IDA Ireland asked for money or this or that agency asked for money. Obviously, oftentimes agencies ask for more funding than the amount available. All public bodies put forward spending proposals but all such bodies, including the HSE, are required to operate within the amounts proposed by Government and determined by the Dáil.

While increased resources contribute to health service improvement, there are always ways in which improvements can be achieved within current resources. The HSE has my full support in achieving these improvements as part of our shared reform agenda.

Since I have come to office, the allocation to the Health Service Executive has increased by €1.4 billion or 10.6%. More resources are always welcome in contributing to the development of services but there is a responsibility on the HSE to seek greater value from the substantial existing resources at its disposal as well. Deputies heard yesterday from the director general and the deputy director general that they are up for the challenge as well. They accept that there is a need to ensure every euro counts in the delivery of health care.

The HSE 2018 service plan notes that provision of the level of services and activities will require the delivery of value improvements totalling €346 million. The HSE will lead on that aim, including a corporate value programme. It is focused on cost reductions and savings, including procurement savings and agency conversion, something we have talked about for some time but which needs to be delivered. It also identifies savings and cost reductions across all corporate operations. This might include better control of central administrative costs, such as travel costs, and better management of supplies. I imagine our citizens think these aims are appropriate, normal and good practice.

The Department of Health will work with the HSE within a shared governance and oversight framework. As Deputy Kelleher correctly stated, this will be a multi-year strategic initiative, because we need to get it right. The funding of our health service, and every health service, is a challenge and therefore we need to drive value. The objective is to identify and implement savings from improved productivity and changes in models of care or policies.

Health services to the public will not be reduced in 2018. The services to be provided in 2018 are as set out clearly in the national service plan. All levels within the plan are either equal to the level delivered in 2017 or, in many cases, higher than the level delivered in 2017. For example, as set out in the national service plan, the budget for acute hospital income will be set at €44 million less than the planned levels for 2017 and, as such, it contains no stretch targets. That addresses Deputy O'Reilly's question about the stretch targets. The additional funding provided in budget 2018 for new developments will support new or expanded levels of services throughout priority service areas. I expect the HSE to operate within the funding provided to it in 2018. The HSE has signed up to do precisely that.

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