Stephen Donnelly (Wicklow, Fianna Fail)
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63. To ask the Minister for Health the reason for the overrun in health spending in 2018; if he was informed by the HSE in late 2017 or early 2018 that such an overrun was likely; the steps he took to avoid an overrun; the overrun in each health sector; the amount realised in savings to date in 2018 under the HSE's value improvement programme; the amount by which anticipated revenues have fallen short; and if he will make a statement on the matter. [43914/18]

Stephen Donnelly (Wicklow, Fianna Fail)
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The question concerns the overrun. We are looking at a very hefty overrun for this year. Worryingly, it has been locked into next year as well. I think €625 million is accounted for based on the overrun for this year, which is money we could and should be spending on Sláintecare, on scaling up the system and so forth. When was the overrun signalled to the Minister? Was it signalled in late 2017 or early 2018? If so, what steps did the Minister take to try to avoid this significant overrun? Will he give us the details of what has caused the overrun for this year?

Simon Harris (Wicklow, Fine Gael)
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I thank Deputy Donnelly for the question. A number of areas within the HSE are contributing to the overspend in 2018. These include higher payouts under the State Claims Agency, a shortfall in private patient income, a higher level of spend in the acute and disability services sectors and, for example, the additional costs associated with Storm Emma, which amounted to about €40 million. The overspend in services is driven by the non-achievement of planned savings, higher levels and higher complexity of demand, costs associated with meeting national regulatory standards in the disability sector and the need for additional emergency placements for children and young people with disabilities. Finally and importantly, an amount of €280 million was provided in the 2018 Revised Estimates for appropriations-in-aid receipts from the UK in respect of healthcare provided under EU regulations. These receipts are now estimated at €225 million, leaving a shortfall of €55 million against the provision.

The HSE advises that the savings projected to be achieved by year end under the value improvement programme will be in the region of €80 million. The introduction of a savings programme into the HSE's 2018 national service plan reflects the commitment we must have in the health service to achieve greater value and efficiency across the totality of resources at its disposal. With major increases in public funding for our health services in recent years to a level which compares favourably with spending in other countries, it is important that the scope to develop services through the improved management of existing resources also receives ongoing attention.

In presenting its 2018 national service plan in late 2017, the HSE conveyed its view of what it saw as the significant financial challenge of implementing the plan within the allocated budget for 2018. This was not a secret; it was published on pages 2 and 3 of the national service plan. In response, I confirmed to the HSE that the plan was to be framed having regard to the funding available. The health sector was but one of several priority areas competing for additional funding in 2018 from the fiscal space available to the Government. I pointed out that over €600 million in additional funding was provided for the health sector in the 2018 budget and that the HSE’s allocation had increased by approximately 20% since 2015, or by an average of 6.6% per annum, which is ahead of both the programme for Government and the confidence and supply agreement level of increase. Taking the significant 2018 and prior year allocations into account, it is clear that issues of budgetary performance need to be addressed in certain areas and that the HSE should discharge its accountability in this regard under the performance and accountability framework.

Additional information not given on the floor of the House

As part of the monthly performance cycle, my Department holds the HSE to account for its expenditure and for the delivery of the services set out in the national service plan. Performance in respect of service delivery and finance is monitored monthly and, where services are experiencing significant performance issues, the HSE is required to submit an escalation report. Finally, the Government is committed to a significant programme of legislative and managerial reform to improve performance and accountability in the HSE. This includes the Health Service Executive (Governance) Bill 2018, which is currently before the Oireachtas. This legislation will establish an independent board governance structure for the HSE, and as one of its functions will support the chief executive officer and HSE executive team in developing a more effective performance management and accountability system.

Stephen Donnelly (Wicklow, Fianna Fail)
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What I hear from the Minister causes concern because the Minister is telling us the HSE told him towards the end of last year that it was not a big enough budget and that there would be an overrun. I will read back on exactly what the Minister has said but my understanding of what he said is he heard what the HSE said and told it to go back and come up with a service plan that was within budget. I assume that is what the Minister did. The Minister got the budget he got, which the Dáil voted on. The HSE came back to the Minister late last year and said it was not enough money for the service plan so the Minister had to do one of two things. He had to either increase the budget or reduce the service plan. Did the Minister instruct the HSE to reduce the service plan to make sure the HSE could deliver on budget? Presumably he did. If he did that, what has happened to lead to a nearly €800 million overrun? Saying things like Storm Emma and unforeseen events is not an acceptable rationale. If one is running a €16 billion or €17 billion healthcare system, storms and flu epidemics happen and one plans for the unforeseen and makes sure there are contingency budgets in place. Did the Minister ask the HSE to reduce its service plan to a level that should have allowed it and the Minister to deliver according to budget?

Simon Harris (Wicklow, Fine Gael)
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The HSE did not just tell me, it told us all in the HSE service plan, as it does most years, the challenges and risks that exist in an organisation like the HSE. This is not the first year the HSE has needed a supplementary budget. If one looks back to 2006, we had a long-stay charges repayment scheme of €1 billion. We had shortfalls of €240 million and overrun of demand led schemes in 2007, €345 million in 2008, €595 million in 2010 and €680 million in 2014. I am not saying it is a good thing but we all know we need to reform our health service in order that it can deliver value for money and improve services, which is why we have all signed up to the Sláintecare plan. The law is very clear. The HSE has a legal obligation under the Health Act to present a service plan that it signs up to delivering. It can highlight risks and challenges and it did highlight those risks and challenges. Ultimately when it submits a service plan to the Minister of the day, it is committing to deliver the services contained within the service plan. It is its legal responsibility. We need to improve the oversight and governance structures. That is why I have appointed Sir Ciarán Devane as the new chair designate of the HSE board. That is why I want to put a competency-based board in place as well. The Deputy may talk about Storm Emma or the State Claims Agency costs and say they do not explain it but they explain a fair bit of it. Let us just take the State Claims Agency as an example. We cannot predict the level of claims being paid out every year. It as clear there was an overrun in that area. It is clear Storm Emma cost €40 million. It was also clear, let us be honest, that when it came to our acute hospitals and disability sector there was a significant overspend. When the Deputy asks what I told the HSE to do, I certainly did not tell it to reduce those services because when one is the Minister for Health, one does not have the luxury of telling sick people they are to go home and come back the next year. We have to manage. That is the situation that I and all my predecessors have found themselves in.

Stephen Donnelly (Wicklow, Fianna Fail)
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If we in the Dáil vote the Minister a certain amount of money - last year it was north of €15 billion - and the HSE comes to the Minister and tells him it cannot deliver the service plan for the amount of money the Minister has got from the Dáil, the Minister has three choices. He can come back to the Dáil and tell us he needs an extra €600 million, €700 million or €800 million, whatever the HSE tells the Minister. The other choice is to go back to the HSE and say he is sorry but this is the amount of money Dáil Éireann has voted him and they will have to figure out how to bring this in on budget. No one is suggesting that sick people are sent away. The Minister knows that is not being suggested. Anyone managing a budget anywhere in the world says what they will deliver and what amount of money they have. The third thing, which is what actually happened, if I understand the Minister, is he did not tell the HSE to adjust the service plan according to the budget therefore its warning that it did not have enough money held and we ended up where we are now with a nearly €800 million overrun. Was anything done throughout the year? Did the Minister instruct the HSE to adjust the service plan or capital expenditure plan or whatever it was to bring it in on budget?

Simon Harris (Wicklow, Fine Gael)
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That is not what the HSE said. The HSE did not say it could not deliver the service plan. The HSE produced a service plan. It was launched by the then director general and me. It was discussed at the Oireachtas health committee. I am pretty sure it was debated on the floor of the House. It produced it in the knowledge of the resources it had available to it. It did spell out, in correspondence to me, which has been long since published and on page 2 and 3 of the service plan, the risks and the challenges it saw. If one looks back through all service plans, the risks and challenges are always highlighted. Nobody in the HSE said, nor legally could anyone have said, it was producing a service plan it did not believe it had adequate resources to deliver. It has an obligation to produce a service plan it can deliver within the resources. However, having said that it is also clear that when one looks at the HSE's budgetary performance since its establishment, it has almost always required a supplementary budget. The question for all of us in the House and for me as Minister is how we endeavour to move to a better place in that regard. The governance piece we are putting in place is a part of it but I also think reforming the model of healthcare is a part. The Deputy and I have somewhat of a luxury of looking at the available resources from a health prism. The Deputy's party and the Government sat down in budgetary talks last year and had to decide how much money we could give to health and we had to do our very best within that envelope. I did not see anybody agitating for any more than was given on budget day.