Paschal Donohoe (Dublin Central, Fine Gael)
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A key part of the annual budgetary cycle is determining the amount of funding required for Departments to carry out their existing functions, before any new decisions are taken. This is referred to as the ‘Existing Level of Service’ or ELS. ELS funding provides for the maintenance of our existing services and schemes, with the overall affordability limits set out in the Medium Term Expenditure Strategy.

ELS is a significant part of the additional expenditure funding allocated each year and delivers increased investment in public services, through for example providing existing schemes to a growing number of people, and investment in the public service workforce.

Each year both as part of the whole of year Budget process, and the finalisation of Estimates, ELS is considered in detail in each Vote. This requires an assessment of the specific needs of the Vote including previous budget decisions, the impact of the existing public sector pay deals and any demographic or other demand impacts.

Since 2019, the Government has prioritised a significant and unprecedented level of investment in the health service, over €7.7 billion. There has been an average annual increase in total budget allocation of approx. 9%. This significant investment has allowed for very significant service expansion, for example:

• An expansion in capacity through the funding of 1,228 additional acute beds and 93 critical care beds in hospital settings;
• An increase of over 24,000 staff through additional recruitment;
• Expansion of access to free GP care and free contraception; and
• Removal of Inpatient Hospital charges.

Budget 2024 allocated €22.82 billion to the Department of Health for 2024, €21.77 billion in core and €1.05 billion in non-core funding, an increase of €1.46 billion (6.9%) compared to the 2023 allocation. The core allocation of €21.77 billion represents a 6.2% increase to address demographic change, service pressures and new developments.

The Department of Finance, Population Ageing and the Public Finances in Ireland, projects that the old-age dependency ratio will nearly double over the next 30 years, increasing from 24 percent (2019) to 53 percent in 2070. The biggest ratio increase of 9.1% will take place from 2040 to 2050, followed by an increase of 7.1% from 2030 to 2040.

Therefore, there is significant importance on the continued investment of our health system, which accounts for approximately 1 in every 4 euro of voted expenditure. However, in order to meet the growing health demands, the financial sustainability of our health system also needs to be underpinned with a focus on reform, productivity, better financial governance and delivering on the expenditure control measures.

On 17th January 2024, the Minister for Health announced the establishment of Health’s Productivity and Savings Taskforce, which aims at maximising existing funding and providing as many services as possible to patients, while meeting the needs of a growing and ageing population.