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Stronger link needed between Exchequer and HSE for financial planning – budgetary oversight committee

By Paul Mulholland - 21st Oct 2019

The Oireachtas Committee on Budgetary Oversight has stated there needs to be “a much stronger link” between published Exchequer figures and the HSE’s financial reporting.

In its report, which was completed in advance of Budget 2020, the committee stated the change is necessary to allow the Oireachtas to carry out proper monitoring and scrutiny of expenditure in healthcare.

“There should not be a big element of estimation surrounding expenditure levels in health at this stage in the budget cycle,” according to the report.

The committee also requested that the minutes of the health budget oversight group be published on the Department of Public Expenditure and Reform’s website.

“A considerable portion of the committee’s pre-Budget scrutiny work focused on expenditure pressures in health, which was identified by numerous witnesses to the committee as being of significant concern,” the report stated.

The revised estimates for 2019 represented a 12 per cent increase on the revised estimates for 2018, and an 18 per cent increase on those for 2017.

It also represented a €1.06 billion (6.6 per cent) increase on the 2018 outturn post supplementary estimate.

“To date in 2019, the Department of Health appears to be below profile with regard to Exchequer expenditure, as set out in data presented in the Fiscal Monitor,” according to the report.

“However, this is not fully reflective of the actual financial position of the health sector, due to the accrual accounting process used by the HSE.”

In a response to the committee’s formal request for information, the Department of Health stated that, as at 31 May 2019, the HSE had a deficit for the first five months of €169.4 million and “while significant savings are profiled for the remainder of the year, the HSE is projected to have a deficit for 2019”.

In his Budget 2020 announcement, Minister for Finance and Public Expenditure and Reform Paschal Donohoe stated that current expenditure in healthcare is set to increase by 6.3 per cent to €17.4 billion in 2020.

This increase will be used to fund a supplementary estimate of €335 million and respond to demands associated with significant demographic changes, Minister Donohoe stated.

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