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What does the Budget mean for healthcare?

By Mindo - 26th Oct 2021

An early analysis of Budget 2022 by the Parliamentary Budget Office points to the difficulty in assessing certain aspects
of healthcare spending. Paul Mulholland reports

The Preliminary Review of Budget 2022 by the Parliamentary Budget Office (PBO) has highlighted some of the major aspects of Budget 2022, as it applies to different sectors. The PBO is an independent specialist unit within the Houses of the Oireachtas.

This document was prepared in order to assist members with their scrutiny of the Budget. In 2022, overall core spending on health (current and capital) is set to increase from €20,261 million to €21,374 million. Of this total, approximately €20,955 million relates to HSE allocations. Within the sector, €10 billion has been allocated for pay and pensions in 2022.

While Covid-19-related spending is set to decrease by over €1 billion in 2022, a further €800 million will be provided to continue the health sector’s management of the pandemic. This is mostly to meet the costs associated with issues suchas vaccination, test and trace, personal protective equipment (PPE), and the HSE Winter Plan.

The €800 million is split as €750 million in current expenditure and €50 million in capital allocations. In addition, €200 million is to be held in reserve to meet any unexpected funding requirements, related to Covid, placed by the Department of Health on the HSE.

“It should be noted, that despite the reduced need for measures linked to the pandemic, over €1 billion of the additional funding earmarked for pandemic relief in 2021 has been incorporated into the health vote’s base expenditure for the coming year. In part, this may illustrate the challenge in distinguishing between Covid and non-Covid healthcare spending,” according to the document. Expenditure on Covid-19 in 2021 is the subject of a separate PBO report (see panel).


Due to the manner in which HSE funding is allocated, the Preliminary PBO Review of Budget 2022 stated it was difficult to analyse the funding allocation for 2022.

“While the Minister [for Public Expenditure and Reform] has outlined certain spending areas where spending will
be allocated, the bulk of HSE money (€14 billion) is drawn down through one health subhead and as such, limited
scrutiny is possible at this time,” the document states.

Areas highlighted by the Minister include an additional €200 million to the HSE and €50 million to the National Treatment Purchase Fund to address increased patient waiting lists. Also, €300 million in HSE funding will be set
aside for “new measures” aimed at modernising and expanding health service delivery has also formed part of this

However, according to the Department of Health’s correspondence with the PBO, the HSE currently has almost
€373 million in unspent funding from 2021 relating to this same spending area.


Direct funding for Sláintecare has not increased in this Budget. The funding for the health strategy remains at €22.6 million for 2022. The document states this area is more closely linked to policy development and managing implementation rather than directly impacting patient outcomes.

“Issues exist in identifying spending commitments, which are directly linked to the functional implementation of the policy,” according to the PBO. “Sláintecare implementation will necessitate funding areas to conduct reform – long-term this may pose significant challenges to ensure such funding is used to implement necessary reforms, rather than simply being absorbed into service delivery in those areas.”

However, some measures have been announced which are linked to the principles of Sláintecare delivery. These include €45 million to improve health affordability through expanded free GP care for six- and seven-year-olds, reduced Drugs Payment Scheme threshold (from €114 to €100), and other measures.

Other areas

A total of €31 million is to be provided for women’s health investments, including free contraception for women aged 17-to-25, maternity and gynaecology strategies, and addressing period poverty. Disability services have been allocated a further €55 million, including funding for measures aimed at removing inappropriately homed younger people with disabilities from adult nursing homes.

Core capital expenditure will see an increased provision in 2022 of €85 million, bringing the total estimate spend
next year to €990 million. Much of the specific announcements within the Budget 2022 statement related to the funding of existing projects or projects due to be completed in 2022.

The document noted that despite the impact of the cyberattack on HSE systems in May 2021 and immediate costs of €100 million – and estimates of overall costs to the health service of approximately €500 million – there is “no specific provision in the Budget related to mitigating or addressing the issue of cyber-security”.

“Additional capital funding of €35 million has been allocated to information systems for health agencies, though how much is related to improving ICT infrastructure and security is unknown,” according to the document.


Valerie Ryan

With direct spending in the HSE and health sector on Covid-related measures €332 million ahead of the forecast so far this year, the repurposing of expected savings from elsewhere in the HSE budget may be required, the Parliamentary
Budget Office (PBO) has stated.

In its latest assessment of State spending on Covid-19-related mitigation measures in 2021, the PBO highlighted that while its assessment related to direct spending allocations within the health sector, it was likely that the true cost of the pandemic would be much higher and only fully appreciable over the coming years.

A number of Government Departments had been particularly dependent on increased funding to support Covid-19-related spending. For example, both the Departments of Health and Social Protection have had dramatic increases in their respective allocations.

In 2021, approximately €15 billion had been allocated across 14 departments and vote groups to fund specific
measures aimed at mitigating the impact of the pandemic.

In Budget 2021, an additional €4 billion was made available to the health sector above the original 2020 estimate, partly to fund the response to the pandemic, but also to “build up permanent capacity and resilience in the health service in line with the Health Service Capacity Review”.

The Mid-Year Expenditure Report, published in July 2021 by the Department of Public Expenditure and Reform, had detailed €1.856 billion already allocated through estimates brought to the Dáil and linked directly to Covid-19 mitigation measures in the health sector, with no further allocation provided in the Economic Recovery Plan.

Assigned spending up to September against 2021 funds for the HSE Covid-19 response was €1.595 billion of €1.666 billion allocated; agency Covid-19 response spending had totalled €23.2 million so far of €45 million in funding;
Primary Care Reimbursement Service direct spending on Covid-19 mitigation measures reached €9.7 million in September of €10 million assigned; and capital spending, including ICT, totalled €82.7 million against €130 million in funding.

Given the volatility of the courseof the pandemic, accurate budget forecasts around these measures has proved difficult. Tracking Covid-19 spending in a transparent manner, to allow for proper scrutiny, is essential to ensuring that expenditure on Covid-19-related measures could be identified, measured, and disentangled from core Departmental budget expenditures, according to the PBO.

Measures within the HSE Covid-19 response had seen allocations revised in line with changing requirements, stated the report. For example, in April there had been an expectation that these measures would require funding
of approximately €2.1 billion, though the most recent estimate had total in-year spending/costs at €1.7 billion.

To understand the extent of the sums involved across all Government departments and votes, the PBO report added it was worth noting that approximately €16 billion had been allocated in 2020 and with a further €7 billion being put
aside for 2022. This would bring total specific Covid-related spending to over €40 billion.

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