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Budget 2015 – a very slight turn in the right direction

Posted in Uncategorized by saraburke on November 6, 2014

Speaking in the Dáil the day after the Budget, Minister Leo Varadkar said “the gross current budget for the Health Service for 2015 is €13.079 billion. This is equivalent to an increase of €305 million compared to the 2014 allocation of €12.774 million.”On the evening of Budget 2015, Fianna Fáil issued two statements on the health budget. The first one, from their health spokesman Billy Kelleher, stated: “The HSE will need a bailout of at least €500 million in 2014. That is testament to the fact that our health services were under-resourced this year. The minimum that our health service needs to deliver the hardly satisfactory 2014 level of service in 2015 is €13.1 billion… Well, a ‘flat’ budget is what Minister Varadkar has secured for health services today.”

The second one issued less than an hour later by his Fianna Fáil colleague, Seán Fleming, made a much more critical statement: “The Department of Health is progressing a range of savings measures (€130 million) and income generation measures (€330 million) estimated to have the potential to support expenditure in 2015. This amounts to nothing short of a €460 million hole in the health budget for next year before we get started.” So who is right — did Budget 2015 deliver an increased, flat or decreased budget for health?

There are difficulties comparing Budget 2014 and 2015. The children’s services budget was included in the headline allocation for 2014 as the Child and Family Agency was not set up as a separate service until 1 January 2014. So while the headline allocation for health was €13.1 billion for 2014, when the children’s services budget was taken out, the revised health estimate was €12.7 billion. The allocation for 2015 is €13 billion, which is in effect a €305 million increase.
There are further complications comparing this year with next as the vote (who has responsibility for the health budget) is being returned from the HSE to the Department of Health, exactly 10 years after it was moved there. This means that some parts of the health budget included in the gross health estimate for the last decade will no longer be counted as of 1 January 2015.

And what about this €460 million hole in the health budget? €130 million of that are further savings that are to be achieved in “procurement, the cost of medicines and the cost of agency staff”. A significant win by Health this year was to secure that any savings made in 2015 would be kept in the health budget. The €130 million is not built into the headline figures and therefore is not a hole.

The other €330 million is, according to this author’s best assessment, made up of one-off payments that will land in 2015 and therefore are part of the overall public health budget. Some €135 million of this is to come from money owed by insurers. The remaining €195 million is to come more or less equally from the UK (€96 million), owed for care received by British people in Ireland, and another €98 million that is an overhang from the transfer of the health vote from the HSE to the Department of Health.

Of course, none of these are guaranteed until delivered but they do seem to be based on sound assumptions, unlike items from last year’s budget, such as the fictional savings of €113 million, which was earmarked for medical card probity.
None of the above takes into account the €500 million-plus supplementary amount required for 2014, the vast majority of which will be recurring in 2015.

My best squaring of all the above is that there will be an increase year-on-year in the health budget between 2014 and 2015, albeit very small. This does not leave enough room for increasing costs or increased demands brought about by our sicker, ageing population and little if any room for much-needed service improvements.

The health budget for 2015 is better than any year since 2009; it is a very slight turn in the right direction. But it is not enough — it leaves little if any room for manoeuvre and it will be very difficult, if not impossible, for health to live within their means in the year ahead.

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