Paschal Donohoe has said the Government plans to breach its own spending rules next year to ensure the health service has adequate funding despite another significant overspend across the health service in the first six months of 2024.
In its midyear spending review published on Thursday, the Department of Public Expenditure confirmed the total package for Budget 2025 will be €105.4 billion, 6.9 per cent higher than last year and above the 5 per cent annual limit set by Mr Donohoe during his term as minister for finance in 2020.
The Coalition has broken its own spending rules in each subsequent budget since they were introduced, drawing criticism from the Irish Fiscal Advisory Council (IFAC) – the State’s budget watchdog – among others.
On Thursday, Mr Donohoe said he had acknowledged in 2020 that the rule would be difficult to implement. “If I had implemented the 5 per cent spending rule in the last few years, I wouldn’t have been able to help with the pandemic and the economic and health costs of that, and I wouldn’t have been able to help offset the soaring prices [of recent years].”
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Half-year figures published by the Department of Public Expenditure confirmed the Department of Health spent €11.7 billion in the first six months of the year, more than €1 billion or 9.7 per cent higher than expected, representing the largest overspend by any department.
“The majority of this overspend is in relation to the acute hospital area, with some other pay and non-pay pressures also emerging in the first half of the year,” officials from the Department of Public Expenditure said in the report, which underlined the Government’s commitment to making an additional €1.5 billion available to support the health service in 2024.
In a statement, the Minister said he had allocated an additional €1.5 billion to health this year and €1.2 billion next year, describing it as an “opportunity” to strengthen financial planning across the health service with Minister for Health Stephen Donnelly and the Health Service Executive.
The Fine Gael TD said he takes the views of IFAC – which in June said the overrun across the health service could breach €2 billion this year – very seriously.
“In terms of their comments with regard to health, I recognise that health spending in the first half of this year was at a level that made it necessary we needed to handle it differently to how we had done in previous years,” he said. “And that is why I reached agreement with Minister Stephen Donnelly and with the health services for two-year funding settlement for the Department of Health.
“That means for 2024 we expect the overall Government spending on health will be around €23 billion and for next year, before any new budget measures are agreed, it will be €24.2 billion. I expect and I’m confident that our current spending will be inside that level,” he said.
Meanwhile, increased spending on international protection accommodation services, disability services and Tusla were the main factors behind a €195 million overspend at the Department of Children, Equality, Disability, Integration and Youth in the first half of the year, the Department of Public Expenditure.
Spending at Minister Roderic O’Gorman’s department was 5.4 per cent ahead of profile in the first half of the year.
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