Minister for Health Stephen Donnelly will seek to make savings of more than €600 million in the health service next year, with the focus mainly on spending in hospitals and use of agency staff.
It comes after the Health Service Executive announced a freeze on the recruitment of junior doctors, healthcare assistants, home helps and other frontline staff due to financial constraints.
The combination of a recruitment embargo and tightened budgets is expected to put hospitals under extreme pressure this winter, leading to longer waiting lists for patients and delays in emergency departments.
Mr Donnelly’s demand for increased productivity from hospitals follows fraught Budget 2024 negotiations in which he received an additional €800 million in core funding despite seeking more than €2 billion.
Budget 2025 main points: Energy credits, bonus welfare payments, higher minimum wage and tax changes
Budget 2025 calculator: How this year’s budget will affect your income
If our finances go flat, how will Ireland pay its bills?
Costing the election manifestos: Making sense of the billions being thrown out by parties to win your vote
A war of words has opened up within the Coalition about the reasons for this year’s health overspend, which is forecast to exceed €1 billion. One Government source said Mr Donnelly had not “cut his cloth to measure” or provided a plan to rein in health spending, which led to difficult budget negotiations.
However, sources close to Mr Donnelly denied this and said he has presented a plan for more than €600 million in savings, which will focus on “efficiencies” across acute hospital services.
This includes cutting back on agency staff and overtime where safe staffing levels are in place. Spending on agency workers is running at more than three times the approved budget.
With no dedicated budget for new medicines next year, Mr Donnelly is likely to seek savings in the existing budget which could then be redirected into this area.
However, pharmaceutical companies say they have already delivered “more than expected” in terms of savings during their current four-year deal with the HSE. The Irish Pharmaceutical Healthcare Association says its members have delivered €400 million in savings over the last two years.
There was little change in the scale of health waiting lists in October, according to data published on Friday, though the number of people classified as long waiters fell.
No new staff will be recruited in the health service next year, except where prior commitments have been made. Plans for the addition of another 7,000 staff have been abandoned. Consultants, GP trainees, nurses, midwives, dentists, orthodontists, health and social care professionals, and key ambulance staff are exempted from the freeze.
The current ban on recruiting administrative and management staff is being extended across the health service until the end of the year, according to a memo from HSE chief executive Bernard Gloster.
Deconstructing Budget 2024 - with Pearse Doherty
All external or net growth recruitment is being paused, with some exceptions, Mr Gloster told staff on Friday. “This reflects the recruitment and net growth year to date and is necessary to limit the impact of those staff categories with growth potential remaining.”
He said the HSE had added 23,000 staff since the end of 2019 and has reached and even exceeded many recruitment targets for this year.
The Irish Medical Organisation described the decision as dangerous and predicted it would “add to the chaos” in the health service and negatively impact patient care.
Separately, it is understood that Minister for the Environment Eamon Ryan initially sought about €6.5 billion for his climate action “war chest” — more than double the amount allocated in Budget 2024 — to be spent over a longer timeframe.
The Green Party leader wanted the higher allocation to be spent from 2026 to 2033, but ultimately secured €3.15 billion for the period 2026-2030. He ran into opposition in the Department of Finance, which considered the initial ask for 10 per cent of the projected exchequer surplus up to 2026 as neither realistic nor desirable.
The fund has been welcomed by environmental groups while Green Party sources said the infrastructure, climate and nature fund was “undeniably a great result”.
