Proposed €1bn spend on health could pose risk to Budget 2024 plans, says Donohoe

There is a “risk” that overspending in the Department of Health could jeopardise Budget 2024 spending plans, Minister for Public Expenditure Paschal Donohoe has warned. Speaking after a Cabinet meeting on Tuesday afternoon, he also warned that the overall package would be less than the €11 billion budget which was unveiled last year.

Mr Donohoe said the final shape of Budget 2024, including the potential scope of one-off measures to address the cost-of-living crisis, would not emerge until the weekend before it was announced.

There has been growing concern across Government that a projected €1 billion spend in the Department of Health could threaten plans for extra spending next year. Minister for Health Stephen Donnelly has said that demand has shot up across the health sector and that inflation has also put pressure on costs, but it is understood Government colleagues want to see cost-saving measures implemented within weeks.

Mr Donohoe confirmed that the overrun could pose a risk to Budget 2024.

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“I hugely recognise and value the work that those working in hospitals and primary care do. I very much appreciate the challenges that the HSE and the Department of Health face in meeting the health needs of our country given how busy our hospitals are.

“In addition to that I am working very hard to make sure that the potential additional spending that is taking place in the health service does not jeopardise the plans that other government departments have and the overall aims for next year. There is a risk, but I am working very hard to make sure that this risk does not materialise, and I have been very clear within Government and with Minister Donnelly on our efforts to avoid that risk taking place.”

Asked what size the extra package for cost-of-living measures would be, he indicated it would be less than the €4 billion rolled out last year.

“The decisions in relation to the one-off measures will be made in the weekend before the budget and just before it. At the moment my focus is more on the day-to-day spending plans that Ministers will have in place for all of next year and beyond and the estimates meetings for those are taking place at the moment. In relation to the overall scale of that, myself and Minister McGrath are engaging with party leaders and we won’t make a final decision until closer to budget day.”

He cautioned, however, that the amount of new spending would be less than last year. “Last year we had a budget package that reflected the fact that inflation was at 11 per cent and had been increasing for many months in the run-up to budget day. In terms of the overall scale of the budget for 2024, it has to be meaningful and make a difference to those households that are facing such challenges due to inflation. But it can’t be the same size as it was a year ago because inflation is lower for this year and lower again for next year.”

Mr Donohoe said he would not know the final details of what would be in the overall package until the weekend before budget day, which is in two weeks on Tuesday, October 10th.

Separately, Minister for Children Roderic O’Gorman has refused to reiterate a previous pledge that he will be pushing for a further 25 per cent cut in childcare costs, after a similar cut last year.

“I achieved a significant cut in childcare last year, 25 per cent was my focus. I have indicated this year that I have a broader focus. I want to continue to reduce the cost of childcare for parents. But I want other parents to benefit from those reductions as well, for example parents who use childminders who are excluded from the National Childcare Scheme at present. I also want to broaden the access and inclusion model which allows children with a disability access services.”

He said he would look to childcare costs “as much as I can”.