Minister for Health Leo Varadkar is making a late push for more than €100 million in additional spending for the final weeks of 2015, prompting tension within Government amid efforts to curtail a year-end increase in expenditure.
Contentious discussions on the final allocation for health come ahead of new tax returns due tomorrow which will show accumulated exchequer receipts in the 11 months to November are more than €3 billion ahead of target.
The Department of Finance is now understood to be forecasting a budget deficit of 1.4 per cent of gross domestic product for the end of 2015, almost half its original target of 2.7 per cent. The budget-day target was 2.1 per cent.
The health service was to receive some €600 million in new funding when the Coalition agreed, days before the October budget, to set aside €1.5 billion for supplementary spending this year in an assortment of departments.
However, Mr Varadkar has since returned to Minister for Public Expenditure Brendan Howlin with demands for another €100 million or more on top of his original bid for some €600 million.
Implications
Such demands have implications for health spending next year as supplementary estimates for 2015 will be rolled into the 2016 base before new allocations on budget day.
Mr Varadkar’s request for more spending, which comes amid winter strain on hospital services, has been challenged in Mr Howlin’s department.
The question remains unresolved, although final settlements have already been reached with each of the other Ministers who are receiving supplementary estimates. The money is being used for the Christmas welfare bonus, recruitment of gardaí, education, works on country roads, new buses for Dublin and higher-than-forecast live register payments for lone parents.
While the health budget is not on the formal agenda for the Cabinet meeting today, a source said efforts were under way to close the discussion.
As it stands, the supplementary allocations are coming in about €100 million below the amount set out before the budget. The gross additional spending is €1.4 billion, but the net total is €1.2 billion when higher appropriations are taken into account from increased pay-related social insurance payments in the light of rising employment .
The emerging gap may provide leeway to increase the health allocation. However, officials in Government circles have been questioning whether a further increase in health expenditure is required at this point in the year.
The debate is sensitive as the fiscal rules for 2016 forbid supplementary spending to meet overruns in the health service or other departments.
