THE COST of the health service could soar by €12.5 billion in the next decade due to the changing age profile of the population, Minister for Public Expenditure Brendan Howlin said last night.
Mr Howlin said that over the next 20 years the number of people in the State over 65 is set to increase by almost half a million.
He used the health statistic as an example of why public service reform would have been necessary, irrespective of the EU-IMF bailout.
While reform was a major part of Government attempts “to regain full sovereignty over economic policy”, Mr Howlin told a meeting of the Association of Chief Executives of State Agencies they would in any event face key imperatives in coming years.
He said the public spending review on which he had briefed the Cabinet in recent days would not be simply an assessment of where to make cuts, but would also consider the way public services were delivered.
Mr Howlin said the cost of the health service (€18 billion this year) coupled with the demographic projections created one of the imperatives for change.
But he said technological change also offered an opportunity to rethink delivery of services. “For example, last January an 81-year-old stroke patient in Mullingar was diagnosed and treated by a consultant [working in] in Tallaght hospital.”
The association of chief executives, which was holding a joint meeting with the CEO Forum of Northern Ireland, was also told by Mr Howlin that Ireland needed to adapt the population’s skills “to the needs of the 21st century labour market”.
Mr Howlin said that 20 years ago if you could use Microsoft Word, you were an IT specialist. “Now, you need to be digitally literate for almost every job, at every skill level, from stock checking in a supermarket to building a bridge.”
He said the Expert Group on Future Skills Needs estimated that by 2020, with no policy change, those in the labour force with lower skills would far outstrip the supply of low-skilled jobs, while there would not be enough higher-skilled workers to fill the new jobs being created.
“In other words, even as employment in Ireland reached record highs, we were facing a growth in structural unemployment.”
Speaking to The Irish Times in advance of his address, Mr Howlin reiterated the Government’s commitment not to cut public sector pay if the Croke Park agreement could be made to work.
“These are just some of the challenges that our society is facing in the coming decade – crisis or no crisis. In the good times, tackling them was going to be difficult. Today, in these difficult times, tackling them is going to be imperative.”
Mr Howlin said Ireland’s was facing a profound economic crisis “where we are fighting a battle on three fronts – mass unemployment, a major failure in banking and a fiscal crisis”.
While he did not absolve the previous government of its responsibility, he said “even before the economic crisis was upon us, there were significant challenges on the horizon, that could not be met without far-reaching reform”.