Health Minister Jennifer Carroll MacNeill has been accused of shifting blame to the HSE over her department’s expected €1billion overspend, after an internal report challenged her assertion that excessive recruitment was the main cause of the deficit.
In recent weeks, Ms Carroll MacNeill and several Cabinet colleagues have repeatedly blamed the HSE for persistent overspending.
The newly established HSE regions have been accused in particular of launching an unauthorised “hiring spree”.
However, an internal HSE analysis shows that spending on non-pay items is 2.4 times higher than the overspend on staff salaries.
The Government has already admitted that the Department of Health, which has a long record of exceeding its budget, was more than €600million over target by October.
The Irish Mail on Sunday reported last month that the final deficit for the year is expected to surpass €1billion.
Minister Carroll MacNeill and other Cabinet colleagues have blamed the HSE for its ongoing overspending
The HSE Cost Performance Oversight Group (CPOG) report, seen by the MoS, now indicates that non-pay expenditure is outstripping pay costs, despite the minister’s claims that the regional health authorities pursued recruitment without approval.
The Department of Public Expenditure (DPER) subsequently ordered four of the six health regions to surrender their day-to-day autonomy to the Department of Health. It also alleged that excessive recruitment had driven up HSE pay costs.
According to the HSE’s own figures, expenditure at the end of August was €659million above the allocation agreed at the start of the year.
Non-pay spending accounted for the largest share of that excess, reaching €431million by the end of August.
That represented spending 4.6 per cent above the agreed level, according to the report.
Non-pay expenditure includes the Primary Care Reimbursement Service (PCRS), which covers payments to GPs, pharmacists, dentists and community healthcare schemes.
It also covers medical devices, medicines, clinical supplies, information technology systems and the upkeep of facilities.
Pay-related costs were approximately €180million above the annual budget, putting them 2 per cent over the agreed figure.
The report also identifies the troubled Children’s Health Ireland (CHI) as having the weakest cost controls, with an overspend of €50.8million.
Minister Carroll MacNeill said HSE recruitment was responsible for much of the rapidly growing deficit
Labour health spokeswoman Marie Sherlock said the figures raise “very serious questions” about how the Department of Health prepares its budgets and whether it is consistently underestimating demand for services.
The Dublin Central TD told the MoS this week: “The HSE is in this position because budgets are set in a deeply flawed, arbitrary and amateurish way. The organisation is expected to work with whatever funding the department decides to provide, rather than receiving budgets based on projected demand.
“A deficit was inevitable this year. What sets this year apart is the minister’s bizarre insistence that the HSE will receive no additional funding apart from the drugs budget, and that this year’s overspend will effectively be taken from next year’s allocation.”
Ms Sherlock said this approach amounted to “multi-annual funding in reverse” and could have a “devastating” effect on health services.
“It is completely farcical when the HSE is facing one of the largest deficits in the history of the health service.”
Following last month’s Budget, senior ministers blamed an “unsanctioned recruitment splurge” for the worsening financial crisis in the health sector.
KEEP READING: Democrats Intensify Calls to Impeach Defense Secretary Pete Hegseth
Public Expenditure Minister Jack Chambers also supported Ms Carroll MacNeill’s claim that recruitment by most of the newly reorganised HSE regions had fuelled the spiralling overspend.
Public Expenditure Minister Jack Chambers also blamed recruitment in most of the newly restructured HSE regions for the growing overspend
After the MoS revealed that the overall deficit could reach €1billion, several ministers said the financial crisis was the HSE’s responsibility. They accused the organisation of “abusing” the new financial powers introduced under the regional restructuring programme.
Before Budget 2027 was announced, Minister Chambers said four of the six HSE regions were “going to lose autonomy on day-to-day spending”.
He also warned that “much greater controls” would be imposed on all pay and non-pay expenditure.
The previous month, as the Government sought to contain the fallout, Ms Carroll MacNeill said HSE recruitment was responsible for much of the rising deficit. She said the organisation “can’t just keep adding more and more people to the health system”.
Ms Sherlock said the internal report directly challenges the minister’s claim, and those of her Cabinet colleagues, that regional overspending is the primary cause of the deficit.
She warned that the health service was entering “a very dangerous period”.
She told the MoS: “The Department of Health is blaming over-recruitment for the deficit, yet its own internal figures suggest a very different picture. Direct pay is being restrained while agency spending is surging, and the HSE’s non-pay deficit is almost three times the overall pay deficit.
“There is dishonesty at the centre of the response from the Department of Health and DPER. Staffing levels appear to be treated as the sacrificial lamb in an effort to reduce the deficit.
“I fully support efforts to improve productivity, but I am shocked by the disrespect, disdain and lack of transparency shown by ministers when legitimate concerns are raised about safe staffing and adequate bed capacity.”
Labour health spokeswoman Marie Sherlock said the health service was entering “a very dangerous period”
She also pointed out that the report shows the South West region, which Ms Carroll MacNeill had publicly criticised for overspending, has a smaller deficit and lower pay overspend than other regions.
“The minister has promoted the idea that excess recruitment caused the HSE’s second-highest deficit in the history of the health service, with the South West supposedly the biggest offender.
“But the CPOG report shows that non-pay spending, not pay, is the main driver of the deficit. While the focus has been placed on the regions, cost control has been weakest at CHI, where non-pay expenditure is the central issue.”
The health service restructuring began in 2024, when it was divided into six regions under a key recommendation of the Sláintecare reform programme.
The overhaul, which revived a regional model similar to the former health boards, gave the regions greater control over their finances.
They were also granted additional authority to recruit staff, a process the Government has claimed went ahead without adequate checks.
The Department of Health did not directly address claims that the internal HSE report contradicts Ms Carroll MacNeill’s criticism of regional overspending.
A spokesman said: “It would be premature to draw conclusions about the HSE’s final year-end deficit.
“The final position will depend on spending during the remainder of the year, as well as the effect of enhanced controls and savings measures being introduced by the HSE.”
The department said the HSE’s current financial position “reflects a range of pressures across both pay and non-pay expenditure”.