Speech by Minister for Health Leo Varadkar on Budget 2015

Dáil Eireann
Wednesday 15th October

Check against delivery

A Chathaoirligh

First of all, I want to thank you for the opportunity to address the House on the Budget and the 2015 Health Estimates.

For the last 7 years we have come into the Dáil on this day to debate the latest round of tax increases, pay cuts and cuts to public services.  Today is very different.  We have, for the first time since 2008, a budget that contains income tax reductions and more money for public services and investment in infrastructure.

As a result of this budget, there will be more jobs, more teachers, more housing, more investment and more money for public services and welfare.  In January, people will see more take home pay in their payslips and families will benefit from an increase in child benefit.

But this is not a ‘giveaway budget’, it is a prudent one designed to secure the recovery.

We have learned from the mistakes of other governments and will not repeat them.   The deficit target we are aiming for is 2.7% of GDP which is below the EU limit of 3% and the measures in this budget will allow our national debt to be reduced next year, as a proportion of GDP.

We do not find ourselves in this position by accident.  We are here because of the sacrifices made by the Irish people and the tough decisions made by the government, opposed by many on the opposition benches, which have now proven to be correct.

Health Sector Budget 2015
My first priority on coming into office as Minister for Health was to achieve a realistic budget for the health sector in 2015. I am pleased to announce that the government is asking the Oireachtas to allocate additional exchequer funding of €305 million to invest in the health service in 2015. The gross current budget for the Health Service for 2015 is €13.079bn.  This is equivalent to an increase of €305m compared to the 2014 allocation of €12.774m.

In addition, once-off revenue measures amounting to some €330m have been identified which will support expenditure in 2015.  And savings of €130m have been identified in procurement, the cost of medicines and the cost of agency staff.  These measures combined will allow us to develop a HSE service plan with in excess of €750m more to spend on services than we had this time last year.  It is of course correct to point out that this does not take account of service overruns of about €500m this year, which will recur next year. But no matter how you calculate it, it is an increase in funding for health services.

Crucially, it will allow also us to progress commitments under the Programme for Government in 2015. But we are not awash with cash.  We still face major cost pressures from a rising population, more older people, more people being diagnosed with cancer and chronic diseases and new expensive medicines and treatments.

The additional funding secured will ease the pressure on the Health Service and will allow it to provide safe services.  However, next year will remain extremely challenging from a budgetary point of view and it is important that we continue with an unrelenting focus on cost containment and cost avoidance.

But, most importantly, as our spending ceiling is now rising again, any and all savings and efficiencies identified and achieved will be available to reinvest in improving health services. There is no longer a requirement to make savings to reduce the general government deficit or pay down the debt.  Savings will be made, but the money will remain within the system and will be reinvested efficiently.  I think that is a key message that I want all health service staff and managers to hear and understand.

I am grateful to Ministers Noonan and Howlin – both former Ministers for Health – for their support, and for understanding the challenges we face in trying to deliver the kind of health services we want for the 21st century.

Services to be Delivered in 2015
The funding in 2015 will be used to provide effective, safe, high quality health and personal social services. The level of health services to be delivered within the available funding will be set out in the Health Service Executive’s 2015 National Service Plan.  This will be published in three weeks or so.

I am pleased to announce that there will be no change to hospital or prescription charges next year. The monthly DPS threshold remains unchanged, and there will be no adjustments to income thresholds for eligibility for medical or GP Visit Cards.

The health service will continue to deliver on important Programme for Government measures with the allocation of a further €35m for mental health services and the funding necessary to commence the first phase of universal GP services for children under 6 and adults over 70.  I am confident that it will be possible to come to an agreement with the Irish Medical Organisation soon.  No one wants to see the money provided for primary care being sucked back into hospital services if there isn’t an agreement, and we will not allow that to happen.

GP Services
Some 240,000 children aged 6 years and under will be able to access a GP service without fees. This accounts for about 57% of the total population of children in this age group. 43% are already covered by the medical card or GP visit card.

Approximately 10,000 seniors aged over 70 years, who currently have neither a medical card nor a GP visit card, will be provided with GP services.

By the end of next year, almost half of the population (49%) will have access to GP services, without charges.  That’s a major step on the way to universal health care.

Mental Health
Budget 2015 provides for an additional €35 million ring-fenced for Mental Health. This will bring to €125 million the total investment by the Government in mental health services since 2012. The additional funding will enable the HSE to continue to develop and modernise our mental health services in line with A Vision for Change.

Minister Lynch will speak about this in more detail in her contribution.

I am also pleased to announce the extension of the BreastCheck screening programme to women aged 65 to 69 years. It is expected that screening of the extended cohort will commence towards the end of 2015 with women aged 65 years, the first to receive an invitation.

The age extension will be implemented on an incremental basis in line with the capacity of the system to manage the additional screening and follow up workload. The number of women included in the age extension will be over 100,000.

Breast cancer survival rates in Ireland have improved significantly in recent years through a combined approach of screening, symptomatic detection and improved treatment.

I particularly want to acknowledge the contribution of Deputies and Senators who campaigned on this issue. Their work impressed on us the importance of this matter.

Delayed Discharges
There has been a continuing upward trend in delayed discharges since the beginning of the year, with 768 delayed discharges reported nationally, as of last week.  These are people who are well enough to leave hospital but do not have a nursing home or home care package in place for them to do so.  They are often elderly people, citizens, not bed blockers, and they should not be left in hospital, where they are at a higher risk of a fall or getting an infection.

There will always be delayed discharges but at its current level it is silting up the system resulting in more people on trollies and more people having elective admissions and surgery cancelled.

The HSE will take an integrated approach across the hospital and social care divisions to deal with this issue.  This will involve a range of measures to provide an effective response, including the nursing home support scheme (the FairDeal), short term beds and home care packages and specific intensive packages for complex discharges.  Funding will be targeted where the hospital and community services demonstrate that they can implement initiatives to address the specific needs of  their delayed discharge patient profile in a way which will impact most positively on patient flow and consequently on waiting lists in scheduled and unscheduled care.  Additional funding of €25m has been ring-fenced in 2015 for this initiative.

€382m is available for capital expenditure in 2015 compared to €390m in 2014. The apparent €8m reduction in capital is not a real reduction, as the expenditure was dependent on sales of surplus assets and these sales have not materialised in recent years.

More importantly, the capital budget for health will increase by €70 million from 2016 onwards, an increase of 18%, which will allow planning for new primary care centres and community nursing units, and new capital investments in the cancer facilities programme. It will also allow investments in ICT, where existing systems and the level of integration are not appropriate for a modern health service.  The existing capital envelope already provides for the new Children’s Hospital, new National Maternity Hospital (Holles St) and the new Central Mental Hospital.

Though we have achieved a more realistic budget for the health sector in 2015, it remains a priority to focus on improving the way services are organised and delivered, and to reduce costs in order to minimise any negative effect on service provision.  The HSE Service Plan will make provision for the further development of Hospital Groups among other things.

The opposition
This Budget was never just about securing more money.  When health spending peaked seven or eight years ago, under Fianna Fail, the Greens and supported by Independents, waiting times were longer, there were more people on trolleys and many fewer people had medical cards.  The health service needs more resources but it is incorrect to argue or believe that there is a direct correlation between resources and the quality of services.  There is not.  Much is down to best practice and good management. And we need more of this.  It is about being able to deliver meaningful change within a realistic budget.

That is why I am also planning a robust efficiency and accountability framework to ensure that resources will be managed effectively.

A Cathaoirligh, It would be remiss of me not to mention the alternative budgets put forward by the main opposition parties.

The Fianna Fail alternative budget provides only an extra €94m for health.  That is approximately €200m less than has been provided by this Government.  And they proposed only €10m more for Mental Health against €35m allocated by the Government.  Fianna Fail has no credibility calling for more spending or resources for health.  Between 2008 and 2011, they cut €1.5bn out of health.  And next year, if they were in office, they would spend €200m less.  It’s all in their document.

The Sinn Fein alternative budget is even harsher.  For the health service, it has austerity written all over it.

Sinn Fein proposes no increase in the exchequer allocation for health, no provision for GP care for the over 70’s and there is no mention at all of Mental Health.  For people will private health insurance, they propose that another €90m be loaded on to their premiums.

A Cathaoirligh, the economy and the health service is safe with us.  Under Fianna Fail or Sinn Fein, both would be in jeopardy again.

Finally, I want to thank my colleagues in Government who have been willing to back me, even though circumstances remain difficult in their own Departments. I particularly want to pay tribute to healthcare staff who have been through some very difficult years. It’s due to their hard work and dedication that the Irish health service has survived the most difficult period in its history. We still face many difficulties but hopefully things will become a little more manageable next year.

Yesterday the poet Robert Frost was quoted extensively in this chamber.  My favourite lines are from a poem he recited at an inauguration of an American President in 1961.  In ‘The Gift Outright’ he spoke of his country ‘such as she was, such as she will become’.  With this budget today we have the opportunity to build on the recovery of the past three years and offer hope for a prosperous and healthy Ireland – ‘such as she was, such as she will become’.