“Substantial” funding, above that allocated for the year, will be required to deliver the HSE National Service Plan (NSP) 2023, according to the Executive’s audit and risk committee. The comment was made in an advisory note to the HSE board and CEO based on discussions about the NSP during a committee meeting on 24 March 2023. The note was obtained by the Medical Independent through Freedom of Information law.
For the meeting, the committee was provided with a copy of the NSP, including the financial management chapter.
According to the note, based on a “careful reading” of this chapter, the funding shortfall for the year could range from €700 million to approximately €2 billion.
“The board does not need to be reminded that such amounts are hugely impactful at every level,” according to the advisory note.
The note referred to three letters sent by the Minister for Health Stephen Donnelly during the development of the NSP. In these letters, the Minister stressed the importance of the HSE adhering to spending control and limits. In his letter on 16 March, Minister Donnelly stated it remained a concern that the revised NSP continued to highlight a material level of financial risk for the year. The Minister said it was “critical that all such financial risks are fully and proactively managed by the Executive”.
The audit and risk committee also pointed to “noteworthy language” in another part of the letter. In this section, the Minister highlighted “the need for any mitigation measures to ensure service capacity, activity volumes, and access times, for patients and services users, are not adversely impacted”.
The note stated management should immediately use established risk management procedures to recognise and manage the risks arising in NSP implementation.
“Particularly given the scale of the shortfall and notwithstanding the Minister’s comments, there ought to be an identification and assessment by management of service delivery risk down the line,” according to the advisory note.
With regard to public opinion, the committee said the threat to the reputation of the HSE in the event of perceived unanticipated deficits should “not be overlooked”.
When required, the mitigation measures noted by the Minister for Health should be expedited, according to the committee. It stated that the Minister’s stipulation that such measures should not impact services was positive.
However, the note added that while the stipulation was welcome, it “limits the ability to generate additional cash savings”.
“Absent any new… funding, the likely financial impact of proactively managing the risks highlighted and undertaking the identified mitigation actions in our view will not erode the anticipated shortfall to anywhere close to the current funding determination for 2023.”
The committee argued the HSE board should ensure “in so far as possible” that it is fully transparent to all of the relevant Government Ministers and Departments that substantial funding over the current allocation will be required to deliver on the NSP.
The committee recommended that HSE board meeting minutes should record faithfully the “thought process” of the board, document concerns, and these should be made available through publication at the earliest possible point.
The committee stated that timely review of the funding situation, through appropriate processes, is essential. It noted the “novelty” of some budgetary assessment approaches being considered by management. While these approaches have benefits in terms of additional scrutiny, they also add to the complexity of the monitoring process.
“In support of transparency, every opportunity should be taken to highlight potential and actual financial overruns, particularly if the expenditure is still yet to be incurred,” according to the advisory note.
“In recognising the need for this, the board and other stakeholders should be cognisant of the complexity imposed on the current reporting processes by having to adapt. Before HSE will have the benefit of the [integrated financial management system] project, the board must also consider that the current capacity of HSE’s reporting system to deliver timely and reliable results is limited, as is its ability to adapt in the manner needed by the 2023 funding challenges and the budgetary control system being considered as set out above.”
The NSP, which was supported with over €21 billion in funding, was published on 29 March.
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