Move to strip four HSE regions of spending powers is a dramatic Government policy shift

The Government’s move to remove autonomy over day-to-day spending from several HSE regions represents a significant reversal of healthcare reforms, announced with much fanfare just two years ago, aimed at having decisions made at a more local level.Only a year or so ago, the six new HSE areas – established under a policy of regionalisation – were given powers over how they spent their budgets.Speaking at a conference last September, Taoiseach Micheál Martin described the regional structure as “critical” to the overall Sláintecare health reform plan. The changes, he said, had strengthened and streamlined governance and improved delivery.However, a few months into this year it was clear that financial control problems were emerging in some regions, with expenditure running well in advance of official allocations. There were also claims that some regions had recruited more personnel than officially permitted.READ MOREIn April, HSE chief executive Anne O’Connor placed three of the regions – Dublin and South East, Dublin and Midlands and the South West – in what is known as “tier three escalation”, which introduced employment controls and greater scrutiny on spending.Initially, senior health officials were optimistic these measures were having the desired effect and the financial position was stabilising. However, the figures deteriorated further over the summer, resulting in what appears to be a loss of patience within Government.A leaked internal report, obtained by The Irish Times, showed the HSE had an overall deficit of €577 million at the end of July. “Overspend is system-wide, with all six health regions reporting adverse variances,” said the report, dated August 28th. [ HSE €580m over-budget at the end of July despite curbs on spendingOpens in new window ]Between them, the six HSE regions had a deficit of €446.5 million at the end of July, with other parts of the health service making up the full overrun.Minister for Public Expenditure Jack Chambers told The Irish Times Inside Politics podcast on Wednesday that the spending position for August – which has not yet been published – had deteriorated.In May, Minister for Health Jennifer Carroll MacNeill denied splitting the health service into regions had been a mistake. Photograph: Alan Betson / The Irish Times He said there had been “essentially completely ineffective management of the control system by the HSE and really poor performance by certain regions when it comes to financial management and when it comes upholding the staffing allocation that they were given versus the numbers that they have hired”.The announcement by Chambers that the Government was taking back autonomy over day-to-day spending from four regions is a dramatic policy shift. But even within the HSE there had been concerns about how the system was functioning.Official minutes show that at a meeting on April 29th the governing board of the HSE was worried that the operation of the six regions appeared patchy.“Board members noted the need for greater clarity and consistency in governance structures, alongside stronger central oversight and co-ordination,” the minutes stated.[ Carroll MacNeill plans in-house HSE ‘agency’ staff to reduce payouts to outside companiesOpens in new window ]“It was recognised that the current model has reduced visibility and oversight at the centre, with some regional functions operating with significant autonomy, making it more challenging to maintain a consistent view of performance across the system.”Members of the HSE board described the performance of the regions as “variable” and discussed whether additional senior-level support might be required to strengthen oversight, co-ordination and decision-making in the organisation. The board believed existing reporting arrangements “were considered insufficient in providing a clear picture of operational performance and emerging risks, highlighting the need for more robust and actionable information”.Speaking to reporters in May, Minister for Health Jennifer Carroll MacNeill denied splitting the health service into regions had been a mistake.“This is the first year where we are devolving funding structure; it’s always going to be a certain amount challenging,” she said.Nine months into this change, however, it appears understanding is waning at Government level, with the spiralling financial deficit prompting dramatic and drastic action.