Northern Ireland's health service facing projected £600m budget shortfall

Northern Ireland's health service is expected to face a £600 million (€715 million) budget shortfall.
Stormont Health Minister Mike Nesbitt described financial plans being finalised which will be 'unprecedented in their scale and ambition' and involve 'extremely difficult and painful savings measures'.
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In a written statement to the Assembly on Wednesday afternoon, Mr Nesbitt said the projected £600 million is the 'scale of the gap between existing funding and what's needed to maintain services'.
Northern Ireland's health service is facing a budget shortfall (Liam McBurney/PA)
He told MLAs he will play his part and 'do everything I can to achieve a breakeven budget', but also urged the Executive and the Assembly to support him.
'My permanent secretary is finalising financial plans that will be unprecedented in their scale and ambition,' he said.
'They will involve an extremely difficult and indeed painful series of savings measures for HSC trusts.
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'I can assure the Assembly that I will drive forward savings to reduce the projected shortfall.'
'To repeat, I will play my part and do everything I can to achieve a breakeven budget.
'But I will need Executive and Assembly support.'
Mr Nesbitt also confirmed he is ordering the paying of £200 million (€238 million) recommended pay increases despite not having the budget to cover it.
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It includes 3.6 per cent for nurses and staff under Agenda for Change, 4 per cent for doctors, and 4 per cent plus £750 (€893) for resident doctors – formerly known as junior doctors.
That requires a ministerial directive to be made to the department's permanent secretary to proceed despite not having the necessary budget.
It will go to the Finance Minister, John O'Dowd, and potentially be passed to the Executive for approval.
Mr Nesbitt told MLAs the move involves the risk of an overspend for the department, but that not paying the pay increases also involves risks.
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'There is an undeniable risk that the department could be on a path towards a potential overspend,' he said.
'I have also concluded that there are also substantial risks in not proceeding with the pay increases – the biggest risk is failing to deliver on my promise to deliver 'better outcomes'.
'I do not want health service staff to be demoralised by inaction and another year of uncertainty on pay. They deserve better than that. This is about treating with respect the people who keep us healthy, fix us when we are broken and keep us alive when death becomes a potential outcome.
'Falling behind pay levels across the water will also exacerbate challenges with recruitment and retention of health service staff.'
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He added that pay parity with England for Agenda for Change staff is a 'well-established and hard-fought principle' that he intends to maintain.
'Failure to do so would undoubtedly lead to industrial action with all the disruption to patient care that will involve,' he said.
'Not to mention the negative impact on the focus to reduce waiting lists, or the overdue need to reform healthcare delivery.
'In short, the risk of a potential budget overspend must be balanced against the significant risk to service provision.'
Mike Farrar, permanent secretary of the Department of Health in Northern Ireland at the department headquarters in Castle Buildings, Stormont Estate, east Belfast. (Rebecca Black/PA)
Permanent secretary Mike Farrar said finding the £200 million for the pay award is a challenge.
'I have got a statutory duty as the accounting officer to point out to the minister that we don't have that in the budget which is what I've done,' he said.
Mr Farrar said he is talking to colleagues from the Department of Finance, and expects the Executive to be involved.
'I'm hoping that if they can see how hard we're working to get our efficiencies, and that this plan that we're putting forward to reset the health and social care system is going to lead to a sustainable financial position, I'm hoping that they will somehow find the wherewithal to help me in the short term,' he added.

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