This morning we will engage with the Health Service Executive, HSE, to discuss the 2025 financial statement. On behalf of the committee I welcome the following officials from the HSE: Ms Anne O'Connor, chief executive officer; Mr. Michael Lane, chief financial officer; Ms Martina Queally, regional executive officer HSE Dublin and South East; Mr. Damien McCallion, chief technology and transformation officer; and Dr. Philippa Ryan Withero, assistant national director, human resources division. We are also joined by officials from the Department of Health who are attending in a representative capacity: Ms Louise McGirr, assistant secretary, resources division; and Mr. Patrick McGlynn, principal officer. Finally, we are joined by officials from the Office of the Comptroller and Auditor General: Mr. Seamus McCarthy, Comptroller and Auditor General; and Mr. John Byrne, audit manager. You are all very welcome to our meeting.

Before we begin, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards references you may make to other persons in your evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. This means that you have an absolute defence against any defamation action for anything you say at the meeting. However, you are expected not to abuse this privilege. It is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if your statements are potentially defamatory in relation to an identifiable person or entity you will be directed to discontinue your remarks and it is imperative that you comply with any such direction. Witnesses are also reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name, or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded to the good name of the person or entity.

I now call on the Comptroller and Auditor General to deliver his opening statement.

The HSE's financial statements for 2025 record total expenditure of €30.4 billion. This was up 7% from the €28.3 billion spent in 2024. A total of €25.5 billion of the HSE’s funding for 2025 was from the health Vote. Funding for specialist disability services totalling €3.5 billion was provided to the HSE by the Vote for children, disability and equality. Over €100 million was received from other State agencies, including the National Treatment Purchase Fund, NTPF. The HSE was allowed to retain receipts from employee pension contributions and other payroll deductions totalling €504 million. Income from patient charges amounted to just under €310 million. Non-capital expenditure in 2025 exceeded income by just over €1 billion and this deficit was carried forward to be met as a first charge from the funding provided from the health Vote in 2026. On the capital side, there was a deficit of €19.7 million in 2025.

I issued a clear audit opinion in relation to the financial statements. However, in my report I drew attention to a number of matters which I will now briefly outline. The HSE incurred charges of €8.4 million in respect of Covid-19 vaccines held at the year's end which had reached their expiry dates or were determined no longer to be clinically suitable for use. The equivalent write-off was €11.1 million in 2024.

In 2025, the HSE also incurred storage costs amounting to €1.5 million in respect of stocks of legacy and obsolete personal protective equipment, PPE. The cumulative cost of storing the obsolete items to the end of 2025 was €8.85 million. A further €6.7 million was incurred by the executive in 2025 to dispose of this obsolete stock in an environmentally secure manner using a specialist service provider.

The executive acknowledges in the statement on internal control that delays occurred in submitting some completed forms to a private insurer in 2025 and discloses that around €3.4 million in patient income was lost in 2025 as a result. The loss for similar reasons in 2024 was estimated at €4.1 million.

As in previous years, my audit report for 2025 drew attention to non-compliant procurement, which remains a significant issue for the HSE. The HSE reviewed the compliance status of €1.8 billion, or 33%, of its spend on procurement of goods and services. The sample reviewed was based on invoices individually over €25,000 each. From this subset of invoices, HSE managers reported that 5% of the value of the sample invoices, or €90 million, had been procured in a manner that was non-compliant. In itself, this is a significant non-compliant procurement level.

Additionally, in 2025 the executive carried out an exercise on a sample of procurements below €25,000 each. Expenditure to the value of €6.3 million was reviewed. This exercise identified that the procurement non-compliance rate in respect of the sample transactions examined was 16%. The overall rate of procurement non-compliance is not known, because the spending within the scope of the review may not be representative of the executive’s overall procurement of goods and services. However, the system-wide operation of the HSE's integrated financial management system may allow for better, more representative sampling of spending for review, and for more reliable estimates to be reported in the future.

The analysis of HSE personnel remuneration by pay band indicates that 11 employees, all of whom are medical consultants, were paid in excess of €500,000 each in 2025. The top ten earners received a combined €6.8 million in 2025. Four of the top earners were employed in one of the HSE’s acute hospitals. The highest earner received almost €910,000 in total remuneration in 2025, of which over €616,000 was recorded as payments for additional work, including overtime, fees and session payments. Payments totalling €324,000 related to additional work carried out by the employee in 2023 and 2024. The remaining €586,000 related to work carried out in 2025, but the audit noted that the employee had submitted claims and been paid in respect of additional work only up to May 2025, so significant additional outlay may arise in respect of that year.

In 2025, the HSE provided non-capital grant funding of €8.4 billion to outside agencies. Agencies that received €100,000 or more are listed individually in appendix 1 of the financial statements, showing the amount of funding provided. Annual grant funding of the agencies should be covered by the relevant form of funding and service contract or agreement. The level of detail in the standard agreements varies depending on the grant level. To be effective as a control over the level and timing of grant funding and the related level of service to be delivered, the relevant funding agreement should be in place early in the funding year. The audit found that by the end of March 2025, only 4% of grant funding issued in 2025 was covered by a funding agreement. More agreements were signed as the year progressed, but the statement on internal control indicates that, even by the end of the year, 11% of the funding for 2025 was still not covered by a completed funding agreement.

I also noted that the statement on internal control discloses weaknesses around the control and management of fixed assets in the HSE. These include inconsistencies in the application of HSE financial regulations, instances where assets no longer in use remained on asset registers, and capital projects where some costs were not included on asset registers.

I have raised concerns previously about these shortcomings related to fixed assets. In 2024, the HSE committed to establishment of a working group to address the issues. However, we noted that the working group’s first meeting took place only in March 2026.

I noted in my report that the statement on internal control discloses that the Data Protection Commission had conducted a review of two data breaches arising from failures in the HSE's handling of patient records and that fines were expected to arise from these failures. Subsequently, the commission issued its report and recommendations and imposed fines on the HSE to the overall total of €945,000 in respect of both breaches.

I ask the chief executive officer of the HSE to deliver her opening statement.

I thank the Chair and committee members for the invitation to attend to discuss the HSE's 2025 annual report and financial statements. I am joined by my colleagues: Mr. Damien McCallion, chief technology and transformation officer and deputy CEO; Ms Martina Queally, regional executive officer for HSE Dublin and South East; Mr. Michael Lane, acting chief financial officer; and Dr. Philippa Ryan Withero, assistant national director for our national human resources division. I am also supported by Ms Nessa Lynch, general manager for my office; and Ms Mairead Dolan, assistant CFO from the national finance team.

The committee has received the annual financial statements for 2025, including the Comptroller and Auditor General's report and supporting briefing materials. Together with my colleagues, I welcome the opportunity to discuss both the financial performance of the organisation and the governance and control matters identified within these reports. The 2025 financial statements reflect a year of significant challenge and change for the health service. Demand for health and social care services continued to grow, reflecting Ireland's population of approximately 5.5 million people, with particularly strong growth in older age groups and increasing levels of complexity across the services we provide.

At the same time, the HSE continued to deliver extensive reform programmes aimed at strengthening governance, accountability and stewardship of public resources. The HSE received approximately €29 billion in revenue and capital funding during 2025 and reported total revenue expenditure of €28.9 billion. The financial statements report a revenue deficit of €1 billion. However, this includes the prior year deficit brought forward in accordance with the Health Act. Excluding that accounting treatment, the underlying deficit incurred during 2025 was approximately €240 million, representing less than 1% of overall income.

The board and executive fully recognise that the effective stewardship of public funds is as important as the delivery of healthcare services. We also recognise the importance of transparency where weaknesses are identified. The Comptroller and Auditor General's report and the statement on internal control identify areas where further improvement is required, including procurement compliance, oversight of funded agencies, fixed asset management, elements of payroll administration, records management, write-offs and other aspects of financial control. We accept these findings and are committed to addressing them. However, it is important to view these matters in the context of a health service employing more than 150,000 staff, operating thousands of facilities and funding almost 1,900 external organisations, while managing expenditure approaching €29 billion annually. The existence of control weaknesses does not diminish our responsibility to address them. Rather, it reinforces the importance of continuing to strengthen governance, accountability and oversight across the organisation.

A key theme of 2025 was the implementation of major organisational reform. The six health regions and 20 integrated health areas became fully operational during the year. This change represents a fundamental redesign of how health services are planned, managed and held to account. Responsibility for service delivery and resource management is increasingly exercised through regional structures operating within a single national governance framework. As with any major organisational transformation, the effectiveness of these arrangements depends not only on organisational structures but on the consistent application of governance, accountability and control.

During 2026, the HSE has deployed a strengthened performance and accountability framework to support the new regional operating model. A significant management focus has been on ensuring that responsibilities for financial performance, service delivery, compliance and risk management are clearly assigned, actively monitored and subject to appropriate intervention where performance falls below standard expectations. Alongside regionalisation, the HSE completed implementation of the integrated financial management and procurement system, IFMS, across all directly managed HSE services, representing approximately 80% of health expenditure. The roll-out to section 38 organisations and other funded providers is now under way and will continue over the coming years. The IFMS is a critical investment and provides the foundation for improved financial management, procurement governance, reporting and transparency.

However, technology alone does not deliver effective control. Realising the full benefits of that investment requires continued improvement in business processes, data quality, compliance with the national procedures and the consistent adoption of common ways of working across both statutory and funded services. That work remains ongoing and is a major management priority. The establishment of health regions, the implementation of the IFMS and the deployment of the performance and accountability framework together represent a fundamental change in how the HSE manages public resources. These reforms are now moving from implementation to embedding and assurance. The challenge for the organisation is to ensure that the expected improvements in governance, accountability and financial control are consistently realised across the entire health service.

Notwithstanding these challenges, the health service continued to deliver substantial levels of activity during 2025, including over 1.6 million emergency department attendances, over 25 million home support hours, significant increases in community-based services and the treatment of record numbers of patients across many service areas. These services were delivered while continuing to manage increasing demand and ongoing workforce pressures.

The board and the executive are committed to strengthening the controlled environment of the organisation and to ensuring that the significant public investment entrusted to the health service is managed to the highest possible standards of governance, accountability and transparency. While the financial statements and the Comptroller and Auditor General's report identify areas where improvements are required, they also reflect an organisation undertaking substantial reform to strengthen financial management, accountability and oversight across a complex health system. We welcome the scrutiny of the committee and we look forward to engaging constructively on the matters raised in the financial statements and the Comptroller and Auditor General's report. I thank the committee and look forward to assisting members.

We will suspend at approximately 12.30 p.m. for a short 15-minute break. Our lead speaker today is Deputy Joanna Byrne, who has 15 minutes and all other speakers have ten minutes. I am conscious that some of our witnesses have to be elsewhere for another meeting and will have to leave at 2 o'clock, so I ask that members work with us regarding time. If time permits, on conclusion of the first round, we will try to allow members back in for a second round of questions.

I thank the witnesses for joining us here today. In the game they are in, the provision and delivery of healthcare, they cannot do it without sufficient professional staff. I want to start on recruitment and retention and the cost issues in that regard, starting with agency costs. We have seen figures of €832 million spent on agency staff across all HSE divisions in 2025, which was an increase of over €100 million on 2024. What has been done to tackle that? I notice it was something that was not really focused on in the opening statement but I imagine it is a huge challenge for the HSE. I would like to get some insight in that regard. There are figures of 6,000 fewer nurses, doctors and staff across the board than what is recommended for the HSE to provide the service it provides. I know many of them are nurses, which is predominantly a female profession, and there are issues with maternity leave and so on. I imagine that is a significant challenge for the HSE and I would like to get an insight on that.

I thank the Deputy for the question. She is absolutely right. Our health service is obviously hugely dependent on our workforce and we are competing in a global market when recruiting staff. We are dealing with a few different challenges at the minute. One is that we have, I suppose, an ever-increasing demand for the types of staff that we need. We have to compete in a global way for that workforce. From a fiscal perspective, we are challenged with respect to the affordability of our workforce. As the Deputy correctly states, we have a reliance on agency staff across the board but predominantly in nursing areas and healthcare assistants. We do have a very high cost for agency staff. This year, we have been focused on driving a reduction in the use of agency because agency staff are far more expensive than permanently employed staff.

We can see in some areas there has been a heavy reliance on agency. There has been a targeted approach to the reduction of agency staff. One control we have put in has been that push to convert agency staff to permanent staff to reduce the cost because it works out in excess of 30%, I think, higher for agency staff.

We have a programme of conversion. We had a ceiling for agency this year. We have been driving a conversion rate. As it stands, we have converted over 1,400 staff from agency to permanent staff. We are at 56% or 57% of our target for this year. That work is ongoing. In some areas they have been able to do it more effectively. For example, in Dublin and North East and in the West they have achieved their targets in respect of agency conversation. Other areas are struggling more. In the midlands there is a very high dependency on agency staff. It is harder to replace them in those areas. This is a clear focus. We have seen the cost of agency come down. We have had our fifth month of a reduction in agency costs both in the actual hours we need of agency and the cost of those hours. We reduced the cost from about €70 million in March down to €60 million in the most recent figures. It is a continual reduction in spend on agency.

That leads to the next point I was going to raise in regard to inpatient hospital treatment rising by only 2% yet the spending increase was 50% or 51%. The Minister for public expenditure, Deputy Chambers, said that the ineffective implementation of budget controls and poor financial management by certain HSE regional executives has driven massive health service overspending. Does the HSE agree with that? Ms O'Connor probably answered this question already in regard to the affordability of the workforce, the level of expertise and the costs of the reliance on agency staff. Is that leading to the overspend or is it the inability of the HSE to manage its books effectively, as the Minister said?

A couple of different things are going on. If one looks at it at a high level, our hospitals are busier than ever before and we are seeing more people than ever. If one looks at our emergency departments, it is up by about 8%. In the past year, we have grown our emergency activity by the equivalent of the full number Beaumont Hospital emergency department might see in a year. It is a significant increase. When we have that level of activity, we have to open additional beds in hospitals, for example, and we rely on what we call surge beds. That often has a dependency on agency. We have to bring in staff, often at short notice, to staff up to manage demand. That is particularly prevalent across the busy months.

We have an absolute responsibility to manage the resource we have. We are entrusted with a level of resource every year. We have to ensure our resource is maxed out to best effect in the interests of patients. The population coming into our services is older and more frail. We see that across all of our services. We are dealing with a much higher and more complex group of patients than five or ten years ago. I think it is both. We have the type of activity we are doing and we have higher cost drugs. When we see more people, there are more drugs and more use of aids and appliances, etc. We also have management controls in terms of how efficient we are being. Some of that comes back to things like having national procurement frameworks in place, for example, and proactive management in the controls we have identified. We work closely with the Department in ensuring that control environment is embedded through our services and regions through to the front line because ultimately it is the people managing boards, units, hospitals and community services so it builds up from there.

Does the HSE have the resources it needs to deliver the services? The reason I ask is the Mater hospital, St. Vincent's hospital and other hospital boards were at the committee before the recess. They were quite explicit in saying to us that they did not believe they had the resources to properly deliver services. Is there truth in that from the HSE's perspective?

I am not sure in all the years I have been around healthcare that we have ever been able to say we feel we have enough. There is always more demand. Our challenge because of the demand and people turning up is that we are responding a lot. We have a national service plan that is agreed at the beginning of the year which is effectively our contract for delivery. We have to orient our resources towards that.

I would make an observation that we are seeing a very high level of attendance at our hospitals. We see a lot of pressure in hospitals. We react, more money goes in and more agency but in fact when you look at our population and what the whole intent of Sláintecare is, it is about shifting that. We want to keep people in their communities at home. We have to over time engineer the resource more towards supporting people at home through home care or community services in the first instance. It is always a challenge. People will always want more resource. Some of that comes back to the prioritisation we have to do in our services and ensuring we align to the longer-term strategy in how we develop our services and, critically, how we recruit for those services.

I see a bit of that locally. I am from Drogheda. We have a huge hospital, Our Lady of Lourdes Hospital. Our integrated health area lead, Paddy Clerkin, is doing an exceptional job. I have met him a number of times this year alone. I know the endeavours to streamline services and to improve efficiencies, opening additional wards and everything that is going on but we still see a challenge. A local journalist emailed us a couple of weeks ago who went in for a blood test to the emergency department on a Friday. She was left sitting for 16 hours just to get a blood test, around people who were probably more sick than she was and she was probably exposed to different things. There is always a challenge. Coming into this time of the year, there are reports of trolley crises. Unfortunately Our Lady of Lourdes is usually on the news with all the ambulances waiting outside not being able to offload their patients because there is no room. It is a stock image that seems to be pulled out every now and then. Great work is going on in local areas.

A big issue raised with me in regard to the HSE and Our Lady of Lourdes Hospital in my area is car parking charges. The hospital is choked in the middle of a huge and rapidly growing residential area. There is not a lot of on-street parking. The charges for the hospital cark park are proving a particular challenge. The car park is some distance away from the hospital and people have to get to it and back. There is an inconvenience in that alone and then there is an additional charge. I have seen media reports of late - it seems to be a topical issue in the past couple of months - about a review of hospital car parking charges which the HSE may be looking into, with revenue more than doubling over four years. It is a massive amount of money. Our Lady of Lourdes Hospital took in €346,000 in 2020. This increased to €460,000 in 2025 with an upward trajectory year on year. It is an additional charge on families in particular those using hospitals long term on an ongoing basis. It is an additional tax on being sick in some people's view. Where does the HSE see that review going and what does Ms O'Connor think the outcome will be from the HSE's perspective?

I thank the Deputy for her acknowledgment of the work going on in the hospital. Priya and the team have done huge work and the improvement there is massive across elective care and emergency care.

Car parking is a topic that has been around for some time. The Deputy will be aware a review was done in 2018 which was not fully implemented. Recently we instructed all areas and all hospitals to proceed with the implementation of that. In parallel, the world has moved on a bit since 2018 and we now have to see where we are with car parking. In some areas, it is a bigger issue than others. For example, in Dublin city centre, you cannot have your car park being used by everybody if you need it for visitors and patients. I have asked our national director of health infrastructure to establish a group to look at this and drive on in terms of looking at the recommendations of the 2018 report, proceeding to drive the €10-a-day charge and to determine what else needs to happen. I understand that group is meeting next week.

We will keep an eye on that. It is probably relevant to everybody.

I am being a bit parochial but if I do not get the local issues in, I will be in trouble. I have been raising for a long time the need for a new ambulance station in Drogheda. Very early on following my election to the Dáil this term, I was asked to visit the current ambulance station. I was appalled by the unsafe and unsanitary conditions our ambulance personnel were working in. There were major issues with exposed electrical wires, cases of green mould and everything grown in them.

There were also structural issues, with cracks and subsidence and so on. I went back recently to visit after remedial works had started. I was very impressed with the pace of the works and the level of acknowledgement, following me raising directly with the NAS and the HSE the urgent need for this work at the time. That is under way. Our ambulance station has moved into a temporary station while the works are ongoing. Personnel are due to move back into the upgraded station in the coming weeks and I have been invited to visit again.

The crux of the issue is that we need a fit-for-purpose ambulance station in Drogheda. Recently I met officials from the HSE estates unit on this matter and the challenge seems to be the identification of a suitable site. There has been a massive growth in population in Drogheda, with 25,000 people expected to move into the area in the coming years. We have had a huge housing boom along the new port access Northern Cross route. The current location of the ambulance station has particular challenges in turn-out times and getting in and out of traffic and everything in the town. A station is needed on the outer ring roads of the growing town as it evolves into a city. I ask the witnesses not to comment on that today but to take it away. There does seem to be an appetite across the board but it is crucially important that it is kept on the radar. I know there is investment in the station in Dundalk and I think there is investment in a station in Swords. I ask the witnesses to ensure that Drogheda does not fall through the cracks on both sides of that.

My last comment relates to finances. I have received correspondence from the family of a young boxer who knew the HSE was due to appear before this committee this morning. Sadly, a 31-year-old boxer called Lee Reeves was injured in a fight that took place in the 3Arena a number of weeks ago. He is in a coma and is breathing on his own. This week, he has started to squeeze the hands of members of his family, which is a really good sign. Lee has had a section of his skull removed to allow his brain to expand and awaits an operation for that part of his skull to be reconfigured with a plate and whatnot. His operation has been cancelled twice. He is in the Mater hospital. There are real concerns that the longer this goes on, the more it will impede his recovery. My query is probably more relevant to Ms Queally, being Dublin-based. Again, I am not asking for a comment on that this morning. I ask for it to be taken away and reviewed.

Absolutely.

It is crucially important that his operation is done in a timely manner to ensure that Lee gets the best outcome in terms of recovery.

Okay. I am not sure whether Ms O'Connor wants to pass comment on any of those issues.

I think that is fine.

Thanks for that. Our next questioner is Deputy Kenny.

I welcome the witnesses and wish Ms O'Connor well in her new role.

The HSE financial statement shows that one consultant received almost €910,000 in 2025, including more than €616,000 in payments for additional work. I will now ask a "Yes" or "No" question. Is Ms O'Connor, as CEO, able to tell this committee how many additional hours or sessions that consultant worked to receive those payments?

I am not sure if I have that in front of me here. I would have to get that.

Okay. Has the CEO any idea who independently verified that this work was carried out or who authorised these payments?

In terms of the high earners we have a decision register for that and the regional executive officers monitor that with their teams. Whenever a consultant is working extra hours, first, in terms of the payment piece, the payment can be related to arrears and I am sure Mr. Lane can talk more about that.

I see that €324,000 of these payments are related to work carried out in 2023 and 2024.

Yes.

Is there a time limit imposed on consultants submitting claims for additional work? There is an historical element to this. Is the HSE able to verify that work was carried out? As I said last week at a meeting of this committee, the system almost allows a lot of consultants who are paid in this way to treat the HSE as a savings scheme. A consultant would be able to go back as far as 2023 to get additional hours that he or she worked, in this magnitude, in one year. It is quite unbelievable and quite striking for me and the committee that a consultant within the HSE can be paid €910,000 with €324,000 of that dating back almost to 2023. I am not sure how the HSE can plan for its expenditure year on year if consultants can claim money from as far back as 2023.

I might ask Mr. Lane to comment on the arrears. In terms of the consultants working the extra hours, what we see is that there is a small number of specialties where this arises more than others, for example radiology and CAMHS consultants, where we have gaps.

That is fully understandable but it is quite concerning that at this committee, knowing that this question would probably arise because it is such a high amount to be paid, the CEO cannot tell me how many additional hours that person worked.

I might ask my colleague to comment on the arrears.

Each hospital will individually validate all of the arrears and validate all of the workings in relation to that. Off the top of my head, I do not know what that equates to in hours. There is a formula for that. Maybe our HR colleagues here might understand that. The responsibility is with each hospital to manage that aspect, the calculations on that and the provision for accruals to make sure that it is reflected in the-----

Does Mr. Lane not accept that it is an issue for the HSE that a consultant can go back as far as 2023, from an expenditure point of view, to claim overpaid hours?

It is very difficult to stand over that. That is not-----

Is the HSE putting any mechanisms in place to stop that?

Our aim in all of this is to make sure that each hospital is working to the highest standard in terms of the controls.

I do not doubt that at all. What mechanism has the HSE put in place to stop this from happening again? Can Mr. Lane provide to me the amount of historical claims that are possible within the HSE now?

I cannot give the Deputy that at the moment but I will get it for him in terms of historical claims.

We need, as a committee, to understand how many additional hours were worked by that consultant who was able to be paid that significant amount. We also need to get an understanding as to whether any mechanism has been put in place by the HSE to stop this from happening again. It is impossible for the HSE to plan its expenditure year on year if it does not know whether a particular consultant would claim back their additional overpaid hours. We cannot allow consultants to treat the HSE as a savings scheme.

Absolutely.

The HSE, as a State agency, cannot be year on year not knowing whether or not a consultant is going to claim back the additional hours that they worked. That has to be fully appreciated. I do not doubt that this person worked these hours. This person is probably a very good consultant. It is possible that they worked these hours, and these significant hours of overtime. That is absolutely acceptable. The issue for the Committee of Public Accounts and taxpayers is that the HSE's senior management does not know whether those hours were worked or how many hours were worked. It definitely cannot understand, year on year, what its expenditure is going to be if it does not know the historical claims that are within the HSE and whether or not it can plan on a yearly budget, while not knowing if a particular consultant is going to claim back their overtime hours.

Ms Queally is a regional executive officer and I ask her to outline the process that exists at a regional level for managing this.

In terms of high earners in 2025, we had one in the Dublin and South East region. We know who that was and why those hours occurred.

Is that the person who was paid €910,000?

No.

Where was the person paid? What consultant? I am not asking for a name. Where is that consultant based?

I am not sure where the €910,000 was.

In Cavan.

In Cavan General Hospital.

Yes.

We know that the consultant is in Cavan General Hospital. Can the HSE prove that consultant did work those hours?

Perhaps the Deputy will allow me to explain the process, which I think is what he is interested in. The decision register is important. For anyone who is doing additional hours, there has to be a management decision to approve additional hours. For instance, in the context of the four consultants on the high earners this year, we know exactly what hours they have done.

Sorry to interject. Are those four earners all in Cavan?

No, sorry. I am talking about my own region. Apologies. Every regional officer has a decision register at site so that before anybody is asked to do additional hours there is a decision. There is a management decision taken and signed as to the additional hours that are being contracted.

The Deputy is correct. It is not appropriate that they would roll on and not be submitted in a timely fashion. That does not just refer to payments in terms of salary. It is about mileage, hours and everything. The Deputy is absolutely correct and I agree with him there have to be processes in place where people submit their claims in a timely fashion.

Currently, we do not have that process in place.

No, we do. We do.

Since when?

I certainly know that it is in place in the region since late 2024 or early 2025.

Is that possibly in one region or possibly in all of them?

No, I think it is in all regions.

We have a policy where consultants have to submit claims within three months.

When was that policy?

I am not sure when it came in. I would have to check it. I do not have that information.

So it is extremely possible that we have historical claims outstanding.

You have to tell people when you are introducing a new policy and they have to be afforded an opportunity to comply with the new policy, so if there are outstanding claims that can be verified, they would be honoured, but going forward the policy applies.

Do we have any idea how much it will cost in relation to historical payments?

We are now claiming on time and it has to be claimed within the time period.

That is appreciated. Have we an idea of how much the HSE has to pay out in historical claims based off the hours worked before this policy was put in place?

We have advised people that all claims must be submitted. We have some historical claims-----

Has the HSE had claims submitted to it now?

In the 2025 and 2026 period, yes, we have outstanding claims.

How much is that?

For instance in 2025, it was one consultant, as I said. I know I have the figure for how much of that related to a previous year accrued-----

Has Ms Queally an estimate of that figure?

Let me see if I can find it on the page. For instance, this year, of the three people, there was €209,000 related to 2025 in terms of payments.

There was €209,000 in relation to 2025. Did they claim back on any other hours in 2024 or 2023?

In 2026, there was €115,000 from January to July 2026. That was for approved work in histopathology to make sure that we had reduced turnaround times.

In that particular claim for that individual, did they claim anything for 2023 or 2024?

No.

Nothing at all.

No.

Okay. That is fine.

And our decision registers will mean that all of this is approved and authorised in a timely fashion.

Yes, there is a policy being put in place or has been put in place by the HSE to stop this from happening.

Yes, exactly.

Okay. What we want to know as a committee is to get an understanding, and the Chair might want to come in-----

On a point of clarification, I think the figures Ms Queally gave were just for the south region as opposed to national. Maybe that is the point the Deputy was coming to there. It would be useful to get those figures on a national basis as opposed to regional.

Yes, I think the committee has to have an understanding of how much is going to be paid out in historical claims since this policy has now been put in place, particularly if it is €324,000 for the years 2023 and 2024 for one individual. It is difficult to comprehend.

I will move on. On the €7.5 million in private insurance income lost, the HSE lost €4.1 million in 2024 and a further €3.4 million in 2025 because claims were not submitted to private health insurers within the required timeframe. That is €7.5 million income lost over two years. Will the CEO explain how this was allowed to happen? Which hospitals accounted for the largest losses? Who is responsible for ensuring that these claims were submitted on time? Were any disciplinary proceedings initiated as a result of these losses? If so, how many? Most important, how much money has the HSE lost in 2026 because of the same failures?

For 2025, we have a figure of €35 million. On the rejection of claims, there are different reasons we do not claim. In respect of people’s cover, for example, the insurance companies might say the cover or the correct cover was not in place. We have different disputes over and back with insurers or delays in finalising details around claims. I think the important-----

I am speaking specifically to the HSE not submitting the claims of €4.1 million in 2024 and €3.4 million in 2025. That is what the Comptroller and Auditor General brought attention to.

That is not good enough, basically. We know there are delays there. A lot of that relates to consultants, in terms of signing forms and getting forms submitted on time. I would view that as something that is and should be within our control. That is a site management issue in terms of consultants.

Which hospitals had the largest?

I think it was possibly Limerick.

St. James's Hospital would be the largest write-off.

Is there any accountability mechanisms put in place by the HSE on that?

I am conscious of time, Deputy Kenny.

Sorry.

It is a performance issue with the hospital. As Ms Queally said, within the regions we have performance agreements between the regions and the hospitals. In terms of income that would be an important discussion as part of the financial aspect of that performance relationship.

I thank the witnesses. The HSE got a budget of €29 billion for 2026. It is reported that it is in deficit this year by July by half a billion euro. In the briefing they provided to the committee, the witnesses from HSE said its deficit was increasingly structural rather than operational. What do they mean by that?

Our deficit is made up of a range of drivers. For example, part of that deficit-----

I was going to direct my questions to Ms O’Connor, if I could. What is the reason for that?

On the structural deficit, we know that, particularly in our acute hospital system, there would be different deficits relating to prior years, etc. The acute hospitals would have deficits in terms of how they have been funded over different years and it is a particular issue for some of our major voluntary hospitals, the section 38s.

On our deficit in general, we break it down into our pay and non-pay in the organisation. We can see that we have a considerable deficit on our pay front. A bit of what we talked about earlier, for example, in terms of high agency costs would be a key driver of our pay deficit. That is something we are trying to drive down because it is, you could argue, within our control to do better on that. Then we have our non-pay deficits that can relate to anything that is non-pay, including the funding of services that count as non-pay. Sometimes our non-pay costs relate to actual service provision as well. It is just not provided directly by us so we fund the agencies.

What has changed in 2026 versus 2025? When a HSE briefing was given to us in 2025, it did not mention to us that the financial difficulties were structural rather than operational. The witnesses are specifically saying that now in the documents they have provided to us, so what has changed in that year?

I will have to go to our CFO on this.

I think 2025 was a very particular year where we had the ability to manage to the year end with the funding we had. On the CEO's point, the biggest thing is that we started to rely too much on agency. Our agency grew significantly in 2025 and that continued into 2026. That means our funding base is wrong in that we cannot run a service on agency so we have to take that agency out. That is probably the largest structural change.

To understand our overall deficit, one of the things is the policy change on private income. That is a significant loss in income to us this year, so structurally we are going to have to rebalance that and we are going to have to find a way to do without that income. That is probably a loss of €140 million to us in this year. That has to get filled structurally somewhere else to take account of that policy decision. Our extreme reliance on agency is one that is incredible; €833 million on agency is not sustainable. We have a target to bring that down to €720 million this year. That has to get reduced even further next year. Again, that is structurally getting the workforce in such a way that it can-----

If Mr. Lane were to characterise the change from operational to structural, he would be saying it is the loss of private income-----

Yes.

-----and the HSE having an increased reliance on agency. Is that what he is saying?

Yes.

What is the cause of the increased reliance on agency staff?

The increase was to react very quickly to service decisions such as the surge that was mentioned earlier, to get that surge capacity in. The thing with agency is you can get it in very quickly and you can get it into sites where it is very difficult.

What happened in 2026 that you needed more agency than you needed in 2025?

We need less agency but we need to convert that to permanent staff within our total pay budget. The mix is wrong and we have to get the mix right.

Ms O'Connor, am I right in saying that last year's budget allocated for 3,000 whole-time equivalent staff?

Over 3,000 - 3,200.

It is 3,200. How many have actually been employed to date?

We still have new developments to come in. We know we have-----

What are the figures at now? The HSE was given money for 3,200. What is it actually at right now today as Ms O'Connor sits before the committee?

I will ask Ms Ryan Withero, as head of HR, on our new developments.

Whole-time equivalents, 3,200, what figure is the HSE at now?

On the figure in relation to the Department of Health-funded services, in terms of the additional service expansion for 2026-----

I just want to know. The HSE was given money for 3,200 whole-time equivalents. How many has it hired right now? That is all I want; just the figure.

So, 3,300 is the figure-----

So you are already over the amount of money that the Department has allocated you for the whole-time equivalents. Will Ms O'Connor just explain why the HSE is already over in terms of staffing numbers that the Department of Health has allocated the moneys for?

I do not think Ms Ryan Withero has answered the question around the 3,300.

Just to clarify-----

It is simple. Is it 3,300 whole-time equivalents that you have hired?

We have hired 3,286 WTE against a figure of 3,300, which was the net expansion for 2026 alone. That does not take into consideration service developments that were unfilled from prior years coming into 2026.

Just to be clear, the Department of Health provided moneys for 3,200 whole-time equivalents. Is that the correct figure?

It was 3,300.

Sorry, 3,300, and you are currently at how many?

We are at 3,286 WTEs.

It is 3,286. Please do not confuse matters. Is 3,286 what you are at in whole-time equivalents?

Correct.

Okay. What is the trajectory between now and year end in terms of whole-time equivalent hires that the HSE is going to make?

Perhaps Ms McGirr wants to take that.

Is it okay if I answer?

Yes.

The control environment within the HSE-----

I really just want the figure. Does Ms O'Connor know the figure? 3,286. Where are we going by year end?

They were additional headcount that were provided for in NSP 2026, as I understand it. Our challenge relates to prior recruitment.

Do you know the figure? Do you know how many more people the HSE is going to hire before year end? You are at 3,286 right now. You were given an allocation for 3,300. Do you know the figure you are going to be at by year end? It is a really simple question, and I just want the answer.

We are estimating that in terms, for example, of the agency conversions that I mentioned. We are getting away from that. The focus in the HSE now is on total pay bill management. It is about the affordability. So, in a way, whether it is 3,000-----

Are you going to tell me or are you just not going to tell me the figure? I would prefer if you just told me you are not going to tell me the figure.

What I can tell you is that we have converted agency of about 1,450.

No, can somebody here just tell me the figure? 3,286. What is the trajectory?

We need to reduce the total pay bill. That is where we are at.

But by year end, are you going to be 3,400 or are you going to be 3,500? What are you going to be?

We need to reduce it from where we are.

So you are going to get the figure down at a net level from 3,286 before the year end?

We need to reduce our total pay, which means our agencies and overtime - all of those buckets. The total pay number must come down before the end of the year.

Was it an error of control that you are already at 3,286 in September?

If the Deputy looks at how it works, recruitment in the HSE is a huge thing given that our workforce is so huge. It takes a number of months, so what we can see in our figures is that recruitment that was initiated in 2025 resulted in people coming onto our payroll in 2026. These could be people who were recruited for new developments in the service plan, even in 2024 because, in particular if we are recruiting consultants, it can be a year or more to recruit them. We are seeing people coming onto the payroll who were recruited in 2024 and 2025 through funded developments then. What we can see is that the recruitment increased considerably in the back end of last year-----

Am I right in saying that the board, in the first quarter of this year, flagged this as a concern? Very early on in the board minutes it records that recruitment was at 1,700 whole-time equivalents around March. I think I am correct in that. Very early on in the calendar year people were expressing concerns at the pace at which whole-time equivalent hires were being made. Is that a correct assertion?

There there has been a control escalation financially since April in the HSE. The CEO has had authorisation for hiring since June. That situation is now changing, where an additional layer of sanction is required by the Department in terms of any hiring.

Just to be clear, a control escalation means that certain elements in the HSE lost control and you are trying to gain back control at the central level. Is that right?

Yes is the answer to the Deputy's question. I started at the end of March and I brought in controls and escalations in April, the month after I started in the role, and further escalations were put in place in June. I was not satisfied that the controls from April were taking a significant grip, and that is when the national controls came in for both pay and non-pay at the end of June. We have now got two months of figures showing us that there is a difference on the things that are more controllable, if you like - the agency reduction, overtime reduction and some of our non-pay reductions. We are seeing that, but we also know from previous experience in terms of introducing controls that it can take a few months. Because of our system, it can take a few months to wind down recruitment and, equally, it will take a few months to wind it back up. We are seeing that now. We are in our third month. We can see it starting to grip and we can see the costs coming down. To re-emphasise what Ms McGirr said, our focus is on reducing our total pay bill. It is not so much on numbers of people, it is about the affordability of the people we have. As I mentioned earlier, when we employ agency staff, they come at a higher premium, so our absolute priority is to convert the hired agency staff.

Just to conclude, and I acknowledge the demand on the services - nobody disputes that - but reading the figures in terms of the rise in deficit of over half a billion by the end of July, the board minute concerns, and the actions Ms O'Connor took in terms of control escalation, it does feel like for a certain period of this year the HSE lost control of spending. Does Ms O'Connor accept that contention?

I know that when I came in and I introduced the controls, I was concerned about the deficit, and that was a discussion that took place at that time in terms of escalations. We can see variances around the country. We can see that some regions are more on budget in terms of their pay and non-pay. Other regions are more challenged. That is why we are working through it. I would also say in parallel that the regional structures only really come in this year. In terms of shifting, there are an awful lot of things that have moved around. I mentioned in my opening statement about a year of very significant change. We are seeing that bedding down. We have our integrated structures now that have come in only really in the last six months, and the accountabilities and all that will flow from that are bedding in. There is no doubt that we are very challenged in terms of our fiscal environment and that we are going to be very challenged to reduce our spend both in respect of pay and non-pay, and that is an absolute focus for us, working with the Department on a daily basis on this.

I thank Ms O'Connor.

Ms O'Connor and all her colleagues are very welcome. I thank them for their time so far. Given the significant expenditure and income in an organisation like this - Deputy McAuliffe raised it before - an initial reaction is that it warrants a series of meetings. We are not really going to scratch the surface of such a significant programme area. We should be looking at a series of meetings with the committee into the future to really get into the weeds of this.

Ms McGirr mentioned that we need to reduce the pay bill. Will Ms O'Connor say what that will look like in practice, because there are people who experience the HSE in many different areas who would say that the one area where we do not need less is people on the ground providing services? She referred to agency staff. Irrespective of who they are, a loss of human resources in services will be a reduction in outcomes for people throughout this country. Will Ms O'Connor tell us that what will be prioritised first is to ensure all efficiencies are there from a management perspective within the organisation before she starts to look at those providing direct services?

Our focus is on the provision of services to patients. That is our number one priority, and the provision of safe services across the board. That has been the focus in terms of prioritising patient care. When I look at the posts that have been approved in recent months, they have been agency conversion to ensure we are continuing the delivery of clinical services, and front-line clinical services are being prioritised. We have other enablers in our system. For example, in terms of our medical workforce, we are driving POCC implementation and we are seeing significant increases there in terms of Saturday hours and evening hours. We have to use all of those enablers that have come to us and that have been funded by the Government for the HSE, so we are driving those as well.

I thank Ms O'Connor. Has she received a figure from the Department of what that reduction in the pay bill needs to look like in terms of a calculation this year?

I will ask Ms McGirr to respond.

We have to get back to break-even on pay, which means the HSE and the Department have to live within our pay budget. I will make a couple of comments in terms of-----

Could Ms McGirr just give the figure? What does that figure look like? What does the HSE need to reduce?

We are currently over on pay by €100 million, so it has got to come back.

By year end we need to find €100 million.

The new control is going in on four of the regions around additional sanction from us, which means they will have to get back to 2% over their pay deficit. It is a gradual reduction. This will continue into next year. This will not all be fixed this year for sure, but it will continue. This is what a multi-annual budget looks like in real life. The problems get carried in and we have to resolve them.

Just a point on the loss of staff, in looking at the last five years, and these are some big picture headline numbers, we should not confuse staff management and pay management with value for money and productivity. The health sector has had five years of a massive increase in investment. We are up 40% from Covid times. We have increased staffing overall by 30%.

I thank Ms McGirr. I understand. We have increased staffing by 30% and-----

But that is not converting-----

-----and now we need to find €100 million.

No, it is not converting, so when we stand back and look at it that level of an influx into the system, the total activity is not being delivered.

There is a 14% increase in the actual activity of hospitals versus an 80% increase in funding. Does the Deputy see what I mean? Everything is going into the hospital. Fixing this relies to a large extent on what is outside the hospitals where community services need to help people to stop going into hospitals.

I fully agree.

We need to look at how we are spending the money. If we gave another €10 billion to the hospitals, we would still have an ED problem. We need to look at how we are spending it and whether we are converting that money in the best way possible to deliver the most services and the most patients. That is what we need to do and that is what we are all trying to do.

I accept that point. Who it currently is working for in terms of pay right now is certainly that consultant in Cavan General Hospital who received €910,000 in a salary in 2025. We talked about this at the committee last week and we asked that correspondence be issued so that we would not have a situation today whereby, when we asked detailed questions about this specific issue, people would not say they did not have the information to hand. We are asking for a very detailed breakdown on how someone can earn €910,000 when a significant portion of it was in payments additional to their salary. Can the witnesses provide us with this information right now?

I do not have the detailed breakdown here in terms of the breakdown of the different salaries. Can I make an observation because some of it is core salary and some is allowances? We can come back to the Deputy with that.

I understand that, but I propose that we take a break so the witnesses can get this information for us. We asked for this information last week. We need this information. A colleague of the witnesses will be able to provide us with that information in a couple of minutes. I ask that we pause the clock so we can get it. This is really important information. What we asked for was a detailed breakdown of how somebody can earn in such excess to their base salary, because if it is happening for one, we know it is happening for many others. I do not accept that the information is not readily available to somebody here. Can we press pause on the clock and get that information?

I think we will have to go through a lot of workings to get all of that.

We should not have to go through a lot of workings to get that information.

In fairness, we had a lengthy conversation here at the committee last week and I believe some who are present from the HSE were tuned in and are very aware as to what areas of focus we would be turning to. I propose that we take our break at this point for 15 minutes. I am conscious of the time still remaining on the clock. It is to be hoped in that time the witnesses might endeavour to try to get some of the information for us. I propose that we suspend our engagement now and take a short break for 15 minutes.

Just to be clear, is it the number of hours behind the calculations?

We know the categories and we know the cross-cover of the amounts.

We did not know that ten minutes ago. What we are looking for is a very detailed breakdown of where that expenditure was accrued.

In terms of hours?

Can we take a break for 15 minutes? Deputy Farrelly will have five minutes remaining on the clock when we come back in 15 minutes and it is to be hoped we will have clarity. Maybe Deputy Farrelly and the witnesses can have a conversation and establish what exactly it is that Deputy Farrelly requires. The meeting is now suspended for 15 minutes.

I call on Deputy Farrelly to resume where we left off. He has five minutes or thereabouts. We hope we can establish the information he requested.

I thank those who spoke to me during the break about providing me with the headings relating to these payments. Many questions remain, particularly with regard to heading items relating to fees, sessions and so on. The questions I have revolve around the culture of such significant overpayments to the extent where it looks like you could nearly be earning double your salary in a year. That is a matter of concern. I thank the witnesses for their commitment to come back with detailed information. If we could get that across the board, it would be really prudent, given the work we are trying to do.

How many voluntary hospitals do not have a service arrangement in place for 2026?

The service arrangements have a part 1 and a part 2. Part 1 arrangements are at 98% or 99% completion and the part 2 arrangements are at about 81% in terms of the completion rate of the section 38 entities.

I cannot wrap my head around that. The HSE would potentially not have service arrangements in place until many months into the year. When did negotiations with voluntary hospitals to develop service arrangements for 2027 start? Are those negotiations ongoing?

Absolutely. I understand that documentation for last year went out at the end of 2025. They were working with the hospitals from late 2025 in respect of the 2026 funding. The discussions going on now relate to 2026 and 2027, but we have to have line of sight on our financial position for 2027 in order to have detailed discussions. The process is ongoing.

We have service arrangements with the larger agencies and grant aid agreements with smaller agencies. Where there is significant funding, regular governance meetings take place to review where they are in the context of funding. Governance meetings happen all year. They include consideration of whatever issues may be preventing signing of the service arrangements.

Perfect. My final question regards the use or prevalence of debt collection agencies by the organisation. In 2025, how much was spent on debt collection agency services by the HSE?

We will have to ask our CFO for that.

I do not have that figure to hand. Is this the total for debt collection?

Yes.

I can get the committee that figure.

Am I right in assuming that Mr. Lane does not have the figure for revenue brought in by their work?

Not to hand, no.

Legislation is in place whereby the HSE is compelled to chase fees from patients. What does that involve? Does it tell the HSE how to chase down the cost or is there flexibility associated with it?

There is flexibility. It depends. On the ED charges, for example, a series of letters go out. We try to collect the money through a series of letters over a period. We will look, maybe, to tighten that. We are moving to try to collect ED charges at the point of service delivery. That is best for everybody. People want to pay there and it helps us. We save postage, we do not have to go chasing down invoices and stuff. We have made a lot of progress on that this year. The new policy is two invoices - two chases - and then we look to see if we can recover it beyond that. For smaller fees, it is generally not worthwhile to use a debt collection agency for an ED charge.

There is an improvement programme for collection at point of care. In emergency departments, where possible, there is better communication to patients, better understanding, posters and better use of technology so people have various ways to pay. It is easier for everyone to collect at source. Obviously, there will be circumstances where that is not appropriate, and there is a clear policy around that. It is also done through our app, in terms of providing other ways for people to collect it. We do not want to have to chase money down from people but we have an obligation to try to do that. The more we can do that at source, that is what the improvement programme is focused on with all our hospitals, including the use of technology for payment systems. Many hospitals did not have the full array of payment options for people, which these days is just mandatory, really. We are trying to improve that at source so we do not have to chase or send letters and we avoid the situation the Deputy is setting out.

Will the HSE consider stopping the use of debt collectors for patients?

Without information on the fees, we are probably operating a little in the dark. However, we can see what the legacy of these fees has been. Often, they are quite small sums of money. While the legislation compels the HSE to do what it can to get this money back, there are no people sitting at home choosing not to pay for their emergency department visit or other interaction with the HSE. This is in sharp contrast to the sums of money that the organisation is willing to lose via insurance claims or in other ways. There are much more rewarding efficiencies that the organisation could find while not using someone to send a very threatening letter or knock on the door for what is often quite a small sum of money. I would appreciate it if the witnesses could follow up as to exactly what those sums look like for 2025 in order that we might see if the prevalence is increasing.

To clarify, while the committee did not formally write to the HSE after last week’s meeting to request the specific information that Deputy Farrelly alluded to, it was discussed extensively at last week’s meeting. This matter was highlighted in the Comptroller and Auditor General’s accounts. There was a reasonable expectation on the part of members that the relevant information would be here. I reiterate that we did not formally write to the HSE subsequent to last week’s engagement. I call Deputy Dolan.

I thank the officials from the HSE for being with us. As Ms O’Connor continues in her role, I wish her the very best of luck. It is a very difficult role to take on. The HSE is a mega-organisation. We are talking about an organisation with a budget of over €27 billion, which brings with it a huge amount of responsibility.

I want to start by thanking the HSE for reducing the publishing threshold from €100,000 per purchase order to €20,000. This opened up the HSE’s transparency and visibility across its public spending. I welcome that. Just to give an idea, when the HSE was publishing its purchase order reports in quarter 4 of 2025, there were maybe 600 or 700 records and a very low amount of visible spending. When that changed in quarter 1 of 2026, there were over 7,000 records. That gives an idea of how much spending falls into the bracket between €20,000 and €100,000. That was not visible to the public or to me, as a member of the Committee of Public Accounts, but now we can scrutinise it better and, hopefully, the HSE can use it to drive greater efficiencies within the organisation.

How much does the HSE spend on procurement each year?

It is €5.6 billion or thereabouts.

I have a concern about that figure. It is stated in the HSE’s 2024 report, in the context of compliance with procurement rules, that procurement spending was approximately €5.5 billion. Fast-forward to the 2025 report and it is stated that approximately €5.5 billion was spent on procurement. I do not believe for a second that procurement spending remained exactly or approximately the same between 2024 and 2025. Is Mr. Lane confident that the HSE is able to track spending on procured items or services?

Yes. Everything we procure has a purchase order and a trail relating to it. We are having to do a lot of work, but our single IFMS system gives us visibility that we never had before. That is the starting point of trying to understand everything we are doing. With regard to contracting, there is more visibility of contracts and multi-annual procurement, and we are tracking those contracts on our software.

How does the HSE calculate that €5.5 billion?

The €5.5 billion would be run off our procurement system.

Is it just an estimate based on what the contract awards are when summed together?

Yes, to my knowledge.

That does not tell me how much was spent. It tells me what the estimate of the spend is going to be. The HSE has produced two annual reports in which the same figure comes up. The figure of €5.5 billion is 20% to 25% of total HSE spending. My fear is that a report comes out stating that it is€5.5 billion, and the amount is the same the next year. However, the HSE has calculated it on the basis of an estimate of the contracts and then wonders where all the money is going. Can the HSE be confident that it is not being fleeced by suppliers?

The Deputy met our head of procurement earlier this week and discussed some of these things. Gareth Morton and his team are very focused on increasing the visibility of everything in terms of the contracts that are there. He is working across the regions. With the regions coming in, there is work under way this year to ensure the visibility of all the contracts. By later this year, he will have that in place, and driving the improvement programmes. Certainly, in looking at the work that has been done, significant steps have been taken in terms of increasing the number of contracts that are in place and improving contracts, but it is a work in progress.

Following on from my meeting with Mr. Morton, I was incredibly impressed by the work that he is doing in trying to have greater transparency across the spend. The HSE has to remember that it is one of the largest buyers in the country. It should be using its position to leverage downward price pressure across this area. I welcome what it is doing with regard to agency workers and bringing people into the HSE. However, this frustrates me. I had the same problem with the Department of housing, which could not tell me the procurement spend - it is all based on an estimate, not what the actual spend was for the year. These are financial statements. They are a report. I just want to know how much was spent on procured items, whether services, items, capital or whatever was procured. What was the total spend for that? Very few bodies seem to be able to give a figure to it. The HSE uses the word "approximately", and it put in the same figure for 2024 and 2025.

We are now at the stage where we have full visibility. We did not have that up to the full roll-out of the IFMS. We now have every single purchase order fleshed up each day on the system on a Power BI platform, where we have the contracts that are associated with that. That is going to move to the business warehouse, which we are developing from the IFMS, very soon. Every euro that comes from the system will be tracked on that, and we will be moving from looking at compliance sampling to real figures.

As per the correspondence I received from Ms O’Connor, I welcome that for quarter 3 of this year, the HSE will be doing a pilot phase. Then, in quarter 4, it is hoping to have reporting outputs. That is essentially achieving the golden thread, which is to go from the purchase order to the payment and link it back to the contract. The HSE has fragmented systems. However, for the systems and the coverage that it has with the IFMS, linking back to the contract spending - what the HSE contracted for, what it was trying to buy and what it actually got for that - is going to be important for the HSE when it goes back to talk to suppliers. The HSE can sat that it has agreed a contract and a price, and this is where it is at. It is a behemoth of a task.

I thank Mr. Morton and his team for what they are doing. I just wanted to get it on the record today that right now, the HSE does not know exactly how much is spent on procurement. Is that fair to say?

No. We can actually find that figure based on all of the purchase orders on our IFMS system at this point.

Would it be an arduous task to do that?

No.

Without saying that Mr. Lane should go and do this, in the 2026 report, can we get an exact procurement spend figure for 2025 and then for the 2026 year, when it ends? At least then it allows the HSE to do a look-back exercise and get an exact figure for 2025, and it will have the figure for 2026. Going forward, this committee deserves to know, given this accounts for some 25% to 30% of HSE spend, exactly what that number is. Is that fair?

Yes, absolutely.

It will come from our business warehouse, which we have not fully deployed yet, but it is well on track for quarter 4 of this year, and we will be putting all the purchasing data into that.

One advantage of the IFMS regarding our cost oversight process is that Mr. Morton is focused on our big spending areas and where we can drive value from contracts. That information is vital to prioritise because he only has so much capacity as well. It is a matter of prioritising his energy to the areas where we can drive up value with regard to things like aids and appliances, drugs and so on. The information we are able to draw from that now is phenomenal.

I appreciate that. An article that appeared in The Irish Times on 3 September was headlined “HSE €580m over-budget at the end of July despite curbs on spending”. For the €580 million that it went over budget, what did the HSE receive?

We can break down that budget over many areas. Some of the elements are not within our control. We talked about patient private income, which would be about €70 million of that year to date. State claims and pensions are probably another €70 million. Those are HSE obligations, but they are not within our ability to control. We can then look at another key block of it that is entirely within our control and entirely our responsibility, which is the €130 million in agency savings and non-pay savings that were not directly patient-fronting that we would have to deliver.

If you want to talk think about the approximately €236 million, which is the balance of that, it all has a patient behind it. It is driven by the patient. It is drugs-related spend and for some of the staffing in the surge. To stop that immediately has an impact on a patient. That is the challenge for us. To be clear, there is a space in that €580 million, which is ours to manage. That is the agency piece and the non-pay savings across certain categories.

We have seen the rate at which the HSE budget has ballooned over the past five years or so. Obviously, all of these controls now have to be implemented, which is a signal from somewhere that this is a runaway train. How do the witnesses justify the extra spend when they are paying it out? What outcomes are patients seeing off the back of this extra money? If we are spending money for the sake of spending money, or if we are spending it to firefight, then we have to be honest about that and say we are firefighting. I want to know what patient outcomes they have delivered with the massive deficit.

There are a few bits in that. One is in terms of patient activity. We can see we are spending more money on drugs, which are more expensive. High-tech drugs and cancer drugs all cost an awful lot more. We are spending more money on aids and appliances. To go back to the Deputy's earlier point, we absolutely should become a price-setter in these areas. We have huge volume going through. If you look at the cohort coming into our hospitals, there are a lot more older people with co-morbidities and higher needs, who then often have to go into different types of care with higher cost, etc. I go back to Ms McGirr's earlier point. When we build services and continue to focus on the hospitals, which is where people turn up for all sorts of reasons, sometimes because of a lack of options elsewhere, we end up in this world of higher cost and higher need. It is very hard to unravel that. That is not to take away from our need to be more productive and reduce agency and all of that. However, going back to what Ms McGirr said earlier, the answer is to really drive the Sláintecare agenda. For example, if you have somebody at home with access to good home support and good community services - I have an elderly father in my life - that reduces the need to pitch up to a hospital, where everything changes - people require beds and there are more costs, etc. When you look at the demography we have now, never mind what is coming at us, we have to reorient how we use our resource and get the value the Deputy is talking about. There is value. We can see that we are employing staff. We can see that we are spending money on drugs. If you look, for example, at the work going on in our chronic disease management programme, we are trying to bring back and kick the can down the road for people with chronic disease to support them earlier. Apart from doing the right thing for patients so they have better health outcomes, it also reduces costs over time. It is all of that we have to focus on in the context of our future years.

I thank the witnesses for their time, and the accounts team for all the work they are doing on the purchase order stuff. I really appreciate it, and I think the HSE has the potential to drive down prices across the board. I will support that endeavour as much as I can.

I wish the best to Ms O'Connor in her tenure as CEO, and to Mr. McCallion, as well as Ms McGirr and her team from the Department of Health. I continue on from the discussion with Deputy Dolan. The witnesses have made some points about removing the pathways directly into hospital because it is expensive care and there is an ageing demographic, etc. However, there is no evidence that we have put commensurate investment into primary care as has gone into hospital care. Every year since the primary care strategy came out in 2001, and then the health strategy and Sláintecare, we have said that we need to put money into primary care and community services. In my region of HSE West North-West, we have the longest waiting lists for speech therapy and occupational therapy in the community. We have the longest wait for talk therapies. We have the longest delayed discharge from the time someone decides to send someone out of the hospital into the community in the country because of a dearth of services in the community such as home care packages, step-down facilities and nursing home beds. What are we doing about it? Are we going to continue running this deficit year on year without real structural change and different clinical pathways?

This is a discussion we had at our senior management team last week. From my perspective and that of the organisation, we absolutely have to focus on our community services and all the things the Deputy has described. We know that we have gaps in community services. We know we have teams that have one or two people and are not really teams. We equally know that we can see huge success from our initiatives like our integrated care teams for older persons and our chronic disease management programmes I mentioned earlier. It goes back to the point of shifting that dial back. We have become very focused on acute services. They will gobble up any amount of money. That is the reality because of how hospitals work and the demand that comes in. For us, in terms of our positioning and discussions with the Department about next year, and from a health system perspective on the delivery of services, we have to get back to driving development. We know what works. We do not need to learn that, so we have to drive the development of our community services.

The chronic disease management programme is one, but we need to go further upstream and start screening people at the age of 50, for example, for blood pressure, atrial fibrillation, chronic disease, smoking and lifestyle. The interventions are not early enough, but that is a policy decision.

I come back to recruitment and retention in the community. My time is tight, but I would like some answers. There is a sense that people are working agency in the community. I know of one young nurse who came back from Australia. She is working in Ballinasloe, County Galway, in the job she left to go to Australia. They need that job. She is in that agency job doing it. They are not going to facilitate her in Ballinasloe. They want to send her into Galway to do another job. That does not make any sense. There is no common sense to that type of recruitment. She has made representations to me. I do not want to make representations because it might affect her career. I have advised her to keep pushing, and I am bringing it up here in an anonymous way. It does not make any sense. Is the culture right for all of these young nursing, medical and allied health professionals coming out? Is the culture welcoming in the HSE, to attract them to and retain them in the service?

I do not mean to be glib and say I hope it is, but clearly it is not, if this is what the Deputy is describing. We want to retain our workforce. That includes graduates and people who have trained in our system who we are trying to attract back. Ms Queally is here for her own region, but in terms of how the regions work there is prioritisation. Agency conversion is something we are driving.

I will take that answer. It seems incredible to me. It costs so much to place someone in an agency job who says they would take the permanent position, but that is the only thing being offered. The only sense I can get out of it is that it is personal. It should not be. I do not know why-----

I am happy to chat with the Deputy privately about that.

On the agency costs, there is this change to having a bank, so the HSE will manage additional work. If people have retired from the HSE but come back in agency roles to do additional work, how will that affect their pension entitlements?

I will ask Ms Ryan Withero to speak to this.

It may cause a bottleneck.

It is a good point. Let us look at our ability to attract and rehire retirees. In our staff banks we have 20 in place now with the national staff bank model. We are increasing numbers that we are attracting into the staff bank at all times. It is a core issue, particularly if you look at some of our harder-to-fill roles. For example, in mental health nursing it can be difficult to attract and retain, but a source we can look to is rehiring retirees. We are currently engaged with the Department. Obviously, the pension abatement rules lie outside the scope of the HSE. It is something on which we are working with the Department.

When we look at the job market that is the key group for the banks to take out of agency. It is a big cadre in the agencies.

That is why I asked the question. I come to the payment to high earners. I take a 180° look back at this instead of focusing on a small number of people earning considerable additional amounts of money in the service for work that has been verified. There are two issues I have with it. If someone is earning €900,000, which is the headline figure, how many hours are they putting in safely to provide that service? Is there a safety issue that the HSE is reliant on people to work that number of hours to, in effect, triple their base income?

That is absolutely one of the considerations. When the decision is being made at a local level, our adherence to the Organisation of Working Time Act is part of that, in terms of actual adherence to the legislation in respect of working time. They are two different questions but making sure we are watching the hours and the working time Act as well as the individual-----

It is too easy to sign off on overtime forms and not actively recruit to fill that resourced position and, by the way, provide a better service and a safer service with less risk.

In terms of the posts where we see high earners, they are in a small number of specialties and, as I said, it is mainly radiology. Unfortunately, we are very challenged in recruiting in those specialties. We have CAMHS consultants who cover other areas at our request.

I know that. I understand.

In terms of the high earners, sometimes we ask consultants to do this.

The point has been made well by Deputy Farrelly about the management of this. Why should someone have to claim overtime? If you have put someone on to do a shift of work or cover, why is that not managed centrally and reflected in the monthly cheque, or whenever they get it, at the end of the day?

I would have to check in terms of the local arrangement there.

If they are an employee, why do they need to claim? If they are asked to cover a weekend or a 48-hour shift, it should be reflected and they should not have to claim it 12, 15 or 18 months or two years later.

In relation to the private insurance charges, this is a perennial issue. Has the HSE engaged with the private insurance companies and found a way to streamline claims for hospital services?

I think extensively, but I will ask Mr. Lane to comment on that.

Why is it not solvable?

The answer is that yes, we do. We use a claims organisation to help us to do that for some of the more complex ones. We have been noticing a trend over the last number of years where insurance companies are really pushing back very hard on us. That means-----

Is it a cumulative €200 million?

Yes that is-----

That is a lot of money.

That is in the pipeline.

The amount of €3.4 million is still a lot of money but a €200 million cumulative debt is a lot of money and deserves focus.

Coming back to productivity, we had issues with insourcing last year. Something that struck me was the difference between the productivity of someone in the same hospital or the same institution for the HSE or a voluntary hospital going in on a Saturday morning and able to see double the number of patients with fewer resources. Is that a question that can be answered?

To be clear, does Deputy Daly mean in terms of third party insourcing or is he speaking about-----

I am talking about people who are asked to do additional clinics who are able to see more patients, often with fewer resources, on a Saturday morning.

We have ceased third party insourcing. In terms of any insourcing that happens on our sites with our own staff it is at our request. That is not managed externally by other organisations any more. In terms of productivity, a number of things are going on. For example, we have POCC implementation under way. We have a lot of Saturday work happening and layering in the five-over-seven working to support that.

I am running out of time and I do not mean to interrupt but I want to say that I have raised the issue of digitalisation previously. The HSE talks about structural issues and there are real structural issues with this. If the State is spending 80% more on the delivery of health services, notwithstanding a growing and ageing population, and is getting 14% additional activity, there is a problem. The digitalisation of the health service really has to be the number one structural issue facing the HSE and the Department of Health.

As Deputy Daly knows, we have a big programme under way around that, with the health app launched and delivered to 250,000 people using the shared record available to staff. It started in the south east. We are out to tender for a full electronic health record. It is in the procurement process at the moment. It has been shortlisted down to four. We have a team of over 100 people working on it.

To reinforce Deputy Daly's point, if we look at the radiology area, where we have a full imaging system, we are also rolling it out to the private sector because it means that patients do not have to get their images taken again, which is not good for patients. We are also extending this to some of our smaller hospitals. In this area we are able to see everything that is happening and we can look at it in hospitals, and areas like Ms Queally's can use it to look at the productivity around the radiology function and how to organise staff. Deputy Daly is right that this sort of data gives us the ability to look at it in a way that perhaps we cannot when we are trying to run everything on paper.

We can throw as much money as we want at the health service but if we do not digitalise the delivery of clinical services, as has been done with the IMFS, we are simply burning money-----

That is why we have-----

-----on inefficiency.

Agreed. That is why we have kicked off that programme.

I thank the witnesses for coming before the committee. I will start which some short questions and I ask for brief answers so we can try to get through as much as possible. What was the budget for 2025 for the HSE? I just want to get it on record.

Revenue funding for 2025 was €27.6 billion.