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Finance
Existing level of service
The cost of maintaining existing services increases each year due to a variety of factors including:
• Incremental costs of developments commenced during 2016
• Impact of national pay agreements
• Increases in drugs and other clinical non-pay costs
• Inflation-related price increases
• Additional costs associated with demographic factors.
Full year effect of 2016 developments - €72.9m
The incremental cost of developments and commitments approved in 2016 is €72.9m. This includes the
cost of providing services, which commenced part way through 2016, over a full year in 2017.
Pay rate funding (including Lansdowne Road Agreement) - €118.1m
This funding is provided in respect of the growth in pay costs associated with the Lansdowne Road
Agreement (LRA), Labour Relations Commission recommendations and other pay pressures. It is provided
to offset the increased cost of employing existing levels of staff and does not allow for an increase in staff
numbers.
It is noted that some unavoidable pay-related costs, identified as part of the estimates process, were not
funded within the overall allocation. The most significant of these relate to the net cost of increments, which
must be paid in line with approved public pay policy, which has been estimated at €27.5m for 2017.
A breakdown of the pay rate funding allocation by division is provided at Appendix 1, Table 3, Column E.
Non-pay and demographic related costs - €186.3m
Additional funding of €186.3m has been received to off-set increases in non-pay costs and the impact of
demographics on maintaining services in 2017. Of this amount €113.9m (61%) is allocated to operational
service areas performance managed by the HSE and €72.4m (39%) is allocated to pensions and other
demand-led areas. Costs in these areas are primarily driven by eligibility, legislation and similar factors and
therefore cannot be directly controlled by the HSE.
Expanding existing services / developing new services - €81.3m
Within the total allocation of €13,948.5m, funding of €81.3m will be applied to enhance or expand existing
services, including responding to demographic pressures, and to commence new approved service
developments.
Full year cost in 2018 of NSP 2017
In addition to some costs funded within the €81.3m referenced above, a number of additional initiatives are
funded on a part-year basis within NSP 2017. The full-year cost of all of these investments represents an
additional funding requirement of €88.7m in 2018 upon which this plan is predicated. The full-year cost and
additional funding requirement of these investments is detailed at Appendix 1, Table 4.
National Service Plan 2017 9