The HSE's deficit more than doubled between January and February this year, and the organisation is heading for a sizable deficit by the end of the year, a new report has warned.

The HSE report has also warned that covering the cost of providing free GP care for under sixes as planned for the second half of this year will be a challenge, and that there are other major financial challenges ahead as the year progresses.

On the Haddington Road Agreement, the HSE says the extent to which savings under this heading cannot be achieved in 2014 is a 'key financial risk to the organisation'. The HSE says it is currently examining the achievability of plannedsavings under Haddington Road.

The health executive's latest financial report says the deficit for the end of February was €54.76 million, compared to €24.5 million at the end of January.

The report says the deficit for the end of February last year stood at just over €40 million.

The bulk of the current deficit - €39.5 million, is within the hospital sector, according to the HSE.

Hospitals in the West/North-West region and the Mid-West Hospital group have overruns of nearly €9 million and €4.8 million respectively. University Hospital Limerick alone has a deficit of €4.1 million.

Pay expenditure is over budget in both hospital groups, mainly as a result of agency staff costs relating to a shortage of junior doctors, according to the report.

The HSE admits that the acute hospital system is facing a challenging year, with 'legacy deficits' of €56.5 million left over from last year needing to be addressed.

There have also been overruns reported in disability and elderly services.

Agency staff costs for the HSE as a whole have more than doubled to over €16 million in the first two months of this year compared to the same period last year.

The number of full medical cards in the system in February 2014 was down by just over 31,000 compared to February of 2013.

Risks to cost reduction plans in primary care include finding the €35 million necessary to fund the under sixes GP scheme. The report adds that this scheme 'will deliver savings' in 2014.

The report says it will also be a challenge to meet the planned €23 million in savings under medical card 'probity' (review/removal of medical cards).

It says while reference pricing drug cost targets of €50 million were set for 2014, this was dependent on the pharmaceutical industry supplying drugs at the reference price.