The HSE says it is heading for a deficit of €104 million at the end of the year based on its current spending, and it will need to bring in new cutback measures to deal with this shortfall.

However, the health executive, in its latest performance report, has also warned that its deficit may be higher as it does not have the capacity to address shortfalls that may emerge in areas such as public service pay, the medical card and other community schemes, and planned increases in private health insurance income.

Health Minister James Reilly hinted yesterday that a supplementary allocation to 'bail out' the HSE may again be needed this year. Last year, the HSE required an extra €360 million from the Department of Health to balance its budget.

The HSE, in its report, warns that projected savings through Minister Reilly's plans to charge all private patients in public hospitals for beds will not, as planned, be put in place this year, resulting in an income shortfall of €60 million.

In addition, planned fee cuts for GPs and other health professionals working in the medical card and other community schemes were delayed this year, resulting in income being €18 million behind schedule under this heading.

The report says the projected deficited under the medical card and other community schemes for the end of the year could be as much as €100 million unless as yet unspecified 'contingency measures' are introduced.

The HSE has also indicted that the projected pay savings of €150 million in the health service through the Haddington Road Agreement will not fully materialise this year.

The June performance report shows a HSE deficit in the year to date of €63 million, compared to a deficit of nearly €300 million at the same time last year.

Hospitals are currently €60 million in the red, with the HSE projecting a potential hospitals deficit of €75 million  at the end of the year.

The HSE report points out that the financial position has to be assessed against a background of 22% being cut from the health budget since 2008 and increased pressure on EDs, which has led to spending on additional hospital capacity, thereby further adding to costs.

The HSE also stresses that the service is currently operating with 11,300 fewer staff than in 2007.