Four Health Service Executive regions are to be stripped of their powers over day-to-day spending by the Government in response to an overspend of hundreds of millions of euro, Minister for Public Expenditure Jack Chambers has said.

Speaking on The Irish Times Inside Politics podcast, Chambers said the overspend in the four regions was “completely unacceptable”.

“They’re going to lose autonomy on day-to-day spending and there’ll be much greater controls introduced on all elements of pay and non-pay spending,” he said.

The move would signal a blow to the Government’s policy of decentralising healthcare decision-making from the HSE to six regional authorities, but Chambers said there has been “ineffective implementation” by the HSE so far.

“The budget in health has increased exponentially and the disconnect between the level of recruitment and the allocation that’s been received isn’t acceptable and that’s why we need a much greater level of oversight but also a centralisation of the control environment,” he said.

Chambers said that while the health service had made improvements in some areas there was a significant disimprovement last month.

“What we saw in the August figures was a worsening of that and essentially completely ineffective management of the control system by the HSE and really poor performance by certain regions when it comes to financial management, when it comes to upholding the staff allocation that they were given.”

He said this was unacceptable to him and Minister for Health Jennifer Carroll MacNeill, with final steps being put in place with her department now.

“There’ll be much greater centralisation, particularly for four regions where they will lose essentially the autonomy they’ve been given in the structure that’s been stood up in the last 12 months.”

It is understood that spending powers are to be removed from the HSE regions in the West and North West, the South West, Dublin South East and Dublin and Midlands regions. There are six HSE regions in total.

Chambers said some of the executive regional structures have shown a “completely ineffective ability to manage the budget that they’ve been allocated”.

He said there was strong evidence from a clinical perspective to continue enhancing regional structures and their community focus.

“But from a financial management perspective, in my view, we’re going to have to centralise a lot of the financial management and governance for a sustained period of time until we see much greater alignment between the budget that’s been allocated and the out-turn position.”

He predicted that would extend through much of next year, with the overspend this year set to have an impact on the health budget in 2027.

Overspending issues emerged in the HSE regions in the early part of this year, with the agency’s chief executive Anne O’Connor placing three – Dublin and South East, Dublin and Midlands, and South West – in what is known as “tier three escalation”, introducing employment controls and greater scrutiny on spending.

An internal HSE report showed the HSE had an overall deficit of €577 million at the end of July, with all six regions reporting overspending to differing degrees. Official HSE minutes from April show its governing board felt there was a need then for greater clarity and consistency in governance structures, alongside stronger central oversight and co-ordination.

Separately, Chambers said decisions on increases to the carbon tax – which were deferred in the spring – would be made before Budget 2027 is announced next month.

He warned that any indefinite deferral would be narrowing the tax base and come at the cost of higher expenditure while also undermining the “polluter pays” principle of climate policy.

“The principle of the carbon tax and the trajectory of it increasing should sustain and should continue,” he said, adding that “matters relating to the carbon tax have to be connected solely to timing and sequencing, but not undermining the policy principle”.