The new Director General of the Health Service Executive has said the organisation must build a culture of delivering within the budget allocated to it by Government.

Paul Reid said he is assessing "every euro and every cent" of spending in the health service.

Mr Reid, who started in the Director General role last week, said the organisation is moving to a new model of budgeting.

Addressing the Oireachtas Health Committee he said: "It is a very challenging environment of assessing every euro and every cent that we have and where we currently put it."  

"My early assessment is that if we continue to put it into the current system of congested acutes and building outpatients we will continuously make slow progress."  

Before today's hearing, Mr Reid had already issued a stark warning to senior managers in the health service with a memo last week saying they must start living within budget or be held accountable.

Mr Reid plans to meet those managers over the coming week to discuss how they plan to control spending.

He is to also acknowledge that the mortuary at University Hospital  Waterford, which he visited on his second day in the job, is not up to standard.

Mr Reid told the Committee that there were now 3,388 consultant posts in the public health system.

He said that 359 were unoccupied and the biggest area where these were unoccupied is in psychiatry.

He said that the number of consultant posts had increased by 119 compared with last year.

Other issues, including a backlog in cervical smear tests, the cost overruns at the National Children’s Hospital and the delivery of Sláintecare are also part of the committee's agenda. 

The meeting is also being attended by Minister for Health Simon Harris who will appeal for patience as he consults the Attorney General on the impact of the recent judgment in a case taken by Ruth Morrissey, that screeners should have absolute confidence before giving the all clear.

Ms Morrissey, who is terminally ill, was awarded more than €2m in damages in her High Court action earlier this month over the misreading of smear tests and the failure to tell her about it.

In his judgment, Mr Justice Kevin Cross said screeners should have "absolute confidence" before they give the all-clear.

Additional reporting Fergal Bowers