Mr. John Pollock:

The National Paediatric Hospital Development Board, NPHDB, would like to thank the committee for the opportunity to outline and discuss its annual accounts for the year ended 31 December 2013.

As set out in the accounts for 2013, a number of significant developments took place in 2012 which impacted the work of the NPHDB, including, in particular, the refusal by An Bord Pleanála of the planning application for the children’s hospital at the Mater site, the subsequent decision by Government to locate the hospital at the St James’s site and the resignation, in July 2013, of the transitional board that was appointed in January 2013. On 2 August 2013, the current board was appointed and a new executive recruited. Total expenditure for 2013 was €1.71 million. This can be summarised under the following headings: payroll and related costs, €460,000; site clearance cost €260,000; design team fees, €260,000; health planning, €200,000; and administration and other costs, €530,000. The 2013 balance sheet includes assets valued at €39.98 million at the beginning of 2013 in respect of the planning and development work for the children’s hospital planned for the Mater Hospital campus. This value relates to accumulated expenditure in the period 2007 to 2012. These details were discussed at a previous Committee of Public Accounts meeting with the NPHDB on 23 October 2014.

The current board of the NPHDB was announced in August 2013 and commenced familiarising itself with the overall project details, including the 2012 and 2013 accounts. On page 14 of the 2013 accounts, note 3 identifies that, arising from the Government decision to change the location of the new children's hospital to the St James’s hospital site, the board spent considerable time ascertaining potential reusable value of the accumulated expenditure. The development board initiated a process in 2014 to review and analyse the asset impairment. The review was carried out based on guidelines in financial reporting standard, FRS, 11 ensuring any impairment or loss is measured and recognised. The board has reviewed all expenditure for construction work in progress, identified the deliverables which were supported by that expenditure, set out the sections of the deliverables which can be utilised on the St. James's campus and carried out detailed analysis on the value of the sections of work which can be utilised or modified to provide future value.

The impairment analysis comprised detailed examination of all expenditure, divided into separate, distinct components being examined by the staff of the board who have project knowledge of the individual components involved. The review involved detailed analysis of the costs up to November 2012 - the date of the decision to move to the St. James’s campus - and the costs in 2013 that relate Mater site project. The staff members then reviewed the data to assess what portion of each individual component could be reutilised on the St. James’s site. The review was completed in September 2014. The proposed impairment was reviewed by the NPHDB audit committee, the board of the NPHDB, the HSE, the Departments of Health and Public Expenditure and Reform, the Comptroller and Auditor General as part of the audit process and PricewaterhouseCoopers has reviewed and confirmed that the process is in compliance with generally accepted accounting principles, GAAP.

The Comptroller and Auditor General, Department of Public Expenditure and Reform and the HSE, as funder, were in agreement with the approach taken by the development board and the Department confirmed to the development board that it had no objection to the write-down in the development board’s 2013 accounts. The review resulted in an impairment of €35,501,586 which related to the provision of services as set out in page 15 of the of 2013 accounts, which were specific to the activities and services supporting the Mater site and cannot be utilised or transferred to the project on the St. James’s site.

I will now turn to the current status of the project. A strategic infrastructure development planning submission for the new children’s hospital was submitted to An Bord Pleanála on 10 August 2015. We expect an oral hearing to take place in November 2015. A planning decision from An Bord Pleanála is expected on 15 February 2016.