Jim Daly (Cork South West, Fine Gael) | Oireachtas source

I thank the Deputy. The new body will have to have an arrangement with multiple universities, academic institutions and research entities due to its national remit in the education of health care professionals in paediatrics and engagement in paediatric research. The formal arrangements between the universities and the new body will require some corporate identity to be decided. While this is not yet clear, it is considered prudent to allow the new body to become a member of a company subject, of course, as members can see, to the consent of the Minister. The provision also keeps options open for the type of structure that may be required for a body to carry out philanthropy for Children's Health Ireland.

Under amendment No. 4, the provision allowing the new body to borrow for current as well as capital purposes is considered useful but as members can see from the Bill it is strictly controlled. The ability of service providers to respond to strategic investment opportunities in the public interest within legal control limits must be seen to be a progressive step in managing hospital facilities into the future. I understand there may be a concern that the retention of this provision will allow this and other Governments to under-fund the hospital and exploit the provision by instructing the new body to borrow money for the purposes of providing health care services. Nothing could be further from the truth. The new body will be funded by the State as a section 38 agency as the three children's hospitals currently are through a service level agreement reached with the HSE. The primary driver for a service provider to borrow is to drive better value in services provided to patient in a cost effective and timely manner. This provision allows the board to respond to strategic opportunities or needs as they arise. Borrowing for current purposes could be considered in scenarios where the hospital cannot generate sufficient internal funding resources in the short term to develop a service but is able to demonstrate longer-term viability and an ability to repay. The ability to borrow within controls creates this opportunity. Circumstances in which the new children's hospital would make a case to borrow money or engage in activities that have an element of borrowing could also arise in regard to leasing or licensing of commercial areas or leasing of equipment. This could also encompass investment in a strategic service initiative or expanding operational capacity in a service that has hospital income generating potential such as attracting international patients to avail of cutting edge high technology services or the specialist paediatric expertise and experience that will available in the new hospital. There is also the need to consider possible scenarios whereby the new body could require the potential to borrow to invest in extending existing services further in order to generate hospital income by providing cross-jurisdictional services for example for children from Northern Ireland as part of an accountability framework. Such scenarios would be subject to approval of a business case, demonstrating return on investment with the potential to repay borrowings and generate hospital income. The Bill allows for proper and fully accountable governance and management within the framework of national policy. It is acknowledged that since the new body will be largely funded by the State, its borrowing would form part of the overall public debt of the State, as assessed by the EU and other bodies and the State must exercise control before such liabilities are undertaken. The Bill therefore includes a provision for borrowing subject to the approval of the HSE, Minister and approval of the Minister for Public Expenditure and Reform and the Minister for Finance. It is therefore considered appropriate to provide for the potential to borrow in the Bill. Accordingly I do not propose to accept amendments Nos. 3 and 4.