Oireachtas Joint and Select Committees
Wednesday, 6 February 2019
Joint Oireachtas Committee on Health
Quarterly Update on Health Issues: Discussion
Quarterly Update on Health Issues: Discussion
I thank the Chairman for having me and my team appear before the Joint Committee on Health this morning. I look forward to having an opportunity to answer questions on a wide range of issues. I have circulated an opening statement but with the agreement of the committee, I would like to comment at the outset on a few issues related to the National Children's Hospital and then the Chairman can decide whether I should read the rest of my opening statement or to take it as read.
I would like to update the committee on four matters relating to the National Children's Hospital this morning. First, I wish to confirm that yesterday evening I took the decision to appoint Mr. Fred Barry as the new chairperson of the National Paediatric Hospital Development Board. Mr. Barry has a wealth of experience in delivering major capital projects, particularly in his role as CEO of the National Roads Authority. It is recognised across the House that the National Roads Authority is one of the State agencies that has done a very good job in bringing in many capital projects. Mr. Barry's record shows him to be a man who went into that agency and really ensured that projects came in on time and on budget. I am very grateful to Mr. Barry for agreeing to take up the role. I think his long track record with the National Roads Authority coupled with his professional experience and qualifications leaves him very well placed to lead this entity and all its legal responsibilities at what is a crucial time for this landmark project for children's health care in our country.
We had a long discussion on the next issue, the PwC investigation into the spiralling costs and its terms of reference at our previous committee meeting and at other engagements the committee has had with officials. I, of course, heard from members of this committee, from members of the Committee of Public Accounts and from others that there was a view that the terms of reference needed to be made robust and more comprehensive. I have listened very carefully to the committee's suggestions on that and I have tried to meet them in the revised version which was also published yesterday evening. This review will now deal with the accountability of relevant key parties, functions and roles. Obviously any sanctions to be applied to any individuals or people in roles will be a matter for Government, be it by way of the contracts we have with such organisations or by issues regarding board appointments and the likes. It is important that it will also examine the role of the Department of Health and the HSE in terms of making sure that we are comprehensive about roles and responsibilities. Crucially, and this is an issue that Deputy Donnelly raised with me last Tuesday and again this week, which is the importance of PwC also looking at cost mitigation and value for money. On the suggestion of Deputy Donnelly and others, I have also included that in the terms of reference for PwC.
My third point relates to the reference in the media this morning to potential cost pressures being highlighted at an earlier stage. Of course, this should not be news to anybody at this committee because by my count the issue of the €61 million of potential cost pressures has been discussed at this committee and at the PAC on at least 11 occasions from a quick tot I did of the transcripts this morning. Far from the figure being concealed, it is explicitly referenced in a briefing note that I provided to this committee in advance of my attendance here last week. This is a very different situation and I need colleagues to be clear on that. There were cost pressures emerging in 2017 but the development board had been told in no uncertain terms that it was important to take measures to mitigate that, that we were not seeking additional Exchequer funding at that stage and that there were a number of things, including some of the suggestions I have heard from members of this committee, including descoping that had to be considered is a very different situation from the one we found ourselves in at the end of August of last year when it became apparent to me that there was going to be a need to apprise Government of its options and indeed to seek a substantial additional amount of Exchequer funding as well.
The fourth and final issue is what was going on between August and December. I am somewhat frustrated at the characterisation I have heard of this. I have heard a characterisation that the Minister knew in August and nothing happened until November. Nothing could be further from the truth and the paper trail and testimony from my officials, from members of the National Paediatric Hospital Development Board, from the HSE and from my own mouth at this committee last week show that not to be the case.
When we talk about August, we are talking about 27 August, effectively the end of August and start of the September where I became aware of the potential significant cost increase. The Secretary General made it clear to this committee that he was on leave until the start of September. We are talking about roughly the start of September when it became clear that there was a significant emerging capital issue. We then had a situation whereby there was a significant level of negotiation ongoing with commercial entities to try to drive down the cost, exactly what one would expect the National Paediatric Hospital Development Board to do as the legal entity that had the contracts and the only legal entity, by the way, that could negotiate. Neither the Department nor I could negotiate. The legal power in respect of the contract and the negotiations rested with and rest today with the National Paediatric Hospital Development Board. The commercial process of negotiation was going on. I need to be clear that this idea that I and I alone knew about the guaranteed maximum price, GMP, process does not stand up to any scrutiny. A Government decision was made when the Fine Gael and Labour parties were in government and I believe it was the right decision that the procurement process should be two phased, that Phase A would be in respect of the excavation works and Phase B would be the substantive works. It was always going to be essential that before one could award a contract for Phase B, there had to be the finalisation of the GMP process. The idea that the knowledge that the GMP process was ongoing was confined to me and my Department is not true. Of course, that is not to suggest people knew the figures of the overrun, because they could not have had such knowledge because they did not crystalise until 9 November but the fact that the process was ongoing in the month of September was not concealed nor was it a secret issue. In the month of October as this work was ongoing, my officials were engaging and seeking to engage with officials in the Department of Public Expenditure and Reform, as one would expect them to do. They would have been engaging and seeking to find out how they would deal with an emerging issue, telling others about the information they had. On 9 November, the final figure that we now all know became apparent; the Taoiseach and I were told about that figure, I believe, on 9 November. I think also it was told to the Minister for Public Expenditure and Reform's officials as well. I think the Minister for Public Expenditure and Reform knew in November and he spoke about that yesterday. In the months of November and December we had intensive engagements about what we should do about the very large overrun and what options were open to us. As I discussed at length, and do not propose to do again today, in the interests of time, there were effectively three options: pause, re-tender or proceed. I do not believe any Minister, sitting in my seat, would have made a different decision, other than to proceed with this project.
What was happening from August to December, was an intensive body of work to present a full and detailed number of options to the Government at its meeting on 18 December to enable the Government to make its decision, which it made, to proceed with this project. I believe it is the right decision. It is the right decision for children and I believe, whoever is Minister for Health in 2023 will be very proud opening that hospital, which will transform the delivery of children's health care in our country. It could be one of the members present.
The Minister for Public Expenditure and Reform commented yesterday on two other matters. He said that it was the appropriate thing for me as the Minister for Health to come to him when I knew the quantity, that one would go to the Minister when one knows the scale of the problem and the potential solutions. He believes that I acted appropriately in that regard. I have no doubt that I did. He also made the point that it would have been helpful to know earlier. He is entirely correct. I said the same thing. We all would have liked to know about the scale of the problem earlier. The programme board, the Secretary General, the HSE and I have all flagged the fact that an early warning system would have helped significantly in terms of people knowing about this earlier.
I just wanted to put on record what actually happened between the months of August and December. That was a period of very intense engagement to arrive at a set of robust options for us to pick the best way to proceed or not to proceed with this vital project.
My opening statement is quite long and it goes into a number of issues. Obviously there are many issues happening in my Department and the HSE in respect of industrial relations matters; our efforts to reach a new and better deal with our GPs; on the progress we have made on issues, such as termination of pregnancy, the introduction of abortion services; the passage of the Public Health (Alcohol) Bill 2018.
We are also working on falling waiting lists for inpatient day cases; significant increased funding in respect of waiting lists, particularly outpatient waiting lists for 2019; our Sláintecare implementation plan; the establishment of the advisory group and the progress being made on that; the fact that I have appointed a new HSE board on an interim and administrative basis while we await the legislation to be passed by the Houses of the Oireachtas; and some of the work we are doing in respect of patient safety and the patient experience survey. I have set out all of that and also some of the progress and work ongoing in the areas for which the Ministers of State, Deputies Catherine Byrne, Jim Daly and Finian McGrath, have responsibility. However, if the Chairman is happy to do so, I am more than happy to take questions on that rather than take time reading it into the record.