Mr. Derek Tierney:

I thank the committee for inviting the Department of Health to join the National Paediatric Hospital Development Board to assist the committee in its examination of the development board's 2020 financial statements. I also thank the committee for extending the invitation to the HSE and I welcome my colleague from the HSE, Mr. McKeith, assistant lead director for the children's hospital programme. The HSE plays a vital role in the national children's hospital, NCH, project and this is reaffirmed by the new roles of lead director and assistant lead director emanating from the recommendations of the 2019 PricewaterhouseCoopers, PwC, report, including new governance and oversight arrangements, as approved by the Government.

Under the ministerial order that established the development board in 2007, the board is charged with keeping all proper and usual accounts and all special accounts as the Minister may from time to time require, and to additionally submit an annual financial statement to the Comptroller and Auditor General for an audit report to be carried out in accordance with the Comptroller and Auditor General (Amendment) Act 1993. The board’s annual financial statements for 2020 were submitted to the Department on 6 December 2021, following the completion of the Comptroller and Auditor General’s audit. They were then laid before the Houses of the Oireachtas on 20 December 2021, pursuant to section 11 of the 1993 Act.

The board receives its capital funding for the project from the HSE, as the sanctioning body for the new children’s hospital programme. As set out in the 2020 financial statements, costs of €161.2 million were incurred by the board in 2020. Costs incurred by the board in the preceding year were €199.6 million. The board’s annual financial statements for 2021 will be submitted to the Minister following the completion of the Comptroller and Auditor General's audit and will be laid before the Houses of the Oireachtas following an internal review by the Department. The development board has advised the Department that future financial statements will include a note that details the additional costs paid to date that are not included in the approved budget of €1.4 billion as well as a note that indicates the overall claims received by the employer's representative and the current stage that they are at in the dispute management processes. This is on foot of recommendations from this committee's report, published on 8 March 2022, following the examination of the 2019 financial statements. The development board has also committed to attaching a monetary value to resolved claims to show any impact they may have on the overall cost and providing a quarterly report to the committee on both open and settled claims. This approach is also welcomed by the Department.

Regarding progress on the project, the new children’s hospital project remains the most significant capital investment programme undertaken in the healthcare system in Ireland. It will play a key role in strategic reform for paediatric services and is fully aligned with Sláintecare. It is already delivering in terms of the two satellite centres that are open and delivering the new model of ambulatory care for children in the greater Dublin area. The project and programme will deliver world-class facilities that will improve and prioritise medical outcomes for the nation's sickest children while bringing about transformational change to the delivery of healthcare for the children of Ireland for generations to come.

The construction project is only one part of three interrelated elements of the NCH programme for the delivery of a new paediatric model of care in Ireland, the others being the ICT and electronic health record infrastructure and the operational integration of the three existing children's hospitals. Despite unprecedented challenges and uncertainty that have not only delayed this project but also affected the wider construction industry, broader sectors and the general economy, it is important to acknowledge the great progress that has been made on the project. My colleagues from the board have provided information and images in this regard. As I noted earlier, the satellite centres, the paediatric outpatient and emergency care centre in Tallaght Hospital and the paediatric outpatient and urgent care centre at Connolly Hospital, are now successfully delivering the new model of ambulatory and urgent care for children and adolescents in the greater Dublin area. In the opening statement I provided to the committee last night I have given some operational and service details which I will not go into now.

In terms of project risks, in its latest programme the construction contractor is now forecasting a substantial completion date of end of January 2024. The development board is therefore focused on ensuring that everything possible is being done to ensure the construction project is completed as soon as possible. However, there remain risks beyond the control of the development board and the contractor to the timeline arising from the disruption to just-in-time supply chains arising from Brexit and the global Covid-19 pandemic over the last two years. More recently, the war in Ukraine has given and will continue to give rise to global economic uncertainty and supply chain disruption along with the effect on shortages of construction raw materials. It is right that the development board might have concerns about the risks to the construction works, especially in respect of the risks I have just mentioned. Furthermore, the wider construction industry is challenged by these same supply chain issues and price increases and the NCH project cannot alone be immune to these external risks. I also set out in my statement some of the mitigating actions taken to date by the development board and the contractor, as well as the impact of current high inflationary pressures on the contract and the impact that has on the budget.

The hardly predictable course of the pandemic, recent geopolitical events and the consequent uncertainty make speculation and precise definitive forecasting of time and costs, hypothetical or otherwise, at this time very challenging, may also prejudice enforcement of the existing live contract and very likely negatively impact or jeopardise the board in its ongoing confidential commercial engagement with the main contractor, including its responsibilities for ensuring timely completion of the construction works. The development board continues to monitor and respond to the risks to cost and timelines and to administer the contract as mandated by the Government. Nevertheless, reflecting on the positives, we now have paediatric outpatient and urgent care being delivered at Connolly Hospital, outpatient and emergency care being delivered at Tallaght Hospital and a site at St. James's Hospital that is visibly progressing towards construction completion. As mentioned by Mr. Gunning, if members of the committee have not yet had an opportunity to visit the site, I would be happy to facilitate a site visit through the development board and Children's Health Ireland, CHI. It is only when one sees the facility in person that one gets a full appreciation of the scale, vision and difference that this new hospital will make for the lives of children, their families and our healthcare professionals in the very near future.