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
The purpose of this meeting is to allow the Minister and his officials and the interim director general of the HSE and her staff to update members on key healthcare issues. On behalf of the committee, I welcome the Minister for Health, Deputy Simon Harris, who is accompanied by the Ministers of State, Deputies Catherine Byrne and Jim Daly. From the Department of Health, I welcome Mr. Jim Breslin, Secretary General. I also welcome the new interim director general of the HSE, Ms Anne O'Connor, who is accompanied by Mr. Liam Woods, Mr. Dean Sullivan and Dr. Peter McKenna.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Any opening statements made to the committee may be published on its website after this meeting.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
Any opening statements that have been made to the committee may be published on its website after the meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
I invite the Minister to make his opening statement.
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.
Ms Anne O'Connor:
I thank the chairman and members of the committee for inviting us. I am joined by my colleagues Mr. Liam Woods, deputy director general and chief operations officer; Mr. Dean Sullivan, deputy director general and chief strategy and planning Officer; and Dr. Peter McKenna, clinical director, national women and infants health programme.
I would like to update the members on a number of issues. On the winter plan, the HSE commenced winter planning for 2018-19 in May 2018. The planning process focused on three main areas: emphasis on providing community based care options to prevent emergency department, ED, attendance and expedite discharge from acute hospitals to either a patient’s home or a community-based care alternative; close integrated working between acute hospitals and community services through local winter action teams with national oversight; and increasing specific measures in nine sites over a peak four-week focus period between 17 December and 30January.
Some €30 million was provided in winter funding - €10 million once-off in quarter 4 of 2018 and €20 million in 2019. The emphasis on community-based services saw two thirds of the available funding directed towards primary and social care services - €10.6 million to home support packages, €4 million to the provision of aids and appliances, €1.5 million to transitional care and more than €4 million allocated to community beds and initiatives.
Due to increasing system pressures towards the end of the focus period, the national oversight group agreed to extend the enhanced measures by an additional two weeks to support unscheduled care at the nine sites. Unscheduled care performance improved significantly in quarter 4 2018 compared to quarter 4 2017 where the 8 a.m. trolley count was 4.2% lower than the same period last year. This was despite ED presentations increasing at a rate higher than expected at 3.3% for the same period.
This trend has continued and increased into January 2019. Analysis of performance for the period 1 January to 27 January 2019 recorded ED attendances at 98,797, an increase of 9.2% on the same period in 2018. ED admissions in this period were 27,319, an increase of 6.3% on the same period in 2018. Despite such increases, the 8 a.m. trolley count for the same period in 2019 was 8,732, representing a 14.8% decrease in trolleys on the same period in 2018.
It should be noted that the flu season in 2018-19, while not yet over, appears to have been shorter and less intense than that in 2017-18. However, the high ED attendances this year have included significant levels of respiratory cases that are non-flu related.
Regarding service improvements and achievements in 2018, during the year there were significant achievements and improvements across the range of health and social care services and I would like to highlight some of these to the committee. Our acute hospital services continue to demonstrate improvements in the inpatient day case waiting list, which reduced to almost 70,000 at the end of 2018 from 86,100 in 2017 or a reduction of 18%. This ambitious target was achieved as a result of the continuous focused efforts in collaboration with the National Treatment Purchase Fund, NTPF, and the Department of Health. Last year saw considerable improvements in a number of other targets as follows: the number of patients waiting over nine months has almost halved since July 2017 from 28,100 to 14,900; the number waiting over nine months for a cataract procedure has fallen by 87% since July 2017; the number waiting nine months for a tonsillectomy has fallen by 84% in the same period, with the number for angiograms falling by 88%. Over the course of last year, 418 spinal surgeries were completed, including 201 spinal fusions, and the number of children waiting longer than four months reduced to 35 at the end of 2018. Cancer key performance indicators, KPI, continued to improve in services such as symptomatic breast, lung and prostate cancer in 2018 with all sites showing sustained improvement over the year.
In 2018, primary care services expanded with the opening of 13 new primary care centres. Within the primary care services, 743,000 people were seen by community nursing services; 1.5 million people were treated by health and social care professionals; and in excess of 1 million contacts were made with GP out-of-hours services in the year.
A significant milestone was achieved when all of our 1,149 disability centres were registered by the Health Information and Quality Authority, HIQA, as of 31 October 2018 under the national standards for residential services for children and adults with disabilities. This has been a substantial achievement for the sector.
More than 53,000 people benefitted from home support in 2018 and 15.7 million hours of support were provided. The percentage of persons over the age of 65 in long-term care has fallen to 3.4% against a target of 4%. This is assisted by the ongoing investment in home support.
In our mental health services, 10,734 children and adolescents were seen by child and adolescent mental health services, CAMHS; 203 children and adolescents were admitted to CAMHS acute inpatient units; and 27,124 adults were seen by mental health services.
However, notwithstanding that progress and achievements, we still have significant pressure on acute and community services with high numbers of people on outpatient waiting lists, a significant increase in the numbers of people attending EDs and increasing unmet demand for home care support. Our service plan for 2019 will focus on bringing about further improvements and increased capacity across the health services, particularly in those areas where we are experiencing ongoing service pressures.
The Sláintecare implementation strategy was published last year. A detailed action plan is in development, led by the executive director of the Sláintecare programme office that will set out a series of work streams and designated actions, with associated measures to be delivered in 2019. The HSE is committed to working with the Sláintecare programme office and all stakeholders to play our part in successfully bridging the gap between the vision for health service transformation in Ireland and delivery of that change at the front line.
In respect of termination of pregnancy services, following last year’s referendum and subsequent legislative change, abortion services are now being provided by the HSE through GPs or family planning services and in maternity units and hospitals across the country. People can now access an abortion in Ireland under specific circumstances. Some 259 GPs have signed the contract and each day more GPs are signing up as the service evolves. Of the 259 GPs, 128 consented to having their details shared by My Options. There is a good geographic spread of GPs taking part, enough to meet the needs of people who may need to access the service. The Well Woman and Irish Family Planning Association, IFPA, clinics are now well established in the provision of services in the greater Dublin area. All maternity hospitals are providing the following services: managing complications arising from termination; providing appropriate care and supervision for women following a diagnosis of fatal foetal abnormality, and referral to the appropriate tertiary unit; and providing appropriate care and supervision in cases where maternal health or life is at risk, and referral to an appropriate tertiary hospital, as appropriate.
Nine maternity hospitals are providing the full range of termination of pregnancy services. The number of sites providing these services will increase during the remainder of 2019. My Options, the HSE’s unplanned pregnancy service, is the first point of contact, providing free and confidential information and non-directive counselling to people experiencing an unplanned pregnancy. The My Options helpline has seen a steady number of calls each day since it went live on 1 January 2019. Since the myoptions.iewebsite information went live on 21 December after the legislation was enacted, there have been more than 80,000 visits and almost 300,000 page views to the website.
I will give an update on the nurses' strike action. Within the HSE, we have put in place a governance structure to oversee preparedness for the series of nurses strikes and for the co-ordination and implementation of system-wide contingency plans. During the recent strike days the ongoing interaction between local management and strike committees proved to be effective. As the strike continues, there is increased risk for patients and clients along with increasing disruption. We estimate that in excess of 40,000 patients and service users are impacted on each strike day. The HSE continues to seek full derogation for cancer surgery and services while the action continues. There is ongoing engagement with community health organisations, CHOs, hospital groups and all front-line services to seek to manage this difficult situation. We are acutely aware of the significant impact of patient appointment cancellations and the cumulative impact on access to services, and we are advising the public to stay tuned to media reports and adverts as well as to contacts from local services to those affected.
In addition to this week's strike days, the Irish Nurses and Midwives Organisation, INMO, has notified further strike dates next week from 12 to 14 February, inclusive, and 19 and 21 February. The overriding objective remains that the dispute be resolved given the number of patients and clients affected. The HSE remains open to be part of any talks to achieve that objective.
That concludes my opening statement and, together with my colleagues, we will endeavour to answer any questions members may wish to ask.
-----and undoubtedly this meeting, which is not specifically related to that, will also address the issue.
The Committee of Public Accounts also had a meeting last week about the children's hospital. Notwithstanding that Deputy Harris is the line Minister and that the Secretary General, Mr. Jim Breslin, is the Accounting Officer for the Department of Health, the committee has asked to meet officials from the Department of Public Expenditure and Reform because that Department had a significant input into what happened in approving the additional €450 million and because the Government contracts committee for construction is under the auspices of the Department. We also now know that a Department of Public Expenditure and Reform official was also a member of the NPHDB. We are still anxious to meet with the Department of Public Expenditure and Reform to discuss this issue, notwithstanding that Deputy Harris is the line Minister-----
Does PricewaterhouseCoopers, PwC, have the expertise to forensically examine the original tender documents and the bills of quantities that were presented? The report PwC will provide at the end of March will not have substance if it does not have that expertise. We need to forensically examine the original bill of quantities and procurement documents to find out exactly what was being asked.
Was there a target cost for the hospital? It would appear that the two-stage process allowed the costs to escalate without having any target cost. Most building projects have a price and the project will be accommodated at that price. It appears, in this instance, there was no cap on price. It was allowed to develop between the contractor, the design team, the quantity surveyors and all the other participants in the project who came up with a cost as the project developed. That is where the problem lies. The Minister might address those questions.
I thank the Chairman and the committee members for having me. I am more than happy, as the line Minister, to be here and I note the comments the Chairman has made and they will also be noted by others.
The contract with BAM has been signed for phase B. The decision to proceed was taken by Government on 18 December and that decision was conveyed by me to the director general of the HSE. I obviously conveyed the disappointment that Government felt about the lack of early warning systems and, therefore, the need for this external review in the letter I sent to the director general.
PwC has expertise in procurement and construction. It is important to say that, even when we were amending the terms of reference in recent days, we took on board the Chairman's concerns and PwC satisfied itself that it could deliver on those terms of reference. I am satisfied that is the case.
I will be very clear that the target cost for the hospital was €983 million. That was the sanction given by Government when it made its decision in April 2017. That was always meant to be the cost of the hospital.
There was a two-stage procurement used. The Chairman did not quite say this, but I presume he is thinking, as we all are, whether that was the right model to use. At the moment the view seems to be that it was. The report commissioned from Mazars by the project development board before we proceeded with phase B suggested that, while there were weaknesses and a lack of early warning, from my memory, the gross maximum price, GMP, process would have highlighted issues at an earlier stage than the traditional procurement model. One would hear about the overrun at the end of the project under a traditional procurement model whereas the two-stage process highlighted the problem earlier and we can now have the conversations about how to mitigate and manage the problems.
What happened when the Government approved €983 million? I have been asking a lot of questions about this, as one can imagine. We can talk about GMP processes and all of this, but, for people watching at home, the way I think of it is we effectively approved phase A, the excavation works, which, by the way, came in on budget. We also acknowledged there was further work to be done under phase B but, based on the outline design, the project would come in at €983 million. We were all badly let down when we went beyond the outline design and design teams, and the likes, did further work and it was clear that the costs were an awful lot higher. Where the responsibility for that lies is something that, even with privilege, I should not prejudice, though I have strong views about it, and I hope and expect PwC to get to the bottom of it. We will then act on that.
The Ministers and Ministers of State are welcome. I wish Ms O'Connor the best of luck in her new job, which is not an easy one. We wish her the very best with it.
I want to focus on the timeline for the children's hospital and who knew what and when. In April 2017, the Cabinet approved €983 million. As the Minister stated, in August 2017, concerns were raised about an additional cost of approximately €60 million. That has been referenced before. I understand that the next time the Minister knew about cost escalations was on 27 August 2018, a year after this initial issue of €60 million was raised.
Today's edition of The Irish Timescontains details of minutes from project management meetings which show that, at project management and board levels, issues of costs were continuously being raised, month after month. In March 2017, there was a recommendation that the concerns on the issue of the GMP were escalated. Eight senior HSE officials and three senior Department of Health officials were present at earlier meetings. In April 2018, the minutes show that further cost issues were discussed. In May, which is particularly relevant, in response to increasing cost concerns, an assistant secretary from the Department of Health advised the board to go before Government prior to the budgetary process. That is critical because, obviously, these kinds of cost overruns are relevant to a budgetary process.
Can the Minister confirm that he was not made aware of any of this? He signed off on the cost of €983 million in April 2017. In August 2017, he was made aware of the €60 million increase and was told nothing else until August 2018 when he was told the cost escalation was in the range of several hundred million euro?
Deputy Donnelly and I will both acknowledge that PwC has a role to play on the questions of who knew what, when and where.
I appreciate the Deputy acknowledging that the figures, including the additional €61 million, have been discussed and shared with this committee during the hearings. I hope he understands and accepts my explanation that this was a different situation from the one in which we found ourselves in August 2018 when it was clear that work would have to be done, and decisions made, by Government.
I want to make a slight tweak to something the Deputy said. While the meeting he referred to took place in August 2017, I was informed in September 2017. That is to be accurate, not to be pedantic. I was told on that occasion by my Secretary General, who may wish to add something about this. That is also referenced in the briefing note given to the committee last week. The NPHDB had been told to put in place a programme of work to mitigate those costs. It was also more specific than that. The board was just told to try and manage the costs. Issues such as philanthropy, risk minimisation, offset through value engineering savings, offset through other design or scope changes where appropriate and the deployment of contingency were all mentioned. I was told, in September 2017, that there was a cost pressure but that it would be managed, the board had been told to manage it, and there was no proposal to go to Government about it. The next-----
That is correct. The next time I was made aware was 27 August, exactly as per the public record. I then became aware of a potentially significant overrun and the committee knows the timeline after that which ultimately crystallised a figure on 9 November.
On 27 August, the Minister was told that the costs were escalating to the tune of several hundred million euro. He did not know it was €450 million but the statements received by the committee over the past few weeks confirm that it was in the range of several hundred million euro. The Minister responded to a parliamentary question on 18 September concerning the original cost of the children's hospital if it was in budget when compared to the original budget. The Minister said that the total budgeted cost was €983 million, which was the 2017 cost. He also said that capital expenditure to date was in line with expected expenditure. We all now know that the Minister knew at that point that it was not in line with expected expenditure. Contracts may not have been signed but the Minister had been made aware that it was above by several hundred million euro. Does the Minister accept that his response to a parliamentary question was misleading?
No, I would not. With the benefit of hindsight and in the interests of absolute honestly, when reflecting on this in recent days, I wish I added a further sentence to acknowledge that there was an ongoing GMP process that would crystallise the final cost for phase B. Again, I do not think the existence of a GMP process was a secret. Members of the Oireachtas would have been well aware of it because it was originally decided on as a strategy in 2014, endorsed by the Government's contracts committee in 2015 and subject to a number of Cabinet decisions and Cabinet memoranda, including memoranda on the children's hospital, before my appointment to Cabinet as Minister for Health. There was an ongoing process. I stand by the importance of answering the question accurately, which I did. The project was on profile. I repeated the figure relating to the original budget as well. With the benefit of hindsight, I wish I had added a line pointing out that there was an ongoing process relating to the GMP. I must also make the point, and the evidence before this committee clearly shows it, that very intensive commercial negotiations were ongoing for about three months during and after that parliamentary question. I did not know the accurate figures until 9 November. Without being too pedantic, I would reject the assertion that I knew of figures of several hundred million euro. I do not believe that was the case. I have learned as Minister for Health - at times, the hard way - about the importance of establishing accurate and factual information before throwing it out into the public domain or putting on the record of the Dáil. Being truthful, a process was ongoing and I wish I had referenced that fact in the beginning.
I will move on to the budget negotiations because they baffle me. Throughout September, the Minister was looking in detail at a cost overrun of several hundred million euro and how that might be addressed. He had major choices to make-----
-----on capital expenditure, on the hospital. The Minister did not know the final figure but he knew the cost had spiralled significantly. The entire fiscal space was just €800 million. The Minister and his officials would have been engaged in detailed negotiations with the Minister for Finance and his officials around the health budget for 2019, including the capital budget. This committee was looking in detail at the current expenditure overrun for last year, which was around €600 million or €700 million, and was spending time trying to identify ways of making sure there was no overrun in 2019. Fianna Fáil was in detailed negotiations with Government on the health budget and was looking for some big ticket items to the tune of many millions. We were also looking for very small ticket items - around €50,000 here or €100,000 there - so very detailed negotiations were taking place. The Dáil signed off on a budget, the HSE service plan was delivered, a capital plan was put together for healthcare for the following year and the whole time the Minister knew there was an additional overrun to the tune of several hundred million euro, which transpired to settle at €450 million. I know Fianna Fáil was not informed of it. It was a very pertinent piece of information in terms of a fiscal space of just €800 million. Can the Minister confirm that at no point during the entire budgetary process did he inform the Taoiseach or the Minister for Finance about this enormous overrun and the enormous amount of additional funding on top of the entire budget that would need to be found?
I need to say a few things about that and I will answer those very specific questions. When we talk about the health budget and the budget negotiations that were ongoing - I do not need to explain this to the Deputy because he was involved in it - the significant effort at the time involved dealing with current expenditure issues and the fact that we were facing and ultimately agreed a supplementary budget on current expenditure for the health service for €645 million. The overriding priority for me in budget 2019, and I accept for the Deputy and the Oireachtas, was stabilising current expenditure and making sure we addressed what was going to be an immediate shortfall in funding to provide services. That was my priority.
The Deputy spoke about the size of the fiscal space and the sum being larger than or a very large proportion of the available fiscal space. That ignores one fact, which is that during budget negotiations, I neither knew nor could have known the outcome of the ongoing process nor the cashflow. I could not possibly have known the impact of this in 2019, 2020 and 2021. This project will go out to 2023 when the hospital will open. Construction finishes in 2022. Until 9 November, it was not possible to know the impact in 2019 and 2020 or indeed any subsequent year. What people need to know, and freedom of information documents have shown this, is that I was actively seeking additional capital for the health service throughout budget negotiations. There is correspondence that journalists who made freedom of information requests have received and put in newspapers about me writing about the need for more capital for the health service. While neither I, the Minister for Public Expenditure and Reform nor anyone else could crystallise, because nobody knew the figures, the outcome of the commercial negotiations or the impact in terms of cashflow in each of the years, I was actively looking for more capital for the health service and indeed received some in the negotiations.
When he was negotiating or engaging with the Minister for Public Expenditure and Reform and telling him that he needed more capital for the health budget for next year, did he tell him why? Did he tell him that part of the reason he was looking for more capital was because there was a pretty good chance that he would have a massive over-spend on the children's hospital and would need more money for that? Did he tell the Minister for Public Expenditure and Reform that?
When the Minister was looking for this additional capital, did he tell any of his Cabinet colleagues that he was looking at a massive overrun on the children's hospital and that this was one of the reasons he needed more capital?
There are two parts to that question. First, as I said in my opening statement, there was an awareness across Government, including in the Department of Public Expenditure and Reform, that the GMP process was ongoing. The fact that there was an ongoing process to finalise the costs for phase B for the national children's hospital was not a secret that I or my Department was retaining. All of Government, and, I would suggest, much of the Oireachtas, would have known that before the contract for phase B of the children's hospital could be awarded, a GMP process was ongoing. Government colleagues knew about that. What was not known, and this is entirely in line with what the Minister for Public Expenditure and Reform said yesterday, was what that quantity was going to be. The fact that this process was ongoing was known by my Department and the Department of Public Expenditure and Reform. I would suggest that it was widely known. I did not negotiate specifically on additional funding for the children's hospital but it was always going to be apparent that at some point the Government was going to have to award a contract for phase B, that this contract could not be awarded pending the completion of the GMP process and that the GMP process was ongoing. That was known about more broadly and not just by me.
The Minister stated that there was broad awareness across Departments, including the Department of Public Expenditure and Reform, that a process was under way. Did the Minister tell the Taoiseach, the Minister for Finance or any of his Cabinet colleagues that this was a major issue with which he was dealing and could have significant implications for the budget-----
Given that the Minister for Public Expenditure and Reform said yesterday that it would have been helpful and the Taoiseach said that he was in disbelief when the Minister for Health told him, with the benefit of hindsight, does the Minister think that the information might have been pertinent to everybody in terms of the budget process?
The Taoiseach was not alone in being in disbelief. I think we are all in disbelief. The Taoiseach and I found out about the figure on the same day - 9 November. We found out about the figure at a meeting we attended in the Department of Health on 9 November, so I can assure the Deputy that the disbelief was shared more widely. I believe the job of a Minister is to obtain factual and accurate information and then brief Government colleagues as appropriate.
I am saying very clearly that the GMP process was ongoing. The outcome of it was not known. There were commercial negotiations, the outcome of which could have made a difference in terms of a very large scale. We did not know and could not have known the impact of this on capital expenditure in 2019, 2020 or any other year pending the outcome. I was very busy negotiating on what I did know we were going to need for 2019 in terms of both current and capital expenditure.
The Minister for Public Expenditure and Reform did say, with the benefit of hindsight, that even had I told him or had I had a direct conversation, he would have told me to do exactly what we did, which was to quantify the figures and come back to him. I am very satisfied that the Minister for Public Expenditure and Reform, Deputy Donohoe, looking at this with the benefit of hindsight in February rather in October of last year, is satisfied that I acted entirely appropriately. So is the Taoiseach. When we did quantify the figures, there was very intensive work to decide what to do. There was a very stark decision to be made, on whether to pause, re-tender or proceed. We made the decision to proceed but it was not an easy one.
I fully appreciate that the Minister says his colleagues accept now that he did the right thing and that, had he had a time machine, everything would be exactly as it is now. I would reflect on those remarks if I were him because I do not believe the view is shared by other people. Those who look in at this are dissatisfied. The hands-off approach that has been referred to by me and others is very evident here. I do not believe this is something that the Minister can simply dismiss, saying everybody believes he has done a fantastic job on this. The scale of the overrun is such that it will cause other projects to be brought into question. Those who are waiting on projects - many of them are small but they are vital – probably would not share what the Minister for Health says is the view of the Taoiseach and Minister for Public Expenditure and Reform.
I have a question on the tender process. Mr. Tom Costello told us when he was here in January, which strangely seems like a very long time ago although it was only a few weeks ago, that the lowest bid came in at €637 million. That would have been €131 million below the next highest bid. Could the Minister outline for me the values of all the bids? We obviously know the values of two of the bids because we can add €637 million and €131 million. What were the figures for the other bids that came in? When the bid of €637 million was chosen - it was €131 million below the next lowest - what was the value of the contract? Could the Minister give us those figures? I have not seen them in the public domain as yet.
I will ask my Secretary General to give the Deputy some of those figures in a moment. First, could I address three of the assertions made by the Deputy? They concern comments she put into my mouth that I did not make. No word such as "fantastic" was used. The Deputy can be sure that I share the concerns of this committee and the people of Ireland on the scale of the overrun. I am not satisfied about it and that is why I am determined to act in relation to personnel changes, governance changes and the like. I will be led by PwC's recommendations in that regard. I reflected on the Deputy's comments and others in making those terms of reference more robust.
The Deputy talked about a hands-off approach. I do not believe she was here for all of my opening statement, which is fine, but I documented very clearly the very hands-on approach we actually took when teasing through these issues, seeking expert reports and ultimately arriving at a very difficult point for any Minister to be in, that is, a point where a decision has to be made on whether to pause, re-tender or proceed. From me, there was only one decision, namely, to proceed.
The Deputy referred to other projects. It is right and proper for her to do so because people are wondering what will happen to their project in their community, be it small-scale or otherwise, and about the difference that will be made to their health service or, indeed, other projects. It is important to say that 25% of our population comprises children. Some 20% of the Department of Health's capital budget will go towards this project. Some 80% will not go towards this project. We are talking about €50 million having to be found out of a capital budget of almost €700 million this year. We are talking about €100 million across Government out of a capital budget of about €7 billion. Of course one would rather not be in this place but there needs to be a degree of context on this. The Deputy does not have to take my word for the impact but she should take that of the Minister for Finance yesterday. At the committee, he talked about no project needing to be cancelled and how this could be managed. I believe he is proposing to bring a memo to the Government on that next week.
On the awarding of tenders, the procurement process and the like, obviously PwC is considering all the steps. I am not suggesting the Deputy is doing otherwise but we should follow the expert views of those who have procurement and construction expertise and who are going to consider this matter.
I ask the Secretary General, the Accounting Officer, to give any information we have on the figures the Deputy is requesting.
Mr. Jim Breslin:
As the Minister said, there is a reason these figures are not in the public domain. They would normally be commercially sensitive but in the circumstances we find ourselves, I am happy to put them into the public domain. They would normally be confidential to the people awarding the contract, the development board. Given the seriousness of the matter, however-----
That is fine but Mr. Jim Breslin realises that questions are asked by people. I will not compare the project to building a house but one would have thought that when one bid came in substantially lower, red flags would have been raised about how to proceed. These are the questions that are being answered now. Clearly, they could not do what was proposed. That is why we are using phrases such as "massive cost overrun".
Mr. Jim Breslin:
Neither the Minister nor I was involved in the awarding of the contract. If the contract is not awarded to somebody who submits the lowest bid under public procurement law and who has met the quality threshold, one can be pretty sure one will end up with one's project in the Four Courts for the foreseeable future as one is challenged by the lowest bidder.
But of course it was not our decision. The Deputy is asking us these questions on who had legal responsibility for awarding the contract and for the procurement process, which is appropriate. It was not the Secretary General or myself. We would be answering very different questions if I were picking what company is to receive a very significant contract.
I am not suggesting the Minister was involved in the awarding of the specific contract; I am just suggesting he was involved in the process that led to its being awarded. I do not believe anyone-----
Yes. We have probably got a while to run on that. We will be interested to see what PwC says. I am used to dealing with big organisations, possibly dysfunctionally big organisations, but the structure for this is a little maze-like.
I am always very conscious of not naming people but the name of the person to whom I now wish to refer is in the public domain anyway, that is, the person from the Office of Government Procurement who was on the board. I have heard comments by some in this regard that I want to clear up. There is absolutely no way the person was present in a personal capacity. Is anybody suggesting that?
They were appointed by the then Minister, Senator Reilly, along with one of the members of the board based on their own professional expertise rather than being nominated by a Department to sit on that board. That is the distinction.
No, no. It was part of their work that they would have been involved in that. I believe the job title is Director of the Office of Government Procurement. In all likelihood, whoever was the Director of the Office of Government Procurement would have been on the board. It was not personal to that individual.
That is right. Of course the head of the Office of Government Procurement will have procurement skills. There is no doubt about that. These appointments were made by Government in 2013 on the recommendation of the Minister for Health at the time. My understanding is that four people were appointed. The Deputy will know the structure of the board.
This person was on the board. I am really loving the phraseology such as the "emerging challenges". If I had emerging challenges like that within my own household budget I would probably end up in the poorhouse. The "emerging challenges" were being discussed. The person who is the head of the Office of Government Procurement, who presumably oversees all of this convoluted procurement process, sees these "emerging challenges" and then goes back to work but says nothing about it. Does the Minister have a view as to whether that is appropriate? The Minister has very senior people on his staff. Let us say they had important information about a catastrophic overspend or whatever words he wants to use. Would he expect his staff to tell him or make it their business to let him know about such a matter? The Minister either has a Department that has a culture where open and transparent conversations are encouraged or he does not. In my view, one should have such a culture and I am interested in hearing the view of the Minister on this matter.
My view, of course, is that I would, but I would in line with the person discharging their functions for the board. My understanding of the much discussed circular in recent days, is that there is a circular in existence that says if one is appointed, and I do not have it in front of me, but the Deputy will know about the circular-----
I am talking about what the expectation would be if the Minister for Health swapped places with the Minister for Public Expenditure and Reform.
Deputy Simon Harris:Please let me finish because I want to get this right. There are two pieces. Yes, of course, if there was someone on my staff or working for me who had concerns about something I would expect him or her to tell me.
I am making the point that we have got to look at what the circular actually says. My understanding is that the circular refers to what should happen if one is not satisfied that one's board is dealing with it through the appropriate structures. I cannot speak for individual members of the board but, clearly, they were satisfied that the board was dealing with these issues. The board's minutes seem to suggest to me that the board was dealing with these issues, and then the board did escalate these issues into the Department of Health in August and, ultimately, they arrived at Government in December. There is a suggestion, and not just on the part of the Deputy, that there may have been a board member sitting on a board saying: "Hmmm, something is going on here and no one is, kind of, doing anything about it." I do not think that is a fair reflection of what the board was doing. It looks to me that this was a board trying to grapple with a problem and then, when it became aware of the seriousness of that, escalating it through the structures. Let us see what the PwC report says in terms of how that actually worked. That is my view of the matter today.
No, sorry, I must be careful. What I am saying is what I am saying. What I am actually saying is that a person in that position should of course go to his or her Minister if the person is not satisfied that a matter is not being dealt with in the appropriate way of the board's structure.
I did reappoint the board. In the letters of reappointment, with which the Deputy will be familiar from her work on the children's health legislation, I advised the members of the board that I was appointing them for continuity. I do not have the letter in front of me but I also advised them in the letter and, indeed, it is in the briefing notes that I have given to the committee, that I would have new powers under the Children's Health Act, if and when it was passed by the Oireachtas, which would give me the right, if I so chose, to replace the board.
I have been very careful in relation to this. I am going to await the outcome of the PwC report in terms of where the weaknesses lie. If I had not reappointed the people there would have been a vacuum. There was legislation about to be passed in the Oireachtas that was going to give me, as Minister, a raft of new powers in relation to replacing that board. I now have those powers and I am actively considering what to do in that regard, and will decide when the PwC report comes back at the end of March.
I have quite a number of questions. This matter has become even more confusing because of the layers of information that has come out. I am very confused about the timelines. What legislation allowed for the setting up of the National Paediatric Hospital Development Board?
Yes. I understand that the board comes under the remit of the Health (Corporate Bodies) Act. Let us drill down into this matter. This idea that somebody from the Department of Public Expenditure and Reform can be a representative on the board, under this legislation under which the board was set up, yet act in a personal capacity and not be subject to circular 12/2010, which was incorporated into the 2016 code of State bodies, is complete and utter garbage. It is rubbish.
Yes, but that the Taoiseach could say yesterday that this individual did not have a responsibility to bring to his relevant Secretary General and-or Minister - and I believe he should have gone to his Minister - any concerns about controls given the legislation under which the board was set up under, and given the circular that is in place is rubbish. I do not think anybody in the Oireachtas fundamentally believes the line that has been spun about personal capacity. I think it is the weakest of all of the weak arguments that have been put out. Let me park that matter.
The Minister was informed on 9 November. Who was the Minister with when he was informed?
So the Taoiseach and the Minister for Health were made aware on the same day and they were together on that day, coincidentally. The Minister for Finance and Public Expenditure and Reform has said that he was made aware as well on 9 November. Is that correct?
I am sorry for reading from my phone but I have just got an answer to a parliamentary question that was taken yesterday that asked the Department of Public Expenditure and Reform when it was told about this matter. It reads: "The first full assessment of the cost overrun and the reasons for it was received by my Department in the form of a report from the National Paediatric Hospital Development Board submitted by the Department of Health on 19 November."
Why has the Minister for Public Expenditure and Reform said that he was told on 9 November? I do not expect the Minister present to answer my question. The Minister for Public Expenditure and Reform must answer my question. How did the Minister present tell him on 9 November?
On 9 November, the Taoiseach was visiting my Department and officials from the Department of Public Expenditure and Reform were there as well. It should not be construed - I know that the Deputy has not suggested this - that this was a meeting about the children's hospital as it was not. On that day that information happened to be available and those present at the meeting would have been aware of it. It is also correct to say, exactly as that parliamentary reply says, the formal process in such an event-----
The Department found out about this matter at the end of August. I accept that it could have been early September given the time of year and all of that. I have no issue with that.
Did the Minister attempt to meet with or inform the Department of Public Expenditure and Reform between the end of August and September and 9 November? If so, when, and what happened?
Mr. Jim Breslin:
In the course of October, when the process was still incomplete, officials in the Department would have contacted the Department of Public Expenditure and Reform to arrange a meeting to go through the emerging situation. There are emails to the Department of Public Expenditure and Reform about that. Those meetings were not held until November. The formal briefing and exchange of documents took place in November.
The Department attempted by email, which I am sure it can publish and make available - I thank the Minister for nodding - to meet with the Department of Public Expenditure and Reform to discuss this. Is it correct that the Department requested formally meetings with the Department of Public Expenditure and Reform?
Attempts were made in October by the Department of Health to say to the Department of Public Expenditure and Reform that an issue was building and that the Departments needed to talk. It did not happen until 9 November.
The Department of Health knew there was a significant overrun of potentially €200 million and an ongoing budgetary process. The Department will release correspondence to us that shows it attempted to sit down with the Department of Public Expenditure and Reform to discuss this issue whereby an official under Circular 12/2010 was obliged to tell his or her own Minister and Secretary General, yet the Department could not get a meeting until 9 November.
Mr. Jim Breslin:
The interaction with the Department of Public Expenditure and Reform was to say that we would like a meeting with it on this. There was then a time lag. The date 9 November is a significant one because the development board had just completed the guaranteed maximum price, GMP, process. It was not complete in October. It might have been completed by the eighth. We had good information by 9 November. We had a written report from the development board by the following week. This issue crystallised in that period.
I accept what the Minister said about the €61 million in 2017 and those issues. I will go through some minutes that would raise other concerns relating to other issues. We know that this is a serious escalation. The Minister told us that he was shocked in late August, and, to be polite, "annoyed". He had budget negotiations going on in parallel. He looked for meetings with the Department of Public Expenditure and Reform, which had somebody on the board. He could not get a meeting. To the public watching, this is "Father Ted" territory. The idea that it would not sit down and that there was not awareness across the two Departments that this was a significant issue and that they could not have a meeting beggars belief. I accept what Mr. Breslin said about 9 November and the meetings. I have gone through all that and understand it. Given that the Department and Minister were aware of it, the idea that it took that long to have a meeting beggars belief and throws up a whole new set of issues.
Let us call a spade a spade. We knew around here that it was around €200 million. We have established that it was at least that on some level. In parallel, the Department was engaged in budget negotiations. Maybe there was concern that one would be conflated with the other. I do not want to suggest that but there may have been an issue. This beggars belief for any member of the public watching this.
I understand what Mr. Breslin said about the €61 million. The minutes of the steering group from 20 October 2017 state that John Pollock said they would have reasonable certainty about the size of the funding deficit by March 2018. They knew there would be a funding deficit of over €61 million. On 23 April 2018, it was said that the GMP approval was significantly at risk. Mr. Dean Sullivan chaired that meeting. On 31 May, it was said that a memorandum would go to Government by October. On 25 June, BAM was asked for a response about the implication of the delay. Throughout April, May and June, GMP was way off and was going to be in trouble. Throughout the process, the Departments of Public Expenditure and Reform and Health would have been aware that the GMP process had not been concluded.
The Department had people on the board and was aware of it. It had brought in layers of oversight. It had a steering group over the board and another board over the steering group. It brought that in because it had concerns and would not have done so otherwise. Concerns were expressed during the GMP process. I have read the minutes of April, May and June. How did those not escalate through the Department to the Minister? I know they came in August. The Department of Public Expenditure and Reform was also aware of the GMP process. The Department of Public Expenditure and Reform has people who monitor all capital budget lines. It has people there specifically to deal with health. Why were they not asking? The GMP was way off. Was there any communication from it to the Department of Health saying that?
I can only answer for myself and my Department. As I said to Deputy Donnelly earlier, the €61 million arose in September 2017. I appreciate that Deputy Kelly accepts that is different and thank him for that. I wrote on 20 September with regard to the information I was given. The Government has been very clear that this project needs to come in within budget, for all the good that did. That was the position that I was holding-----
On the note I was given which I am happy to give to Deputy Kelly, which told me about the €61 million. I wrote on 20 September 2017 that the Government has to be very clear that this project needs to come within budget. That was the position of the Government, of the Department of Health, my Secretary General and senior officials, who fed the information back through the appropriate structures, saying that something needed to be done, that contingency and descoping needed to be looked at where appropriate, and that value engineering and risk management needed to be looked at.
I will get to that. I share the Deputy's frustrations and it is a reason for having an external review.
I refer to the role of the governance structures and why there was not what I am politely calling the early warning system, to which my Secretary General and the HSE have referred. Even board members have reflected on it. The questions of why flags were not raised earlier and who decided they did not need to be raised earlier are questions that those producing the PwC report absolutely need to consider.
As Deputy Kelly knows, the timeline for the GMP process kept getting pushed out. It was taking longer to complete the process. As part of that process, there were commercial negotiations ongoing and, therefore, perhaps a great deal of uncertainty as to where the figures would end up. I do not think the PwC report, which I do not want to pre-empt, is needed to suggest clearly that something was badly lacking in terms of early warning.
I am going to come back to the €200 million because I do not agree with what the Minister said. On a number of occasions now, I have asked Mr. Breslin for the briefing note given to the Minister on 27 August. He said he would give it to us. This is the third time I have asked for it. Can he ask one of his officials now to get it and send it to members of this committee before we conclude today? I am sick of asking for it.
It should have happened. I know I keep saying that. I have already asked for the correspondence. If I have to table a parliamentary question, it will be put off for weeks upon weeks. I have had to fight for information. Through the Chair and with the members' agreement, I ask for the correspondence between the Department of Health and the Department of Public Expenditure and Reform requesting meetings on this issue from the end of August or September until 19 November.
I want to go back to some of the questions I raised earlier in this meeting. Incidentally, I am aware this issue has been dealt with by the Committee of Public Accounts. This is inappropriate because that committee does not have a competence in policy. In fact, it is specifically excluded from dealing with policy. I want to establish that because what is occurring undermines the role and function of the Chairman of this committee. Speculation is outside the remit of the Committee of Public Accounts. It is acting ultra vires. There are consequences if that continues.
The point I want to raise relates to tenders. What is the process for evaluating a tender? Someone might tell me how it works. For instance, what is the capacity of the client to assess the validity of a tender? How can it be grounded? How can we test it? What was the process in this particular case?
Mr. Jim Breslin:
As I said, I was not involved in this instance but the normal course of events is that a request for tenders is issued, stating the required specification and what we want to be delivered. In this case, companies must give an indication that they have the requisite ability to deliver. They put forward their capacity to undertake a job of this scale and get short-listed. In this situation, five companies for the main contract were short-listed. In advance of any tenders being received, the people who are going to award the contract come up with a marking scheme in line with the request for tenders they have issued. That would involve a combination of quality and cost. My understanding in this situation was that the first thing done when the tenders were opened entailed a sealed process pertaining to quality. One had to meet the quality criteria before being evaluated for price. Those companies that met the quality criteria were evaluated on the price they were tendering, and marks were awarded based on that.
To whom did one have to prove one's ability in those circumstances? I would like Mr. Breslin to devote some time to addressing this. How does one assess whether the lowest tender is even feasible? In answering, could Mr. Breslin refer to the detailed specification and the bill quantity. I presume these are all made available to the tenderer at the time in order that the tenderer can present a valid tender.
Mr. Jim Breslin:
I am speaking at second hand on this but my understanding is that the first thing that was done on receipt of the tenders was that a team was put together to assess them or evaluate the quality. That was carried out without the costs being present in what it was evaluating. It evaluated the quality and the technical detail of the tender.
Mr. Jim Breslin:
It is the client. Normally I would not have this information. Normally the process is sealed like a drum and nobody can interact with it. In these circumstances, we obviously have information on it, which I am passing on to the Deputy, but I was not in the process.
To clarify a point in which I believe the Deputy is interested, my understanding of the scoring is that quality and price were assessed and that there was a proportion of 25% for quality and 75% for price. Therefore, the most economically advantageous was awarded.
Therein lies the serious question as to whether it is good practice. In a previous existence, many of my colleagues and I would have been cautious about tenders, particularly the testing of a tender. It is illegal to qualify a tender, or in theory, at least. In the case in question, however, I am concerned that all kinds of figures have been thrashed around over the past few weeks as to where the project came from and went. My summation is that, in the initial stages, the project was not adequately costed from the point of view of the client. If it had been, we would not have that degree of overrun we have now. For that reason, I am asking what competence existed among board members to assess the validity and basis for the tender. For instance, why did somebody not say accepting the lowest tender price could result in the making of the wrong decision, thereby undermining the whole process? Could Mr. Breslin elucidate how we can prevent that kind of thing from happening again? Would the same thing happen again?
Mr. Jim Breslin:
There are two points. There was a clear approach to the competency that would be needed among the professional staff of the development board, who were recruited by the development board, and among those on the board. If there is one body that was specifically set up for the task it was being given, it is this body. It was not an existing body that was asked to take on something different on the basis that since it looked like it was good at doing a certain thing, it might consider doing something different. This was a body that was specifically set up for the purpose of executing the children's hospital. It recruited competent individuals for that task. The PwC review will consider the procurement process very carefully, how it was managed, whether the right process was utilised, how it was utilised, and whether the approach taken was fully in line with best practice. We will by the end of March have independent experts saying how this was handled. That will be important for us all to see.
Could I add to that? There are two points I would make. The first, which echoes the Secretary General's, is important. We have had, and I have appeared before, Oireachtas committees that have predetermined the outcome of expert reports only to be proven to be 100% incorrect. We have had committees talking about cover-ups and the like.
We have expert reports, such as that produced by Dr. Scally, that found that there was none. If we are going down the route of an expert inquiry, which we are, have been collaborative in trying to make sure those terms of reference are robust and have taken on board and addressed the weaknesses in them that were rightly highlighted by members of this committee, we should allow it to do its work. I know the Deputy is a believer in that due process.
This should be a cause of great frustration and concern to all of us because if we look at the competencies and skill sets of the people on the board of the National Paediatric Hospital Development Board and take out the names because this is not about personalities, it does read like a "Who's Who" in terms of who we would want to develop capital projects. Without getting into the names, we are talking about chartered engineers, former managing directors of very large construction companies, a solicitor with 40 years' experience in dealing with public authorities, developers, architects, engineers, surveyors and builders. We are talking about people who have won significant commendation or who are members of the International Court of Arbitration along with chartered engineers, a former president of the Institution of Engineers of Ireland, a founding director of the Environmental Protection Agency, an architect by profession, people who have worked outside the jurisdiction, a fellow of the Royal Institute of Architects, a deputy chairperson of An Bord Pleanála and a procurement expert. Often politicians are accused of tapping random people on the shoulder and saying "congratulations, you're on this board because you're a branch chair" or something stupid like that. I am not saying this to throw bouquets at the Government because I did not make these decisions. This was and is a competency-based board in terms of the skill sets of its members to deliver major projects. That adds to the frustration. The board had such a skill set yet, clearly, the price the Government presumed to be the price of the national children's hospital based on all of the expert and professional advice available to that board - €983 million - turned out to be a far higher cost. I hear people jump up and down about this project and how it will cost €2 billion and more than that. Can we please let the record show that the sanctioned sum for this project is €1.4 billion? We have asked PwC to look at how we can mitigate some of those costs. Included within that €1.4 billion along with money wasted - €40 million on the Mater site that never took off - is an effort to get philanthropy. Something that is not included but must be considered is the future role of the assets we have such as Our Lady's Hospital, Crumlin, when it moves to a new hospital and the value on that in terms of new services being delivered there or funding that could be provided towards the cost of this new hospital.
Given that this is the largest project in the history of the Department, was any attention paid to the magnitude when the tenders were awarded and the testing of the tenders? Was the bill of quantities around at that time? It should have been and I presume it was. I know the bill of quantities was ultimately found to be short of the target. Why was that not spotted at the stage when it should have been spotted? From the cost increases in front of me, which I will not go through again, it appears there was a serious deficiency in the degree to which the tenderer could assess the price and come up with a competitive price and, at the same time, not come up with a shortfall if that information was not precise. Given that three projects are running together - the one in the children's hospital, the one in the urgent care centre in Blanchardstown and the one in Tallaght - to what extent were they all examined at the same time with a view to identifying possible snags because when there are three different projects and three different sites, there is the potential for something to go wrong?
There is. The Government of the day consciously made a decision, which remains the Government's position, that the best way of delivering this project was to bring in that expertise and professionalism rightly referred to by the Deputy that, with no disrespect to my Department, does not exist in-house in the Department such is the scale and magnitude of this. Appointing a competency-based board that I have described as a "Who's Who" in terms of professional qualifications and experience allowed it to bring in professional expertise. The legal power did not reside with me or the Department in terms of the awarding. It resided with the development board.
The Deputy spoke about the bill of quantities. He reminded me of something. The benefit of this two-stage procurement process - the GMP process as it is now known - was that it actually locked in the price per item at 2016 costs. We were badly let down by the quantities being entirely incorrect. Members have heard that in the evidence given to this committee and other committees. The cost of a widget is still at the 2016 level but they need a hell of a lot more widgets. I want to know who messed that up, and it is one of the reasons the Government wants a review. Who got that wrong? When we know who got that wrong, we will take action. PwC will not take the action. That is not what it does. It will identify what happened and then we will act. We will act as a Government whether it is through powers we have under contracts we may have had with professional companies or whether it is through changes in governance structures, boards or personnel. There are lots of reasons for the composition of the €1.4 billion but that is really where a large proportion of it is. The good thing is that prices were locked in at 2016 levels but the really worrying thing was that quantities were so off. The quantities were not decided by me or the Deputy. They were decided by professionals who were paid a handsome fee to get this right and that is what we must get to the bottom of.
I have one other question. Time seems to be very short. I was just beginning to enjoy myself. The main question for the benefit of the State, the client and the committee involves giving some indication as to what we have learned in this process. For example, how do we get professionals who, having read a detailed specification, can come up with a bill of quantities that gives a clear indication of what the costs will be and then we can put the guaranteed maximum price in place? If we do not learn something from it, we could find ourselves back in the same position.
The phrase "who knew what, who said what to whom and when?" comes from the McCarthy investigations in the US a long time ago. What that means is that by asking a series of confusing questions in rapid order, one can implicate the friends and relatives of all the people who are being questioned in a way that proves a point that is extremely vague to say the least and only because it is obvious. The most recent effort in this regard was the investigation into the Garda Commissioner by the Committee of Public Accounts where several allegations were made about serious wrongdoing and knowledge by the Commissioner and the Minister of the day. This is a serious issue. Playing politics is one thing but this is a serious matter that we do not want to be repeated. It transpired that there was no basis for the allegations or supposition and all that was happening was a tourist project on behalf of people who wanted to make a name for themselves at the expense of somebody else. If the Committee of Public Accounts goes down that road once again, there will be repercussions. Could the Minister answer the question about the learning curve?
The Deputy made a fair point. Robust questioning is a really important part of any democracy but so too is due process. I do not believe it is the job, or the only job, of a Minister to find partial information, chuck it out into the media or on the floor of the Dáil and say: "That's grand. Job done. I told you all about the problem." I believe the job of a Minister is to make decisions based on full facts, make sure due diligence is carried out, stress test things and then make difficult decisions. I have often reflected in recent weeks and months that perhaps the easiest way to get through being Minister for Health is to keep the head down and do nothing. If a Minister decides to try to do complex things-----
Perhaps one day, Deputy Boyd Barrett will be in this role and can give it a go. If a Minister decides to do complex things, risk and challenge come with that but it is worth it because otherwise we will not build the national children's hospital. There is a reason the children's hospital was first mentioned in these Houses in the 1960s. My mother was born in the 1960s. How long does this have to go on for? We are building this hospital. We are going to get to the question but we are going to get to it in a logical way, which brings me to the next point about what we learn. The learnings from this will be far bigger than just my Department.
Thankfully, we are back in an era of growth, in capital terms, and of doing big projects. That is good and that is why I am excited about the appointment I have made of Mr. Fred Barry to the new chair of the National Paediatric Hospital Development Board. As CEO of the National Roads Authority, Mr. Barry showed an ability to demand that projects got delivered on time and on budget. He will bring a forensic eye to the issue and he has my full support.
We also need to be careful that we do not presume, yet again, that these increases were avoidable and that if everybody had not made loads of big mistakes, the figure would have been €983 million. Even without the PwC report, we know there was user engagement and that, after the Government decision of April 2017, there was further engagement with staff and patients. Staff and patients made other changes that were appropriate, though I do not suggest it represented a big amount. I believe it was some €20 million. There was a High Court ruling on fire safety standards and, while there were safety precautions in the existing hospital, the High Court stated that we had to do more and this cost several millions more. We need to differentiate between the costs that were unavoidable and those that could have been avoided if people had done their job. It is not within my competence to do this and that is why we have brought in PwC. We should not jump to category 2 and presume everything sits in that bucket. If we did that, we could cancel the external review and issue findings now.
I could make her feel the love, or not, as the case may be. Does the Minister think that he and the health sector are unravelling? He is reminding me of a knitted jumper from the sleeve of which the wool is coming away. There is the overspend, the nurses' strike and cervical smears and GPs are outside today. Does he see that he is unravelling before our eyes?
I thank the Deputy. I have not knitted since primary school but I get the reality of what the Deputy is saying. It is a political charge but it is, as is always the case with the Deputy, one that is made very politely. I do not see that. I am very proud of the record I have so far in the Department of Health. Like many before me, I have made mistakes and I would rather have done some things in a different way. However, on my watch we have worked together to repeal the eighth amendment, we have introduced the Public Health (Alcohol) Bill 2018 and we are building a national children's hospital that others have shirked, or tried to build on sites on which they could not even get planning permission, wasting €40 million in the process. We are increasing the number of nurses, with 3,300 more nurses working in the health service in the past five years. We have challenges in health, but that has always been the case no matter who the Minister was, whether it was the Deputy's party leader, a former leader of her party, my own party leader or anybody else. All of us have one thing in common, which is that we all face challenges.
Deputy Murphy O'Mahony referenced CervicalCheck but I do not think the Chair would appreciate it if I opened up a big debate on that, though I look forward to the debate on the matter in the Dáil this evening. I take comfort in my work from the comments of people who have been impacted by the CervicalCheck audit, who know the work I have done and have articulated their view of the way I have, quite publicly, worked with them. They are the people whose views on my political record I care about rather than those of political opponents.
The recent period has been very challenging and many issues have come together at the same time. We will work our way through them. We will resolve the nurses' strike because all disputes get resolved. It does not fall just to me to do that as there is a central government pay policy issue, but disputes are resolved by engaging, and that needs to happen urgently. On GPs, the Irish Medical Organisation, IMO, circular to members referred to the significant progress we were making in moving beyond the financial emergency measures in the public interest, FEMPI, and reversing the cuts that were imposed by the Deputy's party and mine during the economically different years. I will work as hard as I can to work through the issues, though we will not solve them all.
My understanding is that, at a committee meeting yesterday, the Minister for Public Expenditure and Reform said he plans to bring a memo to Government next week about how we are going to deal with this capital pressure in 2019. He said there was a way to deal with the issues and he was, I believe, more optimistic than he was originally interpreted as being about it.
My understanding is that Departments will probably be given revised ceilings. There may be a new figure for what the Department of Health is getting and the question will be what the impact will be. There is a context to all of this. The capital budget of the Department of Health and the HSE is almost €700 million. We have to find €50 million during the course of 2019, and while we would rather not have to find it but have an extra €50 million instead, it is €50 million out of €700 million. The entire capital budget for the State is approximately €7 billion, with the increase alone being €1.1 billion. The entire Government has to find €100 million, and while I do not want to be flippant about it, it has to be seen in that context. It is a question of paying a bill a month or two late, or staggering the starting times of projects, but there will not be a widespread cancellation of projects.
Neither do I. People need to have certainty about whether a particular project is happening. Once I get the final figures from the Minister for Public Expenditure and Reform, which I presume will be next week, we will move quickly on it in the following weeks.
The last time the Minister was here I brought up the case of Ann, who has now gone public so I can mention her. She was retested with a cervical smear because her first test was inconclusive. The Minister asked me to write to him and he wrote back with a generic letter that stated it was important that she be rechecked. She did this in November but she is still waiting for the results. She is a symbol of many women throughout the country. Her test was inconclusive and this is a worry for her as people need to know. Are there any plans in place to extend the long-term illness list?
I might ask Dr. Peter McKenna if he wants to add anything from a clinical perspective to what I say. I answered questions on CervicalCheck in the Dáil yesterday and we have a debate with questions and answers on the issue today. I remember the Deputy's letter and the case of Ann, which she raised here. There are no two ways about it. We have a very significant backlog in our CervicalCheck programme, with an average waiting time of some 22 weeks. I do not suggest that is appropriate, desirable or acceptable, but I want Ann, and everybody else who is affected, to know that everything possible is being done to drive the waiting time down, including the HSE working to find additional capacity. This is very challenging as there is a global shortage in cytology, but the HSE is working on a capacity plan, which I expect to receive shortly. I think the Deputy knows that this is not a resourcing issue. If we could write a cheque to solve this problem, we would write it in the morning.
There are two reasons for the backlog. When the CervicalCheck controversy broke, many people, including some in this room, asked if people could have a repeat smear test and whether they would have to pay for it. People said it was not fair that a woman could get that assurance if she could afford it but that, if she could not, she would have to wait three years. At a time of great uncertainty, it was not easy to provide clarity on our screening programme and we needed to wait for Dr. Scally's report for that. Contrary to the cheap political charges that have been made against me, I took the decision, in conjunction with my officials and the Chief Medical Officer, to offer the free repeat smear test and I negotiated the fee to be paid to GPs with the IMO. This has meant many women went for tests, and while many got reassurance, it has contributed to the backlog.
The second reason is something we saw in the UK, which became known as the Jade Goody effect. After Jade Goody's high-profile illness, many women opted into the screening service, and while I am not sure of the figures, this could account for up to one third of the backlog. This estimate has not been validated so I cannot stand over it.
Up to a third of the backlog could be new women signing up to the screening programme who had not participated but I am awaiting figures on that. They are the reasons behind the backlog. The people, who are working night and day, are very familiar to this committee. People, like Mr. Damien McCallion, in the HSE are doing everything they possibly can on this and I am very confident about that.
I have been told cervical cancer is something that can develop over a period of ten to 15 years and that the clinical risk is low but Dr. McKenna is much more qualified to speak about clinical risk than I am.
Dr. Peter McKenna:
I can confirm that it is a disease that develops usually over a ten to 15 year period and that is why engaging with a programme and having several smears rather than relying on a single smear is very important. The programme dealt with an expansion of more than 100,000 smears, which is against the backdrop of the programme doing approximately 250,000 every year. That is a very substantial increase in number. The other thing to bear in mind is that it is very difficult now to get screeners internationally because as screeners see that the programmes internationally will be moving to human papillomavirus vaccine, HPV, it is not considered to be a career that has, necessarily, a long-term future. Therefore, the number of screeners internationally is decreasing and currently this is not regarded to be a particularly friendly environment for companies to work in.
One of the American laboratories, which has been coming in for criticism, has proven to be very helpful and the HSE has funded the development of the Coombe laboratory which will in the future be able to provide a much larger capacity to read smears in a publicly-funded laboratory, which as a medium-term to long-term goal, will be very helpful.
Dr. Peter McKenna:
It has been said that women have lost confidence in the programme but generally speaking when people lose confidence in a programme, for example, a programme for a vaccination, they stop coming in. Exactly the opposite has happened here. While there is undoubtedly is much concern, it is overstating it to say that women have lost confidence. They are appearing. They understand the message and that currently this is the only way we have of detecting cervical cancer. I do not subscribe to the notion that people have totally lost confidence in this. Of course, it could be improved.
On the long-term illness card, it is not my intention to expand it in its current scope, but what I am looking at is the extension of entitlement for all health services beyond medical cards, GP visit cards and LTI cards to the universal entitlement under Sláintecare. A big body of work needs to be done on universal entitlement to health services under Sláintecare. The Sláintecare team will be beginning that work this year.
Ms Anne O'Connor:
This is with the HSE leadership team so it is coming back in. It has been discussed in detail. Some more questions are being asked and it is due to be considered again at our next leadership team meeting.
My next question is for my colleague, the Minister of State, Deputy Finian McGrath. As he is aware, the waiting lists for the assessment of needs and after that for the therapies are particularly high in Cork and Kerry. Why is Cork way higher than the national average and what is the Minister of State going to do about it?
I am very conscious of that which is one of the reasons we prioritised assessment of need along with a number of measures being taken in this year's negotiations on the HSE service plan. We accept the argument that waiting lists in Cork and Kerry are particularly high. There seems to be high number of young children with disabilities coming into the services. That is something we have put a strong focus on.
I am doing a number of things to deal with the issue and there are a number of initiatives are under way. The first is that we are trying to reorganise the disability services in geographical teams under the progressing disabilities services programme. We are trying to clear a pathway for children, irrespective of their disability, so they can get services.
Another initiative is the new standard operating procedure for assessment of need, the purpose of which is to ensure that children and their families access appropriate assessment and intervention as early as possible. Another initiative, which is very important, is that we are doing much in-school early years speech and language therapy. We are doing occupational therapy demonstration projects in different areas also. This is something we have rolled out already and it is made up of 75 preschools, 60 primary schools and 15 post-primary schools indifferent areas.
We have taken the points raised by the Deputy very seriously that we need to improve the number of speech and language therapists in the system and we are recruiting more speech and language therapists in the services. We got a budget for 100 therapists and we will try to drive that higher as we go along. I take the point that there are issues but the assessment of need is very important and I will focus on that. We need to understand that the additional therapy posts will make a dent in this as well. There were industrial relations issues behind the scenes but these have been resolved and I am confident that we can roll-out the services for these young families.
This is a priority for me in 2019 because when took office three years ago, we had the school leavers' issue, the respite issue and other issues within the disability services but listening to colleagues, like Deputy Murphy O'Mahony, we have to do something about the assessment of needs. That has started and I will drive that forward in 2019.
I thank all the witnesses for coming in this morning. I would like to go back to the hospital contract issue and to the Department. In planning for this project, I presume the Department would have looked at other projects internationally where new hospitals had been built. The Royal Manchester Children's Hospital, for instance, which has 371 beds, cost £504 million in 2004, which translates to approximately €680 million. A project in Ontario is costing Canadian $2.4 billion dollars, which is equivalent to €1.68 billion. The interesting thing about the Ontario project is that it has received approximately Canadian $1.3 billion dollars in donations from the public for building that hospital.
Our project was always going to be a huge one, with 6,151 rooms in the hospital. My understanding is that at any one time there will be approximately 140 outpatient clinics running. The building itself will be approximately the length of Grafton Street. When one then considers projects that went radically wrong in the past, for instance, the Dublin Port tunnel, where the project went from €250 million to €900 million, the Department must have been aware, in terms of dealing with any issue, that precise detail would have had to have been worked out at a very early stage. Were all those risks identified at an early stage?
When exactly were the various stages of contracts signed? For instance, the Department states that the tender came in at €637 million and we ended up in April at €983 million. Can we get an outline of the additional items which were added to the €637 million figure? I presume these are mechanical and electrical items. Do we have the exact figures on those so that we can make up the margin from €637 million to €983 million?
When exactly were the contracts for those various additional items signed? Were they all signed in December 2018 or at an earlier stage? Why did it take so long to work out the finite detail, which is about where everything would be located in each room? Planning permission was granted in April 2016. When the tenders were invited, a bill of quantities was prepared and sent out to all of those who were tendering for the project. I presume it was known at that stage that certain items were not included in that. When did the process of working out the finite detail start? If the second highest tender had been selected, would the other additional mechanical and electrical items still have worked out at the same price or would there have been a difference? There is a need for clarity on the move from €637 million to €983 million and on how everything progressed after that.
I will ask the Secretary General to come in on a few of the issues raised by the Senator but will make a few comments first. I listened to the former Taoiseach, Mr. Bertie Ahern, talking about this on the radio last weekend. He spoke about the huge volume of work that he and his Ministers did in his time, in terms of the discussion about the need for a children's hospital, what other countries have done, what sites were available and so on. I was struck by the fact that so many Ministers of Health, Governments and taoisigh have been involved in this project. This is something that was probably scrutinised, considered and debated more than any other capital project and bizarrely, it has still yet to be delivered.
Senator Colm Burke referenced some projects that ran over budget but were delivered. I heard some members of the commentariat refer in recent days to other public projects like Thornton Hall on which €50 million of taxpayers' money was spent, the Mater Hospital site on which €40 million was spent, as well as e-voting machines, PPARS and so on and try to compare them to this project. Obviously, that is such a ridiculous analogy because the difference with all of them is that none of them happened. This children's hospital is going to open. Indeed, the Connolly part of it will open this summer. The X-ray machine was delivered this week and it is going to start serving kids this year.
Senator Colm Burke is right to raise the issue of the comparative costs with other countries and the international comparisons. AECOM completed an external report on this and estimated that the cost of this project is approximately €6,500 per sq. m. Regarding international comparisons, it estimated that the cost of building the equivalent paediatric hospital in London would be €9,000 per sq. m. The report also referred to the spectrum of the costs being somewhere between €6,000 and €8,000 per sq. m. If one was to measure the project just by bed numbers, one could get a great headline figure about the world's most expensive hospital. However, paediatric healthcare is about a hell of lot more than just putting a child in a bed and in that context, this project is not the world's most expensive hospital or anything like it. We will move from having 14 theatres today serving children in Ireland - and we all know the impact of only having 14 theatres in terms of waiting times - to 22 theatres. There will be outdoor space so that kids can exercise and get fresh air. I heard something on radio recently which went unchallenged. I heard somebody on radio ask why we need so much outdoor space in the new hospital, given that there are lots of parks in Dublin to which the kids could go. That sort of ignorant comment is incredible and the person who said it should get in his or her car and visit Crumlin or Temple Street hospitals and look the children there in the eye and repeat it. Some of the children have spent most of their lives in hospital while others have been there for months on end. They cannot go to the local park because they are ill.
Serious questions must be answered regarding this project and we need to get to the bottom of serious issues but gathering in a radio studio to wax lyrical about Thornton Hall and open spaces shows a lack of basic understanding of the matter. I will now ask the Secretary General to comment on some of the figures and comparisons referred to by the Senator.
Mr. Jim Breslin:
On the question about other hospitals, both the development board and the children's hospital group did extensive research on other paediatric hospitals. The design team recruited by the development board includes international expertise that delivered hospital facilities internationally. They visited those sites and also reviewed, in detail, the design they adopted, the adjacencies in terms of which departments fit best together and the facilities that have been put in.
Mr. Jim Breslin:
I will come to that. That process of research informed the design brief, against which the hospital will be built. The Senator asked when the contracts were signed. The briefing note given to last week's meeting references the main contracts signing dates. The contract with the main contractor and the two specialist contractors was signed on 3 August 2017. As we said earlier, the instruction of the phase B works took place on 8 January 2019.
The Senator asked why it took so long to finalise the detail. It took so long because it is a very technical process to get to a final design. The option that existed was not to go to the market but to wait for all of that work to be done, which could have taken two years. We would then be pricing things at a higher level, when we could have gone with our outline design. That is what the technical exercise of getting down to the very nitty-gritty detail of every room and every piece of plant takes. The choice was to do an outline design, to go the market and get pricing against that and then to remeasure it, based on the detailed design or else to hold off for two years and go in one go. That will obviously be examined now but that was a strategic choice made by the development board. The board decided that it was better to get into the market and get the prices locked down at 2016 levels.
The Senator asked a question about the second bidder. It is important to say that if the second bidder for the main contract had been selected, which was not the lowest bidder, we would still have had the process for selecting the mechanical and electrical elements. We would have had to look at those competitions as well. The lowest bidders were accepted for all three elements. The main contract was awarded to BAM and the mechanical and electrical contracts were awarded separately. Then they were brought together as part of the whole construction programme.
Mr. Jim Breslin:
A table was shared with the Committee of Public Accounts last Thursday which I am happy to also share with this committee. In terms of the figure increasing from €637 million to €983 million, that includes the outpatient and urgent care centres, equipping, planning and design team fees, contingency and elements of VAT. We can work that up from the €637 million to €983 million for the Senator.
The final question was about what would have happened if the contract was awarded to the second bidder. The second bidder would have gone through the same process of final design and remeasuring of the bill of quantities. It would have been entitled to look for an uplift for the increase in quantities. It is not that in awarding the contract to the second bidder, whose bid was approximately €130 million above the lowest bidder, we were likely to get the product for that price. Once we started to adjust the final design and add in extra quantities, the second bidder would have been entitled to increase the price which it had tendered on a lower level of quantity.
I thank Mr. Breslin for his reply. How will the cost overruns on this project will affect other projects? Project Ireland 2040 contains plans for an elective hospital in Cork, for example. The population in Cork city and county has increased by 130,000 over the past 30 years but no new beds have been opened in any of the area's hospitals over that period. It is my understanding that a committee was to be established to help to identify a site for a new hospital. That committee has still not met and I am concerned that this project is now on the back foot. I ask for a commitment from the Minister that the committee will be set up within the next four weeks and will meet at an early date thereafter. It has not even started identifying a site. This is an important project. It is an elective-only hospital. The other issue that arises is whether there have been discussions with the two voluntary hospitals that provide a crucial service to the city and county of Cork as well as to the wider Munster region.
I am concerned that while there is a focus on the Dublin area now in relation to hospitals - the focus on a new maternity hospital in Dublin, the children's hospital and the work going on in Dún Laoghaire - we have not even had a meeting of the committee to help identify a site, let alone go through the planning process. I wonder if we can get a commitment on that issue at this stage.
Senator Colm Burke talks about the overturn. I need to refer to it as a projected overrun because we have just asked PwC to come back to how we can rein in the costs. I want members and, most importantly, taxpayers, to know that trying to rein the costs is now what needs to happen. That is why I have asked Mr. Fred Barry, with his expertise, to take up a role. It is also why I have amended the terms of reference and asked PwC to look at how we can mitigate costs. It is also why I stated at this committee, for the first time publicly, that issues such as what future role Crumlin hospital can play in terms of resources for this project must be considered and examined. I suppose the benefit of the GMP two-stage process is that the overrun becomes apparent before it happens, whereas generally in procurement, we hear about it afterwards and all bemoan the fact. We know about this now. There is no overrun today. There is a projected overrun. What are we going to do? It is an important point that we try to grapple with together.
I understand, and know well, Senator Colm Burke's interest in health in general and in the elective-only hospitals in particular, as well as the fact that the Cork region lacks an adequate number of beds per head of population. I am sure the Senator will not mind me making the point that when we talk about the national children's hospital, it is not a project for Dublin.
There are many sick children from Cork today in Crumlin and Temple Street hospitals. It is a project for the country that has to be located somewhere and happens to be located in Dublin.
As for the elective-only hospitals, a significant body of work is being done in my Department on deciding what these will do and deciding the policy framework. I visited Scotland not that long ago to look at its elective-only hospitals and its model. I am hoping that we will complete that policy piece of work in 2019. I will give a commitment to Senator Colm Burke to meet him and Oireachtas Members from Cork within four weeks to discuss the next steps in the preparatory work that could be taken in Cork. I am happy to give the commitment through this committee that I will arrange in the next month for this to happen.
I dealt with the issue of capital in general when the Senator was out of the room but I am happy to repeat it. There needs to be a context to this. I understand people are worried and want to know what is the impact of this and what will not happen as a result of this. The Government has been very clear. Everything we have committed to will happen. That is the first point. Projects will not be cancelled. A total of 80%% of the health capital budget is spent on projects that are not the national children's hospital. At present, 25% of our population are children and 20% of our capital budget is being spent on a hospital for children while 80% is being spend on projects that have nothing to do with the national children's hospital. The budget for the Department of Health from a capital point of view has increased by 165% for the next ten years. In real terms, that means the capital budget for the next ten years is almost €11 billion, compared with €4 billion for the past ten years. I would much rather not be in this situation. The Senator should not get me wrong in that regard but at least we are trying to deal with this situation in a time of rising, rather than static or shrinking capital budgets. The Minister for Public Expenditure and Reform, Deputy Donohoe, will bring proposals on capital re-profiling for 2019 to Cabinet shortly, as he outlined yesterday, and we will make any adjustments we are required to make then. I certainly do not see the adjustments in health capital projects in 2019 being in any way significant. It is manageable in 2019.
Can we get on with the job we need to do in Cork? That even involves starting off by identifying a site. It is about setting the structure in order that everyone, from the hospital to the university and the two local authorities, Cork city and Cork county, is involved and we can get on with identifying where this hospital should go and move on from there, rather than what happened in Dublin, where it went on for ten or 15 years before the site was identified and then it turned out that An Bord Pleanála held that the size of project could not go ahead on the Mater site. I do not want that to happen in Cork, namely, that there was a further delay of seven years arising from what occurred. I want this committee set up in order that it can identify the most appropriate place for this elective hospital and that we can get on with the other work thereafter. We do not even have a site identified and we do not even have a committee meeting.
Initially, I wish to speak about the operation of termination of pregnancy. We will take a break from the children's hospital for the minute. I have a few issues in this regard.
As the Minister will be aware, recently there were breaches of patients' privacy and knowledge of terminations happening in hospitals. In terms of the alleged breaches of patient privacy, what action has the Minister taken? The reason I am concerned about this, other than for obvious reasons, is it was flagged by both committees, namely, the Joint Committee on the Eighth Amendment of the Constitution and the subsequent Select Committee on Health on which we dealt with legislation, that some people perceive this to be a separate issue and therefore, confidentiality does not seem to apply to it. This is extremely concerning. The whole point was that we would be able to care for women in a compassionate way in their own country. If people are concerned when they go for a termination of pregnancy, or seek to have one, that their details might be in the public domain, that inevitably will lead to back-street abortions or to women still travelling. Consequently, it defeats the purpose of what we spent two years doing. The Minister might refer to that. We spent a lot of time last year talking about data protection and having systems in place and how even we Deputies had to sort out our houses in terms of data protection. Here, we have, at a basic level, what is to my mind a very serious breach.
What actions can be taken against rogue agencies that have contacted this particular lady? I also am being told that GPs are being contacted randomly by people purporting to have ultrasound machines they can use to date pregnancies. There appears to be a bit of skulduggery going on in the background, all of which is adding up to a difficult and dangerous situation for women. The Minister might comment on that point.
As far as I am aware, the Rotunda has pulled back from 12 weeks to 11 weeks in terms of providing the parameters. We spoke on Committee Stage about somebody being on the cusp of the 12 weeks and how we would manage that. Here we are with a self-imposed 11-week end-period by the Rotunda. Is the Rotunda in breach of the legislation or is it acceptable?
I thank Deputy O'Connell for raising these important matters. I will take them sequentially.
Like the Deputy, I am extremely disturbed that there is an attempt by some, despite a referendum and the legislation, still to think it is in some way acceptable to treat termination of pregnancy services differently from other legally authorised services in the Irish health service. We will not stand for it and I thank the director general of the HSE for the swift action she has taken after I engaged with the HSE.
There are two separate, but interlinked, matters that at the same fundamental level have that disgusting attitude to women's healthcare. The first is the idea that there would be fake My Options websites. We set up a 24-7 helpline and an informative website that gives a woman information, in a non-directional way, on all of her options, including abortion. The director general outlined in her opening statement the success of that website and telephone line, in terms of women now being able to have a conversation with a health-qualified professional, rather than having a conversation with Google or an airline. That has worked fairly well.
The idea that people would endeavour to fake being that website is fairly despicable. First, I echo the advice of the HSE that any information from the HSE displays its logo and myoptions.ieis the best way to access the site, rather than hoping Google searches will come across it. We cannot promote the myoptions.ieweb address enough in terms of women knowing that is where one goes for reputable information.
The HSE, at my request, has now looked into that matter and has initiated legal proceedings in the form of cease and desist. Those legal proceedings relating to the owner of the so-called "fake" website were initiated on Saturday, 2 February. The director general may wish to add to that. I thank her and the HSE for showing leadership and swift action on this.
The second issue is the issue of potential data breaches.
We have seen two examples. We saw one where an allegation emerged on social media that at a certain time a termination was taking place in a certain hospital, and we saw another - we can talk about it because it is in the public domain - where a woman who accessed a termination through the National Maternity Hospital found herself being contacted in the most despicable way by people opposed to the provision of this service pretending to be others. Hospital group CEOs are investigating that to establish in the first instance if the data breach happened. I assure members, as I know the HSE will, that we will not tolerate such data breaches. Whether a person is getting a hip replacement, accessing termination, having a cataract operation or to talking to his or her doctor, that person is entitled to privacy in relation to his or her medical information. That is not a privacy that is partial or complete, dependent on a person's view as to the service.
On the Rotunda Hospital, the law is the law, and the law is clear. Twelve weeks is the outer limit, the cut-off point legally, for accessing termination without specific indication in our country. Beyond that, as Deputy O'Connell knows better than most, the grounds relate to one's health, life and fatal foetal abnormalities. However, 12 weeks is the cut-off, not 11 weeks. The Chief Medical Officer has helpfully written to the Rotunda Hospital clarifying that. The law is the law. The operation of the law is a matter for clinicians and not for me, and that is right, but through the Chief Medical Officer we have written to the Rotunda to provide clarity on the matter.
The final issue I wish to mention is one that regularly comes up at the committee. It is about making sure that we address not just the parts of the all-party committee report that relate to abortion but also the ancillary recommendations. The committee has been pushing for access to free contraception for women, which is a recommendation of the all-party committee. I want to let the committee know that I will be setting up a working group in my Department, including all the various divisions, the Chief Medical Officer, primary care and eligibility, and some external experts in women's health. We will have that set up in the next few weeks to look at how we move towards expanding eligibility to free contraception for women. It is easy enough to do for men. We just increase the number of condoms, which we are doing this year. To increase eligibility to free access for women is likely to require legislative change and different types of contraception, but we will have the working group established with external expertise in women’s health in the next few weeks.
In terms of the data breach, I am aware as a medical professional that it is always easier to deal with somebody who is regulated, such as a doctor, pharmacist or nurse, but if it is the man who does the bins who logged into the computer, that is a far more difficult thing to deal with. To correct the Minister, in terms of ancillary recommendations, it was free contraception for everyone, not just women. I am very much in favour of vasectomies being provided in future if men want them. Obviously, it would not be mandatory.
Thank you. That is very generous. We will be here for the day probably. As Mr. Breslin and the Minister know, I sit on both the Joint Committee on Health and the Committee of Public Accounts. A few issues arose that I hope we will get through today. Something came up on Thursday. I want this hospital. I want it to continue. I do not want it to be paused or stopped. I am fully aware of the political pressures and medical politics that have led to the delay of this hospital that was first mooted in 1962. Sometimes I feel as if I am banging my head off a wall in here. I am very concerned about the future of the project. I spoke late last Thursday evening in this same room at the Committee of Public Accounts about the liquidity of BAM. What I am concerned about is the situation with subcontractors that are being given jobs by BAM, such as M&E, which keeps being mentioned as one subcontractor. Does BAM have enough headroom if one of the subcontractors goes bust? If M&E goes bust and is not liquid and the job has been given at whatever price, what happens then? I was not happy with the answer I got last Thursday evening in that, for me, this is about not having a hospital half way out of the ground.
We spoke on 16 January about specification with regard to the hospital and we heard about the famous 5 km of cables and we did not know how many lengths of 5 km. Last night I thought about what would not have changed from point A to B. The windows would not have changed. We saw a model of the hospital with the glass on the outside. Could anybody get me the price that was quoted on the specification for the hospital for the glass on the first day and the glass on the second day? We saw a model. I questioned Professor Hardiman as to whether it was full of cotton wool inside the model because it was clear that nobody worked out whether there were 6,000 rooms. We know the size of the building and the amount of glazing on the outside. I would like to compare that figure just to see who is making the money here.
Mr. Breslin might come back to me after lunch on a figure on a sheet the Committee of Public Accounts was given last week. If I remember correctly, there was a €66 million saving in the 2017 costs. I am sorry as other members of this committee might not have this document in front of them. Unless I am reading it wrong, this €66 million saving was not transferred to the 2018 costs. I am missing €66 million on that balance sheet. Could somebody look at that on the next break and get back to me on it? I am not happy that there is minus €66 million on one side and it does not reflect on the other side.
I have asked for this information already. I would like to know in terms of the people involved in this project, who was working on a fixed contract and who was working on a percentage. Who was going to gain financially in terms of more money being spent? Was an architect working off 1%? Were quantity surveyors working off 3%? Obviously, if there was more work to be done, they deserve more money but I want to know how many of those getting taxpayers' money have an elastic fee system.
Perhaps Mr. Woods would like to speak at some point to his position, unless I have the wrong Mr. Woods. He is national director of acute operations in the HSE. He was on the 12 person board beside Mr. Quinn from the Department of Public Expenditure and Reform. At any point did he consider that if he was spending all his money on a children's hospital, given his role as national director of acute operations, he would not be able to do his job. I refer to Deputy Kelly's circular 12/10. It is fairly clear to me from that circular what his role was.
Mr. Jim Breslin:
I think it is on the record that the full €66 million on value engineering was not achieved and that €20 million was achieved. It is just that, the way the figures were presented on Thursday, that was included in the total figure for 2018 costs, but there was a shortfall of €46 million in value engineering that occurred in the finalisation of the value engineering.
Mr. Jim Breslin:
In moving to instruct phase B, there was a process of engagement with the contractors to say they had specified this, but if we used that, it would save money for everybody. The value engineering was targeted to save €66 million through rejigging, but in fact it only saved €20 million.
Deputy O'Connell had other questions. We will need to come back to her on windows. This is where PwC will earn its money.
I understand. I am well used to quantity surveying balance sheets and figures. I do not need it explained, but I do know that the hospital is the same size as it was with the same number of windows in it today as there was back in the day.
I was referring to Mr. Woods's position on the board, the famous 12 person board that Mr. Woods and Mr. Quinn from the Department of Public Expenditure and Reform have sat on and for some reason did not seem to mention that the costs were going sky high.
Mr. Liam Woods:
With regard to my position on the board, the information relating to trends in potential cost projection and any other matters relating to the project were incrementally known within the HSE as I was aware of them. There is no contention other than that.
Mr. Liam Woods:
No. There already has been a reference to some documentation that is reporting on concern relating to cost escalation for the proposed price of the project. That information was known to me as a board member of the building board, but it was also known within the HSE.
Mr. Liam Woods:
I joined the board in 2015, so in terms of the discussion we have been having at the committee, the reference to the figure of €61 million would have been known, which was known back in 2017 and that has been dialogued about here and previously. On the subsequent cost escalation in terms of projected cost of the project, I think the board meeting in September had a report to it on that matter.
Chairman, may I ask a final question of Mr. Breslin? On 16 January 2019, this committee asked about this new governance structure that emerged in May 2017. The gist of what I said then was that the Department never puts in a new governance structure unless something is going wrong. I am still worried about that date in May 2017 as to why that new governance structure was put in place. From memory - I think I used these words - I asked what sparked the creation of that board. I think that is where we will find our answers to this.
Mr. Jim Breslin:
The reason for the new governance structure at the time was the movement of the project forward into delivery stage and the various strands that were going to have to be successfully managed in arriving at a point where staff, patients, technology and building were all aligned and operational and the project was complete. To give the Deputy an example, during the course of 2017, the Department of Health and the Minister brought the Children's Health Ireland legislation through this committee. That was passed in November 2018. By 1 January 2019 we had to have Children's Health Ireland established with a bank account and with the staff transferring from the three constituent hospitals on to the payroll of Children's Health Ireland. That is just one example of how various strands, and tasks being executed by one element within the overall programme, have to be co-ordinated. We were going to have to do that all the way to go live, that was the issue. We did not want to find ourselves in 2023 with a building complete but with the technology, the electronic health record, not complete or with the staff not having transferred. There was a co-ordination mechanism to put in place to make sure all of the milestones by each of the entities involved was to be executed. That does not take from the responsibility of the individual entities for the execution of the responsibilities they have statutorily been given but it is a co-ordination task that needs to sit above that.
I thank Mr. Breslin. I will now call our non-members. There are four non-members of this committee present. I will ask each of them to be disciplined and limit himself or herself to five minutes. I ask each to concentrate on his or her questions so that the Minister or the Secretary General can give the answer. I call the first non-member of the committee, Deputy Boyd Barrett.
The Minister put out a comforting narrative at the outset about the general situation in the health service but to my mind it would clash fairly strongly with the perceptions that people have about what is happening in the health service in general at present. Would people not be correct to be pretty sceptical? The GPs are protesting outside because we have a crisis in general practice. We have a national nurses strike over pay, recruitment and retention. We have a national ambulance strike which we do not seem interested in resolving. We have a desperate trolley crisis and hundreds of thousands of people on hospital waiting lists. We have a Child and Adolescent Mental Health Service, CAMHS, which is 50% understaffed and a major crisis in community mental health. We have a CervicalCheck scandal, a €600 million overrun in the health budget and the cherry on top, from a Fine Gael Government that prides itself on prudence and fiscal rectitude, we have a cost escalation for this project going from €400 million when Fine Gael came into power to €1.4 billion for the hospital itself, and €1.7 billion in total. At an elementary level, is it not a shambles, that this has happened collectively for the years of Fine Gael Government from the time of the then Minister, James Reilly through Deputy Leo Varadkar to the present Minister? That is not improvement. We are actually reaching the worst point of a crisis in the health service at just about every level. Is that not a reasonable comment, given what is going on? Is that not a reasonable perception that the public would have at present?
No. The public does not agree with Deputy Boyd Barrett if one actually asks people who use the health service, rather than Deputy Boyd Barrett who thinks that everything my party touches is a crisis because he has a funny political ideology that I do not agree with but to which he is entitled to believe. If one asks patients who spent a night in a hospital last year or the year before how they found their treatment by the health service, how they found their experience from the moment they went into the emergency department, how they went to the ward and how they were discharged back home and how they got into the community and whether they had a good or very good experience, some 84% of people said good or very good. They are the people who actually used the health service. People are not as negative as-----
-----the Deputy about the health service. That is my first point. The second point, which never gets discussed here bizarrely, is that people measure the health service through a very limited prism. I accept there are access challenges in respect of getting into the health service. That is a valid and fair criticism but if one looks at survival rates for cancer, for strokes, for heart attacks, life expectancy being above the EU average and the fact that a baby girl born in a hospital across the road today has a very good chance of living to be 100, how is it that anything my Department or the Government funds that goes well in the health service has nothing to do with the Government and the Department and anything that goes bad has everything to do with it? These are conscious decisions that we as a Government and indeed previous Governments, made. For example, the current leader of Fianna Fáil introduced the smoking ban. There are things that have been done in our health service that have significantly improved the outcomes of our people. I find it somewhat hard to square the circle where one of the things that Deputy Boyd Barrett criticised me for is the overrun in the health service last year, an overrun that has happen nearly every year, and then listed out a number of other things that had I done that would have actually tripled the overrun. The Deputy wants me to sort out the nurses strike at a cost of €300 million a year and to rectify the GP budget and then he is being critical that we cannot live with budget. So the Deputy has to square that one.
On some of the industrial relations issues, there are ways of resolving these things but they have to be resolved within the confines of the public service stability agreement because that is the agreement we have with all unions through ICTU. We have not had a chance to discuss these today but perhaps we will at some point because there is still an industrial relations dispute with 40,000 nurses and midwives, which is very serious and is having a serious impact on patient safety, that we need to resolve. If people want to try to resolve the disputes through the parameters of the Irish Congress of Trade Unions and the public service stability agreement, we are ready and wanting to engage intensively.
Okay, having waited two and a half hours and now getting five minutes, I will ask a couple of direct questions.
Does the Minister believe it is appropriate to use PwC, to which he has essentially batted off the incredible escalation under Fine Gael management on the national paediatric hospital project from €400 million to €1.4 billion? Now he is batting off the answers to all of these questions, as well as essential responsibility to PwC, when it has been the auditor of BAM, the contractor at the centre of this issue, for nine years. PwC has received €30 million in fees from BAM. It also works for the HSE. Can we honestly put faith in it to do this task and not fear a serious conflict of interest? This is particularly relevant, given that ordinary people believe they have been had. A company comes in with a bid which turns out to be a gross underestimation of the actual cost of the hospital. The ones who are going to look into how it happened are the same people who audited the company, BAM International, or whatever it is called, for nine years. Moreover, it seems no one was made aware at the time - Ministers included - that there was a gap of €130 million between the BAM bid and the next bid. Were the Ministers made so aware? No one said the gap was a little odd. If it was €10 million or €15 million, it might be credible, but there was a gap of €130 million between the lowest bidder and the next bidder and no one thought it a little odd. That is extraordinary, especially when BAM had a record of cases in which the company had significantly overrun, both in this country and internationally. As that has been well flagged in the press, I do not have time to go into it, but no one raised the need to look into it.
Did anyone do the basic things? For example, in talking about windows, did anyone ask what cost BAM had included for them? What costs did it include for wires, bricks and all of the different components? How did these costs compare to those included in the next bid and the one above it? Was there a significant gap between them? If so, did no one ask whether it was a little odd? I realise the Minister is not supposed to be over every single detail, but the then Minister responsible – it was probably the Taoiseach, Deputy Leo Varadkar, at the time – should have been aware at least of the difference and the dichotomy between the bids. He should have called for them to be checked and sought a forensic analysis.
First, no one is batting anything away. By my estimation, I am into approximately six and a half hours of questioning about the national children's hospital. I did three and a half hours last week and we are now into approximately three hours this week. We will be here for as long as committee members want.
As I said, we are six and a half hours in and no one is batting anything away. We will be here all day and will answer every question. We will stay for as long as members want to discuss the matter.
There is a view which is not confined to my party or the Government, of which I am a member. It is shared across the Oireachtas. It is that getting in some external expertise, such is the scale of the overrun, makes sense. Members of this and other committees suggested they would like to have an input into the terms of reference. They had suggestions to make, on which we also acted. I have no doubt about the competency, ability and impartiality of PwC to do a professional job and we will publish the report.
We will publish the report. For the record, the HSE appointed the company and commissioned the report. It would have followed due process in respect of there being a conflict of interest, the procurement process and the like.
Deputy Boyd Barrett asked a series of questions about procurement. I am not suggesting they are not valid, but there would be serious concerns if they were questions to which I knew the answers. Of course, the procurement process was gone through in the awarding of the contract and tender. If the process was gone through by me or any other politician or Minister, we would be back to the dark old days of Ministers awarding contracts or endeavouring to do so. There is a review in place that will look at all of these issues and a report will issue. We are not asking people to wait forever and a day. PwC will report next month and we will act on the report. That is when responsibility and accountability will come back to me to make the decisions on the various recommendations made and what needs to be done next.
I have a one line question for Mr. Woods about something he said. If I heard him correctly, he said the board knew about the escalation from €61 million and had received a figure at a meeting in September. Is he saying the figure of €450 million was known at a meeting in September but that it did not get to the Minister until November? If it is true, it is shocking. I am pretty sure that is what I heard Mr. Woods say.
Mr. Liam Woods:
I did not say that. The board was being briefed in its ongoing meetings on the issue of pricing and the gross maximum price. That was part of the normal board process related to information that became available. The question I was asked was when a report had been made available to the board. To be honest, I would have to go back and look, but my recollection is that there was a report in September about concerns. Clearly, it developed, as indicated in prior discussions here, up to the date of 9 November.
I welcome the Minister and Mr. Breslin. I will be sharp in the questions I intend to put because we are confined to five minutes.
My first question is for the Minister. He will know that at the Committee of Public Accounts last week there was some discussion about capital projects that might or might not be under consideration. There was some confusion, it has to be said, about the second catheterisation laboratory in Waterford. I know that the Minister communicated by email with Oireachtas Members and provided clarification. However, given that this is the first chance he has had to clarify the matter in public, I am seeking an assurance that there will be no delay of any description in giving approval for this project. Is that the case? Has the design team been appointed to commence the work? It is my understanding that it will take up to 15 months to complete. The clock only starts to tick when the design team is appointed. Has that been done? Is the project absolutely guaranteed? Can the Minister give a commitment that it will not be affected by the overspend on the children's hospital project?
I am happy to give that commitment which I gave to the Deputy in writing, but I am happy to give it at this committee. I have been dealing in a bi-partisan manner with all Oireachtas Members from Waterford, as the Deputy is aware. He has also been operating in that way. This project will proceed. It is very important and we have had numerous discussions on it. It affects not only Waterford but also the south east. It will proceed and not be delayed as a result. I cannot be more clear. I do not know the answer to the question on the design team. Perhaps Mr. Woods might answer it. If he cannot do so, we will come back to the Deputy on the matter.
The HSE is almost at the point of appointing the team, but we are getting there. Is that correct?
I will move on to the overspend. I have several questions to seek clarification. Mr. Breslin said figures had been presented to the Committee of Public Accounts that were somewhat helpful, but there is still some confusion about the matter. Perhaps either the Minister or Mr. Breslin might help me. We are told that the original quote or tender from BAM was for €637 million. That was the original tender.
Mr. Jim Breslin:
Yes. In the briefing notes supplied to this committee and the Committee of Public Accounts in advance of the appearance last week the figure is broken down as follows: BAM, €432 million; mechanical costs for Jones Engineering Group, €107 million; and electrical costs for Mercury Engineering-----
I have that information. At the Committee of Public Accounts I asked about the figure of €630 million. The overall tender was from the three contractors. The figure for BAM was €432 million, but the estimated cost is now €556 million, or an overspend of €120 million.
That means that there was haggling for some time, as seems to be evident from the minutes of the meetings of the steering group of the paediatric board and the Department. There was haggling over the guaranteed maximum price which took a great deal of time. The minutes of the meeting in April suggest there were difficulties with the guaranteed maximum price, yet it took until November to sign off on it.
That suited the developer, BAM, because the longer it went on, the more it was going to cost. The cost eventually went from €432 million to €556 million. Why did it take from April until November for the issue to be resolved?
Mr. Jim Breslin:
Because all of the detailed work was being priced. The development board originally had in the contract 2 November as the close-out date for the guaranteed maximum price process. It agreed with the three contractors - BAM, Mercury Engineering and Jones Engineering - that it would be extended by three months, until December, in order to complete the process.
We will have a report from PwC that I assume will look into this matter in more detail. The minutes of the meeting of the steering group on 23 April 2018 stated a number of things. When I asked Mr. Breslin at a meeting of the Committee of Public Accounts when he had first become aware of any serious overrun, he said it was in November and that the Minister had been informed at the same time.
Mr. Jim Breslin:
No, I definitely did not say November. I am on the record as to when I became aware of the figure of €61 million. It was in the autumn of 2017. With regard to the subsequent guaranteed maximum price process and the additional costs coming out of it, I am on the record as saying that when I came back from leave in the first week of September, I read the briefings on it.
Was that the guaranteed maximum price? From my reading of the minutes of the meetings of the steering group, from November 2017 up to April 2018, there were issues with the accommodation unit. There were concerns about the philanthropic funding and car parking. These issues were arising, on the one hand, and, on the other, there was the issue of the guaranteed maximum price.
Let me finish. In the minutes of the meeting of the steering group in April it is stated approval of the guaranteed maximum price by the end of June was significantly at risk. They also state the Exchequer capital budget was already under significant pressure. The expectation was that Ronald McDonald House would pay for the accommodation unit. Why was none of this reported at that point to the Department? I have a request that I will make through the Committee of Public Accounts, but it might be helpful to make it on behalf of this committee also. We have all of the minutes of the meetings of the steering group. They seem to paint a picture that there was some discussion on the over-expenditure on a range of issues as far back as November which certainly crystallised in April. How was the information from the steering group communicated to the board? It would be helpful if we obtain the minutes of board meetings. Perhaps they might give us a clearer picture.
Mr. Jim Breslin:
There is a risk that it all bundles into one thing. There is a clear demarcation, set out in the briefing note supplied to the committee, on fire certification, programme alignment, the design team and the urgent care centre costs which add up to €61 million, as well as the reference the Deputy has made to the GMP process and the fact that it was not being completed as quickly as originally scheduled.
There are two points on which I want to touch. I want to go back to the issue of timing because there are so many dates and issues that people are becoming confused. I know that I certainly am. Therefore, I want to make sure we are all on the same page. Mr. Woods said he first became aware of the overrun in September 2018. Is that correct?
Mr. Liam Woods:
As a board member, I was aware at the meeting in September that there was an issue in the conclusion of the guaranteed maximum price process. As I recall, it was at that stage that a request was made of the companies engaged for an extended period in which to resolve or consider it further.
That totally contradicts what we were told at the meeting of the Committee of Public Accounts last Thursday. We were told that the board had first become aware of the overrun in June 2018. Is Mr. Woods saying that is not correct?
Mr. Liam Woods:
Let me stay with the 2018 issues which are what I believe the Deputy is talking about. I can recall clearly a report in September. Clearly, that is included in the records of the board and can be made available. There would have been earlier discussions and advice, perhaps even a report; I would have to look back at the records to be sure, but I am not saying there was not. Substantively, with regard to the concerns to which the Deputy is referring, related to the €450 million piece on which he has just concluded, September was certainly a time that it would have been known to a board member. The extended period was requested to do further work on it.
Mr. Jim Breslin:
We do. I am just making the point that, given all of the time put in at meetings of committees, we need to have a very serious schedule of questions that will form part of what PwC is doing, whereby it can go off and verify against records in real time and report accurately. Of course, the Deputy is entitled to ask the questions he is asking and get the answers to them, but there are others that are also worth asking.
That is fair enough, but I cannot ask the chairman of the development board because he has resigned. I believe he was the person who said at the meeting of the Committee of Public Accounts-----
And the project director. We will get him back before the Committee of Public Accounts also. It was in June 2018 that those concerned first became aware of the issue. The actual wording was that we were on budget up to that point. Leaving aside the 2017 figure, we were told that we were on budget up until then. There had been no indication that there was an issue, but we are now hearing that it was known in April that potential issues were arising. This totally contradicts what we were told at the meeting of the Committee of Public Accounts. We were told that we had been on budget until June 2018, but now we are being told that it was September when the board became aware of the issue in a report. There may or may not have been a report before then; Mr. Woods cannot recall. The witnesses need to get real. This is absolutely ridiculous. We are paying somebody €450,000 to find out this information and the delegates cannot remember what happened six months ago.
I have one more question. The Chairman can note that I have not got answers to the questions I have asked. On the original tenders, is Mr. Breslin aware of the EU procurement guidelines on abnormally low tenders?
Under EU procurement law, there are guidelines on how abnormally low tenders should be dealt with by the contracting authority. The guidelines state abnormally low tenders can be questioned. Was there any questioning of the tender price, given that it was €131 million below the next lowest price?
I have a question for Mr. Woods. Was there any questioning of the bid from BAM? I ask that given how low it was and the EU procurement guidelines in place. Did anyone question that? I refer in particular to Mr. Quinn, who is the Government head of procurement. Did he not point out that the EU guidelines state that the bid could be questioned?
It was 75% for having the lowest price and 25% for the quality. Does Mr. Woods know what that average is normally? It is 40%. Anything above 40% has to be questioned. We are referring to a weighting of 75% for this project. Serious questions have to be asked here.
My next question is for Mr. Breslin. As the Accounting Officer in the Department of Health, would it be normal in respect of tendering for any health projects that the weighting would be 75% based on just the cost coming in?
Mr. Jim Breslin:
That is not abnormal. There are distinct projects where what we are getting is not measurable and the weighting might not be as high. In a situation where a bidder is stating it will supply this number at this price, then that is something that can be more accurately priced and to which a weighting can be applied.
I thank the Chairman for his leniency and I will finish on this question. I would argue that the weighting is usually around 40% and anything above that has to attract questioning. The EU procurement guidelines are very clear. They grant the ability to question low tenders. If that had been done, it might not have ended up in the Four Courts. I refer to the power to question. I will give Mr. Breslin the guidelines. I know he is not an expert in this area but we had individuals appointed by the Minister of Health who were experts to sit on the development board for this very reason. They did not do their job. They completely washed their hands of it.
I refer to the record of the company we are dealing with for coming in with low tenders that have ended up costing this State tens of millions of euro. Mr. Breslin should look at those projects and the history. I am not going to put the details on the record here but look at the history. I refer to the Cork events centre, the Tralee bypass project and various road projects-----
I have some direct questions. My first questions are for Mr. Sullivan. What is his reporting relationship, as chair of the steering group, to the Secretary General? When was he notified of any trigger in the escalations? I want to know when he was first notified.
Mr. Dean Sullivan:
My reporting relationship is that I am chair of the steering group and that steering group reports to a board chaired by Mr. Breslin. My steering group typically meets every month or so and the board typically meets every other month. As the Secretary General stated earlier this morning, it is important to distinguish between the €61 million overrun which was well known between September and October 2017 and June 2018 and the escalation in GMP.
Mr. Dean Sullivan:
I will tell Deputy Chambers what the reference was. In April 2018, Mr. John Pollock from the development board advised that approval of GMP by the end of June was at risk. That was not in respect of the quantum at the time but in regard to the complications of closing the process out. He also stated at that meeting, in response to the then chair of the steering group, that it was too early to estimate the scale of the financial risk.
Mr. Dean Sullivan:
I would need to go back to the records. I was not on the steering group at the time, so I will have to go back and check the records. As I said, however, there are regular board meetings as well. Departmental colleagues sit on the steering group and on the board, so it would have been known by the Department at the time.
It was known by the Department. My next questions are for the Secretary General. What was his awareness of the scale or the risk? What exactly was he told in that spring-summer period in advance of winter 2018?
Mr. Jim Breslin:
As I have said, I had a formal briefing on the issue when I returned in September 2018. I later had a meeting of the board of the Children's Hospital Programme Project in mid-September. I got a verbal update from the project director at that meeting and that allowed us to interrogate what the issues were. At the previous board meeting, I think it was in June, we would certainly have been informed of the delay in the GMP process. We would also have been informed that it might have had to be extended and that difficulty was being experienced with the contractors on the GMP process. Quite an aggressive stance was being taken, particularly with collaboration on value engineering where there was an attempt to make savings.
I refer to the minutes of the board. I submitted a freedom of information request a couple of years ago. There are references in the minutes of the board to discussions on the inflation taking place. It was agreed that the implications of this could not be underestimated and that confirmation that this would be covered would be required so there was a clear trend in the board minutes of the Children's Hospital Group concerning the trend and a consistent reference to and concerns about that cost. For anyone to say there were concerns around cost, even around the tendering or post-tendering stages, does not really follow through because there is a clear trend throughout this. If we go back through the minutes, we can see that the Department of Health and the HSE were being notified about the scale of the potential inflation risks and the scale of the risks around the capital costs.
Mr. Jim Breslin:
We have the benefit of the earlier meetings that have been held on this subject. The development board is on record as saying that as it initiates the GMP process, in terms of the work packages, one does not just try to cost everything but rather one tries to cost elements of it. The first work packages that are coming back are on trend. They are on expectations and on budget. As it moved through the GMP process into the summer of 2018, and I have tried to stress this point on a number of occasions with regard to mechanical and electrical because that is where many of the large increases take place, and those work packages arrive back, the quantity surveying design team supporting the development board is saying that these are now coming in ahead of budget so it was late in the process. At the core of what PwC must ask is why it was late and why there were no early warnings.
I have two final questions. Could the Ernst and Young, EY, report on the business case for the tendering process be published? EY prepared a report and presented the business case. I think we need to assess what that was and what work was conducted by EY.
I am asking two questions and Mr. Breslin can answer them both. There is an odd reference in the November 2016 board minutes that the board was advised that invoices for the public information advertorials had been queried by the HSE but the board paid on re-submission. The minutes stated that the advertorials had been placed following the ministerial briefing request for the board to be more proactive in communications. The Minister needs to clarify why he was seeking increased communications in his own engagements with the board. In those board meetings, Mr. Woods said that he would assist in resolving the matter-----
That is actually in the minutes. We need clarity. What was that about? Why were communications involved? What did Mr. Woods say he would square off around resolving the matter afterwards when he was questioned by the HSE?
I accept I was Minister for Health and would have started engaging with the Children's Hospital Group. I will have to check and revert to the Deputy. I have no recollection of that but I will check. I recall that there was a discussion and debates in the Oireachtas about the merits and importance of the project and getting out information about the clinical benefits but I do not understand the specific reference in the minutes so I will revert to the Deputy directly on the matter.
This meeting concerns the quarterly update so, obviously, I would like to spend a lot of time on the issue of the nurses' strike. I know that we will have an opportunity to discuss the matter on Thursday morning so I will save my contribution for that. As the Minister is aware, the GPs are outside Leinster House today. Again, there is a significant issue around primary care delivery and the new contract. Could the Minister give me a brief update on those issues along with a brief update on the Sláintecare implementation group?
I will focus on the issue that seems to be dominating today's proceedings, namely, the national children's hospital. I watched proceedings on the monitor in my office and Mr. Breslin spoke about a serious underestimation of quantities and that prices had been obtained for individual items. I have two questions relating to that. Why was there a serious under-estimation of quantities and who made that error? Were there complete omissions of quantities? If this was a private client engaging a design team and the team came in with a seriously under-estimated bill of quantities, that client would take very serious action against the team that was responsible for the under-estimation right up to, I would imagine, suing the team. Why did such an under-estimation occur? Were there complete omissions? What action can we take against those who made those errors?
I take as noted Deputy Brassil's comments on the nurses' dispute. We will have an opportunity to debate that in the morning but I hope that between now and then, there will be a continued effort to get this back into some formal engagement because that is the only place where it will be resolved. The floor of the Dáil is a perfectly appropriate place to discuss it but it is not going to be resolved there. It needs to be back in our industrial relations mechanisms. That is where we need to get to.
I would be happy to provide Deputy Brassil and the committee with a note about the GPs. The most up-to-date and accurate position is the one issued by the IMO to its members this week, a copy of which I can also send to Deputy Brassil. Significant progress has been made between the IMO, my Department and the HSE to try to move to a point where we move beyond FEMPI. Obviously, there are things we need in return from GPs for significant additional investment. We have a lot of money that we want to spend in general practice. We have been talking about this for a very long time. The fact that the IMO is reporting progress this week to its own members is significant in itself. I know the IMO and I want to bottom it out this month. I will send Deputy Brassil and perhaps the committee a note about where we are at. I will try to do that today.
Regarding the implementation of Sláintecare, we are at the point where I am about to publish the action plan for 2019. I will give the committee a slight preview of what are likely to be the priority areas this year. Geo-alignment is one area. One of the key recommendations of Sláintecare was that we cannot continue to have the siloed structures so we cannot have hospital groups and CHOs, separate budgets and separate management structures. Deputy Brassil understands this. How do we get there? What does the map of Ireland look like effectively? Geo-alignment will be significant this year. Elective-only hospitals constitute another issue. What do they do, what range of services do they provide, and ultimately, where do they go? The third key element I would highlight is the integration fund. We have a ring-fenced integration fund this year. There are a couple of really good pilot projects such as the Sligo primary eye review and the musculoskeletal physiotherapy service. Could we use that integration fund to roll out what we know are successful projects locally to a broader region or indeed to the country this year? The action plan will be published in the next few weeks.
Regarding the children's hospital and the quantities, I am giving a general answer to the specific question asked by Deputy Brassil but I did make the point earlier about not pre-empting the PwC report. What is apparent in advance of it is that the prices per unit had been locked in at 2016 levels. What was clearly completely off the Richter scale were the quantities that would be provided. While there are a number of elements involved in how we got from €983 million to €1.4 billion, a very sizeable element was the fact that when the National Paediatric Hospital Development Board went beyond outline design stage to the detailed design, somebody got the quantities seriously wrong. That is one of the things for which we are paying a significant price today. I expect PwC to be able to get to the bottom of that. Professional companies and people with expertise were used. Through its agencies, the State would have had contracts with these people in terms of the provision of services and we must consider what action can be taken in light of the PwC report.
Mr. Jim Breslin:
In the engagements we have had and in the briefing note we provided last week, we highlighted the two issues raised by Deputy Brassil. The price put on the increase in quantities is €115 million, of which €27 million is the statutory element - the fire works and so on.
Therefore that could perhaps be taken off. One can see the scale of the increase in quantities that has taken place there and in the omissions from it; it is €20 million. Those two things combined are really sizeable in explaining what is happening. They probably underestimate it because they knock on into the programme and the preliminaries, and how long it will take to execute the project. Further increases result from the overall increase in scale. I agree with the Deputy that a very serious question remains to be asked as to how the order of magnitude of increase could have taken place albeit from a preliminary design to a final design. How could it have been out by so much? When we asked the question of the National Paediatric Hospital Development Board in the context of finalising it, it was of the view that the design team and others were not at fault. However, in December the Government made a decision to request an independent review by PwC of this process to see where any of those omissions or increases could have been avoided and whose responsibility it might have been to do so and if they carried out those responsibilities.
Mr. Jim Breslin:
Sorry for interrupting. That is not obvious to me because there is a separate figure of €20 million for user engagement where the scope changes because users identify issues. It looks like the change-control procedure on quantities and omissions does not involve an authority based on the user engagement to instruct an increase the quantities. It looks like - this is me being pre-emptive of the PwC report - it is going on at a lower level than that. I am very interested to try to establish that.
I specifically raised the €90 million for the nine months increased cost for the construction programme including preliminaries. How much of that €90 million relates to preliminaries? What percentage of the overall contract price did the preliminaries represent? It is normally between 10% and 15%. It might be as high as 20% for a very complex structure. Mr. Breslin might not have the figure right now. What was the percentage of the original tender price for preliminaries? What is the mark-up now for the nine months? The contractor might claim things have changed and are now more complicated, and look for a mark-up for the preliminaries for the extra nine months. How does the percentage of that mark-up compare with the other mark-ups on the contract price?
Yesterday the Minister announced Fred Barry, the former CEO of the NRA, as the new chair. At least Mr. Barry is conversant with and has knowledge of overspending on contracts because he was the CEO of the NRA when two projects in Kerry, the bypasses of Tralee and Castleisland, overran by €55 million. The records will show who the contractor was on that occasion. There is a striking similarity with the contractor for the national children's hospital.
As a non-member of this committee I appreciate the opportunity to ask a question. I wish to take a break from the children's hospital to talk about CervicalCheck. Does the Minister accept that the decision to offer out-of-cycle smear tests which commenced on 1 May 2018 was his responsibility?
The Chairman might give some latitude on this because it is quite important.
The repeat smear test was one of the top queries coming in. GPs were also ringing the helpline asking if they could give women sitting in front of them a repeat free smear test. I discussed the issue with my officials, including senior officials well known to this committee and the Chief Medical Officer, all of whom agreed it was an appropriate action as part of the reassurance statement. The Chief Medical Officer has told me that they would have drafted the memo I would have brought to Cabinet on 1 May where I sought Government approval for this. While it absolutely was my decision, I believe everyone in this room was looking for me to make that decision.
It was my idea. I want to be clear on this because it is quite clear. I fed back into my Department that women were contacting me about the matter, people were emailing me, Members of the Oireachtas were raising it, all political parties were raising it, GPs were raising it, it was coming up on the helpline, and asked if it would be an appropriate thing to do. The answer I was given, including by the Chief Medical Officer, was that it was.
Prior to the Minister taking that decision and taking the memo to Cabinet on 1 May, did any clinical expert or any of his officials advise him against that decision or warn about the dangers of taking that decision?
Not to my recollection. The people I would have spoken to in advance of that decision were the assistant secretary in my Department with responsibility for the acute hospital sector and the Chief Medical Officer. Certainly they were supportive of the decision and the proposal, and drafted the memo and the press statement. It is important to say that we put into the memo and it was communicated to GPs that this was to be done where a GP felt it was appropriate as part of the reassurance. Certainly no one in my Department advised me against it and I do not recall anybody after that.
The Deputy has previously said in the Dáil that letters were sent to me much later than that. Following an FOI request I believe they appeared in publications such as TheJournal.ie. In those letters people expressed a contrary viewpoint. However, this did not happen in advance to the best of my recollection.
There was not one single dissenting voice given that it would be pretty obvious, I would suggest, that the service would experience an increase in demand. The Minister was aware of the lack of cytologists at the time, which is still an ongoing challenge. The Minister is saying that of all of the experts and officials advising him, not one person suggested this might have an adverse effect on the screening programme and put the system under unnecessary pressure that it might not cope with. Not one-----
We just talked about armies. I engaged with two people primarily on this: the Chief Medical Officer and assistant secretary I referenced. Having worked with me, they both thought that it was appropriate as part of the reassurance measures. The Deputy's party colleagues also thought so and I think they were correct.
I did review the decision. I want to give the Deputy the correct date. If I do not have it I will revert to her. From my memory, I think it was in October after the publication of the Scally report. I will confirm the timeline for the Deputy because I do not have it before me and I do not want to mislead her. From my recollection it was in October post the publication of the Scally report. The Scally report had stated definitively that our screening programme was safe and that we could continue using the labs we were using. I felt that was a very big part of reassurance. I would have conveyed my decision to the HSE that I now wanted to end the out-of-cycle smear tests at the appropriate opportunity. It was agreed operationally that that would be in December because many women would have booked in for smear tests because three months need to elapse.
The Minister took that decision and it took effect from 1 May. In May, June, July and August the Minister did not review the impact of that decision or how it was operating. There was no discussion until October. The Minister did not review a decision he implemented for four months.
I think there is a benefit of hindsight thing going on here. The Deputy must remember we were waiting for Dr. Scally's report to provide reassurance to the women of Ireland as to whether the programme was safe, if they needed to get new smears. There was considerable unease on the matter. Many Members of the Oireachtas, women and GPs recommended that we do this. I think it was the appropriate thing to do and many thousands of women got reassurance. As I told the Deputy yesterday in the Dáil and as I am sure will be saying later during the CervicalCheck debate in the Dáil, it certainly contributed in part - not exclusively - to the backlog we are dealing with today.
As GPs pointed out to the helpline, women who could afford the repeat smear test were always going to go and get it. There was an equity issue where women who could not afford it would have been left out.
I cannot remember the specific date.
I was aware of the backlog. I was dealing with this on a constant basis and was having meetings on issues to do with CervicalCheck, if not weekly, fortnightly. As soon as the backlog became apparent, I would have known about it. I was well apprised about it. I can get the Deputy a specific date on that.
I left out one piece of information from my previous answer which is important. This issue was also the subject of ongoing monitoring and discussion at the steering group which included doctors, officials and patient representatives who were supportive of the monitoring of this. The patient representatives, who are my concern, were supportive of this measure. I received advice that in light of the Scally report - I think it was in October but I will confirm that date to the Deputy later - that I should now move to end this cycle of free repeat smear tests, which was only ever meant to be temporary measure. We conveyed that to the HSE as to when it would be operationally appropriate to do that, and in its discussions with doctors' organisations, including the IMO, a date of December was decided on.
Presumably the date in October I am referencing is 21 October, when I received a submission from officials that suggested that in light of the Scally report we should move to end the cycle. My officials then would have conversed. I accepted their recommendation in full. They can attest to that. My officials would have conversed then with the HSE as to when it would be operationally best to do that. The date in December was decided on because women book their smear tests some time in advance because they have to wait for three months to elapse.
Ms Anne O'Connor:
The majority of the letters have issued. There was an outstanding number of approximately 200 more complex ones so more than 11,000 letters issued, because even in terms of the women who did not require a retest, more than 800 letters were issued to GPs. They will be completely finished this week. At this stage, we are down to approximately 160 which will be over the next few days.
That is a good point. It was recommended that the repeat smear would be provided free where the GP believed it was important as part of the reassurance. This was where the woman and her doctor, in conversation, believed that a repeat smear would help provide the reassurance.
I am sure there were many doctors who had conversations with women and said they could provide them with the free repeat smear, that they had agreed a fee with the Department, but that they did not require it.
People say it was a political decision. If decisions are made by me, as Minister, then all decisions I make are political decisions. It was sought by most members of this committee, by women and by GPs telephoning the helpline and asking for guidance to be issued in relation to it. A fee was agreed with the GPs' representative body to pay GPs to do this. It was one that I put in place as part of the reassurance, with the agreement of my chief medical officer and senior officials in my Department and I believe they were correct.
I acknowledge the Minister has been answering questions for several hours but I want to bring this back to the hospital. This is the fourth session we have had on the hospital. We have met the development board, the hospital group, the HSE, the Department of Health and this is the second time we have met the Minister. A common theme we are hearing at committee is that while it is all very regrettable, nobody has done anything wrong. The two stage process, which was clearly the wrong process, has been repeatedly defended. I put the withholding of information from the Dáil to the Minister, and he has defended it, as is his right. I would argue that if a Minister is asked if we are on budget and knows we are several hundred million euro over budget, then it is misleading the Dáil to say we are still on budget. He has given his reasons for that.
The withholding of information from the Cabinet, the Minister for Finance, Fianna Fáil and the Taoiseach during budget negotiations has been defended. It has been defended that not a single commercial contract has been cancelled, in spite of the fact the Minister said a few minutes ago that the quantities were completely off the Richter scale. As Deputy Brassil alluded to earlier on, if private contractors get their quantities wrong to the tune of being completely off the Richter scale, those companies tend to be fired. People tend to lose their jobs but not here. When I put it to the officials in previous sessions as to why no commercial contract had been cancelled, that was also defended as well. Everything has been defended.
The most egregious defence is the one on costs. This is what I want to put to the Minister. I want clarity on this. I have sat through hours of debate on this and I still do not know what the Government's position is on costs and on whether or not it believes that a reasonable cost is being paid. My position, which I have put forward several times, is that per bed, this will be the most expensive hospital ever built by a mile.
The two most expensive hospitals, including the Karolinska in Stockholm, came in at €1.6 billion and €1.8 billion, and we know that this is going to come in at €3.7 billion. Let us take an example closer to home.
It has intensive care, it has research and it has 134 single-occupancy en suite rooms. It came in at approximately €284 million. If we were to very conservatively scale that up by a factor of three, even though it does not have any of the economies of scale, one arrives at a figure of about €850 million which is still less than half of the cost of the children's hospital.
Even if we accept that a children's hospital needs additional things that the Mater hospital did not need, it still came in at less than half the cost, without any of the economies of scale. When I put this to the Minister and the officials, the defence consistently is that it is not the way to look at it and if one looks at the cost per square metre, they have this quantity surveyors' report, which in 2016 said it was €2,500 per sq. m, but it turns out that two years later it thinks it is €6,000 per sq. m. If one looks at the children's hospital in cost per square metre terms essentially what the Minister and his officials said that it is coming in at a reasonable price.
Can I ask a straight question? Given my position and how I am looking at the numbers and the Minister's position and how he has laid them out and given that he arrives at very different conclusions, does he believe that the costs that are being incurred - we all accept a fantastic children's hospital is required - at €1.4 billion to €1.7 billion is not acceptable and does not represent a reasonable price for the hopefully great hospital we are going to get?
I cannot agree with the Deputy on that. What I agree with him on is that we are going to look at ways of mitigating the cost further, without compromising the clinical benefits, which neither of us wants to do, of the hospital. I have put in the additional line regarding that in the terms of reference at the Deputy's constructive suggestion.
I must respond to a couple of points the Deputy has made. He said people on this side of the table, and presumably he is including me, suggest that nobody has done anything wrong. To be clear, that is not my position nor is it the position of the Government. The position of the Government and myself is that the PwC report will identify roles and who did what, who knew what and will knit all this together in a way in which it has an expertise that we as individuals and collectives may not have.
The Deputy talked about not telling the Department of Public Expenditure and Reform. I was very clear in my opening statement that it was well known in Government Departments beyond my own that the guaranteed maximum price, GMP, process would have to be worked through, that it would arrive at an outcome and that this outcome would then go to Government. The Deputy said that no contracts were cancelled. That is factually true. The Deputy knows that I do not have the legal power to cancel contracts. The awarding of contracts is a matter for the National Paediatric Hospital Development Board. I thought I had said this but perhaps I have not said it explicitly. If the PwC report, or any report, suggests that a company which has a contract did something wrong or was incompetent or inept, we will act with the full vigour of the law to pursue the matter under the contracts we have. I assure the Deputy of that.
Deputy Donnelly and I go back and forth on the issue of costs, on which we have different viewpoints. It is not just a matter of cost per bed because it is not just about beds. It is also about moving from 14 theatres to 22 theatres and from having two or two and half MRI machines for children to having five of them. Costs are not comparable with the costs of the Mater Hospital because the new hospital will be a digital hospital. We cannot build paper based hospitals in the 21st century. The new hospital will also be spread across three sites. The facility at Connolly Hospital will open and start providing services for children this summer. The extra equipment was delivered this week. The AECOM review was a good way to look at the question because it looked at what it would cost to build an equivalent paediatric hospital in London. From memory, I believe it indicated a cost of €9,000 per square metre in London, while our hospital will cost €6,500 per square metre. This will be an expensive hospital but-----
I thank the Minister for addressing all of the points. This is the core of the issue. He just said his report, which he and his officials have used to defend the cost, indicated that the children's hospital will cost a little over €6,000 per square metre but that building an equivalent hospital in London would cost €9,000 per square metre. Is it, therefore, the Minister's view that €1.7 billion represents good value for money?
It is my view that €1.4 billion, which will be the capital cost, is what is required to deliver this state-of-the-art hospital. My frustration relates to how we got to this point when the Government expected the cost to be €983 million.
It is a different point. I apologise to the Minister, but can we just go back. This is the core point. I am still not clear in my mind as to whether the Minister believes that €1.4 billion represents a reasonable price for the children's hospital.
If I did not, the Government would not have pressed "Go" and proceeded with construction. The Government of which I am a member cannot make a collective decision to go ahead with a hospital if it does not think it is a good decision to make. Of course, the other two decisions-----
I had three options, namely, pause, retender or proceed. Proceed was the only option with which I could go. The cost of doing so is €1.4 billion. If we can mitigate some of those costs, I would like to do so.
Yes, but decisions on value and cost are relative to the other decisions made. I had three options to choose from and I believe this decision represented the best value for the taxpayer compared with the other decisions I could have made. That is a fair point.
I am trying to understand what the Government's position is because its defence of the overrun of €450 million or more is that, according to its quantity surveyors, this is still pretty good value for money, even at €1.4 billion, because it is less than it would cost in London. Is that the Minister's view?
No. The point that it will cost less to build than it would in London was in response to the Deputy's assertion that it is going to be the world's most expensive hospital. It is the rebuttal to that point. The AECOM view is that the Deputy's view is not correct. The overrun to which the Deputy refers is a projected overrun. I am not being pedantic about this. The reason I am making that point is that there is some benefit to the overrun being projected rather than actual as it gives us a chance to mitigate the costs further. That is what we are all going to try to do through the PwC process. When I had three options, this option represented the best value for taxpayers because it delivers the hospital. The other options would not have delivered the hospital or would not have delivered it any more cheaply, while delaying it further.
Yes. We have not seen that report. We have asked for it but have not yet received it. The report concludes that, on the basis of cost per square metre, the costs are in line with what it costs to build a hospital.
The assertion is being made that the children's hospital we are building is completely out of sync with any comparable children's hospital in the world. I have heard that a lot. If the Deputy has requested the AECOM report, I hope he is given it. The report does not agree with that assertion. It states that the hospital is expensive but the cost is not out of line.
Before I bring in Deputy O'Reilly, the Minister referred to talks with general practitioners on the financial emergency measures in the public interest, FEMPI, legislation this morning. The Government seems to have set its mind against rewinding FEMPI for contract holders, including general practitioners. This has brought general practice into a very sorry state. GPs are under severe pressure with regard to funding. FEMPI removed 38% of funding for the provision of services through general practice. GPs feel that the stance of the Government and HSE in respect of the provision of GP services is dishonest and negligent. They are under severe pressure. GPs cannot be recruited and those who are still in place cannot supply a service to their patients because of the reduction in funding made under FEMPI. What is the Minister going to do with regard to the reversal of FEMPI cuts for general practitioners? It is unacceptable to state he will move beyond FEMPI because to do so would be to ignore FEMPI and expect services to be delivered without its unwinding. How does the Minister intend approaching that?
The assertion that our stance is dishonest and negative is not shared by all general practitioners or all GP organisations. The Irish Medical Organisation is in negotiations with my Department and the Government. A circular it sent to its members this week referred to the progress made through those negotiations. While some GPs obviously have a different view, and while I do not speak for the IMO, I do not believe it is of the view that engagement with my Department and me has been dishonest or negative. I need to make that point.
-----that GPs are being treated dishonestly. Negligence is evident because GPs cannot supply a service to their patients. Patients are now moving out of general practice and into casualty departments because they cannot get a service from their general practitioner. They are moving into out-of-hours services, which are being flooded and overworked, and ending up in accident and emergency departments unnecessarily. I believe the Minister's refusal to unwind FEMPI treats GPs dishonestly.
I did not say that. I will have to be slightly cautious about what I am saying because my Department and I have not finalised agreement with the IMO, as the Chairman knows. The IMO certainly said an awful lot about its view of the negotiations in its circular. Its words are there for every GP to see. For the record, while I can be pedantic and careful in my wording, I want to see fees moving towards what they were before FEMPI. I want to see FEMPI reversed. I will need some modernisation measures if that is to happen. That is not unusual and does not involve treating GPs differently. There is not a public servant working here or in our hospitals and health services who did not see some modernisation or productivity measures introduced in return for the unwinding of the FEMPI measures that affect him or her. Separate and distinct from that, there is also additional money for new services in respect of chronic disease management, eligibility and access. These are services about which the Chairman is very passionate and which he knows about in great detail.
With a big push, we can wrap this up very quickly. It would be incorrect to say "quickly" because this has been going on a long time, but we can wrap this up in a very short period of time. The IMO circular to its members sets out its position. There is not much in it with which I disagree. Good progress has been made. We need to address the issue of FEMPI. There is funding for new services. We - the employer, contractor or whatever word one wishes to use - on the management side need productivity and modernisation measures in return. We can get to a point at which GPs will see a very significant increase in the fees being paid to them in 2019.
I am not sure about that characterisation and I am not sure it is shared by the GPs who are negotiating on behalf of the IMO. Many of the public servants or anyone working in the public service who had their FEMPI unwound, to use the Chairman's phrase, are doing new and different things as a result of that. What I am saying to GPs, who I am sure are watching this very carefully and closely, particularly given the day that is in it, is that we will in 2019 invest an awful lot more in general practice and that will address the issue of FEMPI. It will also address the issue of new services because our patients need new services and our GPs want to provide them. It will do so in a way that is managed and controlled and does not flood general practice. Mistakes have been made in the past in that regard but we are making very significant progress. I welcome the fact the IMO updated its members this week.
If that is the case, I will talk fast and, hopefully, I will get the responses even faster. With regard to the unwinding of FEMPI, I do not think it is true to say everybody necessarily has some form of productivity or changed work practice associated with the unwinding of FEMPI. My understanding is that the processes by which that was monitored have been substantially dismantled. Some attempt was made several years back but we can talk about that another time. Nonetheless, I would not say with the same confidence as the Minister that everyone is doing something different that would be outside of the norm in terms of upskilling and changed general roles. It is not linked to any percentage because, clearly, if it was, we would be able to point to a grade, group or category of workers that had not necessarily achieved whatever targets were set down, and there would be a timeline and so on. That is not the case. It is a bit unfair to GPs-----
I want to get onto the legal aspect shortly. I am going to use the term "abnormally low tender price". I understand you were concerned about the potential for legal action, so I am assuming you would have sought some advice in regard to the potential for legal action, had you not gone with the lowest.
Mr. Jim Breslin:
I am looking back now, in hindsight, because I was not in the decision making process at the time. The Deputy is asking me questions about why would somebody accept a tender that is €130 million below another one. I am saying that one reason they might do so would be that, if they did not accept, they would be challenged legally and would be tied up for two years.
Okay, I thank Mr. Breslin for clarifying that. Is it his opinion that the board would have sought legal advice on how likely that was? Should it have done so? Would Mr. Breslin consider that to be best practice or was the board fine just to say it had better not take the chance, just in case?
Mr. Jim Breslin:
Again, not having been in the process, my expectation would be that before the board would arrive at that point, it would carefully invigilate all of the tenders to see where the gaps are and to see whether those gaps are sustainable, or whether somebody has just left a hole in their tender which is ultimately going to come back and bite.
Okay. When the board went to the tender process, the weightings used were 75% on price and 25% on quality. That does not really square with the emerging narrative that the children of Ireland deserve the best hospital in the world, and one would be putting a small bit more emphasis on quality if that was going to be at the absolute top of the agenda. I cannot square the statements made about wanting this to be the best. I am not getting into whether it is the most expensive and I think that once we are in catastrophic overrun territory, it does not matter. However, it does not square with the notion that everything was going to be done to the highest possible standard because, actually, far more emphasis was placed on getting this done cheaply. We see now where that was because, obviously, the lowest bidder was going to get it if 75% was going on price and 25% on quality.
Perhaps the Minister can comment on that. He is the one who keeps saying he wants it to be the best in the world but 75% was on price and we see now that the emphasis on price is going to cost very dearly. The Minister used the phrase that somebody got the quantities seriously wrong. That is a wee bit of an understatement when we are dealing with cost overruns of this nature. The Minister might comment.
I would be delighted to. I am telling the Deputy how I see it. When we look at the quantities between the detailed design and the outline design, someone did get it seriously wrong. I can put it in more hyperbolic language if the Deputy wishes but that is my view in regard to it.
In regard to the awarding of the contract, I am not commenting in regard to procurement roles that I did not play a part in, should not have played a part in and, if I did play a part in, would have resulted in me having extraordinarily serious questions to answer. My view and my position when I talk about it being the best hospital for children is based on what it will do for kids compared with what they have today, the services it will provide and the specifications it will deliver. I am very satisfied in that regard that it is an investment worth making.
With regard to the steering group, there were 12 meetings for which we have the minutes. The assistant secretary general, Ms Conroy, attended ten of them and Mr. Woods attended six. It is clear from what was being discussed that people were starting to get concerned. I presume Mr. Breslin would meet regularly with Ms Conroy, given they work in the same place.
Even if it is just the occasional water cooler moment, Mr. Breslin will have seen this woman on an ongoing basis. Did she not say anything to him? It is obvious from the tone of the minutes that concerns were being raised. Would she not have said anything to Mr. Breslin in this regard? She was at ten of those meetings and Mr. Woods was at six.
I have two questions. Was this not mentioned at any stage to Mr. Breslin, even casually if it was not followed up? Did Mr. Woods understand that somebody who was a member of this steering group was making the concerns that were being raised by the members of the steering group known to Government? Was he happy to continue with the Secretary General and-or the Minister being unaware? Mr. Woods went to six meetings and, presumably, he read the minutes of the ones he could not get to. Would he have had a belief that the concerns being raised were being communicated to people more senior than the ones sitting at the table?
Mr. Jim Breslin:
Maybe I can answer first. I can quite honestly say that my understanding would be that the assistant secretary general's understanding of where the process was would be consistent with my understanding of that. We communicate regularly. The surprise moment I got was coming back to see in September how the issue had crystallised, not that it was taking longer and not that there were not challenges in the process, but the type of figures that were talked about when I came back off leave were news to me. However, it would not have been news to me that the process would have to be extended because it was taking longer and the GMP was at risk, and it would not have been news to me that there were challenges around value engineering savings and other inflation factors.
Mr. Jim Breslin:
No, it is not that we did not ask. The position of the development board was that it was too early to say and the position was not yet quantifiable. It is not that we did not ask. Throughout the process, particularly in September and October, our emphasis was to get the process to the end so we could have certainty. We were making sure the development board put all the resources it could into finalising the process.
Mr. Liam Woods:
As the Deputy said, I was at six of those 12 meetings and I saw the other minutes because they are the first item on the agenda of the following meeting. I will restate what the Secretary General has just said in saying that the concerns that were reflected in those minutes related at that time, the spring and summer of 2018, to a delay in timescale. The financial challenge on the guaranteed maximum price crystallised and became visible in autumn.
The Secretary General has addressed the information flows within Government and it is not for me to comment on them. The HSE has its processes and this was one of them, so that information was being shared, to the extent reflected in the minutes, at those meetings.
My final question relates to the minutes of the meeting of 31 May 2018. Point 5 of page 3 stated that MOC noted concerns around the nursing intake to third level education, as the current flow will not generate the required 300 paediatric nurses in 2022. We have had discussions on this but my observation is that, even if this hospital is built, there will not be enough staff to staff it. The minutes also suggested that similar challenges exist in relation to junior doctors, allied health professionals and an ongoing interface with the Department of Education and Skills was noted. Has that circle been squared now? Is the staff ready? Are there sufficient numbers in the system? Is the HSE confident that the staff will not emigrate like everyone else?
Mr. Dean Sullivan:
The issue was flagged. There are issues with any major capital build like this that requires a significant expansion in staffing. One needs to be clearly assured that the building is happening, which has been the subject of major discussion, but also that when it is built, the staff will be available to run the services. We know how many staff members there will be when the hospital opens in 2023 by staff group. We know how many more that is than we currently have, we know what the turnover is of the different staff groups and we know where the pinch points are in all of that and there is a process, staff group by staff group, under the arrangements that I chair to look at each of those areas and to seek to mitigate the existing risks in terms of ensuring there is a pool for the hospital group to recruit from.
Mr. Liam Woods:
Perhaps I can help. Staffing for the satellite unit in Connolly is proceeding now and there has been some success in recruitment of consultant staff and others. We also need to remember that this is not just a hospital, this is a model of care for paediatric service nationally, so resources have also gone into Cork, Galway and Limerick and will have to go into those facilities. It also goes beyond hospitals into mental health and disability. Actions are under way at the moment across a range of areas to grow staff numbers.
The Deputy is right in saying there are challenges. Theatre nursing, for example, is one challenge that is real and the children's hospital group has looked at training its own staff in that area and are doing some work on that. There will be challenges but there are also some signs of progress at the moment in recruitment for the satellite unit, which is the first step.
Last May, the HSE was not confident that it was going to get the numbers and it is not confident now. As someone looking on, it seems that sufficient attention was not being paid to the detail. There is no additional detail on how many new nurses will be in the system, how many will be recruited, and it is the same with allied health professionals.
I understand the witnesses are here to say that people were taking responsibility and all of that but it does not help the HSE's cause if the hospital were to be built and not to have sufficient staff to be able to open it. It is not a new model of anything. It would be just like the rest of the health service.
I make the point to the Minister, the Department and the various boards in the hospital that this committee has not received a single document since these hearings started. They may be sending documents to individual members but not one document has been received by this committee. Could they ensure that all those documents are sent to the committee-----
Mr. Jim Breslin:
I am just reflecting on our normal experience with committees, including other committees such as the Committee of Public Accounts, that we get that from the secretariat and we then have no disagreement as between what was promised and what is delivered. I have taken notes here this morning and I am happy to make the preparations to do that but it is useful for us to liaise with the secretariat on that.
I find that extraordinary that Mr. Breslin would sit here at a committee, say he will provide the committee with a document and then not provide the committee with the document unless the committee requests it.
Some of us ask pertinent parliamentary questions and that is another way to get information. I have pointed out to the Minister and Secretary General that sometimes, one must follow up parliamentary questions to get documentation.
I agree with the Chairman that it does seem bizarre. I have asked for the memo that went to the Minister in August on at least three occasions now. I do not think we need to get a note from the clerk to ask the Minister to get it. I expected to get it while the committee has been sitting here because I asked for it four hours ago.
To be clear, we also looked for all correspondence to and from the Department of Public Expenditure and Reform regarding requests for meetings in October. We also want all minutes of the board meetings from the board of which Mr. Breslin is the chair and the original hospital board. The minutes of the steering group should also be distributed to everyone.
Anything else that the witnesses think would be useful should be given to us. Is that not the best way? If in doubt, do not leave it out.
I am intrigued by the pinch point. I have always accepted the Minister's bona fides about the cost escalation of €61 million. He found out that figure was at least €200 million in August. I want to know what happened between summer 2017 and August 2018 as to communications from the board to the steering group, to the other board and to the Minister. That has not really been discussed today. I have been waiting for two and a half or three hours to get to this point.
Mr. Woods sat on the board of the hospital and on the steering group. In his view, when was the escalation and changeover? Think about it. We are accepting the bona fides in respect of the €61 million. When was there a sign of an escalation over the €61 million that made Mr. Woods think this was a real issue?
Mr. Liam Woods:
I am only identifying the location to be helpful, not to isolate the answers, if the Deputy knows what I mean. I would need to look back at the record. Clearly, there was a report in September at the board meeting of the NPHDB. I would have to see if there was information at an August meeting. I am not sure whether I was there or on leave. I would have to look at that.
Mr. Liam Woods:
The point has been made that in early summer 2018, the chief executive of the building board was flagging a time delay risk, and could not be precise at that point on any financial risk associated with the good manufacturing practice, GMP. I am happy to go back to detailed records to look at this, but, to the best of my recollection, it was September 2018 when that became known to me in the board. I am not distinguishing between the two roles. In my role in the HSE, the timescale was something similar to that. That is the answer. I would have to look at the detailed record. To be honest, I did not have the opportunity to do that before attending here.
Perhaps Mr. Sullivan could tell us. I will ask him exactly the same question. I see he took over as chairman of the steering group after the April meeting. He took over in May. When did he become aware of the change from the €61 million figure, which we have accepted, to anything higher than that?
Mr. Dean Sullivan:
At the meeting on 23 April, Mr. Pollock noted that the acquisition of GMP approval by the end of June was at significant risk. Mr. Connaghan, as chair, asked about the scale of the financial risk involved. Mr. Pollock advised that it was too early to estimate at that point but agreed to provide clarity about the timeline and financial risk by June, as per the minutes. That was in April 2018. That is why it is not particularly helpful to start in May, when I took over the role.
Mr. Dean Sullivan:
There was some bubbling of an issue at the time. The next steering group meeting was in May 2018. As the Deputy noted, that is the first one I chaired. At that meeting Mr. Pollock advised that, by the end of June, the NPHDB would have a strong sense of where we stood in overall terms regarding the capital construction cost. That was the view he expressed at the time, in good faith I am sure. There is only one other date that is relevant to where I assume the Deputy is going in joining the dots in all of this. Subsequent to that May meeting, there was a board meeting on 20 June 2018 which Mr. Breslin chaired. Again, consistent with what has been said today and in previous sessions, Mr. Pollock reported to the board on capital costs, challenges, pressures and delays in completing the GMP negotiations. He said at that meeting, as was recorded, that the close-out date for the GMP process had been pushed back from the end of June to the end of October. That was the position at the board meeting Mr. Breslin chaired.
Fair enough. Mr. Woods sat in on the meeting to which Mr. Sullivan has referred. I presume Mr. Sullivan is saying that this was being flagged in April. Mr. Woods does not feel it was being flagged in April at all.
Hold on a second. I was very clear. I did not ask Mr. Sullivan to know whether it was €200 million or another figure. I just asked both Mr. Sullivan and Mr. Woods the same question. The figure of €61 million is parked. We now know that in August the figure was €200 million and in November it was €450 million. What we are trying to figure out is the timeline between midsummer 2017, when the figure was €61 million, and August 2018 when it was €200 million. It is very clear. What Mr. Sullivan said is probably quite accurate. From reading the minutes, the April meeting is the one at which I noticed that there was noise in the system.
Very well. Is Mr. Woods happy to be consistent with Mr. Sullivan in that as far as he is concerned the noise in the system, potential escalation of issues or whatever phraseology we want to use took place around April 2018? Both witnesses are saying more or less the same thing.
Mr. Dean Sullivan:
There were no other steering group meetings until August. There were no steering group meetings in July. It met 11 times during 2018. It did not meet in July. I would need to check the record but I am not aware of my understanding of the position changing during that time. The first time I was aware of a change in the position and the beginnings of a number firming up, as Mr. Woods says, was when I met Mr. Costello and Mr. Pollock in August, around the time the Minister was briefed-----
That was a day or two before he was briefed. I saw that correlation. I am concluding. The chair will like one of my questions because it involves him. I wish to ask Mr. Breslin if that has all run perfectly for him. Is he happy with the information outlined about the knowledge provided to him in April, May and June? There was no accentuation, but the Department definitely knew there was an issue.
Mr. Jim Breslin:
Exactly. I know about the board meeting. In January and March, the programme board, which I chair, was only dealing with the figure of €61 million and what was being called a "backstop" around that. That backstop was intended to manage that issue without any impact on funding. The first meeting at which issues were raised was in June. The most important development at that point was the signal that the time for the GMP process would have to be extended by three months. The conversation on that topic was about pressures. The board saw that the contractors and the behaviour and interaction we were seeing were causing problems. It was taking longer, but we did not have figures at that stage. Then-----
Mr. Jim Breslin:
I would like to complete that point to the end. I apologise to the Chairman for taking some of the Deputy's time but it is necessary to put this on the record. In August, as I have described, information came into the Department. In September, I got that information. On 19 September, we held the next board meeting. At that point, the board was further along in the process. It was talking about figures but saying the figures were preliminary. The board was still not in a position to be in any way definitive about the outcome.
I will put three questions and that will be it. During April, May and June issues were bouncing around. There were concerns and whatever the phrase Mr. Sullivan used a minute ago, which made me laugh. I cannot remember the phrase.
Noise in the system will definitely stay with me from now on anyway. We now know that there was no communication at all at any level in the Department with the Department of Public Expenditure and Reform about the noise in the system. Is that so? That question is specifically for Mr. Breslin. From April on, there was no communication at all on the noise in the system with the Department of Public Expenditure and Reform until August. That is my first question.
My second question is for the Minister, Deputy Harris. In November, he was in the mid-west. We are talking about projects that are affected and I want clarity here because I am very confused. The Chairman and I welcomed the Minister's announcement that the 60 bed modular unit in Limerick would be funded amid great public fanfare. I asked a parliamentary question about this two weeks ago and the Minister gave me an answer with a bottom line that there was no commitment to do so, it was competing with all other projects and no decision had been made until a capital plan was in place. I do not like using this word but either what the Minister said in November is not accurate or else the reply that came back to my parliamentary question last week is false. The Minister announced it in November, the funding was there and all of the Minister's colleagues were out saying it was great.
-----but the Minister told me last week that funding had not been secured but his colleagues came out a day after I released this information and said they had a guarantee from the Minister that it was. How can the Minister answer a parliamentary question and say it has not been secured? The Minister has told us numerous times that the capital plan will not be announced until next week.
My last question is on CervicalCheck, specifically on Quest Diagnostics.
The Deputy asked Mr. Breslin to answer the question on the Department of Public Expenditure and Reform. On the mid-west question, to be very clear, I presume the answer to that parliamentary question was the same as the answer to all the many parliamentary questions we get on individual projects. Deputy Kelly has campaigned for this as did the Chairman and I acknowledge that. The 60 bed modular build for Limerick will go ahead as part of the capital plan. The capital plan-----
To be honest, we have had a number of examples of this. There was the answer the Minister gave to my parliamentary question, and there was the answer the Minister gave to a parliamentary question previously for which he apologised to Fianna Fáil about not sticking the line on. I ask the Minister not to respond to parliamentary questions like that. It is not appropriate for parliamentarians to be sending out something which is not factually accurate. The Minister is telling us here that he is guaranteeing that the funding will be provided. In the reply to the parliamentary question, he said it was open to other considerations and other capital projects. I ask the Minister to take that on board.
Mr. Jim Breslin:
I certainly did not advise it at that stage and when I have asked people, they have told me it happened in the latter period, which I have said to the Deputy on the record previously. The Department of Public Expenditure and Reform was told informally in October and formally in November so I do not expect that it was advised over the summer.
On that point, I do not doubt that the 60 bed modular unit in Limerick will be delivered. The question is when will it be delivered. My understanding is that it was to be delivered before the end of 2019 and the rapid construction of it would take 300 days so we do not have many days left to deliver that unit before the end of 2019. That is the question Deputy Kelly was getting at. We have no doubt that it will be delivered but when will it be delivered?
One will not represent the three. Some of us have sat here very patiently all morning. Every week the same thing happens and at the end of the day we find ourselves being cut short. That is not the Chairman's fault and I am not blaming him for it-----
Is it that the Chairman thinks I am looking the angriest and it is a safer bet to ask me? Mr. John Connaghan was in the role before Mr. Sullivan took up the role. Is that the same Mr. John Connaghan we have met here before?
I am not suggesting that anyone is telling lies here but Deputy Kelly, who has just left, has a famous line about the people watching at home who are getting teed up for the six o'clock news. For normal people watching at home, it is not acceptable or believable that Mr. John Connaghan, who was in the role that has just been described, was in Mr. Sullivan's position and that taxpayer's money would be described as noise here this morning. I understand Mr. Woods's commentary about crystallisation of the financial position, which could basically be summarised as the price of it. That is just HSE-speak for the price of the product. It is not credible for people watching at home that we had the top man in the Department of Public Expenditure and Reform doing shopping. His job is procurement and that is essentially shopping. We have a fellow charged with shopping for the country who is on the board and he does not see that this noise will have a knock-on effect on his position on the board and on his job doing shopping for Ireland. I do not buy that, even if there was no formal communication.
Mr. Breslin said recently that he expected the normal governance structures to be in place and he said just now that he did not advise the Department of Public Expenditure and Reform. Everyone with a head on their shoulders knows that somewhere along the way, the man who was in charge of the shopping, Mr. Paul Quinn, must have said that this is getting out of control, this will pull from other areas and he would not have enough money to do his day job in his board position. When Mr. Breslin looks at this useful document which we got at the Committee of Public Accounts meeting last week, which details all of the reviews that were done in 2018 and 2017, he will see that €200,000 was spent on reports in 2017 and 2018, starting in February 2017. In February 2017 there was a stakeholder review. In April 2017 there was a contract management review. In my mind, at some point before February 2017 the "you know what" was heading towards the fan and this exercise of spending €200,000 on reviews was a backside covering exercise. I am suspicious of the €200,000 spent on reviews up to then.
To follow on from Deputy Kelly, there was a gap in the reviews from July 2017 to May 2018. We are going around the houses here in the sense that obviously there are official emails and official memos but Mr. Breslin is taking all of us for fools when he expects us to believe that Mr. Woods, who is sitting here in front of me, who works for the HSE and whose job is to deliver the service, did not consider that his day job could not be achieved if all the money was spent on the hospital. It is not believable that the man who was in charge of the shopping did not mention it. Whether there is a paper trail or not, whether people secretly said it or whether it was in this noise situation, it is just not credible. I do not blame the Minister; he is being treated unfairly here because he cannot be inspired about what is going on. If people deliberately plot behind his back and do not tell him, how is he to know? It is not his job to go measuring the cable. This is our fifth or sixth meeting on this and we are none the wiser. We are getting nowhere because no one is prepared to answer direct questions unless they know they have themselves covered and it is very concerning because at the end of the day the HSE is supposed to deliver the service.
Further to that, when Dr. Gabriel Scally started his review, he met an information wall. How are we to say that PwC will not meet that same wall? I cannot remember the exact phrasing Dr. Scally used at the health committee. Why should we expect that PwC will get the information? Many people in here seem to be very good at referring to minutes. However, Mr. Woods is in a top position in the HSE and Mr. Quinn is in a top position in the Department of Public Expenditure and Reform. I do not believe they did not tell somebody before the Minister was told officially in June.
Mr. Liam Woods:
The Deputy made reference to my role. I hear, in effect, her making a statement more than asking a question. In terms of her reference to my role, the records are clear in terms of what was known then and I am very happy to share that. We are happy to give straight answers to questions.
The records are very clear on the official documentation of what was known when. Does Mr. Woods believe that people at home actually think nobody mentioned, "You know that hospital we were going to build is going to cost X amount more"?
Mr. Jim Breslin:
I wish to make a point. In my years observing the questioning of how things happened, often a position is adopted that no records are available, minutes were not taken and it is not documented. I think PwC will find documentation of the issues discussed at meetings and a clear record of that. I think that is good public administration; it is not something to apologise for. The Deputy is asking if there is stuff going on outside that. I was not involved in stuff outside that. We had a formal process for considering issues, documenting the issues and making decisions on the actions to be taken, and they are available. There was not some other subterfuge going on somewhere else. That is how the issues - tough issues, difficult issues - were being dealt with, starting with the €62 million going into the summer of 2018 when problems were flagged in the GMP process and arriving at a point where the GMP process was completed in November and Government made a decision in December.
It is not really credible to refer to November. Although the GMP figure had crystallised in November, does Mr. Breslin think it is credible for the public when they hear this? We have the HSE and the Department of Health - I would argue over the need for both, but that is another day's work. We have this change of governance structure etc. The minutes are the minutes, but, as I said last Thursday, we all know that discussions happen. I do not believe that this overrun could happen and nobody would have mentioned, "Okay, we don't know the amount, but it's going to be big." I find that really hard to believe.
The Minister said that progress had been made with the IMO on the GP contract negotiations. Many GPs are not in the IMO but are in the NAGP. However, the NAGP is not in those negotiations. I am concerned that even if the Minister reaches agreement with the IMO, NAGP members might not accept the outcome of those negotiations. At what stage will the Department engage with the NAGP? I know its members will be protesting later today. A large number of GPs who are not part of this ongoing negotiating process feel frustrated at the moment.
That is a fair point. My Department engages with the IMO on contractual matters. The IMO is a member of the Irish Congress of Trade Unions. We have a framework agreement with it. Issues with FEMPI etc. would have been introduced as part of discussions with the broader union movement - I am not saying they were in any way agreed. There is a role for the NAGP to play in terms of being consulted and involved, but the negotiations are with the IMO.
I will not get into the medical politics of it because it makes the politics in which we are involved seem very tame at times. They are different organisations with perhaps different perspectives and rivalry. The IMO is the organisation with which my Department engages. I am happy to explore consultative roles for other organisations. The IMO has delivered on a number of occasions - for example, when we were negotiating the free repeat smear test. It also negotiated for its members on the contract for termination of pregnancy and the free GP-visit card for the under sixes. That is the current negotiating arrangement. The IMO has issued an update to its members. The organisation individual GPs decide to join is not a matter for me.
GPs cannot collectively negotiate because they operate on an individual contract basis. Any GP can sign up to any contract being offered by the State without necessarily being a member of one organisation or the other. I am happy to reflect on the issues the Senator raised. We are in intensive negotiations with the IMO. I believe the outcome of these negotiations will benefit all GPs. It is obviously up to GPs to decide whether they wish to sign up to contracts being offered by the State.
I will not put words in anybody's mouth. I will not exaggerate the claims. I will not start the estimate for the hospital at a lower base than has already been discussed in order to further inflate the degree of annoyance one might have at the new price. I believed weeks ago and I still believe that unless the specification and the bill of quantities are properly identified and assessed in the initial stages, it leaves the whole situation open to exaggeration, mistakes, allegations and levelling of blame on different people. I do not want to do that and I do not believe there is any value in that.
The word "preliminaries" should be removed from big contracts like this; it is lethal. The one thing that needs to be learned is it is not possible to achieve any degree of accuracy if working on preliminaries, estimates or guesstimates, which is really all they are. In a big contract such as this, taking place over three sites, there is a propensity for something going wrong or something slipping. That is what we heard referred to as noise in the system; I can understand what that might be. My supposition is that the degree of concern at that stage was not of a magnitude that would cause the matter to be brought to the attention of those higher up the ladder.
It comes back to the kernel of what was in the original tender documents, what was tendered for, the bill of costs, the specifications and if the two meet. Obviously they did not meet. The bill of costs was short or else the detailed specification was short. I do not know how anybody can assess a situation given those circumstances.
Deputy Jonathan O'Brien mentioned last week that it would be a great help to the committee, if we knew what was involved in the very beginning. Somebody somewhere must know what kind of hospital we were going to have. Was it to be a high-tech hospital or was it to be just walls, floors and ceilings, the same as traditional hospitals or whatever the case may be? That is fundamentally the debate we are having.
The debate we are having now can be detrimental to the quality of health service that we all want to provide in the future. That has been a characteristic of the debate on the health services for some time. This relates to GP services and hospital services. As a result, I think we are dumbing down the quality of the services to suit the particular location, which is very dangerous.
This is a very dangerous thing to do, and if we keep going on like this, we will not have the class of health service we expect and that we pay for, that is provided for by the taxpayer. I expect PricewaterhouseCoopers to get to the bottom of the matter. I expect that the cost will be revised in accordance with the actual specification and the actual bill of costs, which did not emerge until late in the day.
I thank Deputy Durkan. I am afraid that concludes our meeting because we must vacate this room for the next committee meeting, which concerns climate change. On behalf of the committee, I thank the Minister-----