Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I do not propose to accept amendments Nos. 3 and 4. The new body must have an arrangement with multiple universities, academic institutions and research bodies owing to its national remit in the education of healthcare professionals in paediatrics and engagement in paediatric research. The formal arrangements between the universities and the new body will require some corporate identity to be decided. While it is not yet clear, it is considered prudent to allow the new body to become a member of a company, subject, of course, as one can see, to the consent of the Minister. The provision also keeps options open for the type of structure that may be required for a body to carry out philanthropy for Children's Health Ireland.

On amendment No. 4, the provision which allows the new body to borrow for current, as well as capital, purposes is considered useful, but, as one can see from the Bill, it is strictly controlled. The ability of service providers to avail of strategic investment opportunities in the public interest, within legal control limits, must be seen as a progressive step in managing hospital facilities into the future. I understand there may be a concern that the retention of this provision will allow this and other Governments to underfund the hospital and exploit the provision by instructing the new body to borrow money for the purposes of providing healthcare services. Let me reassure the Deputy that the new body will be funded by the State as a section 38 agency, as the three children's hospitals currently are, through a service level agreement reached with the HSE. The primary driver for a service provider to borrow is better value in services provided for patients in a cost effective and timely manner. The provision will allow the board to respond to strategic opportunities or needs as they arise. Borrowing for current purposes could be considered in situations where the hospital did not have sufficient internal funding resources in the short term to develop a service but was able to demonstrate longer term viability and an ability to repay.

The ability to borrow within controls creates that opportunity.

Circumstances in which the new children’s hospital would make a case to borrow money, or engage in activities that had an element of borrowing, could also arise in regard to leasing or the licensing of commercial areas, the leasing of equipment or investing in a strategic service initiative. This could include expanding operational capacity in a service that has hospital income generating potential such as attracting international patients to avail of cutting edge high technology services or specialist paediatric expertise and experience that will be available in the new hospital. There is also the need to consider possible scenarios where the new body could require the potential to borrow to invest in extending existing services further to provide cross-jurisdictional services, for example, for children from Northern Ireland, which could generate hospital income to repay initial borrowings. As part of an accountability framework, all such scenarios would be subject to the approval of a business case demonstrating a return on investment, with the potential to repay borrowings and generate hospital income.

The Bill allows for proper and fully accountable governance and management within the framework of national policy. It is acknowledged that since the new body will be largely funded by the State, its borrowings would form part of the overall public debt of the State, as assessed by the European Union and other bodies and that the State must exercise control before such liabilities are undertaken. The Bill, therefore, includes a provision for borrowing, subject to the approval of the HSE and the Minister, as well as the approval of the Minister for Finance and Public Expenditure and Reform. It is, therefore, considered appropriate to provide for the potential to borrow in the Bill. Accordingly, I do not intend to accept amendments Nos. 3 and 4.

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