Thursday, 14 February 2019
Ceisteanna ó Cheannairí - Leaders' Questions
On the day that is in it, I send good wishes and love to everybody in the Chamber. Those of us on this side of the House sent a Valentine's card to the Tánaiste and the Government. Unfortunately, we gave it to the Minister for Health so it might be a few months before they get it but I am sure they will eventually get it.
Small businesses throughout the country are not receiving any love from their insurance companies. I caught the end of the Minister for Finance's interaction with Deputy Burton. Small businesses, farms, marts and festivals are being hammered by increasing insurance costs, particularly business insurance costs. I do not know if the Tánaiste heard it but I would encourage him to listen to Tuesday's edition of "Today With Sean O'Rourke" over the weekend. That edition focused on play centres in particular and the hit they are taking. One case in Navan involves a lady called Linda Murray who runs a centre employing 12 people that hosted 20,000 children last year. Her costs have gone from €2,000 in 2012 to €16,000 in 2018 without a claim. She is being advised that she cannot get a quote in 2019. The insurance companies in this sector are beginning pull plant because Ireland is seen as such an outlier by the insurance industry. If she was operating in the UK, she would get a quote - one that would be much lower. We are talking about 12 jobs in a business that has been operating for seven years, involving very hard work, and that has a very high reputation. Some 20,000 children in Navan being completely discommoded. Similarly, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach and the Joint Committee on Agriculture, Food and the Marine are being told about marts throughout the country having to close. Community events such as street festivals are affected. Some 75 community festivals alone have shut down in the past few years because of increased insurance costs.
Meanwhile nothing is happening. Yes, there have been reductions in the cost of motor insurance because motor insurance is trackable and accessible but when it comes to this kind of insurance, there is a mystery behind it. Business owners cannot see why their costs are increasing and what kind of claims are being settled. Meanwhile the Government, once again, has its head in the sand. On "Today with Sean O'Rourke" the other day, the Minister of State at the Department of Finance, Deputy D'Arcy, acknowledged that the level of claims in this country was the problem but this has been known for 19 or 20 months since it came forward in the report. Yet it was only yesterday that the Minister for Justice and Equality wrote to the Chief Justice to ask him to do something about it. In the meantime, 75 festivals, marts and small businesses throughout the country have gone to the wall. What is the Government going to do about it? Does it understand the seriousness of the situation facing small businesses? Once and for all, can the Government stand up for small businesses against the might of the insurance industry?
It is early in the day but I will pass on Deputy Calleary's good wishes to the Minister for Health. That is appreciated. On the serious issue of insurance, I emphasise that we in government are very aware of the financial strain that the cost of insurance is placing some consumers and many businesses. Indeed the problem of rising premiums in respect of motor insurance in particular was the main impetus for the establishment of the cost of insurance working group chaired by the Minister for Finance. The working group is continuing to implement the 33 recommendations from the 2017 report on the cost of motor insurance and the 15 recommendations from the 2018 report on the cost of employer and public liability insurance, to which Deputy Calleary did not refer but which certainly exists. Both of these primary reports contain action plans that set out agreed timelines for implementation as well as a commitment that the working group will prepare regular updates on its progress. The seventh such update was published last November and shows that of the total number of 78 separate relevant deadlines within the action plans of the two reports set up to the end of quarter three of 2018, 63 relate to actions that have been completed.
There is more work to do but it is not true to say that nothing is happening in this area. It is envisaged that the next quarterly progress update will be completed by the end of this month and will concentrate on outlining the definitive position relating to all the 33 recommendations from the cost of motor insurance report as the last deadlines in its action plan passed at the end of 2018. In respect of employment and public liability insurance, the vast majority of the 26 action points, which were due for completion during 2018, have been accomplished. I remain confident that any outstanding action points will be completed in the coming months along with the three remaining action points with deadlines set for various quarters throughout 2019.
I am familiar with the pressure outlined by Deputy Calleary regarding many individual businesses, be they marts or other businesses. The Government will continue to monitor how we, through change policy and changes of approach, can continue to ensure that we have a competitive insurance offer in Ireland for small businesses in particular. We have an action plan that is being implemented and we will continue to update that.
That is no comfort to businesses throughout the country that are facing extraordinary rises - hundreds of percent - in premiums, including nightclubs, restaurants, community events such as festivals and play centres. People have been made redundant because they cannot pay for insurance or get a quote. While the Government is coming up with these action plans, insurance companies are refusing to give quotes. On "Today with Sean O'Rourke", the Minister of State at the Department of Finance, Deputy D'Arcy, outlined that he had a plan A. He was unable to progress that; it was delayed. Plan B was delayed and now he is on plan C. Much of the delay was because legislation is not being pursued.
If there is urgency, one concrete action the Government can take and take quickly is publishing a new book of quantum. When will the new book of quantum that might bring some sort of discipline and order to injury awards, which are four times higher in this country than they are in the UK, be produced? An award that might be £10,000 in the UK is €40,000 here. This is costing jobs and closing down businesses. When can we expect the book of quantum?
It is important to say that while I recognise there are significant pressures in some of the areas raised by Deputy Calleary, it is also important to recognise the progress that has been made in other areas. If we were here two years ago or last year, we would have been talking about the cost of motor insurance-----
What we have seen over the past two and a half years is a 22% reduction in the cost of motor insurance. We now need to deliver the kind of results for small businesses that we have managed to deliver for motor insurance. That is what we intend to do. That is why we have an action plan. Motor insurance was phase one, we are now looking at public liability insurance and businesses and we are determined to deliver the kind of results that we have seen in the motor insurance sector in the broader commercial sector as well.
I will have to come back to Deputy Calleary about that but I will do so happily. I will speak to the Minister concerned, who is the Minister of State, Deputy D'Arcy, and revert to Deputy Calleary about the book of quantum.
I offer my good wishes given the day that is in it. They will probably be a bit superfluous to requirements since there is already so much love in the Chamber between the two parties of Government. In the wake of the CervicalCheck scandal, the buzz word about this place was "confidence". However, the revelations of the past few days regarding cervical screening do nothing but undermine confidence in a system that can barely afford further controversy. The Tánaiste should not take my word for it. The Irish Cancer Society has expressed worry about the delays. At a meeting of the Joint Committee on Health yesterday, officials from the Department of Health said that no capacity analysis had been conducted regarding the ability of the CervicalCheck programme to carry out extra smear tests once the free tests had been announced by the Minister in April 2018.
This has resulted in a backlog of 78,000 tests and in some women waiting up to 27 weeks for their results. Imagine that wait. It is disgraceful.
I happen to believe that offering free tests to women who wanted them, given the calamity we witnessed last year in respect of CervicalCheck, was the right thing to do but the Minister should have ensured that the capacity was there to deliver. It is patently clear now he did not do that. It is yet another shocking example of the shambles of a system this Minister presides over and it is further evidence that he is not up to the job of leading our health service.
Given the scale of the CervicalCheck crisis, the very first thing the Minister should have done before offering free smear tests was to make it absolutely certain that the volume of additional tests could be dealt with within the medically indicated timeframe. The position of the Department of Health is that it was impossible to quantify the uptake in respect of repeat smear tests. This is nonsense. It is a relatively recent scandal. I am sure the Tánaiste will recall the public outcry and the interest in this subject at the time, so it is little wonder that 90,000 women availed of the offer of a free repeat test. We all now know about the Jade Goody effect, which, in 2009, gave rise to an increase in the number of women seeking tests in the wake of the death of that young woman. It is no wonder that it happened here. In fact, it is entirely predictable that it would happen here. However, what we got instead was a soundbite when no work had been done in advance.
We need to be able to trust the Minister for Health, the Department of Health and the HSE to respond appropriately and intelligently in a crisis. What work was undertaken since these backlogs were reported as far back as August of last year? Why has the backlog grown so continuously almost month on month? Is it the case that no effective action was taken? If action was taken, why are these actions not working to reduce the waiting times? Furthermore, what work is being undertaken at this time to ensure this backlog is cleared urgently and that tests are carried out within a recommended timeframe? What is the new revised deadline for the roll-out of the HPV test since two deadlines have already been missed?
The Deputy is right in one thing - the CervicalCheck screening process does not need another controversy. It has been a real challenge for the Government, the Department of Health and the HSE to deal with what was an extraordinary scandal a little less than a year ago. At all times, the Minister and the Government have responded in a way that has tried to put women's interests first. I am glad that it was confirmed at the health committee yesterday that the Minister, unlike what has been stated by some in this House, was not advised by his officials not to proceed with-----
That was not the case the Deputy made but it was a charge the leader of Fianna Fáil made this week.
The Minister was not advised by his officials not to provide free out-of-cycle tests for women on a temporary basis in order to try to provide confidence and reassurance. That is what happened. Undoubtedly, the response to that, as the Deputy has outlined, was significant as people sought reassurance, and that has put more pressure on the system. The HSE and the Department of Health are responding to that by looking for increased lab capacity to be able to deal with that significant increase, which is a combination, by the way, not just of an increase as a result of out-of-cycle free smear tests on the advice of GPs but also an increased uptake of the test generally. Therefore, the system has been put under a lot of extra strain. It is not easy to put expanded or new contracts in place with the labs concerned. What the HSE is now doing is prioritising the stabilising of CervicalCheck to get us back to where we should be, which is between four to six weeks of a wait as opposed to 24 to 26 weeks, which is not acceptable. That needs to be and is the priority now. The way in which we are responding to that is to look for and source increased capacity so we can get these waiting times down.
In the context of the switch to HPV testing, we are committed to this and international best practice would support that decision. Some countries have already moved to HPV testing but Ireland will be one of the first movers. We have committed in this year's budget to facilitating that transition and the preparation and scoping that is necessary to do that efficiently is under way. We also have to factor in the need to prioritise the stabilisation of the existing screening process, which we are doing. I am not in a position to give the Deputy an exact date. Those questions were asked yesterday at the health committee. As soon as we have a date we can commit to, of course, we will inform the House straight away.
I am a woman who uses that service. I can say on my behalf and on that of women I have spoken to that the Tánaiste is not filling me with any confidence. The wait time is now 27 weeks, which, as the Tánaiste stated, is not acceptable. The shaking heads, sighing, shrugging and all of that is not going to help. I asked him what concrete steps are being taken. In advance of making the offer, it is now clear that no steps were taken to ensure there was additional capacity despite the fact the need for additional capacity was absolutely predictable. We got a soundbite but no homework done in advance and no follow-up work done to date. There is no date for the HPV testing and, again, that has been long-fingered. It is another issue of women's health that has been put on the back-burner, which is not acceptable.
On the news yesterday, we saw a young woman who is waiting for the return of her test results. She was told that had she had the capacity to pay, it would have been turned around in two weeks. Is the Government doing anything concrete to ensure that this backlog is cleared as a matter of urgency and priority? What does the Tánaiste say to those women who have not jumped the two-tier recovery bus and who do not have the money to go private and jump the queue?
The introduction of HPV testing is not being long-fingered but it is going to be done properly in order to ensure that transition works and that we do not add any further uncertainty in regard to CervicalCheck in the future. This decision is not going to be rushed. The work is already under way to make sure this transition happens in a way that is seamless and that works. We are not in a position to give an exact date as to when that will happen. We are in a position to say the money is there to do that this year, and there is a process under way and a team working on that to make sure it is done.
What we are doing to focus on a backlog and waiting times that are far too long is to increase capacity, where that is possible. It is not a straightforward thing to increase lab capacity overnight. Decisions had to be made in response to what was a crisis at the time, where-----
That was a real commitment which resulted in real demand and real tests. It put the lab system under pressure and that has resulted in a delay in the turnaround times. We know that. The priority is to get those times down, which is what the HSE is focusing on.
The cost of the children's hospital is out of control. I laid out last night what I see as being at the root of the problem. How many variations have there been since this contract was awarded? What is the value of the different variations? How many more variations might the Government be expecting? The procurement process should have delivered the correct form of contract but it did not happen.
The Government has used a fixed-price contract and for that one must have a well-defined scope of works or the claims will come. We do not have a well-defined scope of work because, as I said last night, it is almost impossible with a complex engineering project such as a hospital, so the claims are coming, and we are only starting. We needed a bespoke civil engineering remeasurement contract but we did not get it. As I said last night also, in that situation the contractor does the work, it is measured and one pays accordingly and lets the quantity surveyors sort out the differences. The contractor looks at what avenues he has to make extra money.
The Taoiseach passed a comment about the low balling of contracts. He was a little on the naive side with his comment. I would argue that right now for BAM it is like picking apples in an orchard and that is a big problem for the Government. The legal firm is the adviser on how one procures and amends the tender documents and it has a duty to alarm its clients of the consequences of using standard documents such as those in the capital works management framework because they can only facilitate a fixed-price contract and they do not suit a job such as this one. That gives unbelievable potential to the contractor to get extra money as it goes. The legal firm is a construction specialist. It is not true that it does not know. It should know. That is part of its job. It did not have to rely on the capital works management framework, which the Department of Finance gives it. It had other options. I am seriously concerned with its performance and I think its professional indemnity should be considered. This is not good enough and it will cost the Government too much money. At this stage in the contract the Government has the potential for termination at will. It excludes loss of profits.
The cost of calling a halt is in the contract. We have not reached the point of no return. We are really only starting. The extra cost we are looking at now will be far exceeded in time if the Government continues along this road. The Government needs to stop and retender.
I note the Deputy's very constructive engagement on this issue in the House and the obvious experience he has in the construction industry which makes for a very helpful contribution. A process is under way now to fully evaluate what happened. Mistakes were made. There was a gross underestimate of the-----
-----cost of building the hospital. When the estimate was corrected, there was a dramatic change in the overall predicted and estimated cost of delivering the hospital. When we got clarity on the figure, the Minister brought a series of recommendations to the Government to make a decision on to how to proceed. I think he made the right decision to do that. What Deputy Wallace is focusing on, understandably, is how we got there, how we learn lessons from that and how we change systems in the future for project management or tendering processes for big projects such as this one. The Government is listening-----
What I respectfully suggest is that we, as politicians, have limited expertise in this House to make the right judgment calls in relation to this project. Our job as legislators and policymakers is to put structures and systems in place that ensure underestimates such as this do not happen in the future. By and large, when one looks at many of the other big projects that have been delivered, our systems have worked. I refer to the N17, the N18 from Gort to Tuam, the N11, the N7, the north docklands sewerage system and the Phoenix Park Tunnel. I could go on. There are lots of projects on time and within budget because the systems have improved significantly from seven to ten years ago when many projects went over budget. Something has gone wrong in relation to the estimation of cost of the children's hospital. We intend on getting to the bottom of that and learning lessons from it, and we will change systems where necessary in response to that to make sure it does not happen in the future. Of course we will take on board the constructive criticism, concern and suggestions that are made in this House. I do not think it is helpful to start naming individual firms in this House and to start apportioning blame before we have the full, clear picture of what happened. I will certainly not get into that space.
The Tánaiste is talking about learning lessons for the future, but I would like him to learn them for the present because I would argue that if the Government stops now, which it is allowed to do according to the terms of the contract, and retenders, it could save itself in the region of €500 million. The Government should opt for a remeasurable contract rather than stick with a fixed-price contract which will cost a lot more than €1.7 billion. I have already said that I do not expect the overall cost to stop at €2.2 billion.
I know value for money is a concern for the Government. I checked the Government's public spending code. One of the questions it asks is whether the Government is doing the right thing, namely, spending money to achieve the right objectives. I would say "Yes" because the Government is looking to provide a hospital that is required. The second question relates to doing it right, namely, spending money as efficiently as possible and avoiding waste. I would say "No" the Government is not doing it right. I accept that we will learn lessons for the future, but let us learn them for now. The Government can save itself a lot of money by stopping the project now and going for a retender. I am not interested in looking for heads either, but I ask the Tánaiste to look at the legal process and the conflict of interest between the board and the legal firm involved.
We have undertaken a process now that will examine those issues and we will come back with a report to the Government which we will publish. Following that, we can have a debate in this House in terms of the actions we should take on the back of that.
We have two challenges. First, we must get a children's hospital built. The current health infrastructure for children in this country is not good enough. Most parents in this House will know that if their child has required specialist paediatric care. We must improve the infrastructure. We will build one of the most advanced children's hospitals in the world. We are committed to doing that.
There have been numerous false dawns in terms of trying to get that done.
Second, we ensure that we get value for money. We must recognise that a significant mistake was made in this process when costs and quantities were being estimated. Those mistakes have been corrected and we now have a more expensive project. As far as I am aware, in terms of the advice to the Government, nobody is suggesting that by retendering we would get this done for less money.
I wish to raise the role of the head of the Office of Government Procurement in respect of the children's hospital.
I ask the Tánaiste to respond to the issues I am raising rather than giving a rationale for a new children's hospital. Nobody is denying the need for a new children's hospital, but there are important issues at stake here on which we need answers.
I want to raise the issue of this person's role and the statements that both the Taoiseach and the Minister, Deputy Donohoe, made on the record of this House. On Tuesday of last week, when asked if the head of the Office of Government Procurement, OGP, alerted the Minister for Finance, Deputy Donohoe, to the children's hospital's escalating cost overruns, the Taoiseach replied: "If somebody is on a board, his or her fiduciary and legal responsibilities are to that board and the correct line of accountability is from the chairman of that board to the line Minister, not individual board members acting on their own part." We now know that this statement was not true. These constraints do not apply as the board in question is not a company. It is a development board. The Taoiseach needs to correct the record of the House as what he said was simply untrue and misleading. I ask the Tánaiste to convey those concerns to the Taoiseach and request that he does that at the earliest possible date.
In respect of civil servants who are members of the boards of non-commercial State bodies, circular 12/10 applies and is very clear:
Where there is a significant public policy issue at stake or a disagreement within the board on a major public policy issue, the civil servant should request the Chairman to notify the Minister or, failing that, notify the Minister himself/herself.
Under protocol outlined in the circular, the Minister must be notified without delay where:
(i) There are serious weakness in controls that have not been addressed despite being drawn to the attention of the board or the Chairman;
(ii) There is a significant strategic or reputational risk to the body that is not being addressed;
Yesterday evening the Minister confirmed that circular 12/10 applied. He said: "According to the circular that the head of the OGP was subject to, it was his role to ensure that the parent Department responsible for the project was being informed of what was happening and that was happening." Either the official did what he was supposed to do and alerted the Minister or he did not. If he did not adhere to the circular, that is a serious matter. If he did, it is important that we know exactly when he did inform the Minister. Was that information provided without delay, as was required of the official, and can we have the detail of that? Can we also have information on the actions of that official in respect of his own Minister, Deputy Donohoe? Presumably, if he was aware of this escalating problem with the children's hospital, he would have notified his own Minister.
The Deputy has asked quite a lot of detailed questions. I will try to respond to them. First, Mr. Paul Quinn is the Government chief procurement officer and head of the Office of Government Procurement. Mr. Quinn was appointed in a personal capacity to the National Paediatric Hospital Development Board for a five-year term in 2013 by the then Minister for Health, the now Senator James Reilly. He was reappointed in 2018 by the current Minister for Health, Deputy Harris. Members of the National Paediatric Hospital Development Board, in line with the code of practice for the governance of State bodies and the board's own code of governance, have a duty to the board in the first instance, a responsibility to act collectively in decision-making and communication and an obligation to observe its confidentiality arrangements. The Department of Health, as the accountable Department, established reporting and governance arrangements for the project through which the board provided regular updates to it on the project. The Department of Health has already set out those governance arrangements in detail along with the timeline of when the board alerted it to the cost escalation and when the Department of Health subsequently communicated the new cost projections to the Government and the Department of Public Expenditure and Reform. In other words, there were agreed codes of communication, both on the National Paediatric Hospital Development Board and also between that board and the accountable Department, that is, the Department of Health. From my notes those codes and that process were followed.
I thank the Tánaiste. I was quoting from the circular. It specifies what is required of an official who is appointed as a board member in a body such as this. Under that protocol the Minister "must be notified without delay" where "There are serious weakness in controls that have not been addressed". It was quite apparent to anybody involved in the children's hospital that there were serious weaknesses in the controls. That was apparent from early 2018. Last night, the Minister, Deputy Donohoe, told us the official in question was doing what he was supposed to be doing and was notifying the Department and the Minister. When did he notify the Department and the Minister that this was the case? He was required to do it without delay. Maybe we could have clarification on when exactly he was told and whether or not he notified his own Minister, in this case, the Minister, Deputy Donohoe, given that Minister's responsibility.
I thank the Deputy. The point here is that he was on the board. He had a code of practice by which he was governed on that board. He was also accountable to the sponsoring Department, which was the Department of Health. There was a line of communication between the National Paediatric Hospital Development Board and the Department of Health. He had an obligation to play his role in that as a board member who was accountable to the Department of Health. That was the line of communication.