Thursday, 14 November 2019
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Capital Expenditure Programme
2. To ask the Minister for Public Expenditure and Reform the capital projects that are to be delayed or deferred in the years of the National Development Plan as a result of cost overruns such as the national children’s hospital and National Broadband Plan, which the Irish Fiscal Advisory Council calculates could reduce funding for capital projects by as much as €17 billion; and if he will make a statement on the matter. [47029/19]
4. To ask the Minister for Public Expenditure and Reform if the escalating costs of the national children’s hospital will require changes to his budget projections or to promised capital expenditure; and if he will make a statement on the matter. [46799/19]
The national development plan set out approximately €116 billion to be invested in capital projects in the ten years from 2018 to 2027. According to the Irish Fiscal Advisory Council, if the Government continues its trend of allowing major overruns on major Government flagship capital projects, the funding available to other capital projects will be reduced by as much as €2 billion per year. We can already see the impact of this issue with regard to the national broadband plan and the children's hospital. What capital projects, if any, has the Minister's Department identified for delay or deferral on the back of the enormous overruns currently being seen, as the Irish Fiscal Advisory Council has indicated that capital projects will be squeezed by €2 billion per annum if this trend continues?
I propose to take Questions Nos. 2 and 4 together.
As I have previously indicated, I intend to provide the capital required to fund the additional cost of proceeding with the national broadband project from future revenues. This will be done, and has been done, in the context of updating the overall capital ceilings set out in Project Ireland 2040. This means that the decision to approve the appointment of the preferred bidder will have no repercussions for other planned projects within the national development plan, NDP. Additional costs in respect of the national children's hospital have been met this year by reallocating savings made in other sectors, within the overall national capital envelope.
The Deputy went on to refer to the Irish Fiscal Advisory Council. The council has carried out some analysis of the impact of cost overruns in its latest fiscal assessment report, which draws on domestic and international experience. It is really important to note that we have not experienced cost overruns of €17 billion, nor is any such scale of overrun in prospect. What IFAC has prepared is a technical projection of the situation if the very high cost overruns we experienced with regard to the national children's hospital were to be experienced on all major projects.
As IFAC goes on to point out, Ireland is not alone in facing challenges in managing cost on major projects. This is why Project Ireland 2040 seeks to reform how public investment is planned and delivered. It sets out a strategic vision for public capital investment and signals a shift to a greater integration of regional investment plans with local planning. It also involves a number of different bodies including a construction sector group, a delivery board, and an investment projects and programmes officer, who will oversee the delivery of the plan.
The Government's approach is extremely worrying. The Irish Fiscal Advisory Council has shown that, under the Minister's watch, major capital projects, of which I have mentioned two, are running at 100% to 300% over budget. In respect of the national broadband plan, we are looking at an overrun of 500% for infrastructure which the public will not even own at the end of the day. That is an overrun of €2.5 billion more than was initially budgeted for in respect of this project alone. The overrun on the national children's hospital is close to 100%, double the original cost. That overrun represents nearly €1 billion. We will not know the final cost of that project until later in the year. This funding could be used to resolve the housing crisis, to build primary care centres, or to develop schools or flood defences but the Government seems to be absolutely asleep at the wheel when it comes to managing the public finances when it comes to large projects like this. What plans does the Minister's Department have for controlling cost overruns on major-scale projects in the future?
On the same question, I will particularly focus on the implications of the overrun on the children's hospital on other capital projects within the health service. In May of this year, the then acting director general of the HSE said that she had growing concerns about the capital funding position of the organisation and the emerging impact of the children’s hospital on its overall capital programme. I am particularly concerned about the delivery of the primary healthcare centre for the Drimnagh area that has been promised since 2014. This is an ageing population. We already have an Alzheimer's unit in temporary accommodation. The infrastructure for the service in this area is very poor and has been there for decades. We have been promised a primary healthcare centre since 2014. In the response to a recent parliamentary question to the Minister, I was told that: "It is important to recognise that all capital development proposals must progress through a number of approval stages" and that an application to extend planning permission for the primary care centre in Drimnagh had been made. The building was supposed to start by the end of November but nothing has started. An application has been made to the council to extend the planning permission. This is not good enough. The delivery of services to local populations is crucial.
Deputy Doherty asked me what we are doing to learn from the situation in respect of the national children's hospital, which I have said is unacceptable. We are in the final stages of revising our public spending code to ensure that the delivery of projects of huge scale is managed better than the delivery of the national children's hospital. He made reference to school projects, primary care centres and housing units. Let me tell him where we are in those respects. In 2019, 90 new school buildings were delivered. Some 127 primary care centres have been delivered and a further 11 are due to be delivered, open and looking after local communities and citizens this year. Beyond that, we have plans for a further 70 primary care centres to be delivered in local communities to enrich the healthcare provided. The Deputy referred to where we are in respect of housing. By the end of this year, 6,500 more social homes will be delivered. Things went wrong with the national children's hospital. These were unacceptable and we are addressing them but, as we are doing that, let us also recognise the progress that has been made in the very areas the Deputy called out. I will make the case for that progress in this House.
With regard to Deputy Smith's comments, which related to Drimnagh primary care centre in particular, I am not aware of the status of this project but I know that primary care centres and the facilities they offer make a big difference to local communities. I will find out where the project stands and the Minister for Health or I will write to the Deputy.
The Minister says that lessons have to be learned from past projects and talks about revising the public spending code, an issue to which I will return in a later question. I have outlined two projects, however, that are being funded by taxpayers' money, by fathers and mothers who are out working every hour they can get and paying their taxes. These people expect the Government to ensure that the revenue collected is spent appropriately. In these two projects, the overruns equate to €3.5 billion. There is an overrun of €2.5 billion on broadband and an overrun of €1 billion on the national children's hospital. There is no doubt that if these projects were managed properly that €3.5 billion could be used in areas which are starved of investment, the areas which I talked about. It could enhance the investment already being made in these areas.
The Minister talked about learning lessons. We know that the cost of the national children's hospital increased from €790 million to the current price tag of €1.73 billion. Can the Minister commit to the House that this price tag will not reach the €2 billion mark, as many of us in the House fear and have suggested?
Will the Minister categorically give that commitment to me and, more importantly, to those who pay their taxes and expect him as Minister for Public Expenditure and Reform to manage revenue appropriately?
I argue that no matter how many times or how I ask this question I do not receive an answer to it. I do not believe I will get one from the Minister either. The Government is attempting to use its ideological commitment to competition, competitive tendering and the free market, until the next general election, to disguise the fact that the way it does things, with its ideological commitment to free market mechanisms, has cost the State and the taxpayer way more and delivered fewer results. I ask this question specifically about the situation in Drimnagh. Why has it taken six years to deliver a primary healthcare centre to take the pressure off local hospitals such as St. James's Hospital and Tallaght Hospital? It will not be delivered because of the cost overruns and overspend on the national children's hospital project, the national broadband plan and so on. The Minister claims to be a good housekeeper and prides himself on his fiscal prudence. I argue that, rather than delivering the services that are required, he is driving nurses out onto the streets to strike. He has a preference for withholding an increase in the national minimum wage and favouring other ideological commitments and has done so. In this case he is depriving an entire community in Dublin 12 of the services they were promised and which they deserve.
Deputy Pearse Doherty referred to hardworking families, hardworking mothers and fathers, the young children who were depending on schools being completed and hospitals being available to them, if needed. They are the very same people for whom we are seeking to deliver projects such as the national children's hospital and the national broadband plan. It is in order that young children can have access to the best surgery and if the sickest children need specialised care, they will have the opportunity to receive it in Ireland. We are looking to deliver the national broadband plan in order that children growing up in towns and villages will have the same opportunities as children living in parts of Dublin. That is why we are undertaking these projects.
The Deputy referred to where things had gone wrong. I want to name the projects we are delivering on time and within budget. They include the new road projects in Longford and the primary care centre projects on which I have touched, as well as the investment in water infrastructure, the kind of investment Deputies say they want to see, but, of course, they were against the way it was proposed to pay for it.
On the Deputy's question about the cost of the national children's hospital, I will not give any further indication of what the final cost will be until I have clear information available to me, but I have always said there is potential for the cost to change, given all what we have been through on the project. I will provide the information for the Deputy and the House when it is available to me, but the Deputy can be confident that we will do all we can to ensure good value for the taxpayer will be delivered, given the importance of the project and all of the lessons we have learned in relation to it.
I said I would try to give Deputy Bríd Smith an answer, but if she does not believe what I am offering, I will leave it to her to pursue the matter in other ways. She referred to ideology and the free market. We are having a debate about a public capital plan of more than €110 billion, under which we are investing the people's money to try to deliver better public projects for it.