Dáil debates

Tuesday, 4 October 2022

Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

National Children's Hospital

10:50 pm

Photo of Carol NolanCarol Nolan (Laois-Offaly, Independent)
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82. To ask the Minister for Public Expenditure and Reform if he will provide details of the engagements his Department has had with the Department of Health and other Departments regarding the way the increased costs of the national children's hospital project will be managed within the overall agreed national development plan capital allocations; and if he will make a statement on the matter. [48255/22]

Photo of Carol NolanCarol Nolan (Laois-Offaly, Independent)
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As the Minister is aware, there are ongoing concerns regarding the cost of the national children's hospital. Has his Department flagged any of those concerns with the Department of Health or any other Department?

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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As the Deputy is aware, my Department is responsible for the allocation of public funds across each area of Government spending and ensuring that expenditure is managed by Departments in line with these allocations. My Department is also responsible for maintaining the national frameworks, such as the public spending code, within which Departments operate to ensure appropriate accounting and value for money in public expenditure. The responsibility for the management and delivery of investment projects within the agreed allocations and within the national frameworks rests with the individual sponsoring Department in each case.

In addition, several measures are in place to help ensure that budgetary targets are met. The Department of Public Expenditure and Reform is in constant communication with all Departments and offices and it monitors their drawdown of capital funds from the Exchequer against the published capital expenditure profiles, with information published monthly as part of the Exchequer statement.

With regard to the health sector, all expenditure is examined on a monthly basis through the tripartite health budget oversight group consisting of my Department, the Department of Health and the HSE. This is in addition to the ongoing contact between the health finance unit and the health Vote section in my Department in respect of expenditure issues in the health sector. The Department of Health also reports to the Project Ireland 2040 delivery board with regard to its national development plan delivery and its capital expenditure. This group meets six times per annum and consists of the Secretaries General of major capital spending Departments, as well as five external members.

Last week I published the budget for 2023, in which I allocated over €12 billion to Departments to spend next year on investment in vital capital infrastructure projects. The Department of Health will receive almost €1.2 billion to enable it to plan and deliver its investment in capital projects in 2023. The Department of Health has also had committed to it core sectoral capital allocations of €1.255 billion and €1.36 billion for 2024 and 2025, respectively, under the national development plan, NDP. It is the responsibility of that Department to prioritise within these NDP commitments to deliver capital projects under its remit, including the national children's hospital.

Photo of Carol NolanCarol Nolan (Laois-Offaly, Independent)
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I thank the Minister for his response. He mentioned oversight and his Department but have specific concerns in respect of the cost and rising expenditure on the hospital project been flagged? As he is aware, in March 2017 and March 2019 the Rural Independent Group, of which I am part, gave the previous Government openings to change course in respect of the national children's hospital when my colleagues provided opportunities for a radical reassessment of the project. The then Government failed to take those opportunities and now we are on track for unprecedented cost overruns and endless legal battles with contractors. Where was the Minister's Department in terms of oversight of this issue? We have learned from reports in the media last week that many of the costs are down to the fact that the contracts were signed before designs were even drawn up. That in itself was a recipe for disaster. We also know that more than 700 claims have now been lodged by various contractors against the project, with the associated amount thought to be in excess of €300 million.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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The first point is that my Department does not manage the capital projects of other Departments. It is their responsibility, in line with their legal obligations, to manage those projects, and it is the responsibility of the Accounting Officer to do so. Arising from the lessons that had to be learned from the national children's hospital, the public spending code was strengthened in 2019. I went further than that in the past year by bringing in a new external assurance process that involves setting up a panel of external experts and a new major projects advisory group to advise my Department in respect of major projects that come before us for approval.

On the national children's hospital, as the Deputy is aware, back in 2018 the then Government approved a capital budget of €1.433 billion. This included the capital costs for the main hospital at St. James's, the outpatient departments and urgent care centres at Connolly and Tallaght campuses, equipment for the three sites and the construction of the car park and retail spaces. There were other elements that it did not include, such as the integration and transfer of the services at the three children's hospitals to the new sites, ICT, a new electronic health records system and so on. The figure approved by the then Government was €1.433 billion. That amount has not yet been reached. Approximately €1.1 billion of that figure had been drawn down as of 20 September, so approximately 76% of the approved budget has been drawn down at this point. It is a matter for the Department of Health to manage the project.

Photo of Carol NolanCarol Nolan (Laois-Offaly, Independent)
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I again thank the Minister for his response but surely there is some intervention he can make with the Department of Health given that €1.1 billion has been drawn down and there are endless problems with the whole project. To be constructive, I suggest that we have a debate on the real cost and service implications of this train wreck of a project. Will the Minister commit to that? It is very important that we have that debate when such a level of expenditure is being reached and it is obvious that the project is hitting many problems.

To put in context what €1 billion of an overspend on this project could pay for in the area of health alone, I was informed in reply to a parliamentary question I tabled that the total cost of implementing the entire national cancer strategy between now and 2026 will be in the region of €840 million. The total net budget for palliative care for adults and children was just over €100 million. That still leaves €60 million that would provide homes to those who desperately need them. Serious amounts of money could have been saved.

We need to refocus our attention on this project which has been allowed to run wild. We need accountability and a meaningful debate. That is the only way forward. Will the Minister accept that the Rural Independent Group was right to demand a change in the course of action in 2017 and 2019? If the group had been listened to back then, we would not be in the mess we are in today but, rather, would most likely have a functioning children's hospital that would serve everyone. To come back to my core question, will the Minister agree to a debate on this issue?

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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There are many opportunities for projects such as this to be debated, such as at the health committee, here on the floor of the House as a Topical Issue matter and so on. It is not for me, as Minister for Public Expenditure and Reform, to commit to a debate on a project that is being managed by another Department.

As I stated, the capital budget for this project was approved in 2018. Since then, the public spending code has been strengthened. I have introduced a new external assurance framework to strengthen the oversight procedures that are in place in respect of major capital projects. We have a live contract here that has to be managed. The priority is to get the hospital built and open for the children of Ireland who urgently need it to be completed. The contractor is entitled to submit additional claims, and many such claims have been submitted, but the National Paediatric Hospital Development Board is entitled to defend those claims and has been doing so. I respect and support the work it is doing. It needs to conclude that work in the fullness of time and enable this hospital to be completed and opened.