Catherine Ardagh (Fianna Fail) | Oireachtas source

I thank the Minister for coming to the House. He has given us a great run down of what exactly we will get in the hospital, and we are grateful for that. While we do not dispute the need for the hospital, we dispute the cost management associated with the rolling out of the project. This is where the grievance lies. The Government found out the project was €450 million in the red in November. In February 2017, I divided this House and called on the Minister to come in to discuss cost overruns after comments made by Mr. Tony O Brien at a meeting of a health committee. At that time, the Minister sent in Minister of State, Deputy Catherine Byrne, who said the cost overrun was just 5%, which we now know was untrue.

The Minister was told of an overrun of €191 million in August of last year and of another €200 million that was disputed. A month later, it was learned through a parliamentary question that the budget for the project was on track. The Minister told members of my party that the Government overrun was on track. In December 2018, Mazars pointed to a lack of early warning systems. It materialised that costs were ballooning and issues with estimating costs accurately had been evident from the very start. It is clear that structures needed to be implemented to ensure individuals were held accountable.

The estimated cost of the new hospital on the campus of St. James's has risen from the original cost, €450 million, to in excess of €1 billion. A significant proportion of the €450 million increase, which was undisclosed during Fine Gael–Fianna Fáil budget negotiations, can be traced back to this time, including some €100 million in omissions and an underestimation of material costs. The preliminary investigations by Mazars, delivered last December, determined that a 56% increase in construction costs led to the cost per square metre of the new hospital jumping from €3,600 to €5,600. It is clear that construction inflation was an issue. It seems not to have been taken into consideration at all by the board. The report examined a number of issues, including the cost increases and the reporting of those increases. Among these issues was the fact that the final design added some €94 million in cost to the original budget due to the apparent understatement of the quality and quantity of materials needed.

The National Paediatric Hospital Development Board has seen four chairman come and go along the way. It was reported on 6 February in The Irish Timesthat the children's hospital project steering group, the body overseeing the €1 billion project, consistently flagged issues related to capital costs as far back as October 2017. To say this is a saga is an understatement but now the project is having serious knock-on effects in other areas. Yesterday, the HIQA report into fostering services, which the Minister's Department oversees, showed that Dublin South-Central alone has been greatly affected and that there has been a regression in care for minors in foster care. There is a serious lack of oversight. We have been promised primary care centres in Drimnagh and elsewhere but they have not materialised. It seems this is because the cost overrun at the hospital is taking funds from projects run by the Department and from other Government funds. The total in funds to be paid out in SUSI grants will drop by more than €2 million in 2019. The Minister for Education and Skills, Deputy McHugh, has proposed a cut to third level funding in the region of €15.5 million from the education budget. An analysis published by the Parliamentary Budget Office, PBO, clearly indicates the Government is deprioritising education.

This mismanagement by the Department of Health is having a serious knock-on effect on other Departments, and we are seeing deprioritisation of projects within the Department of Education and Skills and, more seriously, the Department of Health itself, particularly in regard to primary health care centres promised in 2011 by the Fine Gael–Labour Government. The latter have not been delivered. One of the excuses we are given is the cost overrun at the children's hospital.

Not only has the cost of the hospital increased by €450 million but we do not know at this stage what the exact final cost will be. We are aware that residents living near the hospital have brought actions against the hospital because of subsidence at their homes. This is before the courts and we do not know what the court actions will cost. The Department will have to pay these costs to compensate the residents. I have made inquiries and have been told by the Department that the matter is sub judice. Nothing is being done, therefore, to help the residents. The Minister has invited us to see the hospital site but I invite him to go to Clancourt and see the destruction caused to many residents' homes owing to subsidence.

The project is worthwhile and it is important that it proceeds but the cost overruns and management not only of this capital project but also of many others around the country have to be considered. Anyone who builds an extension, even on a small scale, is conscious of costs overrunning and the cost of bricklayers and electricians. It is something we all keep an eye on to ensure projects proceed according to plan. If one does not have the money, one cannot go ahead with a project. There is basic mismanagement in the case of the children's hospital. Taxpayers are disappointed the money has been spent without any proper consideration as to what it is being spent on and without any departmental foresight.