I ask the Taoiseach about reports in this morning's newspapers that Our Lady's Children's Hospital in Crumlin will have to close a ward almost immediately and another later this year because of a cost overrun of €10 million. The Health Service Executive, when it was set up, was purported to be a method of delivering a world-class health service for this country, funded by the Taoiseach, who was then Minister for Finance. Yet he has stood over a budgetary situation in which at the first sign of trouble in any hospital, when the cost base is examined, the answer is to close wards and not to treat patients. This is a policy of lunacy.

Of all the hospitals in the country, the children's hospital, as the Taoiseach is aware, does exceptional work which is extremely sensitive and personal to potentially every family in the country. We are four months into the year and a ward is being closed, with another to be closed later in the year, because of a €10 million overrun. This was announced on the same day as the now absent Minister for the Environment, Heritage and Local Government announced a toothless mayoralty for Dublin. It has the potential to affect every family in the country.

The Taoiseach has been at the children's hospital, as have I and members of all parties, and we have seen the exceptional work done there. What is the Taoiseach's response to this? A ward is being closed, with another to follow, and children denied operations in Crumlin will either go on a long waiting list or be sent to the UK under the National Treatment Purchase Fund. This is a crazy policy. Has the Taoiseach considered the situation? The hospital has expensive equipment, trained consultants and trained front line staff, and it is now being denied the opportunity to treat patients from all over the country. What is the Taoiseach's plan to deal with this?

Every year the service plan devised for all hospitals must be adhered to in the interest of budgetary sustainability and in order to provide services in all our hospitals. It is important to point out that Crumlin hospital was allocated just under €140 million for this year, which is an increase of more than €38 million, or 39%, since 2004. There is a need for greater co-ordination between Crumlin, the National Children's Hospital, Tallaght, and the Children's University Hospital, Temple Street, to avoid duplication in the provision of out-of-hours services and so on. Such an approach would provide the services required while avoiding extra costs. Co-ordination of services across all three hospitals, in the interest of providing services for children in our straitened budgetary circumstances, is the way forward. A meeting has been held between the chief executive of the HSE and the chairman of the medical board of Crumlin hospital, and progress was made in that respect.

As I said, there is a need for a more co-ordinated approach among all three hospitals. Closing wards should not be an initial response; the initial response must be to obtain better co-ordination of services. That is the best way of ensuring we maintain service levels, and it is the approach that will be taken. Savings of €6.5 million have already been identified by the hospital in respect of its budgets and these are being implemented, but it is important to point out that better co-ordination should help alleviate the worst aspects of the problem.

I accept the Taoiseach's comments about the need for co-ordination. Crumlin hospital has found €6.5 million in cuts from its cost base but that will not solve the problem. A ward has been closed; trained staff and expensive equipment will lie idle and, as a consequence, children will not be treated. The system is all wrong. At the first sign of budgetary difficulty, the hospital looks at its cost base to see what to do. It cut €6.5 million and stopped treating patients. In other systems, the opposite would happen. Fine Gael has proposed that money should follow the patient and hospitals should be paid for what they do. If they are given €140 million for 2009, why is the patient seen as an obstacle, not a resource? Does the Taoiseach believe the system he has stood over for 12 years can deliver the services we need and patients deserve? Four months into the year a children's ward is being closed in this hospital. Does the Taoiseach not accept it would be a far better system if hospitals were paid for what they did, if they saw that instead of closing wards and leaving expensive equipment unused, they should be used more, with theatre times extended? Trained consultants and front-line staff should see patients as a resource, not as an impediment. This has been ongoing for 12 years and it is not working. Will the Taoiseach consider the proposal made by Deputy James Reilly on behalf of Fine Gael, that the "FairCare" system should apply here, where the money follows the patient, rather than the other way round? In the immediate term, to meet the €10 million shortfall in 2009, the Minister for Health and Children has repeatedly spoken about her redundancy programme within the HSE. This would save more than €10 million at any one time and allow the hospital to keep its children's wards open, while enjoying better co-ordination between hospitals.

We have not seen the costings for the "FairCare" plan, that is one of the problems. If Deputy Kenny has it costed, we could chat about it, if it is intelligent.

Does the Taoiseach support the principle?

In the meantime, there is no such thing as unlimited resources for the provision of health care in this or any other country.

It is based on the use of existing resources.

Instead of looking at every hospital as a stand-alone institution, we must look at hospitals as a network providing care, avoiding duplication and maintaining service levels for children's services.

The Government does not want to know.

In Dublin there are three such hospitals. More than €300 million is being spent on the budgets of Crumlin, Temple Street and Tallaght hospitals. If they were to co-ordinate and act as one in the provision of services, savings could be made without affecting service levels. That is the approach being taken. Under the new consultants' contract, there is a proposal to have a single clinical director for the three hospitals to co-ordinate services and work with professionals within them. The patient, therefore, would not be affected and savings of up to €20 million could be made if there was greater co-ordination between hospitals. That is the approach that must be taken.

The Government has had 12 years to do this but it has done nothing.

That proposal was made following meetings on these matters. It is the common-sense way forward. I hope everyone in the hospitals concerned will agree with that approach and proceed on that basis in order that we can provide the levels of service required, given that we have limited resources available.

I hope a lot fewer children get sick.