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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Children's hospital cost overruns

Summary

Deputy Catherine Murphy challenged the spiralling cost and delays in the new children's hospital and questioned decisions taken when the Taoiseach held health-related portfolios. The Taoiseach accepted collective responsibility for earlier decisions, defended the hospital's value and design, said further inquiries were needed, and noted that overruns would require extra capital funding.

Over the weekend, we learned that PwC had been appointed to carry out an independent review of the colossal scale of spiralling costs of the national children's hospital.

The current estimate of the cost - it appears to increase day by day - stands at more than €1.73 billion, which is almost three times more than the initial estimate of €650 million. The timescale for the project is also going to be longer than that originally envisaged. While this crisis is unfolding on the watch of the Minister, Deputy Harris, the Taoiseach was Minister for Health when the relevant decisions were taken and when the initial information was placed in the public domain. It appears that said information had little grounding in reality. The origins of this spending extravaganza, which has not appeared suddenly in recent months, can be found in the establishment of this process, including that part relating to site selection. The Taoiseach was a key player in the process during his time as Minister for Health. There was a considerable delay prior to the awarding of the contracts. At the time, there was a great deal of speculation that the delay was caused by difficulties getting funding in place.

Did the figures ever really stack up? Did officials ever raise this issue with the Taoiseach at that time? Will he outline the extent to which he, as the then Minister for Health, scrutinised the tendering process? What set of circumstances led him to sign off on contracts that now seem to have been a work of fiction? Was the veracity of the cost projections and the timescales rigorously tested by the then Minister and his officials? If it was, how have we ended up in this predicament? We all know that the health budget is finite. The cost overrun has already had an impact on health services and will continue to have such an impact. What assurances do we have now that there will be no further increase in the estimated cost of building this hospital?

We accept that the new children's hospital is desperately needed. Fine Gael likes to laud itself as a party of prudent fiscal management - the Taoiseach did so earlier - but in the case of this project, it appears that a blank cheque has been written for those who have been awarded the contract to develop the site. There is absolutely nothing prudent about that. Did the Taoiseach, as the Minister for Health of the day, and his officials engage in due diligence to rigorously test the veracity of the contract proposals, specifically in relation to cost? What immediate steps are being taken, or have been taken, to stop the overruns I have mentioned? What is the updated figure, as of today, in relation to the cost? What health projects are now in doubt because of the overruns?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

I thank the Deputy. For the record, the decision to opt for the St. James's Hospital site was made when I was Minister for Transport, Tourism and Sport.

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The Taoiseach is going to hide behind that now.

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Leo Varadkar The Taoiseach Fine Gael

The decision in respect of tendering was made when I was Minister for Social Protection. Planning permission was secured when I was Minister for Health.

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The Taoiseach is blaming everyone.

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Leo Varadkar The Taoiseach Fine Gael

I was a member of all of those Governments. Therefore, I accept collective responsibility for the decisions in question, as should everyone who was around the Cabinet table at those times.

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It was the Taoiseach's decision.

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Leo Varadkar The Taoiseach Fine Gael

It was decided at an early stage that the best way to pursue the new hospital, and ensure it was built well, was by establishing a national paediatric hospital development board. A dedicated board, with its own chairman and its own accountability structure, was established to make this development happen. The employees had a substantial amount of experience in delivering big projects like the Aviva Stadium. When I was Minister for Health, the costs were in the region of €600 million. We were aware at the time that the costs were always likely to increase, not least because of construction inflation.

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The wrong site was chosen.

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Leo Varadkar The Taoiseach Fine Gael

Additional things, including ICT equipment and sprinkler systems, had to be added along the way.

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There is no helipad.

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The cost has increased from €600 million to €1.7 billion.

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Leo Varadkar The Taoiseach Fine Gael

The cost was always likely to increase, although not by the amount by which it has increased in recent months.

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The Government was warned about the site.

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Leo Varadkar The Taoiseach Fine Gael

Further inquiries are required. The Department of Health is making those inquiries. I imagine that the Committee of Public Accounts and others will want to do the same.

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The cost has increased by over €1 billion.

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Leo Varadkar The Taoiseach Fine Gael

When we discuss the cost of the new national children's hospital, we should not forget the value of what we are building. The main hospital will be at the St. James's Hospital site. The satellite centre in Blanchardstown will open this year and the satellite centre in Tallaght will open next year. We should not forget the value of what we are building. Something struck me when I was watching the news on New Year's Day.

I saw the pictures one sees every new year’s day of the babies who are the first born that year. It occurred to me that those babies born this year will be alive in the 22nd century. They will be alive in 2100 or even in 2110.

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It is the old Clinton line.

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Leo Varadkar The Taoiseach Fine Gael

We are building this hospital not for one generation but for three, four and five generations. Let us not lose sight of the value of this development.

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It is going to cost what it will cost.

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Leo Varadkar The Taoiseach Fine Gael

There will be an individual room for every child with the possibility of their parents being able to stay in the room with them, five MRI machines and 15 theatres. This has the potential to totally transform the quality of paediatric care in Ireland, and not just for one or two years. This is a project that will last 100 years or more.

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The same building, which was proposed, is being built. If we consider the costs in other countries where hospitals are being built, they are not of the order of the costs we face. Just because it will be the most expensive hospital in the world does not mean it is will necessarily be the best one but I hope it will be one of the best. The reality is that there are major cost overruns. Would the Taoiseach have signed off on this when he did if he knew it was going to cost three times what was projected at that time?

I asked the Taoiseach what other health facilities will be impacted by virtue of the fact the capital budget will be greatly impacted by this development. Dr. Fergal Hickey in a radio interview this morning spoke of the need for capital investment to deal with overcrowding. We understand investment is needed for the likes of Sláintecare. In that context, what will not be done? I ask the Taoiseach to answer the questions I asked him. What is the cost, as of today, of the national children's hospital?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The cost as of today is exactly what it was back in December. I do not have the exact figure in front of me but it is about €1.4 billion with additional contingencies above that, particularly around construction inflation. If there has been any change since the week before Christmas, I have not been informed of it. It is what it was then.

In terms of whether I would have signed off on it, it is impossible to answer a hypothetical question like that. One would have to know what the alternatives were, what the costs of those alternatives were-----

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A greenfield site.

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Leo Varadkar The Taoiseach Fine Gael

-----and what the pros and cons of those were, and there were many cons in terms of a greenfield site.

Regarding capital projects, Deputy Catherine Murphy will know that we added 250 beds to the acute hospital system last year. The service plan provides for another 140 to 150 to be added this year, and that will happen and will not be affected by this. However, we will need to find an extra €100 million because of the overruns this year and that will have to come out of capital budgets. Roughly €50 million will come from the capital budget of the Department of Health and roughly €50 million will come from the capital budgets of every other Government Department. We are currently working out how that can be done. The Deputy should bear in mind it is in the context of a capital budget of about €5 billion a year, so it is in the 1% or 2% territory. We anticipate it will mostly be achieved by postponing or delaying projects by two or three months rather than having to cancel any particular project but that has yet to be worked out.

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