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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Children's hospital cost overrun

Summary

Deputy Mary Lou McDonald challenged the projected national children's hospital overrun and wider procurement failures. The Taoiseach said projects would be deferred rather than cut, defended the hospital’s value, and said an investigation and future publication of the report would follow.

The projected cost overrun in respect of the national children's hospital is, at best, a fiasco and, at worst, an example of gross incompetence on the part of the Government and those overseeing the project. What is most worrying is that, despite the fact that this overrun is set to blow a hole in the capital budget for years to come, no one seems willing to take responsibility for it. The Department of Public Expenditure and Reform, whose function is to supervise Government procurement and public expenditure, has gone into hiding. Its Secretary General has refused to appear before the Oireachtas Joint Committee on Health to account for the Department's role in this process.

On "The Week in Politics" at the weekend, the Chief Whip and Minister of State, Teachta Kyne, said that the position of the Secretary General was not sustainable. He was right. He offered up the view that the Comptroller and Auditor General could review the spiralling cost of the children's hospital. We in Sinn Féin welcomed that suggestion and were hopeful that such an investigation would be forthcoming, but lo and behold, a few hours after the suggestion was made, it was rebuffed by a Government spokesperson. It would seem that the Minister of State either misspoke or was slapped down. Which was it?

There are serious issues to be examined. The original tender from BAM was €131 million lower than the next bid. Did anyone in government raise questions as to how the accepted tender could be delivered when others were indicating clearly that it would cost over €100 million more to deliver? Surely the Taoiseach will agree when I suggest that someone or a group of people have messed up seriously. Will he now act without hesitation and agree to a full public investigation into what has happened and who is responsible? This is serious stuff.

The Government has committed to capital spending of €3 billion over the next four years. An overrun of more than €450 million will reduce that amount by up to 15% and will stop projects that have been provided for going ahead. That is the reality. There is significant concern in communities across the State about how the overspend will impact on them and on commitments made to fund badly needed projects. For example, what of the commitment for a new MRI scanner at the Midland Regional Hospital, Mullingar? What about the second cath lab at University Hospital Waterford? What about the Drimnagh primary care centre? I could go on.

What projects will be cut because of this scandalous cost overrun? People want an answer to that question. Will the Taoiseach clarify whether he agrees with the Minister of State that the position of the Secretary General of the Department of Public Expenditure and Reform is not sustainable and that he should make himself available to answer questions?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

Thanks very much, Deputy. First of all, it is not €3 billion. No projects will be stopped and no projects will be cut but some projects may have to be-----

Comment on this
Leo Varadkar The Taoiseach Fine Gael

----deferred. It requires a reprofiling of about €100 million worth of capital expenditure this year out of a total capital budget of €7 billion. It requires a reprofiling of the budget of somewhere between 1% and 2%, half of that coming from the Department of Health and the other half coming from other Departments. Where there are overruns in expenditure, there are consequences, but it is not true to say that any project will be stopped or cut or cancelled. Some may well be deferred.

When we talk about the children's hospital, I really think we need to understand the value of this project as well as the cost. This is going to be a state-of-the-art children's hospital, a revolution in healthcare for our children - a hospital attached to a major adult hospital, a maternity hospital and an academic centre, with 450 single beds, with rooms for parents to stay beside their sick kids at night-----

Comment on this

Expensive bread and board.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

-----with 15 theatres, five MRI machines, parent accommodation, and outpatient and-----

Comment on this
Leo Varadkar The Taoiseach Fine Gael

-----urgent care centres in Blanchardstown and in Tallaght-----

Comment on this

Not a single extra place.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

-----allowing a whole new model of paediatric care to happen in this country, the kind of which we have never seen and a hospital that will be born digital with an electronic health record. That is the value of it. Like many of these big, expensive, important projects, whether it is the port tunnel or terminal 2 at the airport or the Luas, when it is built, everyone will be glad that it was built and will want to be associated with it and not the criticisms thereof.

Comment on this

No maternity services.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

An investigation will be carried out into the reasons for the overruns. PwC, the major accounting and consultancy firm, has been retained by the Department of Health to carry out that investigation. I am always afraid to put a timeline on investigations or inquiries, as they always seem to take longer than we expect-----

Comment on this

How much will it cost?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

-----but as soon as it is done, that report will be furnished to the Government and published thereafter. If people wish to make further inquiries on foot of that, having all the facts, that would be very welcome.

Mr. Robert Watt is the Secretary General of the Department of Public Expenditure and Reform. He regularly accounts to committees - the finance committee and the Committee of Public Accounts - and he will do that on any aspect of expenditure. However, the Accounting Officer for the Department of Health and for this project is Mr. Jim Breslin, and he will make himself available to account for any health expenditure to the health committee. I understand a date has been set for that.

Comment on this

The Taoiseach need not convince anybody on the necessity of having a world-class children's hospital. God knows, people have waited long enough for it, but that is not the source of my questions. I am questioning the efficacy and effectiveness of the procurement procedures of the State. The Taoiseach should bear in mind that in the term of office of the previous Government his party made a virtue of the fact that it had overhauled procurement procedures to avoid precisely this type of scenario of cost inflation and potential wastage of expenditure by the State. It is for that reason that Mr. Watt needs to present himself to the Joint Committee on Health. I am well aware that Mr. Breslin is the Accounting Officer for the Department of Health, but I am with Deputy Kyne, the Government Chief Whip. I do not believe Mr. Watt's position is sustainable and see no good reason he should not present himself to the Joint Committee on Health. A review by PwC is all well and good, but it is not in government and running Departments. Where we need accountability for this cock up is among people in government and the senior civil servants who advise, guide and implement Government decisions. The Taoiseach is dancing on the head of a pin in saying matters are simply being deferred in respect of other spending. Neither people living in Waterford who are waiting for a second catheterisation laboratory, nor people living in the midlands or Drimnagh will welcome or feel in any way reassured by the Taoiseach's distinction between a cut and a deferral. Will he confirm for the House that he will make available a full and comprehensive list of deferred and re-profiled projects in order that people can make a decision for themselves?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

We will make it available when we have it. As the Deputy is aware, in the procurement process for any project there are a number of steps along the way. A project must have planning permission; it must then to go to tender and be built. We may find other projects have been delayed for reasons beyond our control. For example, sometimes a project will not receive planning permission, which in itself creates a saving. When we have the list, we will provide it. However, I can assure the Deputy that none of these projects has been cancelled and stopped. The report on the inquiry being carried out by PwC will be made available. The Deputy correctly states PwC is not in government. It is also not in opposition, which means that it will be objective and not political in coming to the facts. When we come to the facts, the report will be furnished to the Government and then published. People can take it from there.

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