Cost hike of €450m for children’s hospital ‘very disturbing’

PAC to hear €50m of overrun for St James’s site to come from health budget this year

Robert Watt, secretary general of the Department of Public Expenditure, has declined to attend an Oireachtas committee meeting  to answer questions on the hospital overspend.  Photograph: Dara Mac Dónaill

Robert Watt, secretary general of the Department of Public Expenditure, has declined to attend an Oireachtas committee meeting to answer questions on the hospital overspend. Photograph: Dara Mac Dónaill

 

An additional €450 million will have to be found to cover a “very significant and disturbing” escalation in the cost of the new national children’s hospital, Department of Health officials will tell an Oireachtas committee on Wednesday .

The sum would include additional exchequer funding of €320 million and €130 million that is expected to be raised through philanthropy, the health committee will be told.

Colm Desmond, assistant secretary at the Department of Health, is to say the impact of the increased cost of the project at St James’s Hospital, which is now projected to cost €1.43 billion, will see the timing of other capital projects in health “managed within the available health capital allocations”.

Mr Desmond will say €100 million of the additional money for the project is required this year. The Government had decided half of this will come from the health allocation and the other half will be met by reductions in capital allocations to all departments.

“There is no doubt that the additional costs associated with the project are of great concern and we must have assurance that phase B of the construction project will be delivered within budget and timescale,” Mr Desmond says in his statement to the committee.

Independent review

An independent review of the rising cost began this week, he notes, and existing oversight arrangements between the department, the Health Service Executive and the National Paediatric Hospital Development Board are also being reviewed.

Dean Sullivan, deputy director general of the HSE, will tell the meeting the spending review will be completed by March.

“The escalation in costs is of significant concern and will undoubtedly impact on other priority health investments,” according to Mr Sullivan.

Cost overruns have brought the current estimate of the cost of the new National Children’s Hospital to €1.433 billion compared with €650 million in August 2015.
Cost overruns have brought the current estimate of the cost of the new National Children’s Hospital to €1.433 billion compared with €650 million in August 2015.

Department of Health secretary general Jim Breslin has told the committee he is unable to attend due to interviewing commitments.

The committee had asked Robert Watt, secretary general of the Department of Public Expenditure, to attend to answer questions on the overspend.

However, Mr Watt has declined to do so. In a letter to committee chairman Dr Michael Harty on Monday, Mr Watt said the Minister at his department, Paschal Donohoe, attends the Oireachtas Committee on Public Expenditure and Reform as well as the Budgetary Oversight Committee.

“In effect, officials from this department attend hearings of these committees and most hearings of the PAC. These represent significant opportunities for officials to account for their policy responsibilities,” Mr Watt wrote, adding that it would be “impractical” to attend all Oireachtas committees.

Dr Harty has pointed out that Mr Watt’s department is responsible for Government procurement and for “ensuring proper use of resources and the provision of cost-effective public services”.