Funding concern for large health projects

The Minister for Public Expenditure and Reform Brendan Howlin expressed concern at spending plans by the Department of Health for the proposed new national children’s hospital and other large healthcare projects.

In his official sanction for the HSE’s capital expenditure plan for 2012-2016, he said he accepted the priority which Minister for Health James Reilly had attached to headline projects such as the national children’s hospital, the programme for radiation oncology and the new central mental hospital.

In a letter to Dr Reilly on September 19th, he said: “However, in the current challenging fiscal climate and the HSE budgetary situation, I am concerned that the risks arising from commitments that would arise on these projects, combined with the scale of the ambition on other projects that have been prioritised, might be too high.”

Mr Howlin’s comments were before the Government decision in November to establish the national children’s hospital at St James’s Hospital, Dublin.

Mr Howlin also said in the letter he was prepared to review the issue of future year financial thresholds as the position became clearer on progress on the major projects and the overall budgetary situation.

In a later email to the Department of Health at the end of September, the Department of Public Expenditure said the sanction for capital spending basically meant the health service could not enter into commitments, including for the headline projects in 2013 and subsequent years which would exceed financial thresholds, without getting its approval.

In further correspondence to the Department of Health in October, the Department of Public Expenditure said the total level of contractual commitments made by the HSE in 2012 would not – when aggregated with commitments made in other years – without the prior sanction of its Minister exceed €250.5 million for 2013.

This could rise to €256.5 million if the approved programme of sale of surplus mental health facilities and expenditure on high priority mental health projects was achieved.