Hospital overruns discussed year before Harris says he was told

Minutes of steering group meetings are likely to intensify pressure on Minister for Health

Minister for Health Simon Harris said he became aware of potential overruns at the National Children’s Hospital in August 2018. Photograph: Niall Carson/PA Wire

Minister for Health Simon Harris said he became aware of potential overruns at the National Children’s Hospital in August 2018. Photograph: Niall Carson/PA Wire

 

Senior Department of Health and HSE officials discussed potential overruns at the new national children’s hospital almost +a year before the date when Minister for Health Simon Harris says he was informed of the rising costs, official documents show.

Confidential minutes of meetings of the top-level Children’s Hospital Programme and Project Steering Group show that members considered the increasing cost of the development on several occasions from early autumn 2017 through to summer 2018.

The documents show that as early as October 2017 senior officials were looking at options to address a deficit in funding, including scaling back the scope of the project or seeking more money from the Government.

Details of the minutes of the steering-group meetings are likely to intensify pressure on Mr Harris about the soaring cost of the new National Children’s Hospital which will now cost at least €1.7 billion.

Mr Harris has said he became aware of potential overruns in August 2018 but said he was not aware of the exact amounts involved until November.

A Government spokesman said last night that Mr Harris had “acted with all due speed” in notifying the Taoiseach and Minister for Public Expenditure Paschal Donohoe of the escalating costs in November last year.

The spokesman did not respond to comments by Mr Donohoe on Tuesday when he said that it would have been better had he been informed earlier about the cost overruns.

Mr Harris told the Dáil last month that the steering group was chaired by the HSE deputy director general and included senior officials at HSE national-director and Department of Health assistant-secretary level.

Concerns

The steering group minutes show that project director of the National Paediatric Hospital Development Board (NPHDB) John Pollock raised concerns about increased costs on August 29th, 2017.

In the next meeting of the group in October, Mr Pollock spoke of “emerging challenges” in the capital project and a “working estimate” was provided. No figure was recorded in the minutes for this estimate, and the group was told that it could be as late as March until “certainty” around the figure was provided.

Four possible options for addressing the funding deficit were discussed, including “descoping” the project, reallocating money from the wider HSE capital plan, and mitigating the deficit through philanthropic funding. Another option was to engage with the Department of Public Expenditure about additional funding.

The group agreed to prepare a case on projected philanthropy funding by March 2018. It was also agreed that a report would be compiled to describe the emerging risks which would also “commit to looking at immediate ways to mitigate the deficit”. It would also explore contingency options “in the event a sizeable deficit cannot be reasonably avoided”.

Eight senior officials from the HSE were present for this meeting, as well as three senior officials from the Department of Health.

In March 2018, the situation was escalated. The guaranteed maximum price arrangements “with main contractor are currently unsatisfactory and this issue has been escalated,” the minutes state.

In April, the group discussed further financial risks. “Pricing discrepancies between NPH quantity surveyors and BAM/M&E Contractors” were discussed. The discrepancies could not be agreed upon and went to an “agreed independent expert to adjudicate”.

The then-HSE deputy director general John Connaghan, asked about “the financial risk involved” to which Mr Pollock “explained it is too early to estimate at this point”.

In May, a Department of Health assistant secretary advised the board “to go to government for decision before the 2019 estimates process, September would be better than October”.

In August, a new estimate was given by the contractor. “It is likely that the final guaranteed maximum price will be significantly greater than originally anticipated,” the minutes state.

Commenting on the disclosures last night, Labour TD Alan Kelly said: “To the public it is unbelievable that so many Department of Health and HSE officials sat on this steering group month after month, expressed concerns about the escalating costs up to a year previously but that concern never worked its way up to the Minister’s office.”