Children’s hospital governance structures have to change – Harris

Minister has power to change board structure in order to strengthen project oversight

Simon Harris: ‘What the report doesn’t find is that there should be a clear-out of the board, in fact it explicitly recommends against.’  Photograph: Nick Bradshaw

Simon Harris: ‘What the report doesn’t find is that there should be a clear-out of the board, in fact it explicitly recommends against.’ Photograph: Nick Bradshaw

 

The governance structures of the national children’s hospital will have to change, the Minister for Health Simon Harris has said.

Mr Harris has indicated that he will place additional members on the hospital board charged with overseeing the project.

It comes after consultants PwC identified “significant failings” in planning and budgeting in a report into cost overruns.

The report found “red flags” were missed from an early stage.

The long-awaiting PwC report found all but €16 million of the over-run could have been controlled, and attributed most of it to an under-estimation of the project’s real cost. Retendering the project is ruled out as unfeasible and the report suggests there is little scope for savings.

Speaking at the Oireachtas Committee on Health this morning, Mr Harris said he has the power to change the structure of the board in order to strengthen the oversight of the project.

“There is no doubt that the governance structures need to change and they will need to be strengthened. What the report doesn’t find is that there should be a clear-out of the board, in fact it explicitly recommends against.

“In auditor’s speak it basically says if you were to do that you would lose such corporate memory that you could jeopardise the project.

“But it does say I need to strengthen it. You don’t bring in auditors if you think everything is great.”

He said he has the power to add people to the board, indicating that individuals with experience in health construction may be appointed.

Mr Harris said he intends to meet with the authors of the report.

The PwC found that there remains a “significant risk on this project, which will require careful monitoring and control.”

The cost could rise by almost €100 million if construction inflation increases to 10 per cent this year. Furthermore, elements of the design still have not been finalised.

If an upwards trend inflationary continues, there will be a “material cost implication over the duration of the construction” of the hospital out to 2022. There is “very limited protection” for the State against such inflationary increases.