Harris told Donohoe of difficulty with health ‘funding gaps’ in May 2018

Minister requested re-profiling of health capital allocation to address capital shortfall

February 6th, 2019: Minister for Health Simon Harris TD has told the Oireachtas health committee that he remained unaware of the scale of emerging cost overruns on the national children’s hospital for almost a year. Video: Oireachtas TV

 

Minister for Health Simon Harris wrote to the Minister for Public Expenditure Paschal Donohoe in May 2018 to inform him of a “difficulty” in balancing the health capital budget with “funding gaps” emerging, documents released under Freedom of Information show.

In the letter, Mr Harris references the ongoing work at the national children’s hospital, among other projects.

Department of Public Expenditure sources indicated that instead of responding to the letter, it was “agreed that the issues referred to would be addressed in the estimates process”.

Taoiseach Leo Varadkar said last week the impact of the cost overrun at the children’s hospital on Budget 2019 was a red herring.

In the correspondence, Mr Harris asks that the allocation of capital money be “re-profiled” because of emerging gaps.

“Despite the relatively low level of capital funding in the recent past, a very ambitious programme of capital commitments has been maintained by the Health Service Executive, in particular through major capital projects including the new children’s hospital, national forensic mental health campus at Portrane, national plan for radiation oncology at Cork University Hospital . . .

“In the next three years, the overwhelming majority of the capital funding available on an annual basis will be absorbed by contractual commitments on the projects mentioned above.”

Mr Harris pointed out that “in 2018, there is an immediate difficulty in that the capital plan is not balanced, with a funding gap of €109 million. The HSE contractual commitments in 2018 amount to €425 million with the HSE building and equipping allocation of €418 million.

“Given the extent of the health estate and the demands outside of these major projects, this leaves little or no scope to undertake the essential investment in diagnostic and medical, to commence the planning and design of future projects including bed capacity.”

Re-profiling

Mr Harris requested a “relatively modest re-profiling of the health capital allocation to address capital shortfall in 2018 arising from the extensive commitments associated with national priority projects”.

While the 10-year capital allocation would remain the same, larger amounts would be brought forward to the first few years under the proposal.

Labour TD Alan Kelly said: “The public need to know what projects are being delayed or cancelled. The Taoiseach has called this a red herring but he is deliberately trying to distract from his Government’s disastrous management of capital spending. An extra €100 million now has to be pulled to cover the shortfall that would have paid for other much needed works.”

The Cabinet will on Monday discuss plans about how to find the €100 million to offset the overruns at the hospital, the final cost of which could top €2 billion.

Sources have said that the money will be found through a number of avenues. This includes underspends in some departments and through taking advantage of projects which are “stuck in planning” or subject to court proceedings.