Tens of millions redirected to pay for children’s hospital cost overrun

Senior public officials complained about the “unfortunate situation” they found themselves in as the Government tried to find €99 million in savings to cover cost overruns at the national children’s hospital.

New correspondence has revealed concerns raised by officials in Government departments about the “re-profiling” of projects because of the increase in the cost of the hospital, which was estimated at €800 million in 2014, €983 million in 2017, and €1.43 billion now.

Tens of millions were redirected from Irish language and Gaeltacht support schemes, the carbon fund, rural funds, waste management initiatives, flood risk management, roads and higher education projects, documents released under the Freedom of Information Act show.

Department of Finance official David Byrne wrote to a colleague in the Department of Public Expenditure on January 31st, raising concerns about the capacity to find the savings sought.

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“This is, of course, an unfortunate situation we all find ourselves in,” he wrote, adding that his department would try to be helpful but had concerns. “This department will need some Brexit-related expenditure support and you will recall we discussed that with you at budget time.

“This department typically uses almost all of its allocation in any given year and does not typically have leeway for capital expenditures being returned to the exchequer.

“For example in 2018 we spent 99.9 per cent of our budget and returned less than €5 million to the exchequer. Indeed, our capital carryover amounts are often very small in comparison to our overall capital budget.”

Public Expenditure

In early February, Department of Public Expenditure official Brian O’Malley wrote to his department colleagues saying they should consider redirecting money from the National Shared Services Office, the Public Appointments Service and Revenue.

“Revenue had no increase in overall capital for 2019 despite Brexit asks. I spoke with Revenue and they will revert to me in the morning, based on conversation we should be able to re-profile €1 million from Revenue for 2019.” In an email later that day, Mr O’Malley said they had agreed to a sum of €1.5 million.

An official from Revenue emailed the department to say the €1.5 million would come from office equipment and motor vehicles and equipment maintenance.

In the Department of Culture, emails show that the plan was to find €2 million from cultural infrastructure and development, built heritage, natural heritage, Gaeltacht support schemes and Irish language support schemes.

In the Department of Rural and Community Development, officials exchanged correspondence in February stating they would find €3 million from the Rural Regeneration and Development Fund. Officials from the OPW said they would be taking €3 million from flood risk management.

The largest single saving came from the delays to the construction of the A5 Dublin to Derry road, totalling €27 million.

Meanwhile, a report from consultants PwC on the cost overruns at the hospital is due to go to Government shortly. A source said it was due before the Department of Taoiseach last Friday but it had not yet been shared among Ministers, leading to speculation of another delay in its publication.