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Children's hospital costs controversy: Officials deny 'catastrophic failure of management'

The rise in costs have been described as ‘disturbing’.

Updated Jan 23rd 2019, 11:00 AM

DEPARTMENT OF HEALTH officials have denied that the rise in costs for the new national children’s hospital represents a failure of management. 

In a second day of hearings relating to the spiralling costs of the new hospital, Dean Sullivan, Deputy Director General Chief Strategy and Planning Officer at the Health Service Executive (HSE) has said that the rise in costs is of “significant concern” but denied that the controversy represented what Fianna Fáil TD Stephen Donnelly described as “a catastrophic failure of management.”

Donnelly questioned officials over the project at this morning’s Oireachtas Health Committee where he stated that the finished cost per bed at the new children’s hospital would be twice that of the most expensive hospital built in the world. 

Last week, the committee was told the current estimation is the hospital will cost €1.433 billion – €450 million higher than the figure of €983 million approved by government in 2017 and that the rise in costs ”will undoubtedly impact on other priority health investments”

However, indications are the cost is expected to rise. Yesterday, the Taoiseach said the Department of Health has retained PWC, the expert accountancy and consultancy firm, to carry out an analysis of the situation. 

Sullivan told today’s committee that the independent review commenced this week.

“The review will examine the contributory factors and associated responsibilities so that any potential weaknesses are identified and comprehensively and speedily resolved in the interests of the successful completion of the project and the effective management of public funds, he said. 

It is understood the review is expected to be completed in March.

‘Significant and disturbing’

Assistant General Secretary of the Department of Health Colm Desmond described the rise in costs this morning as “significant and disturbing” but told committee members that the government has proceeded with the project due to the importance of the project to children’s healthcare in Ireland.

The HSE is currently drafting the Capital plan for 2019, which will set out the health projects that can proceed into the future.

The HSE said it must think about the general everyday costs of healthcare infrastructure such as equipment and vehicles that might be needed, as well as expenditure it is contractually required to honour. 

Desmond told today’s committee that the capital expenditure funding for continuing with the National Children’s Hospital must now also be considered.

The impacts of the cost escalation will see non-contracted capital projects having to be managed within the available capital allocations.

There are a number of large-scale projects mooted over the next few years such as the National Maternity Hospital. However, there are a number of contracted projects due for completion such as phase one of the National Rehabilitation Hospital and also the National Forensic Mental Hospital in Portrane.

“With regard meeting the additional funding requirements for the project in future years, the department [of health] is engaging with the Department of Public Expenditure and Reform and the HSE,” said Desmond.

Desmond told today’s committee that the costs are of significant concern and assurances must now be sought that the National Children’s Hospital will be delivered “within budget and timescale”.

General Secretary of the Department of Public Expenditure Robert Watt was invited to attend today’s meeting but has refused to attend, much to the displeasure of some committee members.

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