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Costs, changes and controversies: The decades-long saga behind the NCH

The controversy over the costs of the project is just the latest in a series of problems to affect the project

Minister for Health Simon Harris at the cast of the foundation stone for National Childrens Hospital in 2017
Minister for Health Simon Harris at the cast of the foundation stone for National Childrens Hospital in 2017
Image: Sam Boal

THIS WEEK, THE government came under more pressure over the controversy surrounding the new National Children’s Hospital.

Questions have arisen over the escalating costs of the project, specifically about how the Taoiseach, the Minister for Health and the Minister for Public Expenditure have been managing the country’s finances.

A figure of €983 million for the development was approved by government in 2017, but the Public Accounts Committee heard last week that the cost could rise to over €2 billion.

The latest furore over the project only arose before Christmas, but problems with the hospital – or versions of it – have been going on for decades.

Here’s how the project has gone from controversy to controversy over the years.

The ‘grand plan’

When it opens, the new facility will consolidate the resources of three existing children’s hospitals in Dublin: Our Lady’s Hospital in Crumlin, Temple Street Children’s Hospital and the National Children’s Hospital in Tallaght.

Plans to merge the three hospitals were first put forward by the faculty of paediatrics at the Royal College of Physicians in 1993.

However, the recommendation was ignored by successive governments, who felt that upgrading the three facilities separately was a better idea.

90251664_90251664 Temple Street Children's Hospital Source: Sam Boal/Photocall Ireland

An upgrade to Temple Street became something of a precursor to the current hospital project, with the government deciding to relocate it to the nearby Mater Hospital – later the original site for the current NCH project – in 1989.

Within a few years, however, problems began to arise, with concerns over planning and financial implications leading to uncertainty about the development.

“In one way the grand plan has inhibited smaller plans which might remedy the problems,” then-Minister for Health Michael Noonan said in the Dáil in 1995.

The cost is huge and I cannot indicate when progress will be made.”

Déjà vu

After years of false starts, the HSE decided to commission a review into tertiary paediatric services, resulting in the ‘Children’s Health First’ McKinsey report in 2006.

It found “compelling” evidence to build a single children’s hospital in Dublin, 13 years after the idea was recommended by the Royal College of Physicians.

It also recommended that the new hospital was easy to access, had space for future expansion, and – notably – was co-located with an adult hospital with academic facilities, all of which were seen as crucial in the decision to select the St. James’s site later.

Permission refused

Following the publication of the McKinsey report, a joint HSE and Department of Health group was formed and decided that the new hospital should be built at the Mater site.

In 2007, the government established the National Paediatric Hospital Development Board (NPHDB) to oversee the project, but the selection of the Mater site brought yet more problems.

The plan was opposed by both the National Children’s Hospital in Tallaght and Our Lady’s in Crumlin, while questions about the selection process were raised in the Dáil.

However, Minister for Health Mary Harney defended the choice, citing its central location and its ability to bring about the quick delivery of the project.

Plans for the hospital moved slowly along, before the chairman of the NPHDB, Philip Lynch resigned in 2010 citing “significant and fundamental differences” with the Minister over the choice of the Mater.

Lynch was replaced by businessman John Gallagher, but a new chairman and a change in government the following year didn’t free the project from controversy.

90229268_90229268 James Reilly announces the decision to locate the National Children's Hospital at the Mater Hospital in 2011 Source: Mark Stedman/Photocall Ireland

Gallagher lasted just six months in the role, resigning after the new Minister for Health, James Reilly, announced yet another review into the decision to build at the Mater.

After the review found in favour of the original choice, a planning application was finally submitted that summer.

But the project hit a brick wall in February 2012, when An Bord Pleanála refused permission to build.

It found that the height, scale and form of the proposed facility meant it would have “a profound negative impact on the appearance and visual amenity of the city skyline”.

It was back to the drawing board for the government, which now had to choose a new site for the project, six years after it was first decided to locate the NCH at the Mater.

Dolphin report

After this, yet another review group was established, led by Dr Frank Dolphin, to look at the options now available to the government.

Six adult hospitals in Dublin were considered: a revised project at the Mater, Beaumont, St James’s, Tallaght, and Connolly Hospital, as well as a proposal from the Coombe.

Following the publication of its report in June 2012 the government announced its decision to build at St. James’s in November, projecting a delivery between late 2017 and early 2018.

File Photo The spiralling bill for the new National Children's Hospital - now expected to cost at least Û1bn - must be explained, Labour health spokesman Alan Kelly has said. End. An artist's impression of the new National Children's Hospital at the St. James's site Source: RollingNews.ie

The site was seen as advantageous because the hospital already had teaching facilities, “excellent public transport” access and was close to The Coombe maternity hospital.

It was also felt that the St. James’s site met the terms outlined by the McKinsey report, in particular the adult teaching facilities that existed on site.

But the Dolphin report also warned that the construction of new children’s and maternity hospitals on the site would stretch the site’s capacity, and that it would be more expensive than building on a greenfield site.

More delays followed, and St. James’s soon attracted similar criticisms to those that were made of the Mater, many of which were to do with its location in the city.

Planning permission was granted in 2016, but the project still hadn’t gotten off the ground when Leo Varadkar, then Minister for Health, announced more cost increases for the project, rising to €650 million – €150 million more than was initially envisaged.

At the time, Varadkar was so confident the hospital would open by 2020 that he claimed it would happen “short of an asteroid hitting the planet”.

But it wasn’t until April 2017 that his predecessor Simon Harris signed off on the hospital when planning permission was granted, with a delayed opening date of 2021.

By then, the projected cost had risen to over €1.07 billion. Harris was denying that the budget had spiraled out of control, however. 

The Phoenix naming controversy

Finally that year, construction began on the hospital, and the project appeared to be firmly up and running with the government announcing a name for the facility – Phoenix Children’s Health – in October.

However, questions arose about the choice of name after it emerged that it was similar to another facility: the Phoenix Children’s Hospital in Arizona in the US.

Others, meanwhile, felt that the name was problematic for different reasons.

Sinn Féin’s Louise O’Reilly told TheJournal.ie that the focus should have been on building the hospital first:

It’s a handy distraction for the government that we’re talking about the name and we’re not talking about the health and safety issues that have arisen.

Then came a report in the Irish Times, which revealed that the US-based Phoenix Children’s Hospital had threatened legal action if the naming went ahead as planned.

The name was subsequently abandoned in April 2018, after the Children’s Hospital Group had already spent over €40,000 on it.

Records later released to TheJournal.ie under the Freedom of Information act also revealed that the American hospital had contacted the CHG at least three weeks before the name was announced to the public.

Costs controversy

During this time, discussions were taking place between officials from the Department of Health and the Department of Finance and Public Expenditure about the rising costs of the project.

In August 2018, Harris was made aware of the potential overruns, but has since claimed that he didn’t know the exact figure and asked officials to investigate what the final cost would be.

The controversy really caught fire in December, when Taoiseach Leo Varadkar told the Dáil that the project may cost even more than what was, at the time, a €1.433 billion price tag – €450 million more than what it was projected to cost in April 2017.

Varadkar also acknowledged that several capital health projects may have to be delayed due to the overspend, but was not initially drawn on whether anyone would be held responsible over the issue.

2347 New Childrens Hospital_90562810 Construction cranes on the building site at St. James's Hospital Source: Rollingnews.ie

There were more indications that the cost of the project would rise again in January, when the Public Accounts Committee heard that the final figure could exceed €2 billion.

Last week Tom Costello, the latest chairman of the NPHDB, stepped down, but that didn’t stop pressure intensifying on the government this week.

As the Opposition sought to clarify who knew what – and when – about the overspend, Minister for Finance and Public Expenditure Paschal Donohoe said the government had become aware of the cost overrun before November.

Donohoe continued to maintain that he did not have any knowledge until then, despite an official from his department being on the board of the project.

Then on Thursday, documents released by the Department of Health showed that Harris was informed about some of the overrun on 27 August last year.

That came a day after the Minister told PAC that he was not aware of the cost implications in the run-up to last year’s Budget.

Varadkar claimed he had “total confidence” Harris, and described the potential impact on the budget as “a red herring.”

But with claims the Taoiseach and Donohoe were not informed about the potential overrun until November, a month after Budget 2019, there are questions as to why Harris didn’t inform them if he knew about the problems in August.

There have also been calls for Harris to resign, with Sinn Féin’s Louise O’Reilly calling his position “untenable”.

Next week will likely to see more scrutiny brought upon the government, and the controversy could yet claim political scalps before the heat is taken out of it.

With additional reporting from Christina Finn.

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