The Government is facing mounting pressure to explain why it was not aware until November of a €500 million cost overrun on the national children’s hospital.
Minister for Health Simon Harris and Minster for Public Expenditure Pascal Donohoe have separately confirmed they learned on November 9th that the costs of the scheme had risen from €983 million to €1.433 billion.
Both accepted they were aware of the issue earlier, in late August in Mr Harris’s case, but insisted no figures were given at the earlier juncture.
But the Opposition said it was “extraordinary” and “unbelievable” that neither Minister was made aware of the extent of the spiralling costs for some three months. This was especially unbelievable given that a senior official from the Department of Public Expenditure and Reform (DPER) sat on the board of the development board for the new hospital, Opposition spokespeople on health said.
Yesterday, Mr Donohoe’s spokeswoman said Paul Quinn, head of procurement at the department, had been appointed to the board by then minister for health James Reilly as an “experienced procurement professional”.
As such, the spokeswoman said, he had “an obligation to observe its confidential arrangements” and was therefore not obliged to report to the Minister.
However, Labour’s Alan Kelly maintained that civil servants appointed to State boards were subject to a 2010 circular which obliged them, when a matter of serious concern arose, to report to the relevant Minister.
Mr Kelly said he had spoken to the chairman of the Oireachtas Health Committee Dr Michael Harty and both wanted Mr Donohoe, Mr Quinn and the department’s secretary general to appear before the committee.
Timeline
Mr Kelly said the most senior official at the Department of Health Jim Breslin had said last week he had informed DPER about the overrun in October. “That is a month earlier. That needs to be explained,” said Mr Kelly. “Mr Donohoe and Mr Harris cannot conjure a proper timeline for the escalation of costs. This issue is turning into a political crisis.”
Dr Harty said yesterday it was “extraordinary” the serious information was not communicated to Mr Donohoe.
Mr Harris said he became aware on August 25th there would be an overrun but was not told the extent. He said expert reports needed to be completed and the final figure did not “crystallise” until November 9th.
He responded to criticisms from the Opposition by saying it would not have been prudent to act earlier armed with only a “partial piece” of information.
“The correct course of action was to get all the information scrutinised and then to act,” he said.
The revised terms of reference for an examination of the costs overrun by PwC were being completed last night. One of the terms preventing a finding to be made against any individual has been removed.
“Those terms will be changed to make it clear that PwC can go as far as it can on accountability,” said Mr Harris. “We are also looking at ways of paring back the costs.”
Slow response
Fianna Fáil spokesman Stephen Donnelly criticised the governance of the project and what he described as the slow response to the overruns. “I do not think it is acceptable. That kind of overrun would not happen in the private sector. All leave would be cancelled.
“They would know the full extent of it by the end of the month. People could lose their jobs.
“It does not take months to find out that information. So why did it take so long for them to find out?”
Sinn Féin’s Louise O’Reilly said she was worried about the implications of the cost overruns “not just for the relocation of the National Maternity Hospital, but also for dozens of other health projects, including primary care centre”.
