Tánaiste: Govt not using 'magic money' to pay for children's hospital overruns

Tánaiste: Govt not using 'magic money' to pay for children's hospital overruns

Tánaiste Simon Coveney has insisted “magic money” is not being used to pay for overruns for the children's hospital while pledging that cash will be found to fund the project.

Opposition parties targetted spending for the construction of the planned €1.7bn children's hospital amid reports that other health projects are now at risk because of the excessive costs.

Mr Coveney had to deny claims from Labour that it was “magic money” the government was counting on and insisted no other projects would be cut to pay for the hospital build.

Department of Health chiefs were warned last month by the HSE's acting director general Anne O'Connor that it will be almost “impossible” to deliver planned multi-billion euro investments in new healthcare projects in the coming years because of cost overruns with the hospital.

Of particular concern is money needed for the hospital build in the years ahead, including up to almost €400m by 2022.

Fianna Fáil Deputy Leader, Dara Calleary, said HSE officials are concerned over the cost implications resulting from the Children's Hospital.

Mr Calleary told the Dáil: "People in charge of the programme, people whose job it is to implement it, yet you the Taoiseach and Minister Harris continue to act as if there is no problem, continue to say 'there is nothing to see here, we will manage the cost overruns, we will spread them out'.

"You published a list of projects that would be, to use the phrase, reprofiled. But the people on the ground, the people who are in charge of implementing have sent up a flag this morning."

He also questioned why the HSE's capital spending plan for 2019 had still not been published.

Mr Coveney responded that the HSE was finalising the plan. Furthermore, it was seeking to find €24m in its €700m capital spend to help supplement spending on the new hospital.

Projects that were “contractually committed” to would not be impacted on or cut, he told the Dáil.

Fianna Fáil's Barry Cowen also hit out at the claims that the overspends in the National Children’s Hospital and the National Broadband Plan will not impact other projects.

Deputy Cowen said: “Reports in this morning’s Irish Times highlight the fact that Minister Donohoe’s position lacks any credibility and clearly shows that the overspend on the National Children’s Hospital is having a direct impact on other health projects.

“The National Children’s Hospital could cost as much as €2 billion. It has been reported that the Secretary General of DPER, Robert Watt, has indicated that between 2020 and 2022 at least €385 million extra will be required to complete the project.

"This cannot be wished out of thin air as the Minister seems to think."

“His contention that no project will be impacted does not hold water. He claims that every year other projects are delayed for non-Budget reasons and that the funding dedicated to those projects can then be redirected to the children’s hospital.

"Senior HSE officials disagree with Minister Donohoe’s contention saying that the overspend at the Children’s Hospital has made a very difficult situation almost impossible. His belief that will be alright on the night just simply does not hold up.”

Sinn Féin's Jonathan O'Brien went further and claimed that a draft capital plan by the HSE was pulled in February after the scandal of the hospital overrun emerged.

He added that it does not make sense that projects would not be cut. Moreover, he claimed the capital spending plan had been delayed because of problems with the hospital cost.

“We are now coming up to July 1 and that plan has still not been published. It is not possible for the Government to have this both ways. The Taoiseach and the Minister for Finance cannot state that there is no impact on the capital projects which have been announced as a result of the cost overrun,” argued the Cork TD.

Meanwhile, Finance Minister Paschal Donohoe refused to commit to firing any HSE officials after new figures revealed the health fund is facing a deficit of €100m for the first quarter of this year.

"I do not believe that the answer is to sack people from the HSE. We have just appointed a new chief executive to the HSE and he has indicated his commitment to managing out spend within the health service in a new way, by the indications that he has given to his organisation and by the work that is underway in relation to how we manage recruitment.

"I am actively involved in all of that and I want to ensure that as we move into the second half of the year that we end up in a significantly better position on health expenditure than we did a year ago."

Mr Donohoe said last year was "very difficult" in terms of the scale of the supplementary budget that was required to shore up the HSE and said they now need to do better on that this year.

He said he has been meeting "intensively" with Health Minister Simon Harris and senior HSE management to tackle any overspend. Further questioned on his comments that no one should be sacked, he said a new head of the HSE had just been appointed and he should be given time to do his job.

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