Insufficient overview of chaos that is health spending

Last Tuesday evening, political correspondents gathered with the Government press secretary for our weekly post-Cabinet briefing.

Reporters are informed in vague enough terms about what matters were discussed by ministers earlier that day.

Because the agenda was so heavy, the Cabinet meeting had to be split in two, which meant our briefing was later than usual too.

One of the items to be discussed by ministers was the new HSE service plan for 2019. This is the master plan as to how the health service plans to spend its whopping €17bn current and capital budget for next year.

That is €17 billion.

Given the scale of the monies involved, one naturally assumed it was the subject of a detailed debate among ministers, with issues fleshed out to the letter and probing examination of budgets.

One also assumed that the health budget in the past three years has seen double-digit growth year-on- year, on top of what have become predictable budget overruns of in excess of €500m a year.

So one asked the Government press secretary the question: “Was there a prolonged discussion at Cabinet on the HSE Service Plan?

“Eh, no, it was only noted by Cabinet, as is normally the case,” came the reply.

But it seems that even these year-on-year record increases in funding are not enough.

Yesterday, health economist Brian Turner of University College Cork warned that the HSE has “very little wriggle room” in its budget for next year and if additional money is required, services might have to be cut.

Dr Turner told RTÉ’s Morning Ireland that while the 200 extra beds planned for 2019 will help the overstretched service, “they will be only a drop in the ocean”.

Dr Turner was commenting on the HSE Service Plan which reveals that a record day-to-day spending budget of €16bn has been allocated in 2019, an increase of almost €850m on 2018’s budget.

The increase comes following an overspend of €700m in health this year. Dr Turner added that €114m will immediately go on last year’s over-run.

“The HSE is being up-front that they will have to cut services,” he said.

They have indicated there are a number of risks, but they’re not clear which services could potentially be cut.

Dr Turner said one option would be to cut elective procedures to ensure emergency procedures are prioritised.

Another area of concern in relation to the budget will be public service pay restoration.

So in light of these risks, surely it would have been more advisable to do more than merely note the €17bn plan?

Is it any wonder that we end up with the charade every year in relation to health, when such little attention is paid?

At the same Cabinet meeting, to reinforce the chaos of health spending, ministers approved a €400m cost increase to the increasingly expensive National Children’s Hospital.

As Taoiseach Leo Varadkar informed the Dáil, the project, which was initially forecast to cost about €450m is now going to cost at least €1.43bn.

Quite correctly, the increase left many agog.

“We are now told that the projected cost is €1.4bn,” said Fianna Fáil leader Micheál Martin.

“This is despite the fact that on 27 September, and the week before that, the Minister for Health, Simon Harris, said it would nbe about €983m. In the space of about six weeks it has apparently gone from less than €1bn to €1.4bn, which is extraordinary stuff.

We have a Minister for Health, we have a Cabinet committee on health, and yet the recently projected cost of €1.4bn seems to have caught everybody by surprise, including the Taoiseach. It has an impact on other projects within the health service and indeed across the public service in general.

Mr Martin demanded to know why the nabsence of transparency on this?

"Deputy Cowen [Fianna Fáil spokesman on Public Expenditure] has been pursuing this for quite some time, as indeed have many journalists such as Fiachra Ó Cionnaith [of this parish].”

“Will the Taoiseach confirm that the up-to-date projected cost, including IT and fit-out costs, is €1.4bn? Is that the upper limit of the cost of the hospital? How did this overrun occur? Were there deficiencies at the tender stage?

Will the Taoiseach outline to the House what other projects will be delayed or cancelled as a result of the overrun on the children's hospital, and will he specify that in terms of Health and other


“Will the Government stop stone-walling on this and provide a detailed and transparent presentation on this entire issue, because the public is entitled to know?”

In response, the Taoiseach said the Cabinet met and discussed the escalating costs.

“We agreed to accept the new overall cost, which is €1.433bn,” he said.

“That represents a €450m increase on what we had projected in April 2017. Of that, €319m is made up of increased constructions, €50m is VAT and the remainder relates to staff planning, design teams, risk contingency, and the management equipment service to make sure that the hospital is properly equipped.

“There will be further investigations as to how these costs escalated by so much since April last year, and the National Paediatric Hospital Development Board will be available to brief members of the Committee of Public Accounts (PAC) and of the Oireachtas joint committee, to give them any information that they want about this project and about the reasons behind the escalating costs,” he said in a bid to assuage concern.

One noted with deep irony that in this instance, the PAC was deemed to be an appropriate body to investigate the overrun, when so recently it had been branded a “kangaroo court” by some.

But in truth, Varadkar’s answer was completely insufficient. Behind the scenes, he is said to be furious at having to make available such enormous pots of additional cash, but what is sadly lacking so far is any sense of accountability from those responsible.

The reason I raise this is that this hospital project was deliberately not given to the HSE or the OPW to build, precisely to avoid such unforeseen cost escalations.

A board has been appointed, with plenty of expertise of building such big projects, yet this escalation of costs has occurred. And worse, Varadkar made it clear that more pain is likely.

Plans for the National Children's Hospital.

The problem is that for the State, we are so far down this track that pulling out is not an option.

Despite being the biggest payer for services, it yet again seems we are not able to use that muscle to deliver cost-effectiveness for the taxpayer.

However, as Mr Varadkar made clear, because of this incredibly sloppy management of budgets, other much-needed projects will suffer, either through delay or cancellation.

All of this must also be remembered in the context that the HSE is struggling to find a new director general, meaning a major vacuum has been allowed to open up at the top of the health service.

After seven years in office, Fine Gael must finally realise that has done enormous damage when it comes to healthcare. This week is just the latest example of its incompetence and mismanagement.

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