When all is said and done it’s the way we go about procuring capital projects that is the problem, says Fergus Finlay.
SHOULD Simon Harris lose his job over the cost of the National Children’s Hospital? Should the hospital be stopped? Should we go back to the drawing board?
The answer to those three questions, in my humble opinion, is no. If Simon Harris should be sacked, so should every minister who has a capital project in his or her budget. As far as I can tell (and I have no more or less knowledge than anyone else) he’s been grappling with a massively difficult problem as well as anyone could.
In our legal and political system, we set up major capital projects to fail, and I’ll tell you why in a minute. Blaming an individual, especially one who is at a significant remove from the project, makes no sense.
That’s not to say there hasn’t been a disaster, and a massive failure of accountability. An overspend on any capital project, let alone one as important as this, doesn’t just cost money; it affects other essential projects and it hugely undermines trust.
But if we go back to the drawing board, or try to start again with this hospital, we’d be entering a world as uncertain as Brexit. At least we know that the current project has planning permission. At least we know what the cost factors are and what the broad parameters are. At least we have a rough idea of the timelines.
When you have to say “at least” as often as that, it’s not ideal, is it? But the National Children’s Hospital is essential. If we stop now, we’ll ending up spending a huge amount more and it will take an awful lot longer.
I know there are many who will say, when you’re in a hole stop digging. But to be honest, I can only see one realistic alternative right now. And that’s to decide that we simply don’t need, and can’t afford, a new national children’s hospital at all. That’s the only way to save big money.
It’s a tempting argument. In the immediate future, there are massive personnel issues facing the health service. The resolution of the nurses’ strike will probably cost €150 million a year, and even if a settlement were to generate savings over time, a lot of resources will be needed to meet the nurses’ legitimate claims.
Apart from that altogether, the implementation of Sláintecare, which most people see as essential to the future of the health service, will also cost a lot of money. A significant move towards primary care, and away from a hospital-dependent system, can’t be done on the cheap.
If we were to stop building the children’s hospital right now, and decide only to revisit it when we discover oil or something, there’s no doubt (once the various legal disputes were settled) that we’d be saving an awful lot of money to invest elsewhere.
So we could do it. Abandoning the idea of a top class children’s hospital is the only way we’re going to save money on this project. Starting somewhere else is not going to save a penny, assuming it’s even possible to do so. But I have a funny feeling that if we were to stop now, it would be a source of bitter regret in years to come. Generations of Irish children have been poorly served by the facilities in which they have had to be treated, and we shouldn’t betray the promise of the future now.
There are other issues, of course. It’s clearly the case that the Dáil wasn’t told everything it should have been, and Simon Harris has to put that right. But I find it hard to see how anyone on the opposition benches would have shouted stop if he or she were the Minister for Health.
And in the meantime, some crowd called the Fingal Battalion Direct Action Group decided to picket Simon Harris’s wife and baby girl. It’s the sort of thing fascists do, and it is stupid and counter-productive. They describe themselves as having staged a dignified and democratic protest, and talk all sorts of nonsense on social media about how they’re going to save the working class. In fact, they represent nothing and nobody, except some mad fringe that thinks bullying, intimidation and abuse are appropriate democratic weapons.
When all is said and done it’s the way we go about procuring capital projects that is the problem.
I’ve been involved in several capital projects in the last couple of years. The smallest of them — it was big to me — involved selling my house and buying another that need extensive renovation. It’s called downsizing, though it never felt like that. The renovation involved a design, a builder, and a quantity surveyor, who drew up a bill of quantities that ran to 40 pages.
It was full of phrases and language we didn’t understand, and the first thing we had to do was interrogate every foreign-sounding phrase. Once we got past that, we had to go through the 40 pages line by line, to ensure that what was proposed was in line with what we could afford.
Along the way, we discovered that there are enormous variations in price depending on what thickness of insulation you pick, what type of flooring, or tiles, or windows you use, what heating system you go for. There’s a huge amount to juggle all the time, and a lot of it is based on your trust in the builder.
The balance you have to strike is between what you’d like and what you can afford. That process starts the day you agree the contract with the builder, and it ends when you move in and the snags are done. And what you very quickly realise, even when your builder is entirely trustworthy, as mine was, is that if you stop poring over the 40 pages, and revisiting them constantly, the money starts to rack up. It’s a nerve-jangling process from start to finish.
I've seen substantial public service projects, and projects in the voluntary sector (schools and housing and other building projects) conducted the same way. I’ve seen them brought in on time and on budget. And the key is exactly the same in every case. The person in charge hasn’t just put the contract out to tender and bought the cheapest result. They’ve managed it day after day, never taking their eye off the key relationships.
That’s what good project managers do. And that’s what we need. The only way we’re going to learn the lesson of the children’s hospital fiasco is to establish a proper national project management team, to handle major capital works transparently and openly, once the initial price has been agreed.
The procurement system we use is only fit for purpose in terms of securing a price for a project. There has to be a different layer of expertise in bringing projects to completion, and it has to be set up in such a way that it operates in the open.
A national project management agency, properly set up under law and accountable to the Comptroller and Auditor General, would revolutionise the way we do things. Maybe we should think about it — before the next billion euro project goes wrong.
When all is said and done it’s the way we go about procuring capital projects that is the problem