Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

I remind Members they have a six-and-a-half minute slot with 30 seconds to introduce the question and the Minister having two minutes in which to reply. The Deputy has a minute for a supplementary question, the Minister has one minute to reply and this is followed by a final supplementary question and final reply. I say this because I want everybody to stick to the time limit.

National Children's Hospital Expenditure

Barry Cowen

Question:

1. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform if he played a role in the cost budgeting, tendering and cost management process for the national children’s hospital; the impacts on other projects as a result of the increase in costs; if the terms of reference for a report (details supplied) have been finalised; and if he will make a statement on the matter. [5977/19]

Jonathan O'Brien

Question:

2. Deputy Jonathan O'Brien asked the Minister for Public Expenditure and Reform when his attention was drawn to the cost overruns in the national children’s hospital; when he raised concerns with the Department of Health on the robustness of internal cost controls; and if he will make a statement on the matter. [6137/19]

I will be brief because many of the points mentioned in this question, which had to be submitted by last Thursday, have been overtaken by events. The Minister need not elaborate on the PwC report; he can give a brief overview. I can pre-empt his answer on the tendering and cost management processes and cost budgeting that the Department would have done in the preparation of the contract.

I propose to take Questions Nos. 1 and 2 together.

With regard to the overruns associated with the build of the hospital, the full assessment of the cost overrun and the reasons for it were received by my Department in the form of a report from the National Paediatric Hospital Development Board submitted by the Department of Health on 19 November. My Department reviewed the report and met the Department of Health to discuss it on 23 November and made a formal submission to me on 26 November.

The Department of Health submitted a memorandum to Government in April 2017 that included a section on the proposed new governance arrangements for the national children's hospital, NCH, project. This proposal included the establishment of the board, to be chaired by the Secretary General of the Department of Health, with responsibility for monitoring the progress of the children's hospital programme against the agreed parameters for the programme in relation to its timeline, scope and funding.

There is much in my prepared statement which I have already shared with the Deputy. I will respond to one question he put to me with regard to the timeline for how I plan to deal with the issue for this year. My aim is to be in a position to agree this with Cabinet next Tuesday.

The Minister says he was made aware of the extent of this overrun on 19 November. We are led to believe that the board discussed seismic overruns in June and that in September the Secretary General of the Department of Health was present when a figure of €391 million was relayed to the committee. The Minister's representative on the board did not remind the chairman to contact the line Minister, as was his duty. The Minister and ourselves were in the throes of budget preparations. He was well aware of the overrun in respect of current expenditure in the Department of Health, so much so that he was looking at a supplementary budget to the tune of €600 million. Obviously the Minister deals directly with Department of Health officials, officials of his own Department, and the Minister for Health in respect of budget preparations. When it became apparent that there was such an overrun on the current side, did the Minister ask about the situation in respect of capital expenditure?

I would just like to point out that it is not the case that I am cutting the Deputies' time short. The time is doubled, but the two Deputies will have a better chance to ask more questions if they stick to one minute for each supplementary question.

To answer the Deputy's two questions, I did not deal with the issue of whether a supplementary budget was required for capital expenditure at that point. There were two reasons for this. First, a supplementary budget would have dealt with last year, 2018, rather than with any additional costs for 2019. The second reason is that in all of my experience of engaging on this issue in previous years, all supplementary budgets for the Department of Health focused on current expenditure. In any event, we were dealing with 2018 and the costs that are now the cause of debate and inquiry in the House related to 2019 and beyond. With regard to the role of my official on the board, I emphasise that, from working with him, I know of his excellence as a procurement professional and the work he has done in that area. From his point of view, he could see engagement on the matter taking place in the board and with the Department of Health. This engagement then led to the timeline that both the Minister, Deputy Harris, and I have shared.

There are serious questions which need to be answered and we are not getting the answers. For instance, we now know that in April an assistant secretary in the Department of Health made a request for an interim report to be forwarded to Government in respect of the escalating costs. In May she again asked for a report to be sent to Government in respect of these escalating costs. The minutes show that she asked for this to be done prior to the budgetary process taking place. We now know that the figure of €391 million was, to use the term used by the Secretary General yesterday, "crystallised" and known on 19 September. Despite this, nobody seems to have told the Minister or the Minister for Health what the figure was until after the budget. If that is the case, I put it to the Minister that there have been serious breakdowns in communication between the most senior officials in the Department of Health and the Minister and within the Minister's Department. He was not able to get that information from the Department of Health when discussing a black hole of €600 million or €700 million in current expenditure. Which is it?

It is very important to be clear around the timings. The so-called black hole to which the Deputy is referring, which ultimately resulted in a supplementary budget of €645 million for the Department of Health, referred to 2018. It was a supplementary budget for last year. A discussion about additional funding for last year cannot be conflated with funding for this year and the years to come. All of the engagement we had on the supplementary budget was focused on current expenditure for last year and referred to a process that had been ongoing between myself and the Minister for Health for a number of months. With regard to the engagement within the Department of Health and between my Department and the Department of Health, the Minister, Deputy Harris, has outlined all of the work he did in trying to interrogate all of the costs and to come up with a figure he felt he could submit to me and on which we could then work. That is what happened.

The Minister is saying that the discussions within his Department with regard to his preparations for the budget were solely concentrated on current expenditure. I do not doubt that but I find it amazing that he would never ask the Minister for Health or his representatives, or his own officials to check the situation in respect of capital expenditure. The Minister knows as well as I do that, when we spoke, we looked to see whether he was in a position to provide funds within the HSE service plan, under future expenditure for this year, to deal with our demands in respect of children who are were awaiting psychiatric assessment and in respect of the elderly and the lack of home help packages and hours to deal with the backlog in that area. That was a priority of ours. Obviously we were mindful of the commitments the Minister had made in the national development plan and the commitments he made at various roadshows around the country with regard to the different projects and primary care centres to be included in that plan. They are now in jeopardy because of an overrun in capital spending on the children's hospital to the tune of €100 million. If the Minister did not ask about capital expenditure, that is very disappointing. If he did ask, what is the answer? The Minister is saying he did not ask and that he is therefore exonerated. That is a poor reflection on the situation.

As I have said, I have to take, and do take, responsibility for the framing of any budget. Ultimately, while line Departments have responsibility for specific projects, I hold myself accountable for overall decisions on how the country's money is used and I understand why the House is putting these questions to me. The majority of the discussions we had with the Department of Health were focused on current expenditure because that is where services are delivered. The two issues the Deputy has raised, and which I acknowledge he pressed during our budget discussions, are entirely issues of current expenditure. If the matter of the national children's hospital had come up in the way it has now, I would have asked the Minister, Deputy Harris, to quantify the costs. As he has outlined, that is what he and his Department are doing.

We are led to believe that the Minister, Deputy Harris, was not aware of the costs in September, despite the Secretary General and an assistant secretary knowing that the figure was €391 million. I accept that is a capital cost but surely it is a pretty important figure to feed into the budgetary process. While the budget deals with current expenditure, there were also massive increases on the capital side, which we have all welcomed.

Surely if the Minister is dealing with the issue of increasing the capital budget for next year and further years, it is an important piece of information that the cost of the flagship capital project is running over by €391 million. Surely he would have an expectation that such information would be relayed to him, given that the assistant secretary in the Department requested as early as May that it be given to the Government as part of the budgetary process, which did not happen. Will the Minister give a commitment that he will find out why it did not happen, given that it was requested at the steering group meeting in May?

The minutes that have been released for the meeting of the steering group in May outline all of the options that body was considering in moving the national children's hospital project forward. Because the capital expenditure figures for this year had already been determined as part of Ireland 2040, the vast majority of the engagement I had with all colleagues on budget 2019 was on the issue of current expenditure. I will repeat what I said before. In dealing with a project of this size, for me to do the kind of work I now have to do, the key issue would have been to understand the exact figure about which we were talking. What we can see is that within the Department of Health that was exactly the work they were doing. They were trying to understand why it had developed. From the moment the Minister for Health was notified - he has outlined the timeline - he has shown what he did to try to interrogate the figure and deal with it. He did the work I would have asked him to do. I am now responsible for how we can include it in our plans for this year from a capital point of view.

Capital Expenditure Programme

Barry Cowen

Question:

3. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform if his Department is or has been involved in the final stages of the tendering process for the national broadband plan; when the tendering process will be complete; and if he will make a statement on the matter. [5765/19]

As the Deputy will be aware, the Department of Communications, Climate Action and Environment is the sponsoring agency for the national broadband plan, NBP. The Government is the final sanctioning authority. A procurement process was launched to engage a company to build, operate and maintain the State intervention network. A final tender from the remaining bidder was received by the Department of Communications, Climate Action and Environment on 18 September 2018. Officials of that Department are examining this bid.

Officials of my Department with responsibility for the Vote for the Department of Communications, Climate Action and Environment have been apprised periodically of progress in the NBP procurement process. The Office of Government Procurement was represented in an advisory role on the procurement board for the project, but it does not have a decision-making role in the procurement process. In accordance with the public spending code, the Department of Communications, Climate Action and Environment has submitted cost benefit analysis reports to my Department for comment regarding methodology. I will be working with my colleague, the Minister for Communications, Climate Action and Environment, as he gets ready to bring a recommendation to the Government once he has considered the outcome of the evaluation process being undertaken by his Department.

I ask the question because we all have a great fear in respect of another big capital project which is expected to cost up to €500 million more than originally intended. I am also mindful of the comments made this morning by the Minister for Communications, Climate Action and Environment. He said the Cabinet had collectively thought the right protections were in place to protect taxpayers' money, despite the overrun that occurred on the children's hospital project. I am also conscious of the commitment the Minister, Deputy Donohoe, gave this week to bring forward proposals next week to deal with any such issue into the future. It was last November when he became aware of the problems. He is now bringing forward proposals only because of the furore caused by the fallout. It is incumbent on him to carry out an audit or trawl of all capital development programmes and projects that are under way or have been contracted. I have helped him along the way by putting questions about every item programmed for expenditure under the national development plan this year. I hope he can meet the commitment given by the Taoiseach on Sunday when he said he would bring forward the details of the projects within the capital development plan that would not be progressed because the money was needed to plug the hole created by the overrun this year. I hope in later weeks the Minister will bring forward the details of what will not proceed in the next three or four years to make up the shortfall of €450 million.

To be clear, these are completely different processes. Where we are with the national broadband plan is that any decision to be made on it will be made on the basis of a price now tendered. In working with me the Minister for Communications, Climate Action and Environment has completed a tendering process that is yielding figures. These figures, a consequence of the completed tendering process, will form the basis on which the Government will make a decision.

On what the Deputy aid about the furore caused, it is worth reminding the House that as part of the decision made to move ahead with the national children's hospital project, I said I would deal with the cost in 2019 inside the overall capital expenditure figures for the year. My commitment and decision in that respect predate the debate taking place on the project.

The Minister's last comment might well be true, but I am talking about a commitment the Taoiseach gave to the country when he spoke on on the "This Week" programme on Sunday. He was specifically asked whether, as a result of the overrun, he would bring into the public domain the details associated with the figure of €50 million to come out of the health capital plan and the €50 million to come out of other capital plans. He said he would; "reprofile" is the word he used. As I have said to the Minister previously, there were plenty of road shows to tell us what was going to take place under the national development plan. We only want one road show to tell us what is being cut, where it is being cut and the communities and sectors within the health service, in respect of which the Government will not be in a position to deliver on its commitments under the 2019 plan. That is only fair and appropriate. The public is very anxious to know the real effect the mismanagement of such a colossal amount of money is having on the daily lives and health not only of the nation but also of the various communities and sectors that will be affected.

I appreciate that. The Taoiseach was repeating again, in the context of the current debate, the decision the Government had made on this matter in December. I will be able to clarify the consequences of where we are with the national children's hospital project, but I also want to emphasise the long-term consequences when the hospital is delivered. I fully acknowledge the difficulties we now have. Next week I will deal with their consequences. As we move forward with the project and see construction work begin to accelerate, the scale of and impact the project will have when it is open will become clear to the public.

Question No. 4 replied to with Written Answers.

Public Service Pay Commission Reports

Róisín Shortall

Question:

5. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform the reason the submission made by the HSE to the Public Service Pay Commission was edited by his Department to remove a section (details supplied); and if he will make a statement on the matter. [6159/19]

This question relates to the background to the nurses' dispute and what transpired in respect of the Public Service Pay Commission. It has been brought to my attention that a very important sentence in the HSE's submission intended for the commission was edited by the Department of Public Expenditure and Reform. It reads: "The overall picture of the nursing and midwifery workforce is one of a constant challenge to effectively recruit and retain to meet ever increasing service demands". Is that the case and, if so, why did it happen?

First, I wish to clarify that the HSE submission was not to the Public Service Pay Commission but instead came to the Department of Public Expenditure and Reform through the Department of Health to assist with preparation of a joint employer submission.

I also wish to clarify that, when requested by the pay commission, my Department made the HSE internal submission available to it in June 2018 and it was considered in the preparation of its report, published in September 2018. I understand that both the HSE and the joint employer submissions are available on the website of the pay commission.

It is longstanding practice that the Department of Public Expenditure and Reform, and before it the Department of Finance, represents the public service as employer.

The Department has the responsibility for co-ordinating, articulating and submitting the employer case in such matters on behalf of the Government as employer. This is absolutely essential to ensure consistency and coherence in approach.

The employer submission compiled by this Department is based on data and inputs from a broad range of sources, including material submitted to the Department by both the Department of Health and the HSE.

It should be said that the joint employer submission to the pay commission reflects evidence presented by the HSE, particularly the increase year on year in absolute numbers of nurses and midwives, over and above the level required to simply replace leavers and retirees. Since December 2013, the public service has now recruited an additional 3,876 nurses.

The pay commission is completely independent and comprises seven individuals with a vast experience of human resources and industrial relations in the private and public sectors and in the trade union movement.

Additional information not given on the floor of the House.

It forensically examined all the evidence from the employer side and from the staff side.

Its considered conclusion is that there are no generalised recruitment and retention difficulties in respect of nursing and midwifery. The report states that the commission was not persuaded, based on the evidence available, that pay arrangements were in themselves a significant impediment to recruitment and that current pay rates do not appear to be unduly affecting the number of nurses, midwives and doctors applying to work abroad.

In respect of nurses and midwives it considered that the national levels of nursing and midwifery turnover rates do not indicate a generalised retention crisis and that the available evidence suggests that none of the turnover rates reported are significantly out of line with those experienced in private sector employment generally.

Instead it recommended a targeted package to incentivise nurses and midwives to work in certain areas, a recommendation which the Government has accepted and which remains on the table alongside the other pay benefits of the public service stability agreement and the significant measures agreed with ICTU on new entrant salary scales.

The difficulty is that the constant line from the Minister, his Department and the Government is that there is no evidence of any difficulty in recruiting and retaining nurses. That is the line that is being put out, and it is entirely unhelpful to the current situation. It flies in the face of the evidence before our eyes. The HSE has said that difficulties in recruitment and retention pose a major challenge to its ability to meet the demand for health services. The HSE knows; it is dealing with this problem on a daily basis. It tries to find cover for its services, whether at hospital level or community level. It has made a clear statement that this is a constant challenge. In light of that, and in light of the fact that we are spending €2 million per week on agency nurses, why does the HSE have to travel all around the world, paying very substantial recruitment costs and still not managing to get enough nurses, why is the Minister in denial?

If the Deputy reads the conclusion of the submission to which the Deputy is referring, it says:

Equipping the public health service with the required nursing and midwifery workforce is undoubtedly a substantial challenge.

The text to which the Deputy refers, which went to the Public Service Pay Commission on behalf of the employer, acknowledged the challenges we face. It went on to state the challenges here "collectively...represent some of the greatest challenges faced by our health services nursery and midwifery workforce." It did acknowledge that there were challenges in this area. It made the point, however, that these challenges are not generalised in nature and are concentrated in particular hospitals and particular disciplines. It placed that in the context of our being successful in recruiting more nurses and midwives. We have turnover levels that are comparable with the rest of our public service.

If that is the case, why is it that procedures are cancelled because of a shortage of theatre nurses? Why is it that our child health programmes and our vaccination programmes are hopelessly inadequate in terms of coverage as a result of the lack of public health nurses? This is the evidence before the Minister's eyes, yet the Government continues to create the impression that there is no problem in this area. We all know there is a problem. Anyone who has any interaction with the health service knows there is a serious problem there as a result of those challenges. The longer this goes on and the longer a situation is allowed to continue where we are losing significant numbers of nurses, the heavier the burden becomes on those who remain, the more stressful the job becomes and the more incentive there is for those people to move on also.

This morning the Minister said he was genuine about engagement with the nurses. Will he ensure that people get around the table as soon as possible and that they do so in a constructive manner? Will he remove any preconditions in order that there can be open and frank discussions?

I repeat that across the entirety of this document, there are repeated references to specific difficulties that occur. I want to see another round of genuine and constructive engagement to try to deal with this issue. The only condition I have - I maintain it is vital - is that any engagement happens inside the context of the existing agreement. That agreement says that strike action should not take place and that cost-increasing claims should not be made. It is clear that those elements of this agreement are already being challenged. As I said during our two-hour debate on this issue earlier, the consequences of this going wrong in a very disorderly way, if we cannot maintain a wage agreement in our society for our public servants, will create even greater difficulties in the future as we try to maintain and improve services.

It will cost €300 million to sort out.