I presume, as is traditional, the Minister will make the first contribution.
Report on Tallaght Hospital: Statements.
Yes, when he arrives.
On a point of order, will the Chair provide clarification on the speaking times?
The Minister or Minister of State and the spokespersons for Fine Gael and the Labour Party shall have a maximum of 15 minutes each. The speech of the main spokesperson of Democratic Left shall not exceed ten minutes and that of the main spokesperson of the Green Party shall not exceed five minutes.
Those arrangements may be somewhat out of date because the debate is now limited to 25 minutes rather than one hour.
The debate will adjourn at 2.30 p.m. My understanding is that the debate will conclude after 60 minutes. This part of the debate will conclude at 2.30 p.m. and at 3.30 p.m. the matter raised under Standing Order 31 will be taken. As I understand it, the House is then due to adjourn at 4.45 p.m.
Perhaps I can be of assistance. I understand the matter raised under Standing Order 31 will be the only business taken after Question Time and that the House will adjourn at 4.45 p.m. That would mean that only Deputy Shatter and I would be able to contribute to this debate under the current arrangements. I would prefer it if everyone was given the opportunity to make a statement. Is it possible to amend the arrangements so that Members contributions should last only seven or eight minutes? This situation is unsatisfactory from everyone's point of view.
Is the Minister suggesting he should make the final contribution?
If the House so wishes.
It would be better if the Minister made the first contribution.
I have no difficulty with that.
If the House is agreeable Members' will now have eight minutes in which to contribute.
That will not allow everyone to contribute. Perhaps the time should be reduced to six minutes.
That is acceptable.
Is it agreed that contributions shall not exceed six minutes? Agreed.
In those circumstances, I will dispose of my script.
The purpose of this debate is to allow Members to express their views on the report on Tallaght Hospital. The report is important and it was provided to me on the basis of a situation which came to my notice in September involving a significant overrun in the operating costs of Tallaght Hospital. It sets out that important governance and general management issues must be addressed. Everyone should be aware that this issue casts no reflection on the level of patient care provided in the hospital. The terms of reference for Deloitte & Touche stipulated that its representative should deal only with governance and general management issues and report on service planning and the way in which the hospital's budget is being spent.
An allocation of almost £54 million was given to Tallaght Hospital. Comments have been made about the adequacy or otherwise of the funding and I must make it clear that the only process for funding hospitals in this country is the process of determination. The report refers to the possibility of introducing another method of funding in respect of the opening of hospitals. In this case that would not have been possible because the board did not appoint a director of finance until September 1997, despite the fact that it was originally intended to open the hospital on 1 January 1998. However, the opening was subsequently postponed to 21 June 1998 on the recommendation of the management team to the board.
With regard to the adequacy of the funding, the base funding contained finance for the three hospitals plus an additional £5.8 million to allow for the commissioning to take place. The report refers to the complexity of that aspect of the matter, which, it must be emphasised, constitutes only 10 per cent of the total budget. On that basis a figure of £5.9 million was provided which, as far as the Department was concerned, would be deemed adequate. The hospital was also provided with £3.7 million in both 1996 and 1997 in preparation for the changeover. A once off payment of £2 million was also provided for IR issues relating to the changeover. Despite the fact that 76 fewer beds than were in operation in the three base hospitals were available when the hospital opened, finance for those 76 beds was included in the base funding. In addition, of the 60 beds in a unit in the Meath Hospital which is funded by the Eastern Health Board and which provides stepdown facilities for St. James's and Tallaght Hospitals, 35 are red circled for Tallaght. The benefit of that to the hospital will be over £4 million per annum.
Adequate funding has been provided. The report confirms that there is no justification for the board to suggest that the level of funding provided would allow for the sort of management and performance we have seen in the six months since the changeover. People should hang their hats on such assertions because by doing so they are moving away from the core problem. I made it clear to the board when I handed over the report that it is not a matter for hospital boards to determine the level of service and the Department to pay the cheques. Under the accountability legislation health boards must deliver service plans within the allocations made by the Department. It is clear from the report that planning in the hospital in question leaves much to be desired and that there is much room for improvement.
It has been suggested that there has been a selective leaking of the report. I categorically deny this. I did not leak the report nor did I authorise that it be leaked. I gave the board an opportunity to read it. I issued a statement on the Wednesday night giving the minimum information. It stated that I had handed over the report, that there was a revenue overrun of £12.8 million gross and a capital overrun of £4.2 million gross, that there were serious governance and management issues to be resolved and that there could be no further development of services until the existing level of service was bedded down. I reject the suggestion that I compounded the matter by replying to an Adjournment debate, which is an exercise in accountability, and that it was misleading. I ask those who have an interest in the matter and who read the full report to make their own judgment as to whether what I said was balanced. It was designed to give room for manoeuvre.
I wish to resolve this matter. The board should detail how it proposes to deal with the revenue overrun. We could then proceed with the 1999 determination process. It is critical that that issue is faced up to. I am meeting the board this afternoon.
There is one matter on which the Minister and I agree. It is important to look to the future. Tallaght Hospital should be placed on a sound financial basis so that patients have full confidence in it.
Criticism of the manner in which the report has been dealt with by the Minister focuses not just on the fact that extensive extracts were leaked and appeared in The Sunday Times but that a departmental memorandum was leaked and appeared in the Sunday Independent. They could only have come from one source. I did not receive a copy of the memorandum. I assume no other Member did either. The problem is that this undermined public confidence in the hospital.
Having met the board the Minister should not have mentioned in the statement issued on the Wednesday night that the Deloitte & Touche report indicates serious governance and general management problems in the hospital. It was agreed that the board would have time to consider the content of the report, following which discussions would take place. It should not have discovered on the night it commenced its deliberations that the Minister had launched an attack on it. That was a breach of faith which is of concern to Members. In criticising the governance and management of the hospital the Minister should look at his Department. Members are entitled to know who leaked the departmental memorandum.
It is important that the board and management tackle the serious problems in the hospital. The management structure was suitable in facilitating the move of the three base hospitals to one site. Neither the board nor the Department, however, gave any consideration to whether it would be appropriate when the hospital opened. Departmental officials, who have long experience of establishing new hospitals and extending existing ones, did not pursue that issue with the board with any vigour. The focus was on moving the three base hospitals to one site. When that was achieved the focus should have been on the appropriate management structure.
The report states at page 26:
In our view the decision to base the 1998 determination on the cost structure of the three base hospitals plus certain additional moneys was inappropriate. We have concluded that the determination process does not lend itself well to a situation of major change such as the opening of a major new hospital unless supported by a fundamental review of the likely costs profile of the hospital.
It is clear that the process used was not the appropriate one to determine the level of funding for the hospital for 1998 or 1999. I suspected that this would be addressed in the report but the Minister was not prepared to admit it. It was, therefore, a source of contention between us.
The report refers, at page 58, to the importance of the hospital and the Department agreeing in principle a medium-term development plan and a service plan for 1999 within whatever determination is made. It must be recognised that new methodology must be applied to determine what the 1998 determination should have been, by which one can determine the 1999 allocation.
The Minister has an obligation to the hospital to make up the shortfall. There is already a waiting list of 1,200. If the Minister fails to provide funding for a proper service plan, the number on the waiting list will increase and the hospital will not be able to provide for the community the services it was constructed to deliver.
According to the Deloitte & Touche report, Tallaght Hospital, the most ambitious health care project in the history of the State, is "in a financial crisis of the most serious kind. .. In the absence of an injection of funds in the short-term the hospital will run out of funds". This is not an impersonal business institution, it is a major hospital serving the needs of Tallaght and surrounding areas. It provides life and death services. We must keep in mind the patients who depend on those services.
Hear, hear.
The Minister appeared to leave them out.
No, the opposite is the case.
The Minister has tried to avoid responsibility for his role in the crisis. He attempted to keep the report under wraps and sought to lay the blame for the financial crisis on the board of the hospital, but people have seen through his stance. The report does not absolve the Minister or the Department of responsibility for the crisis in the hospital. For example, serious questions arise concerning the letter of determination sent to the board in December 1997. This is the critical document which established the funding level of the day to day expenditure in the hospital this year. The figure was set at £53.7 million. If the Minister did not have doubts about this figure in December 1997, alarm bells must surely have rung in his mind when, in March 1998, the board adopted a service plan for the hospital which established a £59.5 million cost for the day-to-day running of the hospital. This service plan was submitted to the Department on 7 April, 1998. What action did the Minister take when the board adopted this plan? Did the Minister seek a meeting with the board or the chief executive of the hospital? No letter issued from the Department rejecting the Tallaght Hospital service plan.
This was a critical stage in the financial crisis which now engulfs Tallaght Hospital. It seems that this is the stage in the process when the Minister sought to distance himself from the project. It appears from the Deloitte & Touche report that a stand-off developed between the Department and the hospital board from this point. The board was adamant that it would execute the service plan it had adopted while the Department maintained its stance of the original letter of determination and also maintained a certain silence.
It now appears, from comments made by the Minister at the press conference on the publication of the report, that the huge difference regarding the funding requirements of the hospital belies an even greater difference of opinion as to how the hospital should have been established. While the board was intent on establishing a state-of-the-art medical facility in Tallaght from day one, according to the comments made by the Minister, he had a conflicting view. The Minister was of the opinion that first, the key services provided by the three base hospitals should have been transferred to Tallaght and then, over a period of time, the services available at the hospital could have been expanded. I find it hard to believe that no effort was made to reconcile the Minister's view and that of the board on this key issue. This was a crucial failing.
The letter was sent in February 1997 and was never brought to the attention of the board.
No cognizance was taken of the fact that the hospital was to serve an entirely new catchment area. Tallaght has a growing population, as Deputy Conor Lenihan will testify, with a new set of health needs and demands. The view of the Minister and of his Department was that one could simply add up the cost of the three original hospitals and add a little extra. There was no appreciation of the fact that this new modern hospital was to serve a new catchment area and that its needs could not have been based on the funding needs of the three original hospitals. The Minister did not take a proactive role. He did not seek to arrive at a resolution before the hospital opened. The relationship between the board and the Department was strained from this point on.
The report details the failings both of the hospital board and the management to control costs since the hospital began operations. No one is attempting to hide this fact. There are two factors in the current crisis. One is the attitude taken by the Department and the flawed manner of agreeing the original allocation. The other factor is the problems in the hospital itself. The board failed to develop adequate management information systems to monitor its financial performance. Pay costs are well ahead of budget and overtime costs are a huge strain on the budget. The report reveals that a realistic staffing plan should have been instituted and followed closely.
We must bear in mind that we are presented with a completely new situation. The letter of determination and procedure may work for existing hospitals. It does not work for the establishment of a new hospital in its first year of operation in a new area and with new services planned. The Minister must accept this. There must also be an acceptance of the role the board has played to date in bringing together three separate institutions dealing with the organisational difficulties involved. The Minister must sit down with the board and work out a solution.
It is important to remember that Tallaght Hospital is a story of success. The construction of a new hospital to replace three existing hospitals has been a formidable logistical, administrative, professional and engineering feat which has required much skill and dedication. That has been acknowledged in the consultants' report which notes that patient care was not compromised in the transfer. That, in itself, was a significant achievement.
That achievement has its cost which is now putting Tallaght Hospital at risk. The consultants' report has assessed the various problems and has clarified what needs to be done. On the revenue side it is clear that there were shortcomings in the management approach to staffing. The level of non-pay costs could not have been accurately predetermined and, in relation to capital costs, the report exonerates management of any dereliction of duty and makes it clear that the overrun was inevitable and that money had to be spent in order to open the hospital and rectify defects.
The report points out deficiencies in relation to the letter of determination. Expectations were raised by the approach adopted by the Department and the hospital board that more money would be forthcoming. The report is comprehensive and provides a good overview of the difficulties, failings and the task ahead. It looks at management weaknesses and provides a foundation for the future. However, the question of how future funding is to be structured which has been raised by other Deputies must be addressed. This is a unique situation which must have a unique response.
The approach taken by the Minister when he handed over the report to the hospital board is regrettable. The board understood that there was an agreed strategy between himself and the board for managing a response to the report. The Minister did not adhere to that agreement but made a public statement and thereby damaged the board and his own reputation.
I did not take a vow of silence.
I congratulate the chairperson and treasurer of the board on the stand they have taken in maintaining proper standards of good medical practice. I find recent reports from the board that a political game is being played out within the board very disturbing. I ask the Minister to speak to his Fianna Fáil colleagues about their commitment to the future of the hospital and to ensuring that the issue is not further politicised.
That remark is unworthy of the Deputy.
It is important to remember that problems existed in the three existing run-down hospitals and problems attached to providing a new quality hospital on a greenfield site. These cumulative problems required extra funding. I ask the Minister to remember the difficulties which accompanied the establishment of Beaumont Hospital. Wards lay idle, bitter turf wars were fought among consultants which were finally decided by the courts and enormous costs ensued. The Tallaght Hospital board learned valuable lessons from the problems which arose in Beaumont and no such problems attached to the transfer to Tallaght. Thousands of professionals were brought into a new situation with no industrial relations problems. That is greatly to the credit of the Tallaght Hospital board. I urge the Minister to build a new relationship with the hospital board so that problems can be addressed. It is feared that the Department is not happy with Tallaght Hospital and with its unique nature and ethos.
That is ridiculous. The quid pro quo for autonomy is accountability.
I like to tell the truth.
The report does not identify the root causes of the problem. The Minister may not agree with me when I say that while Tallaght needed a hospital it did not need this monster that is eating up money. We have deprived my constituency of Dublin South-East, which includes the south inner city, of two hospitals, the Meath and the Adelaide. There are no acute hospital services in my constituency despite the fact that there has been a demographic change, more families have moved into the area and there are more children. People are being asked to use Tallaght Hospital. The strategy in this area has changed in more progressive countries. They are not promoting large hospitals, but medium-sized ones that serve smaller catchment areas. We should also examine that. This problem is the inevitable consequence of a decision that was taken many years ago before the Minister came to office. When we saw the writing on the wall we should have taken a step back and said "this is a bad decision." We will live to regret this in terms of cost long after the Minister ceases to be in office. All Ministers will have to deal with this problem.