I ask for Members' co-operation. If I have to interrupt them, it will eat into their time.
Ceisteanna ó Cheannairí - Leaders' Questions
Tá rudaí ag dul in olcais ó thaobh an bhreithiúnais atá déanta ag an Rialtas ó thaobh ospidéal náisiúnta na bpáistí. Tá na hamlínte sínte amach arís agus tá an buiséad imithe suas go dtí níos mó ná €1 billiún. Tá an cuma ar an scéal, ón méid a dúirt an bord leis an choiste oireachtais inné, nach bhfuil deireadh ar bith leis an scannal seo. Is é an cheist atá ann ná cad atá an Rialtas ag déanamh leis na héilimh ar chostais bhreise uilig atá curtha ar an mhéar fhada? Cén uair a bheidh an togra seo críochnaithe? Cad é an machnamh is déanaí maidir leis na costais dheireanacha?
Eight months ago, the National Paediatric Hospital Development Board made a commitment to provide the Oireachtas Joint Committee on Health with the revised cost and timeline of the national children's hospital. This project is years overdue and has overrun by more than €1 billion. It has been a shambles from the start. In 2019, it was described by the Tánaiste as a "debacle". Yesterday, the board was not able to give details of the time it would take to complete the construction of the hospital, which is not satisfactory. It is unacceptable that the board is not in a position to give clarity about the project's rising costs.
There is a vacuum of transparency and accountability surrounding the development of the hospital. Total claims have risen from 600 to 900. Most have been parked for later settlement, which is just kicking the can down the road. It is a never-ending saga of more claims, rising costs and no completion date in sight. The sketchy information that the board provided indicates that we are looking at the second half of 2024, if not 2025, as the earliest date on which the hospital will be in a position to open its doors. When will it be completed? Does the Government even know?
We should not lose sight of the root causes of this scandal. Policy failure and ministerial incompetence were at its heart. In 2019, the Government paid PricewaterhouseCoopers, PwC, €500,000 to review the cost overruns. PwC found that the total cost of the hospital had risen from the original budget of €790 million in 2013 to €1.4 billion by December 2018. PwC was of the view that, in 2019, the all-in cost would be €1.73 billion. That is some overrun. PwC found that the overspend was a direct result of "Significant failures [that] occurred during the crucial planning and budgeting stages of the project." That did not happen this year or last year, but from 2014 to 2019. The Tánaiste was the Minister for Health between 2014 and 2016. It was he who stood over a two-stage procurement process despite knowing it was untested, with significant risks. He was followed in that ministerial position by the current further and higher education Minister, Deputy Harris, who was informed by the Department of cost overruns of as much as €391 million in August 2018. He failed to share this information with his Cabinet colleagues, including the Minister for Finance.
This is a mess, but there seems to be no accountability or transparency. We have no idea as to what the revised additional costs will be, given there are 900 outstanding claims. The hospital board will not provide this information. Will the Minister, as a member of the Government, provide it to the Dáil? Someone in government must know. What action is being taken to rein in costs and bring this project under control? What will be the final cost?
I cannot give the Deputy the final cost today. It is a live project and, as he mentioned, there have been significant cost increases and changed contractual arrangements throughout the process. There is a wider issue with significant cost inflation in the construction sector. As we all recognise, there is a problem with the planning, development, costing and delivery of major public construction projects. I am afraid to say that the children's hospital is a critical example of that. This does not just relate to James's Street. Going back further, the original proposal was for a site at the Mater hospital, which had benefits and coherence in terms of the transport plans, including a metro station. that were planned for the same site. Both of those projects ended up not proceeding, which is one of the reasons for the incredible cost overruns with this hospital. The long time it has taken to get through planning to construction is one of the most critical factors in the overrun.
However, the project will be delivered. A significant milestone has been reached in the topping off of the main fabric of the building. It is a time for us to focus on getting the hospital delivered. The 2024 timeframe is far from ideal and constitutes a long delay, but for the health of the children of our country, it is important that we get it completed. There are complex and difficult contractual arrangements. No one in government will try to ignore that reality. We will have to manage them out to the hospital's completion. At that point, we will at least have a world-leading facility for our health system.
There have been developments. The acute centre in Connolly hospital is up and running. It is part of the overall children's hospital strategy. However, the main project has been bedevilled by significant delays. I do not disagree with the Deputy that one of the lessons we need to learn has to do with the two-phase contract process, wherein the broad outline was agreed but further contractual difficulties arose during the process. We should learn lessons from this.
We have had significant difficulties with Covid, including the availability of workers and, similar to the rest of the economy, the construction sector operating on a stop-start basis. We have a wider problem of skills shortages, which is increasing prices in the construction sector in particular. None of these difficulties will be resolved immediately, but critical to the Government's next steps will be ensuring that the economy has the necessary skills, we learn lessons about managing cost overruns in large public projects and we deliver a new and better planning system so that there will not be an incredibly long process again, given that this is one of the reasons the cost overruns have been so high. It is not ideal and has been an unsatisfactory process throughout, but it will be concluded with the delivery of a first class children's hospital. That is the most important aspect on which we should focus.
I cannot give the Deputy a specific price today because there are still contractual issues to be resolved. It would be a false figure if I gave one. However, we will minimise the cost to the best of the Government's ability and deliver the hospital, albeit after a long delay that no one has wanted. Now that the building has been topped off and its basic fabric has been built, we need to complete the hospital for the children of this country.
With respect, from listening to the Minister's answer, I believe that the Cabinet has taken a hands-off approach to this.
The Government does not know what the estimated costs are. Maybe it does not want to know. Where I do agree with the Government is that the root cause of this is the two-stage procurement process, a process Deputy Varadkar, as Minister for Health, signed off on. The cause of this is ministerial incompetence. The PwC report found it was not because of inflation or other matters but the lack of budgeting and failures in crucial planning at the early stages. That is why we have a situation in which Leo Varadkar promised this project would be built by 2020 and the all-in costs, including contingency and inflation, would be €650 million. We now have figures of €1.7 billion. We have 900 outstanding claims.
As leader of his party and a senior member of Cabinet, can the Minister not even tell the Dáil what the total quantum of those claims is? Are we supposed to allow the Government to continue to write a blank cheque for this project? What actions is the Cabinet taking to make sure costs are reined it? Or is it a case it had made such a mess of this in the 2014 to 2016 period, it has to pay no matter what comes?
Cabinet subcommittees have been meeting regularly to assess just this project because of concern about the contractual difficulties there. We have been paying it all our attention and we have every intention to get it built and keep the costs down. However, if I were to give false promises in terms of what the exact final cost would be, I would be guilty of the same things Deputy Doherty is accusing others of. There is a wider issue in our wider debate about construction, in housing, transport, water and a range of other infrastructure, that we in the political system start to recognise we cannot promise everything at the cheapest price to get it over the line and deal with the consequences of it later, something which parties of all colours and shades do. We have to start being realistic about the likely cost of various projects.
We can and will learn from this as an example.
The Minister should share them with the Dáil.
We have to, first and foremost, get them through the planning system. In terms of the cost overruns on this and the other main public infrastructure projects we have, the greatest factor in terms of cost inflation is the long lead times it takes to deliver projects. We all need to focus on improving that, especially in the planning system.
Thank you, Minister. I am moving on to the Social Democrats.
The Government is tying itself up in knots trying to explain the screeching U-turns on the cuckoo funds. Yesterday, the Taoiseach said this capitulation to cuckoo funds had been signalled when the stamp duty increase was announced in May. However, when Deputy Donohoe announced this measure, he said three bodies would be exempt: local authorities, approved housing bodies and the Housing Agency. If he had signalled he was about to exempt cuckoo funds from a measure designed to target cuckoo funds, it certainly would have stood out and caused a row on the floor of this House.
The Taoiseach also told us 2,400 social homes are due to be leased this year and that they could be in jeopardy if the stamp duty surcharge were not waived. The cuckoo funds are not content with paying virtually no tax on their profits or the extraordinarily lucrative 25-year contracts and secure investments, which have been described by some as Government bonds on steroids. No, the State has to sweeten the deal further and exempt them from this stamp duty increase if it wants them to play ball. The revelation 2,400 lease deals are about to be done with cuckoo funds for 2021 was also a big surprise. Last year 1,440 social homes were delivered through that lease programme. The Minister for Housing, Local Government and Heritage now tells us the number of lease deals in the pipeline is substantially more than the total amount leased for last year, despite everyone in Government agreeing this is terrible value for money. The Minister might address that point. What does in the pipeline mean? Are there contracts in place?
When Paschal Donohoe announced this measure in May, he said there would be a three-month transition period for the execution of binding contracts which had been entered into but not completed, prior to the commencement of the resolution. Were we to understand this is additional to those ones in binding contracts? If it was the case they were all in binding contracts, there would have been no need for that resolution last night.
Perhaps the Minister could answer a simple question. How many lease deals do we expect in 2021? What is the ballpark? There is no transparency around this. Councillors only hear at local authority level after the deal is done. When I raised this during Leaders' Questions some months ago, I was looked at as though I was making it up and there were only tiny numbers, when it is exactly what I thought it was at the time. Will the Minister tell us what is in the pipeline? Is this over and above those which are already in existing contracts? Will the Minister give a ballpark for this year and does he accept this is awful value for public money?
I agree with the Taoiseach yesterday, that what we will see in the housing for all strategy, which will be published shortly, is a change in how we do leasing arrangements and a recognition this is not the approach we want to take as we develop a new housing for all strategy. It will change. There are 2,450 units projected in this year's target and a direct build target of 9,500 units. A percentage of the leased units would be in mortgage to rent and repair and lease schemes, of which approximately one third of those houses already leased so far this year are part. It is not that a lease arrangement, repair and lease or mortgage to rent may have a role to play in every single instance, and I think other parties have recognised that, but we need to change the policy and approach. Whether that is in much longer leases, with ownership reverting to the local authority, or other such arrangements, that is what will be set out in the housing for all strategy.
My recollection during the implementation of this short-term measure to avoid what happened in Maynooth and other locations, in which large volumes of housing estates where bought up, was there was a clear indication and signal at that time, for example, with regard to direct provision, social housing or such policy areas where we want to see an immediate response in supply this year, that we would look to try to take a different approach in such categories.
However, these are short-term, emergency measures to address a particular problem. The key thing we need to get right now is the new housing for all strategy and a different approach to housing. Yes, we need additional social housing and, critically in my mind, additional cost rental and affordable housing for purchase. Critically, it is not all about the numbers. It is about where the housing is going, to make sure we get transport-led development housing close to new public transport systems. We need more balanced regional developments in order that it is not just all pressure on Dublin. My constituency and Deputy Murphy's are some of the areas in which some of the worst increases in rent have occurred and the biggest problems exist.
In this new housing for all strategy, there will be much stronger State engagement, including the use of public lands and the Land Development Agency, to provide social and affordable housing, as was agreed in recent amendments to the affordable housing legislation. No one is saying the current leasing arrangement is something we think is the future. We have a legacy issue here and targets and an immediate issue in that certain contracts have to be delivered upon, but the key change coming was signalled by the Taoiseach yesterday and is one I agree with.
The Minister described this as a short-term emergency measure - for 25 years. Let us just talk about what this entails. A builder builds a housing estate and a cuckoo fund comes in and buys it in its entirety. It is exempted from the 10% stamp duty because it will lease it to the local authority. The local authority will pay the equivalent, if not more, in terms of a mortgage for 25 years. The local authority will then refurbish the house and hand it back to the original owner. You could not make this up. This is not short term. This is an abuse of public money.
What will be even more abusive is we will be told the 1,400, 2,400 or 3,800 houses are part of the housing stock the Government has delivered.
The Government has not delivered it. Will the Minister accept that this is desperate value for money? Why did he go along with the 10% U-turn?
For clarity, the Minister for Finance, Deputy Donohoe, said in the Dáil on 19 May that multiple purchases of property are undertaken by bodies specifically for the purpose of providing social and affordable housing and it is not intended to apply the higher stamp duty rate to those instances. I do not disagree with the Deputy on her underlying point. We need to change the approach. The massive ramping up of the investment we are about to make in social housing is not best provided if it is done in an arrangement whereby we have a 25-year lease with ownership not being transferred at the end. My expectation is that we will see a change in direction in that regard in the housing for all strategy. It will not be a complete switch because there will be certain instances, a very small number such as the type of instance I mentioned earlier, where leasing arrangements may have a role, but it cannot provide a substantial part in the meeting of social or affordable housing targets on which we all agree and which have to be delivered. There will be a change. The new housing for all strategy is imminent. Within that, there will be a variety of different measures to see an overall change in housing policy.
I very much welcome the Minister's acceptance last week of two significant amendments to the Climate Action and Low Carbon Development (Amendment) Bill 2021. I strongly support that. The reason is that the two amendments will ensure, for the first time, that the farming community will get due recognition when it comes to capturing and storing carbon on the land, be it in hedgerows, soil or the trees. This is potentially very positive from a farming perspective with regard to setting carbon targets, carbon budgeting and sectoral emissions thresholds later in the year. Furthermore, it is important to acknowledge the positive contribution the agricultural community can make to climate action because that will further encourage good behaviour in that regard.
While I accept that the principle is sound and the concept is good, I appreciate that there are still many questions. I have many questions, as do the agricultural community and farming families. I accept that the Minister may not have all the information to hand, but five questions jump out. How will the carbon sequestration be calculated and quantified? If the Minister could shed some light on that, it would be much appreciated. Second, which State agency will take the lead in coming up with such a formula that can be applied to various farms and regions? Third, how long will it take before a formula that can be applied can be agreed between various parties? Fourth, does any other country do something similar? Rather than us reinventing the wheel, could we take a template from another country and apply it or customise it here? Finally, how will individual farms and the farming community in general draw down these credits? Will there be financial incentives to assist them and will there be financial recognition for what they are doing from a climate point of view? I would be grateful if the Minister could respond to that. Again, I accept that he may not have all the information to hand relating to how it is going to be applied and implemented, but any light he could shed on the topic would be greatly appreciated.
I thank the Deputy. It is significant. We are about to change how we approach climate in land use in a way that I believe will see farmers benefitting from our emissions reduction targets. The critical thing in the policy approach we are taking is that we want income to go up as emissions go down. Bringing down emissions involves not only reducing the source of the emissions, be it biogenic methane, nitrous oxide or carbon dioxide coming from our activities, but also looking at sinks such as being able to store carbon in the soil and in woodlands and being able to stop carbon being emitted by re-wetting bogs, which allows the dry exposed bog to retain carbon rather than emitting it into the atmosphere. It is recognising that what are called sinks for storing carbon using nature-based solutions is where payments will be able to come.
Regarding how it will be quantified, we still have work to do. A key commitment in the programme for Government is a full land use review. A lot of science and mapping is happening in this regard, but we need further scientific information to be accurate and scientific in terms of what is happening. Many changes are taking place in forestry, wetlands, grass and other systems and, therefore, we have to do a proper land use review to have a full assessment.
As regards which agencies, to answer each of the Deputy's five questions in turn, Teagasc and the Environmental Protection Agency, EPA, have critical roles, as well as other State agencies such as Coillte. However, I single out Teagasc and the EPA as having a critical role as scientific organisations spreading best practice and helping us to determine the policy levers that we will use to deliver it.
As to how long it will take, it will probably take towards the middle to latter part of this decade. That is in tune with changes that are also going to occur at European level. There will be a further amendment to the Bill in the Seanad tomorrow to back up the two amendments that were agreed on Committee Stage and clarifying that it is the European accounting system. That accounting system will evolve. In 2026, the European accounting system will include wetlands and emissions from wetlands within the European system. We even expect further information next week when the Fit for 55, the European climate strategy for the next decade, comes out and that there will be further evolution. However, it will take time for us to set up the scientific and trading-based solutions as well as other policy levers to avail of those payments. Some will come sooner. Even on wetlands, the agreement in the CAP reform in recent weeks for farmers to be paid through CAP payments for storing carbon in wetlands is already here. There is an evolving European and domestic attention on this as a key part of the solution.
I thank the Minister for his genuinely useful and helpful response, particularly regarding how farmers may be able to monetise this situation, which is definitely good news. The Minister mentioned that an amendment will be tabled in the Upper House tomorrow. Does the Minister envisage any more amendments being accepted and can he indicate when the amended Climate Action and Low Carbon Development (Amendment) Bill is due to be brought back before the Dáil for consideration and final sign-off?
I have to await the Report Stage tomorrow in the Seanad, but I do not expect other amendments on this complex issue. Even explaining the science of sinks, sources and different accounting mechanisms is an evolving and complex process in its own right. However, the amendments we have introduced and the further amendment tomorrow help. As I said during the Dáil debate, the Bill recognises that we are going to be using sources and sinks and that we will pay farmers.
To answer briefly the two other questions the Deputy asked which I did not get a chance to answer, New Zealand provides a model. For example, its dairy farmers are switching away from the heavy fertiliser and pumped-up rye grass model towards mixed sward. They are doing what many smart farmers are starting to do here, which is good nutrient and soil management, so it is happening. On individual farms, we will look at similar systems that country has for here, where there will be payments from other sectors for the nature-based services and solutions, including carbon sinks, that farmers and foresters provide. That is coming. It will take some time to get the systems in place, but it is part of the future for Irish agriculture.
Recently in County Donegal, residents in Glenties, Doochary and Lettermacaward were blanketed with a leaflet drop announcing a new wind farm application in Cloghercor. This is in addition to a new application in the geographically adjacent Graffy area, a broadly similar landscape. The proposed Cloghercor project runs from Cleengort and Derkmore Lough in the south through to Shallogans and Doochary parallel to the Gweebarra river estuary.
This 7 km stretch of land is mainly peat bog, much of it with significant slopes. It is an environmentally sensitive landscape. The application will be by way of the heavily flawed strategic infrastructure development process. The process is similar to the strategic housing development process for large housing projects, which for all intents and purposes appears to serve only to exclude proper public consultation. As a consequence of this, An Bord Pleanála has seen 90% of its grants overturned on judicial review.
The response to this from the Government has been to propose pricing communities out of the process in direct contravention of the principles of the Aarhus Convention, which is strange as its legislative programme commits to strengthening access to justice through the Aarhus Convention Bill, although I am not surprised that the Government has taken the Trumpian "if we stop testing right now, we'd have very few cases" approach to problem solving, as this Administration and previous ones have serious form in this area.
Governments of inaction have failed, and continue to fail, our citizens on so many fronts. I stood in front of the Taoiseach on 18 November and he told me he was anxious to progress a comprehensive review of the wind energy guidelines. Nothing has happened. The following day, I raised the Meenbog landslide as a Topical Issue with the Minister of State, Deputy Noonan. As yet, nothing of consequence has emerged from the litany of investigations by an alphabet soup of organisations, which he outlined that day were to happen. Again, during Questions on Promised Legislation in January, I raised with the Taoiseach the focused review of wind energy guidelines, which has been ongoing since December 2013, and the Mulcahy report into planning irregularities in Donegal, which has sat unpublished on the desks of eight different Ministers. The Minister's boss told me he would follow up these issues and that he would speak to the Minister about them. I have heard nothing since.
Derrybrien has been ongoing since 2003 with total Government inaction. Today, the cost of this inaction stands at more than €13.9 million. There is no plan and no action, only dither and spiralling costs. The present mealy-mouthed approach that masquerades as participation does not work because the provision of information is not participative, and neither are attempts to limit access to the courts. Will the Minister outline for me what actions the Government intends to take to ensure communities throughout the country can be properly involved in and consulted on significant development projects in their areas?
I thank the Deputy. I understand that communities in the area, particularly Gaeltacht communities, have been very concerned. I understand it is at a very early stage of the planning application process. It is critical the communities are listened to and involved and there is real engagement. Nothing is certain in the planning system. An Bord Pleanála is an independent agency. We will have to judge any application on its merits. Earlier this week, I was pleased to launch further updated initiatives on how we are looking to engage communities in the renewable revolution that is taking place, for example by looking for direct ownership of new renewable projects and significant advances in terms of supports, facilities or benefits for local communities. We are also looking for engagement with local communities in a way that is fair and in line with the Aarhus Convention which, as the Deputy has said, is a critical part of European environmental legal structures.
Critical in this is the recent public consultation in which EirGrid has been engaged. I say this particularly for Donegal because it has recognised that areas such as Donegal have seen significant development compared to other parts of the country. It happens to be an area with the strongest wind resource and this may explain it. There is a real understanding that grid policy and renewables development policy go together. I am sure An Bord Pleanála will keep a very close eye on the conclusion of the consultation process, when EirGrid will set out some of the key questions as to where will we benefit from what we have, which is a huge economic resource. Included in this is the potential to bring industrial or other employment opportunities close to the wind rather than always shipping it over long distances. We must look at the grid as well as the wind turbines themselves. This is a key part of the process.
The Deputy is right that the wind energy guidelines have been in consideration since 2013 and there has been a real difficulty in getting final agreement on the relevant measures to be put in place, such as sound and other systems. Neighbouring countries have been able to do this but we have not been able to get agreement. We have to resolve this for local communities and developers so we do not go back to what Deputy Doherty referred to earlier - a process that is so long and drawn out that it frustrates everyone. People do not want to end up in court with the costs and all the problems it involves.
We are starting to go offshore and this has huge potential in particular for Donegal because the north-western waters are significant. We will still have onshore development of renewable energy because it gives us real economic opportunities. However, it has to be done in line with community interests and environmental protection. We commit as a Government to making sure this is the case.
The Minister has outlined that he is waiting for final agreement on the regulations. With whom is he waiting for agreement? As far as I know, nobody has been consulted on a final agreement except, perhaps, the developers. What the Minister has outlined on EirGrid sounds very good and nice but the reality is it is not the developer of the wind farms. The developers of the wind farms are private developers across the board, who railroad over communities and then end up with An Bord Pleanála and the courts and the Aarhus Convention is trampled on. We need to make sure people and communities are recognised and responded to. This is the reality of the situation and what the Government needs to do. The first thing the Minister could do is publish the wind energy guidelines and put in place guidelines that are useful and will benefit communities.
The negotiations are not with any developer. That is not the key consideration. It is with regard to agreement on sound standards and other distance parameters and standards, and looking to best international comparison on that, that there has been difficulty in getting final agreement within Departments. In the first auction system we introduced last year, we saw the first seven community energy projects getting approved. In the next auction system, we will also see a number of community projects and real support for community investment. This on its own is not enough. We need to have mechanisms which ensure that people, particularly those who live close to renewable energy systems - solar or wind - have the potential to gain, Their concerns must be listened to and heeded in An Bord Pleanála and lessons must be learned from Derrybrien and the bogslide last year in Donegal. The development of this industry has to be in tune with the protection of the environment and not hindering it. Those lessons will be learned and An Bord Pleanála will apply them.