Howlin rejects Taoiseach comments on corporate governance

05 February 2019

Labour Party Leader Brendan Howlin TD has rejected the assertion by the Taoiseach that corporate governance rules take precedence over Government circulars. Their appointee certainly should have informed the Minister for Public Expenditure in relation to cost overruns in the National Children’s Hospital.

Deputy Howlin said:

“Fine Gael has learned nothing from our years of austerity, and has instead adopted a Celtic Tiger attitude towards overspending. Just ten months after telling us the cost of the National Children’s Hospital at St James’s was to be €983 million, Fine Gael now say the final cost could be €1.73 billion or more.

“I asked the Taoiseach to clarify one aspect of when the Government first learned of this disastrous overrun in spending.

“The Minister for Public Expenditure has annually re-appointed a senior civil servant to the National Paediatric Hospital Development Board since his initial appointment in 2013.

“According to the Department of Finance Circular 12/2010, Protocol for Civil Servants Nominated to the Boards of Non-commercial State Bodies, for any civil servant acting on a non-commercial board, their Minister ‘must be notified without delay where there are serious weakness in controls that have not been addressed despite being drawn to the attention of the board or the Chair,’ or where ‘there is a significant strategic or reputational risk to the body that is not being addressed.’

“The question is simple. When, if at all, did this civil servant report to the Minster with concerns about spending on the new hospital?

“The Department of Finance Circular 12/2010 is adopted and repeated word for word in the revised and updated Code of Practice for the Governance of State Bodies, published by Paschal Donohoe on 17th August 2016, following Government approval.

“The National Paediatric Hospital Development Board is a statutory corporation established by Ministerial order under the Health (Corporate Bodies) Act 1961. It is not a Companies Act company and so general company law rules and principles are not automatically applicable. It is certainly not the case that a civil servant could serve on this kind of board in a purely ‘personal capacity’ as the Taoiseach has claimed.

“It is inconceivable that a civil servant would not report to the Minister if one of the largest capital projects in the State was running hundreds of millions over-budget in a matter of months.

“As such, it is implausible to claim – as Paschal Donohoe has claimed – that he as Minister for Public Expenditure was unaware of these cost over-runs until November 2018, even though the Minister for Health, Simon Harris, was aware of them in August 2018 and members of the National Paediatric Hospital Development Board may have been aware of them for months in advance of that.

“This has the further implication that the Budget presented by Minister Donohoe in October 2018 was inaccurate, as it failed to accurately represent knowledge that must have been in the possession of officials in the Departments of Health and Public Expenditure at the time that the Budget was being drawn up.

“The National Children’s Hospital is now running at €750 million over what was estimated just ten months ago. This has left a €100 million hole in this year’s capital budget, which will delay or cancel other vital investments around the country. As the full impact of the extra costs hit the national budget, other health investments will be delayed or cancelled, which will affect thousands of patients and their families.

“Fine Gael have demonstrated incompetence in managing the national finances, and now they are being incredibly evasive in accounting to the Dáil for how these costs have spiralled out of control.

“The Taoiseach’s assertion that corporate governance rules prevented a civil servant from informing the Minister for Public Expenditure is just a smokescreen to cover up the Government’s abject failure to control costs on the National Children’s Hospital project.”

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