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The real cost of ‘reprofiling’ capital funds

The cost of the new National Children’s Hospital which has almost doubled in four years will have significant knock on effects on the rest of the health service. Who is ultimately going to pay for the cost overruns? In 2015, the cost of the project was estimated at €800 million, in April 2017 it was estimated to be €950 million and yet today it stands at €1.4 billion.  An overrun of €450 million has to be paid for. 

So where is the money to pay for this overrun going to come from?  In 2019 €50 million will come for the Department of Health capital budget, and €50 million from other Government departments.  The Taoiseach has labelled this reallocation as ‘reprofiling’.  What does ‘reprofiling’ capital funding from existing projects and budgets entail?  It means taking money already allocated or earmarked for investment in a project away, and thus leaving that project without the required resourcing.

One of the immediate implications of the reallocation of €50 million of capital funding from the Department of Health budget is that in 2019 is that there will not be sufficient capital funding available in the Department of Health to invest in step down care facilities, in respite facilities, and in community nursing facilities.  Without this much needed investment patients will be trapped in the acute hospital system as there won’t be appropriate step down care or community nursing facilities available, and carers and their families will continue to go without much needed respite care facilities across the country.   

And what of the rest?  Will a further €100 million be taken from the capital budget in 2020, 2021 and 2022?  What will this mean for projects already announced under the Capital Plan 2106-2021 and Ireland 2040?  The answers to this are unknown, but no doubt will become clear in the coming weeks and months.