Government approves increases to the capital and current budget sanctions for the New Children’s Hospital

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The Government has approved enhanced capital and current budget sanctions for the New Children’s Hospital (NCH) project, bringing the total approved budget to €2.24 billion (previously approved budget was €1.73 billion).

Included in this are the design, build and equipping costs (including the Satellite Centres at Tallaght and Connolly) of €1.88 billion, and a separate €360 million for the integration and transition of services to the NCH, including commissioning, ICT and the Electronic Health Record. 

The Department of Health said on February 13 that the new hospital would be a state-of-the-art hospital. “It will be Ireland’s first fully digital public hospital, providing 300 individual, inpatient, ensuite rooms – each with its own place for a parent/guardian to sleep. In addition, it will double the current number of critical care beds to 60, and have 93-day beds and 20 dedicated, ensuite mental health (CAMHS) beds. Theatre capacity will be expanded to 22 theatres and procedure rooms. The building will accommodate 5 MRIs and 110 outpatient rooms. 

“The approved increase in the capital budget will address areas identified in the 2019 report, the New Children’s Hospital Independent Review of Escalation in Costs, carried out by PWC.  The Report said that the New Children’s Hospital was unique in scope, scale and complexity in comparison to any other health infrastructure project in Ireland’s history and was explicit in stating that the project’s complexity should not be understated. 

“However, it identified a series of weaknesses in terms of set-up, planning, budget, execution, and governance that have since been addressed.

“The report considered the alternative option of re-tendering the works. It concluded that this was an unrealistic fall-back option and would have increased costs further and would have likely resulted in no hospital being built. 

“The 2019 PwC report also noted that a number of risks had the potential to place further cost pressure on the approved capital budget, including contractor entitlements under the contract, the outturn of provisional sums (items for which there could be no cost certainty until their procurement closer to the end of the project), recovery of construction inflation >4%, the need for additional capacity and capability in the NPHDB executive team, and the contractor’s right to claim for additional true costs in line with public works contract provisions.

“Project costs, like other areas of the construction sector and wider society, have also been impacted by other external pressures including the impacts to supply chains arising from the pandemic and other global events such as the war in Ukraine and Brexit.

“Subsequent to the PwC Review, Government was advised in late 2021 and again last December that the project would take longer than originally envisaged. Government was also advised that the original 2018 budget allocation would need to be increased. 

“The revised budget for the NCH project and programme follows significant work by the National Paediatric Hospital Development Board (NPHDB), Children’s Health Ireland (CHI), the HSE and officials in the Department of Health, along with the Department of Public Expenditure, NDP Delivery and Reform.” 

Speaking following the Government decision Health Minister, Stephen Donnelly said, “We all want to see this hospital open as soon as possible. Today’s approval by Cabinet to increase the capital and current budget sanctions for the New Children’s Hospital project will assist in achieving the opening of what will be a world-class hospital.

“We already have two satellite centres open and delivering the new model of care. The construction of the main hospital is also well advanced at over 90% completion. I acknowledge that a significant amount of money is being spent on this project, but it must not be forgotten that this is a hospital built to serve children and their families for the next 100 years. The new hospital building is unprecedented in scale and technological advancement.” 

The Department said that despite challenges the project had continued to advance, and was now over 90% complete, with the fit-out of rooms and the installation of medical equipment underway, and the first roof-top helipad of its kind in Ireland, to be shared with St James’s Hospital, recently completed. 

“The main contractor has now set out its programme for the completion of the construction and fit-out of the hospital by Q4 2024. Allowing for an operational commissioning period of at least six months for Children’s Health Ireland (CHI), the hospital could open in mid-2025. 

“Cabinet approval also includes an increase to the non-recurrent funding of the Children’s Hospital Programme. This Programme includes the completed commissioning of the two new urgent care/emergency care facilities, the commissioning of the NCH, the integration and transition of three hospitals and workforces, and a new Electronic Health Record system.”