Vol. 1027 No. 1
78. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform if he will provide an update on the national development plan; the impact of cost inflation; if he will provide a list of any projects which may now need to go back out for tender; and if he will make a statement on the matter. [48646/22]
The question is fairly self-explanatory. It is to look for an update on the national development plan, the impact of cost inflation and if the Minister of State will provide a list of any projects which may now need to go back out for tender. As the Minister of State knows, the national development plan is very significant and many people are concerned about the impact of inflation.
The National Development Plan 2021-2030, NDP, published last year, demonstrates the Government’s commitment to meeting Ireland’s infrastructure and investment needs over the medium-term horizon. The NDP 2021-2030 provides €165 billion in public capital funding alongside a detailed and positive vision for Ireland up to 2030 as part of Project Ireland 2040.
In budget 2023 last week, the Minister, Deputy Michael McGrath, announced an additional €800 million which will be made available under the NDP for core capital spending to help in delivering the largest, greenest and most ambitious infrastructure plan in the history of the State. This represents a very substantial commitment of resources. Project Ireland 2040 remains the Government’s long-term overarching strategy to make Ireland a better country for all of its people, including the additional one million people expected to live in Ireland by 2040.
Inflation in the cost of construction materials and energy are factors which must be considered by sponsoring agencies and approving authorities when establishing their project programmes. Costs relating to inflation are to be met within existing overall NDP capital expenditure ceilings. Similar to any process of Vote management, it will be up to sectors and Accounting Officers to assess whether existing timelines for the implementation of key projects will need to be adjusted or if there will be a need for prioritisation within their existing five-year Departmental ceilings. It is also possible for the same set of projects to be delivered with some extension of delivery timelines or some re-evaluation of project scope.
At the project delivery level, the Office of Government Procurement issued a range of measures and guidance that are designed to assist contracting authorities to manage the impact of the exceptional price increases that have arisen since the reopening of economies post-pandemic which were further exacerbated by the Russian invasion of Ukraine in February of this year. Interim amendments to the public works contracts and the associated procurement templates were introduced on 7 January 2022 in response to the inflationary pressures on construction materials evident throughout 2021. These applied to new works contracts whose tenders were received after 18 January 2022 and permit cost recovery for inflation even within the fixed price period for exceptional increases.
In light of increased volatility in the price of materials and energy arising out of the invasion of Ukraine, the inflation-supply chain delay co-operation framework was introduced on 10 May to mitigate the risk of insolvency or contract repudiation on contracts that were under way prior to the invasion where there would have been little or no appreciation of the price increases that we have witnessed.
There are two questions that spring to mind initially. I am aware of the €800 million that was assigned in the budget. I am wondering how it looks at the moment in respect of capital carry-over. The Minister of State also mentioned that the extensions would be done by the approving authorities, which is fair enough. Is there any analysis at departmental level to see if there much need for time extensions? I would be interested in hearing that.
I understand the capital carry-over is projected to be €800 million for next year, although we will not know without the outturn. The Minister, Deputy Michael McGrath, can tell me if I am wrong, but in general I believe we are not constrained by money in our capital programme at the moment. The real constraints are coming from lack of labour and delays that arise in the legal process or the planning system. We are not short of money for projects. As the Deputy said, it is the contracting authorities and the Accounting Officer in each individual Department who is responsible for making sure their own projects are on track. They update us on the capital projects tracker spreadsheet, which is available for every member of the public to read. If they feel their projects are going to run late or they are not going to complete as many projects as expected within the time, it is up to them to tell us and tell the Deputies opposite at the same time.
I thank the Minister of State. On the inflation co-operation framework, that was totally new when it was announced. I was wondering how it is working at this time. Were there any hiccups at the start? One of the things that sprung to mind at the time, which I had discussed, was that certain contracting authorities might not have the same ability, know-how or knowledge base going into it. How is that working practically? Does the Minister of State see it needing to be extended? How is it working in general?
I meet quarterly with the Construction Industry Federation to ask it how things are going. My understanding is that it is happy and satisfied and is not looking for changes to what was brought in in the inflation co-operation framework. When a new capital works contract is taken out, the various sub-indices of inflation are agreed and a risk-sharing arrangement is put in place. If a contract is heavily dependent on the price of wood and concrete, for example, an agreement is made beforehand that if the price goes above a certain level, a certain degree of risk-sharing will take place between the Government and the contractor. The idea of that is to prevent a situation arising where it is not worthwhile for the contractor to complete the project. Situations arose where there would be a large housing project and the builders could legitimately come back, open their books and say they would lose money on it if they completed it, or go bust. To avoid that, there has to be a degree of risk-sharing. They have to take that on, they understand that, with their financing. However, there also has to be some risk taken on by the contractor and the Government.
79. Deputy Ged Nash asked the Minister for Public Expenditure and Reform if his Department has examined or requested a SWITCH analysis of the budget 2023 measures, excluding the 2022 temporary cost-of-living measures to be carried out; if he will provide a copy of any such analysis reviewed by his Department, for the distributional impact of the permanent expenditure and taxation changes from budget 2023 only; and if he will make a statement on the matter. [48282/22]
This time last week the Minister and his Government colleagues were patting themselves on the back on a job well done on budget day. There is no shortage of graphs and other narrative in the glossy expenditure report claiming how much better off low-income households will be as a result of the once-off measures combined with the budget 2023 measures. However, when we strip away the €4.1 billion in once-off measures, the picture is not as rosy as presented in the expenditure report. Why is there no analysis using the ESRI's simulating welfare, income tax, childcare and health policies, SWITCH, model done for budget 2023 specifically?
In addition to a €4.4 billion package of temporary supports to be provided this year, budget 2023 provides for additional core expenditure of €5.8 billion. This significant commitment, which will bring overall core spending next year to €85.9 billion, is designed to support households and businesses in a challenging economic climate, and to invest in public services and critical public infrastructure in a fiscally responsible and sustainable manner.
In order to promote economic equity, equality of opportunity and social solidarity in the budget process the programme for Government commits to developing a complementary process of budget- and policy-proofing, analysing the distributional implications of expenditure and facilitating the targeting of measures to assist those most in need. In accordance with this commitment, my Department, along with the Department of Finance, undertakes distributional analysis of those measures captured in existing models as part of the budgetary process. This analysis provides detail on the expected impact of measures on households and socioeconomic groups and creates an evidence base which is central in informing the overall package.
It should be noted that it is necessarily an understatement of the true impact, as not all measures can be captured with existing models. The distributional analysis of the final package is published on budget day to improve overall transparency.
As part of budget 2023, my Department set out the findings of our distributional analysis on pages 29 to 31 of the expenditure report, published online on the budget 2023 website. The analysis, as provided, was based on the year of impact, with measures that are expected to benefit households in 2022 presented separately from those which will impact in 2023. The distributional impact of the core 2023 package in isolation was an integral part of the analysis carried out by my Department and I will arrange for this to be shared with the Deputy. In a further reply, I can outline some of the figures that strip out the cost-of-living measures in 2023 from the core budget 2023 impact. However, I wish to make the overall point that what matters is the benefits that are provided to people, not whether they are core or cost-of-leaving measures. People wanted to know what the budget meant for them.
I absolutely get that. It is normal practice that the distributional impact of a budget would be provided in the Exchequer report. A bit of a con job was attempted to be perpetrated against the Irish people, quite frankly. I read the documents and I do not see any separate, isolated analysis for the measures and provisions that apply for 2023 exclusively. Of course, when one looks in the round at the once-off package of €4.1 billion and add that to the budget 2023 package, it looks very impressive.
However, the reality is as follows, and I will quote from the Economic and Social Research Institute’s, ESRI’s, post-budget analysis statement. It states: "...below forecast inflation increases to tax credits and welfare payments next year will mean many lower-income households will experience real terms cuts in living standards in the latter half of 2023 without a repeat of the welfare bonuses, lump-sum payments and household energy credits." The reality is that people who are struggling today will continue to struggle next year in the absence of any additional once-off support. It would be very useful, and in the interest of transparency, for the Minister to publish an isolated budget 2023 distributional impact. It is normally done through the SWITCH analysis, which is a very important measure.
This is the expenditure report. It is not terribly glossy, but it is full of useful information. The way that the distribution analysis is presented is there is the 2022 impact and then, separately, the 2023 impact. The Deputy is asking to strip out the 2023 measures that are cost-of-living related, such as the €400 energy credits that will apply next year, the continued reduction of VAT on utility bills, excise reduction and the continued reduction in public transport fares. I will provide that analysis to the Deputy. We have nothing whatsoever to hide. The overall conclusion of the ESRI was clear: "One-off measures announced [in the budget] will insulate most households from rising prices this winter." It does, of course, go on to talk about the following winter. That is a year away and we do not know what will happen in the intervening 12 months. The ESRI also stated:
Our research shows the government’s approach to insulating households from the recent rise in energy prices has been effective. Targeted welfare measures combined with universal household energy credits will do more for most lower income households this winter than had welfare payment rates risen in line with inflation both this year and next.
I regard that as its central conclusion. However, the Deputy makes a fair point. We do not know what will happen in 12 months’ time. However, this budget is first and foremost about helping people in the coming months and through 2023 insofar as we can foresee how that will that develop at this point.
I welcome the Minister’s commitment on the record of the House to provide that additional analysis. That is very useful, indeed. It is not abstract, either. It is an important analysis to have.
I draw the Minister’s attention to the minimum essential standard of living, MESL, post-budget analysis from the Vincentian Partnership. It essentially concur with some of the conclusions arrived at by the ESRI and makes the point that, in reality, a €12 a week increase to social welfare rates will not sufficiently insulate those who are in lower deciles in terms of income from the worst vicissitudes of the cost-of-living crisis given that inflation will be at about 7% next year. It makes some other points as well on the real value of core rates and some of the secondary supports that are provided for this year that are not provided for next year.
The reality is that we will be back here next spring discussing the need for additional once-off measures. Given the analysis of the likes of the ESRI and the Vincentian Partnership, we know that €12 a week increase to the core social welfare rates is not adequate. We should have gone for something more like €20 to insulate people as best we could.
If it were the case that we only provided €12 a week increase in the core weekly rates and did nothing else, then the Deputy’s conclusion would be a fair one. However, of course, that is not the case. The increase in the core weekly social welfare rates is being supplemented by an extensive range of once-off payments that will start to flow within the next short number of weeks. People look at this in the round. They want to know what benefits they are getting from the budget, how much cash they will receive in the coming weeks and what they will get next year. When the Deputy looks at this in the round, on balance, it is a very fair package. It is fiscally sustainable, and we have to have an eye on. It is one thing to use excess corporate tax receipts to make once-off payments but it is a different thing altogether to use excess corporate tax receipts to sign up to permanent expenditure commitments that recur year in, year out. That is a different thing. However, we will review this as the year goes on next year, depending on the prevailing economic circumstance.
80. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform his views relating to public pay. [48647/22]
In relation to the conversation the Minister just had with Deputy Nash, we are all aware of the impact of the cost-of-living crisis on many people. This question is on the Minister’s view on public pay.
Public service pay has been governed by a system of collective agreements since the Croke Park agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.
As the Deputy will be aware, the current public service agreement, namely, Building Momentum, was due to expire at the end of 2022. Discussions recently concluded between the parties to the agreement following the triggering of the review clause of the agreement by public service unions and associations due to the increases in the cost of living. These were challenging discussions given the impact high levels of inflation are having on living standards of workers, but also because of the uncertainty in the global economic outlook. The Government’s aim in these talks was to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.
The outcome of these discussions was a set of proposals put forward by the Workplace Relations Commission to extend Building Momentum for a period of 12 months, to the end of 2023. Three additional pay adjustments totalling 6.5% are provided for under these proposals over this and next year. The Deputy will be familiar with the detail of that.
The cost of these proposed pay adjustments under the extension to Building Momentum is estimated to be €1.6 billion spread over three calendar years - 2022 to 2024, inclusive. This extension would make Building Momentum a three-year pay deal. The extension acknowledges the higher than anticipated rates of inflation that have emerged since 2021 and, in particular, the impact of cost of living pressures. The existing agreement provided headline benefits of 3%. In total, including the existing agreement and the extension, headline benefits over the lifetime of Building Momentum amount to 9.5%, or just over 3% per year.
In respect of public servants at lower pay levels, the extended Building Momentum, as proposed, provides for increases of 12.5% over its lifetime, which is an average of just over 4% per annum.
I want to raise the issue of section 39 workers. As the Minister is aware, many section 39 workers held rallies and protests in the lead up to the budget. They also did so in my hometown of Galway.
I would imagine that we all recognise that section 39 workers do Trojan work and how much, as a State, we rely on their work. The reality is they often feel undervalued. We know that the income inequality has a massive impact on those workers. We also know that the income inequality aspect has an impact on retention of staff for these organisations. Will the Minister outline what steps have been taken in budget 2023 and the impact that will have on these workers?
I thank Deputy Farrell and agree with her point on the value of section 39 organisations and the work they do. I met representatives of several section 39 organisations over recent weeks in the lead-up to the budget and they made the point to me on the impact of the pay deal on them. As they are of course grant-aided organisations, they receive their financial support directly from the HSE. I expect the financial support they receive from the HSE will need to reflect the fact that there is an increase in funding for the Department of Health and that pay costs will now present an additional burden for many of these organisations, which are competing with the public sector to attract and retain staff. As matters stand and as the Deputy is aware, their staff are not public servants. They receive significant grant support from the Exchequer. Recognising the cost-of-living pressures and the costs of running the services, we have made an additional provision across the health area of €110 million, much of which will go to section 39 organisations between now and the end of the year to help them to sustain service provision.
The detail of that will be important to the workers. The topic of the evening is the considerable pressure people are under as a result of the cost-of-living crisis. I realise we refer to it often in this Chamber but the reality is that people are choosing between heating, eating and paying the rent. It is difficult for many to do all three.
I want to raise the issue of the secretarial assistants. The Houses of the Oireachtas Commission has sent the Minister the Shay Cody report on secretarial assistants. Can the Minister advise me on the next step? I am sure he is aware that tomorrow it will be four years since SIPTU lodged the pay claim. Some political staff are still starting at a salary that is lower than the living wage, which is shocking.
I thank the Deputy for raising this issue. Having been a practising Deputy for more than 15 years, I have a deep appreciation of the work of our secretarial assistants. An independent review was carried out on the secretarial assistant grade at the request of the Houses of the Oireachtas Commission. It has been completed and in the past few days has been sent to my Department, having been considered by the commission. Under the 2003 Act, it falls to the Minister for Public Expenditure and Reform to give consent or not to a proposal of the Houses of the Oireachtas Commission. I received the report only in the past few days. I have not yet read it but I am sure it will be made available to me by my officials as soon as they have carried out an initial assessment of it. I certainly will not delay. Once I have full sight of the report and have considered its implications, I will give a decision within a very short period.
81. Deputy Catherine Connolly asked the Minister for Public Expenditure and Reform the status of Ireland's partnership agreement for cohesion funding for the period 2021 to 2027; when he expects to bring the agreement to the Government; when he expects to publish the agreement; the details of any engagement that he or his Department has had with the European Commission on the recently reported downgrading of the northern and western region of Ireland to a lagging region (details supplied); and if he will make a statement on the matter. [48382/22]
I ask my question in the context of the downgrading of the north-west region, which covers seven counties, including mine. I am specifically asking the Minister about the status of the partnership agreement for cohesion funds. When is it expected to go to the Cabinet? When will it be published? What exchange has the Minister had with the European Commission on the serious downgrading and the recognition of how the north-west is falling significantly behind?
The partnership agreement sets out Ireland's investment strategy for its cohesion policy funds. Ireland will receive €1.4 billion in cohesion policy funding for the period 2021 to 2027. When this funding is co-financed at national level, it will mean cohesion policy programmes will add a total value of almost €3.5 billion to the economy. Using these funds, implementation of the partnership agreement will strengthen economic, social and territorial cohesion and further reduce disparities between different regions, including in the northern and western region.
In July, I secured Cabinet approval to formally submit a draft of Ireland's partnership agreement to the European Commission for its consideration. The Commission adopted the partnership agreement without change on 16 September, and I launched it with the Commissioner responsible for regional affairs, Ms Elisa Ferreira, on 20 September in Dublin. The Commissioner was in Ireland in September as part of a two-day visit to see European Regional Development Fund, ERDF, and European Social Fund projects and to engage with project participants. At a meeting of the Cabinet in July, I undertook to return to the Government with the final text of the partnership agreement. My officials are preparing this memorandum at present. I will bring the partnership agreement to the Government in the coming weeks. I intend to publish the document on my Department's website as soon as the Government has approved it.
Across the EU, the European Commission classifies regions within the Union as being less developed, in transition or more developed, based on their GDP per head of population relative to the EU average. As the Deputy has identified, the Commission recently reclassified the northern and western region from a more developed region to a region in transition on the basis that its GDP is between 75% and 100% of the EU 27 average. The other two regions in Ireland are classified as more developed as their GDP is above 100% of the EU average. Under the cohesion policy rules, regions classified as regions in transition, like the northern and western region, benefit from a higher co-financing rate, whereby the EU provides 60% of the funding for programmes, as opposed to 40% in the more developed regions.
I welcome the fact that the Minister is telling me the document will be published. I take it that it will be published in October or in the next few weeks. Will the Minister confirm that?
Will the Commission report itself be available? All we have are media reports of what the Commission has done. What it has done regarding recognition is very serious. It repeated its previous concern that the regional disparities in Ireland were among the highest in the EU and warned that if left unchecked, the trend of growing inequality between regions would have a damaging impact on the economic and social well-being of all regions in Ireland. We are talking about counties Galway, Mayo, Sligo, Roscommon, Donegal, Leitrim and Monaghan. Has the region been downgraded to a lagging region? The Minister referred in his answer to a transition. Could he clarify the terminology? It means there are significant challenges, including relatively lower productivity and educational attainment and a weaker skills base and business environment. Lagging regions are characterised by extremely low growth that is divergent from that of the rest of the country.
I cannot answer the question on the European Commission publishing its assessment but will seek to find out the answer for the Deputy. As I said in my reply, the Commission classifies regions into three categories depending on their GDP output performance relative to the EU average. Based on that, the northern and western region has been reclassified from a more developed region to a region in transition. This is because of the band it now falls into in terms of economic output relative to the EU average.
Let me add a few points. I have designated the Northern and Western Regional Assembly as the managing authority for the development of the ERDF programme for the northern and western region for the period to 2027. It will benefit from a more favourable co-financing rate of 60%. I made the decision, in consultation with the regional assemblies, to transfer €20 million in ERDF resources from the two more developed regions to the northern and western region in recognition of the transition status of the region. My Department engaged with the Commission on this matter and secured its agreement on this use of ERDF funds.
To answer the Deputy's question on publication, I believe it will be within weeks. I expect to have the memorandum for the Government very shortly.
I welcome what the Minister is saying and the extra money; however, what is occurring is a damning indictment of Government policy, which is committed to balanced regional development. This has not come out of the blue. In 2020, a report by the European Parliament's Committee on Regional Development categorised the region as a lagging region. In the Northern and Western Regional Assembly's pre-budget submission for the most recent budget, it set out low levels of research-and-development expenditure and problems with an estimated gap in disposable income between that of the north-west region and the national average. It was really significant, being three times higher than the corresponding gap in 2010. This is all set out. The Minister has seen the submission. The assembly is clearly pointing out that, instead of going forward, the north-west region has gone backwards.
It is important for the reports of the Commission and the Minister to be published. We will then be able to see whether the money is meeting what the Northern and Western Regional Assembly is seeking so that we can have balanced regional development.
I do not accept the Deputy's assertion that it is an indictment of Government policy. It is the European Commission that has reclassified the region because of its improved economic performance relative to the European Union average.
It has disimproved.
The population is up in the northern and western region. Employment is up there, as, of course, are investment levels. It is because of its improved performance that it has been reclassified, not by the Government but by the European Commission. I do not suggest that the Deputy is trying to make a political football out of it.
No, it is a misunderstanding of-----
This is not a national decision; it is a decision by the European Commission based on the three classifications it has for regions and it is based on the improved performance of the north and western region using that benchmark.
82. Deputy Carol Nolan asked the Minister for Public Expenditure and Reform if he will provide details of the engagements his Department has had with the Department of Health and other Departments regarding the way the increased costs of the national children's hospital project will be managed within the overall agreed national development plan capital allocations; and if he will make a statement on the matter. [48255/22]
As the Minister is aware, there are ongoing concerns regarding the cost of the national children's hospital. Has his Department flagged any of those concerns with the Department of Health or any other Department?
As the Deputy is aware, my Department is responsible for the allocation of public funds across each area of Government spending and ensuring that expenditure is managed by Departments in line with these allocations. My Department is also responsible for maintaining the national frameworks, such as the public spending code, within which Departments operate to ensure appropriate accounting and value for money in public expenditure. The responsibility for the management and delivery of investment projects within the agreed allocations and within the national frameworks rests with the individual sponsoring Department in each case.
In addition, several measures are in place to help ensure that budgetary targets are met. The Department of Public Expenditure and Reform is in constant communication with all Departments and offices and it monitors their drawdown of capital funds from the Exchequer against the published capital expenditure profiles, with information published monthly as part of the Exchequer statement.
With regard to the health sector, all expenditure is examined on a monthly basis through the tripartite health budget oversight group consisting of my Department, the Department of Health and the HSE. This is in addition to the ongoing contact between the health finance unit and the health Vote section in my Department in respect of expenditure issues in the health sector. The Department of Health also reports to the Project Ireland 2040 delivery board with regard to its national development plan delivery and its capital expenditure. This group meets six times per annum and consists of the Secretaries General of major capital spending Departments, as well as five external members.
Last week I published the budget for 2023, in which I allocated over €12 billion to Departments to spend next year on investment in vital capital infrastructure projects. The Department of Health will receive almost €1.2 billion to enable it to plan and deliver its investment in capital projects in 2023. The Department of Health has also had committed to it core sectoral capital allocations of €1.255 billion and €1.36 billion for 2024 and 2025, respectively, under the national development plan, NDP. It is the responsibility of that Department to prioritise within these NDP commitments to deliver capital projects under its remit, including the national children's hospital.
I thank the Minister for his response. He mentioned oversight and his Department but have specific concerns in respect of the cost and rising expenditure on the hospital project been flagged? As he is aware, in March 2017 and March 2019 the Rural Independent Group, of which I am part, gave the previous Government openings to change course in respect of the national children's hospital when my colleagues provided opportunities for a radical reassessment of the project. The then Government failed to take those opportunities and now we are on track for unprecedented cost overruns and endless legal battles with contractors. Where was the Minister's Department in terms of oversight of this issue? We have learned from reports in the media last week that many of the costs are down to the fact that the contracts were signed before designs were even drawn up. That in itself was a recipe for disaster. We also know that more than 700 claims have now been lodged by various contractors against the project, with the associated amount thought to be in excess of €300 million.
The first point is that my Department does not manage the capital projects of other Departments. It is their responsibility, in line with their legal obligations, to manage those projects, and it is the responsibility of the Accounting Officer to do so. Arising from the lessons that had to be learned from the national children's hospital, the public spending code was strengthened in 2019. I went further than that in the past year by bringing in a new external assurance process that involves setting up a panel of external experts and a new major projects advisory group to advise my Department in respect of major projects that come before us for approval.
On the national children's hospital, as the Deputy is aware, back in 2018 the then Government approved a capital budget of €1.433 billion. This included the capital costs for the main hospital at St. James's, the outpatient departments and urgent care centres at Connolly and Tallaght campuses, equipment for the three sites and the construction of the car park and retail spaces. There were other elements that it did not include, such as the integration and transfer of the services at the three children's hospitals to the new sites, ICT, a new electronic health records system and so on. The figure approved by the then Government was €1.433 billion. That amount has not yet been reached. Approximately €1.1 billion of that figure had been drawn down as of 20 September, so approximately 76% of the approved budget has been drawn down at this point. It is a matter for the Department of Health to manage the project.
I again thank the Minister for his response but surely there is some intervention he can make with the Department of Health given that €1.1 billion has been drawn down and there are endless problems with the whole project. To be constructive, I suggest that we have a debate on the real cost and service implications of this train wreck of a project. Will the Minister commit to that? It is very important that we have that debate when such a level of expenditure is being reached and it is obvious that the project is hitting many problems.
To put in context what €1 billion of an overspend on this project could pay for in the area of health alone, I was informed in reply to a parliamentary question I tabled that the total cost of implementing the entire national cancer strategy between now and 2026 will be in the region of €840 million. The total net budget for palliative care for adults and children was just over €100 million. That still leaves €60 million that would provide homes to those who desperately need them. Serious amounts of money could have been saved.
We need to refocus our attention on this project which has been allowed to run wild. We need accountability and a meaningful debate. That is the only way forward. Will the Minister accept that the Rural Independent Group was right to demand a change in the course of action in 2017 and 2019? If the group had been listened to back then, we would not be in the mess we are in today but, rather, would most likely have a functioning children's hospital that would serve everyone. To come back to my core question, will the Minister agree to a debate on this issue?
There are many opportunities for projects such as this to be debated, such as at the health committee, here on the floor of the House as a Topical Issue matter and so on. It is not for me, as Minister for Public Expenditure and Reform, to commit to a debate on a project that is being managed by another Department.
As I stated, the capital budget for this project was approved in 2018. Since then, the public spending code has been strengthened. I have introduced a new external assurance framework to strengthen the oversight procedures that are in place in respect of major capital projects. We have a live contract here that has to be managed. The priority is to get the hospital built and open for the children of Ireland who urgently need it to be completed. The contractor is entitled to submit additional claims, and many such claims have been submitted, but the National Paediatric Hospital Development Board is entitled to defend those claims and has been doing so. I respect and support the work it is doing. It needs to conclude that work in the fullness of time and enable this hospital to be completed and opened.
