The terms of reference of a review into the massive cost overrun of the national children’s hospital project are to be revised to allow individuals to be held accountable, Taoiseach Leo Varadkar has said.

Mr Varadkar said the Government had looked at the terms of reference of the review currently being conducted by consultants PWC and decided to revise them to enable it to find individuals accountable for cost overruns, if this was the case.

PWC has been tasked with identifying the “underlying root causes” that led to the escalation, The Irish Times reported on Friday.

While it will deal with the “role and accountability of the relevant key parties,” it will “stop short of determining culpability at the individual level,” according to the terms of reference.

Revelations of an increase in the cost of building the hospital from €987 million last year to €1.4 billion now have sparked a growing political controversy. When other costs are added, the project is expected to cost €1.73 billion and possibly more.

However, Mr Varadkar said talk of the project eventually costing over €2 billion was misleading, as the construction cost would be €1.4-1.5 billion and any higher figure included costs that would have arisen anyway, such as a figure for the previous plan to develop the project at the Mater hospital a decade ago.

He said the public was right to be angry over the escalating cost of the project, but it may be that some of the cost increases are “unavoidable” due to the current boom in construction. It may be possible to “pull back” on some cost increases that were avoidable, he told RTÉ Radio’s This Week programme.

With an additional €100 million having to be found in the Government’s capital budget this year to pay for the cost of the hospital overrun, spending in other areas will have to be “reprofiled”, he acknowledged.

Decisions on when other capital projects will go ahead will be clarified in the next 10 days, he said.

Mr Varadkar said he was aware the public was anxious about the increased spending on the project, but it was not the case that it was holding up lots of other projects. Major roads and airport projects were going ahead as planned, for instance, he said.

In health, spending on the children’s hospital was “manageable” as it would account for less than 20 per cent of the €10 billion budget over 10 years, he pointed out. What was of more concern was that construction costs were rising across the economy as “that means we get less value for money”.

Asked whether the controversy raised serious questions about the financial stewardship of the Government and of Minister for Health Simon Harris, the Taoiseach said the Government had set up a statutory board to drive and deliver the project and “of course there has to be political oversight as well”.

He said he had confidence in Mr Harris and in his ability to deliver the project. The main hospital would open in 2023 but when it did, it would be like Terminal 2 in Dublin Airport: “Once it’s open no one will regret it.”