The State is facing a €10 million-plus bill to provide family accommodation at the national children’s hospital after it declined to give naming rights to a McDonald’s-linked charity that will operate the facility.

The size of the block is now likely to be reduced in order to make savings and reduce the exposure of the exchequer. It remains unclear whether the facility will be ready in time for the opening of the new hospital as discussions between the HSE and the Ronald McDonald House Charity are continuing.

The sponsorship of the block by the charitable arm of McDonald’s has already proved controversial, with leading obesity expert Dr Donal O’Shea saying it was not sending out the right message to have a fast food chain linked to the hospital when childhood obesity is Ireland’s biggest epidemic.

The charity originally proposed funding the entire cost of providing 53 units of family accommodation at the hospital. It already runs a smaller unit in Our Lady’s Children’s Hospital in Crumlin, as well as dozens of similar facilities around the world.

After the HSE refused to cede naming rights to the charity, it was agreed the charity would part-fund the unit, with the rest of the cost to be met by the State.

Concerns about the funding arrangements for the project surfaced at a meeting of the hospital’s programme and project steering group in January last year, which heard the charity was now proposing to fund €8 million upfront. It asked the HSE to lend €7 million-€7.5 million for the balance of construction costs; officials warned it would take the charity “many years” to repay the money.

The HSE owns the site and would also own the building, which it would lease to the charity to run. Officials warned that any financial risk would ultimately lie with the children’s hospital.

Inflation costs

In November, a meeting of the project and programme board heard inflation had added to the cost of the project, which was now projected by HSE Estates to cost more than €20 million. The McDonald’s charity proposed funding of €10 million, with the State providing the balance. The board proposed reducing the size of the facility as a way of limiting costs.

The hospital referred queries to the Department of Health, which said that although delivery of the family accommodation was not part of the remit of the hospital development board, “the importance and value of this support service has long been recognised”. Accordingly, the unit was included in the planning application for the hospital, approved in April 2016.

“At the time, the charity proposed to cover all costs associated with building and running the facility, without need for HSE input, and therefore its cost was not included within the new children’s hospital project brief and no provision sought in April 2017 for exchequer funding in relation to it,” the department said.

“The charity has since advised that it does not now believe it will be able to raise sufficient funds to cover the entire capital and running costs of the family accommodation unit. While it remains committed to covering all operating costs, the charity has been discussing with the HSE options for funding the capital development of the facility.”

RMHC said, as the agreed service provider for the family accommodation unit of the hospital, it will cover the annual running costs of over €1million per annum, at no cost to the State. “RMHC is continuing to work with the HSE and the development board in relation to these plans for the on-site facility.”

The charity, which is run by a board of voluntary trustees, says it has helped 3,778 families from every county in Ireland since 2004 with no state funding. The new unit will have 53 ensuite bedrooms. It will include a kitchen and sitting room for every 12 family rooms, dining room, playrooms, teenage rooms, feeding rooms, a garden, laundry facilities and private spaces for families.