Dáil Éireann debate -
Thursday, 12 Dec 2013

Vol. 824 No. 3

Leaders' Questions

Deputy Michael McGrath

The members of the Committee of Public Accounts are to be commended on the manner in which they conducted yesterday's hearing with the Central Remedial Clinic. Some of the practices that were revealed during yesterday's hearing are unacceptable. These include the use of charitable donations to top-up lavish executive salaries and pension payouts, the highly irregular recruitment process for the chief executive and the mystery annual payment of €660,000 to the Mater hospital. The saddest part of all this is that the children and adults with physical disabilities who rely on the services of the CRC will potentially suffer as public donations inevitably fall off. There is also a growing concern now that public trust and confidence in charities generally will be negatively affected by this controversy.

If we want people to continue to support charities as generously as they always have done, they need to be assured that their hard-earned money will be spent on those for whom it is intended. We would be naive to think that the issues at the CRC pertain only to that organisation and that it is the only publicly funded body to operate in this manner. The Minister for Health said late last month that of the 44 so-called section 38 bodies contacted by the HSE, more than half, 24 of them, stated they did not comply with public sector pay policy. A further eight did not even bother to reply to the HSE. What about the 2,000 or so section 39 bodies that also receive substantial funding from the HSE? Do we know what is going on within these organisations?

We await the implementation of the Charities Act 2009. The Act expressly provides for the Minister for Justice and Equality to regulate for narrative and financial disclosure standards. Were these standards in force they would require every charity of any significant scale to provide a report on the sources of its revenues, the pay bands of its highest paid employees, the costs of governance and the specific uses to which it puts income and assets. Will the Tánaiste advise the House when this legislation will be enacted? In the meantime, will the Tánaiste ensure the statement of recommended practice of charities, which is mandatory in England, Wales and Scotland, becomes mandatory in Ireland for the largest organisations funded by the HSE?

The Tánaiste

I agree with Deputy McGrath that it is important public confidence is retained and renewed in charitable organisations and that people who contribute to charities can have confidence their contributions are used for the purposes for which they are intended, in other words, that they go to front-line services. That is why the measures being taken to deal with the issues of top-up payments and transparency in the section 38 organisations are so important. The bottom line is that the agencies and organisations which are substantially funded from the public purse should adhere to stated pay policy.

The chairman and members of the board of the CRC and the former chief executive appeared before the Committee of Public Accounts yesterday together with the HSE and the Department of Public Expenditure and Reform. On foot of calls for the board of the CRC to resign, the chairman indicated he would call a meeting of the members of the board to consider their position. It is regrettable that the former chief executive of the CRC, who resigned this week, decided not to attend the Committee of Public Accounts hearing. The HSE will be following up urgently on the governance deficits identified in the CRC and the issues that arose relating to pension arrangements. I understand that arising from the PAC hearing yesterday the HSE has been asked to appear again before the Committee of Public Accounts on Thursday, 19 December together with representatives from the Mater hospital, which has a role in respect of superannuation arrangements in the CRC. Officials from the Department of Health and the Department of Public Expenditure and Reform will also attend at that committee hearing.

Deputy McGrath referred to the general subject of top-up payments and section 38 agencies. The HSE has a team of senior managers following up with individual agencies in respect of non-compliance with public pay policy. The reason these breaches of policy came to light in the first place was on foot of an audit of the section 38 agencies. As part of this process, the director general of the HSE is meeting the chairpersons of all section 38 organisations today. This meeting will focus on the requirement of the board of each agency to strengthen governance standards further and will set out the need to furnish the HSE with a compliance statement from the current financial year and for each year thereafter. This statement will be required to be approved by the board of each agency on an annual basis and signed by the chairman and another director on behalf of the board. It will be submitted to the HSE together with the organisation's annual audited accounts. This annual compliance statement will be required in addition to the annual service agreement between the agency and the HSE.

Further and separate meetings will be held by senior HSE managers with all of the disability organisations and hospitals concerned in the week commencing 16 December to ensure appropriate steps are taken to bring these organisations into compliance with public pay policy and that any governance deficits are rectified immediately.

Deputy McGrath asked me specifically about the commencement of the Charities Act. I understand it is intended to commence that early in the new year.

Deputy Michael McGrath

I thank the Tánaiste for his reply. The key issue is the lack of accountability and transparency and the inevitable consequence for public trust and confidence in charities. It is inevitable that donations will fall off. The people who will suffer and bear the brunt will be those who rely on the services. That is the sad part about what is going to unfold at the CRC. I hope other issues of a comparable nature will not emerge in other organisations, but that may well be the case. We know the HSE identified these issues in its internal audit report dating back to March of this year. It is scandalous that 24 of the 44 section 38 organisations have openly admitted to the HSE that they are not in compliance with public sector pay policy. That position is untenable. I want to know specifically what the HSE is going to do about that in terms of signing up to new service level agreements with those organisations. What is the ultimate power the HSE has at its disposal and is prepared to use to ensure all those organisations fully comply with public pay policy?

I welcome the Tánaiste's commitment on the Charities Act. In November 2011 the Minister for Justice and Equality, Deputy Shatter, said the Government was postponing the establishment of a charities regulator on budgetary grounds. That was the wrong decision. We are now seeing some of the fall-out from the lack of standards applying across the 8,000 charities in the country. I hope the regulator and all the associated provisions in terms of financial disclosures and standards can be put in place without any further delay.

The Tánaiste

The first thing I wish to deal with is the issue of public confidence in charities. It needs to be made clear to people who contribute to charities or people who are contemplating contributing to charities that the act is being cleaned up and that the problems identified in respect of top-ups or excessive payments - whatever we call it - to senior management staff and senior executives in charitable organisations are being dealt with. They are being dealt with at the initiative of the Minister for Health, who asked the HSE to conduct an audit of these organisations following the Health Information Quality Authority report on Tallaght hospital in 2012. It was the audit of the section 38 agencies which identified the problems and which brought to light the various top-up payments, pension arrangements and all the other matters that have come into the public domain.

That audit now is being followed up by meetings that are being conducted by senior managers from the HSE with the agencies concerned. The chief executive officer of the HSE is meeting the chairpersons of the section 38 agencies to make clear to them what is expected of them in respect of compliance with public pay policy. As I stated earlier, the mechanism it is intended to use is to require each of the section 38 agencies to sign a compliance statement. In other words, the chairman of the board of each agency, as well as another director of the board, will be obliged to sign a compliance statement that will be submitted to the HSE making clear that the agency in question is complying with public pay policy. As a consequence, members of the public can have confidence that when they donate their money, they know where their money is going and that there is transparency in respect of the administration, the management and the payment of senior executives in such organisations.

Deputy Mary Lou McDonald

Everyone agrees the testimony given yesterday to the Committee of Public Accounts by former and current members of the board of the CRC was both shocking in content and arrogant in its delivery. Members now have it that in addition to paying top-ups to senior executives, there also are gold-plated retirement packages being doled out and appointments being made in open defiance of HSE guidelines. As someone who sits on that committee, I must state that as matters unfolded, I was minded of Myles na gCopaleen, because one literally could not have made up the story the committee was told. Perhaps the Tánaiste and his colleagues in government are now almost breathing a sigh of relief because in a way, the CRC being at the eye of the storm takes the eye off the Government and in particular, away from the Minister for Health and his shambolic stewardship of the portfolio. I caught sight of the Minister, Deputy Reilly, on television commenting on this matter and it struck me that he looked like a disinterested observer or as someone who had been vox popped while out Christmas shopping. The truth is that these top-ups in the CRC have been known about by the system since 2009. Incidentally, Members should remember that Fianna Fáil was in charge at the time. Senior HSE management was ignored and was virtually told to get lost by the board of the CRC. Notwithstanding the audit carried out in March of this year, in December Members still do not know the full extent of the top-ups in the system or of other breaches. While it is commendable of the Tánaiste to recognise the work of the Committee of Public Accounts, it is not enough.

An Ceann Comhairle

Can we have a question please?

Deputy Mary Lou McDonald

One should bear in mind that the Government, and in particular, the Minister for Health, are the people in charge. What precisely does the Government intend to do to bring full clarity on this matter and to end the practices, some of which have been uncovered? It is only by doing this, by taking charge of the situation, that the Government has any hope of re-establishing that confidence in charities of which the Tánaiste spoke.

The Tánaiste

First,the Government already has taken in charge of it. In May 2012, the Health Information and Quality Authority, HIQA, published a report on the governance of Tallaght hospital. It emerged from that report that an employee in that hospital was receiving additional payments since 2005. On foot of that report, the Minister for Health asked the HSE to carry out an audit of all the section 38 agencies. The HSE approached each agency and asked it to revert with what was being paid, what additional payments, if any, were being paid, what was the nature of and basis for them and so on.

Deputy Mary Lou McDonald

I am aware of that.

The Tánaiste

While the Deputy now states she is aware of that, as that was not clear from her question, let me explain it to her. As a result of that audit, each agency was asked to revert to the HSE. Some came back very quickly showing that they were complying, others came back showing they were not and in the case of some others, it was necessary to follow through with them. However, this was an exercise the HSE conducted at the direction of the Minister for Health. That process now is coming to a conclusion. The Government has information that has been submitted by the different agencies and it is being followed through. At present, 17 senior managers of the HSE are pursuing this matter with the various agencies concerned in order to drill down into what payments are being made, what is their nature and so on. The chief executive officer of the HSE is meeting the chairperson of each section 38 agency, first, to clarify all of the facts and, second, to make it absolutely clear to them what is expected of them with regard to pay policy. There will be transparency in this regard and there will be compliance with public pay policy. This will be structured in such a way that each agency will be required to sign a compliance statement each year. This compliance statement will be part and parcel of the arrangements and will be separate from the service agreement that such agencies much sign with the HSE in any event. The Deputy asked what recourse is open to the HSE if such agencies are not compliant. If an agency cannot sign the compliance agreement, there are consequences in terms of the portions of public funding that go to the payment of salaries and, certainly, that go to the payment of any of these top-up arrangements. Consequently, there are options that will be open to the HSE but it will centre on the compliance statement being signed by each agency. This is a matter on which the Government already has taken action. The information that now is in the public domain is as a result of the audit conducted by the HSE. It is being followed through by the HSE management and by the Minister for Health and I am glad it also is being dealt with by the Committee of Public Accounts.

Deputy Mary Lou McDonald

If the Tánaiste followed yesterday's meeting, he would know that at the tail end of the exchange with the Committee of Public Accounts, the information regarding the payments to the Mater hospital was unearthed. He also might have noticed, were he tuned in, that the HSE knew absolutely nothing about that. The top human resources person in the HSE was left dumbfounded by that revelation. Not alone was he unaware of that relationship between the CRC and the Mater in respect of pensions, he could not tell committee members whether other section 38 organisations had a similar arrangement. This is the level of attention that has been paid in real terms to the detail and the proper governance of the €1.6 billion that goes annually to section 38 organisations. Moreover, the Government has not been sure-footed on this matter.

An Ceann Comhairle

A question, please.

Deputy Mary Lou McDonald

The HIQA report was published in May 2012 and the audit took place almost one year later, in March 2013. It is now December 2013 and all the time, the Government seeks to put at arm's length, through HIQA-----

An Ceann Comhairle

A question, please.

Deputy Mary Lou McDonald

-----and through the HSE, the sole responsibility for dealing with this issue and that is not good enough. This leads me to suspect-----

An Ceann Comhairle

No, it does not lead you anywhere. It leads you to a supplementary question, please.

Deputy Mary Lou McDonald

-----there may be an ambivalence on the Government's part in respect of top-up payments and breaching of pay caps.

An Ceann Comhairle

Deputy, you are over time. Thank you.

Deputy Mary Lou McDonald

After all, the Tánaiste's own record is not terribly good on that matter. I put it to the Tánaiste again, what will the Government and the Minister for Health do directly to ensure that no one in the HSE can be told to get lost by any section 38 organisation?

The Tánaiste

I note Deputy McDonald herself was hard enough to find last week to be vox popped on matters in which there might have been some public interest. This exchange this morning is quite interesting, in that there used to be a time when the Opposition would come into the Chamber and would raise issues with the Government regarding things the Government was not doing. It must be extraordinary that the Opposition, certainly this Deputy in particular, now is complaining about things the Government is doing.

Deputy Finian McGrath

The Tánaiste is a gas man.

The Tánaiste

To be clear, the issue of the top-up payments in the section 38 agencies is a matter with which the Government already has dealt and continues to deal.

I understand that the representatives of the Mater hospital - which has a role in the superannuation arrangements with the CRC - are due to appear before the Committee of Public Accounts on 19 December.

Deputy Mary Lou McDonald

The HSE knew nothing about it.

The Tánaiste

Let us be clear on this matter. The HSE conducted the audit and established that the top-up payments were being paid. That was done at the request of the Minister for Health. The Government and the Minister for Health are determined to ensure that there will be transparency on these payments so that the public, who contribute to charities, can have confidence that their money is going where it is supposed to go. The Government and the Minister are also determined that the agencies concerned will comply with public pay policy. Each of these agencies will be required each year to sign a statement of compliance which will be part of any arrangement for the continued funding between these agencies and the HSE.

Deputy Stephen S. Donnelly

This morning I received a letter from 66 pensioners in Carnew, County Wicklow.

Deputy Patrick O'Donovan

The Deputy probably got it from Deputy Micheál Martin.

Deputy Stephen S. Donnelly

They were writing to express their outrage at the scrapping of the telephone rental allowance, as a result of which many are being forced to cancel their land lines. Not only will this cut them off from friends and family but it will also cut them off from their community-based alarm system.

Benny Conaghan said: "They shouldn't have taken it from us in the first place because it means so much to us with no family. We rely on it for emergency response". Lil Kilbride said: "I am very annoyed over the telephone cuts. I only have a certain amount to live on. I have had a stroke, making it hard to use a mobile phone". Pat Sheppard said: "I am upset and angry. The pension is small enough to live on. It annoys me immensely to hear them say they haven't touched the pension but there are so many other things like the prescription charges and the increase in fuel".

Deputy Paul Kehoe

The Leader's allowance.

An Ceann Comhairle

Quiet, please.

Deputy Stephen S. Donnelly

Unfortunately, the full impact of the budget on Mr. Sheppard or the other pensioners is unknown. During Leaders' Questions on an occasion before the budget was introduced I asked the Tánaiste to inform the Dáil how the burden of the budget would be distributed across society. He refused to do so. Now we know. This morning, one week after the Finance Bill was voted through the House, the ESRI has presented that analysis. Here is what happened in budget 2014-----

An Ceann Comhairle

We do not have time now for the whole budget.

Deputy Stephen S. Donnelly

The poorest 10% of people in the country are being asked to give up the most. The next poorest 10% in the country are being asked to give up the next amount. A study of 80% of the population will show a correlation between poverty and how much budget 2014 takes from the poorest.

We all know the budget has to be closed but it does not have to be closed in this way. I bet the Tánaiste could not find a single Fine Gael or Labour Party Deputy willing to go on television to defend the budget and explain why it is right and proper that the poorest people in this country are being asked to give up the most in this budget.

An Ceann Comhairle

A question, please, Deputy.

Deputy Paul Kehoe

What about the Deputy's own top-up?

Deputy Stephen S. Donnelly

That is exactly what this budget does and what this Government has done through the Social Welfare and Pensions Bill and the Finance Bill.

Deputy Patrick O'Donovan

Some €50,000 a year, tax-free.

Deputy John Halligan

The Government is getting €1 million.

Deputy Paul Kehoe

We vouch for it.

An Ceann Comhairle

Stay quiet, please.

Deputy Stephen S. Donnelly

When the Tánaiste ordered Labour Party Deputies to vote through the Finance Bill last week, did he know that he was asking them to vote for something that would take the most amount from the poorest people in this country?

Deputy Patrick O'Donovan

Keep the good seats vacant.

An Ceann Comhairle

Please stay quiet on the backbenches. This is between the Tánaiste and the questioner. We do not need your help either, Deputy Finian McGrath. I appreciate your assistance. I must put you on the Acting Chairman panel, if you are interested.

A Deputy

Bertie Ahern-----

Deputy Finian McGrath

They are provoking me.

An Ceann Comhairle

I suggest you suck a sweet or something, Deputy.

The Tánaiste

The ESRI published two reports yesterday although Deputy Donnelly referred to only one of them. Every year it publishes a report on what it terms the distributional impact of the budget measures, based on what it calls the Switch model. The ESRI also published a second report which studied the impact of social transfers on people at risk of poverty.

In the report on the distributional analysis the ESRI acknowledges that it is having difficulties with the Switch model. I acknowledge it is making some progress in expanding the coverage of that model. However, the ESRI accepts in the report that it is still experiencing difficulties in incorporating all of the budget measures within the model, particularly in assessing the impact on higher incomes. The ESRI has acknowledged that the model exaggerates the scale of the actual losses in the budget as it assumes more income is taxed and welfare payments fall behind average incomes. No one doubts, however, that all recent budgets have had a serious impact on the incomes of people in all parts of the country. Despite those difficulties we have managed to maintain core social welfare rates. There have been no cuts in the old age pension and we have not increased taxes-----

A Deputy

Jobseeker's and respite care.

The Tánaiste

-----on working people. We managed to take 330,000 people out of the universal social charge. We reversed the cut in the minimum wage and in this year's budget we are providing free GP care to children aged under six years.

The second ESRI report looked at the impact of social transfers in reducing the risk of poverty and the findings are unambiguous. Social transfers, including pensions, have reduced the at-risk-of-poverty rate by 71%. In other words, seven out of every ten people in society would be regarded as being at increased risk of poverty without the redistribution provided for by the social protection system. The report shows that Ireland is in the top section of 15 EU member states for the effectiveness of social transfers in reducing poverty and that the welfare system is playing a pivotal role in alleviating poverty in Ireland.

No one is attempting to argue that the budget measures can be sugar-coated. The main issue is that we have now reached a point where we know that the Government's approach is working. Jobs are being created again and this creation of employment and the growth in the economy will generate the revenues to enable us ensure that people can have hope of a better future and allow us to consider making improvements.

Deputy Stephen S. Donnelly

The Tánaiste says it is working. Who is it working for? It is not working for the poorest people in the country. What he is espousing is old-fashioned Thatcherite-Reagan economics which says, "Take care of the rich and the benefits will trickle down".

(Interruptions).

An Ceann Comhairle

Settle down, please.

Deputy John Halligan

You sit comfortably with Thatcher on this.

An Ceann Comhairle

Resume your seat, Deputy. You are wasting your time shouting. Nobody can hear because there are so many people shouting. Please allow Deputy Donnelly to put his question because he has one minute in which to put it. I appreciate Deputy Finian McGrath's help but I do not need it.

Deputy Stephen S. Donnelly

It seems we have hit on a sensitive issue because the analysis is unambiguous. Of course there are always errors in analysis but the ESRI analysis is the best we have. I discussed it with them this morning on the telephone. It is a solid analysis which states unambiguously that this Government in budget 2014 is asking the poorest people in the country to take the greatest share of the correction. That is a fact and it is a disgrace.

An Ceann Comhairle

A question, please, Deputy.

Deputy Stephen S. Donnelly

It is bad social policy and bad economic policy. It leads to a rise in inequality and inequality is bad for everybody. The Tánaiste, of all people, knows that but it is what he is doing. Why is this happening?

Why are Labour Deputies voting through a budget that hits the poorest hardest? I believe part of the reason is that none of us knows what we are voting for because we do not have the analysis when we vote. Maybe I am being naive but I believe that if the Deputies in the Tánaiste's party, for whom I have great respect, had the analysis before the vote we will have today, they would have demanded changes to the measures for which they have to vote. That is why the analysis is so important.

An Ceann Comhairle

Thank you, Deputy.

Deputy Stephen S. Donnelly

I am missing my child's Christmas play to be here to ask the Tánaiste this question so I ask him to do me a favour-----

(Interruptions).

Deputy Stephen S. Donnelly

-----and answer the question.

An Ceann Comhairle

I will get the Deputy back to his Christmas party quicker if he sits down.

Deputy Stephen S. Donnelly

My question to the Tánaiste is simple. Last week, when he instructed the Labour-----

An Ceann Comhairle

Sorry, Deputy. You do not understand there is a time limit. Will you listen to me?

Deputy Stephen S. Donnelly

Last week, when the Tánaiste instructed his party to vote through the Finance Bill-----

An Ceann Comhairle

You are way over time.

Deputy Stephen S. Donnelly

-----did he know that the Bill would take the most from the poorest in the country? That is the question.

Deputy Bernard J. Durkan

A poor performance.

The Tánaiste

I am sorry the Deputy is missing his child's Christmas play but can I predict what the Deputy will not miss? I think he will not miss the Fianna Fáil Parliamentary Party away day in 2015 before the general election because I predict that-----

Deputy Mattie McGrath

What about the Christmas bonus?

The Tánaiste

-----that is where he is heading.

(Interruptions).

Deputy Stephen S. Donnelly

Answer the question.

The Tánaiste

I predict that Deputy Donnelly will be wearing the Fianna Fáil jersey at the next general election and between now and then-----

Deputy Bernard J. Durkan

Hear, hear.

Deputy Stephen S. Donnelly

The Tánaiste should not believe everything he reads in the papers.

(Interruptions).

The Tánaiste

-----he will do Fianna Fáil's work for them by coming in here and saying, "I am an Independent and I am quoting a very worthwhile independent document in order to criticise the Government".

Deputy Stephen S. Donnelly

Is questioning the Tánaiste not my job?

Deputy Sean Fleming

How many parties was the Tánaiste in? How many parties did he change from? Was it five or six?

The Tánaiste

I have the answer for Deputy Donnelly. The party that I believe he will be a candidate for in the next general election cut social welfare rates, cut the minimum wage-----

(Interruptions).

The Tánaiste

-----and put low paid people into the universal social charge. This is the Government that has taken low paid people out of the universal social charge, reversed the cut in the minimum wage, reinstated the joint labour committees and protected people on core social welfare rates.

Deputy John Halligan

The Tánaiste did not answer the question.

Deputy Stephen S. Donnelly

Answer the question. It is a disgrace.

Deputy John Halligan

What is the point in having Leaders' Questions if the Tánaiste will not answer the questions?

(Interruptions).

An Ceann Comhairle

This is not "Ballymagash". We are in the Houses of Parliament.

Deputy Mattie McGrath

A Cheann Comhairle, is there any chance you could restrain the Government Whip? He is always insulting and taunting people.

An Ceann Comhairle

The sooner you get your holidays, the better. I think you all need a break.