Voluntary Organisations in the Health Sector: Discussion

Today's meeting is to discuss the report of the independent review group on the role of voluntary organisations in the delivery of our health services. I welcome Dr. Catherine Day, chair, and Professor Jane Grimson, member, from the review group. From the Rehab Group, I welcome Ms Mo Flynn, chief executive officer and Ms Kathleen O'Meara, director of communications. I welcome from the National Federation of Voluntary Bodies Mr. Bernard O'Regan ,chairman, and Ms Anna Shakespeare, chief executive officer of St. Michael's House. I welcome from the Not for Profit Association Ms Rosemary Keogh, chairperson, and Ms Clodagh O'Brien, executive officer.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Any opening statements to the committee will be published on its website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

Dr. Catherine Day

I thank the committee for the opportunity to discuss the report of the independent review group established by the Minister in 2017 to examine the role of voluntary organisations in publicly-funded health and personal social services.

Our terms of reference called for factual analysis, including of issues with faith-based voluntary organisations, consultation and recommendations on future relations between the State and the voluntary sector. This led us to establish an evidence base which included drawing on previous reports, of which there have been many, and to meet stakeholders on over 40 occasions. We undertook a public consultation, to which we received over 100 replies and many written submissions, and we felt it was important to compare the situation in Ireland with other countries, particularly other EU countries.

Our main finding is that the State and the voluntary sector need each other. The voluntary sector provides 28% of inpatient hospital beds and two thirds of disability services, while the State pays €3.3 billion a year to the voluntary sector to provide these services.

We recommend recognising this reality and making a new start through building a new relationship of mutual trust and respect between the parties. In our report we explain how and why we believe the relationship between the voluntary sector and the HSE has broken down and why it is necessary to find better ways of working together. In our view this should be done through State recognition of the role and value of the voluntary sector and by recognising its separate legal status. Equally, the voluntary sector must recognise that it is an integral part of the overall health and personal social care system with all the duties and responsibilities that arise.

We propose giving this recognition through a charter and a forum where the voluntary sector and the State can interact on a permanent basis.

We recommend a two-way process of consultation, early involvement, listening and learning to deliver a genuine partnership such as exists in several other EU countries. Drawing on wider EU experience, we recommend moving to a system whereby the State decides, in early and real consultation with the voluntary sector, on a list of essential services to be delivered to the public. The list should be based on full-cost pricing for the delivery of these services, with prices fixed nationally but with room for regional variation.

A first step on the road to this way of delivering services would be to improve data and to map service needs across the country. We recommend including a map of difficult-to-replace services to help ensure continuity of services in the case of withdrawal of key service providers. We recommend that the State should apply or fix national standards for commissioned services. Obviously, the list would require regular updating. Such a process would be more patient centred, providing greater certainty about availability and affordability of services and would have the benefit of moving the dialogue between the HSE and the voluntary sector away from the current overwhelming focus on funding to instead focus on the type of services to be delivered and their quality and outcomes.

In addition to hoping to put relations between the HSE and the voluntary sector on a new footing, we recommend separating the commissioning and service provider roles of the HSE and making the executive more accountable to the Minister and the Department of Health. We also recommend a stronger and more visible role for the Department, including ensuring more joined-up services for users and fostering greater co-operation between Departments and agencies to reduce unnecessary duplication. We also point out that the voluntary sector needs to modernise and improve its governance, to strive to avoid duplication and to accept it is part of delivering a national health service that requires it to take wider considerations into account.

With specific reference to the faith-based organisations that formed part of our terms of reference, we carried out a detailed analysis to establish how many there are and who owns them. That detail can be found in the annexes to our report in particular. In summary, we concluded that 14 of the 48 public and acute hospitals in the State are voluntary and that as many as 12 of them still have some degree of faith-based ownership or governance involvement. This situation is changing and new decisions are being taken. We foresee that the number of faith-based hospitals will reduce to four in the coming years. We looked at the mission statements of faith-based organisations, examined how they provide access to services and considered issues around ethos and decor and the range of services they provide. We made recommendations to the organisations and the State in the light of previous experience. For example, on the issue of co-ownership, we recommend that in future, the State should own the land and buildings of publicly funded hospitals. Where this is not possible, financing and governance arrangements should be agreed before funding decisions are taken.

To conclude, we met a wide range of very dedicated public-service-minded people in the course of our work. We thank them for their input. We also met with high levels of frustration in both the voluntary sector and the HSE. We believe that a new beginning is needed if we are all to benefit from the positive contribution of the voluntary sector as described in more detail in our report. Other countries have found ways of working with the voluntary sector in mutually beneficial partnerships and we believe this is possible here, provided a new relationship is developed based on mutual trust and respect.

Ms Kathleen O'Meara

I thank the Chairman and members for the opportunity to address the committee on the report commissioned by the Rehab Group and with which members will be familiar, entitled "Who Cares?" on building a new relationship between the independent voluntary sector and the State. Although there is no direct relationship or connection between our report and that of the independent review group, coincidentally, each report was researched at approximately the same time. Although our report was published first, its recommendations are very similar to those of the independent review group.

I will first address why we commissioned the report. Many members are familiar with it having attended the briefing facilitated by Senator Dolan last November when the report was published. Early in 2017, we asked Dr. Chris McInerney of the University of Limerick to conduct the research because we and our colleagues in the section 39 or disability sector had a sense that in addition to facing many challenges, basically, something was wrong and we wanted to establish what that was. He looked at the larger section 39 organisations which, coincidentally, are providers of disability services. That is interesting because, as members know, section 39 organisations are supposed to provide services ancillary to those provided by the State. However, RehabCare, a division of the Rehab Group with which the committee is familiar, is funded to the tune of €65 million annually to provide disability services, which is hardly ancillary. We are the largest section 39 organisation and would argue that our services and those of other large section 39 organisations are anything but ancillary. They are vital. The day services, residential and respite services we provide are essential for those who use them every day. The first thing to realise is that section 39 organisations are not ancillary. Rather, they are core and central to the delivery of a vital part of health services in this country.

Our report found that our future is very uncertain. The extent of the challenges we face means that our future as a sector is anything but secure and, as such, the services we provide do not have a secure future. The sector stands at a crossroads and the core, immediate and urgent issue is funding. My colleagues will substantially address that issue. The adequacy of funding and our wider relationship with the State as represented by the HSE and more broadly are key. A hangover from the recession years is that many section 39 organisations are carrying a deficit as a result of underfunding and that is making them financially unsustainable. Members will all be aware of the recent efforts of Rehab, particularly during May, to secure more funding. I thank all members for their support of our efforts because, thanks to those efforts, the Minister and the Government agreed to provide us with the essential funding we needed, which means that the services we provide are secure. Rehab is not the only organisation which has been facing financial sustainability issues, as we pointed out to the committee at the time. The issue of deficits was called out by the members of the independent review group. In particular, we strongly support the recommendation that the issue be resolved and ask the committee to call on the Minister for Health to establish an urgent time-bound process to have that happen as soon as possible.

We want this meeting to be the start of something. We are very pleased to be here to outline the issues to the committee. We are very supportive of the clear and powerful recommendations of the independent review group. The key issue is that they must be implemented. We want and need a process to ensure that happens.

Ms Mo Flynn

It is no surprise to us that the findings of the report commissioned by the Rehab Group and entitled "Who Cares?" are mirrored in those of the independent review group. The messages and conclusions in both reports are clear and consistent. Independent voluntary disability service providers operate in the absence of a Government strategy for our role and future or adequate funding for services. Our warning is that this will soon be unsustainable. The people impacted on by this uncertain future are those who rely on our residential, respite and day services and who deserve to live full lives as citizens of this State with the support they need. The "Who Cares?" report and the independent review group report concluded that the relationship between the State and the independent voluntary sector has deteriorated and that there is an urgent need to place it on a new footing. The conclusions of the "Who Cares?" report can help us to design a roadmap which would see the independent voluntary sector working in partnership with Government bodies to provide services for people with disabilities which promote, protect and ensure their full and equal enjoyment of all human rights while promoting respect for their inherent dignity.

Those objectives are reflected in the UN Convention on the Rights of Persons with Disabilities, the ratification of which the voluntary sector campaigned for and which the Government effected last year. We should all be on the same page in supporting the implementation of the convention.

Members will hear more details from our colleagues in the sector about the deficits organisations are facing. Our research findings highlighted that the HSE is not paying the full economic costs for services delivered. Organisations have exhausted their economic reserves, board members are no longer willing to operate the law as it stands and, without change, more organisations will be forced to closed down.

The first step on the road to a solution would involve the Government bodies paying the full cost of the delivery of services and dealing with the immediate and urgent problem of the deficits in voluntary organisations. As we experienced recently in RehabCare, many independent voluntary sector service providers are just a few short steps from closing down essential services for vulnerable people. It is only a matter of time before some hand their keys over to the HSE. I ask the committee and the Government officials here today to consider what the HSE will do when the deficits are too large for these voluntary organisations to bear. What will happen when board members refuse to tread recklessly under company law and organisations are forced to close down? What is the Government's plan B when - it is a case of when, not if - this occurs? When doors are shut, what will happen to the thousands of vulnerable people who use these services throughout the country? As a matter of urgency, the current financial deficits facing these organisations must be addressed by an independent reviewer. Ultimately, the State must pay the full cost of delivering the services.

The second step is that the independent voluntary sector must build a new relationship of partnership with the State organisations. We should be working towards one goal, namely, providing services for people with disabilities which protect and promote their human rights. Why is that not at the core of the relationship?

The third step is to develop a compact to govern this relationship which sets out a clear vision and principles for interaction. We also propose that the Government create a junior ministerial portfolio within the Department of the Taoiseach to manage the strategic relationship with the community and independent voluntary sector, including the compact. We have a responsibility to get this right for the people who rely on our training and education and our residential, respite and day services, all of whom deserve access to the supports they need to live full lives as citizens of this State.

I thank Ms Flynn and invite Mr. O'Regan to make his opening statement.

Mr. Bernard O'Regan

I thank the Chairman and members for the opportunity to address the committee today on behalf of the 59 service providers which comprise the membership of the National Federation of Voluntary Bodies and, more importantly, on behalf of the thousands of children and adults with intellectual disabilities and-or autism and their families who those organisations support, to discuss our concerns for the future of the voluntary care sector. The federation is the umbrella organisation for the voluntary agencies that provide approximately 85% of the direct support services to more than 25,000 children and adults with an intellectual disability in Ireland. All providers are governed by boards of directors, are made up of some 395 volunteers and are subject to a wide range of oversight, from Health Information and Quality Authority, HIQA, regulations to company law and housing regulations, where the provider concerned is also an approved housing body.

The disability sector is facing a critical challenge in 2019 owing to financial constraints which, if not addressed in a comprehensive way, will have serious repercussions for service provision and for people with disabilities and their families. In 2017, financial losses occurred in 23 member organisations for which full accounts are publicly available. The combined deficits of those companies were €25.2 million in 2017. Some boards that are carrying operational deficits are unable to sign service agreements as that would effectively mean signing off on a "reckless trading" situation which is contrary to their legal obligation as directors of companies limited by guarantee. Some have signed the agreements as a good-faith gesture in anticipation of addressing the underlying funding deficit as part of an engagement process with the HSE. However, if the deficit is not addressed, those agencies will be left with no option but to cut services, transfer services to the HSE, or enter into a voluntary liquidation process.

Several key drivers have given rise to this situation. We have supplied the committee with supporting documentation that provides more information, so I will focus on two key factors. First, providers have frequently felt forced to implement cost-increasing measures following HIQA inspections to avoid being in breach of the law and facing closure orders. Boards of directors are faced with the unenviable task of meeting the terms of HIQA regulations or face legal proceedings, which has often resulted in financial deficits. Second, the changing needs of persons availing of services, together with the higher standards required resulting from regulation, are another significant cost driver in voluntary agencies at present.

Due to the lack of appropriate supports, thousands of citizens with intellectual disabilities are not being supported to live lives of their choosing or to maximise their potential to live as independently as possible as contributing, active citizens. In addition to the personal cost, this is not compliant with the requirements of the UN Convention on the Rights of Persons with Disabilities, which Ireland has ratified. Older family members are trapped in unsustainable caring roles in the community due to the lack of investment in planned supports. Families are forced to watch key milestones in their child's development pass without appropriate intervention due to waiting lists and, in the most distressing cases, children and young people are moving into full-time care on an unplanned basis.

I will now hand over to my colleague, Ms Shakespeare.

Ms Anna Shakespeare

The scale of service delivery by members of the National Federation of Voluntary Bodies is, in cost terms, worth €1.3 billion. However, many of them face financial deficits which relate, in the main, to compliance with HIQA regulatory standards and the need to respond to the urgent support needs of children and adults. The required expenditure reduction over the period 2009 to 2016 and the continued maintenance of agreed service levels over that period are central to understanding the current financial sustainability predicament. We cannot close wards as the acute care sector can do. The care our members provide is in people's homes as part of their regular day-to-day lives. As providers, our members have exhausted all possible savings across management, administration, maintenance, and non-pay, in addition to savings achieved through efficiencies such as roster reviews, service innovations and attendance management initiatives. There is a significant risk for the State arising from the lack of financial viability of the voluntary disability provider sector, where verified deficits total some €25 million in the annual financial statements of those companies for 2017.

It is important to note the vulnerable position of volunteer company directors who are faced with intensive demands to deliver services while also meeting extremely demanding regulatory compliance requirements which have created a significant burden in both professional and reputational terms for those concerned. The degree to which these significant stakeholders can maintain their position should be of particular concern in terms of their organisational resilience and capacity to continue indefinitely to maintain organisational service delivery. To be clear, the disability social care sector is in a seriously weakened state in respect of both its financial stability and its organisational resilience. This represents a serious risk for service users who rely on our services. The provision of support from the HSE, including cash liquidity to ensure day-to-day operations are maintained, has provided some remedy for the organisations concerned. However, it cannot and will not provide the necessary ultimate solutions to ensure an ongoing and resilient voluntary provider sector into the future.

I will now outline our main recommendations to establish an immediate and longer-term resolution of the challenges facing the sector. There is an urgent need for the State and voluntary sectors to work together to implement in full the recommendations of the independent review group. Its recommendations challenge all stakeholders, both voluntary and statutory, and provide a framework for addressing the urgent challenges facing us in supporting the future of our citizens with disabilities. There is also a need for urgent financial investment by the State to resolve the unsustainable deficit situation.

Companies will fold. There is an urgent need for a multi-annual investment programme to address the unmet need outlined in the supporting document we have tabled and the working group's report developed by the HSE as part of the Transforming Lives programme. There is a requirement for consideration of a change in the approach to the application of the HIQA regulations that will move from a position of compliance to a model of service user outcomes. It should include a legal obligation to have regard to the financial resources available prior to compliance plans being developed and accepted. The State and service providers must work together to innovate and develop new models of integrated service delivery in accordance with Sláintecare, harnessing the capacity of the community and voluntary sector in the provision of effective social care for persons with disabilities as citizens of Ireland.

Ms Rosemary Keogh

I thank the Chairman and the joint committee for giving me the opportunity to present on behalf of the Not For Profit Association and the tens of thousands of people for whom we provide services.

The report of the independent review group, rightly, recognises that Ireland owes a debt of gratitude to the voluntary sector which was the first to provide hospital and social care services at a time when the State did not. As outlined by my colleagues, the current crisis in the sector calls into question the value the State places on the sector and, more importantly, how it prioritises the rights of the people who depend on the services the sector provides. The sector has grown to provide two thirds of all services for people with disabilities on behalf of the State and the continued delivery of those services is now dependent on the financial sustainability of voluntary organisations.

The Not for Profit Association represents the largest independent, national, not for profit organisations engaged in the provision of essential social care services on behalf of the State. Collectively, the seven member organisations manage an annual service delivery budget of more than €200 million on behalf of the State. We employ 7,000 people in delivering services to more than 30,000 adults and children in every part of the country.

Notwithstanding the distinctions between section 38 and section 39 funded organisations as set out in the Health Act 2004, we provide direct services on behalf of the HSE under the mandate of the service arrangement process. The services we provide are essential, not ancillary, and annually include 1.8 million personal assistant hours, 150,000 days of service in our centres throughout the country, 40,000 respite care nights, 125,000 clinical interventions, as well as a wide range of other person-centred services, including training, education, employment and independent living. What will happen to these services if the organisations can no longer provide them? Their continued delivery is under immediate threat. Our member organisations are struggling to remain financially viable, some to the point of existential crisis, following years of cumulative deficits that have eroded financial reserves. The deficits have arisen owing to austerity cuts that have never been restored, additional costs of compliance and regulation, ageing infrastructure and general inflationary cost increases as the economy continues to grow, but there has been no equivalent increase in State funding for the services provided.

In 2018 Not for Profit Association member organisations reported a combined deficit of €8.3 million which was directly attributable to the shortfall between the cost of delivering services on behalf of the HSE and the funding allocated by the HSE for these services. For ten years our member organisations have subsidised the cost of providing services on behalf of the HSE from their own independently generated income and related reserves. Those reserves are depleted and continued delivery of services is under immediate threat. Should the organisations have to cease providing services, the HSE will be required to resource and reinstate the services at full cost to and with no scope for savings for the Exchequer.

The issue of deficits for our member organisations is compounded by the HSE's ongoing insistence that deficits not be recorded in the annual service arrangements process. They are, therefore, not provided for in funding allocations and, presumably, not included by the Department of Health for consideration in future year budgets and strategic service planning. It is further compounded where service providers do record the deficits in service arrangements, thereby reflecting the true cost of delivering services. The HSE then threatens the withholding of 20% of the already inadequate funding, further compromising service delivery. This practice completely disregards and undermines the organisations' obligations in statutory corporate governance requirements, as companies limited by guarantee, to ensure the accuracy of information contained in legally binding contracts.

The State's regard for the sector is evident in its recent handling of the pay restoration process for section 39 employees. Having had funding cut to ensure our employees took the same austerity cuts as public sector staff under financial emergency measures in the public interest legislation, they were left out of the original public sector pay restoration process that began in 2016. Late last year the HSE agreed to a process of partial pay restoration for employees in just 38 out of more than 2,000 section 39 organisations, which will see these staff only return to 2008 rates of pay by October 2021. Recent communications from the HSE state there will be no funding for the pension element of pay restoration when historically service funding from the HSE always covered the pension element of service related pay. Our member organisations which are already operating with significant deficits arising from underfunding by the HSE cannot fund the pension costs arising from pay restoration. This is likely to lead to further industrial action which, in turn, will have a detrimental impact on service delivery and the lives of those depending on it.

The recent communication also states there is no expectation or requirement for section 39 employees to be aligned with health service salary scales. This seems to be a contradiction in the service arrangement process in which there is a requirement to have regard to public sector pay scales and the decades long practice of funding section 39 employees' pay at public sector pay rates. There is now a two-tier system of pay for social care workers, with those in the voluntary sector lagging behind their public sector peers in doing exactly the same work. In an economy with full employment this has created huge challenges in staff recruitment and retention, with a knock-on impact on service delivery already evident in our member organisations.

The publication of the independent review group's report should serve as a defining moment in preserving the positive impacts of the voluntary sector and its recommendations should be the anchor that will underpin a new relationship between the State and the sector. Failure to urgently implement the recommendations made in the report will result in many voluntary organisations being forced to terminate services. The biggest losers in this scenario will be the tens of thousands of people throughout the country who rely on the organisations for these essential services. The Government was able to find €3 billion to connect people virtually through the national broadband plan. What is it prepared to do, before it is too late, to connect tens of thousands of vulnerable people who are dependent on the services provided by voluntary organisations for their communities and society?

Unfortunately, I must vacate the chair. Deputy O'Reilly will take over.

Deputy Louise O'Reilly took the Chair.

I will try to pick up where the Chairman left off. Before I open the floor to members, I have one or two questions of my own. I will try to keep them brief because I know others have questions.

On the operation of deficits and the manner in which they arise, the phrase "trading recklessly" was used by more than one person. Will the delegates describe for us the impact on the organisations because it would be dramatic and the potential impact on service users? For the organisations and their staff, having to read in the newspapers that there is a deficit is very worrying, but, in turn, it has an impact on service users. I note the use of the phrase "more than a little coercive". Will the delegates describe exactly for us what that behaviour is and how it manifests? It is a serious charge. There is the notion that people are somehow being coerced into signing service level agreements when they know that they will not be in a position to deliver on them and when they also know that if they do not sign them, they will find themselves in a position where their funding may be cut off. I believe I am quoting the phrase directly from at least one of the reports. It jumped out at me and I found it concerning.

Ms Rosemary Keogh

I am happy to answer that question. When we speak about coercive behaviour - the Acting Chairman summed it up well - in the service level agreement process the HSE requires all organisations to sign service level agreements by 28 February each year.

There was a change in that practice, I think it was introduced around 2015 or 2016, where organisations were told that if they had not signed by 28 February or if they had signed the service arrangements but had declared deficits, they would be faced with a withholding of 20% of funding for those services until such time as they signed the service arrangements with no deficits. I am CEO of the Irish Wheelchair Association and as recently as yesterday, we received a letter from the HSE advising us that because we had shown deficits in our service arrangements for this year that accurately reflect the cost of delivering those services, we will now be faced with a withholding of 20% of funding. If that does not demonstrate coercion, then I do not know what does.

Ms Keogh is right on that.

Ms Mo Flynn

I echo my colleague's viewpoint in that, similarly, Rehab faced the same position. In 2017, we decided to include all of our deficits in our nine service arrangements around the country and the HSE moved to withhold 20% of funding. At that stage, we exercised our right under the service arrangement to enter into the dispute resolution process and were able to demonstrate clearly that the HSE had no legal right to withhold funding under that service arrangement. Once we had demonstrated this, the HSE rescinded its action. However, we are a large organisation and were able to enter into the process. In addition, we had the capacity to manage the situation during that period. For many smaller organisations, the withholding of 20% of funding on a monthly cashflow basis is incredibly difficult and poses considerable challenges in terms of meeting pay costs, service delivery costs etc. The measure pushes many organisations to the extent where they must sign in the way in which the HSE has indicated and that is primarily by not demonstrating that there are deficits.

Again, I echo what was said by my colleague whereby if we continue to produce service arrangements, which are public documents, indicating there are no deficits, then we feed into the myth that there are no deficits in the sector. We have all been doing this for a good number of years. As a result, there is no public recognition or recognition within the health budgets that deficits are accumulating. This is something that is very much under the radar. It is only through our efforts and what emerged from the report compiled by the independent review group report that the deficits and the process that has been initiated have become public knowledge.

It is clear the public recognises the deficits. The service users and people who work in the area do so. Unfortunately, the Department is unable or unwilling to recognise the deficits. Presumably, that has an impact on an organisation's capacity to plan on a year-by-year basis.

Mr. Bernard O'Regan

I will comment on the first part of the question. I support everything that was said about the experience with service agreements. Our own members have experienced that as well. Boards of directors have been placed in a very difficult situation. They are asked to govern organisations that provide services to people with disabilities, which is their core purpose and the only reason that they exist. They are very driven by a commitment to people with disabilities to provide the best services that they can and respond to their needs. They do so in an environment that has changed dramatically over the past five to ten years in terms of the level of compliance in respect of lots of different regulations. That is very different from how things used to be. The environment has improved for the better but there are consequences, much of which were not properly planned for, anticipated or costed in terms of potential implications. Directors govern organisations and ensure all of those requirements are met. At the same time directors are conscious of the unmet needs and try to respond to them. Directors are being placed in situations where there is not proper and adequate funding for the actual cost of the services they are being asked to provide and yet must provide the services at the level that is expected. For them to continue to do both of these things without adequate funding places them in an unenviable situation. They do not have the finances to do this work, yet are driven by both regulation and needs at the same time. The effect of that on the people we support is either they do not get the services they need or their confidence in the services they receive and their sustainability into the future is always in doubt. Families who have battled for services and got them feel that they have to continuously battle to maintain them rather than being able to say, "We have won this war and we can now move on with other parts of our lives".

I saw that in my own community as well.

Dr. Catherine Day

When we prepared our report we were surprised to hear about these deficits and that they could not be mentioned in the service agreements. I do not think there is an overview of the size of the deficits. Therefore, we recommended that a survey should be carried out to establish how much we are talking about. We also felt, from what we heard, that the way in which the HSE negotiates the service agreements was to start by saying one got X last year so it will start at X minus so much this year. The whole process is designed to squeeze down the costs. In itself that is obvious, because one must manage public money. There was no discussion, however, about what services would not be provided if there is less money.

The introduction of the 20% cut in funding has been described. We tried to explore the measure with the HSE and the organisations. What we also heard was that because the 20% cut jeopardises the delivery of the services, then late in the year the HSE would produce emergency financing to keep things going. We recommended a few things. First, in terms of the overall management of this issue, there must be a survey to discover the extent of the deficit and then a plan must be drawn up to eliminate the deficit by using more money or by deciding to not make services available. There are not many options.

Second, we must move to a system of full cost pricing, where organisations must be paid for the service that they provide. Third, we must move to multi-annual budgets in order that the organisations can make a reasonable plan and give reasonable certainty to the service users.

In her opening statement, Dr. Day recommended there should be a "stronger and more visible role for the Department". Does she envisage that in the context of multi-annual funding? Presumably, the role is not strong enough or visible enough at the moment. What areas should be improved?

Dr. Catherine Day

Behind the day-to-day delivery is the health policy. As the HSE is so big, a lot of responsibility has been delegated to it and until fairly recently it did not even have a board to hold them accountable in some way. We felt there was a little too much distance between the Department and the actual conduct and way the policy is being implemented by the HSE. While there is lots of international practice about delegating work like the HSE does to agencies, experience also shows that in the end, the political responsibility comes back to the Minister and the Department. Given that, we felt that should be a stronger line of communication, including a way to signal problems between the HSE and the Department.

Do the representative groups agree that there needs to be a stronger and more visible relationship with the Department? Is it easy for them to get access to the Department? Do they feel they have been listened to?

Ms Rosemary Keogh

No. I wholeheartedly agree with the recommendation made in Dr. Day's report. Our relationship is with the HSE. We do not have any inroad to the Department of Health. There are a number of national forums that we might sit on where there may be a representative of the Department of Health present but, typically, he or she is not somebody in a decision-making capacity. There is a huge remove in our relationship with the Department of Health.

Ms Mo Flynn

It is fair to say this reflects the fact that there is no policy or strategy. Clearly what existed in the past and was recognised in the 1980s and 1990s on the key role of the voluntary sector led to enhancing the partnership agreement. The agreement may have had its pros and cons but it underpinned the relationship between the State and the Department of Health and the voluntary and disability sectors for many years, and did so very effectively for many years. That was basically lost from 2009 onwards.

What we see today is a reflection of the absence of a strategy or policy that would determine what that relationship should be. The result has been a rather ad hoc relationship in which many of the issues relating to the sector are not brought forward or addressed.

Ms Anna Shakespeare

Deputy O'Reilly referred to reckless trading. Many members of the National Federation of Voluntary Bodies have experienced emphasis of matter being noted in their annual financial statements and conversations being held at board meetings about going concern and trading recklessly. My organisation has a €101 million turnover, a €7.2 million accumulated deficit and an in-year operating deficit of €3.2 million. Our board had a serious discussion on the issue of going concern and trading recklessly and whether that would become a reality in 2019. To manage that deficit cash is forwarded during the year on a drip-feed, monthly basis. To add to Ms Keogh's remarks on the withholding of 20% of funding when a board member does not sign a service arrangement it clearly indicates that the organisation cannot operate with the allocation that has been received. That is the lived reality of our members, of which there are 59 accounting for expenditure of €1.3 billion across Ireland. We do not believe it is possible to sustain this any further.

I have a question for Dr. Day. We could get into the rights and wrongs of the involvement of faith-based organisations in healthcare delivery but we would be here all day. Faith-based organisations are currently involved in 14 hospitals. Some would say that is 14 too many but the expectation is that the figure will eventually fall to four. Does Dr. Day have a timeline for achieving that reduction? Can she indicate where and how it will happen? Is there a specific plan in place with a timeline or is her view based on a sense of how this will be done?

Dr. Catherine Day

There are 14 voluntary hospitals, of which we concluded 12 are faith-based, although some of them would contest that. For example, the National Maternity Hospital has a board of 100 people, which is, according to its charter, chaired by the Archbishop of Dublin, though he has never chaired a meeting. For us, that technically still constitutes faith-based involvement while in reality the hospital has already moved away from that. These are all individual decisions of the faith-based organisations.

The archbishop has not chaired a meeting but he could do so if he so chose.

Dr. Catherine Day

He does not attend or chair so there is involvement on paper but not in practice. There are nuances and differences among those 12 hospitals. Most of the faith-based organisations, though not all, are withdrawing from the boards of hospitals or withdrawing their right to nominate directors to boards and some are even withdrawing from ownership of hospitals. We cannot say exactly how many years the process will take but we estimate, based on decisions we know are being taken in some of the faith-based organisations, that it will be relatively quick. Our best estimate is that the number of hospitals with faith-based involvement will have declined to four in three to five years' time.

Does Dr. Day know which hospitals they are? Would she be comfortable telling us?

Dr. Catherine Day

We will try to find out as I cannot remember offhand. They include the Mater Hospital and St. John's Hospital in Limerick.

We can return to that issue if the information is not readily available. Deputy Donnelly would like to contribute.

I thank the witnesses for attending this meeting and for the work they do in the voluntary sector. I also thank the independent review group for its report. It makes for sobering reading and the opening statements make for sobering listening for a wide variety of reasons, from service provision and financial stresses and strains to future stresses and strains and what is described as a broken relationship between the voluntary sector and the State. It is all very sobering stuff.

I will start with the voluntary organisations. The independent review group's report was published in February. It is 100 pages long and makes 24 very sensible recommendations, some of which are technical and relate to good governance, while others would profoundly change the relationship between the sector and the State. Have the witnesses seen any progress from the State on any of those 24 recommendations? Have their organisations been engaged with in a meaningful way on any of them? A massive reorganisation and reconfiguration of the health service, of which they are an integral part, is taking place. How closely have the voluntary organisations been consulted on and involved in the plans, which will soon be brought before the Cabinet?

Ms Rosemary Keogh

The simple answer to Deputy Donnelly's question is "No". There is nothing to expand on because there has been no engagement, at least with our organisations, either in terms of the recommendations in the report or on the future development of strategy. There is not much more to say because there is nothing to say.

I was afraid Ms Keogh would say that.

Ms Rosemary Keogh

I do not know if anyone else has anything to add.

There has been no engagement.

Ms Mo Flynn

When we published the "Who Cares?" report, we asked to meet Ms Laura Magahey in the Sláintecare office and while she did meet us, that has been the extent of the engagement. When the Sláintecare report was issued, it initially identified that the voluntary sector was not a key part of future plans and the relative importance it gave to disability was no more than a couple of lines. That, to us, reflected our status in future thinking, yet we are intrinsic to a policy that aims to have our health and social care services delivered from a community perspective. Without the home supports, residential and day services and other supports we provide, many of the opportunities to deliver alternatives to acute delivery will not be available. We have an ageing population within our demographic and we do not see their needs being reflected. Many of the Sláintecare proposals on funding were geared towards opportunities for older people but not older people with disabilities. We are not part of the consideration.

Ms Anna Shakespeare

The health service capacity review published last year did not comprehend disability, and even explicitly excluded it. There has been no forecasting to 2031 for disability services, as there has been for the acute care sector. The workforce planning report from the Department of Health, which was also published in 2017, similarly failed to comprehend disability social care from a workforce planning perspective. That is quite significant.

To recap, disability and social care were explicitly excluded from thinking about the future. Ms Flynn stated there is no policy or strategy, described the relationship with the State as broken and noted that even though an excellent report was published about five months ago, there has been zero engagement with either that report or the forthcoming changes to the healthcare system. That is the most damning testimony we have of the reality of this broken relationship. It is quite extraordinary.

Dr. Day also referred to a broken relationship, a phrase that clearly goes to the heart of the problem. Why is the relationship so broken? What we are hearing about is not a mildly dysfunctional relationship. We are hearing that a multibillion euro essential service is being kept at arm's length by the State, despite €3.3 billion of public money going into it. Does Dr. Day have a sense of why the relationship is so profoundly broken or what we can do, not in the coming years but in the coming months, to start bringing these groups together? That is one question. How much strategic alignment did Dr. Day see in her work between the stated health goals of the State and the expenditure of €3.3 billion?

I cannot remember who said one of the things. It was in the report. It was recommended that a mapping of services be provided for. Is it the case that the HSE could not tell us today what it is getting, or what it thinks it is getting, for our €3.3 billion?

Dr. Catherine Day

One arrives at a complicated situation for many reasons that build over many years. While it is dangerous to simplify, I will do so nonetheless. There is not a good understanding of the value of the positive contribution made by the voluntary sector. It was present in Ireland for a long time, but it has evaporated. The need to impose cutbacks during the financial crisis was interpreted not in a partnership way but in a command and control way, to adopt the wording the HSE often used with us. Unfortunately, we found that the emphasis had almost shifted to the financial side. That meant that the quality and range of services being made available to service users tended to be squeezed out. For that reason, we have recommended that there be a new start. In some parts of the HSE there was a tendency to amalgamate the voluntary sector with the public sector. That is why we are recommending that the separate legal status of voluntary organisations be respected. Their permission is needed to involve them, rather than presuming that certain services will be made available through them.

We have looked at how this has happened in other EU member states, most of which have a similar background in having voluntary health and social care services provided partly through faith based organisations and partly by means of philanthropy. Unless there is a new respect for the role, nature and difference of the voluntary sector, it will be hard to fix this problem. Now that there is a new CEO in the HSE and a new HSE board - there was no board for most of this period - perhaps there might be an opportunity to fix it. We hope our report will make a contribution to it. We would like the forum we have recommended to be convened quickly in order that our ideas can be discussed. It may transpire that they are not the best ones. There are many people in voluntary organisations and the HSE who have good ideas about how things could be improved, but those voices do not seem to be getting through. The idea is that the forum would enable them to meet and hammer out ways to improve things.

Everybody understands public money is limited and has to be spent wisely. It seems to us that people in the voluntary organisations are fully cognisant of the fact that they have to be accountable for public money, but they also believe many things could be done better. There is a need for a change in attitude and culture. We hope the changes at the top of the HSE provide an opportunity and a moment to bring that about. Having been at the head of the European Commission, much of what we have heard during this discussion reminds me of when the Commission had to change its attitude from one of arrogance to one of consultation and involvement. It was a difficult process. The people at the top level understood it was not possible to continue with the old way. As a result, the message came strongly that a change in attitude was needed. That is part of our message. We think it is important for the future that there be such engagement and involvement.

Professor Jane Grimson

The key to our thinking in this regard is the need for mutual recognition that the €3.3 billion voluntary sector is an integral part of the way services are delivered in this country. Therefore, the involvement of the voluntary sector in the development of policies and strategies is absolutely critical. They are not out there but an integral part of the system. We are very taken by the fact that this can work very well. We saw the strengths of the voluntary sector in other countries. It is not the case that we have to say the State should take over everything. A great deal would be lost in going down that route. It works elsewhere and I think we can make it work here.

My second question relates to strategic alignment. The State, via the HSE, is paying out €3.3 billion, which is a substantial amount of money. It sounds like this figure needs to be increased for a wide variety of reasons. How well is it aligned with the State's clear and strategic position as set out in the HSE's service delivery plan and overall objectives, etc? How well is the money lined up with what the HSE needs? In the light of the recommendation that the HSE needs to create a list of all the services for which it is currently paying, am I right in thinking it does not have such a list? I may have misunderstood the point that was being made.

Dr. Catherine Day

I would like to explain what we meant. The HSE knows what it gets for the money it pays. Our point was that no advance consideration was given to the services needed by the population. It is forecast that the population will grow by 1 million in the next 20 or 30 years. Rather than start with how much money we have, how much we can spend and what we spent previously, we need to look at the population, including the increase in it, and try to come up with an idea of what those people need and what services the State should be obliged to provide for them. Without oversimplifying matters, some continental countries involve the voluntary sector with the equivalent of the HSE. Together they work out which services are needed in order to take care of vulnerable parts of society. They debate how many services will be funded from the public purse and how many will be provided through voluntary fundraising. In times of budgetary cutbacks perhaps the list of publicly funded services might have to shrink, but at least there is clarity on what services are needed, what services are to be funded and how they are to be funded. If we were to adopt such an approach here, it would give much more certainty to families, parents and service users. Mapping needs to take place regionally and across populations to link with-----

Therefore, it is a planning exercise.

Dr. Catherine Day

Yes.

My final question relates to the future health of the voluntary organisations. I have done work with non-governmental organisations in Ireland, America and the United Kingdom. One of the differences I see here is that many voluntary organisations are very small. Ten or 15 years ago a big effort was made in London to consolidate and reach scale. It was a painful process, but it led to better outcomes for service users because it created an ability to have economies of scale, bring in more expertise and do a bunch of things that really small organisations find it difficult to do. Is that something the voluntary sector would consider to be okay? Does it think there is a good opportunity to consolidate to try to create a smaller number of bigger organisations? I would also like to ask about the pension funding issue in that context. Deputy O'Reilly has spoken about the deficit. The funding of pensions can destroy the wealthiest of organisations. Am I right in thinking the State is now saying it may fund some of the voluntary organisations' capital, wage and associated costs but that they will have to find the money to fund the future pension contributions of their staff? I understand the voluntary organisations will have to raise the money to fund the 5%, 10% or 15% that will have to be put into staff pension funds each year.

Ms Rosemary Keogh

I will begin by clarifying the Deputy's final point. Historically, our organisations have always been aligned to HSE pay scales. If public sector pay went up, our funding went up accordingly. If it came down, our funding came down accordingly. In the current round of pay restoration we have been told that there will be no funding for pensions. However, we already have funding that covers the pension element of existing pay rates.

But not for future pay rises.

Ms Rosemary Keogh

Not for future pay rises.

If a member of staff in the voluntary sector gets €1,000 a year, that will amount to €4,000 in four years' time.

Ms Rosemary Keogh

We will have to pay the pension element on that €1,000.

It is necessary for Ms Keogh's organisation to go out and fundraise to deal with the pension liability associated with any future-----

Ms Rosemary Keogh

Yes. I will give a concrete example. One of our member organisations within the Not For Profit Association has a high take-up of its pension scheme. That will be exacerbated next year when there will be mandatory enrolment to pensions. This particular organisation has calculated that the impact of having to pay that pension contribution in respect of the €1,000 per year increase for each of its employees will effectively double its deficit for this year. While that organisation has been given the first tranche of funding to undertake pay restoration, it cannot do that because it cannot pay the associated pension element. That organisation is now in negotiations with the trade unions to resolve the issue.

I thank Ms Keogh.

Ms Mo Flynn

My finance director just advised me that the cost for us will be €435,000 up to 2021. That is solely for the pay restoration element we will have to find.

Mr. Bernard O'Regan

Regarding the mergers and acquisitions part of the question from Deputy Donnelly, there are examples of organisations that have merged and formed alliances with each other or where one has taken over another. That has been partly driven by decisions between those organisations themselves regarding what was in the best interests of the future of services or for financial or governance reasons, etc. Those are some examples of what is happening. I know from our membership that there is certainly an openness to exploring those options but there are also questions. Some of those questions concern the underlying assumptions regarding what mergers and acquisitions achieve.

There is also concern about the importance of the relationship these organisations have with the communities of which they are a part and trying to maintain the right balance of scale. There are questions on how to maintain that connection to communities and how to do that well, while, at the same time, making changes on a scale that could bring about the type of efficiencies mentioned. Becoming involved in these exercises, however, comes with costs as well. They may be time bound, but there are transition costs and a need for resources. If these kinds of mergers and acquisitions are to happen in a serious way, the role of the State in facilitating them will be important. Rather than two organisations inventing the wheel and two other organisations then reinventing it, the sharing of learning on process, etc., could be usefully facilitated by the State.

I thank Mr. O'Regan.

I welcome all of the witnesses and I am delighted that we are talking about this issue. I have been raising many questions in this area for some time, including some weeks ago in the Dáil with the Minister of State, Deputy Finian McGrath, who accused me of frightening people. What we have heard today justifies my raising of the issue. I have also tabled a number of specific parliamentary questions. I will not embarrass the Minister of State by the referring to the fact that no information was received in response. We had an example of the real problems that exist in the first five minutes of today's meeting.

The issues in this sector are coming to a head due to the report that has been carried out. I believe this is a crisis, which is one of the greatest crises facing healthcare in this country. It has been suggested that these organisations provide ancillary services but that is not the case; they provide essential services. I have been fighting for two years on behalf of a young man from Waterford to get him full-time residential care. That has not happened because there are no services to be found for him. That is a crisis for him and his family. No funding is available to provide the required services for him because the package needed would probably cost €250,000. That is just one example. When we break this issue down to individuals and how they are affected, I have an image in my head of that young man.

I will ask some specific questions because what happens at this committee is monitored closely by the Department of Health and the HSE. They need to start paying attention to what is happening here. Some of the staff in the HSE, in particular, are excellent people. Off the record, those people will admit that they know that this cannot go on. How I do I know that? They tell me the same thing. This situation has to come to head and, hopefully, this meeting will facilitate that happening. We cannot go on the way we are. I have some specific questions on the deficits. How much is the total deficit? I know this will be a matter of guesstimates to some extent, but how much do the witnesses reckon is the total deficit in the sector? I refer to the deficit in funding for current services right now in June 2019. I have heard the figure of €30 million mentioned. Is that accurate?

Ms Rosemary Keogh

It is €30 million between the two umbrella organisations we represent. There are other organisations, however, outside of our groups and we cannot speak for them. The overall deficit is, therefore, more than €30 million.

Mr. Bernard O'Regan

I would say it is in excess of that. It is difficult to know and that is part of the problem. Some work needs to be done on getting an accurate figure. Concerning our own members, based on the 2017 accounts we know the figure was €25 million. We do not yet know what it will be for 2018 because those accounts are still being filed. We also need, however, to examine what has been accumulated in previous years because that also needs to be added to this total. The amounts concerned are probably lower the current deficits because this situation has been worsening. That is certainly the case with our members.

Taking the current deficits and historical deficits of the organisations represented here, up to the end of 2017, we are talking about a figure of €30 million, at least.

Mr. Bernard O'Regan

At least.

And it may be higher.

Mr. Bernard O'Regan

That is correct.

That gives us an insight into the scale of the issue with which we are dealing. Other organisations are not members of the umbrella groups present and, therefore, we can increase that overall total for deficits. It would not be an exaggeration, therefore, to state that in 2019 the historical and current funding deficit overall is somewhere in the region of €40 million.

Mr. Bernard O'Regan

At least.

That figure needs to be out there. Another issue concerns the hands-off approach of the Department of Health. That is obvious. It outsources responsibility to the HSE. The HSE then works with the umbrella groups to outsource service provision to the member organisations. The witnesses have outlined in detail how they have to balance corporate governance, company law and trading recklessly versus moral issues. The dependency of the users on the service providers must also be taken into account. That is a difficult position to be in.

This situation has been constructed and facilitated by the HSE. The Department of Health is aware of what is happening. It is a process whereby the HSE is effectively facilitating the potential for reckless trading, in some cases. The dichotomy is that on one side there is a necessity to behave in a certain manner while, on the other, there is no way in which we want services to be taken away. That is an impossible situation for all of these organisations to be left in. It is not the fault of the organisations. I know, however, where the finger of blame would be pointed if there were to be any issues. It would not be at the Department of Health or HSE. The finger of blame would be pointed at the witnesses' organisations. That is not right.

I want to focus now on the process that happens each year. I ask that the committee be sent a copy of the letter sent to the Irish Wheelchair Association stating there would be a cut of 20%. I also wonder whether it would be possible to canvass all the organisations that the witnesses represent and find as many of those types of letters as possible that have been issued in the past three years. I ask the witnesses to forward all of those letters to the committee. I make that request because it would be good to get a sense of the scale of what is going on. I am sure that the Department of Health will be delighted that I have asked for those letters. Let us tease this out a little. If I am wrong here, just stop me. Each year negotiations start in respect of the provision of the contract-----

Ms Rosemary Keogh

I have to stop the Deputy there regarding the word "negotiation". There is no negotiation. As Dr. Day rightly pointed out when she described the process, an email comes out with a service arrangement template which effectively states: "Here is the number that was in it last year so here is the number that is in it this year", or it may be a smaller number. That is the negotiation.

That is very good. The fait accompli comes out in written format and Ms Keogh is told to sign it by X date. There is no negotiation. They do not tolerate negotiation. Is that the case?

Ms Rosemary Keogh

In terms of my organisation, we always have what we call a protracted negotiation led by us, which we are still in because we have refused to show no deficits within our service. We have done that for the past three years. Like the Rehab Group, we also evoked the dispute resolution process successfully, and we will be doing it again in the coming days if this is not resolved. We would have some back-and-forth exchanges but it never changes anything.

Is that consistent with all Ms Keogh's experiences?

Mr. Bernard O'Regan

If I may make one brief point, I do not believe the experience is exactly the same in every community healthcare organisation, CHO.

That is a fair point.

Mr. Bernard O'Regan

The Deputy referred to the HSE but there can be some variations as well.

To be fair, that is a good qualification. If Ms Keogh does not sign it, she gets a 20% cut. In that scenario, service provision and so on is hit.

Ms Anna Shakespeare

No. One would dip into one's overdraft and start paying charges earlier in the year. To be clear, we make every effort to protect service provision and not eliminate or reduce it.

Perfect, and rightly so. In other words, the deficit grows and we get hit for this €40 million.

I want to get into the way the HSE helps with cashflow and loans. Mr. O'Regan might talk me through what happens as regards how the HSE then facilitates organisations with loans because for me, this is incredible stuff and it will validate what I said earlier.

Mr. Bernard O'Regan

What happens in some organisations when they are running out of cash, and as part of their engagement process with the HSE, the HSE will advance cash to them. For example, if we were being advanced cash this month, it may be coming off our December payment. To a point it is within year but by the time one reaches the end of the year, nothing has changed because one's underlying financial position is still challenged. Effectively, one has a loan from the HSE, which has to be repaid to it. One is beginning the following year with, say, €500,000 - the number does not matter-----

The numbers do matter to the public watching this meeting. This is Mr. O'Regan's forum-----

Mr. Bernard O'Regan

This is the reality.

What scale of loans are we talking about?

Mr. Bernard O'Regan

That I do not know. We are talking about very significant figures.

Are we taking in the millions of euro in some cases?

Ms Anna Shakespeare

Yes.

Mr. Bernard O'Regan

Absolutely.

The public is not aware of this. That sort of information goes across the scale of this issue.

Mr. Bernard O'Regan

When one reaches the end of the year, effectively, one has a loan from the HSE that now needs to be repaid. One's conversation with the HSE, as part of one's service agreement for the following year, is about how that will be repaid but the underlying issues remain. Effectively, one could be in a position that year where one is again getting cash advances. The position can accumulate and worsen unless something happens in the year -----

It just gets worse from year to year.

Mr. Bernard O'Regan

-----with services, cost containment or whatever the strategy is, but potentially the situation could get worse. If the situation does not get worse, one owes money to the HSE. If one has exhausted one's overdraft facility in the bank, one owes that back and effectively one also has an overdraft facility from the HSE, which is owed also.

Is the loan from the HSE a continuation of the funding it gives to the organisation or is it a loan with interest?

Mr. Bernard O'Regan

There is no interest.

I wanted to clarify that. It is a straight loan.

That is a very good point. Is that in terms of borrowing from next year's money?

Ms Anna Shakespeare

Yes.

The organisation is constantly-----

It is a roll-over.

Ms Anna Shakespeare

From our members' experiences, in January, they draw down a large lump sum - in the millions of euro - to clear the overdraft in their account and to repay the HSE. The money they have left is to operates the services. It is called cash acceleration. We have members in the national federation who have had cash accelerated to them to manage in January of this year, such is the size and scale of their-----

In January. They are already hitting a problem in January.

Ms Anna Shakespeare

We have members who had to have cash accelerated to them in April of this year to avoid dipping into their overdraft facilities, which incur penalties and extra charges.

When I asked parliamentary questions to the Minister regarding loans and deficits, he was not able to tell us.

Ms Mo Flynn

I am not an expert on the financial position of other organisations. However, if one looks at the published accounts of a number of large voluntary organisations, one can see clearly that there are both going concern conditions put in by their auditors and the clear indication of how much money the HSE has had to advance those organisations in terms of functioning. That would be some of the larger voluntary organisations. That information is very clear within their published accounts.

Mr. Bernard O'Regan

For balance and fairness, it is important to say that the HSE made funding available to some organisations to try to contribute something towards correcting their financial situation. It is not just the loans.

They operate-----

Mr. Bernard O'Regan

There have been some efforts made but I do not believe they have been adequate. They have not dealt with the overall situation for voluntary organisations in general but it is important to be fair and say that some efforts have been made to try to make some corrections as well.

The following is the picture. There is a significant deficit. The contract is sent. There may be some form of minimal negotiation. The contract has to be signed. If not, a 20% cut is imposed. As a result, organisations have to fund their operations in a different way, which means they have a larger deficit. As a consequence of that, some organisations are now coming under increasing pressure and, even in January, require to get advances from the HSE. The HSE is providing millions of euro in loans to fund the gap created by the funding deficit as regards the equation versus actual service provision. As a consequence of that, there are examples of the HSE putting in other funds to keep service provision in operation where organisations are in very serious situations. Following on from that, the deficits keep growing year on year as a consequence of what I just said, and there is no end in sight.

Ms Anna Shakespeare

They may or they may not, depending on the cost containment measures the organisations-----

Of course. I am aware from different organisations of cost containment by way of various actions that have been taken. That is the factual position. It is a disgrace. It is a crisis and the public now knows about it because we have elevated it here and highlighted the detail. It cannot continue. The Minister accused me of scaring people. This is not scaring people. These are the facts. We must continue and elaborate on the service provision so that the young man in Waterford I spoke about can get a service. We cannot continue the way we are now.

I want to bring it up to the next level. The report done by Dr. Day is excellent and needs full implementation. We know that. When I asked the Minister of State about this he said that he and the Minister, Deputy Harris, intended to establish a new dialogue forum between the relevant Department organisations and so on and to "strengthen the relationship". We heard from Dr. Day when responding to questions from some of my colleagues that since the report was produced, there has been zero dialogue. Is that accurate?

Mr. Bernard O'Regan

Yes.

Since the report was produced and despite the Minister's assurances, we know now from the Department of Health that there has been zero dialogue as regards dealing with this issue. Is that a fair reflection?

Mr. Bernard O'Regan

Yes.

The Minister has said this but it has not happened and they are setting up this new forum which the witnesses probably have not heard of yet. It is interesting that they have not heard of this new forum.

We now know the factual position of the scale of the crisis and how it will escalate year on year. It will get worse. Would it be fair to say that the top will explode because it is not sustainable. What will be the consequences?

Ms Kathleen O'Meara

I think the Deputy saw what happened with RehabCare. The Deputy will be familiar with the recent situation in RehabCare, where the board of the Rehab Group found itself in a situation where it could not countenance the effective conflict between the reckless trading and our commitment to delivering services. We were then forced to say publicly that the board had no option but to say that the service agreement would have to be terminated, and to give notice that the service agreement would have to be terminated to stay within the law. We were talking about €2 million, which in the context of the size of RehabCare is small, but without that €2 million we would be in a situation where we were ready for liquidation. That is what happens.

Mr. Bernard O'Regan

The cynical part of me would think that an organisation going to the wall and bringing this issue to a complete head is almost a requirement for the sense of urgency this needs. I think there are organisations which are very close to that, not because they want to be but because they have to be. It is a case of asking whether that needs to happen before it is taken as seriously as it needs to be taken.

I think that is a very accurate statement from Mr. O'Regan. It very nearly happened.

The picture I painted in dialogue with the witnesses is where we currently are. Obviously, to everybody present, the most important thing is service provision. I outlined the requirement for future service provision as well, which is high demand. When I talk about full-time residential care, I believe that specific area alone and where we are leaving people is embarrassing.

How do we fix this? We know that it requires the 100% implementation of the report. That will take a period of time, if there is a commitment from Government. Today is a shocking day and it is an embarrassment for the Government and for the Minister. It is obvious that the commitments they have made are not being honoured. It is obvious that what they have said is not being honoured. What are the first steps to take to force the Government into a direction?

I ask the witnesses to keep their responses brief because other members have indicated that they want to come in. I have been lenient with time.

Ms Anna Shakespeare

I would answer that in two parts. First, a costing methodology for disability services has never been bottomed out in Ireland. Several stop start attempts have been made at it, so until we understand how to cost disability services, we will never reach that platform that is referenced in the independent review group, IRG. Implementation of all aspects of the IRG recommendations is taken as read but a costing methodology is very clearly intrinsically linked to the financial viability and the service provision aspect.

There is a false assumption that the service provision in disability social care is static. We are seeing an explosion in young people with very complex needs-----

I agree; I see that myself.

Ms Anna Shakespeare

-----who would not have survived into adulthood in times past. Equally, at the far end of the spectrum, we are seeing men and women with disabilities who are older and are surviving much longer than they would ten, 20 or 30 years ago. We are also seeing an increase in population, and for the first time since the Famine the population the risen beyond 5.5 million. There is a requirement for a health service capacity review for disability and social care to map out and scope out the scale and extent of disability social care provision and to plan for it in the context of multi-annual budgets that are sensible.

Ms Clodagh O'Brien

May I add a point? A review of the service agreement part 1 was due to take place last year, and ironically because of the IRG report that review was deferred until the outcome of the report was known. It is being deferred continuously and as recently as last week, we were told the meeting that should have kicked off that process was not happening because the Department of Health and the HSE have not met to discuss the recommendations of the report. I think that would be a very useful step.

Ms Kathleen O'Meara

As Deputy Kelly said, there is a crisis and it is really welcome to hear that this is recognised by the members here today. It needs to be recognised, as Deputy Kelly stated, by the Department and, in particular, by the Minister. Actions need to be taken. As we speak, the house is falling down right around us. It will not be built again unless action is taken. We have a great deal of analysis, recommendations and we have put our figures in front of members. It is urgent that action be taken. What we need is a commitment from the Minister and from the Government, because the Department that has not been mentioned today is the Department of Public Expenditure and Reform. There was a reference to the change in the relationship from partnership to command and control. We have identified in our report that the change in culture has been driven very much by the Department of Public Expenditure and Reform, but obviously it is Government policy and a cultural issue. That needs to change.

In the short term, there is a crisis. First, it must be recognised that there is crisis. We must admit there is a funding problem, because without the funding the house will fall down, as we know. Let us get some scaffolding in place to hold it up.

I thank our witnesses for appearing before the committee and giving us their respective reports. That is a very useful starting point. I am a little concerned about the direction in which we tend to go at some of these meetings because it would appear that the Government seems to be in some way blocking or impeding progress in terms of delivering much-needed services to a very vulnerable group in society. I want to state emphatically that is not the case. The Minister is fully conversant with the issues, but the issue that is arising now is different. I have a number of questions on it.

If we attempt to fund all the organisations and the country itself by way of public acclamation, we will soon be back in the place we were in 2008 but only worse. That is an issue we need to take on board and learn carefully from it. The question we must ask ourselves is whether we want to be back where we were in 2008, nationally bankrupt. We do not, because we will not get salvation from any quarter the next time, it will be our own fault fundamentally and we will be left with it. We need to bear that in mind.

I used to be a member of a health board for a very long time. How do the service providers see themselves? Do they see themselves as being contracted to provide a service? Who is contracting the contacting body? Is it the Department of Health, the HSE, both or something in between? I would like an answer to that question.

Professor Jane Grimson

We sign a service arrangement with the HSE.

That is a contract. The services are being provided on a contractual basis. I agree, as that is my understanding as well.

To what degree does that entail the Department of Health or the HSE providing support for pensions or for other services? In my view if one has a contract to provide a service, it entails everything. One brings one's baggage to the contract and one provides everything oneself. I provide everything myself if I am a contractor, in the same way as a builder or somebody else. To what degree have the witnesses found that it was necessary to call on the RehabCare voluntary fundraising activities, the HSE or the Department of Health to assist in such issues as pension provisions for the future?

That is another question.

To what extent has consideration been given to the multiplicity of organisations that appear to be engaged in the delivery of vital and sensitive services in the same marketplace, in competition in some circumstances, particularly with regard to voluntary fundraising? How do voluntary bodies fit in there? Would some degree of amalgamation might be beneficial? For example, the HSE - and the health boards in the past - has certainly attempted to provide services under respective headings from within its own resources. The other issue is the voluntary sector, which consists of many and various compartments these days. I respect the voluntary sector for what it does. It does a great deal of work. The religious parts of that have been referred to on numerous occasions. The country was quite happy to accept the services provided by the voluntary sector in years gone by. We cannot state that we do not want an organisation because it represents some religious group but that we want the services it provides. We are being hypocritical in how we look at some of those issues.

How do voluntary and non-profit bodies see themselves fitting into the fabric of services provided by the HSE or the Department of Health? Our guests had a meeting with Laura Magahy. How long did the meeting last and was it satisfactory? Did Ms Magahy provide any indication of future prospects around interaction? Will there be a further meeting? The cost of providing health-related services are growing all the time and will continue to do so. Even in the context of the very extensive budget of the Department of Health, €3 billion is a great deal of money. The extension of the cost of the services is likely to continue based on information to date. What is the likely outcome in terms of the necessary increase in taxation to fund it? That is the only way it can be funded. The Minister does not stick his hand into a back pocket to find money. He does not refuse to find money either. He wants to help out and the Department of Health wants to help for obvious reasons, including political ones. There are all kinds of reasons. The creation of the belief that in some way the Minister is opposed to providing the necessary services is completely wrong. Everybody has to look at how they present the picture in that context. If we do not, we are heading back to 2008. If we want to go back to 2008 in respect of the national finances, it might be a learning process. It might be a hard way to learn, but also necessary. Maybe the country has to go broke again in order to illustrate fully the seriousness of the situation in which we find ourselves.

I have restricted my submissions so far and I intend to come back in. I have a final question for now. Has any evaluation been made of the extent of the increase in income tax paid by the public on a weekly or monthly basis? It would be helpful if we were given some indication of where we might have to go in future. If we do not pay for the services, we lose them. If we do not provide the funding through taxation - and it does not come from anywhere else - the services will go too. We are caught in a cleft stick. I have had dealings with all of the voluntary organisations represented here and many of their subsidiaries as well.

I am delighted to know that. I ask our guests if they can to address some of the questions raised. We will take them in turn.

I have noted the Deputy's intention to come back in.

It is my intention to come back in. That is good.

And that is noted.

Ms Mo Flynn

On the issue of contracting services, we are in what is ostensibly a contractual relationship with the HSE. As an organisation that contracts with many other bodies in this jurisdiction and outside it, the essential difference in the relationship is that in other contractual relationships we are in a position where we can build in the costs relating to running the service, employment, pensions and so on for our employees as well as being able to build in sufficient margin to develop our services. As not-for-profit organisations, we are not putting out money back for shareholders but rather back into services. Our relationship with the HSE is as described earlier where we are informed "This is the money you got last year and this is the money we are giving you this year". The room to increase funding to drive a surplus to sustain an organisation into the future for all of those areas is not there.

I hesitate to interrupt but that is not an answer to my question. In a contracting situation, the reference to the terms on which the response comes from the person or the organisation to whom we provide the contract is not really relevant. The relevant issue is the extent of what we propose to provide under the contract and the cost to the person to whom we are making the contract.

Ms Mo Flynn

Yes, but what if one cannot build in the true cost? The issue is where one is unable to describe the true cost of delivering those services.

One presumes that the true cost is determined by a specification as to what the contract is. It is either a true cost or it is not.

Ms Mo Flynn

That is the point we are trying to make.

The true cost arises if I advertise for somebody to contract to provide a particular service. The detail of that particular service is what the contract is going to entail, not in respect of some ancillary issues that might add costs afterwards. In respect of Government contracts, it is illegal to qualify a contract or to extend it beyond its original terms. My question still remains. This is a fundamental issue. If the contract is not properly set out by Government or the person advertising it or if it is not responded to properly by the organisations proposing to provide the contractual service, we have a problem and do not know where we are going.

Ms Mo Flynn

If the Deputy had the opportunity to look at the service arrangement documentation, it contains many sub-schedules, all of which allow, at various stages during the year, for variations in the contract as and when required by the HSE or where arising. It is not the case that a contract is assigned at the beginning of the year and that determines fully the requirements. There is space within it to change that.

I state emphatically that this is an unsatisfactory way in which to engage in contractual business.

Ms Rosemary Keogh

The contract is initiated and driven by the HSE. As such, Deputy Durkan would need to bring that back to the HSE.

I need to bring it back to both parties, namely, those providing the contract and those seeking to have the contract provided. If we have a series of provisions and additions emerging throughout the year, we will not be able to set down a precise cost. It does not work that way.

Dr. Catherine Day

As I do not represent any organisation, I will make a broader comment. We were asked first to perform a factual assessment of the situation. The reason we recommended mapping the services was that we felt there was not a good overall understanding of the services that were needed and what it really cost to provide them. That is why we raised in our report the question of the ballooning deficit. It was simply being put to one side as though it did not exist. We recommended the mapping of the services because we need to know what the extent of those services is and the State needs to indicate how many of the services that are needed it is willing to provide for.

The State must then decide whether it should provide for them through the public system or whether it should contract out to the voluntary sector because it feels there is a positive value in working with that sector.

The question about the large number of organisations came up and we looked at that as well. We did not make a recommendation to consolidate because we feel that, in many cases, proximity to service users is part of the extra that the voluntary service adds. The reason we recommended that the State should have a rolling list of services that it commits to fully funding is because then it would be possible to be clear with people about what services would be provided. We made the point that, for example, one could not prevent a group of concerned parents from setting up a voluntary organisation if they felt they could help in some way but, equally, they could not have an expectation that the State would fund whatever they decided was needed. This why we need clarity in terms of what services are required by the population and how much of those services the State is prepared to provide.

In the context of the negotiations with the HSE, we are not starting afresh; we are coming from an historical position. We are coming from a situation whereby the HSE wants to provide the services but has a limited amount of public money. Instead of looking at the services that are needed, it and, to a certain extent, the organisations are looking at it as being a case of "Well, we are here because we are here and we need to be funded to continue." We felt that this was not a sustainable situation and that what we needed was to be clear about which services are to be provided and by whom. The full cost must then be paid, particularly if one considers what might happen if, to use the expression used earlier, the voluntary sector "throws back the keys". If the latter happened, the would have to step in and provide those services. One needs to look at the cost of that and decide whether it is better value for the public purse to do it through the voluntary sector - taken in the round, not only financially but also in terms of the quality of the services that are offered - or whether it is not sustainable because the voluntary sector does not have the capacity to do it. If the latter is the case, then provision must be made, from a budgetary perspective, for the public sector to provide it. What we were trying to recommend in our report was that the factual basis needs to be established. As a result, we suggested that the Departments of Health and Public Expenditure and Reform look at the deficit situation, put a figure on it and then work out how it will be absorbed or what services will be cut if it cannot be absorbed. There is a need for greater clarity on the factual situation and then a strategic discussion about what services are to be provided and by whom. This needs to happen before one can put a cost on it.

I call Senator Dolan.

I have a couple of other questions to be answered. I do not want mine to be the shortest contribution to the meeting, which started at 9 a.m.

I assure the Deputy that I am keeping a very close eye on the time.

I am keeping a closer eye on-----

I will ensure that the Deputy gets all the time he needs. Could our guests answer the last question from Deputy Kelly as briefly as possible because I am conscious there are other people who have indicated?

I have been mixed up with a lot of people but never with Deputy Durkan.

Hopefully, Deputy Kelly will not have to be.

To be clear, I was referring to the point I made regarding Deputy Kelly's last question.

Mr. Bernard O'Regan

Regarding what the cost to the taxpayer would be in terms of responding to the need, I cannot comment on what a percentage impact might be.

Can Mr. O'Regan provide a rough estimate?

Mr. Bernard O'Regan

What I can tell the Deputy is that the HSE undertook a piece of work as part of a review of future service need in 2017. It produced a report which projected that an additional investment of €200 million per annum for a five-year period was needed, based on cost at that time, in order to meet known and future need. My understanding is that this is being updated by the Department of Health, which is looking at a ten-year project to build on that. That is the kind of cost at which one would be looking in terms of meeting current and future need. That does not include the type of issues we are raising around deficits or dealing with the things that are there. They would be on top of that. That is the kind of scale of investment we think is needed. That was work done by the HSE.

Part of the challenge in respect of the work in which we are involved relates to the challenges around contracting for services. We are in support of people who travel along the whole-of-life journey. We can engage with the HSE today to agree a budget for the provision of a service to a person but that person's needs can change quite significantly tomorrow. What we do not have is a system that permits renegotiation when those things happen. They are real-life situations. We cannot and will not abandon people in those circumstances but we need an arrangement with the State because, on the one hand, the State has a finite resource and has to manage within that resource and, on the other, we need something flexible and adaptable enough for us to be able to engage properly around when those changing needs occur and to be able to respond to them in a reasonable way.

Can Mr. O'Regan envisage a situation whereby voluntary bodies, on an ongoing basis, can inform the HSE and the Minister for Health at the beginning of the year that they will have add-on costs throughout the year arising from extra services that need to be provided or additional costs associated with services that are being provided and in what way? I am mindful of the fact that we cannot negotiate pay agreements in this or any similar forum. It we were to do so, we would need to abdicate our various responsibilities, walk away and stated that this thing is out of control and cannot be resolved. Incidentally, that was one of the matters on which previous Minister's opined over the years but-----

Mr. Bernard O'Regan

Between the HSE and the community of service providers, there is enough information and experience for them to be able to work together to produce some kind of estimate each year of what might typically arise in the course of a year. We do not necessarily know where it will arise but we could anticipate that there would be a certain level of changing need over the course of the year. The other thing I would say about some of the deficit situation for organisations like ourselves is that, in the past - and I do appreciate that it was in the past - when the HSE ran into financial difficulty, it was able to go back to the Oireachtas and get a supplementary allocation. We were never included in any of those supplementary submissions so our need, particularly for voluntary providers, was not necessarily included in the ask.

So the supplement required was much bigger than was identified at the time.

Mr. Bernard O'Regan

Absolutely. Some of our historical deficits might have been addressed at different times and in different ways but the system did not allow for this. That has been a contributing factor part of the frustration regarding how we are arriving at a position like today.

The National Federation of Voluntary Bodies made a submission to Sláintecare-----

Ms Kathleen O'Meara

Could I clarify that? When the Rehab Group published its report, it requested a meeting with Laura Magahy to discuss the report, bring it to her attention and raise the issues regarding where we fit in the context of the implementation of Sláintecare. It was very much an information meeting. She was very interested in the report and its findings but it was purely on behalf of the Rehab Group, it was not on behalf a wider section. There was no follow-up from that and no structure was put in place to pursue it. It was very much about information, trying to put the issues on her agenda and bringing the findings of our report to her attention.

Did the Rehab Group write to the committee that produced the Sláintecare report in the course of its hearings and deliberations?

Ms Kathleen O'Meara

Yes.

Did it get a satisfactory response?

Ms Kathleen O'Meara

No. We did not appear before it at any point. We were not-----

That committee has concluded its work.

Ms Kathleen O'Meara

As stated, we did not appear before it.

Ms Anna Shakespeare

The federation met Laura Magahy. She had 104 actions on the Sláintecare implementation plan, none of which related to disability. She was very cognisant of that and recognised the fact that throughout 2019, she needed to capture data so that it would be built into the 2020 Estimates. That was her commitment to us when we met with her.

Going back to the Deputy's earlier points around costing, we have a national database that profiles, for the most part, individuals with intellectual disabilities.

However, it has less capacity to profile individuals with autism and physical and sensory disabilities. Certainly, on a preliminary review, in the period from 2010 to 2018, inclusive, the country saw a 35% increase in the number of men and women with intellectual disabilities and a 240% increase in the number of people over the age of 65 years. For the ordinary population that requires increases in health, dementia and social care supports. We have not done anything similar for disability social care services. I understand this is something at which the HSE is looking and to which the voluntary providers are committed to contributing. There is no equivalent for what the acute care sector calls the exotic or unscheduled care budget for disability social care services. When these changed needs present in a person's daily functioning, we have no budgetary capacity to meet them other than by overspending for the sake of safety. These are really important things the committee ought to be aware of.

I thank all of the delegates. There is no doubt that, to coin a phrase, the independent review group has done the State some service, as will become manifest and for which the three representatives need to be thanked, as do those who are providing the support they receive in doing that work. My colleagues have made several useful and interesting points. To put it mildly, we have excavated a range of concerns and issues.

My first question is a speculative one for Dr. Day. Are public bodies and the political system threatened by the voluntary sector as an equal partner, a conscience and critical friend? How might the broken-down relationship be put back together? What are the first three steps or the key pieces of that process?

There is an idea of health being a resource for living and well-being, something that supports people in being out and about, rather than simply being cared for in a health setting. This point was touched on. Is this being considered as something valuable in what I would call the investment, rather than the cost, made from the public purse? I will put it in industrial relations terms. Could this be the productivity element that will bring us from deficits and under-funding?

Reference was made to other EU countries that had got it right. To get us to use Google in the right place, about what states are we talking? Mr. and Mrs. Google are our saviours.

In effect, the faith-based organisation sector was one of the spurs for the independent review group in starting its work. It is interesting how it has moved from it. I have in mind the idea of charity status and the Charities Act. For charitable purposes is a concept that dates back hundreds of years, long before the Republic, the Free State or anything else. It comes from an altogether different world view when kings were appointed divinely. Now we have the notion of public benefit which the Constitution sets out in secular language. It underwrites the connection between the old-fashioned terms of charity and charitable with public benefit. The Constitution also includes fundamental freedom provisions. Reference was made to a point about a group of parents. The Constitution refers to the right of people to form associations and unions. It does not give them the right to send in invoices to be returned as paid within 30 days. That is understood. Can the review group representatives offer some thoughts on whether that could be a way to bridge the traditional concept of faith-based or charitable purposes with public benefit or the public good?

I will come down to more testing or immediate issues. The new head of the HSE was before the committee smartly after he was appointed. He brought with him a letter he had written on 14 June. Two things in it interested me. The first was the statement that the director general held the line absolutely on the budget he had been given. We know that the footnote is that every year we have seen the budget broken such that the State has to come in with a Supplementary Estimate. We now have the idea that this cannot or will not happen or that it could happen but will not happen. My second point is allied to the first. The director general stated the HSE had to earn the trust and confidence of its funders. I put this point to him on the day. He is suggesting people who are not receiving services, whether they are disability or elderly care services, will have to wait until a public body earns the trust and confidence of another public body. I simply do not know what words to put on that statement, but it is a serious place for public bodies in which to find themselves. From our point of view and that of the people we want to serve, that leaves them well and truly out in the cold and there are many of them. There are deficits and unmet needs. We also have the Irish Fiscal Advisory Council giving us a financial weather forecast. Let us also bring it in. There is considerable competition in public spending. The issue arises as to whether the base of €60 billion has to be looked at or whether we keep looking at the portion on the edge that is considered to be extra funding.

I turn to the disability organisation representatives. I am someone who lives on both sides of these tracks. That is my position in the here and now, not only in the past. I will attend a board meeting tomorrow of the Disability Federation of Ireland, of which I am chief executive. I will attend our annual general meeting. We are dealing with a 20% deficit in funding this year, as are others, because of reductions made earlier this year by the HSE, about which I am not moaning, as we all know it. I have it also in being involved in the Seanad which is a great privilege and honour. It is a valuable position to be in.

Section 38 and section 39 organisations provide ancillary and essential services. Perhaps some of those present know this off by heart. I have in mind two organisations, Ability West and the Brothers of Charity, both of which are based in Galway. One is a section 38 organisation, while the other is a section 39 organisation. I defy anyone to put the thickness of the paper I have in my hand between either of them. That is one of the great lies in all of this. Do the disability organisation representatives wish to comment on that matter?

The current narrative emerged during the past couple of decades. It was different in previous decades, for example, when I started work in the Irish Wheelchair Association. At the time, we might have met the Minister if he or she came to open something and do whatever else. I am paraphrasing, but the Minister would say to us that when the Government got some money, we would be looked after. It got money and we know exactly where we are today. Something has shifted in the past 20 years. That is one of the conundrums. The narrative now is that there are too many organisations with inefficiencies and that there is duplication. The view is disability services are getting almost €2 billion annually.

My next comment is for the committee. We need to have some analysis or receive some response smartly from the three connected entities in the public arena, namely, the Department of Public Expenditure and Reform, the Department of Health and the HSE.

We know the Department of Public Expenditure and Reform is always busy elsewhere. I cannot see, however, how it, with any honour, could refuse to be part of this conversation with this committee and others. I am sorry that my colleague, Deputy Bernard Durkan, is not here. I found some of the things he said confusing. I am coming to a conclusion after these points. Deputy Durkan stated that he respected the voluntary sector for what it does. He continued by saying that as a country we were happy to accept the services provided in the past and now. I will put this point to the voluntary organisations. As somebody who has grown up with and has a great grá for voluntary participation in this republic, I find it hard to hear what Bernard said.

Which Bernard?

I am not referring to Mr. Bernard O'Regan but Deputy Bernard Durkan.

There are two Bernards.

For the avoidance of doubt, I am referring to Deputy Durkan.

Where is he?

Emotionally and instinctively, I heard that statement from Deputy Durkan in regard to a fear or threat of finding ourselves back in 2008 because the voluntary disability organisations would be getting a lot of funding. I know he made a different statement later. I was deeply involved in this sector at the time. I was on the National Economic and Social Council, NESC, then and we did reports on this whole business and the cause of the crisis. I do not know how what happened then could happen again because voluntary organisations are standing up for the people they see day in, day out. They do not see people in the context of reports. Let us be clear about this. These organisations are dealing with people who are in front of them every day. I know the Chair wishes me to conclude.

I thank Senator Dolan. I would be grateful if he could conclude.

I just want to be clear on what I think is the instinct of our Government. I was in New York last week as one of Ireland's representatives at the conference of states parties at the United Nations. The Minister of State, Deputy Finian McGrath, was also present with his officials. I stated in the general debate that Ireland is serious about implementation and wants to make progress. My instinct is not that our State does not want to do the right thing. However, we have to go about this in the right way.

I thank Senator Dolan. I ask our witnesses for a response.

Dr. Catherine Day

Perhaps I can address three of those points and then others may want to come in as well. Regarding the first point on whether the Department and the HSE regard the critical friend of the voluntary sector as a threat in some way, I cannot speak for them. Let me take the question in a different way. In our report we state that one of the strengths and one of the positive contributions of the voluntary sector is its ability to advocate, champion and say uncomfortable things. We felt that was important in a democracy. Those who work in the public sector are not free to criticise public policy. I cannot remember the exact wording we used, but we stated that the role of non-governmental organisations, NGOs, and the voluntary sector in this particular case is necessary to keep challenging the system to deliver the best that it can deliver.

Turning to the second point, the other European Union countries we looked at included France, Germany, Portugal, the Netherlands and Belgium, among others. A European Observatory on Health Systems and Polices exists and gathers much comparative data which is very useful in looking at how other European countries are doing this. We all know that there is no country on earth that does not have problems in its health sector. We are not stating that everybody else has got it right and we do not. We are stating that there are interesting things to learn from what others are doing in this area. I hope that what comes through from our report is that there are problems but that they are fixable. That should be our goal. We should be trying to find a way to bring the parties together to fix these problems.

Mr. Bernard O'Regan

I will make two comments. Regarding the point made on the lack of difference between section 38 and section 39 organisations, I think that is correct. It would not be possible to slip a sheet of paper in between the services provided, the language used in the legislation and in the contracts and to distinguish one as ancillary and the other as essential. That makes no sense when they are exactly the same services. This raises a core issue as to how we as a State and a country look at all our citizens and how we judge them. If we look at the services being provided by one organisation and we describe them as ancillary but exactly the same services as essential services for somebody else, we are saying something as a State to those people with disabilities regarding how the State views them. I do not believe that is how we think about it. We want to treat everybody equally. Our legislation and language, however, undermines some of that desire. We end up with differences regarding how staff are being paid for doing the same job depending on which organisation they happen to be employed by. That states something as well about the people in receipt of those supports and services. We have to be cognisant of that too.

Turning to the point made about avoiding going back to 2008, we as service providers are really conscious of how the economic downturn affected people with disabilities in Ireland. It affected all citizens but we have to be mindful that it had additional consequence for those people with disabilities. There is no way that we want to cause or participate in a process that brings the State backwards. That is not what we are about. It is important for us today to name the issue. We know we have a stake in the resolution of this problem. We made the point in our opening statement that the IRG recommendations are challenging for everybody. It is not just the State that has to do things. There are things in there that we will find challenging as well and that will require us to consider how we are doing things, how we are using our assets and many other aspects. If we are looking for the recommendations to be implemented, it behoves us to state that we are committing to something as well. That has to be to work jointly with the State so that we do not go back to 2008 and we do not get into this belief that what is involved is always about just throwing money at the problem. It cannot just be about that. Equally, we cannot state that it is not about some money. Any money invested, however, needs to be part of a strategy.

Professor Jane Grimson

Reference was made to potential for a lack of trust between public bodies. One of the issues we highlighted in our report was that the vast majority of these voluntary organisations have to report to the Companies Office, the Charities Regulatory Authority, HIQA, the HSE and probably many other bodies besides. In many cases those organisations are reporting the same information multiple times over, probably on a slightly different form. There needs to be much more co-operation. It is good to see that the Charities Regulatory Authority is looking at the Australian charities passport idea. That would be very good. This is a cost issue because there is an expense involved in the State and State bodies requesting the information and processing it when it is received. It is, however, also a cost on the voluntary sector.

I call Senator Colm Burke.

I thank all the witnesses for their presentations today and for all the work they have done over many years on behalf of the voluntary organisations. Both reports are very welcome. I will start with the increase in the health budget over the last four years. There has been a substantial increase. Have comparable amounts of money been allocated to the HSE and the voluntary sector? We are talking about €3.3 billion. I think that is nearly the same amount as four years ago. Has the comparable increase been looked at? My second point concerns staffing levels in the HSE. There has been an increase of 13,000 in four years and 2,700 of those are in administration and management. I have serious issues with that. Staffing in public health nursing has only increased by 3.7% whereas there has been an increase of 17% in administration and management staff in the HSE.

I do not believe there has been a comparable increase in staffing levels in the voluntary sector. If anything, there has probably been a greater demand on the voluntary sector to do the same amount of work with fewer staff or do more work with fewer staff. Has a comparison been done between the increases that have occurred in the public and voluntary sectors?

There is a lack of understanding in Ireland about the contribution of the voluntary sector and the organisations working in it. I remember approximately five years ago going through the HSE's annual report and seeing more than 2,500 organisations getting funding and trying to explain it to the general public. Does the voluntary sector need to get more information out there about the services it delivers and how cost-effective it actually is? I know the nursing home sector is not comparable because it is very much the private sector and not the voluntary sector but I have seen that a relatively new nursing home run by the HSE costs €1,600 per bed per week whereas a comparable facility three miles away receives €900 per bed per week to look after the same demand for patients. It is the same with regard to costings for the voluntary sector. It appears to deliver very effective care to a large number of people at a very efficient cost but does not receive recognition for it.

Will the witnesses comment on increasing demands? In private session this morning, I raised one aspect of the HSE whereby the staff of an entire section resigned because they cannot cope with increasing pressure from the general public requiring the service to be delivered. To put my cards on the table, this is because of a lot of adverse commentary in the media. For instance, if a voluntary organisation runs into any difficulty, the media immediately seem to focus on that particular aspect of the organisation without looking at the overall picture of what the organisation does. Voluntary organisations are, unfairly, very prone to adverse media coverage.

The report shows the need for us all to work together, including the general public, voluntary organisations, the HSE and the Department. There is a disconnect and the question now is how do we go forward. It is not only about the HSE and the voluntary sector working together but also the general public. There is only so much a voluntary organisation or healthcare system can do. Perfection cannot be provided in every area but we have reached a stage where people are looking for perfection that we cannot deliver. How do we get out the message that everyone has a part to play, not only those providing the service and working there but also the general public? I might come back to make a few more comments later.

Ms Rosemary Keogh

Senator Burke is right about the lack of public visibility of the services provided by voluntary organisations. People do not realise the depth and breadth of the essential services our organisations provide. Interestingly, until 2016 the social care division of the HSE produced an annual report that set out in detail the funding that went to each organisation and the types of services provided. People did not use it for bedtime reading but it was available in the public domain. That report has not been published for the past two years so there really is no visibility of the quantum of services provided. We need to find a way to get that message out there publicly. We do it individually as organisations but the HSE in its own annual report should recognise the contribution of the voluntary sector and the types of services and quantity of services we provide for people.

With regard to whether headcount increases in the voluntary sector are comparable to those in the HSE, the short answer is that they are absolutely not. This is compounded because we have a pay disparity between the public and voluntary sectors. All of our organisations are struggling in a full economy to recruit and retain staff. My organisation is the largest provider of personal assistance hours in the country and we find it very difficult to recruit and retain staff because people doing exactly the same job in the HSE are getting full pay restoration. In the past month, they have been getting the benefit of pay for travel time, which our organisation cannot provide. We cannot compete. This impacts our services. Already this year we have been unable to deliver personal assistance hours and this will only be compounded. At the end of the day, it goes back to the people sitting in their homes relying on those personal assistance services. They are in complete isolation and cannot get out of bed or their houses. They cannot participate in and contribute to society and it is very important that we hammer this home.

Ms Anna Shakespeare

Senator Burke asked about the increase in budget and whether it was matched between the HSE and the voluntary service providers. This year, the HSE budget uplift was 6%. Our members did not experience a similar uplift. It is a little more complicated for section 38 agencies that use the pension related deduction, or the additional superannuation charge to which it has become this year, as part of their operational income. This goes back a little to Deputy Durkan's query on how we are funded. We are funded by using some of the pension levy income in addition to the allocation from the HSE. The effect of this for some of our members is they have had a negative increase in budget, that is, a decrease in budget, or a 1.16% or 1.6% increase in budget. This does not match the pay awards we are expected to pay to remain compliant with health sector pay policy.

Ms Mo Flynn

It is fair to say that section 39 organisations have not seen a similar increase in budget. The only increases we see are specific to service areas. An individual's care needs may have increased and we may have negotiated an increase in funding for that person. It is, therefore, very much related to particular services rather than the organisation as a whole. Perhaps during the year HIQA inspections identify increased service requirements. It is those we hope to get funded in the following year. In the years they occur we are expected to meet those costs ourselves. To give an example, as a result of a meeting with HIQA yesterday, we will probably have an additional cost of between €60,000 and €80,000 for just one service for three people. That is just one of 61 residential services I have and that additional cost arose in one day. These are continuous costs that increase but are not being met and have to be negotiated on a case by case basis each year. Provisions are made in the HSE budget for increased numbers of places or increased numbers of multidisciplinary services such as occupational therapy but while they may be seen as increasing within HSE delivered services, those rarely translate to those of us in section 39 agencies. We cannot avail of psychology services. We spend more than €250,000 each year buying in private psychology services to deliver to our service users because the HSE is unable to provide them through the public service for the individuals in question.

If we compare what was going to the voluntary sector as a percentage of the budget four years ago with today, my understanding is that in real terms the budget to the voluntary sector has not increased. It is taking a smaller share of the overall budget.

Ms Mo Flynn

Yes, it is a smaller share.

Have figures been examined from that point of view? The same level of service is required by the voluntary organisations but not as regards the overall increasing costs they have in respect of insurance and so on.

Ms Mo Flynn

Yes.

Has Rehab not conducted a comparison on that? It would be interesting one to look at from our point of view. I imagine that the increase in the budget allocation to health has been absorbed principally by the HSE and not by many of the 2,500 organisations.

Insurance is another issue that was raised in the report in terms of the State Claims Agency. Could Ms Flynn outline the current position regarding insurance costs for voluntary organisations? When people look at moneys going to organisations, they do not look at the straightforward costs of heating, light, rent and insurance. We do not have any overall information. I presume each voluntary organisation is insured independently. Is a policy needed whereby the 2,500 organisations providing a public service are brought in under one umbrella for insurance and ensure that the cost can be absorbed in a better way? Could Ms Flynn outline her position on that?

Ms Mo Flynn

Increased insurance costs is a pressing issue for all our organisations. To be fair, the HSE has facilitated a piece of work in the past year involving a number of our organisations with the State Claims Agency. A detailed analysis was undertaken of the costs incurred, in particular in employer's liability and public liability. We have just had that information given to us and it clearly shows those costs have increased exponentially in recent years. We do not come under the remit of the State Claims Agency. The section 38 disability agencies were brought in under the remit of the agency some years ago. The ongoing effect that has had is that the insurance pool has decreased, which means that private insurance companies are now insuring section 39 agencies on the basis of a reduced pool and, therefore, our costs have gone up because we are not under the remit of the State Claims Agency. That has had a significant effect on us. Some of us self-insure, which is a perverse place to find oneself in, but there is no doubt that while the solutions are being considered, nothing has been forthcoming to offer us the same protections through the State Claims Agency as our section 38 colleagues. As Senator Dolan said, the difference between us is barely a slip of paper. This comes back to the issue of costs and contracts. It is the same price for the same services but that does not take account of the considerable increase that has come upon us in recent years as a result of the decision to bring in the section 38 agencies under the remit of the agency.

But that reform could be implemented easily enough.

Ms Mo Flynn

It would make a significant difference.

Has there been correspondence with the Department on it or has it progressed?

Ms Mo Flynn

No, the work that was completed in the past week could inform the Department to give consideration to that. The evidence is now clearly there with regard to the impact of insurance costs on section 39 agencies.

Mr. Bernard O'Regan

Part of the issue is section 39 organisations are viewed by the State slightly differently from section 38 agencies. Our staff are paid differently and the insurance is treated differently. Based on the work that has been done so far, I am not sure that we could assume that we are going to come under the remit of the State Claims Agency. If anything, that is not going to happen and the best that may happen is that we work together to pool our insurance needs and go to the market as a collaborative rather than coming under the remit of the agency. That may have some financial benefit but it might not be as beneficial as coming under the remit of the agency.

Approximately, how many section 39 agencies are there?

Mr. Bernard O'Regan

Approximately 2,000.

There are approximately 2,000 section 39 organisations.

Mr. Bernard O'Regan

We do not represent all of them.

Dr. Catherine Day

If I could, I will draw attention to one aspect of the report. Two thousand organisations is a lot of organisations but more than 50% of the funding goes to the top 30.

Yes, I know that.

Dr. Catherine Day

There are some large organisations operating nationally and then there are some tiny ones that receive a small amount of State funding. I wanted to clarify the position.

Presumably the proportion is similar in terms of what the organisations pay for insurance.

Ms Mo Flynn

Yes, undoubtedly the larger organisations are bearing the major cost associated with insurance.

I wish to ask one final question about directors on boards. It is a considerable challenge. As I come from a legal background, I am very much aware of it and I give legal advice to people who sit on boards. What can we do to give support to those who give of their time and leave themselves exposed due to the decisions they make? Given the current structure, what can be done for them?

Dr. Catherine Day

Perhaps I will pick up on that. The underlying problems have to be solved. The risk of being accused of reckless trading will exist as long as there are deficits. We suggested that it would probably be financially worthwhile and useful for the State to fund some kind of small support office for the smaller voluntary organisations to provide training for board members and, perhaps, to support shared services. Insurance is another example of that. Rather than having to deal with multiple individual problems, we could provide a centrally funded service that would help to take some of the burden of administration and personal burden away from the organisations and help to get a more streamlined delivery coming through. That would be one inexpensive but useful way of supporting the boards.

Many people made the point to us that it is becoming increasingly difficult to get people to go on boards because of that problem, which shows that they take their duties responsibly and seriously. To solve that problem, we will have to take away the underlying problem, which is that there is a risk of reckless trading because the deficits are mushrooming. They are not being taken into account or even being talked about. Then it will come out some day that there is a funding gap and people will ask how that happened but the warning signs have been there for a long time. It is not a new or sudden problem.

I was going to raise the matter of a break, which I am obligated to do, but it seems that we have come to a conclusion. On behalf of the committee, I thank everyone for attending and for sharing their up-to-date position with regard to their own organisations. I also thank the men and women who provide the services, who are not present, and the people they are helping to try to live their best life and to realise their full potential. They do a job that very often goes unremarked and it should be remarked on every day of the week.

I thank Ms O'Meara, Ms Flynn, Dr. Day, Professor Grimson, Mr. O'Regan, Ms Shakespeare, Ms O'Brien and Ms Keogh.

The joint committee adjourned at 12 noon until 9 a.m. on Wednesday, 26 June 2019.