I thank the committee for the invitation to attend this morning's meeting. Much of what I have to say is a reinforcement of what my colleague, Mr. John Dolan, said earlier. I will place a particular focus on people with intellectual disability and their families. The Chairman will be aware that Ireland is almost unique internationally in so far as the voluntary sector provides the substantial majority of services to people with intellectual disability. Up to 85% of such services are provided directly by voluntary organisations on the basis of service level agreements with the HSE, which has statutory responsibility for this area. Voluntary organisations have a long and rich tradition of providing services to people with intellectual disability in Ireland. In some cases, such as Stewart's Hospital and the Daughters of Charity, this form of provision dates back to a time before the foundation of the State. Voluntary organisations are typically an amalgam of members of local communities, parents, friends, people with an intellectual disability and staff who come together with the common objective of responding to local need by providing the best possible support to people with intellectual disability in their communities.
Over the decades, services have developed to the extent that they are now internationally recognised for the range and quality of supports provided. Voluntary organisations are to the fore in promoting quality within services. Following work done by our federation’s quality sub-committee in the 1990s, voluntary organisations took the initiative in developing quality systems. A recent survey of our member organisations confirmed that the majority have achieved international accreditation as high-quality providers of services to people with intellectual disability. A unique characteristic of service provision in Ireland is the high number of organisations which were founded by parents and friends of people with intellectual disability. These organisations, which were established on a voluntary basis, were born out of local communities and therefore have strong ties and affiliations with the communities in which they are embedded. Parents have a strong role in their governance, as evidenced by the number who are members of the respective boards of directors. The parental voice is an essential and valued perspective and the federation is committed to ensuring this voice is heard. To this end, last month we organised comprehensive briefings for parents on the implications of funding cuts and on what we are doing as a sector to manage the cuts and to seek protection from further cuts in the forthcoming budget.
Being closely identified with local communities gives voluntary organisations access to significant voluntary input, which has evolved from fund-raising activities to include befriending programmes, policy development and supporting people with intellectual disability to enjoy meaningful lives. The value of this input, which is obviously provided at no cost to the State, has been conservatively estimated to be approximately €50 million per annum. It has always been the case, within a context of finite resources, that the demand for the services of voluntary organisations has exceeded supply. Therefore, there has always been a focus on the efficient and effective use of the resources available. There has been a constant drive to innovate and to develop newer and better solutions to meet the diverse needs of the people we support. This focus is particularly sharp in the current economic climate. For example, the needs of over 650 school leavers were met this year through the development of a series of innovative solutions in the absence of additional resources. That was the first time that any of us can remember when no resource at all was available to meet the needs of school leavers. That was managed this year. We have fully engaged with the value for money and policy report that was published recently. We carried out a national survey of our membership which confirmed that significant progress has been made, and continues to be made, in implementing the recommendations contained in the report.
I would like to set out the challenges that are facing the voluntary sector at present. Like everybody else in this country, those involved in this sector have faced significant cuts over the past four years. In our case, there has been an aggregate cut of approximately 15% at a time when the demand for services has been increasing rapidly and the changing needs of those already availing of our services have never been greater. Many organisations are struggling to stay afloat and have incurred financial deficits to maintain essential services. The boards of many registered companies limited by guarantee are concerned that they may be breaching the Companies Acts by trading recklessly. Board members are worried about the implications of this for their organisations and for themselves personally. Some organisations are so concerned about this that they are closing services. Responsibility for services at Cregg House in Sligo, for example, was handed back to the HSE because of real concerns about the deficits being encountered.
We are also concerned with regard to the unravelling of much of the progress that has been achieved in recent years in both the quality of the service and the quality of life of the people we support. Given that the sector that was in the vanguard in the context of promoting quality, we are worried now about the diminution of quality within services. In the face of the funding cuts, there is evidence of re-institutionalisation at a time when Government policy is to achieve the opposite. People with intellectual disabilities and their families rightly expect there to be no diminution in either the quantum or quality of the services they receive. Similarly, the political system expects that despite funding cutbacks, essential services will be maintained and that new services will be developed, for example and as in the current year, to meet the needs of school leavers. This situation will also obtain next year and in future years.
The demographic trends in Ireland to which I have already alluded are placing greater demands on services and supports than ever. Waiting lists for services will inevitably lengthen and a population which is growing older will place greater demand on the sector in terms of meeting changing needs. As parents age, their ability to care will diminish. The economic crisis, which is likely to be with us for some years, means that the drive to do more with less resources will continue unabated and the need for us to innovate and do things in a radically different way will remain.
It is imperative that we protect people with intellectual disabilities from any diminution in the quality of or a reduction in services as we struggle to continue to meet all needs with significantly reduced resources. As a voluntary sector, we must at all costs avoid a dumbing down of services which have been so assiduously built up over the years. The sector is fortunate in having staff who are highly committed to the individuals they support. The challenge for us is to achieve an appropriate mix of people who are competent, skilled and possess the right knowledge and expertise to support people with intellectual disabilities to have meaningful lives.
In embracing the challenge by which we will be faced in 2013, we are conscious that there is a limit to what can be done in the context of significantly reduced resources. Many of our organisations are indicating that they have reached the end of the line in terms of their ability not only to maintain existing front-line services but also in the context of even considering the development of new services. In 2012 alone, a cut of 3.7% in funding equated to €33 million. In addition, other budgetary considerations, such as increases in PRSI and VAT and the payment of increments, added €11 million to our costs. Furthermore, the extra resources required in respect of school leavers added a further €10 million to our costs. All of this means that we were obliged to find an additional €54 million in the current year.
I indicate how this was achieved in the material circulated to the committee. We surveyed our members and asked how it should be done. I need not go into detail other than to state that all of the big-ticket efficiency measures which could be taken have been implemented. To use the cliché, we climbed every tree in search of the money. We remain vigilant in the context of trying to achieve further efficiencies. However, we have reached the end of the line in the context of achieving major efficiencies and we are seriously concerned with regard to whether this will lead us in 2013 in the context of front-line services. The consequences for people with intellectual disabilities and their families will be very severe.