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.