Mr. Hamilton Goulding:

The word "top-ups" suggests that the CRC looked at the HSE levels and said that they were not enough for its employees and that it would add something to them and give them some more. That is not the case. They were never "topped up". It was simply continuing what they had been paid fully by the HSE until these new scales came in. While the HSE had backed out of part-payment of these salaries, the clinic had contracts of employment with these individuals which are legally binding. The board was advised that it could not unilaterally break these contracts without expensive compensation and the risk of legal action in addition to severe disruption of clinical function. The board's view, which was rejected by the HSE at the time, is now supported in the Cregan report by the following statement:

It would be unwise for an Interim Administrator (or a Board of Governors) to unilaterally break existing employee contractual arrangements and, thereby, expose the CRC to significant financial risk. It should be remembered that the cuts in public sector pay required the passing of the FEMPI legislation.

Any legal person will back that up. A recently published article by Professor Michael Doherty from the Department of Law at NUI Maynooth states:

The core of the employment contract is that in general, terms agreed cannot be altered unilaterally by one side to its benefit, or to the detriment of the other. Pay cuts, for example, cannot be simply "imposed" on unwilling employees.

This article goes on to warn the HSE specifically to be cautious about this issue.
The board's decision to continue to pay these long-established contracts is, for example, exactly what the Government or the HSE have done in the case of medical consultants' contracts. They found that while they wanted to reduce these levels, they were unable to do so and had to continue them. Replacements were allowed to come in a newer level but those on the higher level were allowed to stay to the end of their contracts. We are simply following practice that has been done elsewhere. It was agreed at a meeting with the HSE in June 2009 that the clinic would pay the difference from other sources while maintaining the longer-term objective of bringing pay levels into line with the consolidated scales. Salary levels were also reported to the HSE since 2009, as previously denied, unfortunately, but now specified in the Cregan report from 25 May 2012. This problem does not just relate to the CRC, and it is strange that it has been highlighted as such. The director general of the HSE confidently announced last December that by the end of January all section 38 salaries would be brought into line with approved scales. Six months later at this committee, he conceded that there are still 58 employees whose salaries remain in excess. When asked why this was the case, he cited "contracts and legal restraints," which is exactly the problem we have been trying to deal with. There does not seem to be an easy solution for anyone.
However, it seemed to me that within our pay structure, with these high pay levels coming from the boom years, we had an exceptional anomaly, which was the pay level of the chief executive. I took action on that question due to unease about this salary level in the charity sector and brought it to the board hoping to address it in some practical way while respecting contractual constraints. I held talks with Mr. Kiely and an agreement was reached and approved by the board which reduced the enormous contractual liability of €2.08 million by €1.34 million over the next six years. I went home thinking that this was a marvellous success for the clinic. Although it was uncomfortable to have to give such a large payment to one individual, it was a huge step towards conformity with HSE scales. It was, in fact, a normal commercial buy-out of a contract.
I will go through the sources of the CRC's income, which comes largely from the HSE. Some of it comes from voluntary sources. The CRC also generates independent income. From 2004 to 2012, the clinic accumulated revenues of €34.7 million. Breaking that down, €13.12 million came from revenues and activities within the clinic; €19.16 million came from commercial lotteries operated by The Care Trust, which should not be confused by Rehab lotteries; and €2.46 million was in investment income. The last two items are held by F&S, a company whose purpose is to hold funds for capital projects and a reserve against future shortfalls in normal operating costs and State funding reductions. It makes payments on a roughly annual basis to the CRC to cover any deficit and special projects. This money is used to provide additional services to people with disabilities. Every cent of it goes towards those purposes. It included co-funded projects with the HSE, such as those in Waterford Regional hospital, and also with the Department of Education and Skills, such as Scoil Mochua. Without these matching funds raised for the CRC, many of these valuable projects which gave so much aid to disabled people would simply not have happened. The CRC used a small portion of its independent funds to achieve the settlement and associated savings with Mr. Kiely without recourse to either State or voluntary funding.
These past few months have been very difficult for me personally. I can only apologise for any shortcomings or inadequacies on my part in dealing with the issues that so affected staff and clients of the clinic over the past year. Difficult issues confronted us and difficult decisions were made, which the committee may not like. I have, however, a clear conscience that nothing I did or failed to do resulted from any motive other than the best interests of the clinic. I believe this to be true for the other former board members. I still cannot now specify how a better outcome could have been achieved, given the circumstances and options open to us at the time. I am also disappointed that the HSE, in pursuing these issues, forced a position on the CRC board that it now accepts cannot be implemented. It has in the process caused serious damage to public perception of the CRC and to the charity sector in general. I believe the HSE should correct the public record in this regard. I look forward to answering any questions to the best of my ability.