Oireachtas Joint and Select Committees
Wednesday, 31 January 2018
Joint Oireachtas Committee on Health
Section 39 Organisations: Discussion
9:00 am
Michael Harty (Clare, Independent)
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This morning the committee will hold two separate sessions, the first of which will be with representatives from the National Federation of Voluntary Bodies, the Disability Federation of Ireland, the Not for Profit Association and the Irish Congress of Trade Unions' health sector committee. In the second session, we will engage with the Department of Health and the HSE. We had invited the Department of Public Expenditure and Reform to attend this second session but it declined to provide officials. The committee is extremely disappointed that the Department of Public Expenditure and Reform has failed to attend this committee. We will invite it again on another occasion.
Alan Kelly (Tipperary, Labour)
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It is a disgrace that the Department of Public Expenditure and Reform has refused the invitation to come here. It obviously did not wish to come before the committee to explain its role. We have spoken in private session and are unanimous as a committee in our requirement for the Department to come before us. The clerk should write to the Department in the strongest terms to tell it that its behaviour is unacceptable. The Department has a huge responsibility - ultimately it is the national paymaster, and we expect its officials to come before the committee, on their own, in the near future. By absenting itself from this process and not explaining its role, it is trying to be a secondary decision maker separate from the HSE and the Department of Health. Its attitude and the manner in which the Department has refused to come here, and without explanation, is completely unacceptable and this committee will not tolerate it.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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In my previous role, I have had experience of dealing with the Department of Public Expenditure and Reform. This is nothing less than a tactic. The Department is clearly material to the resolution of this issue and its decision to withdraw - as I understand it was arranged that the Department's officials would be here - is not acceptable. I want to convey to the witnesses the committee's position that this is not acceptable, and I am sure that the witnesses will agree with us in that. We will insist that the Department of Public Expenditure and Reform comes before us because the Department is central to this matter. As we know, without its signal, the Department of Health is not in a position to move this matter forward. We will write to the Department and let it know our attitude and, hopefully, in the very near future we will have an opportunity to have a meeting with it on its own, when we can put the questions to it that the witnesses here and those they represent will want to have answered.
Bernard Durkan (Kildare North, Fine Gael)
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I agree with the previous speakers. It is important that the Department comes before the committee in order to answer the legitimate questions that the committee has a right to put. Notwithstanding what any outcome might be, this discourtesy of refusing to come before the committee cannot be tolerated.
John Dolan (Independent)
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I raised this matter early last year with the Minister for Public Expenditure and Reform. I said that section 39 organisations are public benefit organisations, as charities they are part of public service. Then they get contracts from the HSE to deliver public services. Other organisations, be they section 38 or the HSE itself, are doing the same work. Responding to me, the Minister said he would anchor this matter into current negotiations. There was no sense in the last week that the Department understands that the matter is anchored. If one moves pay for one group of people who are doing the same work as others, and both are doing it for and on behalf of the State, they are enjoined in this. The Department has to come here and give an account. There is a migration of people who have been trained and who have built up relationships with people with disabilities but they can get a better job. Fair play to them. There is a lot of pressure to get better jobs, but the person who is disabled and the organisation which is trying to meet the commitments that it has to the State in service agreements, to deliver quality services to a standard, are stuck. The person is most stuck and the organisation is enjoined in that. The Department must come in and play its part. I am glad that the Department of Health and the HSE is doing so.
Michael Harty (Clare, Independent)
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We have undertaken to write to the Department of Public Expenditure and Reform and request that its officials attend on a separate session.
I welcome Ms Anne Winslow of the Disability Federation of Ireland, Mr. Brian O'Donnell of the National Federation of Voluntary Bodies and Ms Mo Flynn of the Not for Profit Association. I also welcome Mr. David Joyce from the Irish Congress of Trade Unions, Mr. Paul Bell from SIPTU, Mr. Tony Fitzpatrick from the Irish Nurses and Midwives Organisation, INMO, Ms Catherine Keogh from Fórsa and Mr. Willie Quigley from Unite.
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 that have been submitted to the committee will be published on its website after this 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.
I ask Mr. David Joyce to make his opening statement.
Mr. David Joyce:
On behalf of the Irish Congress of Trade Unions, I thank the Chairman and the committee for the opportunity to present on section 39 organisations and the difficulties which they face. I am joined by members of the health committee of the ICTU whom the Chairman mentioned, along with officials and shop stewards from various organisations in the Gallery.
Mr. Paul Bell will deliver our opening statement.
Mr. Paul Bell:
On behalf of the Irish Congress of Trade Unions, I thank the Chairman and the members of the committee for the invitation to participate in this discussion on issues affecting workers employed in section 39 organisations.
The services provided by section 39 organisations are critical to the functioning of the public health service. They provide hospice services, intellectual disability services, training and education services, and home care services. The members of unions employed in section 39 organisations are all qualified in their fields of expertise to the same standard as their counterparts employed directly by the HSE and those employed in section 38 organisations. Section 39 organisations provide services through service level agreements with the Health Service Executive and the Department of Education and Skills.
Many of these organisations are household names, including the Irish Wheelchair Association, Rehab Group, comprising Rehabcare and the National Learning Network, and Cheshire Homes. The numbers employed in these organisations can range from as few as three to several hundred. We estimate that there are approximately 12,000 full-time equivalents employed in the sector.
Our members employed in section 39 organisations are not public servants. As a result of this, they do not fall within the scope of public sector pay agreements, including the most recent public service stability agreement. However, a significant number of section 39 organisations have established pay linkages with the pay scales in the HSE and wider public service.
In 2010, the HSE formally advised section 39 organisations that the block grant would be cut and that the cut in the grant was to be achieved through cuts in staff salary in line with those applied to public servants under FEMPI legislation. The HSE at that time also confirmed that it would not pay section 39 organisations for incremental progression. As a result of this, the pay of union members in section 39 organisations had the same cuts applied to them as those in the public sector. However, union members in section 39 organisations continued to provide the vital services that so many people relied on.
As members of the committee will be aware, the process of gradually restoring the pay of public servants commenced as part of the Lansdowne Road agreement. Once this process was under way unions with members employed in section 39 organisations submitted claims for the restoration of pay. A small number of section 39 employers commenced restoration in 2017 from their own resources while the majority did not citing inability to pay, as the HSE did not make the appropriate amendments to the block grant it cut in 2010.
In response to the claims submitted by unions the HSE, the Department of Health and the Department of Public Expenditure and Reform continued to maintain that section 39 organisations have no pay linkage to the public service. The HSE advised section 39 organisations that unions in the sector would probably make claims for pay restoration. However, the HSE instructed section 39 organisations that these claims should not be conceded and should be referred to the WRC and Labour Court as appropriate, as outlined in appendix 2.
Unions with members in the section 39 organisations have pursued claims for pay restoration through the WRC and the Labour Court. The Labour Court has issued recommendations supporting the unions claim for pay restoration in at least eight cases. However, the HSE, the Department of Health and the Department of Public Expenditure and Reform have refused to provide the additional funds to allow for the implementation of the Labour Court recommendations. This position is untenable and unacceptable. Furthermore, agreement has been reached under the auspices of the Workplace Relations Commission on increased funding for section 39 organisations from the HSE to provide for increases in pay due to members of unions who provide sleepovers.
It is untenable and unacceptable particularly in light of statements by the Taoiseach in Dáil Éireann that there was an established pay link between section 39 organisations and the wider public service, and in the knowledge that the Oireachtas passed a motion calling for a the issue of pay restoration to be resolved through an agreed process.
The ongoing refusal by the Department of Public Expenditure and Reform, Department of Health and HSE to engage in negotiation or indeed a focused, transparent and dedicated process with the aim of restoring the pay of union members in section 39 organisations has forced one union in the sector to service notice of strike action.
I will now outline the impact on the sector. The apparent unwillingness to restore the pay of union members in section 39 organisations is having a devastating effect on staff morale. Staff, all of whom are professionally qualified, are now starting to vote with their feet and are leaving to take up opportunities to work in section 38 organisations, the HSE or the Department of Education and Skills. Section 38 organisations, the HSE and the Department of Health are in a position to offer higher rates of pay courtesy of pay restoration under the terms of the public service stability agreement. In addition both the HSE and section 38 employers are offering incremental credit in recognition of experience and service. This has also resulted in section 39 organisations increasing their reliance on agency staff which members of the committee will be aware is more expensive than employing staff directly.
The ongoing difficulties are also beginning to impact on those who rely on the education training support and care services provided by section 39 organisations. We have reports that service users are now been subjected to breaks in continuity of care. The committee will be aware that sections 38 and 39 organisations provide 18% of health and social care services that are available as part of public health services. These services could not be directly provided by the HSE without massive investment in additional capacity.
In this submission, we have attempted to summarise the problems faced by union members regarding their pay and the knock-on impact on staff morale. We have also sought to highlight the impact on the people who rely on the services provided by these organisations. While we appreciate that the committee may not be in a position to resolve the issues we have sought to highlight, we hope the information the committee will gather during the course of the morning will allow it to advocate for initiatives that will lead to a satisfactory resolution for all concerned. Ultimately these difficulties can only be resolved if all the parties engage constructively. The unions will not be found wanting if we are presented with the opportunity to do so.
Michael Harty (Clare, Independent)
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I thank Mr. Bell. We will now have the joint opening statement from the section 39 voluntary organisations. I call Mr. O'Donnell.
Mr. Brian O'Donnell:
Clearly, as national representative organisations, we are not political organisations, but we share the committee's disappointment at the non-attendance of representatives from the Department of Public Expenditure and Reform. Our experience in dealing with them has been extremely frustrating and exasperating. We are not surprised at their non-attendance today.
I am grateful for the opportunity to address the committee today on behalf of the thousands of workers in section 39 organisations across Ireland who need the committee's support and intervention to achieve pay equality with their opposite numbers in section 38 organisations and HSE services. I also thank the committee on behalf of the many thousands of people who use the services being run by section 39 organisations, as they too are suffering the effects of this failure by the Government to treat staff equally.
Members have all been extensively briefed on the issue before the committee today. They know that the vast majority of section 39 organisations took the same pay cuts as their section 38 and HSE colleagues, when the FEMPI cuts were imposed. They know that they were left with no choice but to do so, as their block funding was cut on this basis.
Traditionally, section 39-funded organisations had aligned salary scales applicable to all their employees to the Department of Health consolidated salary scales which operate across both the HSE and section 38-funded organisations. All pay cuts to the Department of Health’s consolidated salary scales which arose as a result of implementation of the Financial Emergency Measures in the Public Interest Act 2009 were fully implemented by the majority of section 39 organisations following the collapse of the public finances after 2010. They also complied with the terms of both the Haddington Road and Lansdowne Road agreements.
Now pay is being restored to HSE and section 38 workers but there has been indifference so far to the pleas being made by section 39 organisations and their workers for equality and fairness. One of the arguments being used by the Department of Public Expenditure and Reform to defend its refusal to fund pay restoration is that our workers are not public servants. This is true, but let me clear up something. We are not looking to be added to the public service numbers. We are not asking to be made section 38 organisations. We are asking for fairness and equality and to be funded in order to restore pay to our workers.
This funding is essential to delivering the service because our staff are essential to delivering the service. We provide services on behalf of the State on the basis of the annual service arrangement with the HSE, and we are all required, similar to section 38 organisations, to sign the annual compliance statements. As employers, we are engaging in processes in the Workplace Relations Commission and in the Labour Court. We do not resist this process but if we are told to restore these payments, we simply cannot do so without funding.
This unacceptable position has given rise to a number of serious concerns for section 39 organisations as follows. A significant pay gap has now opened up. Staff employed by section 39 organisations are now being paid circa 10% less than colleagues on similar grades employed by section 38 organisations. Section 39 organisations are experiencing serious difficulties in recruiting and retaining staff who are critical to the provision of essential services. It is the people using the services who are suffering most. Staff employed by section 39 organisations have been balloted for industrial action by their trade union, SIPTU, as already mentioned. They have voted overwhelmingly for strike action. If this goes ahead, it will have very serious implications for the people who use our services, especially those in residential services. There is now a very high attrition rate among social care workers employed by section 39 organisations, which is leading to a concerning diminution in both the quantum and quality of services provided, leading to stress and anxiety in the people who avail of services and their families. We are also very concerned that despite the level of political support we have received for the case we are making, there has been no satisfactory response from the Department of Public Expenditure and Reform. We had hoped with its attendance today that we would receive some words of comfort. That is clearly not going to happen now.
We appreciate the opportunity to set out our case for support to the committee today. Our organisations and others in the health care sector have been lobbying for the restoration of funding which is necessary if we are to deliver services on behalf of the State for its most vulnerable citizens. I hope we will finally be heard. I do not need to remind the committee that the organisations we represent provide vital services for the State. Historically, we have stepped in when the State was either unwilling or unable to do so. During the recession, we took on more services at the request of the State during the moratorium on recruitment. We are not-for-profit organisations, operating independently but reliant on the State for funding. We are asking for fairness and for acknowledgement that the work we do is the same as our colleagues in the public service and should be equally funded. Without this funding, our services will be put at risk and the people who use our services will equally be put at risk.
Alan Kelly (Tipperary, Labour)
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I thank the witnesses for coming in. In fairness, the way in which they have battled with such great dignity is a credit to them. There is much political support across the board for this plight. We are seeing that ultimately the paymaster is deliberately not engaging. We have see the greatest example of it here today. Colleagues should remember that we are being watched at this committee by the Departments of Health, Public Expenditure and Reform and the Taoiseach. They are watching this to see how to judge the political pendulum. It is the reality and it should be borne in mind as the cameras focus on us. They need to get a clear message based on the information and evidence that will be given today on the matter they will face very soon. It is my objective to get that from the comments today.
We all know the history of this, going back to 2010, and there is no need to go through all of it. We are all very well aware of it. The organisations have engaged by going through the Labour Court and Labour Relations Commission on sleepovers etc. Is it the absolute belief of the witnesses that the principal blockage is the Department of Public Expenditure and Reform, as it relates to the Department of Health and the HSE? Do the witnesses believe strands relate to the HSE and the Department of Health? A second question relates to the impact this has on service provision. Will the witnesses describe this as it relates to recruitment and retention of workers? How will this multiply as an issue in the coming weeks and months if this continues? What impact will that have on service provision in terms of quantity and quality?
There is also the matter of cost. The Department of Public Expenditure and Reform has reneged on its responsibilities and jumped from this equation. In this scenario, agency staff have to be brought in. The Department that is supposed to look after public expenditure and the taxpayer would want to keep an eye on this. With the overuse of agency staff, will the witnesses outline what they estimate is the extra cost that arises from the Department's failure to deal with the matter? There are costs on the other side that make the argument even stronger. A strike is inevitable unless the Department of Public Expenditure and Reform engages on this. Will the witnesses outline to the committee, the watching public and the three Departments I mentioned, as well as the HSE, the consequences of a strike? This would give the Department a measure of the impact of its non-engagement.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I welcome the statement from the representatives of the federation and other bodies that they do not resist the process with third parties, because there certainly was a time when they did. This is a very welcome development. It seems a bit odd that it happened when the workers were trying to resist cuts.
I have questions for both parties. We know the industrial action by workers is due to kick off on St. Valentine's Day, 14 February. Will the representatives outline what efforts are currently being made to avert that and at which stage are the negotiations? What is the level of involvement or interest from the Department of Public Expenditure and Reform? The Department has sent a very loud message this morning through its non-attendance. Is it involved, either peripherally or otherwise, in the negotiations? Has it any influence? What is the state of play in that regard? Last night on the radio I heard a process was under way and a deal was offered of some form. My understanding is it is not acceptable to all the parties involved.
If we are to be of any assistance at all, we need to understand the state of play. My question on the cost is for both parties and concerns the Department of Public Expenditure and Reform. I find this matter quite ironic because some or most of the delegates may know that when the pay cuts were initiated, I was representing the people at the business end of those cuts. The Department and paymasters were very clear about the need to cut the pay. If they were very clear about the need to cut the pay, they would have been very clear about the money they would be saving in the national interest or whatever other interest required them to take money from people earning a wage pretty close to the minimum wage. Will the delegates give us some sense of the cost? They might tier it for us. Clearly, there will be ongoing costs. There is now a restitution process. We must bear in mind the money required for pay to catch up with that of public service colleagues in addition to money required to fund this in the future. We need to hear confirmation that, if the dispute is settled, the money will find its way to where it is required. We realise there are considerable pressures on the service. In the event that some of money becomes available, pressure will be exerted to have it devoted directly to service delivery. We can fully understand that pressure. Are the delegates in a position to confirm to us that money made available through the pay restitution process, irrespective of how this comes about, will be made available to the workers in the first instance? I understand it is a very hard decision to make. Clearly, we are here to discuss an industrial relations matter and an industrial relations dispute.
Will the delegates outline whether they have to use agency staff to plug the gaps? In the HSE, agency staff are being used. Agency staff are not good value for money. The Minister for Health agreed with me when I said that on a number of occasions. How is the pressure that is being exerted manifesting itself? Do the delegates believe that, if the recruitment and retention crises continue or deepen, they may find themselves in circumstances in which they have to rely on agency staff?
My last question is for the representatives from the various federations and organisations. The finance reform programme of the Department of Public Expenditure and Reform is under way in some shape or form. Will the representatives bring us up to speed on it?
Michael Harty (Clare, Independent)
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When responding, the delegates might comment on my following point. The voluntary organisations, the section 39 organisations, are the meat in the sandwich here. They are committed to providing the services and delivering, on behalf of the HSE, services that are essential, yet they have, on the one hand, pay demands from the unions to which they must respond and, on the other, a lack of funding from the Department of Health via the Department of Public Expenditure and Reform. Perhaps the delegates will comment on how they feel about that. They may begin by answering Deputy Kelly's questions first. I am not sure who wants to lead off.
Mr. Brian O'Donnell:
I will take the first one. The first question, asked by Deputy Kelly, was whether it was our belief that the blockage is at the level of the Department of Public Expenditure and Reform. That is our experience. We have engaged extensively with the HSE as it is our funder. The HSE, from the get-go, has consistently held the position that provision for pay restoration for section 39 organisations was not included in the overall HSE allocation at the start of the year. The HSE is sympathetic, or, to use its term, not unsympathetic on the issue but it has not been funded by the Department of Public Expenditure and Reform to deal with this. That has been the consistent message. We had been encouraged to engage through the industrial relations machinery available to the State.
Alan Kelly (Tipperary, Labour)
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Has Mr. O'Donnell seen evidence of the Department of Health writing to the Department of Public Expenditure and Reform outlining its sympathy?
Mr. Brian O'Donnell:
No, I have not. The only thing we have is a recorded message by Mr. Tony O'Brien, the director general of the HSE, saying he and the HSE are not unsympathetic regarding the situation but that it has not been funded.
On the second question regarding the impact and scale, Senator Dolan and Mr. Bell have already alluded to the significant attrition rate owing to the debacle over section 39 organisations. We estimate a rate of attrition of 17% in the intellectual disability sector. This significantly affects its ability to provide essential services.
I was asked about the outlook. In the absence of a resolution to this issue, it is only going to get worse. Senator Dolan alluded to the fact that there is a natural progression in that if one can find similar employment in an organisation that offers better terms and conditions, it is only natural to be attracted to it. In the absence of any action on this, I can only see the circumstances becoming much worse. Ultimately, the main concern for everyone in the room is people with disabilities and their families. They will feel the effects considerably. That is a matter of distress and upset to everybody concerned.
Ms Anne Winslow:
I wish to add to the comments on the second question. There is an impact on staff also because there is quite a changeover and there are attrition issues. People are being trained and then let go. This has a significant impact on staff and their ability to work in an environment that complies with all the regulations and standards that are required and desired by people on whose behalf we are working, namely, people living with disabilities. There are more issues coming down the line. We all want to use the Assisted Decision-Making (Capacity) Act and the various provisions for the betterment of people living with disabilities, but this clearly has an impact across the staff teams in terms of their being able to deliver a quality service, stay motivated and retain a sense of well-being.
Ms Mo Flynn:
On the impact on service provision, I would like to outline just two scenarios. The first concerns the impact on one of our care workers' earnings. Those who started in any of our organisations after May 2012 are now operating according to a 90% scale because of the lack of restoration in regard to the Haddington Road pay scales. We have received no funding to restore the scale to 100%. An individual operating on the first point of the scale is currently earning €120 per month less than someone doing the same job in a section 38 agency or in HSE employment. With the implementation in 2018 of the next two provisions with regard to Lansdowne Road pay restoration, the differential that will occur during the year will rise to €140 per month. That obviously has a very significant impact. As one goes higher up the scale, the impact becomes greater.
The money concerned is a huge amount for an individual on a relatively low starting salary. What is occurring is an incentive to move to another employer. Ultimately, it affects people with disabilities, and it does so in two very key areas. First, as Mr. O'Donnell stated, staff turnover is very high. This is directly related to pay, reduced pay scales for new entrants applied under the Haddington Road agreement, and the decision of the HSE not to pay the increases under the Lansdowne Road agreement. Since 2012, Rehab has hired 1,167 employees but 40% of them have now left the organisation. Each year, between 15% and 17% of our staff leave, mostly in year one or year two of their service. Continuity and familiarity are so important when delivering support services to people with disabilities, particularly those with high-support needs.
Throughout all our organisations, we are in the unsustainable position of going to the expense of hiring employees because, obviously, each person who has left needs to be replaced. The organisation incurs the costs involved with recruiting and training them and then loses them to a section 38 body or HSE service in the same region and sometimes in the same town, all of which are now funded to pay those individuals more.
The real impact of these cuts and the lack of pay restoration can be seen in the areas of continuity of service provision and the incredible isolation. Many of the people with whom we work have profound disabilities and have considerable difficulty in communicating. As an example, with individuals whose only method of communication is non-verbal either through their eyes or facial movement, it can be begun to be comprehended how long it takes a staff member to build a relationship with somebody whereby they can both communicate and that staff member understands his or her needs. If that staff member changes five times a year, can the committee members imagine the isolation felt by that individual with a disability who goes into a world of silence again because he or she is unable to communicate his or her needs because somebody new has to learn this? That is the reality. We can talk in abstract terms about figures but we see how people's lives are impacted. This is not about us ignoring the needs of people with disabilities in favour of workers getting more pay. This is about a recognition that we have skilled professional people who are required to bring their skills to empower and support those people with disabilities to live good occupied lives that they themselves determine, but if they cannot communicate because we do not have the skills and the people to engage with them, we are in a very difficult situation. Sometimes in these discussions we can lose sight of the very human element of this. In reality, this is what this means if this does not happen and there is that constant changeover of staff and the training costs incurred.
The Deputy asked about costs. Within the not-for-profit organisations, which represent the largest groups of employees who are affected by this, we estimate that the cost to 2018 will be €13 million. Obviously, that is rising with each year.
Alan Kelly (Tipperary, Labour)
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Breaking down that €13 million, it is-----
Alan Kelly (Tipperary, Labour)
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Does Ms Flynn have a figure for-----
Alan Kelly (Tipperary, Labour)
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It would be helpful if collectively we could get a figure because it throws the Department of Public Expenditure and Reform's argument out the window.
Alan Kelly (Tipperary, Labour)
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That is incredible.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I apologise for the interruption but this is important. Will Ms Flynn tells us how the €2 million fits as a percentage of her organisation's pay bill and whether it is increasing, which is probably the more pertinent point?
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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That is quite a jump.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Perhaps Ms Flynn might be able to provide us with that figure because it would be helpful. We know it will vary from organisation to organisation but even an idea or projection of it for the whole sector might be helpful because as an indication, €700,000 to €2 million over three years is quite a jump.
Ms Mo Flynn:
We might also try to give the Deputy an indication of the cost associated with providing the mandatory training for all of these individuals who come in because with the 40% turnover, those costs are involved plus recruitment, obviously, so they are all associated costs. Often they are hidden costs but they all drive the cost associated with the lack of pay restoration.
Michael Harty (Clare, Independent)
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Ms Flynn said the organisation is spending €2 million on agency costs and there is a premium of 20% on an agency payment, so €400,000 per €2 million would be the premium on those agency staff.
Michael Harty (Clare, Independent)
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However, 20% would be €400,000.
Michael Harty (Clare, Independent)
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Plus training plus-----
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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That would be a saving of 20% if they were directly employed straight away.
Michael Harty (Clare, Independent)
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How much in relative terms would those additional costs on training and recruitment come to?
Michael Harty (Clare, Independent)
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So that saving of 20% premium plus the savings and costs could be money spent on the delivery of services?
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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It is a good value for money argument which we would love to be able to make to the Department of Public Expenditure and Reform if it was here.
Ms Mo Flynn:
The Deputy asked a question about the issue of a voluntary organisation being the meat in the sandwich. I think it is a very pertinent request. It has been like that. We have found ourselves in the very unusual position of having to go the WRC on the instructions, it must be said, of the HSE which told us that it would only give consideration to our claims for additional funding if we proceeded through the industrial relations mechanisms and received directions to pay. It is a very unusual position because we fully recognise the rights of our employees to pay restoration. To go back to Deputy O'Reilly's point, in the event that pay restoration is received, we are fully committed to passing it on to the employees concerned. Certainly my organisation recognises that in respect of some employees, we will have to find the money from our resources to pay them because they might not be covered by HSE funding or such like. We are fully committed to doing that. It is a very unusual place to find oneself as an employer but it is not one where we have found that we are arguing against the position being put forward because we think it is correct. However, being unable to comply with the requirements because we are unable to meet the costs is a very difficult place in terms of our negotiation and relationship with the HSE in terms of our service arrangements. We are carrying deficits to meet those costs so it leads to considerable pressure from both sides.
Mr. Paul Bell:
Regarding Deputy Kelly's questions, the first thing to say is that thousands of service users, their families and our members are following these proceedings. This is most important because we want to show that a transparent process is taking place and people can understand that they are not forgotten. Regarding the description of what is happening with employee turnover, pay, the challenges and the knock-on negative impact on the service user, there is not much we could add to that except to say that our members also feel that somewhere along the line, they are in that sandwich and are being ground down every day in terms of whether they remain loyal to their client and organisation or whether their loyalty will be pulled to look after their family by using their qualifications and going somewhere else. That is what is happening and that is the kernel of this problem. Some of our members are saying they feel somewhat ashamed when they move from their organisation. They are literally working in people's homes. They are in a community setting. They know the clients and their families or guardians. That is the kind of commitment we see. As everybody in this room knows, to sign up to work in such a service is a difficult decision. One needs to be a very special person to do that.
The question was posed as to the bloc, the Department of Public Expenditure and Reform, the Department of Health and the Health Service Executive. I think there is a scale of blame for each organisation. The Health Service Executive, in considering its service plan for 2018, as I understand it, made an application to the Department of Health for a heading that would deal with anticipated pay movements to the sum of €68 million. We understand that €68 million is not for our members, but that some of that money could be used to commence pay restoration. In fairness, Ms Mo Flynn made it quite clear that approximately €13 million would kick this process off. We understood it was around €12 million on the basis of the number of whole-time equivalents who are entitled to pay restoration. The HSE was unsuccessful in that regard. We do not know the reason. We question that judgment. There are probably other organisations, with members and staff providing public services, which would have expected to be in that particular funding pot had that been granted. If those moneys had been granted, that would have given confidence not only to our members but "the industry", for the want of a better terms, that a process of dialogue could commence.
There is a notion being put around that to restore any moneys will be a complex process. We want to put on record today that if one looks at appendix A of the submission from the Irish Congress of Trade Unions, it was not such a complex process to butcher the wages of our members and they did that unilaterally on the direction of the Health Service Executive. That has to be taken into consideration because our members are not confident about the bona fides of the Departments of Health and Public Expenditure and Reform or the Health Service Executive. We must remember also the Health Service Executive and the Department of Health are at pains to say that these organisations are stand alone organisations, that the staff who work for them are not public servants, however, in evidence today, members will see that the Health Service Executive continues to give direction and instruction to these organisations. One will see that also in appendices B and C, whereby the employer has been instructed by the HSE to proceed to the Workplace Relations Commission, WRC, and to proceed to the Labour Court in order that there will be a civilised approach to addressing a dispute and for the outcome of the Labour Court to be honoured. In some cases, section 39 organisations, which wish to prevent our members from leaving and going elsewhere, have from their own resources paid some moneys. In some cases, they have been chastised by the HSE for doing that, because it is breaking away from the party line. I believe the Department of Public Expenditure and Reform is responsible for this, the Department of Health has a role in it and the Health Service Executive has some accountability, because at the end of the day, the services are coming back to the Health Service Executive by default.
To lead into my response to the question put by Deputy Louise O'Reilly about a process, let us be very clear, SIPTU, in particular, has commenced balloting for strike action on the basis that we have eight labour court recommendation, processes entered into at the direction of the Health Service Executive. We expect Labour Court recommendations to be honoured. The greater economy, employees in other organisations, be they private, retail or otherwise, expect labour recommendations to be honoured. I suggest that the members of both Houses of the Oireachtas expect Labour Court recommendations to be honoured.
In direct response to Deputy Louise O'Reilly, we have not been offered a viable process to address those issues. SIPTU, INMO and I understand Unite have Labour Court recommendations that we need implemented. The communications from the Department of Health and the Health Service Executive are indicating a number of things. We will have a process where we will talk the whole thing to death but we will not come to a conclusion. For the record, the process that SIPTU seeks is to have discussions with a beginning, a middle and an end and is to be transparent and with integrity. A confidence building measure has to be that we get into a process where there is an understanding that the Labour Court recommendations are key.
A final point that has also been made in some of these utterances from the Department of Public Expenditure and Reform, the Department of Health and HSE is that these cuts did not have to be passed on to staff members. We absolutely reject that. They instructed that this would happen. We are left in this position in trying to defend our membership, the people who work in the service, protect the service and, most importantly, protect the service in communities. We look forward to generating a process that would basically satisfy the needs of all parties but it has to be viable and that is why we are in the very difficult position where we are saying that on 14 February, our members will be forced into a strike position which is absolutely unprecedented and which is causing a high level of anxiety among our union membership because of the people they serve. In fact, in some cases, we will have to agree contingency terms that it will be difficult to understand what kind of action we can actually take.
If there are any points I have missed, Chairman, I will have no difficulty in clarifying them.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Can the witnesses confirm for the record, and I know it because I was there at the time, that it was an instruction effectively that pay would be cut, exactly as Mr. Bell outlined? Will they confirm that it was an instruction that did not leave the witnesses in any doubt that there was anything else they could do and that it was not just an implicit but an explicit instruction?
Ms Mo Flynn:
I think we can confirm clearly that all of us received individual letters from every HSE office in the country, which specified and quite clearly categorised the requirement with the imposition of the cuts in terms of public sector workers and our requirement to carry out the same with regard to our employees.
It is interesting that in the 2000s, when we were going through the benchmarking experience, all our organisations were equally engaged in benchmarking and were considered to be in the same line as public servants without being public servants and went through that process and the verification process.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Absolutely, some more willing than others, Ms Flynn. It was done.
Ms Mo Flynn:
It was done and it was followed through. What we have here is a history over 15 years, where it has been very evident of the association between our employees and the public sector pay. It is disingenuous of the State to try to imply that there is no association between those employees in section 39 organisations and public employees, because it is clearly incorrect.
Michael Harty (Clare, Independent)
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I will allow one comment from Mr. Tony Fitzpatrick. Then we will move on to our next contributors.
Mr. Tony Fitzpatrick:
I thank the Chairman. The Irish Nurses and Midwives Organisation thanks the committee for taking an interest in this issue. I will be brief. Obviously, our members working within the services, and there are various section 39 organisations, are extremely troubled at what is going on. They are aware of their colleagues in SIPTU who have balloted. Indeed, the INMO has been involved in numerous third party processes, whether in the Workplace Relations Commission, the Labour Court or with our colleagues in other unions.
We talk about waste in this regard. Our estimation is that there is a 33% premium for agency staff vis-à-visdirectly employed staff members.A staff nurse on the first point of the pay scale costs €30,000, in contrast to the cost of €40,000 for the same nurse via agency. It is a blatant waste of money.
Mr. Paul Bell referred to the public health service's reliance on sections 39 and 38 organisations. It is also the case that in the independent and assisted living sector, 70% of the services are provided by section 38 and 39 organisations, so this will have a major impact in that area.
There is a major problem around recruitment and retention for nursing and midwifery roles in the public service currently. Section 39 organisations cannot compete, and their staffing shortages will be exacerbated. That will ensure that service provision is adversely affected. We are all approaching this from the point of view that there are service users who require this service. It is a service without which they cannot live. Staff members are deeply invested in the process and in their clients. They want to provide quality care, but that has been impeded by the issues we have discussed.
With regard to the estimates and the costs, we can share the Labour Court recommendations with the committee. We contend that the HSE's insistence that section 39 workers go through the Workplace Relations Commission, WRC, the Labour Court, etc., is a waste of their time, because it has acknowledged the difficulties facing the section 39 agencies. It acknowledges that there is pay parity and pay relativity and, as Mr. Bell has said, it is calling on the parties to engage in the process to try to resolve these issues.
It is important that the committee is aware of the pressure coming from our members. Let us be clear. Our members, nurses working within this sector, do not want to have to engage in industrial action to pursue this issue, but they are now left with no option. Next Monday and Tuesday, our executive will have to consider requests from the service to ballot for industrial action. That is very regrettable, but it is the reality of the situation.
Industrial action is due to begin on 14 February. It is likely that other unions, given their members' angst around issue, will have to respond. It is important that the committee is aware that there will be further angst in this area. It is very important that this is recognised.
The majority of the questions raised have been answered. There is a major problem with recruitment and retention in the sector, as there is in nursing and the public service. As Mr. Bell said, there is a scale of blame. There is no doubt that in 2010 the HSE instructed these organisations to cut pay. Then, when the time for pay restoration came, the HSE chose to put the unions through the industrial relations machinery of the State, namely, the WRC and the Labour Court. This was disingenuous because they did not have the money to pay and, therefore, they were not in the room. We record our disappointment that the Department of Public Expenditure and Reform is not represented here today. The committee has already covered that, and we agree with all the comments that members have made on that point.
John Dolan (Independent)
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I must say at the outset that it is ironic that we are having this discussion today. There was decision in the Cabinet yesterday to ratify the UN Convention on the Rights of Persons with Disabilities. We have had lots of similar news stories for several years. The Government made a decision that the convention is to be ratified in the next several weeks or the next month, and the committee is discussing something with two aspects.
The first aspect concerns what happened eight, nine or ten years ago. If one is asked to take 5%, 6% or 7% off a budget, and staffing accounts for 80% of one's budget, one cannot say the saving will not come from staff. It cannot come from anywhere else.
We are in this room for one reason. We are all interested and enjoined in the provision of a public service, regardless of the governance of the entities that provide it. I have heard the angst experienced by those caring for people who have conditions expressed very strongly by Ms Mo Flynn and Mr. Paul Bell . They are close to the patients and their families. I respect that, and I appreciate it being put to the committee.
We do not have people with disabilities in the room. We have heard representatives of organisations on both sides strongly contend that persons with disabilities are the focal point of this issue. It is worth remembering that this is about real people, people who have difficult lives quite apart from the services they require.
I have a few questions. What happens? There seems to be a go-slow on this issue, one that is being expressed in different ways. The organisations represented here are told to trot off to the Workplace Relations Commission. Meanwhile, the entities that actually control the money bag have not been turning up. It is decided that the process must be undergone, so those involved dance around it. That has been going on for a year or more, probably for longer.
I have a question for the organisations represented here. In this arrangement contracts are signed, stipulating that in exchange for X, their members must do Y for Z people, and the service must be up to a certain standard. The Health Information and Quality Authority, HIQA, is rightly scrutinising performance. What happens if the providers cannot deliver the service? It strikes me that this cannot be fudged. There are standards. The service providers will have to say that they cannot do this anymore. If that is true, what happens then? I would like someone to explain that to me. What happens in the context of the obligation of the State to continue to provide the service to those people?
This issue is a continuation of pay cuts in 2009, 2010, 2011 and so on. There were organisations that were funded under sections 39 and 38 before that, however. What is different? How were things managed prior to that? I know that was the era of the social partnership. This certainly did not seem to be the hot and fraught topic that it now is.
Colm Burke (Fine Gael)
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I thank all the organisations which are working in this area. There is a huge commitment by staff. In many cases it is quite a demanding job, and it is important that we recognise that.
Many of the issues I want to raise have already been raised. My question concerns the operations of the HSE. Last year it took me six months to establish that the HSE had taken on an additional 2,000 administration and managerial staff from December 2014 to April 2017. I have made a very conservative calculation of the cost of that. It equates to approximately €80 million. At any stage from 2013 onwards, was any suggestion of a pro rata increase made by the unions to the HSE? I have no difficulty with increasing administration staff numbers. I am talking about an increase in administration staff numbers from 15,000 to 17,000. Were there any discussions, at any time, of a pro rata increase in administrative staff at the same time that people in section 39 organisations would get their increase?
No one has given me the answer as to who authorised the additional 2,000 administration and management staff, while those at the coal face - I mean section 39 workers - were left without any consideration been given to having their pay restored. This goes back to the HSE, the Department of Health and the Department of Public Expenditure and Reform. Was it ever raised in the discussions? Some 2,000 staff did not suddenly appear overnight, rather it happened over a period. The argument used by the HSE was related to restoring the same staff levels as in 2010, but that does not take into account the fact that Tusla was established and took staff from the HSE. The figure of €80 million is very conservative for the additional staff employed. Whether we could have had pro rataincreases, we could have had an increase in administration and management staff and still looked after the section 39 organisations, albeit not to the same scale.
Many organisations have told me about the turnover of staff that is a consequence of changing circumstances. The situation where there are more jobs available than people cuts across various sectors outside health care. Is something else required in addition to pay increases in order to retain staff? It is a very demanding job. I raised this issue in private session as it pertained to another area. The work done by section 39 organisations is very demanding and can be extremely stressful because of this. Should we look at other issues to provide staff with support, in addition to pay restoration? That would allow continuity and provide for the delivery of services without staff only staying for six, 12 or 18 months before moving on. I accept what the delegates have said that if there were better conditions in a section 38 organisation or the HSE, people would not move, but are there other issues we should consider also? I recognise that the principal issue is pay, but there may be other matters that should be considered. Some 12,000 people were referred to. They make a huge commitment. I have seen the work these organisations do and the demands put on them. The increase in staff employed in back offices but not on the front line is an important issue. Has it been raised? Will we continue to see a similar increase in administration and management staff without looking after those who work in section 39 organisations?
Billy Kelleher (Cork North Central, Fianna Fail)
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I apologise for not being here earlier. I had something else on and was unable to get out of in time.
As my party's spokesperson on health, if I ever visit a constituency or I am invited by another Deputy, I invariably end up in a section 39 organisation in some part of the country to see at first hand the wonderful work being done, the service being provided, the interaction between clients, staff and the broader community, the voluntary aspect, the level of fiduciary oversight and so on. They are not platitudes; it is the reality which indicates the importance of section 39 organisations which are embedded in communities in which they provide a service. To an extent, the State plays hardball with them, knowing that they are a soft target because of their commitment to provide a service. We see a strong bond between the organisation, the employees, the clients and the community. I have seen cases in which, for instance, HIQA which has an oversight role in adhering to standards and guidelines frequently visits organisations and might point to deficiencies in staffing numbers, which creates great stress for the organisations and their clients because they do not have the resources to comply with the guidelines and are not being supported sufficiently by the HSE. This happens to the point where there have to be voluntary efforts, fundraising and so on, not just to meet capital costs but also often current expenditure. This applies to organisations which are providing services which should be provided by the State.
For all of these reasons, it is distasteful that we have allowed ourselves to get to where we are. Look at what is being done in section 38 organisations and the challenges in trying to recruit or retain staff. If we do not get to a situation where there will be parity between the public service and section 38 and 39 organisations, there will only be short-term, transient staff who will come and move on again. That is wrong for the staff and, equally and critically, the service and those who depend on it. It relates to the HSE, but I cannot let the Government escape from its responsibility as it is primarily a Government decision that is needed to enable the HSE to start to unwind the cuts and restore parity.
The delgates have noted that there have been many Labour Court recommendations. The Department of Public Expenditure and Reform, the Department of Health and the HSE will refer to the complexities in analysing the unwinding of the pay cuts and state they are unsure what the cost will be. Will they expand on this and unwind the myth because in almost every document I have read from the Department of Health, the Department of Public Expenditure and Reform and the HSE it has been stated this is a key issue because of increments. Will they explain if that is because of requests for back pay or why is it being raised as an issue? Is it really an issue? If so, can we address it and, if not, why is it consistently being raised?
Representatives of HIQA has been before the committee on many occasions. HIQA has a very significant and important oversight role, but how can the State or we, as a Parliament, allow a situation to continue where there is a regulatory body which is charged with undertaking various responsibilities and outlines to section 38 or section 39 organisations that there are deficiencies in the service provided and the funder, namely, the HSE, turns a blind eye and states it is not its responsibility whatever? Section 39 organisations cannot pull the service from vulnerable persons and put them out on the road, but HIQA is forcing them into very difficult positions in terms of the level of fiduciary oversight. They are being forced to cut corners and try to get around standards because they are not being provided with the necessary funding. It comes back to my belief the HSE and the Department know that the people who work in these organisations will do extraordinary things to try to deliver a service to their clients. It is a huge breach. It is also happening in the home help service. Half an hour for a person living in a house on a mountainside in west Cork is not much good because the HSE knows that the home help will stay there for an hour. It is taking advantage of the strong empathy and bond between the service providers, the employees and the clients.
Has there been an assessment made of the cost of unwinding the pay cuts? Is an element of back pay included? What have the Labour Court's recommendations been in this context?
We are under a little bit of time pressure so the representatives from the HSE and from the Department will be here in a few minutes. We have ten to 15 minutes.
Ms Anne Winslow:
I would like to pick up on what will happen. Deputy Kelleher and Senator Dolan made some points on section 39 being seen almost as a soft option. The sector brings a huge amount of added value in various ways, through fundraising, through extra voluntary time and through the huge commitment out there in the community. This impacts on community services that we believe in, and which are so critical to enabling families and people with disabilities who live at home. Those services are often unseen; it may be half an hour or one hour in the home. In keeping with Senator Dolan's point, if we withdrew those services or the organisations withdrew, there would be a huge direct impact on people with disabilities and on the employees. In some cases the HSE would come in and fund the services because they would be very visible, especially in residential situations. The HSE would pay the pay that is required and bring the terms and conditions. In some instances it would be a huge loss and impact on families. Yet again it would be the most vulnerable who would be impacted.
Mr. Paul Bell:
I will address some of the points made by Senator Burke around the recruitment of managerial, clerical and administration office staff within the HSE. There are never any conversations on trading off. I want to be very clear that this is a conversation we would not be having. Anybody who is hired in the health service, at no matter what grade, is deemed to be necessary to the functioning of the services. Also, it is sometimes forgotten that many of these staff would have worked as agency staff and have been converted. The taxpayer is getting good value for money in that regard.
Colm Burke (Fine Gael)
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Is the figure 2,000?
Mr. Paul Bell:
I did not say 2,000. Over recent years there were serious staffing cuts as part of FEMPI and this is very hard to recover. Sometimes it is very easy to say that if we did not have one group of staff we could pay another group of staff. That is certainly not the conversation we have been having nor is it one we would encourage. We do not believe that employers - be they the Health Service Executive, a section 38 organisation or a 39 organisation - hire people they do not need.
A good point was made on the process of the Workplace Relations Commission and the Labour Court. We would have seen that for what it is. We believe it is an abuse of process and that we are being funnelled into this process on the basis that it will occupy a group for a period - be it the employer or the unions. We say it is an abuse of process because the Health Service Executive, obviously having discussions with the Department of Health and with the Department of Public Expenditure and Reform, would have adopted that strategy. The problem is that at the end of that process parties are expected to abide by the result. I understand that in one of the Labour Court recommendations it made very clear its frustration at continually hearing the same case from different organisations.
Deputy Kelleher made reference to the softness of the sector. This softness is well acknowledged. Our members are extremely anxious about the fact that they are in this space. The staff members, not alone the organisations, have the feeling that they are basically being taken advantage of. When it comes to the crunch or if a dispute goes ahead there will be no big fallout or big issue. The Government does not understand that the goodwill of our members has literally been sucked dry and is no longer there. Members have a choice now in whether to leave the employment or stand and fight for the service and for their families. Deputy Kelleher knows of many such people in Cork and he is supportive of many such organisations in that area.
The issue of complexity was raised. If officials from the Department of Public Expenditure and Reform spoke with me today - which is not going to be possible, not even possible for the members - I would explain to them there is no complexity. The Department had no issue with complexity when it issued the letter via the Health Service Executive in 2010, appendix A of the Irish Congress of Trade Unions submission to the committee. This correspondence blatantly outlined the list of organisations and the actions the organisations were to take in order to reduce numbers. Some organisations may have done various things, but with due respect to all Government Departments, they knew this was coming and they had from mid-2017 to start the process, if they were in earnest. This is why there is no trust in the so-called "process" that is being floated. It would become a neverending story for our members. There would be no supervision of the process, no confidence in it and no beginning, middle or end.
Our members mentioned in the Labour Court recommendations believe that they have gone through a process and that the wisdom of the Labour Court has said: "Yes, there are moneys owed there". If there are difficulties in providing money, which there are, that is the kind of engagement to be had at local level, for example asking if the cost is too high and if organisations can afford to pay retrospectively. The union has been very clear that if these are the issues then we would have conversations about phased payments to let the budget catch up. We have always said that.
This is as honest I can be about the issue. We do understand that this needs to be moved on. People make things complex when they do not wish to resolve them. Appendix A of the submission points out how uncomplicated that communication was from the Health Service Executive at the beginning of the situation in 2010.
Colm Burke (Fine Gael)
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Can I come back on this as I think it is important? There was a sudden increase of 2,000 people who were not front-line staff, whether or not they were agency staff. I have raised with the Minister and the Department the lack of accountability in this regard. It is a pity that the same pro rataincrease was not provided in section 39 staff when it could have been. Probably some 300 or 400 fewer staff would have been recruited in administration.
Ms Catherine Keogh:
Senator Burke asked whether something else needed to be looked at. Today we are at the committee mainly to discuss pay restoration but when we fix that particular problem the other issue the unions need to address is long-term sustainable funding for the section 39 organisations.
I was very privileged to attend a confirmation mass in St. Michael's House last week. It is a section 38 organisation. I noticed that the same people who were at that mass helping the children with profound difficulties had been at the communion mass four years previously. It is a matter of gross inequality that the children who are lucky enough to go to a section 38 funded service can rely on the continuity of staff but their fellow citizens and other children who have to rely on section 39 services cannot have that consistency. In fairness to our members, they are working in worse conditions than their counterparts in the section 38 organisations. It is important to note that. Reference was made to not having service users, those who access these services, in this room. They are the people who, ultimately, will suffer the inequality that is here today.
Ms Mo Flynn:
Deputy Kelleher spoke about Health Information and Quality Authority, HIQA, and the relationship with the HSE. This situation on pay has been totally exacerbated within that context. Indeed we have HIQA come in to our establishments and rightly look at the quality and standards of service that is being delivered. In many of the services around the State HIQA raises valid issues regarding the continuity of staff in the context of the quality of care planning and the quality of interaction between people.
Where we must move to a position whereby services are staffed on an ongoing basis by agency or release staff because we cannot have continuity, they raise concerns about the viability of that as a model into the future. They may accept that release staff must be brought in for holiday cover, but when they see significant numbers of relief or agency staff regularly incorporated into a staff rota, they find that unacceptable and raise serious questions as to whether one's registration can be sustained. These are the issues coming up for every service provider throughout the country. This relates to the fact that while we can talk to the HSE about issues of capital costs that may need to be met within a residential service, those costs arising from having to change staff continually because of turnover are not being addressed because they are fundamentally related to the issue of pay. Senator Dolan raised the question why this has happened-----
John Dolan (Independent)
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When it was not there before.
Ms Mo Flynn:
I made reference earlier to the fact that we were included in benchmarking and everything else prior to this event. I think the words used by a senior member of staff in the HSE to me was that we were forgotten. I think all parties to the negotiations for both the Haddington Road agreement and then the Lansdowne Road agreement forgot about section 39s. It is only a small cohort of employees, not the hundreds of thousands involved in many other sectors. They were forgotten, which I think is why people are now retrospectively trying to figure out an answer. We have now created this problem that is difficult to untangle, yet for so many years previously we had been able to manage this and it was always addressed. It is an issue that is readily resolved; it just needs the commitment and the timelines. I very much welcome the indication from the Department and the Minister last week in the Dáil that a system will be put in place to address this. However, there are no timelines associated with that. In our terms of negotiations with the HSE 12 months ago we asked about this money and were told to bring the matter to the WRC and force that to happen. I am concerned we are now into 2018 service arrangement negotiations and are no further in the process but the Bill is bigger and there seems no resolution in sight.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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On a very brief point of order, Ms Flynn referred to the section 39s being forgotten. I wish to correct the record. They were not forgotten. They were included, and representations were made by the trade unions at the time to have them included but we were told very firmly and clearly that they were not part of that process and that they would be part of another process. I fully agree that some political parties and the HSE and the Department may have forgotten about the section 39s but they were not forgotten about by the workers' representatives. We did try to put them on the agenda, but the answer was a firm "no".
Michael Harty (Clare, Independent)
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We will try to wind up the session because we must bring in the next group. Deputy Durkan has minus three minutes to make a contribution.
Bernard Durkan (Kildare North, Fine Gael)
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I assure the Chairman that at my stage of life any minute is a bonus. I also wish to point out-----
Michael Harty (Clare, Independent)
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I will give Mr. Brian O'Donnell a chance to give a last comment-----
Bernard Durkan (Kildare North, Fine Gael)
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I do have a number of questions that I intend to pursue. I have waited patiently until now.
First, it generally goes without saying that if people take a wage or salary cut, there is an expectation of restoration. Did the HSE give any indication at the time of the cuts that section 39s would be treated separately or that it would be difficult to achieve restoration in their particular cases? Second, are the witnesses aware of any particular reason the HSE might have for slowing the process down at this stage? Are the witnesses aware of any implications their claim may have for other organisations in the wings? To the witnesses' knowledge - this is a question for the HSE - did the HSE recognise there would have to be restoration at some stage? Did it ignore it? Did it make provision for it in its budgetary submission for the current year? If not, why not? To what extent did it make the provision? Further, the witnesses have been to the Labour Court, which found in their favour. How does the HSE respond to this other than by bringing them in a continuous and indefinite circle? Has it had recourse to the Department of Public Expenditure and Reform, DPER, in the first instance or has it attempted to resolve the issue itself? Has the HSE gone back in a sequence of events to DPER and said it cannot go any further? To recognise the work done by the section 38 and section 39 organisations, and recognising the increasing demands on the services of their members, now and likely into the future to a greater extent, can the witnesses give me any indication as to what alternative provision the HSE has in its mind if it does not propose to face the realities of restoration and its ongoing and obvious consequent costs? Lastly, in the event of a shrinking of section 39 staff members in the various organisations, who will carry responsibility for the work that will not be done by the witnesses' membership? I thank the Chairman. He must admit the questions were well worth waiting for.
Michael Harty (Clare, Independent)
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I thank Deputy Durkan. I ask Mr. O'Donnell to handle as many of those questions as possible.
Mr. Brian O'Donnell:
I will try to do so quickly. Some are interlinked. To answer the first, which was, if I understand the Deputy's question correctly, whether the HSE gave us any indication that pay would be restored sometime, no. I do not think any of us was given any indication that, although there were demands on pay reduction, when the tide would turn there would be restoration. That was not the expectation.
Bernard Durkan (Kildare North, Fine Gael)
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Does that apply to other organisations that Mr. O'Donnell is aware of?
Mr. Brian O'Donnell:
I am not aware of others. I am just talking about the voluntary organisations, in particular section 39s. We have talked about the issue of shrinkage of staff. We use the word "attrition". Who takes up the slack? I think Ms Winslow mentioned, in response to Senator Dolan's question along the same lines, that it would largely fall to the HSE, which has the statutory responsibility for the provision of services. As we have often said, it discharges that statutory responsibility by engaging in service arrangements with voluntary organisations primarily, but for-profit organisations are an option also. The HSE increasingly engages the latter, and there is obviously a jeopardy in that. One might expect us to say that as voluntary organisations but we have good reasons to believe there is a jeopardy in hiring for-profit organisations to take up the slack. What the HSE has in mind, I think, is along the lines of what I have just said. I hope I have addressed the questions the Deputy has asked.
Bernard Durkan (Kildare North, Fine Gael)
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Who is likely to take up the slack, the work that would be-----
Michael Harty (Clare, Independent)
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There was a question about how the HSE has responded to the Labour Court recommendations.
Ms Mo Flynn:
It has advised that it does not have the resources to meet the cost. For instance, regarding the restoration of the pay differential provided for in the Haddington Road agreement, while the HSE is giving it to us for new contracts, it will not pay for the staff who were recruited during the moratorium, when we had to recruit staff to deliver services on behalf of them. However, if we cannot do it, the services go back to the HSE to be delivered at the new rates of pay.
Michael Harty (Clare, Independent)
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We will go one minute here and then one minute there.
Mr. Paul Bell:
Okay. I will defer to the Chairman as he is in charge. With regard to Deputy Durkan's comments, the pay link determines the reduction in salary. It was fully understood. When the pay cuts came it was via a pay linkage, as confirmed by the Taoiseach, Deputy Leo Varadkar on 8 November. Pay linkage existed. That is the cause of that.
Reference was made to whether the HSE submitted an application to the Department of Health for foreseen wage increases. It is my understanding that it did and it was rejected.
On whether other groups of workers would follow on from this, that is another myth that has been put out there. The only workers entitled to have this compensation are the ones with pay linkages. They are the only workers the Labour Court will have entertained. If the services start to collapse they fall back to the Health Service Executive as the statutory health provider.
Mr. Brian O'Donnell:
I want to go back to Deputy Kelleher's very perceptive remarks around the nature and importance of the relationship between voluntary organisations, the people they support, their families and the communities in which they are born. We often make the point that voluntary organisations have historically grown out of communities. Many section 39 organisations are family and friend associations that were established by families. The importance of this in the context of national disability policy, which we all welcome, is about participation, social inclusion and connectedness with one's community. Section 39 organisations in particular, in being borne out of local communities, are uniquely placed to deliver on that. If we link this to the conversation we had this morning on pay restoration, the role of the social care worker, especially in section 39 organisations, is changing. It has to change in line with disability policy. Increasingly they are required to be more community co-ordinators and to make linkages. If people who have disabilities are to have meaningful lives in the community it will involve people building and making relationships with communities, be they employers, training providers or educationalists. The complexity of the role of the social care workers employed in section 39 organisations is changing. This is all the more reason that they should not have to endure this reduction in pay without any hope of restoration. That is probably the overriding message we, as the representative organisations, wanted to give to the committee today.
Mr. David Joyce:
I thank the members of the committee for their engagement and discussion this morning. I agree with Senator Dolan that it is indeed ironic we are discussing starvation of funding for crucial organisations in the lives of people who have disabilities in the same week Ireland is talking about finally ratifying the United Nations Convention on the Rights of Persons with Disabilities.
Michael Harty (Clare, Independent)
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On behalf of the committee I thank the representative from the section 39 organisations, and from the unions ICTU, SIPTU, INMO, Fórsa, and UNITE. I thank all the witnesses for their contributions.
Michael Harty (Clare, Independent)
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We will now resume in public session for session B of this morning's meeting. On behalf of the committee, I welcome Ms Teresa Cody and Ms Sorcha Murray from the Department of Health, and Ms Anne O'Connor, Mr. Stephen Mulvaney and Ms Rosarii Mannion from the HSE.
Before we begin, and as I also did at the beginning of session A, I wish to express the disappointment of the committee that the Department of Public Expenditure and Reform has not attended our meeting this morning. We are going to write to the Department to express our dissatisfaction and invite it to attend a further session.
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.
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.
I invite Ms Teresa Cody to make the opening statement.
Ms Teresa Cody:
I am assistant secretary in charge of the national HR division in the Department of Health. I am making a joint statement on behalf of the Department of Health and the Health Service Executive. I am joined by Ms Sorcha Murray, principal officer in the national HR unit in the Department of Health. I am also joined by HSE colleagues, Stephen Mulvany, chief financial officer; Anne O’Connor, national director for community operations; and Rosarii Mannion, national director of HR. I thank the Chairman and the committee for inviting us here today to discuss issues in respect of the section 39 organisations.
The committee has already heard from representatives of the Disability Federation of Ireland, the National Federation of Voluntary Bodies and the Not for Profit Association, through their collective presentation. I understand that representatives of the ICTU health sector committee were also in attendance.
The Government, the Department of Health and the HSE recognise and appreciate the important work carried out by staff who work in section 39 funded agencies. In the recent Dáil debate on this issue, the Minister of State spoke at length on the role played by voluntary agencies and the efforts under way to address the complex issues that have arisen.
Voluntary organisations have been engaged in and have contributed significantly to the provision and ongoing development of the health and social care services in Ireland over many generations. An important point to note at the outset is what is meant by the term "voluntary sector". Agencies funded by the HSE under both section 38 and section 39 of the Health Act 2004 go to make up what is often referred to as the voluntary sector. While section 38 funded agencies are not the focus of this discussion, it is important to recognise that they too make a valuable contribution. The HSE provides a total of €3,576 million to the voluntary sector, with 78% allocated to section 38 organisations and the remaining 22% going to section 39 organisations.
Under section 39 of the Health Act 2004 the HSE provides financial assistance to organisations by means of a grant. Section 39 legally underpins the provision of services similar or ancillary to a service that the HSE may provide. To put it in context, the HSE provides financial assistance to 2,224 section 39 organisations. In 2017, the HSE provided funding of approximately €800 million to these agencies. These grants can range from very large amounts in their millions to much lower amounts of just a few hundred euro. The services covered by the funding to these agencies include: services to people with disabilities; services to older people; mental health and primary care services; social inclusion; palliative care services; and health and wellbeing services. The chief officers in the community health organisations have delegated accountability for the funding they release to these agencies. The profile of the agencies ranges from large, long established and nationally recognised service providers, providing essential services to small organisations that have evolved over the years, providing non-acute services, advocacy or other related support to local communities. Equally, some of these bodies are large employers and others may rely on volunteers with very few staff employed.
The HSE is very reliant on section 39 organisations to deliver services. In the case of disability services for example, approximately 25% of the disability services are delivered by section 39 providers. Again, for mental health services, the statutory services are primarily provided by the HSE directly but valuable additional services are provided by the section 39 providers which add value and capacity to the HSE directly provided services.
Representatives of these providers also over the years have been involved in working with the State sector to help shape policy and strategies for the ongoing development and improvement of these services. The HSE is held accountable for the use of public funds and it in turn must ensure transparency and accountability in how section 39 organisations spend the grants provided for services. The monitoring which the HSE has in place seeks to be proportionate to the nature of the services provided and the scale of financial assistance provided. We are aware that during the financial crisis, as public spending was reduced, section 39 agencies looked to reduce costs, including pay costs. Where staff in these organisations had their salaries reduced, there is an understandable desire to see these reductions unwound, particularly where such adjustments are under way across the public and private sectors. However, in assessing and seeking to address this issue in conjunction with the Department of Public Expenditure and Reform and the HSE, the Department of Health must be mindful of a number of considerations.
Employees of section 39 organisations in the health sector are not public servants and are therefore not covered by the public service stability agreements. Staff in these organisations were not subject to the financial emergency measures in the public interest, FEMPI, legislation, passed by the Oireachtas, which imposed pay reductions on public servants. Neither do the recent revisions made to this legislation cover employees of section 39 agencies. As the employer, it is a matter for section 39 organisations to negotiate salaries with their staff as part of their employment relationship and within the overall funding available for the delivery of agreed services. All agencies had their budgets cut during the financial crisis and were expected to make savings. Given that a large part of the budgets of these organisations are spent on pay, the pay budget was a logical place to start. While it is understood that pay cuts were imposed on section 39 employees, this was not uniform. Even where pay reductions were made, it is not clear how and when these cuts were actually employed in each case. We understand that different organisations did different things depending on their specific circumstances. There may have been increment freezes. There may have been a stop put to all recruitment. The number of staff working in the agency may have been reduced over time. They needed to do more with less and this is what they did.
This issue has been the subject of detailed consideration by officials in the Departments of Public Expenditure and Reform and Health and discussions have taken place between the Minister for Public Expenditure and Reform and the Minister for Health. The urgency around this issue is also heightened as industrial action is threatened from the 14 February 2018 in a number of these organisations. It is clear that in order to redress the problem there is a need for a much deeper understanding of the funding position in these grant-aided voluntary organisations, the extent to which pay reductions were made and the manner in which they were applied. The Minister for Health has asked the HSE to take forward as a matter of urgency an evidence gathering exercise with section 39 organisations to establish the factual position regarding pay reductions and pay restoration. It is important that such an exercise is properly conducted, having regard to the need to ensure value for money for the taxpayer, given the significant sums involved and the appropriate treatment where the approach taken by agencies differs. Although this will be a very complex piece of work, it is anticipated that this process will bring about the necessary clarity and transparency and ultimately an agreed way forward for all parties involved.
The Minister for Health, his officials and the HSE are working to address the matter. We are committed to doing all we can to ensure there is no disruption to the delivery of health services.
Michael Harty (Clare, Independent)
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I thank Ms Cody. We will open the discussion to our members. The first two members who have indicated are Deputies Louise O'Reilly and Bernard Durkan.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I have a number of questions. Most of the witnesses will be aware of my trade union involvement prior to being elected.
Was Ms Cody involved in instructing the section 39 organisations to cut pay? When the cut was imposed, was it the Department of Public Expenditure and Reform that advised the Department of Health to pass it on? I am trying to figure out where the cuts started from?
I am looking at Labour Court recommendations - indeed I was at the Labour Court on similar cases and we really never seem to get to the bottom of who was issuing the instruction, except that an instruction had been issued. The section 39 organisations were very clear that they were not given any option other than to cut pay. For the benefit of this committee, it would be very helpful if we knew where that instruction was coming from? One gets the general feeling that it was coming from upstairs, but we want to know the exact room it was coming from? Perhaps Ms Cody might be able to explain that to us.
We understand that the HSE has allocated an amount of €68 million for what is called pay movement. Does that include pay restoration in any way, shape or form for the section 39 organisations, and if it does, does it also include a reference to incremental credit, because that is an issue that we need to be cognisant of? I am looking at the Labour Court recommendation 21.630 which relates to County Wexford Community Workshop, in which explicit reference is made to the public service pay cuts and the consequent pay adjustment, which is the nice word, we were putting on it at the time, when pay was only going in one direction, that the pay adjustment and all the other factors such as incremental freeze that apply were going to have to apply in the case of the workers in the Wexford community workshop. I think the Labour Court was fairly clear in its recommendations in December 2017 and recommended that the parties should jointly approach the HSE to secure the resources necessary to meet the cost of this recommendation.
In the event that they do approach the HSE and I am sure they have, what is the answer to that? Is the answer "No" or is it "Let's all get together and go to DPER." Will Ms Cody explain that to us?
Likewise, the Labour Court recommendation 21.609 for the Irish Wheelchair Association. The court is very clear on this. It states that the Labour Court has some sympathy for the difficulties that the employer but they cannot accept that they are the basis for not implementing pay restoration in line with the public service agreement. It appears to the court that one of the reasons this matter is before us is because the employer feels obliged to do so in order to satisfy an administrative requirement of the HSE, which is its main funder rather than to seek a resolution.
We used to refer to this as "simply getting a harp on it". That is bad practice. I am not as well connected to people in the court as I once was but I understand there is a path worn to the door of the Labour Court and Workplace Relations Commission by these agencies. The same answer is being issued every time. The Labour Court recommendation from November 2017 — I believe the chairman was Ms Louise O'Donnell — is very clear that the court is actually somewhat exasperated over what is occurring. The delegates might explain the administrative requirement. What I am taking from the recommendation is that the workers and their representatives are going to the Labour Court to satisfy an administrative requirement placed on them by the HSE in order that they might be able to secure some funding to meet what is essentially a very legitimate claim, namely, for pay restoration. I have not heard anyone contradict this. Certainly, the pay was cut in line with FEMPI. As public servants see some form of pay restoration, there is none happening in the section 39 agencies. The delegates might advise us on the administrative requirement. It appears to the court that this requirement is in place. If what I contend is the case, I would like to hear the justification for it. It sounds like an absolute waste of the Labour Court's time. As someone who would have waited for months to get a case into the Labour Court, I believe bringing cases to that court simply to satisfy an administrative requirement is not justified.
The delegates might explain the role of the Department of Public Expenditure and Reform in this. Is it that Department that is requiring this administrative exercise - the effective rubber-stamping of the claim? Clearly, the claim is justified. The court sees no difficulty with the claim. It is merely the mechanism by which the claim is settled that is in question.
Bernard Durkan (Kildare North, Fine Gael)
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I wish to continue on similar lines. The staff of the section 39 organisations are not regarded as public servants but I presume they received cuts to their salaries and wages. Is that acknowledged? I presume it is. There is a bit of a shady area here in regard to how the cuts were imposed on those involved in the section 39 organisations. Was there a bloc cut to the grant right across the board, reducing it by X amount? Was any undertaking given as to when it might be restored? Did the instruction refer to a cut to salaries and wages or did it state "excluding cuts to salaries and wages" at the time the cuts were imposed generally across the services in 2010 or whenever? Was any indication given as to when restoration would take place, if ever? We have raised this question with other organisations also.
Does the HSE recognise that restoration is legitimate and must be dealt with? Is it recognised that services may suffer, either through industrial action or by virtue of people moving to other employment, thereby leaving service gaps as a result? What is the HSE's response to that?
In the HSE's budget for 2018, is any reference made to the possibility of having to make provision under this particular heading? I presume provision was not made. What other areas of a similar nature were left without any such provision, to the delegates' knowledge? For instance, were there competing organisations of a similar nature that might have been left out of the equation? On what basis did the HSE conclude that there would be no repercussions? We recognise the difference between the public and private sectors. The private sector staff had to receive cuts to their salaries and wages also. In light of an overall evaluation of the services provided by the section 39 organisations, on what basis was it presumed that the organisations could seamlessly continue to provide services without pay restoration, for whatever reason?
Is it recognised that the mortgage and rent payments of people who were employed directly or indirectly through the section 39 organisations might have increased in the past five to seven years? Was that not a consideration in the determination of the response, either by the HSE, the Department of Public Expenditure and Reform, or both? I emphasise that point because it affects everybody.
Reference was made to benchmarking. Benchmarking occurred as a result of the cost of living becoming so high that public servants, and even private sector staff, could no longer subsist. Therefore, there was a top-up, which in turn created further problems far down the road. The same thing is coming to the fore again. I refer to the aftermath of cuts that were brought to bear on people in the workforce providing a particular service, in this case through section 39 organisations.
Who else does work currently undertaken by section 39 organisations, and what will the likely cost be in the event of it having to be delegated elsewhere?
Michael Harty (Clare, Independent)
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I have just one question. Could the delegates let the committee know whether there has been any increase in bloc grants to section 39 organisations since our economic recovery?
Ms Teresa Cody:
The first question raised by Deputy Louise O’Reilly, and also asked by Deputy Durkan, concerned the instruction to cut pay and the position in 2010 and 2013. The position is that the budgets were cut and bloc grants were cut. It was then a matter for the individual employer to decide exactly what mix of actions should be taken to achieve the goal of reducing costs. That is the information I have on 2010.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I am sorry but that reply is not acceptable. It cannot be the case that all these disparate agencies came to the same conclusion. It was my feeling at the time, although not all of the correspondence were shared with us, and it is my clear understanding now, with the benefit of hindsight, that an instruction was issued, or advice. When the grant was cut, I presume the Department was inundated with calls from section 39 agencies stating they were cut to the bone and asking what they would have to cut. Is it really Ms Cody's position that the answer every time was that each agency just had to decide for itself, with the result that the vast majority managed to come to the same conclusion with regard to cutting staff pay? It strikes me that it was an indication or suggestion, or perhaps even an instruction.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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That really underlines why we need to have staff from the Department of Public Expenditure and Reform present.
Ms Rosarii Mannion:
In support of Ms Cody, we all know it is up to each organisation to manage its own budget. To the best of my knowledge, the HSE certainly did not provide a blanket instruction to the organisations to cut pay. As they are not employees of the HSE, this would not have been possible or appropriate. Instead, the budgets of the organisations were cut but, given that the pay bill makes up a large part of the expenditure of these organisations, many did end up cutting pay, as we know. That is the position from the HSE's perspective.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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With respect, there is no way that answers the question. The organisations' representatives were here just before the delegates who are present and they were very clear that the communication with which they were issued was in the form of an instruction.
Michael Harty (Clare, Independent)
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When representatives of the HSE attended a committee meeting some months ago, it was stated that, whereas there had not been an instruction that they cut pay, they had been asked to take cognisance of the fact that there had been pay reductions in the public service and that that should be borne in mind when they dealt with their reduced funding. That was how it was put. We will proceed with questions and can explore them further when we receive the answers to them. I am sorry that Ms Cody was interrupted.
Mr. Stephen Mulvany:
The Deputy mentioned a figure of €68 million. I think the fundamental question is whether there is funding within the HSE or if we will receive funding in 2018 to allow us to make restoration or additional pay-related payments to section 39 bodies. We sought funding but did not secure it; therefore, we do not have it.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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What funding did the HSE seek?
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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We were talking about it before Mr. Mulvaney came into the room. A figure somewhere in the region of €12 million to €13 million was mentioned.
Mr. Stephen Mulvany:
I heard that figure being indicated. I was not sure how it had been calculated, but our figure was a significant number of millions of euro. We can consider offline whether it would be appropriate to share it with the committee, but, as the Deputy can imagine, there are sensitivities.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Mr. Mulvany might explain what they are because I do not understand it. The previous delegates were very clear on the minimum amount they thought it would take to begin the process and I think it excludes increments. Rather than go into the figures, Mr. Mulvany might explain why he thinks the issue is sensitive. That is not clear to me.
Mr. Stephen Mulvany:
Absolutely. It is sensitive because we have to carry out an exercise to establish exactly the level of pay reduction imposed by employers on individual staff in individual section 39 bodies. We have an instruction from the Department to begin that process and will begin it. Our estimate was based on high-level assumptions. For example, it was assumed that all section 39 staff had access at the time to consolidated salary scales, that they had all been cut by the same amount on the same date - something which would not necessarily have happened - and that they would all be restored by the same amount on the same date. None of that will necessarily be the case and the data gathering exercise mentioned in the opening statement will determine the facts in that regard. The figure is significant and a number in the tens of millions of euro. I am not sure of the relevance of the exact figure as there is a process to be gone through.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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That Mr. Mulvany will not share it with us is relevant. It has superseded the figure. He said he will give consideration offline to sharing it with us. He might do so and communicate it to us.
Michael Harty (Clare, Independent)
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Will Mr. Mulvany supply the information to the committee?
Michael Harty (Clare, Independent)
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Is there agreement in principle that if a section 39 organisation reduced pay for its staff, that it will be restored in line with pay restoration for public servants?
Ms Teresa Cody:
The process in which the Minister has asked the HSE to engage is to establish the factual position on what happened with pay reductions and whether, when and to what extent reductions in pay rates were applied during the crisis in each relevant organisation; whether, when and to what extent restoration of pay reductions has happened, and to identify, with appropriate supporting evidence, the financial implications for each organisation, taking into account all sources of funding associated with addressing the issues identified and to propose an appropriate plan for phased resolution in each case. That is the fact-finding process under way.
Michael Harty (Clare, Independent)
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Does that indicate that, should it be established that there were pay reductions, they will be restored or that funding will be restored?
Michael Harty (Clare, Independent)
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There were other questions. Deputy Louise O'Reilly spoke about the response to the Labour Court's recommendations.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I asked a very specific question about Labour Court recommendation No. 21609, which makes specific reference to the need for what it calls an administrative exercise by the HSE. The delegates might comment on it.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I am sorry to keep interrupting, but that directly contradicts what the representatives of the section 39 agencies said when they were here a few moments ago. They were very clear that they had been advised by the HSE to go through the industrial relations channels. Ms Mannion has been involved with this issue for a long time and knows that one cannot keep running into and out of the Labour Court to handle something that should be resolved at local level. She would not thank me, nor I her, if we were back in that scenario again and the court does not like it. It is clearly of the view that that is what is being done. Will Ms Mannion tell the section 39 agencies that it was never said to them? It directly contradicts what they have said to us.
Ms Rosarii Mannion:
I will not contradict them or otherwise. I will have to look at and establish the facts of what was said. My clear understanding was that it would be very poor HR practice to encourage organisations, whether internal or external, to use the Labour Court to obtain determinations on funding. It is not a practice I would encourage. If that is the lived experience of the organisations, the representatives of which were with the committee before we came in, we have to hear and address it. It would not be good customer practice and I would not advocate or support it.
Louise O'Reilly (Dublin Fingal, Sinn Fein)
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The court and representatives of section 39 agencies disagree fundamentally with what Ms Mannion has just said.
Michael Harty (Clare, Independent)
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Have all of Deputy Bernard J. Durkan's questions been answered?
Bernard Durkan (Kildare North, Fine Gael)
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Surprise, surprise - no. I asked whether an impression had been created by the HSE that section 39 organisations might not qualify for pay restoration. Was such an indication given in the course of the last year when other organisations througout the country were in negotiations or preparing for the restoration of pay? It is a natural supposition. Has the HSE given any thought to the provision of services by section 39 organisations in the event that they break down, are decimated by the lack of staff or whatever else the case may be? The people concerned may feel compelled to move to other organisations in which there are opportunities.
Michael Harty (Clare, Independent)
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Who would like to take those unanswered questions from Deputy Bernard J. Durkan?
Mr. Stephen Mulvany:
One of the Deputy's questions is whether it is acknowledged pay was cut in section 39 bodies. It is acknowledged that pay costs were cut and that, in some instances, it led to individuals' take-home pay and rates of pay being cut. The issue is that it did not happen uniformly. Therefore, we have to establish exactly what happened. Reducing pay costs is not only about reducing individuals' actual hourly rates of pay. There are other aspects to it.
I am not aware of any indication being given that there would be restoration. No doubt, there were conversations in which it was indicated that the recession would not last forever, but I would not say anyone could say firm commitments were given on restoration. However, the Deputy may have heard something different.
Could anyone say there were firm commitments given about restoration? I would say not. I do not know whether the Deputy has heard any different from-----
Bernard Durkan (Kildare North, Fine Gael)
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When the economy began to turn around, was there not a growing recognition within the HSE that this was the natural progression of where it was going?
Mr. Stephen Mulvany:
With apologies to the Deputy, that is a different question. He had asked whether we gave any indication or commitment. I believe "commitment" was the word he used. The answer to that is probably "No". Is there a recognition that there is an issue which needs to be addressed? Absolutely. That was covered in our opening statement. There is clearly an issue. That issue has been discussed by our Minister and other Ministers. We have been instructed to carry out a data gathering exercise with a view, as my colleague said, to identifying a phased resolution to the problem. Yes, there is a recognition of the issue. Is there any heading in the 2018 HSE budget which has the money to pay for this? No. We do not have such a heading. We sought funding for that but did not secure it.
Michael Harty (Clare, Independent)
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Does that mean that there has not been any increase in block grants to section 39 bodies since the economic recovery?
Mr. Stephen Mulvany:
There has been. In 2015 and 2016 block grants for overall expenditure per annual financial statements to section 39 organisations did increase. Funding fell up until 2014 and increased in 2015 and 2016. These increases were not specifically to restore rates of pay. Funding would have been increased for volume issues and general cost increases. We have not been in a position to specifically fund any formalised-----
Michael Harty (Clare, Independent)
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Nothing was provided over what was needed to keep services going.
Ms Anne O'Connor:
There are so many agencies. Nationally we have more than 1,000 agencies dealing with older people alone. In respect of disabilities there are more than 400. The challenge would be enormous. In terms of considering who would provide a service, the reality for us in the HSE is that the majority of our disability services are provided by funded agencies. We do not have an immediate alternative so it would be a very significant challenge if a strike were to go ahead or if agencies were to stop providing services because we do not provide that quantum of service ourselves.
Bernard Durkan (Kildare North, Fine Gael)
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Was there a reaction or an anticipated reaction? Given that we do not know the sum which was requested to compensate for these contingencies, do the witnesses think that if a smaller amount had been sought the response might have been more positive?
Bernard Durkan (Kildare North, Fine Gael)
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What was the reaction, for example, when the powers that be saw the extent of the request to deal with this situation? Were they aghast? Did they express shock and horror or did they say that the amount was too high and that they would not go there? What happened?
Mr. Stephen Mulvany:
All I know is that, in the final resolution to the 2018 budget, they did not receive the funding sought. In fairness to colleagues who are not here, given the absence of the data gathering exercise which we are now going to carry out, our figure was simply based on very high level estimates. I could not say whether they might have been in a position to agree to a lower figure.
Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome the witnesses. I would also like to put on record my disappointment that the Department of Public Expenditure and Reform does not feel it necessary to attend these meetings. Was a reason offered?
Billy Kelleher (Cork North Central, Fianna Fail)
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It is extraordinary that a Department would simply ignore the request of a committee to address an issue which is critically important in view of the fact that notices of industrial action are being served. People are being balloted. We have officials before us who are sincerely trying to resolve the issue and who realise its seriousness. The Department of Public Expenditure and Reform holds the purse strings and it is effectively ignoring this committee. I take a very dim view of that. I suggest the Chair make my view in this case known, which I am quite sure is the view of the other members of this committee. It is extraordinary. I cannot believe it. When I came down this morning I assumed the Department's representatives were somewhere else and would come in later. I am really disappointed and I want that disappointment to be conveyed to the Department.
Michael Harty (Clare, Independent)
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In both private and public session the committee has committed to writing to the Department and inviting it to a separate session.
Billy Kelleher (Cork North Central, Fianna Fail)
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I will also be raising it myself in my own way. At the outset, all of us around this table accept that the section 39 organisations do invaluable work in providing services for people with physical and intellectual disabilities and in other areas of health in communities across the country. I am a little confused. I am asking these questions more to seek clarity than anything else. Letters have been sent out, including one which reads:
I attach for information a summary note prepared by Mr. John Delamare, Head of Corporate Employee Relations with the HSE [...] I would draw attention in particular to the following 2 paragraphs:
Section 39 agencies are not encompassed the provisions of the LRA or of FEMPI. For example, the pension levy of 2008 does not apply to such personnel.
I assume that letter is just stating the obvious. Staff in section 39 bodies do not receive public service pensions. Is that correct?
Billy Kelleher (Cork North Central, Fianna Fail)
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Why would that need to be stated? Is it just stated to fill up a paragraph or what? If any other group made a pay claim and its members were not members of the public service, would it state that the pension levy should be part and parcel of the assessment of their pay? I doubt it very much. I am surprised that it is in there. The letter continues:
It is accepted that a number of such agencies have had a pay alignment with rates applicable in the public service and that pay rates were reduced in the "crash" years.
It is now likely that there will be claims to have pay rates restored in such agencies to reflect the developments that are occurring in the public service. Such claims should be dealt with in accordance usual procedures applying in such employment, i.e. direct discussions initially, with referral to the WRC and Labour Court if required.
From what I can gather, there have been a number of referrals to the Labour Court and the Workplace Relations Commission. Deputy Louise O'Reilly - who would have a lot more knowledge of the court than I would, although I have some knowledge of it in that I was Minister of State with responsibility for labour affairs at one stage - has alluded to the fact that the courts and agencies that address issues of employment and pay on behalf of the State take a dim view in general of people shepherding claims to the courts as a way of prevaricating and delaying discussions. Is that a policy or is just the case that these claims are ending up there? Is it a delaying tactic on behalf of some entity - the HSE, the Department of Health or the Department of Public Expenditure and Reform? It seems that it is almost an unwritten policy to get these section 39 claims for pay restoration to end up in the Labour Court even though it is now acknowledged that pay restoration is, and has to be, part and parcel of any discussions.
On the impending strike and the impact it will have on services, this again goes back to what was discussed earlier with the previous witnesses and was just alluded to in this session. These are quite labour intensive services. Most section 39 organisations get very little grant aid in respect of capital development. Funding is primarily for the delivery of services. Quite a substantial amount of funding for capital expenditure is voluntary funding. The organisations will raise funds for capital expenditure and the HSE will step in with a block grant primarily for staff costs and the basic delivery of services. In some cases as much as 97% or 98% of such a grant can be for staff costs, with 3% or 4% for ancillary services. When an organisation which has such a high number of staff delivering a labour intensive service and which has HIQA on the other side of the equation looking at the quality of the service being provided gets a letter from the HSE telling it that its funding base is being cut, clearly only one thing can give. Well two things can give. Either the people who depend on the service are put out on the side of the road or expenditure on pay is reduced. Invariably organisations that have a strong ethos of voluntary and community involvement are not going to put their clients on the side of the road, so the only thing that can happen, unless I am reading this all wrong, is that there would be pay cuts.
It had to be pay cuts, whether direct or otherwise. The only ways to reduce the salary payroll are to remove people from it or to reduce their pay. If staff were removed, due to guidelines set out by the Health Information and Quality Authority, HIQA, the number of clients using the service would have to be reduced. As such, it was inevitably going to be pay cuts. Any analysis that does not accept that as the logical outcome of any correspondence between the HSE and the section 39 staff leaves a lot to be desired.
In that context, what we are trying to do is get the Department, the HSE and the Government to accept that there is now an urgent need for pay restoration. Further, those authorities must not use the Labour Court and the Workplace Relations Commission in these matters any longer, unless a very detailed and protracted discussion is required. In general, it should not be beyond the ability of the HSE and the Department of Health to determine how much pay restoration will cost, and the Department of Public Expenditure and Reform should be able to provide funding. That will obviously be a Government decision. Surely, however, there should be no more prevarication on the part of the HSE in ascertaining the bill for full restoration. The HSE should work with the Department of Health to finally determine a figure, which would obviate the need for referrals to the Labour Court and the Workplace Relations Commission.
I stress this for two reasons. There is huge anxiety among those affected. When any member of this committee visits a constituency, one of the first places we will be asked to visit is a section 39 facility, either by party members, other Deputies or colleagues. That is particularly the case for Deputy O'Reilly and me, as spokespersons for our parties on health. That is of because of the work the staff members do and the stress under which they are operating. Furthermore, it is because of the stress that the clients and their families are now under. They are affected by a continual cloud of scraping and scrimping as they try to ensure there is consistency and continuity of service. I can assure the committee that service is being provided as efficiently, and in many cases more efficiently, than it could provided by the public service, because of the voluntary involvement and community ethos. That is putting huge pressure on communities across the country. The more quickly this issue is resolved, the better. If we can get the detail on cost from the HSE and the Department of Health, with its goodwill, then we will help the organisations represented here to get the money from the Department of Public Expenditure and Reform. What we want the witnesses to do is to help us.
John Dolan (Independent)
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I will start by making a few observations on the statement that has been made by the Department and the HSE. It is just short of four pages. It begins with an expression of appreciation of the work carried out by section 39 staff. From page 2 onwards, it continues with what I would describe as a description and definitions, all of which could be contained in a footnote. I do not know how they substantially add to the crunch issue before us. It goes on with what I would describe as vagueness and an absence of detail. I am quite disappointed with it, and it gives me the sense that the fool is being sent further. This issue is going to go on and on.
On the bottom of page 3, the statement reads:
"As the employer, it is a matter for Section 39 organisations to negotiate salaries with their staff as part of their employment relationship and within the overall funding available for the delivery of agreed services."
Every employer knows that. It is a matter of ordinary common sense and fact. However, the reason that is not mentioned is that the organisations, in their capacity as employers, and the staff representatives have taken this matter to the Workplace Relations Commission. The Workplace Relations Commission's officials are fed up with this repeated traffic, and they cannot bring the people and entities with responsibility for funding into the negotiation. Representatives from the HSE have to be asked to appear at meeting, or have appeared at some.
The question of pay restoration has been discussed. Frankly, I think it is a little bit academic. We are not involved today in a professional training workshop on human resources or industrial relations issue. This is not about continuing professional development points. There is migration of staff, and if the Department of Health or the HSE wish to claim that there is not, let them say that. There is significant migration of staff out of section 39 funded organisations. They take up similar work in either section 38 funded organisations or the HSE.
We all accept that there will be a turnover of staff. There will be a ratio in any sector. It will be more pronounced in some areas. That is often a function of the market. The market is operating here. Given their qualifications and background, people see that they can move. Can I say they should not? Absolutely not. Many of us will move. We have other pressures, from our banks, our building societies, our children, and so on. These are real issues.
What is the witnesses' estimate of the rate of turnover during the last several years? What do they estimate it will be this year if nothing happens? What further attrition, what extraordinary movement of staff from section 39 organisations to either section 38 organisations or the HSE, will we see? That would be a useful piece of information.
Let us consider the first paragraph on page 4 of the presentation. It reads: "This issue has been the subject of detailed consideration by officials in the Departments of Public Expenditure and Reform and Health." The previous paragraph features phrases like "we understand", "while it is understood" and "expected to". This is vague language. We then read that the issue "has been the subject of detailed consideration by officials in the Departments of Public Expenditure and Reform". I welcome this. Those officials are obliviously too shy to be here today to tell us about all the work they have been doing, and how long they have been doing it. The statement says that there has also been detailed consideration by the Department of Health. It is good that officials from the Department of Health are here, because they can tell us when these discussions started, and how much discussion and engagement has been going on. That might help us.
The next sentence in that paragraph states: "The urgency around this issue is also heightened as industrial action is threatened for 14 February in a number of these organisations." That is the first and only date mentioned in this document. We will obviously remember 14 February for other reasons. It is the only date in the statement, and it features not because the HSE, the Department of Health or the Department of Public Expenditure and Reform have done something. That date is there because representatives of staff have drawn a line in the sand.
I expect the evidence for the assertions made in that paragraph to be made available to us. Just to begin with, when was the first engagement? The witnesses must give us a date, or even a month. When did the Department of Health engage with the Department of Public Expenditure and Reform on this issue? The organisations, the staff and most important, the people who are not in the room and were not in here this morning, the people who are receiving those services must have some assurance that this is being dealt with.
I do not think that anyone thinks that there is any one simple one-size-fits-all solution. I know that. I have been in and out of area for long enough. I remember when section 38 was section 26 of the Health Act 1974. I remember when section 39 was section 65 of the Health Act 1953. That was invented just a few years before I was born. We all know there are a lot of issues at work here. However, we do not have any comfort that this is actually being progressed.
Was it not on 17 January that the Minister of State, Deputy Finian McGrath, announced in the Dáil on a Private Members' motion that the Minister for Health, Deputy Harris, had instructed the HSE to enter into a process of engagement? Subject to correction, I presume that happened prior to the tabling of that motion, or had the Minister instructed the HSE months ago? When was that instruction given? If we are to get beyond talk, talk, talk, and I have used the phrase sending the fool further, there is a lot at stake for people with disabilities and for staff and the point was well made by Mr. Bell this morning in that many of these staff work in community settings. They may be involved in activities in the community. There are relationships here. I say that for two reasons. People find it very hard to walk away from that. The other point I would make is that relationships with a key worker are critical for people who have disabilities and various conditions to be able to progress. It is not just somebody turning up every now and again. How does one deal with that and the issue of people with communication needs? I think members are quite clear that I am not pleased. We need to get dates as to when this detailed consideration by officials took place. When did the Minister for Public Expenditure and Reform and the Minister for Health first sit down?
The final point I will make is that if something goes down in a crisis, such as funding, and there is a pressure on services, I do not think anybody can reasonably not anticipate that when we start to come out of that there are going to be pressures for that to go back up. Officials in either the HSE or the Department cannot have been unaware that what goes down comes back up, or what goes up comes back down. This has not come out of the blue. This was to be anticipated. We had a bit of a lesson about the differences between sections 38 and 39 organisations but the bottom line is that they are all necessary services. I do not think the HSE and the Department of Health are giving money to section 39 organisations because they think they are nice and fluffy. They are giving it because they want the service delivered to a certain standard and to a certain number of people. It is no different from a section 38 organisation. I can give members an example of a section 38 organisation and a section 39 organisation, with one operating on one side of the street and the other operating on the other side with the same cohort of clients. This is going on, but it is unsustainable. I will leave it at that but I am looking for an answer to the question on when the process started. In particular, I want an answer to the question on when the gathering evidence and making sure it is all accurate, etc., will finish.
Michael Harty (Clare, Independent)
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Thank you, Senator Dolan. I call Senator Burke.
Colm Burke (Fine Gael)
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I thank the witnesses for their presentations. I do not necessarily agree with my colleague. I believe they are setting out the facts as they are and I very much appreciate what they have set out here. I have one or two questions - I apologise in advance but I have to speak in the Seanad in a few minutes - on the €800 million, which is going to the section 39 organisations. We heard this morning that up to 80% of the funding goes to salaries in these organisations. I do not believe that is correct as I do not imagine that amount of funding of the €800 million is being paid in salaries. Does the Department have any idea of the amount going towards salaries currently?
The other issue is that the figure we were talking about this morning was around 12,000. We are talking about 2,200 organisations. I presume the number, in real terms, between all the organisations is greater than 12,000 so I wonder if the Department has a full audit of what numbers are employed, either part-time or whole-time equivalents, in the organisations? Have we ever actually done an audit and looked for all that information to be compiled? I know the HSE has that information available in relation to all the staff employed in the various different units around the country, and rightly so. Could we get the figure of the number employed in all of these 39 organisations? There is a large number of people working in the section 39 organisations on a voluntary basis. Do we have any idea of that?
I refer to the cost of the increase. I raised the question of pro rata, across the board, increase this morning. I know the employees of section 39 organisations are not considered to be in the same category as HSE employees but, in fairness to them, they are at the front line, they are providing a service and, in many cases, they providing a very difficult service with a huge amount of dedication and commitment required. We need to look after the section 39 organisations in the same way as we look after the other sections of the HSE. For instance, I raised the issue this morning of an extra 2,000 staff taken on in administration and management between December 2014 and April 2017. If there was the samepro rataapproach in looking after the section 39 organisations, maybe we might have had a little more balance about the number we took on in relation to the section 39 organisations. That is what I am talking about in relation to funding. Did the Department look at this issue and say that if we do not look after the people at the coalface, then there will be consequences? I am not saying we should not have recruited people in administration. I have no difficulty with that but I think that the same pro rataapproach was not taken with the section 39 organisations.
We all knew there was only a certain pot of money available for the health service. Whether one is employed by the HSE, a section 38 organisation or a section 39 organisation, surely there must have been a policy decision to take the same approach that ball boats rise together. Instead we seem to have a situation where certain boats were able to rise and others were not. Has the Department or the HSE looked at that? Since section 39 organisations did not get an increase in funding in real terms, they were not able to recruit the same number of administration and management staff recruited by the HSE. On top of that, and I accept there are many more services now compared to 2010, Tusla is now providing services previously provided by the HSE and it took over 500 administrative staff as well. I am just looking for answers as we look at the health service. We need to look at all areas in a proportionate way. We need to look at it from the point of view of making sure that people at the front line, who are providing a very valuable service the HSE itself is not able to provide, are not left paddling their own canoe in trying to provide those services and hold on to staff because they cannot give the same rate of pay. These are fundamental issues that need to be tackled and delivered on within a very short timeframe.
Michael Harty (Clare, Independent)
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Thank you very much, Senator.
Who would like to lead off?
Ms Teresa Cody:
I wish to repeat that we have acknowledged, and wish to acknowledge, the work and contribution of section 39 agencies. That is not denied.
Senator Dolan referenced the fact that there is no one-size-fits-all solution. We need to carry out an analysis to establish what happened and where, the extent of the reductions, when they happened and whether restoration has happened to date. We understand that different things have happened in different places. We need to get the correct facts, and that is the current process.
In the normal course of events there is engagement between the Departments of Health and Public Expenditure and Reform, among others, on these matters. Given that section 39 health agencies are under the remit of the Department of Health, it would be normal that we would appear before the committee today. There is a focus on getting the analysis to establish the facts so that we can move forward in determining what has happened and the appropriate steps at this stage. That is why we have a process in place now. One union has indicated satisfaction with that approach, and we hope to continue to work with others in the hope that we make progress on this matter as quickly as possible.
John Dolan (Independent)
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The only reason that process needs to be gone through at this point is because it was not done before now. This issue was quite easy to anticipate. Concerns have been expressed about it by organisations and trade unions for quite some time. I have not had any dates in responses to specific questions. When did the start of the detailed consideration by officials in the two Departments commence? I have no indication as to when this exercise will be completed. I do not mean that every i needs to be dotted and every t crossed, but when will the exercise be concluded in a substantive way? There is continued attrition and migration this year, which is creating pressure.
Mr. Stephen Mulvany:
Senator Burke had a question about what percentage of section 39 organisations' revenue costs would involve pay. As we said in our opening statement, €787 million is what we provided in 2017 as financial assistance to section 38 organisations. I would certainly agree with some of the comments. It is likely that pay costs for typical section 39 organisations would be at least 80% of their total running costs. In some cases the figure may be higher given that they predominantly involve staff, and consumables and external supplies will not be significant unless the organisation has a policy of outsourcing. We think that 80% or more of the funding we provide is used for pay costs.
I agree with Deputy Kelleher that it is the case that in many instances sections 38 and 39 organisations fundraise for capital. The HSE more typically provides revenue costs.
There is some conflation around the HIQA piece. It and the registration of residential facilities were more important issues in recent years than the cuts in 2010. We have to remember that, as one of the committee members mentioned, there is a certain total pot of available resources to the Government and health. Within that, a pot is available to section 39 organisations and our services. What we spend on dealing with the appropriate outcomes of, for example, HIQA inspections often means incurring additional staffing costs, that is, additional pairs of hands in an organisation.
A fundamental choice always has to be made, something which is not unique to this situation, between the numbers of staff an organisation wishes to have versus the hourly rate of pay for those staff. We have been very clear that there is an issue which needs to be resolved. Our intention is that this process will provide data to allow decision-makers to make calls on the appropriate phased restoration or resolution to this issue. We agree it needs to be resolved. While those involved are not public servants, they are providing important public services. There is no dispute in that context.
Billy Kelleher (Cork North Central, Fianna Fail)
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I refer to HIQA. I accept it is conflated but it is inextricably linked in another way. A block grant comes from the HSE to a section 39 organisation. HIQA then arrives on the scene and says additional staff are needed to provide a service and that the organisation is in breach of guidelines or regulations if it does not do so. Following that, two things can happen. The organisation can reduce the service to the complement of staff it has, which effectively means that some of those requiring services can no longer access them, which can have an impact. Alternatively, the service can try to manage around the situation in a way which skirts very close to a breach of regulations. That is a fact.
Services do not want to send people home or tell people they cannot send their son or sister to a service because the organisation can longer provide it. Not a week goes by without Senators Dolan and Burke and I making representations on this issue on behalf of families who have been told that services have been cut because of HIQA regulations and inspections. More often than not, it is down to staffing levels. Staff pay cannot be reduced any further, because there will be even fewer staff due to the fact they will go elsewhere. As Senator Dolan said, there is a market. Qualified nurses, therapists and others specialising in this area will go elsewhere, which further diminishes services. It is creating significant difficulties.
The issue is inextricably linked to pay because HIQA is now stating quite clearly in reports that it is disappointed with the level of training standards of agency or transient staff because organisations cannot retain them in the first place. Services are being diminished on a continual basis. When everything else is stripped away, it primarily comes down to the pay of individuals as opposed to the block grants given to section 39 organisations.
Mr. Stephen Mulvany:
I would largely, but not totally, agree with the Deputy. He spoke about the pressures in disability organisations and other services in terms of providing residential disability services. Given the necessary regulation provided by HIQA and the results of those inspections, that pressure is typically pressure to be able to afford sufficient numbers of quality staff to meet the requirements. That is a significant pressure which services are under and it is a continual focus of our Estimates discussions with colleagues in the Department of Public Expenditure and Reform each year.
Beside that pressure is the significant issue of the recruitment and retention of staff for section 39 organisations, in particular the pay rate. In financial terms, it is a smaller pressure. It is in itself a significant pressure. We have sought funding for both of those pressures this year. Unfortunately, we were not successful in securing resources for the pay rate issue referred to as restoration in section 39 organisations. We have to realise that the two compete for the same resources.
Colm Burke (Fine Gael)
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One section of the HSE had a significant increase in staff numbers, but there was no pro rataincrease in section 39 provision. I do not think that was taken into account in the planning process.
Colm Burke (Fine Gael)
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Over the past three years there was significant growth in administration and managerial staff in the HSE without anyone calling check on it and saying that we need to look after the people on the front line of section 39 organisations.
Neither the Department nor the HSE looked at that issue which should not have arisen.
Colm Burke (Fine Gael)
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I have analysed the figures and do not accept that. The figures show that 2,000 additional staff were recruited and I do not accept that they ended up on the front line.
Colm Burke (Fine Gael)
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I have examined the figures for hospitals. The same approach to looking after front-line services in section 39 organisations was not taken in 2014, 2015 and 2016. My point is that if it had been taken on a pro rata basis, the current challenge in respect of section 39 organisations would not have arisen.
Ms Rosarii Mannion:
I take the Senator's point. We are dealing with competing priorities in the services we must provide. On the specific issue of the growth in management numbers, I will be happy to take the Senator through them in detail. At grade 8 level and above, we have slightly more than 1,000 staff across the organisation. If the Senator would like to set aside a half day, we could discuss the matter in detail.
Colm Burke (Fine Gael)
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In the 2015 annual report 4,700 staff were categorised as managerial. However, the HSE subsequently changed the classification by removing grades 7 and 8 from the managerial category. The real figures I received in April show there are now 5,400 managerial staff in the HSE. Ms Mannion can give me all of the figures she likes. When questions were tabled on this issue, grade 7 and 8 staff who had been classified as managerial in 2015 were removed from the managerial category and classified as administrative staff. The figures show that the number of staff at senior management level has increased by more than 700.
Ms Rosarii Mannion:
I do not dispute that and will be happy to go through the figures in detail. On the breakdown, the HSE employs 11,655 staff at grades 5, 6 and 7 and we employ 1,610 staff at grade 8 and above. There is a significant variation in respect of grades, role description and whether staff are back office, front-facing or whatever the case may be.
Ms Rosarii Mannion:
As I stated previously and the Senator will be aware, the health service depends on fully functioning teams to deliver services to service users, clients and patients. We have to approach issues of having growth in one area and a reduction in another or whatever else in a coherent and integrated way. I take the Senator's point on whether there has been more prioritisation in one area as opposed to another. We have specific details available on the management and administration area. When we expand services, whatever they may be, a management-administrative component is invariably required and many of these posts will be front-facing, for example, supporting consultants, clinics, dentists, etc. As I stated, we are prioritising, but it is crucial that we staff teams in an holistic way and do not constantly zone in on-----
Colm Burke (Fine Gael)
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While I accept that, the section 39 organisations did not benefit from a pro rataincrease in funding. If they had been provided with a pro rataincrease, we would not have the current problem.
Michael Harty (Clare, Independent)
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I am sure none of the delgates is calling into question of the bona fides of the section 39 organisations or the quality of care they provide, given the funding they receive. Is it appreciated that one of two things will happen if these organisations do not receive proper funding for staff and elements of their services, either there will be an increase in unmet need whereby those who receive a service or are those looking after service users will have a major burden imposed on them, or the service will transfer from the section 39 organisation to the HSE or a section 38 organisation? Service users are not going to go away; therefore, if they do not receive a service from a section 39 organisation, they will obtain it elsewhere, probably at a much higher cost. It does not make financial sense to fail to properly fund section 39 organisations because the cost of providing services outside them will be much greater. Is that appreciated?
Ms Anne O'Connor:
Absolutely. The group of service users to which the Chairman refers often have highly complex needs. We have agencies which provide highly intense services that require a high level of input. There is an absolute acknowledgement that these often vulnerable persons will always need services and that there will be a group of people who will always need that kind of service. It is important also that these services are often the front-facing services in communities. They are the services with which everyone is familiar and for which many people raise funds and so forth. From our perspective, it would not be in anyone's interest if section 39 agencies were to cease providing services or were placed in a position in which they believed they could not provide safe services. We are committed to ensuring these services remain in place. As I indicated, the HSE would struggle to provide the level of service provided by the section 39 organisations and the section 38 organisations would not be able to step to fill the gap. These organisations provide a wide range of services and are an absolute requirement for the population.
A breakdown of the figures shows there are in excess of 2,000 agencies. We need to consider how funding is allocated across these organisations within available resources. We are dependent on the resources available to us to be able to manage this.
Michael Harty (Clare, Independent)
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My point is that while we are focused on organisations, patients should be the focal point of all discussions.
Michael Harty (Clare, Independent)
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Patients are often forgotten about in the discussions between the Health Service Executive, the Department of Health, the Department of Public Expenditure and Reform and the section 39 organisations. The requirements of patients should be foremost in our considerations.
John Dolan (Independent)
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There is no such thing as a section 38 or 39 organisation, only organisations that receive funding under these sections.
Alan Kelly (Tipperary, Labour)
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I apologise for my absence during the presentation. However, I have read the submission. I seek clarity on a matter with which the Chairman may have to assist me. Since our earlier discussion, I have received a communication which indicates that officials from the Department of Public Expenditure and Reform spoke to officials from the Department of Health about this meeting. Is that the case? In a discussion earlier today members noted that it would be inappropriate if the Department of Public Expenditure and Reform were not represented at this meeting. Was an understanding reached between the Departments of Health and Public Expenditure and Reform that the former would represent the latter at this meeting?
Alan Kelly (Tipperary, Labour)
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I am not asking whether the Department of Health took the lead. When officials from two Departments appear before a committee, one Department obviously takes the lead. Did officials from the two Departments have a conversation in which it was agreed that officials from the Department of Public Expenditure and Reform would not attend this meeting and that officials from the Department of Health would effectively represent the Government?
Alan Kelly (Tipperary, Labour)
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In fairness, the delegates do not have jurisdiction over the Department of Public Expenditure and Reform. Are they representing the Department of Public Expenditure and Reform?
Alan Kelly (Tipperary, Labour)
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What was the purpose of having a conversation with the Department of Public Expenditure and Reform about representing it at this meeting, given that, as Ms Cody stated, she cannot represent that Department?
Alan Kelly (Tipperary, Labour)
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Ms Cody is splitting hairs. I think she knows what I am getting at. Is it correct that there was a conversation between officials from the Departments of Public Expenditure and Reform and Health about this meeting?
Alan Kelly (Tipperary, Labour)
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As a result of that meeting, the officials from the Department of Health indicated that they would represent either the Department of Health or the Departments of Health and Public Expenditure and Reform.
Ms Teresa Cody:
I have come and made a statement on behalf of the Department of Health and the HSE. We have been in discussions with the Department of Public Expenditure and Reform.
Alan Kelly (Tipperary, Labour)
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I will stay here all day if I have to because I need an answer. Ms Cody is not representing the Department of Public Expenditure and Reform and no agreement was reached between the Departments of Health and Public Expenditure and Reform to the effect that officials from the Department of Health would represent both Departments. Is that correct or am I wrong?
Alan Kelly (Tipperary, Labour)
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I would like the Chairman to direct that my question be answered. I understand Ms Cody is here to represent the Department of Health. I only require some factual information, but Ms Cody is not here to represent the Department of Public Expenditure and Reform.
Alan Kelly (Tipperary, Labour)
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We are making a little progress. Now we just need to get to the truth. Ms Cody is here to represent the discussion the Departments of Health and Public Expenditure and Reform had on this issue, but she is not here to represent the Department of Public Expenditure and Reform. Is that correct?
Alan Kelly (Tipperary, Labour)
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Can the Chairman tell me if the Department of Public Expenditure and Reform stated its officials were not going to attend?
Michael Harty (Clare, Independent)
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The Secretary General of the Department of Public Expenditure and Reform contacted the clerk to say it would not provide officials to attend the meeting this morning.
Alan Kelly (Tipperary, Labour)
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What happened then?
Michael Harty (Clare, Independent)
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That was it.
Alan Kelly (Tipperary, Labour)
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When was that?
Michael Harty (Clare, Independent)
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On Friday afternoon.
Alan Kelly (Tipperary, Labour)
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Did we express concern or what was the outcome? He communicated that information to us and that was it.
Michael Harty (Clare, Independent)
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Yes; it was a verbal communication.
Alan Kelly (Tipperary, Labour)
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There was no other issue.
Michael Harty (Clare, Independent)
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There was no written communication.
Alan Kelly (Tipperary, Labour)
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As a result the officials representing the Department of Health have been put in a difficult position. I do not think this is the way things should be done. I have often sat on that side of the fence, as the officials know. It would have been better if the HSE had been represented here to deal with the questions to it only and the Department of Health to deal with the questions to it only. There are three legs to this issue and the Department of Public Expenditure and Reform is the paymaster, but it is obvious from what has happened this morning and subsequently that we have to have officials from the Department of Public Expenditure and Reform here within the next few days, if possible, to close off the full conversation on this issue. What has happened this morning is deeply regrettable. The officials had to come and explain their role, but officials from the Department of Public Expenditure and Reform, for whatever reason - I am not casting aspirations on anyone - did not come. That is deeply regrettable and unsatisfactory and, for future similar meetings, something we need to consider.
Michael Harty (Clare, Independent)
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We did consider our powers of compellability. It appears we do not have powers of compellability.
Alan Kelly (Tipperary, Labour)
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I accept that. Only the Committee of Public Accounts has powers of compellability. It is unclear whether officials from the Department of Public Expenditure and Reform were willing to come. If they were willing to come, was there a mix-up or an issue regarding the conversation with the Department of Health? I take it that they were unwilling to come and that we will have to bring them here.
Michael Harty (Clare, Independent)
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An invitation was issued to the Department in the same way as every other grouping was invited. On Friday it indicated that it would not provide officials to attend this meeting and that the Department of Health would take the lead on this issue.
Alan Kelly (Tipperary, Labour)
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That is unacceptable and we need clarity on the issue. I suggest the Chairman talk to the Department of Public Expenditure and Reform this afternoon to get a date for representatives to come here. I do not think on moral grounds that officials from any Department can refuse to come before a committee such as this.
Michael Harty (Clare, Independent)
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On behalf of the joint committee, I thank the representatives of the Department of Health and the HSE for attending to give evidence.