Michael Kitt (Galway East, Fianna Fail)
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We will wait a minute for Deputy Robert Dowds to speak on the next Topical Issue.

Robert Dowds (Dublin Mid West, Labour)
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Gabh mo leithscéal, bhí mé ag feitheamh taobh amuigh agus ní raibh a fhios agam go raibh tús curtha leis an díospóireacht.

James Reilly (Dublin North, Fine Gael)
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Táimid an-efficient anseo, nach bhfuil?

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Toisc go bhfuil an Aire anseo, sin an fáth.

Robert Dowds (Dublin Mid West, Labour)
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The topic I raise relates to the need to ensure the boards of section 38 health organisations are representative of all stakeholders. It is an obvious one because of some of the cases that have come to light. As a member of the Committee of Public Accounts, I heard representatives of the Central Remedial Clinic, CRC, and the board of St. Vincent’s University Hospital explain themselves. While issues definitely arise in terms of pay, one of the things that struck me was the way the boards had been constituted. I worked in a school that was under the patronage of the CRC; therefore, I have some personal experience of it. These organisations have boards which do not in any way represent their clients and staff. The Government should use its clout to ensure all section 38 bodies have boards which represent the organisation effectively and which are fit for purpose. I have no doubt that if one trawls through all section 38 organisations, some of them will have good, effective boards, but we must put down a marker to ensure best practice is followed. The fact that most of the money the organisations receives comes from the State puts us in a good position to ensure this happens in the sense that he who pays the piper calls the tune. We have an opportunity to improve the position.

The first board that comes to mind is that of the CRC because it and the board of the Friends and Supporters of the CRC have now resigned and something must be done about the situation. I understand the HSE has been talking to an organisation called Boardmatch Ireland which is working on constituting a new board for the CRC. How that pans out might be instructive on how the situation will develop. The problem arises because many of the organisations – the CRC is a good example, while Enable Ireland is another – started off as charitable organisations with the very best of motives on behalf of those who worked for them. Many of those involved were working voluntarily. The position changed fundamentally when the State began to fund these organisations. Therefore, the old model under which they had operated was no longer appropriate. The issue should have been tackled previously, but the revelations about the CRC, St. Vincent’s University Hospital and, I suspect, other organisations give us an opportunity to make a new start. I am interested in hearing the response of the Minister.

James Reilly (Dublin North, Fine Gael)
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I thank the Deputy for raising this important and current issue. The HSE provides funding of approximately €3 billion for almost 3,000 agencies for the delivery of a range of services, of which €2.44 billion is provided for section 38 organisations, of which there are approximately 38.

Robert Dowds (Dublin Mid West, Labour)
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There are 43.

James Reilly (Dublin North, Fine Gael)
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They are primarily in the acute hospital and disability sectors. Since 2009 they have been required to enter into a formal service arrangement with the HSE. The service arrangement is the contract between the HSE and each individual agency. Under this arrangement, they are obliged to give certain undertakings in relation to compliance with a range of standards and statutory requirements.

A compliance statement process came into effect for agencies from January 2014 and applies to their 2013 financial accounts. Submission of an annual compliance statement will form part of the consideration of ongoing funding for each agency. In agencies established under legislation the membership of the board is often prescribed in the legislation. In general, legislation prescribing the membership of boards provides for the inclusion of relevant stakeholders particular to the organisation. Where membership is not prescribed, boards must examine their functions to ensure the appropriate competency and skills mix is provided by board members in order to carry out their functions effectively, ethically and in keeping with best governance practice.

In line with Government decisions in 2011, my Department advertises for board vacancies as they arise where I, as Minister for Health, have nominating rights. Competencies are developed and agreed in conjunction with relevant boards, depending on their requirements. The suitability of applicants is assessed against these criteria and a short list is compiled, from which I may make appointments. Full cognisance is taken in all appointments made by me of relevant competencies or gaps identified by individual organisations. The code of practice for the governance of State bodies provides a framework for the application of best practice in corporate governance by both commercial and non-commercial State bodies. While a list is provided, sometimes people who have not applied, who are deemed by the Department to have suitable qualifications, can be appointed also.

The chairperson performs a key role in ensuring appropriate standards of corporate governance are adhered to in all aspects of the activities of the board. Boards are required to constantly review their operations and seek to identify ways to improve their effectiveness. This will include the identification of gaps in competencies and ways they could be addressed. Where a board chairperson is of the view that specific skills are required on the board, he or she should advise me of this view for consideration sufficiently in advance of the time when board vacancies are due to arise in order that I may take his or her views into consideration when making appointments.

I have recently established a governance forum for the health sector, including section 38 agencies, to support and help chairpersons, board members and CEOs to fulfil their accountability and governance roles. I will insist on structured induction programmes for all new board members and a system of independent regular governance audits. All efforts are made, in conjunction with relevant agencies, by my Department and the Health Service Executive to ensure the composition of each board and relevant competencies required to facilitate the effective and efficient conduct of each organisation, including relevant stakeholder inclusion, are in place.

Robert Dowds (Dublin Mid West, Labour)
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I thank the Minister for his response. It is welcome that there will be pressure on the agencies to have appropriate boards in place. I am interested in hearing what the timescale is and whether any effort will be made to create an appropriate template for the various organisations. Primary schools have a particular template for how boards are appointed which specifies the inclusion of representatives of parents, teachers and the community, the principal and the chairperson of the board of management. Does the Minister consider that it would be valuable to do some work along these lines? Will he comment on two things, first, whether staff or clients of an organisation should be able to elect people to boards and, second, the length of time for which one should serve on a board? It is important that there be rotation. I do not wish to be entirely prescriptive, but, for example, a person might serve for a period of three years, after which another election should be held. In total, nobody should serve on a board for more than nine years. One of the problems with the CRC was that it was a self-perpetuating board and the staff and clients of the organisation had no influence on it whatsoever.

I am interested in hearing the Minister's response on whether a template should be put in place, whether clients and members of staff should be able to elect people to the board and how long people should serve.

James Reilly (Dublin North, Fine Gael)
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The Deputy is absolutely right; there are 43 section 38 agencies. All of this arose out of the HIQA report into Tallaght hospital, during the course of which we discovered alternative streams of payment which led us to a broader audit of the entire sector. This took some time, as the Deputy knows. With regard to the formulation of boards, strong recommendations came out of the inquiry following the appointment of Sir Keith Pearson to the board of Tallaght hospital. He is an expert in the NHS on governance. While I have great sympathy with the view that a member of the clientele or community should be on the board, he was absolutely clear, and I fully agree, that no member of staff should be on it. A member of staff can be on a board of governors but not on the board that supports the management of a hospital. In the past this has led to difficulties. This is the new template we use. We look at the various competencies required and we have a grid. If somebody does not meet the competencies on the grid, or the grid shows a deficit in competencies on the board, such as no one on the board having legal or financial competency, these must be addressed.

As is the Deputy, I am strongly in favour of the idea that a member of the clientele of a body such as the CRC should definitely be on the board, as should members of the community. These can be represented through the competencies but not necessarily exclusively so. We have made a huge leap forward in transparency and competencies on boards, and our health service will be the better for it. With regard to section 38 and section 39 agencies, we will have a better service for the people as a consequence.