Seanad debates
Thursday, 21 March 2024
Nithe i dtosach suíonna - Commencement Matters
Disability Services
9:30 am
Jerry Buttimer (Fine Gael)
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I welcome the Minister of State, Deputy Niall Collins. I call Senator Carrigy. The Senator has four minutes.
Micheál Carrigy (Fine Gael)
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I thank the Chair. I also welcome the Minister of State.
This matter relates to the current funding situation at St. Christopher's Services, which is a special school in Longford that was built by the people of Longford and has been funded by them for more than 40 years. The school is close to the hearts of all of us in Longford. However, there is currently a significant deficit of €250,000 per month. This will decrease to €140,000 per month when the 8% increase for section 39 organisations that was agreed prior to Christmas comes into play.
St. Christopher's Services is a section 39 organisation. A number of years ago, a significant number of staff left the school to work in the HSE as a result of the wage differences that existed. In recent months, to my understanding, there have been a number of issues around delays in pay. Staff have contacted my office about the matter. Issues around pension contributions not being forwarded to various companies and so forth came to the fore in recent weeks. I met with management and spoke to some people on the board of directors, etc., to discuss the issue. This organisation is at crisis point. When the wage increase comes into place, there will be a deficit of €140,000 per month. That amounts to almost €1.7 million by the end of the year.
In 2022, Government TDs in our county made promises of additional funding to cover wage increases. The board of directors made a decision to increase the wages of staff in light of the high numbers that were leaving the organisation. It did so on the basis that it was told that funding would be made available to cover the increase. That promise was made by a local TD in Longford. It is now early 2024. In recent months, staff have not been paid on time. In recent weeks, we have discovered that there is a significant financial shortage. The HSE had to come on board and front-load money from the end of the year to allow the school to get over this hump. The reality is that this will continue unless there is a change in the funding model for St. Christopher's Services, as a section 39 organisation, or unless it is taken over by the HSE.
This was caused by false truths told to staff and the board that money was in place. We now find out that it is not in place. I do not think that is acceptable. St. Christopher's Services has been close to the heart of every person in Longford for almost the past 50 years. It fundraised in every single corner of our community. That has stopped because of numerous issues such as that to which I refer. I am seeking the facts in respect of this matter. Staff are entitled to the facts. They were not told the facts; they had to find out for themselves that these issues had arisen. They were not told in advance. I am a public representative. As someone who represents the people of Longford, I need to know what the facts are because those involved are not being told the facts by another public representative in the county. They are being told lies. They were informed that money was put in place and that is not the case.
Jerry Buttimer (Fine Gael)
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I ask Senator Carrigy to be careful when using the word "lies".
Micheál Carrigy (Fine Gael)
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I apologise. There were mistruths. The facts need to be put out there. We must ensure that this organisation that looks after the vulnerable in our community is properly funded into the future and that it is placed on a firm footing. We need to ensure that we will not have a situation where a voluntary board of directors makes a decision to pay increased wages - and rightly so - to a significant number of staff in order to keep them on board to look after our vulnerable people to then be left in a situation where there is a significant deficit within the organisation as a result of that decision, which was based on information that turned out to be incorrect. I call on the Government to immediately put in place the funding, on a permanent basis, to cover these increased wages in order to ensure that we can keep the staff within St. Christopher's Services to look after the vulnerable in our community in Longford.
Niall Collins (Limerick County, Fianna Fail)
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I thank Senator Carrigy for raising this important issue. St. Christopher's Services is a disability services provider founded in 1964 by parents and friends of disabled people in Longford. It is an independent legal entity governed by a board of directors. The organisation is funded by the HSE's Midlands Louth Meath community healthcare organisation, CHO, under section 39 of the Health Act, with minor funding from other sources. St. Christopher's Services currently provides day, residential and respite services in a number of locations across Longford. Services are provided on the basis of individualised need and are agreed in partnership with the HSE, service users, families and other voluntary providers to enable service users to reach their full potential. The organisation is an important provider of services, and the HSE is consistently assured of the quality of the services provided by the organisation.
Notwithstanding recent year-on-year increases in funding, it is acknowledged that the HSE, and the disability service providers it funds, are experiencing financial pressures. Demographic changes, increased complexity in service user need, regulatory compliance and recruitment challenges have all served to increase demand on available resources. With significant assistance from the HSE and the implementation of a cost-management programme, St. Christopher's Services had achieved a break-even financial position over recent years, with a small deficit in 2022.However the HSE did not have advance warning of the scale of the financial difficulties which emerged at St. Christopher's in late 2023. This included a number of Revenue notices of attachment served on the HSE in relation to St. Christopher's. The HSE has assisted St. Christopher's to deal with these notices of attachment through a cash acceleration process. The cumulative cash advances as of 15 March 2024 are in the region of €3.5 million. This is a significant commitment of public funds by the HSE and as a result the CHO finance team undertook a due diligence process with the organisation with a draft report issued to the management of St. Christopher's. A response to this report is awaited. The HSE separately comissioned EY to review the due diligence process and the last number of years income and expenditure at St. Christopher's. The review identified weaknesses in internal financial controls and information deficits, with the gap between operational costs and available income due almost exclusively to the organisation's decision to increase its pay costs beyond available funding. HSE cash advancements have enabled the service to cover weekly and monthly payroll, to cover commitments to Revenue and to pay into pension schemes for employees. In addition, funding has been advanced to cover trade creditors and ensure that supply chain for service provision is maintained. On the basis of current knowledge, the anticipated cash deficit 2024 is expected to be €2.4 million. This will result in a cumulative deficit of €4.4 million at the end of 2024, with a funding level of approximately €14 million being provided by the HSE this year.
As to next steps, I know that, most importantly, the Minister, Deputy O’Gorman and the Minister of State, Deputy Rabbitte want to take this opportunity to reassure the many people who use these services and their families that their services will be protected and maintained. The HSE chief officer of CHO 8 is working intensively with the organisation to develop a pathway to financial stability. This includes exploring options for additional support for the board to enhance governance and oversight processes and mechanisms for further audits of financial systems and governance. The chief officer remains in close contact with senior members of the St. Christopher’s board in order to provide support and maintain communication channels during this challenging period.
The chief officer will be meeting with the board again in the coming days to clearly articulate the next steps required and to request defined cash flow information for the next six to eight weeks, to ensure that the HSE can respond to any changing needs accordingly. This proactive financial and practical support from the HSE will enable St. Christopher’s to continue its valuable service provision in the immediate term while a strategy is developed to address core sustainability issues. It is a key objective of the Government to ensure that appropriate funding is available to give stability to service providers for delivery of quality services for people with disabilities.
Micheál Carrigy (Fine Gael)
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I thank the Minister and I welcome the commitment to ensure that there is going to be appropriate funding. Within the reply, there was a reference to the flow of information for the next six to eight weeks to ensure that the HSE can respond but we need to know for the next number of years; key to that we are looking at a deficit of €4.4 million in the organisation at the end of the year, a deficit of more than I thought of €2.4 million for the current year alone. That is not sustainable for an organisation going into the future, going from week to week. I see where the deficits have been caused exclusively by a decision made by the organisation; that is what is said in the reply here. However the information that was given to the people making that decision was that funding would be made available permanently going into the future and that funding would be put in place to pay those wages. Those commitments were made by members of the Government and Government parties, it was not made by me. It is not acceptable that these people have given their time voluntarily to look after the most vulnerable in our community, have made a decision based on those commitments and have now been left with a huge deficit and uncertainty for staff, service users and their families. We need a commitment and a guarantee going into the future.
Niall Collins (Limerick County, Fianna Fail)
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Once again I thank the Senator for his contributions on this matter, the points he has made will be conveyed to both Ministers and the HSE. The Government has demonstrated its continuing commitment to people with disabilities with a record €2.9 billion being provided in 2024. This includes significant additional funding to help increase service capacity to deliver more for people with disabilities across the country. It is however recognised that several organisations are in a weakened financial state. The financial challenges facing the voluntary sector are highly complex, arising from both historical issues around funding arrangements as well as emerging challenges due to a changing profile of user need, higher safety and quality standards and general demographic pressures.
The Governement is working to progressively address these challenges and the disability capacity review was an important step in mapping out and acknowledging the levels of unmet need in the sector. The action plan for disability services sets out our ambition for reform and expansion of disability sevices over the next three years and this includes a significant policy service transformation initiative to ensure innovative person-centered solutions to meet these systemic challenges. In the meantime,cash advances have been made to cover the financial commitments and funding has been advanced to cover outstanding debts to ensure the service provision is maintained at St. Christopher's.