Joan Burton (Dublin West, Labour)
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Question 224: To ask the Minister for Health and Children if he will confirm that letters (details supplied) were issued on 25 January 2010 to both the chief executive officers of the Health Board Executive and the National Federation of Voluntary Bodies outlining a €21.5 million reduction in grant aid to agencies; if she envisaged that the totality of these grant reductions would be passed on in the form of pay cost reductions for employees of these grant aided agencies; and if she will make a statement on the matter. [7619/10]

Mary Harney (Dublin Mid West, Independent)
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The Government's decision to reduce its payroll costs in various ways – principally by reducing the salaries paid to public servants and reducing the numbers employed – was deliberately designed to protect existing levels of public services and to provide a more sustainable payroll cost base into the future. I understand that the HSE issued an early warning notice to its grant aided voluntary agencies signalling that the pay reduction for public servants under the Financial Emergency Measures in the Public Interest (No 2) Act 2009 might automatically apply to the agencies. My Department subsequently clarified to the HSE in writing, on 22 January 2010, at their request, that grant aided agencies funded under section 39 of the Health Act 2004 were not directly affected by the pay adjustments provided for under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009. Section 39 agencies are not public service bodies as defined in that Act and their employees are not public servants. A similar letter also issued to the CEO of the National Federation of Voluntary Bodies on 25 January 2010. I believe these are the letters to which the Deputy refers in his question. However, the level of funding being provided to section 39 agencies is being reduced as part of the general efficiency savings for the health sector provided for in the Budget and it is entirely appropriate that notwithstanding these reductions section 39 agencies and other HSE funded voluntary providers take appropriate measures to ensure that they continue to provide the same level of service in 2010 as previously. It is the responsibility of each individual employer to decide exactly what mix of actions should be taken to achieve this goal, to take appropriate legal and other advice, to consult and inform its employees and trade unions as necessary and to manage the HR and industrial relations implications of its decisions. I further understand that the HSE is in the process of confirming this position to the bodies concerned on foot of clarification in the matter from my Department. Budget 2010 requires the HSE to generate non-pay savings of €394 million, €106 million of which is to be met through economies. It is a matter for the HSE to determine how these non-pay savings are to be met, but it is likely that grant-funded agencies will bear some proportion of the savings.