Martin Daly (Roscommon-Galway, Fianna Fail)
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341. To ask the Minister for Children, Equality, Disability, Integration and Youth if she has received representations from Section 38 disability service providers about historic financial deficits for service providers; the scale of any historic deficits in the sector made known to her department; her plans for dealing with this issue; and if she will make a statement on the matter. [18158/25]

Hildegarde Naughton (Galway West, Fine Gael)
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The Government acknowledges the essential role of workers in community and voluntary organisations who deliver health and social care services to many people across the country. My Department is committed to working with the HSE and the broader disability sector in order to ensure that valued service providers receive the funding they need to continue to deliver quality services and supports to disabled people in Ireland.

The sustainability of services is a focus for Government and we recognise that there is a recurring service and financial risk within some specialist disability services. While I have not received specific correspondence in this regard from Section 38 providers, I acknowledge and understand that some specialist disability service providers are experiencing funding, operational and governance challenges.

Operational deficits were identified as a systemic financial risk at the time of the transfer of services to the Department of Children, Equality, Disability, Integration and Youth from the Department of Health. These risks are actively managed by the HSE through its oversight and monitoring of services, and where necessary, the provision of once-off supplementary funding and cash accelerations to organisations.

Most importantly, Government has also provided substantial additional funding to disability services since the transfer through the annual Estimates process to help meet the increasing cost of existing service while also incrementally expanding service provision to meet demand.

Specifically, the budget for specialist disability services has grown by €1.6bn since 2020. Notably, the bulk of these increases have been provided in the last two years, with an additional €272m allocated in 2024 and €333m allocated in 2025 bringing the total budget to €3.2bn (incl. €27m capital)

Of the €333m in additional funding in 2025, €290m was allocated to maintain existing levels of service for people with disabilities. This is a significant provision which recognises the challenges prevailing in the voluntary sector including the increased cost of service provision, pay cost pressures and service provider sustainability.

In addition, the Department provided €162m in supplementary funding to the HSE in 2024 to meet cost overruns arising last year.

While the Minister sets the strategy, policy direction and the overall allocation for the sector, funding allocations to individual service providers is an operational matter for the HSE as the funding authority. The Department provides funding to the HSE to deliver specialist disability services either directly or via grant funding to Voluntary Organisations under Section 38 and Section 39 of the Health Act. There is a statutory obligation upon the HSE under the Health Act to plan and deliver services within the agreed allocation.

In allocating funding to service providers, the HSE takes into account the resources available, Ministerial strategic priorities, national targets for service expansion, regional need and capacity of service providers to deliver.

The financial challenges facing the voluntary disability sector are highly complex, arising from both historical issues around funding arrangements as well as emerging challenges due to changing profile of user need, higher safety and quality standards, and general demographic and inflationary pressures. The Department, in conjunction with the HSE, has agreed a program of work to achieve a better understanding of unit costs, expenditure drivers and forecast demand to ensure investment is targeted appropriately and effectively.

As we enter the next Estimates process, there will be an opportunity to further consider theses funding allocations. The Department will engage with the HSE, as part of the Estimates process, to determine funding priorities. The Department will also take into consideration the pre-budget submissions received from representative bodies and feedback from a disability stakeholder pre-budget forum which will take place in the summer.

Going forward, the Department is also looking to develop a national strategic vision for specialist disability supports and services for 2030. The aim of this strategy is to ensure that people with disabilities and their families can have clear and credible expectations as to what supports and services they can expect to access, wherever they live in Ireland.

This strategic vision will be based on a reformed models of service which embed a human rights approach to reflect the changing profile of need of service users, with a focus on credible staffing expectations, expanded use of technology, and other critical enablers. It will also ensure that service providers, whether HSE, voluntary or private, can deliver person-centred services at scale, in a cost-effective and sustainable way. It is envisaged that this strategic vision will inform a second phase of the Action Plan for Disability Services.