As the Tánaiste will be aware, next Tuesday is the International Day of Persons with Disabilities and many Deputies met representatives of a new organisation, the disability action coalition, in a meeting facilitated by Senator Dolan last week. The coalition comprises nine not-for-profit organisations that fall under section 39 of the Health Act 2004. The coalition comprises Rehab, Enable Ireland, the Irish Wheelchair Association, MS Ireland, Headway Ireland, National Council for the Blind, Chime, Acquired Brain Injury Ireland and Cheshire Ireland. As we all know, they cater for tens of thousands of our citizens with disabilities in our constituencies and employ more than 9,000 dedicated staff members.
The coalition informed us about its research last week, which shows a funding shortfall of at least €20 million between those organisations each year. That is only the amount required to keep services going and those organisations have had to cut services over recent years, including respite and day services and a range of specialist services for children and adults. That has happened because the funding they receive from the HSE simply does not match the cost of delivering those services. They have also faced additional costs in recent years, including pay restoration and unwinding the financial emergency measures in the public interest, FEMPI; additional regulations and compliance costs, which are necessary; and soaring insurance costs with which the Government has not dealt.
Many organisations are struggling to retain staff because of the difference in pay between section 39 bodies, as defined by the 2004 Act, and section 38 bodies which have HSE staff. This adds substantially to training, recruitment, staff retention and agency staff costs and lengthens waiting lists for people with disabilities. These organisations have tried to bridge the shortfall using their own resources but that is increasingly difficult. Not-for-profit section 39 organisations deliver two thirds of our disability services and are contracted to deliver vital health and social care services. In fact, 35% of the overall disability budget is spent in this area. Although the staff feel they are delivering the same kind of services as HSE staff, these organisations are not fully funded and their employees are not being treated the same.
I raised this with the Tánaiste and the then incoming Taoiseach more than two years ago. The Government set up an independent review group, chaired by Dr. Catherine Day, in late 2017, which reported early this year. Will the Government implement the key recommendations of the report, especially those in chapters 8 and 9? One recommendation is that the Department of Public Expenditure and Reform should examine the financial analysis of deficits and surpluses of voluntary bodies. The report also recommends a move to multi-annual funding, including budgets for three to five years, and a forum where the HSE, the Department of Health and the voluntary sector, including section 39 bodies, can meet regularly and avoid the annual wrangling over budgets.
Will the Minister for Health, Deputy Harris, meet representatives of the disability action coalition? The emphasis should be on action to try to ensure that the deficits of these nine organisations will be addressed. We are discussing a supplementary health budget in the amount of €338 million.
The Deputy will have a second opportunity to contribution.
Is it possible to amend that budget to address this matter or at least to ensure that the shortfall in funding does not happen again in 2020?
This is an important issue. Voluntary organisations that provide services on behalf of the HSE do so on a contract basis under either section 38 or section 39 of the Health Act 2004, as the Deputy outlined. Such organisations provide a broad range of services across the health system, including large acute care hospitals, specialist hospitals, disability services, hospice care, mental health services and addiction and rehabilitation services. Community-based support groups focusing on social inclusion support and advocacy may also operate under these sections.
Service arrangements are in place between the HSE and all service providers, which clearly set out the obligations of the organisation, the services for which they are engaged by the HSE and the funding that has been agreed for that. The HSE is monitoring, on an ongoing basis, the financial position of organisations funded under the service level agreements. The current service level agreement process provides a forum for such organisations to discuss any issues or difficulties with the chief officer of the relevant community healthcare organisation.
The Minister for Health is aware that some section 39 organisations have raised concerns about financial sustainability with the HSE, including a number of organisations in the disability sector. The HSE has assured the Department of Health that it is committed to working intensively with such organisations to support them as appropriate to address such issues in the context of the service level agreement process. Where it is identified that a genuine issue is arising that may impede the effective and efficient delivery of services by sections 38 or 39 social care service providers, any remedial action will need to be considered by central Government, as a resolution cannot be addressed within the current health Vote resources.
In May this year, the voluntary hospice group wrote to the Minister for Health asking that all section 39 hospices be redesignated as section 38 organisations on the basis that hospices provide core services not provided by the HSE. I have been involved in that conversation with the Minister for Health. As of now, there is no established procedure for transitioning from section 39 status to section 38 status. There are obstacles to overcome while determining how a mechanism could be created to facilitate such a transition, which include additional costs to the Exchequer, employment ceilings and conditions attached to transfer as well as legacy and governance issues.
This is a real debate. Dr. Catherine Day produced a report, which I understand is with the Minister at the moment. He is likely to implement its recommendations but it is important for him to have the opportunity to outline that in the context of the related issues. This issue is getting serious Government consideration.
Dr. Day and her colleagues set out a roadmap to overhaul the current, flawed budgetary process that applies to section 39 organisations. The outdated funding system in operation results in conflict, year in and year out, with the HSE. Once again this year, as every year, section 39 services are struggling desperately to keep going. It is important that the Minister for Health meets representatives of the disability action coalition soon, I hope before Christmas, and he might set out a timetable. Everybody in the House will agree with that because of the nature of the services involved, which are important to our society. A timetable should be agreed for 2020 to implement these key changes.
What is happening with pay restoration for section 39 organisations? The Minister told me previously that there is engagement with the Workplace Relations Commission on this matter but the exact cost of restoration for the entire sector has not been determined, and the Department of Public Expenditure and Reform needs to become involved in this because it is a considerable burden on the disability action coalition members.
Is it possible, even at this late stage, to look again at a Supplementary Estimate and to ascertain if we need more funding for these bodies? It is €338 million at present. Can we add to that to enable them to balance their books this year? One of the key issues to emerge at the Committee on Budgetary Oversight, of which I am a member, is that we must have realistic—–
The Tánaiste to respond. Deputy Broughan knows the rules.
—–and fully costed health budgets. That is critical.
We are moving in the direction of making sure that the health services Estimate is accurate and that we do not have a substantial Supplementary Estimate at the end of each year for healthcare provision. This is where we are moving to. The Minister for Health, Deputy Harris, has made huge progress on that this year. It is, however, difficult because every time I answer questions in this House Deputies are looking for more money for healthcare outside the Estimates—–
It is because the Government is not spending the money it has.
—–and we need to respond to that and do—–
It is due to incompetence.
—–and therefore have to introduce Supplementary Estimates. We must try to shrink that number by being more accurate in predictions 12 months out, while at the same time recognising that healthcare will need more and more money every year. This year the HSE has allocated €1.9 billion to the disability service programme. In context, this is an increase of almost €350 million since 2016. We continue to raise expenditure in the area of disability, and this will continue as demand continues.
The issue of section 38 organisations versus section 39 organisations, and the request for recategorisation from section 39 to section 38 status, is a complex issue for the Government. It is a very expensive problem to solve and the Department of Public Expenditure and Reform is involved in this conversation, as is the Minister, Deputy Harris. I will ask the Minister if he will meet the disability action coalition. I would be very surprised if that would not happen before the end of the year.