The Department of Health has proposed a new initiative to deal with serious financial issues at one of of the country's main disability and mental health service providers, St John of God Community Services, which had warned Ministers that it could potentially face a disorderly collapse.
St John of God Community Services told staff on Thursday that following the intervention of the new secretary general of the Department of Health Robert Watt, it and the HSE had been asked to develop a new "sustainability impact assessment".
“The core objective of this is to provide St John of God Community Services with a pathway to financial and operational sustainability so that it can continue to maintain its important service delivery role in line with a reformed model of care.”
The letter to staff said that Mr Watt had identified to the HSE that St John of God Community Services was “a significant and important service provider for the State”.
“It was his foremost concern to ensure the continuity of appropriate services in accordance with strong governance mechanisms in a cost-effective and equitable manner”, management told staff in the letter on Thursday.
St John of God Community Services is a voluntary healthcare provider, with its own board and management. It receives funding from the HSE each year to operate services and employs about 2,500 people.
It is technically known as a Section 38 organisation, meaning its staff are considered to be public service personnel.
It announced last September that it would cease running the majority of its healthcare services, due to a funding crisis. It said at the time it would transfer responsibility for the services to the HSE over a 12-month period. Over this period the HSE could either arrange to run the services itself or transfer them to another operator.
A number of weeks ago it warned the Minister for Health Stephen Donnelly in a letter that an accumulated deficit of more than €32 million could have implications for its planned orderly wind-down and transition.
It told the Minister that without State support to deal with an accumulated legacy deficit of more than €32 million, it could face “liquidation as either a solvent entity or otherwise”.
It warned that this could lead to it having to sell off assets and properties to meet its debts. It suggested that such a scenario could have significant implications for the thousands of people to whom it provided services.
Management at St John of God Community Services told staff on Thursday that its board was considering the new proposal from Mr Watt but that pending a successful outcome it was continuing with the preparations to withdraw from the public system in the autumn.
“The Board of St John of God Community Services is carefully considering this development and how it can be aligned with its own strategic objectives for our services. If brought to a successful conclusion within a suitably defined timeframe, it has the potential to allow us to continue providing services into the future. We are engaging with the HSE to discuss the precise detail of the engagement process as currently proposed. Our first priority remains the interests of everyone we provide services to, their families, our staff and volunteers. Our participation will be underpinned by the prudent and responsible approach adopted by St John of God Community Services throughout this challenging period. Therefore we have also informed the HSE, that until there is a successful conclusion to the process, we must continue with the transition process in parallel with these new discussions and work to the previously stated 30th September deadline for the transfer of services to the HSE.”
A spokesman for St John of God Community Services told The Irish Times that it welcomed the intervention of the Department of Health.
“A key priority will be ensuring a focused and time-limited process which acts in the best interests of all concerned and with the objective of truly placing the service on a long-term sustainable footing. This will work in parallel with the continuing transition process which is ongoing and working to a 31 September deadline.”
The Department of Health was approached for comment on the new initiative and on whether this proposal is unique to St John of God Community Services or if it will apply to other organisations in the sector, but none was received.
