An independent review may be ordered into financial deficits being faced by organisations providing disability services on behalf of the State, health officials have signalled.
Last year the HSE flagged to the Government its "serious concern" about the deteriorating financial position of a number of organisations providing disability services across the country.
Last autumn St John of God Community Services* notified the HSE that it had decided to cease running the majority of its healthcare services due to a funding crisis. It is to transfer responsibility for services to the HSE over a 12-month period. It pointed, at the time, to a financial deficit of €37.7 million.
Documents released by the HSE show the planned withdrawal of St John of God Community Services had been considered by its risk and audit committee.
The committee was told by senior management that it was likely that an independent review of the financial deficits of legacy providers may be commissioned by the Government, although it said this had yet to be confirmed.
The Department of Health said it could not confirm that a review of legacy financial deficits in disability service providers was planned.
The St John of God organisation last month told staff the HSE had indicated it may put forward new proposals to deal with its current financial crisis.
It said in the absence of concrete measures for sustainable funding, plans to transfer responsibility for running disability and mental health services back to the State from the autumn would proceed.
Clare Dempsey, chief executive of St John of God Community Services, told staff the HSE had "referenced bringing a resolution to the funding crisis" in talks with the organisation.
However, she said no proposals had yet been put forward by the HSE for consideration by the board of St John of God Community Services.
“In the absence of concrete and realistic proposals to address the deficit and fully fund service provision sustainably into the future, I therefore remain mandated by the board to work with the HSE to plan for the transfer of services to the HSE,” she said.
Funding
In a letter to staff, Ms Dempsey said the HSE had provided funding to the organisation to run its services up to September 30th next.
“This funding, which amounts to €139.2 million, is sufficient to provide the current level of services for this nine-month period and will, therefore, enable us to focus our energies more directly on the ongoing transition process,” she wrote.
“The HSE also provided additional funding for 2020 in the main to cover the costs of Covid-19. This additional funding, together with reduced costs associated with the necessary closure or curtailment of services and the redeployment of staff to residential services, resulted in a surplus for 2020, which enabled us to reduce our accumulated deficit to €32.5 million from €37.5 million at the end of 2020,” Ms Dempsey wrote.
“While the reduction to the accumulated deficit is welcome, it remains a cause of significant concern.”
The Department of Health said the budget this year provided an additional €100 million in new funding to enhance services and supports for people with disabilities, which would increase the disability budget to more than €2.2 billion in 2021.
*This article was amended on March 3rd, 2021
