Care services funding model lacks credibility and is ‘out of date’ – IMPACT

2693_001Ireland’s largest public sector trade union, IMPACT, has said that the existing statutory funding structures – for organisations delivering care services in the community and voluntary sector – lack credibility and are out of date.

IMPACT said that state funding for these organisations, known as ‘Section 39’ funded agencies, need to be restored in order to ensure the sustainability of care services to people who are homeless, older people in care, people with disabilities, young people from disadvantaged backgrounds, and those dealing with drug and addiction issues. The union also said that the terms and conditions of staff in Section 39 agencies should be moved onto terms comparable with their public service counterparts.

The findings are included in a report launched today (Tuesday 22nd September) and commissioned by IMPACT’s Health & Welfare division entitled ‘Caring – At What Cost? – Rebuilding and refinancing the community and voluntary sector’. The report is researched and written by Dr Chris McInerney of the University of Limerick.

IMPACT organiser Joe O’Connor said that the research was prompted by the experience of union members in the sector and who have been subject to a continued stagnation and retrenchment of their terms and conditions throughout the recession.

“What has emerged from this research is that these funding structures are no longer fit for purpose. We need a revised funding model in order to ensure agencies in the community and voluntary sector can continue to meet modern service delivery demands in a sustainable way.

The Health Act defines the services they provided as ‘ancillary’ to mainstream health services which is entirely wide of the mark. On the contrary, they are integral to the delivery of a coherent health service and have, despite the challenges of recent years, continued to step up and meet increasing demands despite dwindling resources,” he said.

The chair of IMPACT’s Health & Welfare division, Tony Martin, said that the capacity of the sector to play a strong and progressive role in in service delivery had been severely tested in recent years. “Sustained cutbacks have been accompanied by an increased demand to deliver. Employees are increasingly expected to do more with less and for less. This presents challenges both in terms of service delivery, as well as the retention of experienced and committed staff,” he said.

Among its findings the report concludes that:

  • Despite a sustained period of funding cuts community/voluntary sector organisations have continued to provide essential services at a highly professional level;
  • The organisations are providing vital services to citizens who otherwise would not receive that service and are provided in place of state services, on behalf of the state;
  • Staff have carried the burden of maintaining service delivery over a sustained period and have experienced wage cuts and freezes. Some have also experienced cuts to working hours, take on extra work for the same or reduced pay, while many have had to take unpaid leave. The extent of cuts has varied, with inconsistency in administrative procedures and decision making processes across sectors and regions and between different health offices;
  • Staff in the sector are highly educated and bring a strong level of personal commitment and have been employed on lesser pay and conditions than their counterparts in the public service and comparable ‘Section 38’ funded agencies (see notes below on the distinction between Section 38 and 39 funded agencies). However, in a recovering economy with pay recovery taking place in other sectors, the retention of skilled and experienced staff will become a greater challenge;
  • Some organisations have become more streamlined and have significantly reduced non-pay operating costs. However, indications are that the limit to such savings has been reached.

The report makes a number of recommendations, including:

  • Levels of funding for organisations currently funded under Section 39 should be gradually restored to ensure sustainable delivery of services and to retain staff. Organisations cannot to continue to ‘do more with less’ without this having a negative effect on service delivery;
  • The restoration of pay and conditions for staff in Section 39 organisations without additional productivity demands;
  • Staff in Section 39 funded organisations should progress onto scales comparable with their public service and Section 38 counterparts;
  • In some cases, in order to address evident disparities between organisations of comparable size and function, re-designation as Section 38 funded organisations may be relevant in the short term for organisations with service level agreements and annual funding of at least €250,000;
  • Ultimately, the Section 39 funding model should be replaced with specific funding mechanisms that make provision for multi annual funding, provision for funding for core operations as well as service delivery, and national level funding for national organisations to enable economies of scale and to eliminate unnecessary administration.

Download a full copy of the report HERE.

Sections 38 and 39 explained

Section 39

Section 39 refers to that part of the 2004 Health Act which provides funding for a service ‘similar or ancillary to a service’ that the HSE provides. In reality, it is more accurate to refer to these organisations as ‘Section 39 funded organisations’, as they rarely rely entirely on this one funding stream to carry out their activities. In 2014 almost 1,900 organisations were supported by Section 39 funding, though within this there were substantial differences in levels of funding, service provision and employment.

Examples: Ability West, Peter McVerry Trust, Enable Ireland

Section 38

Provision for the funding of non-statutory bodies is also made in Section 38 of the same 2004 Health Act. For clarity, Section 38 states that: ‘(1) The Executive may, subject to its available resources and any directions issued by the Minister under section 10, enter, on such terms and conditions as it considers appropriate, into an arrangement with a person for the provision of a health or personal social service by that person on behalf of the Executive [emphasis added]”.

Examples: Brothers of Charity, St. John of Gods, St. Michael’s House

For example, in the Galway area, the Brothers of Charity (Section 38) and Ability West (Section 39) provide the same service.