More than two dozen bodies providing specialist disability services to tens of thousands of people have warned there is “an extreme risk” to their ability to expand services or, in many cases, sustain existing operations.
In an unprecedented joint letter to Health Service Executive chief Bernard Gloster, the chairmen/women of 26 voluntary disability service providers – voluntary public service organisations and voluntary grant-aided bodies – said their ability to deliver existing services and meet the needs in their communities were under threat.
The letter, signed late last week, said many organisations were facing such acute financial situations that their boards were “concerned they may be in breach of the reckless trading provisions of the Companies Act”.
About 80,000 people with disabilities in the Republic receive a range of specialist services, although the Government acknowledges there is significant unmet need.
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Some services are delivered by the HSE directly, but most are operated by voluntary providers.
Taoiseach Micheál Martin has said the issue of disability is a top priority for his Government. However, while the amount of money allocated for specialist disability services has grown by €1.6 billion since 2020, the Government has recognised that some providers are experiencing “funding, operational and governance challenges”.
The letter said that boards of public service disability organisations – known as section 38 bodies, while those which receive State grant aid are known as section 39 bodies – were “having to operate in crisis mode”.
It said they were “balancing the requirement to run quality services, with the risk of defaulting on payroll/revenue/supplier payments ... Organisations are being threatened with withdrawal of supplies due to inability to pay on time. Boards are having to consider financial and legal advice on solvency and reckless trading.
“In this context, there is an extreme risk to our ability to expand services and in many cases to our ability to sustain existing services.”
The letter was organised by the National Federation of Voluntary Service Providers, which has been in talks to the HSE about funding for disability services.
It was signed by the chairpeople of organisations such as Brothers of Charity Services Ireland, St Michael’s House, St John of God Community Services, Muiriosa Foundation, Stewarts Care, Ability West, L’Arche Ireland and Peamount Ireland.
The organisations said that “significant and unsustainable financial pressures” had built up over the past few years.
The chairpeople of the organisations’ board said these included large-scale year-on-year increases in non-pay costs such as electricity and fuel, with no provision provided in their base funding for these.
They spoke about the increased cost of delivery of service due to the age-related changing needs of people they supported, the significant alteration in the complexity of people entering services and significant regulatory cost pressures in residential services.
The organisations also pointed to having to fund mandatory permanent pay increases for staff, but where money for such rises was either not provided for in full in their allocations from the State or only on a temporary basis.
The disability service providers maintained that there was a “significant shortfall in 2024 supplementary funding”.
“The above pressures will cause many Section 38/39 organisations to record large financial deficits for 2024, which has also exacerbated historical deficits,” the organisations say in the letter.
“There is no agreed pathway to address the historical deficits of a number of organisations. The 2024 deficits, together with deficits accumulated from prior years, will weaken the organisations balance sheet to the extent that many boards are concerned they may be in breach of the reckless trading provisions of the Companies Act.
“Some organisations are facing critical cash flow problems as a result of these deficits and defaulting on payroll or revenue obligations is a continual risk.”
