The HSE has said it is “shocked and disappointed” by one of the biggest providers of disability and mental health services in the country stating it will have to close and have the State step in and take over its services.
St John of God Community Services, part of the wider St John of God Hospitaller Services Group, is funded by the HSE to provide services to 8,000 children and adults on behalf of the State. The voluntary organisation has been in negotiations with the HSE for several years over what it says is a significant shortfall in its funding.
Correspondence shows St John of God (SJOG) told the HSE last month if it did not secure a bailout of more than €30 million in funding it would have to shut. In 2020 it threatened to hand responsibility for its community services over to the HSE, with that decision paused following promised negotiations over a new funding model.
In a statement on Friday, St John of God said it had taken the decision to cease providing services by the middle of August this year. “The decision follows the failure to conclude a funding agreement with the HSE aimed at securing the future financial sustainability of the organisation.”
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The organisation employs around 3,000 staff and provides care to 2,500 people with intellectual disabilities, as well as 5,500 adult and youth patients in mental health services.
The provider said in recent months it had flagged “serious concerns” about the sustained “lack of adequate funding” and a built-up financial deficit the organisation was carrying as a result. It has said it now intends to hand over services to the HSE by August 15th this year.
In a January 12th letter to the HSE, Clare Dempsey, St John of God Community Services chief executive, said the organisation faced a “critical” requirement for more than €32 million in funding to survive. The provider was facing an accumulated deficit of nearly €28 million as a result of the costs of providing services for the HSE, she wrote.
The correspondence, seen by The Irish Times, said the €32.5 million bailout included €11 million to “keep the doors open”, as well as €6.4 million to meet inflationary costs.
Ms Dempsey said its auditors, PwC, had informed the provider that failure to address its accumulated financial deficit would “present difficulties” in clearing the organisation as solvent in its financial accounts.
“It is the board’s position that a plan must be agreed to clear the accumulated deficit and to provide the critical funding requirement of €32.5 million to maintain the operation of current services on a safe and effective basis,” she wrote.
The chief executive told the HSE that in the absence of a plan to deal with the funding shortfall the organisation would immediately begin discussions about handing over its services to the HSE.
In a statement the HSE said it was “shocked and disappointed” by St John of God’s decision, “and the manner in which they have chosen to communicate that to families”.
The HSE said the voluntary provider had broken even “each year for several years, with the help of substantial HSE support”. with this year likely to be no different. It said it was open to further meetings to discuss the organisation’s finances, but stated it felt the provider “has sufficient funding and assurances to continue to provide its services and to pay bills as they fall due”.
The statement said the HSE had set out an “extensive financial package” to St John of God on Thursday, and there was “no reason to transfer service or indeed cause the anxiety to families and the public that has been in the public domain today”.
Bernard Gloster, HSE chief executive, said he did not accept St John of God’s declaration that services would need to be handed over to the HSE by August.
“If despite substantial assistance in a €200 million grant to SJOG annually, they remain insistent on withdrawing from service provision then we will require them to do so in an orderly and appropriate fashion having regard to the rights of service users and their staff,” he said.
“The HSE will consider carefully its options if this eventuality arises. For now we urge SJOG to remove the anxiety for families and continue their engagement safe in the knowledge they have more than enough money and assurance to avoid such an immediate action.”
Albert Murphy, chair of a panel of trade unions representing SJOG staff, wrote to Ms Dempsey on Friday seeking an “urgent meeting” to discuss the developments. In a statement, Mr Murphy, Irish Nurses & Midwives Organisation director of industrial relations, said staff were “worried sick” about the impact the changes would have on service users.
In a statement Ms Dempsey said the decision to stop providing disability and mental health community services was a “sad day” for the organisation. “We are confirming with profound regret and deep disappointment that due to the failure of an extensive engagement process with the HSE we have initiated the plan to transfer responsibility for service provision to the HSE.
“I know it is deeply disappointing for those we support, our staff and the many thousands of families around the country with whom we hold such strong ties and bonds with over so many years,” she said.
The closure will not affect the wider St John of God group’s 180-bed psychiatric hospital in Stillorgan, Dublin, or its dementia care facility Saint Joseph’s, Shankill. While the more than 3,000 staff working in community services would move to the HSE under the handover.
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