Why did the Rehab Group commission this report?
The Rehab Group decided to commission this research to map an accurate picture of the current experiences of one part of the not-for-profit sector – large not-for-profit organisations providing services for people with disabilities. This sector is not fully funded by the state.
The report specifically examines the serious issues being faced by eight of Ireland’s larger independent not-for-profit providers, known as Section 39 funded organisations, whose current combined annual funding is in the region of €430m and who provide residential, respite and day services for more than 20,000 people with a disability, right across Ireland.
The sector is in crisis. After more than a decade of underfunding, a huge growth in regulation and compliance requirements, which is incurring huge cost, and operating in the absence of a government strategy for its role and future, the sector has become unsustainable.
Caught in a no-win environment between the fully-funded state sector and the for-profit sector, this group of organisations has suffered more a decade of underfunding, while at the same time is continually trying to meet the growing needs of the people who use their services.
Ultimately, it is the people the sector serves, our most vulnerable members of society, who suffer in a climate besieged by attrition, underfunding and overly bureaucratic regulation.
This important research report has been commissioned by the Rehab Group to map the challenges currently being faced by the not-for-profit sector and to make recommendations for a sustainable future; a future where we can bring our considerable expertise to the table, be listened to, and continue to provide the best services to those who need them the most.
The question we are asking is, Who Cares?
Who cares about the future of this sector? More importantly, who cares about the many thousands of vulnerable people who use the services we provide, every day? Who cares about their, and our future?
Ostensibly, the key challenges are under-funding and a lack of autonomy, while attempting to manage a very significant demand for accountability and compliance and meeting the requirements of regulation. These challenges are made more difficult by the lack of a policy framework for the current and future role of these organisations, known colloquially as ‘Section 39s’ – a name drawn from their designation under Section 39 of the 2004 Health Act. The staff of Section 39 organisations are not public servants.
Who did the research?
Dr. Chris McInerney of the University of Limerick conducted in-depth interviews with the CEOs of the largest funded Section 39-funded organisations, to ask them what their experience currently is, and what the challenges they currently face, are.
What organisations does this research look at?
The eight organisations who took part in this research are: the Rehab Group, the Irish Wheelchair Association, Acquired Brain Injury, Enable Ireland, Ability West, Western Care, Kerry Friends and Parents Association and St. Joseph’s Foundation. They are all what is known as Section 39-funded organisations. They are the larger not-for-profit organisations providing disability services. Between them they receive €430m in funding and support more than 20,000 people with a disability.
Representative organisations and senior officials in the HSE and Department of Health were also interviewed.
Some background
A key feature of the provision of services to people with disabilities in Ireland has been the State’s persistent reliance on not-for-profit organisations. However, from 1953 onwards, distinctions were drawn and framed in legislation between different types of organisations, eventually emerging as a distinction between those providing services on behalf of the State (Section 38) and those providing services ancillary to, or similar to, the State (Section 39). The distinctions are widely seen as being very much outdated but there does not appear to be any great appetite to remove them.
Over the years the institutional landscape has also changed considerably. More recent years have seen the emergence of the regulatory State, with the creation of HIQA, The Charities Regulator and the Department of Public Expenditure and Reform (DPER), resulting in lower levels of local discretion; weakening of collaborative approaches and an increase in the presence of the regulatory State. However, the State and relevant agencies have failed to facilitate charities to fulfil their compliance requirements. There have been major changes to amount of compliance regulation charities are obliged to engage in over the last five years, and while welcome and necessary to build trust and confidence, it comes at a cost which is currently not being met by funders.
Essentially, not-for-profits have been dealing with the State’s failure to provide mainstream services to meet the needs of people with disabilities. In contrast to the State and the commercial sector, the ethos and motivation of many not-for-profit organisations is towards meeting such needs.
What are the main findings of the report?
1. Concern about Financial Viability—Organisations are under-funded for the services they provide and there is no funding for the growing cost of compliance and regulation.
2. Growing emphasis on regulatory compliance—Providers of services to people with disabilities recognise the importance of regulatory compliance , but the cost of it is not funded by the State. Streamlining is needed as duplication of reporting adds to the burden of administration.
3. Full cost of service delivery not met by HSE—The HSE’s refusal to pay full costs of service provision is resulting in growing deficits and threatens the sustainability of the organisations.
4. Urgent need to revise how not-for-profit organisations are funded—a new model of funding is needed, e.g. commissioning, with more than just financial outcomes being relevant.
5. Not-for-Profits are increasingly being treated as service-delivery extensions of the State—Note-for-Profits are being integrated into the machinery of the state rather than mission-and-ethos driven organisations.
6. Not-for-profit relationships strong at local level and weak at national level—Communications and institutional agreements seem less effective at national level. Loss of autonomy and independence for the not-for-profit as well as undermining of the potential of the organisations.
7. Undermining of autonomy and independence of not-for-profits—growing compliance regulations impact the composition of boards and limit their independence.
8. Measurements of outcomes is too narrowly -focused—Compliance requirements are focused excessively on micro-level detail while potentially missing out on larger and more strategically significant issues.
9. Concern about the capacity to retain staff—There is a high staff turnover and difficulties in retaining and securing senior staff. More board members are needed who bring a range of different perspectives and skills and not just the skill needed to negotiate the increasingly onerous regulatory environment. There is concern that the high staff turnover has a detrimental effect on those who rely on residential, respite and day services.
Main recommendations:
- CLEAR CURRENT DEFICITS
To secure the immediate future of organisations delivering vital and flexible services, the deficits which have built up during the austerity years must now be cleared
- A NEW MODEL OF FUNDING
New consideration to be given to a more structured model of commissioning designed to meet emerging needs and underpinned by both collaboration and a broader definition of accountability.
- MULTI-ANNUAL FUNDING
Move to a system of multi-annual funding with a focus on person-centred as well as financial outcomes.
- PAY THE FULL COST OF DELIVERY
The State must pay the full cost of the delivery of services to organisations providing ‘ancillary’ services, rather than a percentage of the cost, which inevitably grows deficits and threatens vital services putting our most vulnerable people at risk.
- INTELLIGENT REGULATION
The development of a less complex and more-intelligent, integrated and streamlined accountability system which would eliminate duplication, accommodate the needs of different regulators, focus not just on financial and governance compliance but evolves towards stronger performative accountability, with the core administrative costs required being funded.
- LEGISLATIVE DEFINITION OF ROLE
The role of this sector to be defined in legislation, as SláinteCare reforms are being developed, recognising the role of not-for-profits in healthcare delivery, and the creation of a Section 38 half designation
- JUNIOR MINISTER FOR NOT-FOR-PROFIT SECTOR
It is recommended that the Government needs to take a decisive step and follow the example of New Zealand and create a junior ministerial portfolio for the community and voluntary /not-for-profit sectors, to be located as a distinct office/unit within the Department of the Taoiseach.
- A NEW AGREEMENT BETWEEN THE SECTOR AND THE STATE
Using models in Scotland, Northern Ireland and elsewhere, the State commit, within a three-year period, to develop, in a collaborative way, an accord, governing the relationship between itself and not-for-profit organisations involved in the delivery of a substantial level of services on behalf of the State.
- BUILDING A NEW COLLABORATION
Using OECD recommendations, initiate a public service reform process, using the disability sector as a pilot, designed to move away from command-and-control bureaucracy towards a model that emphasises collaboration, responsiveness, partnership, entrepreneurship and deliberation alongside, but not replacing, necessary rules and regulations.