INCLUSION IRELAND AGM

‘FINDING SOLUTIONS TO PROVIDING DISABILITY SERVICES IN A CHANGED FINANCIAL ENVIRONMENT’

Jim Power

April 16th 2011

THE ECONOMIC REALITIES

Global recovery still on track after sharp recession

Irish economy has experienced drastic economic collapse

Banking system totally dysfunctional Some bright spots in economy, but

prospects for recovery not good Difficult adjustment process has a long

way to run – will entail considerably more pain

THE FISCAL REALITIES

We spend €19 bln more than we raise in taxation

Deficit of €7.1 bln Q1 2011Debt servicing costs €4.8 billion

in 2010, set to rise dramatically even with targeted adjustment

Public finances not sustainable

THE FINANCIAL & POLITICAL REALITIES

Ireland has few friends after decade of arrogance Massive fiscal adjustment €30 billion 2008-2015 Commitment on sovereign & most bank debt Bank bailout to cost €70 bln – could it go higher? National debt could rise to €240 bln by 2015 –

size of black hole in banking system still uncertain

Arithmetic does not add up Is debt re-structuring inevitable? External assistance required to make it work Future in the hands of outsiders Corporation tax rate issue is hard to understand

THE FISCAL IMPERATIVES

Current levels of borrowing not sustainable Tax base will have to be broadened Expenditure will have to be cut Further public sector pay cuts? Not really a

viable option Focus will have to be on numbers Value for Money will have to drive all

expenditure Focus should be on ‘outputs’ rather than

‘inputs’ Very challenging fiscal outlook

VISIONS FOR DISABILITY SECTOR

‘A vision of a society where people with disabilities have sufficient support to participate fully in economic and social life and have access to a range of quality supports and services to enhance their quality of life & well-being’

‘the creation of a cost-effective, responsive and accountable system to support the full inclusion of all people with disabilities’

Governance – ‘to provide strategic direction, ensure objectives are achieved, manage risks and use resources responsibly and with accountability’

THE FACTS (1)

€1.6 bln provided by HSE to fund disability services

€1.2 bln through non-profit organisations who deliver 80% of all disability services

281 such bodies ~ community & residential settings

HSE funding supports 53,326 persons (8,997 in adult residential care, 24,707 adult day services)

25 >€10m, 75 €1-€10m, 683 grants averaging €100,000 to a range of smaller non-profits

No independent inspection of residential centres

THE FACTS (2)

Nov 2004-Jan 2005 42 non-profits examined No audited financial statements from 12

€100m in HSE funding in 2003) 6 reconciliations of funding to reported

income had been carried out One received €288m 2000-2004 ~ financial

statements for 4 years not presented No formalised review procedure Serious deficiencies in documentary

evidenceIs this good enough?

WHAT IS REQUIRED Service agreements should be in place HSE should have power to enter non-profit to check

delivery ~ independent inspection of standards Financial reporting norms & key disclosure

requirements should be put in place Funding should be targeted at area of greatest need Funding should be informed by standard costs Proper resource allocation model Efficiency & effectiveness should be the drivers Quality of services, Value for money for taxpayers &

protection from possible liability by an breach of fiduciary duties

ISSUES IN DISABILITY SECTOR

How much money is spent? Who spends the money? Are there too many agencies and un-

necessary duplication? Broad & diverse range of services provided Is cost exacerbated by focus on too many

‘health professionals’? Expectations of people with disability have

changed Many are living longer – increased costs Serious fiscal constraints will remain a sad

fact of life

WHAT SHOULD THOSE WHO PAY THE BILL EXPECT?

Aim should be to deliver more and better for people with disability

Minimise cost of provision – give people what they want in a less expensive way – is a specialised service always necessary?

Greater use of primary care Eradicate inefficiencies – is consolidation or merger of

complementary services an option? Provide greater freedom of choice & self-determination Tight governance structures The HSE provides €1.6 billion (75% to non-profit

organisations) – it should be free to check delivery of services in terms of quantity and quality – quality control a basic right

KEY CONCLUSIONS

Very challenging economic background & outlook

Pressure on public finances will remain very acute

Need to get more from less Focus on outputs rather than inputs Value for money will have to become the

guiding principle Needs of customer has to be the key priority

– not service providers or social partnership addicts

Is current model sustainable?

A FINAL THOUGHT!

‘the most efficient way of spending money is to spend your own and the least efficient way is to spend other people’s’

Milton Friedman

Thank You?