State may attach terms to voluntary bodies’ health funding, review finds

Review group warns this could lead to serious effects and prolonged disruption for patients

The review group, which was chaired by Catherine Day, above, said there seemed to have been “a breakdown in mutual trust and respect” between the voluntary sector and the State.  Photograph: Nick Bradshaw

The review group, which was chaired by Catherine Day, above, said there seemed to have been “a breakdown in mutual trust and respect” between the voluntary sector and the State. Photograph: Nick Bradshaw


The State is legally entitled to attach reasonable conditions to any funding it allocates to voluntary organisations providing health and social services and is free to withhold money from bodies that refuse to provide certain lawful services, a review group established by Government has found.

However the group warned this could lead to serious consequences and prolonged disruption for patients and has instead urged reforms be introduced that would ensure all citizens could access the full range of lawful State-funded services.

The group established to look at the future role of the voluntary sector in the provision of healthcare proposed that in a new funding approach, the State should establish a list of essential services it wanted provided on its behalf. It said the State could either commission these from the voluntary or private sectors on a nationally-fixed price basis or deliver them directly through the public health system.

“The State would no longer fund providers of services as such but would pay only for the services it deems necessary to meet its obligations to the population. A variety of organisations would then contract to provide a range of services according to their capacity and other considerations and on the basis of quality and safety standards set by the State. Those that do not wish to participate in the provision of certain services, including on grounds of ethos, could decide not to tender for them.”


The group also proposed that where the State decided to build any new hospital or facility, it should endeavour to ensure it owned the land concerned.

“Where the State is unable to secure the purchase of land on which it intends to develop a new facility, any capital investment by the State should only be provided subject to prior agreement on the services that will be delivered in this new facility and the governance arrangements that will apply.”

The group said there was very significant mutual reliance between the State and voluntary organisations. The voluntary sector accounted for approximately one-quarter of publicly funded acute hospital care while it also provided around two-thirds of disability services. On the other hand, the State paid the voluntary sector approximately €3.3 billion in 2017.

Abortion referendum

The group said the issue of what services were to be provided and funded by the State had come under the spotlight following the abortion referendum.

“It is hypothetically possible, for example, that a Catholic hospital may refuse to provide certain services. This debate raises legal questions as well as questions relating to the provision of State funding to hospitals that refuse to provide the full range of lawful services by reference to their religious ethos.”

“The full extent of the constitutional right of independently owned faith-based organisations to manage their own affairs has not yet been determined in the healthcare context by the Supreme Court.”

The group, which was chaired by former senior EU commission official Catherine Day, said there seemed to have been “a breakdown in mutual trust and respect” between the voluntary sector, which provides services to the public, and the State, through the HSE which is its funding agency.

“We make recommendations to rebalance the burden of current contractual relations between the voluntary sector and the HSE from a heavily bureaucratic emphasis on control of spending towards a greater focus on the quality of services delivered and outcomes.”


The group said the pressures of the financial crisis seem to have led to “mission creep” and increased micromanagement by the HSE. It said in particular the HSE seemed to have used the annual negotiations on service level agreements “to impose conditions that have eroded the autonomy of voluntary organisations, irrespective of the scale of state funding to an organisation”.

It has urged that voluntary organisations should indicate publicly that, if they were wound up, the proceeds of any asset sales would be reinvested in a charitable body with similar objectives in Ireland.

It said voluntary organisations in receipt of State funding should be cognisant of the impact of religious decor on patients.

It proposed the Government should bring forward proposals for dealing with financial deficits recorded by voluntary bodies over recent years.

It suggested that where voluntary organisations received more than 50 per cent of their funding from the State and where this exceeded €20 million annually, “ways should be found to strengthen State representation at board level, for example through the appointment of ministerial nominees or public interest directors”.