One of the country’s leading mental health and disability service providers, St John of God Community Services, has warned the government it could potentially face a disorderly collapse with major implications for up to 8,000 children , adolescents and adults who depend on it.
She told Health Minister Stephen Donnelly that without state support to deal with an accumulated legacy deficit of more than 32 million euros, she could be “liquidated as a solvent entity or otherwise “.
He warned that this could force him to sell assets and properties to meet his debts. He suggested that such a scenario could have significant implications for the thousands of people he provided services to.
St John of God Community Services is a voluntary health care provider, with its own board and management. It receives funding from the HSE each year to operate services and employs around 2,500 people.
It is technically known as a Section 38 organization, which means that its personnel are considered civil service personnel.
It announced last September that it would stop managing the majority of its health services, due to a funding crisis. He said at the time that he would hand over responsibility for the services to the HSE over a 12-month period. During this period, the HSE could either arrange to manage the services itself or transfer them to another operator.
The HSE subsequently provided funding of over €139 million this year to enable the organization to continue operating at its current level of services until next autumn. It has also received additional funding to deal with the impact of the Covid-19 pandemic.
However, he warned the minister in a letter of the serious potential consequences of his accumulated deficit – which now stands at 32.5 million euros – and the implications this could have on his plans for liquidation and orderly transition.
It is understood that St John of God Community Services – along with a number of other voluntary organizations in the sector – argue that its deficits have been incurred largely because the amount of funding provided over the years by the State was insufficient to pay for the level of services it was asked to provide.
Clare Dempsey, chief executive of St John of God Community Services, told the minister in the letter that the HSE had in recent months made occasional reference to a resolution of the organisation’s funding crisis, but no proposals to this regard had been advanced.
She said the issue of the unpaid deficit was “a very pressing concern”.
“If this issue is not addressed quickly, it could raise a question mark as to whether the service faces liquidation as a solvent entity or otherwise. This, in turn, could trigger a possible sale of assets and properties in order to pay all outstanding debts, which would then seriously jeopardize the orderly transfer and future functioning of day and residential services on which 8,000 children, adolescents and adults currently depend.
St John of God Community Services did not comment Sunday evening on the content of its letter to the minister.