CRC top-ups ‘not at any stage sanctioned’ - HSE

The HSE has said that top-up payments for the chief executive and other senior staff in the Central Remedial Clinic (CRC) were "not at any stage agreed to or sanctioned".

The statement comes after a former chair of the CRC, Des Peelo claimed earlier today that two of the "very top people" in the HSE attended a meeting in 2009 at which privately-funded top-up payments for nine people in the organisation were agreed to.

In an interview on RTÉ Radio 1 this morning, Mr Peelo said that, in a meeting held in June 2009, the HSE had agreed to fund the salaries up to the end of the year after which point the difference over and above the HSE-funded portion of the salaries would be funded privately.

He said the HSE was “fully aware” of this arrangement and that “every year since 2010 the HSE get a list of salaries and they know about it...it’s been fully on the record and agreed with the HSE”.

Minister for Health James Reilly today met the director general of the HSE Tony O’Brien to seek an update on unsanctioned payments to management at organisations receiving funding under Section 38 of the 2004 Health Act.

The Department of Health said Dr Reilly requested "urgent action to ensure that every agency is fully compliant with Government pay policy".

“The HSE will take whatever actions are necessary to deliver full compliance and ensure that any governance deficits identified are comprehensively rectified immediately. Meetings are now being arranged with each agency concerned,” the department said.

“Arising from this process, those found not to be compliant will be called in by the Director General to meet him before Christmas. Such meetings will commence next week.”

A statement from the Central Remedial Clinic, released this evening, said that, in 2009, it had agreed with the HSE to phase out any existing management salaries being paid over and above the Department of Health’s consolidated pay scales but that “in the meantime, the difference between the Department of Health pay scales and the contractually obligated salaries of these staff would be funded by the Central Remedial Clinic through the lottery proceeds received by the Friends of the CRC”.

“This has been the case since then with regular reports being sent to the HSE confirming the portion of salaries being paid through both sources.” the statement said.

However, the HSE this evening in a statement said: “The arrangement entered into by CRC with its former chief executive and other senior staff at the organisation was not at any stage agreed to or sanctioned by the HSE. All HSE funded agencies are expected to comply with public pay policy”.

A spokeswoman said that it had come to the attention of the HSE in 2009 that the chief executive and a number of other staff of the CRC were being paid “substantially above comparable levels within the HSE or other public bodies” and held a meeting with the chairman of the organisation.

“The HSE set out the appropriate salary for these posts in line with public pay scales and informed the CRC that these were the salary levels the organisation was required to comply with. For legal contractual reasons the agency stated that it could not change the contractual conditions of these staff at the time. The CRC gave a commitment that on the refilling of these posts in the future, rates would be brought in line with public sector pay rates.”

However, a spokeswoman for the HSE said it at no point agreed to or sanctioned this arrangement.

In its statement the CRC said that five of the nine individuals identified by it in 2009 as having “contractually obligated salaries” remain with the organisation, with two of them due to retire in the next two years.

The statement added that funds donated through sources such as its annual Santa Bear Appeal or other fundraising sources including comedy nights, golf classics, donor fundraising events, sponsorships, flag days and sales of Christmas cards were “not used to fund these salaries”.

“Overall charitable donations fund only 1.1 per cent of the CRC wage bill, with over 98 per cent of all public donations being used to fund the provision of services and capital investment.”

It added that the board of the CRC would participate fully with the HSE and relevant Dáil committees in their review of these matters and that the “embers of the Board do not receive any remuneration, expenses or payments of any kind”.

Mr Peelo, who was on the board of the CRC for 24 years up to 2010, told Today with Sean O'Rourke that the organisation was approached by the HSE in 2009 to discuss the payments.

Mr Peelo said that he, as the then chairman, and a fellow board member met with five HSE representatives in June 2009, including “two of the very top people” in the HSE.

“We had this meeting, a very amicable meeting, it took less than an hour to agree all of this and what happened at that meeting was that it was agreed that the salary levels would continue because we had contractual obligations.

“We couldn’t turn around and unilaterally . . . reduce the salaries of nine people,” he said, adding that the company could have been “sued . . . under employment legislation” had they done so.

“It isn’t a question of top-ups. These people were already on these salaries,” Mr Peelo said.

Central Remedial Clinic statement

In 2009, the Central Remedial Clinic had an agreed position with the HSE to phase out any existing management salaries being paid over and above the Department of Health’s consolidated pay scales, and nine affected posts were identified in correspondence with the HSE. It was agreed at the time that as these positions became available through retirement or vacancy, new staff would be engaged on salaries purely in line with the department’s pay scales. In the meantime, the difference between the Department of Health pay scales and the contractually obligated salaries of these staff would be funded by the Central Remedial Clinic through the lottery proceeds received by the Friends of the CRC. This has been the case since then with regular reports being sent to the HSE confirming the portion of salaries being paid through both sources. Also in line with this agreement, the salary of the Central Remedial Clinic’s newly appointed chief executive, Brian Conlan, complies with HSE current pay scales and is funded entirely by the HSE. At present five of the originally affected posts remain following retirement and vacancy and two of these posts are due to retire in the next two years.

Funds donated via other sources (such as the Santa Bear Appeal, comedy night, sale of work, golf classic, donor fundraising events, sponsorships, flag days and sales of Christmas cards) are not used to fund these salaries, and overall charitable donations fund only 1.1 per cent of the CRC wage bill, with over 98 per cent of all public donations being used to fund the provision of services and capital investment.

Funds currently held in reserve totalling €12 million are earmarked for planned capital expenditure.

The €3 million loan from the Friends of the CRC to the pension scheme covering 70 former staff was in response to a requirement from the Irish Pension Board together with advice received from the CRC’s pension advisers and is expected to be repaid in full by 2017.

The board of the CRC will participate fully with the HSE and relevant Dáil committees in their review of these matters. The members of the board do not receive any remuneration, expenses or payments of any kind.