Chapter 2 — Finance

The Sisters of Mercy response

The Sisters of Mercy ran a lucrative bead-making industry in respect of which no accounts appeared to have survived. Inquiries by the Committee indicated that this activity brought in at least £50 per week.

In 1952, which was a time when the Resident Managers were demanding substantial increases in capitation allowances, the Sisters bought a large house in Rathdrum, County Wicklow, with this money, which they used as a summer house for the children for a couple of weeks every August. There was no record of any other Sisters of Mercy schools using Rathdrum and there is no evidence as to what it was used for during the other 11 months of the year. Such a purchase was not consistent with an institution struggling to survive. The Sisters’ response also dismissed the comparators used by Mazars on the basis that they failed to take into account the nature of the costs implicit in running an institution. It insisted that the only valid comparator was with a UK institution but, like the Christian Brothers’ submission, did not advert to the differences between the two systems.

The Rosminian response

The Rosminians also disputed the comparators used because of the inherent expenses in running an institution that were not reflected in ordinary household accounts. They stated: In any event, and critically, the schools were dealing with a situation which required remedial and restorative standards of care. This cannot be done on a tight budget, never mind a persistent deficit.

The allegations made against institutions – including Ferryhouse and Upton – were that basic care was not provided. The Commission accepts that high levels of individual care were not possible because of the lack of funds, but was concerned to establish to what extent serious neglect could be excused.

The Rosminians stated that their schools barely survived and that that would indicate either gross mismanagement by the Order, or underfunding by the State. All the evidence, they maintained pointed to the latter.

The Oblates of Mary Immaculate response

The Oblate response to the Mazars report was also defensive. The Oblates saw the Mazars’ report as an attempt to illustrate that the Order had profited from their involvement in Daingean and set about dismissing that proposition. They did not see that Mazars was engaged in a much simpler task. Their response set out the arguments for using UK schools as a benchmark for assessing the adequacy of the grant and they also engaged in a detailed exercise of looking at the costs of childcare in institutions today and adjusting these costs for inflation.

In relation to the ‘benchmarks’ used, they reiterated the point made by the other three submissions that Comparisons with the value of average family incomes, welfare benefits paid to families or family spending are unlikely to give a useful measure of the cost to the Oblates of running a residential institution.

Whilst this is true to a certain extent, the comparators used by Mazars are valid in assessing whether funding was adequate to provide basic physical care such as food, clothing and accommodation.

Conclusion

The Mazars report raises doubts about the generally accepted proposition that funding for the residential schools was so inadequate that children suffered neglect and deprivation.

There were variables that had a considerable effect on the ability of schools to provide an adequate standard of care. These include: The size of the school. Mazars calculated a break-even number in respect of the four schools. This would indicate that where numbers fell below a critical figure, which varied as between the schools, a school would have been under financial pressure. Economies of scale were a significant factor in large schools. The ‘one size fits all’ approach by the Resident Managers failed to address the genuine needs of some of the smaller institutions. The existence of a farm that could provide food and fuel to the institution. Schools with an internal national school received a national school grant in addition to the capitation grant. This grant was also based on capitation and was therefore more valuable to larger schools. Many schools used industrial training as a means of generating income and for providing the needs of the institution.

Value of work done by the Order

The purpose of the residential school system was that the State and religious Orders would act in partnership in providing care to poor and destitute children. The Religious would raise donations for the establishment and upkeep of the schools and the State would pay to maintain the children. By the time the Department of Education took over the running of these schools and by the start of the period examined by the Investigation Committee, this dual role had become blurred for a number of Congregations. Most religious Orders did not seek public subscription for the premises used as residential homes and used the capitation grant to enhance and improve them. It is difficult to establish what effect, if any, this had on the funds available for the children and it varied from school to school.

In assessing the adequacy of the capitation grant, some Congregations have taken into account the monetary value of the work done by the religious staff over the years. On a simple accounting basis such an approach may be justified, but in determining whether the institutions had enough money to provide the basic needs of the children, an analysis of what was, at the time, understood to be the charitable nature of this work is important.

The Christian Brothers were particularly defensive of the remuneration paid to the Brothers. Their response submission criticised the suggested assumption by Mazars that everything earned by the Christian Brothers in the community irrespective of source should have been available to the school ‘to fund its losses’. It argued that this was tantamount to suggesting that anybody who worked in state institutions should hand back any money left over at the end of the year. The argument proceeded to criticise this approach as ignoring ‘obvious and unarguable facts.’ One of these facts was that each and every Brother who provided his services to the industrial school was entitled to remuneration and that such remuneration paid by way of stipend ‘was unarguably the property of the community. If the State was running the institution itself it would have paid each and every person employed there a salary which would have been the legal property of that person.’

In putting forward their analysis of the value of the Brothers’ work to the institution, the Christian Brothers stated in their opening statement to the Artane module: the Brothers working in Artane were not paid a salary; instead a stipend for each Brother working in the schools or on the administrative staff was paid to the local Community. This was in keeping with other schools or institutions in the capitation system. The annual stipend in Artane ranged from £142 per Brother in the 1940s to £300 per Brother in the 1960s. Significantly the rate of stipend in Artane was lower than in other schools where the rate in the 1960s was £550. The fact that the Brothers were only paid a stipend represented a clear saving to the State....

The statement then set out the 25 Brothers working in Artane in the 1960s and, by reference to Northern Ireland salary scales, estimated what they would have been earning in salary. They concluded that had the State paid the Brothers’ salaries instead of stipends it would have cost the State £14,070 per year in the mid-1960s.The stipends came to a total of £7,500 thus representing a saving to the State of £6,570.