The Church has received six bids for the running of its homes for the elderly, the first time that it is considering outsourcing.

The move was prompted by the introduction of national minimum standards for the sector – 38 set out in a 54-page document – which would require the Church to invest “many millions” to upgrade its homes, according to administrative secretary Michael Pace Ross.

“We are no longer experts at running homes for the elderly in the way that is expected today. There are professionals in care homes who run them on more professional lines,” he said. “And investment is required to tackle everything from room size to ventilation and cooling, hygiene, food quality, and the ratio of staff to residents.

“We don’t need a five-star hotel but we want to meet and exceed the standards!” he said.

The outsourcing is only one element of a wide programme to raise the levels of governance at the Archdiocese, which is facing growing pressure on its finances.

In 2015, the Curia had a net surplus €222,000 but paid out €845,000 in subsidies (€187,000 of which was for the homes for the elderly), ending up in the red had it not been for unrealised gains from exchange rates.

Mr Pace Ross joined the Curia from the National Statistics Office a year-and-a-half ago, and is the first lay person to occupy the position – the result of ever-increasing demands and regulations in accounting, finance and administration.

His initial focus was on clearing up legacy issues such as arrears, and then on finding more efficient ways to provide services.

“There are certain rules set by the Archdiocese – but we have limited control over how our entities spend their money and on what. Although we can take corrective action where necessary, they are mostly autonomous,” he explained, adding that this was no different to any corporate group and its subsidiaries.

However, the Church is not after increasing its profits: quite the contrary. All the money is funnelled back to those in need. With the full backing of Archbishop Charles Scicluna, Mr Pace Ross has now embarked on a programme to refocus the Church’s ability to fulfil its social mission, particularly given the demographic pressure that will increase in the future.

In fact, the outsourcing concession for the homes for the elderly would be for up to 60 years, to enable the successful bidder to recoup the investment that will be required – but the Church will retain 10 per cent of the beds for social cases – and a direct say in who should occupy them.

Church homes for the elderly charge below-market rates – even for the beds ‘bought’ by the government

Church homes for the elderly charge below-market rates – even for the beds “bought” by the government – but these do not generate enough income to sustain their operations, let alone to invest the “millions upon millions” of capital expenditure required to bring them up to scratch. In 2015, they brought in a mere €84,000.

“The rates will remain subsidised and will be monitored by the Curia for the first five years. After that, there will be reviews and any rate increases would need to be justified by them,” Mr Pace Ross said.

“However, over the years, we found that there was a veritable hotchpotch of different rates accumulated over the years, resulting in considerable discrimination. The intention is to streamline them – prior to the outsourcing.”

Mr Pace Ross would also like to bring its debtors into line, noting that there were unfortunately those who abused the Church’s goodwill and simply did not pay the fees – for years on end – even though they can afford it.

Apart from chasing the debtors, on the whole with success, he is also ensuring that there are clear lines of responsibility to prevent future problems, with forms identifying which relatives assume responsibility for payment.

Unlike entities run on commercial lines, it is hard to imagine the Church being able to evict defaulters or to take legal action against them, but the risk of a public relations nightmare is outweighed by the numbers of genuine cases on the waiting list.

“Is it fair for someone who can afford to stay in a home to spend months and years without paying a cent? The residents are washed a few times a day, fed three times a day; we have care workers, nurses, social workers who have to be paid, utility bills which need to be paid. Are residents expecting that we do not need to pay these bills?

“If some of them cannot afford to pay, then the Church is there to help them. They are being assessed case by case and whenever residents claim to be social cases, we are inviting them to submit proof of some sort that they have low income. The burden of proof lies with them.”

The Church is in a unique position. The Archdiocese – the main group, if it were a corporate – has an annual income of over €34 million and almost 1,500 full and part-time staff, not counting the clergy and members of Orders, which would make it a substantial company in the business world.

The Curia – its financing arm, in corporate speak – provided €845,000 in subsidies in 2015, down from €1.1 million the previous year, but had it not been for the unrealised gains on exchange rates (yes, the Archdiocese also dabbles in currency exchange), it would have made a loss of €623,000. And of course, those exchange gains may not actually materialise.

Nearly going into the red has a tremendous power to focus the mind on neglected areas, particularly the arrears – not only in the Church homes but across the whole spectrum – which the team of a nearly dozen at the Curia is now chasing. There are people who used the Metropolitan Tribunal who have not paid their fees. And there are even parishes which have not paid up the percentage of their income that goes towards remuneration of the clergy.

“We are making sure that the rules are observed to the letter,” he said.

Looking ahead, the Church is also already planning what to do with the €200,000 it will save in subsidies for the homes for elderly, as well as the income it will get from the successful bidder.

The Archdiocese has joined forces with the Hospice Movement and will open St Michael’s Hospice at Sta Venera at the former Cini Institute, which hosted battered women and children. Three-quarters of the building provided by the Church, worth millions, is already vacant and architects are currently working on plans for the internal layout.

It is also reviewing subsidies for its loss-making media and will be cutting down on costs.

“An assessment was made, and it was decided that in spite of all the other channels available, we need to have one media house – incorporating RTK and Media Centre – to get the Church’s message across. But that means we will consider new channels, whether web-based television or new programmes.

“Where we give a direct subsidy, we will be exerting more control to ensure it is being spent in a better way,” he said.

This story was published in The Business Observer, distributed with Times of Malta)