There is a need for immediate State funding to charities to prevent the looming collapse of essential public services, according to a new report.
The study entitled "The Future of Public Service Delivery by the Community and Voluntary Sector" has been released by think-thank TASC, in conjunction with The Wheel, the representative body for the charity sector.
The report looked at charities that receive contracts from the State to deliver services in areas such as health, disability, family support, children, care of older people, homelessness and addiction.
Staff in these organisations are not entitled to the same pay as public sector employees and are often paid considerably less than workers doing similar jobs in State agencies such as the Health Service Executive.
It has led to major recruitment and retention problems for charities, with staff shortages impacting on the provision of services.
"Some organisations are being forced, because of understaffing, to offer less or to not tender for new services," said Shana Cohen, Director of TASC.
"There is effectively a two-tier funding and pay system for overall public services delivery, with many thousands of qualified and committed staff in charities expected by the State to work on the cheap," Ms Cohen said.
"Without Government approval of funding to enable not-for-profit organisations to fill vacancies and to pay salaries to their staff that are equivalent to the public sector, existing services will inevitably shrink, while development of new services to meet changing needs will not happen," she added.
The report recommends the inclusion of representatives from Sections 39, 56 and 10 organisations in future public sector pay talks.
CEO of The Wheel Ivan Cooper said that the findings reveal a shocking imbalance and discrimination in the allocation of resources by the State to charities providing public services.
"These organisations deliver not just essential contracted services to the public but bring an added value to public service delivery due to their mission, commitment to specific needs and vulnerable groups in society and in their capacity to innovate and adapt quickly to changing needs," Mr Cooper said.
"We will be raising this issue as a matter of priority with Ministers Michael McGrath and Paschal Donohoe at the forthcoming National Economic Dialogue on June 12th," he added.
Community and voluntary sector workers staged a number of strikes last year calling for better pay and conditions and last month, the Government approved a 5% pay increase for workers in the community sector.
Fórsa and SIPTU members have voted in favour of the deal but have highlighted that the pay agreement relates only to staff in community sector organisations funded by the Department of Social Protection.
They have vowed to continue their campaign to secure increases for staff in organisations funded by other Government departments and agencies.