THE Catholic Diocese of Maitland-Newcastle may use funds generated by its St Nicholas OOSH centres to pay compensation to child abuse survivors.
The diocese is under fire from families about the lack of notice and community consultation around its plan to replace all private OOSH operators at its schools with its not-for-profit St Nicholas brand by the end of 2020.
Diocese chief executive Sean Scanlon dropped what parents described as a "bombshell" at a Monday meeting at St Joseph's Primary Merewether, where families had gathered to discuss the replacement of private operator Kids Connect Australia (KCA).
"Profits or surplus [from St Nicholas OOSH] may be used to compensate survivors of abuse," Mr Scanlon said at the meeting.
"As Catholics and Christians that is the right thing to do."
Parent Renee Mantle told the Newcastle Herald it was "ironic that care for children today is paying for past abuse by the church".
"While I respected them being honest about it, hearing it was still quite difficult," she said.
"There were lots of bombs dropped with no reason or respect."
Parent Natalie van den Boogaard said she didn't want "macro level conversations" distracting from parents' questions about continuity of care.
"We'd rather the focus be on supporting KCA's ability to continue their quality childcare in our community rather than the focus be on profiteering and monopolising and monetising childcare."
Parent Alana Dagwell said the revelation was "surprising".
Mr Scanlon said in a statement on Tuesday that any revenue generated by profitable OOSH services "will, in the first instance, be redirected to support OOSH services that due to their size, location and/or profitability would not be commercially viable."
"We see this as an essential step in ensuring equity of familial support services across our diocese and so that no school community should be disadvantaged," Mr Scanlon said.
"Any remaining profits will be directed to support educational services, the philanthropic works of the church including the support provided to the community through the Development and Relief Agency, and a portion may also be used towards compensating abuse survivors."
The spending of funds was just one matter discussed at what the Herald reported on Tuesday was an emotionally charged meeting.
"I felt very frustrated at the lack of respect given to parent voice, but also the lack of concrete information given," Mrs Mantle said.
"It was very haphazard."
Families had asked for the diocese to reverse its decision and pleaded at the meeting for a transition period to allow KCA to make new arrangements and for parents to review work schedules. Mr Scanlon said he didn't want to give false hope and was not going to promise to reverse the decision.
He told the meeting an attempt to start public consultation was quashed after families reacted negatively to media coverage about the plan.
He said on Tuesday the diocese aimed to balance the need and timing of consultation with the school community and the providers in line with its contractual obligations to existing OOSH providers.
He said the diocese was "receptive" to feedback it received from the meeting regarding its processes and "will be reviewing our procedures moving forward".
A parent at the meeting said canon law suggested decisions be made at a local level and the matter "sounded like a school community decision".
Vicar General Father Andrew Doohan said it was "not a school community decision because it's not being run by the school".
"The school is not a person, it does not exist as a separate entity. It's an agency of the diocese," Fr Doohan said.
"The school does not exist except as an agency of the diocese."
When a parent asked if that meant school communities didn't have the power to make their own decisions, Fr Doohan answered "that's the reality".
"The school does not exist as a separate canonical reality," he said.
"The CSO is an agency of the diocese."
When a parent raised the issue of consultation, he answered the diocese could "consult you about the level of paperclips we'll order next week?"
A parent said it sounded like "the executive can come in and make decisions".
When Fr Doohan said this was the "reality of the church" another parent said this was concerning to school communities.
Fr Doohan said not all school communities were equally concerned. "Have you been to every school in the diocese?" he asked.
"It seems to be of particular concern to this school."
Ms van den Boogaard described the paperclips comment as "patronising and dismissive".
"It minimised the real concerns of parents about the wellbeing of their children," she said.
Mrs Mantle said it was "childish and disrespectful, especially at a time when a lot of parents are baring their hearts to leaders".
"It's concerning that the power they have is being thrown around in that way," she said.
"That they are telling the school they have no voice or say."
Mrs Dagwell said the school community liked to think it had some ownership over decisions made about the school, but Fr Doohan's comment "seemed to contradict that".
Mr Scanlon said the diocese planned to offer vacation care at St Joseph's from January 6, pending KCA transferring the licence in time.
If KCA doesn't, it will take students in buses to St James' at Kotara South or St Therese's at New Lambton, which several parents opposed.
He said on Tuesday the diocese would provide "ongoing updates" about the licence and vacation care.
Ms van den Boogaard, Mrs Mantle and Mrs Dagwell said they supported KCA in whatever decision it made.
Mrs Mantle said if the diocese wanted a licence "it should have applied for one and not relied on others".
Ms van den Boogaard said the diocese would inherit KCA's rating, which was the highest possible.
"So they will inherit KCA's rating, goodwill, customer base and won't have to remunerate an outgoing business."
She said she was interested in further consultation.
"I don't feel the issue should be closed," she said.
"I don't feel the questions parents presented were answered."