Next Generation Ireland

Ireland’s public services need to be transformed rather than reformed, writes economist Ronan Lyons who calls for government to work back from 2030 to today.

Crisis presents opportunity. Ireland is at a crossroads in the early 2010s, just as it was in the late 1950s and again in the 1980s. And just as in both of those previous generations, Ireland can take the opportunity presented in the moment of crisis.

If we think ahead to the Ireland of the 2020s and 2030s, there are many changes we will need to make. The challenges range from responding to climate change to ensuring peace in Northern Ireland, from political reform to integrating our migrants and connecting with our diaspora.

Across all these areas, Ireland needs to divorce itself from two cornerstones of decision-making over the last generation: incremental reform and consensus. We have tricked ourselves into thinking that the best decisions were the ones made with the minimum of dissent, and the ones that assumed that the existing way of doing things only needed a little fix and we were fine.

Nowhere is this holding us back more than in our public service. It would be reassuring, particularly given the challenges Ireland currently faces, to be able to say that Ireland’s public service has come a long way since independence and that change along similar lines will be needed over the coming generation. In truth, however, what is startling is that Ireland’s public service would be so recognisable now to someone who worked in public administration a century ago.

Comparison

The lack of contrast is made starker by the huge transformations that private sector organisations have undergone in the last generation, let alone the last century. If we think of our public service as a conglomerate employing about 350,000 people, we can compare how it operates with some of the world’s biggest private companies. Like those large companies, our public service needs a huge variety of skills to perform a huge variety of tasks. But whereas large private companies will use, for example, tools like in-house online networks so that people can share connections and connect, for the good of the corporation, in Ireland’s public service, no similar tool exists.

The reason for this is the same reason some public service organisations, in response to an email query, will type, print, sign and scan in a letter, rather than hit reply. Why do we have parts of the public service where the mindset is still “If it’s not on paper, it doesn’t exist”? The answer is that there is no incentive for the individual worker – and in many cases the managers – to improve the way the public service works. We all know stories of public sector organisations spending cash in December so that their budget for the following year is maintained. We need to change this, so that it’s in each public sector worker’s interest to save money or time for tax-payers who are the shareholder of public services.

Unfortunately, this will not change with business as usual, even though Ireland has managed to develop a significant industry behind public service reform, producing seemingly endless incremental programs, initiatives and plans since the mid-1990s. Instead of incremental reform, it is now time for a scale of transformation in public administration similar to the one undergone in the 1950s.

Perhaps the most urgent challenge facing the public service is the huge discrepancy between what it costs and what it raises in revenue. However, it is by no means the only challenge. As the OECD review of 2008 highlighted, the public service is currently unable to ensure it has the skills or flexibility required to meet its customers’ needs. There is no motivation of performance, rather a culture of compliance that does not foster efficiency, let alone excellence. Despite the efforts of the past fifteen years, the public service is still not focused on its customer, the citizen. Lastly, the governance structures need to be overhauled, and the two central departments – Finance and An Taoiseach – need to move from direct control to setting a framework for public service organisations.

Principles

Three broad principles should be adopted when transforming Ireland’s public services.

The first is that the state needs to be transformed into a twenty-first-century employer. This will inevitably involve conflict with trade unions, but it is needed in order to enable public service organisations to hire the best people for as long as it needs them, at a fair price, just like other organisations do.

It means an end to permanent posts, as these restrict the ability of the public service to use the skills it needs when they are needed. It would mean the introduction of meaningful performance reviews, where outstanding work is recognised and rewarded, enhancing the performance of the public service and its ability to attract the best workers. And it would mean an end to open-liability pensions that rely on demographics that Ireland no longer has.

The second principle for transformation is adapting the public service away from its current pyramid system so that it is ready or the project economy. This will only be done when the default unit in the public service is not, as it currently stands, the permanent department. Rather it should be the finite team. By doing this, the public service will free up the skills of its workers so they can be used where they are needed most, be it tackling swine flu, climate change or a faulty server. This requires the abolition of all barriers to worker mobility within the public service and between it and the rest of the economy.

Our current approach to the public service is summed up by An Bord Snip Nua: public services are viewed in terms of the costs they impose. We need to move from this accounting approach to an economic approach, one that thinks of public services in terms of both cost and benefits. The third principle that should underpin public service reform is matching public service organisations’ budgets to the outcomes they deliver.

Budgets in the public service are primarily set currently by inputs, not outcomes. By matching budgets to outcomes, this will mean that public service organisations will think in terms of the impact they have, and organise their work and teams around that impact, rather than the other way around. Measurement of the impact of public services will require ingenuity, particularly for some services, but it is the only way of ensuring that the public service is sustainably engaging in the activities that society needs it to be providing.

Each of these three principles has significant implications for how Ireland’s public service operates and each would require a decade-long transition phase. But difficulty is not an excuse for avoiding a task. Understanding how our public service will work in the 2030s means we can work back from there and start making changes straight away, to build the future we want.

Ronan Lyons is co-editor with Ed Burke of ‘Next Generation Ireland’, published by Blackhall Press, which brings together the ideas of 10 emerging Irish researchers across a range of fields. For more, see www.nextgenerationireland.ie