Public sector

There is a need for more leadership on public sector reform according to attendees at an eolas event on the subject. Meadhbh Monahan reports.

A gathering of officials from central and local government, the wider public sector, the unions and private sector bodies has agreed that public sector reform is essential in aiding economic recovery.

“People are up for reform” of the public sector, Department of Public Expenditure and Reform Secretary-General Robert Watt told eolas. However, there is a need for more “buy-in” from senior management.

Minister for Public Expenditure and Reform Brendan Howlin told delegates: “While there seems to be a clamour in society for reform, it is incredible how, as soon as you practically propose meaningful reform, vested interests immediately mobilise, and while they support it in theory [they don’t support] that practical manifestation of it.”

“There are some people who feel that this is a temporary little crisis and if we keep our heads down the world will go back to the way it was,” added Shay Cody, General Secretary of public sector union IMPACT.

Pat McLoughlin, who chairs the implementation group for the Local Government Efficiency Review, explained that it had recommended reductions in county and city managers from 34 to 24; directors from 240 to 190; and senior and middle managers by 15 per cent. Following a workforce analysis, the review also suggested that 180 senior and middle managers should go, as well as 250 staff in roads and 171 in planning.

Other areas, which would contribute to total savings of €511 million, are motor tax (by going online rather than at the counter), taking social housing rents directly out of welfare payments (to reduce collection costs), and in ensuring local government is getting best value for money on procurement.

However, reformers have met resistance, with some in senior level staff asking: “Why are you targeting local government?” and pointing out that their money doesn’t all come from government.

McLoughlin stated that the average amount provided by the exchequer to local government is 40 per cent (“sometimes reaching over 70 per cent”) therefore “the State has a legitimacy to ask about its management structure and costs.”

Action

An action-focused implementation plan is currently being drafted by a new reform and delivery office within the department. It is expected to be published by mid-November and will set priority actions and a timeline for the following “concrete initiatives”: e-government, shared services, public procurement, business process improvement and financial management.

The action plan will be designed to ensure “greater efficiency, effectiveness and ensure flexibility in the deployment of services and people,” Minister Howlin explained. This will be crucial in the new year because (as Shay Cody predicted) a significant number of public servants could retire before March 2012; when their pensions would be lower due to the lower wage rate and the pension levy.

Howlin acknowledged that “public sector reform has not just been invented since I became Minister” and pointed to successful online initiatives e.g. citizens managing their taxes and receiving payments from state agencies.

“We must acknowledge these successes and use them to inspire us to go an awful lot further,” he urged. Howlin stressed that implementation of reform needs to be done with “great urgency” and there “needs to be buy-in from everyone” to ensure economic recovery.

An integral part of the Government’s action plan will be a focus on shared services.

It will ask the public sector to examine back office services, processing, HR, pensions and payroll.

There will be a move from the current system where services are “divided diffusely across many departments” to consolidation, which will allow the public sector “to benefit from technologies and platforms and common economies of scale that can drive cost production and headcount production,” Robert Watt told eolas.

When asked why more has not been done to date on shared services, while colleagues in Northern Ireland and Britain have made advances, Watt replied: “We’d rather not dwell on the reasons why we didn’t do things in the past. We are focusing on the fact that we now have a new government, a new mandate [and] new structures. We have a clear imperative in terms of the need to reduce costs and services.”

He added that the Government has “the commitment” and the action plan will be its focus.

Procurement

“The public sector isn’t getting best value for money,” Director of the National Procurement Service (NPS) Vincent Campbell told delegates.

In 2010, €15.1 billion was spent on procurement: €6 billion on capital works, €4.6 billion on health, €2 billion on central government, €1.6 billion on local government and €0.9 billion on education.

The NPS doesn’t have a mandate, which is “critical for getting buy-in from across the public sector.” Campbell says there is a need to look at “where aggregation can be brought together to get value for money.”

A culture change is needed, he stressed, and ultimately “there is an onus on suppliers to give a good price to SMEs and for public sector buyers to get their act together.”

SMEs show the biggest potential, with some recording return of between 20 and 30 per cent. If SMEs “win” in Ireland “they will win in Europe,” he predicted.

In order to help public purchasers achieve better outcomes, the NPS recommends reduced timescales, greater freedom to use negotiation, better tools for repetitive purchasing and the use of e-procurement.

New priorities

Impact’s organisational role has changed from the traditional one of “asking for more” [to] co-operating with management in order to extract costs from the service.” Shay Cody said that the new difficulty is: “We have to say to our members that if we don’t extract these costs, [the Government] will be coming back for more.” Redeployments should be done more efficiently and Cody suggested that an IT ‘swap shop’ would assist in this. Despite his acceptance that “cost reductions are inevitable”, he reminded delegates that the Croke Park Agreement has a provision for reviewing the levy on pay.

Shared services in practice

Established in 2005, the Department of Justice and Equality’s shared services centre in Killarney provides payroll and financial management for nine clients: the Department of Justice and Equality; An Garda Síochána; the Prison Service; the Courts Service; the Property Registration Authority; the Department of Arts, Heritage and the Gaeltacht; the National Museum; the National Library; and the Department of the Taoiseach. Its Director Ken Bruton told eolas that he interpreted the Department of the Taoiseach’s decision to join the centre in 2008 as a “signal to other departments to follow suit.” However, it was met with “deafening silence.” Bruton and his colleagues have been trying to persuade other clients to come on board but “there is reluctance at very senior management levels to change the status quo.”