McCarthy: Incentives for public sector vital

By Donal Hickey

Friday, September 10, 2010

BORD Snip Nua chairman Colm McCarthy yesterday called for a system to give incentives to people in the public sector to bring about cost savings.

One of the lessons learnt in recent years was that, if budgets available to county councils and the semi-State sector were "too elastic and too generous", the money would be spent, he said.

Unlike what happened in the private sector, there was no reward for public sector mid-management to come up with ways of saving money, he remarked.

"We must try to replicate (in the public sector) the incentive system that rewards economies and cost effectiveness and penalises empire-building and waste," McCarthy, speaking at the Richard Cantillon School, in Tralee, said.

Cantillon, born in Ballyheigue, Co Kerry, in 1680, was a distinguished economist and banker and has been credited with being the first person to use the term entrepreneur.

Mr McCarthy also said there was a danger of vilifying everyone in the public sector, while stating the concept of the public sector versus private sector was divisive and not conducive to reform. On the banking crisis, he hoped the recapitalising of AIB and disposal of its overseas businesses would be addressed in the next few weeks.

SIPTU general president Jack O’Connor told the school that, in order to emerge from the economic crisis, Ireland must look beyond issues such as lack of regulation and question the value system that underpinned the economic bubble. People had to stop confusing speculation with entrepreneurship, he suggested.

With the collapse of private investment, it was essential to mobilise the collectively owned resources of society – our semi-State enterprises – to rescue the economy.

"The key to recovery is the development of a credible plan which has the potential to mobilise the entire resources of the nation, which offers not just a coherent vision of the future but the prospect of establishing a truly sustainable economy and a fairer and more just society.

"I am confident that there is a way out of the current debacle and that entrepreneurship in both the private and public sector is critical to it."

This appeared in the printed version of the Irish Examiner Friday, September 10, 2010