Howlin must stand firm to deliver real public sector reform

FOR Ireland to escape the drop zone and avoid relegation from the euro currency league, we must win our home fixtures. Away games are subject to vagaries of fortune.

Whether Merkel, Sarkozy or Barroso, stop “torturing” Ireland is beyond our control. Global economic waves of higher oil prices and interest rates may batter our ship of state. The ECB and IMF will operate in their own best interests of avoiding contagion within the eurozone and limit the damage of default. Meanwhile, the government has within its grasp power to effect critical public service reform, more efficient services, elimination of waste and delivery of value for taxpayers.

The Department of Finance faces its own Operation Transformation. New legislation is being drafted to bisect its ministry into two separate parts. This represents either potential for disastrous paralysis or most innovative dynamic of modern governance. A positive generous relationship between Michael Noonan and Brendan Howlin is fundamental to a successful outcome. The political culture of the civil service is to provide exclusive loyalty to their own minister. The last attempt to divide finance functions was short lived. Jack Lynch appointed Dr Martin O’Donoghue as Minister for Economic Planning in 1977. Two years later this was aborted, when Haughey abandoned the new office.

The traditional approach to turf wars in Merrion Street suggests bleak prospects of separation. What kind of double act can we expect? Our own political Ant and Dec, D’unbelievables, Jedward or Torvill & Dean — take your pick. Senior mandarins ensure junior ministers are neutered and given a diary full of ‘B’ celebrity events that senior ministers don’t want to carry out, keeping the plum prizes for their minister. Brendan Howlin has to assert authority as a senior minister. Medium-term effectiveness of this administration depends on his ability to deliver as the new Minister for Public Service Reform and Expenditure. If quangos are retained, layers of bureaucracy preserved and spending programmes rolled over by the end of this Dáil term, there’ll be no hiding place for FG and Labour. Explicit pre-election promises were made ad nauseum to carry out comprehensive audits and reviews.

The Croke Park Agreement is either a gateway or a barrier to cost savings. One year after establishment, the National Implementation Body’s quantum of economies is most meagre. They seek to include cost reductions from prior decisions as part of their achievements. Majority membership of the overseeing body is made up of union bosses (eg Tom Geraghty and Sheila Noonan) and public officials, with minimum private sector expertise. The deal was sold to public servants on the basis that it would preserve pay and conditions and outlaw compulsory redundancies. These pre-emptive ground rules remove potency to enforce change. Achieving cost reduction in handcuffs is unattainable.

Fine Gael identified 145 quangos for culling. Both parties suggested “zero budgeting” approaches to state agencies. There would be a presumption against retention, compelling them to justify future existence. The recent spat in the health service about agency nurses provides the most graphic microcosm of the conflict agenda. Health experts and the INMO alleged nursing agency costs were more expensive than filling permanent posts. The HSE cut agency budgets by €40m. Unions advised agency staff, who were members, not to turn up for work at reduced pay rates. 95% did so. They needed the cash. Now that pay rates can be reduced by 20%-40%, the HSE can consider further future employment outside of permanent staffing.

Outsourcing of public services has massive potential to drive savings. In the areas of catering, cleaning, maintenance and security, annual tendering in today’s competitive hungry arena can render endless union negotiation as redundant. Whole tranches of routine administration could be outsourced, including bill pay, invoicing, call centres and debt collection. The back drop of last week’s CSO pay comparisons between public and private workers’ weekly pay respectively at €912 and €624, explain differences between a protected and exposed employment environment.

The gradualist approach of expecting the ultimate fallout from the recruitment embargo to secure public service transformation through redeployment is wishful thinking. Every quango, voluntary hospital and public entity has their own HR unit, accounts division and management structure. Centralising recruitment processes, accounts procedures and procurement will only be driven by Brendan Howlin and his new department. Singular purchasing power is a sleeping giant of value for money if properly co-ordinated.

The Programme for Government promises to reduce public sector employees by between 18,000 and 21,000 by 2014, with a further reduction of 4,000 in the following year. Job sacrifices must come from the current base of 305,000 public servants, costing €15.1bn in 2010. No details are provided as to the carrot or stick.

Experience to date in extinguishing perks, let alone posts, augurs poorly. Privilege days were extra holidays based on tradition. An extra day off at Christmas, Easter Tuesday and for local horse racing festivals was long established. Some statutory organisations’ staff enjoyed both bank holidays and holy days off up to recent years. Outcome of negotiations was to exchange privilege days fox extra annual leave entitlement. Despite electronic banking and online wage payments, the practice of taking an hour off to cash pay cheques exists. Apparently, its abolition would discriminate against low-paid workers. Such daft debate doesn’t get to first base in the real world.

Colm McCarthy’s Bord Snip Report provided a blunt blueprint for broad rationalisation of state bodies, merging multiple fiefdoms carrying out similar functions. It exposed the lack of commercial logic about the prolificacy of such a myriad of bodies (eg 39 different organisations under the Department of Transport). For job creation, we have IDA, Enterprise Ireland, Leader groups, local development companies, Údarás na Gaeltachta, SFADCO and a network of County & City Enterprise Boards. What happened to implementation? Mutual allies of vested interests (beneficiaries), state bodies parent departments combined to thwart change. Expect similar retrenchment when it comes to implementing the Hunt Report to consolidate third-level education and ensure accountability amongst academics. Vested interests don’t go quietly.

We need to avoid past mistakes of endless analysis, countless consultations, resulting in glossy worthy documents, culminating in the great and good being assembled in Dublin Castle with ministerial pronouncements of far-reaching fundamental reform. Blah, blah, blah… Heard it all before. Remember the Strategic Management Initiative. Let’s start with opening up one in three posts from Principal Officer level and above to external appointment. Change the cosy culture. This domestic agenda is directly within our politicians’ remit. No foreign scapegoats can be blamed. Brendan should remember the old adage about political power — “don’t use it, you’ll lose it”.