EC evaluation - No easy way to rebuild economy

Yesterday’s European Commission progress report, the one based on principles aimed at reaching a point where the public finances — and services — are stabilised and sustainable, leaves little enough wriggle room for a Government that would dearly like to be able to sweeten the 2015 budget when it is announced in a few months.

EC evaluation - No easy way to rebuild economy

It was less than enthusiastic too about efforts to cut unemployment figures, especially long-term unemployment rates.

The assessment is also critical of the poor rate of progress in remaking our health system, especially efforts at streamlining management and delivering value for money. In school report terms it says we’re doing well enough but can, or must, do better.

It pointed to repeat-offender areas that seem to defy all efforts, no matter from which quarter, to resolve them. It also strongly challenges the suggestion that we do not properly fund our health service but rather pointed to management failures and the widespread duplication of services as the root causes of unacceptable outcomes for health service users and employees.

The Commission warned: “public healthcare expenditure [in Ireland] was among the highest in the EU in 2012 at 8.7%” but that we have a poorly managed system that does not deliver value for money. It continued: “financial management and accounting systems and processes are fragmented” and that this “hinders the monitoring of healthcare expenditure and efforts to achieve value-for-money and an appropriate allocation of resources”. In other words our less than optimal health service is, at least partially, a result of poor management and not a shortage of resources.

These findings go some way to explaining last week’s figures that showed acute hospitals have overspent their budgets by more than €63m in the first three months of the year and that inpatient and outpatient waiting lists are getting longer once again.

This report, and last week’s figures, will add to the already considerable pressure on Taoiseach Enda Kenny to replace Health Minister James Reilly in the summer cabinet reshuffle. Should Mr Reilly be replaced it might be prudent, and decent, to wish his successor the very best, as it seems the intractability, the power of a number of self-serving groups and the culture of our health service might only be challenged successfully by the kind of autocracy unacceptable today.

The observation that our property tax base is too narrow and that we allow too many exceptions is not good news for a Government still reeling from the local and European election dismissals, provoked, in part, by the imposition of new taxes. Any attempts to broaden the tax base will almost certainly have consequences at the ballot box, possibly sooner rather than later.

It would be cheering to suggest the EC analysis, part of the EU’s normal economic governance procedure in place since 2011 and aimed at ensuring all member states meet targets set for 2020, offers alternatives to the increasingly difficult process of living within our means. But it does not. This underlines the political and social challenge involved in restoring our public finances to some kind of equilibrium. It also gives the lie to the argument there may be an easier way, the one used to such effect at last month’s elections and one which will undoubtedly be used again as soon as the next election is called.

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