Belfast Telegraph

Wednesday 17 September 2014

Separate visions: reform the civil service and slice budget

Irish Finance Minister Brian Lenihan hit two very large nails on the head when he launched the latest initiative to make the public service more efficient and cost-effective.

He said that, even in his short time as a minister, the most frustrating thing was the inability to move staff from where they were, to where they were needed.

He also asserted that the public service must be one which rewards excellence, and which does not tolerate mediocrity or poor performance.

He could have hammered both nails homes last week. He could have said that, with immediate effect, staff will be moved to where they are needed, and fired if they won't go.

He could have said that performance bonuses next year will not be paid to every civil servant in the scheme, but to 10% of them at most — chosen by a rigorous independent system.

The first statement would have produced immediate threats of industrial action — perhaps even strikes. The second would have provoked the equally dangerous, but much less visible, ire of the senior civil service. But both actions would have gone to the heart of the problems in the Irish public service.

One is the refusal of the public sector trade unions to distinguish between legitimate protection of their members' interests and the protection of feather-bedding, over-staffing, restrictive practices and overtime-hoarding.

No trade union ever will separate them unless it is forced to, which governments have failed to do.

The second problem is the cynicism and promotion of self-interest with which the senior ranks have met proposals for reform, accountability and reward for performance.

They have turned these schemes into nothing more than increases in their own salaries, while averting the appalling prospect that any of them should actually suffer because of the failings of their departments or agencies.

Mr Lenihan was right to say that we should not demonise the Irish public service.

But there would be no task forces or implementation bodies if it were living up to the expectations of citizens. It is not, as a few officials and trade union leaders have been prepared to admit.

The place for Mr Lenihan to start is with action on the problems we already know about; both to set an example and to show intent for the future.

One danger already apparent yesterday is that of mixing up the need for budgetary correction in the present crisis with fundamental reform of the public sector.

All kinds of spending cuts and savings will be needed over the next couple of years to prevent deficits ballooning to intolerable levels, but that is not the same as reform.

Such cuts can damage the public sector and its services in the medium term. They may still be necessary, but they should be separated from the process of making the service more efficient and responsive.

That is essential because, when the economic crisis is over, the public service will find itself in a very different world. Its commitments for education and healthcare will grow.

But its resources will not rise by much more than 5% a year over the long run, and on a declining trend as the economy matures. At the same time, the pensions bill will take a growing share of national income.

Many of the present inadequacies are another unfortunate facet of the 2004-08 bubble. Nothing could make that clearer than Mr Lenihan's own figures of a 39% increase in pay costs and an 11% rise in numbers over that period.

Even the best corporate managers would quail at changing the culture that has been engendered to what is required for the next decade and beyond.

They would, however, start at the top, and not fool themselves that it can be done without spilling blood on the carpet.

Brendan Keenan writes for the Irish Independent.

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