Civil service plan misses goal - report

THE biggest single initiative in recent years aimed at reducing the cost of the civil service failed to achieve one of its main objectives, according to a report published yesterday.

Since the introduction of the scheme in 1991, expenditure on administration has increased by an average of 2.7 per cent a year in real terms, according to the report by the Comptroller and Auditor General, Mr John Purcell.

However the report found there were indications that the initiative has helped contain increases in running costs and that civil service efficiency has increased.

Since the introduction of the system there has been a "rapid" increase in staffing and a "significant grade drift" from clerical assistant to the higher grade of clerical officer, the report found.

The Administrative Budget System was introduced in most departments and offices in 1991.

The system, which runs in three-year cycles, involves agreements between the Department of Finance and each department, providing for a set budget allocation for each year of the cycle.

Similar agreements were reached for 1994 to 1996 and a third cycle of agreements is currently being implemented.

Under the system centrally agreed decisions which lead to cost rises, such as wage increases, are extra to the budget allocations.

The aim of the system is to increase administrative efficiency and the effectiveness of spending programmes by the delegation of decision-making about administrative spending.

During the first cycle a 2 per cent per year "efficiency dividend" was provided for.

For the second cycle a reduction could be "waived" if the Department of Finance agreed it would seriously impair the delivery of existing essential services, or if the department involved undertook not to seek additions to the budget allocations for the years concerned.

In the event, expenditure on administration increased by an average of 2.7 per cent a year.

"In general, spending and staffing levels have not been reduced by the introduction of the administrative budget system," according to the report.

"Civil service running costs have increased very substantially over recent years, which suggests that a primary objective of the administrative budget system - a reduction in civil service running costs in real terms was not achieved."

Not all departments introduced the system and the rate of increase in running costs was lower in those which did. However the trend in the rate of increase in running costs was not affected significantly in either group of departments.

Between 1988 and 1996 average pay For civil servants, allowing for inflation and the increase in numbers, rose by 13.5 per cent.

Non-pay running costs in the civil service increased faster than pay costs over the same period and now account for 29 per cent of total running costs.

An objective of the initiative was to free up resources formerly taken up by ongoing control by the Department of Finance of expenditure by all departments.

The initiative appears to have led to a decrease in correspondence with the Department of Finance, but no data are available on the extent of the resources freed.

The report finds that departments are "still somewhat wary about the provision to carry over savings, being honoured by Finance.