It is significant that public sector numbers and expenditure are included in the special group's title, writes Noel Whelan.
IT IS a pity that Ray MacSharry has never written a comprehensive political memoir - or at least not yet. A blow-by-blow account of his time in the Dáil, the European Parliament and the European Commission would be fascinating. MacSharry did, however, write a partial memoir of sorts when, in 2000, he co-authored a book called The Making of the Celtic Tigerwith Pádraic White, which includes a fascinating account of his time as minister for finance.
In the book, MacSharry sets out the background to the so-called hairshirt budget which he introduced in March 1987, just weeks after being given the finance portfolio in the new Haughey-led minority government. He tells how, notwithstanding the significant cuts in public expenditure "realised" in that budget, it was to be merely the first phase in a sustained onslaught on spending, which he had planned.
MacSharry reprints in full the text of a letter sent, in Haughey's name, to all ministers on May 13th, 1987, in which they were given 10 days to come up with a preliminary paper outlining further proposed cuts in each of their departments. Ministers were told to "consider the elimination or reduction of particular schemes, the rooting out of overlaps and duplications between organisations, the merger of organisations, the closure of institutions which may have outlived their usefulness, the scaling down of operations or organisations and the disposal of physical assets which are no longer productively used".
Ministers were warned: "We do not want a series of justifications of the status quo or special pleadings." They were ordered to take a radical approach. No expenditure was to be regarded as "sacrosanct and immune to elimination or reduction".
MacSharry writes about how, once they had produced this preliminary paper on cutbacks, each department was to be interrogated on its proposals before a specially established expenditure review group. This group had the power to recommend cuts other than and in addition to those suggested by the departments, and decisions on what was to be cut would be made on a weekly basis by the cabinet. MacSharry's objective was to have the full programme of cuts agreed by government before early September, and this he largely achieved.
The expenditure review group established by MacSharry was composed of four people, and it quickly became more commonly known as "An Bord Snip". The then secretary general of the Department of Finance, Seán Cromien, presided over each meeting. The second secretary heading the department's public expenditure division and the second secretary responsible for personnel were also members. The fourth man was the economist Colm McCarthy.
Now, more than two decades later, in similarly difficult economic times, the Government has decided to establish a new group of four cost-cutters. This time the group has a more unwieldy official title, namely, the Special Group on Public Service Numbers and Expenditure Programmes, but already most commentators have dubbed it "An Bord Snip Nua". The establishment of this group is actually the most significant decision included in a wider series of public sector reforms announced by Taoiseach Brian Cowen and Minister for Finance Brian Lenihan in Dublin Castle last Wednesday.
While An Bord Snip Nua has some similarities to its predecessor, there are also a number of what appear to be substantial and important differences. In a move clearly designed to echo with the MacSharry initiative, Colm McCarthy has again been included among its membership. However, while in 1987 the Department of Finance itself both chaired and dominated the group, this time around McCarthy will be in the chair. The Minister confirmed on Wednesday that the group will have three other members, but he said that their names will not be announced until after Cabinet has agreed them next week.
If media reports are to be believed, however, a majority of the group's members on this occasion will be from outside the Department of Finance and maybe even from outside the Civil Service altogether. All of this could suggest that the Government does not have sufficient confidence in the Department of Finance's capacity or willingness to introduce the cuts in personnel and programmes which now need to be achieved.
The new group also appears, on paper at least, to have a wider role. It is significant that public sector numbers are included in its title alongside expenditure and, according to Lenihan, its brief is not only to examine the scope for reducing and refocusing expenditure in all departments and agencies, but also extends to "examining the numbers of public servants employed across the public services, to assess the scope for transferring staff to priority areas and for reducing numbers overall and to identify surplus staff".
The McCarthy-led board will clearly require an even bigger scissors than its predecessor 20 years ago. It will have to examine expenditure across a much larger public service and over a much more complex patchwork of agencies and institutions. It will also have to face what is likely to be even greater resistance to cuts from senior managers, whose careers have been shaped in a decade and a half of boom and whose expectations have been honed to centre on dramatically increased budgets rather than cutbacks.
In his book, Ray MacSharry describes Colm McCarthy as a "blunt and outspoken Dubliner". If anything, McCarthy has got even more blunt and more outspoken over the years. He may need every ounce of those characteristics. His willingness to take on this task again now, and in a more significant and high-profile role than previously, suggests that he, at least, is persuaded that the Government is serious about cutting both public sector expenditure and public sector staff numbers.