OPINION:IT IS hard to argue with the broad contents of the public sector reform plan announced last week by the Government. Most of these proposals were well flagged in previous reports and can yield substantial cost savings. But the devil is in the detail of the plan and the real question is can the Irish public service deliver? The following are five steps to a successful outcome.
* Prepare for battle: get and maintain, strong political commitment.
Minister for Public Expenditure Brendan Howlin has shown determination to get this plan published. But transformation will be difficult and there will be attempts to delay and undermine it. Without strong political commitment over the long term many of these proposals cannot be implemented. Minister of State Willie Penrose’s resignation does not augur well and swift action will be required by the Coalition to get, and maintain, discipline.
It is important to recruit strong and visible champions for each initiative and here the Government is off to a strong start. It has established a Cabinet Committee on Reform; it has set up a reform and delivery office within the new Department of Public Expenditure and Reform. It has appointed a programme director with private sector experience. This needs to continue and intensify. When London successfully introduced congestion charging it had the strong and highly visible commitment of Ken Livingstone. He made it clear that this was his administration’s policy and was a central, non-negotiable part of his overall strategy. When the governor of Minnesota set up his successful transformation programme, he put in place a well-resourced team of 200 to drive implementation.
* Insist on hard facts
The plan is light on hard data. Most of the savings claimed in this plan, and under the Croke Park agreement, are expressed as savings vs the peak of the boom. But a 10 per cent saving might be a very poor result if we were 20 per cent overstaffed at the start. We need to benchmark our public services against equivalent public and private organisations to find out where savings should be targeted.
This kind of benchmarking is especially important because the public service has a monopoly on many of the services it provides and is not subject to the kind of market pressures that force private organisations to adapt, innovate and cut costs relentlessly. Among the issues for the Irish public service is the absence of a central personnel and skills database. No one knows exactly how many people are employed on similar tasks in areas such as finance, human resources and IT making it difficult to know where to cut and where to share these critical skills.
There is no central procurement database. The plan mentions 45 national contracts put in place by the National Procurement Service. A good start, but they will need the resources and systems to ensure that the billions spent on procurement are completely cost-effective. This could save the taxpayer hundreds of millions.
There is no comprehensive database of property and facilities and so it’s not possible to be sure that expensive facilities are being used to their maximum.
Financial systems are geared towards managing day-to-day expenditure and budgets too often provide limited meaningful management data on which to base cost-saving decisions.
* Obtain buy-in: keep stakeholders and the public informed and on side
It will be important to identify key stakeholders – citizens, public sector workers, businesses, etc – and have intense consultation and communication plans. Ideas and innovation should be gathered from citizens and within the public service. Many public servants want to help and are frustrated by slow progress. Listening to them and implementing the best ideas will deliver savings and improve morale. The proposed GovStat website will be a welcome help in understanding how much progress is being made.
* Leverage existing best practices and investments
Despite often negative perceptions, there are examples of existing good practices in the public sector as outlined in the Government statement. However, they should be used more widely and should be mandatory. If an existing, good value national contract is in place make it compulsory that all public bodies use it.
Ban the signing of new leases for office space if there are existing facilities nearby. Irish public servants occupy significantly more office space than their UK counterparts or the private sector. Savings are possible. If a shared service already exists, scale it up and use it for as many services as possible. Where online services such as motor tax are available, provide financial incentives to encourage more use.
No major organisation, public or private, can transform itself without help. Companies invariably seek external help by establishing links with peers, recruiting people with relevant skills and appointing suitably skilled service suppliers. Ireland’s public service reform will need to draw on the skills and expertise of the private sector to succeed.
The scale should not be underestimated – a small number of external appointments will not be enough. If reform is to take hold a majority of new management posts should be filled externally.
* Reform is not just cutting costs
“All pain and no gain” will rarely work. There must be some rewards for citizens and employees at the end of this. For example the reform of the Dublin Bus network will achieve cost savings but it also aims to deliver a faster, more direct service to the majority of users.
Health service reform aimed at developing community care centres has the potential to help prevent more illness, improving citizens’ health and saving on expensive future healthcare bills.
And while all the focus is on cutting costs, we must not forget to invest in the future. A strong and fit-for-purpose public service will be to the benefit of all citizens. Despite the recession, I believe we should start recruiting graduates and young people into the public service – even if this means making more job savings at upper and middle ranks. We should not wait until the recession is over or we will end up with critical skills gaps in middle and upper management in the future.
The Government could examine introducing a graduate trainee contract, perhaps lasting three years, and retain the top performers when contracts expire. This would be relatively low-cost, give our young people an opportunity to develop key skills and provide a future stream of talent for the public service.
Ireland has shown itself very resilient in the past. We pride ourselves on our adaptability. I believe public sector reform is possible – but implementation is key.
David Hearn is head of consulting at Deloitte