Good morning Ladies and Gentlemen
Introduction and Context
I am very pleased to join you this morning on the second day of your Annual Delegate Conference.
I am told that I am the first Minister for some time to be invited to address the Conference and so I am honoured to be here. I hope my remarks this morning will help to inform your deliberations over the remainder of the event.
I am sure the significant economic and fiscal challenges this country continues to face are never far from your thoughts during these proceedings. While I will try not to dwell too much on that, there are certain unpalatable realities we must all be conscious of.
This Government has inherited the problem of a catastrophic deficit which is the result of a number of basic policy failures that are without precedent in the history of this State. We are determined to deal with that situation and have made good strides already. The Exchequer figures for the first three months of this year confirm a solid start to 2012. All of the quantitative fiscal targets set as part of the EU/IMF Programme have so far been achieved and we are making good progress in returning our public finances to sustainability.
We cannot, however, afford to be complacent. There remains a very challenging road ahead. The deficit limit we have been set for 2012 is 8.6 per cent of GDP or around €13.5 billion, which is still very high by international standards. Notwithstanding the progress made it is clear that the deficit in our public finances remains large and it is very important that we continue to reduce it in the coming years.
Clearly the budgetary adjustment process presents challenges for policymakers, but we remain steadfast in our commitment to reduce the deficit to below 3 per cent of GDP by 2015. This will require the Government to make difficult choices in all areas of public expenditure and to ensure that we remain on a credible path of budgetary adjustment. This is the only way we can regain our economic sovereignty.
Sadly, there is no pain-free, better or simpler way to go about this – as some would like to suggest. The reality is that we are dependent on funds borrowed from others to fund the day to day costs of running this state and delivering public services. There is only one group of lenders prepared to lend to us at present – and they are only prepared to do so solely on condition that we pursue measures aimed at eliminating our borrowing requirement and repaying our debts.
We also have to be mindful of the wider economic environment. There continues to be considerable volatility in the European and world economy, which as a small open economy, we are particularly exposed to and which we must take account of.
Contribution of Public Servants
We in Government fully understand that everyone in this country is suffering after four years of painful austerity, and that suffering extends to civil and public servants.
Public servants do not, in my view, receive enough credit for their contribution to restoring sustainability to the public finances and to helping economic recovery. There are those who have sought to unfairly apportion blame for this crisis to the public service and to drive a wedge between private sector and public service workers. This “blame-game” serves no useful purpose at all and only detracts from our efforts to find solutions to the problems we face. It is far better that Irish society works collectively to overcome this crisis. History, including our own, is littered with examples of the harm that can be caused by such politics of division.
I recognise that public servants have seen their take home pay significantly impacted by a range of measures since 2008.
The Government would, of course, prefer there to be other options but that is simply not the case. Regrettably, we do not have any room to manoeuvre. We have to continue to extract costs and drive productivity and reform across the public service relentlessly if we are to meet the challenge set by the economic crisis.
Notwithstanding your reduced pay, public servants have mobilised to meet the challenges of responding to significantly increased demand for critical public services with far fewer resources and staff around them. Despite the storm of unfair and ill informed comment, you have got on with the job. I believe that this reflects the pragmatic realism of Irish civil and public servants. You understand that all of our fellow citizens need a well functioning and effective public service to mitigate the effects of the terrible economic crisis the country is in, and despite the losses you have suffered you are prepared to deliver that service.
Your response to date to this crisis has been commendable even though you have not got enough credit for it. I pay tribute to you and all public servants who are working hard to put the country back on its feet.
Croke Park Agreement
We must also give due credit to the Croke Park Agreement for the part it has played, and continues to play, in facilitating the extraction of costs and improvements in productivity and work practice while, at the same time, ensuring widespread industrial peace and stability across the public service.
Over the period 2009 to 2015, it is expected that the Exchequer pay bill will reduce from €17.5bn to €13.7bn. That amounts to a saving of €3.8bn from the peak of the public pay bill. Even when the inevitable increase in public service pension costs over that period are included, there will still be a €3.3bn or nearly 19% reduction, which, by any measure, is very significant.
The major part of the saving achieved was done through the financial emergency measures introduced in 2009. Critical to delivering the reduction in paybill costs over the next few years will be the fall in public service staff numbers. By last December, numbers had fallen by over 23,000 from their 2008 peak and, as we know, a further 7,500 retired in January and February this year. Despite these departures, including those at the end of February, public services continue to be maintained. That is important to acknowledge given the widespread concern we witnessed in the weeks beforehand. Yes, there are pressure points and we are addressing those where they arise. But the doomsday scenario that was widely predicted did not materialize and this is a credit to management and staff whose collective efforts ensured that was the case.
I believe that the increase in productivity and the efficiency dividend being delivered by the Croke Park Agreement will be clearly demonstrated in every sector when the Implementation Body issues its next Report later this year. The reports already published by the Body last June and last November point to solid evidence of progress and co-operation by staff. They show that management and staff of the public service are working closely together to deliver:
̶ Real, verifiable and sustainable savings in the Exchequer pay bill, through public service numbers reductions;
̶ Widespread redeployment within and across sectors, to protect frontline service delivery as numbers fall;
̶ Extensive reconfiguration, restructuring and rationalization of services; and
̶ Efficiencies and improvements, in particular through the greater use of shared services and online services.
Specifically in the civil service where your members are concentrated, major redeployments have been facilitated to the Department of Social Protection to deliver more targeted job activation measures to the unemployed. Many PSEU members have been redeployed into that Department to ensure that the welfare service continues to deliver for Irish people. Offices in the Courts Service and the Department of Agriculture have been rationalised and so on.
The Agreement has many detractors as we know. However, I want to assure you that the Government wishes to stand by the Agreement and the commitments it has made under it. However, as we have said many times now, this will only be possible if there is full and continued co-operation with the implementation of the change and reform agendas set out in the revised Action Plans for each sector. Members of the PSEU have been at the forefront of that process and I have every confidence that the PSEU will continue to play a key role in supporting this Agreement and its implementation.
The Public Service Reform Plan
This Government is committed to reform and the role of my Department is to facilitate, support and drive that reform. Last November, we launched a comprehensive Public Service Reform Plan, which details key commitments and actions for change across the Public Service. This overall Reform Plan is now complemented by Integrated Reform Delivery Plans, which have been developed by all Departments and major Offices. The Croke Park Agreement will play a key role in enabling the implementation of this plan.
This reform agenda is about making the public service “fit for purpose” by focusing on five priority areas for change:
- Placing customer service at the core of everything we do;
- Maximising new and innovative service delivery channels;
- Radically reducing our costs to drive better value for money;
4. Leading, organising and working in new ways; and
5. Strong focus on implementation and delivery.
There are some big challenges involved in this agenda. As well as managing the reduction in public service numbers, we will also look to deliver reform in areas like:
̶ eGovernment, where we have just published a new eGovernment Strategy which will ensure that the Public Service continues to develop informational and transactional online services which deliver real benefits to service users. We have also commenced the roll-out of the Public Services Card which will facilitate easier access to Government services.
̶ Shared services, where the implementation of shared services models will be core to our reform plans in areas such as HR, Payroll, Pensions etc. Shared services will be implemented on a phased basis over the lifetime of the Reform Plan and I am aware significant progress has already been made on a HR Shared Service for the Civil Service.
̶ Procurement, where, we are developing further measures involving mandated use of common frameworks, performance measurement, increased professionalism and more innovative use of technology.
̶ Performance budgeting, where we have introduced a range of public expenditure reforms such as the Medium Term Expenditure Framework, performance-based budgeting and a new Value for Money Code.
̶ Performance management, where we are strengthening systems and related processes, including in the Civil Service, to deal with underperformance where it occurs.
̶ Agency rationalisation, where our task is to rationalise some 48 State Bodies by the end of 2012 and to review the position of 46 others by June 2012.
These are just some examples of the changes underway as part of the reform programme. It is clear that leadership will be crucial to its success. I refer here to leadership at all levels, and across the whole of the Civil and Public Service. The important role of individual public servants in the reform process should not be underestimated. We are open to good ideas for reform. We fully accept that we do not and cannot know everything that is happening in every part of the Public Service. We will listen to those who do know, and who are willing to make a contribution to the opportunities and challenges that we now face.
I believe that there is broad agreement that we have to reform the way the Public Service does business. I do think that it is important to also acknowledge the significant levels of change that have already been implemented in areas of the Public Service such as the Civil Service and the contribution of staff to that.
I think it is also important to say that the need for reform is not a reflection of failure but rather a reflection of a need to do better and achieve better outcomes with less.
While good progress has been made on delivering savings and implementing change, further reductions in resources and staff numbers are necessary and unavoidable over the coming years if we are to restore order to the public finances. At the same time, we must ensure that we can continue to provide essential frontline services and respond to increasing demands on the part of citizens and business.
Let me be clear. I have set out the big changes that are coming under Action Plans and the Public Service Reform programme. That will be challenging for people in this room and in this union, as management seek changes to the way in which you work and the conditions under which you do so. However I know that it is sometimes those changes that appear relatively inconsequential that are in fact the most sensitive, for example the move to monthly salary payments. The PSEU like all unions is entitled to press management to demonstrate the benefits and cost reductions that will follow from that change, so that they in turn can answer the questions of their members. Efficiencies need to be transparent in order for the extent of the reforms to be fully appreciated by all interests. But where potential efficiencies are identified, you have committed under the Agreement to help us deliver those efficiencies.
What is clear is that it is in all of our interests that we make a success of this Agreement and to prove the doubters wrong. We are all aware of the intense scrutiny which the Agreement is under. That is not just from the media and the public at large. Our international stakeholders, who are here at the moment, raise with us the ongoing delivery of the Croke Park Agreement on every visit.
Within the framework of the Agreement, we need to look at more radical and innovative ways to extract costs and deliver increased productivity and reform. It is important that all staff get behind the delivery of change, whether it is changing employer or location, retraining and upskilling to do different things, co-operating with the introduction of shared service operations, or changing the way in which we interact with customers and business. Further reform is necessary for the public service to function effectively into the future.
We will also continue to address the challenge of creating a single public service. We are making progress in that regard with the introduction of standardised arrangements for annual leave and the review of allowances and sick leave arrangements that are currently underway.
And we must ensure that the Agreement works for our bright and talented public servants, supporting them to achieve their full potential. They, as much as anyone, want to see the end of those age old complacencies and structures that are wasteful of innovation and initiative and complicit in allowing instances of underperformance to go unchecked.. We must not let them down in that regard.
This country and the public service have been through enormously difficult times.
We are not out of the woods, far from it, but we are now starting in the right direction.
PSEU members and all public servants have put their shoulders to the wheel and I acknowledge that.
I would urge you now to continue to work within the framework of the Agreement to help us finish the good work that we have started and help us return this country to growth and prosperity.
Let us also strive to achieve a strong, vibrant, efficient and motivated public service that delivers for the citizens and businesses of this country.
I look forward to working closely with you to achieve these goals over the coming years.
I wish you all an enjoyable and productive Conference.