Public Service Reform – The Balance Sheet?
A paper by Robert Watt, Secretary General,
On 17 November 2011, the Government published a comprehensive Public Service Reform Plan, which outlined key commitments and actions for change across the Public Service.
This paper, presented by Mr Robert Watt, the Secretary General of the Department of Public Expenditure and Reform, outlines how the Reform Plan is changing the Public Service in terms of the way its people are managed, how it is organised and how it manages expenditure. It also sets out the Government’s ambitious programme of political and legislative reform.
Mr Watt highlights the need for a strong emphasis on implementation and delivery and describes some of the structures that have been put in place to drive the reform process with real actions and real deadlines focussing on real results. The role of the Croke Park Agreement as an enabler of the reform process is also discussed.
Mr Watt concludes that, with buy-in and leadership across the Public Service, the vision of a high-performing Public Service that serves the needs of the community can be achieved.
None of us can escape from the challenges we face as a country to restore the public finances to a sustainable footing. Good progress has been made in dealing with the situation but we remain reliant on funding from the EU and IMF to fund public services and pay people’s wages, pensions and social welfare benefits.
We must consolidate public spending but it cannot be a case of cutting funding across the board. The demand for public services is greater than ever. Sustained reform of public services is essential to ensure we can continue to provide services, to protect the vulnerable members of our society and to drive job creation and rebuild our economy. We must focus on changing business practices and changing the way we use available resources to deliver savings.
At last year’s MacGill Summer School, I presented a paper titled, “Transforming the Public Service – How and When”. In it, I set out the Government’s vision for a customer-focussed, flexible and efficient Public Service that does better with less, where change is part of business as usual. In this paper, I will discuss the progress we have made to date and the challenges we face in making this vision a reality.
The Public Service Reform Plan
The drive for reform is the reason why the Government published the comprehensive and ambitious Public Service Reform Plan on 17 November 2011, which sets out key commitments and actions for change across the Public Service under five central themes. These are:
Placing customer service at the heart of everything we do;
Maximising new and innovative service delivery channels;
Radically reducing our costs to drive better value for money;
Leading, organising and working in new ways; and
A strong focus on implementation and delivery.
The Reform Plan contains some 70 recommendations and more than 200 actions. The Minister for Public Expenditure and Reform has described it as the most comprehensive programme of reform in the history of the State. It is changing the Public Service in terms of the way its people are managed, the way it is organised and the way it manages expenditure. In the following sections, I will give a number of examples of how we are achieving this.
Reforming how we manage people
Reducing the cost of the Public Service paybill is a key objective in the current climate. Over the period 2009 to 2015, the Exchequer paybill is expected to fall by €3.8 billion, or €3.3 billion net of expected increases in Public Service pensions costs. Much of this will be driven by the reduction in Public Service numbers, which we plan to reduce to 282,500 by the end of 2015 from a peak of 320,000 in 2008, or 12% approximately. There has already been a reduction of 28,000 staff since 2008. Strategic Workforce Planning Groups have been established in each sector to deal with the operational and strategic consequences of the outflow of staff.
Flexible redeployment arrangements are ensuring that staff resources are being assigned to where they are most needed to meet operational priorities, eliminating the need to recruit new staff and securing substantial savings. For example, 200 secondary and 950 primary level teachers have been redeployed for the 2011/12 school year, with an estimated full-year saving of €57.5 million. Similarly, some 4,500 staff have been redeployed across the Health Sector.
Legislation for a new single Public Service pension scheme has been passed by the Oireachtas. The new scheme will (i) introduce a career average pension scheme; (ii) index pension accrual and pension increases to CPI and not pay; and (iii) increase the pension age for all new entrants to the service thus significantly reducing future pension costs and will, in time, produce improved efficiencies in administration.
The agreed standardisation of annual leave will eliminate many of the anomalies that exist under the current leave arrangements by having the same cap on the leave allowance for different public service employment groups. This will lead to greater uniformity of terms and conditions in the Public Service and enhance the fluid movement of staff between different sectors and organisations.
The Labour Court has issued a recommendation on management proposals on a revised sick leave scheme for the Public Service. Under the new arrangements, the amount of paid sick leave which may be granted will be halved and effective policies for the management of sick leave will be implemented. This will result in greater productivity, less absenteeism and a significant reduction in the cost of sick leave to the Exchequer.
New roster arrangements will ensure more Gardaí are available for frontline duty at peak hours. Additional working hours are being implemented in schools and universities resulting in fewer in-house training days and more teaching hours. New working arrangements are also being implemented in the health sector with new rosters for radiographers and medical laboratory technicians delivering greater productivity. Outmoded practices such as bank time and privilege days have been abolished from the Civil Service.
The Senior Public Service has been established to promote a more integrated Public Service and strengthen its senior management and leadership capacity.
Proposals for mobility between the public and private sectors were recently agreed by Government. The Career Break Scheme will be revised to permit participants to take up paid employment in Ireland for a career break duration of three years with an in-built review after three years. In addition, a scheme to permit one-year exchanges of staff between the Civil Service and the private sector will be put in place on a pilot basis and reviewed after two years.
Reforming how we are organised
The Government has agreed a strategic mandate on Shared Services, which will reduce duplication, streamline business practices and reduce transaction times. The Government has approved the establishment of a HR and Pensions Administration Shared Service Centre for the Civil Service. The baselining of current payroll arrangements has been completed and a business case for Payroll Shared Services will be submitted to Government later this year. These are just two examples from the Civil Service and each sector is now developing its own benefits-driven shared services plan.
The use of Information and Communications Technology (ICT) is a key enabler for maximising new and innovative service delivery channels to deliver better services and information in a more cost effective manner. The eGovernment 2012-15 Strategy ensures that Ireland will be in a position to benefit from the opportunities offered by new and existing ICT technologies. Initiatives in the area include the new Public Services Card, a new Data Sharing Clearing House and the opening up of data held by Public Service bodies to citizens, academics and businesses. A Cloud Computing strategy, which will reduce costs by rationalising the number of computing centres and data facilities we use, has also been developed and was published by Government last week.
The Government has also agreed to a number of actions aimed at achieving a focussed and integrated approach to external service delivery to increase efficiency and enhance focus on core activities. External delivery will be considered as a means of delivery for any proposed new services. Work has also commenced to identify non-core activities that may be suitable for external delivery. A shortlist of potential projects for priority implementation is being prepared and detailed benefits-driven external service delivery plans will be developed by the four major sectors of Health, Justice, Education and Local Government.
46 State Agency rationalisation proposals are being critically reviewed by Departments and a report will be brought to Government for consideration setting out conclusions of these reviews. 48 other measures are being implemented with a deadline of end 2012.
Reforming how we manage expenditure
The traditional Estimates cycle is being replaced by a Medium Term Expenditure Framework, under which expenditure ceilings for each Department are set out on a multi-annual basis. A new “whole of year” Budget/Estimates cycle has been introduced and it is now open to Oireachtas committees to engage directly with Departments on an ex ante basis with regard to the 2013 allocations.
Performance budgeting was successfully rolled out to almost all Departments in the 2012 Revised Estimates and, in this context, an unprecedented volume of performance information has now been published. The initiative will be rolled out fully in the 2013 Estimates.
Last December, the Government announced the creation of a public-facing whole of Government performance measurement system. A pilot project is underway in respect of selected programmes in the areas of agriculture, enterprise, transport and public works. The pilot project aims to set out performance information for each programme on the basis of four questions: What has been done? How much did it cost? What was achieved? How does Ireland compare internationally? One of the core aims is to ensure the information is as accessible as possible for the citizen.
A new Value For Money (VFM) Code has been introduced to consolidate and update the earlier VFM framework, to make it more effective in supporting policy decisions and to embed a culture of evaluation across the Public Service. A dedicated Irish Government Economic and Evaluation Service has been established to expand technical capacity in evaluation across all Government Departments.
Savings on a range of goods and services procured across the Public Service are to be maximised by the mandatory use of centralised national frameworks put in place by the National Procurement Service. Alongside this, an external review of the central procurement function is well advanced. This review has examined our procurement structures and processes with a view to identifying the actions required to realise substantial savings in public procurement in the short to medium term.
Proposals are being developed to reform the management of the State’s property portfolio and to make savings on leasehold expenditure.
Reforming the political framework
Delivery of an ambitious programme of commitments of political reform contained in the Programme for Government is underway. The common theme running through these initiatives relates to securing greater openness and transparency, enhanced accountability and thereby leading to more effective public governance.
The Minister for Public Expenditure and Reform’s policy proposals on lobbying regulation were published in early July and have been subject of a public seminar involving key interests and experts. A comprehensive approach is proposed to the definition of lobbying to shed greater light on the question who is lobbying whom about what.
There is a strong complementarity between the proposed lobbying register and the planned reform and extension of Freedom of Information. The availability of greater information in the public domain on interactions between key interest groups and the political and senior administrative system will inevitably lead to a focus on accessing official records on “the what” which is the subject of the lobbying.
The introduction of comprehensive whistleblower protection legislation is central to more effective management and early amelioration of risk, both in the public and the private sector. In well run and risk focused organisations whistleblowing should be encouraged and promoted; the need for protections against reprisals is a safety-net when the whistleblower rather than the information they have disclosed becomes the primary focus of the organisation’s attention.
The primary purpose of the Ombudsman Amendment Bill which it is hoped can be enacted by end-year is to extend the Ombudsman’s jurisdiction to all public bodies. The Ombudsman plays a central role in seeking to ensure that administrative decision-making is fair and robust in all circumstances.
The findings and recommendations of the Mahon Tribunal highlight the requirement for a fundamental review of the legislative framework for ethics. There is a consensus that the existing framework needs significant reform, updating and modernisation and this is now underway.
The Programme for Government contains a strong commitment to strengthening Civil Service accountability. This is a key element of the objectives in the Public Service Reform Plan for boosting the performance and capacity of the overall system of public administration in Ireland. There are important legislative issues to consider going back to the Ministers and Secretaries Act 1924, one of the foundation stones of the Irish State.
Following the recent enactment of the Statute Law Revision Bill 2012, the next phase of the project of legislative simplification will be focusing on post-1922 Statutes.
Finally, the necessity for an effective legal framework for Oireachtas inquiries consistent with the existing constitutional position speaks for itself.
Taken as a whole, these are a comprehensive suite of significant measures, which have the potential to bring about an important shift in the ‘rules of the game’ for the political and administrative system.
A strong focus on implementation and delivery
Implementing the Reform Plan is an enormous undertaking, involving hundreds of diverse organisations and almost 300,000 employees. A concerted focus on action and delivery is required in order to ensure success. To this end, we have put in place a number of governance structures and processes.
The Cabinet Committee on Public Service Reform, chaired by the Taoiseach, provides political direction, governance and accountability. The Cabinet Committee is supported by an Advisory Group of Secretaries General, which I chair. In addition, a Reform Delivery Board, comprised mainly of Assistant Secretaries responsible for delivering reform in their respective Departments/Offices, meets regularly to oversee the delivery of the Reform Plan at organisational and sectoral level.
The Reform and Delivery Office in the Department of Public Expenditure and Reform is responsible for overall leadership, oversight and reporting on the Reform Plan. It is headed by a Programme Director with experience of implementing large-scale change in complex environments. We have brought new specialist skills into the Reform and Delivery Office in key areas such as shared services and external service delivery.
International experience has shown that real leadership is needed at both central and Departmental levels if major transformational initiatives like Shared Services are to succeed. It will be crucial that we learn from the challenges faced elsewhere. In this context, we are determined to take robust, methodological approaches to the delivery of all change programmes. Furthermore, all Secretaries General and other senior officials will be expected to play an active part in leading the delivery of reform.
Departments and major offices have prepared their own Integrated Reform Delivery Plans and established Change Delivery Teams to manage and drive the reform process in their organisations and sectors.
Senior Responsible Owners have been assigned to major reform projects, empowered to lead, direct and take key decisions necessary for their implementation.
By developing integrated plans with clear milestones and deliverables, by reporting on progress on these plans and by assigning responsibility for particular initiatives to specific individuals and making them accountable for progress, we are showing that we are focussed on specific actions and delivery.
The role of the Public Service Agreement
The Government sees the Public Service (Croke Park) Agreement as a key enabler for the delivery of the overall reform programme. The evidence to date from the Reports published by the Implementation Body charged with overseeing progress is that it is working and delivering.
One of the key benefits of the Agreement is that it is facilitating a significant reduction in public service costs and the delivery of efficiencies and reform in a climate of industrial relations peace and stability.
The Agreement is critical to ensuring that the Public Service can continue to function effectively as we reduce staff numbers in line with the Government’s targets. Under the Agreement:
staff are being redeployed to front line services and areas of greatest need;
public services are being extensively reconfigured, restructured and rationalised, as I have mentioned earlier; and
efficiencies are being achieved, in particular through changes to work practices, new roster arrangements and the greater use of centralised procurement arrangements, shared service operations and online services.
The measures being pursued with staff cooperation under the Agreement will enable us to deliver the significant and sustainable €3.8 billion in savings in the Exchequer pay bill by 2015.
It is important to acknowledge what has been achieved under the Agreement but it is critical now that we do not lose momentum in the pursuit of savings and reform. There are substantial reforms to be delivered across the system and while progress has been made, we need to see an acceleration and deepening of change across the Public Service in the period ahead, making maximum use of the provisions of the Agreement.
Ireland needs a Public Service that can lead our economic recovery and meet the needs of our people in the years ahead. Implementation of the Public Service Reform Plan is fundamentally changing how we manage people, how we are organised and how we manage expenditure. We have made a start in the right direction but the task ahead of us is not easy and there will be many obstacles to overcome. Nevertheless, our fiscal commitments have provided us with a “burning platform” to change how we are structured, what we do and how we do it.
As we continue to progress our reform plans, we must be continuously aware of the changing environment in which we operate. Our plans must be fluid and dynamic as well as integrated and cohesive. Leadership across all levels of the Public Service will be crucial to our success. I continue to believe that we will rise to challenge and deliver on the vision of a high-performing Public Service that works together to achieve value for money and quality public services that meet the needs of our community.