Bord Snip lines up big quango cuts
From the Mushrooms Board to the Manuscripts Comission, the country has been over-run by expensive quangos, writes Roisin Burke
Sunday July 05 2009
IN a treble whammy of fiscal hits last week, Moody's downgraded Ireland's top notch AAA status, the latest horrific quarterly economic data came out and the public spending cuts grim reaper -- an Bord Snip Nua -- delivered its cost-axing recommendations to Government.
The Government is refusing to spill the gory details of what Snip Nua would get rid of, fuelling speculation even further as to how it used its cart blanche to recommend anything it deemed "unnecessary" for a spending chop.
Snip Nua is bound to have had a good hard look at Ireland's 1,000 quangos, or state funded public bodies.
These multiplied faster than bored lab rabbits during the boom. Some 200 leapt into being in the last three years alone -- more than one a week. This orgy of state outsourcing means there is one quango for every 4,000 people in the country, from the Mushroom Taskforce or Beaumont Hospital Carpark Committee and the Board of Ulster Scotch to more mainstream bodies such as the Health Service Executive and the National Roads Authority.
While some serve a useful and valid purpose, others are incredibly profligate with colossal pay, expenses and consultancy bills landing on the taxpayers' tab.
The quangos' combined annual budget was €13bn in 2006, according to a Think Tank for Action on Social Change report, and it's sure to be even more now.
A saving of €200m could be made by culling the quangos, according to a Fine Gael proposal of last year, but a look at some of their splurging shows it could easily be millions more than that.
The hottest An Bord Snip Nua hearsay is that €1bn will be slashed in health spending. To Mary Harney's credit, health quangos have been culled or merged from a cluttered 57 to just 18 but there have been some new quango incarnations too.
Snip Nua might wonder how a new quango on the block, the Health Information and Quality Authority (Hiqa) has almost half its €14.8m funding -- €6m -- wiped out by staff costs, according to its annual report.
One reason may be the high salaries for medical professionals among the 130 staff, with some justification, given the body's health care monitoring remit. Harder to explain is the €637,000 in "recruitment" it shelled out last year.
Just getting Hiqa started last year set the Exchequer back €2.4m in "support and establishment" costs, when there is already a fully set up Dept of Health. At €6m, less than 50 per cent of its budget is left for Hiqa to do what it was established to do. A third of that, €2m, goes to "investigations and professional fees", and the "travel and subsistence" spend is €475,000.
Snip Nua could easily argue that the Irish Greyhound Board's (IGB) €13.8m government funding could be saved if it and other sports bodies with a strong gambling element exploited lucrative betting and sponsorship income to pay for themselves.
The IGB's past record could be "how-not-to-run-a-quango" textbook material.
A €1.5m legal bill from a Supreme Court case involving Tote Advanced is just one major cost resulting from a litany of tendering mishaps, as a Comptroller and Auditor-General's (CAG) report of last year discovered.
"Perquisites enjoyed by certain staff" as the CAG put it, included free cars for two of them, compliments of a local car dealership until 2005. When the CEO discovered and nixed this carry-on his wishes were ignored and the cars were kept on by the corporate-governance-nightmare duo involved, so that IGB ended up with a tax and benefit in kind liability on them.
Surely things are less freewheeling now? Maybe, but "travel, promotion and expenses" outlay is €600,000 a year, more than double that of the Arts Council, with its much bigger remit. Latest figures show €63,000 of goods were purchased from one individual who is now a board member, prior to his being appointed, IGB's accounts said. Buying out an IGB's premises lease in Limerick resulted in paying €95,000 to a former CEO's daughter-in-law to pay her to rescind her office tenancy there.
The bill to investigate where things went wrong netted PwC €76,000.
Somebody or everybody at Udaras na Gaeltachta is earning a very nice wedge, as combined salaries for its 112 full-time staff come to €8.9m, an average of almost €80,000 a year each. The gaeltacht areas' social, cultural and economic body has 20 board members, 17 of whom are elected.
Its state investment for the year was €68m a year, plus grants of around €8m. It funds everything from airstrips to energy projects to R&D. Snip Nua could rein in Udaras's €233m allocation from the NDP for 2007-2013.
A €479,000 bad debts write-off for 2007 goes unexplained in its annual report.
The last budget already cut deep into the Arts Council's funds, and many festivals and projects will be without money as it is. However even allowing for its huge nationwide grant administration, some of its expenses seem massively high.
With 13 board members and 17 advisers, the Arts Council paid out €387,000 on "business consultants", according to its last annual report. Then there are the €229,000 "council and staff expenses". That's almost €4,000 per full-time staff member. Its advisers cost €896,000 in total for 2008, averaging over €52,000 each.
Employer, union and government collaborative body National Economic and Social Development Office (NESDO) describes it's role thus: "to add value to the work of its constituent bodies by creating the conditions under which synergies can be released ... the development of a shared vision for realising these goals and encouraging the constituent bodies to maximise their efforts through collaborative policy development initiatives." There's more, but you won't understand what that means either.
With the good times that were in it some might argue employers and unions could have funded their own multi-million euro collaborations.
Salary expenditure is almost half of its €5.2m state funding of €2.2m, its 2007 figures show.
NESDO's council is a cast of dozens from the Irish Business and Employers Confederation (Ibec), the government and unions -- but yet its "consultancy fee" spend is €547,000. Separate to that, a €141,000 "professional fees" figure features. There's a travel and subsistence tab of €73,000. Rather mad splurging includes €67,000 on "post and taxis" and €45,000 on "recruitment". In the age of email and the paperless office, in the as yet unaudited accounts for 2008, the annual bill for stationery is €78,000.
Inter-body scrapping, internal disputes, money squabbles -- Snip Nua might query why the Department of Arts, Sports and Tourism is funding its very own untelevised reality soap opera at the Sports Council of Ireland. As the 2012 Olympics preparations get closer, the best spending use of its €55m sports money is coming into sharper focus.
Former U2 accountant Ossie Kilkenny chairs the Sports Council in a five-year non-executive appointment, with board members including Bertie's brother Maurice Ahern. There is major disharmony between the Sports Council and the Olympic Council and Athletics Ireland, which rely on it for money. Kilkenny recently backed withholding money from Athletics Ireland last year, leading to a public dispute.
One top spending quango that Snip Nua won't be likely to touch is the National Treasury Management Agency. Chief executive Michael Somers took a pay cut in 2008. His salary was €1.1m in 2007. It's now a measly €980,000, but odds are he'll be earning it in the months to come. The salary bill of €16.3m at NTMA averages out at over €100,000 between 163 employees.