News Analysis

Saturday 30 August 2014

Brendan Howlin: Ivan appears to have missed all the reforms in the public sector

Brendan Howlin

Published 11/10/2013 | 05:00

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Brendan Howlin: to begin a new review of spending

My old friend and sparring partner from Wexford, Ivan Yates, set out a critique of public sector reform in this newspaper yesterday.

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To be honest, I was a bit taken aback. I checked the date of the paper itself on the off chance I had picked up an old copy, from, say, two years ago.

I had hoped that with Haddington Road we had got away from the sterile argument of public versus private in terms of who had sacrificed most over the last few years. The reality is that there were few winners.

But one thing is clear: that in response to our fiscal crisis, Irish public servants have made significant sacrifices. In 2009, the cost to the exchequer of the pay of public servants was €17.5bn.

Taking account of all the painful reductions since then, including widespread reductions in staffing, the application of a pension levy specific to public servants and two pay cuts, the cost will be €14.1bn this year.

The new Single Public Service Pension Scheme has raised the minimum pension age. Now career average earnings rather than final salary will be used to calculate pension. And despite a litany of changes to pay and conditions, we have maintained a level of industrial calm that I believe has been a key contributor to our burgeoning economic revival.

I don't believe the public service is perfect. I am happy, though, that the pervasive neglect of spendthrift Fianna Fail governments is over. Under this Government, the public sector has begun an ongoing reform process.

I was perplexed when Ivan referred to a lack of singular office for state procurement. A quick google would have revealed that I appointed a Chief Procurement Officer, Paul Quinn, in December 2012, and that I, along with my colleague, Brian Hayes, launched the Office of Government Procurement in July of this year.

As Ivan said, managers everywhere are looking at external service delivery but he missed the fact that this too is happening in the public service.

Nowadays, all new services must first be tested for external service delivery suitability before any approval to deliver the service internally will be granted.

Another new innovation, which Ivan has overlooked, are the Shared Services projects that Mr Hayes and I are advancing.

PeoplePoint, the HR and Pensions Shared Services centre, based in Clonskeagh, became operational in March 2013 and is now servicing over 15,000 employees across 13 departments and offices.

Once fully operational, the savings are estimated at €12.5m annually, with a reduction of 17pc in staff numbers in HR across the civil service.

We are also establishing a single Civil Service Payroll Shared Service Centre. These two Civil Service Shared Services Centres combined will realise savings of an estimated €18.1m per annum, once fully operational.

I have to assume that the establishment of the Office of the Government Chief Information Officer passed him by, too. Bill McCluggage took office in May. He is leading at the executive level across the entire IT spectrum, and taking responsibility for the development of the ICT strategy for the public service.

I do agree with Ivan's assessment in one respect – the cost of sick pay in the public service is unacceptable. But as is the case for many of the other issues he highlighted, I have done something about it.

I have agreed what is the most significant reform of sick leave arrangements for public servants since the foundation of the State, halving the maximum entitlement of one year to six months; three months at half pay.

These far-reaching changes are being reinforced through a renewed focus by public service management on vigorously managing absenteeism and tackling its root causes.

Similarly, the introduction of a standardised annual leave system with reduced leave benefits for promotees and new entrants has reduced costs, brought uniformity and integration across the system.

The full-year cost of increments amounts to €150m for 2013, not €250m, as stated by Ivan. Some 86pc of these employees due increments earn annual salaries of less than €65,000. Significantly reduced recruitment, the ongoing substantial fall in numbers of public servants, higher numbers reaching the maxima of scales and the pausing of increments under Haddington Road has already reduced this cost, which will continue to fall.

Of course, reform is a continuum, not a destination. This Government is a reforming Government. We have demonstrated this in myriad ways, not least by the establishment of my own department, Public Expenditure and Reform.

So you might say I have skin in this game.

Brendan Howlin TD is Minister for Public Expenditure and Reform

Irish Independent

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