Tuesday 16 January 2018

Glacial pace of change is too much for those used to private sector

Tom Molloy

TO lose six senior officials in a year would make even the most insouciant Central Bank governor pause for thought. Governor Patrick Honohan was quick to portray Fiona Muldoon's departure as part of the cut and thrust of finance.

Other voices, but not the governor's, suggested sotto voce that Ms Muldoon's departure was due to sour grapes after she was not picked to replace Matthew Elderfield as the Central Bank's number two.

While sour grapes can play a role and people at the the financial services sector do tend to leave their jobs rather more often than the rest of us, both those explanations ring hollow.

The truth is that the Central Bank is in serious trouble. To make matters worse, the Department of Finance is also showing no signs of emerging from the problems that have left it barely able to function.

Only one leg of the establishment's financial stool, the National Treasury Management Agency, seems to be able to retain staff and function at a high level.

In a sense this should surprise nobody. The NTMA was set up by Charlie Haughey precisely because the former Taoiseach believed the other two organisations to be unfit for purpose and incapable of reform.

The problem with this cure is that it probably made the problem worse because the NTMA has acted as a magnet for financially minded types who wanted to do the State some service. Taoiseach Enda Kenny's decision to by-pass the department with the Economic Management Committee has hardly helped matters.

It would be rash to doubt Fiona Muldoon's motives. She was one of those who came back to Ireland when the ship was sinking.

Prof Honohan appears to be comfortable with the glacial pace of change at state institutions but few of his subordinates from the private sector appear able to tolerate the masterly inactivity.

Not one of those who left the Central Bank has spoken publicly of their motives but several have spoken off the record about their unhappiness at their inability to take action.

If this was the only reason for their departures, we might still be able to sleep at night. The gap between the public and private sector mentality is huge in all countries and many have failed to bridge the two cultures.

We are drowning in debt but there has still not been any comprehensive or compelling set of solutions. Before he left, Matthew Elderfield never looked comfortable when discussing the Department of Finance's plans for debt solution. Fiona Muldoon never looked too comfortable talking about credit unions either.

Institutions that are not fit for purpose and financial policies that make little sense both help to explain the brain drain but there is also a third explanation worth considering; this country is simply no longer a good place to work. Very high taxes, low salaries for new appointments, poor healthcare and middling schools are all problems when it comes to attracting and retaining top talent. Most talented people want to know that their children are being properly educated and that they and their spouses will get good treatment if they need to go to hospitals.

Many Irish people who have returned to Ireland for senior jobs are disappointed with the poor quality of life.

The problems on Dame Street show we still have some way to go before this is a country where talent will want to live and work.

Irish Independent

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