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Thomas Molloy: Risky civil service reforms to blow away the cobwebs

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THE room used for press briefings in the Department of Finance was crowded with pinstripe suits yesterday morning as scores of senior civil servants squeezed in to watch their new master unveil his masterplan for their department.

Civil servants are notorious for their love of intrigue and fiercely fought turf wars but this long-overdue reorganisation has implications far beyond Merrion Street because the department remains the Government's most important arm with the power to do great good or great mischief.

The good news is that most of the reforms presented yesterday make lots of sense and are the clearest statement yet that the department is back in business and moving away from fire-fighting and towards strategic stewardship of the economy.

The reforms are the first important response to the crisis from Secretary General John Moran who took over the ¿200,00-a-year job of running the department in March. The Limerick native's own career in the legal and financial worlds, as well as a stint running a juice bar in France, mean that he probably has a better understanding of the financial world than any previous secretary general. Knowledge of the world outside the civil service is important but it is not enough in itself; many leaders such as George W Bush have entered politics promising business acumen only to come a cropper.

Mr Moran's plan envisages the creation of five units which will have responsibility for issues such as budgetary policy, economic policy, banks, implementation of the bailout plan and international relations. He made it clear yesterday that he wants to encourage debate within the units, between the units and between the department and the rest of government.

This makes sense. One of the themes that has emerged repeatedly in the endless post-crash autopsies is the danger of "groupthink". Intolerance of minority views is one of the curses of Irish life but it is particularly prevalent in the public sector which does not recruit or attract those inclined to rock boats.

To counter groupthink, Mr Moran appears to have several strategies. The first is the decision to reorganise the department into cells that will debate issues among themselves.

The second strategy is to hire people from outside the civil service to fill senior jobs such as the new heads of the banking and economic units. While this will help, Mr Moran sensibly wants to spend money on training those civil servants who are already there. Lack of funds means that many civil servants have received very little training since the economy crashed; something that cannot be sustained indefinitely. The bust presents new challenges which require new skills.

The employment of private sector executives is a welcome departure from the traditional civil service hierarchy where people were promoted automatically every few years but it can also be dangerous. Well-run organisations also need to promote from within to encourage talented employees to stay as well as recruiting from other sectors.

Much has been made of a tiny number of economists working within the Department of Finance. Perhaps too much. Yesterday it emerged that just 74 people have undergraduate degrees and just a third of these have a master's in the dismal science. The department almost certainly does need more economists but it is important to determine what sort of economists are needed. There is a big difference between a macro economist and a transport economist, for example, just as there is a big difference between a French and Spanish speaker even if they are both linguists.

Even T K Whitaker, the former secretary general who is the founding father of the modern Department of Finance, had got by with a degree in mathematics, Latin and Celtic studies although he later took a degree in economics by correspondence from the University of London.

Mr Moran also plans to place a greater emphasis on communication, something that is essential at a time when the public is being asked to pay for many of the department's mistakes. Tweets and Facebook will become commonplace although it remains to be seen how many people will want to 'friend' the department. Mr Moran said yesterday that he hopes the department can learn from Google and other technology companies -- conjuring up unlikely images of his pin-striped colleagues lounging on bean bags or playing table football in dour 19th century rooms.

While most of the changes are welcome, they do carry risks. One obvious danger is Mr Moran's penchant for using secondments from large law and accountancy firms. Quizzed about the obvious conflicts of interest, Mr Moran said those on secondment sign the official secrets act but it is still troubling that some people working inside the department can take a salary from an employer in a position to make millions from a single piece of information.

Mr Moran attributed the private sector's penchant for "helping us over this hump" to "patriotism" but the public could be forgiven for a certain cynicism here.

This is not Mr Moran's fault but the department also remains dangerously understaffed at ministerial level. While Brian Hayes is a good junior minister, his boss Michael Noonan needs to give him more responsibility and bring in other ministers as well. This is unlikely to happen because politicians hate to devolve power no matter how ill or stressed they are but it would be a logical next step now that the civil servants have tidied up their patch.

Regardless of Mr Noonan's decisions, Mr Moran still faces a formidable task when it comes to execution. Many new chief executives have successfully diagnosed problems only to flounder when it came to the painstaking work required to implement the reforms. The department is still weighed down by tradition and vested interests. It was deflating to learn yesterday, for example, that the publication and thus the implementation of the strategic review were delayed to enable the translation of the documents into Irish. A waste of time and money when both are in short supply.