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Brendan Keenan: Operation of government has to be revised along with estimates

SEAN Lemass is our Winston Churchill -- in the sense of having so many witty, pithy political sayings attributed to him.

As with Winston, it makes you wonder if they can all be true, although in Lemass's case, it is more likely that they are than in Churchill's.

One of my favourites was his answer to the perennial question as to what is the difference between Fianna Fail and Fine Gael? "The difference is, we're in, and they're out," the great man growled.

It is the other way round at the moment, of course, and Fine Gael isn't half enjoying it. This struck me as one explanation for the celebration that never was.

After half a working lifetime on those coldest of seats, the opposition benches, neither Fine Gael or Labour can quite hide their sheer delight at being in, and in such unprecedented numbers.

This can cloud the judgement, as the ill-fated lark in the park demonstrated. It is more difficult to know whether it was wise even to produce the one-year term report, but this is not a political analysis column.

This column can say that the report was at least based on the laudable objective of measuring performance, even if it stalled at holding the performers accountable.

My, but that is a hard thing to do for real. Every Fine Gael leader for the past 20 years has trumpeted in opposition about the need to see that policies are implemented, and ministers held accountable. The notion still appears in government statements, but not much in government actions.

Reactions to the appointment of John Moran to the top of the Department of Finance show that a lot of people tend to agree with Bertie Ahern when he said outside appointments were unfair.

Yet anyone who has worked in a large organisation knows that a certain amount of harshness is needed to get the best out of people. The difficulty is to know how much. And to be fair, one needs to be able to measure what people are actually achieving, which is not always easy.

As it happens, the soul-searching over whether to pat the back or cuff the ear came within days of one of the promised attempts to measure things better, in the "revised spending estimates" for 2012.

These spending estimates came at the wrong time. Nobody's fault, I'm sure, but in normal times, interest in budgetary matters has waned by the end of February. And in these abnormal times the doings of the troika overshadow everything.

This is a pity, since there are often lots of little nuggets to be mined from the estimates. It certainly seems worth looking at the new setting of objectives and measurement of performance for government departments.

Take, for instance, social protection, which accounts for no less than 40pc of all current public spending. Its estimates say it almost achieved the 90pc target for handling pensions promptly, but had only a 54pc success rate on illness payments.

Of more interest for next year perhaps, is the target to have the new national employment service operating in 14 local offices by the end of the year. I leave it to the experts to say if that is an ambitious target or a soft one, but at least it is there and can be measured this time next year.

This month, the department is due to submit a programme of reforms of working age payments, child income support and disability allowance to help ensure that "work pays for welfare recipients". One to watch, along with the "partial capacity payment" for people on invalidity or illness benefits.

It is too early to take these measurements of public sector performance entirely seriously. Not only will the objectives have to be demanding, there will have to be consequences for failure.

But, in fairness, one should recognise that these published statements do give involved citizens something more to go on than was the case in the past.

The traditional role of the revised estimates remains as important as ever. This is to show the actual amounts of money spent by government. Monthly exchequer returns deduct non-tax revenues such as PRSI, although the introduction of the Universal Social Charge -- which is treated as tax -- has reduced the difference between the two measures of spending.

Even so, there is a lot to ponder in these figures. The actual amount to be spent on day-to-day government services is set to fall by just 1.8pc this year, despite all the cuts on which we hear such cries of woe.

The pay bill will fall by a similar amount. But the departures under the Croke Park Agreement contribute to a 10pc rise in the cost of public sector pensions.

This is now a fifth of the cost of paying those at work. In the case of gardai, who can retire earlier because of the physical demands of the job, pensions cost a quarter as much as the salaries of serving members. Taking public pay and pensions together, the total of €18.5bn is little changed from three years ago.

In one way, that is quite an achievement, with increments still payable, and has required unpopular decisions by government and sacrifices by public sector workers. In another way, it shows how very little reduction there has been, set against a 16pc fall in national income.

Things are not going to get any easier. The reductions in current spending are supposed to average almost 3pc per annum over the next three years, rather than the fall of less than 2pc this year, to give a cumulative drop of €3.5bn in current spending.

Part of that is meant to include reductions in social welfare costs, as a result of the forecast increase in economic growth. One can see why the EU Commission is beginning to fret about targets being missed if the economy does not recover as hoped, and why the IMF is worried that responding with more cuts could be self-defeating.

A more fundamental question is whether the changes we have seen go far enough. Current spending accounts for 40pc of national income, and no one seems very happy with the results.

Even in a restored economy, just holding this percentage steady would require public spending to grow by no more than 4pc a year, even as the pension bill rises and the inevitable pressures for more staff and replacement of lost income grow.

In the end, it is not just the estimates which may have to be revised, but the operations of government itself.

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