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Colum Kenny: Beware of panicked asset-stripping and expensive outsiders

Irish health services spent more than €92m on agency staff last year. "How can this make sense when it stands to reason agency staff are more expensive?" asked Mayo Fine Gael Deputy John O'Mahony last week. He has highlighted inefficiency.

Throughout the public service, savings could be made by cutting outsourcing and introducing other reforms. But this would require a shift in government thinking.

Right now, with people distracted by so much economic bad news, there is an acute danger of hit-and-run raids on public services. The party that brought you botched decentralisation, at great cost to taxpayers and great gain to some property speculators, is still in power.

Fool us once, shame on you. Fool us twice, shame on us. The Irish public is so dazed by the shock of what has been done to it by banks and buffoons, that it may not notice the circling vultures. But it should. Predators are ready to pick the fleshy bones of our ailing economy. Public service reform is needed. Profiteering from public assets is not.

Consultants will always be with us. From Edison through Enron, Arthur Andersen rode the crest of corporate waves to survive as Accenture. That company is just one example of how outside expertise will always be ready to do as it is paid to do. But he who pays the piper calls the tune.

No matter how much they spend on consultants, it is the case that public sector or private enterprise managers who use expensive outsiders to promote short-term strategies simply short-change their shareholders. And taxpayers, who are the principle shareholders in Irish public services, are now in danger of being severely short-changed.

It is not just a case of locums in the health service. It is not just consultants paid millions by this State. It is not just the case of rates of pay for lawyers and accountants that are remarkably generous in a country the size of Ireland. (Those rates have been slightly modified, but not fundamentally overhauled, despite the recession.)

It is not just the fortunes made from a process of privatisation that proceeds quietly under the guise of public service reform (and that sees some public servants gain personally by moving into privatised roles). It is also that cheerleaders like Mary Harney, the minister with no political future, have appeared to regard privatisation as a matter of political ideology as much as hard economic sense.

Once bitten, twice shy. Governments should guard public assets as ordinary citizens guard their own wealth. Outsourcing and privatisation are not alternatives to public sector reform. They are only options when they result in real long-term benefits and savings for the public at large.

Having been ransacked to pay for banking losses, a stunned public may not notice those who are now eagerly eyeing the assets that taxpayers still hold in public services. Efficient reform of the public sector is one thing. Asset-stripping or profiteering is quite another.

You do not have to be a conspiracy theorist to believe that people are prepared to take advantage of the confusion wrought on our public consciousness by the present economic collapse. In her very readable book The Shock Doctrine, Naomi Klein has described what happened within a number of economies in recent years as they were dazed by financial crisis.

From Russia, through South Africa to New Orleans, public bodies were hustled and hassled into panic reactions that made some people very wealthy but left states owning fewer assets than they might otherwise have salvaged from the wreck. We should learn from Klein's warning.

Senior public servants are being induced to opt out of caring by taking early retirement. Senior trade unionists have been compromised by their failure to ensure reform sooner, and by some union deals. So who will protect public services for the public, especially when politicians are themselves ready to rob public service Peter to pay public service Paul?

Reports that Fianna Fail deputies want the State to stop paying RTE the TV licence fees that fall due each year from social welfare recipients are an example of the gombeen instinct that could now make a bad situation in the Irish economy even worse.

There are rational arguments in favour of restructuring how we pay for RTE and how it spends its money. But this is not one of them. Fianna Fail is not just being dishonest. It is issuing a financial threat to the State's biggest broadcaster in the run-up to a General Election. When times were easier, Irish politicians courted popularity by paying from general taxation revenue the TV licences due to RTE from pensioners and other social welfare recipients. Now, when times are tough, they want to stop paying and have RTE pick up the tab.

This change will be at the expense of citizens who actually pay a licence fee. That is because RTE will have to reduce its services and shed jobs once it receives substantially less money. Even slashing the pay of its star presenters in half would not go near making up the difference.

The quality of thinking behind this Fianna Fail threat to RTE is alarming. It is the old cute-hoor stroke mentality that got us into this mess, and it should scare anyone who is already worried that a secretive Nama or other public body may sell off state assets for short-term gains.

This level of political thinking about our public services is worrying. Is the Government saying we cannot reform the public service to ensure that we get efficiency and value for money? Or is it saying it is not willing to do so?

As vultures gather to pick the corpse of the Irish economy, we cannot just depend on the Comptroller and Auditor General to see that we are getting value for money. We need a government that will prevent outsourcing and privatisation, unless these truly represent good economic and social value in the long term.

Sunday Independent