Saturday 7 December 2019

Bankers and mandarins are still the 'untouchables' as the rest of us are squeezed

Ivan Yates

Ivan Yates

'The Guarantee' was unmissable for me. As a prequel to the banking inquiry, would it reveal whodunnit? Who failed to supervise, regulate and give crucial advice over a state guarantee of six indigenous banks' loan books - without due diligence or any clue as to their solvency.

No one really expected politicos Brian Cowen or Brian Lenihan, second-generation politicians devoid of specialist expertise, to fully fathom the complexity or enormity of the banking collapse in real-time. Where were the options for putting Anglo Irish/ Nationwide into administration on September 29, 2008?

Subsequent events proved those financial institutions were non-systemic.

This film is worth watching alone for Peter Coonan's macho role as David Drumm and the 'Reeling in the Years' type clips, chronicling the political dramas as they unfolded. Banks just love guarantees. Personal guarantees allow for the pursuit of borrowers beyond secured assets, in unfettered pursuit of future earnings and assets, thereby evading their own responsibility to ensure adequate collateral when loans are issued.

State guarantees mean that -however big a cock-up they make of balance sheets - taxpayers pick up the tab. Anything else will be absorbed by shareholder losses. These are foolproof ways of ensuring they survive.

John Kelleher's screen production adds to the mystery surrounding the €64bn bailout. Advisory documentation in the Department has gone missing. A lacuna exists in our public administration, where culpability remains blurred between ministers and mandarins to the point of obfuscation. It was not addressed in the 'Civil Service Renewal Plan' launched by Minister for Public Enterprise and Reform Brendan Howlin last week. No reform of the 1924 Act is even considered, which allows bureaucrats and ministers to hide behind each other. The 1994 Strategic Management Initiative and the 2002 Mullarkey Report were supposed to change governance procedures. It never happened.

Despite administrative blunders evident in the Beef Tribunal, the Hepatitis C scandal, Army deafness payouts and planning corruption episodes - no one takes responsibility. It is only one of many failings from this latest wheeze under the grandiose goal of public service reform. Four top-line themes are: delivering improved outcomes; procuring a reform dividend, whereby savings can be reinvested; new government information and communications strategy; and the usual bland aspirations of 'openness, transparency and accountability'. Jesus wept.

How many more times will we hear about addressing the culture of the public service? If carrots of Benchmarking or sticks of FEMPI (legislation to cut pay in recession) did not alter mindsets, nothing will. Headlines have implied that under-performing personnel can be fired. Yet, no new actual disciplinary procedures have been prepared, let alone agreed or implemented. Internal rating systems incredulously only yielded 'unsatisfactory' levels of 0.1pc. Despite their good intentions, Mr Howlin and his Secretary General Robert Watt have failed to grapple with the big issues.

The notion of a job for life in the private sector has been consigned to history. Any entrant employee is lucky to have, at most, a five-year contract. The absence of any fixed-term limit on new civil servants' tenure means compulsory redundancies are impossible. When I was Minister for Agriculture, the Land Commission was no longer required; as the State no longer acquired land to redistribute to small farmers.

Superfluous staff could not be let go, despite the fact that there was no work to be done. Other civil servants have refused enforced redeployment. No attempt is being made to introduce finite terms for future recruits. The system of increments, providing automatic annual pay rises based on years of service, remains entirely intact. Therefore, hard work and talent go unrewarded. Surely it is reasonable that public officials should have to attain a rating of "achieved expectations" or better to earn extra remuneration? Potential benefits from outsourcing have completely dropped from this Government's agenda. Such external contracting-out of services facilitates competitive tendering, leading to lower costs, flexibility in altering service provision and avoids pension liabilities.

It is what every other large employer has done during the recession, yet it remains a no-go area within civil service bastions. Despite the lack of an appetite for any meaningful regeneration of the civil service, management remains stymied by a culture of organised resistance to change.

Apparently the Public Service Executive Union, representing more than 10,000 staff, doesn't agree with open recruitment for senior positions. Its boss described as "daft" the notion of looking for outsiders, as it could deprive insiders of promotional opportunities.

Our civil service employs the same number of people as Diageo or Specsavers - around 34,000 people. Just imagine if these private firms were to limit themselves to internal candidates only for managerial posts. The most recent hiatus, whereby the Department of Justice was found to be "closed, secretive and silo-driven", leading to the resignation of former Secretary General Brian Purcell remains unresolved. The post remains unfilled until a suitable insider can be found. This minimalist approach does promise to establish a new management board and accountability board. Both are to be stuffed with a majority of insiders, with only a token of worthy external notaries to give a semblance of real-world experience.

These further layers of administration amount only to cosmetic tinkering. Meanwhile, it seems reductions in public service numbers from 320,000 in 2008 to 282,000 at the end of this year has been paid for by extra public sector pension costs, rising by 67pc to €2.5bn. Yet the HSE spent €8.4m re-hiring 266 nurses, while schools re-employed 282 former teachers last year.

Post-austerity, the old realities reappear - bankers remain a protected species. Mandarins prepare to reverse pay cuts, with their job security undisturbed and secrecy and protections unaltered. Fresh rounds of recruitment are under way. Despite all the promises, our elites remain the 'untouchables', while us mugs learn the Universal Social Charge, Local Property Tax and water bills are here to stay. Failure to reform the civil service adds cost burdens on the entire economy.

Irish Independent

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