Thursday 5 December 2019

Colm McCarthy: 'Far bigger headaches than a printing machine face next finance minister'

Printer screw-up is a 'bicycle shed' scandal in light of the State's overall spending programme and of only symbolic importance

Only 34 politicians in Leinster House used the Oireachtas printing service to print cards and calendars for constituents this year. Stock: Getty
Only 34 politicians in Leinster House used the Oireachtas printing service to print cards and calendars for constituents this year. Stock: Getty
Colm McCarthy

Colm McCarthy

Last week's row about the printing machine in the Oireachtas (it will cost well over the initial estimate) is of symbolic importance only. The final bill will be €1.6m or thereabouts, compared to an Exchequer capital programme which has recently been running at around €8,000m per annum and which the Government is keen to expand. The ceiling of the building in Kildare Street, across the road from Leinster House, was about 2ft too low to accommodate the new printing machine and nobody noticed, so structural work had to be undertaken, increasing the bill.

The attention devoted to this relatively minor matter reflects the high concentration of journalists per square metre in the Kildare Street area and the absence last Thursday of any more substantial news. But it also illustrates Parkinson's Law of Triviality. Writing in 1957, C Northcote Parkinson, a management consultant, describes a board of directors which met to discuss the construction of a nuclear power plant. The agenda included two other items, a new bicycle shed for employees and the refreshment expenses of the welfare committee. The board spent three minutes on the nuclear plant, 45 minutes on the bicycle shed and over an hour on the budget for refreshments. They approved the nuclear power plant and the bicycle shed but could not resolve the refreshments budget which was deferred to a later meeting. Nobody has a clue about nuclear plants, but everyone understands bicycles and refreshments. In the framework of the State capital programme, the printer screw-up is a bicycle shed.

The official in charge of the Oireachtas staff is the Clerk of the Dail. He promised the Public Accounts Committee that the "requirement for specialist expertise will be a consideration in all future projects", which rather concedes that no such requirement has hitherto been operative. There could now be an opening for Vertical Clearance Inspection Officers, in line with another of Parkinson's laws, the one about work expanding to fill the time available for its completion.

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It is tempting to overdo the printer episode because it is so readily understood - who would bring home a fridge from Power City, find it is too big for the slot in the kitchen and not feel embarrassed? Somebody screwed up, these things happen, this is a minor matter and no conclusions should be drawn about rampant incompetence in public administration. Most public officials are more-or-less competent and screw up infrequently. Most of the capital programme is managed reasonably well.

But when the big screw-ups emerge, the absence of embarrassment on display at Oireachtas committees can be heroic - a commitment not to careful financial control but to process and defence of the institution, attitudes much in evidence in the Department of Health over the National Children's Hospital and in the Department of Communications over the broadband plan.

The Clerk of the Dail told the PAC that the firm which supplied the printing machine had recommended a ceiling height exceeding that available, but continued "…at the time of writing this report I have yet to establish how or if this information was processed within the Houses of the Oireachtas Service". No whodunit mystery in Irish public administration is ever resolved, everyone did it, nobody did it, the system did it, the model set in stone during the banking inquiry.

The hearings over the National Children's Hospital revealed such a bewildering array of committees and quangos, ostensibly exercising oversight, that the Dail deputies abandoned the attempt to allocate personal responsibility to anyone. The Department of Communications maintains that its evaluation of the broadband plan is consistent with the public spending code, a view flatly rejected by none other than the Department of Public Expenditure, which is responsible for policing the public spending code. For the avoidance of doubt, they described the cost-benefit study on which the communications people continue to rely as 'not credible'. They are the experts on cost-benefit in the Irish civil service, not the Department of Communications.

Each of the departments and agencies with significant capital budgets is necessarily engaged in proposing projects but also in conducting evaluations of their own proposals, which is not necessary at all. The conflict of interest is egregious and has spawned a minor industry in Dublin devoted to the conduct of spurious cost-benefit studies commissioned by project promoters and a sub-industry of public relations wizards on the same payroll. The result is an entirely predictable concern that large parts of the capital programme are delivering poor value for money. This is happening at a time when the State finances will struggle to sustain a decent level of overall public investment. The units of the public administration which undertake large parts of the capital programme proceed as if they have no responsibility for financial sustainability, a task they expect to somehow take care of itself.

The upshot is a crisis of accountability. Personnel in Government departments and agencies, when capital cost over-runs or current spending overshoots occur, are facilitated in dodging institutional and personal responsibility. As well as rendering future failures more likely, the public is led to believe that mismanagement of public money is more widespread than is actually the case. That it does occur, and too often to justify complacency, was emphasised again last week in a report from the Fiscal Advisory Council.

Noting that Ireland's overall State debt is excessive by international standards and that economic prospects are uncertain, they write: "New analysis in this report shows that three quarters of the upward spending revisions since Budget 2017 are due to current spending. Many of these increases are long-lasting in nature. This report also shows that recent health overruns have been largely driven by hospitals, where current spending - such as wages - dominates overall spending. Repeated overruns in the health budget, averaging around €500m annually in recent years, are undermining the sustainability of the public finances and health spending needs to be properly managed."

Since there would be no call that health spending be properly managed if proper management was already in place, the fiscal council is saying something quite unambiguous: that health spending is currently mismanaged, to the point where the sustainability of the public finances is being undermined.

In a country which lost the ability to finance itself and emerged from an IMF programme just a few short years ago, this is a potent accusation, aimed at the people who brought you the children's hospital debacle on the capital side.

In view of the gravity of the accusation, it is fair to ask what consequences will ensue for the management cadre in the Department of Health and in the Health Service Executive. If the answer is none, in what sense is there a credible system of State budgeting at all?

The public finances would have deteriorated sharply over the past few years due to the failures to manage current spending, most notably in the Department of Health, had there not been an unexpected surge in corporation tax receipts. This could continue for a while and the broader economy could escape a downturn, but there are no guarantees. The next finance minister will have bigger headaches than the Oireachtas printing machine.

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