An Bord Snip: Specific Savings

This post was written by Patrick Honohan

How about some specialized discussion on proposed cuts?

I haven’t yet counted the recommendations in Volume 2 of An Bord Snip’s report, but there is much detail on which specific expert comment would be valuable and could begin here.

Three-quarters of the potential savings identified by An Bord Snip nua are (unsurprisingly) in the three biggest spending areas: Health, Social Welfare and Education. I’m opening a separate thread for each of those three: keep this thread for the rest.

Please no general waffle on this thread please!

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11 Responses to “An Bord Snip: Specific Savings”

  1. Liam Delaney Says:

    On some specific cuts:

    I find it difficult to see how a good argument could be made against reducing the Horse and Greyhound racing fund. I have written about this before. While some of the polemics written about it are misguided and don’t give full credit to the rationale behind funding, it is clear that this fund has become a larger exchequer drain than the original legislation might have suggested. For Horse and Greyhound Racing to still maintain over 50 million in exchequer support long after the original end-date of the scheme cannot be seen as savage in the current environment. Furthermore, Sports and Arts groups should be careful how they respond to this report. We are in a different world than the last ten years. Outrage campaigns will look extremely hollow against the backdrop of growing dole queues.

    You are opening a specific thread on education Patrick, but I would comment here that the Commission document makes assertions about research strategy that simply need more analysis. Much of the proposed cuts in research funding is based on the view that there is not strong evidence that research is having an economic impact. I imagine that as we speak several agencies will now be producing documents that try to demonstrate economic impact which will further clutter the debate. An independent and impartial assessment of the role of research funding is badly needed. As said above, we are in a different world than previously and no sector can expect to maintain the same level of support. However, there are good ways and bad ways of restructuring research and we need external input into this. The amalgamation of research funders into something more like the National Science Foundation does not seem a bad idea but surely requires more thought than a few paragraphs.

    As far as I can read, the report does not deal with payments that may need to be made in the event of another incident such as Dioxin. Alan Matthews spoke about this in a previous post. This really is a massive issue. The recent dioxin outbreak was relatively minor and a conservative estimate of the cost has to be at least 200 million euro. There needs to be a review of potential costs arising from events that the State is implicitly or explicitly insuring against. Karl and others have maintained a strong debate about this issue in banking. In general, there are far too many episodes in recent Irish history where a substantial implicit insurance arrangement has led to extraordinary negative implications for the taxpayer and the credibility of the state.

    Given the history of Irish emigration in the 50s, 60s and 70s, I think its worth scrutinising reductions in the Irish Emigrant Services provision. Many of the most vulnerable people who grew up during this period are currently living in poor conditions in the UK. The fact that many of them are in too poor a mental condition or were too badly treated here to come back is, in brutal terms, a major cost-saving in itself. While the usual caveat holds that we dont have detailed evidence on the effectiveness of the schemes operated under this funding, I think there is a compelling moral case to not cut this scheme.

  2. Richard Tol Says:

    @Liam
    You may want to have a look at the “Value for Money” report of Science Foundation Ireland. See http://www.sfi.ie/uploads/documents/upload/Value_for_Money_July_08.pdf It underlines An Bord Snip Nua’s argument that value for money has yet to be demonstrated.

    An Bord Snip also warns against wage inflation in academia. I have not seen any research on this, but I do know a couple of stark anecdotes that support their claim.

  3. Liam Delaney Says:

    The extent to which university money should be allocated between admin pay and non-pay, academic pay, service provision, research, capital and so on is of course an important topic but not for this thread. You should perhaps address academic pay on the education thread Richard but given pay is outside the scope of the McCarthy report, perhaps it would be better to address pay on another day in another thread so that the actual report can be discussed. I raised research funding as it is arguably broader than education. I agree with Patrick that hearing more about people’s analysis of the actual provisions in the report rather than more general discussions would be interesting. Its quite surprising that nobody has commented yet on the foreign affairs vote or the changes proposed in agriculture, cultural spending and so on.

  4. EWI Says:

    Re: the cuts in the Defence Forces.

    Headscratching stuff. The DF have already been pared down to the bone from a decade-long transformation arising from the PwC report in the Nineties. So where is the ‘fat’ meant to come from, exactly.

    * Manpower: the PwC report produced an intentionally under-strength Permanent Defence Forces; with the gaps to be filled with a Reserve (the old FCÁ) reduced in size but with more investment in their equipment and training. How does Colm McCarthy and his colleagues propose to square this circle with a cut in a further 500 PDF and losing two-thirds of what’s left of the RDF?

    I’m not going to start a discussion of the worth to society of young people having the option of Reserve service - I don’t think that this might get much traction in an economists’ blog.

    The Equitation School to go? Welcome development, easy knowing that Charlie McCreevey’s not around anymore…

    * Infrastructure: Selling off the traning grounds is nuts. These are an absolute prerequisite for a trained and effective military, and the relatively small amount of money raised is dwarfed by the waste of resources on inadequately-trained troops.

    Likewise, selling off Cathal Brugha Barracks, which would attract only a percentage of what it would have a few years ago. The Defence Forces have invested an enormous amount of time, effort and budget in moving the units previously barracked around Dublin into “the Brugha” and renovating it to serve a modern military in the 21st Century (shades of the Spike Island debacle all over again).

    Flushing all of that down the toilet is an action we will come to regret, and smacks of the old Finance advice to Dev during the Emergency that the counry should surrender to any German invasion in order to save moeny.

    * Equipment: Scrapping the replacements for the Naval ships nearing the end of their working lives means that there will in the very near future be fewer ships available to patrol our EEA and to carry out the coastguard function - which includes rescue and drug interdiction. It is a matter of fantasy to speak about ‘extending’ the lives of these ships (which were built to commercial, not naval standards), and we’re shortly going to be revisting the spectacle last seen in the ’70s of rusting Naval Service ships tied up at the wharf in Haulbowline.

    In light of the above, it’s inexplicable that McCarthy restricts himself to talking merely of Departments being charged for use of the Air Corps VIP taxi service, rather than selling off the (two) government jets and the fleet of supposedly ‘military’ helicopters which were bought recently at enormous cost, and which seem to exist solely to ferry Martin Cullen and his collaegues around the country.

    Likewise the recent turbojet trainers could be disposed of - the only fixed-wing aircraft we actually require (and certainly not the government jets) are the two CASA maritime patrol planes, which are part-funded by the EU anyway. The masters of the universe at Aer Lingus want to become a prvate company, then fine - cut off the no-costs supply of trained Air Corps pilots which both they and Ryanair rely on, and we the taxpayers will never notice any difference whatsoever.

    * UN service. We actually get paid by the UN for Irish solders on UN service. It is therefore entirely baffling where Colm McCarthy and his colleagues believe that there are significant savings to be made in this regard (non-UN missions such as Chad are a different matter entirely). And I believe that the claim in the Report that we should pretend that our UN service should count as foreign aid is the finest example of gombe-atlk that I’ve heard out of officialdom in sme time.

  5. Mark Dowling Says:

    EWI - I was more surprised that the three brigade structure is to remain, which is likely to mean undermanned ranks but plenty of officer posts. If there was ever a time to slaughter that sacred cow shouldn’t it be now? (and maybe make some reductions at general rank too)

  6. Mark Dowling Says:

    Also - what’s the arrears position re: UN payments? I seem to recall some occasions when it was seriously behind.

    My cut would be to close and sell Baldonnel, with helicopters moving to the Curragh, government to Dublin Airport and maritime patrol and training to a military compound at Shannon. Shannon’s status as a 24/7 diversion airport is valuable to maintain and a cost-share by the Air Corps will help prop open their doors.

  7. EWI Says:

    I was more surprised that the three brigade structure is to remain, which is likely to mean undermanned ranks but plenty of officer posts. If there was ever a time to slaughter that sacred cow shouldn’t it be now? (and maybe make some reductions at general rank too)

    There was an implicit point in PwC on vegetation in the mid-level officer ranks due to overmanning (the expanded early ’70s cadet intake), so there does need to be care taken as to avoiding this situation arising again. The point is, that there needs to be a certain number of senior positions in order to have some sort of career path (and a selection of candidates for the Chief of Staff appointment). There’s also the matter of the need for the DF to have officers of a certain rank to deal with foreign senior military figures (brass counts in these things in being taken seriously, childish as that seems).

    So, that’s the Army. But as anyone who’s been reading Antony Beevor and Lewis Page on the topic over the years can tell you the real fat in terms of over-manning are in the other two arms of the modern military - the navy and the airforce. Does the Air Corps really need the range of senior officers that just replicate the Army’s hierarchy? What about the senior officers in the Naval service who never put to sea? Scope there for re-combining all three back into one service, with resulting savings.

    Speaking of the Naval Service, they’ve been working imaginatively in recent years to overcome their relative lack of funding - efforts like the National Maritime College in co-operation with CIT http://www.nmci.ie/ The Air Corps could surely do the same (no need for a squadron of fixed-wing trainers, apart from providing trained pilots at the public expense for Mr. O’Leary) and save money.

    Also - what’s the arrears position re: UN payments? I seem to recall some occasions when it was seriously behind.

    I understand that the US has paid some of their arrears in the last few years (Democratic control of Congress means that the grown-ups are back in charge), which hopefully means that we have been paid ours in turn.

    My cut would be to close and sell Baldonnel, with helicopters moving to the Curragh, government to Dublin Airport and maritime patrol and training to a military compound at Shannon. Shannon’s status as a 24/7 diversion airport is valuable to maintain and a cost-share by the Air Corps will help prop open their doors.

    I agree with you entirely. Baldonnel’s handy proximity to Dublin for VIP taxiing is the main reason it exists these days (have you seen the plush VIP lounge there?). Shannon is a massively under-utilised resource, and moving the Air Corps across the length of the country to actually be closer to its ‘proper’ operational area on the southern and western coasts is makes a lot of sense.

  8. Joseph Says:

    I don’t usually read the Telegraph but there’s a related article in there today on:

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5857074/Fiscal-ruin-of-the-Western-world-beckons.html

    It starts off: “Events have already forced Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state.”

    I thought they had raised taxes to date, not carried out a harsh assault on public services?

  9. James Conran Says:

    Given the small scale of our defence forces, is there not a case for merging the Dept of Defence into Foreign Affairs?

  10. Mark Dowling Says:

    Could ABSN kindly strangle this nonsense at birth please?
    http://www.independent.ie/entertainment/tv-radio/rte-changes-name-ndash-spot-the-difference-1830557.html

    God knows how much this will cost in stationery alone…

  11. Joseph Says:

    I’m too young to remember but wasn’t Colm McCarthy involved in something like an An Bord Snip about 20 years ago? Does anyone recall how that one turned out?

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