An Bord Snip: Structural and Strategic Issues

@Patrick,

You are right to point to this Chapter which addresses the structural and strategic issues that confront efforts to control public expenditure. The media are caught up in the headline cuts, especially for social welfare, but this Chapter reveals the longer-term agenda.

Firstly, the Chapter highlights the failure of medium-term expenditure control i.e. the Government is good at sticking to the annual estimates but the projections for the following years are often hopelessly inaccurate.

Chart 2.1 tells the story: look especially at the year 2000. The year 3 projection was exceeded by over 25% ! The truth is the medium-term projections were torn up in a higher cause: getting re-elected in 2002. The 2002 projections were enforced with much greater rigor: year 3 expenditure kept within 3% of the projection. The public expressed their view on that rigor in the 2004 local and EP elections and McCreevy was on his way to Brussels.

Rather than face this political truth – that our medium-term plans are hostage to auction politics – the Group want Finance to be given controls over policy planning which are as strict as their control over the annual estimates. Are the Department of Finance better placed to make these policy judgments than the spending Departments? Did the events of the past year which are the basis for this Group’s creation give the Group confidence that Finance would exercise better judgment and control in policy fields outside their area of special expertise?

The second major point (and there are many others) is a recommendation for a “uniform public service numbers policy” to be implemented centrally by the Department of Finance. Table 2.1 shows the growth in numbers in the public service since 2001. Health and Education account for 38K of the 45K additional staff. Again, the solution is to give Finance overall control.

Further into the chapter, there is a very significant comment in regard to value-for-money (Chapter 2.13). The report makes a very serious criticism of civil service management: “The management focus across Departments generally still seems to be on securing and retaining the maximum volume of expenditure in particular areas…outputs and actual performance seem secondary”. In bureaucratic language, that is a damning indictment of spending Departments.

The group recommends a series of tests for all public expenditure programmes including that they should all have a “sunset clause” after which a programme is wound down unless it shows “clear positive benefits” after rigorous evaluation.

All three of these themes share a common approach: strengthening the control with the Department of Finance can command over public expenditure programmes and staffing.

This prompts a closer reading of Chapter 2.9 dealing with the Finance Group of Votes. It is striking that, not alone does the Report propose only a modest 5.7% reduction in expenditure in this area, it is remarkably vague on where these savings are to be found except for agencies outside of the Department’s direct control, notably the Ombudsman.

Let’s look again at who actually produced this report. Colm McCarthy is something of a “celebrity” this week with much talk of Doheny and Nesbitt but rather less of his Finance/Central Bank schooling. The Report itself has a curious turn of phrase about his role in the Group: “The Minister appointed Mr Colm McCarthy….as member and Chair of the Special Group.., along with Mr. Donal McNally, Second Secretary General, Department of Finance.

So was McNally a co-chair? Did he have a veto over McCarthy If not, why he is singled out in this way from the ordinary members of the Group. Not that there are any “ordinary” people in this Group. McNally’s former boss, Maurice O’Connell, was there (but didn’t offer any wisdom on that most dysfunctional entity, the Central Bank, which he lead for some years and which bears ultimate responsibility for our banking crisis)

Actually, two other members of the Group – Willie Slattery and Mary Walsh from PWC – might have pointed to where the loot went from our banks. And then there was Pat McLoughlin who is CEO of the irish Payments Services Organisation which is “the representative industry body” for the Irish banks. No doubt his paymasters were glad to give his time to the task of cutting the public sector which can be sustained by an economy that they have reduced to ashes. Of course, the carefully worded mandate for this Group meant that his year of experience in the Health Service would be invaluable. Perhaps the Group’s discussion with the HSE left some time to reflect on the circumstances of Pat’s departure.
http://archives.tcm.ie/irishexaminer/2005/12/03/story645373455.asp

There is something impressive about Report of this scope and scale being produced from scratch within six months (first draft would have been done within 4 months). Full credit then to the Group who no doubt approached each Department with and open mind, intellectual rigour and complete independence:

If we are to have any hope of emerging from the current debacle, vested interests and special pleading must be replaced by a broader vision of our society in which the interests of the vulnerable, and especially the children who must repay our debts, are given full weight. For too long, powerful groups in business and in government have feathered their own nests and left others to clean up their mess.

Credit here must also go to the Group’s support staff as mentioned in the Report’s preface:
“The Group was supported by a Secretariat provided by the Department of Finance”

I think that ICT debate should be broken down into 2 strands:

A. Development and B. Systems & Infracstructure Maintenance.

A. Development

We need more co-ordination in development to:
(i) stop duplication of effort and
(ii) ensure lessons learnt are applied by making internal (i.e., civil servants not consultants) aystems analysis and design and project management experience available for all public service software development,
(iii) to make interraction with public service systems as uniform as possible for the private sector,
(iv) to ensure that public service systems integrate and interract where appropriate,
(v) to enable across the board upgrades in the future, e.g. in terms of digital signatures, money transfers, the uploading of forms, creating audit trails, and
(vi) to ensure that the goal of reduced transaction costs is applied for the benefit of the private people who the systems are supposed to serve rather than for the benefit of the public “servants” themselves who seem anxious to outsource their work to people who are less efficient at it than themselves.

B. Systems & Infracstructure Maintenance.

We need more co-ordination in Systems infrastructure and maintenance to:
(i) create a clear picture of all IT expenditure,
(ii) to eliminate duplication of hardware, systems and software,
(iii) to pool expertise,
(iv) to make and implement strategic decisions,
(v) to second guess any consultants,
(vi) to promote and increase the influence of technologicy natives in Government.

I think that the state should look at setting up its own data centres so that it can operate its own “cloud” within which all the Public Sector computing could be run and auditted. This could be easily outsourced and should lead to huge savings. For those who aren’t aware, in cloud computing your data is hoseted remotely as are your applications. All data back-up, virus scanning, software upgrading and patching, licensing, and so forth is handles remotely. The business just pays a service fee and does not waste time duplicating the maintenance work of other businesses. Each business has a separate network and set up and has full flexibility. All software is run remotely so you do not have to maintain the individual machines.

I still question how An Bord Snip can come up with credible figures for IT expenditure. I would love to know how such information is logged and gathered.

PREVIOUS POST FROM GENERAL THREAD

Vol. 1: “Information and Communications Technology (ICT) represents a particular sub-set of activities for which shared services solutions should be actively explored. Approximately 1,300 staff work in ICT in the civil service at an estimated cost of €65m a year.”

I think this is a vast under-estimate of the amount of waste and duplication that is caused by different departments implementing different IT solutions. I suspect that no development of new sofware or services is included in this figure. How much did it cost the various Local Authorities to implement different planning register systems? The lack of knowledge sharing and co-ordination in IT projects is abysmal. I am deeply disappointed that the focus is on waste in systems maintenance rather than systems development which is where the consultants are really creaming it and where similar modules are developed by different bodies at great expense.

Do different departments and bodies really buy, maintain and licence different antivirus packages and email server technologies etc.? That such could be the case is scandalous and it is good it is being focussed on but development is really the place where huge money is spent and where the opportunities for future efficiencies are going a begging.

The suggestion of an IT Advisory group is way too little. There is no one stop shop for departments to share experiences or co-ordinate project developments. Everybody department and body carries out similar projects differently and many do it half-arsed. Furthemore, any private sector that deals with multiple agencies has no contact point to suggest changes that should be deployed across the board. An advisory board is not going to cure that.

Some related comments on what An Bord Snip means for software/technology companies at http://www.version1.com/News—Events/Blog/July-2009/An-Bord-Snip—They-shoot-horses,-don-t-they-.aspx