The Future of the Public Sector Post author By Philip Lane Post date November 2, 2009 A couple of interesting articles: Brendan Tuohy (in the Sunday Times), “It’s Time to Call in the Outsiders” The Economist, “A Tough Search for Talent“ Categories In Economic Performance Tags Irish public sector 25 Comments on The Future of the Public Sector ← Ireland’s International Investment Position → Macroeconomic Adjustment and Fiscal Policy in Ireland 25 replies on “The Future of the Public Sector” Reading Mr. Tuohy’s piece it is difficult to avoid recalling the aphorism highlighting the unparalleled virtue of a reformed member of the oldest profession. It is regrettable that Mr. Tuohy was not consumed by this burning desire for reform while he was in the first rank of the civil service and when he had some power, influence and authority. It was ever thus. Those within the system have no interest or incentive to drive the necessary changes and those outside have no power to compel change. In fairness to Brendan Tuohy, I think he was known to be a strong advocate of reform while still ‘inside’. Paul: Breath of fresh air from Brendan Tuohy – how many retired officials have bothered to advocate reform? I see I am running the risk of being accused of “playing the man and not the ball”. No personal attack intended – Mr. Tuohy may indeed be the exception that proves the rule, but simply seeking to illustrate a more general point. And perhaps, some frustration that there seems to be no evidence that those wielding power, influence and authority have the faintest idea of the extent of reform required – or even interest in contemplating what is required. There is a big difference between being an advocate of change and an agent of change. In short, it is the difference between theory and practice. This is where the expression “talk is cheap” comes from. Now we know where Mr. Tuothy stands in relation to his former workers. I am sure there will be lots of other “I told you so” people, lining up when their pensions book arrives. In Ireland, we know what needs to be done, so we order another report or set up another commission, not to expedite change, but specifically to prevent it. However, with close to 440,000 thousand people unemployed and a further 60,000 “job seekers” waiting to be processed, the system has becoming exceedingly unstable. The danger is that those supposedly having no power, may decide enough is enough (NAMA may well be the tipping point) and decide to drag the whole edifice down rather than put up, any longer, with the stench of a rotting corpse. The black economy for those that have not noticed is now growing exponentially. The clear danger for those on the inside is they don’t see the sword of Damocles dangling above their heads, but then what’s new? Did the Pharaoh ever think that there would be an end to his power or did the empire think it would ever collapse? Likewise, it seems with our own courtier’s who dare us to reform them. Reform always comes, it is just that sometimes it comes in the form of collapse. Paul, Brendan Touhy was the most innovative and progressive Secretary General of any Department in a very long time. It is just a little too easy to engage in this constant, senseless and destructive public sector bashing at every opportunity! @Vincent, I have no desire or intention to engage in “constant, senseless and destructive public sector bashing at every opportunity”. I am simply pointing to the huge gap between the reform being advocated by those, such as Mr. Tuohy, who have knowledge of the “inside” and the current structures and process. The process that produced NAMA – and that has yet to move to the implementation stage – provides an excellent case study of what’s wrong and should highlight the changes that are required. And the process has to be driven politically, but it is a two-way street. @Paul The process which produced NAMA, I suspect, is very much a political and ideological one.It links directly to the Galway race tent and the relationship between FF and developers and bankers. It was sugested by a consultant economist/develper with strong FF ties.I doubt if you can lay the blame for NAMA on the shoulders of civil servants. Terming Paul’s comment “public sector bashing” is over the top. It is important to recognise that both in the private and public sectors, people generally go with the flow. In the money economy taking a stand is a dangerous position and while the whistleblower can be viewed as positive in the abstract, he or she is usually treated as a pariah in the real world. Also when it comes to money and recognition, it can be easy for individuals to target “greedy” bankers or developers and forget that they may share the same motivations themselves. A number of retired civil servants have been writing in the media in recent years and I do wonder, how many within the public service questioned the benchmarking scheme, which is still very relevant today to the budget and both current and retired staff. It is important to ask these questions and while I believe that no senior manager took a public stance on any issue of policy during the boom years, we should not just accept that it is stupid to stand on principle. As for reform, as the fish rots from the head down, any significant reform has to start with a political system of limited accountability which produces politicians who are unfit to run government departments, generate new ideas and handle change. Personnel and structures are important but pale compared with the potential impact of ending the culture of Victorian secrecy and providing full transparency on public spending with the exception of FDI grants – – we have to remember who our masters are! Brendan Touhy has a few very good ideas. I suspect that if it’s ever going to happen that this will be the way to start. I remember years ago looking at an advertised job in DunLaoghaire – Rathdowne Council – it was project managing something or other. I was pretty qualified to do it I felt. And when I phoned them to ask how to apply I was told that it was open only to existing employees other county councils or the public sector. It wasn’t a recruitment embargo thing it was just a restriction they placed. It was, of course, discriminatory but I could get no reason for it in terms of suitability for the job. It struck me that thay were restricting their talent pool to a much smaller than desirable size. On a slightly related question – does anyone know the % of the public sector that are on fixed-term or renewable contracts and the extent to which being on these contracts presents a real danger that they may be terminated due to lack of money or poor performance….? Of course the questions to consider in public sector reform include not only ‘How do we do this better?’ but also ‘Should we or anyone else be doing this at all?’ – see Colm McCarthy’s excellent report… BT is a man that definitely should be listened to. But: “Subject to satisfactory performance over each period, the contract is renewed. If performance is not satisfactory, a process of performance development and improvement could be completed over a specific period. If this process does not yield the required results, and after due process, the contract is not renewed.” How could a civil servant say no to a politician with such a contract over his head. Also how many of the Drumcondra mafia would have been ‘in’ if positions were opened up 10 years ago? I think the ongoing national debate is about the future of the public sector Whereas it should be about the public services we can afford. And how to get value for money when providing these services. @Vincent Byrne The real problem is the corporation sole which makes the civil servant an extension of the Minister. Neither is accouontable, in our present system. As one observer put it, “when you talk to the civil servants, they blame the politicians and when you talk to the politicians, they blame the civil servants.” Brendan Touhy is not half radical enough. We are living with the results of the kind of reform he advocates. Following the late John Boland’s introduction of the Top Level Appointments Commission during the 1980s, many senior public service posts (eg. Secretary Generals of government departments, County Managers) now have 7 years terms of office. As these are Government appointments, there is nothing to stop the same person being re-appointed, for another term or even a shorter term, as has sometimes been done. There is nothing to stop the public service advertising every job, without any of the kind of restrictions that Paul MacDonnell has referred to. “People are also demanding that the public service become more accountable and that it deliver more cost-effective and efficient services” For a different perspective on what needs to be done to ensure accountability, I quote from an article which two friends and I wrote – during the last economic crisis here in the 1980s. “Public sector reorganisation There have been many attempts to improve the effectiveness of the government by making changes in the organisation of the public service. Among the more important ones were: ― the creation of some state-sponsored bodies;16 ― the establishment of the Local Appointments Commission and Civil Service Commission; ― the setting up of the Public Services Organisation Review Group (Devlin Report) in 1966; ― the introduction of a new method of appointments for senior civil servants in 1984. None of these proposals has dealt with the need to separate clearly the Active and Representative Branches. The primary problem centres on the dual function of Cabinet Ministers —both executive and representative, which results from the fusion of the legislature and executive. There is an increasing tendency to recognise the political nature of the public service function. It is realised that public servants cannot be invisible, without being ineffective as well. This view leads to the tendency to make public servants (even In the civil service) public figures also. We have brought this trend to its logical conclusion and made the executive (and initiating) function the prerogative of a separately elected official (the head of the Active Branch). If the Active Branch is to attract effective individuals it must allow them to exercise their power subject to predictable controls by the Representative Branch. The proposals for the legislative process allow initiatives to become law unless they are vetoed. The need for this kind of bias towards action is illustrated by the Bankruptcy Commission which reported in 1972. Although it had drafted a bill to lay before the Oireacthtas as part of its report, it took ten years before this bill reached the floor of the Dáil. (for the full argument see http://184.108.40.206/politics/design-for-democracy.pdf) Even in the UK, Andrew Turnbull, a former head of the UK Home Civil Service and Secretary to the Cabinet has called publicly for a separation of powers see http://www.ft.com/cms/s/0/73f524ca-4faa-11de-a692-00144feabdc0.html Brendan Touhy says “Putting new wine in old wineskins rarely works in any organisation. Leaving in place the current structures to deliver the changes required will simply not work, as the system is incapable of delivering the reforms from within. In other successful public-sector reforms, it was the establishment of external oversight bodies, accompanied by the recruitment of new senior people, that drove the process.” Can we have successful public sector reform without a major rethink of how we allocate our power to those who govern us and bring in new methods of ensuring that we can exercise the kind of oversight that he calls for, using checks and balances that are well tried elsewhere? PS. Perhaps Brendan Touhy would provide some impetus towards this remaking of how we govern ourselves, if he were to give a warts and all account of the slow roll-out of broadband in this Republic! This would help us understand how the power of government has failed to ensure delivery of the kind of infrastructure that places like Sweden and South Korea take for granted. We would then have more insight into other similar failures eg. supplying potable water in many places. @Garry Relative to our society the public service is probably still as conservative as it ever was. There were always new agencies, new challenges and new technology. But public servants today have convinced themselves that they are radical compared to their distant predecessors. Everyone is radical compared to their distant predecessors. I think there are two other unmentioned problems: 1. The drastically botched reform. Would an updated Department of Health have been much worse than the HSE has actually turned out, as distinct from what was originally envisioned? 2. Declining ethics. The public service, in particular the civil service, like the Catholic Church used to be seen as honest and was highly respected. They have been tarnished by the tiger and it’s aftermath and if they are not careful they will end up as discredited as the church. I think we need to exactly copy the best working public service in the world. No more Irish solutions to Irish problems. They always fail. Bring in foreign managers to reorganise and to manage. Then have a permanent majority foreign group to continually reorganise services. Canada and Sweden are good places to look at. Finally, the new public service will need additional massive safeguards to prevent politicians from corrupting it, as they corrupted the once respected old public service. This is a good time to raise this with the unions as part of a national effort. Our unions like the country are deeply conservative. But if they have the interests of the country at heart they will back wholeheartedly back reform. @E76 “Would an updated Department of Health have been much worse than the HSE has actually turned out, as distinct from what was originally envisioned?” Can you produce any evidence that the HSE has been a failure? By ‘evidence’ I mean proper statistics, not just that the Irish Times says so. Since the HSE was set up: (a) Mortality rates in Ireland have fallen from 20% above the EU average to lower than the EU average. (b) Life expectancy has gone from below the EU average, where it languished for well over a century, to above the EU average. (c) Waiting-times for operations have fallen sharply. (d) MRSA infection rates have fallen sharply. (e) Infant mortality has fallen to one of the lowest in the developed world, and much lower than in the UK – a few years ago it was one of the highest in the developed world. (f) The Gold Standard for health services in Europe is the Euro Health Consumer Index. This Index is produced by a Swedish organisation which measures health services in 33 European countries annually, based on criteria such as outcomes, waithing-times, infection rates etc. Before the HSE was set up, Ireland ranked 28th. In their most recent survey, published a few weks ago, Ireland ranked 13th (out of the 33). http://www.belfasttelegraph.co.uk/breaking-news/ireland/irish-health-service-up-to-13th-in-european-rankings-14513789.html I have always felt the Rolling Contract could have a place in Public Service reform. By that I mean you are employed (post-probation) on a (say) 3 year contract. At the end of year 1 you are performance renewed and if all is well you get a revised contract for 3 further years. If things are not good you are down to 2 years and a programme of “sock pulling up” commences. If this gets things back on track then you are back to the 3 year horizon. @John For a quintupling of health spending I would have expected a lot more. All of the customers are dissatified – that is usually a bad sign for any organisation. Are there many example where mass customer dissatifaction was delivered by an efficient, high quality organisation? If there are I’d like to know. “The customer is always wrong”. No, I am sure that is not how the saying goes. @ Paul MacD Your story about a certain job being only available to existing public sector staff tells an important tale. The problem (to me) seems to be the job-for-life nature of the public sector, where not only do you assume you’ll be with the same employer for your entire career, but you seem to assume you’ll be in the exact same line of work for your whole career. This stymies any new ideas coming into the management and provision of our public services. We essentially, with few exceptions, are left with the same staff doling out the same public services as were doing it ten or twenty years ago. Ideas and skills get stale, and public services suffer. In the private sector people change employers all the time, and can move from one industry to another with relative ease. This brings new ideas, new skills and new ways of doing things, encouraging inovation and increased productivity. We need to encourage more of this movement within the public sector itself, as well as to/from the public and private sectors as well. @Michael Henniigan “It is important to ask these questions and while I believe that no senior manager took a public stance on any issue of policy during the boom years, we should not just accept that it is stupid to stand on principle” I think that it should be pointed out that senior managers in the Civil Service and indeed all civil servants are not allowed take public stances on issues of policy.The restrictions placed on civil servants in this regard are strictly adhered to. The very well informed economic debate on this site is not matched by informed comment on governance and how policy is made. I strongly believe that there is a need for a whistle blowers charter within the service. I also strongly believe that reform is very much needed and that this reform needs to tackle the very culture that prevails within the service, a culture that shares authoritarianism and anti-intellectualism with the catholic church and FF! Action on changing this is needed but will not happen so long as the debate is ill informed. Too many people are condemning what they think happens and others proposing changes to something that does not exist in the form that they think. Lets commence honest debate and remember that some of those who know best what needs changing are prevented by law from entering the public discourse.There is a need, and I suspect that academic debate, and publications like the IPA Administration, may well provide the best public space for that discourse to take place without compromising the line between politics and administration. @ Vincent Byrne “I think that it should be pointed out that senior managers in the Civil Service and indeed all civil servants are not allowed take public stances on issues of policy.The restrictions placed on civil servants in this regard are strictly adhered to.” This sounds like I was only obeying orders. Of course they are strictly adhered to, rules are rules after all. However, I doubt very much if these gagging techniques were very high on the Public Sector unions agenda as they drove in and out of government buildings incessantly during the bubble era. Of course I am open to correction on that. Union officials pay is bench marked to pay in the public service. So their is a duality to their agenda. As a matter of interest there are over 60 full time union officials depending on nurses pay. @Robert. Not quite sure what your point is. Civil Servants and most LA workers (not all public servants) are prohibited by law from engaging in political debate and activity. Civil Servants sacrifice the right of free speech in this regard for public service.My point, above, is about finding an appropriate public space for civil servants to contribute to informed discussion on how to improve our policy making. @ Vincent would it constitute taking a policy stance for a civil servant to simply say that a particular element of the public sector was badly managed or overpaid or whatever and that remedial action should be taken? It possibly explains part of the problem that is now in front of us that the basic employment pay and conditions of the public sector constitute a political policy issue rather than a simple employment issue. @Eoin. The position is that the Minister is the manager and the policy maker and the civil servant is there to administer the ministers will. There is a large literature dealing with the crossing of these lines in terms of the policy making aspect of civil service advice to a minister, and indeed, there can be a de facto policy making role in implementing decisions.However, it is not open to a civil servant to publicly contest a policy decision. Many senior civil servants opposed decentralisation, for eg, and did raise it through their association (union) but this type of action would be considered very rare I should think. Without getting bogged down in explanation and debate the SMI process for example was begun by civil servants cloaked in an academic veil. Perhaps something similar is needed now. The type of leadership shown by Whitaker and let me say by Brendan Touhy is rare. I am simply saying that there has to be a way to generate that type of leadership without being seen to usurp the demoratic will. 18 months after the OECD report & indeed v. little done. Now at last, in the run up to the budget & with a need to find the €1.3B in staff costs, the transformation agenda seems to be breathing a bit of life. The mantra ‘never waste a crisis’ seems to be showing some some action, at last. And, last weekend, the unions were presented with a new vision document – which speaks of a smaller & more integrated public service. I’ve written an update in Torc Blog which you can read here in Transforming Public Services Comments are closed.