External Review of Department of Finance Post author By Philip Lane Post date June 28, 2010 The last week has seen a lot of coverage of the announcement by Brian Lenihan that there will be an external review of the Department of Finance. Some media responses: Dan O’Brien Eddie Molloy Categories In Fiscal Policy Tags Department of Finance 8 Comments on External Review of Department of Finance ← Colm Kearney on the smart economy → The Hand of Henry 8 replies on “External Review of Department of Finance” Apart from economic and financial expertise, I hope the independent review looks at the following areas: 1. The Department’s legislative capacity [still not bankruptcy reform, still no resolution scheme]. 2. The Department’s responsibility and capacity for assessing the impact of legislation and regulation carried out by other departments. 3. The Department’s responsibility for assessing the capacity and resources required by public bodies to carry out new duties and roles assigned to them. 4. The Department’s role in monitoring and assessing the cost to the economy as a result of additional transaction costs imposed by other departments and state bodies [e.g. the Revenue’s outsourcing of clerical duties through online services to solicitors paid by private individuals]. 5. The Department’s role in monitoring and assessing the duplication of services procured by state bodies and other departments [e.g. different local authorities developing different on-line planning registers and search by map systems]. Why even now do we not have forecasting systems in place that run models across the spectrum from building houses with gold brick to virtual famine conditions, and all scenario in between. It is truly pitiful that the department did not have some sort of melt-down file ready to be dusted off. For even if wrong at least they would have had a start point. We should also of course remember that the civil servants propose but the minister disposes. The best advice in the world will be as nothing in the face of shortterm political expediency. Ally that to longterm “survivors bias” and we are where we are… One interesting issue to explore is the decision to ignore the recommendation of the the first benchmarking body on withholding 75 per cent of the payment until “real outputs” were determined and a system for “validation” had been put in place. It was stressed that the proposals were to be taken as “integral parts of the recommendations on pay.” This was a case where national interest competed with self-interest. Was there one among them who objected to this abuse of public funds? http://www.finfacts.ie/irishfinancenews/article_1019286.shtml so glad they opted for a more believable external review “One interesting issue to explore is the decision to ignore the recommendation of the the first benchmarking body on withholding 75 per cent of the payment until “real outputs” were determined and a system for “validation” had been put in place. It was stressed that the proposals were to be taken as “integral parts of the recommendations on pay.”” Didnt all the records of that get shredded? It is to the Minister of Finance’s great credit that he appears to be seeking to enforce a significant change in the culture and the processes of the governance and policy-making institutons over which he exercises ultimate control. Yet one is left with the gnawing feeling that a leopard canot really change its spots and that the motivation for his, almost single-handed, efforts is an overwhelming desire to shore up the tattered reputation of his political faction. It is very rare for the interest of the faction to be over-ridden by the public interest – despite bombastic and often angry declarations to the contrary; and, on occasion, the public interest may experience some “collateral benefit” even when the interest of the faction is being pursued. It is only when institutional and procedural arrangements are in place to discipline the tyranny of faction that there is any possibility the public interest will be served. We are a long, long way from this. This is a national crisis, probably more serious than any experienced in the short history of this state. It is for the political classes to set aside faction, to engage with the people and to craft more effective institutions and procedures of democratic governance. But of this there is only the faintest rumbling. One gets the sense that those who exercise power and influence are resigned, resentfully, to experience a period in purgatory. But equally, one gets the sense they are pawing the ground until they are free to continue ‘business as usual’. This would be the worst of all possible outcomes, but, as time passes, it appears as the most likely. Looking back my chief impression of McCreevy is of arrogance. When Cowen took over he supersized spending while only gradually reducing tax incentives. For this he is culpable. But McCreevy was the one who set the template. Opus DoF are deeply conservative and deeply secretive (e.g., in 1981 they concealed – on government orders – the true scale of the budget crisis. I am sure they have done similarly in recent times) and one can be sure they have made dreadful errors. But the arrogant recklessness that sunk the country just isn’t the style, to any degree, of our civil service. It was politically and business driven. Comments are closed.