Categories Bailout Banking Crisis Fiscal Policy After the Election: Reality Bites Post author By Karl Whelan Post date March 1, 2011 54 Comments on After the Election: Reality Bites Here‘s a column I wrote for Business and Finance on the challenges facing the new government. Related Tags Croke Park, ECB, EU-IMF ← Review of the Department of Finance → Patrick Honohan on Prime Time 54 replies on “After the Election: Reality Bites” “For example, a large book of Irish mortgages is not likely to raise anything close to its face value.” True enough, but perhaps it might raise quite close to its market value. There is no shortage of liquidity at the moment, and interest rates are low. Will this book be worth more in future? Efficient market hypothesis suggests a 50% chance (assuming a normal distribution?). Or to put it another way, should the Irish state be in the business of property speculation? Not selling the book is deciding to gamble on mortgages – courtesy of the bank guarantee. Before the unions decide they have nothing left to loose if Croke Park is torn up maybe they should read this. http://www.nytimes.com/2011/02/27/magazine/27christie-t.html?_r=1&nl=us&emc=politicsemailema1 I think that s a really good article which will focus readers on economic reality a bit more than the rhetoric that is more easily consumed. I don’t though, understand why you chose such pejorative language in connection with Croke Park eg “ripping up”. “Indeed, it is hard to see how anything like the 30,000 figure can be achieved without ripping up the Croke Park deal and its commitment to ruling out involuntary redundancies. Many of the public sector employees who were likely to avail of redundancy packages have already gone. And if the government is to focus on particular areas of administration as the source of job cuts, then compulsory redundancies would seem inevitable. This raises an obvious question. With unemployment already so high, if the Croke Park deal is to be ripped up, why not focus on a mix of job losses and wage cuts, so as to protect employment and front-line services? Unfortunately, any reneging on Croke Park is likely to be greeted by unions as the final straw.” Why do you use the term “reneging”? You asked for debate questions a little while ago. Mine was: “Two part question: 1. Do you think the country as experienced any budgetary deterioration since March 2010, which you did not foresee at the time? 2. In its clarification of the Croke Park agreement, issued in May of this year, the Government indicated that the provisions in paragraph 1.28 of the agreement, which stated that, “the implementation of this Agreement is subject to no currently unforeseen budgetary deterioration”, would be applied in a bona fide manner”. Do you think this has been applied in a bona fide manner?” Either you think the budgetary deterioration that resulted in an IMF bailout that is probably going to have to be supplemented – together with possible insolvency of the state and default – was “foreseen” last March, or you have to conclude the government has no business going along with CP at all. Is it not the case that if the government “sticks” to CP it is actually “reneging” on its responsibility to the non-public sector element of the economy? @ Grumpy Indeed, perhaps “reneging” is the wrong term, in light of the “unforeseen budgetary deterioration” — but you know what I mean. “Ripping up” is fine — the agreement is dead at that point. Great article. This government is really just a second King Canuut holding out the inevitable tide of debt restructuring. The tide that is debt restructuring (including sovereign) is coming. We need to be as light and unfettered as possible to deal with it. We need to reduce public service pay by 45% across the board, extend mortgage terms by 20% (and let insurance pick up the risk) and cut social welfare and minimum wage right back. This tide is coming. The connected have already eyed out the high ground. For the rest of us we just got to make sure that we can swin – if we survive this we will be fine. Time to cut our weights and say “bring it on” The banks and successor vehicles have to go into receivership immediately. In the circumstances a bullet to the head is the only thing that will relieve everybody’s pain. “Pray and delay”, “extend and pretend” is about to come crashing down to emerge as harsh reality. Advice should not be sought from New York, London, Frankfurt or Geneva. It should be sought from Christina Kirchner of Agentina or the gov’ts of countries that have defaulted in the past quarter century. We are most grateful to the ECB and IMF, we will do the decent thing and offer 33.33% against losses incurred that we backstopped. We will honour amounts outstanding April 1st 2011 to ECB and IMF. If that is not acceptable we are out of the Eurozone with a punt worth 20 pingean on the Euro (80% dprctn). Life will go on and the recovery will be swift even if the short term pain will be traumatic. We will sell off overseas assets quickly, property as well as liquid (lawsuit proofing). Great article, and very interesting comment from Grumpy. Question to the economists here around: a central part of the problem (or the solution) is the future growth rate. Where do economists pull it from? For example before the crisis the IMF used to project a growth rate of 4% and now the numbers are lower but they’re still creeping back to 4% over a number of years. Does it come from the heavens, is it an extrapolation from past growth? I guess that in a “normal” country the population growth rate gives an anchor for the long term GDP growth rate but as Ireland’s working population is volatile with the emigration issue I don’t get how anything reliable can be calculated. I browsed this website a bit but depending on the source the growth estimates differ significantly – I’d like to know a bit more about the underlying assumptions to make up my mind. To give the new Gov a tail wind how about a 7 point agenda not involving extra taxes or redundancies.– 1. Drive on Social Welfare abuse and Fraud —-yield 500 M PA 2. Drive on Tax evasion and Tax avoidance —yield 500 M PA 3. Drive on Black Economy ———————-Yield 500 M PA. 4 Drive on Excise Duty avoidance (Smuggling) —yield 500M PA 5. Professional Cost Benefit ANALYSIS of all new projects —yield 500 M PA 6. Professional Project Management of all sizeable Projects.—yield 500M PA 7. Wind up/down all Tribunals ———————————yield 500M. As regularly heralded by political parties (without any questions) from Media these proposals have all ” Been Costed” @ Karl Yes, good article, but why won’t you back off this obsession of how long the IMF/EU deal will last. It will last forever, just might need some resetting in a couple of years. @ BW2 Sounds like we should send you in as chief negotiator for the extension of the IMF/EU deal since you’re so unconcerned about it! As for repeating myself on this, remember that the generic reader of dead tree publications probably doesn’t read every post on the IE blog, so repeating a point made at length here can be worthwhile if you feel it’s a point worth making. @ Robert Browne It may possibly have escaped your attention, but public sector workers in this country have already had cuts far beyond what Christie has done. And I’d be careful of lauding him too far. He’s a clown whose day will come. The domestic expenditures so near and dear to everybody’s heart cannot be reduced by an amount sufficent to deal with the shortfall. Intelligent politicians in a hopeless situation create a crisis very early in their mandate that magnifies the difficulties they are facing. Impending sovereign default will concentrate the minds of all parties quickly and wonderfully. In a national emergency all agreements are null and void, even Brain and Berties pesnions are not sacrosanct. We are past the tinkering and catering stage, this has gone on since 2007 getting deeper in the mire each year. Take control and do the unthinkable so as we can get on with rebuilding. You all know Schumpeter lets employ tried and true principles. The unions could reasonably argue though that the budget position has not deteriorated in an unforeseen way. Taxes and expenditure is pretty much on target for the year. The problem arises from bad bank loans made years ago which probably were known at the time that the CP deal was made. Wages have not declined much recently either, so any proposed paycuts in the public sector would be an attempt to impose the burden, not on taxpayers which is itself seen as unjust, but on one seventh of taxpayers who happen to work for the government. Public servants may well be overpaid and such overpayment is not sustainable, but this has to be argued directly and the overpayment clearly identified. @Karl Whelan But the optics matter. Very powerful lobbies in Ireland spin like crazy (and very successfully) that the commitments to the unions are set in stone and would be a dreadful betrayal of an agreement if not adhered to. I yo stopped a hundred people in the street probably one or two would know about that clause. The way everybody is tiptoeing around it, pretending it doesn’t exist – and keeping quite about it – is eerily reminiscent of the way nobody was allowed to talk about the property bubble at one point. It is effectively a conspiracy of silence, and I note that one of the most useful functions of academics is to speak truth to power. If I didn’t know about this stuff before reading your article I never would have guessed the nation had anything but a duty to plod on doing whatever it could to honour those commitments. Karl, do you not expect the imf quarterly reviews to address public expenditure issues? Which in turn could make the money last a bit longer. @ grumpy t is effectively a conspiracy of silence Oh, please. This clause was argued about when Croke Park was being pushed at the union memberships, and the government ‘clarified’ that it was just a standard clause that they didn’t envisage ever coming into play. @ Ahura “do you not expect the imf quarterly reviews to address public expenditure issues? Which in turn could make the money last a bit longer.” Eh, no. @ KW, I wonder myself. I dumped some old ‘dead wood’ magazine articles from the mid 1990s not so long ago. It was really funny to read them. Oh the innocence of it. I wonder how articles such as KW’s, or those by many others, will appear when we read them in a decade. Will they betray a similar lack of awareness, or effects around the corner? I suppose, by general question is: Was there ever a dead wood magazine publication article, that really nailed it. And if so, was it by sheer luck, rather than insight? BOH. Was there ever a dead wood magazine publication article, that really nailed it. THe Phoenix doesn’t do too badly. They had some interesting thoughts on the recent burglaries surrounding Anglo. @ EWI, thanks for the comment. It’s just, when I try to remember an example myself, of a seminal article in a magazine, I get a brain block. About the only ones, I can stretch my brain to remember, are a couple from the field I know best – innovation and technology. A couple of Wired magazine articles, still pack a punch, even today. And you would find Wired mag, on the shelf beside B&F mag. BOH. @Karl Whelan I once heard of something called the ‘Three Day Week’ ……………. One can get Two  Three day Weeks into every Six [six] days continuously ……….. and what is so special about Sunday …. … let’s make Sunday a week-day …. and those on the Three Day Week can call the other four days Sun-days if they wish – and that Sound Man Martin, a pragmatist, will not object to getting a few extra Sun-days … I also heard about something called the Twenty Four Hour Day – think it was in some economic history textbook from the Pleistocene era …. into which one can fit Three Eight hour Days – e.g. for ESSENTIAL front line services such as doctors, nurses, economists, CAB investigators, Mary-Joanna vendors, fish an chip vendors, coffee-house assistants, bloggers, firewomen, bouncers, taxi-drivers, bounty hunters, et al …… and with all the spare unutilised capacity in our first, second, and third level institutions and all public buildings we could fit Two 8 hour days of reasonable daylight giving 14 working days to suit those on the 3 working day weeks for non-essential work ….. let’s call it Labour Market Flexibility & Making Use of the Infrastrucure that we have as no one can afford to build more – and we can upskill the half million officially unemployed and the quarter million unofficially unemployed and get many of the million officially employed but really underemployed to add some real intangible value …… it is often called Productivity …. and some like to have a Pact with it …………. and some used to have Jam with it …. but now that we have no bread, time to forget about the jam ….. And we leave the really productive million employed in really productive work well and truly alone to get on with it …… it used to be called Wealth Creation …. By Smith or Marx or someone ….. fado fado fado ….. Just a thought …… @ EWI The man is onto something and the unions here are behaving ostrich like . What has the Croke Park deal delivered? I believe the “negotiation” was that unions would be compliant on NAMA and bank guarantees as long as they got Croke Park. They got CP and we got the IMF all they did was capitulate to buy time. The idea that paragraph 1.28 would never be used is childish, same way as our high court did not buy the idea that developers were supposedly told personal guarantees on loans would never be called in. So now all contracts have clauses that are never supposed to be used we just have to figure out which ones before we sign on the dotted line? Unions have done their members and country a major disservice in the manner in which they have “negotiated” deals from Ahern and his cohorts. In reality, nothing was “negotiated” you just had different people sitting on each others remuneration committees. I have sat and listened to Blair Horan of the CPSU tell me that ” we asked Bertie for 600 million but he gave us the 1.2bn”. What was delivered from bench marking besides the interminable form filling? The unions have used the lazy mans guide to negotiating public sector pay, government promised much more than they could deliver and now there is the small matter that nobody can get a cheque at the end of any month without EU/IMF bailouts. We need targeted redundancies right across the public sector and if you think that enough pain has been endured, even though nothing has been delivered then you are in for a real shock. The NPRF is as good as gone and it is going to be very interesting in 18 months time when public sector pensions and interest on our bailout combined hit a minimum of 18bn a year. The unions are facing a real crisis, they have only one model for survival and that is the threat of “industrial strife” that is not going to work, but I predict their approach will herald large scale sell offs of state assets for obvious reasons. @Karl How do you suggest the ripping up of Croke Park proceeds? Presumably the government will have to rip up cosy fee arrangements with the armies of consultants cronies and legal professionals that haunt the public purse. @Karl, Excellent piece, but you have high-lighted only three of the Titanic-busting protrusions on the iceberg. There has been quite a bit of reporting on a leaked Commission document on ‘Enhanced Economic Policy Coordination in the Euro Area, Main Features and Concepts’ which spells out some more protrusions that could hole other ships. Wonder if any members of the Fourth Estate frequenting this parish have a copy? @grumpy, I set myself up for the ‘Numpty of the Year’ year award yesterday for failing to recognise Colm McCarthy’s thrust of his verbal rapier dipped in irony directed at the ‘useful idiot’ German economists. But your “I note that one of the most useful functions of academics is to speak truth to power” might get an honourable mention. We are blessed here to have some, but, as I am sure they would recognise, their critiques have no “standing”. The only way these critiques would have any standing or impact is if they were allowed to confront and contest directly the official bullshit, PR and spin in the only forum that should really matter – a suitably empowered and resourced Dail Cttee. Distruntled trade unions? Eat your heart out, Lewis Carroll. The EU and IMF are going to rip up Croke Park for us. You can rest assured part of the quick resolution of negotiations with the previous government was that the croke park deal would be left untouched so that they could go into the Election grasping at least one straw…..but now thats out of the way…and the current incumbents are planning to go back to “renegotiate” the whole lot…well its pretty clear they’ll be met with arched eyebrows and questions from the other side. @ Robert Browne ‘Unions have done their members and country a major disservice in the manner in which they have “negotiated” deals from Ahern and his cohorts. In reality, nothing was “negotiated” you just had different people sitting on each others remuneration committees’ Given the general dearth of native industry, the anti-union stance of the MNCs, the tendency towards a service economy, and the size of the public sector, unions are significant stakeholders in this state. Union leaders had the same sort of access to senior politicians as leaders of the business and professional comunities.They looked and they listened. They could scarcely fail to note the predatory tax breaks, procurement deals, pretend regulation and other arrangements for the protection of private vested interests. Insofar as sitting on each other’s committees is the problem, it is the business sector which really takes the biscuit. The ‘special’ arrangements for the private sector were grossly abused. The actions of bankers have been extraordinarily damaging to the public interest. It is a sign of our weakess as a people that no one has been made accountable. Despite the bust, private vested interests are still a sacred cow. @ Anon: Mar 1st 10:37: “I browsed this website a bit but depending on the source the growth estimates differ significantly – I’d like to know a bit more about the underlying assumptions to make up my mind.” Its a tad complicated (or should I say confused?). Each of us has a psychologically embedded economic Model-in-Use – which we conveniently ignore unless we are really pressed to articulate it. Then you discover the awful truth. Its (usually) an annual, incremental increase in aggregate economic activity (an exponential trend-line – with occassional ‘cycles’ above and below that trend-line). Its know as the Permagrowth Model. And since Permagrowth is a mathematical model – it MUST be true! I’ll leave you to ponder on the intellectual fantasy of the usefulness of a virtual exponential upward-sloping trend-line in a real world of finite resources allied to the luniest construct of all, that debt, the toxic effluent of the oxidation of credit using fossil fuel energy (debt is both real and exhibits an exponential growth trend-line) can be managed within the framework of emitting further credit! The mind boggles at it. But that’s they way it is. Basically, from what little I can discern, the estimates for future economic activity (aka: growth) are based on a mixture of historical fact and future fantasy. I may be quite wrong about this opinion, so it is open to anyone to provide the appropriate empirical evidence to correct me. I would appreciate it if they could do so. But, no Spinola please. “I guess we should never assume intellectual rigour when ignorance remains a possibility” (apologies to Paul Krugman for macerating his original quote). BpW Democracy surely comes in again. During the camapign both Fine Gael and Labour gave positions on the Croke Park deal. This from the Fine Gael Manifeto: “Croke Park Agreement: Pending a built-in review of its implementation, Fine Gael remains committed to honouring the pay elements of the Croke Park Agreement. Fine Gael has always indicated its commitment to go beyond the Croke Park Agreement in terms of the reform agenda needed to get Ireland working again. The planned reduction in public sector numbers will be achieved through voluntary mechanisms.” So, look at the results of the review, and until then: pay deal to stay, more reform, numbers down voluntarily. I think it matters what politicians say in manifestos to gain votes and it matters that there is integrity in governments building a platform on what they have said to the electorate. You can say that they employed mental reservation in not mentioning the bit that says about economic deterioration, but this would be wilfully misleading to any reasonable voter. So if a new government goes ‘ripping-up’ what all ‘sensible people’ know is a ‘dead-letter’ – we’re back to square one with regard to trust in our electoral process. No party got elected on a platform of tearing up Croke Park (quite the opposite), and therefore there is no mandate to do it. By the way, I’m not claiming that Croke Park is a good thing or a bad thing, just objecting to what seems to me to be a disregard for democratic decision making. There is a really strange don’t-say-boo-to-a-goose mentality in Ireland. Probably not unconnected with the progress to ts current predicament. On the one hand you have a government determination to ignore reality and insist there is an obligation on the taxpayer to pay off all bonds whether subordinated, unsecured or unguaranteed – maybe now starting to crumble when it is too late – where no such requirement existed. On the other hand you have a government determination to ignore reality and insist there is an obligation on the taxpayer to essentially maintain high state payroll costs and negotiate all reform as the country slides into insolvency – where no such requirement existed. It is cloud cuckoo land. @EWI “the government ‘clarified’ that it was just a standard clause that they didn’t envisage ever coming into play” It would appear the unions asked for clarification that the clause would not be used in the event of some insignificant deterioration as a mere technicality for the government to find an excuse to dump the deal, viz: “In its clarification of the Croke Park agreement, issued in May of this year, the Government indicated that the provisions in paragraph 1.28 of the agreement, which stated that, “the implementation of this Agreement is subject to no currently unforeseen budgetary deterioration”, would be applied in a bona fide manner”. Do you think this has been applied in a bona fide manner? Does “bona fide” in Ireland mean nothing? If so it rpehaps deserves to be where it is. @paul quigley & Gavin Kostick, You both make valid points. There is a requirement for ‘political balance’, of which, I expect, those negotiating a programme for government are well aware. Any sensible reform of the broader public sector will be a complex and time-consuming affair; but it must be balanced by equally meaningful reform of the private sheltered sectors which, though many here are nominally in the private sector, rely on public revenue, concessions and subsidies. The boring, tedious, mind-numbing work of good governance is the balancing of competing sectional interests in the broader public interest. I can’t believe that major capital spends in Ireland aren’t subject to cost benefit analysis. If the government cuts PS wages and dumps Croke Park it also needs to take a hatchet to the obscene looting of the legal fraternity. How much is an hour’s time of a mediocre Dublin lawyer worth ? While reference is made to public sector jobs, it is also worthy of note that all the parties appear to be ignorant of the challenges on the jobs front. The situation is not helped by the fact that most journalists would be as ill-informed as the politicians. The task of creating 200,000 net new jobs is a daunting one and while there is a large amount spent on enterprise policy and innovation, much of it is clearly wasted. The first steps to a credible jobs strategy have yet to be taken. @ Seafoid, “I can’t believe that major capital spends in Ireland aren’t subject to cost benefit analysis.” It is entirely beyond belief. The Irish taxpayer has for years been asked to spend undisclosed billions on public private projects, the exact public sector contribution to which are concealed under dubious “commercial confidentiality clauses” in PPP agreements. The DoF justifies this obscene practice by reference to its own “Public Procurement Best Practice” guide – as if that were a reason to force people to buy things without telling them the price tag!!!! Case in point: Metro North. What will it cost? What are the benefits and to whom? Are there higher CBA valued alternatives? A project which the now disgraced FF of FF tried desperately to push through the Oireachtas Transport Committee with no real public scrutiny. Hopefully the 17 Independents will ensure that the Oireachtas starts doing the job for which they are extremely well paid to do – protect the Irish taxpayers money. If it is possible to save substantial amounts of money by Croke Park-style adjustments – reorganising nurses and teachers working arrangements, overtime arrangements and so on – then this sort of deal-making offers benefits to both staff and the taxpayer. Much of the discussion of Croke Park, including perhaps Karl’s above, seems to assume that it only relates to no-pay-cuts etc, whereas it is in fact no-pay-cuts-but-potentially-massive-cost-saving-reorganisation. From the snippet we hear (it certainly would be nice to know more) about nursing schedules and so on, it appears at least possible that this reorganisation is in fact happening. People who want to take a fact-based approach to Croke Park should therefore be taking this other half of the bargain into account in their analysis. It would be nice to see as many posts here on the possible changes to the public sector as part of the Croke Park process as there are to the possible final costs of the bank rescue. @ Karl Whelan, “Eh, no.” Succinct. Just to clarify – you think the IMF will not be active in (eh) influencing Irish expenditure beyond measures outlined in the four year plan? @ PH: “The boring, tedious, mind-numbing work of good governance is the balancing of competing sectional interests in the broader public interest.” ” . . . in the broader public interest” ? That’s like saying “Here be mines (of the expolosive kind) – just mind how you go” Its not a time for mine-detectors, but a Flail Tank. I would assert that you cannot, and must not, attempt any balance of competing sectional interests in our current predicament. You Triage: A we save, B attends to itself, and C is left to expire. Our Citizens, our banks, our creditors (except the IMF). If B expires also, then so-be-it. They are merely temporary social and economic constructs which can be readily (albeit, with some considerable effort) be re-instated. I genuinely doubt there would be any fatal casualties if our bankrupt banks were to shut. Their imprudent lending debts are a sunk cost – and we know what econs say about that! “Move along folks. Nothing to see here”. Not so with the lives of our people – most especially our children. (Though AMcQ allowed that he preferred his credit card to his kid’s futures: Surely he was mistaken?). BpW @William Phelan Social partnership agreements were continued too far beyond their 80s configuration. Benchmarking, for example, if it had delivered efficiencies, would have obviated the need for Croke Park. I made this point before but it is worth restating. After the last round of CAP ‘reform’, a Single Payment was introduced for farmers getting a slice of the subsidy cake. Completing Area Aid forms would be a thing of the past. Of course, it didn’t work out like that. Only a reasonable person could have expected that miracle. Single Payment forms (a.k.a. Area Aid forms) are still dispatched annually. Staffing efficiencies (reductions) that should have logically flowed from the ‘reforms’ never occurred. The Department of Agriculture is still an overstaffed dronocracy. My understanding is that since ’95 new recruits to the public service pay full PRSI just like private sector employees (I am open to correction) so there is scope for any government to opt for involuntary redundancy schemes in extremis and offer, at the least, statutory redundancy payments. This would be on a par with what many have been receiving in the private sector for the last couple of years. Public service members recruited since 1995 do pay full PRSI, but we don’t receive any benefits from paying it. We aren’t, for example, entitled to the old age pension (contributory or non-contributory), or unemployment benefit/assistance. @Kevin Walsh “We aren’t, for example, entitled to the old age pension (contributory or non-contributory), or unemployment benefit/assistance.” Erm, do you have any backup for those two statements? My understanding is that the contributory OAP is counted as part of your PS pension. Same as it is for many (most?) private sector workers. And that you don’t qualify for unemployment benefit/assistance because you can’t be sacked… if you leave a job voluntarily, you don’t get it… same as private sector workers. I fail to see the case you are making? @ BOH I’ve taken a dislike to Wired after their (i) ratting out the alleged Wikileaker to the US Feds and (ii) being one of the prime sources of passing along smears against Assange (nothing like the rats at Andrew Orlowski’s Register, but still). @ Ludwig +1. There was an eye-opening report about the costs of the privatised Air-Sea Rescue in ‘Aircraft Ireland’ a while back. What is it about FF and helicopters? @ William Phelan + 1 again. There’s big changes coming down the pike in terms of working conditions from Croke Park. @ grumpy I have some direct knowledge of how and why this was raised by one particular large union’s membership (the union leadership themselves were sanguine about it, of course). Specifically, people were most concerned that FF’s duplicity/denialism on bank problems would provide the convenient trigger for this clause. The ‘clarification’ came in this context. If there was duplicity here by FF and their union leadership allies, then the lack of bona fides was theirs’. not the ordinary union memberships’. @ Robert Browne. Christie has Mafia problems. And if those don’t get him, then stunts like taking a 1/4 billion of Federal money for a tunnel, then cancelling the tunnel and refusing to repay the money are going to lead him rapidly into a cul-de-sac. The strong grassroots public resistance in Wisconsin to the corporate crony agenda of the current crop of GOP governors shows that a backlash may be starting. As to your “nothing has been delivered”, as an example I heard the other day that the cutbacks have hit the public sector so badly that the PDF are having difficulties getting uniforms for troops going to the Lebanon(!). The Courts Service 2010 Annual Report basically states that the latest job cuts target for the Courts Service is unworkable. It’s trying to go to 1990s level staffing when courts business has about doubled in volume, and computerisation has also increased staffing requirements. “…computerisation has also increased staffing requirements.” Eh? Computerisation diminishes productivity? We’re deeper in the mire than I feared. It might be useful to point a common factual error in relation to the size of the civil service. Numbers employed in the civil service peaked at 39,129 in 2009 (Analysis of Exchequer Pay and Pensions Bill 2005 – 2010). There was a change in the counting method for 2010, but even under that method the numbers were 37,381. This is far above the 30,000 regularly cited by various commentators. Bearing in mind that relatively few departments are involved in large-scale services to the public, it is open to question whether numbers on anything like this scale are necessary. There are countries – particularly those who have devolved large numbers of functions once carried out by the civil service to various quangos – where civil service departments are small, policy-making secretariats, composed largely of senior civil servants. I do also wonder whether civil service departments may still be staffed on a basis which hails from the era of the ‘typing pool’, where each Principal Officer might have required X APs, Y HEOs, Z EO’s plus a large number of Clerical Officers. I would presume that senior civil servants now write, and largely research, their own policy documents, and should therefore need only a fraction of the clerical back-up that was once required. To the extent that I have examined numbers employed in the core civil service, it seems to me that this area of the public service warrants at least as much attention in terms of potential savings as the much-talked-about-and-all-still-there quangos. @ Karl Did you listen to the Gov the other night? Asked about renegotiation this is what he said: “This deal is subject to constant renogiation, perhaps for the next 10 years”. See, you really should get over your obsession about drop dead dates. Very good point Donagh. Unions such as the CPSU which represent junior civil service grades seem to have won the media debate about future reform of the civil service by complaining about the larger expansion in the senior policy making grades compared to for instance clerical officers. But in view of the fact that most people type and files their own material now by view is the opposite – why do we need so many people in the clerk typist grades? I also think Fine Gael’s plan for the quangos is just plain wrong. True some of them were set up for reasons related to political expidency but many others carry out very important functions effectively and employ the type of specialists (PhDs in economics, social policy etc) that we really need in order to imporve the standard of policy making and implementation. I do accept the point that government by quango raises accountability problems, so skilled staff from these agencies should be moved into the core civil service and recruitment arrangements for the civil service should be reformed in order to enable the recuitment of outside specialists. I read this & I’m hoping Ireland will do better than the US: http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=1 @ BW2 “you really should get over your obsession about drop dead dates” I’d recommend you get over your obsession with my supposed obsession … @ Donagh Not that anyone’s reading but just for the record, in relation to my supposed factual error, note the column says “the core administrative civil service only contains about 30,000 employees” Here’s my source: http://www.cso.ie/releasespublications/documents/earnings/current/psempearn.pdf Page 5 says total civil service was 38,000 in September 2009 but subtracting prison officers and “industrial civil servants” (not sure what that is) we’re left with administrative civil servants of 32,500. Presumably this has declined a bit since then, hence “about 30,000”. Somewhat amazingly, the Public Sector Earnings and Employment release from the CSO has been discontinued. http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf Page 15 contains some information on public sector employment but no longer has a separate figure for administrative civil servants. The Analysis of Exchequer Pay and Pensions Bill separates the public service numbers into civil service, health, education, security, and non-commercial State sector. I think taking the number listed under ‘civil service’ as the size of the core civil service is reasonable. I entirely take your point that not all them would be ‘administrative’ civil servants. Comments are closed.