"Next Stages in Public Service Reform - Challenges and Choices"
Introduction
Ladies and Gentlemen,
I am delighted to be here to provide the opening address for this morning’s conference. I am particularly impressed by the IPA’s choice of title for this event – Next Stages in Public Service Reform – Challenges and Choices. I believe that we are now entering a new and crucial stage in the reform of the Irish Public Service, and that we will indeed face significant challenges and choices in the coming months.
The importance of reform and why we need it
We know the challenge that we face – the challenge of implementing a programme of reform, the scale and importance of which is unprecedented in this State. This will take place in tandem with an equally ambitious programme of constitutional, political and institutional reform.
We know we have choices to make, choices that will impact on people and businesses across the country. But we should also recognise that the choices we face are also limited, due to the difficult circumstances in which we find ourselves economically.
Yes, we have some hard choices to make. But on the issue of reform itself, there is no choice. It is going to happen.
At the moment we are funding our public services, pensions and social welfare benefits with money borrowed from the Troika. Ireland is performing very well in living up to our side of the deal. However, our deficit must be reduced.
I should say that we are meeting all of our international commitments, our economy is improving and becoming more competitive and exports are strengthening. Our target for the general government deficit this year will be beaten. But we are not there just yet. We must stick to our task, and chart the long course back to a sustainable budgetary position if we want to achieve a sustainable and prosperous economy and a fairer and more cohesive society in the future.
For 2012, Ireland is committed to a fiscal consolidation of €3.6 billion, to move our deficit down to a level of around 8.6% of GDP – still extraordinarily high by international standards, but now at least on a decidedly downward path. This consolidation is necessary, and it is painful.
Our job is to ensure that consolidation has as modest an impact on our growth prospects as is possible. We must also do what we can within the funding constraints to support growth in the domestic economy and to create more jobs.
In focusing on the important fiscal and economic issues, we must not lose sight of the fact that we live in a society, with real people, and with a duty of care to ensure that our actions are as fair and equitable as possible. In doing this, we must also recognise that sustainable economic recovery growth will be crucial to meet the future needs of our citizens and businesses. We must work harder than ever to increase job creation, to ensure that education, health and other services are provided as efficiently and effectively as possible, and to ensure that the needs of the less fortunate in this country are not disregarded.
But we cannot do this unless we now work tirelessly and strategically to work our way out of the economic straitjacket we currently find ourselves in, to regain full control of our own affairs and to do that as quickly as we can.
An important part of that process will be reforming public services to ensure maximum value for money, maximum "bang" for our limited "bucks"!
Comprehensive Review of Expenditure
The €3.6 billion fiscal correction for next year is not a small figure, and it will include both tax measures and spending reductions. As far as spending is concerned, the Government has decided to undertake a new approach. Earlier this year, we launched the Comprehensive Review of Expenditure, a root-and-branch examination of every area of public spending, to see where resources could be moved from old spending lines towards new priorities, and to see how the business of government could be delivered in new ways. Ministers and their Departments are now finalising their detailed analysis, and the results of this new exercise will be decided by Government over the coming weeks. A similar task has been undertaken on Capital spending, to examine where our more limited resources can be invested to maximise the impact on jobs and on supporting economic growth.
I should also say that the Comprehensive Review of Expenditure is not just focused on a one-time process. The Government Programme sets out our plans for a major overhaul of the way in which public expenditure is allocated from year to year. I am determined to move Ireland on from the traditional, one-year scramble around the Estimates and the Budget, with less attention to matters of substance, to scrutiny of our performance, to medium-term planning and structural reform. By the end of this year, Ireland will have put in place a new, modern Medium-term Expenditure Framework that will bring all of these matters to the fore.
I also believe that Departments and, indeed, Ministers, should be more accountable to the Oireachtas and its Committees on how they spend their allocations, and on their plans for delivery and reform.
Ministers and Departments should be delegated more authority from the Centre, to prioritise within their expenditure envelopes, and to be accountable to the public for their performance.
I believe that all of these things – performance, accountability, reform – will put Ireland and Ireland’s public servants in a good position to meet all of the challenges that will confront us in the coming months and years.
The Croke Park Agreement
Of course my Department is not just a Department of Expenditure – it is a Department of Public Expenditure and Reform, and the Reform dimension will play a crucial role is how we all, as public servants, deliver modern public services more efficiently and more imaginatively in the future.
Our challenge is to maintain critical frontline services to the greatest extent possible with the substantially reduced resources available, and I believe that the Croke Park Agreement is a critical lever for enabling change in this context.
It is clear that reform on this scale and level of complexity cannot simply be imposed on an unwilling workforce of 300,000 people. The reality is that we need the buy-in of staff at all levels across the Public Service if this is to work.
The real value of the Croke Park Agreement is that it has secured staff co-operation with the ‘tools of change’ – redeployment, reform and reconfiguration of services – which will be critical as staff numbers and resources continue to be significantly reduced.
The Agreement has its detractors – as we know. The challenge for Croke Park in the period ahead is to prove these critics wrong – to show that the Agreement can deliver, and is delivering, real and demonstrable change.
A promising start has been made – as shown by the Implementation Body for the Agreement in their First Progress Report published last June. The Body have shown that the Agreement is supporting a significant reduction in public service numbers which, in turn, is resulting in considerable sustainable savings on the Exchequer Pay Bill – some €289m in the first year of the Agreement.
At the same time, frontline services are, by and large, being maintained and, in some cases, enhanced. This has been possible because work practices are being reformed, services restructured and staff are being moved to areas of greatest need.
However, the greatest challenge for Croke Park lies ahead. The low hanging fruit has long disappeared and we now face quite stark policy choices. Resources will be squeezed further and staff numbers will fall, with significant departures expected in the coming months.
Yet our responsibilities to the citizens we serve remain the same and the demand for the services we provide has never been greater.
That is why delaying further reform is not an option. Without it, the Public Service will simply not be in a position to function.
We need to move forward quickly now to build on the solid start made under Croke Park. We must all work together – management, staff and their representatives – to ensure that the Agreement weathers the inevitable challenges ahead.
This means accelerating implementation of the sectoral agreements under Croke Park where much remains to be done. All sides must be fully committed to making the Agreement work. There is a key role and responsibility here for managers and leaders of the Public Service. Reform – its scope and its ambition – must be driven and led from the top.
Staff and their representatives are also integral to the process – they must be prepared to show flexibility and openness to change.
The reform agenda is not something that is set in stone. It must evolve continuously in response to changing circumstances. The Croke Park Agreement provides us with an effective framework for pursuing additional reform measures. Once decisions are taken on the Comprehensive Review of Expenditure, we will need to identify those measures that are appropriate to be dealt with under the Agreement and consult on delivering those changes in the way that the Agreement sets out.
I know that the burden of reductions in expenditure and staff numbers is being acutely felt by staff across the Public Service. I wish that further cuts were avoidable. But the harsh reality is that they are not.
While I acknowledge that the resolve of public servants, and particularly those on the front line, will be tested in the challenging period ahead, I hope that they will remain committed to the Croke Park process and, in particular, continue to respect and observe the provisions in relation to industrial peace which are so integral to it.
The Government has made clear it wants to honour the commitments it has made under Croke Park but we can only do so as long as there is full co-operation with the Agreement and with the implementation of the significant reform that is needed.
Reforming the Public Service
Turning to the overall Public Service reform programme, we face the most ambitious and far-reaching reform programme since the founding of the State.
The Programme for Government sets the basis for this change, with an ambitious range of commitments to Public Service Reform. But we must also integrate the commitments set out in the Programme for Government with those reforms that are already underway under the Croke Park Agreement, the outcomes of the Comprehensive Review of Expenditure and various organisation and sector specific reform initiatives.
The establishment of a Department of Public Expenditure and Reform underlines the importance which this Government attaches to the reform agenda and its potential for underpinning economic recovery. My Department will lead an integrated and coordinated programme of reform across the Public Service.
That is the key role for the Department of Public Expenditure and Reform – to integrate the various reform initiatives across the Public Service to ensure a strategic and concerted implementation programme. The reform programme will be led and coordinated by a new Reform and Delivery Office within my Department. This new Office will be led by Paul Reid, who was appointed last week as Programme Director. Paul has many years experience in leading change in eircom and in Trocaire. I would like to take this opportunity to wish Paul the best of luck in his endeavours and to say that I look forward to working with him in the coming months and years on this most challenging, but hopefully rewarding programme of reform.
A Vision for the Public Service
I understand that Robert Watt will be speaking to you later on "how" we will achieve our objectives. But before that, I would now like to set out clearly what we hope to achieve from the Public Service Reform programme. I believe that it is absolutely crucial that we have a clear vision of the Public Service of the future, and that this vision is communicated effectively to all public servants as well as to other key stakeholders, including citizens and business customers. Before setting off on any journey, it is important to know where you want to go!
All of our efforts must go into moulding a new Public Service, one:
· that has the flexibility, capacity and capability to respond to current and future challenges in an ever-changing economic and business environment, nationally and internationally;
· that does "better for less", providing real value-for-money for the Irish taxpayer by maximising efficiency and eliminating waste, including through a focus on the priorities emerging from the Government’s decisions on the Comprehensive Review of Expenditure;
· that is focused on improving organisational and individual performance, with public servants motivated by a commitment to excellence in administration and service delivery;
· that is focused on the customer, supporting citizens and businesses where and when they need it most, making the interaction with the State as simply and cohesive as possible; and
· that makes the most of online delivery channels, utilises shared services to eliminate duplication, and has an ongoing focus on improving business processes.
Our vision is for a unified and integrated Public Service where change itself is part of "business as usual", and not simply an add-on to someone’s day job.
Cultural change will also be essential to our success. We must reinforce the traditional Public Service values of integrity, impartiality and commitment. But we must strengthen other values too, including greater openness, accountability and performance at all levels, to develop a more customer-focused, flexible and efficient Public Service. We need to set clear targets, performance indicators, critical success factors and milestones for progress and we need to be able to show the results of our efforts along the way.
The Implementation Challenge
We are clear on what it is we want to achieve, and we are committed to change. Over the years, we have been very good at policy and planning, and that is still important of course. But now we have to ensure that we have an equally strong focus on delivery of reform. That is the challenge we face.
We are putting in place the structures and processes to facilitate reform. My Department is now finalising a new overall Public Service Reform Implementation Plan, which will be submitted to the Cabinet Committee of Public Service Reform in the coming weeks.
My Department has a key role to play in the reform programme. We will provide support to Public Service organisations in implementing reform, as well as directing resources and focus to priority areas when necessary.
We will also take the lead role in driving the implementation of cross-cutting initiatives, including shared services, eGovernment, procurement and business process improvement.
We are committed to this challenge. But we cannot do it alone. We cannot micro-manage change across hundreds of diverse organisations and 300,000 members of staff.
We need the cooperation and commitment of staff. We need the leadership and dedication of public service managers. We need the support and insights of public service users – citizens and the business community.
We should not pretend that we have all the answers, and we will be drawing on expertise from outside of the Public Service and from different jurisdictions, where necessary.
It goes without saying that we will be drawing on the expertise and experience of our colleagues in the IPA!
Conclusions
In concluding, I would just like to say that I am fully aware of the difficulties being faced by many people - including public servants – at the moment.
Change is not easy and it can be a difficult experience for some, but I am confident that public servants will rise to the challenge. I think there is a real appreciation among those working in the Public Service of the scale of the problems we face, and a sense of common purpose around doing what needs to be done to get us though it.
By continued hard work, and by working together, I believe that the Public Service can change, and that it can form the bedrock for sustainable economic and social progress in the years ahead.
Let me finish by wishing you all the best for an interesting and productive event this morning.
Thank you.