Wednesday, 13th April, 2011
Introduction
I would like to start by saying on behalf of the Irish Government that you are all very welcome to Ireland. I hope that you have enjoyed your time here and that your busy schedule left you time to sample just some of what Dublin has to offer.
I am delighted to have been invited to speak to you this evening. Having seen the comprehensive conference programme, and having spoken about the conference to Mary Lee, other members of the conference committee and the IRSPM Board, I am in no doubt that you deserve some downtime. And where better for that than the Jameson Whiskey Distillery.
The Importance of the IRSPM
I am informed that this week’s conference has been a great success and I am grateful to the IRSPM, and our colleagues in Trinity College, for bringing the conference to Ireland.
It is my view that it is crucial that Ireland continues to foster international relationships and that it contributes to international research and discussion. The IRSPM is a wonderful example of how we can all benefit from information sharing, learning from best practice and identifying emerging trends in public policy and management.
Conferences such as this provide a real opportunity to engage in dialogue. The world is getting smaller and vast swathes of information are available at the touch of a button, but I believe that it is only in actually meeting each other and through face-to-face discussion that we can gain a true understanding of the nuances and intricacies involved.
Trust in Public Administration
Following the recent General Election, I was appointed as Minister for Public Expenditure and Reform, the first time that a Cabinet Minister has had such a portfolio. Having a keen interest in public management and reform, it was already apparent to me that there was much to do to reform the institutions of the State - in terms of both political and Public Service structures and processes. In common with other countries, public confidence in our public institutions has been undermined in recent years and Ireland’s current crisis has shaken our systems of governance to their core.
However, if there any positives to be drawn from our current situation, it is in providing a new opportunity for reform, as an impetus for recovery. And, reform of the institutions of State, which I must stress includes the political and as well as the administrative, will be a cornerstone of that recovery.
The Role of Public Service Reform in Recovery
In 2008, the OECD undertook a comprehensive review of the Irish Public Service. Obtaining an expert international view on the Public Service was hugely beneficial. The key areas identified in the OECD report were the need for greater integration of the various branches of the Public Service, the more efficient use of resources, a greater customer focus and the need for better governance generally.
I believe that those findings remain valid today, and I will be targeting major reforms in these and other important areas in the coming months – the reform agenda is now centre stage and is recognised as being essential to the future of this country. We now have an opportunity to radically change what we do, and how we do it, and it is an opportunity that we must take with vigour and commitment.
Actions for Reform
The new Programme for Government contains the most ambitious and far-reaching agenda for reform in the history of this State. We know that the Irish Public Service is full of committed and hard-working individuals, in all sectors and at all levels. But we also know that many parts of the Irish Public Service, as they currently operate, are not fit-for-purpose. We need a leaner, more efficient, better integrated and responsive Public Service, one that can meet the needs of citizens and industry over the coming years.
The Spending Review
The Government intends to radically overhaul scrutiny of public spending in Ireland and, as part of that, to undertake a Comprehensive Spending Review of all public expenditure.
As I am sure you will agree, it is essential that public spending is measured against its effectiveness in achieving intended outcomes. It is not simply a case of being more efficient in continuing to do what we have always done. Rather, there is a need to assess what we are doing in the first place, and to re-design services and structures to meet the challenges of a new world.
There are a number of other key areas that the Government will be prioritising as part of our reform programme.
Integration
We want a more integrated Public Service. Customers don’t care which organisation delivers a particular service, as long as it is delivered efficiently. Meeting customer expectations will involve greater use of modern technology, and information-sharing as a facilitator of joined-up government. Also, public servants must be driven by an ethos of customer service, rather than being concerned with job demarcation and organisational divisions.
We also need to cherish and nurture our greatest assets – public servants themselves. We need to empower them to take ownership of the reform agenda and to play a pivotal role in service design and delivery. To do this, they must be equipped with the necessary skills, experience and supports.
Leadership
Leadership will be essential in this regard. We need leaders, not just at the highest levels in central government, but in every part of the Public Service. We need people who will drive change, in terms of processes and structures, but also in building a culture of professionalism and customer service.
The newly established Senior Public Service will play a key role in developing our cadre of Public Service leaders, by identifying where skill gaps exist, by ensuring a breadth of experience and by instilling an ethos of collegiality and cross-organisational cooperation. In developing the model for our Senior Public Service, we have drawn on international best practice and the experience of other countries such as Canada, New Zealand, the UK and in particular the Netherlands.
Improving accountability and performance
It is also important that public servants, including politicians, have clarity around their role and responsibilities. Legislative change in this area is on our agenda. Clear objectives need to be set and then individual and organisational performance must be measured to ensure that the outcomes match the expectations of government and the citizen.
We particularly plan to strengthen our Freedom of Information legislation and will have clear accountability arrangements that pin down accountability at every level from Ministers down.
Culture
I believe that we need to bring about a major cultural change in the Irish Public Service. You will be aware that culture is perhaps the most difficult thing to manage in any system, but it is also often the most important factor too. I believe that changing attitudes - to embrace a more open and accountable form of public service - is the key to reform. We must also place the citizen firmly at the centre of how we think and what we do.
But this will not happen by accident. We must drive this change. We must win hearts and minds by putting in place the structures and processes that will support public servants taking ownership of the change process. We must ensure that we do this in an intelligent and considered way, learning from the experiences of others and listening to people who know what they are talking about.
IRSPM as a Resource
And that is why the IRSPM is such a valuable forum. Constraints on resources - and I know that applies outside of Ireland too - mean that we must carefully consider everything that we do, and develop new ways of thinking and acting. Public policy must be implemented on a coordinated, strategic and structured basis, with economic and social analysis. It is essential that we are armed with the best possible information and expertise, and the IRSPM can be a source of knowledge that will facilitate better public policy making. It is my sincere hope that in continuously learning from each other, we can enrich all our lives.
I would like to take this opportunity to speak for a few moments on some of the wider challenges which we in this country are facing at this time.
Economy
Firstly, I would point out that Ireland’s fundamental strengths remain; we have a well educated, young workforce; high quality physical infrastructure; favourable demographics, a pro-enterprise environment and a strong high-technology exporting base. Exports increased by 9.4% in 2010 – with a broadening of growth from the multinational companies to include the indigenous exporting firms. The high-tech sector is doing well, driven in particular by the chemicals / pharmaceuticals industry. Trends in the Purchasing Manager’s Indices for manufacturing and services have also been encouraging this year. Both indices are on a broad upward trend, with the export orders index proving particularly strong. These indicators point to a continued strong performance in the exporting sector in the coming months which is built on the back of considerable improvement in competitiveness through a fall in pay costs and prices.
With regard to the domestic economy, it cannot be denied that we will continue to see weakness over the course of this year given the impact of the fiscal consolidation and the necessary unwinding of private sector imbalances. However, over the coming years, export-led growth will gradually filter through to the domestic economy. The nature of the export led recovery means that we won’t see a significant boost to the labour market until the broader domestic economy begins to recover.
With regard to specifics, I would like to add that Ireland will submit its Stability Programme Update to the European Commission by the end of April and this document will contain revised macroeconomic and fiscal forecasts encompassing all recent developments.
Public Finances
Last week, clear evidence was provided that the Government’s efforts to stabilise the public finances are now having a positive impact. The Exchequer Returns of revenue and expenditure, covering the period to end-March, showed that the overall Exchequer position was broadly in line with target. While tax revenues were a little below expectations due to shortfalls in income tax and VAT, on a positive note, corporation tax and excise duties outperformed their targets.
I acknowledge that the sheer size of the deficit position is formidable but we have a funding structure in place with our external partners which will ensure that we have adequate flexibility to put our public finances in order in a controlled and considered manner. It is important to point out that, in the face of adjustment on this scale and of what more has to be done, the Irish economy and its people have proven to be resilient and the return to economic growth, expected this year, bears this out.
Banking
Turning to the banking situation, the Government is firmly resolved to finally putting credibility back into the Irish banking landscape and will fundamentally reorganise the sector. The Irish banks will become smaller, more focussed on core operations, better funded and better capitalised and more focussed on serving the economy of the island of Ireland.
We will have two pillar banks emerging from AIB and Bank of Ireland with possible third pillars coming from foreign owned institutions. The Government will inject sufficient capital to ensure, first and foremost, that Irish banks will serve the credit needs of the real economy. Our plan creates capacity for the Pillar Banks to lend in excess of €30 billion over the next three years which will provide the foundation for recovery.
Banks are only one aspect of the restoration of economic growth in Ireland. We understand that we must do more to build up confidence in industry and consumers so that they feel confident in the future again and feel that they can spend for the future.
At the moment, the household savings rate is extraordinarily high – in large part because families and individuals are worried about the employment prospects. We must do what we can therefore to stimulate sustainable growth as well as enabling our young people to attain the potential of their talents and ambitions in their own country. To this end, the next key part of the Government’s programme will be the jobs initiative that we plan to announce before the end of May.
Overall, I want to leave you with the message that our recovery and renewal is already underway – we know what we have to do and we are committed to doing it.
Concluding Remarks
In concluding, I would like to thank Mary Lee Rhodes, the organising committee and the members of the board of the IRSPM for inviting me here tonight. I hope you will enjoy the rest of this event and that you will leave with a good impression of Ireland. For those of you travelling on to Queen’s University in Belfast tomorrow, I wish you well and I am sure that you will enjoy your time there as well. Thank you.