Speech by Minister of State, Dara Calleary TD, to the Public Affairs Ireland Conference

23 September 2010

Ladies and gentlemen

It is appropriate that we gather here today [Thursday] in Croke Park to discuss the Public Service Agreement and the Public Service Transformation agenda. Croke Park has seen many dramatic events since the Pay Agreement was concluded here last spring, not least the dramatic North South encounter that took place here last Sunday. Today, however, we have to come back down to earth as we discuss the implementation of the Public Service agreement and consider how it will contribute to Public Service Transformation.

The rapid deterioration in the public finances in recent years brings greater urgency to the need to improve the way in which services are provided by the Public Service. A more efficient, more productive Public Service can play a key role in putting the public finances on a more sustainable footing. That is in all of our interests.

The scale of the public finance problem cannot be overstated. In monetary terms, the Government has to borrow around €20 billion this year to bridge the gap between its income and expenditure; this is apart from banking-related issues. A substantial part of Government spending relates to public sector employment, so it is incumbent upon us to enhance efficiency within the sector.

As you are all aware, living standards in Ireland have been severely affected by the crisis – national income fell by nearly 15 per cent between 2007 and 2009, an almost unprecedented decline by international standards. Employment has contracted significantly, with job losses most severe in construction, retail and manufacturing. Having said that, labour market data published earlier this week do point towards some stabilisation; while this is to be welcomed, the Government is under no illusion as to the scale of the labour market problem.

Signs of life are becoming increasingly evident in our main export markets, and the competitiveness of our economy has improved. This will help to underpin an improvement in our exports in the months and years ahead.

Uncertainty, however, remains high. It is also clear that even with economic recovery over the next few years a significant hole will remain in the public finances. This is because the tax base is too narrow and the fact that property-related tax receipts will never return to levels witnessed in the mid-part of this decade.

To correct this, further fiscal consolidation measures will be needed in the forthcoming budget and over the medium term. This is unfortunate but necessary – economic recovery will not be possible unless we put the public finances on a sustainable path. The Government recognises that an efficient high performing Public Service is essential to such economic recovery.

It is true that the imperative to transform our public services has never been greater. But it is also true that this process has been underway for some time. Successive Governments have recognised the need to examine the way the Public Service operates. As a result we have had initiatives such as the Strategic Management Initiative and Delivering Better Government. These initiatives delivered tangible results across a range of headings, which provide the building blocks for the work that is now underway. The Strategic Management Initiative, for example, brought a new focus on customer service, with the advent of Customer Charters and Customer Service Action Plans, a theme that was taken up by both the OECD Review of the Public Service and the Task Force on the Public Service. Freedom of Information legislation and the appointment of an Ombudsman played a key role in bringing about greater openness and transparency in the system. In the area of human resource management we saw the introduction of performance management systems and greater use of open recruitment, while in the area of financial management we saw the introduction of capital envelopes and delegated sanctioning. There was a greater emphasis on better regulation as well as improved management and accountability, with the introduction of Strategy Statements and Annual Output Statements. All of this was supported by a greater and more effective use of ICT.

The Government, however, was mindful, of the need to test the work being undertaken and to subject it to external evaluation. It was for this reason that it asked the OECD to conduct a review of the whole of the Irish Public Service; the first time the OECD had undertaken a ‘whole of Public Service’ review. This review was completed and reported on in 2008.

The OECD gave a generally positive assessment of the Irish Public Service and the role it has played in our national development. It recognised that Ireland has continually sought to modernise and reform its Public Service systems and practices to ensure that they could continue to meet the needs and expectations of Government and citizens. The OECD also recognised that Ireland was looking for new directions in which to further renew its agenda for Public Service modernisation, so that it would continue to deliver improved outcomes for citizens, respond to shifting and complex societal needs, and support business in gaining competitive advantage, thereby contributing to economic growth for Ireland. But it recognised that there was much more to be done. It said that there is a need for a more integrated Public Service and a greater performance focus, with more information being gathered on outputs and outcomes and what has actually been achieved.

And it acknowledged that in a tighter fiscal environment there would be a need to prioritise spending within budgetary frameworks.

In November 2008, as the scale of the economic crisis facing us became apparent, the Government set out its agenda for Public Service reform in its Statement on Transforming Public Services which accompanied the Report of the Task Force on the Public Service. As well as addressing the recommendations of the OECD, the Government Statement dealt with the issues of controlling Public Service numbers and expenditure programmes as well as ensuring value for money.

The overall theme of TPS is a more integrated Public Service which has greater connectivity and linkages across Departments and agencies and delivers an improved level of performance for customers along with enhanced accountability.

With a view to addressing organisational performance, the Task Force recommended that the requirement to produce Output Statements – introduced under the Strategic Management Initiative but largely confined to Government Departments and Offices – should be extended to every State body. The allocation of resources should be linked to these statements and there should be an annual examination or audit. Responsibility and financial accountability should be devolved to the lowest possible level to improve organisational performance.

At the level of the individual, TPS recommends that the sort of systems of performance management that had first emerged under the Strategic Management Initiative should be extended across all sectors of the Public Service and existing systems should be strengthened significantly to provide real connectivity between performance ratings and actual performance.

Like the OECD Review, TPS puts the citizen at the centre of our public services and recommends that customer satisfaction should be defined and measured as a key performance indicator. It notes the action of the Government in locating responsibility for e-Government generally as well as the development of organisational targets in the Department of Finance, and says that this should be accompanied by administrative simplification, enhanced user choice and experience, and reduced collection of duplicate data. It also says that there should be greater use of shared services - both in-sourced and out-sourced - by organisations, particularly in the areas of ICT, human resources, procurement and financial management.

In the context of a more integrated Public Service, TPS envisages a single flexible labour market and talent pool with a facility to redeploy staff across sectoral boundaries to areas of greatest priority, with a Senior Public Service as an enabler for the development and mobility of leaders across the service.

The Government attaches the highest priority to the Transformation agenda. This is reflected in the arrangements in place for its implementation. The Taoiseach himself chairs a Cabinet Committee which includes the Ministers for Finance, Education & Skills, Environment, Heritage & Local Government, Health & Children and Justice & Law Reform. A Steering Group of Secretaries General meets regularly to prepare the work of the Cabinet Committee.

In March, the Taoiseach announced my appointment as Minister with responsibilities in the Departments of Finance and the Taoiseach to strengthen the political leadership of the change process under the direction of the Cabinet Committee. In addition, a Public Service Board, including members from outside the Public Service with appropriate experience and skills, will be appointed to support this work on a Public Service-wide basis and to bring greater focus and energy to the task of Public Service Transformation. Announcements about the role and membership of this Board will be made shortly.

There have been important developments in the way we approach our business as a result of the Transformation agenda, and progress has already been made under a number of headings. In the area of human resources, measures have been put in place which continue to contribute to the implementation of expenditure savings. These include the incentivised scheme of early retirement in the Public Service, the special Civil Service career break scheme and the shorter working year scheme, together with restrictions on the filling of Public Service vacancies by recruitment or promotion.

In addition, an eGovernment Strategy has been approved by the Cabinet Committee. This strategy highlights new approaches to overcoming some of the difficulties with putting certain services online and is designed to achieve an improvement in the use of electronic means for delivering public services. I should point out that, as a result of efforts made on priority targets agreed by the Government in the area of eGovernment, we have made good progress in the EU eGovernment Benchmark, moving from 17^th to joint 7^th of 32 countries.

A National Procurement Service has been established and continues to leverage the Public Service’s buying power by organising the procurement of common goods and services across the Public Service. Last year, in addition to achieving better value for money, savings of €27 million were achieved by public bodies with the support of the NPS. Savings of approximately €40 million are being targeted in 2010.

Work is underway on specific shared services proposals in the areas of human resources, pensions’ administration and payroll and financial Management. The aim is not just to make significant savings but also to bring about improvements in the delivery of services.

Work is also progressing in relation to the development of new performance and governance frameworks for State agencies, and the greater use of Service Level Agreements in this context.

Central to the Government’s Transformation agenda is implementation of the measures included in the Public Service Agreement. The Agreement provides a shared vision of how the Transformation agenda will be implemented, and gives both Public Service managers and Public Servants alike certainty and confidence as they face the shared challenges of restoring Ireland to economic growth and prosperity and delivering quality service to the public. The Agreement aims to provide a comprehensive agenda for Public Service Transformation and a framework for Public Service pay determination over the next five year period, during which time the Government is committed to restoring order to the public finances and reducing the deficit to less than 3% of GDP. The changes envisaged are real and meaningful and their implementation will contribute to the more efficient and effective delivery of services to the public.

Like TPS, the Agreement recognises that a more integrated Public Service that is leaner, more effective and more focussed on the needs of the citizen is required to contribute to the process of returning Ireland to economic growth and prosperity. In the context of reduced numbers and resources, the Public Service will have to be reorganised and Public Servants will need to show greater flexibility and mobility in working across traditional boundaries.

The Agreement recognises, as I do, the very significant contribution made by Public Servants to the recovery of the economy over the last two years. In a climate of extreme pressure on the public finances and downward pressures on Public Service numbers, senior management and their staff face the challenge of continuing to provide quality services to the public. Staff at all levels and across all sectors have to work within a smaller work force overall to deliver the same wide range of public services, and in some areas, such as the delivery of social welfare service, to deal with unprecedented levels of demand. This has been possible because of the flexibility shown by all in co-operating to address priority needs.

While the Croke Park Agreement has the potential to be a powerful enabler of change across the Public Service, the full benefits of the agreement will only be achieved if the Government and Public Service managements across the system are active in driving forward the TPS agenda. The Government is fully committed to ensuring that this happens.

Early progress on the implementation of the Agreement will be important and you will hear later this morning from PJ Fitzpatrick about the role of the Implementation Body in driving this implementation.

Change in organisations requires trust and leadership. We need leadership at all levels of our organisations whether at the front line, at middle management or at senior levels. The Government will shortly establish the new Senior Public Service to centrally manage and deploy top public servants. This will promote greater mobility at senior levels in the Public Service, and ensure the talent pool for filling leadership vacancies is broadened.

Shortly after being given responsibility for driving forward the Transformation agenda, the Taoiseach asked me to meet Ministers from right across the Government to discuss how best to bring about change in the Public Service. I wanted to hear from Ministers the challenges they face in their sectors and seek their views on how best to address them. It became clear from these meetings that there are issues which are specific to each sector, but the common theme across all sectors is the delivery of public services to the highest standards in a coherent fashion. To this end we will have to improve the integration of services.

In a similar vein, there is recognition that the redeployment of staff across the Public Service is vital to ensuring the improved delivery of services. It is true to say that there are areas in the Public Service which need improved staff resourcing while at the same time there are areas where the needs are less pressing. It is important to address these imbalances and redeployment will go some way to doing this. There are already instances of successful redeployment we can point to. The forthcoming Estimates decisions will clearly impact on the scale and shape of our services and organisations, and with the appropriate detailed work (circulars) on redeployment completed in almost all areas, we should work as soon as possible to reassign people to higher priority tasks.

However, we need to break down the unnecessary distinctions between different types of Public Servants, through legislation if necessary, and through the use of much more flexible redeployment. The initiation of the Senior Public Service will promote a shared approach across the leadership of the Public Service to the pursuit of Government priorities.

Overall, we need more joined-up Government to respond to the needs of citizens as they live their lives and go about their business.

In conclusion, the Public Service has a critical role to play during these difficult times in the process of national recovery and in providing services to the citizen. It must display flexibility in being able to respond to rapidly changing demands, and it must manage to do this with significantly fewer resources. The Transformation agenda, together with the implementation of the Croke Park agreement will ensure that the Public Service is equipped to be capable of meeting the challenges of the future.

ENDS

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