Mr. Ian Talbot:

In regard to business process outsourcing, the logic of the State putting in place a clear process for the delivery of certain routine services can be very efficient. It can be very efficient to get a private sector organisation to do that work. However, one has to get from where one is to where one needs to be before one starts to outsource. If one tries to outsource a process that is not clearly defined, understood and working, it will go wrong. The process we would like to see in place is one that has been clearly defined. Some of these things are working. For example, we learned last year that the Revenue Commissioners are using Abtran in Cork for much of their work around the collection of the local property tax. Apart from one minor glitch it has worked extremely well. That shows it can work. It was a brand new process. It was not redoing something that has already been done. Something we look at frequently is aspects of passport issuing and whether the State needs to carry out all the components of passport issuance. While that is not directly relevant to local authorities, I cite it as an example. Equally, there are plenty of examples in local authorities, such as motor taxation, where there is a much better system in place than a few years ago. Earlier in the week, Dublin City Council closed its motor tax office for a week as it could not cope with the volume of activity. That is not a good indicator that the process is working well. If a private sector organisation had to do that, great surprise would be expressed.

The key is to identify processes and tasks that could potentially be outsourced without any risk to the State. Sorting out those processes effectively, perhaps through a shared service culture, is crucial. I am aware that in local authorities many processes are being delivered through shared services. This leads on to the Deputy's second comment on the work that Kerry County Council is doing in the area of procurement. Once a process has been clearly defined and is working reasonably well, greater efficiencies can be achieved by taking certain aspects of it and outsourcing it completely to a third-party independent provider who will organise delivery hours and everything else. I hope that answers the Deputy's question about business process outsourcing and where we see it. Wholesale outsourcing is not our view of life; it is very much a steady and balanced process towards a better model. Jumping from where we are now to outsourcing will go wrong. In the past we have seen outsourcing opportunities go horribly wrong, as in the PPARS fiasco, because the proper process had not been followed. In retrospect it is clear.

On the procurement side, there is a centralisation of local authority purchasing into Kerry County Council for the past year or 18 months. A meeting has been scheduled with the organisation the Deputy asked about. We meet regularly with the CCMA and many county councils and our local chambers. Only a relatively small percentage of activity at State and local authority levels is going to central contracts, while a great deal is still being purchased locally. Individuals are being appointed as procurement managers but they need to have the right training, education, background and so on to coach them on how to actually manage a tender process properly. Our sense is that there are many good processes but the process is more important than the actual purpose, which is to buy something effectively. Much work is being put into it, and as a result it becomes far too cumbersome. I refer to the analogy I raised earlier - if one is going out to buy only a few staplers that are needed urgently, does one need a ten-page tender document? It is about an appropriate set of criteria and an appropriate process for purchasing. It is a worry. I am sure the County and City Managers' Association is concerned about what percentage of purchasing activity will ultimately have to be done through the central system in Kerry County Council versus local discretion. If 20% of purchasing was through the central office and 80% through the local office, that would be a tremendous support to, for example, SMEs in an area.

However, I am not sure how strict the guidance is or will be.

The Government must remember the cost of losing jobs, whether as a result of tweaking an extra few cent from a contract, resulting in a loss of jobs throughout the country, or of contracts going to a different jurisdiction where there is a different minimum wage and tax regime. It must look at the cost of this versus the cost in terms of social welfare and so on in jobs being lost in Ireland because too many contracts are leaving the country because of a marginal difference in price.