Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I am joined by my colleague, Minister of State at the Department of Public Expenditure and Reform, Deputy Eoghan Murphy, and officials from my Department. I am pleased to have the opportunity to present the 2016 Estimates for my Department’s group of Votes. The group comprises a significant number of Votes and is as follows: the Vote for the Department of Public Expenditure and Reform, the Vote for the Office of Government Procurement and the Vote for the National Shared Services Office; the Votes for a number of offices under the aegis of my Department – the State Laboratory, the Public Appointments Service and the Office of the Ombudsman; and (iii) the Votes for superannuation and retired allowances, which covers Civil Service pensions, and for the Secret Service.

The Vote for the remaining element of the public expenditure and reform, PER, group, that is for the Office of Public Works, was dealt with by the committee this morning. The structure of the PER Vote remains unchanged in 2016 from last year, with two strategic programmes focused on public expenditure and sectoral policy and public service management and reform. The requested resources for each programme, in terms of staffing and funding, are set out in part III of the Estimate.

As regards the first of these programmes, the objective of which is to manage public expenditure at more sustainable levels in a planned, rational and balanced manner in support of Ireland’s economic performance and social progress, the committee will be aware of the timetable envisaged by the Government in regard to the 2017 Estimates process, including the forthcoming national economic dialogue, the summer statement and the process of arriving at the various components of budget 2017 due in October.

The 3% increase in gross spend on this Vote to bring total gross allocation to €45.9 million is required primarily in the second programme of my Department – public service management and reform, which has as its objective “to formulate and promote policies which drive efficiency, effectiveness and reform across the public service”. The additional allocation is largely related to the provision for investment in a resilient and robust technical platform on which to deliver build-to-share applications and Government cloud services as part of the remit of the Office of Government Chief Information Officer. Provision is also made for funding of the Civil Service learning and development shared services project, which will deliver a shared model of learning and development across the Civil Service.

In the above regard, I emphasise that public service reform has been, and will continue to be, an essential element of how we respond to the challenges and opportunities in building for our future. The public service reform plan 2014-2016 has a strong focus on service improvement and the delivery of improved outcomes for service users. Substantial progress has been made across a range of areas in terms of reducing costs, delivering better value for money and improving services. A comprehensive progress report on the implementation of the Public Service Reform Plan 2014-16 was published in April.

A Civil Service Renewal Plan was published in October 2014 and the implementation of this ambitious three year plan is leading to major changes right across Departments and Government offices. The plan provides a framework to deliver a more unified, responsive, professional and open and accountable Civil Service, with the aim of providing a world-class service to the State. It is supporting the future development of the Civil Service so that it has the capacity and capability to meet demands. Significant progress has been made. However, we must build on this progress and maintain a focus on public reform over the coming years. It is essential that as we move forward to recruit more people into the public services, plans for which are under way, this runs in tandem with further continuing efforts to reform how we deliver public services. Recruitment and reform must continue to go hand in hand. In addition to overseeing the final phase of the implementation of the current reform plan I have asked my Department to initiate the development of the next phase of public service reform.

In tandem with the developments which I have just outlined, the reform and delivery office, RDO, within my Department is overseeing and driving the reform programme across the civil and public services. It is, of course, often necessary to invest in the short term to facilitate change and savings in the medium term. For this reason, the RDO has been allocated €1.4 million in 2016 from the reform agenda fund. It has been used to fund the following - conduct the Civil Service customer satisfaction survey; complete the next phase of implementation of the Civil Service renewal plan; publish the first datasets on the non-profit sector on the benefacts website; and support the delivery of service improvements through alternative and innovative delivery models. My Department will use these resources to continue to work with all Departments and offices.

I will now turn to the issue of public service pay. From 2009 to 2013 the Financial Emergency Measures in the Public Interest Acts, FEMPI, introduced pay reduction measures. These measures, together with the public service pension reduction, PSPR, are estimated to have resulted in over €2.2 billion in direct reductions in public service remuneration and pensions annually. Any sudden elimination of the FEMPI measures is not feasible.

The Government has, through the negotiation and agreement of a financially prudent public service agreement on pay and related issues, provided for a gradual unwinding of the FEMPI measures as they apply to public servants. The terms of this agreement, the Lansdowne Road agreement, were accepted by the vast majority of public servants and are being implemented under the FEMPI 2015 Act with effect from 1 January 2016 at a full year cost of €844 million by 2018. Additional provision has also been made for the amelioration of the PSPR for public service pensioners at an additional full year cost of €90 million in 2018.

The programme for Government contains a strong commitment to the Lansdowne Road agreement. It is the best way forward to meet the needs of those who work in our public service and of those who depend upon them. In addition to progress in public service reform, we have been pursuing a wide-ranging reform programme aimed at delivering open, accountable and ethical government underpinned by a transparent, efficient and effective public system to help rebuild trust in Government and in the institutions of the State. Progress made includes the commencement of the Regulation of Lobbying Act 2015 on 1 September 2015. There are more than 1,300 organisations and individuals who have registered, and just over 4,500 returns have been submitted to the register. A substantial review of the effectiveness and efficiency of Ireland’s current ethics framework has been undertaken, including consideration of the recommendations of the Mahon and Moriarty tribunals and other relevant recommendations, as well as international best practice. I expect to publish a draft scheme of a Bill later this year, following the approval by the Government. My Department is drafting the Data Sharing and Governance Bill on the basis of heads agreed by Government in July 2015. The aim of this legislation is to simplify the legal basis for data-sharing between public service bodies while delivering stronger governance arrangements to protect the rights of individuals. In November 2015, the Department published the corporate governance standard for the Civil Service. This followed from a commitment in the Civil Service renewal plan to strengthen corporate governance in the Civil Service in line with international best practice. Departments and offices are required to develop their governance frameworks in line with the standard which requires them for the first time to document and publish their governance arrangements, the core elements of which are identified in the standard. These frameworks, which have now been published, set out how each Department and office does its work. In addition, my Department is leading on Ireland’s open data initiative, which forms a core element of the Office of Government Procurement’s national action plan. That office is an important element of Government’s overall reform programme and is tasked with delivering increased value for money, more accurate and timely data, and improving the capacity and capability of procurement across the public service. The net funding allocation for the Office of Government Procurement, OGP, in 2016 is estimated at €19.982 million, compared to €18.974 million in 2015. A portion of this funding reflects budget transfers from the national public procurement policy unit and national procurement service, functions that previously resided in my Department’s Vote and in the Vote of the Office of Public Works.

The office continues to lead the implementation of the programme for procurement reform. In the three years to the end of 2015, the OGP and its partner sector sourcing organisations in health, education, local government enabled procurement savings in excess of €160 million. Projected savings for the next three years are in the range of €80 million to €100 million per annum for the programme as a whole. The office is increasingly called upon to support key priority programmes such as the re-negotiation of the pharmaceutical agreement with industry, rapid build housing, the Garda safety camera network and large scale IT projects.

The national shared services office within my Department is leading the shared services strategy and the implementation of such projects within the overall reform and renewal context. This office is directly responsible for overseeing shared services projects within the Civil Service and provides expert guidance and support to other public service sectors in progressing their shared services commitments. Solid progress has been made: PeoplePoint, the Civil Service human resources and pensions administration shared service centre, now services more than 33,300 employees across 38 public service bodies; the payroll shared service centre services 92,000 payees, including pensioners, from 41 organisations and the financial management shared services project has commenced the design phase. The centre is scheduled to begin providing financial management services in early 2018 and by 2020 will service 48 public sector bodies. A provision of €37.9 million is sought for Vote 18, shared services. These areas require upfront investment but will yield economies and efficiencies in the medium term.

PeoplePoint will become fully operational in 2016 while the transitioning of payroll shared services will reach a conclusion by November 2017. The financial management project will pilot next year and will be fully operational two or three years after.

Vote 12 refers to the superannuation and retired allowances. It primarily provides for pension and retirement lump sum costs for civil servants, including prison officers, and pension payments for dependants. Year to year variations in expenditure on this Vote is primarily driven by the number of individuals who will opt to retire before reaching their compulsory retirement age and whose years of service and grade and-or pay level are variable and uncertain.

The majority of persons covered by the Vote, once they reach the age of 60, may opt to retire at any stage before reaching compulsory retirement age, which is generally 65. Some people may opt to retire earlier than 60 under the terms of the cost neutral early retirement arrangements whereby they may receive an actuarially reduced pension. In addition, there can be retirements due to ill health as well as persons becoming eligible to claim preserved pension benefits arising from previous employment within the Civil Service. The Estimate that I am proposing today involves a net provision of €391.88 million and represents an increase of just over €5 million, or 1%, on the net Estimate 2015.

The select committee has been supplied with detailed briefing by my Department's officials on the various Votes in the PER group, including those for the sub-office of my Department. As I mentioned earlier, the Vote for the Office of Public Works is handled separately by the select committee. I thank the Chairman and members for their time. I will be happy to answer any questions that may arise.