Mr. John A. Moran:

I thank the Chairman. First, I will introduce some of my colleagues who are present today: Mr. Gary Comiskey, acting chief operations officer of the Department; Dr. Nicholas O'Brien, head of our international and economic relations group; Mr. John Hogan, newly appointed head of banking policy; and Ms Valerie Robinson, who works in the corporate office. I have asked them to come in case we need to answer questions on particular areas. On behalf of the Department and on my own behalf I offer my congratulations and best wishes to the Chairman on his recent appointment. More generally, I thank the committee for the opportunity to speak today. This is the first opportunity I have had since my appointment in March to update the committee on the implementation of our statement of strategy. When the Department last published a statement of strategy, it covered the period from 2007 to 2010.

During that time there had been a significant change, both in the context in which the Department operates as well as in the Department. My first job as Secretary General was to assess, with the management team, the effect of the changes on the Department and on its work over the following couple of years. We agreed that the previous strategy statements were no longer appropriate for the Department. We took the unusual step of adopting a revised statement of strategy in the middle of the three year period. We committed ourselves to a heightened level of external and public communication. We invited stakeholders and media to a presentation in the Department to explain the document that has become our revised statement of strategy and also to hear their views and to answer their questions. Today's meeting provides me with an excellent opportunity to discuss with the committee the Department's new role and how we have progressed with the implementation of the strategy during the past six months.

To help with today's discussion I have put together some slides which highlight the Department's priorities and our achievements in recent months. These slides will be published on our website later this afternoon.

By way of context and as I mentioned in the statement last March, it is important to note that in recent years the Department, of necessity, has focused on crisis management. It has done so with very limited resources for the tasks at hand. The job of rebuilding the economy is ongoing but significant progress has been made to restore stability. We did not want to be merely reacting to the latest crisis event. This is a natural reaction when a crisis hits. The statement of strategy sets out that the management team is focused on a parallel effort to develop and implement longer-term measures which will contribute to enhanced confidence and deliver sustainable growth in our economy. I was very anxious to build on the positive aspects of the past. Tremendous work had been done by the team to deal with the storm which hit the country in recent years. At the same time, however, we all recognised that improvements could be made and were required.

I wish to make the important point that since my appointment, I am very grateful to all the staff in the Department for their help and support with our transformation agenda. I am often asked by people from outside the Department how things are progressing since my appointment. I can honestly say that the willingness to be flexible and adaptable on the part of the Department's staff has equalled anything I have seen before, including in the private sector.

I refer to slide No. 3. We agreed that our mission should reflect this forward-looking focus. The Department's mission is to manage Government finances and to play a central role in the achievement of the Government's economic and social goals having regard to the programme for Government. In this way we will play a leadership role in the improvement of the standards of living of our citizens. An important point to underline is that the Department's business is more than just to administer the troika programme. The Department must play a central role in developing and planning the future direction of our economy to the betterment of standards of living for all citizens.

To make this real and more specific, the management team and I dropped down a level and we agreed clear goals which we can use to measure our progress and to demonstrate the success of our efforts. At the time everyone seemed to like the number five so we boiled down our priorities to five principal goals for our Department. These are outlined on slide No. 4 of the presentation.

The first goal is to have sustainable and balanced growth in the domestic economy. The second goal is a sustainable macroeconomic environment and sound public finances. The third goal is an improvement in the living standards of our citizens. The fourth goal is a return to the international debt markets to achieve an exit from the troika programme. The fifth goal is to complete the restructuring of the banking sector.

The order of these goals is no coincidence. As I have stated, support for economic growth is a key priority for the Government. Growth is the essential element for a successful exit from the current crisis. Slide No. 5 sets out the key guiding principles which underpin our approach to achieving these goals. These are very important principles and I will return to them later in the discussion.

It is appropriate to deal now with slide No. 6. It shows the changes made in the structure of the Department, taking into account our own observations and those of the Wright report. The former Department of Finance has been split into two Departments, the new Department of Finance and the Department of Public Expenditure and Reform. Both Departments have important and complementary roles in implementing the programme for Government and other Government policies. In light of these new responsibilities we examined our internal structures and reviewed how treasury departments in other countries operate. We refined our organisational structures into four policy divisions and two divisions that cut across the entire operation of the Department. The four policy divisions are as follows: the international division, which has been enhanced and to which I will return later; the financial services division, which is focused on the restructuring of the banking system and regulation of the financial sector to prevent a recurrence of a crisis; the fiscal division, which now integrates more closely the budget and tax policy functions; and the economic unit, which is a new expanded section, to which I will come back.

We have also introduced two support offices, a corporate office and a finance office. The purpose of the finance office is to introduce dedicated specialist resources to ensure the proficient delivery on the Department's financial, legal, risk and compliance objectives. In the aftermath of the well-publicised control failures in the Department, I decided it was essential to prioritise the build-out of greater control and risk functions to drive the recommendations of the various reviews of our systems and controls. The corporate office, in parallel, plays a central role in the roll-out and implementation of our statement of strategy. It is primarily responsible for helping the Department to provide new management information and knowledge sharing, to improve communications both internally and externally, to build on good project management principles, and to implement these across the Department.

On the question of governance, good governance requires consistent effort and improvement. As part of our review of the Department we recognised the need to build on the good work done in the past and to enhance our governance structures further to allow the Department to progress. We started at the top with the management advisory council. We have improved and changed the MAC agenda. Rather than holding four similar meetings per month, we now have one in-depth meeting per month, which I liken to a company's board meeting, with three shorter meetings which focus on the week's events. We held a monthly meeting last Monday. At the meeting the MAC reviewed a newly collated comprehensive set of management information for the Department. This monthly management pack provides information on the finances of the State, the finances of the Department, the performance of the economy, detailed human resources information and other information from across the Department. This type of information is not new. Organising the presentation and review of the information in a systematic and consistent way, however, is new and is a significant development for our operations. Other non-MAC member colleagues, as necessary, present the sub-topics and hear management's views at first hand.

We have identified the need for greater challenge as one of our guiding principles across the work of the Department. In this regard we have introduced a number of other initiatives. There are four new MAC sub-committees dealing respectively with risk, policy, transformation, and people and culture. These sub-committees allow greater in-depth analysis than could be carried out during MAC meetings. They are supplemented by ad hoc groupings of staff both within and outside the MAC. These groupings make recommendations for improvement in areas such as internal communications or use of information technology.

The shorter weekly MAC meetings permit us to follow that discussion with a one to two hour peer review and challenge session whereby the management team as a whole considers on a periodic basis the direction and focus of one of our key policy initiatives. At present, we focus on EU strategy, the performance of the economy, measures for growth, and the risk and funding of the State. In addition, divisions are now holding their own challenge sessions in order to validate and assess their policy initiatives. For example, after each monthly management meeting with bank management, the shareholder management unit runs peer challenge sessions, which are not confined to staff in the unit, on the information presented by the banks and the steps they need to take during the upcoming month.

We have also embarked on a new business planning process using forward-looking business plans and a weekly reporting which features the top five priorities in each area. The business plans set out the priorities for the quarter and for the longer period. The weekly reporting gives progress on same in the last week, such as matters dealt with in the previous week, matters to be dealt with in the following week and any obstacles to progress which arise.

This enables us to ensure that we remain on course. It will play an important role in the future in assisting us in engaging in resource management over the various quarters of the year as priorities shift.

We have also worked to ensure that we have a stronger audit committee. We appointed two senior officials to this area, namely, an assistant secretary general and a principal officer with previous internal audit experience. I was anxious that we should include somebody who sits on the MAC in order to connect the work of the audit committee directly with that of the MAC. Senior personnel are now presenting to the audit committee on their own work areas. This is another new departure. Some of the other examples of the changes we have made to our governance structures are set out on the slide 8.

A second key focus area for the Department is the development of a much more outward-focused business model. On slide 9, we have set out some examples of what this means. I will briefly elaborate on a couple of these. With Dr. O'Brien's assistance, we have established a new international economic relations unit, the staff of which includes two diplomats on secondment from the Department of Foreign Affairs and Trade. This has reinforced our bilateral contacts with other finance ministries across the EU and elsewhere and is an important element in the context of cross-departmental co-operation. It also facilitates greater co-operation with our embassies abroad. The Department is playing a more active role in the context of foreign trade missions. For example, Dr. O'Brien and I accompanied the Taoiseach on a trade mission to China earlier in the year. During that trip, simultaneous and overlapping programmes of a cross-departmental and cross-agency nature were run on various fronts each day. Catch-up sessions were held every evening in order that we might share notes and plan for the following day.

I am certainly not acting along in respect of the outreach effort. In that context, I wish to provide the committee with some indication of the size of the challenge we have set for ourselves. Since my appointment as Secretary General last March, I have had more than 400 individual meetings with representatives from external bodies, foreign treasuries and other relevant organisations. Those meetings have taken place in Ireland, across Europe and elsewhere as we have sought to engage on as wide a basis as possible. While over 60 of these meetings involved foreign treasury and similar officials, the other 340 were with a range of representative groups, companies - large and small - professional bodies, financial companies and investors and representatives from State bodies, including from domestic and foreign academic institutions. Media briefings have also been held and there has been an extensive programme structured public speaking engagements throughout the country and internationally.

On slide 10, we have set out some of the key developments in respect of the improved level of economic analysis within the Department. As a key part of our reform programme, a new and expanded economics division has been established. This division is resourced by expert economists in both the macro and microeconomic fields, with experience drawn from the private sector, international financial institutions and the public sector. The Department has also recruited a number of significant graduate level economists who are trained to masters level. Since June last, we have increased the number of staff who possess economics qualifications within the Department from 74 to 99. I know I will embarrass the individuals involved by saying this but it is important that there should be an appreciation of the people we are employing and that we should celebrate success. At a recent all-staff quarterly meeting I had the pleasure to congratulate three of our economics staff who received firsts in their studies. These studies were in the MSc in investment treasury and banking DCU, the MA in economics at UCD and in the MA in economics and policy at NUI Galway.

The expansion of the economics division also responds to one of the recommendations contained in the Wright report, which reviewed the Department in 2010 and recommended that it needed to increase significantly the number of economists on its staff. We are still in the early stages of establishing this new and expanded division but some of the work already being undertaken by it is set out in my submission to the committee. I expect various studies, such as a review the section 481 film tax relief scheme and a profiling of the SME sector within Ireland, to be completed and published shortly. Like the remainder of the Department, the team in the economics division is also committed to greater interaction and communication with stakeholders. To this end, it publishes on our website a monthly economic bulletin, participates in a growing number of meetings and, beginning in the next couple of months, will publish more commentary and analysis on key economic challenges.

None of what I have outlined will work unless all of those in the public sector work together on the same objectives. The final area on which I wish to focus is how the Department is working to facilitate this. On slide 11, we have set out some examples of the roles we have played in cross-departmental initiatives. For example, the Department of Finance chairs the steering group - which comprises senior representation from other relevant Departments and the Central Bank - to drive and oversee the implementation of the Government's strategy to assist those in mortgage arrears. Another cross-departmental initiative is the SME funding consultation committee, which I chair, which meets on a monthly basis, and which includes among its membership representatives from various Departments as well as those from industrial organisations and the banking sector. The role of this committee is to work on solutions for the key issue of funding for SMEs. This is a major priority for the Department. We have also participated in the initiative orchestrated by the Minister of State with responsibility for small business, Deputy Perry. In that context, we have attended seven regional meetings throughout the country in order to discuss access to bank credit with key local stakeholders. Our deepening engagement with the European Investment Bank, EIB, is another example of the result of successful co-ordination. On this occasion, between our Department, the Departments of Public Expenditure and Reform and Jobs, Enterprise and Innovation, the NDFA and Enterprise Ireland.

While there have been many positive developments in recent months significant challenges remain for the Department as we endeavour to implement our revised statement of strategy. The challenges to which I refer include those of an external nature over which we have more limited control, such as difficulties in the world economy. These could impact on the Department's ability to stay on track. I hope, however, that the successful and continued implementation of our plans will position us to be better able to identify, assess and respond successfully to these challenges should and as they develop.

In summary, what I have outlined provides a snapshot of much of the work we have done in the past couple of months. In the side deck which has been circulated, members will be able to see some of the other initiatives in respect of which we are working actively. I would be happy to discuss these areas in more detail with them during the course of the meeting. I thank members for their attention and I am happy to respond to any questions they may wish to pose or observations they may wish to make.