Mr. Robert Watt:

I thank the Chairman and the committee for giving me the opportunity to make a short opening statement. I propose to set out the Department's strategic objectives and our performance in meeting these objectives in the past few years.

The Department of Public Expenditure and Reform has two broad strategic objectives: to support economic and social progress by managing public expenditure on a long-term, sustainable basis; and to introduce and support reform of the civil and public service, ensuring public administration and governance structures are citizen-focused, efficient and cost-effective. Linking these two objectives is an overarching focus on value for money for the taxpayer. Achieving value for money in how public services are delivered is central to the work of the Department and a key concern for the committee.

The Department's key function, since it was established, has been the control of public expenditure. As the committee will be aware, Ireland has met its deficit target in each of the years since the Department's inception and we are on track to do so again this year. We have sought to do so by shifting resources to where they are needed most and protect the most vulnerable in society. Much of our capacity to do this has arisen directly from the sacrifices made by public servants in their terms of employment.

As we return to more normal times, our function will not be to determine the level of spending other than to advise the Government on what we believe is appropriate but to ensure broad budgetary targets are met and that expenditure delivers the best possible value for money for the taxpayer. Many of the reforms we have put in place during the recession years will continue to bear fruit as the economy continues to grow. What are these reforms? First, we are seeking to remove the duplication of services and apply common standards. The provision of HR functionality by a myriad of Departments is more expensive and feeds into the silo-driven nature of government. Shared services is an obvious example of our response to this challenge, as are public service-wide pay agreements, sick leave and annual leave reform and the single pension scheme. The Civil Service Management Board and the Accountability Board are deliberate attempts to break down a culture that has evolved over many years. One of its first tasks will be to see how Departments co-operate better on shared tasks. This is ultimately not only about costs, although that is important, but also about improving the range of data available to the Government to enable it to make more effective decisions.

Second, we are seeking to encourage the development of policy-making on a more open and considered basis. Examples on which I will touch include more measurement of outcomes, more varied commissioning models, more use of specialists, an aggressive attitude to open data and reform of the budgetary process. Similarly, we are trying to broaden recruitment channels into the civil and public service.

We have enacted a series of Bills aimed at opening up our system. Freedom of information legislation has been restored and is being used more extensively. In the next year we will see the first impacts of the lobbying legislation.

The banking inquiry is operating under the terms of the Oireachtas inquiries Act. The Ombudsman has increased powers and is set to see his powers extended further into the health arenas. Whistleblowers now have a common framework under which to report and public bodies have been offered standardised procedures on how to proceed. While we have come a long way, the Department recognises that we have further to go.

Finally, and I think this is important, we are opposed to inertia. Through our reform and delivery office we act as the prodders of reform in other Departments and across the system. Our system has been under extreme pressure in recent years. In the private sector, activity slows when recession hits while in the public sector demand increases. I think in time our response to the crisis will be seen to have been particularly effective but it has undoubtedly been difficult to endure. We cannot go back to the old ways of doing things and must continue to innovate, change and reform. These tasks will become particularly challenging as we exit the excessive deficit arm of the Stability and Growth Pact and move to the preventative arm in 2016.

I stress for the committee the broad budgetary context we have experienced in recent years as it is the appropriate backdrop to discuss the reforms we have introduced. In 2014, gross voted expenditure was €54 billion. This is a reduction of more than €9 billion from the peak in 2009. Current expenditure over the period was reduced by almost 10% and capital expenditure was reduced by half. By identifying savings, driving efficiencies and working with Departments to better manage their cost bases, the Department has made a very significant contribution to the improved fiscal environment and enhanced value for money.

One source of significant Exchequer savings was in the area of public sector pay. As a result of financial emergency legislation, savings in the public sector pay and pensions bill amounted to €2.2 billion annually. Ms Oonagh Buckley, who is in attendance, was very involved in cutting the pay of her colleagues. She is very popular.