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

I move: "That the Bill be now read a Second Time."

This Bill is somewhat detailed and technical, but it is extremely important as it lays out the legislative basis for the establishment of the national shared services office, NSSO, as a separate Civil Service office under the aegis of the Department of Public Expenditure and Reform.

I will give the background to the Bill and to the office of shared services. The office was established on an administrative basis in 2014. It is charged with leading the shared services strategy and the implementation of such projects and operations within the overall public service reform and renewal context across the Civil Service. Government investment in shared services has been significant, with €28.5 million capital funding provided to date, reflecting the importance of this as a cross-cutting transformation initiative under the public service reform programme of 2011.

It is of the greatest importance to me and the Government that our work has a positive impact on the public. I believe shared services in the Civil Service is doing just that, by creating one team which takes daily operational functions common to all Departments such as finance and human resources and transforming them through process standardisation, in other words, by seeking to come up with a common way of doing important actions that are done tens of thousands of times per week or month across the Civil Service, and system consolidation in order that it is all done in one system or a smaller number of systems, with higher levels of automation and self-service. All of this is to allow Departments and civil servants to focus on their core business of providing better front-line services to citizens.

I have had the opportunity to visit the three main centres within which the shared services functions are located in Tullamore, Killarney and Clonskeagh. When one goes into these centres, one sees areas within these offices where all of the pensions to those who used to work in the Civil Services are being paid or one sees salary queries for all of the Civil Service with a few exceptions - I hope we will be able to bring all organisations on board across 2017 and 2018 - being dealt with within one office. This delivers savings to the State and allows us to do important work better and more efficiently. This will, in time, allow more cost-effective custom solutions and will ensure we are not duplicating effort across Departments. It will lower the costs of technology and allow staff who are involved in this work to do important work more effectively and efficiently.

This a customer-focused organisation. The centres themselves are staffed by civil servants who are becoming specialists in best-practice standards of non-core support services such as HR and payroll. They operate a single standard way of working and they are able to contribute, and respond quickly, to the introduction of new policies, such as the recently introduced paternity leave scheme. Furthermore, because data is consolidated and held centrally and standardised, it creates better insights for policy makers and provides improved management information for decision making. When compared with international standards, and indeed when compared with standards in the private sector both in Ireland and abroad, the State has made significant progress in a relatively short timeframe in delivering a really ambitious plan. This is all a result of strong support from both the Government and senior managers and leaders within the Civil Service.

The rationale for this office is to consolidate shared services into one office with better focus on the customer and an improved service culture, and to have this separate to the broad-ranging policy making functions of my Department. Establishing the NSSO as a separate entity will enable my Department to move away from operational matters and prioritise expenditure and budgetary policy over shared services. However, the Bill is clear that I, in my capacity as Minister for Public Expenditure and Reform, will retain the key supervisory role, empowering me to appoint and remove the chief executive, and allowing me, when necessary, to give direction to the office. Furthermore, the chief executive will be fully accountable to the Oireachtas, answering on service, quality, benefits and value for money.

Significant progress has already been made. The human resources and pensions administration shared services centre for the Civil Service has been in operation since March 2013. When the annual running costs are extracted, the saving in the cost of the delivery of transactional human resources was estimated at €3.7 million across the first three groups of Departments and offices that migrated to this new service. It now provides HR and pensions administration services for 34,500 public servants across 39 Departments and offices and employs over 300 staff.

The single payroll shared service centre, PSSC, for the Civil Service, which began operating in December 2013, now services 43 organisations and has 102,000 payees, including 57,000 retirees. Last year, the PSSC made over 2.7 million payments to the value of €3.24 billion. This figure is set to rise in the current year. The PSSC replaces 18 payroll centres that had different versions of payroll systems, which previously cost €21.4 million to provide payroll, pension, travel and subsistence payments. The business case estimates an annual cost when fully operational of nearly €16 million.

The development of a new finance technology solution for Government has also begun. The introduction of a single finance technology platform will replace 31 existing finance systems across Departments and offices and facilitate transaction processing in the financial management shared service centre. The centre which is scheduled to start providing financial management services in 2018 will use common technology and standardised procedures to deliver core financial management services to 48 identified Government organisations, all of which will be on board by 2020. It is expected to yield a sustainable reduction in the annual cost of finance of approximately €15.4 million through a reduction in the cost of support for finance technology and a reduction in the head count, equal to 145 full-time equivalents, required to provide financial management processing services. This will make a big contribution to fulfilling the dual mandate of managing expenditure and reforming the way in which we deliver services. It will deliver tangible improvements in the efficiency and effectiveness of the Government’s central finance function, which includes the processing of finance transactions such as payment of invoices, processing of receipts, fixed asset accounting, as well as the general ledger and appropriation accounts which are audited by the Comptroller and Auditor General.

Research shows that service delivery and high quality customer services are most effective where implementation is separate from policy making. For greater effectiveness, the NSSO requires the flexibility to respond quickly to operational matters. This is not always possible within an environment of measured pace and focus on policy making, as within the Department of Public Expenditure and Reform. Added to that, the demand on my Department from the NSSO is significant. In 2017, with an estimated 780 staff, the NSSO will be twice the size of the manpower of the Department of Public Expenditure and Reform. Creating the NSSO as a separate office also provides for the independence of shared service governance. It ensures clear accountability structures delivered through individual service agreements with public service bodies, which specify the terms and conditions upon which services are to be provided. Further to this, and in anticipation of the enactment of the Bill, the NSSO is formalising and modifying its current governance arrangements with the establishment of the NSSO board, as provided for in the Bill. A separate customer services group will be also established to oversee shared services performance across the service management framework.

Turning to the Bill, the legislation provides for the office to carry out corporate administrative functions on behalf of a public service body. The legislation will specify the chief executive officer of the NSSO as Accounting Officer. The NSSO board, which will have an advisory remit, is also provided for in the legislation. The Bill is set out in five Parts.

Part 2 allows for the practical structures in the establishment of the national shared services office. It confers on the office all such powers that are necessary in the performance of its functions.

Part 3 is concerned with the establishment, membership and functions of the board.

Parts 4 and 5 contain technical provisions dealing with transitional arrangements, and consequential and miscellaneous provisions.

I look forward to hearing the contributions from Members. It always has been envisaged that the NSSO would become independent in the delivery of its functions. Shared services is the biggest cross-Government change the Civil Service has experienced. I acknowledge that this type of project is not without risk. The statutory establishment of the NSSO will help us to meet the requirements of international best practice in this area. These requirements include clear accountability arrangements, clear funding arrangements, an appropriate degree of operational autonomy and a strong focus on the customer. I am sure the House will find that, with five shared service centres operational across the breadth of Government and others planned in the next few years, Ireland has an ambitious plan for investment in shared services.

I acknowledge the guidance, support and direction from the members of the shared services steering board and programme boards to the NSSO. Their sponsorship and work have been instrumental in assisting the delivery of this ambitious programme of work and bringing it to this point. I commend the Bill to the House.

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