Jan O'Sullivan (Limerick East, Labour)
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Question 68: To ask the Minister for Health and Children the discussions she has had with the Health Service Executive on a redundancy scheme for management grades; if there are proposals to reduce the layers of management within the organisation; and if she will make a statement on the matter. [42595/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I have had a number of discussions with the chairman and the chief executive officer of the Health Service Executive about a targeted voluntary early redundancy scheme to be introduced for the HSE. Initially, the scheme will concentrate on surplus management and administrative staff. This will be extended to other staff in due course. It will apply to staff at corporate HSE and also to staff at hospital and community level. This decision was reaffirmed by the Minister for Finance in his budget speech on 14 October.

The HSE announced plans in July to modify its structures, including merging the existing hospital and community pillars at national and regional level. The purpose of this is to have clear lines of authority and accountability for delivering services to patients from national to local level, and between hospital and community services. Initiatives that lead to improved efficiencies and the reduction of administrative duplication at all levels of the HSE will be part of the scheme.

One such example is a plan to create single unified organisation structures between a number of hospitals. The aim of this model is to ensure that health service delivery is planned and organised on the basis of a single entity, thus optimising the use of resources, streamlining decision-making, harvesting the benefits of critical mass and avoiding wasteful duplication. Where two hospitals are to operate as a unified entity, there is no need for a duplication of payroll, personnel, IT offices and many other backroom services. This will lead to efficiencies of between 10% to 20% in administration costs.

Similar initiatives at community level will lead to equivalent efficiencies. As we continue to bring together services through primary care teams, there is an opportunity to reduce levels of administration and to facilitate more clinician-to-clinician engagement regarding the care of patients. I support the rationale for this model of shared services, which is very much in line with the health reform programme.

Jan O'Sullivan (Limerick East, Labour)
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I welcome the Minister's acknowledgement that she has established a dysfunctional organisation, comprising an amalgamation of a large number of separate entities, with a layer of management at the top. It is clearly not working and was not set up properly in the first place. I welcome the Minister's recognition in this regard and her acceptance that nobody could possibly have run it in a way that would work well for the public. Given that more than €14 billion of public money, along with the lives and health of our citizens, are in the hands of this organisation, one must question why it was set up in this way in the first place.

I have several questions for the Minister in the context of the announced changes. We have heard much jargon from her without any clarity in regard to what is envisaged to be done. Does the Minister intend specifically to take out layers of management grades, including some of the 800 staff members above grade eight? One could count on two hands the number of staff at that level before the HSE was established. What types of numbers are envisaged in terms of those who will be offered voluntary redundancy? Is the redundancy programme targeted specifically at the management layers as opposed to those who are taking people's names in clinics? When can we expect these changes to happen?

Mary Harney (Dublin Mid West, Progressive Democrats)
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The Minister for Finance said in his budget speech that his plan was to introduce a voluntary redundancy scheme across the public service. I hope the HSE scheme will be the start of the process in 2009. I am engaged in ongoing discussions on this issue with Professor Drumm and the chairman. It is not a matter for me to identify who should stay and who should go. That is a matter for those charged with the management of the organisation.

Jan O'Sullivan (Limerick East, Labour)
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It is the Minister's role to lead. There must be political leadership on this issue.

Mary Harney (Dublin Mid West, Progressive Democrats)
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I invite Deputy O'Sullivan to read what was said by the spokesperson for her party and those of the other Opposition parties when the organisation was being established, accusing me of not being sensitive to staff and so on.

Jan O'Sullivan (Limerick East, Labour)
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Our spokesperson emphasised the importance of setting up the organisation properly in the first place.

Mary Harney (Dublin Mid West, Progressive Democrats)
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Since the establishment of the HSE, there has been a reduction of 10% in the numbers working at corporate level in the health service, and an increase of 10% in the numbers of professionals, including nurses, physiotherapists, occupational therapists and consultants. I introduced the legislation providing for the establishment of the HSE. Many other countries are considering taking the same approach. I believed then it was the right thing to do and I still believe that.

Jan O'Sullivan (Limerick East, Labour)
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Such a body must be set up with proper management structures in place.

Mary Harney (Dublin Mid West, Progressive Democrats)
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Yes, but one must first establish the organisation and put people in charge before deciding who should go and who should stay.

Jan O'Sullivan (Limerick East, Labour)
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That is the wrong way around.

Mary Harney (Dublin Mid West, Progressive Democrats)
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All the best human relations experts in this State would confirm that this is the appropriate approach.

Jan O'Sullivan (Limerick East, Labour)
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Why did the Minister set up this huge structure in the first place? It is the equivalent of building a house and adding lots of rooms before subsequently removing those same rooms. What is needed is a simple but effective management structure where there is clarity as to who is in charge, instead of throwing up a general plan to take out personnel. Any changes should be focused in such a way that there will ultimately be a structure under which everybody can understand precisely who is responsible for what.

Mary Harney (Dublin Mid West, Progressive Democrats)
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It would not have been possible for any individual, no matter how extraordinary, to have sat down in any office and decided, when more than 50 organisations, including 11 health boards, were being brought together, which staff would be necessary to retain and which would not. It was known that the chief executive officers of the former health boards, since their roles were being abolished, would no longer be in position. Therefore, there was a redundancy plan for them. After that, it was important to establish the unified organisation and to assign it, under its new chief executive officer, Professor Drumm, and his team of managers, the responsibility to decide which personnel were required at the various levels and to learn from experience in this regard.

The recommendation in the reform analysis that was done, before I became Minister for Health and Children, was that there should be two pillars. However, my own experience and that of the management team is that this is not a good idea. We need integration between hospital and community rather than separate pillars with separate budgets. Yet the advice given to the Government in advance of the establishment of the HSE was that the model that was put in place was appropriate. Professor Drumm has been in office for three years. He is the appropriate person, together with his new human relations director and the other staff at his disposal and on the basis of the external advice he has availed of from individuals and organisations with expertise in this area, to decide, in accordance with the process the Minister for Finance will put in place, on the level of redundancy in the organisation in 2009 and onwards.