Seanad debates

Wednesday, 2 July 2008

OECD Report on Integrated Public Service Reform: Statements


12:00 pm

Photo of Martin ManserghMartin Mansergh (Tipperary South, Fianna Fail)
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I am pleased to be in the House today to discuss the OECD review of the public service, Towards an Integrated Public Service. The public service has served this country exceptionally well. Those involved deserve a great deal of credit for the peace process, Ireland's successful engagement with the European Union — even if temporarily disrupted — and the fantastic economic and social progress of the past 20 years, the miracle being that it was sustained for so long. The present sharp slowdown in the economy is not a recession, at any rate so far. Central Statistics Office figures published yesterday showed a 0.8% increase for the first quarter of 2008 in gross national product, which has always been regarded as a truer measure of performance than gross domestic product. A recession requires two successive falls and there has not even been one fall in GNP.

There are commentators who would, in a slightly vindictive spirit, attack the public service as the first item in an economic reform programme. It is salutary to be reminded in the report that general Government employment at 14.6% of the total labour force in 2005 is comparatively low by OECD standards. One needs to bear that in mind when one hears commentators or groups talk about the immense burden the public service puts on the rest of the economy. Naturally, we must avail of efficiencies and cost savings where possible.

The OECD review marks an important step in the ongoing modernisation of the public service. I say "ongoing", because modernisation is a continuing process in the public service which dates back at least to the strategic management initiative launched in 1994. That set the agenda for change in the public service. The objectives were to ensure on an ongoing basis that the public service would make a greater contribution to national development, be a provider of excellent services to the public, and make effective use of resources.

The report, Delivering Better Government, published in 1996, gave clear direction to the programme for change and modernisation. It expanded on the framework set out in the strategic management initiative and outlined an extensive modernisation process for the public service built around key organisational themes, including greater openness and accountability, a mission of quality customer service and the efficient and fair operation of simplified regulations. During that time our public services have been expanded, improved and reformed. There have been significant improvements in the areas of financial management, human resources management, regulatory reform, e-Government initiatives, and customer service delivery. There has been a significant step change not only in the way the public service deals with its customers but also in the manner in which it organises its internal business.

The implementation of the modernisation agenda has been, and continues to be, driven by various partnership agreements across the public service. The current partnership agreement, Towards 2016, builds on the progress made under previous agreements and ensures continued co-operation with change and modernisation initiatives as well as improvements in productivity right across the public service. The agreement provides an important framework for meeting the economic and social challenges ahead and builds on the achievements of previous agreements. The Government is committed to developing the modernisation agenda through the partnership process, which I always staunchly defended when a Member of this House.

No organisation, public or private, can afford to stand still. While significant progress has been made, many more changes are both awaited and needed. At a time when the Government had been investing unprecedented levels of resources in public services, problems remained with delivery on the ground and maximising the return on investments. After a decade of improvement there was a need to take a fresh look at the public service. That is precisely why the Government asked the OECD to undertake a review. The review was not an external audit by the OECD of the public service. Instead, the Government invited the OECD to conduct a comprehensive review of the public service as a whole. That innovative approach was new not just for Ireland but also for the OECD, which is now moving to replicate the approach in other countries. That puts Ireland at the leading edge of developments in public service modernisation and creates a model that will be copied elsewhere.

What the Government wanted the OECD to do was to examine how its priorities and decisions are translated into services and outcomes for citizens and how these processes can be improved. While much change has already taken place in the way we organise our business, there is a need to ensure delivery on the ground. The OECD review was intended to highlight what is and is not working and help the Government make better informed choices about where to allocate resources.

The OECD was given two tasks: first, to benchmark the public service in Ireland against comparable countries and to identify appropriate measures to compare the productivity and effectiveness of the Irish system, or discrete elements of it, against comparable international best practice; and second, to make recommendations on future directions for public service reform which would support the Government's drive for delivery of optimum services to the citizen, within existing resources, and contribute to sustainable national competitive advantage. Put simply, the Government wanted to know how the decisions it is making at Cabinet are translating into services for the citizen and how the process can be improved. Where things are not working properly, we need to know.

The review took place over a period of 16 months and surely must count as one of the most comprehensive reviews of the public service ever undertaken. It was conducted by the OECD's public governance and territorial development directorate through a multidisciplinary team of OECD staff members and national experts from a number of OECD countries. The review was overseen by a high level steering group, chaired by the Secretary General to the Government, and assisted by a project liaison group which was established to support the OECD's fieldwork.

As part of the fact-finding phase of the review, the OECD met a large number of key stakeholders and conducted more than 100 interviews with Ministers, Members of the Oireachtas, officials, representatives of the social partners and other stakeholders from relevant interest groups, the private sector and academia. In addition, there was a major public consultation process involving a media campaign, an invitation to the public, the social partners and other interested parties to make submissions, and a dialogue between the OECD and a representative consultative panel. More than 930 submissions were received from private individuals and organisations.

The review acknowledges the central role played by the public service in contributing to an economic success story that many OECD countries would like to emulate. It states we are on a sound trajectory of modernisation, but we could further improve the yield from reforms by renewing focus on their pace and sequencing in order to make them more mutually reinforcing.

The review concludes that there is a need for a more integrated public service. It recommends that there needs to be improved governance and performance dialogue in order to address the current disconnects between the central Civil Service and the broader public service. Rather than creating new structures, however, it recommends a networked approach to working across existing structures to allow greater connectivity between different sectors. It emphasises the need to move towards a performance focus, with more information being gathered on outputs, outcomes and what has been achieved. It acknowledges that in a tighter fiscal environment there is a need for prioritising spending within budget frameworks.

In an integrated public service it points to the need for increased flexibility for workers. A senior public service should be created to provide a single, integrated public service leadership cadre, a recommendation about which people may have hesitations and which would need to be very carefully considered. It also suggests there needs to be a strong leadership role for the centre.

An overarching theme of the review is the compelling need to adopt a more citizen-centred approach. There needs to be an increased focus on service delivery over internal reforms and a shift in emphasis from organisational inputs to outcomes for the citizen. As the Taoiseach has said on a number of occasions, the modernisation process needs to deliver results that are clear, useful and verifiable to the user. We need to put the public at the centre of our public services.

I welcome the emphasis on a more integrated public service, often described as joined-up Government. Any objective assessment will conclude that the different elements of the public service — the Civil Service, local authorities, health and education services and State agencies — all need to work together better to deliver services to the citizen. Of course, moves towards a more integrated public service will need to take place on a carefully sequenced basis to ensure that reforms are well founded and incorporate the benefits of initiatives already commenced.

We also need to reinforce a performance culture by linking performance information with decision-making processes. Recent developments in annual output statements, and value for money and policy reviews provide a sound basis for progress in this area, but we need to do more. All public service organisations need to deliver higher productivity in their areas to ensure reform of the public service and quality delivery to citizens. I support the OECD's call for improved governance arrangements for the public service. There is a need to take a hard look at the approach to agencies, why and how they are set up, and the proper reporting relationships between agencies and their parent Departments. This area is central to the next phase of public service modernisation.

Underpinning all of this there needs to be a greater use of e-Government for the delivery of services. To this end, the Taoiseach has already announced that responsibility for e-Government will be consolidated in the Department of Finance. This is in keeping with recommendations from both the OECD and from the Comptroller and Auditor General's special report on e-Government.

Much has been made in some quarters about the OECD's comments on decentralisation. However, decentralisation is not new to the Irish public service. Previous decentralisation programmes have built up considerable learning within the system, which is being applied to the current programme. The Government is highly mindful of the impacts that decentralisation could have on the delivery of services to the public, if it is not implemented with due care and attention. Challenges, such as the turnover of staff, can and are being managed in a way which minimises risk.

The Government and the decentralisation implementation group have been always aware of the business issues surrounding the relocation programme. The implementation group recommended to Government back in 2004 that a phased approach be adopted to implementation. This has had the benefit of allowing sufficient time to put in place the property, business and staffing aspects of the programme, including the intake of staff over a phased period to enable skills transfer and training to take place. In addition, organisations participating in the programme were asked to prepare detailed implementation plans, including risk mitigation plans. The implementation group has met individual Secretaries General on a number of occasions and is satisfied with the level of planning in each of the Departments. That said, the Government will take account of the views and concerns outlined in the OECD's report, and will ensure these are taken into account in implementing the decentralisation programme, and in developing and implementing an action plan for public service reform.

The Taoiseach recently announced the establishment of a task force to develop an action plan for the public service. The task force, which has already met on three occasions, is preparing a comprehensive framework for renewal of the public service which takes account of the analysis and conclusions of the OECD report, as well as the lessons to be drawn from the strategic management initiative, the organisational review programme and the efficiency review process. It is developing an action plan to guide the implementation of the recommendations set out in the OECD report. In particular it is examining how best to secure a more integrated public service and the contribution a senior public service could make to a more integrated and cohesive public service.

There are a number of key stakeholders concerned with the shape of this implementation phase, including, in particular, the public service trade unions. In carrying out its work the task force will consider how the principle of partnership with public servants and their representatives should be reflected in the course of implementation. Of course engagement with other stakeholders will also form part of the implementation strategy. The task force is chaired by the Secretary General to the Government and includes four external members as well as the heads of four key sectoral Departments. It will complete its work by the end of the summer and that work will inform the next phase of the modernisation process. I look forward to its report.

Overall the OECD review has many good items to report. Broadly speaking, we are on the right track. However, it outlines certain things we could do better. As that is precisely what we asked the OECD to do, we should be prepared to consider its recommendations. In the past decade or so, Ireland has experienced unparalleled levels of economic success and prosperity. Our economic environment has been transformed through the implementation of appropriate Government policies underpinned by stakeholder participation through the social partnership process. Our public services have made a major positive contribution to this transformation. The OECD review has already added greatly to the debate on the continued modernisation of the public service and I am sure it will be cited for years if not decades to come. As we head into more difficult times the task now facing the public service is to ensure that it remains well placed to continue to contribute to our national development.

Photo of Liam TwomeyLiam Twomey (Fine Gael)
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We have an excellent Civil Service and public service. We may at times criticise senior management in the public service, for example in the HSE, as well as other aspects of the public service and Civil Service. However, the greatest problem has been the particularly bad political leadership in the past decade. It is regrettable that there have been so many lost opportunities as pointed out by many comments in the OECD report. Benchmarking was supposed to have been a means towards helping to reform the public service and improve how things are done in recent years. It was an opportunity that was basically wasted at huge cost to the taxpayers now and into the future.

The Minister of State described decentralisation as a learning process. Decentralisation as announced in 2003 by the then Minister, Mr. McCreevy, was an absolute disaster and was thought out on the back of a stamp. It made no sense to the proper running of the Civil Service and public service. The same people who made a mess of decentralisation, of benchmarking and of reform of the public service are still in control of the process today. As then Minister for Finance, the Taoiseach was central to the process. I do not believe the Taoiseach and his Cabinet colleagues have it in them to introduce the necessary reforms requested here. I believe the senior civil servants are very supportive of these reforms, but they are not getting the political support.

Some interesting comments have been made on the matter. The former Taoiseach, Deputy Bertie Ahern, said that having 800 agencies was too "many by half." It was the same former Taoiseach along with the present Taoiseach and other Ministers, including Deputies Martin and Cullen, who set up these quangos. The same people were responsible for many of the problems the OECD review pointed out. The report contains a very interesting comment which states:

Agencies vary significantly in size and budget and it is unclear how much public funding they use for their own functioning, for further distribution or for investment. Neither is it known exactly how many staff they employ.

The report stated these agencies do not know how many people work for them and for what purpose they are using their budgets. I thought it was an urban myth when somebody pointed out to me that one of these Government agencies had a budget of €250,000, of which only €40,000 was to be distributed. It cost €210,000 to run the agency to distribute €40,000. It remains an urban myth because, as we can clearly see from this report, nobody is quite sure what all these agencies are doing and what is their purpose. That is a complete failure of the Government over the last ten years to walk the walk about reforming public service along with the senior public and Civil Service personnel, who wanted these reforms carried out. However, the Government was too busy meddling with matters for purely political reasons. The decentralisation plan epitomises that sort of interference, making announcements the Government knew would never go anywhere.

The Taoiseach said, "It is clear to me, with the fact that resources will not be increasing at the same rate as up to now, that we will have to look at everything". He is saying, now that we do not have the money we have to stop wasting it. That is the sort of performance we have had from this Government over the last ten years. The Minister has done a major discredit to many of the civil and public servants. Many Government Members try to blame the HSE in the same way and suggest the mess we are in is the responsibility of senior civil servants there rather than the Government. The Government should publish a report on the sort of reforms it has carried out over the past decade and the sort of change it is talking about. People can then make a comparison with what great reforms have happened in the last decade.

There was much political interference in the establishment of the HSE. Some units that were established have had four or five different directors over the last four years. There is such a serious lack of continuity and clear focus on what the Government wants that even new organisations it is establishing are falling apart in a couple of years.

It is interesting to hear in the news today about what is happening in FÁS. Clearly there was an absence of governance in a huge State organisation that was spending €1 billion of taxpayers' money. A recent report showed that IDA Ireland has a huge number of sites that are of no great benefit to anybody. One has to question what has been happening to taxpayers' money over the last number of years and much of that responsibility lies with how the Government and its Ministers do their jobs. Some of the public sector unions have some responsibility here about which there should be more discussion. We have been waiting to see reforms in the health service for many years, yet nothing can happen. Nothing significant has happened.

It was announced that the Minister was happy to reduce the working hours of nurses from 40 hours per week to 38 if it is budget neutral. Up to one third of the nurses working in the health services can make the work practice changes to make that happen. Why cannot we have that sort of initiative? Why did Government Ministers not work with the public sector unions to make those sort of strategic changes over the last decade? It is because the Government members are too lazy to do it. They were too happy spending taxpayers' money because they thought this boom would never end. This Government has been responsible for the failure of reforms.

I have no great confidence that many of the proposals in this report will be implemented. Numerous reports have been published from every aspect of the civil and public service but when one requires real backbone from Government politicians one does not get decisive action. E-Government is an example of that. E-Government has failed dramatically in this country because no great emphasis was put on it over the last ten years. It should not be given to the Department of Finance. It should have its own separate Minister. We should get rid of half a dozen junior Ministers and have a Minister responsible for e-Government across the services because we need it right. It should be done immediately.

Unfortunately, we get only eight minutes to respond to the Minister. I will get the usual criticism that I am great to criticise but cannot suggest any solutions. With only eight minutes to talk it is very difficult to provide a clear debate. However it is clear, from reading this report and watching what has happened in this country over the last decade, that much of the performance failure and lack of governance has come from the political establishment and that has led to problems in the public and civil service.

Photo of Marc MacSharryMarc MacSharry (Fianna Fail)
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I join in welcoming the Minister of State to the House. I am pleased to have the opportunity to make some points on the OECD report on public service reform. I will begin with the normal rebuttal of Senator Twomey, which is customary between us. He might have more time to talk about the solutions if he were to begin with them rather than the perpetual moan. His colleagues in Wexford will not complain about the land bank IDA Ireland held there given this week's announcement of Coca-Cola establishing a facility there. The decentralisation of Zurich Insurance, formerly Eagle Star, to Wexford is also facilitated with the help of a land bank that was held either by Enterprise Ireland or IDA Ireland.

I would like us to focus more consistently on tangible solutions and suggestions we might undertake to pass on to our colleagues around the Cabinet table so they can integrate them into their views and plans for the reform of the public service. Over the years Fianna Fáil in Government has been consistently willing to reform the public service and, contrary to Senator Twomey's view, has always tried to undertake and add in a way that helps to modernise the public service. As the Taoiseach and his predecessor, Deputy Bertie Ahern, have undertaken to do, there is a need for continued modernisation. As a result we requested the OECD to prepare the report.

The findings of the report are interesting. The Irish public service is on a sound path to modernisation, as the Minister said, and has "played a central role in ensuring that the right economic, regulatory, educational and social conditions are in place to facilitate growth and development". We are in a changed set of circumstances and I look forward to a debate on the economy next week when we can get into the detail of that. The banks are being questioned on it by the Joint Committee on Finance and the Public Service and perhaps we can debate the report from that committee in due course.

General Government employment is relatively low in Ireland among OECD countries. That might surprise many people. It is also among the cheapest in terms of the overall cost, given our population. Only Korea and Mexico are cheaper. This figure has decreased over the past ten years. Compared to other OECD countries, Ireland has been able to deliver public services with a relatively small public sector, given the size of the economy and labour force. That is significant. While the Irish public service has created structures and systems to ensure co-operation and co-ordination, it, according to the report, "remains segmented overall, leading to sub-optimal coherence in policy development, implementation and service delivery". These are the kind of issues we must take on board.

According to the OECD report, "the major challenge for the public service is to improve service quality through timely, user-focused and integrated public services". The Minister mentioned many of the key recommendations of the report, but I will focus on some. One is the focus on citizens and societal goals, which is close to my heart. According to the report, "the Irish public service needs to become more outward focused . . . so that it is best placed to more effectively contribute . . . to the identification and attainment of overall societal goals" alongside citizens, business and other actors. It goes on to state that, "In a changing, more complex . . . dynamic and educated society, greater focus needs to be placed by the Irish public service on citizens and their expectations, and on targeting delivery of services from their perspective".

If the public service is to maximise its contribution to meeting citizens' expectations and to achieving broader societal objectives, it needs to think as a more integrated system. According to the report, "achieving an integrated public service will require targeted actions in a number of areas". The first of these is better communication. According to the report, "Improved dialogue is needed to address fragmentation and disconnects between Departments, their offices and agencies, and other public service actors". The Minister mentioned this. We need a better interdepartmental approach, a cross-departmental approach, so communication can improve efficiencies and ensure we are taking the right decisions at the right times, consistent with broader Government policies and policies of other Departments. I recently attended a meeting involving the Higher Education Authority where a particular situation could not be investigated because it fell under the remit of National Qualifications Authority of Ireland. The problem of making a connection in this area created a serious difficulty in getting an answer to the question. One of the major reforms we must undertake is to connect the many boxes that exist within the various Departments throughout our political system as well as to improve dialogue. A more cross-departmental approach will achieve this. We need managing for performance rather than performance reporting. Realistic expectations of performance need to be developed within organisations and additional managerial discretion is also required. Increased flexibility is needed to achieve these goals.

On leadership, in terms of achieving our goals, supporting and driving a renewed reform agenda and moving towards a more integrated public service will require significant leadership from senior management who have a detailed understanding of the broad range of issues and challenges unique to the public service. If new ways of working are to be successfully implemented, a strong central leadership role is required.

In terms of the concept of a senior public service, the development on a phased basis of a single, integrated public service leadership with a membership drawn from elements of the broader public service is an interesting concept and perhaps would allow Ireland to strengthen a system-wide perspective at the leadership level and reinforce and develop skill sets among the senior cohort of the public service as well as deepen coherence within the system.

Membership of the senior public service should not be limited to the Civil Service so as to have a broader perspective on the public service as a whole. I do not propose that this should be a whole new set that would require a ridiculous increase in the level of resources. We should do it from existing budgets through a reorganisation plan. Obviously, this will have to be negotiated with the various unions but it is a good concept and one that could be achieved. I am not suggesting we would create another echelon of new staff which would seriously contribute to additional expense. We want to get away from that.

With regard to managing agencies, a performance dialogue between Departments and agencies is needed, as alluded to by Senator Twomey. This would entail a process of setting different types of targets and evaluations and making links between inputs, processes, outputs and outcomes.

In terms of the general Government response, the Taoiseach set up the task force on the public service, half the membership of which came from the private sector and half from the Secretaries General of various Departments, under the chairmanship of Dermot McCarthy, Secretary General to the Government, whose reputation and experience speaks for itself. The terms of reference given to the task force for consideration were for a comprehensive framework for renewal of the public service and it will report towards the end of the summer.

There is broad cross-departmental and cross-party support for reform of the public service. We can all be justifiably proud of the work our public service and Civil Service have done in the past decades. However, it is time for reform and improvements in efficiency. This will require leadership across the board, not just from the political establishment but also from within the Civil Service and public service. I very much hope that, through negotiation, we can achieve the optimum results which would take this country forward in a way the existing Civil Service has done so successfully in the decades of the past.

I look forward with interest to the report of the task force which is expected before the end of the summer. I hope we can all get behind the action plan it comes up with, put our shoulders to the wheel and move forward in the interest of a more streamlined, efficient public service which will be best placed to continue in the way it has over many decades. While it was a great system which served us well, we need a newer, more effective system based on the OECD report and the action plan which we expect from the task force in due course. I thank the Minister of State for coming to the House and the Leader for facilitating a debate on this issue.

Photo of Alan KellyAlan Kelly (Labour)
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I welcome my fellow county man, the Minister of State, Deputy Mansergh, and I welcome the chance to comment on the report on public service reform. We could talk for ever on this issue which has been raised many times in the House. For the record, the public service has contributed significantly to the development of our country and its economy. I am not one of those who, now the economy is on the slip, are interested in buzz words and the frenzied attack which claims we need public service reform left, right and centre. Of course we need reform but we need to consider it in a rational way.

I intend to raise five or six of the areas we need to address. As one who came to the Seanad having worked for almost nine years in the public service, I might have some insider knowledge from which the Minister of State could benefit. Changes in the public service have been too inward looking and not external enough. Reviews to date have tended to be about — here are the buzz words — internal processes, improving service delivery, organisational development, individual performance management, risk and governance procedures and trying to increase transparency, even if the latter is more about theory than practice because transparency is not increasing.

This is not enough, however. We need to consider the public service in a broader way. We need to consider managing goals better as well as improving project targets and how plans are implemented. We also need to consider how we can achieve better performance across agencies and Departments, which is a core issue I want to address as it is a fundamental problem. There are too many silos in the public service, which is one of the biggest issues relating to lack of efficiency.

We need a networked approach to working in the public service. When we consider this issue on a macro level, there are three areas in the public service: the Civil Service, the commercial semi-States and the non-commercial semi-States. These are three very different types of organisation, a point that needs to be understood because it is where much of the problem we face lies. We have allowed these three silos to develop independently and, to progress, we need to bring them closer together while keeping their positive components and ditching the rest. To use a phrase, we need to use the Kilmeaden cheese approach — take the best and get rid of the rest.

We need to improve governance and performance and we need a Civil Service working more closely with the public service. Dare I say it, there needs to be change on the Civil Service side in particular with regard to the manner and tone with which it deals with the public service. The relationship needs to be one of partnership but there is currently a sense of "us" and "them". I know this is the reality as I have been in that position and, although some will say it is not the case, it is an issue that needs to be addressed. The public service, semi-States in particular, should not be seen to be below the Civil Service or be afraid to report to it. That day and age is gone and the system needs to be more partnership led. We need a structure that allows for the Civil Service and Departments to have goals and outputs that are measured in such a way that they are in some way bound into supporting the semi-State organisations. The reporting should go both ways and not simply in one direction. Anything going in one direction tends to increase a silo and create circumstances that will not work to mutual benefit.

A classic example in this regard is the rural transport scheme. The Department of Community, Rural and Gaeltacht Affairs approached the Department of Health and Children to get the Health Service Executive to consider dealing with local area transport managers to bring people for medical appointments in clinics. When the two Departments came together, one saw a way of dumping some of its costs on the other, so nothing happened. That is just one example but we need a better way of dealing with cross-sectional agencies and projects because there is a lack of joined-up thinking across these.

Another example is that many agencies simply cannot work properly unless they get support across agencies and Departments. I worked for Fáilte Ireland for nine years. It is totally dependent on five or six Departments, not just the Department of Finance but also the Departments of the Environment, Heritage and Local Government, Enterprise, Trade and Employment, Transport and Community, Rural and Gaeltacht Affairs. If it cannot get the buy-in from these Departments, it cannot execute its projects. In many cases, it simply does not get the buy-in.

We need to break down internally focused goals where the larger picture is not being seen. The Committee of Public Accounts investigates spending but we need to ensure the focus is not just on overspending and budgets but also on the reasons for the lack of joined-up thinking and missed opportunities. In many cases, these are not highlighted enough because people do not have the vision to see them. We need to develop networks so people work together on projects rather than within silos in their own Departments and agencies.

On recruitment, as a Labour Party representative I know we need increased flexibility in this area. I do not have an issue with this as long as workers' rights are protected. More to the point, we need to ensure career paths are drawn and people are not allowed to slip into a silo, which happens too often. There is a sense within certain Departments in the Civil Service, and it is probably a bigger issue in certain semi-States, that a staff member must serve his or her time. When I was made a permanent employee in Fáilte Ireland, I was the youngest male permanent employee. Eight years later, I was still the youngest male permanent employee. That simply is not good enough. Such situations are what drives good people out of the public service and into the private sector and one cannot blame people for that.

If the problems are to be dealt with, we must employ specialists. This is a significant issue, given the costs that arise because we do not have specialists employed in the public service and must hire consultants in many areas. We see from the disastrous decentralisation programme that in order to create fluidity between the public service and the Civil Service, we must examine the issue of transferability, particularly with regard to pension entitlements. Staff in a number of semi-State organisations have not applied to decentralise because they cannot transfer their pension entitlements. This issue has not yet been addressed.

While performance management is a very good initiative, in reality it is a failure because it has not been applied from the top down. I urge the Minister of State to ascertain whether performance management procedures, which have been put in place for workers, are also in place for the chief executives and senior managers of the various semi-State organisations. He will find that they are not.

E-Government has not been treated in the correct manner. Measures to date amount to tokenism. I know what I am talking about because I was e-Government person of the year in 2006. If one shows a little initiative, one will get support. However, in many cases we do not have people in the various organisations who have been promoted to a level which would ensure projects are completed. The e-Government process has been tokenism to a large degree.

The issue of leadership is critical in this debate. The best way to promote and change the public service and to achieve greater efficiencies is to show strong leadership. The Taoiseach had an opportunity on coming into office to show such leadership but unfortunately — although fortunately for the Minister of State, Deputy Mansergh — he did not take it. He maintained the offices of 35 Ministers and Ministers of State. He could have shown leadership on the matter but refused to do so.

Photo of Dan BoyleDan Boyle (Green Party)
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The undertaking and publishing of an OECD report into public service reform is a very useful starting point for an important and necessary debate on the quality of Irish public service and the way forward. The report indicates that Irish public servants are persons of ability and commitment who, in the main, operate effectively. However, there are systemic faults within the public service that must be corrected. Such faults can be corrected only with an appropriate amount of political will and through what has been a highly effective social partnership system.

In addressing the issue of reform, we must deal with fundamental questions, one of which is whether the public service in Ireland is of an appropriate size. We do not have good templates surrounding us, given that the public sector in Northern Ireland accounts for 40% of the workforce, which is possibly an unreal comparison. An effective economy must have a proper balance between the private and public sectors, in the areas in which they are separate as well as the areas in which they interact. It is clear that we remain in a process of evolution in that regard.

Historically, the public sector represented a large proportion of our workforce, mainly because important infrastructural developments were not advanced by any bodies other than the State. There was an unwillingness, either through a lack of initiative or a reluctance to provide capital investment to bring about that initiative, in the private sector to do so. The early development of this State was largely brought about through an active public sector and a very inert private sector. That the Irish economy began to shed its agrarian past only in the 1960s meant we had a lot of catching up to do in terms of the lack of enterprise and entrepreneurialism in the Irish psyche.

That said, we still need an appropriate balance in terms of the numbers. I would accept that the number of people involved in the Irish public sector is probably too large but it is also the case that there are significant shortages in certain areas. We lack people of specialisms throughout the public service to provide the most effective performance. We must examine the areas where there is an over abundance of staff and consider retraining and redeploying them to fill in the gaps in the public service.

Political debate continues as to where we locate public servants and how we allow them to operate to ensure the public service operates to its maximum potential. I accept this is a legitimate debate but I do not intend to go into the issues in depth now. I will say, however, that the extent to which we do not hinder the public service by making unnecessary changes to location over short time periods and allow staff to focus on the job of work at hand, the more effective the public sector will be. Those criticisms are expressed clearly in the OECD report.

It would be to our benefit as a society and an economy if we managed to increase the level of interchangeability between the public and private sectors. The fact that many people spend all of their careers within the public sector and sometimes even within a narrow sector of the public service means we cannot use the full potential of such individuals, nor does it allow those individuals to be fully rounded in their ability to offer public service. There should be more people in the public service taking work experience breaks in the private sector, and vice versa. Given the criticism that some in the private sector make of the public service being an inherently bad thing, we might benefit from people from the private sector acting within the public service, thus getting a better sense of a model that is more about service to the public and less about profit making. That interchangeability does not exist in our system at present.

The OECD has indicated some fundamental reforms that must take place. In the current climate, in terms of the public resources available and how they will be allocated, a political debate might emerge regarding whether these are the best circumstances in which to implement many of the report's recommendations but I would argue that it probably is the best time. However, it must be done with great sensitivity and in the sense of partnership that has characterised all of the social partnership deals to date. It also must be recognised that the aim of reform is to bring about a better service and it should not be just a number cutting or budget pruning exercise.

We are talking here about people who provide vital services in our society. Such people cannot and must not be discarded in any way. The reform process is about finding the best use for their talents and abilities in order to meet the needs of the public service. Perhaps marrying public service reform with some of the commitment that already exists to delivering public services throughout our society that are not even properly economically recognised — for example, some of the ideas of the task force on active citizenship — would yield a public service that would suit this country in the 21st century.

Photo of Paschal DonohoePaschal Donohoe (Fine Gael)
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In preparing for today's debate, I came across a very appropriate quote from one of the pioneers of our public service, Mr. T.K. Whitaker, who stated:

The day-to-day decisions of government, no less than those of individuals, tend too often to respond to the pressures, the needs, the provocations and the opportunities of the moment. Good management demands the longer view.

In this debate and the report from the OECD, what we are clearly seeing is the longer view, in terms of the challenges that face our economy and society and the need for our public services to respond to those challenges. In examining how the public service responds, we must recognise and emphasise the wonderful contribution our public services have made in dealing with so many pressing needs and challenges faced by the country, from our engagement with the European Union, to Northern Ireland, to the status and recent success of our economy. However, the report does not believe there is a need to review the structures of our public service, rather it believes there is a need to review the culture of our public service. I am not sure how in recognising the significant challenges we are facing, we can get to a point where we can review our culture in the delivery of those public services without first looking at the way they are delivered and the structures in which they delivered.

It is appropriate for us to pause and reflect on the kind of challenges faced by the public service and our economy and society. There are three that are most appropriate for the discussion in which we are engaged. The first is what is happening with our economy. Over the past ten years, we have seen our economy grow on average by about 7.5% per year. The OECD report acknowledges that for the next 20 to 30 years, we are likely to see economic growth of around 3.5%.

The second point is what will happen to the countries against which we have needed to be competitive and perform in the past. Many of those peer countries will change. The centre of economic gravity will move east. The countries that will decide what the benchmark is in terms of competitiveness and how societies are performing are more than likely to be the Indias, Chinas and Russias of the world. This will pose huge challenges in respect of how a small open economy like ours performs.

The final point relates to the role of technology and globalisation given that so many of those influences are coming together to create a rights-based culture in respect of how people interact with public services and to create profoundly different expectations on the part of people in terms of the information to which they believe they are entitled about how their public services perform and the standard which they expect those public services to attain and deliver for them.

I am critical in that I do not get a sense that this report recognises the breadth of those challenges and the fact that in our future, we will need superb public services more than in the past. The statistics on the economy that appeared earlier in the week showed that many of the public sector parts of our economy were leading the overall economy in terms of output and economic development. We will need that performance more than we ever have in the past. At the same time, our ability to pay for it and our economy's ability to sustain it will perhaps be challenged more than at any point in the past. There is a real pincer movement, to use an unfortunate phrase.

I am concerned because I do not get a sense of urgency or vision from this report about what we as politicians will do and what the public services will do to respond to this profound challenge. The report talks about an integrated public service that acts increasingly through networks rather than top-down structures, greater staff training and mobility, the quality of performance indicators and information, and the need to for them to be improved. I had a real sense of déjÀ vu in that we have said these things before. My question is whether those recommendations are strong enough and radical enough to respond to the kind of challenges we as a small open economy will face in a globalised world and economic environment that is changing very quickly.

There is an omission in this report in that it does not place sufficient focus on the need for the individual using these services to have choice about the services they use and information about the quality of performance they receive. It says additional consideration should be given to the development of both quantitative and qualitative performance indicators that are comprehensible to the citizens and that reflect societal goals. That is the only reference I could find to the need to empower individuals in the services they are performing. This report is good and merits discussion but my point is whether it goes far enough in helping us rise to the kind of challenges we face because we have risen to those in the past and our public service has been instrumental in allowing us to do so.

4:00 pm

Photo of John Gerard HanafinJohn Gerard Hanafin (Fianna Fail)
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I again welcome the Minister of State to the House and am pleased to welcome the OECD report on integrated public service reform. It gives us an opportunity to remind ourselves of the role the public service has played in Ireland's development. We have one of the finest public services anywhere.

It was only in the 1960s when Dr. T. K. Whitaker and Seán Lemass began a process of developing the economy of this country. Prior to that, we had a public service that provided services for the nation that the private sector was not in a position to provide. I am thinking of services such as the Irish Sugar Manufacturing Company and Bord na Móna, which supplied our energy needs, especially during war years. I am conscious that the Land Commission was necessary to redistribute land during the founding years of the State. This took place across so many facets of Irish life that we now take for granted, many of which have subsequently been privatised. These include Telecom Éireann, which is now Eircom, and other State-provided boards such as the Shannon Free Airport Development Company, which was an example to so many others throughout the world. Other examples include the IDA and Forfás.

We have a public service that brought the nation along with an integrated plan for development. It is a very well-educated and highly regarded service which is somewhat on the French model where it is rightly seen as a great public service. We should also remember the great work done by the Institute of Public Administration in providing education. As a graduate of that institution, I can say how very well-organised, committed and focused it is. I welcome the OECD review. Not surprisingly, this review shows that we have one of the most cost-effective public services. Of the OECD nations, we have the third lowest cost for our public service which again must be welcomed.

We are in the midst of changing with decentralisation. This decentralisation is to be welcomed because it is bringing into the provinces many of the services of the State which can, through better communications facilities, be just as easily undertaken in rural areas. As a student of this particular aspect of public service, I am conscious there is a timescale involved, primarily because one wants to allow people in the public service time to stream. I am conscious of the French model where over ten years it was decided that if a department was going to Lyon, which may not have suited everybody in the department, they were given sufficient time over a ten-year period to stream into that area or department that was going to where they wished to go. Of course, decentralisation was handled very well.

The purpose of the OECD review was to benchmark the public service in Ireland against comparable countries and make recommendations regarding future directions for public service reform. There was a particular emphasis on how the various parts of the public service relate to each other, including the Civil Service and particular sectors such as local government, health, education and justice.

The review was undertaken by the OECD's public governance and territorial development directorate. In addition to the core OECD team, national experts from other OECD countries have been involved as peer reviewers. The OECD, which is based in Paris, was established in 1961, with Ireland as one of its 20 founding members. It is an international organisation with 30 full members which promotes dialogue and the exchange of good practices in public and corporate governance issues, including issues relating to the economy, policy making, human resource management, ethics and information technology. Much of the OECD work is based on peer review and dialogue. It has extensive databases and access to key policy makers throughout its network of committees and working parties.

The OECD is a reputable organisation. We are proud founding members of it. The findings of the 375 page report are that general Government employment is relatively low compared to other OECD countries. Ireland has the third lowest public expenditure as a percentage of GDP. We have low cost and low employment, yet we have excellent results and service.

We need to enable co-operation and co-ordination to ensure there is no disconnect between the Civil Service and the broader public service. The OECD recommends that the public service think more as an integrated system. We can only welcome this, which is not a criticism but a recommendation. I would happily take on board this recommendation. There are many aspects of e-Government that have yet to be rolled out. The public service will continue to play its leading and proud role.

Photo of Mary WhiteMary White (Fianna Fail)
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I welcome the Minister of State.

I was fortunate to be in Dublin Castle at the launch of the OECD report on the integration of the public service. Having experience over 40 years in both the public and private sector, I am in a position to comment on it. There are as many clever people in the public sector as there are in the private sector but the management standards in many places in the public sector are not adequate to deliver the service.

The core of this report is that we need a more integrated public service and that the public services should be citizen oriented. The principal of a school and the Secretary General of a Department must act as if they were the chief executive of a private company. Speaking of my experience working 24 hours a day, seven days a week for 16 years, unless a company has nous, and looks after its customers, it will not survive. A public company survives because it has first-class management systems. Many improvements have been made in the 20 years since I left the public sector.

Management is the most difficult science in the world. If a person is taken on, the job should be explained and performance evaluated. The boss must spell out if the person is doing the job right or not. If this did not happen in a private company it would disappear. Many of our problems in delivering public services are due to the lack of good management.

Professor Drumm stated recently that the day must come when Irish people have the courage to demand better public services in the health sector. They forget they pay for the public service. It is taxpayers' money that pays for the service. They must become more self-confident and demand a better service. They should demand that the treatments for our citizens are as good as those for citizens of other countries. If we find that cardiac arrests here are higher than in Nordic countries or another OECD country, we must demand that our standards of cardiac treatment be improved to reach that standard. Our patients in the public health service should not be patient with long waiting lists. Even with private consultants, to whom one pays big money, one might have to wait one hour in a waiting room before seeing the consultant. The citizen must be empowered to demand an excellent service from the public service, for which the citizen pays.

There are at least 360,000 people working in the public sector in Ireland. It is responsible for one in three euros spent in the Irish economy. It sets the policy environment for economic and social development and provides a wide range of essential services. We must take note of the OECD report. The number one change is that we must get metrics to evaluate the service provided by the different Departments.

To be a good manager, one must be a leader. People in key positions in the public sector are afraid to be bold leaders. In contrast, one must be a bold leader in the private sector or one is gone. There must be a mechanism to allow people with leadership skills in the public sector to come forward and take risks without fear of losing promotion opportunities if they make mistakes. If one is a bold leader, everything one does will not be right. If we do not make this change in the public sector and this generation does not get this right, the taxpayer will get very bad value for money.

Those in the public sector are not less clever than those in the private sector. There should be free movement from the private sector to the public sector and vice versa, giving a cross-fertilisation of skills and innovation. For any good business or policy to survive, it must innovate. We must have innovation in the public sector.

Photo of Fiona O'MalleyFiona O'Malley (Progressive Democrats)
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I welcome the Minister of State and congratulate him on his appointment. I requested yesterday that he come to the House but I did not expect to see him so quickly. I will not, however, raise the matter I raised yesterday.

The OECD report is vital to the current position of the economic cycle. As Senator White stated, the public service is enormous and responsible for a huge budget, and we must get it right. A good public service is critical to our economic survival. It is timely to undertake such an assessment. The report is, by and large, positive reading. This is to be expected because the public service was set up to perform a particular duty and it did so exceedingly well, particularly in the 1950s when various public bodies were established. The mark of a good public service is its ability to adapt and, by and large, it has adapted well.

The public service has expanded by 30% in five years. This has caused a certain amount of alarm. When we had the money we needed the capacity which came with it. At present, we need to examine reform and how we can get the best out of the public service.

Previous speakers alluded to a synergy between the public and private sectors, which is a good way to innovate reform. Senator Mary White referred to it. We need an ability within our public service for public servants to move from the public to the private sector. It would be to our mutual benefit that this is the case. The public service would benefit from many practices in the private sector. If we had a better synergy between the two sectors it would improve the performance of our public sector.

I wish to speak in detail about motivating performance in those involved in the public sector. The report states that Ireland is at a stage of performance reporting rather than managing performance. It states, "There is a need to develop a performance culture that is based on achieving outputs and outcomes rather than compliance with processes". This is the essence of what our focus should be. We need a dynamic public service where risk, achievement and innovation are rewarded. I fear this is part of the problem we inherited in an overbureaucratic public service and it is where we need to focus our efforts.

From speaking to public servants I know that a sense of drowning in a deep bureaucracy is demotivating and will never deliver the results we need. Reform of the public service is one of largest challenges we face, particularly in terms of the pay talks and agreements, and it is vital that we get it. We need to be able to reward innovation on the part of public servants. To attract people from the private sector to the public sector we must ensure that payscales are appropriate. We may not have performed very well in this area in the past.

The other side of the equation is that those in the public service have great security and enjoy great benefits. This is why people in the private sector look at public sector workers with a certain level of resentment. This is where tension can exist. If people were able to work in both sectors, these misunderstandings might go.

Reform of the public sector is its single greatest protection. We do not need greater bureaucracy. We need a public service which is motivated, paid appropriately and has an enthusiasm for innovation, which is celebrated and rewarded.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I thank Senator O'Malley for taking the Chair. I had not intended to speak on this motion but I heard her contribution and that of the previous speaker and now wish to state a few words on public service reform. I must concede to the Minister of State that I am not an expert on the report. However, we have had discourse on public service reform and pay during recent months and we all have a passing knowledge on it.

I acknowledge the outstanding service and performance of the Irish public service since the foundation of the State. Many problems have yet to be addressed and we face many challenges. However, looking at the history of the Republic of Ireland during the past number of decades, we have made great progress. Much of this is due to the fine public servants working for Departments, State agencies, local authorities and many other projects throughout the country.

We will always have a need for change, reform, fresh thinking and new approaches and we should focus on this. If there is any difficulty with regard to our public service, and we must acknowledge that we are all public servants, perhaps it is that it does not have the flexibility it needs to face the challenges ahead.

Will the Minister of State comment on the decentralisation programme? We can see the difficulties in trying to put in place a scheme which is desirable and worthwhile and which will be good for the country economically and socially. Our difficulty in progressing such schemes illustrates blockages and a lack of flexibility and, perhaps, work practices which are outdated and need to be challenged and changed.

The other immediate issue facing the Government and the body politic is public service pay. This is part of the reform package as are the questions of productivity, bonuses and performance related incentives. We need fresh thinking in this area. The public sector unions have been clear and strong in defence of their staff during recent weeks, pointing out that there can be no pay restraint or reductions. We must acknowledge that in the new economic climate we face, all sectors will have an obligation to respond, starting in this House.

We must recognise that while the public sector and public servants have legitimate requirements and demands and will make a case for further wage increases, on the other side of the equation are certain advantages to working in the public service from the point of view of security of employment and pensions which must be considered in the overall balance. If, over the course of the next twelve or 18 months or two years, restraint is required and, let us be honest, the Government must put in place some degree of control of public expenditure. We must be realistic from a political point of view and the public sector and public service unions must also be realistic.

This is a challenge which I acknowledge will be difficult for the Government to face but it must be faced. We must work as much as possible with the hundreds of thousands of people in the public sector, acknowledge the great strides and progress made but also respond to the fact that we are in a new Ireland and Europe in a modern world where new challenges are emerging. We will not solve all of the old questions with the same answers as we may have done five or ten years ago. This is why flexibility and a more modern approach to our public sector is required. I hope the Minister of State and his Government colleagues will be able to respond to this report and put in place some of the practices recommended.

Often, we discuss shortcomings in the health service. However, more than 100,000 people work in this sector. We must ask ourselves whether we receive value for money and whether we could do things better. This also applies to many Departments. The public service budget as well as the Government's budget all comes back to the taxpayer who pays the bill at the end of the day and, therefore, we must always demand value for money.

Those are a few brief, inadequate comments and I apologise for my lack of preparation. This issue will require much debate, attention and reflection over the next few months and years. New challenges lie ahead and we need to work with the public sector to address them. We will also need the public sector to work with us and to be realistic in facing these challenges. It should acknowledge things cannot be as they always were and we will have to do things differently in future.

Photo of Martin ManserghMartin Mansergh (Tipperary South, Fianna Fail)
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I thank all those who contributed to the debate. Thinking back on my own time as a Member, I miss the pronounced views on these subjects one often hears from the Independent benches.

The only politicised contribution was made by Senator Twomey. We have had excellent political leadership over the past decade, especially on the economy. The past 20 years have been miraculous and, inevitably, a positive cycle will not continue forever but it has put us on an entirely new plane. Benchmarking was vastly superior to the special pay claims systems that existed previously. From time to time, agencies are created and then rationalised. Senator MacSharry's father rationalised agencies 20 years ago. Many large towns live in hope and their chances are better if they have IDA sites. Inevitably, they will not all be filled and that is not necessarily a criticism. They should not be provided for excessively but they are necessary.

It was stated there were no reforms of the health service. What was the establishment of the Health Service Executive? One might have mixed views on the outcome and Senator MacSharry made an important remark about management for performance rather than performance reporting. I would be concerned if the aim of the public service was merely to satisfy certain bureaucratic criteria rather than service improvements on the ground.

I am interested in Senator Kelly's experience in Fáilte Ireland. Many Members of the Houses, including myself, have spent time in the public service. I refer to the comment that semi-State bodies are below the Civil Service. When I was dealing with energy issues, I was never under the impression that the ESB was below the Department of Energy and I doubt Senator O'Malley's father was either.

I agree with Senator Boyle that the social partnership system has been highly effective and I also agree about the need for more mobility and interoperability. Senator Donohoe correctly stated the OECD report presented the longer view and, like many good OECD reports over the past 40 years, it will be referred to for a long time to come. I also concur with him that many of our benchmarks will be outside the country.

I join in Senator Hanafin's tribute to the public service and I agree with his reference to France and giving people time to stream. I also endorse his praise of the OECD. I attended an OECD ministerial meeting a few weeks ago but, as a public servant in the 1970s, I attended such meetings and the organisation is an enormous resource for western democratic governments. While it does not take decisions, it provides peer reviews and discusses issues and common approaches.

I agree with Senator Mary White's comments about the calibre of people in the public as well as the private sector. She stated people should be encouraged to take risks and make mistakes and I concur up to a point. However, Irish Shipping was sunk by two executives who took speculative risks and put the company in an impossible position.

Senator Bradford rightly praised the social partnership system and we all hope the current talks will come to fruition. It is important that, in the current challenging climate, that be the case. In an address to IBEC on 25 June the Taoiseach stated:

A new deal on pay and related issues would provide much needed stability and reassurance at this time. It would convey a strong sense of confidence domestically and internationally by showing that we are prepared to work together to safeguard the economy and our competitiveness as well as the interests of workers and the more vulnerable in society.

I also agree with his criticism, which has been made by many heads of government across Europe, that it is all very well for organisations to call for pay restraint and moderation but, as he stated, "It is clear that the headline rate of pay increases for top level executives in the private sector has not been aligned with this general message and this is a source of concern."

At its heart, public service modernisation is about delivering excellent public services and improving the service provided to citizens at all levels in the most efficient and cost effective way. It requires good structures and business processes and it also requires that the quality of service delivery to the citizen is central to the work of public servants at all levels. We have come a long way in delivering on this agenda and this is recognised by the OECD but we also recognise there is much more to do. Public service is predominantly a people business run by people for people and I want to be clear about the Government's commitment to our public services. We want a public service fit for purpose of which the public and our public servants can be proud.

According to the OECD, the public service and, in particular, the Civil Service are doing more with less relative to the size of the overall economy and workforce and this has been a factor in Ireland's international competitiveness. I once served in the Department of Foreign Affairs and relatively small embassies do for this country what larger embassies do for bigger countries. The OECD recommends not only improved governance but also performance dialogue for increased sharing of information and expertise and shared agreement on performance targets to hold each party accountable for the realisation of such targets. That must be a real and not an artificial process, otherwise pursuit of targets becomes an end in itself. One can think of other countries where it has been alleged figures have been massaged to meet targets and we do not want to get into that.

The OECD recognises that instead of focusing on outputs and processes, more information must be gathered on outcomes and what has actually been achieved, as this can better assist in measuring how the public service is meeting overarching targets and objectives. The terms of reference for the task force refer to an appropriate framework for reviewing the establishment, operation and governance of State agencies. As already indicated, this area will be important to the next phase of public service modernisation.

With regard to decentralisation, which is of interest to many Members of both Houses, almost 2,200 posts have been relocated to date. Decentralising organisations have now established a presence in 34 locations around the country and over 11,000 civil and public servants have applied on the central applications form to decentralise. I receive representations and correspondence from individuals on this almost every day. I dare say many other public representatives receive similar communications.

It is clear that public service reform has increased importance, particularly in the current economic climate. We will be looking to the public service, in conjunction with political and Government responsibility and the co-operation of all other sectors of society, to help us to steer through the current difficult phase in the hope that we can hold onto and consolidate many of the gains that have been made and retreat as little as possible.

This is a valuable report that will be carefully studied, as is the case with all such reports. It is not a bible so not every recommendation is necessarily perfectly adapted to our culture and circumstances, but it is certainly a resource from which ideas and inspiration can be drawn so we can improve our performance. I will finish as I started by expressing my high regard for the public service and the contribution it makes, and will continue to make, to Irish society.

With regard to a point made by Senator O'Malley, I have looked at the figures for the public sector. The figures for the Civil Service are different. The growth in the public sector in the past five years has been 7%. It is not a large expansion of the public service. Certain sectors have grown but others have contracted in compensation for that. We have a reasonably lean public service but we must get maximum value for money from it.

I thank the Senators for contributing to this useful debate.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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Provision was made on the Order of Business for questions from party spokespersons. Some of the spokespersons are not present so is it agreed that questions can be taken from substitute spokespersons? Agreed. Are there questions for the Minister of State?

Photo of Paschal DonohoePaschal Donohoe (Fine Gael)
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The value of a report such as this is that it provides hard figures which one can discuss and from which one can make evaluations. In his contribution Senator Hanafin said that the figures indicate we have a fairly lean public service, while Senator O'Malley inferred something quite different in her contribution when she referred to the perceived over-manning and bureaucratic structure in the public service. Evaluating the size of our public sector against that of other countries only becomes valid when one considers the type of country we have. The population of our country is predominantly young and growing, which is very different from the situation in France or Germany. One could expect, therefore, that our public service would be smaller at this stage in our demographic development than the public sectors of those countries. However, that is not the case.

The core issue I tried to raise in my contribution is the fact that the need for a well funded and excellently delivering public service will be greater in the next ten or 15 years than in the past but our ability to pay for that public service will be under more pressure than it has been in the past. As a Minister of State in the Department of Finance and somebody who is aware of the discussions taking place, what is the Deputy Mansergh's thinking on how we will rise to that challenge? What will be the contribution of the Government, in light of this report and the discussions taking place, to squaring that circle? The discussions about the funding of the HSE will be of an entirely different nature if, in a few years, we have economic growth that is probably less than half of what we have enjoyed over the last decade.

Photo of Martin ManserghMartin Mansergh (Tipperary South, Fianna Fail)
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The Senator has a legitimate point when he refers to the demographic structure of this country compared to that of other countries. However, we have a significantly smaller public service than some of those countries. I do not believe the size of the public service is disproportionate or out of kilter, even taking account of our stage of development. I disagree with the Senator on that point.

Most bodies who make projections for ten or 15 years, or even beyond that, see that period as a time of opportunity to eliminate or largely eliminate some of our historical deficits. In other words, the demographic and social provision pressures will not really begin to impact seriously until the 2020s and beyond. There is a window of opportunity, therefore, over the next ten to 15 years. That would be part of Government thinking; for example, there is heavy emphasis on getting our infrastructure up to speed because we might have resources to do that now that might not necessarily be available to the same extent in the future.

It is probably always a danger to take any given point in time, whether things are going well, badly or indifferently, and extrapolate that into the future. We simply do not know how matters will develop. Let us take the example of the current economic situation. I was in the public service in the late 1970s and early 1980s. It was thought then that the recession at that time, while quite deep, would be of relatively short duration. That was not the case. It was quite a long siege that lasted several years. We can hope, as turned out to be the situation in 2002 and 2003 or in the early 1990s, that any downturn — and by downturn I do not mean recession but simply greatly diminished growth — will be of relatively short duration. However, we cannot know whether it will be, for which reason the Government must act prudently. Were one to have an absolute assurance that growth would resume at 4% or 5% next year, one's response today might be different than is actually the case, as the volatile international climate and specific domestic factors must also be taken into account.

What public services can be provided is materially connected to the state of the economy and the revenue supplied. There is no doubt that the buoyancy since 1993 or 1994 has enabled us to make significant improvements in public services, but they cannot be divorced from the level of resources available. I agree with Senator Donohoe's basic point in that challenging times lie ahead for everyone in the public service, which includes the Government and other political parties in its broadest sense. For this reason, the report is timely and we must pay close attention to anything capable of improving public service delivery and efficiency.

Sitting suspended at 4.40 p.m. and resumed at 5 p.m.