I welcome the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and his officials. It is unprecedented to have the Minister address the committee. I know that another Minister attended the DIRT inquiry but this is a slightly different setting this morning. I look forward with some optimism to the reform agenda that the Minister has undertaken. He will spend an hour here and Mr. Watt and his officials will remain. I suggest that we ask the Minister for his opening statement and deal with all of the other matters on the agenda when we examine the Department later. I welcome the Minister and ask him to make his opening statement.
Public Service Reform Plan: Discussion with Minister for Public Expenditure and Reform
I thank the Chairman for arranging the meeting and I am delighted to be here.
In the context of the reform agenda I want to engage as fully as I can with all stakeholders, particularly the Oireachtas and its committees. As the Chairman may know, I had a meeting with the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and there was good interaction. It is helpful in today's discussion to refer to the budget because it is still on people's minds. The reality is for next year we must implement a fiscal consolidation of €3.8 billion to deliver a binding target of 8.6% of GDP. That was written in the ECOFIN decision and we must reach it or the only people that are funding us on a day-to-day basis will cease doing so.
Last Monday I presented these detailed reductions in the Dáil and they included €2.2 billion on the expenditure side for the coming year. The reductions must be made at a time when the demand for public services is increasing but reforming the delivery of services is crucial and urgent and I indicated some of the pressure points in my Dáil speech. It surprised me, when I examined the detail, that there have been 500,000 extra medical cards provided in the past couple of years and the cost of pensions has increased by one third due to an ageing population. One cannot escape those pressures yet we must spend less. Reforming how we deliver services and get better value becomes a central issue. Doing better with less will not be an easy task. It is important that we acknowledge publicly, because there has been a lot of verbal bashing, that long established values of integrity, commitment and service continue to be demonstrated by staff across the public service despite these difficult times.
We need meaningful, far-reaching and sustained reform in the delivery of public services. Such reform can only be achieved through the ongoing commitment of everybody dealing with the Croke Park agreement. The agreement is a critical enabler of the reforms needed but it will be tested. The Government has demonstrated by its actions from day one that it is serious about reform and its actions to date are just the start. There is more required in order to have a public service that is leaner, more customer focused and delivers maximum value-for-money and is the reason we have developed such a comprehensive and ambitious reform plan.
I have asked my office to email the committee secretariat a copy of the reform plan rather than waste time going through it. It would be useful, if it is circulated, to allow members see the plan step-by-step and I could then come back to discuss it in detail as it unfolds. It is important to acknowledge that, enabled by the Croke Park agreement, significant progress has already been made across the public service. This is borne out by the summary of progress published by the implementation body for the agreement recently. It is available on its website. However, we know we are only at the beginning of a new and critical phase.
Building on the details of the public service reform plan, which I launched on 17 November and of which members have a copy, I announced a number of key decisions which relate directly to the reform agenda. Next year the public pay bill will fall by €400 million, with an expected further reduction of 6,000 staff. This will leave the total number of staff at 294,000, a level last seen in 2005. Through reduced numbers, the pay cuts that were applied in 2010 and the ongoing pension-related deductions, the overall cost of paying public servants will fall by a very substantial €3.5 billion, or 20%, over the seven-year period 2008 to 2015.
The significant ongoing reduction in staff numbers poses very real challenges. Reform of everything we do is required to deliver adequate services as we further reduced the number of staff. It is essential that we have full implementation of the public service reform plan and the Croke Park agreement. The Government is committed to making fundamental changes to the way the public service operates to safeguard essential services. As outlined in the reform plan, both central and sectoral manpower planning groups are being established or have been established to address the operational and strategic consequences of the reductions.
On the radio this morning, I heard about the pressure caused by teachers leaving in the middle of a school year. We have contingency plans to deal with this so there will be no disruption of essential services, including the preparation of students for examinations, next year.
Public bodies will have to achieve next year savings in respect of overtime of 10% and in respect of allowances and premium payments of 5%. My Department will lead a review of allowances and premium payments across the public service in consultation with all Departments in the coming months. None of this will be easy because allowances and premium pay would have been embedded in people's pay expectations. In addition, discussions with unions will commence shortly with a view to overhauling very significantly the paid sick leave arrangements in the public service. In addition to these measures, on 17 November, I announced plans to rationalise State agencies, and we took decisive decisions to cancel the decentralisation programme.
As members will be aware, I have announced the Government's plan to overhaul Ireland's old-fashioned budget system, which has so clearly failed to deliver sustainable spending policies, proper value for money or good outcomes for citizens. This is a matter close to the Chairman's heart and, therefore, I do not believe we will have any disagreement on this.
The sometimes short-sighted traditional annual Estimates cycle, perceived as a battle between the Department of Public Expenditure and Reform and individual Ministers to determine the winners and losers, does not serve us well. We need a more dynamic, multi-annual expenditure framework which will provide transparency regarding the allocations available to each Department for a three-year period. This new framework will enable responsible structural planning based on priorities and the need for ongoing reform with full public input and, importantly, Dáil oversight.
We now have a three-year envelope of money. Most Departments know what they will have next year. We can start discussing that in January and February and have all the options available such that there will be no kite flying regarding what might happen. Let us have a real debate. On the notion that there is some way of spending more money within the parameters, particularly in areas such as health, which is demand-led, one must realise considerable changes are required. It is a question of setting priorities, as is done in Canada under the model we tried to replicate. The Canadians achieved their model over a much longer period. If one wants to spend money on new priority areas, one must identify the areas that are defunct. We spend at present in the belief that the system is grand and we build on top of it. We should look at what we spend currently and determine whether it is appropriate now.
Evidence-based expenditure policy is the key prerequisite for responsible government. That is why my Department this year oversaw a root-and-branch examination of all areas of public expenditure. The comprehensive review of expenditure, the details of which were published earlier this week on my website, has generated a change in momentum. We will maintain this.
I launched a new value-for-money code and members may get a chance to look at it. This is a very significant new code on which my officials have been working for some time. So much documentation was presented on Monday that the code may not have been noticed, but it would be worthwhile if this committee revisited the code, which will apply to all agencies of the State. It will enhance significantly the processes for ongoing scrutiny and evaluation across the entire public service.
We are now building performance information into the annual Estimates process, as members know. Most Departments' Estimates are being presented in this new format so they can be properly analysed. In essence, the old approach involved considering the expenditure line and one's job was to determine whether the money was spent and whether anybody pocketed it. Instead, the approach should be to identify the spending line, what the money was spent on and the outcome.
We are not underestimating the importance of the proper, democratic involvement of the Oireachtas. All these reforms are geared towards supporting the Oireachtas in its rightful role of holding the Government to account. In this context, we are moving towards a whole-of-year budgetary timetable, as I have indicated.
The reform announcements I have outlined today and all week are crucial but it is important to emphasise that they are just a subset of the ambitious range of action set out in our reform plan. The detailed actions and timelines set out in the plan are designed to ensure that we place the customer, the citizen, at the core of everything we do, and to maximise new and innovative service delivery channels. Some 300 services are already delivered online but we need to do more. Most of us renewing our car tax will now do so online. We need to do a lot more in this regard. Most of us would no longer think of booking an airline seat other than online. The plan is also designed to ensure that we reduce costs radically to drive better value for money; lead, organise and work in new ways; and maintain a strong focus on delivery.
Specifically, we are committed to making better use of technology and implementing radical restructuring of how we manage our business by establishing shared services. There is no reason in the world we need to replicate human resource management, payroll facilities, or procurement arrangements across every Department or agency. Further streamlining of procurement processes will be undertaken under the direct stewardship of the Minister of State, Deputy Brian Hayes, and the National Procurement Service. We are committed to reforming how we manage our property portfolio, which is important, and to reducing costs, addressing duplication and eliminating waste.
Within this context, we have already prioritised a number of major projects of strategic importance: the public service card; HR shared services; payroll shared services; public procurement reform; property management; Government level performance management; performance budgeting; and the establishment and creation of a senior public service. I will be happy to talk to members on the latter if they want me to do so.
The public service reform plan is an enabler to support us in reducing public service numbers, as committed to, while at the same time focusing on maintaining and improving the services we provide. We are now determined to keep the focus on implementation. That is why I have established a dedicated reform-and-delivery office within my Department to lead and co-ordinate the implementation of the reform plan. Mr. Paul Reid is the programme director of the new office. He was recruited specifically for this job and has experience of change management in the commercial sector.
Our reform agenda is not about saying the right things or making hollow promises and commitments; it is about working together positively to build on the very strong public service tradition. It is in this spirit of co-operation that, despite the real and severe challenges we face, we believe we can and will create a public service of which we can all be proud. I thank the committee again for the opportunity to make this presentation. I will be very happy to answer any questions members may have.
I thank the Minister and his colleagues. It has been a tough week for the Minister and I wish him well.
There are a couple of points on which I want to touch. I refer to the Croke Park agreement and outside of that, to those people who have chosen to take early retirement on 29 February next. How many people had applied for this programme by 30 November? The Minister should indicate how he perceives the operation of the programme and the level of controls in place to prevent areas within the public service from lacking the personnel to deliver a service. He should provide a parameter in this regard.
The Department's value for money code, on which I commend the Minister, is greatly to be welcomed. I refer to two elements in this regard. First, it appears that in the past, Departments appear to have run free with spending for the first number of months and then the reins are suddenly applied. This appears to have been the position when the Minister took office and there was then a need to pull back harshly. I believe the Minister's intention is to keep a firm rein on the horse, rather than letting it loose for the first few furlongs and then pulling it back, which I welcome.
However, in respect of value for money, chapter 18 of the Comptroller and Auditor General's report last year highlighted two State bodies, namely, the Road Safety Authority and the National Tourism Development Authority. At the end of 2010, the Road Safety Authority had on deposit €23.5 million of State or taxpayers' money. The National Tourism Development Authority had on deposit €28.9 million. The Pensions Board, which appeared before this committee just over two weeks ago, had on deposit approximately €7 million.
Does the Minister or his Department know how much State or taxpayers' money is unused and on deposit in quangos and State bodies? I would have thought a money management opportunity exists, of which there are two elements, in this regard. First, in any business taking an evidence-based approach, money is normally given out on the basis of a project being put forward and one almost pays on a just-in-time basis. However, this appears to be a highly inefficient use of taxpayers' money. Second, this money could be put on deposit overnight with the National Treasury Management Agency, both to earn a rate of return on the deposit and to reduce the national debt. I ask that an audit be done of all the money on deposit in State quangos and whether the Department knows what is that amount.
I refer to the issue of the SME sector, value for money and the imposition of regulations both on that sector and across a broad range of enterprises. Invariably, such regulations are imposed by State bodies and quangos and I imagine that many of them are now obsolete. Does the Minister know the number of regulations being implemented by quangos within each Department? I suggest the Department of Public Expenditure and Reform should conduct an audit in respect of value for money and the issue of regulation of the critical SME sector, which employs 700,000 people. Such an audit should ask all Departments to revert to it by, say, the end of March on the number of regulations that are in place within each Department, how they work and stating precisely which State body or quango effectively is implementing each regulation. Thereafter, by 30 June or thereabouts, the Department should be in a position whereby it could come up with a regulatory framework that was fit for purpose. It should eliminate obsolete regulations that are taking up an enormous amount of man-hours across all parts of the SME sector, which would feed into the Department's reform agenda. While I note the Department's comprehensive spending review, I wish to keep things practical and seek to have these proposals always to be knitted into it. The Minister might address these points.
While I am happy to address these and other points, by way of open debate I wish to check with the Chair whether I can ask officials to intervene, amplify and so on.
Yes, if it helps the debate.
On Deputy O'Donnell's point regarding the Croke Park agreement, there has been much criticism of the agreement and much pressure has been placed on it. If one looks across the reform agenda and what it has achieved to date, I note that between 2008 and the present, 20,000 people have left the public service. There have been significant cuts in public service pay, as well as a levy on public service pensions. This has happened without strikes or work-to-rules, which has not happened in any other country.
Ground-breaking reform of pensions already has been introduced in respect of the new pensions. While people might state this is a legacy issue that will not apply for 40 years, it will mean that by mid-century, my successor in this job will be very happy that pension demand, which we estimate will be approximately €5 billion by then, will have been reduced by 35%. One must include such long-term planning issues, as well as dealing with the current position. I believe the Croke Park agreement is an enabler of change but it will be tested, particularly in the next year. As for the exact numbers who will opt for early exit, I should be clear there is no early retirement package.
I am aware of that.
There is no enhancement. For that reason, we have no control over who is going to go. It has been suggested we should not allow certain people to go. However, people are making rational decisions on the basis that were they close to or within a few years of retirement and were they to depart before the end of next February, they could do so on a pension and with a lump sum based on the pre-cuts level. We are not yet sure of the numbers because although I have asked for three months' notice, contractually most people are only obliged to give four weeks' notice and some have been advised by the unions to do that.
Are there any indicative figures?
We believe that between now and the end of next year, something in the order of 9,000 people will leave, some of whom will go at the end of December this year. However, as I indicated, we also will be recruiting.
Can the Minister give an indication of how many people had applied by the deadline of 30 November?
We can give the Deputy specific figures on a current date. I will ask for them to be co-ordinated across sectors. The biggest numbers will be within the HSE-----
-----and external bodies on which it is harder to get a full measure. However, we will forward to the Deputy our snapshot from the end of November to give him an indication in this regard. However, I would not place too much faith in those figures as yet, because many people will make their decision later.
I understand that.
I have also indicated there will be some additional recruitment involving a small relaxation of the moratorium. This recruitment will be focused on skills that are required, rather than any general process. I wish to avoid a situation in which services suffer and money is wasted for lack of key people.
That will be tied into the 29 February deadline and will be co-ordinated in that regard.
Yes. In addition, as I have stated, there will be co-ordination across each sector, as well as within my Department, to ascertain whether the pressure points will come.
As for the Deputy's point regarding value for money and the Comptroller and Auditor General's report, I will ask the Secretary General, Mr. Robert Watt, to outline whether the Department has a take on the total quantum of money on deposit and he will revert to the Deputy in this regard.
One matter I wish to address is the farcical situation on the current side, whereby at the end of a year, people felt they were obliged to spend money or they would lose it. Given that we still operate within a single-year envelope at present, I have had dialogue with colleagues on giving up their money, as though that money was Department-specific, instead of being the public's money.
Yes, I know.
Consequently, a three-year envelope of money allows people to engage in much more rational planning and to not bring forward unnecessary spending, which will help in this regard. As an aside, this committee might examine a matter about which I have a view. A very large sum of money is held by local authorities in bonds that are not being drawn down. There may be some way of accessing this money to deal with ghost estates and so on. While I certainly have a personal view on this issue, the legalities have not been worked out. I invite Mr. Watt to comment briefly on the quantum of money on deposit.
Mr. Robert Watt
It is an issue of which we are aware and it was instanced in chapter 18 of the Comptroller and Auditor General's report.
Especially in the current environment.
Mr. Robert Watt
The Deputy is correct. Any cash on deposit carries a financing cost which is reflective of the cost of our funds at this stage. Therefore it is not very efficient from the overall perspective of the Exchequer.
In one of the cases that was mentioned, there were issues from the supply account plus own resources. One of the authorities was retaining own resources while at the same time drawing down a grant in aid. That should not happen. Agencies and authorities should not have those cash balances or be carrying them over; they should be surrendered to the Exchequer. If they have surplus funds they should be surrendered in the normal way. We do have a number which we will furnish to the Deputy. There is an issue which we have mentioned in the reform plan about having a shared service in banking. We should have a shared-service approach where there are different accounts because there is a need across the system, given the number of Departments. In that way, where there are cash balances, they would be consolidated and we can maximise the cut. As a rule, however, the cash balances for authorities that are in any way funded from the Exchequer account should be minimised because, as the Deputy said, there is a financing cost to that. There is a figure of €100 million plus, but I will come back to the Deputy on that figure.
I will ask the Minister to answer the questions because we only have half an hour left in this session.
I am conscious of time, so I will intercept the final question, which concerns the SME sector. I have just come from a meeting with Chambers Ireland and am aware of their concerns. It was interesting to talk to them about that, post-budget. The specific issue of the impact of regulation is in the programme for Government. It is within the purview of the Minister for Jobs, Enterprise and Innovation. We will see how that dovetails into my reform agenda and, as the Deputy suggested, I will talk to the Minister, Deputy Bruton, about that.
Deputies should ask specific questions as we only have 30 minutes left.
I welcome the Minister and thank him for his presentation. I have a couple of questions, which the Minister has already mentioned, but particularly about the moratorium. There is no doubt that it has been effective but it has also been blunt, given the amount of people who will leave the service in February. In his speech to the Dáil on Monday, the Minister said he would be undertaking recruitment. Can he expand on how he will do so? Will that involve dozens or hundreds of people? It is so indiscriminate that some well-managed facilities have to close due to the age demographic with people leaving, whereas others are staying open.
Will the Minister also expand on the central and sectoral public service reform plan? Does that mean that the Minister's people are examining the health service and deciding what is needed? Will that deal with the February 28th exodus of staff who will leave the service then?
As regards public service outputs, the Minister of Health is proud of his special delivery unit because he is managing to get real-time data coming through to his office every week on trolley numbers and other statistics. The previous Labour Party administration in the UK found it had to move to real-time also in order to know what was happening. Will we see that kind of information coming in from across the public service? While we are in the confines of a committee room, the State is in a crisis and we need to do things quickly.
I worked in the private sector for years and we were completely focused on cost. Everything we did was based on reducing costs, including increments. In addition, performance was based on cost management. The famous example was of a general manger who got rid of the flowers and replaced them with shrubs because it was 50% cheaper. Every single element of cost was involved, including the lighting which turned off automatically. It cannot be done from Merrion Street, however; it must be done by someone working with people in the Departments showing that cost is everything. Will those kind of personnel be put in place across the public service and the Civil Service to ensure that cost is at the core of everything?
I will take the questions as briefly as I can. On the moratorium and numbers, as I indicated, we are going to have some recruitment next year after three fallow years of non-recruitment. We need to squeeze down numbers and still have ambitious targets. We will be focused on it and will not do any general recruitment. We will be focused on the skill levels required and they will be of a significant enough quantum. If the Deputy read my two speeches, he can do the maths. I cited the numbers in my speech on Monday.
Two thousand less.
The Deputy is doing the maths correctly. That is a sort of ballpark figure, but it depends on what presents. It is a question of addressing the issue exactly; it makes no sense otherwise. If a significant number of people in Revenue collection are going to leave, we need to replace them in order to ensure that we collect our revenue. If significant people are going to leave Met Éireann we need to ensure they are replaced.
In terms of public sector reform, I will ask Mr. Paul Reid to say a few general words, which will link in to the output and cost issues, which are an integral part of doing things completely differently. As the Chairman will know, when one reads the detail of the plan, a lot of this is nerdy. With all due respect, it is not stuff that will get onto the front page of the Irish Independent.
Or the Sunday Independent.
Or even the Sunday Independent. It will be profound in its impact if we get it right.
Mr. Paul Reid
I will make three brief points which are relative to the points that have been raised. The first is on recruitment. One of the actions in the plan is around workforce planning. We want to take a really proactive look at the workforce, skills, numbers and activities we have, and it is not just about replacing like with like. We will take a strategic look at where gaps have emerged, where we want to fill and what new skills we want to bring in. It is not just about a one-for-one replacement approach. That is in the plan.
The second point concerns measurement. I agree with the Deputy's sentiment. In the private sector, it would probably be called a balanced score-card where one takes a broader look at the measurements, outputs and activities. In the plan we have a strong statement about looking at a gulf-stat. That is a working name for it. We are looking at a whole suite of measurements across various sectors, Departments and offices. At Government level, that will show us how to measure performance, progress or trends. What are the top three measures in education and health, for example? It will take a broad look and examine trends over time. We have started a process to engage and outsource some people who might want to talk to us about how we can do that.
Significant actions within the plan are targeted at significant cost reductions. Along with that, we need to embrace a culture of cost reduction across the public service. Any decision, minor or big, has to be made around its value-add and cost. There are some specific big actions in the plan concerning costs. For example, we will look at procurement and the whole process of aggregating up more framework agreements. There are about 45 big framework agreements in place, and we see significant scope to improve the number. The value of contracts is about €450 million at the moment and we see more scope for that.
In our IT/ICT architecture infrastructure we see real potential for consolidating computer centres and data centres, as well as more use of technology and less use of manual transactions within the service. We therefore see significant grounds for improvement in that respect.
As regards property rationalisation, we will take a wider look at our total property portfolio, particularly in the context of reducing numbers. We need to consolidate and increase the equalisation per square metre or square foot, taking out maintenance costs and energy costs, such as heating and lighting. Where appropriate, we will free up property for cash disposal when the time is right.
Will there be specific staff for that or will it be policy-based only?
Mr. Paul Reid
In terms of the approach to the plan, we have established a dedicated programme office. There may have been some criticism of various approaches to reform in the past. What is different now is that we have a dedicated office within the Minister's Department, which I head up. We are building a central team with particular expertise. I am holding recruiting interviews today for shared services. Somebody will come in externally but with a competence in implementing shared services. We have a dedicated office and are bringing in skills.
However, the real success of change is that we have it owned within each of the sectors and Departments. They have dedicated change teams assigned to work on their reform plan. The reform plan has two large components. One is the reform that is happening within each sector or Department. The second element of the reform plan is the 14 cross-cutting areas. Therefore it is what is in one's Department or sector, plus how these 14 cross-cutting elements relate to oneself. The plan has 200 actions, 70 recommendations, 14 areas of cross-cutting, timelines, dates and owners. This time it is on implementation we are focusing, not on design.
It is great the citizen is being discussed as a customer. That is essential to proper public service delivery. From my experience, many citizens do not have the best interaction with their public services. Treating them as customers will bring a more professional attitude to it. It is great Mr. Reid is working as programme director in the Department, coming from a commercial background.
Regarding the change to a whole-year strategy in the budgetary process, European parliaments work differently to ours in the formulation of and decision on their budgets. How will the participation of Dáil Members in next year's budgetary process change?
I thank the Minister for attending. It is a departure from former procedures when Ministers did not appear before the committee.
Regarding the reforming of the budgetary process as raised by Deputy Eoghan Murphy, this week's issue around disability payments is an example of how to flag issues and allow the Oireachtas to play a more meaningful role in achieving targets as well as avoiding the upset and concerns when issues are not properly discussed politically. It also puts it up to people on all sides of the political divide to make choices. We need to learn a lesson from this.
The committee has heard from various Accounting Officers on sick leave arrangements. The one that sticks out is the Health Service Executive where there are major problems with sick leave. We are paying people significant sums of taxpayers' money to manage it and, yet, the data seems to be scant at best. Will the Minister be demanding better data on sick leave from Accounting Officers?
I take the Minister's point about the Croke Park agreement on delivery and industrial peace. I also take on board the point about not bashing everyone in the public sector. However, the elephant in the room in this is next year's increment payments. This is being discussed in the media and at kitchen tables across the country. Will the Minister explain the rationale behind the increments due next year? Will there be anything given in return to the taxpayer and the consumer of public services, rather than someone in the public service getting a pay increase based on a certain number of years? It is causing concern. If the Croke Park agreement is to receive the support it needs from the public, the issue around increment payments needs to be addressed.
Nearly every week the issue of local government spending is raised at the committee. The Minister is able to increase the committee's role in examining local authority expenditure. Taxpayers' money leaves Departments where it receives a degree of scrutiny by this committee and other bodies. It then gets to the door of local government and off it goes. The committee is left receiving letters of complaint and concern about a lack of accountability in local government expenditure. The Minister should examine extending the committee's role to examine local government spending.
I want to raise the issue of someone retiring from the public service on a Friday and returning to their post on a Monday, a cause of huge concern. We want the people who work in our public sector to have pride and opportunities. However, many young teachers cannot get a job as a substitute teacher because a retired teacher on a public sector pension is brought back in to fill it. I know our colleague the Minister for Education and Skills is working on this. However, it is a broader matter than just teaching, as it goes across the public sector. If one has retired and in receipt of a public sector pension, one should not be back in another guise the following week or month.
Colm McCarthy and an bord snip nua made several recommendations in 2009. How many of these were implemented? How many does the Minister envisage will be implemented or was the bord's report just a costly exercise?
There are many abandoned sites to which Departments in the decentralisation programme were to be moved. Many of them are sitting there, costing a lot of money. Have any costings been undertaken on these sites? Has the Minister any plans for long-term leasing of these sites?
Deputy Eoghan Murphy welcomed my comment on the citizen and customer of which I was very conscious. While it may not be appropriate for me to refer to Uachtaráin na hÉireann, for many years he would berate me up if I ever used the term "customer" when referring to the citizen. He regarded the citizen, never as a customer. If anyone referred to him as a customer of a public service, he would say he was a citizen of Ireland. One has to be careful in the use of language.
The notion of the big bang day for the budgetary process, of someone coming into the Chamber to read out the secrets decided by a Cabinet, is crazy. We need to have much more public debate about the process. It is good for government too. The idea behind the comprehensive review of expenditure is to provide as broad a range of options as is possible. The problem is that if one wants every option, the most egregious and difficult ones will always be described as savage. Every option should be available, even if it is just there to be dismissed. I hope we could have a much more rational approach from the Opposition and the Government to the choices next year. I hope we can say this is the quantum of money we have, these are the options, put everything on the agenda and then make rational decisions. The Government will make the final decision and carry the can for it. That is right and proper as we are elected to do that. There should be public debate about it, however, which might mean allowing lobby groups in.
The way it works now is one makes a set of decisions. Then a lobby group representing those who may be affected adversely by it makes a presentation against it. Any savings which adversely affect somebody will always be resisted. We have to have logical debates about this process, however. I hope from early next year we will have a debate on the outcomes and choices of the fiscal envelope we have determined for the next three years.
The expenditure statement published on Monday has all the options for savings that were considered, the decisions made, the envelope of moneys for next year and the quantum of policy decisions that are yet to be made for next year. It is not very much next year but the year after that it is very significant.
Deputy Harris asked if there had been a political-proofing of the disability issue. Perhaps he is correct. Maybe I should not be straying into this area because the public mind is set about this. However, this was not put forward as a savings issue but as a reform one. In general, 16 year olds should not be getting a long-term payment that will keep them in the payment forever. The idea was to change this to a household payment and that the domiciliary care allowance would be paid instead. The difficulty was that the quantum of money would be substantially less, which is the issue that needs to be addressed now. The Minister for Social Protection is trying to move to not having the 60 different payment schemes that exist but an age-based payment support with a top-up support for people with special needs that is rational. We need to have a debate on this issue as well. It might be better if we settle this one now and come back to it.
It is interesting the former Minister for Social Protection, Mary Hanafin, proposed the same arrangement in 2009. It was withdrawn after the same pressure was applied.
That was due to the backbenchers in her party.
We hear the Chairman.
She put it to an expert group which said it should be implemented. Sometimes even when an expert group has thought about an issue and comes up with a rational proposal, there are certain emotional things one cannot do. That is fair because it is a political judgment too. Viscerally, we feel they are unfair. Anything that touches the disability sector is unfair and we need to be mindful of it. I agree with that.
On sick leave management, I will publish the proposals that will significantly change sick leave arrangements in the public service. We need to engage with the public service in that regard. We need to ensure that there is management of public services. One of the difficulties is that if staff are paid their sick benefit through a central Department such as the Department of Social Protection, the burden is off line managers to manage it because it is not part of their budget line. We need to look over time at dealing with that issue.
Increments was an issue Deputy Harris asked about. That has taken legs, the notion that it is a simple matter to stop pay rises. Everything is on the agenda, but who gets increments? If one is to organise a pay cut in the public service, would one do it through stopping increments? Some 52% of those in the Civil Service on increments are clerical officers, starting the grade on approximately €22,000. Does one cut staff on €22,000 and stop them getting an increment while those on the top of the salary scale who got all their increments are untouched? If one was going to make a cut, is that what one would do? Would one take it from new gardaí and new teachers, but leave untouched the established gardaí and teachers who are on the top of the scales? Is that the way one would go? That is the debate we need to have, if we were going to cut public service pay. There are issues on which we need to have all of the data on the table before we make decisions in that regard.
I take what the Deputy stated about local government, but in another forum there would be a great debate about devolution of power. We elect local authority members who are supposed to be the Deputy's replication at local level. Does the Deputy want to oversee the local authorities or is that the job of local authority members? I would be interested in hearing the Deputy's views on that also.
I full agree with the point the Deputy makes in terms of the annoying factor, and more than that, of those retiring and coming back on a pension to dislodge others. It was to be put in legislation, as the Chairman will recall. It was in legislation before the House and was removed by amendment in the previous Dáil, that teachers who were on pension could not be recruited as substitutes and the schools had to take others.
I will move on quickly. Deputy Anne Ferris spoke of the McCarthy report. There is much in the report which with neither Deputy Ferris nor I would agree. We can conduct an audit of that and maybe come back to her in terms of the specifics.
On the point about site leases, the Deputy will recall that when we published the decisions on decentralisation, 40 decentralisation projects, which had not substantially started, just stopped. Those that are substantially completed are there but they will be integrated into the general Department and we have taken away the notion that we have devolved entire Departments. For example, the Department of the Environment, Community and Local Government is not, lock, stock and barrel, in Wexford as was intended. It is a component part of the Department, but the Aireacht, as it used be called, will remain in Dublin, and that is rational.
There is a third category, which, I think, is the one Deputy Ferris was talking about, of staff who are half-moved. I think they call them advance parties, like on D-Day. The advance parties are there and we are still looking at that. We are looking at the legal arrangements and lease arrangements because some very odd decisions, as the Chairman will be aware, were made with long-term leases of property. We need to come back to the Deputy in terms of the decisions in that regard.
There are some that do not have anybody in them. There are sites or buildings that are empty.
We indicated in the published document that they will be generally treated in our property portfolio in the way Mr. Reid indicated.
I am conscious that we are coming near the end of our time but also of the fact that when we examine the accounts of the Department when the Minister leaves, we will not be able to stray into policy areas, not that I intend to do that. I will take my cue from the other members and ask the Minister some questions, particularly on the Committee of Public Accounts.
The Minister has set out a broad agenda of reform. As I stated to him on many occasions, I may differ with him on some aspects of it but I, too, want to see a constructive reform across the public sector. There are good staff in the service. I do not bash them, as is often reported, but I comment on them. That is my job. I consider it to be the job of everyone in this Parliament that he or she needs to scrutinise what is going on - it is taxpayers' money. Having said that, it is difficult for a Minister or Government to examine the accounts and present a budget based on the fact that it cannot look at, because of the Croke Park deal in this instance, the cost of salaries and all of the rest of it which sometimes makes up 70% of the budget of a Department.
My question relates to the Committee of Public Accounts. As the Minister makes all of the changes, as Departments change and their functions change, we need to change with the times also in order for us to be able to do a comprehensive job on behalf of the tax-paying public. On local government, which Deputy Harris raised, for example, members here are not interested in taking over the role of the members of local government but where funding is allocated directly from the Department to local government, there is a need for us to follow the money. In many cases where substantial funding is given by the State to local government, we cannot follow the money and we cannot bring in the staff responsible in terms of the spend. This is aside from the commercial rates, etc., that are collected. It is not that we are not interested in it, but that it is supposed to be looked after by members of the local authority. However, there is €5 billion a year given to local authorities and the committee cannot follow that money. In many cases the taxpayer would like to see us follow it.
Can the committee call in the local government auditor?
No. It has 40 staff within its audit department.
Are the local government auditors not subject to the committee?
No. The Comptroller and Auditor General has 140. There is not a connection between both and there should be - that would be joined-up government. It is joined-up thinking to follow the money. I would urge the Minister, as part of the reform package, because he has the opportunity and, indeed, the mandate, to follow through on that, to give us the powers to scrutinise that €5 billion spend. That makes sense. It is something for which we have been asking.
Deputy Rabbitte, now a Minister, presented the report on which the Minister, Deputy Howlin made comment in his script for the budget to the Oireachtas at that time. It is almost as if every Opposition Member supports it but when the person goes into Government, he or she tends not to be able to bring it to a conclusion. That happens, and I suppose it is bureaucrats protecting their patch.
In terms of the minutes, it is often the case where we would make recommendations - we had a discussion on this and correspondence on it - that these are delayed in being presented to the Minister, Deputy Howlin's, Department because we are looking back historically on the accounts. Then it goes through this bureaucratic maze and, finally, it turns up, maybe two or three years later.
One of the key points, which the Minister mentioned in his correspondence to the committee, is that our work could be more timely. That is true, as is the other case on the other side of that coin. This committee is supported by the Comptroller and Auditor General, who has 140 staff. Likewise, the local government audit has 40 staff. There are three staff supporting this committee and we are asked to scrutinise across the various Departments. I am not asking for an extra layer of staff but at least if there was one qualified person to liaise between this committee and the Comptroller and Auditor General to assist us in our scrutiny of the accounts, and thereafter in presenting the recommendation and the minute to the Minister's Department, the Minister would have the minute in a timely fashion and then he could insist on the various Accounting Officers in returning their view on matters in a timely fashion.
I am glad to note from the Minister's contribution here - I think I read it elsewhere - that Accounting Officers and Secretaries General have been asked to pay attention to what has been asked of them in terms of the Committee of Public Accounts. That, to me, is real reform because it is a change of culture and attitude in terms of how they view this committee, and I would ask the Minister to look at that.
A figure was mentioned for the Croke Park agreement of 6,000 or 9,000 staff leaving next year. We have to be strategic in terms of where these individuals come from. I accept the Minister has no choice but we need to investigate the qualifications of senior civil servants in particular so that we do not lose critical staff on the front line. This is what is going to happen. I will place a wager with the Minister that when the figures are counted, few of those middle to senior managers who are packed into Departments will be going. They will all go from the front line, which is not what we want.
It will help the public perception of the agreement if somebody from outside of the usual suspects monitored what is going on. This is why I welcome that Mr. Watt and Mr. Reed spent some time in the private sector before bringing their wisdom and intelligence of that sector to bear on the changes that are necessary in the public sector. However, the national implementation body, which was established in 2010 to oversee public sector reform under the Croke Park agreement, contains nobody from the outside. It is chaired by Mr. Fitzpatrick and its members are Secretaries General and representatives of public service unions. It would be valuable if a number of leading figures from the private sector were given an opportunity to serve on the body. It would help to build public confidence.
Given the value for money issues that are built into the Croke Park deal, I hope this committee can evaluate the outcome of the agreement. In that regard, I expect Mr. Fitzpatrick to appear before us. In light of the positive exchange we have had with the Minister, I hope he and his officials will meet us for further discussions on an occasion when they have more time. We learned a lot from what he had to tell us. Being armed with this information might make it more difficult for the Accounting Officers when they appear before us but at least we will be doing our business in the fullest possible way. It cannot be a case of business as usual. Our business has to be very different and this committee has to respond differently. We need to be supported by that one person and we need to have constant communication with the Minister and his Department.
On behalf of the members I thank the Minister for meeting us. I hope he regarded the exercise as worthwhile and will agree to engage further on these issues in future. I ask that he take on board our constructive suggestions about the work of this committee and how it can be expanded in a positive manner to support his reforms.
There is no doubt that the Chairman and I would disagree on certain overarching issues but we share a genuine zeal for reform. I have wanted to reform this place for a long time and a considerable amount of work remains to be done in terms of reforming the way this place operates, although it is not my job now. The moribund traditions of the Houses of the Oireachtas need to be shaken up. That is for a different day, however.
In the public perception, this committee plays a significant role in holding public administration and the cost of running the State to account. Traditionally the committee performed a very good job in this regard. I agree, however, that we need to much more sensitive about time. The committee's investigations are always historic. In Cabinet over the past couple of weeks I have signed off minutes of the Committee of Public Accounts from 2009. I am responding to the recommendations that are made but the process is incredibly slow and laborious. The Secretary General will discuss that issue further with the committee after I leave but it is important that we look for ways to change that process.
The cost of salaries has a huge impact. This is an issue which weighs on my considerations. We have made significant reductions in the cost of salaries in the public service and we will have to seek ways of achieving further efficiencies in the future. I take on board what was said about local government. If we have an effective local government system, that is the place in which expenditure should be monitored. I acknowledge the argument that moneys voted by the Houses of the Oireachtas to the local government fund by the Houses of the Oireachtas should be followed with spend. I will examine the legal basis for that suggestion and will change the legislation if it possible to do so. I will revert to the committee in writing with my judgment on the matter.
In terms of support for the committee, I have to be careful about what I say as a former office holder of the Houses of the Oireachtas. There are ways in which staff could be better deployed to this committee. That is a matter which might be discussed with the Oireachtas Commission. The Houses of the Oireachtas employ a significant number of able and competent staff who are not always deployed to best effect. That is my personal judgment. I would be interested in hearing members' opinions on the issue because it is important they have sufficient staff to do their work.
I do not doubt that when I return with my Department's Estimates I will be asked why I am allowing them to grow if everyone else is being squeezed. If we are going to have oversight or introduce fundamental change, the engine of change must be empowered. Re-allocation of staff to this committee should be considered for the same reason.
On the Croke Park agreement generally, we have no control over departures between now and the end of February. We are not incentivising anybody to leave. These people are making a choice for themselves and we cannot tell them not to leave if they have a legal entitlement to retire early on an actuarially reduced pension. Some individuals will be entitled to full pensions because they will have worked for 40 years and they may wish to retire before they reach the age of 65 in order to avail of a better pension. That is a rational decision which cannot be prevented. I do not know where the holes will arise. I am not as sanguine as the Chairman because I think it will impact on all sectors rather than exclusively on the front line.
The national implementation body is largely comprised of management and union because it is an industrial relations body established to drive the change agenda. I will investigate how we can include external inputs to the body. In the Taoiseach's absence, I chair the Cabinet sub-committee which is driving the reform programme. The sub-committee is supported by a board comprising senior civil servants. There might be a role for the Chairman on that board, if he is interested. It would be an interesting position.
I will send the Minister my CV.
A reverse takeover.
I thank the Minister again. I am interested in learning how the implementation body functions. As a vote has been called, I propose that we suspend the sitting of the committee.
Sitting suspended at 11.10 a.m. and resumed at 11.30 a.m.