I am glad to have the opportunity to present the 2013 Estimates for my Department's group of Votes. The group comprises a significant number of Votes. In addition to my Department's Vote and a new Vote for shared services, the group contains the Votes for several offices under the aegis of my Department, including the State Laboratory, the Public Appointments Service, the Valuation Office and the Ombudsman's Office. It also contains the Votes for superannuation and retired allowances and for the Secret Service. The Vote for the remaining Office under the aegis of my Department, that of the Office of Public Works, will be taken separately by my colleague, the Minister of State, Deputy Brian Hayes.
Before dealing with the individual Votes in the departmental group I wish to draw the attention of the committee to several general issues. The first issue is the matter of performance budgeting and Dáil oversight. In recent years I have revised the format of the Estimates presented to the committee as part of the implementation of performance budgeting. Under this format the Estimates before the committee and all committees present better information in order that Members, members of the public and decision-makers generally can see at a glance the financial and human resource input costs, the key outputs and the impact factors for each expenditure programme. This is part of the reform to create a more coherent and integrated planning and performance management framework for public expenditure. Within this performance budgeting framework the overarching strategic policy for each Department is set out in its statement of strategy, which explains through clear and integrated key objectives or high-level goals the rationale and purpose for each programme area.
The new Estimates format is designed to expand on this high-level strategic document to provide for each departmental programme a clear presentation of the financial and staffing resources allocated to that area, the main activities undertaken and the key outputs delivered. The intention is to give committees a clear sense of what exactly public funds are being spent on and what is being achieved with that spending. Also included in the Estimates document is a section showing the content and impact indicators. These indicators are intended to give a sense of whether the public service outputs are having a positive impact on citizens and on Irish society in general. This approach brings a streamlining and clarity to a process that was previously spread across several documents and allows Dáil committees to better understand what public service outputs and impacts are being delivered through the expenditure of public funds. In addition, my Department will now be working on expanding the expenditure and performance information contained in the Ireland Stat website, which was successfully piloted during the past year. The content of Ireland Stat will be broadened to capture more information about public services. It already provides details of performance in areas such as job creation, research and development, road and food safety. The feedback from our general consultations has been very positive.
This year's Estimates process continues the important structural reform that is intended to assist the committee in its task of scrutiny and holding the Government to account. Much progress has been made on this front. The challenge over the coming period is to bed down this new way of performance monitoring and reporting and, through the expansion of the Ireland Stat website in particular, to make available up-to-date and easily accessible information on what the public service is delivering on the money we are voting and how well it is doing.
In the context of my broader programme of reform in the area of accountability, performance and Dáil oversight, the committee will be aware that I wrote to the chairs of all the Oireachtas committees in January 2012 to advise them of the new arrangements and the opportunities for greater engagement by public representatives in the Estimates formation process. In the second half of last year meetings took place between Ministers and the relevant Oireachtas committees concerning the prospective Estimates for 2013, framed in the context of the expenditure ceilings set out in the comprehensive expenditure report 2012-2014. This was the first time that there was a systematic process of considering future Estimates matters by the Oireachtas in advance of the Government deciding on its expenditure Estimates to present to the Dáil. The purpose of the exercise was to enable committees to engage with line Ministers and their Departments to exchange views on how the fixed allocations would be apportioned. We knew about the amount of money allocated and we knew the options in the comprehensive review of expenditure and people may have had their own views. That was a new and useful departure.
As the Committee is aware, the hearing in regard to my Department's group of Votes took place last October and I found the exercise useful. Arrangements are in train to ensure that the process becomes further embedded in the work of the various committees this year.
Within the overall framework of recent EU fiscal reforms, I have introduced several improvements to Ireland's budgetary architecture since taking office. These measures are designed to improve the management of public resources and to ensure public funds are used effectively in a transparent manner. The Ministers and Secretaries (Amendment) Bill was published late last year and, when enacted, will give legal standing to the existing multi-annual departmental ceilings. This legislation will anchor other reforms to multi-annual budgeting and will allow for sensible, structural planning and prioritisation within each area of public expenditure, encompassing full public input and parliamentary oversight, while affording Government the flexibility to ensure that the appropriate fiscal stance is taken.
Naturally, my Department is not simply focused on ensuring that Government meets its public expenditure targets, although these are important; it is keenly aware of the need to achieve value for money in public expenditure as well.
The new public spending code, which was developed last year, sets out the rules and procedures underpinning value for money, bringing together in one document an updated guide to value for money best practice. The code aims to ensure both current and capital expenditure are subject to rigorous value for money appraisal in advance of public moneys being spent and, where programmes are already advanced, that they too are subject to interim assessment and evaluation. I envisage that committees will be presented with these assessments in due course to aid the former's work in scrutinising departmental allocations and to contribute to their new role in engaging in the Estimates deliberations at an earlier stage.
In order to enhance the economic and evaluative capacity of the Civil Service, which is a matter on which many people commented recently, the Government has established the Irish Government Economic and Evaluation Service, IGEES. Under the stewardship of my Department, specialist economic and evaluation staff were recruited into the new service last year. They are actively engaged in policy work. The service will support enhanced policy analysis across the Civil Service with the new expertise being shared among Departments as requested. Many of my colleagues are interested in having specialist economic evaluators working in line Departments. We are also strengthening our ties with policy experts outside the service, for example, the ESRI, universities and similar government economic units in other jurisdictions.
The type of work involved is illustrated by the analytical papers contained in the 2013 expenditure report, published last December. These concerned, respectively, the reduction of public expenditure on legal services, the expenditure impacts of climate change and the implications of demography for spending in the education field out to 2030. More assessments are under way and I am committed to publishing them. The papers are designed to provide sharper, more focused assessments of specific policy issues to help inform the Government when it is making policy decisions.
Turning to the details of my Department's Vote, the committee will have noted that it comprises two main programmes, namely, public expenditure and sectoral policy and public service management and reform. The first programme has a focus on the promotion of value for money and performance information and the implementation of policies to reduce public service numbers. It also includes the management of EU co-funded structural programmes and the fostering of North-South economic co-operation. The second programme is focused on the delivery of public service reform in line with the programme for Government and the public service reform plan, which I published in 2011. The implementation of ICT and e-Government programmes and the development of policies to minimise the public service pay bill and maintain industrial relations stability in the public service also form part of the overarching Vote.
I draw the committee's attention to the fact that my Department's Estimate for this year involves a net funding allocation of €36.364 million compared with €37.1 million last year. In effect, expenditure will be maintained at broadly 2012 levels despite additional funding requirements in light of, for example, the tendering of the national lottery and additional expenditure on essential IT upgrades required to support Government networks. These have been funded within existing resources. Similarly, employee numbers have been maintained at 2012 levels while additional services and reform objectives have been delivered.
On this aspect, I wish to outline a number of initiatives that have been taken by my Department. The committee will have noted the presence in the public expenditure and reform group of Votes of a new Vote, which I mentioned in our discussion on the timing of today's debate. I am referring to Vote 18 - Shared Services. This new Vote has been created to support the Civil Service shared services programme set out in the reform plan. My Department established this Vote in January to support the significant progress being made in shared services across central government. Prior to this, the expenditure allocation was contained in my Department's own Vote. The gross Estimate for this Vote amounts to €21 million this year, which covers the initial implementation stage for the HR and pensions shared service centre, which will see the transition of 14 Departments this year and a total of 40 Departments and offices before the end of next year. The Estimate also contains provision for the initial implementation stages of a payroll shared services centre and a further shared service - financial management and banking - is under consideration. It is envisaged that shared services in the HR, pensions and payroll areas will, in time, generate time savings of up to €20 million per annum.
I also draw the committee's attention to the work of my Department in respect of procurement reform. In line with the recommendations of the Accenture report that I commissioned last year, entitled "Capacity and Capability Review of Central Procurement Function", an experienced chief procurement officer, CPO, was recruited into my Department and took up his appointment in late January of this year. The CPO is charged with leading reform of the central procurement function and will be accountable for national procurement strategy, all aspects of procurement policy, including EU and national procurement law, and the implementation and the establishment of an effective compliance framework.
Since the CPO's appointment, he has engaged extensively with key stakeholders across the public sector and has developed a plan for Government consideration. The plan sets out ambitious but achievable targets for migration to a new and more centralised model for procurement across the public service, for significant savings to be achieved and for new governance structures for oversight to be introduced. As I mentioned last year, we discovered when we drilled down that many State agencies and Departments were buying the same product from the same supplier at different prices. There is significant scope for improvement. The new procurement office that the CPO will establish will be a separate body under the aegis of my Department. The procurement reform plan was considered by the Government today. My proposals were adopted and I will make public comment on them later today.
In addition, officials from my Department are taking a leading role in the development of a number of procurement directives at EU level. These directives are aimed in the main at the following: streamlining procurement procedures and increasing flexibility; increasing the scope for consideration of environmental and social objectives, including local employment and recruitment for significant projects, an issue that many people are concerned about; and improving procedures and governance. The goal of the Irish Presidency is to achieve a first reading agreement with the European Parliament on all three proposed public procurement directives by the end of June.
As well as these new initiatives, my Department has been heavily involved in one of the key issues facing the Government. The Government is committed to delivering the pay savings as set out in the EU-IMF programme of financial support. Continued reductions in public service numbers in line with Government policy will go a considerable way towards achieving these savings. Significant progress has already been made in that regard.
The end of 2012 returns show that serving numbers in the public service were 290,800, some 30,000 below 2008 levels. The Government is committed to reducing public service numbers further by 2015 to below 282,500. To this end, a ceiling of 287,000 has been set for the end of this year, which represents a reduction of some 3,400 from the end of last year.
Delivering a leaner, more efficient public service is a key feature of my public service reform programme. The timeframe under which we are doing this is challenging. There will be pressures, but the Government is clear that front-line services will be protected and that we can deliver on this target by continuing to focus on improving systems and procedures, by making better use of shared services and by restructuring operations to deliver more efficient services. In that regard, my Department is active in the workforce planning area, with the objective of helping organisations to deploy staffing resources more optimally in the context of the planned reduction to which I have referred. It is an interesting matter. I have also met the CEOs of a number of State agencies. While I will not identify the one with whom I spoke this week, that person mentioned the value of being able to redeploy people to the areas of most need from those areas that were overstaffed. This valuable tool has been utilised across the public service in recent times.
The challenge for each sector is to manage the reduction in staffing levels while maintaining a high level of service delivery to clients and policy support to the Government. The bulk of the reduction in staff numbers is being achieved by a combination of the non-replacement of staff leaving under natural retirement and a moratorium on the filling of posts by way of recruitment or promotion. I am conscious of the fact that this has become a pressure point in some areas that need to be renewed. I hope to give detailed consideration to this matter and would welcome members' opinions in this regard.
