The need for careful evaluation and appraisal of all significant areas of expenditure, including those contained in the Government’s Public Service Reform Plan, is essential, especially in the context of on-going resource constraints.
The Government's approach to addressing the management of expenditure over the medium-term has been clearly set out in the Comprehensive Expenditure Report (CER) 2012-2014. Under the CER, multi-annual current expenditure ceilings are fixed for each Department in order to make clear, in advance, the resources available for each area and the level of savings required. The intention of this reform measure is to improve the focus on medium-term, structural and strategic planning of expenditure within each area and to prevent spending overruns where possible.
Good progress has been made to advance reforms in the area of evidence-based expenditure policy. This includes actions taken in relation to the Public Spending Code to consolidate existing procedures in this area and modernise them in line with best national and international practice. These reforms are supported by the establishment of a Public Service Evaluation Network, reforms to the Value for Money (VFM) and Policy Review process and the introduction of new Focused Policy Assessments designed to answer specific issues of policy configuration and delivery.
With regard to the specific areas referred to in the Deputy’s question, Information and Communications Technologies (ICT) are key enablers to delivering improved public services. In 2012, my Department published the eGovernment Strategy 2012-2015 and the Cloud Commuting Strategy, which identified necessary actions to enhance the delivery of public services using ICT. While these strategies were developed by my Department in conjunction with the Public Service Chief Information Officer (CIO) Council, the specific responsibility for implementation of actions arising from these strategies and for assessing the efficiencies that arise, including enhancing ICT capability, is a matter for each individual Department and Office.
The Reform Plan has given an added impetus to the OPW’s on-going drive to reduce rental outgoings. Through a programme of lease surrenders and rent reviews, The OPW has reduced the annual rental cost of Civil Service accommodation by approximately €25 million. The Reform Plan has been given further support by a specific Government decision mandating the OPW to further rationalise Civil Service accommodation and produce more space efficient accommodation standards. This will facilitate the surrender of the maximum feasible number of leases as lease breaks arise thus further reducing the Government's rental costs. As part of this process, the OPW has been asked to work with the various sectors within the Public Service, e.g., Local Authorities, HSE, etc., to develop standards and protocols that will facilitate the sharing of buildings and the transfer of property, thus reducing the State's overall property costs.
A decision-making model for Shared Services has been established to evaluate value for money to the taxpayer for all Shared Services programmes under my Department’s remit. A cost-benefit analysis to assess the potential efficiencies that a Shared Services Centre can deliver, of both pay and non-payroll expenditure, is carried out in respect of each proposed Shared Service programme. This analysis is assessed with comparable benchmarks elsewhere to identify the opportunity for improving cost efficiencies and effectiveness for a specific function. These make up a significant part of the overall business case. The business case also considers a number of possible options and assesses the financial and non-financial value of each of those options. Each Shared Service programme has a business case submitted for peer review to the Shared Service Transformation Unit and the Central Economic Evaluation Unit (for evaluation of the financial and non-financial assumptions against the Public Spending Code).
The methodology I have described above allows me to report that the Human Resources and Pensions Shared Services Centre for the Civil Service, PeoplePoint, is expected to yield combined pay and non-pay savings in the region of an annual net saving of €12.5 million by 2014 while the number of staff involved in delivering these services will reduce by a minimum of 17%. The first transitions to PeoplePoint are expected at the end of March 2013, with all 40 in scope bodies to be transitioned by the end of 2014. A similar approach has been taken to develop a business case for Payroll Shared Services and to assess the baseline performance of Banking and Financial Management for consideration for Shared Services. A cost-benefit analysis for Shared Services projects notified to my Department is also being undertaken across the Public Service sectors of Health and Local Government.
I would also point out that the Progress Reports published by the Implementation Body overseeing progress on the Public Service Agreement have identified significant non-pay administrative efficiency savings. Two reports have been issued to date – the first in June 2011 and the second in June 2012.
Overall, good progress has been made on delivering savings and implementing the Public Service Reform Plan. Of course, it remains a matter for each Minister and their Departments to ensure that the Vote-level allocations are adhered to and at the same time ensure that they continue to provide essential front-line services and respond to increasing demands.