Friday, March 02, 2007

Flogging the Public Service

Based on my 22 Feb Blog re public service staffing levels, I’ve sent the following letter to all three national broadsheets and a variety of radio commentators e.g. Pat Kenny, Vincent Browne, Matt Cooper, George Hook. Not published, to date, which isn’t a major surprise given the length of the piece. However, if the commentators take the time to read the piece it might influence their approach to public service topics in the future.

Dear ….
The National Economic & Social Forum (NESF) report “Improving the Delivery of Quality Public Services”, published in December 2006, calls for major reforms to the way public services are delivered in Ireland in order to make them more customer focused and to help people to seamlessly access those services they require. These recommendations will hopefully form the backbone of some political party’s promises to us in the run-up to the election. Getting better value for an estimated €39bn spend on public services would surely be a big prize indeed.

While the NESF recommendations may seem highly aspirational, they may not require incremental funding if introduced as part of a root and branch reform of the public services, for it is just possible that currently that Public Service may be overstaffed by as much as 35%.
It is difficult to form a coherent picture of relative efficiency or appropriate staffing levels within the public service, but some former and current semi-state companies may provide a reasonable proxy
, given that they shared, with the wider public service, the same ultimate owner representing "the public interest" and the same unions representing the staff interest.

Since the mid-1990’s, Eircom has shed approx. 5,000 employees, ESB has shed 3,000 and Aer Lingus 3,000. In combination, these three companies have reduced their combined total workforce from about 31,000* to about 20,000 in a little over 10 years, a 35% reduction. The impact on customer service arising from these changes has been interesting: your new home phone will now be installed in days rather than years, while Aer Lingus fly many more of us to a multitude of interesting new destinations at much reduced fares.

This analysis may be somewhat crude but it does pose a serious question as to the likely staffing levels, efficiency and value for money we are getting from the Public Service Sector as a whole. The modus operandi employed in the recent restructure of the eleven Health Boards into the HSE suggests that a prima facie case exists to support this hypothesis. The overall employment scenario implied in this analysis would cover a variety of outcomes - from functions which are understaffed, or even in need of creation, to those which are heavily overstaffed, or even functionally redundant.

The bench-marking process was supposed to provide parity between the public and private sectors, which should presumably have included measures of productivity and efficiency. It’s quite clear that the process has actually achieved little by way of reform to extract value for money, while there is a wide consensus that much of the public service is now significantly overpaid, relative to its private sector peers, notwithstanding the security of employment and
gold-plated pensions enjoyed by the public service.

The wasted opportunity of bench-marking has been further compounded by the fallout from the 2003 decentralisation stroke, which must have seriously damaged trust among middle and senior public service management, effectively killing any prospect of proactive proposals for material change and flexibility from this key group of employees.

The incoming administration must make root and branch reform of the Public Service a key objective, reminding all concerned of the explicit promise in the title of that employment. This NESF report would make an excellent pump-primer for such a review. One immediate
step should be to suspend, temporarily or permanently, the 2003 decentralisation plan which can only further embed the existing inflexible structure and continue to alienate Public Service
management. Such a move should also provide some inducement for the Unions to play their own part in the necessary reform. The next phase of bench-marking should be a very different animal, with the emphasis on reform, restructure and redeployment of resources to actually
the public services which the public need and are able to access.

In the meantime, as the election approaches, Public Service unions will be maximising their effort to extract further concessions in exchange for industrial peace.
Regards, etc.

* Eircom (then Telecom Eireann)1994 13,000 to 8,000 in 2004, -38%
ESB 1997 11,500 to 8,300 in 2005, -28%
Aer Lingus 2002 6,500 to 3,500 in 2006, -46%

Footnote: an edited version (essentially the bits in italics) published by the Irish Independent.

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