Speaking Points on Public Service Reform
for Mr. Brendan Howlin, T.D.,
Minister for Public Expenditure and Reform
Select Committee on
Finance, Public Expenditure and Reform
Thursday, 22nd November, 2012
Introduction
 Firstly, I would like to thank the Chairman and the Committee for
taking up my offer to brief you on the progress being made in the
implementation of the Government’s Public Service Reform Plan. I
would also like to congratulate the Chairman on his appointment and
wish him the very best of luck in his new role.
 This Committee has played, and will continue to play, a valuable role
in the Public Service Reform programme and I look forward to
getting your insights today.
 This Government has embarked on the most ambitious and
comprehensive programme of Public Service Reform in the history of
the State. Our task is considerable but given the situation we
inherited, radical, far-reaching and sustainable change in the Public
Service is not an “add-on”; it is an essential part of our overall
strategic response to the challenges that we continue to face.
 Reform of the Public Service is essential if we are to continue to
deliver public services in an environment of significantly reduced
expenditure and staff numbers. It is also worth remembering that the
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demands on these services are greater than ever before, due to the
economic downturn and demographic changes.
Fiscal Consolidation
 Before talking about the reform programme, I would like to
emphasise that we are making progress on addressing our fiscal
obligations.
 In total, budgetary adjustments designed to save or yield
approximately €25 billion have been implemented so far. As the
Committee will be aware, over two-thirds of these adjustments have
been on the expenditure side.
 Since 2008, overall gross Departmental expenditure has reduced by
€6.5 billion and we are committed to significant further reductions
over the next three years.
 Notwithstanding the progress already made, the deficit in our public
finances remains large. We face difficult decisions in reaching our
target of less than 3 % of GDP by 2015. To this end, the
Government is now drawing up the detailed measures for the 2013
Budget, which will be announced on Wednesday, 5th December.
Public Service Pay and Pensions
 As you will be aware, on Tuesday I invited members of the Public
Services Committee of the Irish Congress of Trade Unions to
discussions aimed at achieving additional reductions of the order of
€1bn from the Public Service pay and pensions bill over the period
2013 to 2015.
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 I am pleased to say that the Public Services Committee of ICTU has
agreed to meet representatives of Public Service management next
week for an initial discussion.
 Those discussions will also allow us to set a new agenda for
improvements in the productivity of public servants, extending and
building on the achievements made to date under the Croke Park
Agreement, and enabling the further reform of the Public Service.
 Depending on the outcome of the initial discussions, the Government
has indicated its willingness to enter a process of negotiation with the
objective of concluding an agreement on workplace change and
savings with its employees at the earliest possible date.
 We should of course recall that those working in the Public Service
have already had two pay reductions, totalling an average of 14%, by
way of the pension related deduction and the further cuts in pay
introduced in 2010. Salaries at the highest levels have been
reduced by up to 30% and capped at €200,000. We have also
reduced the salaries for new entrants to the Public Service by a
further 10%. Public Service pensions have been reduced, saving
over €100 million annually. Legislation for a new Single Public
Service Pension Scheme has been enacted to reduce future pension
costs.
 But, in reducing public expenditure and reforming services, we must
be conscious of our obligations to reduce public spending in a way
that is fair; that protects those who rely on public services; that
supports employment and enterprise; and that takes a more strategic
view of what needs to be done to position ourselves for economic
recovery over the medium to longer term.
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 We believe that the Public Service unions share our ambition to build
on the substantial contribution already made by public servants to
Ireland’s ongoing economic recovery.
Public Service Reform
 It is clear that we must work harder, more efficiently and more
effectively than ever before. With a backdrop of a smaller Public
Service – both in terms of cost and staff numbers – the
Government’s Public Service Reform Plan was published in
November last year, based around five commitments to change:
o placing customer service at the core of everything that we do;
o maximising new and innovative service delivery channels;
o radically reducing our costs to drive better value for money;
o leading, organising and working in new ways; and
o a strong focus on implementation and delivery.
 Since then, effective structures to implement the Reform Plan have
been put in place within my Department, and in other Departments,
Offices and Sectors. We have put in place a strong governance
model and brought in the necessary skills where most needed.
 The Cabinet Committee on Public Service Reform continues to drive
the reform agenda and holds senior management to account against
the commitments in the Plan. The Cabinet Committee is supported
by an Advisory Group of Secretaries General and a Reform Delivery
Board of Assistant Secretaries.
 We are driving the same emphasis on governance and
implementation across the Public Service, with Change Delivery
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Teams in place in Departments and major Offices to oversee
implementation of organisation and sector specific reform plans, in
addition to the centrally driven initiatives.
 The Reform and Delivery Office is collaborating with these sectors
on integrated reform plans that encompass:
o the many strategic reforms the sectors are driving on foot of the
Programme for Government;
o the cross-cutting Public Service Reform initiatives for each sector;
o the suite of reforms being facilitated by the Public Service
Agreement;
o clear timelines and ownership; and
o governance and structures to drive implementation.
 I also want to acknowledge the dedication of my colleague, Brian
Hayes, Minister of State for Public Service Reform in driving the
reform agenda.
Progress on Public Service Reform
 In September, I published a statement on the implementation of the
Reform Plan, which I forwarded to all members of this Committee.
This set out the considerable progress that we have made since the
Plan was published a year ago.
 I would like to provide just some examples of this:
o Public Service staff numbers have been reduced to around
291,000, a reduction of some 29,000 from the 2008 peak of
320,000 and well within our end-year ceiling of 294,400. We plan
to go further to reduce this number to 282,500 by end 2014.
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o We are proceeding with a radical reform of public procurement.
An external review undertaken over the summer estimated that
implementation of these reforms could yield potential annual
savings in the range of €250 to €600 million after three years.
This will involve a new National Procurement Office overseeing
the integration of procurement policy, strategy and operations;
greater aggregation of purchasing; better spend analytics; and
many other actions to transform our procurement model. We are
currently in the process of recruiting a new Chief Procurement
Officer to lead this organisation, through an open competition.
o In May, as part of the wider Shared Services strategy, we
approved the establishment of a HR Shared Service Centre for
the Civil Service. It is estimated that this will reduce HR
headcount by 17% and costs by 26%, with annual net savings of
€12.5 million. We have accelerated our plan for a Pensions
Administration Shared Service and will integrate this with the HR
Shared Service. We are also developing a business case for a
Payroll Shared Service and commencing a baselining exercise for
a Banking and Financial Management Shared Service. These
are all Civil Service projects and each of the main sectors Health, Education, Justice and Local Government - are now
finalising their own shared services plans.
o In July, we agreed a range of actions aimed at achieving a
focused and integrated approach to the external service delivery
of non-core processes. A shortlist of potential major projects for
priority implementation is being prepared. In addition, all
proposed new services across the Public Service will first be
tested for external service delivery before any approval to provide
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the service internally will be granted. Each of the main sectors
are also finalising their own plans for services to be evaluated for
external delivery.
o In April, we published the eGovernment Strategy 2012-2015,
which builds on Ireland’s strong recent performance in this area.
This improved performance is reflected in a number of
international and EU benchmarks. We have also published a
Cloud Computing Strategy and have set out plans for significant
further Data Centre Consolidation.
o We recently launched the “Ireland Stat” website - a pilot whole-ofGovernment performance measurement website which will allow
the public to see how Ireland is performing across a range of
indicators.
o The Senior Public Service has been established to promote a
more integrated Public Service and to strengthen its senior
management and leadership capacity.
o Significant reforms to the Performance Management and
Development System in the Civil Service have been agreed,
which will ensure the more effective management of performance.
o We have introduced a range of expenditure reforms to change the
processes involved in allocating and assessing public expenditure
to improve transparency and decision making.
o As part of this process, a Bill to provide for medium-term
expenditure management through the provision of multi-annual
aggregate Government expenditure ceilings and multi-annual
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Ministerial expenditure ceilings was published in September. This
will facilitate the implementation into legislation of the MediumTerm Expenditure Framework, and is one of our commitments
under the EU/IMF Programme of Financial Support for Ireland.
This new approach will set fixed and binding current expenditure
ceilings for each Ministerial Vote Group over a rolling three years
period and makes clear, well in advance, the level of savings that
need to be planned for in each Department, to ensure that the
allocations are adhered to each year.
o A new 'whole-of-year' budgetary Estimates cycle has been
introduced and it is now open to Oireachtas Select Committees to
engage directly with Departments on an ex ante basis with regard
to the 2013 allocations.
o Performance budgeting was successfully rolled out to almost all
Departments in the 2012 Revised Estimates and, in this context,
an unprecedented volume of performance information has now
been published. The initiative will be extended in the 2013
Estimates and will form the core of the "Ireland Stat" data-set
which will allow the public to see clearly what Ireland is achieving.
o A new Public Spending Code has been introduced to consolidate
and update the earlier value-for-money framework and to make it
more effective in supporting policy decisions and to embed a
culture of evaluation across the Public Service. In particular, the
enhanced Code now extends formal ex ante appraisal
requirements to current as well as capital expenditure.
o A dedicated Irish Government Economic and Evaluation Service
has been launched to expand and develop the necessary
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technical capacity across all Departments. The initial wave of
recruitment to the Service is now completed and IGEES
economists are now actively deployed on policy analysis and
development.
 These are just some examples of the many reforms that we are
driving and many more are set out in the published report.
Croke Park Agreement
 The Croke Park Agreement is an essential element in enabling the
comprehensive reforms that are taking place across the system.
 Overall, nearly €1.5 billion in pay and non-pay savings have been
facilitated in the first two years of the Agreement alone. Despite a
reduction in staff numbers across the Public Service, down around
29,000 on their 2008 peak, services to the public have, by and large,
been maintained and in some cases improved. The redeployment
provisions have been critical to the allocation of the remaining staff
resources to priority and frontline service areas where the need is
greatest.
 So, the Agreement is supporting the continued delivery of services in
a smaller and less expensive Public Service in a climate of industrial
peace.
 It is because of the value of the Agreement, frequently overlooked in
the public discourse, that the Government agreed with my proposal
to invite the public services unions to discussions on extending it.
 However, the existing Agreement continues and management must
continue to maximise its potential to leverage further pay and non-
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pay savings as well as further reform of work practices and service
delivery in the Public Service.
 Revised Action Plans at sectoral level have been sought which will
set out proposals for extracting further costs and advancing key
reforms. The objective is to ensure that we get the very most out of
this Agreement, while engaging in the discussions on extending it.
Political Reform
 Real progress is also being made on the Government’s ambitious
programme of political and legislative reform, aimed at enhancing
openness, transparency and accountability.
 The Ombudsman (Amendment) Bill has now signed into law by the
President. This legislation will result in the most significant
expansion in the jurisdiction of the Ombudsman in the 30 years since
the original legislation was first put into place.
 Following Government approval earlier in the year, the legal drafting
of the Protected Disclosure in the Public Interest Bill – to protect
whistleblowers – is well advanced by the Office of the Parliamentary
Counsel. The Bill is expected to be published early in 2013.
 Government approval for the drafting of a Bill to reform the existing
framework for Freedom of Information and to extend Freedom of
Information to all public bodies was secured at the end of July. The
General Scheme has been submitted to this Committee whom I
believe can make a very significant contribution to the further
development and refinement of these important proposals. I expect
to be in a position to publish the FOI Bill following careful
consideration of the views and recommendations of the Committee –
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and I will be meeting with you next month on this issue – and the
drafting of the Bill by the Office of the Chief Parliamentary Counsel in
due course.
 Following the publication of the Final Report of the Mahon Tribunal in
March 2012, I decided to examine how the existing legislative
framework for ethics could be reformed to develop a single,
comprehensive legislative framework grounded on a clear and
comprehensive set of principles. This will involve the consolidation
of existing legislation and amalgamating other relevant legislation
into a single framework, while also looking to other jurisdictions to
ascertain best practice.
 I recently announced Government approval for the priority drafting of
a Bill to provide a comprehensive statutory framework for Oireachtas
inquiries on matters of significant public importance. The Bill will, for
example, enable the holding of an inquiry into the banking crisis.
 A General Scheme of a Bill on the Regulation of Lobbying is
currently being prepared by my Department and it is intended to
bring this Scheme to Government as soon as possible.
 Taken together, these measures represent the most fundamental
programme of political reform and the most significant advancement
of transparency and accountability in the history of this Republic.
Conclusion
 In concluding, let me say that good progress is being made on the
implementation of the Public Service Reform Plan. This is a huge
endeavour, involving hundreds of different organisations and nearly
300,000 employees.
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 We face challenges of course, but the reality is that frontline services
will suffer unless we continue to implement far-reaching changes
across the system. Without meaningful and sustained reform, we
will continue to be stuck with all the practices and costs that were
allowed to accumulate over the past decade.
 My aim is to build in reforms that last generations, not to pander to
particular interests or headlines. Of course, I am fully aware that the
pace of change needs to be accelerated in many cases. More must
be done to achieve further savings and to develop a Public Service
to meet the challenges of today and of the future. I am confident that
we can do this and deliver a new Public Service of which we can all
be proud.
 I welcome the role of the Committee on Finance, Public Expenditure
and Reform in this process.
 Thank you.
ENDS/
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