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Analysis/Comment Last Updated: Sep 23, 2010 - 5:07:55 PM

The Waste Land - - Bord Snip, Irish Public Spending Transparency and the motto "Never do anything for the first time"
By Michael Hennigan, Founder and Editor of Finfacts
Jul 3, 2009 - 2:49:59 AM

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The State of Missouri with a population of 5.5m, in 2007 put all its public spending online, including the earnings of public employees. The searchable site cost $200,000 to build and its operation did not require any additional outlay. In contrast, the Irish Government's Reach service, designed to provide a facility for public service providers to share data and to act as a "one-stop shop" for the public, has been effectively abandoned after spending of €37 million ($52 million).

The National Consumer Agency (NCA), a small Irish State agency with a board of 14 and staff of over 20, can spend €200,000 ($280,000) on a 2-year public relations contract - - i.e to mainly produce one press release each month - - but it cannot produce a price comparison website as the cost in Ireland for work from one of the insider providers, would be prohibitive. The mission of the NCA is to ensure Irish consumers get value for money! In 2003, US company IBM, won a contract to build an Irish health portal, for a cost of €10.2 million ($14.3 million). It was to have annual running costs of about €1.5 million.

In 2006, the then freshman US senator from Illinois, Barack Obama, co-sponsored a bill to provide for a website that would result in public transparency on US federal contracts. It cost less than $1 million (€710,000) to build.

The Waste Land - - Bord Snip and Irish Public Spending Transparency - - The late American historian Daniel Boorstin, wrote in an essay, "The Amateur Spirit and its Enemies," published in his book "Hidden History":"In the United States today there is hardly an institution or a daily activity where we are not ruled by the bureaucratic frame of mind -- caution, concern for regularity of procedures, avoidance of the need for decision" -- all of which, Boorstin suggested, was best summed up - - "on a sign over the desk of a French civil servant: 'Never do anything for the first time'."

Boorstin used the word "amateur" in its original meaning (from Latin amator lover, from amare to love - - rather than a primary motivation of money and personal position) and concluded his essay with a question: "Can we continue to breed leaders who draw on the expertise of professionals without suffering the contagion of the professional fallacy, who enlist the loyalty and industry of the bureaucrats without being paralysed by their caution? Only leaders informed by the amateur spirit can prepare us for the one certainty in history -- which is the unexpected."

In Ireland, the glacial process of decision making is accepted as the norm of governance and amidst the greatest economic calamity of our times, its business as usual with no apparent interest in embracing radical change to resuscitate public confidence for a more challenging future.

Two decades after UCD economist Colm McCarthy, participated in a body called the Expenditure Review Group, which became known as Bord Snip, he has had good reason in recent months for a feeling of déjà vu, as he and colleagues on the latest Bord Snip, officially known as Special Group on Public Service Numbers and Expenditure Programmes, trawled through the arcane recesses of Irish public spending.

The lack of change in the interval must have been striking, despite the advances in Information Technology.

The €16 billion public procurement programme remains an opaque cornucopia for insiders and beyond public personnel and pension costs, information on cross-departmental spending by category, is only available piecemeal via Freedom of Information requests and parliamentary questions - - an unsatisfactory ad hoc system, which involves large avoidable hidden costs.

An example of conservative Ireland in action was vividly provided in recent weeks by the first steps taken by the National Assets Management Agency (NAMA) the State "bad bank" for troubled bank property loans.

An inspiration of Senators Barack Obama and Tom Coburn in 2006, to provide transparency for taxpayers on US federal contracts.

As Irish taxpayers prepare for a burden which could last for half a generation or more, NAMA began naming the providers of  services : banking and financial advice is to be provided by HSBC Investment Bank Plc, a unit of the global bank HSBC; tax advisory services will be provided by PricewaterhouseCoopers, the biggest of the Big 4 accounting firms and  corporate law firm Arthur Cox, was appointed as legal advisors. More announcements are to follow.

It may be galling enough for the typical taxpayer to see the politicians who set the economy on fire, remain at the helm and some of the firms who profited mightily from the boom, now benefiting from providing services to the undertakers of the Celtic Tiger, the biggest insult surely is the continuation of Victorian era style secrecy, with information withheld from the public on the value of contracts..

What justifies the maintenance of such a sclerotic administrative tradition? It hardly benefits competition or the taxpayer.

So the procedure is to draw up a specification, which reduces the number of tenderers to a small number of insiders and then protect them from public glare by invoking confidentiality.

In contrast with Ireland, a budget transparency movement is sweeping the United States as government reform groups demand state and local officials make it easier for taxpayers to find information on government spending.

Several states have already enacted searchable budget web sites to provide taxpayers with details on government decisions about how to spend their money.

In 2006, the Federal Funding Accountability and Transparency Act of 2006, also known as the Coburn-Obama Bill after its main sponsors, Republican Senator Tom Coburn and the then freshman senator from Illinois, Barack Obama, provided for the launch of  usaspending.gov, a web site that allows taxpayers to track federal government contracts above a value of $25,000. It cost less than $1 million to build.

President Obama has promised that spending data on his $787 billion stimulus programme, will be posted on the recovery.gov website, by October 2009.

MAP, the Missouri Accountability Portal is an example of a comprehensive searchable site, created in 2007, and which required no additional appropriations for its operation.

Despite sentiment that spending transparency requires a massive cost outlay, Missouri was able to implement the website, which many consider the best and most thorough in the country, for less than $200,000.

In a state of just over 5 million people, the MAP gives taxpayers the ability to see how every single dollar is being spent.

Salaries of state employees, the costs of each member of the legislature, detailed spending by each agency, including disbursements according to expenditure category, contract or vendor and state grants and incentives by beneficiary, are all available online.

Last month, the Philadelphia Inquirer newspaper in a comment on Pennsylvania's plans for tax transparency - - Editorial: It's your money - - said that the spending threshold of $25,000 should be eliminated. It said startup costs are estimated at $60,000 to $150,000, in line with other states, so fears of adding to the deficit were unfounded.

In Ireland, neither members of the Oireachtas (the parliament) , senior civil servants or insider suppliers, would support such transparency.

For starters, the cost of an Irish national searchable website would likely be a multiple of Missouri's MAP system, which is in itself, an argument for transparency.

Ireland has a population that is more than 20% lower than Missouri's.

During the boom, Irish public sector IT contracts were a huge bonanza for external consultants who were able to typically charge for a junior analyst, one year after graduation, €1,200 per day. On 40 chargeable weeks, the gross margin was €200,000. Meanwhile, the core or main engine of a software project may have been bought externally by the consultants, at a fraction of the total project cost.

The Comptroller & Auditor General said in a report, published in late 2007, that the estimated cost of Irish eGovernment activity undertaken or commenced in the period 2000 to 2005, was about  €420 million.

The Revenue estimate was €43 million and US consultants Accenture had about 80 staff working on the Revenue Online Service (ROS) for an extended period. The costs at Social and Family Affairs (including Reach/Public Services Broker) were €92 million.

A health portal, was to be built by IBM, at a cost of €10.2 million and with annual running costs of about €1.5 million. Minister for Health Micheál Martin did a demo launch of the portal in May 2004 but it was later abandoned after spending of €2 million effectively flowed down a sink-hole.

The biggest web fiasco was the Public Services Broker, planned as a facility for public service providers to share data and to act as a "one-stop shop" for the public - through the website reachservices.ie - - to access all services provided by Government, State agencies and local authorities.

The original estimate for this project was €14 million but its final cost was €37 million, almost three times higher than planned. The service is currently only used internally for information transfers within the public service, to confirm identity and provide PINs for the ROS tax service.

The fallout from rampant cronyism and a governance system of limited accountability, where the buck stops nowhere, should be self-evident today. A conspiracy against the public interest has kept procurement and most public spending information shielded from the taxpayer. In the world of insiders, inimical to start-ups and with a culture absent a tradition of parsimony towards public funds, a golf trip or similar legal inducement can work wonders.

The Chinese saying that a fish rots from the head down, is so apt.

Irish politician Mary Harney, who will likely be branded in future times by historians, as the greatest political failure of her generation, said in a speech in 2000,"if it ain't broke, don't fix it."

A lot is broken in the Irish political system, where she has prospered since 1977.

In the same speech, she said: "Spiritually we are probably a lot closer to Boston than Berlin."

The inconvenient truth is that it is neither. We remain slaves to the systems that had their genesis in the former capital of the defunct British Empire.

With the sequel to the 1987 Bord Snip arriving, how likely is another sequel in the horror series?

In 1922, the year of the founding of the Irish State, the American poet T.S. Eliot, had a 434-line poem, on the journey for redemption, published and the line "Hurry up please it's time," appears several  times. The barman's call can be used as a long-overdue wake-up siren for Ireland today.

The title of Eliot's poem is "The Waste Land."

July 16, 2009 Update: Lenihan publishes Bord Snip report; Proposes €5.3 billion in spending cuts and public sector staff reductions of 17,300; Says public pension cost at 30% of salary

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