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News : Irish Last Updated: Nov 17, 2011 - 3:59 PM


Irish Public Service Reform: No bonfire of quangos' "organisational zoo"; Slow-motion process is expected
By Finfacts Team
Nov 17, 2011 - 3:55 PM

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Irish Public Service Reform:  The Government today announced plans to rationalise 48 State agencies or quangos by the end of next year and to review the position of a further 46 bodies by the end of next June. There will be no bonfire of quangos and it's clear that a slow-motion process can be expected.

It is almost five years since then Taoiseach Bertie Ahern commissioned the Paris-based Organisation for Economic Co-operation and Development to review the public service and recommend changes. The OECD reported in April 2008 and criticised the proliferation of "arm's length bodies," known as quangos and concluded the situation amounted to an "organisational zoo." Bertie Ahern agreed that the estimated 800 agencies were "too many agencies by half." 

The Government also announced today the cancellation of the decentralisation programme which was announced in 2003, to move 10,000 public servants out of Dublin with ministers having the first choice for departments and agencies for their constituencies. It was an old style Tammany Hall style political stroke to win public support at the 2004 local elections. 

A total of 40 projects are to be scrapped and a further 32 projects, where permanent accommodation has been secured, will be left in place while the Government is to make a decision on the future of 22 additional decentralisation projects in the near future.

The Government also announced that public service numbers will fall to 282,500 by 2015 from a current level of 297,000.

Numbers will have fallen by 37,500 or 12 per cent since the peak in 2008. The Government says that the reduction in staffing will generate savings of over €2.5bn on its pay bill - - this includes overall pay and pension cuts.

The Government will also introduce new leave arrangements for staff in the public service. Staff will get no more than 32 days while new staff, including those who accept promotion, will have a maximum leave entitlement of 30 days.

The report is at this stage a wish-list: the most common word in the document is 'will.'

In related news, Minister for Public Reform Brendan Howlin today refused to confirm or deny a report the Government will increase the top rate of VAT by 2% in next month's budget.

In documents presented to a budget committee of the German Bundestag yesterday, the Government said it will raise the top rate of Value Added Tax (VAT) to 23%, generating an additional €670m of the €1bn in new indirect taxes.

“The Budget is a work in progress,” Howlin told RTÉ’s News At One.  “I’m certainly not going to comment on any potential elements of it, but I can tell you there are no decisions in relation to any element of the Budget, and there won’t be until the entire package is before Cabinet."

Dublin Chamber of Commerce has welcomed the announcement that 40 decentralisation projects are to be scrapped as part of the Public Service Reform Programme. Citing the OECD report ‘Ireland: Towards an integrated Public Service’, the Chamber said that decentralisation has created serious governance and accountability challenges for departments and only creates a Government that is less effective in the way it functions.

Dublin Chamber’s director of Policy, Aebhric Mc Gibney said, “We are pleased that Government is calling a halt to decentralisation, which has cost the public service, and the taxpayer, dear in terms of lost expertise and knowledge. We also welcome the Government’s commitment to expand the use of the external delivery of services and the greater us of shared services. We believe that there are significant savings to be gained by the rationalisation. We believe that there are significant savings to be gained by the rationalisation of back office functions under one roof and also by involving the private sector in the delivery of certain public services.”

Public Service reform plan [pdf]

Howlin speaking points

Changes to Performance Management and Development System

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