I am delighted to be here this afternoon, to launch the OECD’s Report on their Review of the Irish Public Service, Towards an Integrated Public Service. This Report marks the culmination of 16 months of hard work, including extensive consultation and intensive analysis on the part of the OECD. And, lest there be any doubt, let me say straight off that the Irish Government welcomes this Report as an authoritative assessment of the current state of the Irish Public Service. The OECD have outlined in depth the strengths of our current system, but also the disconnects and challenges that must be addressed. We recognise your description of us, good and bad, and we are ready to respond.
Changing economic environment
All of you gathered here today will be keenly aware of the scale and breadth of Ireland’s economic and social transformation. Ireland has achieved some of the highest average annual rates of real GDP growth in the OECD area, propelling our per capita income over the OECD average. When I became Taoiseach in 1997, GDP per head of population was around the EU average – last year it was around 35% greater than the average of the EU 15, and some 47% greater than the EU 27 average.
We know that we benefitted from favourable global economic conditions. But we know also, that there are many domestic factors that contributed to economic success – such as the availability of a highly educated and motivated workforce, a strong post-graduate emphasis on research development and innovation, a stable industrial relations environment, and opportunities for inward investment. However, I firmly believe that the Public Service has played its part in enabling Ireland’s economic and social transformation, not least through the policies developed and implemented over those years.
The full OECD Report is nearly 375 pages long, so I want to share with you my take on the key messages it contains. One issue which is clear, even without the benefit of the OECD analysis, is that in light of the increases over recent years in investment and employee numbers in the public service, the case for renewal, in particular, in pursuit of value for money, is stronger than ever.
The Size and Spend of the Irish Public Service
However, we need to see the size and spend of the public domain in context. The OECD Report highlights that, while the numbers employed in the Irish Public Service have increased significantly, general government employment as a percentage of the workforce in Irelandis relatively low in the OECD cohort. For example, the numbers employed in the Irish Public Service are significantly less in relative terms than the level of public employment in Norway, Sweden, France, Finland or Belgium.
Although expenditure on the Public Service has also increased substantially in the same period, the OECD Report points out that much of these increases have reflected a need to play catch-up from historically low levels. Even when factoring in infrastructural investment, Ireland has the third smallest total public expenditure as a percentage of GDP, (third to Korea and Mexico). In comparison with other OECD countries therefore, Ireland has been able to deliver services with a Public Service that is relatively small given the size of the economy and labour force.
Maintaining Success - the requirement for continued reform
I don’t want to rely on these findings too much however, because I don’t want us tied up in an artificial or ideological debate about big or small Government. Our focus should instead be on whether the Public Service is doing what is asked of it, and in an efficient and effective manner.
Like any successful company in the private sector, the public sector needs continuously to review its systems, processes and procedures.
Modernisation & Change – impact of reforms to date
When I think back to the systems and processes that existed when I was first elected to public office in 1977, it is easy to see just how much the Public Service needed to change, and how it has embraced change and reform. Gone are the days of smoky cheerless buildings. Gone are the days when thick panes of glass stood between citizens and nameless officials in public offices such as Tax or Social Welfare. Gone are the days when the idea of being treated as a customer just didn’t exist.
The OECD Findings on Ireland’s Public Service Reform Programme
The OECD’s Report recognises the value of the reform efforts undertaken to date – in customer service, e-government, HR, financial management, and better regulation. The positive results of the change and reform programme in the quality customer service area are easily visible to citizens. Management and organisational reforms introduced through the Performance Management Development System (PMDS) have resulted in better functioning individual organisations. And the OECD recognises that the dividend from many of these reforms will be fully harvested as they become increasingly embedded.
That said, the OECD clearly say that we can and should do better. If we connect up reforms, we could further improve performance and service delivery, and achieve greater efficiencies. Furthermore, many of the reform initiatives we have introduced to date have focused largely on the Civil Service, as opposed to the broader, Public Service.
Where change and reform have taken place in the broader Public Service, there have been varying levels of success in how they have been adopted and implemented. This has sometimes resulted in a lack of consistency in the level and nature of service being provided to citizens. There is an urgent need to develop methodologies to lead, drive and expand the renewal process in the Health, Education and Local Government sectors, given their very direct impact on people’s lives.
A key point noted in the OECD Report, is that many of the change and modernisation initiatives of the last decade, were essentially internally focused. They were significant, they were highly necessary, but they are not sufficient to ensure that the Public Service is prepared either to deal with the challenges it now faces as a system or to attain Ireland’s ambitions as a nation.
Where should the Public Service be moving? Start with Societal Goals in mind
To know in what direction the Irish public service should be moving, we need to begin by looking at our goals, as set out in our Programme for Government, in Towards 2016, and in strategic priorities for issues like climate change, poverty, equality and energy. We must be clear about the part that the Public Service has to play and we need to look at the allocation of functions between the different elements of the Public Service, to ensure that the right parts are working together in the most effective way possible. We also need to ensure that appropriate accountability structures are in place when multiple Public Service actors work together to achieve these goals.
Over time, we should look at the results, not in terms of inputs or processes, but in terms of outputs and outcomes. We should reassess the mandate and purpose of Departments and agencies, and the flow of resources to each of these. In pursuing societal goals, we should become less focused on input controls, but allow greater operational freedom to the various actors to perform, but hold them to account for what they achieve.
Integrated Public Service
The OECD makes clear in its Report, the challenges involved in leading system level change and pursing system-wide coherence. The OECD challenge to Ireland, as indicated by the title of their Report, is to think increasingly about the Pubic Service as an integrated “system” and devise approaches that encourage system-wide action – for example on infrastructure, poverty, gender, energy, and climate change.
The Public Service has created structures and systems to support cooperation and coordination. Despite these, disconnects remain, particularly between Departments and agencies, between the Civil Service and the broader Public Service, and between central and local government. This leads to poorer outcomes in policy development, implementation, and service delivery. If the Irish Public Service is to become more responsive to meeting citizens’ needs and expectations, and achieving broader societal objectives, the OECD suggests that we go beyond “joined up government” or “whole of government”, and instead think about the Public Service as a more “integrated system”.
Change Behaviours Before Structures
The OECD are suggesting better vertical connections between Departments and their respective offices and agencies, and better horizontal connections between Departments and agencies, across different sectors. I do not believe that the OECD in calling for a more integrated Public Service, means that activity must be centre-led or centralised; or that we are concerned about national or organisational level co-operation only. I believe they are referring more to collaborative policy development, service delivery and shared services, between the appropriate public services bodies, or units, or divisions of organisations, be they national or local.
I have already made some progress in this regard – the Office of the Minister for Children for example, represents a new and dynamic way of working that transcends the traditional boundaries of the Public Service. This is however, just one model that can be utilised. Other ways of working, for example to address more immediate priority areas, will need to be examined and considered.
However, our first response to this Report should not be simply to chop and change, create, abolish or merge bodies. It is clear from the OECD’s conclusions that progress lies, not in changing the architecture for its own sake, but in getting the various parts working differently, and focused on collaborating better. Structural and legal changes are likely to be required as enablers of reform, but they should reflect, not drive the necessary changes in focus and performance.
Agencies
I welcome that the OECD Report calls for special attention to be given to the number and mandates of agencies. The findings and recommendations of the OECD in this area are hard-hitting and well founded. The Report finds that too many agencies have too much policy autonomy and too little operational freedom. Departments focus on controlling inputs to agencies rather than what they should do or how well they perform.
Creating agencies is not unique to Ireland. However, the way in which we have created agencies here has led to particular challenges for the Irish Public Service. In particular, the OECD is critical of the capacity of Government Departments to manage relationships with the offices, agencies and bodies under their remit.
I was particularly interested in the OECD’s findings regarding the governance structures for agencies – in Ireland we have largely utilised a single type of structure. The OECD argues that this is very limiting and other options should be considered to better match governance to the functions to be undertaken.
E-Government
The OECD calls for a renewed emphasis on the role of e-government to better enable integrated service delivery, strengthen information sharing and support shared services. It finds that while Ireland has produced many quality e-government services, fragmentation of responsibility for different elements of e-government has meant that the full potential of ICTs is not being realised by public service organisations for citizens. In addition, it suggests that the most pressing challenge for online service development in Ireland is to improve co-operation between Public Bodies bodies.
I agree that there is a great potential for e-government to assist in improving service delivery to citizens, in advancing the modernisation and change programme, and in improving efficiency and performance. The OECD calls for clear leadership and direction on e-government to be provided across the system, so that it is seen as an enabler of improved efficiency or improved service delivery, and not solely as a technical ICT issue. The OECD points to the potential for reinvesting the benefits of e-government into improved service delivery and service quality.
Connected and aligned e-government initiatives that are championed from the centre of the Public Service will encourage greater collaboration by the different bodies and agencies across the Public Service on the delivery of societal objectives.
Performance Culture
From the perspective of the citizen, the central requirement of a Public Service is ensuring that high quality services are delivered where they are needed, as they are needed. In the reforms we have introduced to date in the Public Service, we’ve tended to focus on measuring performance through compliance with processes. The OECD report instead calls for the development of a performance culture that is based on achieving output and outcomes that calls for sophistication in the use of performance indicators at all levels of government, and the development of aggregate cross-cutting indicators focussed on the attainment of policy goals. The Report notes that better performance measurement mechanisms only reach their full potential when they are utilised by decision-makers, at political and senior administrative levels, for allocating resources within and among programmes.
We need to develop and enforce realistic expectations of performance that are clear for each individual, within organisations, and provide additional managerial discretion to achieve these goals. We need to better align performance measures and initiatives with explicit policy goals set out, for example, in the Programme for Government and national Social Partnership Agreements.
Financial and Budgetary Recommendations
In its detailed recommendations and findings on financial and budgetary issues, the OECD call for an improved focus on long term policy needs. Greater public awareness of and attention to long term budget projections could help support better dialogue on long term social and economic challenges, and possible policy responses. Policy analysis and advice emphasising long term scenarios are therefore needed.
The OECD also call for greater transparency of information and analysis, so as to improve the responsiveness of the Public Service and to extend the planning horizon. The OECD also calls for greater use of independent ex-ante analysis and policy evaluations, such as Regulatory Impact Analysis.
The Report has very interesting and thoughtful proposals to make about how the budget and estimates process could provide a supportive framework for the achievement of greater efficiency and the sharpening of the focus within Departments and Agencies on outputs and outcomes.
HRM Policy
Given that people are the primary input to the delivery of Public Services, how they are managed is critically important. We need to look at the systems they work within. The OECD argues that the centralisation of HRM policy, in relation to numbers, processes and conditions of employment, while an important part of our control of public expenditure, has significant implications for the Public Service, and has tended to: i) limit mobility and career development opportunities; ii) inhibited the autonomy of local level management so that managers do not believe they have the authority or level of independence to manage; and iii) has limited the development and sharing of skills and competencies as needed across the broader system.
The generalist nature of the majority of Public Service staff has been, and will remain, one of its greatest assets. The ability of staff to turn their hand to different tasks, with equal effectiveness, is an attribute that has rightly been lauded for years, particularly in relation to those public servants who have represented this country at European and international level. They have played a significant part in ensuring this country’s economic and social success. However, there is a growing need for specialist staff within the system – for example, staff with project management, accounting, IT or HRM qualifications.
We must equally remember however, that the problem of necessary expertise isn’t solved just because someone with the right qualifications has been recruited to a job – be it in the private or the Public Service. The pace of change demands not only that we recruit the best, but that we continually provide opportunities for existing staff to update existing skills and to develop new ones. While it is a credit to the Public Service system that 4% of administrative budgets are allocated for ongoing training and development opportunities, it is essential that such funds are targeted to best effect.
The existing potential and capacity of staff within the Public Service needs to be harnessed more effectively. Systems need to be developed to encourage innovation and calculated risk-taking by staff. This will require changes to allow good performance to be better recognised and rewarded. The OECD argue that increased flexibility is needed to allow movement and/or redeployment of staff within and across the Public Service as needs and priorities change, and increased structured mobility to allow staff to develop and utilise their skills and competencies.
Leading and Resourcing Change – a Senior Public Service
A more integrated Public Service will require greater pooling and sharing of information, data and resources, a common pursuit of objectives, and better governance of State Agencies, offices and bodies under the aegis of Departments. To achieve the type of integration required, the OECD argue that there is a need for stronger leadership and support for the change effort, particularly through the creation of a Senior Public Service. A Senior Public Service would be a high-level management cohort, with members drawn from the senior ranks from across the broad Public Service. Its aim would be to reinforce the “system-wide” identity across the Public Service.
I can see strong merit in the creation of a Senior Public Service, as the OECD propose, complemented by an active programme to exchange senior personnel between the public and private sectors.
Given the scale of the Public Service – some 330,000 employees – the number of organisations in which they work, and given the level of our ambition in terms of transformation, value for money, service quality, coherence and the desired move towards a lifecycle approach in the provision of services, the OECD argues that there is a need for greater priority for the resourcing of the modernisation effort, both at the centre of Government and across the sectors.
Developing a detailed response to the OECD’s Report
As I’ve already indicated, this Report by the OECD is substantial. The OECD’s messages are about leadership, governance, trusteeship, performance and accountability. Their success will be measured in terms of how, at the end of the day, they will impact on the work of many frontline public servants, by giving them the opportunity and leadership to be effective.
This Report will form the basis of a renewed Public Service-wide reform programme. The Government’s response will take account of initiatives and steps that have been taken by Government already and which address issues highlighted in the report, including the Efficiency Reviews announced in the Budget 2008, the Organisational Review Programme, new management arrangements for core e-government functions and the independent review of the economic regulatory environment now underway.
The Government will therefore direct the preparation of:-
- a new code of corporate governance for State agencies, offices and other bodies;
- an accelerated, Public Service-wide programme of shared service provision, and new arrangements to ensure that e-government more closely supports the process of public service reform.
- a strategy for increased mobility, flexibility, and staff development, so as to address skills deficits, allow for improved career development, the sharing of knowledge and information across the broader Public Service, and better allocate resources to meet emerging or new needs; and
- proposals for the development of a Senior Public Service, to strengthen a system-wide perspective at leadership level, to reinforce core values, and to reinforce and develop skills among the senior cohort of the Public Service.
The Government will shortly announce new arrangements to oversee the follow-up to the OECD Report and these specific initiatives. It will draw on the best of the Public Service leadership, as well as relevant private sector expertise. We will proceed in close consultation with public servants and their representatives, creating a new dynamic of partnership within the Public Service.
Conclusion
When I initiated this Review, it was accepted that there was no international consensus as to where public service reform in advanced economies was heading. This is the first time that the OECD has taken on such an ambitious and wide-ranging project, reviewing the entire system of public administration and public governance. As such, the publication of this Report, Towards an Integrated Public Service, represents a significant milestone for both Ireland and the OECD.
Deputy Secretary General De Geus will talk to us shortly about the challenges of conducting this review from the OECD’s perspective. I would however, like to take this opportunity to thank him, and the OECD team, led by Odile Sallard, Barry Anderson and Edwin Lau. I would also like to thank all of those who contributed to this project within and outside the Public Service, especially the members of the Steering and Liaison Groups and the Consultative Panel.
Commissioning the OECD Review reflects the Government’s desire to accelerate a process of renewal so as to deliver improved outcomes for citizens with increased efficiency.
My experience as a public servant, both in the health system and then through elected office at all levels, convinces me that we have a public service of which we can be proud. I am confident that it will meet the challenges of change and renewal that changed circumstances require. I wish to express my appreciation for all that has been achieved by the Irish public service, especially during my period as Taoiseach. I urge the public service to embrace change while maintaining the high standards and professional values that have always been its hallmark.
Implementing the next phase of the reform programme will present a significant challenge for my successor. I am confident that he will bring forward a renewed agenda for reform that not only will benefit the citizens of Ireland, but will place the Irish Public Service firmly at the forefront of public service administration for years to come.
ENDS