Ministers and Secretaries (Amendment) Bill 2011
Second Stage Speech for Brendan Howlin T.D. Minister for Public Expenditure and Reform
1 June 2011
I move: “That the Bill be now read a Second Time.”
This Bill before us today is the first step towards the creation of a revitalized and customer focused public service in this country and towards placing a stronger focus on how we manage our public expenditure to get the best possible impact from available resources.
Turning first to the reform agenda - we are going to build a more efficient public service which will be manifestly “fit for purpose” and which will deliver the essential services we all need in the most integrated, transparent and accountable manner possible. This is my vision for the reformed public service, a vision built upon the traditional Public Service values of integrity, impartiality, diligence and commitment. We will focus on of what is needed to help rebuild public confidence in the institutions of the State and make a positive contribution to economic recovery.
The process towards achieving this vision has already begun. As Deputies will be aware, a highly significant programme of public service reform is being initiated by the new Government. This process will take place alongside an ambitious programme of constitutional and political institutional reform. There will be a fundamental change in democratic and public governance; and a dramatic change in the cost efficiency and methods of delivery of public services. It is clear that notwithstanding developments to-date, the cost of delivering public services must be reduced further, with fewer staff and tighter budgets, and that the Public Service must become better integrated and more customer-focused, as well as being leaner and more efficient.
Deputies, before I proceed to outline the details of individual provisions of this Bill , I believe it is important to restate the objectives of Public Service reform process we have set in train and to provide an update on the steps already taken or underway towards making the vision a reality.
Public Service Reform Agenda
This Government is committed to the fundamental review, reform and overhaul of all aspects of Government and administration in Ireland. The establishment of the Department of Public Expenditure and Reform reinforces the political and economic importance attached to delivering on the broad reform agenda, and the role which the Government believes a streamlined and high performing Public Service can play in our national recovery. Work is already underway to give effect to the reform commitments this Government has made to the people of Ireland and this Bill today marks the final part of the beginning of a challenging journey to achieve the vision we have set ourselves and that the people of this country deserve.
The Programme for Government also envisages a renewed focus on a range of related reform issues, including legislative change to facilitate more open, transparent and better government, an increased focus on organisational and individual performance, giving citizens greater choice and input into service delivery, and a more empowered, skilled and customer focused Public Service to deliver on all of these changes.
We need to build upon the undoubted commitment and ability of public servants at all levels to foster a culture of high-performance, flexibility, openness and accountability. The importance of re-building public confidence in the institutions of the State cannot be underestimated. We must make better use of our resources, and draw more efficiently on the potential that exists for improving the sharing of public information. We are determined to maximise the dividend from ICT, in terms of reducing the labour intensity of service delivery, by promoting the wide-scale adoption of shared services (in HR, payroll, pension, financial management, payment services etc.); business process improvement; and increased online delivery of services and payments.
Leadership will also be essential of course, and the newly established Senior Public Service will play a key role in developing our cadre of Public Service leaders. But we also need leadership at all levels across the Public Service. This will involve empowering and equipping public servants and releasing their potential to become more flexible and more proactive in changing what they do and how they do it.
Delivering such a programme of reform in the coming years will not be easy. However, I believe that the passing of this Bill will represent a highly significant important step in this process. It will provide the critical impetus for reform that is needed and will facilitate an integrated, focused and coordinated approach, and it is highly significant that the Bill places Public Service reform functions on a statutory basis for the first time.
As well as having a defined role in public expenditure issues, the Minister for Public Expenditure and Reform will be in a position to place the issue of reform at the centre of government, and to ensure that the many diverse elements of the Public Service are moving in a common direction, with a determined purpose – to deliver the Public Service that Ireland needs and that Ireland deserves – a changed, more effective and less costly Public Service – a Public Service operating under a new legislative framework designed to promote a new culture of performance and accountability.
Comprehensive Spending Review
In tandem with the extensive public service modernisation reforms being pursued, the Government has an ambitious agenda for budgetary consolidation over the coming years to put our public finances back onto a sound footing. This will involve further, major savings in the expenditure area, coming on top of the expenditure consolidations of the past two and three years.
In order to lay the groundwork for these expenditure savings, the Government is taking a forensic approach through a Comprehensive Review of Expenditure, to ensure that the savings are prepared rationally and with regard to the Government’s priorities, rather than just apply pro rata cuts across each area. The Comprehensive Review will draw upon international experience in this area, including the Canadian “program review” approach of the 1990s, and the UK Comprehensive Spending Reviews. There is an acceptance that as a country we cannot afford the same level of services, and that prioritisation – and indeed reprioritisation – is now required.
Fiscal Responsibility Bill
In parallel with the Comprehensive Review of Expenditure, the Government is also reforming and modernising the entire system of budgetary management. Under our Government Programme and our EU/IMF agreement, the Government is committed to introducing an independent Fiscal Advisory Council – this should be in place by the summer on an interim basis. A Fiscal Responsibility Bill will include numerical fiscal rules, and provide for a medium-term fiscal framework. As part of that framework, we will set out multi-annual expenditure ceilings. This Comprehensive Review of Expenditure will be instrumental in laying the groundwork for that initiative. The Fiscal responsibility Bill is already at an advanced stage and will be published by the end of the year. The Bill will also reflect the new EU fiscal governance arrangements which as you know are currently being finalised.
The Croke Park Agreement
The reform agenda and the Comprehensive Spending Review as I have outlined above set out what needs to be done to deliver a more effective public service for citizens and businesses.
The framework for how this challenging agenda can be delivered on is provided by the Croke Park Agreement.
The significance of the Agreement is rooted in the reality that the scale of the desired changes and reforms cannot simply be imposed on a system of over 300,000 people without their agreement, active engagement and co-operation; and without proactive and ambitious leadership at every level in public service bodies.
Under the Agreement, Public Service unions have fully accepted that the guarantees the Government have given to avoid further pay reductions and/or compulsory redundancies are dependent on driving forward implementation of the programme of modernisation and improvements in productivity, against the backdrop of significantly reducing financial and staff resources.
In practice that means that staff need to be willing to retrain, where necessary; to take on more responsibility; to work across professional and technical boundaries; and to be open to travelling within a radius of 45 kilometres to take up their new posts.
I think it is also clear that the Agreement can serve as an effective enabler of economic recovery by helping to create greater stability and certainty and, above all, a climate of industrial peace – necessary conditions under which difficult decisions can be taken and implemented.
Review of Progress
My Department has a key role to play in driving implementation of the Agreement, working closely with the Implementation Body chaired by PJ Fitzpatrick.
Over recent weeks, the Implementation Body has been engaged in an intensive review of progress to date under the Agreement and is in the process of completing its assessment. The Body’s Report will be considered by Government and published shortly.
I am confident the Report will show that considerable savings and efficiencies are being achieved under the framework of Croke Park.
We know, for example, that despite a fall in the number of public servants of over 16,400 since the end of 2008 – which has led to considerable payroll savings – services are, by and large, being maintained and, in some cases, being improved or expanded.
We also know of examples of major change from the health sector and civil service, like the reform of the medical laboratories, the transfer of the community welfare service to the Department of Social Protection, the management of the accelerated voluntary departure schemes from the HSE.
A lot more to achieve…..
This Government has made clear that it wishes to honour the commitments given in the Agreement.
However, this will only be possible if the Agreement is implemented in full.
Notwithstanding the progress to date, it is clear that a lot more needs to be done.
There is enormous pressure on us to cut expenditure significantly and to reduce the size of the public service, while, at the same time, making every effort to maintain services.
In the Programme for Government we have set down targets to further reduce the number of public servants by between 18,000 and 21,000 by 2014, compared to the total number at the end of 2010, and by a further 4,000 by 2015.
The framework provided by Croke Park will be critical to achieving these challenging targets and the savings that derive from such a cut in numbers.
If services to the public and to business are to be maintained with significantly fewer staff and resources, we will need to see accelerated delivery of the full range of reform and efficiencies envisaged under the Agreement such as:
- Much greater integration of public service organisations, so that services are designed around the practical needs of the citizen;
- The better targeting of services, so that we avoid duplication of effort.
- Accelerated progress in the area of e-Government so that we deliver faster service to the user, minimise opportunities for fraud and reduce transaction costs for the Exchequer; and
- The consolidation, as far as possible, of financial, payroll, procurement, pensions and HR services in each sector, as well as the processing of standardised information like medical cards.
Economic Context
I hardly need to remind Deputies of the difficult economic background against which this reform agenda is being undertaken. We find ourselves facing unprecedented economic challenges. Gross Domestic Product – the most comprehensive measure of economy activity in Ireland – has fallen in each of the past three years. The labour market has borne the brunt of this adjustment, and as you are all aware unemployment has risen sharply.
Having said that, the recent flow of economic data does provide some grounds for cautious optimism. The recovery is being led by developments in the external sector. What we are seeing is a substantial improvement in our competitiveness – we are pricing our way back into foreign markets. This is generating higher exports and boosting inward direct investment; last year, exports increased by 9½ per cent which was the strongest rate of growth in a decade. In other words, we are trading our way out of recession.
While I believe that the outlook for the external sector is bright, domestic demand conditions are likely to remain muted, at least in the short-term. Over time, sustained strong export growth will help raise overall employment levels, and put unemployment on a downward path. The measures outlined in the Government’s recent Jobs Initiative will also help to underpin the labour market.
However, we cannot rely on the external sector alone. The Public Service must also play its part. We have to be ambitious and ensure that the reform initiatives we are undertaking, informed by the outcome of the Comprehensive Expenditure Review and delivered within the Croke Park agreement deliver a slimmer, more streamlined, efficient and effective public service. This is essential if we are to bring permanent sustainability to Government finances and to ensure the Public Service can make a positive contribution to economic growth.
Outline of Bill in Detail
I would now like to turn to the Bill before us to day. This Bill marks, as I have already indicated the final part of the first of many steps to achieving the vision we have set out of the Irish Public Service and will in its own way make a positive contribution to restoring economic growth and sustainability to Government finances.
The primary purpose of this Bill is to provide the legislative basis which will allow for the formal establishment of the Department of Public Expenditure and Reform and for the transfer of certain functions from the Minister for Finance to the Minister for Public Expenditure and Reform.
I will now briefly go through the sections of the act and give a brief outline of their content and purpose.
PART 1 - PRELIMINARY AND GENERAL
Part 1 deals with preliminary and general matters, specifically
Section 1 deals with the short title, collective citation and construction.
Section 2 defines certain terms used in the Bill.
Section 3 defines “Public service body”
PART 2 - Department of Public Expenditure and Reform
Part 2 deals with the new Department of Public Expenditure and Reform. It transfers many of the general statutory functions of the Minister for Finance in relation to the public service to the Minister for Public Expenditure and Reform and it puts specific public service reform and modernisation functions on a statutory basis .
Section 4 provides that the Government may determine, by order, a day to be the “appointed day” under the Act.
Section 5 provides for the establishment of the Department of Public Expenditure and Reform and the Minister for Public Expenditure and Reform in the English language and An Roinn Caiteachais Phoiblí agus Athchóirithe and an tAire Caiteachais Phoiblí agus Athchóirithe in the Irish language.
Section 6 provides that the Minister for Public Expenditure and Reform will have responsibility for the management of gross voted expenditure and the annual estimates process, general sanctioning powers in relation to expenditure and policy matters relating to the appraisal, review and evaluation of expenditure, while the Minister for Finance will retain responsibility for overall budgetary parameters.
Section 7 is a further provision for the transfer of functions to the Minister for Public Expenditure and Reform. It contains a broad provision transferring the general public service statutory functions of the Minister for Finance to the Minister for Public Expenditure and Reform. A number of Offices currently under the aegis of the Minister for Finance will also transfer to the Minister for Public Expenditure and Reform under this Section. These include the Commissioners of Public Works, Public Appointments Service, Commission for Public Service Appointments, Valuation Office and the State Laboratory. A large number of remaining statutory functions which are appropriate for transfer to the Minister for Public Expenditure and Reform will be transferred by way of Transfer of Functions Order, which will be timed to commence immediately following the commencement of this Act. The Schedules to the Bill list the functions which will be exercised in cooperation with the Minister for Finance.
Section 8 details the specific public service reform and modernisation functions which are being put on a statutory basis to reflect the new reform function included in the name of the Department. The Minister will also assume responsibility for existing non-statutory functions of the Department of Finance and the Department of the Taoiseach in the area of public service modernisation, development and reform. The statutory functions will include the formulation and development of policies required for the modernisation and development of the Public Service and making proposals to Government in relation to the implementation of those policies, along with the coordination and review of the implementation of these measures across the public service. The functions also include the promotion of value for money in the provision of public services and the development of policy and procedural frameworks in relation to the procurement of goods and services by the State.
Section 9 provides for the transfer to the Department of Public Expenditure and Reform of the administration and business connected with the transferred functions.
Section 10 provides that if legal proceedings involving the Minister for Finance are in train in relation to a transferred function immediately before the appointed day, these proceedings will, following the appointed day, be deemed to relate to the Minister for Public Expenditure and Reform.
Section 11 provides that any work commenced before the appointed day, by or under the authority of the Minister for Finance in relation to a transferred function, will be carried on and completed by the Minister for Public Expenditure and Reform.
Section 12 provides that any legal document made by the Minister for Finance in relation to a transferred function will continue to have effect as if it had been made by the Minister for Public Expenditure and Reform
Section 13 provides that any references to the Minister for Finance in
relation to a transferred function in any legal document or in the Memorandum and Articles of Association of any company shall be deemed to be references to the Minister for Public Expenditure and Reform.
Section 14 provides that all property, rights and liabilities, moneys, stocks, shares and securities held by the Minister for Finance in relation to any transferred function will transfer to the Minister for Public Expenditure and Reform without any further legal actions. Section 14 also provides that the consent of the Minister for Finance will be required for in relation to the disposal of assets and the application of the proceeds from the disposal of assets of State bodies, where such assets exceed a value of €50m.
PART 3 PERFORMANCE OF CERTAIN FUNCTIONS
Part 3 deals with the performance of certain other functions including those relating to the Estimates.
Section 15 sets out the responsibility of the Minister in relation to the annual estimates process. This provides that the Government will approve an “annual approved expenditure amount” which can be reviewed in the course of a financial year if circumstances require. The Minister for Public Expenditure and Reform will have full responsibility for the management of gross voted expenditure as set out in Section 6, within the annual approved expenditure amount or the revised annual approved expenditure amount. The Minister for Finance may make recommendations to the Minister for Public Expenditure and Reform on the apportionment of the “annual (or revised annual) approved expenditure amount” as between current and capital expenditure.
Section 16 provides for appropriate changes to the Central Fund (Permanent Provisions) Act, 1965 to give effect to the powers of the Minister for Public Expenditure and Reform in relation to Voted expenditure and to link the policy role of the Minister for Public Expenditure and Reform with the payments role of the Minister for Finance. The Minister for Finance will retain technical responsibility for payments from the Central Fund. The Secretary General of the Department of Finance will remain as Accounting Officer for both the Central Fund and the Finance Accounts.
Section 17 provides that certain functions relating to the promotion and coordination of economic and social planning for the development of the economy and the identification of policies for general economic and social development may be exercised by either Minister separately but that they shall consult from time to time in relation to those functions.
Section 18 provides that the functions transferred to the Minister for Public Expenditure and Reform and referred to in Section 7(2) and detailed in Part 1 of Schedule 2 may be performed with the consent of the Minister for Finance. These include provisions of certain Acts mainly relating to borrowings by State agencies. Section 18 also provides that the functions referred to in Section 7(3) and detailed in Part 2 of Schedule 2 may be performed only following consultation with the Minister for Finance. These relate mainly to the review mechanism in the Financial Emergency Measures in the Public Interest legislation.
Section 19 ensures that responsibility for matters relating to superannuation, remuneration etc of bodies under the aegis of the Minister for Finance remains with the Minister. The Minister for Finance will perform these functions following consultation with the Minister for Public Expenditure and Reform.
PART 4 AMENDMENT OF CERTAIN ENACTMENTS
Part 4 provides for the necessary amendments to miscellaneous pieces of legislation, to take account of the establishment of the new Department or to link the policy role of the Minister for Public Expenditure and Reform in relation to the legislation with the payments role of the Minister for Finance in relation to the Central Fund.
Section 20 provides for the amendment of the Intoxicating Liquor (General) Act 1924, to take account of the establishment of the Department of Public Expenditure and Reform.
Section 21 provides for the amendment of the Seanad Electoral (University Members) Act 1937 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Seanad Electoral (University Members) Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 22 provides for the amendment of the Seanad Electoral (Panel Members) Act 1947 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Seanad Electoral (Panel Members) Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 23 provides for the amendment of the Ombudsman Act 1980, to take account of the establishment of the Department of Public Expenditure and Reform.
Section 24 provides for the amendment of the Postal and Telecommunications Services Act 1983 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Postal and Telecommunications Services Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 25 provides for the amendment of the Electoral Act 1992, to link the policy role of the Minister for Public Expenditure and Reform in relation to the Electoral Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 26 provides for the amendment of the Presidential Elections Act 1993 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Presidential Elections Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 27 provides for the amendment of the Referendum Act 1994 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Referendum Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 28 provides for the amendment of the Electoral Act 1997 to link the policy role of the Minister for Public Expenditure and Reform in relation to the Referendum Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 29 provides for the amendment of the European Parliament Elections Act 1997 to link the policy role of the Minister for Public Expenditure and Reform in relation to the European Parliament Elections Act with the payments role of the Minister for Finance in relation to the Central Fund.
Section 30 provides for the amendment of the Freedom of Information Act 1997, to take account of the establishment of the Department of Public Expenditure and Reform.
Section 31 provides for the amendment of the Public Service Management (Recruitment and Appointments) Act 2004, to take account of the establishment of the Department of Public Expenditure and Reform.
Section 32 provides for the amendment of the Social Welfare Consolidation Act 2005 to take account of the establishment of the Department of Public Expenditure and Reform.
Schedules
Schedule 1 contains a list of excluded bodies for the purposes of the definition of “Public service body” in this Act (Section 2 refers).
Schedule 2 Part 1 lists the functions of the Minister for Finance which are transferring to the Minister for Public Expenditure and Reform which will be exercised with the consent of the Minister for Finance (Sections 7 and 18 refer)
Schedule 2 Part 2 lists the functions of the Minister for Finance which are transferring to the Minister for Public Expenditure and Reform which will be exercised following consultation with the Minister for Finance (Sections 7 and 18 refer)
Schedule 3 lists the legislation governing payments of superannuation and remuneration from the Central Fund to link the policy role of the Minister for Public Expenditure and Reform in relation to this legislation with the payments role of the Minister for Finance in relation to the Central Fund (Section 16 refers).
In addition, to the provisions in the Bill, I want to advise the House, that I will also be introducing a significant number of technical amendments to the Bill which are similar in nature to the provisions in Part IV of the Bill and mainly link the policy role of the Minister for Public Expenditure and Reform with the payment role of the Minister for Finance in relation to certain functions.
Conclusion
To conclude, I am asking the House to support and approve this Bill and in doing so provide a sound legislative basis to underpin the formal establishment of the Department of Public Expenditure and Reform and the transfer of certain functions from the Minister for Finance to the Minister for Public Expenditure and Reform. This Bill is an important step on our reform journey and I commend it to the House.
|
