Public service reform necessary - Howlin


Over the next 20 years the number of people in Ireland over 65 is set to increase by almost half a million, a situation that could see the annual health budget soar - rising by €12.5 billion in the next decade alone.

That is according to Minister for Public Expenditure and Reform Brendan Howlin, who tonight used the health statistic as an example of how public service reform would have been necessary, irrespective of the EU/IMF aid.

While reform was a major part of Government attempts "to regain full sovereignty over economic policy", Mr Howlin told a meeting of the Association of Chief Executives of State Agencies they would in any event face key "imperatives" in coming years.

He said a new public spending review, on which he had briefed the Cabinet in recent days, would not be a simple assessment of where to make cuts, but would also consider the way public sector services were delivered.

Mr Howlin said the cost of the health service at €18 billion this year including insurance and discretionary spending, coupled with the demographic projections created one of the imperatives for change.

But he said technological change also offered an opportunity to rethink delivery of services. "For example, last January, an 81-year old stroke patient in Mullingar was diagnosed and treated by a consultant [working in] in Tallaght hospital, while students in Dunshaughlin are already learning Leaving Cert Chemistry, in real time, from a teacher based in another school."

Speaking to The Irish Times in advance of his address Mr Howlin reiterated the Government's commitment not to cut public sector pay, "if the Croke Park Agreement works".

"These are just some of the challenges that our society is facing in the coming decade - crisis or no crisis. In the good times, tackling them was going to be difficult. Today, in these difficult times, tackling them is going to be imperative."

Mr Howlin said Ireland's was facing a profound and complex economic crisis "where we are fighting a battle on three fronts - mass unemployment, a major failure in banking, and a fiscal crisis".

While he did not absolve the previous government of its responsibility he said "even before the economic crisis was upon us, there were significant challenges on the horizon, that could not be met without far-reaching reform".

The association of chief executives, which was holding a joint meeting with the CEO Forum of Northern Ireland, was also told by Mr Howlin that Ireland needed to adapt the population's skills "to the needs of the 21st century labour market".

Mr Howlin said 20 years ago "if you could use Microsoft Word, you were an IT specialist. Now, you need to be digitally literate for almost every job, at every skill level, from stock checking in a supermarket to building a bridge".

He said the Expert Group on Future Skills Needs estimated that by 2020, with no policy change, those in the labour force with lower skills would far outstrip the supply of low skilled jobs, while there would not be enough higher-skilled workers to fill the new jobs being created. "In other words, even as employment in Ireland reached record highs, we were facing a growth in structural unemployment."