Public expenditure wasted on setting up ineffective agencies

 

Politicians and public officials stand indicted for failing to ensure adequate financial accountability, writes NOEL WHELAN

THE REPORT on public expenditure isn’t exactly easy reading but is actually quite compelling. Even as one tries to work one’s way through the opening chapters, the analysis and data set out by Colm McCarthy and his colleagues force one to stop and think. The report is crammed with detail on how public money is spent, some of which will be a real revelation to many, and is set to be a talking point for months to come.

On page one of the report, the authors set out the macro economic context in which their work was conducted and do so in way which sets out the scale of the problem in the public finances more comprehensively and effectively than many Ministers have in recent months.

By page five the reader begins to understand that any realistic menu of savings has to include some cuts in social welfare and further savings in public sector pay and/or pensions. The report, for example, points out that of every €10 of current public spending, €3.70 is spent on social welfare and €3.50 on pay or pension, with €2.80 spent on the remaining non-pay items.

Some people will have had a vague sense of the generous pensions entitlements available in the public sector. However, it will be a revelation to many that workers like gardaí and teachers, if they joined the force or profession in their 20s, can retire on full pension in their mid-50s. For a private sector worker to buy the equivalent pensions, he or she would have to be paying over the equivalent of between 27 and 48 per cent of their salary into a pension pot. The accelerated pensions for some engineers in the civil service or High Court judges are such that a private sector equivalent would have to be paying up to 87 per cent.

We have previously seen snapshots of bad public expenditure through the annual reports of the Comptroller and Auditor General and in various investigations by the Dáil Public Accounts Committee, but the public has never had access to so much data about how their money is spent.

The real strength of this report is the fact that it is a forensic analysis which considers every single item of public spending covering every single spending line across every single department and agency.

The allegation that governments were failing to ensure adequate financial accountability in the public sector has been made repeatedly in recent years. It was dramatised particularly effectively in Eddie Hobbs’s Rip Off Republic series broadcast on RTÉ television in 2005. It has been an allegation made most frequently by Fine Gael’s Richard Bruton. The allegation is now proven in this book of evidence. There was clearly a systemic failure in the way in which public money was spent in implementing policy.

Politicians and public officials stand indicted for those failures. The onus is now on them to address and solve this problem quickly. Nothing illustrates the bizarre and ad hoc manner in which public expenditure was used in this country then the random way in which the number of State agencies has exploded in recent years.

More often than not the establishment of these new agencies emerged in response to some public controversy or high-profile campaign by a non-government organisation or sectoral interest. They would repeatedly argue that not enough was being done about their issue or for their sector.

In response to this clamour for action, Ministers and ministers of State would call a press conference to announce that a new agency targeted specifically at tackling whichever particular problem was then getting most attention was going to be established promptly.

The proposal would be reannounced at media events to mark the recruitment of a chief executive or the appointment of a high-profile chairperson, the opening of a new office and even the design of a new logo. The agencies were sometimes set up on an interim basis only to prompt a new wave of campaigning for the body to be put on a statutory footing.

The establishment of this new agency often became something which the Government could then flash around nationally and internationally as proof positive that they were really doing something about an issue.

The effectiveness of public policy was measured by the size and budget of the agency rather than in actual outcomes and achievements. Each square in this patchwork of agencies, in addition to their own in-house press operation, often had budgets for external public relations and advertising agencies.

One Minister told me recently how he hit the roof when his adviser came to him to say they had just taken a call from an executive in a public relations company trying to set up a meeting between the Minister and one of their clients who happened to be the chief executive of an agency within the department’s own remit.

In order words, the agency was using public money to lobby its own funding department.

Some of the public relations extravagance engaged in by such agencies has been reined in over recent months, but one can expect that many agencies now fighting for their survival will crank up their public relations operation to generate support for their independent existence.

This report is not a summer blockbuster or ideal poolside reading, but it should get the widest possible circulation and discussion and hopefully give rise to mature dialogue and decision making.

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