From Department of Public Expenditure, NDP Delivery and Reform
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Check Against Delivery
Good afternoon everyone.
When I presented the 2016 Estimates for my department’s Group of Votes to the Committee last June, I agreed to return for a further discussion following the publication of the Mid-Year Expenditure Report. I am pleased to be here with you again today for what I hope will be a fruitful conversation.
The members will recall that my department’s Group of Votes comprises a significant number of Votes, as follows:
The Vote for the remaining element of the PER Group – that for the Office of Public Works – was handled separately by the Committee this morning.
The structure of the PER Vote remains unchanged in 2016 from last year, with two strategic programmes focussed on Public Expenditure and Sectoral Policy and Public Service Management and Reform.
The allocated resources for each Programme, in terms of staffing and funding, are set out in Part III of the Estimate. A total gross estimate of €45.9 million is provided for 2016.
The statement I gave to the Committee in June dealt in detail with the areas covered by these programmes.
In the circumstances, I do not think it will be necessary to go back over the same territory today but I am, of course, willing to answer any queries which might arise on such matters in the course of today’s proceedings.
Instead, I would like to discuss some of the key strategic challenges currently faced by my department and to listen to the Committee’s views on what the priorities for my Department should be and how we can deliver on these objectives.
I will touch on this in more detail later on in my statement.
First, however, I would like to make a few comments on the economic and fiscal position as my department sees it in the context of Budget 2017.
I set this out in some detail last week at the Select Committee on Budgetary Oversight and I would like to touch again on some of the key points raised that have relevance for this Committee.
The government is very supportive of the Oireachtas having an enhanced input into discussions on budgetary priorities and it is in this context that I published the Mid-Year Expenditure Report in July, to provide a starting point for an examination of our priorities and to highlight issues for discussion.
This follows on from the Summer Economic Statement, which sets out the government’s medium-term budgetary strategy as well as the high-level parameters for Budget 2017.
The Summer Economic Statement envisages that day-to-day departmental spending on delivering public services will increase by €1.3 billion to €53.1 billion in 2017.
It also foresees capital investment increasing by €400 million to give a total capital envelope of €4.4 billion.
This funding will provide for continued investment in our schools, healthcare facilities and transport network. It also allows us to invest more in housing to address the serious pressures that exist there.
The State now employs over 66,000 teachers, 10,000 doctors and 41,000 nurses in our education and health sectors, all up significantly on 2013.
This targeted investment in frontline staff has come hand-in-hand with real reform and a focus on excellence in public service delivery.
For example, linking the provision of additional funding in the health sector earlier this year to an accountability framework for the acute hospital sector will to help ensure sustainability for our health system in future years.
The main aim for Budget 2017 is to deliver sustainable public services that are fiscally prudent while delivering targeted improvements to public service in vital areas.
There are numerous competing demands for resources across the public service where genuine need exists for additional resource allocation. If the main challenges and priorities are to be addressed, it is not enough to look solely at the incremental increases to services.
I am also focused on assessing how effectively and efficiently we are delivering existing services.
As I discussed with the Committee on Budgetary Oversight last week, this is a challenging climate in which to formulate a budget and difficult decisions will have to be made in the coming days.
I would like now to touch on the issue of public service pay.
Control of the public service paybill is vital to the overall sustainability of the public finances. This means discipline and responsibility on the two core drivers of the paybill: numbers of public servants employed and their rates of remuneration.
Thankfully, sustainable progress is now possible on both of these fronts.
The government has allocated funding for extra Gardaí, doctors, nurses, teachers and special needs assistants in order to support essential frontline services.
This increase in resources has been accomplished in tandem with real pay restoration under the Lansdowne Road Agreement (LRA).
A negotiated agreement, such as the LRA, provides certainty and predictability to the management of the public service paybill. It allows for strong fiscal planning with resources ring fenced for sustainable pay restoration, balancing the competing claims for additional government expenditure within the resources available.
More than this, the Agreement provides a framework for negotiating on issues that matter to public servants – a good example of this is the recent agreement with the INTO and TUI on new entrant teacher pay.
A final development worth noting is the agreement in principle by the government in July 2016 to establish an independent Public Service Pay Commission.
Its role will be to provide evidence based analysis on pay matters to assist officials in discharging their negotiation function on behalf of Government. The Commission will be advisory in nature and will report initially by the middle of next year.
A consultation is currently underway on the appropriate role and structure of the Commission and I intend to bring a memorandum to government soon.
Moving on to the broader reform agenda, effective expenditure management and sustainable public pay policy goes hand-in-hand with meaningful reform of our public services.
The importance of an effective and efficient public service cannot be overstated – its performance has major implications for the management of the State’s finances and for job creation.
Most importantly, the public service provides essential services for our people when they need them most.
Significant progress has been made across a range of areas under the current Public Service Reform Plan in terms of delivering better outcomes for users of public services.
Service users, whether citizens or business customers, are being placed at the centre of service design and delivery, so that services better meet their needs and expectations.
In particular, we are working to achieve better outcomes for our customers by prioritising the digitisation of services, as set out in the Public Service ICT Strategy, recognising how expectations for technology-enabled government services have risen significantly in recent years.
Successful delivery of the ICT Strategy will require a substantial increase in the provision for the Office of the Government Chief Information Officer (OGCIO), within my department, from 2017 onwards, to be offset by savings elsewhere across the system.
We will fund much of this programme by combining our buying power, sharing our assets across government and driving out duplication. This is a vital investment in modernisation, which will reap substantial benefits across the system. The aim is to streamline processes and enable citizens to transact wholly online with government and access digital government services.
Elsewhere, implementation of the actions under the Civil Service Renewal Plan, which will improve the capacity and capability of the civil service, is continuing.
The Plan is enabling important changes across government departments and offices including strengthening governance, developing capacity and improving our approach to HR in the system.
While acknowledging the significant progress achieved on the reform programme in recent years, I firmly believe there is a need to build on this progress and maintain a strong focus on reform over the coming years.
That is why, in addition to overseeing the final phase of the implementation of the current Reform Plan which runs to the end of this year, I have asked my department to initiate the development of the next phase of public service reform to cover the period 2017-19.
I would now like to take this opportunity to invite Committee members to provide input into the development of the next Public Service Reform Plan, which will focus on further modernisation and renewal of our public service. I would also like to invite your views on the ongoing implementation of the Civil Service Renewal Plan. As always, we would be pleased to receive submissions and also my officials would be very happy to meet with you to discuss aspects of these plans and to hear your thoughts, if that would be convenient.
In parallel with the programme of public service reform, significant progress has also been achieved in delivering more open, transparent and accountable government with a number of significant legislative and public governance measures being delivered in areas including Freedom of Information, Protected Disclosures, Regulation of Lobbying and appointments to State Boards.
This process is continuing under the current government and, as Minister for Public Expenditure and Reform, I am personally committed to advancing this agenda.
For example, work is well underway on Ireland’s second National Action Plan under the Open Government Partnership
Significant progress continues to be made on the Open Data Initiative. Ireland’s Open Data Portal, data.gov.ie, now contains over 4,400 datasets from 90 publishers and is growing all the time.
A Data-Sharing and Governance Bill is also being prepared to simplify data-sharing between public service bodies while also protecting the rights of individuals.
The Public Sector Standards Bill is designed to modernise, simplify and streamline the current legislative framework for ethics, which is in urgent need of reform.
Initiatives such as these are vital if we are to achieve fully the objectives of increased transparency, integrity and accountability underlying the Government’s reform of our public life.
I would now like to turn to some of the other Votes in the PER Group. The roll-out of shared services and the reform of public procurement are central to delivering the efficiency-focussed reforms set out in the Public Service Reform Plan. In this regard, the combined 2016 allocation for both the National Shared Services Office and the Office of Government Procurement is €57.8 million.
The 2016 allocation for Vote 12 – Superannuation and Retired Allowances – is just under €527 million gross, €392 million net. Each year there is a net increase in the number of pensioners, due to retirements. This has the effect of increasing the pension payroll cost year on year. In addition, civil service demographics mean that there has been an increase in the number eligible to retire in recent years. For these reasons I expect the gross expenditure estimate for 2017 to be higher than the 2016 estimate. There will also be an offsetting increase in receipts to the Vote.
The Committee has been supplied with a detailed briefing by my department’s officials on the various Votes in the PER Group, including those for the sub-offices of the department.
The final matter I would like to address with the Committee today is the development of my department’s new Statement of Strategy.
As members will be aware, the development of a three year Statement of Strategy is a requirement of every government department under the Public Service Management Act, 1997.
Under the legislation, a new Statement of Strategy must be submitted to a Minister within six months of their appointment. Therefore, the process to develop a new Statement of Strategy is underway in all departments, including my own.
This work will, of course, be informed by the priorities set out in the Programme for a Partnership Government and the overall economic, budgetary and fiscal context.
The development of this Strategy is extremely important for every government Department, in terms of:
The Statement of Strategy process also provides a timely opportunity to take stock. To consider what has been delivered under the current Strategy Statement. To look at the strategic choices, challenges and risks we face. To re-examine our values, our strengths and our capacity to deliver on our strategic goals.
As part of the consultation process on my department’s new Statement of Strategy, I would like to invite members of this Committee to share your perspectives on my department’s role and mission, which is 'to serve the public interest by supporting the delivery of well-managed, well-targeted and sustainable public spending through modernised, effective and accountable public services.'
I am happy to hear those views today or if you wish, you can write to me separately by mid-October. As the department centrally responsible for expenditure policy and driving reform, we would greatly benefit from hearing your views on our role over the next three years.
While much has been achieved in terms of managing the public finances and delivering reform, we are still borrowing to fund our public services and our debt remains at an elevated level.
The objective of delivering and improving public services within budgetary parameters remains a key strategic and operational goal for all departments and offices. We are particularly interested in your views on how we can deliver on the overarching objective of achieving and maintaining sustainable public finances, whilst continuing to reform public services to meet demographic challenges and the expectations of our citizens.
I thank the Chairman and members for their attention and I am happy to answer any questions which may arise.
ENDS