Meeting with the Task Force on the Public Service

Monday 22nd September 2008

Context:The OECD Review; the Strategic Management Initiative; the Organisational Review Programme and the Efficiency Review ProcessThe stated need for an overarching policy for an integrated public serviceThe scope for the formation of a senior public service and its capacity to contribute to an integrated and cohesive Public Service

Topical Context 1

There is also a more ‘topical’ context, in that Public Sector Agencies have become increasingly identified in the media and elsewhere as contributing to the current ills of the Irish economy

Note also the aside by the then Taoiseach Bertie Ahern at the launch of the OECD Report that there are 800 agencies - and as far as he was concerned, about half of them would be enough

Expenditure Control 2008 and Estimates 2009-2011- 3% payroll reductions- efficiency measures and cost savings- rationalisation of non-commercial agencies

Topical Context 2

Proposals from Departments concerning Agencies, and media reports of ‘Finance brainstorming’The Fine Gael document in relation to the €200m savings which could be made by “rationalising” agenciesComment from current Taoiseach, Brian Cowen, There is a need to take a hard look at the approach to agencies, why and how they are set up and the proper reporting relationships between agencies and their parent Departments

Current Reality

The IPA study (2005) of 601 commercial and non-commercial agencies currently operating in Ireland defines an agency as a public sector organisation that has the following characteristics:It is structurally differentiated from other organisationsIt has some capacity for autonomous decision-makingIt has some expectation of continuity over timeIt performs some public functionIt has some personnel It has some financial resources.

Background Information on Agencies in Ireland (1)

The IPA study provides some general background information on the Irish agency landscape. It shows that: There has been a significant increase in the number of agencies operating in Ireland, with almost 60 per cent of the 601 agencies currently in operation set up since 1990. Three hundred and seven of the agencies are ‘duplicate function agencies’ -that is, the same function is carried out by a number of similar agencies in different locations (e.g. county councils, county development boards, regional tourism authorities). Two thirds of the agencies identified have been set up through legislation.

Background Information on Agencies in Ireland (2)

The agencies carry out a range of functions, which can be grouped into implementation, advisory and regulatory functions. The most common function is implementation of policy, but contrary to the situation noted internationally, providing advice (usually on policy) is also a significant function for these Irish agencies. Agencies are found in a wide variety of policy areas, but the Departments of Environment, Heritage and Local Government; Health and Children; Community Rural and Gaeltacht Affairs; Justice, Equality and Law Reform; and Communications, Marine and Natural Resources are most likely to have agencies operating under their aegis. The Departments of Defence, Agriculture and Food and Foreign Affairs are notable for the low number of agencies under their remit.

Rationale for Establishing Agencies (1)

Reasons offered for the setting up of agencies in Ireland:

Per IPA (1995):1. Economic/efficiency: moving government away from

bureaucratic forms of administration and service provision towards agencies using private sector principles to improve efficiency

2. Changing societal expectations: citizen demand for better service delivery

3. Political: agencies allow more decisions to be made using economic and efficiency rather than political criteria

4. Specialisation: specialist skills in complex policy fields are not available in the Civil Service

5. Isomorphic: ‘everyone else is doing it’The bulk of these motives are comparable to motives that have

been reported in other countries (OECD 2002: 14-15).

Rationale for Establishing Agencies (2)

Per OECD:Signalling and embodying new policy priorities and showing that action is being taken quicklyInvolving stakeholdersProving executive bodies with managerial flexibility, bringing in specialised skills, and allowing more performance focusCo-ordinating government policiesResponding to EU requirements relating to independence of regulators

A Multiplicity of Agency Functions

Implementing policy: direct service delivery and through transfer of fundsRegulationAdvice and policy developmentInformationResearchRepresentationCommercial developmentRegistration (of professional groups)Tribunals

Extent of Agency achievements

Agencies “ have given the Irish Public Service additional capacity and flexibility to deliver services during a time of major growth in public spending and increased citizen expectations. In addition, agencies have allowed governments to involve more stakeholders in participative management (and) to bring needed skills into the Public Service….”

(OECD Report, Page 307)

Objectives which the Task Force hopes to achieve – and where ACESA considers

it has a contribution to make:

How the business of government is structured and organised; An overarching policy for an integrated Public Service;A strategy to enable necessary changes to be planned and implemented successfully;The structure and role of a Senior Public Service;Greater use of shared services across all sectors of the public service;Framework for reviewing the establishment, operation and governance of State agencies;Delivery of coherent and citizen-focused services more closely supporting greater efficiency in administrative processes.

ACESA – Objectives and Functions

To provide an opportunity for CEOs of non-commercial state agencies to meet from time to time to exchange information and to discuss issues of common concern;To provide mutual support and sharing of experience;To foster better communication, enhanced networking and mutually beneficial cooperation between state agencies and with their parent departments;To promote good practice and effective use of resources;To identify and meet common training needs and to support and encourage best management practice;To collect and analyse relevant data on the sector;To promote research into issues of common concern;To raise awareness of relevant developments;To foster links and exchange experience with equivalent bodies in Northern Ireland; andTo develop a collective voice on issues that affect the sector.

ACESA - RoleACESA represents the Chief Executives of the non-commercial National Agencies The Association has a current membership of 82; encompassing around €800m in budgets and a total staff of approximately 5,500 people. The Association plays an active role in helping to bring the overall perspective of state agencies to the national public policy agenda and in informing members of developments in public policy that affect their agencies. It took a lead role in 2002 in commissioning the On Board guide to promote better corporate governance among state agencies. In 2003, it liaised with the Department of Finance in relation to the implementation of modernisation commitments in Sustaining Progress and aspects of the Mullarkey Report affecting state agencies. The Association has been active in relation to the programme of decentralisation.It acts as a conduit for the dissemination of policy and operational initiatives and decisions made centrally.The Association also played a role in the OECD review process

ACESA’s Submission to OECD Review Group30 March 2007

Key Governance Issues Agencies and Parent Departments There is a need to clarify the role of parent/line departments towards their agencies. Is their role

to control? to monitor? to support?

The respective roles of the Departments of Finance and Taoiseach also need to be clarified. ACESA argued that there is a weak ‘governance culture’ in the relationship between line Departments and their agencies. The issues of autonomy and accountability need to be addressed in a coherent and consistent manner. Line Departments have neither the resources nor the defined responsibility to manage the relationship in a strategic manner.

Key Governance Issues Agencies and Parent Departments

(contd.)ACESA proposed the establishment of some form of ‘governance of agencies’ unit in each parent department, probably as part of the corporate services function. Central departments could provide guidelines and disseminate best practice on how these units liaise with agencies. Central Departments could also take a regular sectoral view as to the appropriateness or adequacy of existing agencies.This is particularly important in the light of the clustering of agencies within the responsibility of certain key Departments The basis of the relationship between line Departments and agencies should, in ACESA’s view, be strategic. The focus should be on the statutory (or other) mandate of the body and any other responsibilities or roles assigned. The basis of evaluation should be on outputs and outcomes rather than on inputs. This requires greater engagement on strategic plans and annual reports. ACESA also believes that effective governance can be enhanced through regular formal high-level meetings between agency and parent department, to discuss policy and performance as well as financial resources.

Key Governance Issues Finance and HR

ACESA is of the view that all discussions in relation to finance and human resources should be grounded in the mandate and the strategic objectives of the agency. Both finance and human resources allocated should be linked to strategic plans and therefore, should have a multi-annual dimension.

Key Governance Issues Mandate of Public Sector AgenciesACESA also submitted that there should be a regular review of the mandate of public agencies. This review could take place at the planning phase of a new strategic plan and could include matters such as:

the ongoing relevance of the mandate in the light of changed environmentthe extent to which the mandate is being met and the reasonsthe extent of consistency or overlap with other public bodiesthe adequacy of resource provisionthe adequacy and appropriateness of accountability relationshipswhether the prevailing relationship is appropriate and working in terms of autonomy and control

ACESA is of the view that, in light of recent Government decisions concerning the rationalisation of agencies, a structured review could be initiated immediately.

Key Governance Issues Grading of Staff in Agencies

ACESA is also of the view that it is irrational, in every case, to translate civil service grades to public agencies. The focus needs to be on the most effective structure to implement the particular mandate. The structure also needs to facilitate the greatest amount of inter-changeability possible within the particular agency.

Key Governance Issues Accountability

ACESA also expressed the view that all Chief Executives of State Agencies should be statutorily required to appear before Oireachtas Committees in relation to the business of the agency.

Key Governance Issues Shared Services

The Association sees merit in the provision of central support/shared services for smaller agencies. There are a number of examples of this e.g. Dept. of Justice. The most obvious opportunities lie in the areas of finance, information technology and human resource support services. If provided, these services should be incorporated into the form of Service Level Agreements to ensure there is no diminution in the sense of autonomy of particular agencies.

Key Governance Issues

Boards There is a need to ensure that Board membership and appointment criteria are of highest quality, such that those people best able to contribute to the functioning of the agency are appointedAll Board members should have structured training immediately following appointment in relation to their roleThe governance role and responsibility of Boards should be regularly re-visitedThe effectiveness of Boards should be evaluated (using a facilitator) internally on an annual basisThere should be continuing clarity in relation to the respective roles of the Board and the executive.

Outcome of OECD Review

Strengthening Governance

Clarify the role of the departments and agenciesDevelop a more integrated approach to working through the use of networks Government to rethink the organisational form of service delivery as a wholeMatch governance structure with agency objectivesEstablish clear guidelines and criteria for agency creationRe-balance the autonomy of agencies in favour of more managerial autonomy

Managing Agencies

Performance: Improve the performance focus of agenciesGovernance: Review the Government Agencification frameworkCapacity: Improve HRM capacity and strategic capacity in HRM

Other Key Recommendations

Ensuring CapacityIncrease strategic planning capacity by promoting an integrated public service perspective. Create a unified public service labour market and expand mobilityCreate a Senior Public Service

Moving towards a citizen-centred approachMore integrated service deliveryMore quantitative performance measures and targetse-governmentUtilisation of shared services

The Association’s View:ACESA fully supports the principles of good governanceThe Association re-iterates points made in its original submissionACESA seeks meaningful engagement with central and line departments in relation to proposals on agenciesACESA supports the need for meaningful dialogue with line departmentsThere is a need for clarification of the roles of line departments and agencies Followed by a structured approach to the agency issue Common objective of a more efficient and effective public serviceNeed for a properly integrated approach to the delivery of public servicesNeed to take a whole-of-government approach rather than a Departmental oneSenior Public Service to include entire public serviceGreater mobility should be facilitated across the public service

Thank you for your time!

Further Information: www..acesa.ie