Business

Take risks to create reform: Hayes

Minister 's response Good management and a willingness to take more risks will deliver reform, Minister of State Brian Hayes has told an eolas seminar on external service delivery.

The success of public sector reform ultimately depended on managers and giving people in the public sector the freedom to make mistakes, according to Brian Hayes. The Minister of State at the Department of Public Expenditure and Reform made his comments at an eolas seminar on external service delivery.

He stated: “We’re only going to get this country, in terms of the public sector reform agenda, to a better place with managers managing and leading, doing things differently, and being prepared to put their head above the parapet and try things differently.”

The Minister paid tribute to the many examples of managers across the public sector who were taking risks and called for that to be rewarded: “I think we’ve got to be prepared to make mistakes on things in order to achieve on a whole host of other things.”

He also saw the need for a fundamental exercise in central government to establish its core and non-core functions i.e. “what we need to do and what can be done by the private sector.”

“Where the public sector do something and do it on a cost-effective basis, we should continue to do that,” Hayes affirmed. “And I think there are many examples where what we do cannot be replicated by the private sector and makes no sense to be replicated by the private sector.”

If, though, a transactional part of public sector business could be delivered externally, there was “no reason why we should not consider that.” As a first principle, the Government has stated that it would conduct a study on whether any service should be outsourced for external delivery.

Hayes was keen to point out the variety of models through which outsourcing can work, not just the direct transfer of activity from the public to private sectors. “One of the things we will look at,” he remarked, “is whether there are parts of our business which can be managed externally but the people would remain on the same terms and conditions as working in the public sector.”

In the shared service model, the Government opted for internal service delivery because “it had to work … if it was a flop, it would be a disaster for the future of shared services.” Ministers also had to look at a model that would deliver a core part of the business of government (human resources).

The OECD average was that 33 per cent of public services were delivered externally, while Britain was on 25 per cent and Ireland on 16 per cent.

“That’s not a huge problem as we can learn from what works in other countries,” he continued. The departments covering health, justice and local government have submitted “detailed, benefit-driven external delivery plans” to Hayes and his overseeing Minister, Brendan Howlin.

Debt management is being considered “very closely” by ministers. At least €500 million is owed to the State. To add perspective, the State had to make a fiscal of adjustment of €3.1 billion in 2013.

“It has to be about business acumen,” he added. “The numbers have to stack up. It has to be based on solid evidence if we are going down the outsourcing model [route].”

Over the last two years, Howlin and Hayes had seen “Trojan work right the way across the Irish public sector.” In the private sector, people had lost their jobs but wages were increasing again. The public sector had taken an “enormous hit” in terms of take-home pay, morale and organisationally. That said, there was an “opportunity in this crisis to come out the other side and to give people hope that the new public sector we put in place has, within it, the ability to be part of the success of this country.”

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