Speech given to – Chartered Accountants Ireland – Public Sector Forum

February 22^nd, 2012

I would like to thank the Institute of Chartered Accountants for inviting me here today to address individuals and representatives of organisations who have a crucial role to play in putting Ireland on a new course, one that I hope will lead to a better, fairer, more inclusive society.

During the Tiger years, many people in responsible positions in this country did not do enough, or did nothing. Neither course is really an option for any individual or organisation occupying a leadership role. Politicians, trade union leaders, senior public servants, bankers, regulators and individuals in the media and the professions all have a part to play and have a duty to remember that the common good should take precedence over self-interest. Along with the churches and our cultural and educational institutions, they constitute the spine which binds our society together.

A few discs in that spine slipped, and remained dislodged, under the weight of the boom, when greed crept in and duty was forgotten. Some of those discs still need attention.

Hands were either in gloves or washing one another; nods, winks and nudges were the order of the day; guard dogs did not bark and conflicts of interest were ignored.  With a few notable exceptions, voices, that should have been loud and powerful advocates for good governance, caution and rigour, whispered or stayed silent, as hares were let sit and kings walked naked.

Caution was thrown to the wind and concerned voices were ignored, as greed took hold and the fabric of our society was torn apart. Seduced by the tinkling from what Yeats called “the greasy till” we forgot our obligations to each other, our country and our children’s future.

 We comforted ourselves with the thought that a rising tide lifts all boats.  It certainly did that with the good ship Ireland before testing its construction and sinking it, without discriminating between the foolish, the greedy, the guilty and the many innocent people who were on board. The captains and officers of that ship still have serious questions to answer.

Now we blame many things for our fall from grace: German lenders, rapacious builders, bad bankers, etc, etc. But, I believe, without any doubt, that the real cause was absence of good governance in many areas and the lack of backbone that makes that possible.

Leaders across our society did not lead. They did not keep their people, their organisations or their country safe. They did not make the difficult choices on behalf of their people that their contract with those people demanded.

I want to make this point very clear, this country is governed by politicians, but that is not where it stops, there are other respected powerful voices who should not stand back when duty calls. Without denying in any way the responsibility of government and politicians in general for some of what happened, it has to be said that the backbone of this country was tested and found wanting. We now have three technocrats in Ireland telling us to do what we could, and should have done ourselves, while our politicians go with begging bowls to the EU.  It is shameful.

In politics, if the government was weak, the opposition was asleep. Softened by many years of power and plenty, politicians did not lead or challenge, relying on the Irish people’s reluctance to punish, in the ballot box, lack of ability, weak leadership, broken promises and bad policies, an attitude that I hope is now changed forever.

The people of Ireland must understand that if they do not use their votes to support quality and ability, wherever it is found, and ruthlessly deal with incompetence, they are putting their country and their children’s future at risk. The price of democracy is eternal vigilance.

When governments spent, opposition parties called for more and trade unions asked for, and were given, more; which largely went into the pay packets of senior civil servants who, in many cases, were doing the country a lot less service than they were doing themselves. Power was delegated and often abused, and responsibilities were shifted to such a degree that control was impossible and, in the end, no one was to blame for anything.

 In the private sector, it is very hard for the public, and me, to understand how regulators, solicitors and accountants looking for needles could not find or fall over stacks of them. I believe it is now time for institutes such as yours to look carefully at standards to ensure that, for instance, in accountancy, Chinese walls between consultancy and audit practices in the same organisations are resistant to both pressure and conflicts of interest. It also looks to me that the common good would be better served if these services were separated, with large audits rotated between the big three or four, every few years. This would substantially remove the possibility of conflicts of interests and doubts in the minds of the public.

The trade unions too really must look at their model and shake the dust off it. Trade unions are necessary, they give workers a voice and, in general, collective bargaining is a good thing. But they also have a duty to consider the bigger picture in relation to their leadership role in our society; their openness to advanced industrial relations thinking in other European countries; the transparency of their own accounts and the creation of a two-tier membership.

There is growing concern among some senior union officials, who have spoken or written to me about systems of financial control in unions, and recent events in a number of unions have highlighted this. Unions and large charitable organisations come under the Friendly Societies Act. Given the substantial sums of public money many of them deal with, and ignoring the question of whether unions are charities, this is like being satisfied that Bo Peep can look after a pride of lions. I believe all organisations handling large sums of money should prepare a full set of independently audited accounts and submit them to the Revenue. This would ensure proper controls are in place and alleviate public concern. If, as a member of the Dáil, I and my colleagues have to submit comprehensive accounts, which are subject to audit, surely large social organisations should do the same.

There is also disquiet among private sector union members that they are being discriminated against. It is easy to understand this: either their pay and conditions should be the same as their public sector brothers and sisters or it should be the other way around. Also, private sector workers are contributing through tax to public sector pensions and payoffs, at a time when their wages are being cut and jobs are being lost. Wasn’t there writing on a gable end in Orwell’s farmyard which cast light on this!

I am sure there are a number of you out there desperately suppressing the desire to ask me where I was before and during the crash. It is a fair question to ask a Fianna Fail T.D.

I could give you the answer Khrushchev gave to a delegate at a convention he was addressing, who loudly demanded to know where he had been during the Stalin years. Khrushchev challenged the heckler to stand up and when he didn’t, said “Now you know. Like you, I was lying on the floor.”

My answer is that I did what I could, which was not enough. I was concerned about weak leadership, beurocratic indifference and lack of decision-making.  I did not realise the crash was going to be as big as it was. Like the late Brian Lenihan, who gets too little credit for his bravery and diligence, I initially believed the bankers. It was a national emergency and I did not consider that they might be misleading us or simply did not know the true position. After all, they were independently regulated and audited and neither the regulator nor their accounts had set alarm bells ringing. 

Well now we know. All has been revealed and we are where we are, as they say.

Now, while the smell of burnt fingers, charred egos and incinerated wealth hangs over Ireland, we should all take time to contemplate and accept our mistakes, before putting them behind us and, using the information and insights we have so painfully and expensively gained, pull down, rebuild and make better.

The road we take from here will demand great leadership across our society, plain speaking and a good deal of courage. We have been given a painful and powerful lesson, which requires a powerful, positive response.

This is a call for change in the way we think, in the way we live and in the way we are governed. We need to grow up. The question - the really big question is -are our leaders up for that challenge?

Do they have the stomach for straight talking, hard facts, and, decisions, devoid of spin, fudge, euphemisms, obfuscations and the long grass into which generations of politicians, senior public servants and trade union leaders have kicked every  ball that looked even vaguely like a hot potato, largely without censure. That long grass is now home to a number of sacred cows, the biggest of which is the Croke Park Agreement – the others are resistance to the reform of the public service and the in-house  auditing of local government. All of these will have to be slaughtered, because they are wandering across our pathways to progress.

Political parties too should consider their thinking, and their positions. They should move away from the tired ideologies they cling to, which often demand rhetoric that is damaging and socially divisive, simply because they believe it is a unique selling point that encourages brand loyalty. Yes, it is as cynical as that.

I am tired of hearing from the left that the rich should pay and from the right that greed is good. There are many rich people in and, legally, out of this country who are committed to Ireland and make a huge positive contribution here and abroad. Demands for more tax on them, just to maintain an ideological position is a cheap shot which will yield very little, but could well encourage them to take their talents elsewhere, fed up with being tarred by a brush only a few deserve.  On the other hand, excess at the top and disregard for our society’s norms and standards by a few should not be tolerated. We need to accept the Jesuits advice about the lesser evil for the greater good and reflect on the fact that a society dominated by rule books, which treats all sins as mortal, leaves little room for forgiveness and redemption and squeezes out moral codes that have the flexibility and tolerance to deal with messy humanity, without pushing it into a corner.

The Civil War is over, the Iron Curtain is down and the Irish people are now more interested in truth and performance than the collected thoughts of De Valera, James Larkin or Michael Collins, with the greatest respect to those giants. The world has moved on and most major political parties are already in, or close, to the centre, whatever they tell their supporters.

Political parties should give up the twaddle and hypocrisy that is giving politics a bad name; they should drop the rhetoric and positions of the past and define themselves by the way they deal with real problems in the here and now. God knows there are enough of them.

I think a synthesis of the ideologies of the left and right is emerging, which agrees that capitalism needs to be contained and socialism needs to be sustained. It avoids arguments about big or small government and concentrates on its quality and effectiveness. It acknowledges the rights of the individual, but upholds the principal of the common good, while accepting that it is best served by people standing on their own feet and making their own way, with as little state involvement as possible. It argues that social support systems – the welfare state – are hallmarks of a civilised society, but believes that they should be efficiently and cost-effectively run by bureaucrats who are required to understand that thought, care and reasonable flexibility are good and necessary. It recognizes that capital and labour are well on the way to understanding and respect, under the influence of cutting edge thinking and the practicalities of the market place, which is not going to disappear anytime soon.

If you look at capitalism as a square and socialism as a circle you can see that the discussion might be about which one contains the other, but there can be no doubt that they need one another and must live together. I wish they would settle for a party called Commonsense.

I have been called right wing, which greatly surprises me, and my constituents. In fact, I am that strange animal,  indeed, an oxymoron, a pragmatic socialist, which is one of the reasons I joined Fianna Fail, the least ideologically driven of our three major parties, although it more than lost that sharp edge in the last ten years.

Ideology is not going to take me anywhere that my common sense tells me is not worth the journey. I stay in the middle left, picking the best of what I see around me and what my own experiences and common sense tells me is sound.  And if I had my way that is where Fianna Fail would be too.

My grandfather was a labourer in Kilkenny Gas Works and my father was a shop assistant in Lipton’s before getting his own 8-to-10:30, seven-days-a-week local grocery shop. You could say my family was upwardly mobile until I came along.

I am telling you this because I want you to know that I know what hard work, little money and long hours are about. I experienced them myself and served people in the shop who had to struggle to make ends meet. Men and women who crucially, had pride, dignity and the quiet satisfaction that came from being able to support their families, which their dependence on the welfare system seems to have stolen.

Now we have generations with little understanding of anything other than the social welfare system, which has made them totally dependent and has robbed them of their dignity and self respect, because it gives them money without thought or care. This is a failure of the right but, actually, more particularly of the left, as I will explain later, which will haunt our society for generations, as we struggle to deal with the problems emanating from ghettos that now exist around every town and city in this country. 

I know very well the indifference and systematic failure that has brought these generations to the dreadful place in our society that they now occupy.

I do not need lectures from the left about social justice. Social justice is not about ideology, it is about the quality of the delivery and that’s far from good. Indeed, it is one of the reasons why I am happy to be here today to talk about the need for public sector reform.

While remembering Ibsen’s advice that anyone standing up for truth and justice needs to bring a change of trousers with him, I will try to be as objective and honest about this difficult subject as I can.

The management and administration of the public service, its systems - such as they are – and its human resources and work place practises are not fit for purpose. It costs too much to run and does not give good value for money.

I want to be very clear. I am not talking about front line workers, who are cynically used as human shields every time anyone attempts to touch the creaking ancient structures their hard work is keeping erect. Neither is it about the many good people at all levels of the public service, including senior management level, who know that change must happen and would willingly engage with it were windows and doors to be thrown open and reactionary attitudes and tired useless systems thrown out.

It is about the culture in the public service that has grown up over generations and is now a dominant force in the way public servants think and act. That culture denies people the opportunities, pleasures and satisfaction that a modern efficient well run organisation can bring to its workers.

It is about the loss to our economy of a public service which, if it has been run according to best practise standards in the private sector, would be worth its weight in gold in Ireland‘s effort to right itself.

It is about the lack of courage of governments, political parties and trade unions in facing up to the challenge and properly starting the work of rebuilding and renewal. As far as I can see that is still not being done. We are getting press releases, revolving doors, and activity of one sort or another, but we are not getting action.

In the meantime, the public and front line workers, who are worrying about cuts and the security of their employment, must watch many senior public service managers and politicians, riding off with saddle bags of pensions and pay, towards a sunset full of semi state and EU positions. There is something deeply disturbing about all of this.

The Croke Park Agreement, ladies and gentlemen, will go down as the most expensive and troublesome grab since Paris put his arms around Helen of Troy. ……Although, in his case, he did have something beautiful to look at.

There is very little beauty to look at in the way the public service is run. One of the reasons for this is that it is a monument to the Peter Principle; people are regularly promoted beyond their ability, because promotion in the public service is usually a matter of time, but wide shoulders and elbows help a great deal too. The result is that the aggressive, determined and those skilled in work place politics get promoted faster, but they may not necessarily the best. Another result is the creation over time of a collective mindset. The one system in the public service which is powerful efficient and hugely effective is its system of self protection.

New entrants to the service are given jobs for life. That attracts the cautious and they enter a system that appears safe and encourages caution. Anyone who does not fit is simply squeezed out by the governing DNA of what is essentially a hive. Anyone venturing too close gets stung. Change is never spoken about and resisted at every turn. The culture of the public service, developed over generations, is hugely conservative, reactionary, very quick to defend itself and to that end quietly prepared to interfere with the creation of government structures, like the Public Accounts Committee, to ensure their powers are curtailed.

 For example, the PAC secretariat is too small to give members the support they need to do a really good job, although we do our best. The Comptroller and Auditor General, the highest financial officer in the state does not audit Local Government and, therefore cannot monitor the spending of over five billon Euros of public money each year. This is an exercise in territory protecting that should be dealt with immediately, particularly because there is an absence of qualified accountants with private sector experience in Local Government.

Ultimately over time, as always happens, this culture will destroy itself and evidence of that inevitability is already appearing. Look at what poor management and lack of qualified private sector trained professionals in the Department of Finance caused before and during the crash; look at the way retirement is being handled now, which Gerry Robinson correctly described as a shambles.

Actually, you can see this quite clearly when you look at what external objective forces are telling us about the public service and its ability to manage its own affairs: the outsourcing by the public service of services it runs at a loss to companies that run them at a profit. It is a classic market squeeze on an organisation whose cost base has lost touch with reality. It is also a finger pointing at management and the ridiculous systems that prevented the organisation being modernised many years ago. Those responsible should apologise to the workforce and get on with it now, before further damage is done.

Look at the Public Accounts Committee meetings and consider the tens of millions that the public sector’s lack of knowledge, experience, and inability to negotiate with the private sector and control spending properly, costs the state each year. Look at the creation of rules made to deal with the few and pester the many who are innocent, using enforcers that cost more than the money saved.

A reformed public service must have a strong central core of qualified professionals with private sector experience. It is ridiculous that huge sums of public money are being handled and distributed, generally, by well meaning and maybe, sometimes, gifted amateurs. This is not an opinion. It is as fact that is revealed nearly every week at the Public Accounts Meetings.

We need a considerable number of your members in the public system controlling the purse strings and introducing modern financial management systems.

We need human resources professionals to supervise recruitment and training, because the current system whereby public servants interview themselves only perpetuates the culture and ensures that private sector applicants are subject to bias, however unconscious or disguised that is.

Recently, I wrote to the Department of Public Expenditure & Reform to ask, essentially, if the new Comptroller and Auditor General was going to be interviewed by some of those who would be reporting to them and asking why TD’s could not be on the selection committee – I was thinking particularly of members PAC - and was told that this would be perceived as compromising the independence of the C&AG. By whom I wonder, but more importantly, is it not a reflection on the integrity of members of the Oireachtas: if they are not considered sound enough to sit on an interview panel by the public service – who have no difficulty putting their own people on panels- why should the public believe they can be relied on to legislate.  Politicians should stand up and resist this nonsense. The recent record of senior public service managers does not encourage me to believe they should be allowed to impose their mindset on interview boards or anything else.

Yet, the truth is that there are many, many good people in the public service, at all levels, who do great work and I do not want to decry their efforts. I deal with them every day in my political life and I am grateful to them for their diligence and support. I only wish they would be given the chance to work in a vibrant organisation. There are also those at senior level, who called for reform some years ago. I hope they are there now to participate in the debate and guide their colleagues to a better place. My aim is to begin a debate that will result in a more efficient, open, satisfying, happier workplace for all of them, and a powerful outward creative public service for the country.

I want the public service completely overhauled. I want the many good people in it to be given their chance to understand that the freedom, excitement and workplace satisfactions and challenges they would experience in a state of the art, efficient, proud organization, where ability and effort are recognized and rewarded, would be an infinitely better place for them as individuals and as workers than the Victorian, paternalistic and sometimes bullying disorganisation they now spend their time in. I want them to demand change, work for change and welcome change. I want them to know that they have a hugely important role to play in rebuilding Ireland.

Unions have to respond to this. They have a duty to the country as well as their members. I hope they will contribute and help by assuaging fear of change and confidently engaging with the process of reform.

The government has to be pressed very strongly on this, it has to be encouraged to take radical steps rather than make radical statements. The public service in its current state is costing this country a fortune. It is time for change. This needs more than committees, acronyms, press releases and initiatives that never seem to get anywhere. It needs decisive action which sweeps away obstacles to progress. It will take conviction and courage to put in place new structures.  But it must be done.

I believe that if the following actions are not taken no progress will be made:

° The creation of an external negotiating body to represent the government in its negotiations with trade unions. The current situation, where unions, effectively negotiate with union members who stand to benefit most, is the genesis of the Croke Park Agreement, and about as big a conflict of interest as you can get. I would also like the Agreement to be scrapped or substantially modified

°   The creation of an external interviewing board for all public servants above a certain level, with a considerable majority of rotating private sector professionals, on pro bono or limited expenses, hopefully, as we form a society where people and companies will give something back. This would ensure that any unconscious or disguised bias on the part of public service members does not carry undue influence and exposes them to interviewing and human resources best practice, which would help them on in- house interview boards. It would also level the playing field for applicants from the private sector.

°   All positions within the public service requiring professional expertise should be filled by qualified professionals. You will be pleased to hear that I believe qualified professionals are desperately needed and should be well represented in the hard core of professionals and senior public service personnel around which a reformed public service should be built.

° The internal auditing personnel within Local Government should be placed under the control of the Comptroller and Auditor General, who should have the power to investigate any aspect of public expenditure.

° Dáil Committees should be given greater powers. The Senate should be retained providing that it becomes less of a Limbo for politicians on the way out and in, and more of a place where respected figures from Irish society are given a forum and the opportunity to make a contribution to the state, perhaps on a pro bono or limited expenses basis.

° The practice whereby legislation is guillotined and ministerial order and regulation used excessively should be stopped. Members of the Oireachtas are either legislators or they are not and scrutiny of Bills should be part of the work of the Dáil, Oireachtas committees and a reformed Senate.

I suspect that much of this will not happen unless pressure is put on the government by you and people like you in our country, movers, shakers, opinion makers and commercial and social organisations of one sort or another. Will you and they stand up for the future of this country.

Will you stand up  and risk some department or some semi state that you are doing business with, or want to do business with, discovering they don’t need you right now, as happens? 

Will you decide that your best interest and your country’s future is best served by you and others campaigning for and forcing change.

You too may have to buy a second pair of trousers, but it might be worth it.  And I would like some company.

Thank you for your time.

Draft – Check against delivery

By Tom Lyons

Sunday February 12 2012

Head of public accounts body accuses union of trying to ‘muddy the waters’ in slush fund probe

By MAEVE SHEEHAN

Sunday February 05 2012

THE head of the Public Accounts Committee (PAC) has rounded on Siptu for trying to “muddy the waters” in the investigation of how a taxpayer-funded €5m slush fund was spent by the country’s largest union.

John McGuinness yesterday accused Siptu of “playing games” and of attempting to point the finger at the Health Service Executive (HSE).

Mr McGuinness’s remarks follow reports that Siptu called in the Garda Fraud Squad over two payments of €190,000 destined for the union’s slush fund but which cannot be traced. The HSE already reported the slush fund to the Fraud Squad two years ago.

Mr McGuinness claimed that the union was using the powerful Dail committee as a “battleground to point the finger at the HSE”: “I think it is outrageous that a union of that size will do what they are doing and not answer questions.”

He added: “They seem to believe that they can muddy the waters and get away with it. Well, not on my watch. They will not get away with it.”

The PAC is investigating just how the union spent more than €5m in state funds, which were paid over several years into a bank account controlled by senior union official Matt Merrigan.

The money was paid by the Department of Health and channelled through the HSE. It was intended to be used for training and industrial relations — but was instead used to fund more than 40 foreign trips for civil servants, health workers and union officials.

Siptu agreed to appear before the PAC on March 1. However, Siptu has refused to disclose details of the financial transactions from the fund to anyone other than the Comptroller and Auditor General, whom John McGuinness has now asked to complete a definitive report on the slush fund debacle.

Siptu boss Jack O’Connor defended the union’s decision to go to the gardai, saying that he had referred two specific issues, relating to two lodgements totalling €380,000. The union has said it is its intention to fully assist the PAC, and has also promised every assistance to the Comptroller and Auditor General.

The union and the HSE have been at loggerheads over who bears most responsibility for the lack of governance of the slush fund. SIPTU has claimed it was simply unaware of the fund’s existence and lays the blame with the HSE.

The row has escalated in recent weeks as the HSE stepped up its attempt to track down the two supposedly missing sums of €190,000, seeking details of financial transactions from SIPTU.

In correspondence published by the Public Accounts Committee on Friday, the union said the €380,000 was never lodged into its accounts but accused the HSE of giving the impression that the money had “gone missing”.

The union suggested that responsibility lay with the Health Service Executive: “It now appears that members of the HSE bear responsibility for the failure to account for €380,000 of public funds.

“It is clear to us that certain members of the HSE may be the subject of investigation in respect of these payments.

“Of further concern is the fact that the HSE may also be the subject of Garda investigations, one which they initiated themselves and one initiated by Siptu,” general secretary Joe O’Flynn wrote to the HSE auditor.

In a letter to the PAC, the union said: “As Siptu was implicated in this most serious matter and, as we did not seek or receive the said monies, we have referred the matter to the Garda Fraud Squad for investigation.”

- MAEVE SHEEHAN

INCORRECT LEGAL ADVICE from the Revenue Commissioners resulted in the State taking expensive legal action which was ultimately defeated in the Supreme Court, a committee of TDs has been told.

The Public Accounts Committee heard yesterday that advice from the Revenue Commissioner about the application of VAT had been part of the State’s argument in cases against the operators of the National Aquatic Centre in Abbotstown.

Campus Stadium Ireland Development Ltd, a State-controlled company, had taken action against the Aquatic Centre’s operators Dublin Waterworld pursuing a VAT bill of €10.25 million.

After a six-year legal dispute, the Supreme Court ruled in 2010 that Dublin Waterworld was not liable for VAT under the Finance Act 2002.

The Taxing Master has not yet offered indication the final legal bill for the State’s unsuccessful pursuit of the spending, though the legal costs are expected to reach into hundreds of thousands of euro.

The committee yesterday heard that the Comptroller & Auditor General had advised the State to drop the case years previously – but that the State had pursued the claim based on “guidelines” from the Revenue Commissioners.

Committee chairman John McGuinness said it had become “quite clear that the Revenue Commissions gave regulations which were acted upon, and which caused millions of euro to be lost.

“The Revenue Commissioners were wrong in their interpretation of the regulations, which led to all of this,” he said. “There was quite a litany of poor advice in this instance, and advice that thereafter was followed by the Department leading to the loss of huge amounts of money.”

The disclosures came as the PAC met to ratify Chapter 31 of the Comptroller and Auditor General’s 2010 annual report, which dealt with spending at the National Sports Campus.

The committee deferred signing off on the chapter, and McGuinness said the committee would meet again in private session next week to discuss recommendations that can be made as a result of the dispute.

Fine Gael member Simon Harris said it was not only the Revenue Commissioners who had misinterpreted the Finance Act, but also the Department of Finance itself.

“This is not only worrying, it is utterly bizarre that both Revenue and the Department could incorrectly interpret tax law in this country for a number of years,” Harris said.

“This error will result in the Irish taxpayer having to pick up legal bills from the Supreme Court. Lessons need to be learned from this fiasco.”

FIANNA FÁIL TD John McGuinness has criticised local authorities for failing to make waste collection a profitable enterprise for themselves.

He warned that “dumbing down’’ the county enterprise boards and merging them with county councils would not do the business of Government.

“They are being merged with entities which have outsourced to the private sector the only profitable area of their operations, waste collection, because they have been unable to make money out of it,’’ Mr McGuinness added.

Local authorities could not even make a profit from housing where they had a captive audience.

“Instead, they are proposing to outsource rent collection and local authority housing or transfer responsibility for this function to a single agency,’’ he said.

Speaking during a debate on the Government’s jobs strategy, the Carlow-Kilkenny TD said local authorities did not have the commercial mindset required to understand the needs of the small and medium business sector in local communities.

The county enterprise boards had created many jobs through small businesses and had acquired a reputation for doing business locally.

The Government’s decision to dismantle the boards was a retrograde step and should be revisited, said Mr McGuinness.

Claiming that the local government system was ineffective, Luke Flanagan (Ind, Roscommon-South Leitrim) said he had “personal experience of hell’’ from his six years on Roscommon County Council.

Maureen O’Sullivan (Ind, Dublin Central) said there was a need to be more proactive on job retention.

“I know of small businesses which are in trouble,’’ she added. “A small injection of funding would have kept them going.’’

She said that there were great opportunities in tourism, particularly in terms of culture and sport.

Peadar Tóibín (SF, Meath West) said 76,000 people had emigrated last year. “This amounts to 1,346 people per week, of whom the majority are young,’’ he added.

Mr Tóibín said that as one of a large number of new TDs he found it immensely frustrating to witness the lack of action on jobs.

Minister for Jobs, Enterprise and Innovation Richard Bruton said the sad truth was that Ireland had forgotten what it was to succeed in a small open economy.

MARTIN WALL, Industry Correspondent

THE CROKE Park agreement on public service pay and reform is unsustainable and needs to be renegotiated, the chairman of the Dáil Public Accounts Committee has said. Fianna Fáil TD John McGuinness said that under the deal the pay and pensions of staff in the public service were being protected.

He said that only 58 per cent of the workforce in the country had a pension while 42 per cent had not.

“But those 42 per cent who cannot afford a pension for themselves are contributing to the pension of the public sector. It is creating a two-tier workforce, it is creating a two-tier pension scheme and it has to be renegotiated.”

Mr McGuinness said that in the context of 37,500 staff leaving the public service under the Government’s new reform measures announced on Thursday, it was clear that there were going to be “serious difficulties” in frontline areas. “We are not focusing on where we need to focus, which is at management level – get the best practices in there and strengthen our frontline services.”

Mr McGuinness was speaking after addressing the Public Affairs Ireland conference. During that address, he said that off the top of his head he could probably identify five or six public service agencies that would be run in a better and cheaper manner by private companies as well as other bodies that should be amalgamated or shut down.

“The only reason why that has not been done up to now is that governments were prepared to waste money rather than talk sense to trade unions, culminating in that great monument to sacred cows, the Croke Park agreement.

“That monument is now being eyed by technocrats who have no respect for cloud cuckoo land and have a great desire to pull down any monument built to false gods. The Croke Park agreement certainly falls into that category.”

Mr McGuinness said that “Public Services (Ireland) Ltd” was mismanaged, inefficient and largely indifferent to the needs of its clients. “The company is in a mess, administrators are demanding efficiency and cost-cutting in all areas and our shareholders are deeply disappointed and angry with its directors.”

Mr McGuinness said it was evident that many senior officials who appeared before the committee “still have not grasped that they now live in a different world, where condescension and stalling do not work and detailed answers have to be given, which should lead them to question the culture that encouraged them to put their trust in the status quo”.

A Fianna Fáil spokesman said yesterday that the party supported the implementation of the Croke Park agreement. He said Mr McGuinness’s comments were made in his capacity as chairman of the Public Accounts Committee.

The chairperson of the Public Accounts Committee says he does not believe the Pensions Board offers value for money.

The chairperson of the Public Accounts Committee has told the CEO of the Pensions Board, Brendan Kennedy, that he does not believe the body offers value for money.

John McGuinness said he had listened to the exchanges during today’s committee meeting on the non-directive advice given to the Finance Minister on the pension levy.

He said he wondered about the sense of having 16 members on the Pensions Board who could not reach a conclusion on one of the most significant decisions taken by a Government on pensions.

Mr McGuinness said it was shocking that the board members were paid fees for such little output.

Mr Kennedy earlier confirmed that the Minister for Finance did not consult the board about the pensions levy of 0.6%.

Independent Shane Ross asked Mr Kennedy if it did not say something about the Pensions Board that the Minister did not consult it before imposing the levy. Mr Kennedy said that was a question best addressed to the Minister.

Deputy Ross asked if there is a point in having a Pension Board if pensioners were not protected by the board, when the Minister took €400m out of its members’ pockets.

Deputy Ross asked if anyone considered resigning, given that it is the role of the board to advise the Government on all matters relating to pensions. Mr Kennedy said he was not aware of anyone who considered resigning.

Article taken from IrishIndependent.ie

By Charlie Weston, Personal Finance Editor

Friday November 18 2011

THE value for money provided by the State’s pensions regulator was questioned by an Oireachtas committee yesterday.

Public Accounts Committee chairman John McGuinness told Pensions Board head Brendan Kennedy he did not believe the agency offered good value .

Mr McGuinness questioned the fact that non-directive advice was given to the Finance Minister on the private sector pension levy.

He queried the sense of having 16 members on the Pensions Board who could not reach a conclusion on one of the most significant decisions taken by a Government on pensions and that board members were paid fees for such little output.

Mr Kennedy earlier confirmed that the Finance Minister did not consult the board about the 0.6pc pensions levy.

Independent TD Shane Ross asked Mr Kennedy if it did not say something about the Pensions Board that the minister did not consult it before imposing the levy. Mr Kennedy said that was a question best addressed to the minister.

Mr Ross asked if there was a point in having a Pensions Board if pensioners were not protected by the board.

- Charlie Weston, Personal Finance Editor

I have been asked to speak today on the subject of Challenge and Change in the Public Sector. I am more than happy to do so, because I believe an efficient, cost effective public sector is so important to the health of our economy and the happiness of our people.

I know that I have form with regard to my view of the public service, but that needs to be carefully studied, because it is much misunderstood.  I am not an enemy or a serial complainer, I am a concerned member of the Oireachtas drawing attention to a problem, who understands what you do and how much you, as individuals, can and want to contribute.

I say ‘you as individuals’, because it is the individual public servant I respect, not the systems or culture of the public service generally, which I believe are antiquated and unfit for purpose.  That culture is now so dominant that it is severely limiting Ireland’s ability to right itself.

The controversial author of “The Fountainhead” and “Atlas Shrugged”, Ayn Rand, once said “A collective does not think, only individuals think”.  And, while I do not agree with all she says, I believe that is very true.  It is also true that an established culture can keep even strong minded individuals in their place, to the point that they either give up or get out.

Challenging the status quo, in a culture where powerful high priests guard the secret that it has outlived its purpose, is a difficult and dangerous business.  It has filled tumbrels, removed the heads of prophets, silenced dissent, bullied people into submission and put junior ministers in their place.  Yet, you only have to look at the ruins of ancient empires, and at Ireland, Greece and Italy today, to realise how change can powerfully overcome the obstacles placed in it’s way.

As Walter Bagehot said: “The whole history of civilization is strewn with creeds and institutions which were invaluable at first and deadly afterwards”.

This seminar is about Challenge and Change in the Public Service.  But really change is the challenge for the public service. Once you as individuals agree to embrace change the rest will follow.  Make no mistake about it, the culture will beat you if enough of you do not stand up and challenge the status quo.

If this is not done, it will not just be Ireland that loses, it will be you as individuals, because the burden of conformity and submission crushes the spirit and smothers the desire in all of us to do our best, and grow in work that challenges, satisfies and fulfils.

I don’t believe this seminar or the expensive, and ambiguous, consultant’s reports that will undoubtedly be required, as a means of deferring an evil day and as a substitute for leadership, will tell you anything that you don’t already know in your hearts. The culture is failing and the systems and structures around it are falling down. It is time for a radical overhaul. Now.

You already know that you have to change. You are simply worrying and wondering about what to do and how to do it.  In fact, because you have accepted the need for change, in your hearts you already know what has to be changed.

My purpose over the last few years, has been, and is today, to encourage people like you within the public service to reject the old and embrace the new.  I want a radically reformed public service, dynamic, confident and contributing as a partner of all the other players in our economy and a driver of improving initiatives in our society.

In recent days, we have seen the appointment, not of politicians or public servants but of technocrats to take charge of both Italy and Greece, and they are already working behind the scenes in Ireland.  Some say this is anti-democratic and disgraceful.  I do not agree. It is a reflection on how badly politicians and public servants have performed and an indication of a loss of public support.

It is the lesser evil for the greater good of democracy, arising from the fact that, generally, politicians and senior public servants in many countries have not done what their contract with the public and their obligation to democracy demands.  Too many of us did not do what we were paid to do: Give leadership. That had to change, which is why I welcome the arrival of the Horsemen of Reality.

Many Greek, Italian and Irish people, despite the austerity they will have to face, are also happy with the arrival of professionals who have the integrity, experience, courage and ability to take hard decisions and drive change, while respecting democracy and the limits of their mandate. They are doing what we should have done a long time ago.

Really, we don’t need to discuss change. We are about to be given a master class in how to face change, implement change, and benefit from change or suffer the alternative. We are already witnessing what happens when individuals, politicians, public servants, companies and countries take their eye off the ball, ignore efficiency, are not cost conscious and believe that if they stick their heads in the sand reality will disappear.

If you want to see exactly how much harm this has done, all you need to do is look at a video of the last three or four Public Accounts Committee meetings.  In them you will see the old culture clashing with, and being confused by, what are essentially the standards of the market place in which everyone outside the public service does their business. 

It is evident from the exchanges that many of the senior officials coming before us still have not grasped that they now live in a different world, where condescension and stalling do not work and detailed answers have to be given, which should lead them to question the culture that encouraged them to put their trust in the status quo.

It gives me no pleasure to apply these standards in a top down, determined manner and I regret that it is necessary to put individuals on the spot. But had that always been the case, change would have taken a more gentle trajectory and would have been driven internally.  That has not happened, partly because individuals in senior positions within the public service did not give leadership and were not forced to do so by their political masters.  Too many hands washed one another and proper governance was ignored by both parties.

It constantly surprises me that management and staff in the public service do not take note of the functions that have been lost to quango’s and, sometimes, private companies, driven out by the restrictive practices promoted and defended by public service unions.

In the private sector that would not have been allowed to occur and I can only conclude that your culture has so encouraged reactionary behaviour, that public services employees generally, are unable to understand that they are losing out by not embracing private sector standards and beginning to positively engage with, and contribute to, our economy could result, over  time, in an increase in numbers.  Instead, the reverse often occurs. For example, I have heard members of State Boards complain that their public sector directors are often only there to monitor, control and report back to their departments. 

This lack of confidence and lack of understanding of your real position is deeply disturbing.  If the public service cannot defend itself by lifting its game in the face of competition how can it defend the country?

The reality is that politicians and public servants are in the service industry, an important section of our economy and our society.  We are not grandly doing the State some service.  We are being grandly paid to deliver services to our client, the public.  We have not done that very well over the last ten or fifteen years. In fact, we have betrayed the trust the public placed in us.

Public Services (Ireland) Ltd is mismanaged, inefficient and largely indifferent to the needs of its client.  The company, ladies and gentlemen, is in a mess, administrators are demanding efficiency and cost cutting in all areas and our shareholder are deeply disappointed and angry with its directors.  We need to respond with positive and prompt action.

Once we accept that we are, broadly, a service company competing against other services companies nationally and other countries internationally, reality is in plain view and the only way forward is clear: apply the standards of best practice that we find in the private sector immediately.

There will be those who, out of self interest, want to deny all of this.  They will drag out the much abused sacred cow called “you can’t reduce the lives of our people to a balance sheet and a fumble in the greasy till” to support their argument. 

Well that bloated cow is dead.  It was kicked around in Ireland, beaten up in Greece and has been sacrificed to the Gods of Reality, Pragmatism and Efficiency in Rome by technocrats, whose job it is to slaughter the sacred cows and tooth fairies beloved of self serving cultures and trade unions, before they do any more harm.

Our starting point has to be pragmatic and objective.   Once the directors, staff and unions of Public Service (Ireland) Ltd see their company as a provider of services, legislation,  safety, etc to a client who is pointing out that those services can be obtained cheaper and better elsewhere we either compete or die.  It may be a slow death, but it will happen if we do not respond to what the market place is telling us.

Certainly, off the top of my head, I could probably give you five or six public service agencies and services that private companies would run better and cheaper, and more that should be amalgamated or shut down.  The only reason why that hasn’t been done up to now is that governments were prepared to waste money, rather than talk sense to trade unions, culminating in that great monument to sacred cows, The Croke Park Agreement.

That monument is now being eyed by technocrats who have no respect for cloud cuckoo land and have a great desire to pull down any monuments built to false Gods.  The Croke Park Agreement certainly falls into that category.

We have to tear down and rebuild better.  We have certain advantages over the competition which we should develop further.  Our staff are generally honest and experienced and just need to be released from the shackles that bind them and encouraged to step up to the plate. 

The existing culture has been weakened by its exposure to reality and there is a growing demand for change that can be harnessed.  We are the providers of first choice to our client, even if we have badly damaged our reputation, which we must now speedily rebuild.  A great deal will now depend on the determination with which we approach the task and our ability to demonstrate quickly the positive steps we are prepared to take to regain lost ground.

Change will drive us towards the templates of best practice that exist in the private sector as we consider a new style and a new culture for our public service.  Those templates lay down that accounts must be prepared and audited each year; that staff get bonuses only for extra work, measured and done; that HR departments interview carefully and ensure that square pegs are put in square holes and are encouraged to develop their strengths and possibilities; that management meetings are meaningful and involve hard information, strong exchanges of views and examination of targets and there is firm management and constant engagement with the possibilities of change and the needs of the market place.

What objections could there be to using this model? I agree that some minor alterations might be necessary, but it is there for us and should be used.  Also, there is the ISO standard that the public service encourages every company in the country to strive to achieve, but, strangely, seems to have no desire to achieve itself. 

Indeed, when I recommended this course of action, nobody I spoke to in the public service was prepared to consider it. I was a bit surprised by this as it was only another benchmark, and you guys know how easy they are to achieve! But the fact is that if we do not pursue excellence we will never be better than mediocre.

The templates of proper management, accountability and transparency for every single area of our operation already exist.  We have no need to waste time designing our own. 

The critical question is: Will we use all this available knowledge or will there be discussions, consultations, reflections, think-ins and seminars- the paraphernalia that comes with the activity that impedes action? Will the key of the library available to us lie ignored, because self interest is allowed to dominate patriotism?

We need to listen to Socrates: “An unexamined life is not worth living”. We need to examine ourselves and have conversations with ourselves about where we want to go, because this is about patriotism, the greatest of the offsprings of enlightened self interest.

Ireland, our children and future generations will enjoy or suffer the results of the decisions public servants and politicians take in this generation about the road we must travel. 

We have spent fifteen years on the wrong road and we now have to find the right one. We can begin by fundamentally changing the way we control and spend what we take from the pockets of our citizens and from the legacy we will pass on to our children. Indeed, that is a moral and patriotic duty that public servants and politicians have always owed to the Irish people, which may have been forgotten in the last decade and a half. We must not forget it again.

Do not waste time debating about the colour of the vehicle we will use to travel this road.  It has been built and tested, and sometimes misused and abused. We may need to adapt it slightly, but what we really need is the courage to climb on board and drive it carefully, honourably and expertly to a better, fairer and happier place for our people.

Perhaps the challenge is not change.  Perhaps the challenge is courage and conviction. The question is:  Will we rise to it.

This speech was written prior to Minister Brendan Howlin’s announcement. However, I didn’t feel it needed to be changed, because no matter what reforms are proposed, you will still have to deal with the culture, you will still have to use private sector thinking and systems and you will still have to have conviction, determination and courage. Above all, you will still have to answer your countries call.

Now, with the chairman’s permission, I am happy to take a few questions, applause, insults or anything you may care to throw at me.  There needs to be an open full debate about this and I am willing to engage in it. I have made my contribution and I would be delighted to hear yours.

Thank you for your time.                                         

By MARY MINIHAN

FORMER TAOISEACH and Fianna Fáil leader Brian Cowen was last night accused of favouring “big family names” within the party by Public Accounts Committee chairman John McGuinness.

Mr McGuinness, a Fianna Fáil TD for Carlow-Kilkenny, was one of a number of current party deputies who criticised Mr Cowen in the first episode of Crisis – Inside the Cowen Government , a two-part documentary written and narrated by Sunday Business Post political editor Pat Leahy and broadcast on RTÉ 1.

“He had a loyalty to tribalism within that party, if you could describe it that way, that was unequalled. So he would favour those that he knew well; favour those that were big family names within the party, and there was almost an insider and outsider position,” Mr McGuinness said.

“There was a blind loyalty at play within all of this and it centred itself around those that socialised with him in the bar.”

Fianna Fáil leader Micheál Martin, a former Cabinet colleague of Mr Cowen’s, cited a lack of engagement with the electorate as the worst aspect of the last Government.

“The worst aspect of the last Government was communications. It just did not do optics in any shape or form . . . because I don’t think the Taoiseach himself, Brian Cowen, believed in optics.

“He was old-style in that sense and I don’t think quite appreciated the dynamic of modern media and communication.”

Mayo TD Dara Calleary said Fianna Fáil Oireachtas members were given incorrect information about eligibility for medical cards at a briefing the evening the budget for 2009 was presented. Protests by pensioners ensured a reversal of the policy to change the criteria for eligibility for medical cards.

“I remember that night thinking, what have we done here? If the information on which this decision was made was as flawed in the way that it was presented to us that night, what have we done here?” Mr Calleary said.

Referring to the medical card issue, Cork North Central TD Billy Kelleher said: “That was the one issue where you could physically sense that the public now were gone beyond being dissatisfied with us; they clearly disliked us as well.”