Ireland is in a deep recession. The Organization of Economic Cooperation and Development (OECD) predicts the general Government deficit to be 12.2% of GDP in 2009 and 11.3% of GDP in 2010. Living standards are falling and the country is bracing itself for a harsh public spending cuts in December’s budget.
As the economy has declined, so have the Government’s borrowing requirements risen. The country is borrowing at an unsustainable rate of €400 million per week. The situation was summed up by the Taoiseach Brian Cowen last week:
Put simply, we are now spending more than we earn. Our tax revenues have fallen sharply back to 2003 levels. This means that we will have a deficit in the region of €22 billion in our public finances. To bridge this gap we are borrowing over €400 million every single week. Clearly, this cannot continue.
The general consensus appears to be that a €4bn cut in Government spending is required. Where these cuts should arise is a contentious issue. Saving must be achieved in the public sector spending and there is intensive engagement between unions and the Government on how this will occur.
Internet excluded as a means for cutting public spending
Last year, the Government established a committee to investigate cuts in public spending. It released a report in July recommending various approaches to save €5.3 bn. The methodology used to gather produce this report involved the committee meeting with officials from all Government departments. These departments also had to submit an evaluation paper the purpose of which was to provide:
in a comprehensive and concise manner, what Exchequer money they received, what outputs and public service impacts were produced with this expenditure and possible options for reductions in numbers and programme expenditure, including through administrative efficiencies and scaling-back or elimination of certain programmes.
The committee then produced a report recommending – among other things – 17,300 public service job cuts and a 5% reduction in social welfare payments. One of the striking aspects of the McCarthy report (as it’s commonly known), however, was the absence of words such as ‘internet’ or ‘E-Government’ from the 80 page document. This lack of any mention of the ‘internet’ is oddly consistent with the Government’s report on the Smart Economy last year. Nevertheless, the report does provide some limited ICT-related recommendations:
- the OPW should publish on its web site details of all leases and rental agreements on behalf of public authorities”
- “moving to web-based publication as a norm for [Oireachtas] Committee debates and replies to written questions”
- “the Group has identified opportunities for greater use of centralised shared approaches to ICT services and data centre facilities”
- “an ICT skills map” for reskilling, retraining existing ICT staff etc.
- “an IT Advisory Group comprising senior independent ICT practitioners from medium-large companies in Ireland”
There recommendations are, however, rather vague and much bolder actions are required. Increased use of open-source technology or availability of E-Government services could help reduce costs significantly and ensure Government leads by example in the creation of a ‘Smart Economy’. Ireland is currently ranked 32 out of 75 countries on its use of open source within Government. It also features below average in E-Government readiness and Availability of E-Government services according to the OECD Government at a Glance 2009 report.
The Government said recently it was open to listening to trade unions if they had “better ideas” about how to save money. In this respect, the Government should undertake similar crowdsourcing initiatives to those initiated by the Obama administration over the past few months.
Earlier this year, President Obama called for “a process through which every government worker can submit their ideas for how their agency can save money and perform better.” As part of this a SAVE (Securing Americans Value and Efficiency) Award competition was established. This allowed Federal employees from across government to submit their ideas on how to trim costs and reduce wasteful spending at their respective agencies. The winner will be the Federal employee with the most innovative cost saving initiative and they will have their idea included in the 2011 Budget. They’ll also be invited to a meeting with the President in order to outline the rational behind the idea and how it can be implemented.
One announcing the competition Jeffrey Zients, chief performance officer and deputy director for management in the Office of Management and Budget, said it was important to listen to the voices of those on the front lines:
In the government and in the private sector, it is often those in the front lines that have the best ideas and who know the most… We are looking for ideas that save money, improves the way the government operates by lowering costs, simplifying processes, streamlining processes, getting rid of unnecessary red tape and that has an impact on citizens’ lives. It could be a wide range of ideas. Some ideas we’ve already seen like making sure you are copying on both sides of page or the Justice Department doing all travel online instead of through travel agents. It has saved millions already.
Ideas could be submitted confidentially through SaveAward.gov and would be judged according to the following criteria:
- Does the idea reduce costs in a way that is concrete and quantifiable?
- Does the idea improve the way that government operates?
- Does the idea have a tangible impact on citizens’ lives or environment?
- Is there a clear and practical plan for implementing the idea?
- Will it be possible to begin realizing savings immediately?
The agency with the greatest participation will also receive an award. The competition has now closed, but government employees are still encouraged to submit their ideas because ‘the work of creating a government that is more efficient and effective never ends’.
A panel of high-ranking OMB officials are now reviewing the ideas, and will send recommendations to the President. Federal employees submitted more than 38,000 ideas during the three weeks of the competition and the winning idea will be announced later this month.
An Irish Value and Efficiency Award
Launching such a contest for all Irish Government employees would no doubt generate a considerable number of ideas. It would also send a signal that suggestions from front line workers are necessary in order to reduce public spending and increase efficiency. While such a competition may not generate the comprehensive recommendations contained within the McCarthy report, it would nevertheless provide an outlet for innovative ideas to be explored and debated.
Recent controversies over wasteful spending at Irish state agencies has created deep public distrust of the Government’s ability to manage it’s spending efficiently. While perception may obfuscate reality, it is nevertheless important for the public to regain trust in how it’s money is spent. Increasing transparency of spending within Government departments would be a start. For example, the Government could ensure details of all expenditure over €25,000 is available online. Such a system has been proposed by the Conservatives in the UK and has been in operation for many years in the US.
Those on the front line of Government services often have better ideas on improving efficiencies than senior management. Harnessing their collective wisdom could have dramatic cost saving benefits. It’s not just cost savings, however, that should be sought. Ideas on improving the procurement process and saving energy have been sought through innovative US Federal government initiatives. These include:
- BetterBuyProject – is seeking ideas on how collaboration and social media can be used to make the Federal acquisition process more efficient and effective
- GreenGov Challenge – this contest ran for 2 weeks last month and sought clean energy ideas from Federal employees. This generated over 5,300 ideas with more than 165,000 votes.
Along with such initiatives, the Irish Government should outline a comprehensive E-Government 2.0 strategy to ‘open data and systems to outside developers and use participatory Web 2.0 tools’. The Government does not have a monopoly on the best ideas and should be more collaborative and participatory in its dialogue with its employees and citizens.
Robert Sale in outlining 5 ways in which Government can save money notes that ‘the truth is there is so much the government can do to save money that doesn’t require them to make choices between raising taxes and reducing the workforce.’
The “affordable, efficient, effective and joined up” public service of the future the Taoiseach wants to see will not be achieved through more redundancies and pay cuts; rather it requires the prioritization of tenets such as innovation, risk-taking, collaboration, transparency and participation within Government. A SAVE style award would be a good step in this direction.