Emigration in Ireland

The words economy, efficiency and effectiveness are sometimes used imprecisely. Discuss these terms using examples from the Public Service that you have knowledge or personal experience of.

I’m 45 years old, born and reared in Ireland to Irish parents. . I was reared for emigration as were my peers at school. We knew implicitly that a large percentage of us would end up working in other countries.

I’ve had many good and some great teachers. I never once had a teacher that told me that Ireland would end up having to import large numbers of employees.

My great great grandfather migrated from Tipperary to Galway in the 1840’s and we suspect that he would have emigrated to USA if the famine ships had had a lower death rate. His son emigrated to California and his grand-son founded UPS. I’ve worked in other countries for reasons of economic necessity as have my parents, grand-parents and great grand-parents.

Somewhere in the 1980’s the effects of Ireland’s entry into the European Union began to have significant economic impact. This happened in many sectors of the economy at different speeds and in different sectors at different times. It also became apparent in the Public Service as employees were exposed to public service norms in countries other than the United Kingdom. The Foreign Direct Investment in Ireland by North American countries was also a significant actor on the economy and a key driver of the need to modernize the Public Service.

The expansion of the National economy and Ireland’s Public Service allowed me and more of my generation to domicile in Ireland. The size of the Public Service is a function of the size of an economy. Money to fund the Public Service must come from taxation and borrowing. The size of Ireland’s Public Service has expanded in co-relation to the expansion of the national economy.

Large and vibrant economies are susceptible to cyclical episodes affecting liquidity, investment and inflation. The current Global Financial Crisis (GFC) has brought the national economy and the public service into the spotlight as solutions are sought to budgetary deficits.

Economy, Efficiency and Effectiveness (The Three E’s) are often used loosely in Government and governance (both in business and in society). They can be used imprecisely to heap praise and justification by proponents of a measure “Ceann Comhairle, I commend this bill to the house, I am convinced that it will deliver net gain for the taxpayer” Minister for Finance Brian Lenihan on the passing of the NAMA legislation.

Equally they are used to criticize and condemn by people and organizations opposed to an approach or intervention. For instance Jack O Connor of SIPTU attacks regularly the Austerity Measures implemented by Government as being a false economy.

The Public Service has many components and areas of operation and in its broadest terms includes commercial semi-state operators such as the ESB. The case could also be made for that with the partial nationalization of some of the banks e.g. AIB that the size and cost of the Public Service has increased substantially since the GFC.

Privitisation generally reduces the size of the Public Service but the transition from one category to another often leaves the Government with future economic costs. An example is the creation of Eircom and the retention of employment benefits by public service staff that joined it from its predecessor Dept of Post and Telegraph.

The Three E’s have been with civilization for some time and are used in areas of philosophy and science. Economic theory and social research make great use of them for evaluation. The precise meanings differ depending on the context they are used in and semantics of language are important.

Much study involving time and resources have been allocated to the study of the Three E’s in the Public Service, nationally and internationally. Most developed countries have national organizations involved in or dedicated to research of the Three E’s e.g. ESRI. In addition international organizations such as OECD produce frequent reports monitoring and comparing countries Public Service performance.

Pure science is looked upon as being black and white and much effort is made at bringing the fields of Economics, Social Studies, Business Management and Government Studies to a pure science. It is unlikely to ever succeed. There are too many confounders involved to make what is best practice in one country repeatable in another country. In fact the pure science approach may miss the societal benefits that may be apparent when taking a more holistic long term view which blends art into science.

‘All business is art and making money is the greatest art of all’.

Economy used in the context of the Public Service can mean the cost of the service. For instance the real cost of producing goods and services in the Public Service would include the annual wage bill of the individual Department.

It is defined in the coarse manual as the purchase of inputs at the lowest costs. As Public Service inputs are largely resources of personnel, this is the most significant component of economy applied in this context.

Any increase in wages will lead to a reduction in Economy. Wages in the Public Service increased during the Celtic Tiger mostly due to the Benchmarking exercise where rates of pay were compared to those existing in the private sector. This added significantly to the Public Sector wage bill.

The GFC was used as justification for reducing the Public Sector wage bill. This was introduced in 2009 as Financial Emergency Measures in the Public Interest No 2 Act 2009, and was aimed at reducing the bill by €1 billion by 2010. This is an example of improving economy in the Public Service.

The Health Service is frequently criticized by commentators for its inefficient economy. The abolition of the Health Boards and the creation of the Health Service Executive is associated with an increase in overall employment in the sector and a reduction in economy. The most frequent comment is that the creation added another level of management to the pre-existing structure without any increase in efficiency or effectiveness.

An Bord Snip Nua (officially known as the Special Group on Public Service Numbers and Expenditure Programme) was established by Minister Lenihan to address the economy of the Public Service. It reported in 2009 and made a number of recommendations involving savings of €5.3 billion in total and recommending staff reductions of 17,300

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This however does not give a complete picture in financial terms. For instance the annual wages of the Defence Forces would not display the costs of the Hearing Loss Compensation Claims. Thus past and future liabilities must be included to give the real cost. This is difficult in accounting terms and infrequently done. Most often what is used is current consistent costs.

There are also societal and cultural differences in countries. Public Service Economy costs are lower where there is compulsory National Service. There may also be unquantifiable dividends in societal benefits from National Service. Thus economy is an imprecise overall measurement of effect.

Efficiency is the extent to which best possible use is made of existing resources. In the Public Service the greatest resource is personnel and its knowledge.

Personnel are not the only resource within the wider Public Service. For instance Coillte has significant resources in terms of land and in recent times was very efficient in selling residential sites at high prices. This is an example of maximum outputs being delivered from given inputs over an extended time frame. Some of these lands were acquired in the 1950’s at low values and were sold at the peak of the property market.

Bord Na Mona is a semi-state agency whose original objective was to develop the national economy and create employment. It has morphed from an employment creation project to an efficient competitive profit driven commercial semi state agency delivering a dividend to the State.

Firms such as the above work best where they have a near monopoly in terms of resources and land ownership and market share, but have the flexibility to apply efficient practices. The work practices and industrial relations are key in these Public Services and Employee Share Ownership Plans have been successful tools for building consensus between managers and employees.

Effectiveness is often the key indicator when it comes to evaluation. Is the Public Service doing what it sets out to do? How is it measured and who does the measuring? How can it be improved and at what cost?

Every Public Service has a strategy. Sometimes this is made public as a Mission Statement, other times it is enshrined in legislation. Regardless it must be audited so that it’s performance can be measured and quantified. Then its actual performance can be measured and analyzed for economy and efficiency. This is the basis of evaluation.

The Department of Agriculture prides itself on its Information Technology platform and promotion of access to online services to its clients, mostly farmers. Whatever first image you have of farmers, it’s not one of them sitting at a computer. Uptake of the service has been slow and gradual but has progressed from where Ireland lagged behind the EU average in 2006 to doubling its online participation rates in just 2 years. Of course this has been linked to other developments such as national access to broadband.

This uptake of online services has allowed an overall increase in effectiveness in that Department in one area or service and allowed for an increase in efficiency and improvement in economy by allowing surplus to requirement staff to move to other employment within the Public Service. This did not happen overnight and was built upon existing IT platforms and lessons learnt from previous scheme applications. Previous ways had proven to be laborious and error strewn with poor turnaround times and delay in payments.

An increase in one individual Department may not automatically lead to an overall saving in Government expenditure if the savings are used to lessen the economies in other Departments. The management and re-distribution of the inputs is critical. There must be accountability for allocation of resources.

Recent scandals have included FAS and its effectiveness during the Celtic Tiger. The initial controversy was a political scandal and involved an investigation into spending and procurement practices. The Comptroller and Auditor General made a critical report on its procedures and management http://www.rte.ie/news/2009/0219/fas.pdf.

The wider issue in FAS was why did the country need such an economy in a time of relatively full employment? Should the resources of FAS been allocated to other public services during this period? Is there sufficient resources and accountability for changing objectives and policy in times of economic prosperity?

A more recent questioning of the effectiveness of a public service is the Student Universal Support Ireland (SUSI). The operation of this has been sub-standard and ineffective in delivering financial support to students.

The Financial Regulator and his office have been the focus of media and parliamentary enquiry for their role in the lead up to the bail out of the banks. Their effectiveness was questioned and acknowledged by Minister Lenihan to be sub standard. Changes were introduced in legislation and personnel and resources.

ESB International is an example of an effective public service that generates income and dividend for the state in an efficient economic manner.

Animal Health Ireland is a new model used for the achievement of disease eradication. It is funded by industry, government and is an industry-led, not-for-profit partnership between livestock producers, processors, animal health advisers and government. It will add value to farmers and farming by building on the existing economy efficiency and effectiveness of public services devoted to agriculture.

Summary

The unexamined life is not worth living Socrates

From the beginning of time and the introduction of the earliest civilisation, individuals and society have examined how they lived. People and organizations use measures of economy, efficiency and effectiveness to evaluate their role in life and society- the equity. Used well these terms can allow valuable measures of progress and comparisons with international standards.

Precision id applying the Three E’s can be challenging. Factors that affect them are many and securing agreement on interpretation can be difficult and challenging. Achieving broad consensus is important and note must be made of another E –emotion which is after all the main driver in human activity.

Different pressures apply from Government and Democracy on the Public Service depending on the Economic Cycle. Ireland in its short history as an independent democratic state has experienced severe emigration, mass un-employment and economic shrinkage in its early years.