One of the most prominent but least-reported elements in Finance Minister Brian Cowen’s Budget speech is his stated determination to insist on better value for money through improved delivery in the public services.
The value for money issue rarely gets more than a passing mention in the media. Most journalists don’t have the time or the inclination to pursue it in any depth, largely because they think it has as much priority in the minds of civil and public servants as it does in those of their audience.
For Finance, however, it’s bread-and-butter stuff. Back in the good old days of double-digit public spending rises, value for money struggled to get a mention, much less a look in. Now it looks like an umbrella that departments could use to prevent their schemes from being deluged.
The warning signs for tighter times are everywhere. The economy is losing momentum, house prices are continuing to fall, the cost of living is rising inexorably and consumer confidence is ebbing. Given our political trajectory over the past decade, which has been consciously, deliberately, unashamedly to shrink public spending as a percentage of total output, this means a leaner period for the public sector.
History will be the ultimate judge of whether our public sector did enough at this time to tackle problems which came over the horizon long ago. We’re still stuck on tax cuts, particularly ‘reform’ of stamp duty on houses, which crowded out other worthy issues during the election and dominated public and political debate in the run up to the Budget.
I’m sticking to my long-held view that a more radical change to the stamp-duty regime wouldn’t have made much difference to what was happening already in the property market. When you look back, house prices began crashing when the European Central Bank began jacking up the cost of money.
Changing the stamp-duty regime might have helped for a while, but then a certain shuffling of deck-chairs was always inevitable. If government intends to remain true to its decade-long commitment to pare back public spending as a percentage of national output, then value for money in general, and public sector reform in particular, cannot be postponed.
Even if government’s commitment were otherwise, neither could or should be ignored. There is an arguable case that both have been ignored for too long. There is also ample evidence that higher public spending without clear objectives or proper oversight may ultimately prove wasteful.
In Irish public administration, the traditional perception has been that it is the job of the Department of Finance to raise money- and of other departments and agencies to spend it. Attempts by the department to rein in or stretch budgets were seen invariably, if inaccurately, by others as the mendacious mandarins of Merrion Street coming to spoil the party. Although health has been shielded from the worst effects of the current economic downturn, it would be a mistake to assume that it will be able to resist radical change for yet another year.
Surprisingly, there is still no provision for a voluntary redundancy programme for certain staff who transferred over from the ancien régime, but this may not be far off.
Whatever the ministers for health and finance may say about being as one in their determination to avoid a repeat of the budget over-runs that led to the imposition of a recruitment freeze at the HSE barely more than half way through last year, it is clear that the arrival of a former secretary general from the Department of Finance is a shot across its bows.
‘Comet Considine’, which is now heading straight for ‘Planet HSE’, is unlikely to blow up too much dust if the extent of his remit is a study of the organisation’s accounting systems.
I can attest from my own contacts at senior management level in the HSE that the underlying problem is not a weakness in accounting systems, but a lack of ownership of services and budgets at the coalface which, in turn, lessens the pressure to ensure that all activities and services deliver value for money. My sense of this new development is that it represents the start of a more active and perhaps permanent involvement by the money men in the affairs of the health service.
At the very least, it could lead to an increase in the number of health programmes which are subject to scrutiny as part of the Value for Money and Policy Review Process, the main method for monitoring the effectiveness and efficiency of government spending. But it could also be the harbinger of a voluntary redundancy programme in which the HSE will attempt to buy out the employment contracts it was forced to accept as the price of getting off the ground in the first place.