A WIDE-RANGING review of the Department of Finance and its management of the financial crisis will be carried out by independent experts, Minister for Finance Brian Lenihan has announced.
The review which will “evaluate the systems, structures and processes used by the Department of Finance in providing advice to the Minister and the Government” will be carried out separately from the commission of inquiry into the banking crisis.
The Minister said yesterday he wanted to ensure for the future that the department could give the best achievable policy advice; could better assess risks and opportunities in the fiscal, economic and financial system; and could manage its own operations with high levels of effectiveness and efficiency.
“The review will be informed by a detailed consideration of the department’s performance in the past 10 years, including its management of the current crisis, with a view to ensuring that the lessons of this period of stress will inform the development of the department in the future.
“The review will have due regard to the skills, training and staffing mix required by a modern finance and economic ministry in order that it can best fulfil its role,” Mr Lenihan said.
“I know that the department has good, skilled and capable staff, but I want to be sure they are used to best effect and that the mix of skills is optimised,” he added.
During a discussion of the department’s estimate at the Oireachtas Committee on Finance and the Public Service, Mr Lenihan said he had made his decision to launch the review following discussions with senior management of his department.
“The review, which it is intended will be carried out expeditiously, will be undertaken by a small number of individuals who have informed expertise on the role and operation of finance ministries internationally,” he said.
Mr Lenihan said the purpose of the review was to ensure that the lessons of the last 10 years would inform its work in the future.
He added that it would consider how external information and advice, including critical and dissenting advice, was dealt with by the department and how it should be dealt with in the future.
The Minister said the review would examine the skills, training and staffing mix required by a modern finance and economic ministry to best fulfil its role.
Its approach to economic risk assessment, policy development, communication, transparency and accountability would all be examined.
Mr Lenihan said the handling of the current crisis by the department’s staff had won international approval and the purpose of the review was to ensure it could perform its duties to best possible effect into the future.
The Minister had been expected to speak about the terms of reference of the commission of investigation into the banking crisis at the committee, which met twice yesterday.
However, after a lengthy period in private session yesterday evening, the committee had a brief public session before it was adjourned to next week because opposition TDs were due in the Dáil chamber.
Labour’s finance spokeswoman Joan Burton said: “We’ve had a lengthy discussion in private session . . . I seriously suggest the chairman needs to adjourn this meeting if you want any participation by the Opposition.”
Mr Lenihan said he was happy for the terms of reference to be discussed next week. “We didn’t have any substantive discussion on the terms of reference in private session but I’m quite happy to let that matter proceed to next week and leave it on that basis.”
Ms Burton asked Mr Lenihan if he would revert to the committee with his thoughts on the discussion that did take place about the committee’s own functions. The Minister agreed.
Two separate banking inquiry reports were published earlier this month: one by governor of the Central Bank Patrick Honohan and the other by economists and banking experts Klaus Regling and Max Watson.