OPINION:The waste of money is not the worst aspect of decentralisation. Much worse is the appropriation and vandalisation of the public service for party political gain, writes EDDIE MOLLOY
THE COMPTROLLER and Auditor General’s recent report exposed the waste of public money in buying unused properties for the Government’s “decentralisation” project, but there is much more to this scandal than property costs.
Any final reckoning of the financial waste would need to include the cost of decentralisation units established in targeted departments, duplicate offices in Dublin and the provincial location, travel and subsistence costs, the cost of external consultants to advise on managing the transition and the pay costs of upward grade drift.
There may also be costs associated with the hiring of additional staff, as occurred in the frequently praised movement of social welfare functions to Sligo, when 100 new staff had to be hired to make up the numbers.
Financial costs can be calculated but there are other costs that are incalculable. I refer to strategic, operational and reputational costs.
The system of corporate governance in the public service requires that secretaries general and accounting officers are obliged to assess the “strategic financial, operational and reputational” risks inherent in policy decisions.
In 2004, I wrote to the C&AG urging that he insist on such risk assessments in regard to decentralisation. He replied to the effect that because there was no apparent direct violation of the principles of “regularity, propriety and integrity” in regard to public money, the remit of the C&AG did not permit his office to intervene.
Strategic risk refers to the capacity of departments and agencies to fulfil their fundamental purpose. Right across the public service we see examples of strategic failure – ranging from polluted water supply in Galway to shortage of primary schools in places for children already born four years earlier, ghost estates, overcrowded prisons, inadequate broadband coverage or loss of national competitiveness.
Countless other deficits, following a period when there was no shortage of money, are indicative of very poor strategic management, a root cause of which was the random scattering of expertise across the public service. For example, people with decades of experience in regard to EU fish quotas, the operation of the courts or early childhood education could end up moving to the OPW section responsible for Dublin Zoo, the National Roads Authority or the Land Registry. It was as crazy as that.
A further dilution of expertise was caused by the understandable reluctance of many able public servants to put themselves forward for promotion because of the requirement that they move from Dublin to Kanturk, Listowel or Buncrana.
The negative strategic consequences of decentralisation are incalculable, but clearly enormous and long term.
Operational risk refers to the possibility of deterioration in the quality of services delivered by public bodies. Decentralisation of the Central Statistics Office to Cork is reputed to have caused a drop in service quality that took several years to recover.
Managers responsible for sections that provide direct services to the public speak of the stresses created by having an insufficient number of trained staff. The idea that general service grade staff, even at junior clerical officer level, are interchangeable, entirely underestimates the expertise that is required to provide advice over the phone on such matters as old age pension entitlements or planning permission.
Reputational risk is incurred when the reputation of a particular unit or department, or of the country, is placed in jeopardy. If we didn’t appreciate it before we now know that reputational damage does not just cause embarrassment.
The damage done to Ireland’s international reputation by the banking scandal is costing a fortune. At another level, conscientious staff who work in the banks, Fás, the HSE and other organisations whose reputations have suffered have been demoralised and in some cases have had to face abuse from the public.
Because of the cumulative strategic, operational and financial fallout from decentralisation there has been widespread damage to the reputation of numerous public bodies and to the country as a whole. The Ireland “brand” has been diminished.
In many cases risk assessments were carried out but either they were superficial and designed to downplay the obvious risks or, where they were authentic and thorough – flagging huge risks – the C&AG still could not intervene, for the reasons stated (ie no suspicion of direct mismanagement of public money).
The decentralisation to Limerick of the Development Aid unit of the Department of Foreign Affairs, which distributes up to a billion euro, was one such example. The Minister insisted on forcing through the move despite the major risks notified.
As decentralisation unfolded in 2004 to 2005 and the anticipated risks began to materialise, Bertie Ahern accused those who shouted “stop” of “gombeen thinking”. As recently as this summer, Martin Mansergh, launching the Dublin - Trim - Dublin shuttle bus for OPW staff, was still justifying the policy. Only a few weeks ago Éamonn Ó Cuív was at it up in Buncrana. Talk about “gombeen thinking”!
Decentralisation involved the appropriation and vandalisation of the Public Service for party political gain. We are now paying the price, yet the Government continues to deny this reality, telling us that the full execution of this policy is only “deferred”.
Somewhere among my papers is an article by Barry Staw entitled Knee Deep in the Big Muddy: Escalating Commitment to a Chosen Course of Action. Staw explains how the “trapped administrator”, aware that his policy is failing – but fearing loss of face, is unable to admit the mistake and instead puts more money after bad like a gambler trying to get it all back on the next race. Decentralisation is a classic case of this phenomenon. So, I fear, is the commitment to bailing out Anglo Irish Bank.
The fact that the C&AG felt unable to intervene to halt decentralisation when anyone at the time could foresee the enormous strategic, financial, operational and reputational fallout raises serious questions about the system of risk management and corporate governance across the public service. This hole needs to be plugged.
Dr Eddie Molloy is director of Advanced Organisation and was a member of the Mullarkey Group that updated the system of accountability for Accounting Officers and Secretaries General in 2003