WHEN NO one is sure how many national non-commercial State agencies there are in Ireland – figures range from 249 to several hundred more – that is one indicator of the problem the Government has in reducing their number and in setting out to reform how they operate. Two years ago, Minister for Finance Brian Lenihan proposed a very modest cull of the agency herd to secure a token reduction in public spending in this area. But progress to date has been slow, partly explained by some impediments to rationalisation: lack of legislative provision for agency mergers and uncertainty about management structures in the new merged entities.
A mere 15 of the 33 agencies selected for closure have ceased to operate, according to the Institute of Public Administration (IPA) in a recently published study of non-commercial State bodies. Last year, the review group on public spending, with Colm McCarthy as chairman, recommended a further 43 rationalisation measures relating to State agencies, which were projected to deliver savings of some €170 million. So far, few of the group’s recommendations have been implemented.
The IPA study indicates that since the 1990s the creation of State bodies has accelerated greatly. But, unlike other countries, this proliferation of agencies did not happen as part of a structured programme of public sector reform. Instead, as the IPA suggests, those reforms have “coincided with an ad-hoc expansion in the organisational complexity of the State”.
Of the 249 agencies that the IPA identified, three-quarters operate with a board or governing authority, and involve more than 2,300 persons; the remainder operate within departmental structures. How members are appointed to these national authorities varies; some by ministerial nomination or public appointment, others by virtue of their elected positions. But the very large number of agencies and their wide range of tasks and responsibilities have made it difficult for members of Oireachtas committees to assess their performance, their cost effectiveness – or indeed their continued relevance.
The Organisation for Economic Co-operation and Development (OECD), in its review of the Irish public service in 2008, questioned whether so many boards and governing authorities are required for the management of State agencies. This is a question to which Government has yet to respond adequately.
Experience elsewhere indicates that the performance of boards and governing authorities is critical to an agency’s success. But here, as the OECD pointed out, because so many agencies have been established on a case-by-case basis for specific objectives, Ireland has failed to establish a clear governance framework for their operation. For the effective management of state agencies – at a time when the necessity for them and the cost of their continuing operations are under unprecedented scrutiny – new structures of governance and accountability now need to be put in place.