An Bord Snip… Part 1

Can I recommend Progressive Economy and in particular Michael Taft’s fine dissection of what the effects on the economy of these measures would be, and also Paul Sweeney’s thoughts on other impacts. It does make one wonder what the point of the exercise is.

That said, and I’m reading this a chunk at a time, some stuff struck me very forcibly…and it’s off the beaten track. The larger areas will be well, indeed better, covered by others, so here are a few choice cuts, so to speak.

Let’s look at privilege days, the source of so much contention here earlier in the Summer… mention of it comes on page 65 of Vol 2 and only in reference to the Institutes of Technology under the Education area.

Non-academic staff
(i) Terms and conditions
Non-academic staff in the IoT sector generally have more favourable conditions than their civil service counterparts as follows:
• shorter working weeks (as low as 32.5 hours);
• longer annual leave (up to 34 for Assistant Principal equivalent grades);
• with IoT’s closing for longer periods at Christmas and Easter, there are greater numbers of privilege/concession days (as well as entitlements to religious holidays in the case of some staff).
Absorption of concession days into annual leave and harmonisation of annual leave/working week with other areas of the public sector would provide greater productivity within the sector and generate savings. Entitlements to religious holidays are also considered an out-dated concession and should be abolished.

Okay. No serious quibble from me there. But that’s it. No other mention throughout the entirety of the Reports 200 plus pages.

So, what about this? Infrastructure we’re told is key to our economic development… er… no apparently not.

B.1 Reduce expenditure on roads maintenance/improvement
To a significant extent, the need for this expenditure is a function of the large level of capital investment in recent years improving and expanding the national and regional road network, and also the introduction of higher standards of road design and surfacing for road safety purposes. On the other hand, it is reasonable to hold the view that as this extensive capital investment programme has delivered a relatively new stock of roads, lower repairs should result. Accordingly, the Group
recommends a €20m (10%) reduction in expenditure on road maintenance.

Just like that! Now, does this make sense? We have more roads, but they’ll need fewer repairs. It’s a‘reasonable’ view… but what empirical evidence is there for it? They don’t say. They don’t seem to believe they have to.

Or how about?

Other measures
The Group considers that there is potential for savings from new policy directions:
…
• Introduction of road pricing
The Group is mindful that Government policy thus far in respect of road pricing is that it should be seriously considered at some stage but that it is more appropriate to do so once adequate public transport and road upgrades are in place. That said, the Group is strongly of the view that over the course of the next few years significant advances on transport infrastructure will have been made under Transport 21 and therefore it is appropriate now to initiate an examination of how road pricing is to be introduced.
Road pricing can have a dual purpose as a revenue raising and demand management tool and both elements should be exploited. Moreover, the introduction of pricing mechanisms should not be restricted to new infrastructure; rather a full analysis of all existing road routes (including bridges and tunnels) should be undertaken with a view to implementing a comprehensive and integrated nationwide road pricing system. The Group considers that this approach would represent a fundamental structural reform that would (a) provide a significant ongoing source of Exchequer revenues if introduced at a high enough level (b) broaden the revenue base away from the State’s income and enterprise activity and (c) promote more rational economically efficient activity by road users, including promoting the use of public transport where appropriate.

It’s a libertarian wet dream, but wait, why not pay for this out of general taxation. We are not told.

Same with…

Introduce entrance fees at cultural institutions
The Special Group considers that there is scope to raise revenue by charging entrance fees at the various national cultural institutions and the National Gallery. Even entry fees set at low levels would generate useful revenue1. The Group notes that such fees are common in continental Europe.
The Group recommends that the cultural institutions should decide the appropriate level of fees required, the opening hours and the extent of concessions to be granted for free entry. Such concessions might include free entry on particular days of the week

Let’s consider a Green Party area of interest… public transport…

Programme C – Public transport
The Department of Transport’s 2009 current expenditure allocation for Public Transport is €342m, which is primarily spent to support non-commercial bus and rail services. The Special Group is recommending total savings of €68m a year for this Programme.
The Exchequer current allocation to CIÉ for the provision of non-commercial public transport services (PSO payments) has already been reduced in 2009 by €10m (3%). This reduction is on the back of a number of years where the allocation was held level (a reduction in real terms) and also is in addition to the ending of a fuel excise rebate scheme which was worth about €20m annually to CIE. The impact of this can be seen already in the recently announced programme of cost-cutting measures by Dublin Bus and the review of operations, services and routes by Bus Eireann. The Group is of the view that this cost-cutting programme can be more extensive and recommends that over the next three years the company focuses on reducing its annual operation costs of €1bn to allow it to pass on €55m in full year savings to the Exchequer by means of reduced PSO payments.

So, reductions on top of reductions… tell us more.

C.1 Operational efficiencies among CIE companies
The Group is concerned by the overall upward trend in the level of public service payments per passenger journey although it notes that Irish Rail has achieved a small reduction (Irish Rail still has the highest PSO payment per passenger journey of the three CIÉ transport companies). This indicates poor service delivery.

Or perhaps it is indicative of the costs of running public transport, a service that is a necessity above and beyond mere headline costs (and let’s not even talk about how aviation is supported by various tax incentives particularly as regards fuel in order to make it ‘economic’).

Accordingly, the Group recommends a scheme of targeted
reductions to services across all three CIÉ companies, focused in the first instance on off-peak, low patronage services.
As part of this undertaking, the Department of Transport and CIÉ should jointly review the application of PSO payments to low patronage transport routes and explore how such payments can be best targeted/applied to provide the most economical service levels that meet customer needs and demand patterns. For example, lightly used rail lines should be closed and replacement bus services provided. It is more than likely that more regular and reliable bus services could be provided on such corridors at less cost to the Exchequer. Among the most lightly used rail lines that should be examined in this light include:

– Limerick Junction to Rosslare
– Limerick to Ballybrophy;
– Manulla Junction to Ballina.
In addition, the Group recommends that there should be no further development of the Western Rail Corridor.
Overall, the Group targets a significant reduction of costs at CIÉ which would lead to savings of €55m in the PSO payment.

Not developing the Western Rail Corridor strikes me as the sort of penny pinching of the worst sort. The implementation of that sort of infrastructural link would in and of itself assist increased development. And further cuts to our already rather skeletal railway system seem to me to be perverse given both the reconsideration of a similar process in the UK and the need to shift from the roads… ah, yes, shifting from roads…

C.2. Cease funding the Rural Transport Programme
Given the availability of private sector bus alternatives, the high level of car ownership and the underutilisation of synergies with other publicly funded local transport services support the view that the level of direct Exchequer assistance can and should be eliminated, particularly in light of
current budgetary circumstances this programme should be ended.

King Car, indeed.

C.3. Discontinue the Green Schools Initiative
The Group is of the view that community-based initiatives such as the Green Schools Initiative (GSI), which aims to facilitate children walking to and from school, are best handled at local level and that such a level of direct Exchequer financial support is unnecessary. There is likely to be a significant overlap in State funding between this and closely related initiatives in other areas (Education, Health, Local Authorities and voluntary schemes).
The State does not need a special Programme of €10m over five years to convince school children and their parents to walk to and from school rather than drive. There must be alternative, cheaper ways to achieve the outcome sought from this initiative, which ultimately relies on community spirit and organisation.

No doubt there must, but the Report doesn’t tell us what they might be. And I wonder, I think the state probably does have to put some of its societal weight behind this initiative.

Anyhow, how to square this:

Speaking this afternoon, UCD economist Dr Colm McCarthy, who produced the report, said he believed the jobs cuts were “feasible” but was not sure how they would be achieved.

“We tried to identify areas where it is possible to reduce numbers,” he said.

…with this?

Dr McCarthy said the reduction in jobs could be achieved without compulsory redundancies, stating that a recruitment embargo, retirements and an existing voluntary redundancy scheme could be used to achieve savings.

I think I tend to the first Dr. McCarthy’s view. I can’t see how certain proposals could be achieved without forced redundacies, particularly in the education (amalgamation of the DIT with the IoTs) and health.

But then I hold no hope that there won’t be considerable impacts on the service given to the public by the implementation of this Report’s recommendations…

Delivering a public service numbers policy
The Government has already factored aggregate full-year savings of €300m into its budgetary arithmetic from the above initiatives. The total surplus staff numbers identified by the Special Group would involve, if fully implemented, payroll savings of up to €700 million in a full year, over and above the €300m annual savings already envisaged (and not taking into account the savings in accrued pension costs). To manage the delivery of these reductions, the Group recommends that a uniform Public Service Numbers Policy should now be put in place and implemented centrally by the Department of Finance. Such a policy should provide for the capping and progressive lowering of numbers in particular Ministerial Vote Groups / sectoral areas, with demanding targets for annual reductions and effective staff redeployment mechanisms to minimise public service impacts. Crucially, staff reductions will need to be matched with re-design and streamlining of organisations, and this will require a proactive approach by public service managers. Many of the proposals in this Report, including the scope for outsourcing of services and processes, will be relevant in this regard.

Great. Just great.