Report of the Local Report of the Local Government Efficiency GroupGovernment Efficiency GroupSome PerspectivesSome Perspectives

John O’ConnorJohn O’ConnorHead of FinanceHead of Finance

8 October 20108 October 2010

What is Local Government?What is Local Government?

• ““Local self-government denotes the Local self-government denotes the right and ability of local authorities, right and ability of local authorities, within the limits of the law, to regulate within the limits of the law, to regulate and manage a substantial share of and manage a substantial share of public affairs under their own public affairs under their own responsibilities and in the interests of responsibilities and in the interests of the local population” the local population”

- - Council of Europe Charter - Article 3.1Council of Europe Charter - Article 3.1

Local Government is Local Government is DemocraticDemocratic

The preamble to the European Charter asserts that The preamble to the European Charter asserts that Local Self-Government entailsLocal Self-Government entails:-:-

“ “The existence of local authorities endowed The existence of local authorities endowed with democratically constituted decision-with democratically constituted decision-making bodies and possessing a wide making bodies and possessing a wide degree of autonomy with regard to their degree of autonomy with regard to their responsibilities, the ways and means by responsibilities, the ways and means by which those responsibilities are exercised which those responsibilities are exercised and the resources required for their and the resources required for their fulfilment”.fulfilment”.

Irish LG –v-International ExpIrish LG –v-International Exp

• Very limited range of functionsVery limited range of functions• Extensive centralised controlsExtensive centralised controls• Limited range of local financing sourcesLimited range of local financing sources• No widespread local property taxNo widespread local property tax• No widespread water chargesNo widespread water charges• No significant role in local developmentNo significant role in local development

Sub-National Tax RevenuesSub-National Tax Revenues

• In contrast with many local In contrast with many local governments in other OECD governments in other OECD countries Ireland has few Sub-countries Ireland has few Sub-National Tax Revenues.National Tax Revenues.

Local Government Governance Local Government Governance and Compliance Environmentand Compliance Environment

• Regular public Council meetingsRegular public Council meetings• Mandatory statutory functions and prescribed Mandatory statutory functions and prescribed

methodologymethodology• Acting in the public interestActing in the public interest• Judicial review of decisions/Mandamus OrdersJudicial review of decisions/Mandamus Orders• EPA/HSAEPA/HSA• OmbudsmanOmbudsman• Freedom of InformationFreedom of Information• Detailed Audit RegimeDetailed Audit Regime

Local Government ReportsLocal Government Reports

• Current Report – latest in a long listCurrent Report – latest in a long list

• Common theme and outcome – funding base Common theme and outcome – funding base not structurally reformednot structurally reformed

• Local Government Administrative Structures Local Government Administrative Structures closely linked to Democratic Structuresclosely linked to Democratic Structures

• Terms of reference for current report did not Terms of reference for current report did not extend to review of Democratic Structuresextend to review of Democratic Structures

• Democracy –v- EfficiencyDemocracy –v- Efficiency

Efficiency Review ReportEfficiency Review Report

• Report worthwhile and offers agenda of Report worthwhile and offers agenda of measures to consider and work-throughmeasures to consider and work-through

• Found Local Government: Found Local Government: - was generally well run- was generally well run

– had embarked on innovationhad embarked on innovation– had engaged in shared serviceshad engaged in shared services

• Recommended:Recommended:– Reductions in staffingReductions in staffing– Procurement efficienciesProcurement efficiencies– Operational efficienciesOperational efficiencies– Cost Recovery and Revenue Generation measures Cost Recovery and Revenue Generation measures

Recent AdjustmentsRecent Adjustments• Expenditure reduced by €300m over past 2 years.Expenditure reduced by €300m over past 2 years.• Staff numbers reduced by 3,000Staff numbers reduced by 3,000• Impact of reductions evident in many service areas.Impact of reductions evident in many service areas.• No infinite ongoing reductions possible without No infinite ongoing reductions possible without

severe consequences for services – ever higher severe consequences for services – ever higher prioritisation. prioritisation.

• So far and despite the reductions, the LA Sector So far and despite the reductions, the LA Sector through prudent management at both elected and through prudent management at both elected and executive levels has avoided any regular mention executive levels has avoided any regular mention because of service difficulties, in the main evening because of service difficulties, in the main evening TV news bulletins even though the sector is TV news bulletins even though the sector is responsible for providing many essential services on responsible for providing many essential services on a 24/7/365 basis and the many implications of that. a 24/7/365 basis and the many implications of that.

Budgetary ResponsibilitiesBudgetary Responsibilities

• Each year LA must adopt balanced Each year LA must adopt balanced budget to fund maintenance of its budget to fund maintenance of its statutory public services at a reasonable statutory public services at a reasonable standard and pay any legally due monies. standard and pay any legally due monies. This is a statutory requirement to be met.This is a statutory requirement to be met.

• Legal duty on Manager to prepare draft Legal duty on Manager to prepare draft budget on like terms.budget on like terms.

ProcurementProcurementRecommendations offer good blue-print for further innovation and work in this area.Recommendations offer good blue-print for further innovation and work in this area.

Supplier management very important to avoid the inadvertent creation of monopolies.Supplier management very important to avoid the inadvertent creation of monopolies.

Role for Local Suppliers and SMEs Role for Local Suppliers and SMEs - they provide valuable service locally- they provide valuable service locally - are vital in emergencies- are vital in emergencies - give local employment- give local employment - pay commercial rates locally- pay commercial rates locally

Major challenge – how to get best value for the local authorityMajor challenge – how to get best value for the local authority andand provide fair competition for the SME/local sectorsprovide fair competition for the SME/local sectors

Government Ministers regularly urge better value in procurement on the one hand and then Government Ministers regularly urge better value in procurement on the one hand and then urge support for the SME sectorurge support for the SME sector

StaffingStaffing

• Manager to “make such staffing and organisational Manager to “make such staffing and organisational arrangements as may be necessary for the purpose of arrangements as may be necessary for the purpose of carrying out the functions of the local authorities for which carrying out the functions of the local authorities for which he or she is responsible”.he or she is responsible”. - S.159 Local Government Act, 2001.- S.159 Local Government Act, 2001.

• Recommendations on reductions in staff levels:Recommendations on reductions in staff levels: - basis for reductions not set out- basis for reductions not set out - no qualitative/quantitative assessment of services - no qualitative/quantitative assessment of services vv comparative best value of different staffing levels setcomparative best value of different staffing levels set out. out.

• There is always need for a critical level of staff to maintain There is always need for a critical level of staff to maintain essential services often in emergency circumstances and/or essential services often in emergency circumstances and/or isolated areasisolated areas..

Staffing – County StructureStaffing – County Structure• Historically, county boundaries and county Historically, county boundaries and county

identity have a major significance.identity have a major significance.• 100,000 Min population target per structure100,000 Min population target per structure - international experience? - international experience? • To foster and aid local development in the To foster and aid local development in the

weaker counties the office of County weaker counties the office of County Manager would seem most desirable, if not Manager would seem most desirable, if not essential.essential.

• Flexibility under the “Croke Park Flexibility under the “Croke Park Agreement” would likely offer an alternative Agreement” would likely offer an alternative cost saving measure.cost saving measure.

Where Govt. Depts. could Where Govt. Depts. could helphelp

• Report recommends the compatibility of the ICT systems of Report recommends the compatibility of the ICT systems of LAs and their reporting bodies – this would be beneficial.LAs and their reporting bodies – this would be beneficial.

• Need for much greater streamlining of returns and Need for much greater streamlining of returns and questionnaires from Govt. Depts. and state bodies – better questionnaires from Govt. Depts. and state bodies – better co-ordination required at national level.co-ordination required at national level.

• Too many approval stages in capital projects – concentration Too many approval stages in capital projects – concentration should be on critical stages only.should be on critical stages only.

• National fixed price contracts need review in the light of National fixed price contracts need review in the light of experience.experience.

• DBO contracts need review, as well. DBO contracts need review, as well. • Report recommends that LA housing rent be deducted from Report recommends that LA housing rent be deducted from

social welfare payments at source. This is welcome but such social welfare payments at source. This is welcome but such deduction should include LA Housing Loan Repayments, as deduction should include LA Housing Loan Repayments, as well, and apply to well, and apply to all all Social Welfare paymentsSocial Welfare payments

Local Development Local Development ProgrammesProgrammes

• Little doubt that synergies have been Little doubt that synergies have been lost in this area.lost in this area.

• Report recommendations are Report recommendations are welcome. welcome.

ConclusionConclusion• The present national economic difficulties mean severely The present national economic difficulties mean severely

restricted budgets for many years to come.restricted budgets for many years to come.• Efficiencies through every and all means will be needed to Efficiencies through every and all means will be needed to

lessen the impacts on service delivery both quantum and lessen the impacts on service delivery both quantum and quality.quality.

• Optimising the use of ICT systems will aid efficiencies.Optimising the use of ICT systems will aid efficiencies.• Online customer facilities can help in efficiency though this is Online customer facilities can help in efficiency though this is

constrained by the unavailability of quality broadband in many constrained by the unavailability of quality broadband in many rural areas and customer IT literacy and reluctance.rural areas and customer IT literacy and reluctance.

• Flexibility and re-organisation under “The Croke Park Flexibility and re-organisation under “The Croke Park Agreement” offer many opportunities.Agreement” offer many opportunities.

• The AGRESSO FMS software system is available in most LAs to The AGRESSO FMS software system is available in most LAs to provide very extensive data to aid analysis and decision provide very extensive data to aid analysis and decision making.making.

• The changing operational environment requires more extensive The changing operational environment requires more extensive ongoing staff training, development and regular skills updating.ongoing staff training, development and regular skills updating.

• The present report can contribute to the development of the The present report can contribute to the development of the new operating environment and context. new operating environment and context.

Thank YouThank You