Is government assassinating the public sector?

democrates

Is the government deliberately underfunding public services in order to make it look like private sector alternatives are a better option?

Example: Underfund healthcare, private operators easily offer bettter services but at a price, people pay the private sector because the public sector has become so bad, THEN the public sector budget is further reduced because it's customer base has diminished, and public services are worsened, starting another round of the vicious circle.

Result when this strategy is applied accross all sectors: what services you used to get by virtue of being a citizen, you now have to pay for.

Is this hapenning? Is this the way forward?

pete

democrates wrote:

Is government assassinating the public sector?

And if so, can I send them a list of names?

democrates

pete wrote:

And if so, can I send them a list of names?

Vacuous. Point?

SeanW

Quick example I've been following, Dublin Bus. The government wants to privatise some Dublin routes, not a bad idea per se, but the current approach is totally wrong.

In a normal country, like Britain or Germany, it's ok to have a million different transport operators offering services in a small area, because there is rock solid integration of public transport, under local bodies, such as London has TfL, Berlin has the BVG, Munich has the MVV etc, in these cities you buy tickets from the master body, and those tickets work for services provided by all the individual companies.

Now, a positive approach to integrated transport making way for opening the market might seem like a good idea right?

But what does Bertie and Co do? They go for a Scorched Earth policy, deciding to limit Dublin Bus funding to make sure they cannot buy anything other than replacements for life-expired buses, meaning that while traffic worsens (meaning more buses are needed to maintain the existing service) and demand grows, thus requiring an expanded service.

The end result is that the service becomes so crappy that the public demands private operators come in to clean up the mess. In the meantime, Dublin spirals further into a mess, traffic crawls to a standstill while FF get drunk on power.

pork99

This government spends extravagantly and incontinently on the public sector (eg bench marking - public sector salaries on average 20% higher than the private sector equivalents - plus their security of employment - plus guaranteed non-contributary pensions).

If anything that needs to be curbed as these costs are passed onto the private sector which generates the country's wealth. This year we face a €4 billion trade deficit due to loss of competitiveness. Why is this country losing competitiveness? The costs of higher governement spending is passed onto the private sector via higher ESB, waste disposal charges etc.

Overall inflation in Ireland from 2000 to 2005 ran at 25%. Price increases in the private sector ran below that or even experienced deflation in prices (clothing and footwear costs falling by about 8 or 9% due to exposure to global competition). The leader in cost inflation was the public and semi-state sector especially waste disposal - up about 50% and ESB up 148% in that period.

I'm sure it's very pleasant to be in a secure public sector job with benchmarked pay awards - probably not too much pressure. But other people e.g. the poor feckers in NEC in Ballivor are paying the price for it.

pork99

democrates wrote:

Is the government deliberately underfunding public services in order to make it look like private sector alternatives are a better option?

Spend on the health service in 2005 was about €11 bn - around two thirds of that was for salaries. I think there's enough money - it's competent managment that is lacking not money.

democrates

pork99 wrote:

This government spends extravagantly and incontinently on the public sector (eg bench marking - public sector salaries on average 20% higher than the private sector equivalents - plus their security of employment - plus guaranteed non-contributary pensions).

If anything that needs to be curbed as these costs are passed onto the private sector which generates the country's wealth. This year we face a €4 billion trade deficit due to loss of competitiveness. Why is this country losing competitiveness? The costs of higher governement spending is passed onto the private sector via higher ESB, waste disposal charges etc.

Overall inflation in Ireland from 2000 to 2005 ran at 25%. Price increases in the private sector ran below that or even experienced deflation in prices (clothing and footwear costs falling by about 8 or 9% due to exposure to global competition). The leader in cost inflation was the public and semi-state sector especially waste disposal - up about 50% and ESB up 148% in that period.

I'm sure it's very pleasant to be in a secure public sector job with benchmarked pay awards - probably not too much pressure. But other people e.g. the poor feckers in NEC in Ballivor are paying the price for it.

ESB market prices were increased upon deregulation when 'competitors' demanded increases to justify their entering the market. Though that profitable semi-state is not representative of the public sector which is there to provide services, it is a good indicator of what can happen when the market mantra is introduced. Better for consumers, but the prices got higher?

On the stats, you could pick another 'from-to' span and demonstrate the opposite.

In general I think you're on to a fair point, public services are generally managed terribly. Based on fear of the minister, a strict bureaucracy is enforced with rare the person who values thier career daring to take a risk. I did this the last time and didn't get into trouble, so I'll do it again this time. Innovation is crushed. But for a few enlightened senior civil servants, look at ROS by the revenue commissioners.

SeanW is bang on with dublin bus. Cut funding till people scream, then bring in private operators to cherry-pick profitable routes, then all DB routes suffer more, 'proving' how superior the private sector is. For a while anyway, british rail privatised - body bags mount up.

But you've touched on the 400lb gorilla in the corner. Competitiveness. Life has to be ever harder because we're at economic war with every other country. Nations competing for the crumbs of employment from the global capitalist table.

The easy thing is to conclude all will be well once we privatise everything, but if all the worlds public sector workers join the public sector job competition, will life really be better? 6.5 Billion humans estimated by this saturday.

NewDubliner

democrates wrote:

Is the government deliberately underfunding public services in order to make it look like private sector alternatives are a better option?

Assasination is the wrong term. It's undermining the Public Sector.

The principal tactic centres around HR policies such as PMDS & general servicisation which discriminate against specialists. This is very damaging, particularly in the IT area where, also with the help of the very unpopular 'decentralisation' scheme it is paving the way for full-outsourcing of IT.

All motivation for ther existing IT staff has been replaced by the certainty that their public service IT careers are over.

Large numbers of external contractors have had to be be hired to shore up failing projects such as PULSE, REACH and the new PAYE computer system.

It's a downward spiral and the failure of these projects will lead to the handing over of lucrative work to the private sector as has already happened in the UK.

Once outside of state control, the contractors will sub-contract to low-wage economies.

pete

democrates wrote:

Vacuous. Point?

It's a large building on the Dublin quays, used for concerts and other events. But that's not important right now.

Assassinating? Probably not. Underfunding? Sometimes. Undermining? Most definitely.

The real question is whether this undermining is being guided by political dogma (think: PDs), incompetence (think:FF), or self-serving political agendas (hello, decentralisation)

Red Alert

The current situation regarding dublin bus is deplorable. they are replacing bus after bus and still no improvement in fleet numbers has been experienced, thanks but no thanks to Martin Cullen. all the private operators can do as they please - when Morton's or Dualway decide another bus will pay for itself they will buy it.

As a result their priorities are wrong. They spent a lot of money on a much needed 2-way Radio system but wasted almost the same amount of cash buying new Ticket Machines. They continue to waste money on re-branding.

Their vehicle purchasing policy has become a vendor lock-in. It now seems that Volvo/Transbus are supplying almost all vehicles, with the exception of ten Dennis Tridents purchased a couple of years ago. Thus it becomes less cost effective to support any 'odd' buses, and the CIE-Transbus relationship becomes less price-sensitive. However I would suspect the government value the cross-border nature of this contract, hence the status quo remains. (This whole spectre is very similar to the CIE/Leyland contract of the 1970's).

The taxpayers of this country are the shareholders of CIE and by extension Dublin Bus. Why does the government want us to tolerate the wilful neglect and handicapping of our Bus company for the benefit of these profiteers who will cream off profitable and secure routes like the 46A but might show no interest in operating the 75 for example? The abuse of our semi states and the continuing anti-CIE spin that the government wishes to peddle should be outed for what it is.

shoegirl

SeanW wrote:

Quick example I've been following, Dublin Bus. The government wants to privatise some Dublin routes, not a bad idea per se, but the current approach is totally wrong.

...

But what does Bertie and Co do? They go for a Scorched Earth policy, deciding to limit Dublin Bus funding to make sure they cannot buy anything other than replacements for life-expired buses, meaning that while traffic worsens (meaning more buses are needed to maintain the existing service) and demand grows, thus requiring an expanded service.

The end result is that the service becomes so crappy that the public demands private operators come in to clean up the mess. In the meantime, Dublin spirals further into a mess, traffic crawls to a standstill while FF get drunk on power.

I disagree quite simply because the situation with Dublin Bus long since predates the concept of privatisation. As far back as the early 1980s I remember DB offering a mediocre to appalling service. My theory is that there is a Thatcherite mentality to public transport users which has prevented proper investment in services (Thatcher infamously once commented that anybody over the age of 29 still using the bus was a failure).

I do think much of the problem with public transport services in Ireland is a failure to consider the knock-on effects on society and the economy in failing to provide a proper infrastructure. One of the most direct impacts is Ireland's huge level of road deaths as people are forced into cars where public transport is inadequate. Its not a matter of choice as many young learner drives will tell you, its a necessity.

shoegirl

NewDubliner wrote:

It's a downward spiral and the failure of these projects will lead to the handing over of lucrative work to the private sector as has already happened in the UK.

Once outside of state control, the contractors will sub-contract to low-wage economies.

Actually this isn't quite what has happened. In most UK public sector IT contracts its deeply politically unpopular to send work aboard, and in most cases simply impossible as most UK public sector IT work requires at least basic, if not full security clearance checks. Which effectively means that the work can't be sent outside the UK, except in some very rare cases (usually involving very small contracts for specific work such as data entry for retrogressive digitisation projects to give one example that I know of but cannot obviously name for client confidentiality).

Outside of that it has often been the case that the privatisation has either been disastrous (eg EDS and the Inland Revenue) or has worked out far more expensive for the taxpayer (eg the huge NHS project). Much of the outsourced work these days is tending to cluster around desktop support services which in any case is the low tier of IT services. Even in the private sector more customers are taking/keeping their services back inhouse (eg. Schlumberger, Sainsburys etc).

The Corinthian

democrates wrote:

Is the government deliberately underfunding public services in order to make it look like private sector alternatives are a better option?

Certain areas of the public sector are under funded, however most are, if anything, over funded. Repeatedly we’re finding that the public sector are being paid far more that those in the private sector to the point that the opposite it what you’re suggesting is being recommended.

The mistake you’re making is that you assume that lower standards are as a result of under funding, when they could quite easy be due to poor management and/or public worker incompetence.

pete

The Corinthian wrote:

Certain areas of the public sector are under funded, however most are, if anything, over funded. Repeatedly we’re finding that the public sector are being paid far more that those in the private sector to the point that the opposite it what you’re suggesting is being recommended.

We're also being told of the flaws in this argument.

bonkey

democrates wrote:

ESB market prices were increased upon deregulation when 'competitors' demanded increases to justify their entering the market. Though that profitable semi-state is not representative of the public sector which is there to provide services, it is a good indicator of what can happen when the market mantra is introduced.

Its little different to the UK government forcing BT into a price-freeze to prevent it from competing with startup companies, so that they had a chance to enter the market without being wiped out by a giant who can undercut anything they offer in order to keep its effective monopoly on the market.

ESB suffered further by not being uncompetetive enough to begin with.

Better for consumers, but the prices got higher?

Exactly. It might seem counter-intuitive, but then again, so does an increase in taxes. One could just as easily ask "how can having elss takehome make us better off?" The answer there, as here, is to stop looking at the short-term.

In general I think you're on to a fair point, public services are generally managed terribly.

Indeed. Underfunding is the least of their problems. Inefficiency can swallow any budget. Even our erstwhile FF-supporter Cork stopped beating the "we put more into healthcare than any previous government" drum a long time ago, in favour of "money won't solve the problem of inefficiency".

SeanW is bang on with dublin bus. Cut funding till people scream, then bring in private operators to cherry-pick profitable routes, then all DB routes suffer more, 'proving' how superior the private sector is.

This is based on the (correct or incorrect) assumption that the routes identified as being profitable are actually profitable to Dublin Bus at the moment, as opposed to being routes capable of being profitable if they were managed and run correctly.

But you've touched on the 400lb gorilla in the corner. Competitiveness.

Privatisation doesn't necessarily introduce competitiveness. If you sell a bus-route to one company, that one company now has a monopoly on that route. Unless you sell the same routes to a number of operators, you don't get competition. And as we've seen with the mobile phone market, a small number of players doesn't necessarily result in proper competition either.

The real concept behind provatisation is that private companies exist to make profit and therefore have an incentive to be profitable. State-run companies literally have a disincentive to be profitable. So if you take a company who says they can make a profit out of a route with only a fraction of the subsidisation you currently supply for that route....then in theory the customer gets an equivalent or better service, the government pays less, and the company makes a profit. In theory, everyone's a winner.

Life has to be ever harder because we're at economic war with every other country. Nations competing for the crumbs of employment from the global capitalist table.

This has nothing to do with privatisation. THe simple fact is that our government has allowed our state and semi-state bodies to evolve into inefficient behemoths which are swallowing our money. Regardless of what exists outside our borders and what teh effects of this are on us, there is no excuse for the continuation of the inefficiency.

Selling the stuff off is one way of dealing with the problem. Unfortunately, all too often its the wrong solution. It hands it off quickly, but leads to one of two situations:

1) The British Rail scenario, where subsidisation is what drives profit, and the customer is ultimately who suffers - receiving a worse service at what is ultimately a higher cost.

2) The toll-bridge scenario (yes, I know that wasn't state-run) where the inefficiency is turned around, and the company becomes profitable, and people start asking why they are subsidising a company which makes profit...why their taxes get given to this company as profit.

The easy thing is to conclude all will be well once we privatise everything,

If our government was capable of privatising successfully, it owuld also be capable of fixing the problems that are the reason for privatisation in the first place.

jc

democrates

Agreed that inefficiency is a core problem. The semi-state model has shown success, ESB and Telecom Eireann. TE got privatised and went from a business that was expanding internationally and investing at home to what it is now, interational wings clipped, asset stripped, saddled with debt, and investing in infrastructure so poorly that the govt had to get back into the network business. On ESB, I concede that while interconnectors are a quick win, wind farms and other alternatives need higher prices to justify the capex, if we don't do it now we'll be in serious trouble in the future given the oil supply and demand outlook.

Some of DB's routes cross subsidise others, introduce cherry-pickers on the profitable routes and it'll drive db further down. Some routes will benefit from improvements others the opposite, all taxpayers will foot the bill to prop db up. Like an post. If the new operators contributed to a universal service fund, maybe it might be workable, similar to risk equalisation for vhi and bupa.

All routes could be more profit-driven, you just cut back the service and pay drivers less. The drivers don't help themselves by going out of service on the way back to the depot. Last night I waited half an hour for a 45, meanwhile 2x145s(no use to me) and 4 out of service buses passed which could easily have picked up people who are disembarking before the depot. A private operator wouldn't pass revenue like that.

Of course if wages were constrained and a company-wide bonus scheme introduced, you'd get more customer friendly behaviour. That scheme worked extremely well in telecom eireann, and I don't see why performance measures couldn't be established accross the public service. But just giving people fat pay and conditions is a bad idea, many will sit back and do as little as they can get away with, the money is in the bag regardless of how well they perform. In addition more freedom must be there to restructure and innovate, once the financial motivation to perform is introduced.

I agree that privatisation does not necessarily deliver a competitive market, and even when it does that's not a good thing wherever basic services must be provided at a loss.

NewDubliner

shoegirl wrote:

Actually this isn't quite what has happened. In most UK public sector IT contracts its deeply politically unpopular to send work aboard

They're thinking about it: http://www.theregister.co.uk/2006/01/23/dwp_indian_offshoring/

In Ireland, I've heard that development work on some government IT projects has been sub-contracted to programmers in China. Irish Civil Service rules make it nearly impossible to recruit and retain anyone with IT aptitude & it takes very determined people to persevere at their vocations in the current anti-specialist climate. The Chinese are probably grateful for the experience.

The Decentralisation Implementation Group was put under a lot of pressure to out-source data centre operations to 'World Class Data Centres'. I think the PDs were lobbying hard on this at a time when there was a downturn work for existing hosting facilities.

Not sure how that's going at present, maybe to Balivor?

Victor

pork99 wrote:

Overall inflation in Ireland from 2000 to 2005 ran at 25%. Price increases in the private sector ran below that or even experienced deflation in prices (clothing and footwear costs falling by about 8 or 9% due to exposure to global competition). The leader in cost inflation was the public and semi-state sector especially waste disposal - up about 50% and ESB up 148% in that period.

But these price increase have been largely down to the private sector

Waste disposal - we used to get waste disposal for free. Anything that is free is abused. Much of the waste market is now privatised and it is the private companies that are dictating prices.

Energy - not only have oil prices increased, but so have dividends to government, investment in infrastrutcure (no power stations built 1985-2000) and most of all, private business refused to enter teh market without price increases.

Cork

Only with competion will public services improve - with the arrival of Aircoach on the Dublin to Cork bus route - Bus Eireann reduced prices.

There is a mentality of "jobs for life" in the public sector. Once they are in - they'll be there untill they retire. Where is their motivation to improve services?

Benchmarking was a disaster - talk about an ATM machine.

The sum total of benefits did not match the cost.

The public sector is inefficent. Change is slow and often resisted by vested interests.

The Revenue has got its act together but many government agencys could be better ran.

Blame has to lie with indivual organisations will employees who will be there untill they retire.

Open up these closed shop organisations - by bring in expertise from the private sector.

Value for money and better service delivery needs to be the key.

samb

democrates wrote:

Of course if wages were constrained and a company-wide bonus scheme introduced, you'd get more customer friendly behaviour. That scheme worked extremely well in telecom eireann, and I don't see why performance measures couldn't be established accross the public service. But just giving people fat pay and conditions is a bad idea, many will sit back and do as little as they can get away with, the money is in the bag regardless of how well they perform. In addition more freedom must be there to restructure and innovate, once the financial motivation to perform is introduced.
.

I think this point is key. The public sector generally needs to be performance driven, with less automatic promotions. This must be led by Government but also by ambitous civil servants who believe that thier dedication should be rewarded (rather than a lazy ass who has been there longer being promoted). I'm no expert on this but I have heard often that the civil service has improved somewhat in this regard in recent years.
I find it strange that public sector pay is so often criticised when more they are generally more qualified than public sector workers. What we really need is a culture shift in support of the public sector where the 'best and brightest' want to be in the public sector because they will be respected and rewarded financially if they perform. Then we could expect efficiency to be less of an issue and aviod the problems associated with privitisation.
'To govern is to choose' we will loose the power of democracy if we privitise everything.

With regard public transport I am very much against privitisation. Just as a big company like Walmart can open loads of stores and sell at a lose until it eliminates its competition, the government can subsidise public transport until it outcompetes cars to the extent that the roads can flow freely with both. It may be loser as an enteprise but it is a service that could make everyone spend less time stuck in traffic and more time being productive.

with regard telecommunications the only difference with it privitised that I can see is that we are bombarded with annoying ads 24-7, which presumably are wasting money, and prices would be lower if run by the EFFICIENT public sector.

I know the examples above are simplistic and that making the public sector more efficient is no easy task. I just think that instead of saying 'public sector is ineffiecent-we should privitise' we should say 'public sector is inefficient-how can we improve it'. We need to improve it anyway for the sake of everything that cannot be privitised.

pete

samb wrote:

The public sector generally needs to be performance driven, with less automatic promotions. This must be led by Government but also by ambitous civil servants who believe that thier dedication should be rewarded (rather than a lazy ass who has been there longer being promoted). I'm no expert on this but I have heard often that the civil service has improved somewhat in this regard in recent years.

Seniority based promotions have pretty much gone out the window in the Civil Service, replaced by competency-based and 'senior/suitable' (with the emphasis very firmly on suitable) procedures.

In other words, length of service (i.e. experience in one's current role) can certainly be taken into account, but is not the deciding factor.

I'm sure someone more knowledgable than I can say if this was a condition of Benchmarking or one of the national agreements.

Cork

samb wrote:

I just think that instead of saying 'public sector is ineffiecent-we should privitise' we should say 'public sector is inefficient-how can we improve it'. We need to improve it anyway for the sake of everything that cannot be privitised.

Local Authorities produce meaningless proformace indicators - but not solid facts like cost per transaction.

AIB and Tesco's cost per transaction is small to that of the public sector.

Yet inefficency is tolerated and even encouraged.

pork99

democrates wrote:

In general I think you're on to a fair point, public services are generally managed terribly. Based on fear of the minister, a strict bureaucracy is enforced with rare the person who values thier career daring to take a risk.

The ESB like Eircom effectively remained a monopoly after deregulation so you got the worst of both worlds

Of course for the private sector to flourish you need the infrastructure that is mostly provided by the state, primarily law and order but also things like education and transport infrastructure. We need (and are not getting) efficiency and value for money in these areas (port tunnels that look like Niagra Falls, the never-ending M50 construction, the LUAS falling apart as soon as it's built etc).

Victor

pork99 wrote:

The ESB like Eircom effectively remained a monopoly after deregulation so you got the worst of both worlds

You mean private monopoly.

We need (and are not getting) efficiency and value for money in these areas (port tunnels that look like Niagra Falls

Built by a private company on a design and build basis. The public sector has not taken over the project yet.

never-ending M50 construction,

Built by a private company for a pro-privatisation government agency for use by private transport.

the LUAS falling apart as soon as it's built etc).

Built by a private company on a design and build basis for a pro-privatisation government agency.

Cork

the LUAS falling apart as soon as it's built etc).

If that was the case - why are people using it?

The state is getting a poor return on public expenditure.

Look at Aer Lingus prior to Ryanair.

An inefficent and bloated state monopoly. Ryanair's arrival changed the situation.

Health System Reform is akin to walking on egg shells. So, many vested interests still demanding extra resources without delivering either better services or efficencys.

I know one public sector organisation where staff reading newspapers during working hours, taking long lunch and tea breaks, arriving late, finishing early and going for afternoon walks is not unheard of.

Where is value been had?
The tacpayer is an idiot for allowing this.

NewDubliner

pete wrote:

Seniority based promotions have pretty much gone out the window in the Civil Service, replaced by competency-based and 'senior/suitable' (with the emphasis very firmly on suitable) procedures.

That's all been thrown out now.

The only qualification now is willingness to move out of Dublin.

pork99

Cork wrote:

I know one public sector organisation where staff reading newspapers during working hours, taking long lunch and tea breaks, arriving late, finishing early and going for afternoon walks is not unheard of.

I know of another guy I used to work with (he was a software developer) who got a contract with the Department of Agriculture where he was told to slow down because he was working too fast :rolleyes:

pork99

Victor wrote:

Built by a private company on a design and build basis for a pro-privatisation government agency.

But still taxpayers money and ultimately the state's reponsiblity.

It only proves that is you spend somebody else's money on somebody else you simply do not care about getting value for money.

More example can be found within the public sector eg health service computer system, €3 million on a website which doesn't exist, voting machines etc. Any private company run on that basis (and I'm not denying that there are badly run private companies) tends to go out of business.

Victor

Cork wrote:

I know one public sector organisation where staff reading newspapers during working hours, taking long lunch and tea breaks, arriving late, finishing early and going for afternoon walks is not unheard of.

Now, now, lets not tarnish the civil servants with the bahavior of the occupants of the Dáil. :v:

Cork

Victor wrote:

Now, now, lets not tarnish the civil servants with the bahavior of the occupants of the Dáil. :v:

Seriously, It was not the Dail.

I am not saying such practices is across the public sector and they are many who work hard in the public sector.

But - they are some who are less than productive.

The PMDS lark will not identify the slackers.

pete

NewDubliner wrote:

That's all been thrown out now.

The only qualification now is willingness to move out of Dublin.

Ha!

Sad but true, my friend. Sad but true.