Pucliic Sector Functions that could be done by private sector

westtip

One of the key issues in this whole public sector pay and service issues, for me has to be Why have we let the publc sector grow into the slumbering giant that it is.

FG and Labour are talking about cutting jobs in their thousands (they can argue about the numbers between themselves), but I assume these will all be on a voluntary redundancy basis adn redeployment being used for people in overmanned areas.

Here is a key question: Why does so much pretty basic administration have to be done in the public sector and couldn't a great deal of it be contracted out to the private sector.

Example: Passports - Do they have to be issued by the public sector passports - why not outsource this function with strict controls.

Driving licences - one of the greatest public sector job creation schemes ever.

Let's say we have 2 million driving licences issues in Ireland - they have to be renewed every ten years - thats 200,000 driving licences every year to be renewed - thats 4,000 per week - why not have this done by a private company under strict controls.

Adminstration of CAO for third level entry, Admin of Leaving Cert and Junior Cert exams.

All these are very basic administrative functions - The PS workers working in these kind of areas could be made redundant and potentially a fair portion of them could be re-recruited into the private providers employment - this would remove the on-going cost of these employees from the PS pay bill..Of course there would be the balance of the cost of the outsourcing service, but lets take the example of driving licences and the rough and ready figures I have posted up here. Its 25 euro to renew a ten year licence - could a private company do this for a profit? so the whole thing becomes self financing, do we really need to have such a piece of administration duplicated in evey county council in the country, shouldn't we have one driver licence renewal centre nationally (privatised).

Do we need to renew our licenses every 10 years?

The argument will always be - That's the way it has always been done and you can't do this for security reasons etc etc.

This of course is all poppycock smoke screening to protect a status quo which it is fairly clearly recognised by everyone needs reforming - and was agreed to be reformed under the original benchmarking and the CPA.

Anyway thoughts?

cyclopath2001

westtip wrote: »

One of the key issues in this whole public sector pay and service issues, for me has to be Why have we let the publc sector grow into the slumbering giant that it is.

How about we outsource banking to the private sector? Oh, hang on...we tried that.

You cannot just assume that outsource would be cheaper or more efficient. You'd need to demonstrate that it would be cheaper and more efficient, for example by firing thousands of Irish workers and outsourcing the work to India.

pissants

did the entire country become libertarian while I wasn't looking or what

ParkRunner

westtip wrote: »

Here is a key question: Why does so much pretty basic administration have to be done in the public sector and couldn't a great deal of it be contracted out to the private sector.

Example: Passports - Do they have to be issued by the public sector passports - why not outsource this function with strict controls.

Driving licences - one of the greatest public sector job creation schemes ever.

All these are very basic administrative functions - The PS workers working in these kind of areas could be made redundant and potentially a fair portion of them could be re-recruited into the private providers employment - this would remove the on-going cost of these employees from the PS pay bill

A basic administration function should by definition not need strict controls. Revenue from issuing passports and driving licences do cover the administration costs required to produce them. People are probably not willing to pay higher taxes for loss making public goods & wider services to society however (i.e. all the things that the private sector would not be willing to do)

pissants

more seriously: state services that cannot be made to operate under 'proper' market conditions (i.e. competition) should not be privatised. Any money saved will be lost by increased costs paid directly - and this is assuming that such services will be run properly and not made 'efficient' (i.e. the most profit, not the best service) ((they won't))

sollar

Our country is too small for alot of the services to be provided well without becoming monopolies with massive profiteering takes place imo.

cyclopath2001

sollar wrote: »

Our country is too small for alot of the services to be provided well without becoming monopolies with massive profiteering takes place imo.

Eircom anyone?

MrMatisse

Why is always the automatic response to assume that the private sector would do it 'better'

Eircom
Banking
Public Private Construction (Irish Glass Bottle site)
Docklands development authority
U.S medical system

and the list goes on

Badly performing civil servants does not mean that having the government perform certain services is a bad idea:

Singapore
Sweden
Finland
Germany

Do it well.

Gumbo

the cost for these items will then shoot up as the private sector company we need to make a profit on the operation.

Lemming

Touting eircom as any sort of example of private sector failure is disingenious without first acknowledging the extremely large hand dealt to it via the public-sector and politicians.

Firstly, the then newly-privatised entity eircom had to retain a large number of public-sector union staff that it was otherwise unable to rationalise since it would have been too costly to take on said union(s). Telecom Eireann was heavily overstaffed, and eircome inherited that. I' ve heard figures ranging from 3:1 to 7:1 over the years for some positions although I am also unable to verify that as fact. Thus the company had massive operating overheads and was severely bloated.

Secondly, and here's a rather important point to note; Fianna Failure handed over the entirety of Ireland's telecomms fixed infrastructure to a private entity that was otherwise unaccountable to the people. Can anyone say "monopoly" fast enough? The company abused that monopoly position wholesale in an attempt to milk consumers and engage in anti-competitive practice where other telcos were involved.

Thirdly, in relation to point two, the regulator (ComReg) were provided with farcical powers that were - as described by the then head of EsatBT at a conference I attended - "absurd or draconian" (a fine of 1000 pounds, or your telco license revoked), and thus simply ineffectual for the most part in providing any meaningful level of oversight to the market.

Eircom - as a private entity - has behaved in an abusive manner. I can only liken it to an indulged, spoilt, pampered child (Telecom Eireann) that then comes of age and continues being self-centred.

Welease

kceire wrote: »

the cost for these items will then shoot up as the private sector company we need to make a profit on the operation.

Not necessarily true.. Companies (and indeed the Public Sector) can choose to be more efficient in the services they offer and drive down the cost of providing services in that manner..

A good example would be bin collecion.. Many companies across the country offer profit making services at a vastly cheaper consumer price than availble from the CoCo..

rockandroll

I totally agree whats this about it costing more? I know people in the private sector on €6 and €7 an hour which ofcourse is not rite. My point is it would be way cheaper if it was all private.

ntlbell

rockandroll wrote: »

I totally agree whats this about it costing more? I know people in the private sector on €6 and €7 an hour which ofcourse is not rite. My point is it would be way cheaper if it was all private.

6/7e an hour? you mean they working ilegaly?

krd

Lemming wrote: »

Touting eircom as any sort of example of private sector failure is disingenious without first acknowledging the extremely large hand dealt to it via the public-sector and politicians.

Firstly, the then newly-privatised entity eircom had to retain a large number of public-sector union staff that it was otherwise unable to rationalise since it would have been too costly to take on said union(s). Telecom Eireann was heavily overstaffed, and eircome inherited that. I' ve heard figures ranging from 3:1 to 7:1 over the years for some positions although I am also unable to verify that as fact. Thus the company had massive operating overheads and was severely bloated.

What do you mean by "rationalise". Fire every engineer on a decent wage and replace them with people on low wages - how long is that trick going to work. I don't believe they're over staffed and I don't think the wages they pay are excessive. There's a kind of disease in Telecoms in general. They hire management from each other's companies and the disease spreads. I don't think there's anyway of curing it. Go to any large teleco and you'll find huge numbers of staff who seem to exist for the sake of existing. And these people will invariably have nothing to do with the provisioning or sales of phone lines.

One operator who set up a few years ago in Ireland, hired a "hotshot" sales manager from an Irish Teleco. They gave him about 20 sales people and let him do his stuff - his magic. After the first month his entire sales team had sold less than 30 phones. But that's not a once off - I've known of a few similar occurrences. There are few Telco management types floating around you'd be better off just taking a match to big pile of money than hiring.

Anyway, they have outsourced a lot of their work. I don't think outsourcing works that well - I've seen some hilarious outsourcing disasters. Telcos companies have been Yo-yoing their needs in and out of house for years.

Secondly, and here's a rather important point to note; Fianna Failure handed over the entirety of Ireland's telecomms fixed infrastructure to a private entity that was otherwise unaccountable to the people. Can anyone say "monopoly" fast enough? The company abused that monopoly position wholesale in an attempt to milk consumers and engage in anti-competitive practice where other telcos were involved.

They did engage in some very nasty anti-competitive practices. But that was a long time ago at this point. Now their wholesale is very welcoming to "competition". A lot of the competition is effectively sharing the monopoly profits with other business entities. This is actually what the big players wanted - they didn't want a free for all that would drive down profits across the board. Every phone line in the country is still an Eircom line. All moblie phone traffic crosses the Eircom network at some point. There is very little independent network in Ireland.

They biggest problem in the anti-competitive days was lawyers and judges.

Thirdly, in relation to point two, the regulator (ComReg) were provided with farcical powers that were - as described by the then head of EsatBT at a conference I attended - "absurd or draconian" (a fine of 1000 pounds, or your telco license revoked), and thus simply ineffectual for the most part in providing any meaningful level of oversight to the market.

The UK fines can be £20,000 - even £50,000. It's my opinion they're not draconian. I tend to think spivish behaviour is really bad. There are providers who should have had their licences revoked. Misselling products, not cancelling accounts at customers request. There's one Irish teleco that *cough* accidentally double bills customers every so many months. It's been accidentally happening for years - and it's the same accountant who keeps causing the accident.

Has anyone ever had their Telco licence revoked?

Eircom - as a private entity - has behaved in an abusive manner. I can only liken it to an indulged, spoilt, pampered child (Telecom Eireann) that then comes of age and continues being self-centred.

They are not the worst. They wouldn't be the best either.

I don't know if "competition" has really benefited the Irish consumer. O2 make 25% of the group's profit entire from the Irish market.

Competition didn't drive the provision of broadband - most of the broadband is still Eircom - under different labels.

pissants

as an aside, this is also true of privatised telcos as far as I know in america, britain, and australia (might be changing soon). Eircom's dreadful track record isn't a fluke: there simply doesn't seem to be any incentive to upgrade lines/lay fibre instead of overselling what's already available.

Manach

I stand to be corrected - but I thought BT & Telefonica of Spain (former State Telcos) were success stories.

westtip

My original post wasn't really about privatisation of things like Eircom. It was more about outsourcing from within the current public sector. I don't actually believe the public sector can be reformed, which is why a lot of what it does could be reformed by outsourcing - get someone else to issue dirving license passport, exam timetables etc. The jobs will get done just as they are now but more efficiently and will cost the country a lot less in the long run.

Re the private sector will charge more to do things - well not true other suppliers can always be found if an outsourcing company demands too much adn trys to push the price up, but if the union decides to shut the passport office of - what choice have we all got??

Gumbo

Welease wrote: »

A good example would be bin collecion.. Many companies across the country offer profit making services at a vastly cheaper consumer price than availble from the CoCo..

im afraid thats not a good example imo, the private bin companies will only route the profitable routes. for example, i live in a new estate in Finglas, and the private guys will not service my area as theres not enough houses signed up for them to come in!

krd

Manach wrote: »

I stand to be corrected - but I thought BT & Telefonica of Spain (former State Telcos) were success stories.

They have monopolies. It's not hard to be a success story when you have a monopoly.

BT, in the UK still largely functions as it did when it was state owned. It's very difficult to shake hundreds of years of organisational history. It's a huge organisation. The last I heard they still have a special dining room for the directors and they keep a full time chef and kitchen staff. And it's not sausage, egg and chips.

BT Global services - which is the sexy success story of BT is really a sham. And has cost BT hundreds of millions. They provide IT outsourcing. It's really just thousands of project managers who know nothing about IT, outsourcing contracts to people like IBM. It's kind of Enronesque.

Privatisation may have been bad for BT, now they have to show the "market" they're growing. A lot of their "revenue" and "profits" would be accounting tricks. I'm pretty sure most of BT Global services business was writing up contracts with itself.



In the last 20 years there's been a huge expansion in Telecoms - we all have mobile phones and the internet. This would have come anyway. As most of the telecom standards were developed by state run telecos - or paid for by state run telcos - or in the case of the Internet paid for by the American taxpayer. The technology to make any of this stuff work has only come in the last few years. And it's bloody amazing any of it works.

Welease

kceire wrote: »

im afraid thats not a good example imo, the private bin companies will only route the profitable routes. for example, i live in a new estate in Finglas, and the private guys will not service my area as theres not enough houses signed up for them to come in!

Well I live in the countryside in Kildare, and I have a choice of 5 or 6 companies all of who are cheaper than the council.. So tell me how this can be possible if as you say Private companies are more expensive than Public services because they have to make a profit?

Companies can and do control their costs and become more productive in order to offer more competitive pricing.. It's part of running a successful business.

krd

pissants wrote: »

as an aside, this is also true of privatised telcos as far as I know in america, britain, and australia (might be changing soon). Eircom's dreadful track record isn't a fluke: there simply doesn't seem to be any incentive to upgrade lines/lay fibre instead of overselling what's already available.

What makes you think private companies would have any more interest in providing infrastructure than a state company.

We have a huge amount of fibre laid across the country. There is huge amounts of cable all around Dublin. Most of it has never been used. You can get 50gig to your house - if you have 50k to throw around.

Bord Gais have laid fibre every time they dug a pipeline in the last 30 years. There's lots of fibre there. The ESB have lots of fibre - every one has lots of fibre.

What's happening and why you don't have 100mb to your house.

Eircom are the dominant wholesaler. Eircom always and always will copy cat what BT does. They buy a lot of product from BT.

So Eircom has to watch how BT get on and which product they chose to roll out - which will probably be fibre to the Kerb. They already have rolled out some. But this stuff can take years to get the kinks out. BT do a lot of experimental stuff too. They're large enough and have a large enough customer base for experiments.

Then Eircom will then copy cat them.

it's not just an Eircom thing - it's across Irish industry and government in general. Let's watch what the Brits do, then we'll copy them.

Gumbo

Welease wrote: »

Well I live in the countryside in Kildare, and I have a choice of 5 or 6 companies all of who are cheaper than the council.. So tell me how this can be possible if as you say Private companies are more expensive than Public services because they have to make a profit?

Companies can and do control their costs and become more productive in order to offer more competitive pricing.. It's part of running a successful business.

because they take the profitable routes, they wont take a route that makes them go out of their way to serve 4 houses where the council will.

im not disagreeing with you, i'd like to see where private can take control pf public jobs, but i dont think theres many areas imo.

krd

Welease wrote: »

Well I live in the countryside in Kildare, and I have a choice of 5 or 6 companies all of who are cheaper than the council.. So tell me how this can be possible if as you say Private companies are more expensive than Public services because they have to make a profit?

Companies can and do control their costs and become more productive in order to offer more competitive pricing.. It's part of running a successful business.

Ah yes.

But there's one factor you haven't factored in. The bin charges are largely a council stealth tax.

The private companies are providing a service. They're not in the business of collecting taxes.

The council bin costs are probably the same or less than the private companies.

A friend was working for one of the private bin companies. His wages were very high.

I'm not going to make an attack on council workers. They do actually work. Though in some parts of the country it's a real jobs for the boys exercise, and they have to contract lots work out their own staff won't do. I've seen council workers, down the country, knock a perfectly good wall, that didn't even belong to them, then take weeks rebuilding it.

Welease

kceire wrote: »

because they take the profitable routes, they wont take a route that makes them go out of their way to serve 4 houses where the council will.

im not disagreeing with you, i'd like to see where private can take control pf public jobs, but i dont think theres many areas imo.

Of course there are.. If the PS can make billions in saving as part of the CP agreement while still keeping swathes of unnesessary administrative staff and with the usual union interference, then any lean company could run those services at even less cost..

Does this mean they should be outsourced? No, not necessarily, but to state that prices would increase if private sector companies took over, because the have to make a profit, is frankly rediculous.

sarumite

Really-Stressed wrote: »

Why is always the automatic response to assume that the private sector would do it 'better'

I don't. The private sector doesn't do it better just because it is the private sector. It does it better because there is competition. we need to work out ways to promote competition within the PS. While there is an excess of PS bashing going on, there is also an excess of PS workers making excuses for poor or inadequate services. Promote competition so that those who solve problems are properly rewarded while those that assume an automatic increment weeded out.

Welease

sarumite wrote: »

I don't. The private sector doesn't do it better just because it is the private sector. It does it better because there is competition. we need to work out ways to promote competition within the PS. While there is an excess of PS bashing going on, there is also an excess of PS workers making excuses for poor or inadequate services. Promote competition so that those who solve problems are properly rewarded while those that assume an automatic increment weeded out.

This is exactly what we need to be doing with the PS.. The vast majority of PS workers are hard working and are no different from PrS workers.. Waste in the PS effects them also.. they are tax payers, and will be paying more taxes to cover the cost of the services provided (along with the cuts they have already taken).

krd

Welease wrote: »

Of course there are.. If the PS can make billions in saving as part of the CP agreement while still keeping swathes of unnesessary administrative staff and with the usual union interference, then any lean company could run those services at even less cost..

I don't know. In large private companies there are as many pointless administrative staff as you'll find in the public sector. It's just the way bureaucracy works. Big companies like to look big and corporate - so they'll hire lots of admin type people, they don't need, for the look of the place.

Admin staff and their managers in the private sector will create work to justify their existence. Make pointless changes to projects to create a little chaos for them to manage. Call people at 9 O'clock on a Saturday night with some pointless query - about some document that's in the office. Or even better create some pointless production metrics that will require lots of documentation with lots of boxes to tick. This is what happens in the private sector.

A lot of inefficiency in the public and private sector stems from management. Unions don't come into it. People will abuse their positions if they can get away with it, to do nothing all day and get well paid for it.

Some times it pays for private companies to be highly inefficient - especially if they bill clients separately for admin work and project management.

Does this mean they should be outsourced? No, not necessarily, but to state that prices would increase if private sector companies took over, because the have to make a profit, is frankly rediculous.

The outsourcing goes on big time. Most large Irish companies like SISK are nearly entirely government business. Who is probably going to get hurt the most in the cut backs is private companies whose main business is government contract work.

That's the only way I can see the government making the savings they claim. Billions that are being spent annually are not only going on public sector wages. A lot of that money goes on private contractors. Doing everything from providing food to the hospitals, private ambulances, window cleaners, civil engineering companies. A lot of people working in places like hospitals are only contractors for the health board. They don't appear as civil servants in the employment figures.

There are lots of sweetheart deals and shenanigans between the government serving private sector and the public sector.

It's hard to tell what's going on. A few years back we had one of the most expensive and well funded health systems in the world but our international rating was lower than Estonia. We're way higher in the league table now - but they were at one point just throwing money around like snuff at a wake.

The country is full of multi-millionaires who made all their money from inefficient and pointless government contracts. Unions do not come into it.

A friend who worked in one of the hospitals. The hospital paid for an entire wing to be painted, weeks before it was to be torn down. Again unions did not come into the equation. Private contractor, private enterprise.

And it goes on and on and on. Councils paying exorbitant rates for plant hire when they could just have bought the equipment for a fraction of the rent.


We'll see what happens. We're in for a few crazy years.

sarumite

krd wrote: »

I don't know. In large private companies there are as many pointless administrative staff as you'll find in the public sector. It's just the way bureaucracy works. Big companies like to look big and corporate - so they'll hire lots of admin type people, they don't need, for the look of the place.

I would agree to a certain extent....although if that big company is facing bankruptcy it won't be long shedding unnecessary jobs.

krd

sarumite wrote: »

I would agree to a certain extent....although if that big company is facing bankruptcy it won't be long shedding unnecessary jobs.

If it comes to the point a big company is facing bankruptcy, generally they've got there through very poor management.

And that management will generally try to save their own asses and whatever political set-up they have. So it's enemies and threats first - unnecessary workers next.

I've been in companies that have seriously downsized. (And I've seen this happen in other companies). Where whole departments have vanished and managers have been retained even though there wasn't anything left for them to manage.

The idea of creative destruction is kind of true. But there is a cycle to it. A company starts off - and maybe does really well. They hire more people - they get infected by what a corporate big wig I used to know called 'the rot'. The rot is bad management - bad bureaucracy. It can go on for years before the company collapses. It can be a long painfully drawn out death. It mightn't even kill the company.

It can get get like the Soviet Union. All politics, nothing working. When it came down to it, the Soviet Union didn't collapse because of some abstract idea. It collapsed because they tried to run the place like a big corporation. They thought they could run it like Henry Ford's car plant. And even in Ford's car company the rot set in - and for a long period the company was in a state of collapse.

There are no quick fixes or easy solutions.

The staff cuts in the Public sector will not be a case of getting rid of the lazy and the dead wood. It will be the lazy and deadwood getting rid of anyone who's a threat to them. That's part of the rot.

pissants

krd wrote: »

What makes you think private companies would have any more interest in providing infrastructure than a state company.

they don't - that was the point.

westtip

krd wrote: »

I don't know. In large private companies there are as many pointless administrative staff as you'll find in the public sector. It's just the way bureaucracy works. Big companies like to look big and corporate - so they'll hire lots of admin type people, they don't need, for the look of the place.

this is a very good point I have worked in both large and smaller private sector companies, however large corporations do have culls and can make the choice to make people redundant - it seems in the PS we only have th voluntary option. Huge swathes of people can be cut out of a lot of private corporations and this does happen, in particular after mergers for example. the regional health authorities merged to become the HSE did we see one enforced redundany, in the private sector this is the first thing that woudl have happened as one of the key cost savings ideas in a merger is the mergins of shared services like sales and marketing and IT. In the private sector this is called delivering Share holder value - in the public sector the share holder seeking value is the tax payer. Take my simple example of issuuing driving licenses - why on earth is this process duplicated across all our councils - make this a central service from one office nationally and lets get it outsourced, we are a small country and we need tighter more cost effective public administration, You see the mindset in the PS - and I fully understand this - is about reforming existing ways of doing things - what we need from the PS is a whole look at why we are doing things (like issuing driving licenses for example)