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Report of the Local Government Efficiency Group Some Perspectives

John O’Connor Head of Finance 8 October 2010

What is Local Government? • “Local self-government denotes the right

and ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibilities and in the interests of the local population” - Council of Europe Charter - Article 3.1

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

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

Irish LG –v-International Exp • Very limited range of functions • Extensive centralised controls • Limited range of local financing sources • No widespread local property tax • No widespread water charges • No significant role in local development

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

Local Government Governance and Compliance Environment • Regular public Council meetings • Mandatory statutory functions and prescribed • • • • • •

methodology Acting in the public interest Judicial review of decisions/Mandamus Orders EPA/HSA Ombudsman Freedom of Information Detailed Audit Regime

Local Government Reports • Current Report – latest in a long list • Common theme and outcome – funding base • • •

not structurally reformed Local Government Administrative Structures closely linked to Democratic Structures Terms of reference for current report did not extend to review of Democratic Structures Democracy –v- Efficiency

Efficiency Review Report • Report worthwhile and offers agenda of measures •

to consider and work-through Found Local Government: - was generally well run – had embarked on innovation – had engaged in shared services

• Recommended: – – – –

Reductions in staffing Procurement efficiencies Operational efficiencies Cost Recovery and Revenue Generation measures

Recent Adjustments • • • • •

Expenditure reduced by €300m over past 2 years. Staff numbers reduced by 3,000 Impact of reductions evident in many service areas. No infinite ongoing reductions possible without severe consequences for services – ever higher prioritisation. So far and despite the reductions, the LA Sector through prudent management at both elected and executive levels has avoided any regular mention because of service difficulties, in the main evening TV news bulletins even though the sector is responsible for providing many essential services on a 24/7/365 basis and the many implications of that.

Budgetary Responsibilities • Each year LA must adopt balanced budget to


fund maintenance of its statutory public services at a reasonable standard and pay any legally due monies. This is a statutory requirement to be met. Legal duty on Manager to prepare draft budget on like terms.

Procurement Recommendations offer good blue-print for further innovation and work in this area. Supplier management very important to avoid the inadvertent creation of monopolies. Role for Local Suppliers and SMEs - they provide valuable service locally - are vital in emergencies - give local employment - pay commercial rates locally Major challenge – how to get best value for the local authority and provide fair competition for the SME/local sectors Government Ministers regularly urge better value in procurement on the one hand and then urge support for the SME sector

Staffing • Manager to “make such staffing and organisational arrangements

as may be necessary for the purpose of carrying out the functions of the local authorities for which he or she is responsible ”. - S.159 Local Government Act, 2001.

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

• There is always need for a critical level of staff to maintain

essential services often in emergency circumstances and/or isolated areas.

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

identity have a major significance. 100,000 Min population target per structure - international experience? To foster and aid local development in the weaker counties the office of County Manager would seem most desirable, if not essential. Flexibility under the “Croke Park Agreement” would likely offer an alternative cost saving measure.

Where Govt. Depts. could help • Report recommends the compatibility of the ICT systems of LAs • • • • •

and their reporting bodies – this would be beneficial. Need for much greater streamlining of returns and questionnaires from Govt. Depts. and state bodies – better co-ordination required at national level. Too many approval stages in capital projects – concentration should be on critical stages only. National fixed price contracts need review in the light of experience. DBO contracts need review, as well. Report recommends that LA housing rent be deducted from social welfare payments at source. This is welcome but such deduction should include LA Housing Loan Repayments, as well, and apply to all Social Welfare payments

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

• Report recommendations are welcome.

Conclusion • The present national economic difficulties mean severely restricted • • • • • • •

budgets for many years to come. Efficiencies through every and all means will be needed to lessen the impacts on service delivery both quantum and quality. Optimising the use of ICT systems will aid efficiencies. Online customer facilities can help in efficiency though this is constrained by the unavailability of quality broadband in many rural areas and customer IT literacy and reluctance. Flexibility and re-organisation under “The Croke Park Agreement” offer many opportunities. The AGRESSO FMS software system is available in most LAs to provide very extensive data to aid analysis and decision making. The changing operational environment requires more extensive ongoing staff training, development and regular skills updating. The present report can contribute to the development of the new operating environment and context.

Thank You

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