May 18, 2008

A very public problem

Posted in Celtic Tiger · 40 comments ·

If we want a lean and more efficient public sector, why are the jobs pages littered with civil service positions?

Have you noticed the language used by employment agencies these days? Every dream job is exciting, attractive and offers a ‘‘once in a lifetime’’ opportunity to change your life. Every ideal candidate needs to be bright, creative and energetic.

Sometimes, you’d be forgiven for thinking you’re reading a lonely hearts column. Effusiveness aside, the jobs’ pages do offer a snapshot of the economy.

As this column is based on the most rigorous and up-to-date economic measurement techniques, let’s look at one of the country’s most prominent jobs’ supplements this week, to read a few economic tea leaves. Every Friday, the Irish Times jobs’ section purports to host the best jobs in the land, and as it claims to be read by nine out of ten senior business people, this section offers us a glimpse of what is available at the top of the tree.

If the Economic and Social Research Institute’s (ESRI) latest prognosis is to be believed, and Ireland is set to become a lean, fit machine with a pared down, stream-lined public sector and a dynamic service exporting sector, we would hope to see some indication of this in the jobs’ pages. An economy that is on the cusp of an exporting boom, in the creative services sector, must surely be looking for senior managers to execute this.

So, I counted all the big headline ads in the jobs section on Friday, expecting to see evidence of dynamism. The good news is that there were plenty of jobs – twelve pages in all. The bad news is that 85 per cent of them were for public sector positions. Admittedly, I only counted the larger, expensive looking ads, as they are obviously designed to catch the eye.

In all, there were a respectable 77 ads for senior positions. Astonishingly, 66 of these were in the public sector. Apart from an isolated Ryanair ad, one for Pfizer and a couple from financial institutions, practically every position was either for the civil service, one of the universities, public bodies or a variety of different state ‘agencies’ that have been set up in the past few years.

Who is going to pay for these people? Think about the figure again – 85 per cent of the jobs advertised this week are in the very sector that we are supposed to be cutting back on. In fact, in the first eight pages of the jobs’ supplement, there were only five private sector jobs. This is a joke.

For an economy that is trying to avoid being completely dragged down by the most wasteful property boom the western world has seen in years, the last thing we need is for the public sector to be expanding.

This article is not a rant against the public sector; countries need strong public sectors, staffed by talented people. The issue at stake here, is to understand what is happening in our country – and our labour market.

‘The Irish Times Job Ratio’ — to give my ramblings a grandiose title – suggests that there are eight times more senior jobs being sought by the public sector than the private sector. So, we are having a recession in one part of the economy – the part that earns money – and a boom in the other part of the economy – the part that spends money.

This is a recipe for bankruptcy. To achieve the economy which the ESRI wrote about the other day, it seems logical to suggest that the Irish Times Jobs Ratio (‘ITJR’) should be going the other way.

If this continues, Ireland will be faced with a serious twin deficit, as the current account deficit balloons further and the budget deficit explodes. Just a word of warning from the past: in the early 1990s, when Finland experienced a property market collapse, its budget deficit went from a surplus of 2 per cent of GDP (the value of all final goods and services produced in a nation in a given year) during its boom, to a deficit of 11 per cent of GDP when the economy slowed.

The reason for this was that the entire budget strategy was geared to the property market, and the resulting surge in consumer spending, which itself was driven by enormous personal borrowing.

A figure published by the Central Statistics Office this week reveals that we are in a very similar position. According to the statisticians, total personal indebtedness in Ireland is now running at €194 billion.

About €140 billion of this is in mortgages, leaving an outstanding €50 billion odd in debts built up to buy cars, holidays and Jimmy Choos. If we add the indebtedness of Irish firms to this figure, we get a total private sector debt figure, at the end of March, of €384 billion (published by the Central Bank).This is well over twice our GDP figure.

When people are borrowing so much money, it is easy to run a budget surplus, simply because so much of this borrowed cash finds its way back into the government’s coffers in taxation. The corollary is also true. When the borrowing stops, tax dries up and the budget plummets into deficit.

Therefore, the Irish government’s budget – the figure so many commentators get worked up about – is only a residual in the equation. When the people are borrowing, the surplus is huge; and when people are not borrowing, the deficit is huge. So, we should expect the mother of all deficits in the years ahead, as the main engines for revenue, house price taxation and consumer spending, fall away.

Last week, we saw further evidence from both of these crucial areas. Retail sales fell by 2 per cent in March, while the first-time buyers market has ground to a halt. This situation is likely to get worse. Who would buy a house now?

Another interesting figure that came out recently, is equally worrying. In the first quarter, the buy-to-let mortgage market grew by €1.1 billion. Now, who is taking out these mortgages? In the past, the buy-to-let market was driven by small-time, amateur investors, who bought on the expectation of ever-increasing house prices. As this chimera evaporated, so too has this type of investor – who, during the boom, accounted for over 27 per cent of the total mortgage market. So, who is buying now?

Worryingly, the only buyers in town are those who have to buy. It is, therefore, not inconceivable that the people who are buying to let are the very people who own these apartments in the first place – the developers. This is a hunch, but if it turns out to be true, we are in for an awful ride in the next two years, because this is not borrowing from Peter to pay Paul, it is borrowing from Paul to pay Paul.

All the while, the ITJR points to recession and a bloated apparatchik class who spend, rather than earn. If you want a quick snapshot of the economy and to see beyond all the blather, all you have to do is scan the ITJR every Friday. At the moment, the ratio is 8:1 for the public sector.

No economy ever got rich by expanding the government’s payroll, so now, the ITJR is saying that we will fall off a cliff. Let’s watch the ITJR every week from here on, to see where the economy is actually headed, rather than where some people would like to see it go.

  1. One of your finest articles David.

  2. Donal O'Brolchain

    I think you need to refine your Irish Times Job Ratio (ITJR). It is too simplistic. It is obligatory to advertise many public sector jobs. This is not so in the private sector. I have heard it said that only 40 per cent of prrivate sector jobs are advertised externally. Internal promotions (also done in the public sector), head-hunt agencies, personal knowledge and incentives to employees are used much more frequently than in the public sector. In refining your Job Ratio, check the announcements of new people to positions in private companies (eg.Financial controllers, sales and marketing managers, partners in professional practices, trade uion and NGO officials, etc) against how many of those jobs were advertised in the Irish Times. Similarly, check the number of new civil service promotions that were never advertised outside the civil service against announcements of promotions/transfers of those same jobs. In this respect, both sectors (yes – there will be issues of definition). Compare this with the situation in local government, healther services eg. Council engineers, planners, senior managers, town clerks etc., where there seems to be a much more rigourously followed protocal for public adverstisement. At a time like this, it is good idea for the public sector to seek new people who have considerable experience of the private sector, particularly at senior and professional levels. Such experience could actually promote the kind of lean and efficient public service that you suggest we want. Lastly, how important are the printed media given the widespread use of the web for advertising job vacancies, in any sector?. You need to do a lot more thinking about your ITJR.

  3. Rob

    Donal, I think David is a spot on. I have fairly extensive knowledge of the public sector and know that there are many over-glorified senior positions carrying big salaries and big titles within the public service where people don’t do a whole lot. Think about it, it is now being mooted that the HSE can cut 1000 jobs and still presumably function!! It is reported that there are far too many senior managers in the HSE and I suspect throughout the entire public service.

    The fact is that many of these senior people have angled themselves for a promotion for years and perhaps feel they deserve it. Thats all very well but if in reality these senior positions are not needed then these senior positions should not exist. It may be tough but the reality is that a public service job contract is virtually gold-plated and is now only one of the types of job contracts being taken as secure by banks in lending mortgages. Not to mention the great conditions that go with them. The problem with an excessive public service swollen with over-paid positions is that they are in export terms, non-producing and really do nothing for the wealth of the country. Is Ireland meant to exist in the future with loads of well-paid public service jobs while its industries cease to exist. How exactly will that work?

  4. Donal, I agree that the ITJR is a neat idea that’s perhaps misleading because of HR policies in state versus private organisations. Also, it’s difficult to create a general rule from such a small sample (1 day) but it does give cause for alarm that there are so many senior civil service positions advertised on a single day in a small country, regardless of the ratio to private sector jobs. Are they an acummulation of unfilled positions over a number of months? If so this points towards a difficulty in filling these positions with satisfactory candidates and a lack of satisfactory candidates within the civil services themselves. If it’s not an accumulation then David’s position appears justified. Either way, there’s a problem. Also, advertising the positions in the papers is merely one part of a fair recruitment process. There are no guarantees that experienced executives from private sector are actually being recruited into any of these jobs, just that a process that mandates public job advertisement is being followed. To address the larger issue, a move from budget surplus to deficit is a much needed reality check for a government that simply didn’t understand the precariousness of their economic position and took that lack of understanding into many civil service pay agreement negotiations. The end result is that Ireland Inc. is organised for good times only with massive administrative overheads before we export a single euro of goods or services. Somebody should leave a copy of “The Wealth of Nations” in the Dail. Instead of instituting more daft knee-jerk economic policies (increasing VRT with pseudo environmental justifications) they could form a study group and try to understand the basic elements required for a successful free market economy. It seems we’ve forgotten them, if we ever really understood them…

  5. Billy Waters

    I have a friend who was interviewed NINE times by separate arms of the HSE for the same job in different regions. Each time by a minimum of three people. Including the people that send the letters and service the administration of the HR “function” of the HSE this is minimum 40 people. This does not include the year long illogical and wasteful process of getting her credentials validated. Illogical in the way the do it not for doing it.

    Farcical. The HSE is an insult to each and every one of us.

  6. Garry

    Excellent piece of original thinking David.

    Donal, you raise some valid points. But there is stuff to ponder, even if private companies have long given up on newspapers for all but the most senior positions, so why should the public sector also not get with the 21′st century? A simple wiki would allow each department to enter their positions and update them… it would become a goto site for anyone looking for a job …. Lets pretend that the public service was ran on a commercial footing…. The fact is revenues are well down this year, the reflex reaction from any competent CEO is an immediate hiring freeze and probably a 10% staff cull. Any bureaucracy gets fat in the good times, public or private.

    Of course, we can’t just shut down hospitals and schools; it is after all the public service and some (most?) of the money is spent on worthwhile stuff. But why do we have a hiring freeze on the coalface jobs and obviously not on these others?

    Heres another one for you David…

    How many ads on both RTE and commercial broadcasters are public service in nature? It seems these days that I cant switch on the tv/radio without someone telling me to ask doctors to wash their hands, what a tracker mortgage is, to look after my mental health, how Enterprise Ireland will support startups, that I can change my health insurance, what a wonderful job the fisheries regulator is doing…. the list is endless… It seems like ads which were once exclusively reserved for flogging stuff are now used as public service announcements. Indeed the disease has spread to junk mail; Im getting useless booklets telling me to stay indoors and listen to the radio in the event of a nuclear accident; flooding or some such…. I wonder what the overall budget for this stuff is?

    In the last few years has someone discovered that instead or actually providing staff at the coalface and real public services, its actually much less hassle to spend the money on advertising/marketing and proclaiming to the world what a great job you’re doing…
    The cynic in me sees that large advertising budgets can be a powerful weapon against media criticism… I know I wouldn’t advertise with a radio station or newspaper that continuously exposed the facts behind the marketing…

  7. Rob

    Shane’s point is excellent. Ireland’s public/civil service has reached a stage where it is geared up for operating in surplus cash-rolling times. Now we a have monster that has to be fed and in the meantime cash revenues are drying up. I am all for a lean efficient well-paid public sector but in my view the situation we have created is unsustainable. We have a swollen public service, that isn’t terribly inefficient, (too many layers of management, all the time spent in meetings etc, nothing actually done!) and is costly.

    Practices that i know occur in the public/civil service would make the hairs stand up on the back of your neck The practices in relation to sick days for example in certain sectors is a long-running joke. If this is the road we are heading down we want to make sure we are stuck very close to the teat of Europe. They may be the ones we need to bail us out……

  8. Rob

    that should have read ‘isn’t terribly efficient’…..

  9. Garry,

    You could be onto something. Newstalk (Brenda Power) really gave to the HSE recently. Kept hounding Brendan Drumm for a response on a specific case of incompetence (we don’t have space to list all of them).

    The upshot was that the HSE threatened to pull all advertising from Newstalk as a result (I don’t know if they’re still black listed?)

  10. Johnny Dunne

    David — given the ‘bloated’ public sector and the ‘debt mountain’ the ESRI are betting the future of the economy on the growth of ‘internationally traded services’ which is not a high employment sector like the domestically traded services. There has not been significant numbers of senior management positions in internationally traded service companies since the ‘dot com boom’, the reason is we don’t have many indigenous companies growing fast as most are in survival mode. We have very few internationally traded services companies of scale (with revenue greater than €10 million) and many of those that have grown are selling out to US multinationals in the current environment. I met the owner during the week of Czech company who does the majority of their ‘service’ business with Irish based multinationals from offices in China and Argentina! Founded in the late 90’s, they are very profitable with revenues of $40 million from 500 highly qualified mainly graduates, no Irish based company could achieve this with current costs here. Why are these type of companies not headquartered in Ireland – then the Irish Times would have more real sustainable jobs ? If not, we will be left with the Microsoft/Google engaging 100’s of contractors at the end of accounting periods to process licences / invoices from around the world — value add ?

  11. Garry

    Interesting Paul, I knew Brenda Power/Newstalk were ringing various bureaucrats/press officers live on the air on behalf of people who couldn’t get answers themselves…. I was wondering how that would end up as I couldn’t see government departments and their staff putting up with that for very long. (to be fair it is open to abuse and would probably mean that priority would be given to the case on the radio… but it’s no harm for a government department to be publicly accountable)

    Do you know if the HSE actually threatened to stop advertising or carried out the threat? I reckon their advertising budget must be similar to Guinness or other major advertisers here so even the threat would be enough.

    The media live on advertising so I cant see journalists being allowed to do a piece on the public sector advertising budget; it’ll be much easier to get the numbers for biffos makeup bugdet and take the piss on that.

  12. Vincent

    Good one.

    But, given that the ad’s are there, then the jobs are currently empty, as in not filled from inside the CS. A good thing surely, one would think. I do not blame the CS one little bit for being a bit of a stone, when there are any number of conflicting ideologies and no clear vision. one would think that with a population this small that getting all the horses pulling in the one direction would be easy. But it’s like getting a family on holiday all smiling at the same time.

  13. MK

    Hi again David,

    Your analysis is correct BUT the data you use is not correct, as was pointed out, as the Irish Times jobs ads cannot be used as a definitive barometer of job vacancies across the public sector and the private sector. A wholly unscientific tow in the water I’m afraid.

    One thing you say is true: “This article is not a rant against the public sector”. It should be. The public sector has been and remains a growing problem for Ireland – it has dragged the county back in the past when the private sector hasnt been able to keep all afloat and it could do so again, as not only the number of positions have ballooned, but also the salaries have become huge and are out of whack in comparison with the private sector average. Pensions will also be costly going forward. This is a Public Sector Balloon!

    The politicians of this county have alas (although not unexpectedly as backbones are removed at birth) pandered to their public sector brethern and have effectively handed them huge real-term increases way and above their worth when internationally benchmarked. Take hospital consultants as an example.

    I know people who have left the private sector to join the cushy public sector which has better salaries, easier jobs, less hours, better conditions and better pensions. They invariably become lazy after a couple of years and just see it as a cushy number for life, less stess, etc. The only “difficulty” they face in the public sector are the internal office politics which are seemingly more rife than the private sector. This is where they are really putting their daily energies, the chatting at the coffee machines, the relationships with others, who sits with whom and where for lunch, etc, etc. They are more worried about that than what they actually do they are all under-performing and to boot they actually know it as well! Its not that there is more internal pilitics than the private sector its just that a) there can be more benefit from participating in it and b) they have more time to do so. They also care little if they will ever be intellectually unchallenged for the remainder of their lives and they become immune to their lack of service delivery to the public sector – they dont care. Some are also public sector lifers and no no different, and like people that received social paymenst and benefits such as dole, free housing, etc, they see it that its natural for the state to provide such a job and they cannot even understand the problem. As you can see, public sector reform is a difficult problem.

    Your warning about tax and Finland is appropriate. Ireland has too quickly gone from a surplus to a borrowing situation and the first whiff of a change in economic momentum. It is crazy really. Its a bit like the alcoholic starting to borrow money whilst the party is still going and just a few people have left. This is far form the tough times yet we are already using a safety net.

    Long term the private sector workers will bail everyone out by their ‘flexibility’ which will be enforced by market conditions. ie: jobs lost, conditions eroded, etc, etc.


  14. Rob. Agree with you. In many cases the bloated number of public sector employees is more problematic than their level of pay. The public sector paradox is the number of administrative staff required to dot i’s and cross t’s of procedures which are put in place supposedly so they can ensure the public are getting value for money. It’s a typical “apparatchik” tragicomedy, to use David’s word. Now the government has to react and the only option is layoffs and pay freezes with the inevitable union faceoffs. Johnny Dunne raises an interesting point about the kinds of businesses we can operate successfully in this country. A huge disincentive to enterpreneurship is a high cost base. Contributors to this are high taxation (direct OR indirect), house prices etc. We’d be better off freezing public sector pay and lowering taxation, especially on cars and property which translates itself into debt. The private sector can adapt more quickly. Equally no more increases in the minimum wage should be put in place for a few years at least. National borrowing will arguably have to increase in the short term to permit economic change without chaos. I run a retail business among other things and the message I’m getting from other tradespeople is that after Christmas there’s been a collapse in buyer confidence. The “soft landing” message isn’t believed. We need to kick start sensible spending and encourage investment in indigenous industry. Enterpreneurship (outside property development) needs to be fostered and promoted. If we don’t do this soon we’ll have many backrupcies and steep rises in unemployment figures.

  15. fergal curran

    To David,

    excellent article and you are stating the simple truth. If someone like you was listened to the problems which may well arise could be managed better. Prevention is better than cure regarding our health and the health of the economy.

    How will ireland boom in the future?
    here is my thoughts. A vision in place followed by action.
    1) Energy needs. Solar, wind and sea power i believe is the future. A country which secures its energy needs will prosper. of course this takes vision and action.
    the techology would then be sold to China and India to create the wealth. It takes a lot of thought and complex detail but Ireland can do it.
    2)Your lean mean fighting machine public sector is the way forward…then money reinvested in renewables to create future wealth.
    3) new thinking on working from close to home. commuting costs minimised. Money saved money earned.
    4) ideas from business, web 2, web 3 and future thinking..embracing change… ireland has a bright future but as you say it really needs to use a business model… earn first then reinvest and save where possible.

    just wish you were leading this truly beautiful country

    best wishes

  16. Donal O'Brolchain

    As ITJR is so easily questioned, how useful a metric is it? Will it actually help us focus on how cost-effective the public service is? Will it help us, citizens in a republic, assess the recent OECD Public Management Review of Ireland Towards an Integrated Public Service? I suggest that ITJR will deflect us from checking on how that report will lead to a lean and more efficient public service. Nor do I think that the ITJR metric will in any way dent the evasion of responsibility best summarized as “When you talk to politicians, they blame the public servants and when you talk to public servants, they blame the politicians.” Will the ITJR metric even help sustain an economic cast of mind that does not rely on us creating wealth by selling ever more expensive houses to one another and funding the public service by taxes collected from such transactions eg. stamp duty, VAT? As David is an economist by training and professional experience, I suspect that his ITJR is designed to get us thinking, about how we maintain a balance of public and private sector productive activity on an island with a relatively small population. His reference to Finland suggests as much. Perhaps David’s ITJR and other similar wordsmithing is inspired by Keynes dictum that “Words ought to be a little wild, for they are the assault of thoughts on the unthinking.”

  17. Patrick

    The Revenue Commissioners are coming down hard again on small businesses with tax and vat audits to maximise tax income as the deficit grows. Given that non-payment of taxes is rightly a criminal offence, the corollary should also be true – wasteful expenditure of tax-payers money. The public service is the only body I know where computerisation has led to an increase rather than a decrease in staff ; This is aided by the very structure of the public service.

    For example, what exactly is a clerical officer anyway?? how many clerical officers will you find in a private sector company – instead you have a AP manager or a Sales Manager ie role decribed by function rather than level. This makes it apparent where there are too many heads for a specific area. By lumping everyone into a generic level you cannot tell who does what and how badly they are needed. The Dept of Agriculture has seen a massive reduction in administration of EU payments (more taxpayers money but that is a different story!) with Single payment mechanism, -how many staff were let go as a result -none to my knowledge(One trade union leader suggested that there were 500 staff in Agriculture who were underutilised and could be used to help reduce the driving license waiting lists – alas the staff were found to be unsuited to this role -which makes you wonder what they are suited to).

    You cannot blame public sector staff for protecting their interests – this is human nature. But the highly paid and protected senior staff need to be incentivised to reduce waste. Trade unions need to accept that when a role is not needed the saving should be passed to the taxpayer and not nullified by “redeployment”. As this is anathema to trade unions views of protecting their members interests, the only realistic way to do this by way of a law or regulation – but aimed at the public service rather than the rest of us…

  18. Guillermo

    Hi David,

    Nice article. I haven´t read the Irish times, but it seems to me I was reading the newspaper in Uruguay. Should I understand Ireland has choosen the uruguayan model instead of the swiss model ? . When once you asked what happened in Uruguay, it was what you described in your article. Basically, loads of civil servants. Since then, 60 years ago, we are in the “third world”, and still there.

    Best , from the south

  19. Roy Keane

    Lets hope Leeds lose their play off final, best of luck to the real United, Manchester, a real club.

  20. Philip

    Was looking at the Indo today. Rent down 2% and no one buying property? Hmmmm…anyone decide to check with Aerlingus/RyanAir to see the number of one-ways being purchased.

    I can tell you one thing for sure, none of them are from the public service. I figure a lot of the buy to let were purchased by wannabe landlords from the p’service. So they’ll need a wage hike to cater for lost revenue. And fair doos I say – if they can get away with it.

    What I find very telling about the ITJR is the extravagance of the ads and the nonsense expounded about the depth etc of the job. Not one of these positions are accountable as no one gets fired and none get fired (aside from murder, theft and other trivia) becasue you cannot have the government of the moment choosing their public servants every 4-5 years…and WHY NOT (for areas aside from police etc. which have more flexible off-roll mechanisms as well). Private sector tenure for a typical job is about an election period. Something Cowen should think about maybe?

    What irks me further is that the interview boards are anything but non-biased. There boards are drawn from independents we are led to believe, but what happens is that those independents better fall in line with the opinion of the chief interviewer or they wont be let in on another board. The notion of public open competiton is complete disingenious rubblish.

    I am all for a competent public service. Get it run like a private operation and end this nonsense.

  21. Malcolm McClure

    As Shane Dempsey said, “The “soft landing” message isn’t believed”. Not even by Jean Claude Trichet, the president of the European Central Bank, who has warned that the worst of the credit crunch has not passed and the economy was still heading for a “very significant market correction”.
    If things get really bad, there is no mechanism in place to bail out the ECB.
    Richard Baldwin, professor of International Economics in Geneva says that under current Eurozone rules, each national fiscal authority stands behind its own central bank, but no fiscal authority stands directly behind the ECB. The lender of last resort function is assigned to the ECB’s members.
    Baldwin continues: “But who stands behind the ECB as its recapitaliser of last resort?
    Not the European Community. It has a tiny budget and no discretionary taxation or borrowing powers. Presumably the burden would fall on the Eurozone national treasuries, but in what proportions would they participate in the recapitalising the ECB, should the need arise?”
    We are going to need lots and lots of Civil Servants to work out the answer to that one. If they fail to come up with one, then we can send them round the world with begging bowls to replenish their pension funds. (Because there won’t be anything left in the government’s kitty.)

  22. Billy Waters

    Why do we need “lots and lots of civil servants” to work it out? Are they not the leeches causing the problem?

    The public “service” is too large in middle to “senior” people and lacking in frontline people.

    The impression they give is scruffy, gruff and impenetrable. Like they are doing you a favour by talking you.

  23. Stephen Kenny

    It’s very difficult for a Public Service to be efficient, mainly, I think, because they don’t have goals which are aligned with our interests, and when you try to create aligned goals, you siimply end up with a ludicrous, unforseen, farce. The UK had a beautiful example: The Unemployment service, about 8 or 9 years ago, was incentivised to get people off the unemployment register, i.e. the official unemployment figure. Of course the idea was to get them employed. What happened was that over a 4 or 5 year period, all the public servants hit their targets, bonuses all round, and the number of people on the incapacity register (not working due to some sort of incapacity – sickness, bad back etc) went from 0.5m, to almost 3m, and they had the paperwork to prove it.
    The difficulty was that the staff in unemployment offices don’t actually control jobs, so it isn’t fair to link their incentives to something beyond their control. Of course, the conditions of the goals could have been better thought out, but then that’s carried out by some other group who don’t have their interests suitably aligned. Also, I doubt it’s possible to create conditions, which aren’t longer than a commercial property lease, that would work. Finally, who’s going to be analysing the performance of all these complicated incentives and their unholy conditions?
    The television programme Yes Prime Minister described it best for me: As well as for themselves, the dept of Education is run for the teachers, dept of Health for the doctors, Defence for the defence industries, and social services for the social workers. We, the poor dumb tax payers that we are, just don’t figure.

  24. Lonely Expat

    When private companies go belly-up, senior management is fired. Interim management takes control. Interim management’s main tasks are twofold:
    a) find and hire new management, who shall then
    b) implement a successful turnaround

    Headhunters advertise for new management. This process may well describe David’s ITJR phenomenon, which would imply that the public service sector is on the cusp of turning around the Irish economy. Then again, it may be pure fantasy.

    If so, Ryanair might not be a bad buy.

  25. coldblow

    While I agree that the public service is a big problem I think we might be losing the run of things a bit here.

    The present global financial crisis was created by the private sector which had browbeaten the rest of the world and its elected representatives (and an obliging press and academic establishment) into swallowing a highly dodgy belief system as justification for self-enrichment on an eye-boggling scale. Let’s take Northern Crock for example. Was senior management fired? I haven’t followed this since, but I doubt it.

    One of its central beliefs (even the events of Great Depression couldn’t bury it) was that private is always best, in all circumstances. If you believe that, you will also believe (to take just one example from a million) that the recent launch of the new terminal at Heathrow was a triumphant success.

  26. sinead kelly

    Why are there so few jobs for school leavers’ and college grads advertised in the papers’?.55,000 school leavers’ will be leaving the education sector within the month, but why are employers’ not falling over each other to hire them?.Easier to get ready made immigrant staff with lots of experience perhaps?.

  27. Barry

    Sometimes you just dont want to do the hard work of research so instead you come out with simplistic analysis like this piece. We dont have a huge public sector compared to other OECD nations-go look it up David. The Public sector must advertise everything and they also create panels where successful applicants can wait months to be called up. Then sometimes bodies like the HSE dont go ahead with jobs. I think you spread yourself too thin David. I know you are on big bucks now but you must do some genuine research. Its not all about being witty or buzz wordy!

  28. Hi Barry,

    Maybe you didn’t realise that the line at the top of the piece “As this column is based on the most rigorous and up-to-date economic measurement techniques” was meant to be a bit of a piss take at myself. Of course these ideas are simply constructs (in a 1000 word article) aimed at shedding light on what is going on in the society not as academic paper for the Econometric Society!

    Equally, the piece made the point that this was not a “rant against the public sector” however, the two fastest growing employers in the State in the past two years were construction and the public sector and I’d prefer if this was not the case.

    As for the OECD stats, I suggest that these figures might legacy issues from the 1970s and 1980s combined with a very slow labour force growth in the past ten years to 15 years.

    On the genuine research point, can you recommend a good Irish economic researcher who is doing meaningful work at the moment? I would be genuinely delighted to publicise such stuff. Best David

  29. naesa daly

    David is right but he forget to mention that people working for the Govt earn 50% more than staff in the private sector.France has a higher proportion of total employent acccounted for by the Govt but earn 10% less than their private secor colleagues.Staff in the Irish health service are the highest paid in the world and make on average 70k per annum!.A cop in New york starts on 32,000($) p.a..Ireland is one of the few places on the planet that does not have to import teachers, the starting salary of $55,000 p.a explains why.Cest la vie.

  30. sara jansen

    David is right but he forget to mention that people working for the Govt earn 50% more than staff in the private sector.France has a higher proportion of total employent acccounted for by the Govt but earn 10% less than their private secor colleagues.Staff in the Irish health service are the highest paid in the world and make on average 70k per annum!.A cop in New york starts on 32,000($) p.a..Ireland is one of the few places on the planet that does not have to import teachers, the starting salary of $55,000 p.a explains why.Cest la vie.

  31. Donal O'Brolchain

    “If we want a lean and more efficient public sector”, would we pick the 9 person taskforce that has now been appointed? The only possible merit is the group size and perhaps, the timescale. Of the 9 people, 5 are currently senior civil servants, 1 (an “academic”) is a former Secretary of a Government Department and 3 are currently in the private sector. I have not checked out the CVs. But I would not be surprised to find that of the senior civil servants, most have Dept. of Finance backgrounds. This certainly lacks balance and experience, whatever about the intelligence of the members. I predict that those aspects of the OECD report (on public service reform) that reinforce centralisation and secrecy will be implemented quickly. The executive side of government will take more power, without any countervailing balancing measures being put in place. The ITJR metric will not measure this. Let me suggest that Roy Campbell’s verse offers some insight into what David was trying to get at
    “You praise the firm restraint with which they write.
    I am with you there of course.
    They use the bridle and the curb, all right.
    But where’s the bloody horse?”
    Transport in Dublin is an example of the lack of competence of central government to find and harness horses!

  32. Johnny Dunne

    “We dont have a huge public sector compared to other OECD nations”

    We have been taking research from the likes of the OECD at face value and not interpreting relativities…

    We may have a low public sector spend as a % of GDP (‘uniquely’ inflated by transfer pricing multinational exports and private sector and personal debt fuelled spend). I hope this is not interpreted by ‘decision makers’ that we should spend more in the public sector as a % GDP like Sweden and Finland who have significant indigenous industry and companies such as Ericson and Nokia. If we were to try to catch up with them in % terms we would need to spend approx € 100 billion per annum !!

    Could the ‘real’ case be we are not playing catch up anymore but have overshot all other economies ?

  33. Stephen Kenny

    One of the problems with OECD figures on public spending (I’ve cheated, I’ve looked at their site) is what, exactly, constitutes public spending: Do you include local government spending? How about things like telecoms? Pensions? Postal services? Care of the elderly? In some countries things are done through insurance & savings, while others go the general taxation route i.e. public spending; Railways? How do you account or the sale and lease back deals that some governments love so dearly?
    Using job ads is a pretty well established approach, it’s certainly used by financial analysts trying to see through the fog of spin, and simple dishonesty, that surrounds government statistics.
    It seems to me that the only necessary addition to David’s ITJR is a benchmark, taken from a bunch of editions from the last 10 years.

  34. The Health bureaucracy and the Civil Service are un-reformable. No political party would have the balls to seriously attempt it. The power of the unions is absolute. Political suicide is not a game that any of the politians will play.
    Ronald Reagan sacked the air traffic controllers en masse because he had the military to keep the service going.(The CIE train drivers merit the same fate otherwise the blackmail of public services will continue.)
    Margareth Thatcher once defeated the miners because she had nuclear power to maintain service.
    The ESB unions rule absolute. The CIE unions rule absolute.we dont have engineers capable of running power stations, or a group of trained train drivers in reserve.Even if we did the blackmailing unions power would bring the nation to a standstill.!
    The Aer Lingus unions are an example of a similar unwillingness to accept change-even where they own a chunk of the company, and it’s very survival depends on change.
    Even if the present government were other than an incompetent self serving administration, determined to retain power at any price, I see no light at the end of this tunnel.
    By the way, David your piece in today’s Sunday Business Post is probably your best and most concise analysis yet-well done.

  35. Last time I checked we were a small country with a low population density and most services centralised around one large urban area. I wish this wasn’t the case but as it stands our public service needs are not directly comparable with a large country like France with much greater population distribution, industry and infrastructure. Also our infrastructure, such as it is, was not developed by years as a colonial power. I don’t want to oversimplify things but it would seem that we’ve been operating as a country with abundant national resources and global industries which would prop it up in the event of a down turn. We’re not and our public service needs to be right-sized.

  36. Rob


    I think if you check more train line was installed and operated by
    the Brits in Ireland than we in fact did. There would have been more
    track operated in Ireland in 1908 than 2008. The people of Mayo, Galway
    Sligo, Limerick are still waiting for the track there to be opened. It won’t
    happen now as there is no money in the kitty. The biggest innovation
    in ireland, well one of them was the Luas line in Dundrum, yet this was in
    reality the re-opening of the Harcourt Street line closed in the fifties!

  37. David, your article has a kind of “John the Baptist” ring to it.
    It may be spot on, but thank God the Fianna Fail high priest-politicians, dont have the power to behead you.!!
    The end is nigh.(they will probably still be re-elected.Look at President Mugabe.enough jobs for the boys-enough votes for the party!)

  38. Rob: We have a similar situation in Waterford where there’s talk of a railway lie running from Waterford to Tramore (population nearly 10,000). I’m not sure it’s serious, just discussions about light rail as a way to ease traffic congestion. There was a line in place for around a hundred years, originally operating as a commercial rail system and paid for by Waterford business people (see It’s arguable that the richest were merchants and their wealth came from the colonial power that was the British Empire.
    Closing it was another CIE master stroke. Without wanting to sound overly paranoid, it’s amazing how poorly the dublin-centric public sector has served other regions. CIE is a special case however of an organisation which took one of the few pieces of infrastructure we had and run it into the ground. However, I’d argue that if we’d have been a colonial power ourselves then CIE may have gotten a better start.

  39. laura

    You don’t point out that a lot of these “jobs” are only open to existing civil servants or very specialised roles with particular qualifications. I do agree, however, that a lot of private sector jobs don’t get advertised, or, as was the case a few years ago when companies dealt with multiple agencies, the same job can be advertised dozens of times by different employment agencies as well as the employer themselves!

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