However, the costs of maintaining the Public Service have escalated to the detriment of the the productive sectors of the economy. The FOI urges Government to keep this in its overall consideration of reforms in the Public Sector.
This paper will first give a number of Recommendations for reform and then present the Federation's views on the White Paper and the Bill regulating the Public Service.
2. FOI PROPOSALS FOR A STRATEGIC APPROACH TO REFORM
The private sector cannot help but make a parallel between its situation in the global market place and the results achieved in public service reform. Manufacturing and service industry is being asked by its customers to be more efficient and to give reductions in its prices while being asked to give better quality of products and services. Over the years industry had either to achieve success on these conditions or else simply bow out of the market. On the other hand, Public Service reform has been slow in implementation, and wherever some progress was achieved this was done at a higher cost to taxpayers rather than achieving this through increased efficiency and reduction of personnel and other recurrent costs.
The proposed reform process would be useless if it is implemented formally into a law without a plan to give satisfaction and money's worth to the citizen in his dual role as customer for services and as a taxpayer. The FOI insists with Government that the reform should aim for tangible results by aiming for a reduction in expenditure and at the same time achieving higher levels of efficiency in the public service.
In the FOI's opinions there are crucial priorities that need to be considered by Government before it passes a law for the management of the public service, the establishment of Government Departments and agencies and ancillary matters. We note that the White Paper and the Bill presented to us do not address the situation from this angle. We are suggesting the following points for Government's consideration:
A. The Need for a Revised Strategic Role of the Public Service
A re-think needs to be undertaken by Government on the strategic role of the Public Service. It has been proven statistically in several countries that competitiveness and employment gains were achieved in direct proportion to the diminishing level of government activity as a percentage of GNP.
The FOI strongly recommends that the Government will take immediate steps to improve the overall efficiency of the country and the use of its financial and human resources - and that includes especially the public sector's absorption of resources and the influence this has on the economy in general. It also needs to take immediate steps to identify areas of avoidable expenditure, strengthen accountability and generally aim at reducing public expenditure. Unless this is done as a matter of urgency Government will not be able to achieve the desired reduction in the public deficit and the national debt. The effects of lack of action on these fronts is contributing to the overall decline of competitiveness of the economy and of its main pillars - manufacturing and services industry sectors.
The Federation acknowledges the need for Government to remain responsible for:
- providing essential health and education services,
- internal and external security,
- a fully functioning judicial system, accompanied by serious and fair enforcement of law,
- being the arbiter for the re-distribution of income to ensure a measure of solidarity within our society.
- Dispose of its participation in all economic activity of a commercial nature.
- Refrain from playing a restrictive role that hinders market forces from operating, or by default allowing this to happen by letting any stake-holder in the economy to go against the rules of a market economy.
- Allow the private sector to operate freely under all the rules expected in a market economy. The parallel to be followed should certainly be that of the more successful liberal economies in the European Union, like Britain, Ireland and the Netherlands, because our economy is one of the more open ones in the single market.
- Keep in mind that undue regulation and/or complicated procedures cost the private sector dearly in terms of time and money.
B. Operational Parameters for the Public Service.
The areas of operation should fall within the following parameters:
- Deliver timely advice to Ministers on new policy directions
- Manage Malta's relationship with the EU in the interests of our citizens
- Administer the laws fairly without discrimination
- Safeguard the rule of law and afford security to the citizens of this country
- Strive for an efficient level of Service to the public and ensure that the satisfaction of the citizen should be the focus of all its activities.
- Support the private sector's activities and encourage it towards further development
- Translate into clear targets and programmes of action and implement faithfully and consistently Government's policies through a National Development Plan.
- Manage rigorously public finances and strive for giving best value for money paid by taxpayers
- Monitor developments in the economy and ensure that action is taken at all times to keep it healthy and to do all that is necessary to keep it developing in a sustainable manner
- Adopt the emerging philosophy of Corporate Social Responsibility as a background to all its actions to give the lead to the private sector and to encourage it to act accordingly
C. Relations with the individual Citizen and Corporate Entities
FOI appeals to Government to make all necessary rules for the Public Service to treat the citizen and the corporate entities fairly both as users of services and as taxpayers. The following points should be attended to:
- Corporate clients (industry) should be informed of their rights under every law
- Legislation should be drafted in a customer-friendly way to ensure that the incidence of interpretation and therefore of litigation and waste of time is reduced not increased. One would venture also to say that the legal drafting ignores the fact that a user will not be able to grasp the implications without getting legal advice - that implies more expense.
- It is very evident that an Economic Impact Assessment of new regulation and procedures is not being done. If the public service in 21st century is going to serve the country better it should be looking at this new development. The fact that no mention is made in the white paper is disappointing especially when this practice is gaining more popularity especially among the more successful economies in EU member states.
- A change in attitude by government officials in certain departments who seem to be more keen to quote the law in a threatening manner especially when confronting a businessman rather than showing the better side of the law about the benefits or concessions granted.
- The regulating agencies should issue simple guidelines explaining obligations of operators arising from new legislation now being operated because of EU membership. This is required because Legislation has increased in volume and become highly technical and complex. (Food Hygiene, Food Additives, Chemicals, Environment, Health and Safety, Consumer laws, Industrial legislation)..
- The one stop-shop concept seems to have eluded the Government so far in respect of simple application forms for import and export. E-Government has been adopted for procurement of forms, civil status certificates and other needs from Government - which is positive. But one would have expected the one-stop-shop principle to be included as a priority of e-government. Import licences for food, chemicals in particular involve industry in untold waste of time shuttling forms and obtaining clearance sometimes from as many as 10/12 different departments or sections of departments.
- It seems useless for the white paper to talk about aiming for higher efficiency levels and introducing service charters when the laws as drafted produce procedures that slow down decision-making and do not impose on the public service timescales within which a reply has to be given to a user
Discipline needs to be tightened up. Attendance at the workplace for the duration of the working day still appears to be not fully under control. Lack of supervision and accountability at middle management level is still evidently weak.
One gets the impression that the system does not encourage Heads of Department to take disciplinary steps. It is not exactly clear for an outsider to decide whether this is due to "political protection" for certain offenders, whether it is lack of enthusiasm by management, whether Heads of Department are not empowered enough, afraid of Unions aggressiveness or lose interest because of the lengthy disciplinary procedures and regulations.
E. Benchmarking Efficiency and Other initiatives to Stimulate Improvement.
The introduction of benchmarking techniques and best practice should not only be a priority but should also be subject to public scrutiny if efficiency is to make a quantum leap.
Efficiency Reviews of Departments and of each cost-centre within them should be done by independent persons that are outside the Public Service. Internal audits do not seem to yield any results. This could be a very efficient way of putting on the pressure for continuous improvement and downsizing and giving the user good value for money.
F. Finding a System of Impartiality to Inspire Confidence in the Public Service
Political patronage by any party in government has in the past spawned higher employment within the public sector. It has undermined the authority of heads of department concerning discipline and opened the way for bending the rules to accommodate certain individuals who "deserve favours". Heads of Department and other persons in authority should be allowed to do their job in terms of law and existing regulations without any suggestions or undue pressures at any time from Ministers or political appointees. Auditing should not only include a checking of figures, but also a check on the uniform applications of the law and of administrative procedures.
G. The Need to Institutionalise Impact Assessments
Impact assessments need to be conducted regularly to determine the quantified financial effects there will be on industry by way of cost and additional bureaucracy. This should apply for all amendments to existing legislation, in respect of all new legislation, as well as changes in administrative procedures. The cost-benefit to taxpayers and the optimum way to apply EU regulations, administrative procedures, fees, amendments to laws and regulations should be subject to a detailed review to assess the impact on the economy and the operators in the private sector.
H. Public Corporations/Entities
It is also becoming extremely important if market forces are to operate, for Government not to exempt itself, its corporations, its foundations and other sectors of the economy from the rules of fair competition, from budget pressures and risks found in the private sector. Competitive pressures and inefficiency in the public sector are continuously being buffered by increased taxation from the wealth generated by private investors and their workers.
Public entities should face the challenge and be seen to set the pace by operating in a more business-like manner. They must act purposefully and seen to do so in an effort to achieve higher performance levels in their operations at cost savings to the taxpayer.
Government should seriously study which non-essential functions it can shed in favour of the private sector and to ensure that in the process of transferring such functions it should do this at a net saving, whatever the transfer involves by way of personnel and financial resources.
I. Privatisation & Independent Regulation
The Malta Federation of Industry cannot say that it is satisfied at the pace of privatisation, and, even where this has been done, it is very evident that most independent regulators are not playing their role to the full to ensure a better deal for operators and consumers and in stimulating the overall development of sectors under their vigilance. Similarly, where there is a difficulty to have more than one operator, such as for utilities, the regulatory authority does not make an apparent effort to toughen its stand. In the meantime these entities continue to be a burden to the consumer directly in the way of costs for services provided, as well as indirectly in the additional taxation and rising national debt they generate because of the guarantees made by Government on their loans and the subventions appearing regularly in the Government Budget. This has a domino effect on the productive and more efficient sectors of the economy and contributes to a generally diminished level of competitiveness.
J. Public Private Partnerships
Government should also revisit the manner in which Public Private Partnerships (PPP) can be implemented to the benefit of public finances. In other countries where this concept was implemented successfully, a partnership between public sector set-ups and private sector investors is normally implemented for the purpose of designing, planning, financing, constructing and/or operating an infrastructure project or a service normally provided by the State. Essentially it changes the nature of the state's expenditure from present capital spending to future current spending. It also makes use of private skills and management expertise to deliver public services more efficiently. It is meant moreover to ensure that the country will not be impeded from undertaking essential capital projects and running them because of Government's financial situation.
K. Public Sector Wages and Labour Market Policy Reform
The Federation has had the occasion in the past to comment on Public Sector Wages and Labour Market Policy Reform. The FOI advocates better policies by Government regarding public sector wage awards and its labour market policies. It asks the Government to review the situation in order not to cause imbalances in the economy. A national productivity index should be a point of reference for public sector wage-fixing. This should serve as a benchmark in the same manner as for the private sector. Moreover, Government should take concrete steps to gradually reduce all the known over-staffing from public corporations and government departments.
3. COMMENTS ON THE WHITE PAPER
Government has submitted a White Paper together with a draft Bill that is meant to become law to govern the public service. There is in our opinion a fundamental deficiency in the white paper in that it falls short of being comprehensive in the basic objectives that should guide the public service. In our opinion this should be addressed. It concentrates on the direction of reforms that government wants to implement at the present moment in the public service set up and presents these as if they were the main objectives. The Federation has made its suggestions on adopting a different approach in its proposals earlier on in this paper.
We note that in the White Paper no emphasis is made on efficiency and the economic viewpoint. Activities and programmes of departments, both of an administrative nature or those resulting from laws should be subject to an Impact Assessment that emphasises the effect on the economy in general, the effect on private economic activity besides other aspects. Otherwise, public service activities could prove to be detrimental to the country. Recommendations appear above to this effect.
Page 2 of the White Paper emphasises that senior public officers are accountable for their performance and their appointment "may not be renewed unless they produce results". This presumes that there is in place already a scientific system of appraisal. However, at page 4 of the same white paper there is an admission that "a greater emphasis on performance management is also required" and it is stated that "this needs to be complemented with systems to measure performance and set targets for improvement at the organisational level and with mechanisms to strengthen accountability for staff below senior management level". The question pops up automatically: What was the yardstick used so far to measure performance and strengthen accountability?
The White Paper and the Bill on the Public Sector emphasise the need of observance of a code of ethics. The Public Service Commission is the watch-dog on discipline in the service. It should be the ideal independent body that conducts an audit on how the code of ethics is being observed and to investigate any alleged violations of the code. Unless this kind of approach is taken any desire to implement a code of ethics without surveillance will be just one other nicely worded document in the rule-book destined to be forgotten in the archives of bye-laws.
There should be an independent office of review that makes regular assessments on the performance of departments. Ideally this should be part of the auditing function performed by the Auditor General if Government is to economise on these controls.
At page 5 of the White Paper, it is stated that Government will assign management powers to Heads of Department and allow them to recruit staff in an effort to "improve the efficiency of government operations through more flexible, results-oriented management". This statement is not carried to its logical conclusion in the proposed law. Heads of department are faced with direct controls by the Permanent Secretary of their particular Ministry, the Minister, the Principal Permanent Secretary, the Public Service Management Committee and the Senior Executive Service. The latter three institutions are new creations and cannot but have the effect of neutralising any new-found flexibility and increased efficiency that Heads of Department would have stood to gain from the proposed law. The proposed system of checks and balances also implies severe waste of time by senior public officials if they are to undertake, besides their normal Ministry duties, the serious monitoring and development of the service.
There seems to be a virtual mental tug-of-war between on the one hand the urge to introduce reforms and increase efficiency by a devolution of responsibility and authority to Heads of Department, and a fear that this could get out of hand. So the White Paper gives the impression that powers of authority and responsibility are being handed over to them. In the same breath the proposed bill removes all autonomy by a network of increasing controls and strategic contradictions.
The chances of success of public service reform are doomed to failure if the Government means to act on the principles mentioned at pages 10/11 of the White Paper. On Appointments to Positions the strategic direction Government appears to be taking is to keep untouched current streams of selection and appointments. At Page 11 it is stated that "public officers in employment prior to the coming into force of the Act will continue to enjoy all the rights they currently enjoy. They will retain their grades and their conditions of service will be protected". Again at page 12 it gives staff in position the right to remain in employment "as long the position they occupy continues to exist". On the other hand the white paper talks of introducing new ways of work and flexibility, and prescribes different conditions of employment for new posts.
So current procedures that are acknowledged to lack flexibility and militate against efficiency are to stand and Government is than expecting that efficiency will be achieved from the minority of newly-recruited employees, who will obviously be the exceptions to the general rule. Having two separate streams with different work specifications and different ethics is not considered possible and will in our opinion not achieve any results. The White Paper also pays lip service to eliminating redundant posts. The only solution proposed is that there will be re-training and placement "elsewhere" for redundant staff. Does this mean distributing employees to other departments or local Councils and left unproductive in a different setting ?
4. COMMENTS ON THE BILL ON PUBLIC SERVICE
Autonomous Management powers for Heads of Department/Principal Permanent Secretary
The Bill commences by giving prominence in Section 3 & 4 to the Minister responsible for the public service and to the values by which the service should be governed. It proceeds under Part II to create a new post and functions of a Principal Permanent Secretary to co-ordinate, oversee and lead the activities of each and every Ministry that are assigned to the various Heads of Department working under the direct responsibility of the Permanent Secretary of each particular Ministry. The Bill describes in great detail the role & functions to be exercised by the Permanent Secretary in each Ministry and his relations with the Heads of Department falling under his responsibility. The control he exercises does not seem to allow Heads of Department to exercise any autonomy as the White Paper declares. Heads of Department have to report to the Permanent Secretary of each Ministry. In most instances they also need the Minister's approval and are subject to scrutiny by the Principal Permanent Secretary, the Public Service Management Committee and the Senior Executive Service. As pointed out in the comments on the white paper, the system being created is cumbersome, time-wasting, allows Heads of Department the full opportunity to find excuses for bad decisions, failure to act in time or irregular behaviour. Moreover, it is certainly not conducive for any Head of Department to take the initiative and be truly responsible for the unit under his/her care.
The Senior Executive Service
The Bill makes proposals for the creation of the Senior Executive Service (SES) that appears to be a watch-dog on the public service but is constituted of 'senior public officers?. Whilst the White Paper makes it clear that the SES will be a cadre of persons recruited from amongst senior public officers, the law does not go into the composition of this entity, and it certainly leaves the whole matter at a loose end. This definitely needs clear specification. Moreover, it is not stated in the Bill whether this entity is going to be another controlling body in addition to the Principal Permanent Secretary, the Auditor General and the Public Sector Management Committee. The relative section of the draft law is quite vague about how the Principal Permanent Secretary and the Senior Executive Service will work - whether in liaison or separately. The delineation of functions of the latter body in relation to the departments does not feature in the Bill. We cannot have a definite judgement about its work. Is it going to be an advisory body, or a management consultancy unit? And how will it achieve its functions? Why has the law refrained from giving a clear mission statement to the Senior Executive Service but has preferred to list its functions. One gets the impression that the very idea of giving autonomy to Heads of Department has given rise to a cumbersome system of checks and balances to ensure that uniformity drives the whole public service, come what may.
Merit Protection
In the white paper there is an emphasis on the merit principle that Government would like to strengthen by assigning Merit Protection to the Public Service Commission in an effort to protect those exceptional instances of public servants that resort to ?whistle-blowing?. Part VI of the Bill proposes to assign the task of merit protection by extending the terms of reference of the Public Service Commission. It is doubtful whether the definition and functions of the Public Service Commission that are governed and entrenched in the Constitution of Malta could be altered without altering the Constitution. Although this is defended in the White Paper on the plea that this will only be an extension of the duties of the Public Service Commission, it is of course subject to confirmation when the law is debated in Parliament, and could easily be challenged in the Constitutional Court.
The Public Sector Management Committee
Part II of the Bill makes provision for yet another set-up called the Public Service Management Committee. This seems to be another parallel body with the Senior Executive Service, having the Principal Permanent Secretary leading a "college" made up of Permanent Secretaries in post in the various Ministries who will be assigned additional functions extending beyond their individual responsibility for a particular Ministry. They will collectively be responsible for co-ordinating activities that go across Ministries and agencies. There are serious doubts whether the system can work meaningfully, especially when it depends on Heads of Ministries who are already overworked and who will additionally have to shoulder the additional work-load of monitoring the activities in the various ministries.
Government Agencies & Entities
At Parts VII and VIII of the Public Service Bill the Government intends to make provision for the setting up of Government Agencies and the so-called Government Entities. It is not clear in what circumstances will the Government decide to assign work to an agency rather than to a Government department. In the case of the so-called "entity" the definition itself is quite vague - it will be an "entity" if it is not a department or an agency, nor even a commercial partnership. But no explanation is given as to the exact circumstances that justify the assignment of a Govt-run activity to an entity rather than to a Department, an Authority or a Corporation.
Quelle: Malta Independent, 26.01.2004
