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AHCPS responds to Ivan Yates in Irish Examiner

(12 Dec 2011)

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The full text of Dave Thomas's article that appeared in the Irish Examiner on Monday 12th December 2011 is as follows:

The characteristation of the Department of Finance and civil servants in general recently offered by Ivan Yates is crude and inaccurate.

Setting aside the current debate about the circumstances of individuals at the highest level of the public service, the attribution of terms and phrases such as “plebs”, “not fit for purpose”, and “asleep at the wheel”, to the entire Department of Finance is belittling and does little to advance any considered argument about how we can achieve a reformed public service.

As the Association for Higher Civil and Public Servants I am well used to defending my members against criticisms from those whose entire view of the public sector is based not on a mature and impartial assessment of our role and our work, but is entirely framed by an ideological position that believes in less government.

But Ivan Yates’s descent to effectively lumping the entire blame for this country’s economic collapse onto the shoulders of a small number of civil servants in one Department reaches a new low. Moreover, it is also absolutely contrary to the true facts of the matter as revealed in a number of independent reports by international consultants, Canadian expert Rob Wright and Finnish banking expert Peter Nyberg.

In fact, such is the extent of Ivan Yates selective and misrepresentative citation of these reports – the Wright report actually states that the authors do not accept the notion that the Department is not fit for purpose - that I am compelled to set the record straight in order to protect the good name of those I represent. I wish also to outline that there is already a reform process underway to produce a better more efficient public service that is contributing towards our economic recovery.

First and foremost let us focus on what the Wright and Nyberg reports actually say about the work of the Department of Finance and the warnings that were given about successive Governments’ economic policies during the boom.

Rob Wright states clearly that political, rather than departmental, actions were largely to blame for the subsequent crisis and deep recession. He is explicit that politicians, rather than civil servants, were the primary factors in, firstly, adopting short-term policies that ultimately led to economic collapse; second, ignoring repeated warnings of an impending downturn; and thirdly, failing to respond appropriately when it hit.

On page 15 the report clearly states that in its annual June memo to the Cabinet the Department’s advice ‘did provide clear warnings on the risks of pro-cyclical action’ and that ‘this advice was more direct and comprehensive than concerns expressed by others in Ireland, or by international agencies.’

Furthermore, the report also states that ‘relatively prudent fiscal advice’ provided by the Department was ‘systematically ignored in the Budget process.’

Indeed, the report states that forces outside the control of the Department of Finance, such as commitments given in successive Programmes for Government, left officials having to reconcile these with the normal budgetary process. This, allied with the ending of the construction boom, left the economy vulnerable to a downturn that was beyond the control of civil servants.

No level of better management within the Department of Finance could have overcome the mandate successive Governments received to implement the commitments contained in their manifestos and subsequently repeated in various Programmes for Government that were designed to achieve political success rather than sound economic planning.

The Nyberg report similarly vindicates the Department of Finance. On page 93 of his report Mr Nyberg states that “it is well documented that the DoF consistently…supported a less expansive fiscal policy, particularly regarding property market incentives. It also appears that worries about the developing financial situation were expressed internally.”

While it should be acknowledged that Nyberg states that these reservations were sometimes expressed “not forcefully enough” it must also be recognised that this advice was given in the context of a consensus among politicians from Government and Opposition, the Central Bank, the Financial Regulator, all the major banks, the media, the overwhelming majority of economists and economic commentators and the public at large, that the economy was on a sound and stable footing and that any downturn was likely to result in a soft-landing at worst.

Against this backdrop are we seriously to accept a hypothesis that identifies the structures of the Department of Finance as a primary cause of our economic collapse?

Rather than indulging further in this blame game, my Association is more interested in learning the lessons of the extensive, considered, and important Wright and Nyberg reports and incorporating their recommendations and conclusions into the reform process that is underway and the Croke Park Agreement that is currently being implemented.

That agreement is already delivering. Targets are being met. Efficiencies and savings are being achieved. At the same time, senior civil servants continually recognise that in order to achieve a more streamlined, modern, and effective public service that expenditure will have to be scrutinised more closely and cutbacks made on non-priority areas just as families are doing the length and breadth of the country.

As the Minister for Public Expenditure and Reform, Brendan Howlin, said recently, “Public servants have responded well to the challenges that we are facing and across the system nurses, doctors, teachers, gardaí, prison officers, civil servants, soldiers and other public servants have made, and are making, an enormous contribution to our recovery.”

It is time to stop the scape-goating, end the blame game, and simply get on with the process of reform. That is more likely to achieve the type of change that we all desire.

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Association of Higher Civil and Public Servants