Report of the Local GovernmentReport of the Local Government
Efficiency GroupEfficiency Group
Some PerspectivesSome Perspectives
John O’ConnorJohn O’Connor
Head of FinanceHead of Finance
8 October 20108 October 2010

What is Local Government?What is Local Government?
• ““Local self-government denotes the rightLocal self-government denotes the right
and ability of local authorities, within theand ability of local authorities, within the
limits of the law, to regulate and manage alimits of the law, to regulate and manage a
substantial share of public affairs undersubstantial share of public affairs under
their own responsibilities and in thetheir own responsibilities and in the
interests of the local population”interests of the local population”
-- Council of Europe Charter - Article 3.1Council of Europe Charter - Article 3.1

Local Government is DemocraticLocal Government is Democratic
The preamble to the European Charter asserts that LocalThe preamble to the European Charter asserts that Local
Self-Government entailsSelf-Government entails:-:-
““The existence of local authorities endowed withThe existence of local authorities endowed with
democratically constituted decision-makingdemocratically constituted decision-making
bodies and possessing a wide degree ofbodies and possessing a wide degree of
autonomy with regard to their responsibilities,autonomy with regard to their responsibilities,
the ways and means by which thosethe ways and means by which those
responsibilities are exercised and the resourcesresponsibilities are exercised and the resources
required for their fulfilment”.required for their fulfilment”.

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

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

Local Government Governance andLocal Government Governance and
Compliance EnvironmentCompliance Environment
• Regular public Council meetingsRegular public Council meetings
• Mandatory statutory functions and prescribedMandatory statutory functions and prescribed
methodologymethodology
• Acting in the public interestActing in the public interest
• Judicial review of decisions/Mandamus OrdersJudicial review of decisions/Mandamus Orders
• EPA/HSAEPA/HSA
• OmbudsmanOmbudsman
• Freedom of InformationFreedom of Information
• Detailed Audit RegimeDetailed Audit Regime

Local Government ReportsLocal Government Reports
• Current Report – latest in a long listCurrent Report – latest in a long list
• Common theme and outcome – funding base notCommon theme and outcome – funding base not
structurally reformedstructurally reformed
• Local Government Administrative StructuresLocal Government Administrative Structures
closely linked to Democratic Structuresclosely linked to Democratic Structures
• Terms of reference for current report did notTerms of reference for current report did not
extend to review of Democratic Structuresextend to review of Democratic Structures
• Democracy –v- EfficiencyDemocracy –v- Efficiency

Efficiency Review ReportEfficiency Review Report
• Report worthwhile and offers agenda of measuresReport worthwhile and offers agenda of measures
to consider and work-throughto consider and work-through
• Found Local Government:Found Local Government:
- was generally well run- was generally well run
– had embarked on innovationhad embarked on innovation
– had engaged in shared serviceshad engaged in shared services
• Recommended:Recommended:
– Reductions in staffingReductions in staffing
– Procurement efficienciesProcurement efficiencies
– Operational efficienciesOperational efficiencies
– Cost Recovery and Revenue Generation measuresCost Recovery and Revenue Generation measures

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

Budgetary ResponsibilitiesBudgetary Responsibilities
• Each year LA must adopt balanced budget toEach year LA must adopt balanced budget to
fund maintenance of its statutory publicfund maintenance of its statutory public
services at a reasonable standard and pay anyservices at a reasonable standard and pay any
legally due monies. This is a statutorylegally due monies. This is a statutory
requirement to be met.requirement to be met.
• Legal duty on Manager to prepare draft budgetLegal duty on Manager to prepare draft budget
on like terms.on like terms.

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

StaffingStaffing
• Manager to “make such staffing and organisational arrangementsManager to “make such staffing and organisational arrangements
as may be necessary for the purpose of carrying out the functionsas may be necessary for the purpose of carrying out the functions
of the local authorities for which he or she is responsible”.of the local authorities for which he or she is responsible”.
- S.159 Local Government Act, 2001.- S.159 Local Government Act, 2001.
• Recommendations on reductions in staff levels:Recommendations on reductions in staff levels:
- basis for reductions not set out- basis for reductions not set out
- no qualitative/quantitative assessment of services- no qualitative/quantitative assessment of services vv
comparative best value of different staffing levels setcomparative best value of different staffing levels set
out.out.
• There is always need for a critical level of staff to maintainThere is always need for a critical level of staff to maintain
essential services often in emergency circumstances and/oressential services often in emergency circumstances and/or
isolated areasisolated areas..

Staffing – County StructureStaffing – County Structure
• Historically, county boundaries and countyHistorically, county boundaries and county
identity have a major significance.identity have a major significance.
• 100,000 Min population target per structure100,000 Min population target per structure
- international experience?- international experience?
• To foster and aid local development in theTo foster and aid local development in the
weaker counties the office of County Managerweaker counties the office of County Manager
would seem most desirable, if not essential.would seem most desirable, if not essential.
• Flexibility under the “Croke Park Agreement”Flexibility under the “Croke Park Agreement”
would likely offer an alternative cost savingwould likely offer an alternative cost saving
measure.measure.

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

Local DevelopmentLocal Development
ProgrammesProgrammes
• Little doubt that synergies have been lostLittle doubt that synergies have been lost
in this area.in this area.
• Report recommendations are welcome.Report recommendations are welcome.

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

Thank YouThank You