March 2008 Archives

Philanthropic tax exiles

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Following their recent donations, is there any chance that our philanthropic tax exiles will start donating to the Collector-General instead of using Pay As You Wish to salve their consciences and garner publicity?

Letter published in the Irish Times on 27th March 2008.

Reforming the HSE

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When plans for the the HSE were formally announced by Ministers Martin and McCreevy in June 2003 they proposed to rationalise agencies, manage the health service as a national entity, reform the hospitals sector, improve policy development and oversight, ensure quality and effectiveness of care, devolve responsibility, and improve the planning and delivery of service.

Five years later, the Fitzgerald report on issues arising from the Review of Breast Radiology Services at the Midland Hospital profiled a dysfunctional management structure and concluded that "fundamentally the problems arose from systemic weaknesses of governance, management, and communication for dealing with critical situations ...".

It cannot be claimed that there were no external warnings about structural problems in the HSE. In a review of senior posts after the HSE's establishment in 2005, the Review Body on Higher Remuneration found "that there was a lack of clarity at this stage about the future content of jobs. We are aware also of proposed alterations to the current structure which may result in changes in elements of the roles being exercised at present with implications for the extent of management responsibilities and other factors which are central to any evaluation of the jobs".

When revisiting the matter in its September 2007 report, the Review Body stated that "there is still some lack of clarity about the precise direction and reporting relationships of some of the jobs we examined and this made it difficult to evaluate them. We concluded that there is still an element of evolution about some of the management posts. At this stage in the development of the HSE we would have expected to find a clearer and more stable organisation structure. We would urge the management of the HSE to address this issue as a matter of urgency".

With the Minister, Department and HSE all wringing their hands with concern and simultaneously washing their hands of real responsibility and appearing to lack the will or authority to make long overdue root and branch changes, it is easy to see why the HSE is having problems.

Aside from rereading the Prospectus and Brennan reports which set out roadmaps for the HSE, they would do well to also check out Machiavelli on implementing change and Jack Welsh on delayering and lean management.

From Trams to Chaos

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In the beginning, trams ran on rails across Dublin city.
And buses started travelling on roads throughout the city.
And a DART appeared and ran north-south along existing rail lines.
And then Luas began running to the south and west on different tracks.
And next came (quality) bus corridors but few new buses or park-and-ride.
And, as road traffic continued to grow, congestion increased and commute times lengthened.
And then came plans for more Luas, a Metro, an underground rail link and more bus corridors.
And chaos reigned supreme as no one took charge and the buses, Luas, Metro and rail all went their merry ways.

Partnerships and Pensions

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The article "Why public-private partnerships work" (2nd March 2008, Sunday Business Post) included a picture captioned  "West-Link Toll bridge: an example of a successful public-private partnership in action". Successful for  who? Certainly not for the users of the M50 who, for years, have paid through the nose to queue at the toll or for the taxpayer who has been obliged to pay hundreds of millions to terminate the partnership.

Continuing use of PPPs and provision of massive tax breaks to developers, especially in the health service, are very hard to justify when the Government is borrowing well over a billion euro a year to invest in the National Pension Reserve Fund for onward investment in thousands of overseas companies and funds. This fund, valued at €21.3 billion at end 2007, lost 1.8% in the last quarter of 2007 and has probably lost a multiple of that in the current quarter. 

Perhaps more disconcerting is the fact that as recently as December last, the NPRF was increasing its investments in emerging markets, property and private equity from 7% of the fund's overall value to 23% by end 2009. No doubt these declining markets will recover but, in the meantime, we will have given the NPRF billions of borrowed money for risky investments and simultaneously provided huge tax breaks to developers and handed over critical public infrastructure to PPPs. Why?

Productivity of TDs

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Having recently secured very large salary increases, the Taoiseach and Ministers have been exhorting everyone else to accept realistic pay increases to help maintain our international competitiveness. Well, here is how our TDs compare with their opposite numbers in the UK, our main trading partner:

  • The basic salary for a TD is €97,747 compared with €78,588 (£60,277) for a MP.

  • The Dail sits for about 95 days a year in contrast to 150+ for Westminster.

Based on the foregoing, and ignoring the fact that MPs serve much bigger constituencies, the basic salary cost per sitting day for a TD is about €1,028, double that for a MP €524). Maybe the Ceann Comhairle and some TDs could take a day trip to Westminster during the Easter recess to see how to instigate a four day, forty week year.

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