04 October 2006

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Business Today

Civil service reform
Decisive action in trimming the public service is seriously needed

Falling under the shadow of the 2007 budget, civil service reform looms rather portentous. Perhaps it is not the right time to rekindle this thorny subject with only a few months to a general election, yet many acknowledge that the share of public sector employment in the total gainfully occupied population needs trimming. This proportion is in excess of 34 per cent and by EU standards is somewhat high.
This translates into a situation whereby one-third of Malta’s main asset is working under “less than efficient conditions” and in an environment generally conducive to de-motivation and abuse. In some areas one finds too much nepotism and political patronage. Consequently, opportunists and “sneakers” may find ample scope to manoeuvre. As a matter of fact defects may be magnified out of all proportion to suit ulterior motives. Besides, the civil service, notwithstanding many attempts at reform, is still based on the old colonial system. It is rather obsolete and archaic. It is, so to speak, regimented.
Besides, the high ratio incorporates an anomalous situation in that while there is an over-manning situation overall, the public service also suffers from a severe shortage of human resources in a number of specialised areas crucial to national policy. Some time ago, the Chamber of Commerce had suggested the carrying out of a Gap Analysis to take stock of the exact needs and availability of human resources available within the civil service. The completion of the manpower survey must be followed by measures enabling the public sector to deploy its resources more efficiently into productive activities such as the launching of more private/public partnerships.
Typically the 4,000 odd workers within the infrastructure division can be recruited by the private sector and placed to better use in sprucing the island funded by the EUR820 subvention. This can easily save Lm40 million annually.
At a time when we are striving to cut the deficit and start repaying the accumulated debts it comes as no surprise that any saving on salaries will enable government to sail through the ERM2 test. But not everything is doom and gloom. A White Paper entitled ‘A public service for the 21st Century’ was launched on the 30 October 2003. This brings the public service Reform process to its third phase. The first phase of the reform process began in 1988, when the government appointed a public service Reform Commission to examine the public service and to recommend means by which the service can efficiently respond to the changing needs for an effective government.
To achieve this, the government focused on the internal administrative systems of the government departments. Due to the fact that the public sector occupies one third of all the gainfully occupied people, a major issue which appears to be lacking is how productivity is measured within the public sector at an individual level across all categories of employment. In the past, critics lamented that wage increases in the public sector could not have reflected productivity increases because there existed no measure to gauge productivity in the public sector.
Many attempts have been made to invest in computer systems and government services were to be packaged as part of a consumer-oriented programme, in which the taxpayer would be considered king, or at least be acknowledged to have significant rights. Across the line, one hears complaints about the contemptuous ways by which citizens’ specific requests are dealt with throughout a wide range of public services. This is just as prevalent in areas where IT breakthroughs are allegedly being made, as in more traditional sectors of civil service activity. To this effect, we cannot but make reference to the silent White Paper entitled ‘A public service for the 21st Century’. The contents of this White Paper boldly stated that no government could take the efficiency and effectiveness of its public service for granted. Improving the efficiency of the public service meant, firstly, recognizing that it was a unique institution with a central role to play in governance. It goes without saying that the Service can neither be bypassed nor replaced. But it certainly needs to be harnessed.
Naturally it is subordinate to the elected government, albeit it has its own identity and professional values. To its credit nobody can disagree with the fact that the Malta’s public service has toiled hard to prepare the country for the acquis communautaire. Former Prime Minister Dr Fenech Adami had tried many ways to sharpen its pencils. He gave birth to the Management Systems Unit. This was a think tank advising the Prime Minister in the mid 1990s on civil service improvements. It was a heavy investment and at times reached Lm8 million annually and yet 15 years later, we are still at the doorstep of another initiative suggested by the pre-budget document to reform the quality of the service and identity surplus staffing. Linked to a perceived drop in competitiveness index no effort should be spared to catch up on lost competitiveness and jettison the service in the rarefied air of cyberspace efficiency.
The Opposition may well ask if this is not prevarication given that so much is at stake. Equally vocal are critics who argue that the government has been paying annual performance bonuses to heads of departments for the past years even though the economy has nose dived and in 2003 seen a zero growth. In his 2004 report outgoing Ombudsman, Mr Sammut, himself a former head of the civil service, said there should be consistent, across-the-board application of redress for misadministration in the public service while he lamented of a general deterioration in the top-to-down attitudes of certain departments. It is perplexing why we have been papering the cracks rather than targeting the root of the problem. This is an unsolved mystery. Certainly accountability for management of the economy falls squarely on the government assisted by the service which at the apex of the tourist season closes its shutters to the public at 1.00pm for three whole months. In any case, reforms will always be suspect as long as we have fundamental problems such lack of discipline, ministerial interference, lack of education, prolific bureaucracy, and nepotism, deficiency in levels of transparency, de-motivation, and the lack of modern system of meritocracy legislation.
The time for studies and consultations is over and decisive action is needed.
Certainly the Lm210 million spent on salaries and bonus including overtime is too high for an island the size of a small town in Europe. There are a number of key risks that must be properly managed to avoid taxpayers’ monies being swallowed up in a vortex of in unbridled bureaucracy, red tape and inefficiency. In the past, wage awards were meant to ensure that increases in public sector pay were directly linked to a superior value of service to the public. But has this materialized? The answer is in the affirmative as we are witnessing a major improvement but a lot remains to be done. The benefits to customers are hard to come by and the fly in the ointment is that government agencies and regulators have sought ways of increasing their charges to users. There is no prize for guessing that it is under-deployed, not a few of its workforce made indolent by an assumption that their post is a job for life. Although wages parity with the private sector has been reached in many grades, it is a pity that productivity has not increased in line with income. But is there a solution in sight considering the fact that the workforce is so strongly unionised?
The answer may depend on whether Dr Gonzi manages to secure tangible improvements in the 2007 budget. Hopefully, Dr Gonzi will administer the medicine and apply surgery to spruce excessive bureaucracy where it is most needed. It will be the kindest cut of them all.

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