Paul Dunne Assistant Chief Executive Officer Local Government Management Agency

Paul Dunne Assistant Chief Executive Officer Local Government Management Agency

Transforming Local Government:the HR Agenda

Dublin Castle, 14th October, 2010

Local Government Management Agency

14th October, 2010 Transforming Local Government: the HR Agenda

Background

National Situation – July 2008:• Public Spending Measures Introduced

Difficulties facing local authorities:• Financial Situation• Pre 2008


Difficulties Facing Local Authorities(Change driven out of necessity)

• In order to understand HR Challenge in local govt sector, essential to understand structure of finances and particular funding challenges

• Financial pressures on Local Government existed prior to national financial crisis

• Numerous studies confirmed extent of funding gap in local government sector – Narrow funding base– High dependence on commercial sector – No local government tax – No household water charges

14th October, 2010 Transforming Local Government: the HR Challenge


Funding Challenge• LAs legally required to balance books each year • Acutely aware of impact of economic downturn • Unlike other elements of public sector, LAs receive 57% of

revenue from non-government sources • The dependence on these sources of income has grown

over time Income from Commercial Rates rose from 25% (1999) to over

29% (2010) In contrast, income from General Purpose Grant fell from

19.96% (1999) to 16.7% (2010)



Graph 1: Sources of Revenue Funding 1999



Graph 2: Sources of Revenue Funding 2010



Local Government Sector - not Isolated from Recession

• Problems faced by local businesses to some extent mirrored in local government

• Between 2009 and 2010, Local Government Fund fell from €937.3m to €773.91m, or €164.3m (17.5%)

• During the same period, funding for Regional and Local Roads fell by 31% from €604m to €412m




2008 – 2010 Trends in Government Funding

Category General Purpose Grants €m

Regional & local road allocations €m

2008 999 604.2

2009 revised 832 451.4

2010 estimate 773 412.2

Diff 2007 - 2010 23% 19%


Finance: Conclusion • All other sources of funding ranging from planning fees

income, to development contributions necessary to fund future infrastructure have dried up.

• System has had to absorb these reductions while, broadly speaking, continuing to provide the same range and level of services.

• Only been possible through implementation of actions at local and national level which have squeezed costs and maximised the use of available revenue.

• Change Agenda in Local Government has been driven by local funding and resource pressures



Local Authority Response • In responding to these challenges, local authorities have

implemented significant efficiencies across the board over a two year period.

• The most significant of these has been a 5,000 reduction in the number of LA staff (-13.5%) between 2008 and 2010.

• Extent of progress already achieved in reducing the sector’s footprint has been acknowledged, both by the DoEHLG and the independent Local Government Efficiency Review Group.

• Reduction in staffing achieved in relatively short period • Combination of approaches – including moratorium,

LANPAG agreement, various Government measures, including the ISER/Incentivised Career Break Scheme.



Local Authority Response Cont’d• LANPAG Agreement• Areas identified:

Non-renewal of temporary/contract staff Non-recruitment of staff Management of vacancies Non-replacement of staff Examination of requests for term time, career breaks, etc. Premium pay – overtime, etc. Attendance management – dealing with absenteeism Summer student / co-op schemes



Permanent and Temporary Staff



Reduction in No. of Staff



Ongoing Difficulties Facing LAs • Loss of technical / outdoor / management

expertise – Will reduce capacity of sector to take on additional

responsibilities, respond to events i.e. flooding, severe weather, complex environmental issues.

• Higher Standards driving Higher Costs – Compliance with Environmental Standards, Health &

Safety, European Legislation – Recession driving additional demand for social services

(housing, homelessness, libraries etc.)



Public Service Agreement


• Local authority agenda driven by need to achieve further savings

• Procurement• Shared services• Maximising use of resources• Savings in work practices / rostering etc.• Single common ICT infrastructure


Implementation of Public Service Agreement


• Canvass local authority views• DoEH&LG input• Draft sectoral plan• Establishment of Local Authority Implementation

Committee• Consultation with unions• Agreed Sectoral Action Plan


Next Steps

• Implementation at local level• Regional briefing sessions• Guidelines for local authorities• Disputes protocol



Challenges for Local Government

• Recommendations of Efficiency Review Group

• Reduced funding



Efficiency Review Group (ERG)

• Acknowledged LA progress in reducing staff numbers and in achieving efficiencies

• Did not identify significant areas of waste• Strong emphasis on shared service agenda as

way forward • Most notable recommendations dealt with

proposed structural changes



ERG – main staffing Recommendations

• 30% reduction in County / City Managers (34 to 24)

• 20% reduction in DoS (240 to 190) • 15% reduction in Middle Management • Establishment of Ten Joint Administrative Areas• 10% reduction in Corporate Services Staff • Review of Dublin / Cork City staffing levels • Roads Staff to reduce by 250 • Planning Staff to reduce by 10%



Conclusion

• LAs committed to further change, implementing provisions of the PSA and adhering to the sectors Employment Control Framework figure

• Given the commitments entered into in the PSA detailed further consideration will be necessary as to how the scale of ERG recommendations can be achieved.


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Paul Dunne Assistant Chief Executive Officer Local Government Management Agency

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