Speech to Yonsei University, Seoul, Korea: Reforming the Public Sector – The Irish Experience

15th March, 2017

Good morning to you all – it is an honour for me to be able to talk to you today. Thank you, Professor Ha, and I am delighted to be here at Yonsei, one of Korea’s most prestigious Universities and with such a beautiful campus.

This is my first visit to Korea and I am enormously impressed by the scale, energy and drive of the city of Seoul.

My visit here is part of the celebration of Ireland’s National Day, St Patrick’s Day. Ireland may be a country of fewer than five million people but nearly seventy million people around the world claim Irish heritage and St Patrick’s Day is celebrated across the globe by those of Irish descent together with the broader family of ‘friends of Ireland’.

While Ireland and Korea are far apart in distance we have much in common. Historically both our countries experienced difficult periods of colonisation and subsequently navigated complex relations with our nearest neighbours.

We both experienced rapid economic transformation from a rural agricultural economy into the highly globalised export driven economies that we see today.

My visit to Korea is to promote a strengthened Irish-Korean partnership in the 21st Century. We have seen rapidly growing trade between the two countries, a shared approach to many of today’s global challenges and a common commitment to the open rules based international economic order.

Links between our young people are also growing and this year we have expanded the highly successful Working Holiday Programme giving 600 young Koreans the opportunity to come to Ireland every year to work and study there and to enjoy our culture, our beautiful landscape.

As students of Public Administration many of you will likely play a role in the formulation and implementation of public policy and I would like to recount with you all a particularly challenging period for policymakers in Ireland.

As some of you may know, Ireland has undergone significant economic change in recent years. In 2008/2009 the after effects of a property bubble contributed enormously to an economic downturn and protracted recession which reduced the choices available to policymakers.

Faced with higher unemployment, falling tax revenues and spiralling banking costs some very tough decisions had to be made in order to get the country back on its feet.

One of these difficult decisions was entering a Programme of Financial Assistance with the IMF, the European Commission and the ECB, known as the Troika, in late 2010 as market access for Irish sovereign debt disappeared.

I am proud to say that there has been significant improvement in recent years.

The Irish economy is growingly strongly again with GDP growth of over 5% last year and unemployment has recently fallen below 7%, down from a peak of 15%.

Our financial institutions are on a much sounder footing. Furthermore, our public finances have been stabilised and we have long since exited the Programme of Financial Assistance and restored market access to funding.

I tell you this because of the substantial effort that was required by my country as a whole to bring about this transformation.

The economic pain experienced by Irish citizens is well known and yet, this in and of itself was only part of the story.

It was not sufficient to simply increase taxes and reduce expenditure, the Government had to reform the way it did business, to improve how it utilised public resources in order to ensure value for the taxpayer and the best possible outcomes for the citizen and to ensure past mistakes were not repeated.

Many of the reforms, both in the public sector and the budgetary framework that supports it, are now, I am happy to say, part of structural fabric of Ireland going forward.


I would like to address the wider reform agenda before moving onto the reforms to Ireland’s Budgetary framework which have taken place in recent years.

With the establishment of my Department in 2011 (the Department of Public Expenditure and Reform), the Government ensured that ‘reform’ would be an integral part of the public service landscape even after the economic recovery has begun.

Too often in my job I am asked about the amount of money we have to spend, rather than how we are spending it and how we are delivering value for taxpayers’ money.

And yet, the reform agenda is crucial.

So I want to talk you today about three things;

The progress we are making in improving service delivery;
How we are putting citizens and customers at the centre of that progress and harnessing new technology to help us progress further; and
How we are changing and how we are working smarter and better for the public we serve.
In talking about these issues, we all know that the uncertain and unpredictable world in which we live and work.

Recent events in America, and particularly in Britain given Ireland’s close relationship with the UK, remind us of the need to stay on top of our game.

Domestically, there are competing plans for resources as well as ongoing demographic requirements.

These translate into ever increasing demands on public service delivery that require a strong and responsive public service that contributes to our economic development and allows Ireland to compete and thrive.

So, the reform we are discussing today is not merely a “nice to have”, it is a “must have” for the future.


Thankfully, we are making good progress.

Ireland’s public sector was recently ranked as the most professional and least politicised in Europe as well as one of the least bureaucratic.

Two Public Sector Reform Plans have been completed since 2011 with a focus on bringing citizens ever closer to the core of what we do, both in terms of service delivery and transparency, as well as openness and accountability.

In addition, reform is continuing to deliver savings and value for money across a range of specific areas such as shared services, procurement reform and property management.

I am convinced that a more dynamic approach to the allocation of resources will result in better services for our citizens.


We are now moving from a stage of reform to one of development and continuous improvement and part of our focus will be on delivering improvements that ensure the customer is put at the centre of what we do because our citizens are at the heart of everything we do.

Of course this includes also business customers and the Irish Government is committed to improving the quality of service delivery to its business customers at a central level.

A recent survey by business partners highlighted that both satisfaction with the service received and satisfaction with the outcome of the business interaction have improved by over 15% since the last survey was run in 2009.

Another significant, if not unsurprising, finding of the survey was that 83% of businesses are now interacting via online services compared to only 33% in 2009; and this kind of feedback will inform how we improve service delivery in future.

In terms of public sector reform, whether we are in Korea or Ireland we share the same objectives of transparency, efficiency and value for money and I think there is much we can learn from each other. I have been very impressed, for example, by Korea’s excellence in the area of e-government – ranked one of the top three countries in UN surveys of e-government globally.


So just as we are changing how we interact with our customers, so too are we changing how we work together so that we work in a smarter, better way.

Shared Services is a great example of this and is one of the biggest transformational change the public service has ever experienced in Ireland.

Shared Services is modernising how we deliver common support services in the civil and public service.

Dedicated teams are taking daily operational functions common to all departments, such as Human Resources, Payroll and Financial Management, allowing departments to focus on their core business of effective front-line service delivery, and in turn, deliver better customer service to our citizens.

It is expected the vast majority of public servants will be using Shared Services by the end of 2017. That is phenomenal progress and a great achievement.


I would like to now talk about the issue of expenditure reform, particularly with regard the need to do more with less.

I mentioned to you already the substantial contribution made by Irish citizens during the downturn and this was true of our public servants as well.

During the economic downturn, routine recruitment within the Irish Public Service was suspended with the advent of the crisis in 2009 and the number of employees working in the public service decreased from a peak of 320,000 to less than 290,000 – a decrease of 10%.

Other reforms included reductions in sick leave and a longer working week with a significant saving to the State.

This has resulted in a leaner public service as, despite this reduction in staffing, civil servants, nurses, policemen etc delivered public services to an increasing number of citizens.


I understand that South Korea’s population is beginning to rapidly shift as more and more people get older and that by 2040, more than half of Koreans will be older than 52.

This presents a challenge that every country will have to deal with in the years to come.

Ireland’s demographics are relatively favourable but the additional number of people retiring each year has a cost as does, on the other end of the demographic scale, employing additional teachers to cope with our birth rate which is currently one of the highest in the EU.
So you see, even before demands for new spending initiatives are taken into consideration, an increasing level of resources is required to simply maintain existing service levels.

As a result, it is vital to ensure public resources are allocated in a manner which balances the best outcomes for the citizen with the most of efficient use of scare resources.

To this end, my Department introduced a number of reforms in recent years which aim to ensure public resources are utilised in the most targeted way possible.

The introduction of multi-annual expenditure ceilings was a key element of the Medium-Term Expenditure Framework (MTEF) introduced in 2012 and moved Ireland away from a focus on year-to-year budgeting to a three year cycle.

Other reforms introduced included Comprehensive Reviews of Expenditure (CREs), greater emphasis on tools to support evaluation such as the Public Spending Code and establishment of the Irish Government Economic and Evaluation Service (IGEES) and the performance budgeting initiative.

The MTEF has been an important mechanism in ensuring Ireland complied with the prevailing fiscal requirements and successfully contributed to the recent closure of the excessive deficit at the end of 2015. However, since 2016, Ireland is operating under a new budgetary environment.


I have already talked about domestic budgetary reform today but I would also like to touch upon reforms at a European Union level which apply to Ireland in the medium-term.

As I mentioned previously, Ireland’s public finances have stabilised in recent years but there is an onus on us as a nation not to ensure the mistakes of the past are not repeated.

In 2016 Ireland transitioned from the ‘Corrective Arm’ to the ‘Preventive Arm’ of the reformed EU Stability and Growth Pact. The EU’s reformed Stability and Growth Pact supports the principle of sustainable expenditure by limiting countries’ expenditure growth to the medium-term potential growth rate of the economy unless supported by tax-raising measures.

This helps ensure that cyclical or one-off tax revenues, such as those that supported much of Ireland’s property boom, will no longer be used to finance permanent growth in expenditure and the painful adjustment process this subsequently necessitates.


Although the improvement in the economy and public finances is evident to all, many competing priorities and demands are placed on limited public resources.

This continues to reinforce a compelling case for efficient and effective spending – this year in Ireland we will spend €58bn on delivery and investment in public services. It is vital that the debate is on this figure and not simply the marginal increase to Departments’ budgets which is sought each year.

In order to ensure this, I announced on Budget Day last year that a spending review will take place this year to better inform the Government’s resource allocation decisions in advance of Budget 2018.

A similar review will also take place to inform investment priorities and update the work previously carried out with my Department’s Public Capital Plan.

Reprioritisation of resources from lower priority expenditure programmes to higher priorities is an important way to free up resources for other Government aims.


So I hope that I have given you a flavour of the journey that we have been on in the Irish public service in the past seven years- moving from a severe economic, financial and fiscal crisis to economic recovery and stability.

I have outlined some of reforms that we have introduced over the period to help to maintain our economic recovery; put our public finances on a sustainable path; and reform how we do business.

I wish all of you every success in your own studies and careers and I hope that I have given you some insights into the Irish public administration.