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

Local Government Management Agency 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

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

Local Government Management Agency Graph 1: Sources of Revenue Funding th October, 2010 Transforming Local Government: the HR Challenge

Local Government Management Agency Graph 2: Sources of Revenue Funding th October, 2010 Transforming Local Government: the HR Challenge

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

Local Government Management Agency 14th October, 2010 Transforming Local Government: the HR Challenge 2008 – 2010 Trends in Government Funding CategoryGeneral Purpose Grants €m Regional & local road allocations €m revised estimate Diff %19%

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

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

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

Local Government Management Agency Permanent and Temporary Staff 14th October, 2010 Transforming Local Government: the HR Challenge

Local Government Management Agency Reduction in No. of Staff 14th October, 2010 Transforming Local Government: the HR Challenge

Local Government Management Agency 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.) 14th October, 2010 Transforming Local Government: the HR Challenge

Local Government Management Agency Public Service Agreement 14th October, 2010 Transforming Local Government: the HR Challenge 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

Local Government Management Agency Implementation of Public Service Agreement 14th October, 2010 Transforming Local Government: the HR Challenge Canvass local authority views DoEH&LG input Draft sectoral plan Establishment of Local Authority Implementation Committee Consultation with unions Agreed Sectoral Action Plan

Local Government Management Agency Next Steps Implementation at local level Regional briefing sessions Guidelines for local authorities Disputes protocol 14th October, 2010 Transforming Local Government: the HR Challenge

Local Government Management Agency Challenges for Local Government Recommendations of Efficiency Review Group Reduced funding 14th October, 2010 Transforming Local Government: the HR Challenge

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

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

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