Martin Mansergh (Tipperary South, Fianna Fail)

The OECD said that there is now a need for an improved governance and performance dialogue to address what it described as the current disconnects between the central Civil Service and the broader public sector, especially between Departments and agencies. It noted that there are neither formal nor informal criteria for establishing agencies in Ireland, either at the national or local level. It recommended that the opportunity should now be taken to rethink the agency system to take better advantage of this organisational form.

The OECD's call for improved governance arrangements for the public service is one the Government supports. There is a need to take a hard look at our approach to agencies, why and how they are set up, and the proper reporting relationships between agencies and their parent Departments. This is clearly an area that is central to the next phase of public service modernisation. In this regard it is not merely the manner of appointments that matters but the quality of the framework in place for governance and reporting.

The Government responded to the OECD review by establishing a task force to prepare a comprehensive framework for renewal of the public service. In relation to agencies, the task force was asked to recommend an appropriate framework for their establishment, operation and governance. The report of the task force on the public service, Transforming Public Services, was published last November. The report builds on the findings of the OECD review while at the same time taking account of our new economic circumstances. The report set out a framework which Government has adopted for what amounts to a radical transformation of the public service. The measures set out in the report represent a challenging agenda for change in the public service. A Cabinet committee chaired by the Taoiseach is leading the process, supported by a steering group of relevant Secretaries General.

The task force also recognised that the formation of agencies has been a significant feature of the public service in recent times and that they have played an important role in contributing to policy making in regulation and service delivery. Agencies have given the public service additional capacity and flexibility to deliver services during a time of major growth in public expenditure and increased citizen expectations. It also recognised that they have allowed a clear dedicated focus on delivering a particular function, which might not be possible in a multi-functional Department.

The task force argued that it is necessary to have clarity around statutory mandates and the delivery expectations of Government. In addition, regular evaluation is necessary to allow decisions to cease activities. It said there should be fewer new agencies and fewer agencies overall, as new functions are increasingly assigned to existing agencies or retained within Departments. It endorsed the OECD view that a wider variety of governance arrangements would be appropriate for the diverse range of agency roles, with scope in particular for reducing the number of statutorily independent boards of stakeholders in favour of more immediate ministerial direction with greater recourse to advisory boards.

In parallel with the work of the task force, the Government announced a process for the rationalisation of State agencies. In last October's budget, the Minister for Finance announced the Government's decision to proceed with a series of 30 rationalisation proposals that will reduce the number of bodies by 41 and streamline functions in three areas. The general policy approach on rationalisation of State agencies is to create efficiencies through streamlining the delivery of public services, removing duplication of functions and promoting departmental and ministerial responsibility.

The publication of the task force report was accompanied by a major Government statement on transforming public services. Building on the recommendations of the task force, the Government statement announced the establishment of the special group on public service numbers and expenditure programmes - the McCarthy group - which would, inter alia, report to the Government on the scope for further rationalisation of agencies. It also announced that the Government would not create any new agencies pending the development of new performance management and governance frameworks. Ministers will be required to demonstrate a clear business case for any incremental resources associated with the creation of a new agency or the conferring of new functions on an existing agency, in particular, why an existing agency or Department cannot take on the task within existing resources. All agencies will be required to publish output statements relating to the resources allocated to them with target achievements, and Departments will put in place, with those agencies involved in service provision, service level agreements which commit agencies to delivering agreed volumes and standards to the public. Agencies will be compelled to use shared services options save in exceptional circumstances.

This Bill seeks to improve the arrangements for making appointments to public bodies. I welcome that but the mechanisms proposed are complicated and burdensome. The Bill is also predicated on the assumption that the Executive is not capable of managing the processes surrounding appointments in a proper way. I reject that. Neither does it recognise the reforms that are already under way. The Government has set out clearly how it intends to address this issue in the renewed programme for Government. Nevertheless, contributions from Senators today will be taken into account as new arrangements are framed for a robust and transparent system of appointments.

I would like to respond briefly to one or two points made in the debate. The impression is often given that important appointments are only given to members of governing parties. I point out that the very distinguished EU ambassador in Washington, who is retiring from that post, had the support of the Government in his nomination. The chairman of the Irish Human Rights Commission was a former Opposition Leader of the House. A former leader of Fine Gael, Alan Dukes, has been given several appointments, including in recent times. Our European Commissioners have generally obtained substantial portfolios and their achievements have been regarded as considerable. With regard to people of a political affiliation, a former Cathaoirleach of this House made an excellent board member of CIE and was reappointed, if I remember correctly, by a Fine Gael Minister to that board. I recommend an article in today's Evening Herald about the progress made by CIE in direct response to a point made by Senator Ross.

Much play has been made in the debate of quoting what a Green Party Senator, formerly a Deputy, said on the subject but any Member in Opposition, on coming into government, is in a position to refine his or her policy and, moreover, to get it transformed into action. I am sure the Opposition, if it were to go into government, would act in exactly the same way. Senator John Paul Phelan was critical of the current system but failed to say what Fine Gael in government would do in this area. When the Labour Party was in government in the 1990s, I remember it being quite openly stated that public relations contracts should awarded to like-minded people.

I have been lobbied, as I am sure have most Ministers and Ministers of State. There are very few appointments - in fact, none of which I am aware - that I must make to bodies, but none the less I have been lobbied. I am unsympathetic to lobbying by persons whose only qualification is party affiliation, but if that is combined with a track record and a great deal of experience, then that is an entirely different situation, and I entirely agree with everything Senator Alex White had to say on that subject.

We face failures in governance in both the public sector and private sector. This seems to be an ongoing problem, which is one that goes back many years, to do with the state of knowledge of non-executive board members and what the executive members choose to tell them, and this requires a great deal of reflection across the entire economy and society. It is not confined to the public sector.