Paul Dunne Assistant Chief Executive Officer Local Government Management Agency

1. Paul Dunne Assistant Chief Executive Officer Local Government Management Agency Transforming Local Government:the HR Agenda

2. Background • National Situation – July 2008: • Public Spending Measures Introduced • Difficulties facing local authorities: • Financial Situation • Pre 2008 Transforming Local Government: the HR Agenda

3. 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 Transforming Local Government: the HR Challenge

4. 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) Transforming Local Government: the HR Challenge

5. Graph 1: Sources of Revenue Funding 1999 Transforming Local Government: the HR Challenge

6. Graph 2: Sources of Revenue Funding 2010 Transforming Local Government: the HR Challenge

7. 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 Transforming Local Government: the HR Challenge

8. 2008 – 2010 Trends in Government Funding Transforming Local Government: the HR Challenge

9. 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 Transforming Local Government: the HR Challenge

10. 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. Transforming Local Government: the HR Challenge

11. 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 Transforming Local Government: the HR Challenge

12. Permanent and Temporary Staff Transforming Local Government: the HR Challenge

13. Reduction in No. of Staff Transforming Local Government: the HR Challenge

14. 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.) Transforming Local Government: the HR Challenge

15. 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 Transforming Local Government: the HR Challenge

16. 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 Transforming Local Government: the HR Challenge

17. Next Steps • Implementation at local level • Regional briefing sessions • Guidelines for local authorities • Disputes protocol Transforming Local Government: the HR Challenge

18. Challenges for Local Government • Recommendations of Efficiency Review Group • Reduced funding Transforming Local Government: the HR Challenge

19. 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 Transforming Local Government: the HR Challenge

20. 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% Transforming Local Government: the HR Challenge

21. 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. Transforming Local Government: the HR Challenge