Public Service Costs - The Elephant in the Room


#1

Some more updated analysis on public service costs. This shows that Public Service costs are just not being addressed.

Chart 1 shows the increase in the population, number of public servants and the cost each person pays for the public service over the years 1990 – 20011.

Chart2 shows the cumulative rate of increase of population, relative size of public service, cost per individual public servant, CPI and total cost of public service. The dashed line shows the “expected” rate of increase base on the combined rate of increase of CPI and population. Again expected here assumes there are no savings due to efficiencies, economies or other factors such as technology.

The row ““Expected” Increase in Public Service Costs” shows a view of the expected increase in public service costs based on the increase in population and CPI. For example, if you are providing a service to a population of 100 people at a cost of €10 per person, your total costs are €1,000. If the number of people increases by 20% to 120 and the cost of the service increases by 40% to €14, your total costs are €1,680 or a total increase of 68%, that 20% plus 40% plus 20% or 40% (or 40% of 20%, it is the same). This assumes that there are no savings to be achieved through efficiencies, economies of scale, loading or scope or by the introduction of new technology that offset the pure expected increase.

In summary, over the interval 1990 to 2011:

[code]Total Population Increase 27.91%

Number of Public Servants Increase 44.13%

Average Public Servant Weekly Salary Increase 134.90%

Public Service Salary Bill Increase 227.81%

Public Service Cost Per Person Increase 156.28%

Consumer Price Index Increase 68.93%[/code]

So when CPI increased by 68.93%, public service wages increased by 134.90%.

While the propulation increased by 27.91%, the number of public servants increased by 44.13%, so average weekly salary increased by 1.96 times CPI.

The cost per public servant for each person increased by 156.28% while CPI increased by 68.93%, so the cost per public servant increased by 2.27 times CPI.

The combination of these two increases means public service salary costs increased by 3.30 times CPI in the interval 1990 to 2011.

Does the public service deliver 3.3 times the value for money it did now than in 1990? Also, this 3.3 assumes no improvements in productivity.

Chart 3 shows private and public sector employment by quarter from 2008Q1 to 2011Q3. While private sector employment has dropped by 16.79%, public sector employment dropped by 5.78%.

Chart 4 shows public and private sector average weekly earnings. Public sector earnings are consistently nearky 50% greater than those of the private sector.

Chart 5 shows public and private sector average hourly earnings.

The detail of the data sources is:

Total Population (Thousands)

Various sources including:

cso.ie/en/media/csoie/releas … 202011.pdf

Number of Public Servants (Thousands)

Taken from two sources:

PSQ01: Employment and Earnings in Public Sector - runs up to 2009Q3 (cso.ie/px/pxeirestat/Statire … language=0)

For earlier parts of this time series, values are shown for Q4 of the year. While later years (2002 - 2009) show data for all quarters, I have taken the value for Q4 for consistency.

In the case on 2011, data is only available up to 2011Q3.

The differences between PSQ01 and EHQ08 include PSQ01 did not include substitute teachers and parttime employees were counted differently.

For 2008Q4, the PSQ01 number was 373,300 and the EHQ08 number was 427,300, 14.5% increase.

Public Service Salary Bill (Billions)

As before taken from two sources:

EHQ08 Employment, Hours and Earnings by Quarter, Private or Public Sector and Statistic - 2008Q1-2011Q3

PSQ01 Employment and Earnings in Public Sector by Type of Public Sector Employment, Quarter and Statistic - 1988Q1-2009Q3

Public Service Salary Bill = Earnings per Week multiplied by Number of Public Servants

Consumer Prices Index

Taken from:

cso.ie/en/statistics/prices/ … riceindex/

CPI value taken for All Items

The failure to maintain a consistent time series for Employment and Earnings in Public Sector is a bit annoying, While the old measure underestimated the size of the public service, the lack of a consistent measure makes analysis difficult.


#2

What else would you be at on a Sunday afternoon…


#3

Table 2 Cumulative growth of public and private sector wages per employee (1999 – 2008)
Public sector Private sector
Euro area 34.9 24.2
Belgium 36.6 31.7
Germany 13.1 13.7
ireland 110.8 60.3
Greece 108.7 62.0
Spain 53.1 29.9
France 31.3 32.9
Italy 42.5 24.8
Netherlands 38.5 40.0
Austria 29.3 26.2
Portugal 58.0 35.3
Finland 41.7 38.8
Source: OECD.

As you can see from above Irish public servents nominal pay grew far faster between 1999 and 20008 compared with the Euorzone average resulting in a loss of competitiveness. 111% increase in Ireland compared with 35% as a Eurozone average, that is a shocking difference.

It is interesting too that Greeces public servants pay also shot up in this period (109%) while Germanys public servants did not even keep with inflation (13% ). Should we really be surprised in Ireland and Greece that are public finances are in bits after seeing such increase above the average? Mean while we go around using the word austerity because we find out that we have to cut are pay in line to what they would have been if we gave an increase inline with others in Eurozone… thats not austerity , thats fixing what incompetent governments gave in unsustainable increase.

If I was German and I was aware of this, I would say do not lend Ireland and Greece one cent till there public servants pay are 13% nominally above what they were in 1999, thats fair because thats all that Germen public servants got in that time, why should they pay for other countries wanting to keep increase that they never got or could have afforded, this would result in far more cuts to public servants pay in Ireland.

Croke Park agreement has to be ripped up


#4

That data looks deeply suspect to me. Am I to believe that PS employment jumped by 60,000-80,000 people between 2007 and 2008? Also, how do you figure 400,000 in the PS in 2011?


#5

Taking the lead from Fingers post I set a challenge to all sides who wish to come to this subject becasue I think we are really at a point where we need to honestly appraise as a whole as a group with all agendas left at the door.

So why not amass the best set of figures that all can agree on before prescribing any solutions.

Gather the information in as much totality as you all can without descending into the usual tit for tat and I will allow the debate take place here on this forum built on the satisfactory results but you have to all come together to get the best datasets you can or the PS vs PS will be involved becasue a thread like this has the ability to chain react and thats is boring.

As I said before the property bubble was to pop and then the next was the next stage woudl be Governments going pop it what comes after this that is really why we are all here.

Play not Fight. Create not destroy. Its your choice.


#6

At least read the information provided before making such statements.

The original data sources are listed for you to review.

Before 2008, public service numbers were underestimated because of factors such as:

Substitute teachers were not counted.

The numbers were counted for just one week of the quarter rather than averaging numbers every week of the quarter.

Parttime employees were counted at .5 of an employee rather than 1.

The increase in 2008 was caused by these changes.

The public service employee numbers from series EHQ08 for 2011 are:

2011Q1 404,200

2011Q2 404,300

2011Q3 392,900


#7

Here’s a snippet of information.

Figures show drop in public sector employment. -RTE, 15th November 2011

Is there a discrepancy in these figures? .


#8

Why would you count a part-time employee as 1 rather than as a fraction of one?

And there’s no way there are 400,000 in the PS in 2011. What are you counting that Howlin is not? Semi-states?


#9

EHQ08: Employment, Hours and Earnings by Private or Public Sector, Quarter and Statistic

Quarter 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Public sector All Employees (Number) 417,000 421,400 416,900 427,300 421,000 417,600 410,500 406,900 403,700 402,100 401,100 402,100 404,200 404,300 392,900 Earnings per Week (Euro) 904.80 930.51 930.14 956.71 934.00 946.09 945.50 965.84 881.80 908.08 911.70 910.80 872.85 894.56 906.81 Average Hourly earnings (Euro) 28.64 29.16 29.10 29.92 29.97 30.07 29.64 29.90 28.77 28.72 28.24 28.58 28.69 28.82 28.54

HQ10: Public Sector Employment by Sub Sector and Quarter

Quarter 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Civil service 41,700 42,700 43,000 42,700 42,200 42,100 41,600 40,800 40,100 40,000 39,900 39,600 44,700 44,900 39,900 Defence 11,200 11,200 11,000 11,200 11,000 10,900 10,800 10,600 10,500 10,400 10,500 10,400 10,300 10,400 10,300 Garda Siochana 14,900 15,100 14,200 15,300 14,600 14,700 14,700 14,600 14,600 14,600 14,600 14,400 14,300 14,200 14,100 Education 116,100 117,400 113,200 120,500 120,200 118,300 113,300 114,100 113,600 113,600 111,500 117,000 116,700 117,100 112,300 Regional bodies 38,900 40,100 40,700 40,200 38,400 38,400 37,900 37,300 36,200 36,100 37,600 35,200 34,500 34,700 34,200 Health 137,800 138,000 137,800 139,600 137,700 137,100 136,400 135,000 135,500 134,700 134,200 132,300 131,100 130,000 129,100 Semi-State 56,400 56,900 57,000 57,800 56,900 56,100 55,800 54,500 53,200 52,700 52,800 53,200 52,600 53,000 53,000 Total Public Sector including Semi State bodies 417,000 421,400 416,900 427,300 421,000 417,600 410,500 406,900 403,700 402,100 401,100 402,100 404,200 404,300 392,900 Total Public Sector excluding Semi State bodies 360,600 364,500 359,900 369,500 364,100 361,500 354,700 352,400 350,500 349,400 348,300 348,900 351,600 351,300 339,900

Even excluding semi-state bodies, the total number of public servants in 2011Q3 is 339,900.


#10

How do you explain the discrepancy?


#11

The figures will be difficult to unravel because they were massaged every which way for political optics. For instance here’s an article from 2002 showing that Health Service employees were not included (god knows why).

Public sector wages increase by 9%

Back then it was presented as good news to have wage increases running at a multiple of inflation.


#12

If you do count all the local authorities and semi-states and the army/navy/air corps, you get 295,400.

However, that is just a manipulation and a distortion of reality. These all have a cost.


#13

Huh?


#14

I presume “not” is the missing word - “if you do not count”.

Is the HSE considered a semi-state in that figure?


#15

Here’s a bit of a clarification on the Public Sector employment numbers. I got the data for these charts from the 2011 DoF Budgetary and Economic Statistics.


Public Sector = Public Service + Commercial State Agencies

Health and Education can’t avoid the axe.


#16

SHould these figures not take into account the increased numbers of students in the educations system rather than just raw general figures for education. So if the system has to deal with a large increase in student numbers (which it has and will continue to) then it makes sense that education numbers remain static or actually rise. What we are seeing in a reduction in education employment numbers in the public service at a time when student numbers are increasing.


#17

I’d say the case is more likely for redeployment as the demand is probably growing from primary schooling and secondary in a few years. The major culling probably needs to happen at 3rd level (all those institutes of technology) and administration in the department, there is also a need to re-price services delivered down to more affordable level.

I also reckon most of the decreases in public sector employment have come from the exit caused by the pensions rush, so what cost savings have there been? all that’s happened is people moved from one expense row to the next. It will be interesting to see what the rise in the pensions bill is.

Todays Business Post lead story has the story of the HSE redundancy scheme paid out to people not on the payroll and being paid severence for years they didn’t work. I don’t think anyone has a handle on what’s going on in the HSE bureaucracy and probably never have since the great empire building era of the 2000’s.


#18

We’ll have to wait until the dust has settled from the mass exodus of public & civil servants by Feb 29.

On’ly then will each dept/quango know eactly how many staff they have left, inc. any extra requirements, or excess who can be redeployed.


#19

What hope for public service reform when Howlin is involved in deception like this?

The statement made here:

irishexaminer.com/ireland/ho … 78774.html

becomes the statement made here:

irishtimes.com/newspaper/bre … ing24.html

There are two clerical officer grades listed here:

publicjobs.ie/publicjobs/dow … n-2010.pdf

CLERICAL OFFICER STANDARD SCALE
CLERICAL OFFICER HIGHER SCALE

The standard scale is:

22,015
23,042
24,071
25,100
26,128
27,156
28,183
29,193
30,191
31,192
32,187
33,735
34,954
35,515

In terms of numbers at various grades, the latest information I can find dates from 2009 - debates.oireachtas.ie/dail/2009/11/17/unrevised2.pdf

In it 45% of Civil Service grades are listed as Clerical Officer - with no breakdown between standard and higher scale - and not 53% of standard grade clerical officers in their first year of employment as Howlin states.

These are the same clerical officers who have the worst sick leave record:

audgen.gov.ie/viewdoc.asp?DocID= … nuary+2012

Special Report Number 69: Sickness Absence in the Civil Service

Note that if 75% of clerical officers take sick leave and thr average number of sick days per clerical officer is 16 then the average number of days sick taken by those who take sick days in 21 1/3. An average of a month off.

audgen.gov.ie/documents/vfmrepor … sences.pdf

So the statement “He said 53% of workers in the civil service with increments are clerical officers” appears to be at best a manipulation of the truth by perhaps excluding people who are no longer eligible for increments or some other.

And the statement “He said that half of all increments were paid to those on clerical office grades earning an average of €22,000 per annum.” is just untrue as 22,015 is the starting salary of the lower clerical officer grade. Unless he is saying that 53% of the civil service consists of recently recruited standard grade clerical officers. Or he is counting clerical officers job sharing and further manipulating the truth.

How can someone who is dishonest regarding the state of the public service be realistically in charge of its reform?

Maybe he believes the bullshit he is being fed by his civil servants.

And how can newspapers and other broadcasting media reprint his statements without performing some basic fact-checking?

Answers on the world’s smallest postcard to …


#20

In addition to Greece and Ireland, it’s interesting that the rest of the so-called PIIGS have an exaggerated disparity between public and private wage growth:
Italy 42.5 versus 24.8, Portugal 58.0 versus 35.3, Spain 53.1 versus 29.9.
Take out GIIPS and the remaining euro zone economies would show a much more equitable rate of growth in public versus private wages.