IPA - The Institute of Public Administration

Address by Ombudsman and Information Commissioner, Emily O'Reilly at Governance Conference

Modernisation and Change: Public Services in 2010 - Winter Seminar Series

Royal Academy of Medicine in Ireland

Royal Academy of Medicine in Ireland
The Healthcare Management Section

Presents a free half-day seminar on:

‘The Leadership Quest in Healthcare Delivery Systems’ Friday 16 October 2009, Royal College of Physicians of Ireland, 6 Kildare Street, Dublin 2

Minister for Finance Brian Lenihan TD to address IPA Seminar: Department-Agency Relations and the Performance Dialogue on 28 May 2009

European_eGovernment_Awards

Seminar announced: Moving Mediation into the Workplace, 30 April 2009

Public Policy Seminar announced: PMDS - Implementing the Task Force Recommendations, 21 April 2009

Public Policy Seminar announced: Housing Bill 2008 – Implications for Local Authorities, 3 April 2009

John and Miriam Carver to address IPA’s Governance Forum, 25 March 2009

IPA to offer training for staff involved in Local and European Elections 2009

Applications now being invited for The Leadership Challenge: An intensive Leadership Development Programme for Senior Public Servants

New Books from the IPA

Local Authority Times (Vol. 12, No. 3)

Local Authority Times (Vol 12 No. 1&2)

Local Authority Times (Vol 11 No. 4)

Pensions Tender Document

50th Anniversary Celebrations

Editor - Publications Department

Local Authority Times Autumn 2007

Comhspeisialtóir Seirbhísí Gaeilge Nua ag IPA

Local Authority Times Summer 2007

Successful Apartment Living - Combating Urban Sprawl Conference

Fitzgerald Report on Moyross and other areas of Limerick City

Leadership In the Irish Context – A Woman’s Perspective

Understanding Irish Public Administration Lecture Series

Local Authority Times Spring 2007

ICS/IPA Public Sector Conference - 2 March 2007

3rd Annual IPA/ICS Public Sector Network Conference - 14 Dec 2006

New: Certificate in Strategic Procurement

Local Authority Times Winter 2006

Local Authority Times (Vol. 10 No. 3)

Local Authority Times Vol.10. No.2

IPA received EFQM Index of Excellence Award

Croke Park Research Projects 2006

Leadership in Local Government Programme - Reports

Training Services April-June 2006

Local Authority Times Vol.10 No.1 Spring 2006

Understanding Irish Public Administration - Series of One-day Lectures

The Local Government Policy and Practice Series

Local Authority Times Vol. 4, 2005

Local Authority Times Vol.9 No.3

Local Authority Times - Vol. 9 No. 2

Local Authority Times - Vol.9 No.1 Spring 2005

Local Authority Times, Vol. 8, No. 4 (Winter 2004)

Local Authority Times: Vol. 8, No. 3. Autumn 2004

Annual Report 2003

Local Authority Times - Vol. 8, No. 2

Launch of the Whitaker School of Government and Management

Local Authority Times, vol. 8, no. 1 – Spring 2004

Local Authority Times - Vol. 7, No. 5

Local Authority Times (Vol. 7 No. 4)

Local Authority Times (Vol. 7 No. 3)

Local Authority Times (Vol.7 No. 2)

Note on PDF files: These files can be read using Abode Acrobat Reader, which you can download for free. To save a PDF file to your hard drive right-click the link and select Save Target As...

New Director General at the IPA

A civil servant since 1965, John Cullen`s career has been in the Department of the Environment and Local Government, where he played a leading role in the development of the local government modernisation programme. Previously he headed up the Planning and Urban Renewal Division, during which time he was a member of the board of Temple Bar Properties.

John is no stranger to the IPA, he attended the School of Public Administration in 1970-71. He has lectured on the IPA`s BA in Local Government Studies and has been a member of the IPA Education Committee for many years. He has just completed a term as a member of the Committee for Public Management Research.

Local Authority Times (Vol 7 No. 1)

Note on PDF files: PDF files can be read using Abode Acrobat Reader. Download this software for free.

To save the file to your hard drive for later viewing, right click the link and select Save As...

“Food for Thought” - a Local Authority Unit Paper - 1

The Local Authority as Agent for Central Government: Implications for Local Authority Financial Management

This paper, the first in a new monthly series, takes a look at the financial arrangements that exist in Irish local authorities for services administered for central government departments and agencies.

Introduction

For the past five to ten years more attention has been paid to the role of local government than at any time previously. For many years the role of local government evolved more in response to central government directive than to locally inspired mandate. The case has changed somewhat since the relaxation of the doctrine of ultra vires and more definitely since the initiation of Better Local Government.

Many attempts have been made to clarify and enhance a level of government about whose raison d’être the citizen has often been confused. The attempt to improve the relationship between local authorities and the citizen as clients and customers is not only desirable but necessary. There is now a need to concurrently examine the local authorities’ relationship with central government and the services they provide for central government departments and agencies.

Of course, it is understood that the local authority has a reserved function in many of these areas. Nevertheless, this does not translate into the local authority having the discretion in deciding whether or not to provide these services.

The services provided by local authorities on behalf of central government departments and government agencies include the following:

• Administration of Higher Education Grants (HEGs);
• Administration of motor taxation;
• Food safety monitoring;
• Responsibility for coroners and inquests;
• Execution of some veterinary and livestock activities;
• Administration of VEC pension payments;
• Provision of Civil Defence;
• Administration of National Roads Schemes.

This service provision comes at a cost and has repercussions for the local authorities in terms of financial and performance management, the envisaged expanding role of local authorities, and the provision of new services. What we are primarily concerned with here are the financial implications.

Costs

The arrangements for meeting the costs of providing these services vary. In the case of the HEGs, the local authorities administer the grants without any subsidy or direct compensation from the Department of Education for the administrative costs. While in the case of motor tax, the local authority is paid in full for the administration, and in the case of food safety monitoring there is a service level agreement between the local authorities and the Food Safety Authority. In the case of the HEGs there are further costs borne by the local authority through the delay in the Department of Education in paying the arrears which results in the local authorities having to borrow and pay interest on the borrowings. In addition, their liquidity is reduced.

Overhead cost: In the administration of central government mandated functions, without direct compensation or subsidy, the local authority has to bear the burden of the overhead cost. These include staff numbers, office accommodation, storage of files, dealing with FOI requests, etc.

Cash flow problems: There are hidden costs in the administration of some of these functions, where there is a delay in payment by the different departments. The local authorities incur liquidity problems and further costs in the payment of interest on borrowings. The local authorities are not compensated for this accompanying cost. The importance of this issue is very evident for organizations that are recognized as having very limited revenue-raising abilities. Ultimately, it could be argued that such problems limit the discretion of the local authority and, therefore, impinges on local democracy.

New financial management arrangements: The new financial management arrangements will have an effect on how these costs are accounted for in the local authority financial records. The full cost of providing these services should be transparent in the new accruals system.

For consideration

While it is recognized that the situation has improved over the last five to seven years, all of these issues have implications for the relationship between local authorities and central government in the financing of these functions. Due to the new developing accounting conventions, there may be a need for local authorities to separate the functions they provide under their own mandate and those they provide as agents of central government. For effective management purposes, it is generally deemed desirable to have this distinction. The distinction is made in most jurisdictions, and Denmark offers a very good example, where there is a clear distinction between services which are provided to promote the interests of the local community, and those services provided as agents of central government where service level agreements are used.

As resourcing is such an important issue for local government, the more transparent these costs become, the more convincingly the argument for full compensation for the provision of these services can be made. Central government would also benefit from this transparency.

Better Local Government provides that no new functions will be transferred to local authorities without due regard to the requisite amount of funding. However, it is possible to see a scenario where over time there will be a divergence between the cost of providing these services for the local authorities and the funding provided by the central department or agency requesting the service.

Part 10 of the Local Government Act, covering agreements and arrangements over functions, allows a local authority to enter into agreement with a second local authority to provide a specific function on its behalf. Similarly, a public authority may enter into an agreement with a local authority, whereby the local authority agrees to perform a function on behalf of the public authority. Two or more local authorities may also arrange for the joint discharge of any of their functions.

What can be done

In order that this can be done successfully, there may be a need for an instrument along the lines of a service level agreement. This could meet the basic requirements of a defined service such as the administration of motor tax. However, some of the other services, which are less quantifiable, may need a different instrument for management purposes. What is suggested is an instrument such as the performance agreements that exist in some countries both between central and local governments and between ministers and their departments. The costing methodology used to support these arrangements would need to be rigorous in order to build up the case for central government. The new financial models for job costing due to be in the system by 2003-04 will facilitate this type of instrument.

The basis for most of these types of agreement are the same. They contain provision for:

• Summary of outputs to be delivered / performed;
• Roles, responsibilities, powers and obligations;
• Performance standards;
• Monitoring and reporting arrangements;
• Resourcing arrangements;
• Rewards and sanctions;
• Arbitration arrangements.

Both service level and procurement agreements provide for a win-win scenario for those involved. The benefits for central government of this type of arrangement include:

• Clarity with regard to service provision;
• Agreement on appropriate cost, quantity and quality measures and standards for desired service provision;
• Determine the preferred supplier where there are alternative suppliers;
• Assess the risks and obligations associated with delivery;
• Record and change decisions;
• Verify output delivery;
• Hold the supplier accountable for delivery of the specified output.

The benefits for the local authorities include:

• A closer alignment between cost of provision and recoupment from central government departments and agencies;
• Aid internal management decisions processes;
• Assist in the process of prioritizing local authority activity - having a clear idea of what they are producing or performing and why it is vital in ensuring the right mix within a given budget constraint; Make explicit the means by which changes in output mix may be agreed.

These agreements are not "cast in stone" for the duration of the agreement; parties can still agree to changes in output mix, subject to overall appropriation constraints.

Questions for consideration

• Should there be a greater distinction between what local authorities do as agents of central government and services that are provided to promote the interests of the local community?
• Would procurement and service level agreements assist in the internal management processes of the local authorities?

© Institute of Public Administration – Local Authority Unit Any views expressed herein are those of the author and not necessarily those of the Institute. If you have any quires, wish to make any comment or suggest topics for further issues, please contact Justin F. Keogan at the Institute of Public Administration, Lansdowne Road, Dublin 4, tel. 01 240 3636 or 086 810 9872 or email jkeogan@ipa.ie