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EU Presidency Statement - Improving Public Sector Effectiveness

Mr. Chairman,

I have the honour to speak on behalf of EU at the 42nd Session of the Commission for Social Development. The Acceding Countries Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, the Candidate Countries Bulgaria, Romania and Turkey and the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, and Serbia and Montenegro align themselves with this statement.

Mr. Chairman,

As this is the first time on which Ireland has taken the floor during this session of the Commission, please allow me to congratulate you and the other members of the Bureau on your election and to assure you that the European Union looks forward to participating actively and constructively during the 42nd Session of the Commission for Social Development.

The EU welcomes the consideration by the CSocD of 'Improving Public Sector Effectiveness' as a priority theme for the agenda of its 42nd Session. The EU considers the achievement of significant advances in public sector effectiveness to be of crucial importance to the progress of social development at sub-national, national and cross-national levels.

Allow me to commence by reflecting on the role of and the challenges for the public sector within the development dimension. There is an obvious continuum between the public and the private sector as contractual and other relationships have progressively been put in place between public authorities, the private business sector and also the non-governmental and non-profit sector. Initiatives targeted at achieving significant improvements in public sector effectiveness are therefore also likely to be of considerable significance for the vibrancy of the private and non-profit sectors. The ongoing work in the framework of the Green Paper on Services of General Interest is also of relevance. Therefore efforts at improving public sector effectiveness go hand in hand with efforts to achieve good governance within public bodies and sustainable development in society at large. The importance of improving public sector effectiveness is strongly reflected in the UN Millennium Declaration which clearly states that success in meeting the Millennium Development Goals (MDGs) depends upon good governance within each country. In terms of the EU's approach to International Cooperation/Development Cooperation, the Union firmly believes that effective public governance in developing countries must be a key component of policies and reforms for poverty reduction, equality including gender equality and the well-being of children as well as for democratisation and global security. This is why institutional capacity-building, particularly in the area of good governance and the rule of law is one of the six priority areas of EC Development Policy.

Mr. Chairman,

I. Some Public Sector Effectiveness Issues

The EU considers that the achievement of public sector effectiveness is critical, particularly because of its impact on the delivery of social services and its potential for promoting poverty reduction and as a tool for addressing all inequalities including social and gender inequalities. In this regard the EU believes strongly that all efforts to make the public sector effective, should be constantly monitored and assessed to ensure progress and quality services.

a. Public social services have to be accessible and reach all of the population for whom they are intended, in a way that ensures the principle of non-discrimination.

b. Quality is also an essential component of effectiveness. Quality should be assessed in relation to the responsiveness of the services to public needs, expectations and capabilities, as well as from the perspective of the norms and objectives set by the public authorities responsible for the design and delivery of these same services. In the latter regard, quality management tools, such as the Excellence Model of the European Foundation for Quality Management (EFQM) and the Common Assessment Framework (CAF) which has been specifically developed by the EU for the public sector have both contributed to progress in the area of quality.

c. The productivity of public social services is also a critical element of their effectiveness. As these services are usually labour intensive and resource constrained, relevant questions that need to be answered satisfactorily include what is delivered at a given cost, and how the human resources are utilised.
In contrast to the private sector which is profit driven, non-commercial, public sector bodies aim to increase the availability and accessibility of services in an equitable way, including and especially to those who cannot afford them. These differences can present special challenges to governments seeking to improve public sector effectiveness. For example, charges (if they apply at all) to the users are often subsidised to permit access by those with limited means. Therefore, the simple criterion of profitability that is applicable to the commercial market place cannot be used to assess the effectiveness of public services.

Mr. Chairman,

II. Public Sector Reform

Given the importance of the need to optimise public sector effectiveness, it is perhaps not surprising that over the past 20 years or more there have been significant shifts in governmental policy relating to this area. Public institutions have basically been required to accomplish more with reduced means. Such policies were promoted in developed as well as developing countries.

Since the mid-1990s, across the EU, concerns about the effective functioning of the public sector have led to calls for reform through reinventing and re-engineering government using the power of the entrepreneurial process and the force of the free markets, new public management (NPM) to instil greater management culture in public agencies and enterprises, and e-government or the greater use of information and communications technology (ICT). Some of the underlying drivers of public sector reform to date have been:

• • the need to control government expenditure;
  
  
• the need to improve the quality of services to all citizens, in response in part to rising expectations;
  
  
• the pressure to become more competitive and reduce the costs of doing business, resulting from government regulation or oversight in a highly competitive and dynamic international economy;
  
  
• developments in Information and Communication Technology (ICT) leading to easier access to information and a demand for access to more government information to be provided quickly;
  
  
• calls for new forms of governance which are more responsive, flexible and "modern", and for involvement of social partners in the decision-making and management process.

Attempts to reform the public sector in order to improve its effectiveness have highlighted the need to find - within the context of a changing political, social and economic environment - the best strategy to integrate new incentives to improve performance of public institutions, guarantee widespread public access and ensure minimum standards for services. Good governance has thus become an essential ingredient of development co-operation and is now an integral part of national poverty reduction strategies and plans (e.g. PRS process).

While different national approaches have been adopted with the aim of achieving improvements in public sector effectiveness, on the basis of our experience within the EU, a number of common themes can be identified:

• rationalisation and restructuring to ensure a unified, integrated and leaner public service;
  
  
• institution building and management reforms to promote greater transparency accountability and organisational and managerial effectiveness;
  
  
• increasing representativeness/diversity (age, location, gender, ethnicity, disability etc.) in the public sector through affirmative action;
  
  
• improved service delivery to meet changing needs and redress past imbalances;
  
  
• the promotion of internal democracy and external accountability;
  
  
• human resource development and capacity building;
  
  
• improved employment conditions and labour relations based on fairness and equality including gender equality;
  
  
• the promotion of a professional service ethos; and
  
  
• increased knowledge of the effectiveness of interventions.

The role of public financial management is integral for the effective implementation of public sector reform, through enabling fiscal discipline, the strategic prioritisation of resources and delivering value for money. Public sector reform should therefore include the necessary political and institutional change to enable improvements in public financial management and accountability.

From our experience within the EU, it is also clear that reform needs to be implemented in a realistic and practical manner so as to avoid reform overload. The timing and sequencing of changes and reforms are significant, as are the capacity and education levels of the civil service as well as the level of resources available.

Mr. Chairman,

III. Building Upon Experience

Our experiences of public sector reform within the EU to date confirm that 'one size often does not fit all'. However, certain elements are necessary in the drive forward for improved public sector effectiveness:

1) As part of a wider reform programme and drive to introduce quality management, all public bodies should set clear objectives: what they do, for whom they do it and what they want to achieve. The issues of effective mobilisation, representation, active participation and empowerment of civil society, particularly all people living in poverty and of the effectiveness and capacity of public institutions and administrations to define and deliver the required policies must be addressed. Marginalisation is an aspect of poverty in itself and empowerment is instrumental in reducing poverty.

2) It is of basic importance to promote dialogue, debate and learning through democratisation, both in internal structures of power and in relations with external stakeholders. Recognition of the key role played by public servants themselves as internal customers is a key element of this approach. Within the EU, some Member States have found that the use of a Social Partnership approach to the improvement of public sector effectiveness has been a key element in promoting a sense of 'ownership' of the reform process. Likewise, country ownership of national poverty reduction strategies is key to the success of development policies, and in-country dialogue on governance is essential to build country-driven reform programmes. Not only Parliaments and institutions other than the central government, but other in-country stakeholders including representatives of political, social and economic interests, as well as municipal and other decentralised authorities and the users themselves, play an important role in this dialogue.

3) It is always necessary to place issues of the costs and financing of public social services into the overall context of other government operations and total government expenditures. Public social expenditures typically include human capital development (such as health, education and training), social equity enhancement (such as food programmes, housing and other social assistance), and social protection (such as disability and pension programmes). The facts that public social expenditure programmes directly promote human and social development, and that country experiences have shown that investment in social sectors is linked with favourable economic performance, lend support to this argument.

4) Finally, it is important to try to ensure complementarity among the various social services for achieving efficiency gains. For example, it is well known that expenditures on public health are more effective when parents are literate, expenditures on education are more effective when children are healthy, and poverty alleviation can be more effective if the targeted population is more healthy and literate.

Mr. Chairman,

In conclusion, there is little doubt that realising tangible improvements in the effectiveness of the public sector has a vital role to play in promoting social development centrally, regionally and locally. Good governance in the public sector is an essential ingredient of effective development cooperation. Without good governance, the effectiveness of public sector bodies to improve the standard of living of all people living in poverty, to ensure their access to public services and to guarantee their rights and security is greatly inhibited. For all these reasons, the EU is keen to support the Commission in its work on this priority theme and looks forward to its deliberations and conclusions on this important issue. In this regard, the Commission for Social Development has a crucial contribution to make.

Thank you.

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