Public-sector incapacity

Martin Henry, Contributor

A lot of focus has been placed in recent years on the size of the public service and of its wage bill. The Public Sector Transformation Project, which seems to have now run out of gas like JEEP, was widely regarded as a staff-cutting exercise.

A series of memorandums of understanding between executive Government and the civil service has sought to restrain wage increases in exchange for the indiscriminate preservation of jobs of all types and degrees of usefulness.

Two recent studies, one by the Government itself, the other by a university-based think tank, have shifted focus to capacity and efficiency in the public sector. These studies were reported two days apart late last month by The Gleaner. But not much has been made of them in public discussion. In fact, they were rather small stories in the paper.

The study by the Ministry of Finance (MOF) for the Public Administration and Appropriations Committee (PAAC) has concluded that project implementation is being hampered by procurement delays, weak institutional capacity, low project-management capacity within public-sector departments and agencies, and overambitious implementation plans and timelines. The MoF study comes against the background of a nearly $8-billion cut from capital projects in the 2013-2014 Budget in the compression supplementary estimates tabled by the minister of finance, Dr Peter Phillips, on February 25. The minister felt he could safely save money by cutting allocations to capital development projects, the very projects which increase the country's infrastructural capacity and development capacity, because many of these projects for which money had been provided in the Budget last April were not ready, with just two months to go before the close of the financial year.

The Gleaner, true to media form on the matter, has framed the problem as public-sector workers "sleeping on the job". That's the easy, simplistic explanation. The PAAC itself and its sister committee, the Public Accounts Committee (PAC), are inclined to play the same game, lambasting public servants appearing before them for what is simplistically viewed as "sleeping on the job".

Poor management

CaPRI, the Caribbean Policy Research Institute, with a former minister of government for industry, investment and commerce and for agriculture as one of two co-executive directors, has undertaken a study on the extent of debt in the Caribbean which has sought to tease out causes. Speaking on 'Independent Talk' on Power 106, Co-executive Director Tufton said, "Much of Jamaica's debt has been caused by public entities being managed poorly and making management decisions based on responding to the socio-political landscape rather than to economics."

The 'socio-political landscape' is code for the "run wid it" actions of politicians for political advantage over sound and prudent economic practice of the kind the International Monetary Fund is now enforcing in exchange for its money.

"What has happened," Dr Tufton said, "is that the managers of these entities have yielded to the pressure to respond to the socio-political rather than the economic ... and, therefore, you end up having these huge subsidies. And these subsidies mount over time."

The managers, as public servants, have no option, as Dr Tufton seems to imply, to not yield "to the pressure to respond to the socio-political rather than the economic". Public servants do not decide policy, and, within the law, are obliged to carry out the policy directives of the executive of Government as best as they can under prevailing circumstances.

The CaPRI study identifies some of the major entities which have racked up the "contingent liabilities" outside of the central Government Budget, liabilities which make up the bulk of the debt. Entities such as Air Jamaica, the National Water Commission, the Sugar Company of Jamaica, and the Jamaica Urban Transit Company.

But mainstream operations of Central Government have made their own outstanding contributions to the debt stock. And poor management and execution of projects in these areas has simply made worse the problem of successive administrations offering benefits in response to the 'socio-political landscape' faster than revenue could accommodate or growth could pay back what was borrowed.

The first government in independent Jamaica, for example, embarked upon a massive school-building programme with 50 junior secondary schools and some primary schools "built by Labour". Within months of winning the 1972 general election in February, the new PNP Government set up a commission of enquiry in June of that year, the DaCosta Commission, to unearth corrupt practices and victimisation in the JLP Government it had replaced.

The commission found plenty of both, but also frankly reported that the incapacity of the public service to handle major capital-development projects was also a significant reason for the inefficiencies, wastage and cost overruns which had taken place. Spectacularly, the school-building programme had managed to achieve a 100 per cent cost overrun!

Inadequate manpower

Here it is from the report of the DaCosta CoE: "Among the many contributing factors responsible for the almost doubling of the estimated cost of the School Building Programme was the Ministry of Education's inability to provide the manpower to deal with the construction programme. The Building Section in the ministry, with only one qualified architect and a number of building inspectors who had grown up with long experience in the field, was clearly inadequate to handle a project of this magnitude."

The project director, the commission noted, had submitted to Cabinet in 1967 a memorandum telling the executive of Government, "I should point out, however, that although the contractors seem to be well organised, the ministry does not appear to be organised to undertake this project, even though Cabinet has agreed on the additional staff. As of now, not one additional person has been added to the staff to carry through this programme, and I should add that if the contractors begin in the field before we are geared to undertake the project, it would be disastrous in terms of costs, due to delays in approvals, payments of bills, procurement of materials, approval of variation orders, and coordinating of all the activities necessary to carry through an efficiently operated project."

The commission report concluded: "These words, in fact, proved prophetic. The ministry never secured the manpower or technical expertise to deal with the scheme."

Later on, the report caustically commented on its findings: "The problem of overexpenditure is common to all the ministries whose activities we reviewed, [but] the operations of the Ministry of Education in this sphere form an almost copybook background against which to discuss the problem."

Run the problem of incapacity in numbers and skills and strategic deployment for critical tasks through half a century and it is not difficult to see both its contribution to the debt burden and to the underperformance of Government. While the absolute numbers in the public service may be too large and the wage bill too high, there is a chronic critical shortage of key technical skills and poor pay for attracting and retaining top talent.

The PAAC solution, which Parliament has accepted, to the problem of project implementation being hampered by procurement delays, weak institutional capacity, low project-management capacity, and overambitious implementation plans and timelines is the establishment of a central project-management and implementation unit within the Government to ensure that projects are implemented in a timely and efficient manner. A czar of public-sector management, according to the opposition chairman of the committee, Edmund Bartlett.

It won't work. Certainly not without adequate top-of-the-line staffing attracted and retained with competitive salaries. In any case, it is capacity in the actual implementing units which is most needed from the time those schools were built by Labour in the 1960s, with 100 per cent cost overrun and numerous delays, until now.

Martin Henry is a university administrator and public-affairs analyst. Email feedback to columns@gleanerjm.com and medhen@gmail.com.