Context for Study Visit

1. Study Visit - IrelandPolicy- Making in Ireland, with particular emphasis on Regulatory Impact Analysis (RIA) Michael GriffinDirector Jacobs and Associates Europe Ltd.Dublin

2. Context for Study Visit “Romania drafting a Better Regulation strategy with 5 pillars: • Impact Assessment • Measuring theadministrative costs and reducing the administrative burdens • Consultation and dialogue with the stakeholders • Legislative simplification, and • Application of the EU law” Source: Edward Donelan, Sigma, OECD, “Public Policy – New Developments in 2007”, Conference on Good Governance andPublic Administrative Reform, Bucharest, 6 December 2007

3. Themes • Part 1: Policy-making in Ireland • Part 2: Drivers of Policy • Part 3: EU Influence • Part 4: Whence Regulatory Impact Analysis • Part 5: Doing Regulatory Impact Analysis • Part 6: Some Conclusions

4. PART 1 Policy-making • Policy ideas come from many sources: Government Programmes, Court decisions, EU decisions, International obligations, think-tanks and from the public • Government has to prioritise choices balancing political needs with social good • Progress of Policy, from Government decision to Law, is laid down in the Cabinet Handbook *www.taoiseach.gov.ie

5. Democratic Context • Ireland is a parliamentary democracy, with each government lasting about five years • Each new coalition government sets its ‘Five Year Programme’ at start of life of government • Such ‘Five Year Programmes’ include overall commitments for planned policies and investments • Commitments are in public arena for “checking”

6. Developing a Policy • Start with a ‘public need’ being identified • Submission to the relevant Minister • Minister instructs officials to prepare Memorandum for Government • If Minister agrees and policy is a new departure, it is submitted to the Department of Finance* • If Finance Ministry is opposed, proposals must go to Government for approval and must fully incorporate the views of Line Departments and the Minister for Finance * Since 2005, each legislative proposal must have a RIA (Regulatory Impact Analysis)- more later

7. Legal Route • Following Government approval, legislation drafted by Parliamentary Counsel (lawyers specialising in drafting) • Government sends draft laws to Parliament • Parliament debates legislation • Parliament amends legislation • Parliament passes legislation • Law signed by President and enacted (unless the President refers it to the Supreme Court for a judgment on its constitutionality)

8. PART 2: Policy Drivers • Government Programmes: Coalition governments agree 5-year programme of policy objectives • National Plans: Tradition of 5 year National Development Plans; in recent times such Plans drawn-up in tandem with EU Funding Programmes (and more recently the EU/IMF/ECB requirements) • Social Partnership Programmes: Governments since 1987 agreed 3-yearly social partnership agreements, with main stakeholders…set national pay levels, endorse policies and provide consensus (Croke Park Agreement) • Statements of Strategy: Under Public Service Management Act 1997, each Ministry has to prepare and publish a strategy statement, within six months of the appointment of new Minister – up on websites *High-level goals and objectives; identified strategies,with output and performance indicators to measure progress

9. NESC gives Policy Advice • National Economic and Social Council analyses and reports to the Taoiseach (Prime Minister) on strategic issues • “Stategic Issues” relate to the efficient development of the economy, the achievement of social justice and the development of a strategic framework for the conduct of relations and negotiation of agreements between the government and the social partners • NESC chaired by Secretary General of Prime Ministry, with representatives of trade unions, employers, farmers' groups, NGOs, key government ministries and independent experts

10. White Paper Regulating Better January 2004 Six Principles of Better Regulation Adopted Action Programme for Better Regulation

11. 2004 White Paper • key regulatory principles: • Necessity – Is the regulation necessary? Can we reduce red tape in this area? • Effectiveness – Is the regulation properly targeted? Will we get proper compliance? • Proportionality – Do advantages outweigh disadvantages? Better way to achieve goal? • Transparency – Have stakeholders been consulted? Is regulation clear and accessible? • Accountability – Is it clear who is responsible for what? With an effective appeals process? • Consistency – No regulatory anomalies? www.betterregulation.ie

12. National Recovery Plan, 2011-2014 – Public Sector • Reduce the cost of the public sector pay and pensions bill and public service programmes • Cut public service staff numbers by 24,750 from end-2008 levels, back to levels last seen in 2005   • Reformed pension scheme for public service (*) • Make more effective use of staffing resources with redeployment of staff within and across sectors of the public service to meet priority needs • Reform work practices to provide more efficient public services with scarcer resources (*) To apply to new entrants to the public service, who also will be affected by a 10% pay cut

13. PART 3: Importance of EU Influence • Market access: - greater trading opportunities - trade diversification - reduced dependence on UK economy • Completion of Single Market • EMU and Euro (up to recently) • EU structural reform agenda • Access to EU funding

14. Specific Steps taken Ireland has been developing an extensive experience during past 25 years, through: Learning from EU processes Developing its own systems, e.g. Central Evaluation Unit and Evaluations, e.g. ESRI Putting in place Guidelines* While the foregoing are necessary, they are not sufficient …there has to be effective and efficient delivery of projects “on-the-ground” * Working Rules on Cost-Benefit Analysis, June 1999,

15. Planning Cycle Government Appraisal Guidelines provide for a 4-stage “project cycle” Appraisal and Planning stages may overlap in practice Mid-term evaluation part of the cycle Post-Project Review

16. Monitoring & Evaluation Ireland has developed an effective evaluation system ensuring that both EU projects and domestically-generated projects are monitored • Capital Appraisal Guidelines, Department of Finance, 2005 • Value for Money and Policy Reviews Department of Finance, 2007 www.finance.gov.ie

17. Capital Appraisal Guidelines Designed to be rigorous in their approach to management and evaluation of capital programmes and projects Reflects best practice (updating the previous1994 Guidelines) Introduces greater proportionality into project assessment Central objective to ensure ‘value for money’ - improve quality of decision making - improve quality of management control - provide for post-project reviews www.finance.gov.ie

18. Value for Money Reviews ‘Value for money’ initiative complements the ‘CapitalAppraisal Guidelines’ A carefully considered appraisal system and culture takes into account the overall benefits and costs of a given project and seeks to make sure that budget estimates are met The Department of Finance VfM Manual (March 2007) outlines a Government framework to secure improved value for money from public expenditure www.finance.gov.ie

19. More progress needed Good systems now in place, but not producing “perfect outcomes” for all projects Some examples of “where things went wrong”, under budget, functionality and timeliness Much evidence provided in reports produced by the Comptroller and Auditor General Detailed conditions have been laid down in a timetable for implementation, of the €85 billion of financial support, by EU/IMF/ECB

20. Policy Challenges EU/IMF/ECB support helps Benefits: cheap liquidity and an overdraft Costs: Banking capital and issues on bonds Resolving banking crisis a key priority Political economy issues Implement 2011 Budget and adjustment 2012-2015 Morale – accepting the support of friends Restore Competitiveness Too expensive: private sector must also adjust costs Avoiding structural unemployment Labour market policy Source: Professor John FitzGerald, 15 Dec. 2010

21. Part 4: Role of RIA OECD and EU strongly influenced the introduction of RIA, a key policy tool, in Ireland RIA has only been introduced in Ireland in recent years Government formally decided to introduce RIA in June 2005 The commitment of Prime Minister (the Taoiseach) and Government Ministers very important in successfully introduction of RIA in Ireland 21

22. What is RIA* RIA examines and measures the likely effects of new regulations or changes in existing regulations, ideally by structuring the decision-making process providing an evidence basis for regulatory decisions establishing a comprehensive perspective on regulation  it is not a justification of decisions ‘after the event’ it does not replace political decision-making __________________________________________________________________________________________________________ * Named Regulatory Impact Analysis, Regulatory Impact Assessment or Impact Assessment

23. OECD Regulatory Reform in Ireland, 2001 • “The use of RIA is in its infancy in Ireland. The Government adopted RIA … later that most…and it is not yet consistently implemented. Hence, regulatory quality disciplines in Ireland are still primarily aimed at legal quality rather than regulatory efficiency and performance”

24. White Paper Regulating Better, January 2004 2004 White Paper, “Regulating Better”: “RIA …evidence-based approach…allows… systematic consideration of the benefits and costs of a regulatory proposal … RIA will be integrated with existing procedures. RIA will give special consideration to business impacts…RIA …supported through training, guidelines and promotion”.

25. Formal Introduction of RIA, June 2005 Irish Government decided that all Government Departments and Offices should prepare RIAs for: - all proposals for primary legislation involving changes to the regulatory framework; exceptions, e.g. Finance Bill, security, emergency and some criminal legislation significant Statutory Instruments proposals for EU Directives and significant EU Regulations when they are published by the European Commission …more recently Government decided that RIAs should be prepared for Policy Reviews

26. RIA Guidelines, June 2009 More details on how RIA should be integrated into the EU policy-making process Inclusion of standard approach to calculating administrative costs (being developed for 25% reduction target) Inclusion of advice on calculating public service implementation costs Extended discussion of methodologies More practical examplesbeing assembled www.betterregulation.ie

27. OECD’s Recent Advice “… Check Irish arrangements…to …strengthen the RIA requirements so as to strengthen their quality. For example, consider how the Better Regulation Unit could be formally equipped with the power to turn back inadequate RIAs so that draft proposals cannot be tabled before cabinet unless there is a RIA attached of adequate quality, and how publication might be made a statutory requirement. Enhance accountability for results by regular publication of (and publicity for) RIA statistics-how many done as a proportion of proposals, how many assessed to be reasonable quality, by department”. Better Regulation in Europe: IRELAND, OECD, October 2010

28. Part 5: Doing RIAs Identifying and defining the problem Spelling out the desired objectives Elaborating the different options Consulting the stakeholders Analysing the options (assessment of the likely impacts – the COSTS; the BENEFITS Recommending policy option Communicating the results Monitoring (regulation) and reporting

29. Ireland’s RIA Players Government Secretariat (the ‘Gate-keeper’) All Departments Department of Finance Departments of Taoiseach and Finance RIA check on Memoranda submitted to Government by Departments RIAs undertaken (helped by INDECON Consultants) Training and technical advice Reality checks on robustness of RIAs

30. Five Pilot Studies, 2004/2005 • Health and Children – Medical Practitioners Bill • Enterprise, Trade and Employment – Export Controls Bill • Office of the Revenue Commissioners – Betting Duty Regulations • Justice, Equality and Law Reform – Coroners Bill • Environment, Heritage and Local Government – Draft EU Groundwater Directive

31. Advice for doing a RIA Start as early as possible Assess all the alternative solutions Learn from previous RIAs (“+” an “-”) Avoid introduction of more ‘red tape’ Avoid doing a RIA merely to justify a decision already taken 31

32. Critical Factors for RIA Develop comprehensive guidelines -- Mandatory -- Covering both ‘process’ and ‘technical aspects’ Carry out sound analysis -- Develop strategies for data collection -- Use consistent but flexible methods Consultation Communication Training Apply RIA to both new and existing regulations

33. Gathering information Gather ‘in-house’ expertise Tender for professional advice and assistance Undertake dedicated RIA Training Set-up ‘Network of RIA officials  Search-out “best practice” (OECD/EU) Learn from Focus groups 33

34. Why Consult? Key feature of democratic process Allows maximum participation Allows data/information to be gathered Facilitate greater compliance Accelerates implementation Eases implementation (making the “unknown” known) 34

35. Example of a RIA Options for Free Travel for all citizens who are ‘under-21’ Do nothing Free on State Transport Services Free on State/Private Transport Services Free on State Transport Services with CARD* Free on State/Private Transport Services with CARD* ______________________________________________ * Having to produce a valid identity card, passport or driving licence See Revised RIA Guidelines (Pages 44 and 45) on website www.betterregulation.ie

36. Impacts of ‘Free TravelScheme’ on Government Spending Do nothing: no change for Exchequer State Transport Free – Exchequer cost of €53 mn All Transport Free: Exchequer cost of €73 mn State Transport Free (with card): Exch. cost of €50 mn All Transport Free (with card): Exch. cost of €70 mn Note: Only Exchequer Impacts presented here; also impacts on consumers, public and private transport operators. See Revised RIA Guidelines (Pages 44 and 45) on website www.betterregulation.ie

37. PART 6: Some Conclusions • Policy making process works quite well • Good consultation and good preparation comes with RIA • Skilled personnel specialise in policy-making and drafting • But, not all policies have been evaluated in past • Policies that are evaluated offer learning experiences

38. Importance of Training Specialised training is a very important requirement in the successful appraisal, planning and delivery of policies and projects There is need to ensure that officials are properly trained in areas such as procurement, project management, project appraisal and policy analysis External professional advice should be obtained if Ministeries have not got the relevant expertise – and it should be acquired on a “knowledge-transfer” basis

39. Key RIA Success Factors • Top Level Support: Imperative to have support from Ministers and Secretary Generals • RIA Network important that officials from each Department come together to share experiences • Advice: Very useful to have an independent economic consultant available to assist officials conducting RIAs (with complex issues) • Training: Civil Service Training and Development Centre organises training courses • Communications: All Departments should put RIA information in Annual Reports and on websites

40. RIA is ‘Common sense’ One should not be overawed by RIA.  RIA does pose a real challenge Like anything new, it takes time to adapt  In reality, many elements of RIA process will already be part of existing practices It is largely continuing to ‘make policy’ but in a more structured way 40

41. Dept.Taoiseach Publications • RIA Guidelines : “How to conduct a Regulatory Impact Analysis” (2005) • A Reporton the Introduction of Regulatory Impact Analysis (2005) • Reaching out: Guidelines on Consultation for Public Sector Bodies (2005) • Revised RIA Guidelines (June 2009) www.betterregulation.ie

42. Local Government • Local government functions in the Republic of Ireland are mostly exercised by thirty-four local authorities, termed county or city councils, which cover the entire territory of the state. A further eighty town councils have limited functions in their respective areas. • The principal decision-making body in each authority is composed of the members of the council, elected by universal franchise in local elections. Many of the authorities' statutory functions are, however, the responsibility of their chief executives, termed city or county managers, who are career officials appointed by an independent government body. The city and county councils have a range of functions in areas such as planning, transport infrastructure, sanitary services, public safety (notably fire services) and the provision of public libraries. In eighty smaller towns and cities within the functional area of county councils, a second tier of local government, the town councils, exercise some more limited functions subsidiary to those of the relevant county council. • The local government system is governed by the Local Government Acts, the most recent of which, the (Local Government Act 2001), established this two-tier structure of local government. The Local Government (Ireland) Act 1898 is the founding document of the present system of local government. The Twentieth Amendment of the Constitution of Ireland (1999) provided for constitutional recognition of local government for the first time in Ireland.

43. Funding • Following the abolition of domestic property rates in the late 1970s, local councils have found it extremely difficult to raise money. The shortfall from the abolition of property rates led to the introduction of service charges for water and refuse, but these were highly unpopular in certain areas and led in certain cases to large-scale non-payment. Domestic water charges were abolished on 1 January 1997 placing further pressure on local government funding. • The Department of Finance is a significant source of funding at present, and additional sources are rates on commercial and industrial property, housing rents, service charges and borrowing. The dependence on Exchequer has led to charges that the Republic has an overly centralised system of local government. • It is worth noting that over the past three decades numerous studies carried out by consultants on behalf of the Government have recommended the reintroduction of some form of local taxation/charging regime, but these are generally seen as politically unacceptable. • Since 1999, Motor Tax is paid into the Local Government Fund, established by the Local Government Act 1998[3] and is distributed on a "Needs and Resources" basis.

44. Responsibilities • Local government has progressively lost control over services to national and regional bodies. For instance, local control of education has largely been passed to Vocational Education Committees, whilst other bodies such as the Department of Education and Science still hold significant powers. • In 1970 local government lost its health remit to the Health Board system. • In the 1990s the National Roads Authority took overall authority for national roads projects, supported by local authorities who maintain the non-national roads system. • In 1993 the Environmental Protection Agency was established to underpin a more pro-active and co-ordinated national and local approach to protecting the environment.  • An Bord Pleanala adjudicates on Planning Appeals, • The trend has been to remove decision-making from elected councillors to full-time officials. In particular, every city and county has a manager, who is the chief executive but is also a public servant appointed by the Public Appointments Service and is thus answerable to the national government as well as the local council. • Local policy decisions are sometimes heavily influenced by the politicians who represent the local constituency in parliament and who may be dictated by national politics rather than local needs. • Local government bodies have responsibility for such matters as planning, local roads, sanitation, and libraries. • The Minister for the Environment, Heritage and Local Government has responsibility for local authorities and related services.

47. . Thank You Michael Griffin