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Dublin: 16 °C Wednesday 20 June, 2018

Column: Spending public money - where's the master plan?

Former trader Nick Leeson has an idea to sort out the State coffers – get a bunch of hard-nosed business people to assess the waste and root out value for money.

Nick Leeson

I HAVE BEEN travelling quite a bit lately, various places, different cultures, very different people. But there’s one constant, every time I return to Galway, there’s a new set of roadworks.

I can’t immediately say whether it is the same in the rest of country but against the backdrop of a country that is on its knees financially, a public health service that is under so much pressure that hospital patients are left waiting on trolleys, thousands living in abject poverty and a government that is aggressively wielding the axe in making cuts and dreaming up new taxes, I find it difficult to rationalise the large number of people engaged in what to the untrained eye appears largely meaningless developments.

I’m told that somewhere there is a master plan. I fully understand that there are certain grants and allocations that if unused are not renewed in following years but surely common sense should prevail. In Galway, one roundabout has been replaced by traffic lights, two others have been moved slightly and may have been changed marginally in size and one other is such a hive of activity that nobody is quite sure what is actually going to be the final outcome.

As I’ve said I am told that there is a master plan but I cannot fathom it. For me, quite simply it is a waste of money.

When things are tight, you tighten your belt, you allocate money wisely and you make sure that you get value for each and every penny that you spend. None of that appears true here. But most of all you place money where it is most needed.

How can we bring a halt to the wastage?

It made me wonder though who allocates funding in Government and probably more importantly: are they qualified to do so? If they aren’t, which unfortunately is my conclusion, then what needs to be done to make sure that we make change that will bring a halt to the wastage?

In Ireland we are governed by a coalition government that is made up largely of ex-school teachers, a couple of ex-bankers and a number of career politicians. The government lacks hard-nosed successful business people who take tough decisions to make a living to stay ahead of the competition. I don’t think someone in that category would have approved money spent in any of these ways.

Remember the technological advances that the state sought to introduce to make voting simpler in Ireland. Electronic voting was introduced to Ireland in 2002 on a trial basis. Plans to extend the e-voting project began in 2004 but ran into difficulties and it was eventually abandoned in 2009. A confidential report in 2002 expressed serious concern over the security of the voting machines. As of October 2010, the total cost of the electronic voting project had reached €54.6 million, including €3 million spent on storing the machines over the previous five years. Storage!!

Would Michael O’Leary have bought e-voting machines? I really don’t think so. Or if he did, he would have charged you for using them and made a profit.

The Mahon and Moriarty tribunals were both convened by recent governments to investigate irregularities in the way certain issues were handled. Both achieved very little, other than inflate the bank balances of a number of already wealthy lawyers. Neither reached worthwhile conclusions, neither told us much more than we already knew. Both, in my opinion were an utter waste of money. The total cost of both tribunals is estimated to be well in excess of €350m. Not exactly small change!

The solution is to get hard-nosed business people to properly assess where public money is being spent

There are many more. These three instances alone will top out in the region of €500m. I have no idea of what cost the roundabouts are being moved in Galway but you can add it to the list. The solution for me is to get those people missing from the make-up of government – the hard-nosed successful business people  - to sit astride a non-political disbursement process that properly assesses where money is spent and uses far better assessment techniques than have been employed in the past in making such decisions, common sense being at the top of the list.

We hear this week of a possible new inquiry. It has been reported that efforts will be made to shed light on the decisions which led to the 2008 bank guarantees. I think I can short circuit this and save the country a lot of money. Let’s call it the Leeson Tribunal.

The report would go like this: The banks found themselves to be in grave difficulty after running amok for a number of years. They had covered up the situation as long as they possibly could but the situation was haemorrhaging out of control. They’d kept the government informed but had reassured them that they were able to cope. On 29 September, 2008 they informed the government that they really didn’t have a clue.

The two parties, those without a clue and those without any understanding, then sat down to compare notes and see what needed to be done. The think-tank came up with one solution: a bank guarantee that was ill-conceived and badly thought out but did the one thing that they needed, bought them some time to have another go at it. And another. And another.

The conclusion? When faced with the problem, both parties were found to be incompetent. That should save a couple of hundred million and ten years!

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