Governance reforms anchored in civil service reforms–III

a) Realigning of Structure

The reform of the civil service is linked with the restructuring of government and the enhancement of the capacities of sub-national governments to deliver on the overhauled mandate.

To begin with, post the 18th Amendment there is no need for the continuation of the PAS Cadre. The role of the Federal Government should be restricted to establishing and calibrating a strategic direction through a collaborative process, policy making and standard setting, with the provincial governments fixing their own priorities in terms of the sequencing of implementation and practical matters of governance.

Only a small core, recruited on the basis of specializations (to ensure knowledge, continuity and security of tenure), should form part of the permanent cadre and paid market based salaries, but without perks like cars, housing, etc.

Governance reforms anchored in civil service reforms–II

And, going forward, recent inductees to the PAS should be required to specialize in one or two sectors of their own choosing, while keeping the option for lateral entry open in all positions (with no reservations of posts for any group/cadre) to induct high quality professionals with much-needed new and rapidly developing technological knowledge and skills.

The old systems of governance and skill set requirements do not equip civil servants to manage policies and operations of new technical skills for delivering decent basic services at the local level and for devolving effective administrative and financial powers to local government as a next step to the devolution of functions and powers to the provinces by the centre.

Henceforth, therefore, the structures and the skill sets to be inducted in the public sector should be dependent on the type of services to be performed by each level of government, with, for example, local governments mandated to deliver efficient and sustainable primary and secondary social and municipal services.

And this is desirable because local governments serve as a nursery for the tutoring and nurturing of the country’s future political leadership, while making the elected representatives, nearer to their constituents, more accountable for their decisions on the selection of priority areas and the quality of service delivery.

However, if decision making remains hierarchical and authority essentially rank-based, mere recruitment of adequately skilled professionals may be a necessity but not a sufficient condition for the achievement of the objectives associated with efficient, effective and timely delivery of basic social services through the suitable level of government.

The realization of these goals would, therefore, require a combination of reorganized structures, delegation of administrative and financial powers and re-engineering of business processes and work-flow through simplification and automation.

And to this end, each tier of government should be independent in designing the performance of its functions requiring policy making or service delivery through its own employees with its own pay structure, based broadly on market valuation for the required skills and experience - by establishing a sensible list of comparators.

Furthermore, as already implied earlier, the unified pay structure should be discontinued, along with the elimination of perks and privileges, which should be monetized.

Governance reforms anchored in civil service reforms — I

There is also the need to consider a more pronounced shift to a contractual basis of appointments for a whole range of skills.

Recruitments of a significant proportion of the public sector work force on market based salaries could be on contract. And to counter the curse of transfers, to the extent practical, this hiring should be on department and facility specific basis, e.g., school teachers and doctors should be appointed to a school, basic health unit or hospital, on a non-transferable basis.

b) Deregulation and Greater Transparency

In this writer’s opinion reducing the regulatory role, streamlining procedures and processes and increasing transparency through wider adoption of digitization of service delivery and on-line availability of government policies, laws, rules and regulations, circulars and guidelines and related procedural requirements will make civil servants less powerful.

This will enable curbing excesses and discretion and reduce transaction costs, thereby raising the efficiency and productivity of the private sector, as businessmen get more time to focus on their operations.

c) Rightsizing of Federal Government

There is a large Federal Government, comprising 43 Divisions, even after 18th Amendment. In addition, there are 444 OEs of which 212 are SOEs. The 444 OEs 44% fall under 12 functional categories, 15% of them are attached departments or executing agencies and the rest are in the commercial, manufacturing, public utility and financial services categories.

Of the 212 SOEs, 167 can be classified as commercial-operating essentially in 7 Sectors, while 44 are Section 42 non-profit commercial entities (including trusts, welfare funds, training institutions and universities). The total number of employees in these 41 Divisions and these OEs is more than 1.5 million.

The size of the Federal Government needs to be pruned, and sharply. Presently, the rationalization of its size is opposed both by politicians and bureaucrats-seeking Minister and Secretary-level positions.

Although both the Federal and provincial levels of government need restructuring and rightsizing, the discussion here confines itself to the Federal Government. To reflect the transfer of functions, post 18th Amendment, there should be a shrinking of an over-staffed Federal Government.

For example, those in Grades 1-16, are being paid well above what the market would compensate for a comparable skill set. And these absorb close to 85% of the payroll charged to the Federal budget. Most of these posts should be discontinued (many of which have become redundant overtime) as present occupiers retire. This thinning should be complemented by the following actions:

• Surrender of all vacant posts.

• Since only a handful could be candidates for privatization (because some would end up as monopolies without unbundling, restructuring or retooling/neoteric mode of delivering economic goods and services), the list of the majority of agencies & autonomous organizations that should be liquidated/wound up (for redundancy of purposes or uses for which initially established) should be finalized, while placing bans on all further recruitments.

• Next, for all the above referred divisions and institutions proposed for functional cessation, retire those who have completed 30 years of service (protecting pension entitlements attained to date). If it is politically difficult under present recession-type conditions they should be placed in “surplus pool”, thereby saving on office rent, utilities, cars, etc.

d) Compensation Structure

The discussion above has hopefully made out the case for redesigning the compensation structure by monetizing the vast array of perks by costing the entire set of handouts listed above.

This shift will make the compensation package more transparent and understandable while giving the officer the choice to say spend more on the education of his child rather than residing in a palatial house, thereby also exposing them personally to some of the basic socio-economic stresses faced by ordinary citizens. It will also help release prime commercial land, presently used for providing residential accommodation to these officers.

The additional cash expenditures arising from the monetization of the benefits can be financed by the resources released from the trimming of the Federal and provincial Governments, the liquidation/closing down of several organizations and the use/sale of the above referred land, along with the money that will be saved on a recurrent basis for not having to maintain these properties and motor vehicles funded from the public purse.

To facilitate a speedier shift to monetization the government should a) assist them in getting their cars leased and under existing government rules and compensate the use of the private car for official business; b) Cover their health needs through medical insurance; etc.

Furthermore, there is a need to move away from the present defined benefit pension scheme to a defined contribution pension scheme for new entrants to the Civil Service. For existing employees there is a need adopt it, while protecting pension entitlements attained to date.

Conclusion

To conclude, the government has to be re-invented to bring it in harmony with the demands of a modern globalized economy in which the private sector adopts internationally recognized technologies, production techniques and management practices to remain competitive.

Regrettably, the government, which is supposed to facilitate private sector operations and expects it to become modern in its outlook, sees nothing amiss with its own skills and work processes being antiquated and outmoded.

This huge contradiction is obviously unsustainable, being an important contributory factor to the poor quality of input provided by the bureaucracy for decision-making.

Modernization of the institutional structures and processes is being ignored at a great risk to the much-needed acceleration of economic growth. This would not be possible without adjustments in the size and skill base of the bureaucracy, with more than 45% of its membership of limited functionally literacy, ill-suited to the changing skill requirements of a competitive world.

Admittedly, a politically daunting and long haul task.

(Concluded)

Copyright Business Recorder, 2023