The main reforms will see the introduction of a board of management of ten and a review of the size and structure of the 22-member hospital board by consultants PricewaterhouseCoopers. The board of management will include external members ‘representing patient interests, business and financial skills’.

The hospital says that any alterations to the full hospital board may require legislative changes to its statutes. A new post of Director of Quality will also be established.

PwC was commissioned in 2009 to examine existing governance arrangements and senior management structures at the hospital and presented its report last autumn.

So if PwC already did a report on governance arrangements and management structures, why is there a need for a new review of the board’s size and functions?

According to the version leaked to the Irish Times, in this brave new world, the Senate will be abolished. The number of Dail deputies elected in the traditional way by PR-STV will be reduced to 146. But there will be the ultra-TD elite – a group of 15 elected via a list system from four regional constituencies, based on the existing European constituencies, bringing the total number to 161. The President’s term of office will be reduced from seven to five years, but emigrants living abroad for more than five years will have the right to vote in Presidential elections.

Four Dail Committees will have constitutional status – the Finance Committee, a new Budget Committee, a new Banking and Regulation Committee and an EU Affairs Committee. The ‘Abbeylara’ decision that prevents Oireachtas Committees operating in a quasi-judicial role will be reversed and the number of overall Dail Committees reduced from 19 to nine.
There’s something for everyone in the audience too: . “We believe that citizens must have a direct way, between elections, to make their concerns known. Our proposal will oblige the Dáil to consider a particular issue on receipt of a public petition that has the signatures of a minimum number of citizens, eg 10,000,” according to the Irish Times version of the document.

Problems have emerged within the FG parliamentary party about the Ultra-TDs, it is said. A proposal for female candidate quotas has already been thrown out following a revolt led by Lucinda Creighton at a meeting last week.

Publication of the leaked document’s main contents by the Irish Times, though, shores up the intent of the leadership. Within a year of taking office as Taoiseach, Enda Kenny will call a ‘Super-Referendum’ day to push through this “most ambitious programme for political reform since the 1930s”.

If he does, and that all depends on his becoming Taoiseach and preferably in a Fine Gael majority government, even at that he may fall flat on his face. If Taoiseach Enda Kenny is heading up a coalition involving the Labour Party, then he may well have to water down his ambitions to suit his government partners. After that, with whatever  bits of his package survive a coalition scissors, he may not find the electorate quite so compliant as he would like them to be, especially not in a referendum that would involve voting through a number of complex and controversial reforms as one package.

The Senate is a disgrace, but that doesn’t mean that people will vote to abolish it completely. Fine Gael may be underestimating the political difficulties to which that particular proposal could give rise.

An elite group of 15 Ultra-TDs may not prove all that popular either.

Who would select the candidates for the list? Party apparatchiks and back-room boys? Why should people vote in favour of a drift towards a party centred system of political representation? And, as a seasoned political warrior put it at the weekend, who would be the real people’s representatives in the Dail, the 15 chosen by their party organizations or those ordinary TDs who’ve had to slog it out in the competitive arena of normal constituencies? Do we really want, or need, fifteen George Lees swanning around Leinster House convinced of their own superiority, a two tier TD system to match our two-tier health and every other two tier system we’re already suffering from?

The logic of reducing the term of Presidential office from seven to five years is also difficult to fathom. In practical terms it makes very little difference if our largely ceremonial President is in office for five or seven years, except that with a seven year term the office inevitably straddles the Oireachtas electoral cycle. Thus the President is a stabilizing force in our democracy and unless FG have a very good reason for changing it, it’s an institution that might well be left alone.

While there is definitely a case for abolishing several of the existing Oireachtas  Committees, given the regular carry-on at some meetings and the florid displays of political partisanship, any case for giving constitutional status to four of them should make for interesting reading.

The Petitions proposal is presumably designed to convey the notion of public participation in the parliamentary process, bringing the Dail closer to the people and all that jazz. Yet is creates an uneasy feeling. As it is, within our political culture there is already plenty of opportunity for engagement with one’s public representatives. This petitions idea appears to have been borrowed from the 1m signatures Lisbon Treaty measure for the European Parliament Petitions’ Committee. The EU has 500 million citizens, the Irish electorate is about 2 million. What may (or may not) work on the larger scale could be disastrous on a much smaller scale. Do we really need the parliamentary equivalent of the Joe Duffy show?

Fine Gael and Enda Kenny may be rushing their fences. Kenny is making a political mistake in talking about pushing through his reform agenda via a Super-referendum within a year of taking office. That smells of single party diktat, not the vision of political leadership he would like to present it as.

If this really is the formula for a ‘New Republic’ then it will need a large measure of consensus across the political spectrum if any of it is going to work. Each of its elements must be fully thought through, examined and argued before any such package is laid before the general electorate for decision. Otherwise, it will be rejected, and rightly so.

Dear supporter,

Over the last twenty months, we have taken decisive and bold action to bring this country back from the brink of economic and financial ruin. The latest of these measures were contained in last December’s budget. We made savings of €4 billion through cuts in public sector pay, an average 4% reduction in welfare payments, and through controlling expenditure in all areas of Government.

These measures have stabilised our public finances and greatly increased international investor confidence in our ability to work our way out of this most difficult of economic crises. The benefits are there for all to see. Take a look at this:

http://www.fiannafail.ie/recoveryspreads

This graph shows the cost of borrowing for Ireland and Greece. The cost of repaying our debt has fallen because the government has made the difficult but correct choices.

If Ireland had gone the way of Greece, we could have expected to pay €3.6 billion more in interest over the next 10 years on the money we have had to borrow this year: dead money that we can now divert to much needed public services.

Internationally, we are now held up as an example of a country that is facing up to its economic difficulties and taking the necessary action. Now that we have begun to stabilise our public finances, we can take the necessary measures to return to economic growth and to create and protect jobs.

Please share this email with your friends, family and colleagues:

Recovery Spreads

In their measured reaction to a very difficult and painful budget, the citizens of this country have shown they are willing to make sacrifices in the short term for the long term good of all. This maturity and understanding of the economic difficulties we face is the envy of other countries in Europe. Our flexibility and our foresight will be of enormous value to us as we continue to enact our plan for economic recovery.

Thank you for supporting us,

Brian Lenihan T.D.
Minister for Finance

There is an argument to be had separately about the importance of shuffling ministers. What does it really matter which rural solicitor gets the position at Enterprise, Trade and Employment? However our media, including this blog, will read a great deal into a reshuffle. What did he do with departments? Did he demote the right peole and promote anyone who has any iota of a clue about what they are doing? That in and of itself is going to dominate discussion of the reshuffle after it happens. However there is a deeper question here relating to Cowen’s own conservatism and his priorities.

The two spaces in cabinet mean that Cowen does not have to think about mass demotion to get a healthier mix in cabinet. It looks like we are stuck with this government until 2012, unless the recent travails of the Greens result in exit from the government. For that sake one must hope that Cowen makes best use of his assets and tries to hide the dunces in the corner under a large conical hat. There are competing interests in Cowen’s mind however, as always these days, between the party and the country.

It may be better for us all if Coughlan was moved from Enterprise or the portfolio divided to allow another Minister to begin work on job creation, it may be better to have some other ministers dropped and departments reformed. Mary Harney hardly has a great claim to remain on in cabinet (after the repeated spin that she would resign in the mid-term shuffle has proven to be, as yet unfouned, and she wings her way to Aukland).

The X-Ray scandal at Tallaght is but the latest episode in the tragic deterioration of relations between the health service and superiors/management within the system. Harney’s comments to Morning Ireland to the effect that:

“This is not a huge scandal of misdiagnosis,” Ms Harney insisted. “What we know is the 57,000 X-rays were not read by a radiologist.

“There is no such thing as a hospital free of medical error anywhere in the world…what we’re trying to do is minimise mistakes,” she added. “We will never have a system in which errors don’t occur but what’s important here is that when they do the bad practice stops, we carry out an enquiry and we learn lessons.”

Has more than a hint of the Noel Dempseys about it. Ministers are not immediately responsible for mistakes, can we all just pipe down and back up the truck?

There is a deeper malaise at the heart of a government in power for too long. The front bench is not only tired, it is cynical. The team that managed to get us into a fine mess will not be the team that gets us out and Cowen’s burden is to make the reshuffle a vital part of our recovery. It may not be of material difference but it will be taken as symbolic, as shorthand, of where we are going.

And yet. The fate of Fianna Fail at the next election hinges upon the willingness of party “foot-soldiers” to do the thankless task of having doors shut in their faces. These workers are more often than not associated with cabinet ministers wherever possible – it is what makes them the biggest vote getters in the country and what means that demoting them is bad news for Cowen long term. The loss of O’Dea might be overcome by the obstinacy of voters, the loss of Cullen probably less so. Yet with a tough election in prospect what do you do with ministers who win lots of votes? Do you put the best team out to work hard to get Ireland right? Or do you stick to the rules of the game and go for big vote pullers?

The criticism of Cowen as a ‘party man’ is particularly virulent – especially from the ‘Ireland-first’ Sunday Independent. In the main those criticisms are both understandable and justified, Cowen appears to dally over decisions and when it boils down to it has a deep and unmoving conservative streak. There is no doubt that the streak recoiled when he saw Colm McCarthy’s critisicisms of Departments like those of O’Cuiv and Cullen in his Bord Snip report. Though inventions of Ahern in large part, the provide jobs for those who would otherwise be looking for serious promotion. Jobs for the boys is what it has always been about – it is the best way to get re-elected to power. Cutting Junior Ministers was hard enough, creating a rump of disaffected who in some form or other have harmed the government in recent months.

The opportunity to add to that rump with former cabinet members is a prospect that is unlikely to appeal to Cowen. Yet there are many who need to be moved on. The challenge for Cowen is to take the right decisions for the country.

1

(Thanks to Conor for providing a graphic of my figures).

Instead, we should embark on a substantial investment programme to address our long-term economic and social deficits (infrastructure, public services, poverty and inequality) which can not only ‘grow the economy’ but reduce unemployment. This can be financed through a mix of borrowing and a progressive expansion of taxation and expenditure.

This is the first sustained challenge to the conservative fiscal and economic consensus that has dominated the economic debate to date. It starts with:

‘The Government’s economic strategy is failing.’

It ends with:

‘Embedding investment, rather than debt, into the economy while restructuring taxation and expenditure in a progressive and expansionary manner to ensure a job-rich recovery – this, and not the current deflationary strategy, is the road to success.’

In between it shows where we are going wrong and where we can start going right.

First, we had noted before that the previous regulations had set a highly favourable discount rate for the treatment of future cash flows from bank assets.   This has been modified.  The new regulations set a series of discount rates, one each for 3 year, 5 year, and 8 year (not to be confused with the “standard discount rate” which seems in fact to be fixed percentage fee after all the valuation work is done).   Each incorporates a “risk margin” of 1.7 percent (which still seems low for all the risk) and presumably the risk margin is added to Irish government yields for 3 year, 5 year, and 8 year to get the actual numbers that are presented.  Since short-term yields are lower than long-term ones, sometimes the new discount rate ends up lower than what was set before, and sometimes higher.

Furthermore, the Commission seems to have required that when a bigger markup is being provided to current market value (through the long-term economic value concept), that a higher discount rate is used.  In other words, some of that long-term economic value will be pulled back down through the discounting.

It’s just as well that they got these rates set before European interest rates started to rise, and also good that they managed to maintain relatively low Irish bond yields for so long — no Greece style premium for us.   As a result, NAMA will pay more for assets (lower discount rate = higher asset values).  It’s a funny old world.

The other thing is that NAMA has set a very small window for the receipt of data and analysis relevant to their valuations.  In fact, if you were thinking about supplying your own analysis of what properties might be worth — it’s too late.  The window was 21 December to 10 January.  Someone was busy over the Christmas.

[edit: the technicalities of cash flow valuation might be the least of NAMA's problems]

With TF, who died in 2002 and the report therein completed 18 months ago, somehow there were still legal complications releasing the report.  The Attorney General is apparently still looking at the DDDA report before it can be released, notwithstanding Deirdre de Burca’s explosive hints about what is in there.  And into its 2nd decade, the Moriarty Tribunal is still circling around the core facts of the case, and Michael Lowry’s questions to Brian Cowen yesterday gave us just a glimpse of the intensive legal manoeuvres that still surround the effort to find facts in the telecom licence case — with everyone lawyered up at state expense from the start. 

In short, we’ve arrived at a situation where the apparent purpose of our legal system is to prevent or egregiously delay disclosure, and in doing so, impede broader public accountability.  We’re into multiple election cycles past the original events in some of the above cases, and people still don’t know what actually happened — all in the name of legal sensitivities.

So we’re at a stage where “legal issues” have become a veto over provision of information, when some balancing of individual rights and public right to know is appropriate.  And even if one thinks that the American approach of facts in the public domain quickly goes too far to the other extreme, there must still be middle ground between that approach and the current situation in Ireland.

One other thing on TF.  As Barry Andrews’ flustered reaction shows, the government doesn’t perform well without its talking points — which in this case would have noted that she died in 2002, report done in 2008, so it’s old news and all the deficiencies are being corrected, nothing to see here, move along folks.   But caught on the hop in this case, they now have to explain why there appear to be more cases like TF with reports on the shelf gathering dust. 

Anyone for a children’s rights referendum?

At the height of Michael’s “one little hangar” furore, O’Leary gave the game away to Richard Curran in the Sunday Business Post. His purpose in raising the issue of his getting Hangar 6, an issue dead and buried since last September, was :

“…to ‘‘embarrass the government’’ .

He wanted to be able to put them on the spot. To say: ‘‘You lost 200 jobs.”

Curran wrote: “According to O’Leary, the story gathered momentum and the political debate became one around whether the remaining 300 jobs could still be created at the airport. It may not have been O’Leary’s original intention to engage in this process, but he decided to go for it, ‘‘as a long shot’’.

‘‘The issue then became: could they [the jobs] be got back . . . do I think we’ll get Hangar 6? No,” he said.

”O’Leary expects to announce details of several hundred more maintenance jobs by Ryanair at a continental European location in the coming weeks. This makes it sound like much of last week’s brinkmanship was overcooked and, as O’Leary originally contended last Sunday, these jobs were already gone.”

So just why was Michael O’Leary so bent on getting Hangar 6? He says he wanted the hangar because it was the only hangar in Dublin Airport in which five or six aircraft could be lined up together for base maintenance.

Shortly after SRT Technics had announced its decision to close its Dublin operation with the loss of several hundred skilled jobs in February 2009, O’Leary wrote directly to the Tanaiste. For several months thereafter, O’Leary enjoyed the attentions of the IDA Chief Executive, Barry O’Leary, with the Tanaiste and the Minister for Transport engaged on the periphery as discussions continued. From the correspondence disclosed by Ryanair at the height of last month’s row, Ryanair’s jobs offer to the Tanaiste was conditional on it obtaining sole occupancy of Hangar 6 and, significantly, on no negotiations involving the DAA.

The Dublin Airports Authority had moved quickly to take over the leases on Hangars 1-5 and Hangar 6 following SRT’s announcement of its withdrawal from Dublin. DAA paid SRT €20m for the lease on Hangars 1-5 and the separate lease on Hangar 6 and set about securing new tenants and projects for these facilities, in conjunction with other government agencies.

The lease covering Hangars 1-5 was straightforward and Ryanair negotiated with the DAA for space in Hangars 1 and 2. Ryanair denies direct negotiations with the DAA on this lease, stating  it was done by the two sides’ legal teams. Other projects, such as Dublin Aerospace, which in time is expected to generate up to 250 new maintenance jobs, also became a DAA hangar tenant.

Legally, the lease on Hangar 6 was complicated. DAA Chairman, Declan Collier, told the Oireachtas Committee on Transport last week that as far back as February 2008, a year before they first approached the government with their jobs’ offer, Ryanair was aware of the complex arrangements surrounding the lease to Hangar 6, amounting to a requirement for consent by Aer Lingus to any change in the leasehold arrangements for that facility.

In a letter to Barry O’Leary on 2 July last year, Michael O’Leary clarified the terms and conditions under which Ryanair would acquire Hangar 6. It would take over the lease and reimburse DAA €13m of the €20m the Authority had paid SRT for both leases. It would pay €200,000 in annual rent, for the remaining life – about 80 years – of the lease. A 50% reduction in the €700,000 rates charge from Fingal County Council would be required “in perpetuity”, in light of Ryanair’s substantial contribution to job creation in the County. Ryanair would also sign a restrictive covenant on its use of the hangar for aircraft maintenance purposes only, and would further sign a clause allowing the DAA to terminate its occupancy if necessary, for airport development purposes, but only if alternative facilities on the same terms and conditions were provided.

Presumably, the IDA and Ryanair never got down to the nitty gritty of how many jobs and how they would be phased in over what time period as O’Leary pulled the plug on the negotiations in mid-September last year when it became clear that no deal on hangar 6 would be possible without direct negotiations with the DAA.

By then the DAA was embroiled in its own difficulties with Aer Lingus on the future of hangar 6 and that airline’s plans for its fleet maintenance at Dublin. O’Leary was pressing ahead with his own negotiations with the Scottish agencies to build a new 6,000 sq m hangar at Prestwick airport to add to its existing 200 job maintenance operation there that Ryanair had opened in 2004.

Aer Lingus eventually accepted a lease from the DAA on hangar 6 on 17 December last, on terms that appear more financially preferential to the DAA – a total of €24m according to the DAA –  than what was on offer from Ryanair.

At the Oireachtas Committee, Aer Lingus CEO, Christoph Muellar, explained that hangar 6 is the only existing hangar with sufficient height to accommodate the tailfins of its wide-bodied A330 aircraft as well as several narrow bodied aircraft at the same time. . The advantages to Aer Lingus include efficiency and productivity in fleet maintenance. Aer Lingus would gladly leave the dilapidated and poorly insulated hangar 6 if it was offered equally suitable accommodation elsewhere at the airport, Muellar suggested. But none such exists. Aer Lingus would vacate hangar 6 if the DAA gave adequate notice – 24 months as per the terms of its lease – but only for genuine reasons of airport development like the construction of a new runway which would require demolition of hangar 6. In his view, the definition of “sufficient reason” does not include substituting Aer Lingus in hangar 6 with another tenant. Leaving it to make way for Ryanair and its jobs promises clearly isn’t what he has in mind.

Being forced out of hangar 6 immediately would cost Aer Lingus a great deal of money, Christoph Muellar said, and could not be justified to the company’s shareholders.

“We will not move out of Hangar 6,” he said.

Applying some common sense to what was going on here, it’s self-evident that this was never about jobs. More likely it was about control of a piece of strategic infrastructure at Dublin Airport and getting control of that on the optimum terms and conditions. The jobs are secondary, window-dressing of sorts.

The IDA and thus the Government, were well aware that Ryanair had alternatives for their fleet maintenance needs lined up, including a new hangar at Prestwick, about which Ryanair were engaged in negotiation with the Scottish authorities throughout the entire period they were haggling with the IDA and the Government over possession of hangar 6 at Dublin Airport.

If, as Declan Collier has claimed, Ryanair already knew that Aer Lingus had what amounted to a lien on the ultimate tenancy of hangar 6, it made sense for Ryanair to initially approach the Government and its agencies, rather than the DAA. The Government and the IDA could be expected to attach more importance to a jobs spin-off than the DAA, whose remit is airport management. Ryanair saw a commercial strategic opportunity, with 500 jobs as the carrot to wave under the politicians’ noses, and went for it. Hence no alternative in hangers 3 or 4 or even the offer of a purpose built facility for Ryanair were ever going to be acceptable.

All the rest of it, the posturing, the play-acting, the name calling, is just bull, as Michael O’Leary might put it himself. As he summed it up at the end of his Oireachtas Committee appearance: “Nothing happens here without hangar 6.”

Michael O’Leary must be greatly amused by the antics of the politicians, who fail to understand that Ryanair is not in the job creation business any more than Aer Lingus is is the hangar collecting business. Private organizations in the aviation sector exist to make profits for their shareholders and that’s as far as their loyalty goes or should be expected to go.

But on all sides, our politicians were rightly suckered and fell for the charade. It wasn’t a pleasant sight.

The Tanaiste , Mary Coughlan, made the first mistake when she replied to O’Leary in February 2009 referring him to the IDA without reference to the crucial role that the DAA would have in signing off on any deal involving hangar 6. The limitations on the government’s role and powers to hand over pieces of infrastructure at Dublin Airport to all comers should have been made perfectly clear from the first contact. If she had called O’Leary’s bluff in February 2009, she might have avoided having to listen to his ‘Call my bluff’ mantra in February 2010.

Instead, as political dolts on all side fell over themselves on the airwaves and in the Dail demanding political intervention to save jobs that no longer existed, it was left to the Taoiseach to state the bleedin’ obvious.

“It may be news to Deputy Kenny that neither Governments nor State bodies can act unlawfully,” the Taoiseach told the Opposition leader who ranted about the DAA showing “two fingers” to 300 families in North Dublin and Meath and engaged in shouting about ‘putting it up’ to the DAA and Aer Lingus.
“The Government, as owner of DAA, is like any other shareholder in that it cannot direct a company in which it owns shares to breach a contract,” Cowen said. “To do so would amount to inducing a breach of contract and would be unlawful and render the Government liable to damages to Aer Lingus for all losses suffered.”
Two weeks later, the political argument rumbles on with Michael O’Leary poised to light a spark under it at any time of his own choosing. Fiery hoops might be a nice trick.

A number of sources within the Greens confirmed that discussions had taken place within the party on rotating ministries. One said that such rotation had happened with Greens in government elsewhere, particularly in Germany, to underline the party philosophy that no individual should be placed above policy.

“We’ve discussed it in general but not the who, what or the when,” said the source, who added that circumstances had since changed.

Other sources confirmed that the party reached what amounted to a strong agreement two years ago on rotation and the matter had come up during the most recent parliamentary party think-in in mid-January.

Dan Boyle was tweeting about it earlier:

@Connie_Zevon Look it’s speculation. As leader John decides when or if he is to leave cabinet. Could be tomorrow, could be 2 years time.

It would certainly be no harm for Ciaran Cuffe (and blogging politicians) were the move to take place – with a reduction in seats in Dun Laoghaire from five to four Cuffe would need every single advantage to be in with a shout of keeping a Green Party seat.

Gormley would be in a position, according to the Examiner, to take up a ’super-junior’ ministry like the one being mooted as part of the reform of Finance to take on certain reponsibilities like Public Sector reform and assist Brian Lenihan with other work (or the ‘Department of Administrative Affairs‘ as it was dubbed by John Drennan at the weekend).

The question isn’t simply whether it is good for Ciaran Cuffe however, the question is more correctly, is it good for the Greens? I think it is wrong headed to bask in the demise of the party, any healthy political system needs a clash of perspecitves, one that can be all too absent in the dialogue between the three established parties. Whatever about their decision to take power, their presence in the Irish political system is, like that of the now-dead Progressive Democrats, a sign of health and vigour.

The capacity of the party to sustain itself in office has been tested by their time with Fianna Fail. Criticisms made by Deirdre de Burca stung because they chimed with what was being said on the doorsteps. Like the departed PDs found out, being the smaller party in coalition with Fianna Fail means tough decisions, lots of flak and being put front and centre when the mud is being thrown.

There isn’t much doubting the Greens wanted the challenge of power, their is some traction to the argument that they went ‘native’ at times in their dealings with Fianna Fail. Whether this is down to Gormley (as some members believe) or simple a function of being a party with two ministers, is a matter of conjecture.

The stepping aside of Gormley into a different role and allowing Cuffe to take the Ministerial seat helps to show that the leadership does stick to its promises. A vital part of the Green philosophy is internal democracy and integrity in decisions made, which would mean reneging on a deal by Gormley now could further undermine confidence (internally and externally) in the Green’s professed philosophy. The grestest risk of all for the Greens, one that looms large over them, is that the public see them as a bunch of charlatans who cast down the principal for power. There are plenty of voters out there who see it that way already, the Greens need to ensure that those who voted for them last time don’t see it that way at the next election.

To that end perhaps fulfilling the undertaking – if it was indeed given – might not be the worst thing for the Green Party.