Friday, 14 October 2011

Spanish 'funcionarios' are hampered by a rigid system

SPAIN The word funcionario has its root in the same etymology as 'function'. Well, as most people in Spain will soon tell you (unless they happen to be one), many funcionarios don't function. Covering a multitude of levels and activities, a funcionario is basically a civil servant, a public employee. Spain is awash with them, often because it is very difficult to fire them, no matter how incompetent or uninterested they may be. Or, as the Councillor for the Economy in Catalonia, Andreu Mas-Colell, said recently, "They should be aware of the great privilege the stability of their employment is." What he wants is for those employed by his region, to work 'the same for less' or 'more for the same'. Fat chance, even though Mas-Colell went on to suggest 10 or 15 minutes more. Naturally the mere suggestion provoked spluttering reaction from the unions, who were probably having a coffee break at the time, whatever time it was. But to take this subject somewhat more seriously:>>>

The autonomous regions are being asked, nay obliged, to seek fiscal consolidation as a way to save money (and Spain from the abyss). In the meantime nationally-employed civil servants have had their salaries reduced and later frozen. And now it will probably mean that those employed by the regions will face the same.

It is a common perception that there are too many funcionarios in Spain. But are there?

Facts belie the perception: there are about as many per head of population as there are in other countries. But in terms of the so-called consolidation in times of crisis, they will be asked to improve the productivity of public service through work by objectives, flexibility and mobility.

That sounds like changing some very entrenched habits.

Since the crisis began in 2008 the overall number of funcionarios has risen by 10%, to 3.2 million workers, according to the most recent survey of active population. And according to the central register of personnel in Madrid, in a report dated July 2010, the latest available showing a lower number of workers (getting out more timely updated information could be an area needing improvement...), 50.3% of them work for regional governments, while the central government employs 22.2%, Town Halls and provincial Diputaciones has 23.6% and universities, 3.9%.

The majority of workers in the regions are teachers and health workers, who, combined, take up 77% of the jobs. Yet staff lists have not grown at the same rate everywhere. A small but growing diminution is already being noticed at the levels of regional government and especially at local, Ayuntamiento level, though there are increases in numbers, albeit less so, everywhere but in Cataluña, Balearics and La Rioja.

Overall, 21% of Spanish employees work in the public sector, but that figure varies by region. The highest proportion is in Extremadura (33.2%) and the lowest in Cataluña (15.1%)

The latest interantional statistics, of 2008, when the crisis began officially, Spain was not among the countries with the highest proportion of public employees; it was 19th on the OECD's list of 32 countries scrutinised and below the average.

Experts agree, however, on three essential circumstances:
  1. For many years the median civil servant's salary in Spain grew faster than that of the economy as a whole;
  2. Salary costs for public employees in Spain is above the average of OECDs countries; and
  3. The civil servants' working day in Spain is the shortest in the EU.
Francisco Longo, who heads the Institute of Governance and Public Administration at Esade Business & Law School and is a member of the UN's Committee of Experts in Public Administration, says that to save "the deterioration of productivity must be the objective of any government."

The private sector has cut down employment drastically, to push the unemployed percentage to over 21%. Those who defend the position that funcionarios must assume part of the costs of the crisis say that private sector employees pay their share with salary cuts and redundancies. Those who reject that position point out that civil servants already had their salaries cut by 5% last year and frozen for this year.

Of course, similar measures have been taken, or are about to be taken in many countries. The OECD reports that, in December 2010, 29 countries had taken or proposed a fiscal consolidation plan; 20 opted to reduce salaries in the public sector, 15 for redundancies and five for reorganization of the Administration - or a mix of these measures.

Cutbacks don't just impact the 'rescue countries' of Portugal, Greece and Ireland, as any civil servant in Belgium, Czech, Slovenia, France or the UK can tell you. Indeed, Britain has announced that public employees will be cut by 330,000 to 2015.

Another expert, Xavier Boltaina, Profesor of Administration Law at the University of Barcelona, says, "The public employee has steady employment, but everyone remembers the funcionario in times of crisis, yet forget that during the boom years a construction worker could earn a great more than omeone in the public service." Nevertheless, he does agree that the subject of productivity must be dealt with - and the sooner the better.

Another group of experts, the Consultation Council for Economic Growth and Reactivation (CAREC in its Spanish acronym) in Catalonia, headed by businessman Salvador Alemany, recommends a "reform of the public function". The group's report asks for restructuring the sector and proposes that "lifetime employment contracts" are a "dis-incentive" to productivity improvements. CAREC suggests the introduction of incentives aimed at achieving objectives that can be accredited from outside the sector. This, it says, can be in cash terms -using the variable part of salaries against productivity attainment- or non-monetary prizes such as schedule improvements, days off or choice of placements. These incentives, of course, are used wide and large in the private sector.
Studies of productivity in Spain are not abundant. This is not surprising, as public sector lifetime employment has traditionally been the 'gift' of politicians and their cohorts at all levels. A recent case in Los Barrios is a typical example, if probably at the top end of the scale: an 'administrative assistant', the wife of the head of a municipal company, earned over €70,000 a year for almost ten years, and only showed up for work for the first time three years after she began being paid (See our item here). Similar, if not quite so outrageous examples can be found at the vast majority of public offices throughout the country.

Nepotism is also prevalent at many levels. Wives, husbands, cousins and brothers-in-law, to name just a few, can be found in any Ayuntamiento or local government office. And there is little surprise or outrage from the general public. "Wouldn't you give your unemployed brother a job if you could?" is one response this writer has found time and again.

Nor are the unions too keen to have the system studied too closely, principally because they, too, have similar skeletons to hide. Also, unions are heavilly subsidised by the government, particularly at national level, without a noticeable 'trickle down' effect. At the lower levels, members complain frequently that their union can't possibly be independent interlocutors if they are being paid by the entities they are dealing with.

The crisis has reopened the debate. Vice-Premier Manuel Chaves last year suggested tying public sector salaries to productivity, to which the unions responded that this would be possible because it is entrenched in the Statutes of Public Function. The experts say that, yes, the tools exist, but they have never been used.

"A change of culture is needed; it is not about staying 15 minutes longer, but about helping 15% more people. Aside from a few experiments, most of the Administration is not oriented towards working towards objectives," says Julio Gómez Pomar, former Secretary for Public Administration and now heading the PwC-IE Centre for Innovation in the Public Sector. Most of his fellow experts agree.

One of them says, "the legal concept exists" but has hardly been applied except in the Tax Office and Social Security - noticeably in the state 'collection industry'. "If we believe (it is possible), it must become variable and be linked to specific objectives," says another.

The unions are wary of the proposals. Samuel Vega, who is in charge of the funcionarios main union, CSIF, insists that the concept of 'productivity' exists in Spain, linked to salaries. "There are two types," he says, "one is monthly or modular according to the job's pay scale, which consists of working two and a half extra hours per week, and another every six months per objectives," but these cover only about half public service alaries. Encarna Fernández, of UGT, one of the two big unions (the other is CC.OO.), says that productivity is "regulated" in a payment that discounts such things as sick leaves. Evidently, bureaucracy -the bane of Spain- gets in the way of clarity from the unions, too.

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