Working Group Report findings on Size and Cost of the National Executive
Via Ndungu Wainaina
Much of the countryâ€™s attention on the size and cost of government has focused on the new structures and offices created by the Constitution. The implications on the National Government, which are just as significant have not received as much attention.
In terms of assignment of functions, with the exception of security, education and foreign affairs, the National Government is assigned policy and regulatory functions while counties are assigned service delivery functions. There are also concurrent functions, notably infrastructure, where the National Government is responsible for national components and counties are responsible for the local components.
The potential implications of these changes on the size, structure and cost of running the National Government are significant. By virtue of the principles of distinctness and interdependence espoused in the Constitution, the supervisory powers previously exercised by the National Government on local authorities have been abolished, meaning in turn that the National Government no longer requires the institutional infrastructure that was in the Ministry of Local Government.
Ministries whose functions were fully devolved, notably health and agriculture contained administrative functions that should of necessity be rationalized. One of the largest headquarter functions in these ministries was personnel.
Restructuring and Realignment of the Provincial Administration.
The Constitution requires the Provincial Administration to be restructured and re-aligned with the devolved structure of government. To date, the system remains largely in place as it was before, with only change of names of the positions. Whether this constitutes the restructuring as envisaged by the Constitution and is in accordance with the wishes of Kenyans is debatable.
It is difficult to see how the entire administrative strength that the government had before devolution can continue to be fully employed following devolution. It is not contestable that the National Government needs a presence to coordinate its functions at the county level. The question is what size of presence would be both effective and financially prudent.
From the county level downwards, the administration has five layers [county, sub-county (district), division (DO level), location and sub-location]. Are all the layers necessary? Are there some functions that the National Government could delegate to the county administration to avoid duplication and reduce cost? Article 183 (1) (b) envisages that National Government can assign implementation of aspects of its programmes to County Governments.
There are no clear answers to these questions and we acknowledge that this is the prerogative of the National Government. However, the Constitution requires public resources to be used prudently and responsibly, and the National Government is duty bound to demonstrate that the choices it has made are prudent and constitute value for money for Impact of Restructuring and Rationalizing the Civil Service
The single largest economic and financial risk which adoption of the Constitution portends is failure of the National Government to rationalize and downsize consistent with functions and structures mandated in the Constitution. Whereas figures are not available on how many employees would be made redundant if rationalization is carried out, a rationalization exercise is underway and figures to the order of 60,000 people have been mentioned.
The average national government wage cost per employee in 2013 was Ksh. 442,000. This translates, indicatively to an annual wage cost of Ksh. 26.5 billion.
This assertion begs the question as to how such significant over establishment can be consistent with a sustainable wage cost. There are two dimensions to this.
First, the government has managed to maintain a macro-economically sustainable wage cost by suppressing pay. In other words, there may be too many underpaid civil servants. This also manifests itself in inordinately large wage differentials between the top and the bottom ranks of the civil service. The impact is therefore not to be seen on the macroeconomic plane but in the low productivity and poor performance of the civil service.
The second dimension has to do with the skills mix. Over-establishment in government is driven by pressure to create jobs, usually of labour market entrants, who are seldom the skilled workers that are required, but rather unskilled school leavers and college graduates who are employed in administrative jobs.
Indeed one of the challenges that the National Government has encountered in redeployment of staff to the counties is that the counties put a premium on front line service delivery staff (health workers, agricultural extension workers, engineers, technicians, etc) while the National Government is seeking to redeploy office workers.
The implications are clear. The restructuring imperative impinges on the National Government and its capacity to deliver. The opportunity costs of failing to downsize are understaffing and poor pay for essential national government services such as education and security, crowding out of Operations & Maintenance and investment expenditures (e.g. infrastructure) and excessive borrowing