So Much is Told, so Little is Done

The new Law “On The CivilService” entered into force over a year ago, yet parliamentarians have prepared more then 20 draft law to amend it. Today, it is just typical consequence of the legislative initiative having been developed quickly and without being discussed with all the stakeholders. As a result, such our laws are bounded to permanent occasional amendments.

In the developed countries of the world, together with the adoption of the law, criteria and indicators of performance thereof are being developed. Unfortunately, this is not the case for us, except a selective analysis of regulation impact, the conclusions of which do not have any effect. Sometimes it comes to absurd situations when first a law is adopted and after that the strategy or concept is approved that would be expected to serve the basis for such law.

The same happens with a new law on the civil service. First, the main principles of the civil service  have been adopted, then, in six months, the strategy of reforming the civil service of Ukraine for 2016-2020 was approved. As such, now, in the parliament there are over twenty draft laws registered for bringing amendments of different scale on this law. And this is only in the first year of operation of the law. Within such a system of approving the state decisions in ignoring public discussions, international experience and recommendations of independent experts, the laws are bounded on permanent occasional amendments.

Since on the stage of drafting the Law “On The Civil Service”, there were no defined performance indicators nor the goals to be achieved in the result of approving the bill, it is quite difficult to analyze the efficiency of performing the law. General biased judgments like “good”,  “acceptable”, “bad” are only possible against such a background.

Legislation Harmonization: Bad

The Law “On The Civil Service” prescribes separating political and administrative positions, establish the procedures of competitive admission when hiring for the civil service (including the top positions) and guaranteeing an equal access to the civil service. In addition, it was planned to set a decent justifiability-based remuneration or the work of the civil servants with a minimal impact of personal opinion; hiring only upon personal skills and achievement, with payment system related to the performance evaluation. However, far not everything was taken into account and changed in one law; thus, the necessity arose to harmonize the legislation with the regulation of the new law on the civil service.

Today we can see how the changes expected to be made by this law on the civil service are being intentionally impeded. For example, Verkhovna Rada ignores the draft law No 4526-d, that has been included into agenda ten times but it was never put to be voted. This law is aimed at bringing in complex changes and extensions to several laws and codes in order to harmonize the legislation with a new logic of operation of the civil service.

For instance, the changes relate to the employment history, to remuneration for the civil service in some bodies, issue of some positions be ranked as the civil service. It is also the question of establishing a new procedure of hiring candidates for the positions of the heads of local administrations, regulating a legal status of the position of a chief of staff (general secretaries) in state authorities etc.

Competitive Admission For The Civil Service: Acceptable

There is a certain progress concerning the provisions of the law on separation of political and administrative positions: ministers, their deputies, other heads of central bodies and council members are not civil servants anymore. However, does it ensure sustainability of the state policies and prevent massive staffing reduction in reality? We can make conclusions on this matter only on a fact-check basis, when the government team changes.

Now, competitive admission procedures are effective in all ministries and state services. In particular, the Commission On Executive Civil Servants has been established for selection for the positions of “A” category, as well as other competition commissions.

To illustrate the progress, it is worth to check the statistics as of March, 31, 2017. For instance, within the period of the operation of this law, 1464 candidates participated in 161 competitions for the positions of A category, and 92,482 persons participated in the competitions for the positions of B and C categories. In average, for A categories, the competition was 9 persons per one position, and 3.5 persons per one position of B and C category.

Furthermore, since the law entered into force, 29 competitions were conducted for the positions of state secretaries and deputies thereof. And with the Resolution No 243 of April, 5, 2017, the government has defined main duties of a ministers, their deputies and state secretaries. 

Although the law requirements on appointing people to the civil service positions are officially followed, a political impact on the work of competition commissions is not fully overcome. An insufficient remit of these commissions is also to be noted; criteria of a candidate selection are not always clear. Yet many competitions were void.

Reducing The Number Of Civil Servants: Acceptable

Reducing the number of officials and civil service positions is one more result of the law operation. As reported by the State Statistics Service of Ukraine, on January, 1, 2015, in Ukraine there were 295,709 civil servants, but just in one year their number reduced down to around 250 thousands. In April 2017, the number of the civil servants was already less than 200 thousands. And meanwhile, over 30 thousand positions were vacant.

As on December, 31, 2015, half of officials was older than 36 and had over 10 years of the civil service employment term. The situation did not radically change after the adoption of the law. Youth and new professionals do not want to go on the civil service: as few as 16.4% of officials have a civil service employment term less than 3 years. 

Reduction of the number was made also due to withdrawal out of the law operation of political positions, parliamentarians and their assistants, employees of executive support services, employees of the National Bank, education institutions established by the state bodies, judges, prosecutors etc. The number of officials has been reduced also due to making over 20 thousand positions redundant.

What are the consequences of such reduction of the state machinery? Basically, nothing changed. There is no money saved on remuneration, since these savings in the transitional period go to the bonus pool. Moreover, honestly saying, for such a big country as Ukraine and in the times of reforms, this change of the number of positions (upward or downward) is not really significant.

Instead, the question should be asked not about number but about quality of the work of the state machinery. Rules and procedures must be established to ensure shaping and implementation of an effective public policy and fast reaction to problems, to guarantee capacity of keeping the strategic path of the state development. So, efficiency and performance in complex must be achieved. And this aspect is not solved neither in the law, nor on the practice.

Old Bureaucratic Model Change: Bad

One can assess efficiency of the public administration in Ukraine by international ratings. Thus, in 2016, Ukraine took 129th position in the Global Competitiveness Index by the rate of Wastefulness of government spending, 99th position by Transparency of government policymaking, 74th by Burden of government regulation  and 109th by Favoritism in decisions of government officials.

This score results from the fact that on all the levels of power, an outdated bureaucratic model of decision-making is still effective and slowing down the reforms. Permanent rule-making turbulence caused by absence of unified standards and vague strategic priorities negatively impacts the business climate. Moreover it creates disconfidence in the future, kills the trust of the society in public decisions, complicating implementation thereof.

With ever increasing frequency we are told that the role of the state should be minimized. The state is rapidly loosing the levers of management by the national economy. In the conditions of existing threats to the national security, such ungoverned system is unable to respond to challenges and to ensure not only development but a minimal adequate security level in the state. Therefore, its strengthening and enhancement of performance should become a key priority together with increasing the national defense capability.


Competitive remuneration of civil servants: Bad

An average salary in the public administration bodies amounted to 4.4 thousand UAH in 2015 whereas an average salary in general was 4.1 thousands. Meanwhile, in the salary budget structure, the budget for additional allowances and other payments was prevailing: approx. 66%. This shows a low level of financialsecurity of the civil service in the public administration bodies, that could result in decreased competitiveness of the state service if compared to the corporate sector in the aspect of hiring accomplished professionals.

Meanwhile, there were around 15 types of after-payments and wage premiums, that have been mostly accrued voluntarily, not on the performance basis. In 2016, the wages of officials comprised 60% of bonuses and temporary additional allowances, whereas other 40% were allowances and official emoluments. Therefore, the share of the net salary keeps being relatively small.

Today, a monthly wage of a chief with 17 years of work experience in the civil service might amount to 25 thousand UAH, whereas new comer on the position of a specialists gains 3,200 UAH (with 2,200 UAH of the net salary 1000 UAH of allowance up to minimal wage). The Ministry of Justice and the Ministry of Finances are an exception, an average remuneration over there is traditionally two times more. By the way, this gap in the level of remuneration in different ministries raises the question about financial discrimination inside the executive authorities of one level. 

The factor of the top management earning less competitive wages than in the corporate sector also impacts on the civil service performance in Ukraine. For example, in average, executives in the corporate sector gained 153 thousand UAH monthly in 2016 whereas executives of the civil service gained only 48,898 UAH (according to the calculations of the Center For Economic Strategy).

Even maximal remuneration of a middle management on the civil service is lower. Also, there is still a strange situation when the chief and the deputy chief gain almost the same wage although their level of responsibility is quite different. An amount of salary of low-grade specialists is almost 1.5 times less than a real minimum standard of living; additional allowances to this minimal wage will not change the situation much. Such a level of wages cannot ensure an adequate life level, thus, the civil service is not attractive for employment of young talented professionals and does not stimulate effective non-corrupted activities of officials.

There are some on-the-spot solutions on increasing the level of remuneration, whereas comprehensive solutions are still lacking. So, on July, 13, 2017, the parliamentarians have approved the changes to the State Budget (draft law No6600). As a result, 26 bln UAH of the budget revenue over the target will be allocated on increasing the spending, in particular, for remuneration for the civil servants.

For instance, according to the explanatory note on the draft law No 6660, for the staff of the President’s Office this amount will be 15.3 mln UAH; 37.5 mln for the staff of the Cabinet of Ministers, 34.2 mln – for the Ministry of Economy and Development, 0.9 mln – for the Ministry of Culture, 17.1 mln – for the Ministry of Social Policy, 22.9 mln – for the Ministry of Finances, 40.8 mln – for the Ministry of Justice, 122.3 mln – for the State Treasury, 1 bln UAH – for the State Fiscal Service.

There are also national spending provided for the Cabinet of Ministers: 300 mln UAH upon the program of Supporting Implementing Comprehensive Public Administration Reform, including 245.9 mln are allocated to be spent for the remuneration. This is the first tranche within the 10 mln program financed by the European Commission, aimed at supporting Ukraine in implementation of the Public Administration Reform Strategy for 2016-2020. It is to indicate that overall amount of the budget support by EU for the program implementation is 104 mln EUR.

Within these changes to the state budget, additional bonuses to the salaries of the civil servants are prescribed till the end of the year and this is surely positive. It is known that unlike the corporate sector workers, the civil servant must not have any additional paid activities, so only salary should procure their current needs, their savings, and to go in line with the market conditions. However, this is one-shot event since nobody can guarantee that in the next years the budget will be exceeded.

To summarize, it looks like the civil service reform is slowed down and politicians have less and less enthusiasm on this point. But this is too early yet to give up. Today it is the time to promote the public administration reform even more persistently, together with the pension and health-care reforms, even though it is not so lively discussed in public. Otherwise, in several years, there will be nobody able to ensure implementation of other reforms.