Howard Barrell
Over a Barrel
There is a school of thought which holds that whatever else the conflict in South Africa has been over in the course of this century it has also been over jobs.
Afrikaner nationalists wanted the better jobs to be reserved for whites, the poorer of whom were often Afrikaners who had been dispossessed in the Anglo-Boer War. The alliance between black nationalists, unionists and communists wanted blacks, who had been deprived of land and skills, to fill them. And English-speaking and foreign capitalists wanted the jobs filled by whomever would demand the least money to do them.
In the course of this contest, Afrikaner nationalists, in charge for much of the century, found that the civil service and parastatals were the easiest institutions in which to create jobs for those of their kith and kin who might not otherwise survive. The nationalist government created many more civil service jobs than were needed.
Skills levels remained low. And the civil service and parastatals became the major vehicles for poverty relief among whites. As black pressures grew, the white nationalist government tried out a similar approach on amenable blacks. It bureaucratised the poorest areas of the country by initiating the homelands policy. It created 10 homeland governments, each of which required its own civil service with tens of thousands of public servants to carry through policy. So tens of thousands of additional jobs were created and, in this instance, filled mainly by blacks.
As poverty relief, the approach achieved some successes. But the human cost was enormous for those excluded from it. And its tax cost far exceeded the benefits that flowed from it, according to current conventional wisdom.
Nonetheless, it must have been tempting for the African National Congress, the modern expression of the black nationalist/ union/communist alliance, to resort to the same method of poverty relief when it came to power in 1994. So far, however, it has not.
No doubt this is partly because the international financial markets, which any country ignores at its peril these days, don’t like big government. The markets believe big government leads to high state spending, high taxes, high state borrowing, high inflation, high interest rates and low growth prospects.
But the ANC government has also been put off using the civil service as an instrument of poverty relief by other factors. One is that further growth in the civil service will add to a government salary bill that is already eating up money that is desperately needed to finance new investment in service provision. Another reason is that the ANC inherited a bloated, underskilled civil service which was already an ineffective instrument of government – and one whose effectiveness will not now be improved by greater numbers.
It is not an exaggeration to say that deep reform of the civil service is among the country’s three or four major challenges. It was, however, largely off the news agenda until last month, when striking health and educational workers corrected that.
It is a complex issue. Experts working in the field, however, identify several significant problems. First, there is a serious shortage of skills at all levels, particularly middle and top management.
Additional training, improved knowledge of best practice elsewhere and pay packages that can compete with the private sector are necessary, particularly at top level, to correct this shortcoming. Top-level managerial salaries in the civil service are, however, lagging badly at the moment.
Second, there are at least 35 000 supernumeraries in the civil service. These are mainly former homeland civil servants who now draw a salary but have no job to do. A service and skills audit now being undertaken by the Department of Public Service and Administration may show that the number of supernumeraries and other grossly underemployed civil servants is as high as 100 000. But merely retrenching all civil servants deemed surplus to requirements is unlikely to contribute to any meaningful or long-term reduction in the salaries bill unless better management achieves more efficient use of those civil servants who remain behind. Otherwise, according to experience in other countries, the civil service will merely have to rehire many of those retrenched a few months earlier.
Third, redeploying some “surplus” civil servants may be cheaper than retrenching them, according to calculations by the Department of Public Service and Administration. The Department of Education has had some success in transferring an oversupply of teachers from one area of the country to another experiencing a shortage, so avoiding sometimes expensive severance payments. Similar potential exists among, say, nurses in the health sector. But there are limits to the extent to which this can be done within the civil service: many skills are not readily transferable. And redeployment cannot be allowed to become a way of avoiding the deep surgery that is necessary in the civil service.
Fourth, most of the 35 000 civil servants identified so far as surplus to requirements tend to be less skilled and to come from the former homeland administrations. Their going alone is unlikely to have a substantial effect on the salaries bill. For example, between 1995 and 1999 the public service shrunk by more than 150 000 positions, or 13%, and most of the jobs lost were in the lowest salary brackets. Yet between 1997 and 1999, despite falling numbers and annual salary increases just above inflation, the share of personnel costs in provincial budgets increased.
This brings us to the fifth problem. Experience in other countries shows that a cut in the number of civil servants may not in fact lead to savings in a government’s salary bill. This may be because cutting the size of a civil service is often part of an attempt to professionalise that service. And this usually means that a government recruits better-qualified personnel and pays competitive salaries – which puts upward pressure on its salary bill.
Our government has several additional upward pressures on its salary bill. Among them is the system of automatic annual salary increases, based on length of service or rank, that apply to many categories of civil servant – over and above other pay rises that may be negotiated by their unions to take account of, say, inflation. Another is the system of national-level wage bargaining – which makes flexibility in civil service budgeting and wages between different parts of the country very difficult to achieve.
It is difficult to overestimate the challenge before the new Minister of Public Service and Administration, Geraldine Fraser-Moleketi. She will need considerable political will and skill to meet it, and the full backing of her colleagues to beat it. Her colleagues could so easily undermine her efforts.
She cannot be allowed to fail.