Public service reforms promised

Hungary’s public services sector will see radical changes as of July 2005, the planned date for the introduction of a unified Public Service Law, government officials pledged last week.
“Today, 1,100 paragraphs in five different labor laws apply to workers in the public sector. This is a labyrinth. We need a unified and transparent system,” said János Vadász, government commissioner responsible for public service reform.
According to Vadász, the new law is expected to make Hungary’s public service much more efficient and professional by introducing regular performance evaluations for employees at all levels of the hierarchy. The draft law also stipulates a gradual increase of salaries in the public sector over several years, while tying part of the salaries to individual performance and the level of professionalism needed to fulfill a given post.
The new law is expected to go before Parliament this fall.
According to Vadász, once the law is adopted, its successful application will depend on strong government support.
“Although the new law does not want to take away reasonable privileges from public servants, it will hurt the interests of certain lobby groups within the public administration, so its execution will need the firm backing of the government,” Vadász said.

Paying and weighing

The draft law stipulates that the wages of public servants will rise by a gross 8%–12% a year for six to eight years. The draft proposes three brackets for the annual raises, and the government’s economic cabinet will debate in the near future which version should remain in the final text, Vadász said.
Another wage-related reform envisaged by the draft law is that only 65% of a person’s salary should be automatically calculated by the uniform wage chart, while 15% would be determined based on professional qualifications, and 20% based on performance evaluations.
Such evaluations will be done either quarterly or once a year, with the involvement of a worker’s immediate and higher supervisors, as well as representatives of the relevant professional organization and trade union.
Customer satisfaction surveys focusing on the performance of an office, or, where possible, the performance of an individual, will also be part of the evaluations.
A person will be able to enter the public service after having taken a basic level exam. Public servants will have to work for two or three years with a temporary contract, with their final status due only after they have passed a high-level public service exam.
As for further training, the state will finance only 50% of the costs, as opposed to the current system of 100% funding, Vadász said.
“Professional qualifications have a market value that people can also use in the competitive sector if they decided to leave the public service. It would be unfair to finance the whole cost of getting such training from public money,” Vadász explained.
Currently, 800,000 people work in Hungary’s public service, including armed forces, civil servants and public servants. This is 400,000 fewer than at the beginning of the 1990s.
The sector’s HR costs amount to Ft 1,700 billion a year, financed from taxpayer money.
According to Vadász, the total size of the workforce in the public sector is reasonable compared to the size of the population.
“We do not plan to chop the size of the workforce, but there will be a restructuring within the public service,” he said.

Cut it down

Observers welcomed the planned changes, while remarking that the public service sector should be significantly streamlined.
“We should have a much smaller public sector, with much better paid professionals,” said Zoltán Pogátsa, a research fellow at the Hungarian Academy of Sciences (MTA).
According to Pogátsa, one way to cut back the workforce would be cutting the number of local municipalities.
“Hungary has 3,200 local municipalities, all funded from public money,” Pogátsa said. “This is way too many for a small country, so some small communities should have joint administration.”
Joining forces would put small communities in a much better lobbying position, he added.
Observers also drew attention to the high number of decentralized government offices. Such offices are expected to take care of tasks all over the country on behalf of ministries.
“The number of decentralized offices must be cut back,” said Attila Ágh, a professor at Budapest Economic and Public Administration University. He was also leader of the Interior Ministry’s IDEA project, which aimed at preparing Hungary’s public service reform.
“Every government starts with getting rid of unnecessary decentralized offices, but as soon as the government turns its back to ministries, they start popping up again,” Ágh said.
According to Ágh, while the official number of currently functioning decentralized offices is put at 11, the actual number is about 30.
Pogátsa spoke about different numbers.
“Just in the South Transdanubian Region, I personally came across at least 50 decentralized offices, and I heard about the existence of another 50,” Pogátsa said.
A major problem with decentralized offices is that nobody has a clear picture about how many they are and what they are doing, he said.
Another problem is that these offices are not required to coordinate and cooperate with country municipalities, regardless of the fact that they are engaged in local issues.
“It is nonsense that cooperation depends on whether officials of decentralized offices are on good terms with county officials,” Pogátsa said.
According to Ágh, the issue of mushrooming decentralized offices could be dealt with by a new public administration system.
“This fall, a draft law proposing an elected regional administration will go to Parliament. This law would delegate to regional municipalities most of the powers now exercised by the ministries via their decentralized offices,” Ágh explained.
He added that, since the creation of regional municipalities would require the modification of several laws needing a two-thirds majority, the law is unlikely to be accepted in its current form.

What’s the procedure?

Part of the public service reform is a new law to be adopted on public administration procedures.
The law, which will go to Parliament before the summer break, aims to make life easier to clients by expanding the scope of obligations for public offices.
“The government accepted the draft law without debate two week ago,” said Zsolt Harsányi, deputy head of the Interior Ministry’s legal department.
A major change introduced by the new law will be an obligation by public offices to officially inform people if a procedure is initiated against them, Harsányi said. This will rule out the possibility of someone getting notified at the last minute.
Another change is that, if a certificate is needed for a procedure from a different office, the office in charge of the procedure will be obliged to get it, instead of the current practice of asking clients to do it.
The draft law also stipulates penalties in case of delays in the procedures, Harsányi said.
“If an office does not make a decision within a set time, clients will be able to file a complaint against the office at a higher level,” he said.
The establishment of a prosecuting service would make it easier to actually execute decisions, Harsányi said.
“This part of the law aims to strengthen customer trust by providing the means for enforcing a decision,” Harsányi explained.
Possible acts by this service will include collecting due taxes, removing unlawfully built fences and enforcing child protection decisions.
The law has a separate chapter on electronic procedures, Harsányi said.
It defines the basic concepts of such procedures, such as cases when things can be done in an electronic way and the conditions of client identification.
The details of such procedures will be specified later in various decrees.

by Judit Zegnál


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