Government launches major reform of public administration

In March 2006, the Portuguese government presented its programme for restructuring the country’s central public administration – considered to be one of the most significant reforms in 30 years. One of the main aims of this reform is an extensive reduction in the number of public bodies. While the employers’ confederations have welcomed the programme, trade union confederations are either cautious about or opposed to the reform. Trade unions in the public sector fear that the reform will lead to greater instability and redundancies in the sector.

On 31 March 2006, the Portuguese government presented the Programme for restructuring central public administration (Programa de Reestruturação da Administração Central do Estado, PRACE). According to the Prime Minister, José Sócrates, this reform aims at modernising the country’s central public administration, by promoting flexibility and greater efficiency of existing resources, thereby improving the quality of public services.

Objectives of PRACE

The strategic objectives of the PRACE are as follows:

• restructuring and rationalising administrative bodies;

• reinforcing strategic government support functions, such as those of analysing, evaluation and control;

• improving the regulation and inspection functions of the state;

• rationalising and possibly outsourcing productive functions as well as services;

• creating shared services between ministries;

• reducing bureaucracy and improving flexibility, increasing horizontal and vertical communication, creating matrix structures, and using information and communication technologies (ICT) to a greater extent;

• redefining the role of state administration at regional level;

• increasing proximity to citizens through physical decentralisation processes, as well as through new communication channels (call centres, Internet, outsourcing of local services) and through the creation of all-purpose centres in order to answer citizens’ questions;

• upgrading work processes and improving employees’ skills and competencies;

• phasing-in the new structures through pilot programmes.

At present, Portugal’s central public administration (including some decentralised and consultant bodies) comprises 518 bodies. In accordance with the PRACE, some 246 of these bodies are due to be closed, while 60 new bodies will be created. Overall, therefore, the central public administration will be reduced to a total of 332 bodies.

According to the Minister of Finance, this represents the most significant public reform in the last 30 years. The Minister has indicated that all 573,000 workers of the central public administration will be affected in some way by the reform, as it will promote the mobility of workers. However, he added that the reform will not lead to redundancies in the public sector.

The government did not involve the social partners in the formulation of the PRACE, but outlined its intention to implement the reform gradually through social dialogue with the trade unions in the public sector.

Reactions of the social partners

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) criticised the reform for being mainly focused on cost cutting, and for moving some structures and functions of the public administration to the private sector, thus weakening the social functions of the state. CGTP is particularly concerned about the services of labour inspection and those pertaining to health and safety at work, fearing that these bodies will lose their autonomy and intervention capacity.

The General Workers’ Union (União Geral dos Trabalhadores, UGT) favoured the government’s aims to improve public administration services and to eliminate bureaucracy. However, UGT was critical of the government’s decision not to consult with the unions and emphasised the difficulty it would face in motivating workers to participate in the reform.

Meanwhile, the Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) greatly welcomed the reform, highlighting that the only sacrifice workers would probably have to make would be in relation to increased mobility. Furthermore, CIP’s president pointed out that the surplus of workers was a longstanding problem within the public sector, and that the only way to solve it was by creating a stand-by reserve (bolsa) and by encouraging increased mobility.

On 4 April, the government explained the PRACE to the social partners in a meeting of the Standing Committee for Social Concertation (Comissão Permanente de Concertação Social, CPCS). However, the social partners did not consider the explanations sufficient and clear enough in relation to their main concerns. Reactions of the trade unions in the public sector varied from firm opposition to relative support for the PRACE. Mostly, the trade unions’ opposition centred around the fear that the PRACE would result in redundancies and further instability.

The National Federation of Public Sector Unions (Federação Nacional de Sindicatos da Função Pública, FNSFP), affiliated to CGTP, called for a general strike in the public sector, which was due to take place on 19 May 2006. The strike agenda would include issues relating to careers revision, a performance evaluation system, and increasing the retirement age; it also aimed to include issues directly related to the PRACE, such as rejection of the ‘surplus workers reserve’, and the need to protect the quality of the public services and the social functions of the state.

The State Technical Staff Union (Sindicato dos Quadros Técnicos do Estado, STE), affiliated to UGT, estimates that at least 75,000 public sector workers are at risk of losing their jobs due to the PRACE. The union explains that, according to a previous resolution of the government (No. 124/2005), every new reform, such as this proposal, implies the identification of surplus workers. According to STE, an atmosphere of fear is tangible among the workers as a consequence.

The Public Administration Workers’ Union (Sindicato dos Trabalhadores da Administração Pública, SINTAP), also affiliated to UGT, agreed with the rationalisation and modernisation objectives of the PRACE and, so far, has not outlined its position regarding the potential consequences of the reform for workers. According to the union, more concrete information needs to be provided about the potential impact of the PRACE in each ministry (i.e. an outline of what the government proposes to deliver in June), before it discusses the possible consequences.

Maria da Paz Campos Lima and Reinhard Naumann, Dinâmia