Cost vs Value - The Need For Rational Debate

The most popular media topic of 2009 has undoubtedly been public sector costs. Not a week passes where another debate arises over waste in the system. However, there is a real danger that the overwhelming focus has gone too far. While the public sector deserves to be held to account when money is wasted, the danger is that the level of scrutiny will reach a crescendo where spending decisions will be made simply on the basis of cost, without looking at what value is provided.

For example, there was an interesting segment on Today FM’s Last Word last week where the reported costs involved with RTE broadcasting the second leg of the Ireland vs France World Cup qualifying match. Apparently the state broadcaster paid approximately 650,000 euro for the rights. Given the fall in advertising revenue, newsroom cutbacks and a potential request for an increase in the license fee, it was rightly questioned whether RTE would conceivably make its money back from the investment.

Could you imagine though if RTE had chosen not to broadcast the match? The public outrage would probably have been worse than the wrath inflicted on Thierry Henry in the aftermath of France’s controversial winning goal. As it happened, two million viewers tuned into the match. Marketing Magazine points out that this is “the highest TV audience of the year so far and the highest audience for any sporting event since 1995.”

The cost versus value debate is obvious in this instance. The majority of the general public would be happy to see the license fee pay for broadcast rights for major sporting events like the Ireland vs France second leg. Apply the argument to other scenarios however, and the waters become muddied. Some publications seem to run articles every week which simply seize on figures, without proper analysis about the potential benefits.

For example, this has led to a situation where we cannot have a rational debate about bankers’ pay without resorting to hysteria. Despite the call for candidates outside the Irish banking system to be brought in for senior positions in financial institutions, there is relatively little acknowledgement of the fact that the salary cap hinders this.

Similarly in this morning’s papers there is an article about the Department of Foreign Affairs’ decision to commission research in the wake of the Lisbon Treaty to evaluate what factors influenced voters’ decisions and what the most effective communications channels were. The mind boggles as to how there can be any question about the research. It will provide the basis to evaluate whether the money spent promoting the referendum was well spent and where improvements can be made in the future.

If we are trying to achieve best practice and value for money in the public sector, then a rational debate is required. We should be thinking with our heads, rather than our hearts.


One Response to “Cost vs Value - The Need For Rational Debate”  

  1. 1 Breffni

    Hello Piaras,

    Just wondering your opinion on the public sector strikes on Tuesday. I find it somewhat hypocritical that these workers are looking for support from those who work in the private sector yet ahppily formed a queue to spend their money in Newry. It think this was a PR disaster which exposed the weakeness in power of those in charge of the public sector unions. Ironically the opposite image to what they wanted to demonstrate.

    Breffni

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