Head of the National Agency for Civil Service of Ukraine: One third of civil servants can be slashed painlessly

Head of the National Agency for Civil Service of Ukraine: One third of civil servants can be slashed painlessly

Nataliya Aliushyna on optimisation of expenses for the maintenance of the state apparatus, reduction of salaries, audit of official functions and compensation to the families of deceased officials

Head of the National Agency for Civil Service of Ukraine: One third of civil servants can be slashed painlessly

Since the beginning of the war in Ukraine, civil servants at all levels have experienced a significant decrease in wages. In addition, in the ranks of power, it is increasingly common to hear that the Cabinet of Ministers is discussing a sharp reduction in the number of officials at the project level, which can affect more than half of civil servants. Extremely large gaps in salaries, in particular, between ministers and directors of departments is another problem of the civil service today. Mind has discussed these and other urgent issues of the civil service with Nataliya Aliushyna, head of the National Agency for Civil Service of Ukraine.

On problems of financing the civil service

Interviewer: How does the civil service function after two sequestrations of the budget, when expenses for the maintenance of the state apparatus had to be reduced?

Nataliya Aliushyna: We do not rule out that the third sequestration may also take place. Salary expenses have already decreased by 10-15%, depending on the state agency, and thus the salaries overall have decreased. And here are several points that I would like to emphasise. Ukraine has received a unique opportunity: on June 9, an agreement was signed between the International Bank for Reconstruction and Development (IBRD) and the Ukrainian side on the transfer of 1.5 billion euros to support public administration.

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The funds will be used for the salaries of civil servants and teachers. The first disbursement in the amount of EUR 476 million was already received in June.

We count on this support because today there is a shortage of funds in the state budget.

At the same time, the issue of preserving the human capacity of the civil service remains extremely relevant. After all, it takes time to “raise” a civil servant. It is impossible to take a person from business and simply integrate him/her into the civil service system. There are procedures and certain processes, that require a lot of time to hone one’s skills.

Interviewer: You mentioned that expenses for salaries of civil servants had been reduced by 10-15%, depending on the state body. What is the current situation with the salaries of civil servants in the centre and on the ground?

Nataliya Aliushyna: The question is whether the third sequestration will take place.

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Our life will never be the same. And the question arises about reconsidering some functions.

I know that, as for now, most of the heads of public bodies ensure the functions to be carried out only by the personnel they have.

If the third sequester takes place, of course, the salaries of civil servants will decrease even more. By what percentage – it is difficult to say so far. In May, we conducted a survey on the organisation of the work of state bodies and salaries under martial law. More than 45,000 respondents were surveyed (almost a quarter of all civil servants in state bodies):

  • more than 36% noted that the workload had increased;
  • 43.1% answered that their functionality changed with the introduction of martial law.

For our part, we have prepared a functional audit methodology. It provides an opportunity to analyse the entire functionality, since not all functions used in state bodies are currently relevant. There are those that “played out”, and there are those that have become more relevant at this point.

Taking into account the fact that certain functions and procedures have been digitised, in the prospect we can centralise some of them, carry out reengineering to optimise activities. Therefore, if you rearrange each state body considering the results of the functional audit, you can talk about qualitative optimisation of the system.

We tested the functional audit methodology at the NACS and already have our own case (audit results). It was discussed at the level of the ministries. We met with state secretaries, and this methodology is ready for registration in the Ministry of Justice.

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It takes 21 days to apply and get results. We piloted it in several ministries. In particular, the Ministry of Reintegration of Temporarily Occupied Territories has actively taken up implementing it and plans to present us its position regarding the abandonment of redundant functions and optimisation of the number of employees.

However, before official use, the methodology must appear in programme documents, after which it can be adjusted. We believe that the audit of all bodies should be carried out in July in order to take into account the results in the budget process for 2023.

On official salaries, bonuses and allowances

Interviewer: What are the current official salaries and the actual sizes of salaries together with allowances and bonuses? How are they regulated?

Nataliya Aliushyna: We monitor salaries every year. Today we have indicators for the year 2021. They differ because there is significant competition between ministries. And this is evidence that the need for the reform of the labour payment system is ripe.

Of course, expenses cuts cause pay cuts. In the already mentioned survey on the organisation of the work of state bodies and the remuneration of civil servants work in the conditions of martial law, there was also a question about salaries:

  • 53.1% of respondents noted that the salary was reduced;
  • 7.6% said that everything remained unchanged.

The first level of jurisdiction government institutions (the Secretariat of Cabinet of Ministers of Ukraine, apparatuses of the Office of the President and the Verkhovna Rada – Mind ed.) were the first to feel the reduction of salaries. The decrease in wages occurred for all categories – A, B, and C. The largest percentage of respondents who noted the decrease of wages occurred among first-level state bodies – 79.1%.

Regarding official salaries, we are guided by the Law of Ukraine on Civil Service. There are salaries, fixed payments for rank and service, bonuses and allowances for intensity. The resolution of the Cabinet of Ministers of Ukraine No.15 should also be recalled. It prescribes the categories of positions and the level of salaries and bonuses (within the salary fund of the state body).

In the pre-war period, the NACS had already prepared a draft law on the reform of the system of remuneration of civil servants (on common approaches to remuneration). We compared the salaries of civil servants with market offers, provided grades – corresponding salary levels, and prepared a catalogue of positions. By the way, our new salary system is based on job classification. These are European standards.

Interviewer: Announce, please, specific salaries with bonuses, etc., for each ministry (on average) for the time being.

Natalia Aliushyna: We have state bodies governed by special laws. Therefore, it is incorrect to compare the salary levels in the ministry with the National Anti-Corruption Bureau, the National Agency for Prevention of Corruption, the State Investigation Bureau, or the Bureau of Economic Security. If we talk about the ministries, the indicators differ as well. The average salary in the Ministry of Education and Science and the Ministry of Culture will differ from the one in the Ministry of Digitalisation, the Ministry of Finance or the Ministry of Justice. In addition, we will be able to announce the salary level for 2022 only in 2023. We only have figures for the year 2021.

In 2021, the average salary in some ministries was UAH 25,000–30,000, in others – UAH 45,000–50,000.

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For instance, if we talk about the body in general, then the average salary of Ministry of Social Policy officials is UAH 38,500, in the Ministry of Youth and Sports, such figure reaches UAH 41,800, in the Ministry of Healthcare – UAH 33,400, in the Ministry of Education and Science – UAH 41,000.

If we talk about the level of performers (chief specialists, category B) who perform the main volume of work, the average salary for them in the Ministry of Social Policy is UAH 27,000, in the Ministry of Youth and Sports – UAH 20,100, in the Ministry of Health – UAH 21,000, in the Ministry of Education and Culture – UAH 29,000.

I would like to point out that we are currently referring to the indicators of accruals for the past year without taking into consideration spending on taxes. After appropriate deductions (19.5%), people received significantly lower salaries in fact.

This year, the salary reduction did not affect only the Ministry of Defence and the Ministry of Internal Affairs. Salaries decreased in other ministries as well. Now it is completely inappropriate to talk about bonuses and allowances for intensity.

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There are mandatory payments, for example, in structural reform departments, where the scope of responsibility is wider and the level of complexity of the tasks is higher. Workers are engaged in the formation of policies there, consequently, their salary level is higher than one in ordinary positions.

Interviewer: And what about the reduction of salaries for high-ranking officials?

Nataliya Aliushyna: The Prime Minister emphasised that ministers should refrain from inflated bonuses. And it's done. NGOs (public organisations) are being constantly monitored. As for civil servants of category A – funds are taken from the salary budget of civil servants in conformity with Resolution of Cabinet of Ministers No.15, i.e. salaries are fixed.

Sometimes it can happen that the minister's salary is several times lower than one of the Head of Department.

For example, the head of the department of the Ministry of Justice could earlier receive UAH 2.6 million per year, while the minister – only up to UAH 700,000 per year. These are our analysts' data.

On the lack of regulation of military administration statuses  and massive lay-offs

Interviewer: Can you dwell on the flows of budgets and regulations when moving oblast administrations to the status of “military” ones: how do their powers, responsibilities and monetary rewards change?

Nataliya Aliushyna: I am aware of some obscure issues in this respect. MPs are constantly asking what they should do, how the salary is calculated, and how to make the transition from state administration to military administration. This issue is especially thorny at the city level. But this is not within the competence of the NACS. The Ministry of Communities and Territories Development and the Ministry of Reintegration usually deal with such issues, they are looking for specific solutions.

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As far as I know, this matter requires regulation at the legislative level.

Interviewer: Will there be any massive lay-offs/staff reductions that are already being actively announced?

Nataliya Aliushyna: Reduction is not a super-goal for NACS. There are various opinions and ideas regarding optimisation or transformation, but I will dwell on our specific vision. We focus on fundamental function analysis.

The preservation of the workforce capacity in each state body is crucial for us since the aim of the civil service is to ensure the functioning of the state itself.

Functions that are not relevant in war conditions should be abandoned after identifying them during the audit. Instead of them, new ones appeared in wartime conditions. We should focus on them.

However, there are cases when all functions are relevant. For example, today you cannot reduce the number of people who will stop issuing passports tomorrow... Therefore, the risks and consequences should be analysed first. We don't intend to reduce as many people as possible. Rather, we are trying to ensure qualitative and efficient state functioning.

Interviewer: And yet, within what framework can the reduction of the state apparatus take place? Of course, we are talking about the reduction which won't cause any significant losses to the quality of the civil service.

Nataliya Aliushyna: I can invoke the case of the NACS. We have 10 interregional offices (every 3 regional offices are united into 1 interregional) with the status of legal entities.

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After the functional audit, it became clear that three administrations out of ten (central, western, southeastern) are enough for normal functioning.

In this way, we will save on utility bills, stationery, telecommunications, rental costs, etc. As a result of consolidation, there will also be a reduction in staff: 30 people out of 90 will remain. That means that each department will not need to have its own HR specialist, two accountants/financiers, etc. Thus, there will be a reduction of 60 staff units. At the same time, we will retain certain functions, but not all of them, naturally.

Interviewer: Can the ministries act according to the same scheme?

Nataliya Aliushyna: Of course. This applies, for example, to the State Treasury, the Tax Service, the State Production and Consumer Service – all the services which have territorial bodies. That is the point of the functional audit methodology. In general, in my opinion, it is possible to reduce the staff by 30-35% painlessly for the state.

Interviewer: And how does the information about an abundance of vacancies in the civil service (almost 30,000) correlate with the reduction procedure? As there is information about the resignations of 6,000 civil servants due to the war, and this number is constantly growing. Are you going to hire new people during the war?

Nataliia Aliushyna: Each head of a state body is guided by the number of expenditures the body has.

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If I have nothing to pay the salaries, how will I recruit new people? Of course, I won't do that. Currently, 12 NACS workers have joined the ranks of the Armed Forces, 16 are living abroad at their own expense: women on maternity leave for childcare. And these are not vacant positions.

Nevertheless, I need to perform the necessary functionality. Therefore, I carry out internal rotations – I transfer employees within the state body to positions with different functions. In such a manner, each manager can ensure the performance of the functions of his state body even with smaller resources. Regarding the 30,000 vacancies you mentioned... As far as I'm concerned, starting from 2023, as soon as the optimisation is carried out, the state bodies will fill all these vacancies.

On the fate of civil servants who went abroad

Interviewer: Resolution No.440 of the Cabinet of Ministers of Ukraine (CMU) cancelled the NACS order on the possibility for civil servants to work from other countries. But it can undergo changes: there is an active discussion among MPs. What is exactly meant by these changes?

Nataliya Aliushyna: I have received parliamentary enquiries, in particular, from people's deputy Olha Sovhyria. I made my point on this issue at the hearings of the Verkhovna Rada Committee on Social Policy and Protection of Veterans' Rights. I emphasised that civil servants (75% of whom are women) who went abroad and are staying there at their own expense are currently not working and do not receive money from the state budget.

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Therefore, we submitted a proposal to the Cabinet of Ministers – to allow mothers–civil servants who hold category “B” civil service positions and employees of a state body who are presently abroad and have young or minor children, or an adult child, who is a person with a group I, subgroup A disability since childhood, to work from abroad. The same thing with those who have taken care of a child or a person with a group I, subgroup A disability since childhood, and pregnant women. Of course, we are not talking about categories A and B – the leadership should work in Ukraine.

On a new reform and salary increase in the civil service

Interviewer: You mentioned reforming the remuneration system. Is there any political support on the part of the President and the Prime Minister on this issue?

Nataliya Aliushyna: The reform of the remuneration system is our international obligation, as the current one does not meet world standards. There is support and understanding at the President's level.

There is the December minutes of the meeting with the Prime Minister and a step-by-step plan for implementing this reform, as well as the concept of reforming the system of remuneration of civil servants.

It is clear that only 50% of people support such a reform.

The ministries I mentioned mostly support the reform. Moreover, last year the President supported a petition regarding the need to reform the remuneration system for civil servants, which received 25,000 votes prematurely.

But for now, the war is slowing down this process. In particular, the majority of state bodies reported that they could not classify positions. However, even before the war, we started the development of a new model of labour remuneration. In June, the Verkhovna Rada approved the Anti-corruption Strategy of Ukraine until 2025, which also, among other things, provides for reforming the remuneration system.

So, we have the basis to switch to the global model. Salaries in the civil service should become competitive, transparent and understandable for society.

Interviewer: And yet, when the war ends, how will the level of salaries of civil servants change and to what extent? How many funds will be needed?

Nataliya Aliushyna: It is impossible to give an exact figure of how much the reform will cost without classifying positions first. And the process is currently on hold. Earlier we used the pre-war number of civil servants, but today we have different realities. First and foremost, a functional audit should be performed and the irrelevant functions should be reduced. And only then can we talk about the classification of positions, improvement of staff structures of state bodies and specific figures.

However, if we take into account our experiment from 2021 on four pilot state bodies (according to the Cabinet of Ministers' Order No.1414) – the Ministry of Digitalisation, the Ministry of Finance, the NACS and the Secretariat of the Cabinet of Ministers, then we estimated that salaries should be increased within 20%, depending on the state body

On international aid and support for civil servants who became victims of the war

Interviewer: Which of the international financial institutions, apart from the IBRD, still helps in this matter?

Nataliia Aliushyna: So far, IBRD is the most vivid example. But I will lift the veil of this issue a bit: currently, another possibility of transferring funds to us from the IBRD to support the state apparatus is being discussed.

Interviewer: What about financial support for civil servants who became victims of the war?

Nataliia Aliushyna: Presently, draft law No.7353 has been registered, which was considered and was unanimously supported by MPs at the Committee on Social Policy and Protection of Veterans' Rights.

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It recommends providing compensation to the families of civil servants killed in the workplace – 1 million UAH and from 200,000 to 800,000 UAH of compensation in case of mutilation of a civil servant while performing official duties.

I'm aware of the fact that society has an ambiguous attitude towards this project. But the state is guided not by emotions, but by national interests, placing a special responsibility on civil servants. They are the first objects of enemy attacks in the occupied territories. Therefore, I consider such an initiative fair.

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