True or false. Can the State save money by merging public services?

In L’Événement, Thursday, on France 2, Prime Minister Michel Barnier said he wanted in particular to “merge public services” to make savings in public spending.

It was an announcement that caused a lot of reaction. The FSU union denounces “pure demagoguery”. The Prime Minister, Michel Barnier, wants to make 40 billion euros in savings by reducing public spending. Interviewed in the show L’Événement on France 2, Thursday October 3, he listed some ways to save money and notably said he wanted “merge public services” And “probably not replace all civil servants”. But does merging public services really save money?

There is no global, neutral, absolute study that would provide a yes or no answer to this question. On the other hand, it is possible to take stock of two recent mergers of public services: the merger of the General Directorate of Taxes and the General Directorate of Public Accounting which gave birth to the General Directorate of Public Finances in 2008, and the creation, the same year, of Pôle emploi, after a merger between ANPE and Assedic.

Initially, the exact opposite happened to what the Prime Minister hoped for: there were additional costs. Concerning Pôle emploi, these additional costs were first estimated between 350 and 500 million euros by the Economic Analysis Council. Finally, a Senate information report published in 2011 notes that there was an additional cost of 500 million euros. According to the annual performance report annexed to the bill for the settlement of accounts for 2010, this additional cost is due to the acquisition of part of Unédic’s movable and real estate assets (324 million euros) and to the impact of the new national collective agreement on the accounting of social commitments (188 million euros). The salaries of a large majority of former ANPE – who had accepted the new collective agreement – ​​increased by 20% to be brought to the level of the remuneration of former Assedic employees.

The merger which gave birth to the General Directorate of Public Finances also led to additional costs linked to benefits given to employees, according to a report from the Court of Auditors which took stock of this merger ten years later, in 2018. the first years that followed, between 2008 and 2012, the payroll increased by 209 million euros.

The years have passed and our two examples have taken opposite trajectories. One allowed the State to save money, the other did not. The General Directorate of Public Finances is the good student. According to the Court of Auditors, she had “a sustained rate of savings”. She was “the main contributor to savings made by the State in terms of civilian personnel” between its creation in 2008 and the publication of the court’s balance sheet in 2018. This is mainly due to the reduction in its operating expenses and in particular the drop in its workforce with 2,000 job cuts per year on average.

The Court of Auditors notes that the two directorates which were merged to create the DGFIP had already started to reduce their workforce and the merger did not accelerate their pace. There is therefore no basis for asserting that these savings made through job cuts are solely the result of the merger. Furthermore, the court notes that the payroll, which represents what employees cost the DGFIP in euros, fell less quickly than the workforce between 2009 and 2016. In other words, management had fewer positions, but its employees cost more expensive.

The case of Pôle emploi is radically different. First, it must be remembered that the primary goal of the merger of ANPE and Assedic was to facilitate the procedures for job seekers, and not to make savings, even if the State was also counting on that. In fact, ten years after the creation of Pôle emploi, the subsidies it received from the State and Unédic had rather increased, according to a report from the Court of Auditors taking stock of the system ten years later, in 2018. “Between 2012 and 2018, Pôle emploi’s resources increased by 609 million euros, an increase of 12.4%”notes the court. This is mainly due to the increase in Unédic’s contribution. The state subsidy also increased before experiencing a decline in 2018, while remaining higher in 2018 than in 2012.

Pôle emploi expenses were “strongly growing”. Operating expenses increased from 4.1 million euros to 4.4 million euros, still over the period from 2012 to 2018, driven in particular by the increase in personnel expenses due to the numerous recruitments that Pôle employment had to be carried out to cope with the increase in unemployment in the early 2010s. Pôle emploi also had to incur expenses to finance training plans.