State service “Hydra”: what funds intended for the army do our officials use?

In Ukraine, the number of official civil servants currently exceeds 173 thousand. However, the actual number of officials is almost twice as large. In the process of regular “reforms” and “downsizing”, a certain number of civil servants lose this honorary title, but the essence remains unchanged.

How much budget money is spent on maintaining the army of officials, is it possible to reduce it, thereby relieving the budget and directing the freed-up funds to military needs - Apostrophe found out.

Rising from the Ashes

Over the years of independence, the number of civil servants in Ukraine has increased on average 1.8 times (from 170 thousand to 300 thousand people), while the number of officials in individual departments has more than tripled. All attempts to downsize the bureaucracy - and these good intentions are declared under every new president and every new government - only worsen the situation. The state apparatus seems like a hydra: if you cut off a head, three grow. No wonder.

In 2011, for example, the National Agency of Ukraine for Civil Service Issues was created. Which is quite logical: someone must ensure and control the work of officials in government agencies, as well as monitor the reduction of the state apparatus. Now, by the way, this national agency employs 159 people, and there are still 68 vacancies.

According to the National Agency for Civil Service, the largest number of officials in Ukraine was observed in 2013 – 335 thousand people. As of the beginning of 2022, there were 204,869 full-time positions in government agencies, employing 171,469 people. Most of the officials are in the central executive authorities (ministries, various services, agencies and inspections), the rest work in regional, city and district state administrations.

In June 2022, the Verkhovna Rada and the government announced their readiness to significantly reduce the state apparatus. The results are impressive.

According to the Ministry of Finance, as of the beginning of the third quarter of 2023, the actual number of civil servants in Ukraine amounted to 173.1 thousand. However, since the beginning of the year it has decreased by 2.7 thousand people.

That is, the official number of officials at the beginning of 2023 was 175.8 thousand people. This is despite the fact that the year before there were 171.5 thousand, and they intended to reduce them. Miracles, and that's all.

Cadre officials

However, official data on the number of civil servants, whether from the Ministry of Finance or the National Agency for Civil Service Affairs, should not mislead anyone.

“We still have more than 300 thousand officials of various ranks. True, some of them, in the course of reforms, lost the status of civil servants, moving into the category of patronage service or “technical personnel,” that is, simply state employees. But this has not changed the essence ,” expert, candidate of sciences in public administration Yuri Gavrilechko tells Apostrophe.

Legal expert at the Center for Socio-Economic Research CASE Ukraine Andrey Savarets fully agrees with his opinion: “For example, employees of the prosecutor’s office are civil servants, and prosecutors are prosecutors, there is a separate law for them. The public employment service is no longer civil servants, although it is a public service. There are many similar examples. And at the same time, new government structures are being created .

Currently, there are 107 different structures operating in government bodies (excluding the security and defense sector):

– Secretariat of the Cabinet of Ministers of Ukraine and 17 ministries;

– 20 services;

– 14 agencies;

– 4 inspections;

– 4 commissions;

– 8 government bodies, the number of which is established by the government;

– 9 government bodies, the number of which is not established by the government;

– 24 local state administrations;

– 6 judicial authorities.

And here it should be noted that many divisions within the above structures very often duplicate each other. It is considered good form, for example, to have divisions and departments for digital transformation or European and Euro-Atlantic integration. The Bureau of Economic Security was created, while the corresponding functions remained with the SBU and the Ministry of Internal Affairs. And so on, there are many examples.

At the same time, all government agencies have an actual number and a limit. For example, the largest government agency is the State Tax Service. The limit number is 24,486 people, the actual number is 22,063. That is, there are 2,423 vacancies. The corresponding figures for the Pension Fund (second place in number): 24400, 22000 and 2400. Ministry of Justice (third place): 17001, 12298 and 4703. And there are similar vacant positions in every government agency. It’s like in staffed military units: if necessary, you can increase the number to the maximum.

Salaries are a trifle

A reduction in the state apparatus is necessary. Last year, a program to reduce the bureaucracy was announced by the head of the Servant of the People parliamentary faction, David Arakhamia. Many senior officials spoke about the need to reduce civil servants by at least a third.

But there is a fair amount of deceit in these statements. 30% is the average number of unfilled vacancies in our numerous services, agencies, inspectorates, commissions, state administrations, and other government bodies. Even ministries have vacancies. So you can painlessly reduce the limit number, and cheerfully report on the implementation of the next epoch-making reforms.

That is, the number of officials on paper seems to be decreasing. But their real numbers remain the same. And the costs of maintaining officials, accordingly, too. And last year and this year, the state budget allocated about more than 60 billion hryvnia for the functioning of the state apparatus.

“Even if we average the salaries of ordinary officials, let it be 10-15 thousand hryvnia per month, it turns out to be about 2.5 billion hryvnia. But this is from the series “some people eat meat, others eat cabbage, but on average we eat cabbage rolls.” Let’s not forget how much top and middle managers earn in government agencies ,” political scientist Oleg Lisny tells Apostrophe.

But the salary fund for officials, as well as other expenses for their maintenance, are just pennies compared to how much budgetary funds these officials use as a result of their activities.

“Salaries are relatively small. But officials get funds to distribute in the amount of 600-700 billion hryvnia per year. And they, of course, distribute these budget funds. This is a huge corruption component. What is especially interesting is that officials who have a “port of registration” in the temporarily occupied territories take part in this distribution ,” says Yuriy Gavrilechko.

Cars for Bakhmut

The situation with some government procurement, in the context of a full-scale war with Russia, looks quite surreal. For example, some utility companies from Bakhmut plan to purchase new cars , a van and a truck crane for a total amount of more than 10 million hryvnia. Or the Severodonetsk Trolleybus Administration decided to purchase containers for transporting food products . And there are hundreds, if not thousands, of similar examples.

Well, administration officials from the temporarily occupied territories are now temporarily staying in safe territories. They receive a salary, which, in principle, is reasonable.

“Government structures must always be prepared. It is impossible not to pay them wages, to dissolve the administration. The structure must be maintained. This is how it was in Kherson: the city was liberated, and city administration employees immediately returned and started working. But such procurement cases, as in Bakhmut, Severodonetsk or Mariupol, only cause bewilderment ,” says Oleg Lisny.

But as for purchases... One can, of course, assume that the administrations from the temporarily occupied territories are working for the future. They say that while the war is on, let the trolleybuses purchased for Mariupol remain in garages awaiting de-occupation. Or they will work, for example, on the Lukyanovskaya – Teremki metro route. But it is not exactly.

On the one hand, such cases should be dealt with by the relevant authorities. But in reality it's not that simple.

“According to the law, all services without exception that worked in the temporarily occupied territories retained their posts and salaries, and most importantly, the ability to manage budget funds. Right down to utility companies. And tenders are absolutely legal. Moreover, this is mandatory! There will be no such tenders - officials will be responsible for their failure ,” says Yuriy Gavrilechko.

It should be noted that during the time of full-scale Russian aggression, the population of Ukraine decreased, according to various sources, by 5-7 million people. But this did not affect the number of officials. Men have armor, women don’t leave either, because the job of a civil servant, even the lowest paid one, provides some kind of stability, and not the worst pension in the long term. People hold on to this kind of work.

But still, the staff of officials, everyone admits, is bloated. For example, the tax office. 22 thousand employees, and 2.5 thousand vacancies. During almost two years of a full-scale war, when there was a moratorium on inspections of enterprises, they were not reduced. And now even more so – there’s more work. And this despite the fact that a lot of enterprises have closed or are located in temporarily occupied territory. Well, why do we need so many tax officers?

“I think that with the right approach - digitalization and the launch of new algorithms (the tax office in the West is not a punitive instrument, but a business partner: first of all, to help, to suggest), the number of inspection employees can be safely reduced by one and a half to two times ,” - Economist and financial analyst Alexey Kushch tells Apostrophe.

It's not time to fire

In a word, first of all, the state must establish order in the distribution of budget funds. Although there are fears that some new supervisory government service or administration may arise. But in any case, officials certainly need to be cut. Moreover, reduce their real number, and not the number written on paper.

“But here we need to understand that before dismissing people, it is necessary to optimize the work of the relevant bodies. Computerization, digitalization, transition to online. European approach. If you do this, then I think you can safely reduce it by 30%. How can you reduce the same Pension Fund if postmen still deliver pensions on bicycles to villages? If we just cut it down, we will lose functionality (this is not only about the pension fund, this is about all government agencies). And in any case, a transition period is needed here, two to three years ,” Yuri, the former head of one of the regional tax police departments, tells Apostrophe.

Candidate of Sciences in Public Administration Yuri Gavrilechko also believes that it is possible to reduce the number of officials only after reducing their functions.

“You cannot mechanically reduce the number of civil servants without changing the volume of their work. If this is not done, then officials will distribute the same amount of funds, only they will stop working - they will not have time to absorb the funds ,” says Yuri Gavrilechko with a fair amount of sarcasm.

It should be noted here that government agencies in many localities are actually the only employer. Laying people off means leaving people without work.

“Let’s take almost any village. What is there? Post office, Oschadbank and administration. All. Reduction in such a situation is counterproductive, because there is already unemployment ,” says Alexey Kushch.

An immediate reduction in the number of officials could lead to social explosions. After all, with any layoffs, it is first of all ordinary employees who lose their jobs, not their superiors.

“Painless reduction of civil servants is impossible. People worked, received salaries, made plans for their lives. And where should they go? Yes, we need workers now, but will officials take unskilled jobs or retrain? First, upon dismissal, according to the law, they will receive some kind of payments, severance pay, “parachutes”. Then they will register at the employment center and receive benefits for six months. Many will sue for wrongful dismissal, and many will be able to be reinstated. And at the same time receive compensation ,” says Oleg Lisny.

In his opinion, before starting to reduce the number of officials (which, of course, is necessary), the state should carefully calculate all the pros and cons. In a strategic perspective, in a few years, the reduction of officials will reduce the burden on the budget. But in the short term, this may mean a massive, unnecessary waste of money in the form of compensation payments. Plus additional social problems. Of which there are already enough now, during the war. Because of the same mobilization, for example.

So, most likely, officials will be laid off after the victory. Salaries for civil servants are now not the largest part of government expenses. The only thing that needs to be resolved immediately is the problem of the rather strange use of budget funds by some government officials. And this is up to 700 billion hryvnia annually.