Labour minister Drábek has been somewhat economical with the truth, but rather less economical with the procurement of IT systems

A year ago I wrote about labour minister Jaromír Drábek’s social reform under the title ‘Efficient minister of weak citizens’. I argued then that the concentration of power involved in the establishment of a single national employment office and the centralised distribution of social benefits would save neither money nor time, as the government claimed, and that it would provide politicians with more opportunities to steal.

Today, we know that the reform is neither efficient nor cheap. And there is mounting evidence to show that what Drábek presented as a straightforward transfer of funds from municipal to central government has beome a straightforward transfer of public funds into private hands. The fact that two such pairs of hands were until recently attached to the arms of the minister and his deputy Vladimír Šiška is vexing. iDTAX was owned by the two gentlemen before it was sold to Vitkovice IT Solutions, which is a supplier of the IT infrastructure for Drábek's new centralised system. iDTAX specializes in electronic sales receipts, which are being touted as the main tool for monitoring the abuse of social benefits. How cunning!

Drábek has been claiming since taking up his ministerial post in 2010 that this shift of powers to the centre, and their subsequent exercise will cost more or less the same as the decentralised system it is in the chaotic process of replacing. Until this week, he had been claiming that no additional investment would be made in IT systems because the ministry already owns the necessary hardware and software. We now discover that Drábek has been somewhat economical with the truth but rather less economical with the procurement of IT systems. This week Drábek revealed that the ministry would be spending 3.6 billion kc on new IT systems over the next three years.

It is noteworthy that Drábek’s predecessor at the labour & social affairs ministry, prime minister Petr Nečas, estimated at the time that establishing and equipping a new central employment office would require 3 billion Kc. from the state budget. It turns out that Nečas’s estimates were rather accurate.

Rather than saving money by exploiting economies of scale in procurement, it seems that Drábek and Šiška have merely exploited the procurement process. Their procurements are now being looked into by the police. Someone is making a killing out of Drábek’s reform and it is not the Czech state. Mercifully, the political career of this particular IT entrepreneur will be cut short any day now. Perhaps the only good thing to come out of this trousering of taxpayers’ money is the inchoate anger of citizens. They have now taken to the streets to protest at austerity measures imposed upon them by politicians who, in the name of efficiency, are pushing through reforms that require vast sums of public money to implement, by private firms previously owned by those very same politicians. This is a recipe for disaster.