Sweeping changes to further centralize public administration on Jan. 1

December 14, 2016

25 public administration institutions are to be merged, restructured or eliminated after January 1 as part of a bureaucracy reduction plan, resulting in the loss of 10,000-20,000 public jobs. The functions of most of these institutions will be transferred to government ministries and agencies, a move which, according to deputy minister of the Prime Minister’s Office Nándor Csepreghy, will reduce the number of public employees to 15-20 percent of the total workforce from its current level of 25 percent.

Critics argue that the bureaucracy reduction plan does not reduce bureaucracy but rather places administrative responsibilities into the hands of a much narrower group of centralized government agencies, including the unwieldy Prime Minister’s Office.

A highly centralized, opaque state structure

Since returning to power in 2010, the Fidesz-KDNP political alliance led by Prime Minister Viktor Orbán has presided over a vast expansion of centralized public administration affecting education, energy, banking, retirement funds, and public healthcare at the expense of independent functioning institutions. Previous “reforms” often involved parliament mandating the transfer of assets from local or county authorities (schools, hospitals) or private citizens (private pension funds), to the central government.

The latest centralization of public administration represents a further erosion of checks and balances between central power and the independently functioning institutions, and is the next step in the consolidation of power on the part of Orbán and Fidesz and the building of a highly centralized, opaque state structure.

Whatever the merits of the reforms in terms of efficiency and cost savings, what is clear is that the government stands to make substantial financial gains from the sweeping centralization. According to the December 2 edition of the official Hungarian Gazette all property previously used by the disappearing institutions is to be transferred either to state-owned companies or successor agencies. For example, all computer technology and IT tools are to be transferred to  the state-owned National Infocommunications Service Company Limited, while other properties will be handed over to the General Directorate for Public Procurements and Supply.

Successor agencies also stand to inherit valuable property, including real estate, previously used by the institutions. For example,a building used by the Institute of Foreign Affairs and Trade in Budapest’s exclusive Gellért hill district will reportedly be among the first high-value properties to be sold off by the government. The elimination of the Gyula Forster National Heritage Protection and Asset Management Center will result in its current Castle Hill district offices being transferred to the Ministry of National Economy.

Below is a selection from the 25 institutions that will cease to exist after January 1.

The National Health Insurance Fund of Hungary (OEP) will change its name to the National Health Insurance Fund Manager (NEAK). OEP’s management of the health insurance fund will be turned over to the Ministry of Human Resources, while other functions will be taken over by the Central Administration of National Pension Insurance and the Budapest City Government Office (BFKH.)

The Office of Immigration and Citizenship (BÁH) will also be taken over by the BFKH, which will now be responsible for administering citizenship, birth certificates and name changes.

Many tasks of the Office of Administration and Electronic Public Services (KEKKH) will be taken over directly by the Ministry of the Interior. KEKKH oversees an array of databases containing personal information, including passport administration, identity cards, electronic birth records and criminal records, data on legal proceedings and address information.

The National Cultural Fund of Hungary, which finances cultural projects, will fall largely under the control of the Human Resources Support Manager (Emberi Erőforrás Támogatáskezelő). Those tasks related to the administration of performing arts organizations will be overseen by the Pest County Government Office.

The National Environmental and Nature Protection Inspectorate will be eliminated and its duties taken over largely by the Pest County Government Office. Administrative duties connected to waste management, as well as regulatory environmental protection duties, will be taken over by the Ministry of Agriculture. Other environmental conservation administrative tasks will be taken over by the Ministry of National Development.

The Office of Justice will be merged into the Ministry of Justice. Support for victims of crimes, as well as legal assistance, will be overseen by county and district governments. Supervision of independent court executives will be undertaken by the Hungarian Chamber of Court Executives.

The aforementioned Gyula Forster National Heritage Protection and Asset Management Center will be eliminated. Protection of Hungarian cultural assets and sites, world heritage sites, advisement on world heritage assets, administration of the center’s scientific collections and other functions will be taken over by the Prime Minister’s Office.