Official Report (Hansard)

Session: 2013/2014

Date: 15 January 2014

PDF version of this report (182.34 kb)

Committee for Finance and Personnel


DFP Public Sector Reform Division: Remit and Functions (Departmental briefing)


The Chairperson: I welcome to the meeting Colin Sullivan, strategic policy and reform director, and Paul Montgomery, who sits on the strategic policy and reform directorate.  Do you want to make a brief opening statement to kick us off, and then we will go into questions from members?


Dr Colin Sullivan (Department of Finance and Personnel): Thank you for the opportunity to highlight the remit and functions of the new Department of Finance and Personnel (DFP) public sector reform division (PSRD) and to provide you with a brief overview of the work currently being undertaken by the team. 


One of our new Minister's first actions was to establish the division to provide support to Northern Ireland Departments in the implementation of reform across the public sector.  As Finance Minister, he is keen that the people of Northern Ireland have access to the best public services that the resources we have available can buy.  That is the driver for the work of the PSRD.  We officials are currently developing a programme of work informed by researching best practice approaches both here and further afield.  That involves contact with other government Departments, the private sector, community and voluntary bodies and arm's-length bodies.  PSRD staff are engaged with and listening to others who have valuable views on the reform of public services.


One aim of the division is to help stimulate innovation in service delivery and policy design.  We are currently in the process of developing the methodologies for an innovation laboratory similar to those that have been operating for some time in other countries.  The Minister visited Denmark and Estonia in December, and there were a number of key learning areas that we are presently exploring, including, for example, digital online government services and introducing the innovation laboratory that I have already referred to.


The Minister also visited the Organisation for Economic Co-operation and Development (OECD) in Pairs in September 2013 to learn more about its work on public sector reform.  He is exploring how an external body could help to provide guidance to us here.  When in Estonia, he had the opportunity to discuss how that country had benefited from advice from OECD.  He is keen to engage with his ministerial colleagues on that topic.  He recognises that there is a significant role for the community and voluntary sector, given that it is already involved in the provision of certain public services.  It has a critical role to play as part of the reform programme.  Indeed, following a debate in the Assembly, the Minister asked the public sector reform division team to explore the applicability in Northern Ireland of social impact bonds as one means of supporting alternative models of service delivery.


How the public sector reform division will operate will evolve over time.  The division aims to fully explore the innovative use of technology and improved methods of working to deliver flexible and joined-up services.  We need to build on the successes of the past.  The Minister, as the Personnel Minister, is very keen that we highlight and celebrate the things that we do well at present.  He is also very keen to emphasise that, when working with other Departments, he wishes to adopt a partnership approach, respecting that the policy responsibility is retained by the respective Minister.  He is keen that DFP should be seen to be innovative and reforming just as much as any other part of the public sector.  My colleague Paul Montgomery and I are happy to flesh out further details for you.


The Chairperson: The Committee has done a lot of work to date on flexible working, including a Committee inquiry.  How might the findings of that inquiry inform the work of PSRD, including the innovative use of technology to achieve efficiencies and benefits in how, when and where public servants undertake their work, such as working from home and mobile working?


Dr Sullivan: We need to define what the public sector reform division will cover and whether that will be issues that you have discussed, such as flexible working, or other areas of DFP.  As you know, the Minister is responsible for a number of cross-cutting issues that cut across the public services.  He has corporate HR responsibilities and, obviously, the people strategy, including issues around how people work and engage in the workplace.  He also obviously has responsibility for procurement, which cuts across many areas, and shared services.  In working up a work programme, we need to determine which areas will fall to the public sector reform division and which will fall to other aspects of DFP.


The Chairperson: What is the timescale for all that?  Since the Minister has come into post, this appears to be one of his flagship areas.  Is there any idea of when we will see meat on the bones?  Obviously, this is a big advance on the general discussions we had with the Minister before Christmas, but when do you expect to have an agenda and to start the real work in that regard?


Dr Sullivan: I see that as working at two levels.  One of the first things we did was that we brought the business consultancy service, which was in Enterprise Shared Services, into the PSRD.  It also has the performance and efficiency delivery unit (PEDU) role.  Work is ongoing at present; you might call it an interim work programme.  The Minister is also keen to talk to his ministerial colleagues about giving some strategic focus to this.  Depending on how that progresses and how you look at it strategically, there will be what you might call a strategic work programme, which will add to the work that we are already engaged in.  The time frames will very much depend on discussions with ministerial colleagues.


The Chairperson: Are there any indicators for that?  Do you have any targets?


Dr Sullivan: As I said, we are working up the process of engagement.  Once we have done that, we will be in a better position to give you much more detail around that.


The Chairperson: When will that be?


Dr Sullivan: Again, it comes back to —


Mr Cree: He does not know.


Dr Sullivan: — the discussions the Minister has with his counterparts.


Mr Girvan: When you mention the word "reform", there is always opposition to it.  You alluded to one organisation that was set up for the right reasons.  Unfortunately, there was some reluctance to engage with it along the way.  Are you finding much opposition when trying to deliver reform?


Dr Sullivan: That is a very interesting question, and, going back to the Chairman's question around time frames, I envisage there being a number of phases to this.  One is the listen-and-learn phase, which is where I think we are at the moment.  If you were to engage with a range of different stakeholders, you would find that most people are keen to support reform in principle.  Clearly, once you get into the details, it becomes a question of whether they are with you or not.  At this stage, people are very keen to engage and have ideas. 


There are a range of different methodologies that we can apply.  I do not see the public sector reform division as being the body that will do all of this reform.  If you think of a classification of reform, you have individual Departments doing their reform for their Ministers, and the policy responsibility is with that Minister.  The public sector reform division may assist that.  You also have cross-cutting reform, covering two or more Departments.  Before I took this post, I was in the Department for Social Development (DSD).  Obviously, welfare reform is being led by DSD, but it is a cross-cutting issue and impacts on many different areas of government.  We may help to implement that or we may not, again at the request of Ministers involved.  Then, you have the DFP reforms, some of which might fall to PSRD and others which will be taken forward by different parts of DFP.  So, whether you will have opposition very much depends on what you want to take forward.   We have not fleshed out the detail of that. 


However, at the outset, I want to say that what we do and the success of that will, I think, be very much governed by how we go about it and the engagement that we have.  The Minister has been very keen to indicate that the approach is one of partnership.  When I was appointed, there was an article in the 'Business Telegraph' that dubbed me as a "reform tsar".  I want to say — I know that the Minister would say — that dictatorial approaches will not be successful and that it is very much about partnership.  Therefore, the term "tsar" is, I think, inappropriate.


Mr Girvan: I make that point because I know that there was some opposition to PEDU when it was brought back in.  Some Departments were not too keen on working with it.  I appreciate that you are at the listening stage and that there will be a point where unions become involved.  There is potential for them to say that you are changing people's flexibility of working, for want of a better word.  Ian and I were just talking about what actually happens.  You phone up a Department, and, because someone is off sick, no one can answer your question.  Or, a person is away on holiday, and you are told that they will not be back until January and, "Sorry, we cannot give you any information on that".  That is not good delivery, and these are the things on which we need to see some flexibility, where workers who are working in the same Department are upskilled to be able to lift the ball when someone steps out rather than having the whole thing grind to a halt for a fortnight while the person is away on their holiday.  It is something that frustrates me.


Dr Sullivan: I see part of this as being some sort of public engagement exercise whereby we want to take views from the public as a whole.  On PEDU, Paul is here with me, and I contend that PEDU played itself in.  It maybe took a little time, but it is now much more widely accepted than was the case.  Paul, do you want to add anything?


Mr Paul Montgomery (Department of Finance and Personnel): In the past year, we have conducted work with a range of organisations.  We have worked with the Department of Culture, Arts and Leisure (DCAL), DSD and the Department for Regional Development (DRD), and there was work on flooding.  So, there has been a greater expression of interest and more Departments that are willing to work with us.  I think that the focus of PEDU on savings, although necessary, created a difficulty for many Departments.  The broader focus of the public sector reform division should make it more open and amenable to cooperation.


Mr Girvan: As soon as you mention the word "reform", people are sometimes put off right away.  I am always a great believer that, if you can get buy-in at an earlier stage and maybe change the wording to "more efficient", it sometimes can get people buying in to embracing it.


Dr Sullivan: I think that our Minister is open to those conversations.  Language can be important to the way that people perceive what you are doing, and, sometimes, people talk about innovation as opposed to reform.  We want to harness the best ideas in the public sector.  Although there are certainly good ideas elsewhere, we have really excellent staff, and many of them have very good ideas.  It is a question of taking the best ones and making the most of those. Sometimes, those ideas come forward and do not require huge investment.  People on the ground who are providing the service see where the weaknesses are and can come up with better solutions, which managers and senior staff are not close to and do not know the details of.


Mrs Cochrane: Thank you, Colin, for your briefing this morning.  You touched on a few matters that I was going to raise.  I spent a number of years in the Civil Service.  There are people lurking there who actually do have good ideas — as long as their creativity has not been sucked out of them from being there too long.  This is a positive thing, and we should be positive about it.  How do you think that we can get those ideas from people and actually scale them up?  What infrastructure is needed to make those ideas a reality?


Dr Sullivan: One thing that we are looking at is a staff suggestion scheme.  I almost hesitate to call it that, because that makes it seem as though it is very low level.  As I said, some of the best ideas come from staff.  It is a mechanism by which we can harness the best of them and have some sort of filtering process.  Clearly, if there are 100 ideas, a small proportion of those will be really good and will really make significant changes.  Then again, we could create an innovation laboratory.  That sounds like a very grand thing, but it is really an opportunity for people to take time out and, depending on the topic, bring in people from different Departments across government and give them space and freedom to think outside traditional lines.  So, it is a question of bringing the best ideas to that forum and trying to explore them in more detail.  Perhaps this goes back to earlier points about flexibility and so on, but I think that, if we are going to be really ambitious about public sector reform, we need to look both at culture in the organisation and at risk aversion.  That is because it is quite possible for senior colleagues across the public sector to work in and to do very well with the ethos that is there at present.  We need to try to think of ways to allow the best ideas to come to the fore.


Mr McQuillan: Colin, you mentioned PEDU.  Does the creation of the new unit put a question mark over PEDU's future, or do you see them working together?


Dr Sullivan: I see PEDU being absorbed into it.  PEDU is a very small unit.


Mr McQuillan: Sometimes when a unit is absorbed, it disappears.


Dr Sullivan: I have not thought about branding, but I think that the function is there.  In a sense, PEDU is about economic review and analysis, as well as providing support and advice.  That is one tool in a box that could also involve innovation laboratories and internal consultancy.  I do not think that we would want to stop that activity.  It might just be widened in scope, depending on the needs of a particular situation.


Mr McQuillan: I would be worried about scaling down PEDU, because I think that it is very important to Departments in government.  I would like to see it kept to the fore as much as possible.


Dr Sullivan: I see the public sector reform division as a unit that, depending on what is agreed between Ministers, will have a strategic role.  I hope that it will also have a very practical role.  It will be there to support other Departments and other elements of DFP.  Again, to some extent, it is dependent on what requests come in.  We would have those services available, and we would promote them.


Mr McQuillan: I think that it is an exciting time for any new body to be set up here to look into all Departments.  We look forward to hearing how it is going in the future.


The Chairperson: Before I bring Leslie in, I will say that we are talking about different labs and factories in different countries.  Can you indicate what kind of work goes on in the Danish MindLab, which the Department looked at?


Dr Sullivan: The Minister visited Copenhagen just before Christmas, and I was with him.  We visited the MindLab facility.  It comprises a group of around 10 to 15 people, who are largely academics, but some are practitioners who worked previously in the public sector.  The lab is owned, if you like, by three departments in the Danish central government and one municipality. 


It is really a space where people can go to think through solutions.  However, it is very interesting that — this is informing our methodology, discussions and thought — to actually make this work well, you have to do a lot of work beforehand to get to the starting point of bringing together six or eight experts to sit together to work through issues.  A huge amount of preparation is required to do it properly.  They take forward ideas.  Their main discipline is social anthropology, so they are really looking at how people behave.  It is very much about behaviours and seeing whether you can nudge citizens to work in a different way or encourage them to behave differently. 


Although they also cover service improvement technique, I suppose at a very high level, a lot of it is about policy design.  You can think of public sector reform as having two elements, one being that we do better what we do at the moment, and the other being that we start to think of different services to meet the old problems.  Part of that is also then about demand management, and colleagues across the service are already involved in that.  There is work in early years, in education and in health.  However, that is very much about the fact that, if you deal with a problem early, it will not arise, will not be so big, will not be so costly and will not require so many different facets later. 


So, those people are very much in that sort of demand management space, and the question is whether we can bring a focus to that here.  I would see that, if we had a similar type of lab or factory or whatever you want to call it, it would also work on the service improvement activity.  Indeed, their advice to us was that it was probably easier to start with the process-type stuff first and then to expand it once that was up and running.


The Chairperson: I think that it would be very encouraging for the Department to go down the road of a broader range of thinking about all these issues. 


Point 6 of your submission refers to issues that go beyond the financial imperative, such as public health and education.  I think, however, that that is part of the financial imperative.  You talk about the public health time bomb of obesity and so on, but making key decisions now will save us money in the longer term.  At the moment, I do not know whether we have seen many examples here or even elsewhere of unpopular or significant decisions being made now to try to offset a lot of those things that are coming at us down the public health road.  I do not know whether Simon has come back from Denmark with proposals to get everybody cycling, but that is certainly one of the reasons, along with how people behave and how you change people's behaviour, for making the savings in the longer term.


Dr Sullivan: There are a number of these labs.  MindLab and the Helsinki Design Lab in Finland were two of the first, but there are now quite a number of them.  They are in England, and there is one in Dublin.  There is a range of them, and, from what we can see, it is not rocket science; it is just a way of operating and looking at things differently and trying to create that space for people who have the knowledge but who may be frustrated by the way that government operates at the moment to see whether they can think outside the box.


Mr Cree: I tend to be optimistic, and I still get a buzz from words such as "innovation", but so often, the examples here really do not deliver anything.  We talked about the reform of the Civil Service in 2007.  We had the SIB and the PEDU experience, which have both paled into the background.  To me, reform suggests change, and change for change's sake is a waste of time.  We are really looking for improvement. 


You mentioned another matter that, again, is old hat.  Probably 15 years ago, we talked about managing demand, which actually was then a negative.  It was for cutting down service and managing demand.  So, we really need to be careful that this does not become just another process.  I am really asking you this:  how we can be assured that this does not become merely another process? 


We mentioned some of the other shibboleths, such as suggestion boxes, which go back to when Adam was a wee boy.


Mr Mitchel McLaughlin: He was told not to eat the apple.


Mr Cree: You probably remember that. 


You mentioned risk aversion.  We get all these expressions in the document, but how can you assure me that this will be a new idea that will be carried out?  You mentioned the Danish experience and Estonia. I have been there.  In fact, Lithuania was ahead of them at that time.  Indeed, "novel" was another word that was used.  The Swedish governance example was much better than the Danish one.  I do not know whether there is a league table for this, but I am 100% behind improving things.  How can you reassure me that it is not going to be another process?


Dr Sullivan: The scale of ambition comes down to the appetite for change.  The areas for improvement are relatively straightforward to highlight and identify.  We did some research, and we found that many countries were already engaged in it.  Some were further ahead than others.  For example, our trip to Estonia indicated that, although they are cutting edge by having e-governance, paperless offices and so on, they are arguably behind us in shared services.  It comes down to the ambition and to how we go about engaging and working with communities on particular issues in different Departments.  The "what" is relatively straightforward to determine; it is the "how" that is the challenge.  That is where we want to see whether we can find different "hows" and different ways of working.


Mr Cree: Will you produce a vision?


Dr Sullivan: I think that part of it is the public engagement exercise and developing a vision and philosophy of what public service should be.  However, that is just the starting point; it then has to be fleshed out.


Mr Cree: Surely that does not start with the user; it starts with government.  Do you not have to develop a vision and ask people to share it?


Dr Sullivan: I believe that we have to develop a vision, and the Minister is certainly keen to engage with stakeholders, including the wider public, on what that should be.  He does not want to dictate; he wants to engage.  Once you have the vision, that is really your starting point.


Mr Cree: Are you aware of the danger of process in all this and of it being seen as simply another process?


Dr Sullivan: There have been a range of different initiatives in the past.  They have a life cycle, and some are more successful than others.  The level of success depends on the appetite.


Mr Cree: So, what is your life cycle for this reform initiative?


Dr Sullivan: I think that, if you are serious about reform, you need to be prepared to give it time.  Some of the things in the MindLab-type activity that I talked about will take a generation to have an impact, although we need the vision to do it now.


Mr Cree: Do you consider something that far in the future to be vital?


Dr Sullivan: It is interesting.  The reform plans that have been developed and are being implemented in Scotland started in about 2007.  Their next election is in 2016, I think, so they will have had about nine years of working within what they call their national performance framework.  That is nine years of concerted effort, with full ministerial buy-in and a single-party government, yet they feel that there is still much for them to do.  So, although one understands the political imperative to have quick wins, if you really want public sector reform, you need to give it time to be done properly.


Mr Cree: Do you think that it will take about 20 years?


Dr Sullivan: I think that generational change takes quite a while before results are seen.  If you invest in early years activity for nought-to-five-year-olds, the main benefit of that is realised later in their lives.


Mr Cree: I look forward to that with interest.


Mr Mitchel McLaughlin: Yes, indeed, if we are still here.  I was a strong supporter of PEDU, and I see an ongoing requirement for its interventions, studies and recommendations to help the various Departments.  I also strongly welcome the strategic development.  I think that it is a very positive development, and I wish you well. 


If we are talking about those strategic or even generational issues, we also have to take account of the different constructs that we operate with, compared with what might have been the only points of reference that we had, such as single-party government, etc.  We have the imminent deployment of the RPA and new council structures, and we also have a Programme for Government commitment to review the operations of this institution.  In addition, there is perhaps a general expectation that we would examine whether we need as many Departments and Ministers or whatever.  Is all that factored in to your work?  Have you given any consideration to that?  You could be examining the current model, and, indeed, it could be redundant within a very short period.


Dr Sullivan: Obviously, we are aware of those initiatives, but we are not trying to second-guess what is being done or thought of elsewhere.  I think that we need to define the role of the public sector reform division by asking this question:  what is it doing or not doing?  That is why we need agreement across the board.  In many ways, the themes that you mentioned, such as local government RPA, are obviously a great opportunity for reform initiatives.  The future structure of the number of Departments and so on has a huge bearing on all that, and we need to take that into account.  However, it is not something that we are charged with dealing with at present.  Others are dealing with it, so we need to know how we fit in to the overall picture.  That is the initial part of understanding the landscape and where we are in it.  That is very important.


Mr Mitchel McLaughlin: I realise that it is early days, but let us consider an obvious anomaly in the existing arrangement.  That is that, on subject policy areas, we can have as many as four or five and, in one infamous case, seven Ministers having an entitlement to be consulted or involved in a decision.  Clearly, in practice, efficiencies and service delivery that is a current problem.  We need to inform the discussions about how we can realign or reform our own institutions.  It would be passing strange if you were operating blithely uninvolved in those kinds of issues when, in fact, you could be informing that discussion in the first instance and, perhaps, helping us to streamline arrangements until those reforms are brought forward.


Dr Sullivan: I certainly think that we could help to inform that discussion, yes.


Mr Mitchel McLaughlin: But it is not on the table at the moment.


Dr Sullivan: It is not something that we have been charged with.  Clearly, what happens for the future is primarily an issue for the First Minister and deputy First Minister, but it is something to which we can usefully contribute.  If you look at other models elsewhere, you see that the way that government operates and the machinery of government have a huge bearing on the activities and outputs.


Mr Mitchel McLaughlin: Yes, but if we are planning, say, a generational perspective, we have to take account of current Programme for Government commitments.  Those include the reform of this institution — or at least recommendations on that; we might not deliver so much reform.  I suspect that, without some fairly rigorous and forensic analysis, we may fall short of what we could do.  I think that your Minister will be a central player in bringing that process forward; I do not think that it will simply be OFMDFM.  Perhaps, if it has not been flagged up as an issue that is relevant to your remit, that should be done immediately.


Dr Sullivan: I think that the Finance Minister will be central to that.  Let us look again at the Scottish experience, where the Scottish Finance Minister, John Swinney, leads on the public sector reform initiative.  He is, if you like, our Finance Minister's counterpart.  One of the mechanisms that they are using to create some of this activity, such as, for example, their early years learning collaborative, which I think they call it, is the creation of change funds.  The Finance Minister has created a change fund to help to bring that together so that different Departments or Ministries are working together and have the resource to do that.  So, I think that finance can be a very useful lever in that process, and, working with our DFP colleagues, we could certainly help to promote that.


Mr Mitchel McLaughlin: I know that it is early days, but, given our unique structure, where there is no opposition but fairly powerful scrutiny Committees, has consideration been given to whether there is any mechanism for providing regular updates to this Committee as the work continues?


Dr Sullivan: Obviously, you scrutinise all of DFP's work, and I imagine that that will include this work.


Mr Mitchel McLaughlin: We can leave it to the secretariat to work with the Department to provide regular updates so that we can continue to support what you are doing.  I think that it is vital, and I wish you luck.


Mr McCallister: Given the size of the task, you will probably need all that luck. 


You touched on a couple of things, Colin, about the challenges.  My views on changing the structures of government and opposition here will be no great surprise to anybody in this room.  You mentioned the challenges in some governments that have a single-party Administration, never mind a two-party or three-party coalition.  We are meant to have a five-party coalition.  Some of the points that you, Leslie and the Chair made were about early years.  The Chair talked about the Health Department.  One of the big challenges that you are going to face is making savings in Departments.  Investment in early years will undoubtedly lead down the road to savings for the Health Department.  There will also be savings for the Education Department, probably the Department for Employment and Learning, and maybe even the Justice Department.  It is about how you get them all to buy in, particularly when you have five different parties in government.  You may not have as tight a Programme for Government.  We still have a very entrenched silo mentality, and I will add that to Mitchel's points about possible changes in government.  The rate that we are delivering any type of reform on anything at the minute is not exactly going at breakneck speed.  So, it is going to be very difficult for you to get many big hits in that.


You made a point about how you build risk aversion in to some of the Departments and how you get them to strike a balance between taking some level of risk and ending up in front of the Public Accounts Committee.  I suggest that finding that balance is going to be quite tricky.  We have probably swung it very much to where they are taking no risks on anything or are taking an inordinate length of time to make a decision on things, which is not good, either.


Dr Sullivan: I think that you highlighted some of the challenges.  We need to have huge ambition for the buy-in.  We need to do what we can with the landscape and the appetite that there is in the Executive and across the Assembly.  That can be aided by ensuring that the benefits that can accrue from public sector reform are evident for Ministers and Members to see.  Much of public sector reform is not ideological; it is just good common sense.  Although there are clearly ideological issues that Members will have different views on, much of it is not ideological but is about technology and doing things differently.  There is scope for doing things that maybe are not so controversial.


Wrapped around the buy-in is the question of what type of governance you have.  Do you have some sort of ministerial or Executive subcommittee?  The head of the Civil Service has said that there can be a public sector subcommittee of PSG, which would get the permanent secretaries involved.  Do you have other means of engaging with other sectors, including the voluntary sector — obviously, the private sector has an interest — so that people have their say?  Even if the direction of travel is not necessarily everything that they want, they will feel that they are part of and bound to the process, even if every aspect of its content is not something that they are wholly happy with.


Mr McCallister: Given the speed at which RPA has generally moved over the past 20 years — Leslie's figure might be a bit ambitious — it will take a long time to get buy-in. 


Where risk aversion is concerned, how will you try to get the public sector to be more innovative and not as afraid to take some risks on things?


Dr Sullivan: It goes back to innovation and good ideas and to taking calculated risks.  It is not that risks are wrong per se; it is just that foolish risks are wrong.  Again, it comes down to the people, the cultural issues and the leadership aspects.  At PAC, senior civil servants need to be prepared to say, "Well, we tried it.  We made a percentage decision.  It was a prudent decision, but we got it wrong.  Obviously, you can beat us up for that, but we were calculating in what we did, and we thought that we were trying to do the best thing".  Inevitably, if you look at the private sector and its innovation, you see that it tries things but that not all of them work.  When they do work, that is great, and a great success is made of it.  That is well known, and it takes off.  However, when it does not work, those involved stop it, get out of it and do not keep digging in that hole. Instead, they move on to the next thing.  I suppose that the PAC needs to have some understanding of that, in that people have ended up with an unfortunate outcome but have done things the right way and with the right intentions.  Where they have clearly made foolish mistakes, that is a different issue.  However, where they have done the right thing and with the right intentions but it just has not worked, we need to put that down to experience and to learn from it.


The Chairperson: OK, members?  Colin, that was really interesting stuff.  I wish you all the best in your work ahead.

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