Hospital managers could be let go if they do not control their budgets in future

Senior hospital executives who do not manage within their official budgets in future face being let go, informed Government sources have said.

The sources said that as part of new healthcare management structures, managers will increasingly be appointed on fixed-term contracts, running for three or five years.

If the individuals appointed to top positions in the new healthcare structures – which include new hospital groups – did not do their jobs competently, their contracts would not be renewed.

The sources said there would be “no future in the system for people who did not implement policies set down by the Government”.

The Government believes senior managers across the public service will have key roles in maximising the savings to be generated under the Haddington Road agreement on reducing the public service pay bill which came into force at the beginning of this month.

Senior Government figures say the agreement will deliver €300 million in savings on the State's pay and pensions bill this year and €1 billion by 2016.

'Reform agenda'

“In addition to the obvious cost benefits, the agreement provides the scope to progress the reform agenda and to deliver the unprecedented increases in productivity across the public service,” a source said.

Under the new agreement, staff earning more than €65,000 have had pay cuts implemented while across the public service a longer working week has been introduced.

The Government has maintained that central measures in the agreement such as cuts in pay, reductions in pensions for some retired public servants and pauses in increments will realise about €340 million of the total €1 billion in savings to be generated in the State pay and pensions bill by 2016.

The Government also believes that significantly enhanced productivity across the public services – arising from the provision of about 15 million additional working hours and other efficiency and reform measures – will deliver about €431 million in savings.

Cuts in staffing numbers

It is intended that the additional work will produce the savings by facilitating further cuts in staffing numbers, as well as reducing the amount paid in overtime and on recruiting staff from agencies.

The Government has estimated that the elimination of supervision and substitution payments to teachers will generate savings of €125 million a year. The Government also believes that savings in specific parts of the public service such as An Garda Síochána or the Defence Forces – for example changes to overtime rates – could realise savings of almost €230 million.

It is expected that budgets for parts of the public services such as health and education will next year be based on the expectation that the Haddington Road agreement will deliver specific levels of savings.

The Government has not yet published details on the level of savings to be generated in each of the different parts of the public service this year under the Haddington Road agreement although the health budget for 2013 is based on savings of €150 million being realised.