AMID WARNINGS of further deep cuts, Minister for Public Expenditure Brendan Howlin said last night that he wanted to ensure Ministers were not “captured” by their departments into defending existing levels of spending.
Speaking after a special Cabinet meeting that began the comprehensive spending review promised in the programme for government, the Minister said the process would be completed in September before the annual estimates process.
One cost-saving measure departments will be allowed to explore is the outsourcing of non-essential activity to the private sector.
Mr Howlin said he had brought two memoranda to Cabinet last night; one dealing with a process to curtail current spending and the other with capital spending.
“I wanted it to happen early in the life of the Government so that people wouldn’t be captured by their departments and have to defend every line of spending,” said the Minister.
The changes in the budget process approved by his Cabinet colleagues involve individual departments being given responsibility for coming up with savings by the end of June.
After discussion at Cabinet the broad shape of the spending cuts for 2012 should be clear by September, when the Cabinet will begin detailed consideration of departmental spending estimates.
Mr Howlin said that the McCarthy report on savings to be made through the sale of some State assets and the abolition or merger of quangos will be brought to Cabinet next week, when savings of €2 billion would be sought.
In advance of the Cabinet meeting Taoiseach Enda Kenny warned that further deep cuts in public spending are urgently needed.
Mr Kenny said it was vital that significant savings were achieved. As Ireland was now unable to borrow on international markets there would have to be “real scrutiny” about how public money was spent in the future.
Before the meeting Mr Howlin said that further public service pay cuts could be avoided only if necessary savings were made under the terms of the Croke Park agreement.
Mr Howlin said the public sector unions would have to accept that money was finite. “We can’t think in the old way. The status quo is no longer acceptable,” he said.
The Minister expressed the hope that the required savings could be achieved without the imposition of further pay cuts. “That’s the task I have set myself and the Government has set itself in the coming months.” Two other Labour Party Ministers, Ruairí Quinn and Pat Rabbitte, also warned that further public service pay cuts might be necessary.
Mr Quinn said pay cuts for teachers could be back on the agenda unless the Croke Park agreement delivered real savings.
He said discussions with the teaching unions ahead of the Easter conferences would focus on the need to implement the agreement.