State may save €200m on redundancies

The Government’s target for cuts in its public service pay and pensions bill under an extended Croke Park deal could be cut from €1 billion to €800 million if the full level of savings envisaged under a staff redundancy scheme is realised.

A spokesman for the Department of Public Expenditure and Reform said the Government would credit savings generated by its voluntary redundancy scheme against the €1 billion in cuts which it was seeking under the extension to the Croke Park deal, once the costs involved had been met.

Government sources suggested that the voluntary redundancy scheme, which has been widely flagged over recent weeks and which was considered by Cabinet yesterday, could realise net annual savings of €200 million after two or three years.

Redundancy scheme

The Government is looking to reduce its workforce by about 4,000 under the redundancy programme. It has estimated that the redundancy scheme will cost €57 million for every 1,000 staff who leave.

However, the Government also believes that the full cost of the scheme will be covered after two or three years.

Minister for Public Expenditure and Reform Brendan Howlin said initially the voluntary redundancy programme would be rolled out in three areas – the Department of Agriculture and specific parts of the health and education sectors.

It is envisaged that staff who leave would come mainly from back-office, support areas and management positions. However, it is understood staff who previously worked in creche facilities operated by VECs and which were considered not to be sustainable could be offered voluntary redundancy.

A Department of Education spokesman said: “The Childcare Education and Training Scheme, managed by the Department of Children and Youth Affairs, was introduced in September 2010, and since that time we understand that eight VECs have closed creches they own.”

Staff opting for voluntary redundancy would receive a package of three weeks per year of service plus statutory entitlements capped at two years’ salary – or half pay until retirement.

Mr Howlin said there would be no automatic right to redundancy. All applications would be subject “to ongoing business needs and service provision priorities”.

The Minister said it it was proposed to proceed with the schemes as soon as possible.

Working hours

Under the proposed extension to the Croke Park deal the Government has indicated there could be cuts in pay for some grades, increased working hours, the elimination of increments, a reduction in premium and overtime rates, and reforms to supervision and substitution payments for teachers.