When the Irish Prison Service in 2005 brought in new rules to cut overtime hours in prisons, it expected annual savings of €32 million could be secured. The peak overtime bill for prison officers had reached €59 million in 2003 and radical change was needed. The change involved replacing overtime with individual contracts for prison staff who agreed to work a set number of extra hours annually for higher pay. However, annual savings of just €5.5 million – one sixth of the original estimate – have been achieved. The Comptroller and Auditor General (C&AG) is highly critical of the Prison Service’s operation of the scheme, saying the savings made are “substantially less” than expected.
How could such a major miscalculation occur? Undoubtedly, the financial incentives offered to secure prison staff support for the annualised hours system were excessive. Prison officers received €41 million in lump sum payments simply to adopt the new system. Each officer also gets an €8,000 annual pensionable allowance to operate the system. Those who agree to work a set number of extra hours, beyond the standard 39- hour week, receive 1.8 times the hourly rate, and are paid for all the additional hours contracted, regardless of whether prison management requires them to work. Prison officers are receiving the equivalent of almost two weeks pay each year for overtime hours they have not worked.
In addition, the anticipated savings were based on an erroneous assumption by the Prison Service that overtime payments would continue to rise, even though they had fallen prior to the introduction of the annualised hours system. For the Department of Justice, and its then Minister Michael McDowell, the miscalculation on the pay of prison officers proved to be a costly error. That, and the misjudgment at much the same time to spend €29.9 million on the site of a proposed new prison at Thornton Hall in north Dublin which the C&AG subsequently found was also based on "inadequate" cost analysis. Both were avoidable Celtic Tiger boom-time mistakes for which the taxpayer has had to pay heavily.