Ms Geraldine Tallon:

I am accompanied by Mr. Maurice Coughlan, principal officer; Mr. Barry Quinlan, principal officer; and Mr. Laurence Kelly, principal officer. I am also accompanied from the Department of Public Expenditure and Reform by Ms Oonagh Buckley, principal officer.

I thank the Chairman and members for giving me the opportunity to address the committee. I provided in advance on 12 October information for the committee on allowances in respect of which business cases had been made to the Department of Public Expenditure and Reform. In the intervening period further business cases which have relevance to the local government sector have been submitted to the Department of Public Expenditure and Reform, a list of which was provided for the committee secretariat yesterday. Altogether, the information provided covers common Civil Service allowances which apply in my Department, allowances specific to the Department which apply in Met Éireann, allowances which apply across all local authorities and allowances particular to one or more, rather than to all, local authorities. Total expenditure from the Department's Vote in 2011 was nearly €1.6 billion, of which departmental pay amounted to some €51 million. The allowances common to Departments generally and those applying in Met Éireann totalled €2.5 million in 2011, of which €351,000 related to common Civil Service allowances, while Met Éireann accounted for €2.15 million in the main in shift and public holiday allowances.

Of the 18 general Civil Service allowances paid in the Department in 2011, ten were paid to service officers. These allowances totalled some €64,000 in 2011. There were 28 service officers in the Department in 2011 based at five locations. The allowances were introduced to cover a range of specific additional tasks and, in the main, are legacy type payments to officers in the Department with the lowest basic pay. The committee has been advised by the Department of Public Expenditure and Reform that the service officer grade is common to all Departments and that it is intended to review pay and conditions centrally.

The remaining allowances are paid to a limited number of officers and reflect a range of legacy issues. We have reduced the incidence of the payment of some allowances such as in the case of office accommodation and are in discussions with staff representatives regarding some others. We will continue to focus on this issue as the overall review continues.

In regard to Met Éireann, the National Meteorological Service is a division of the Department. Its core task is to monitor Irish weather conditions and prepare and issue weather forecasts and warnings to help protect life and property. This requires the making of observations and forecasting operations on a 24-7 basis, 365 days a year. As is the norm in organisations with round-the-clock operations, staff receive shift and public holiday allowances to compensate for the arduous nature of the unsocial working patterns required to deliver Met Éireann services. Shift and public holiday allowances in Met Éireann have been in place for decades, with the current arrangements having been initiated in the 1970s. Shift allowance payments amounted to €1.8 million in 2011, while public holiday payments totalled some €300,000.

As regards local authorities, provisional unaudited figures for 2011 indicate that total expenditure was in the region of €7 billion, of which current expenditure represented €4.7 billion. The local government fund provided for a figure of €790 million or 17% of current expenditure of local authorities in the form of general purpose grants in 2011. Payroll costs were €1.4 billion in 2011, a reduction from the figure of €1.7 billion in 2008. Of the figure of €1.4 billion, €61 million or 4% was spent on allowances. Local authorities traditionally incur costs on overtime payments and allowances necessitated by the need to fulfil statutory obligations as service providers in areas such as roads, water, fire and emergency services and to ensure compliance with health and safety legislation.

Work is often done outside normal working hours and conditions. The sector has been active in assessing and reducing costs since 2008, having reduced staff numbers by almost 25% or 8,600 whole-time equivalents. There have been overall savings of €830 million. In the specific area of allowances costs have been reduced by 30%, from €85 million in 2008 to €61 million in 2011. The €61 million spent on allowances in 2011 was made up of a range of allowances related to the provision of critical services often carried out outside core hours and duties.

As is the case in other sectors, the term "allowances" covers a variety of payment types in the sector. They vary depending on the work, duration, grade and time involved. Some are intended to reimburse expenses incurred, while others are linked directly with pay. In most cases the allowance payable was considered to be the least expensive option to deliver a particular service, with the alternative being curtailing or eliminating the service, paying overtime, hiring additional personnel or increasing basic remuneration.

The majority of allowances are paid to outdoor workers at the lower end of the remuneration spectrum in respect of work carried which in most cases must be done out of hours at short notice, at night or at weekends. The employees concerned do not receive overtime payments when performing these duties.

Allowances in local authorities fall into two categories. Those agreed at national level apply across all 34 authorities. Examples include on-call, ice cast, acting up, unsocial hours and winter maintenance allowance. Those agreed locally, in most cases to cater for a particular need, apply in more than one local authority where employees work late or come in early to do a particular job, for example, outdoor staff who work in the sewer system in Dublin city. The majority of the allowances in the sector were introduced following lengthy negotiations between staff and management representatives and many have been the subject of Labour Court decisions. The flexibility local authorities receive in return for what is often a relatively small outlay is considerable. Another example is a cleaning allowance where branch librarians, in addition to their core duty, clean libraries out of hours, thus avoiding the hire of specialist cleaners.

In reviewing allowances in the local authority sector my Department considered 217 separate business cases. They comprised 14 national and 203 local allowances. Of these, 56 business cases in respect of 14 national and 42 local allowances have been submitted to the Department of Public Expenditure and Reform on the basis that the allowance should be payable to new beneficiaries. The committee has been provided with information on all 56 allowances. For the balance where there is no approved business case, my Department did not consider that a business case should be submitted to the Department of Public Expenditure and Reform, but local authorities have been asked to begin the process of engagement with staff representatives with a view to the elimination of such allowances to existing beneficiaries also.

Overall, as I have indicated, the local authority sector has been to the fore since 2008 in reducing expenditure and staff numbers in response to the financial crisis. The sector is now embarking on an ambitious structural and organisational reform programme aimed at delivering services more effectively to citizens locally.