Mr. Michael Howard:

To place today's discussion in an overall context, the expenditure in the Defence Vote in 2011 was of the order of €700 million gross of which slightly more than €500 million is accounted for by payroll. During 2011, the numbers employed in the Defence Forces averaged around 9,500, there were 735 civilian employees and 348 civil servants. In nominal terms, the Department of Defence spent a total of roughly €100 million on allowances. However, more than half of this figure - €53 million - is accounted for by military service allowance, MSA. MSA is a universal payment made to all military personnel to compensate them for the unique demands of military life. MSA is counted as part of the basic pay of military personnel in pay reviews. The balance of roughly €46 million covers allowances as the term is commonly understood, that is, payments that are made selectively to individuals albeit for widely varying reasons.

The term "allowances" covers a variety of payment types that are very different from each other. Some are intended to reimburse expenses and do not actually form part of remuneration. Some payments are made in recognition of particular technical or professional qualifications. The Defence Forces have to be self-sufficient. Therefore, in addition to having purely military training and qualifications, the military workforce is extremely diverse and it includes widely differing skills ranging literally from plumbers to pilots. The pay system has evolved different rates of additional pay to reflect that.

Finally, there is a range of allowances that seek to recognise particularly onerous duties whether at home or overseas that fall outside the norms taken into account in setting basic pay. I wish to emphasise that military personnel may be required to work around the clock, work long hours and remain on duty at weekends. The Defence Forces do not receive overtime, hence this third category of payment.

Overall, while there are around 65 separate allowances, it is important to emphasise that many of these allowances are paid to relatively small numbers of personnel. Almost two thirds of the €46 million is accounted for by the top three categories of allowance, that is, technician pay, €7.7 million; security duty allowances, roughly €10.5 million; and overseas peace support allowances, €10.7 million. The "tech" pay and the security duty allowance had already been selected for review as part of the Defence Sectoral Croke Park Agreement. Their review has now been subsumed into the larger central initiative and is being addressed with the representative associations in accordance with agreed procedures.

It is also important to emphasise that representation in the Defence Forces, compared to other areas of the public service, is a comparatively recent phenomenon. It was introduced around 1990. Roughly half of the allowances, 33, date from 1990 or later. That reflects the influence of the associations which identified discrete groups of military personnel performing duties that either impose more than the normal burden on personnel or that require unique qualifications.

Many of the allowances apply to quite small numbers of personnel. They frequently address circumstances where military personnel are required to perform duties for exceptionally long periods or where changes in technology require personnel to acquire additional qualifications. For example, an aid to the civil authority allowance compensates personnel who are called out after hours in emergencies such as flooding or bad weather. An explosive ordnance disposal, EOD, allowance is paid to bomb disposal personnel.

The committee may wish to note also the ongoing reorganisation, which is a major change in the organisation and structure of the Defence Forces. There have been strength reductions across the board.

The reorganisation has had and will have a very major impact on the lives and future careers of serving and future members of the Defence Forces right across the entire organisation. This programme has entailed barrack closures and a large-scale reorganisation process affecting thousands of personnel. There has been a reduction in the number of brigades, from three to two, requiring the redeployment of some 2,000 personnel. This is in train at present.

Throughout this very challenging period, the modernisation process in defence has been overseen by a sectoral implementation group. While very difficult issues have surfaced, and very robust negotiations have been necessary, there has been continuing constructive engagement by the representative associations at a particularly difficult time for their members. The Croke Park agreement has been adhered to in the most difficult of circumstances and it has and is being used to facilitate fundamental and far-reaching reform. The Government's recent decision on allowances is now in process. I expect the same constructive response, albeit in the context of robust negotiations.

The committee may wish to note that a small portion - less than 2% - of the approximately €100 million refers to allowance payments to civilian employees and civil servants. Pay issues in relation to grades employed in more than one Department are dealt with centrally. These grades are not comprehended by the defence sectoral agreement under the Croke Park agreement but are comprehended by central arrangements.