Brendan Howlin (Wexford, Labour)

-----taken measures to significantly reduce future public service pensions costs, produced a significant programme of agency rationalisation, cancelled many parts of the ill-conceived decentralisation programme, standardised annual leave arrangements for serving and new public servants and launched the most ambitious programme of public service reform since the foundation of the State to improve customer service and reduce costs. We are also pushing ahead with reforms of other areas of the public service, including in the Oireachtas, and insisting on greater openness, transparency and accountability, underpinned by legislative change, where necessary.

PUBLIC SERVICE PAY AND NUMBERS

Today I am announcing that the public service pay bill will fall by €400 million next year. By the end of this year the numbers employed in the public service will be below 300,000. Next year the Government plans to reduce the size of the public service by a further 6,000.

By any standards, the reduction of 37,500, or 12% of staff, against 2008 levels, by 2015 represents significant reform and poses enormous challenges. Reform of everything we do is required to deliver adequate services as we reduce that vast quantum of numbers. Proactive workforce planning is also essential to respond to these reduced numbers and ensure the right people with the right skills set are in the right place. To this end, I am pleased to announce that there will be some limited recruitment to the public service next year. Critically, I want to move towards more targeted recruitment across a range of disciplines to enhance the skills and expertise available to policymakers in the coming years. Through reduced numbers, the pay cuts applied in 2010 and the ongoing pension-related deduction, the overall cost of paying public servants will have fallen by €3.5 billion, or 20%, in the seven year period from 2008 to 2015.

In discussing public service pay it is important to acknowledge that public servants have already seen significant reductions in their pay. The impact of the pay reduction on the gross pay of public servants was progressive and ranged from almost 9% at clerical officer level to more than 23% at Secretary General level. On a similar basis, a teacher would have incurred a reduction of 12%, a staff nurse, 10.5%, and a garda, 11%, while a middle ranking public servant at higher executive officer level would have sustained a reduction of 12.3%. Of course, these figures do not include the various tax changes advanced across the board in recent years.

That said, the Croke Park agreement simply has to deliver. We have made a good start, but we have a way to travel yet. I expect all public service bodies to address inefficiencies in their systems and achieve additional cost savings through the introduction of new working arrangements, including new rosters, where applicable. Next year public service bodies will have to achieve savings in overtime of 10% and allowances and premium payments of 5%. My Department will lead a review of allowances and premium payments across the public service in consultation with all Departments next year.

I can also now announce plans to overhaul public service paid sick leave arrangements. Discussions between my officials and the unions will commence shortly in that regard.

PUBLIC SERVICE PENSIONS

We have been reducing public service pension levels. These are very significant measures, the nature and scale of which need to be fully appreciated. In September I published legislation to introduce a new single public service pension scheme for new entrants to the service. It is estimated that, by the middle years of the century, annual spending on public service pensions will be approximately €5 billion per annum in 2010 terms, if no action is taken. The new single scheme will reduce that annual expenditure by about 35% or €1.8 billion. No further cuts for ordinary public service pensioners are proposed.

Key Current Spending Decisions

Details of all spending decisions taken by the Government are included in pages 21 to 88 of the spending report. The detailed Estimates are also published. The relevant Ministers will provide later today details of all such savings. In this announcement I propose to set out some of the key savings measures.

Social Protection

We have a duty to protect the most vulnerable in our society and to provide the safety net of social protection in what are very extraordinary times. We must also get people back to work and I have already set out some of our plans in that regard. The Minister, Deputy Noonan, will discuss a range of other proposals tomorrow.

The sharp reality that our Government is facing is that the level of social welfare expenditure now in place cannot be sustained from the funding base now available. As unpalatable as it might be, we must make some difficult choices in order to contribute to the reduction of the budget deficit. Notwithstanding this, I can confirm today that the Government has decided not to reduce any weekly rate of social welfare payments and to protect the universal child payment at a standard rate.

We will endeavour to make savings from a range of measures. We will save €475 million in the social protection area next year. This is €190 million less than set out in last year's national recovery plan. Over two years, we will standardise the rates of payments of child benefit for all children. This will save €43 million next year. We have decided to base the payment week for jobseekers' benefit on a five-day week rather than the existing six-day week basis. This will save €5.9 million next year. From January 2013, employment on a Sunday will be taken into account when determining the level of entitlement to jobseekers' payments. The Government has decided to reduce the fuel season from 32 to 26 weeks. This will save €51 million-----

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