Brendan Howlin (Wexford, Labour) | Oireachtas source

I propose to take Questions Nos. 2 and 3 together.

This Government is committed to securing sustainable reductions in the cost of the public service pay and pensions bill. The aim is to reduce the total cost of the Exchequer pay bill by some €3.8 billion in the period from 2009 to 2015, a large and sustainable fall in the cost of employing people to deliver public services by 2015. The reform of allowances is just one element of a sustained programme of cost reduction across the public service.

It is worth repeating that allowances are, and will continue to be, a normal part of the pay structure in the public service. However, allowances should only be payable in circumstances that meet the criteria set out for the review. Those criteria were that they should reflect the arduous nature or unsocial hours, including the need to remain on call at weekends and other times, clearly associated with the duties of posts; they should ensure work of additional value is actually received by an employer; or they should cover an actual cost accruing to the employee derived from their employment.

The allowances review conducted by my Department was the first comprehensive, public-service wide attempt to address outdated allowance-based pay structures across the public service.

There will be two consequences of the decisions taken by the Government on foot of the review. The cost of employing new public servants to deliver public services will continue to fall because we will no longer be paying them outdated allowances. The allowances review also showed structural weaknesses and a lack of transparency in the way in which certain public servants are paid. Pay structures across the public service will be radically reformed through the elimination or modification of certain allowances and the restructuring of pay scales. As well as structural improvements and greater transparency, these measures will generate substantial, sustainable savings in future years as well.

To assist people in understanding the basis of the review, details of business cases together with the outcome of the review have been published on my Department’s website. Details of salary scales in respect of all public service grades and details of allowances payable to those grades are retained at sectoral level and can readily be supplied in respect of each sector by the Department in question.

The review done to date is just the first step in what will be an ongoing process.

My Department has written to sectoral managers instructing them to engage immediately with staff interests with a view to securing their early agreement to the elimination of departmental allowances to current incumbents where no business case exists to pay those allowances to new beneficiaries. Departments have also been asked to identify other allowances, including legacy allowances, for elimination from current beneficiaries. Departments were requested to submit detailed proposals, including setting priorities and indicating timeframes for completion of this process, to my Department. This process will enable further savings to the Exchequer to be quantified.

With regard to the indicative savings target of €75 million for 2012, it was never the case that the allowances review targets was included in the budgetary provision. The intention was that any moneys saved would be available to offset against unallocated savings in the overall spending ceiling. The size and duration of the review could not have been anticipated and I accepted earlier this year that the specific savings targets for 2012 would not be realised. This does not impact on the achievement of the pay bill budget for the year, which will be fully realised.

I am confident that the decisions taken by the Government on foot of the review will go a long way towards making our public service leaner and more efficient, as well as delivering services on a cost effective and value-for-money basis.

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