Brendan Howlin (Wexford, Labour) | Oireachtas source

We are working too on revised budgetary procedures to enhance the role played by parliamentarians in our budgetary process. For the first time, this year Oireachtas committees debated the annual Estimates in advance of decisions taken. Changing budgetary processes for all eurozone member states may make this the last December budget in this country.

Oireachtas committees are also scrutinising legislation in advance of finalisation by Government and feeding constructively into the decision-making process. I intend to bring proposals to Government shortly for Ireland to participate in the global Open Government Partnership, reinforcing our commitment to progress in this area. These are crucial reform measures which stand as this Government’s response to our governance crisis. I believe they will not only help bolster confidence in our political system but will help to enhance openness and transparency around policy formation in the State.

Spending Pressures

Today though, is primarily about our fiscal crisis. We must cut spending while the pressure on our public services remains greater than ever. Last year’s census revealed that there were almost 350,000 more people living in Ireland than in 2006. Compared to 2008, there are over 565,000 more medical card holders today. There are over 50,000 more students in our schools and almost 30,000 more third level students. There are almost 80,000 more people in receipt of the State pension and nearly 200,000 more people receiving jobseeker's payments each week. It is against that backdrop that we must continue to meet our fiscal targets and to reach a deficit of below 3% by 2015.

Public Service Reform/Croke Park Agreement

Reducing public expenditure and numbers while continuing to provide key public services and social supports is not easy. That is why we are undertaking the most comprehensive reform of the public service since the State was founded. The Croke Park agreement has been essential in supporting this reform. The value of a stable industrial relations environment in achieving a fiscal consolidation of this scale should not be underestimated. Public service staff numbers will be reduced to approximately 287,000 in 2013, a reduction of some 33,000 from the 2008 peak of 320,000. We plan to go further to reduce this number to 282,500 by the end of 2014.

Public servants have already had two pay reductions, totalling an average of 14%. Top salaries have been reduced by up to 30% and capped at €200,000. We have also reduced the salaries for new entrants to the public service by a further 10%. Public service pensions have been reduced, saving more than €100 million annually. Legislation for a new single public service pension scheme has been enacted to reduce future pension costs.

We are implementing a radical reform of the way in which public procurement is organised, to yield significant savings. We are reducing duplication and waste through greater use of shared services for a range of back-office functions. For example, a new human resources shared service centre for the Civil Service will reduce human resource headcount by 17% and costs by 26%, with annual net savings of €12.5 million.

We are taking a focused and integrated approach to external service delivery of non-core activities, where appropriate. In April, we published a new e-Government strategy, which builds on Ireland’s strong recent performance in this area. The most recent European Commission e-Government benchmarking exercise shows that Ireland is now ranked first in Europe for the provision and sophistication of online services to businesses and citizens. We have agreed the standardisation of annual leave and paid sick leave across the public service, which will yield both productivity increases and cost savings.

Notwithstanding the progress made to date, the public service pay bill, at 36% of public spending, will need to make an additional and substantial contribution to meeting our fiscal challenge next year and beyond. Additional productivity and cost extraction measures not envisaged under the current Croke Park deal will be required to ensure that the Government meets these commitments.

Following my invitation, the public services committee of the Irish Congress of Trade Unions recently agreed to enter into discussions to establish if we can reach agreement on such measures. The aim of these discussions is to achieve an additional reduction in the cost of delivery of public services of the order of €1 billion from the public service pay and pensions bill over the period 2013 to 2015.

Public servants are delivering on our vision for a new public service and their contribution should be and is recognised by this Government.

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