Liam Twomey (Wexford, Fine Gael)
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Question 54: To ask the Minister for Public Expenditure and Reform if focusing cuts in expenditure on the non pay element of public expenditure is having a disproportionate impact on service provision; if there are any plans on reducing payroll costs, other than reduction in numbers; and if he will make a statement on the matter. [3320/12]

Brendan Howlin (Wexford, Labour)
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Given the overarching requirement to put the public finances on a sustainable footing, it is inevitable that savings must be identified across every area of public spending. This involves difficult decisions on how to allocate and prioritise the more limited resources that are now available. However, in making these decisions, the Government has endeavoured in so far as possible to implement adjustments on a fair and equitable basis, protecting and preserving the core front-line public services with due regard to the relative impacts on pay costs and services. The comprehensive review of expenditure conducted over the course of 2011 has assisted the Government in identifying broad-based savings measures consistent with budgetary objectives, and the results of this exercise are set out in detail in the comprehensive expenditure report published on 5 December last.

The report notes the vital role the reductions in numbers and the pay bill have had in terms of fiscal consolidation to date. It also notes that while public service staffing levels have been reduced by 6%, the net pay bill has been reduced by 14%. The greater reduction is due to the pay cuts applied in 2010 and the ongoing pension related deduction allied with other measures to reduce the overall public pay bill. As a consequence, the overall cost of paying public servants will have fallen by 20% by 2015.

I have also announced further Government initiatives to reduce the cost of allowances, overtime and premium payments in the public service in 2012, with further savings identified in future years. Initiatives to address annual leave allowances and excess sick leave absences will also boost productivity.

The Government has reaffirmed the key commitments made in the public service agreement on pay rates and job security for public servants. However, these commitments are contingent on delivery of the necessary non-pay flexibility and public service reforms required under the agreement.