Michael McGrath (Cork South Central, Fianna Fail)
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Question 202: To ask the Minister for Public Expenditure and Reform the savings that will be realised in 2012 from the public service reform plan recently announced; and if he will make a statement on the matter. [37191/11]

Brendan Howlin (Wexford, Labour)
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On 17 November last, I announced several key developments relating to Public Service Reform and published the Government's Public Service Reform Plan which sets the basis for the comprehensive and strategic reform of the Public Service in the coming years. The challenging fiscal position which we face means that far-reaching reform of the Public Service is essential in order to ensure it is customer-focused, leaner, more efficient, better integrated and delivering maximum value for money.

The most significant element of the savings that will be realised from the Reform Plan is the preservation of critical front line services in tandem with a very significant reduction in Public Service numbers over the coming years. By 2015, we expect to achieve a planned reduction of 37,500 staff, or 12%, since 2008. In total, the Government are expecting the gross Public Service pay bill to reduce by some €2.5 billion to €14.5 billion (i.e. a 15% drop since 2008). Detailed Employment Control Frameworks for the coming years, including for 2012, will be announced next week. A key aspect of the reform programme is that it will enable us to continue to provide quality services notwithstanding the substantial reduction in Public Service numbers and resources.

While the reduction in Public Service numbers will reduce costs significantly, it will also necessitate major reform in all sectors. In this context, the effective implementation of the Croke Park Agreement, and in particular the redeployment arrangements, will be crucial to the success of the reform initiative. This will allow increasingly limited staff resources to be directed to the areas of most strategic importance. At the same time, the envisaged re-engineering of structures, systems and services will mean that the Public Service will be able to continue to deliver quality services with reduced numbers.

Other examples of elements of the Reform Plan where cost savings will be achieved include the increased use of shared services in all sectors which will mean that fewer staff and financial resources are required to perform common business functions as duplication is eliminated. The innovative use of ICTs across the Public Service will improve service delivery and reduce costs, particularly when combined with business process improvement. The analysis and improvement of business processes will be important to reduce the human and other resources required by organisations to undertake certain functions and provide services. Procurement reform is also a key target for cost savings. Framework arrangements that are already in place have maximised volume discounts and provided for reductions in administrative and transaction costs for suppliers and for State bodies. Procurement savings amounted to €30 million in 2009, €40 million in 2010 with €50 million targeted for 2011. Ongoing savings are projected for future years including 2012. I also announced details of a new and expanded programme of State Agency rationalisation which will deliver enhanced service efficiencies, together with ensuring a more focused and democratically accountable Public Service. Rationalisation and effective management of the State's property portfolio, done in a strategic and integrated manner, will also allow the Public Service to maximise value-for-money from its footprint.

These are just some of the main areas where savings will be achieved and they will help ensure that Departments stay within the 2012 allocations, which I will announce next Monday, 5 December.