Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

26. To ask the Minister for Public Expenditure and Reform if he has conducted an analysis of the costs and benefits of the voluntary redundancy scheme which operated in the public service in 2013; and if he will make a statement on the matter. [42053/14]

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

As I have mentioned in previous replies on this matter, before the Government decision was taken in  respect of introducing Voluntary Redundancy in the Public Service, an analysis of the likely Exchequer impacts was carried out to estimate the cost of such a scheme, the payback period for the State and its overall net present value.

This analysis  estimated that for every 1,000 employees who opted to participate in a Voluntary Redundancy programme there would be an estimated gross cost of approximately €109 million. The gross payroll savings for 1,000 employees was estimated at approximately €57 million every year.  Therefore the initial cost of 1,000 employees leaving would be recouped within two years.  The analysis also proposed that further savings would also be realised in the future when these employees reached retirement age because of their reduced pension entitlements.

In 2013, just under 500 staff left the Public Service under a Voluntary Redundancy scheme.  This was largely in the Local Authority area (389), with small pockets in the Defence, Education and Semi-State sectors.  It would have been the responsibility of local sectoral management to oversee the offer of these schemes, under the agreed standard terms.   

It is important to note that: 

- the approach to Voluntary Redundancy schemes has been to allow public service organisations to use it on a targeted basis in different areas where it makes sense and can be shown to offer value for money in the long run; and that

- Voluntary Redundancy is by definition not compulsory, and therefore people will only leave if that is what they want; equally there is no automatic right to redundancy.  All applications are considered in the context of ongoing business needs and service provision priorities.