Dáil Éireann debate -
Wednesday, 1 Nov 1989

Vol. 392 No. 4

Supplementary Estimates, 1989. - Vote 16: Civil Service Commission.

Minister for Finance (Mr. A. Reynolds)

I move:

That a supplementary sum not exceeding £107,000 be granted to defray the charge which will come in course of payment during the year ending 31 December, 1989; for the salaries and expenses of the Civil Service Commission and the Local Appointments Commission.

I recommend to the House a Supplementary Estimate for the Civil Service Commission to cover the cost this year of initiating limited recruitment in certain grades. As the House is aware, the embargo on the filling of vacancies in the Civil Service was introduced as one of several measures to contain the cost of the public service pay bill with the objective of bringing this category of expenditure into line with budgetary and economic realities. While there has been a considerable improvement in the budgetary situation, largely as a result of such economies, I still consider it essential to maintain for a further period that policy of containment. Accordingly, the embargo in the Civil Service will remain in place for the remainder of this year and for 1990. Within this framework, however, I do foresee some limited scope for the filling of certain vacancies in the future where so doing would lead to benefits to the Exchequer which are immediate, significant and continuing and which cannot be otherwise attained.

The number of posts that will be filled depends on the level of natural wastage among staff from now to the end of 1990. What I must emphasise is that there will be no question of systematically filling posts which have become vacant in recent years or of allowing current overall numbers to drift upwards. In July 1981 the numbers serving in the Civil Service as distinct from the wider public service were over 32,000. Since then, these numbers have been reduced to the more sustainable level of approximately 26,800. It is my intention to reduce Civil Service numbers somewhat further to at least the levels that obtained in 1977 before the public service job creation programme of that time took effect.

Further savings must be achieved, for the fact remains that, as a nation, we are still heavily in debt — our debt-GNP ratio is about twice the EC average. This debate represents a major burden on the economy and the cost of servicing it is still taking up a huge amount of resources — over £2 billion in the current year or £40 a week for every worker in the country. There can be no question, therefore, that the Government can now dispense with expenditure restraint and recommence with whole-scale recruitment into the Civil Service. That would end all the good we have achieved. Realisation of our medium-term economic policy objectives — for a more competitive economy, good economic growth, lower interest rates, lower taxes and more jobs — requires control of expenditure and continuing economies with regard to the public sector wage bill. It must be emphasised, therefore that, as I have said, recruitment will only take place where it can be demonstrated that it will lead to benefits to the Exchequer which are immediate and continuing and which cannot be otherwise attained.

I have accordingly arranged with the Civil Service Commission to initiate recruitment procedures with a view to establishing panels of qualified people so that appointments can be made to clerical, executive and graduate vacancies if required in 1990.

Although most of the expenses involved in the holding of these competitions will arise in 1990, certain additional costs related to the announcing of competitions will arise in 1989. The major portion of the additional expenditure required will be on advertising, printing and increased costs of accommodation for examinations arising from the competitions. These items will increase expenditure from Subhead D of the Vote by £59,000. A further £20,000 for Subhead C will be needed to cover the increased volume of postal and telecommunications activity now anticipated. The commission will also incur some additional staffing costs, which will increase Subhead A1 by £18,000, and travel and incidental costs will also rise by £10,000. In order to proceed with the competitions, therefore, the Civil Service Commission will require additional funding of £107,000 in 1989, which will have to be met by a Supplementary Estimate.

With these comments I commend this Supplementary Estimate to the House.

An Leas-Cheann Comhairle

I would remind Deputy Noonan that there is a limit of five minutes for each speaker.

Mr. Noonan

(Limerick East): I wish to thank the Minister for his informative statement. The Fine Gael Party accept the Estimate and the explanation given by the Minister for the Estimate. I presume the Minister, in the time allocated, will have a short time to reply and I would like to ask him a number of questions. I do not need to praise the honesty and effectiveness of the Irish Civil Service. It is something we, on all sides of the House, recognise. It is true to say that the embargo has made life difficult for many of our excellent civil servants. Certainly the public finances are now in a position whereby the Minister, while not removing the embargo, can have a more enlightened view towards its application and I understand he intends to do that.

I would ask the Minister, first of all, the estimated number of people who he envisages will be taken on in the Civil Service and in local authorities in 1990. I understand he said the intention is to fill posts in accordance with natural wastage but I presume there is an estimate for that. Secondly, the Minister said he wants to reduce the figures for the Civil Service as a whole from 26,800 at present to the 1977 figure. Will he give the 1977 figure? I am sure the Minister realises that it was not simply job creation measures that increased the figure to 33,000. A multiplicity of new programmes were also introduced. It is not fair to the Civil Service at large to simply say we are going to bring the numbers back to the 1977 rate without taking into account the programmes which were in some instances created to make jobs for the civil servants but in other instances were legitimate programmes introduced as a matter of policy by a number of Governments. I do not think it is sufficient to say that the number will be reduced to the 1977 level. The Minister has to justify the numbers he intends to employ by reference to the programmes undertaken by those civil servants.

Thirdly, has the Minister a figure as to the complement of civil servants in each Department? As I understand it, the embargo always operated on the basis that you could not hire to fill vacancies but that pre-supposed the fact that the vacancy existed and if the vacancy existed one was of the opinion that it would be filled at some stage. If it is the Minister's intent to go back to the 1977 figures he must have a total figure in mind for the Civil Service as a whole but he also must have a figure in mind for each Government Department. Consequently, it will not be possible any more in reply to a Dáil question to say there are so many unfilled vacancies because if they are unfilled someone intends filling them. Can the Minister give the figures for each Department under this new regime and also the number of positions at the different Civil Service grades which he intends filling?

Will the Minister run a cost-benefit analysis on the early retirement scheme? Now that he is rehiring, it seems it is unlikely that some of the early retirement schemes that were introduced over the last two years will be of benefit whatsoever, taking into account the lump sum involved and the cost of paying it back in the years to come to the Central Bank, and also taking into account the cost of pensions and the cost of re-employment to fill vacancies which are in many instances because of the early retirement schemes right across the public service. Has the Minister any plans to evaluate the cost-benefit of the early retirement scheme? As he knows, many of the Civil Service and public service unions would like to see early retirement schemes continued or reintroduced.

Has the Minister any plan to hive off parts of the public service or the Civil Service and run them under semi-State organisations? I am thinking in particular of a proposal by my colleague, Deputy O'Keeffe. The Land Registry is in a frightful mess at the moment. Every Deputy in the country knows that because we get representations all the time. It seems to make a lot more sense to take responsibility for the Land Registry from the Department of Justice and set up a semi-State organisation. I would like the Minister's view on that. Apart from simply reducing the numbers in the Civil Service to the 1977 level, has the Minister any intention of taking out segments of the Civil Service, as was done with An Post and An Bord Telecom, and setting them up as semi-State bodies?

I know the time is very limited. I would like to thank you, a Leas-Cheann Comhairle, for being patient with me. I have given the Minister a number of rapid fire questions. I do not expect all the answers today but I am sure he will find an opportunity of answering them in the weeks to come.

Mr. Taylor

The fact that this Supplementary Estimate has been brought before the House in this form today highlights the very strange manner in which we are conducting our affairs in so far as the public service is concerned. In the first instance, we set about organising early retirement schemes to reduce the numbers in the Civil Service and thereby paying out substantial amounts in capital sums. Having paid that money and reduced Civil Service numbers we now find, a very short period later, that we are setting about recruiting again. Did the Minister not think about these things in advance and plan accordingly? I find that extremely strange.

I and my party are totally unhappy with the embargo on Civil Service recruitment which is in no way diminished or assuaged by the rather pathetic indication given here of a very limited recruitment. As the Minister said in his statement, there has been a very considerable improvement in the budgetary position. We believe there is room now for a more appreciable recruitment in those areas of service which are so seriously and gravely in need. I am not just talking about benefits to the Exchequer; I am talking about the needs of people for a health service, the fact that lives are put at risk and people continue to suffer pain because there are inadequate numbers in the health sections of the Civil Service and the fact that many children are not getting a proper education by reason of inadequate numbers of teachers.

One comes in here at the Order of Business every day and hears Deputies from all sides of the House constantly raising the question of the need for remedial teachers in certain schools but, of course, the answer is always the same. The embargo applies in a thoughtless manner. What are these graduate teachers and health personnel doing? They are making up the 35,000 or 40,000 a year who are emigrating. The benefit of their expertise is lost to us. Do not tell me we have not got the money to employ them. There are adequate resources to provide a proper health service and a proper education service for our people. Of course, a change in policy is needed from the kind of policies advocated by this Government and their immediate predecessor. No doubt the advent of the Progressive Democrats will not help matters. What we need is a change of policy, for the Government to take a grip of the economy and get money from where they can to provide the proper services the people need. The Minister is offering us nothing here with his modest suggestion. In limited fields he is going to take on more. I do not mind that. That is fine as far as it goes.

Deputy Noonan referred to the Land Registry and rightly so. This is a service which not only pays for itself but makes a profit, Yet, it is starved of the resources it needs to carry out its business in a proper way. I do not accept the idea that we should hive it off, as though that would change or improve anything. That is not what is needed. The staff there do a fine job with the resources available to them. The Land Registry which makes a profit should be given the resources necessary to provide the service for which it is paid.

In regard to the number of staff needed by the Revenue Commissioners, anybody in their right mind would know that no matter how many staff members one takes on, that office will show a profit. Why then did we have to wait until now to say that because the economy has improved, we will take on a certain number of extra people? If we had taken them on last year they would have more than paid for themselves. However, we set ourselves this hard and fast rule and put in place an embargo. We did not say: What is needed? What will show a profit? or what will we do? We said that the number in 1981 was 32,000, that the number at present is 26,800 and that we want to get back to the 1977 figure and pay no attention to what this means in real and practical terms so far as the Exchequer is concerned.

An Leas-Cheann Comhairle

I call on Deputy Rabbitte. Perhaps he can demonstrate that he can make his contribution in four minutes.

Mr. Rabbitte

Unfortunately, I do not have sufficient time to deal with the matter before us. Although the Vote is being dispatched with such speed, this is nonetheless an important issue. It highlights that the embargo which successive Governments have used as an excuse for not engaging in public service reform was always a very crude instrument. The Minister has dealt with the embargo as if that was the only question at stake. In fact, it is far more likely that we have been precipitated into this position as a result of the chickens coming home to roost under the early retirement/voluntary severance scheme in the public service as a whole.

I am not sure what precisely the Minister intends in terms of the number of recruits in 1990. My understanding is that people will be recruited within existing numbers. This would seem to suggest that it will deal only with what the Minister refers to as the question of natural wastage. In fact not only has the early retirement/voluntary severance scheme proved to be counterproductive, in terms of the administration of the Civil Service and the public service, but it has also been economically wrong. This is seen to be the case more every day.

In the early days strong Government, in the Thatcherite mould, getting public expenditure under control and making cuts, impressed the money markets. The result is that terrible gaps have been created in both the Civil Service and the public service. Key personnel have left and they cannot be replaced. People have also been given golden handshakes to ride off into the sunset and to set up businesses, sometimes in competition with elements of the public sector. The key roles they performed cannot now be performed because the posts cannot be filled. This is especially true in the case of senior professional and technical staff whose decisions are critical to the economic interests of this country.

At the lower end of the scale, typists are leaving the Civil Service because their pay is not commensurate with what they can receive in the private sector. I ask the Minister to tell us what proportion of the appointments he has referred to will be outside the Civil Service proper? There are serious gaps in the public service which require attention. I ask the Minister to tell us if they are being tackled now. I also ask him to indicate if he has looked at the report of the Committee of Public Accounts on recruitment to the Civil Service and if any of the recommendations made in that report have been taken on board.

I welcome this Vote. I also welcome the loosening of the embargo. It is important that the Civil Service is not alone efficient but be seen to be efficient and giving value for money. In that sense the relaxation of the embargo is essential, but it carries with it an admission that the inducing of people out of both the Civil Service and the public service is a mistake and leads to gaps being created in the service which cannot be filled and proves to be counterproductive.

The role of the Civil Service Commission in setting up the procedures for recruitment in, for example, the local authorities needs to be examined. There are critical shortages in several areas in local authorities. To some extent we have seen a reversal of the practice in the Civil Service where technical personnel have left the service because they can do better in the private sector, and many frontline staff in the local authorities have been left——

An Leas-Cheann Comhairle

Tá tú istigh anois ar chuid ama an Aire. I am sorry but i must ask the Deputy to conclude.

Minister for Finance (Mr. A. Reynolds)

I thank the Deputies for their comments in relation to the Supplementary Estimate. I would like to deal very quickly with some of the points which have been raised. Deputy Noonan referred to some matters which will require a little more work but we will be happy to communicate with him about the spread in numbers in various Departments. I am sure he will bear with us in that.

In relation to the early retirement voluntary severance scheme, comments made by Deputy Rabbitte and others would seem to indicate that everybody thinks it was a huge mistake. I totally reject that. Far from it. A cost benefit analysis of the early retirement scheme has been carried out. I have not got definite information as yet but it certainly looks at this stage as if it was a worth-while exercise. Let us put this matter into perspective. Total staff in the Civil Service in 1981 numbered 32,000. In 1977, the number was 26,000 approximately. Today the number is 26,800. Therefore, the figure is down about 5,200 or about 16 per cent of the total. One thousand one hundred people availed of the early retirement scheme in the Civil Service — not the wider public service — at a total cost of £26 million, leaving a saving of £19 million per annum. How could anyone in this House seriously suggest, as has been done by some speakers, that it was one big mistake?

Secondly, those in the Civil Service who availed of the early retirement scheme were over 50 years of age and they were not replaced. What brought down the numbers to today's figure was the Government decision of March 1987 to not alone continue to fill one post in three but not to recruit replacements for those who retired. We should not run away with the idea that it was a big mistake. As I said, there were only 1,100 retirements from the Civil Service and each officer was over 50 years of age. I think someone's perspective is badly out of line with the reality.

Mr. Rabbitte

Many of them held key posts.

Mr. A. Reynolds

I am only dealing with the Civil Service, as this is the area of recruitment, but the wider public service is a different story. I will give some of the figures: in 1981 in the total public service, including the Civil Service, there were 212,600 but by 1989 the number was down to 198,000, down about 14,600. On an initial cost analysis and without going into detail, the scheme is quite clearly not only paying for itself but paying for itself quite fast.

What is involved in the present recruitment is not a replacement for those on early retirement but if you had listened carefully to the speech, it would have been clear to you that recruitment is at the lower grades and that in this case we are recruiting at the first entry grades. In no circumstances can this recruitment be attributed to replacements for those who left on early retirement. As I have said, I have approached the matter in a pragmatic way. People will be replaced where such replacement can be of genuine benefit to the Exchequer on a continual basis. In fact, one sector of the Civil Service got extra staff this year on a return of a 29:1 basis. One would be absolutely foolish not to move in a situation where there is such a benefit to be got for the Exchequer.

Deputy Noonan raised the question of the Land Registry. I accept that there are real problems in the Land Registry which are being examined between my Department and the Department of Justice. The question of who should be the final guarantor of title to property in this country is in my view a matter which should remain with the State.

Those are the basic points I wanted to make. I was surprised to hear Deputy Taylor say on behalf of the Labour Party that he would not welcome even limited recruitment——

Mr. Taylor

But I welcomed it as far as it goes.

Mr. A. Reynolds

The Deputy did not even welcome that but I am glad he does so now. One day the Deputy comes in looking for jobs but when you give limited recruitment it is not acceptable at all.

Mr. Rabbitte

How are you going to recruit staff?

(Interruptions.)

Mr. A. Reynolds

At least the other parties opposite do not take the same view.

Mr. Noonan

(Limerick East): How many people are being recruited?

Mr. Taylor

In no way do we welcome this present economic——

Mr. A. Reynolds

We will wait to see what we require in 1990. We have set the wheels in motion to create panels to fill the natural wastage that will arise in 1990.

Mr. Noonan

(Limerick East): What is the estimated number of recruits?

Mr. A. Reynolds

Small numbers.

Vote put and agreed to.