Vol. 738 No. 4
6 Deputy Martin Ferris asked the Minister for Public Expenditure and Reform if public service outputs, identified for outsourcing by Department heads on completion of the comprehensive review of expenditure, will be consistent with the service delivery options principles of the Croke Park agreement. [20333/11]
In line with the programme for Government, a comprehensive review of expenditure is under way across all Departments with a focus on what services the public service should provide and also how these services can be best delivered. This review will undoubtedly lead to changes in the way in which some services are delivered. The Government will make decisions on the outcome of the review in the context of the Estimates and budget of 2012. In this context, outsourcing, in appropriate circumstances, is just one of the many options available. There are many public services where the use of outsourcing would not be appropriate or the most efficient or effective way of delivering the service, and, as such, we are fully aware of the need to consider all of the possible implications.
The Government is committed to compliance with the terms of the Public Service Agreement 2010-14. In an appendix to the agreement on service delivery options, it is recognised that some new or existing services will be provided on an outsourced basis. The appendix provides that, in advance of a decision being taken by management to proceed with outsourcing of an existing service, an evaluation will be undertaken with a view to determining whether the service can continue to be carried out in-house through service changes, having regard among other things to overall cost, quality of service, effectiveness and the public interest. In the event that management decides to proceed with outsourcing, commitments are given in relation to ongoing consultation with staff representatives and to job security and protection of employment terms of existing staff.
The Government's overall objective is to ensure that the cost of delivering public services is reduced further and that the public service becomes leaner, better integrated, more efficient and more effective. I am happy that the terms of the appendix to the Croke Park agreement will allow for efficient and effective delivery of public services, either directly or on an outsourced basis, while ensuring the concerns of public servants affected are taken into account.
I thank the Minister for that answer. This question is interesting because not long ago the Secretary General of the Minister's Department wrote a letter or a memorandum to heads of Departments urging them to do things that "go beyond the Croke Park agreement". Those of us here have not had sight of that correspondence although it is clear Martin Wall from The Irish Times had. I do not know the Minister’s view on his senior staffer writing such a letter, and I wonder if the Minister has seen it, but it sounded alarm bells in my head that the proposition would be made from so senior a figure to move beyond the Croke Park agreement. We need an absolute assurance from the Government that insists on delivery in terms of the Croke Park agreement that it will respect the parameters of the Croke Park agreement. It appears from the correspondence from the Minister’s Secretary General that that is not the case. Can the Minister give us some reassurance on that matter?
I have indicated already that the Government has accepted the Croke Park agreement. We will live up to our side of it. As I have indicated to the House, there is conditionality in that regard. We want an array of options available to us to ensure the review is truly comprehensive. I want people to think outside the box with ideas that I am happy to bring to the unions and to the management. I have begun my discussions with the implementation group in the abstract in terms of saying we will engage with it in regard to the outcome of the comprehensive review of expenditure. I have a simple view on this matter. Every citizen of Ireland — public servant and private worker — has an interest in this country succeeding and we all have an interest in getting the best value we can for the tax we spend.
The Minister has dodged the issue. I do not doubt his commitment to recovery but we understand the most senior official in the Minister's newly established Department has written to line Ministers——
Secretaries General.
——suggesting that they cook up different proposals beyond the Croke Park agreement. Does the Minister not find that alarming, because I do? Would the Minister publish that memorandum or letter?
The Deputy uses nice pejorative terms like "cook up". The letter was to Secretaries General asking people to engage in the process in an open way. In the spirit of transparency, the Deputy asked me if I would publish the letters. I will. I will arrange within the next few days to have them put on my website for the Deputy to examine.
In so far as the Minister is considering the use of outsourced agency workers, will he confirm that agency workers are being used in peak hours for processing medical cards at the centre in Finglas? In those circumstances, is the Minister quantifying the cost of using agency workers as against direct employment by public servants? Also, in his comprehensive spending review are such costs and the extra burden on the social welfare system as a result of greater levels of unemployment and the public sector recruitment embargo factored in? Can the Minister tell us the savings that will result from this?
I will tell the Deputy what the savings are when the savings are adduced and we have the process under way and done. I read out in my reply what is in the public service agreement and its appendix which requires consultation on all these matters and proper evaluation, down to the public interest evaluation. All the Deputy's concerns will be taken into account but we will do things that are efficient. I will not approach it in an ideological way, as the Deputy sometimes does. It is to determine what is efficient, what is good, and what would provide the best front-line service for people. I hope it will be new services as well and that it will not be a case of saying something was done in the past. I hope it will be new services that can be done in a different way. We are examining a range of different ways of providing better services to people as efficiently and effectively as possible.
7 Deputy Seamus Kirk asked the Minister for Public Expenditure and Reform if he is represented on any groups preparing for the NewERA proposal. [20300/11]
The Cabinet committee on economic infrastructure, of which I am a member, has been overseeing the progress of the NewERA initiative in line with the programme for Government commitments. My Department is also represented on the senior officials group on economic infrastructure which supports the work of the Cabinet committee and is charged with preparing proposals for its consideration. I expect the Government to consider the proposals prepared by the Cabinet committee in the coming weeks.
I thank the Minister for that information. I am pleased he and his officials are involved in that committee. The Minister told Deputy Boyd Barrett that we have to pay our way. This programme must be funded, and the Fine Gael proposals clearly state that it would be funded from the sale of State assets. The revised memorandum of agreement with the troika, which the Minister or the Minister for Finance re-signed today, the second time for it to be reviewed since coming into Government, specifically states that it is important to make effective use of our State assets and, where appropriate, dispose of them to help reduce our Government debt. The Minister has signed up to that statement twice since coming into office.
You do not know that.
The Minister should speak through the Chair.
Today's press release made no mention of any change in that. I understand that to be the case and if I am wrong, well and good. I am simply asking where the funding for that proposal is to come from because in the Minister's own words, all these things must be paid for.
I do not answer questions that are not my responsibility. I am sure the relevant Minister will answer that. The infrastructure committee of the Cabinet has done a huge amount of work on this issue. It is crystallising proposals now to go to Cabinet on the establishment of the NewERA proposal. The idea is that it is to be a driver of new jobs into the future. That will be announced in due course, but as of now, no decisions have been made in regard to that. Its funding will be announced at the same time.
I am not sure that I should mention a question that is not in front of me, that is, the contents of the memorandum of understanding. The formal memorandum of understanding that was signed off informally today will not be formally signed off until September when it goes to the principals. It has to go to the board of the European Central Bank, the board of the IMF and the European Commission, but the Deputy will find that it will reflect the programme for Government. As I indicated in informal discussions after the last troika negotiations, there is flexibility for us to engage——
We understand that.
——with the troika on the use of resources that are generated from the sale of State assets.
I am pleased to hear that. The Minister will be aware that I and a number of my colleagues met the troika——
——and I would agree there is room for negotiation and flexibility regarding the agreement.
That answer is astonishing in respect of the NewERA proposal. The Minister said that matters are at an advanced stage. The Taoiseach told me recently in this House that neither he nor the Cabinet had had sight of the Cahill report with which I am sure the Minister is familiar. It deals with the proposal to strip the ESB of its transmission assets and move them——
I have to remind the Deputy of the question.
It is not even under my remit.
As the Minister is well aware, the Cahill report suggested that would be a costly and perilous venture.
The question is whether the Minister is represented on any groups.
How could the Minister's propositions around NewERA be at such an advanced state if it is the case, as the Taoiseach told me in this House, that neither he nor the Cabinet had seen the Cahill report? Will the Minister urge his colleague, the Minister, Deputy Pat Rabbitte, or take the initiative himself, to publish the Cahill report and put that information into the public domain?
I will not answer any questions that are outside my function and responsibility. It is a matter for the Deputy to table a question to the appropriate Minister. All I have indicated is that the Cabinet sub-committee on infrastructure, of which I am a member, has discussed and is crystallising the NewERA proposals that will come to Cabinet in due course. When they are before Cabinet, it will make decision on them, they will be published and all the information the Deputy needs will be available at that stage, not now because it is not available now.
8 Deputy Robert Troy asked the Minister for Public Expenditure and Reform the person who will be the Accounting Officer for actions by him and units of his Department previous to the establishment of his Department. [20306/11]
Within the central government area, the Accounting Officer is usually the Secretary General or Civil Service head of a Department or office to whom the Minister for Finance has assigned the responsibility for preparing the annual appropriation account for Votes under his or her aegis. In addition to preparing the appropriation accounts, Accounting Officers are responsible for a range of functions within their Departments, including value-for-money initiatives, internal control and internal auditing. While most functions exercised by Secretaries General derive from the appropriate Minister to whom he or she is accountable, the responsibilities of a Secretary General as Accounting Officer are personal and derive directly from statute. Accounting Officers do not account for the actions of Ministers and in their appearances before the Committee of Public Accounts, they are prohibited from questioning or expressing an opinion on the merits of any policy of the Government or a Minister of the Government or on the merits of the objectives of such a policy.
With regard to the Department of Public Expenditure and Reform, Mr. Robert Watt, Secretary General of the Department, is the Accounting Officer for the Department's Vote, together with the Votes for superannuation and retired allowances, the President's establishment and the Secret Service. Prior to the establishment of the Department, the functions now assigned to the Department were within the remit of the Department of Finance, where the Accounting Officer up to the time in question was Mr. Kevin Cardiff, Secretary General of the Department of Finance.
I thank the Minister. I will not delay on this question because we had a full discussion at the Estimates debate yesterday. I accept the minor correction to phraseology in respect of action by the Minister. I meant action by his Department considering that the Minister and Department are taken to be the one entity. I will not rehash my argument because we had a big debate on this yesterday.
9 Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform the name of his external consultants; if they are being paid at an hourly rate or on a temporary contract basis; the amount they are being paid; and if he will make a statement on the matter. [20371/11]
The Government is intent on bringing about real and lasting public service reform and detailed implementation plans are being developed by my Department that will encompass the commitments to public service reform in the programme for Government. Three consultants from Deloitte Ireland and Accenture Ireland have been retained on a contract basis to assist my Department in regard to the development of these plans. Under the contract, the companies are reimbursed with the costs for the consultants on a cost-recovery basis. The total cost per month is a maximum of €24,195 plus VAT and the contract will last for no more than three months.
Why are consultants from the private sector regarded as having special qualifications in public sector reform? The EU and IMF seem to be dictating what is happening in terms of so-called public sector reform, although I believe they are simply savaging our public services. What is the precise point of bringing in consultants given that the EU-IMF deal dictates our actions?
While there is a slaughter of jobs in the public sector as a result of the recruitment embargo and cutbacks are imposed, are opportunities not opened up for private for-profit companies to move into the public sector space? Is this not symptomatic of what is occurring? Is this not what the reform is really about?
No. The Deputy is absolutely wrong. I do not know whether he got the same message on the doorsteps as I got during the last general election campaign. For the first time in my political career, I noted that the demand and clamour for fundamental reform was almost as pronounced as the dismay over our economic collapse. People want fundamental institutional reform of politics, public administration, the Civil Service and the way in which we deliver services. This is why both parties that form the Government were determined to have reform at the heart of their agenda. We established for that purpose and for the first time a specific Department responsible for reform.
We did a lot of work on this. I prepared a document when I was in opposition last year containing 150 specific reform proposals. I realised that, in order to bring about reform, one must control expenditure. All the advices we received suggested this. I received very good advices from Deputy Calleary, who was very much a reformist in his time as Minister of State. He told me we need to have a different structure, one that will involve control of expenditure.
Why are we bringing in external help? Even those who work with me on devising reform plans say one needs somebody with experience of implementation. I want people who have experience of implementation of institutional reform to drive an agenda that is not a theory or something merely talked about as so many reform proposals have been talked about in the past. The Deputy should judge me, my Department and the Government over time to determine whether we will bring about real reform. He should not expect it all in four months.
I agree that people want public sector reform and social reform generally. However, is the real source of their anger not the massively overpaid top civil servants, politicians, bankers, who are now effectively public servants because they are paid pretty much with public money, and executives in the private sector, including those in private consultancy firms, etc.? People want reform to reduce the massively excessive salaries of those at the top of both the public and private sectors. Some are earning five to ten times what is earned by the ordinary worker, be he or she in the private or public sector.
The vast majority of public sector workers earn nothing like the salaries to which the Deputy is referring, as he knows. Only a relatively small number of people earn big salaries in the public service. The first thing I did when I became Minister was reduce them considerably, by up to 30% and 40% in some instances. This is important but it is not the most important factor. It does not save a huge amount of money because the numbers involved are relatively small in the overall expenditure picture. What is much more important is that we continue to deliver services that people want in the areas of health and education and deliver social services in a way that is meaningful for people. People see waste and services delivered badly. They, including those delivering services on the ground, want services to be delivered better. This is what reform is about. It is a daunting and difficult task that probably will not be completed in one term of government but I am determined to put a structure in place with the plan to drive change that will be visible on the ground to people who are dependent on services.
10 Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform the minimum figure in expenditure saving proposals he has been tasked with securing by the Department of Finance before bringing the comprehensive spending review to Cabinet. [20335/11]
40 Deputy Brendan Smith asked the Minister for Public Expenditure and Reform the date by which he expects to be in a position to know the proposed annual Estimates amount within which he will prepare the 2012 Estimate. [20318/11]
47 Deputy Seán Fleming asked the Minister for Public Expenditure and Reform in relation to the adjustment of €3.6 billion in the forthcoming budget, his role in deciding how this will be achieved through cuts in expenditure; and the amount that will be achieved through increased taxes. [20286/11]
I propose to take Questions Nos. 10, 40 and 47 together.
The task of settling the spending Estimates for 2012 will take place after the Government has considered the budget strategy memorandum from the Minister for Finance and a memorandum from me on the results of the ongoing comprehensive review of expenditure and the capital review. The overall target figure for the fiscal adjustment will be in line with the memorandum of understanding on specific policy conditionality of the joint EU-IMF programme of financial support for Ireland. It is much easier to refer to this as "the MOU". The figure involved, which is well known to the House and mentioned in one of the questions, is €3.6 billion.
I understand from the Minister for Finance, Deputy Michael Noonan, that up to €1.5 billion of the €3.6 billion, or perhaps €4 billion, in savings will be achieved through "revenue-raising measures" and that the remainder will be achieved through expenditure cuts. As the person responsible for public expenditure, the Minister needs to give us a much more concrete sense of how he proposes to achieve this target, particularly given that he does not intend to publish the results of the comprehensive spending review in a single document, as he made clear in his response to an earlier question. Is the figure of €2.1 billion correct, or will it be €2.5 billion? Given that the Government has made a commitment not to touch welfare payments, how does the Minister envisage achieving this target?
The Deputy will be aware that in the last published quarterly review associated with the memorandum of understanding, indicative figures were published. Those figures stand but there is an understanding that it will be up to the Government to negotiate within the parameters set. The parameter figure is €3.6 billion.
The other relevant figure is the deficit target for next year, which is 8.6%. The best estimate we have at present is that an adjustment of approximately €3.6 billion will arrive us at 8.6%. However, this is not set in stone because there are so many variables between now and the end of the year. The latter part of the year is the most important in terms of revenue, as the Deputies opposite will know. At present, revenue figures are steady and expenditure is on target as it is marginally below the indicative figures for the first half of the year by approximately 1.5%.
We need to be vigilant in terms of controlling public expenditure and looking at the tax take for the rest of the year. We will then be able to make a determination on what type of adjustment will be required to get to the target of 8.6% for next year. There is a range of variables, some of which will not be determined by the State such as the cost of the money we are getting. All of this may impact on the overall budgetary arithmetic.
The comprehensive review of expenditure is a process — not a book to be published — with many people making an input. I want to have an open process into which people input ideas without reservation so we can have all ideas properly costed. The timeframe is very short and it will not be as rigorous as I would like. The Canadians took years to do it but we do not have such a luxury. We will give it our best shot in the few months we have and we will then present our options to the Government and to the House.
Questions Nos. 40 and 47 are also being discussed.
Two figures are being quoted, the €3.6 billion in savings——
It is an adjustment, not savings.
Yes, which includes tax and expenditure changes. Will the Minister give us an indication of his view on the €3.6 billion? The Minister for Finance mentioned that whether it was €3.6 billion or €4 billion was not the issue. The Minister also mentioned the 8.6% budget deficit target which is very important, and also brought into the debate the cost of the money we are getting. The Government is seeking a 1% interest rate reduction on the bailout fee. Is it possible there could be an increase in our interest rate in light of the recent ECB increases? The rate we are paying is linked to the ECB rate.
The Minister has two figures with which to work, namely, the 8.6% or the €3.6 billion. I ask the Government to take the lowest figure in terms of the impact on the people. Do not go for the higher figure. If the 8.6% can be achieved with €3.2 billion in cuts do it that way rather than going for a higher percent deficit just to stick to the figure of €3.6 billion.
The Deputy is very experienced and I put weight to his suggestions. The trajectory we are on, which we must achieve and which we are determined to achieve, is a 3% deficit by 2015. It is an incremental process and the incremental target we have set is 8.6% next year. The indications were that an adjustment of approximately €3.6 billion would achieve this. Given that there are so many variables, we will have to see later in the year whether this will continue to be the case.
We need to show discipline and take control of our own economic destiny as quickly as we can. The timeframe we have set will be vigorous and difficult and it will be hard on people who are already groaning under the pressures that have been created. The Government knows this full well. It should be explained to people and we should be open with them and explain it is not a folly but a destination to get us back our economic sovereignty so we will be in charge of our own destiny. The Irish people desperately want this.
The difficulty with the Minister's argument is that all the evidence to date suggests this bailout arrangement is not the route back to economic sovereignty. If we take the three months since the Troika was last here and examine what has happened since, the domestic economy is still in crisis, unemployment has increased and Irish debt has been relegated to junk status. If the game plan was for the bailout to get us fit to return to the debt markets and regain our sovereignty it is failing. All the while this failure persists, people suffer swingeing cutbacks and austerity and hardship as the Minister has acknowledged.
Here is a figure for the Minister to consider in his calculations, because he has mentioned a large amount of money. The 3% surcharge on EU moneys to the State alone will cost us approximately €9 billion. Talk about friends profiting on the hardship of their alleged friends. I know I will not convince the Minister or the Government as to the folly of their direction but at the very least they must recognise when the indicators for progress and success they establish clearly and manifestly fail.
The analysis coming from the Deputy opposite is invariably the same. I debated this with her in advance of the election. She is great at analysing the failure of somebody else's policy but a bit weak on offering an alternative. The truth is we need to get control of our own fiscal destiny. The only way to do this is to balance our budget. We cannot continue to borrow, as we are, €18 billion this year. It is just not possible. It is worse than an illusion, it is a deception, for some of the Deputies opposite to pretend that somehow if we tell the EU and IMF we do not want their money any more or we stop paying it back that we can still borrow. Nobody else will give us money.
We cannot borrow as things stand.
We are borrowing money; we are borrowing it from the troika, from the EU and the IMF and the European system of financial supervisors, ESFS, process——
Not on the markets.
We are borrowing it at an affordable rate. The markets are unaffordable to us, the Deputy is right. It is disappointing that one rating agency has made a decision but, as one can see from the reaction of the German Chancellor and the Commission they do not agree with it. We must stick to our purpose, which is not to despair or give the counsel of despair or say we will collapse our own economy. We will, as we have done, map a way to economic solvency.
The people of Ireland have met the targets we have set. They have carried the burden with industrial peace because people want us to succeed. They want the Government to succeed in returning us to economic solvency. This is why there is still good will for this. There is hardship and people will resist the individual measures which we will try to make as fairly as we can. However, there is no alternative way. When one sees what the cost of money would be if one could buy it or get it on the open market it is wrong to suggest that our way is a folly. It is also wrong to suggest that somehow one can magic away the debt and continue to borrow money after telling one group of people to take a hike. That is a folly.
It is unfortunate that one rating agency has made the decision it has but it will not distract the Government and the very strong support we have had from the people on whom we depend to fund us. We are completely funded well into 2013. One has seen the dramatic changes that have occurred in the past two years. Who knows what will happen in the next two years but we will, step by step, get ourselves, our country and our economy onto a good footing.
The case the Minister makes for having to impose the "adjustment" as he calls it of €3.6 billion, which means, as he acknowledges, such severe austerity for ordinary people in the country is that we must deal with the deficit problem and that we have no choice but to borrow the money.
As an aside, although I do not think the Minister will agree with me——
Put a question.
Is it the case that if we repudiate the private banking debts the markets might consider lending to a State that would be in a much better financial position? Setting aside this question, which the Minister might answer briefly, is it the case that much of the deficit results from the fact that 350,000 extra people are unemployed? As a result, the burden on the State's finances adds up to approximately €7 billion. The reason we have such a big deficit is because so many people are unemployed. If we put those people back to work——
Thank you Deputy, a question please.
——which would mean resisting the EU and IMF austerity programme, then our public finances would be in a much better state by approximately €7 billion. Add to that the €5 billion we must pay in interest repayments this year and a little tax on the wealthy in the country and one could make up the deficit without imposing austerity.
Perhaps the Minister should ask questions and the Deputy should answer them.
I asked a genuine question.
The Deputy has always been in fantasy land which is a comfortable place to be as it allows one to preach that people do not need to take medicine because the magic doctor has a cure and the rub of the relic will cure all. As to the notion that one can repudiate the debt by deciding to look into one's heart and refuse to pay it——
You should not be facile. It would be done through a debt resolution mechanism.
Deputies should address their remarks through the Chair.
——while at the same time deciding that everyone who is unemployed should go back to work, who would pay the €18 billion we are borrowing? That is the gap that would open up instantly.
We are paying through cuts in social welfare.
Who would pay for the schools, hospitals and gardaí? In Deputy Boyd Barrett's heart of hearts, he knows his proposition is entirely fanciful.
The Government has embarked on a path which will lead to a restoration of our finances and which has job creation at its heart. One of the first steps we took was to renegotiate the first memorandum of understanding to ensure we had up to €500 million in job focused expenditure. In the tourism sector, this expenditure has been effective from 1 July. I hope this initiative, of which we require more, will pay dividends. The more control we gain of the economy, the more decisions we can make to stimulate growth. The Deputies opposite are correct to the extent that we require economic growth to get out of the current mess we are in and that we must ensure job creation is at the heart of our decision making. However, the notion that there is some magic way of eliminating debt is a folly, as the Deputies know full well.
11 Deputy Brendan Smith asked the Minister for Public Expenditure and Reform his target date for publishing the Estimates of expenditure for 2012. [20317/11]
While the exact dates have yet to be decided, budget 2012 would normally be presented to the Dáil in early December and include budget Estimates for 2012. The Revised Estimates Volume for 2012 would be published the following February and contain more detailed expenditure information on all Votes. The Estimates would then be referred to the relevant Dáil select committees on the same date, before being voted on by the House.
I thank the Minister for the information provided. I understood he and members of the Sub-Committee on Public Expenditure and Reform agreed that the Estimates for next year should be discussed before the end of this year. He has indicated that the Revised Estimates Volume will be published in February 2012, which means it will probably be discussed after St. Patrick's Day. Estimates used to be published in February because the budget was introduced in January. That is the old approach taken in the Department of Finance. The Minister should inform the Department that the date of the Budget Statement was moved to December a couple of years ago. The only reason for publishing a Revised Estimate after the budget is to provide for budget expenditure not included in the Estimates, which used to be published in advance of the budget. As the Budget Statement and the Estimates are published simultaneously, they should be debated before the end of the year. I ask the Minister to review the matter to ensure the 2012 Estimates will be discussed before St. Patrick's Day.
As I indicated yesterday, I do not regard the traditional Estimates process as a good one and would like to consider how the process can be reconstructed in a more useful way. The Estimates volume has become a little lost as a result of the practice of publishing it on the same day as the Budget Statement, the reason being that people focus on the fiscal and taxation measures included in the budget. I am open to ideas on how we can deal with the Estimates in a different way. Given the Deputy's experience in this area, perhaps he will produce some ideas over the summer and advise us of them after the recess. I offer the same invitation to other Deputies. Other Ministers and I would welcome a better and more open debate. My Estimates are, however, fairly rigid.
I concur with Deputy Fleming and welcome the Minister's openness to suggestions. We should return to this matter when business resumes in September. I hope the Minister will make a commitment that if realisable proposals are put to him——
They must be practical.
Yes. If such proposals can accommodate a tighter arrangement for the 2012 budget and Estimates, I hope the Minister will facilitate them.
I have sat through many debates on Estimates at committees, mainly as an Opposition Deputy, and they tend to be a little sterile. One normally examines whether a few thousand extra euro is being spent in some area and, as a result, one misses the wood for the trees. I do not know whether we could have a principled debate on Estimates expenditure. Perhaps I am not explaining myself very well. I may give some thought to the matter and we could share some ideas.
12 Deputy Dara Calleary asked the Minister for Public Expenditure and Reform if he remains committed to the target in the programme for Government to reduce the numbers in the public sector by 25,000 by 2015. [20296/11]
The Government plans to bring about a reduction of between 18,000 and 21,000 in overall public service numbers by 2014, relative to the end of 2010 position, with a further 4,000 reduction in 2015, subject to there being no compulsory redundancies and to the protection of front-line services. As outlined in the programme for Government, this will involve a fundamental change to the way in which the Government and the public service operate, including the rationalisation of core processes across the public service, a reduction in the number of State bodies and the elimination of non-priority programmes and outsourcing of non-core functions, where appropriate. The measures necessary to give effect to these reductions are being developed by the Department of Public Expenditure and Reform, taking account of the existing projections for staff numbers over the coming years. The comprehensive spending review will also focus on reform and new ways of delivering public services and the opportunities and challenges arising under the Croke Park agreement. Following completion of the comprehensive spending review and analysis of current levels of public service staffing, including natural wastage, and progress with redeployment, the Government will decide on the necessity for targeted exit mechanisms and the timing of such initiatives.
Based on the documentation provided by the Department at the meeting of the sub-committee yesterday, the reduction in public service staff numbers this year will be 3,000 compared with 5,000 last year. Given that the target for reducing public service staff numbers for the years 2011 to 2014, inclusive, is 21,000, a further 18,000 staff or 6,000 per annum will have to leave the public service in 2012, 2013 and 2014. That is double the reduction envisaged for this year. Does the public service have the capacity to cope with reductions in staff on such a massive scale? We hear there is light at the end of the tunnel, but if the Government tells us the numbers of job losses in the public service will be double what they are this year in each of the years 2012, 2013 and 2014 and that a further 4,000 public sector jobs will be lost in 2014, people will crack at some stage. Does the Minister appreciate the gravity of the figures to which he has committed?
I may give some comfort to the Deputy on the figures. The target of 3,000 for this year is the old one. We have not yet put in place a revised target because I want to do some forensic analysis of the number of public service staff who will retire and so on. At the end of the first quarter this year there were slightly less than 304,000 employees in the public service. As the Deputy correctly noted, the published target in the documentation he has received was to reduce public service numbers to 301,000 by the end of the year. This figure will be significantly exceeded. I am working on a better target and will try to have one firmed up by the time I take questions again. I will give the House a better target as soon as I can. It is my judgment that public service numbers will have fallen below 300,000 by the end of the year.
We are examining how many staff will leave the public service voluntarily. As I indicated yesterday, the previous Government allowed those who will retire up to the end of February next to avail of the pension entitlements they would have enjoyed prior to the public service pay cuts. I decided to require three months' notice of retirement. Obviously, not everyone will retire in February and many will decide to leave at the end of the year. We should have an indication in September of the number who will take the final opportunity to avail of their pension entitlements as they stood prior to the pay cuts. I am confident the number will be significant and that the target of reducing public service numbers by 3,000 this year will be easily exceeded.
Deputy Boyd Barrett may ask a quick supplementary question. We have only a few minutes left.
I apologise because I must leave in a minute to go to a housing meeting, which relates to my question about——
Will you represent me at it?
I will mention you, a Cheann Comhairle. It is in The Graduate.
The meeting is about the fact that no social housing will be built directly and we are going to start leasing in Dún Laoghaire from private landlords.
I am not sure that is relevant to the question.
It does connect. I am not playing fast and loose. Is this how to get good value for public expenditure? As we are losing 13% of local authority staff as a result of the recruitment embargo and, therefore, no longer have people to do the direct build of social housing, social housing must be provided by the private sector. Is that not more costly in the end? We get nothing at the end of it.
We are paying money to NAMA or private landlords——
Please be fair to Deputy McDonald. She has tabled a question.
This is a genuine question about expenditure.
It is a genuine question that has nothing to do with my Department.
I would like to have a debate with the Deputy about that.
Not at the moment.
No, not at the moment, a Cheann Comhairle, in deference to yourself.
There has been significant downsizing in the local authority sector and there have been huge efficiencies. My own local authority published, in last week's local paper, The Wexford People , a two-page analysis of significant efficiencies it has brought about to give better services to people. It is not all about cutting or reducing the quality of service. Things can be done better when we look at them fundamentally.
I do not look at this from an ideological perspective. I do not think everything done by the public service is better than everything done by the private sector, or vice versa. There are things that are performed best by the public sector and things that are performed best by the private sector. We have to make a rational discernment about these things and not be clouded, one way or the other, by an ideological perspective.
13 Deputy Sandra McLellan asked the Minister for Public Expenditure and Reform if he will publish the terms of reference for the comprehensive review of expenditure as circulated to Department heads; and if he will publish in full the recent memo circulated to Department heads by his Secretary General. [20334/11]
While no formal terms of reference were issued to Departments, I have made clear from the outset that, apart from garnering savings, the aim of reforming the public service is to deliver better results within limited resources. This is a driving force behind the comprehensive review of expenditure and the capital review. Both of these processes are now under way and will involve root and branch evaluations of the expenditure of all Departments and of bodies within their remit. This is at the heart of the Government project spelled out in our Programme for a National Government 2011-2016.
The objectives of the process will be to provide the Government with a comprehensive set of decision options. These include to meet the overall fiscal consolidation objectives, both as regards spending and numbers reduction targets; to re-align spending with the programme for Government priorities; and, in this context, to consider new ways of achieving Government through public sector reform. As the Deputy mentions, my Department has been in contact with all Departments to reiterate at official level the position I have already outlined above, namely, that all expenditure must be examined in this process.
As the Deputy has already asked me to do so, I will publish the letters on my Department's website as soon as I can.
Written Answers follow Adjournment Debate.
