Wednesday, 27 February 2013

Questions (34)

Charlie McConalogue


34. Deputy Charlie McConalogue asked the Minister for Public Expenditure and Reform the gross and net savings in each of the next three years from the targeted redundancy scheme in the public service; and if he will make a statement on the matter. [10396/13]

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Written answers (Question to Public)

As the Deputy is aware this Government is committed to developing a leaner, more efficient Public Service. To this end, we agreed on 2 October 2012 to accelerate the reduction in Public Service numbers in order to achieve the previous end 2015 target of 282,500 by end 2014 instead.

Greater efficiencies in the way the Public Service is going about its business means that some functions and work areas are no longer required, and in such instances - where redeployment is not suitable - voluntary redundancy may be required.

For the time being, voluntary redundancy will be rolled out in three areas where a sound business case has been made – the Department of Agriculture, Food and the Marine and specific parts of the Health and Education Sectors. These Departments estimate that there will be scope to effect about 2,000 exits from their areas over time, mainly from back office support areas and management and administrative grades. How this estimated number of exits translates into actual savings over the next three years will be determined by a number of variables, including the take-up rate among staff in the targeted areas, their number and grade mix, timing of departure, etc., information on which will not become apparent until the scheme is offered to the effected staff.

Analysis by my Department estimates that for every 1,000 employees who opt to participate in a voluntary redundancy programme there will be a gross cost of approximately €109 million. The gross payroll savings for 1,000 employees will amount to €57 million every year. Therefore the initial cost of 1,000 employees leaving would be recouped in two years. On a net basis, the cost is in the order of €100m and the savings in the order of €37m. Further savings will be realised in the future when these employees reach retirement age, because of their reduced pension entitlements.