Other Questions
6. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform if the savings he is seeking under the extension of the Croke Park aAgreement are gross savings; the expected saving, net of pensions costs and tax, PRSI, levies and other deductions forgone, if he achieves the targeted saving; and if he will make a statement on the matter. [10378/13]
View answer150. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform the gross saving he intends to achieve from the public sector payroll in each of the years 2013 to 2015 with a breakdown by saving type, that is reduction in head count, overtime, core pay, increments, allowances and so on; and if he will provide an analysis of the net saving that will be achieved when income tax, USC, PRSI, pension levies and so on are factored in and when account is also taken of the effect on VAT and other Exchequer revenue streams. [10661/13]
View answerI propose to take Questions Nos. 6 and 150 together.
Negotiations have taken place between public service employers and the public services committee of the Irish Congress of Trade Unions on the Government’s stated intention to reach agreement on securing an overall saving of €1 billion gross in the public service pay and pensions bill by 2015. Following intensive engagement in recent days between the parties which was facilitated by the Labour Relations Commission, the LRC has developed and recommended a set of proposals for consideration and agreement that seeks to secure the €1 billion gross savings required by the Exchequer, while ameliorating the impacts on public service staff, particularly those on low and middle incomes to the greatest extent possible.
There are three broad strands to the LRC proposals published yesterday which seek to secure agreement on savings and a more long-term structural reform approach to the public service. The proposals include productivity measures - extra hours, standard extended working day, standard extended working week and flexible rostering; workforce reform measures - changes in performance management development systems and flexitime, streamlining management structures and spans of control; and cost reduction measures - reduction in non-core pay rates, increments, overtime, premia and so on. As I said, the full details are published on the LRC website.
The precise implications of the savings package on tax and related revenues, both in direct terms and indirectly through effects on macroeconomic variables, are matters that will fall for consideration by my Department and the Department of Finance in the context of preparing the economic and budgetary strategy for 2014 to 2016. The detailed information sought by the Deputy is not available. However, I am satisfied that, subject to its ultimate acceptance and the necessary legislation being passed by the Oireachtas, the proposals available to public sector workers will produce the necessary savings of €1 billion over the lifetime of the agreement.
Therefore, the savings of €1 billion will be made over three years.
This is what is causing the confusion because-----
To clarify, we are ratcheting up to €1 billion.
Per annum. There has been confusion with the language.
I hope I am clear.
I thank the Minister for that answer and acknowledge he has said that these are gross savings. I know he cannot put an exact figure on it but presumably the net savings to the Exchequer as a result of this will be approximately 50% of that when one takes in PAYE, PRSI, pension levies and other deductions. Nobody can put an exact figure on it. The document that was produced does not give us any information about the amount of money that can be saved as a result of the proposals on working hours; the reduction in public service numbers; the savings in terms of overtime, premium pay and weekend work; the increments issue; and, the savings in terms of former public servants receiving pensions. I have no concept of how that document adds up to €1 billion. The Minister needs to be able to cost that and show me. If he can do that, he will increase the public acceptance of this document. He cannot just say "there's the document with no costing and yes, it meets our budgetary target." He must give us that information so there can be a proper, informed discussion and decision. It is like a referendum. This is a referendum among public servants who are entitled to have the full information about the implications of this. That is the information I am looking for. Can the Minister provide it?
As I indicated, this agreement has just concluded. As the Deputy can imagine, the latter phases of the discussions were fairly intensive so some analysis will be done. In advance of it, we did a considerable amount of work on drilling down into the workplace on a sectoral level to ensure that unlike Croke Park I, the savings will manifest themselves in real terms in the workplace. For example, all the additional hours we will generate should this agreement be accepted have to be monetised in a way that saves either head count, overtime, premium payment or agency costs. We have run indicative views on all of that and are confident that they will amount to the sums we are talking about. Pay generally in all the budgetary arithmetic is expressed in gross terms because individuals have different tax liabilities so we talk about the pay bill in gross terms. In order to compare like with like, if we are going to talk about reductions, we will talk about them in gross terms as well.
I accept that it will require some analysis but could the Minister in due course put into the public arena the savings that will emerge from this from the non-pay savings? Are they in there at all? In some cases, there are almost more non-pay savings through reform than pay savings and that issue has not come out here. Are the non-pay savings factored into this? Can the Minister give us proposals on that?
We need to get €300 million this year in gross pay and pension savings. All the ancillary things like procurement are separate and additional to that. Incrementally, we will get a significant part of €1 billion next year and the full €1 billion in 2015 annualised as it ratchets in if workers vote for the agreement which is a draft agreement - I do not want to be premature about this.
As the Minister is well aware, I am implacably opposed to this new Croke Park deal in so far as it requires further sacrifices from low and middle-income workers. Following from Deputy Sean Fleming's point about the net savings the Government hopes to make, the Minister mentioned macro-economic variables. If I understand it correctly, he said that the Government will carry out further analysis with the Department of Finance in respect of those. That seems a rather bizarre way to proceed. We make the cuts before we have analysed what the impact might be on the wider economy. That leaves open the likelihood that we are cutting off our nose to spite our face. Many of those of us who have opposed austerity have suggested that by cutting the incomes of low and middle-income workers, the Government is reducing spending power and demand in the economy and doing further damage to other sectors of the economy.
Does the Deputy have a question?
Does the Minister agree it is rather bizarre not to carry out an analysis of the likely impact on the rest of the economy before ramming through these cuts to the incomes of low and middle-income workers?
Croke Park is not completely equitable for workers in all sectors.
Does the Deputy have a question because we are running out of time?
The incomes of people earning over €80,000 have not been sufficiently reduced in comparison to people earning below €65,000 who are taking an excessive hit in terms of the reductions. Could the Minister alleviate the position of those in the lower sectors of our public sector, such as nurses, hospital staff, gardaí and firefighters? They are facing a cut of 8% but those earning over €80,000 are also facing a cut of 8%. I request that those on a sliding scale from €80,000 to €120,000 face a cut of 9%, those earning from €121,000 to €150,000 face a cut of about 10% and those above that 12%. That would ease the pressure on those at the lower levels. I ask the Minister to reconsider all this.
I will deal with Deputy Boyd Barrett's question first because it is important. There are two levels to it. I was trying to answer in detail a set of questions from Deputy Sean Fleming which differed from Deputy Boyd Barrett's. They will require further analysis. We have obviously carried out an analysis of the impact of taking €1 billion out of the economy in general terms but the exact methodology was not known until we had a draft agreement so we could not do that work until now. I have already written to a number of trade union officials who posed that question about the impact of it. The bottom line is a very simple one. We must make adjustments. We must make expenditure reductions. The methodology of doing it through a reasonable pay reduction and extracting costs from public sector pay is less impactive on the economy than some of the alternatives, for example, cutting expenditure on social welfare or other areas. We need to get €300 million this year and €1 billion in expenditure reductions by 2015. The impact on the economy generally will be of the order of 0.25% but I will give the Deputy the details when we have crunched the numbers effectively. That is not an avoidable deduction if we are going to reduce public expenditure to the targets we are required under the troika agreement to meet, namely, to get it below 3% by 2015. There is no avoiding this. One does this in a way that is as effective and least impactive on the general economy as possible.
The contention that the burden falls on low and medium-income earners in the public service is wrong. If one looks objectively at it, one will see that what people earning below €35,000 are asked for is some extra hours' work but no reduction in pay in most instances. There are people who receive premium pay and so on. The final point concerns the point people keep churning out about the figure of 8% for nurses. I have not looked at all the figures yet but in order to have that reduction, one would need to work something like 22 Sundays and premium days and have a disproportionate element of one's income on the premium side. We are trying to devise a fair pay deal for 390,000 people. Low-paid workers who work nine to five and do not get premium pay should not be disproportionately hit either. In the round, this is a fair, balanced and, for that reason, complicated deal that I hope people will reflect upon.
Question No. 7 is in the name of Deputy Joan Collins. Deputy Boyd Barrett will be substituting.
7. Deputy Joan Collins asked the Minister for Public Expenditure and Reform the number of public sector workers who have retired in the last three years within his Department or any office or body under his aegis that have been reinstated; the pay rates they are receiving; and if he will make a statement on the matter. [10373/13]
View answerIn response to the Deputy's question, the Public Appointments Service, PAS, in the course of running recruitment competitions for the public service, avails of trained and experienced individuals from the private and public sectors. Those assisting in this that are in receipt of a public or private sector salary receive no payment whatsoever. A fee per day is paid to retired individuals and to those from the private sector who forego earnings in order to facilitate PAS. The list of individuals who assist PAS in undertaking its task is constantly changing but would number several hundred. It would include retired public servants who act as interviewers, assessors or as decisions arbitrators. At any given time, there would be approximately 60 active who would be used from time to time for short periods.
For this work, retired individuals are paid on a fee-per-day basis and are subject to tax and other relevant deductions. The fees are linked to pre-retirement grades and take account of the principle of pension abatement. These positions are not advertised but any trained professional can apply to PAS to be placed on the database for our selection boards.
The outgoing chairman of the Public Appointments Service board, who is a former civil servant, was reappointed by me in September 2011 and is paid a stipend of €11,970 per annum. The chairperson of the PAS internal audit committee is also a former public servant and was paid a fee of €2,137.50 in 2012. She was appointed by the former chief executive of the PAS on the basis of her experience in the area of corporate governance.
The Office of Public Works has engaged the services of a former member of staff for the period of the EU Presidency. This person was selected because of previous experience of EU Presidencies and other important events. The abatement principle was considered to be a cost-effective way of contributing to the smooth running of all Presidency events in Dublin Castle. The cost of that person's services to the OPW is approximately €28,000. Other than in the bodies already mentioned, no retired public sector workers are currently on my Department's payroll.
The wording of my question may have led to its being misunderstood. The phrase "or body under his aegis" refers to the wider role of the Minister in public sector reform and throughout the public service. I am trying to get information on the phenomenon of the re-hiring of people who took early retirement and were in receipt of big lump sum payments. Although people who are retired from the top echelons of the public service and in local authorities have very substantial pensions, it is often the case that days or weeks following retirement they are being re-hired on salaries which, when combined with their pensions, are effectively at the level of their previous salaries, along with significant retirement lump sums. I was hoping to get informative figures on the extent of this phenomenon. I take the point that the question may not specify that request. There is plenty of anecdotal evidence that this is happening, which is alarming. Levels of public services are declining, resulting in long waiting lists for social welfare and other areas. Front-line services are suffering due to the moratorium on recruitment, while people who were at the top of the public service and in local authorities are being taken back after retirement. That is a big problem.
I do not disagree with the Deputy. He makes a very fair point. I am accountable for my own Department. The Public Appointments Service and the Office of Public Works are the only bodies that have engaged such people. The Public Appointments Service needs experienced people with high status to make evaluation decisions. In general terms, there has been a laziness in some quarters - perhaps a predisposition to appoint people who are known and who have been in senior positions in public administration, even though they have been very well provided for.
I will not mention the name of one individual who is well known. She undertakes a significant amount of pro bono work and does not ask for one cent, even for expenses. There are public servants who do this and it is to be commended. By and large, the principle enunciated by the Deputy is an important one. On foot of the Deputy's inquiry I will contact my colleagues to point out that this should not be a general principle.
I welcome the Minister's response. It would be useful to quantify the extent to which this is happening, because it grates hugely with people who are lower down the ladder. It also raises the question of why people were retired if their skills were still required. Either they should have been retired or they should not have been. If retired, they should have stayed retired and those on the live register should have been given the opportunity to take up those jobs. The situation needs to be examined. The perception could be created - rightly or wrongly - of jobs for the boys.
I refer to individuals who retire and are re-hired by agencies. I note the HSE spent more than €200 million in 2012 on agency doctors and nurses. It is not known how many of them may have been public sector retirees. Will the Minister confirm the figures for each Department in which employees who availed of retirement before February 2012 have been re-employed on an agency basis to do the same job? It would not be deemed very fair if this was a widespread practice.
In reply to Deputy Boyd Barrett, the most effective way of getting that information is for the Deputy to table a parliamentary question to all my colleagues. I should not be encouraging that sort of thing but I will write to my colleagues as this information would be useful. Each line Minister would be able to answer that question.
In reply to Deputy Wallace's question about agency workers, the main focus of the new set of recommendations from the Labour Relations Commission is to minimise as far as possible the practice of buying in agency workers in order to get the best value from the cohort of people who are working full-time within the public service by not having to pay excessive premium pay, by extending working hours and so on. I hope this will mitigate the situation. The simple answer to the Deputy's question is that I do not know, for example, how many agency nurses are retired HSE staff who are on pensions. I do not know the answer to that question.
8. Deputy Robert Troy asked the Minister for Public Expenditure and Reform the number of agency and contract staff currently employed under the aegis of his Department; the mechanism in place for monitoring and managing the associated costs; and if he will make a statement on the matter. [10409/13]
View answerIn respect of my own Department, there are currently 42 contract staff employed. Each business case is carefully examined and the Department complies with the guidance on starting pay in all matters to ensure that costs are kept to a minimum. There are no agency staff directly employed in my Department.
The information with regard to the Office of Public Works is as follows:
|
Number of agency staff |
Number of contract staff |
|
|
Established personnel |
2 |
8 |
|
State industrial personnel |
1 |
0 |
|
Total |
3 |
8 |
Excluded from the above figures are the seasonal guides and drainage maintenance workers who are employed on a seasonal basis.
With regard to the Armagh-based special EU programmes body, SEUPB, which co-ordinates the PEACE programme and the North-South INTERREG programme, the following is the position:
|
Year |
Number of agency staff |
Cost |
|
2013 (to date) |
3.5 (full-time equivalent) |
20,000 |
The table shows the number of agency staff currently employed in the SEUPB. The approximate cost to the Irish Exchequer is €5,000, representing 25% of the above total. The cost is paid equally by this State and the UK, with the balance paid by the European Union.
Additional information not given on the floor of the House
The majority of costs relating to agency staff used by the SEUPB are funded through the technical assistance programme. The remainder of these costs are jointly funded via the Department of Finance and Personnel in Northern Ireland and the Department of Public Expenditure and Reform in Ireland.
I thank the Minister for providing that information. The total number of staff, between the Department and the agencies, is 56. The Minister has stated he is only accountable for his own line Department when replying to parliamentary questions. However, we regard him as the Minister with responsibility for the public service.
I have a question about the new draft public service agreement. Extra working hours are being required from staff.
Is the Minister in a position to illustrate whether these extra hours worked will ameliorate the need to hire contract or agency staff? If existing staff work additional hours, by definition, there should not be as much work to be done by outsiders. Is the Minister in a position to provide figures in this regard?
As I informed Deputy Mick Wallace, if we are to maximise the number of hours, we must place a value on it. In embarking on the negotiations I was concerned that we would drill down to workplace level in order that the availability of extra hours would represent a real cost reduction in dealing with the contracting in of agency staff, bringing an end to unnecessary overtime or keeping people on rosters when there was no need to do so and paying them at premium rates. We have certainly done a huge amount of work on that matter. It will come as no great surprise to the Deputy to discover that the largest savings will be made in the HSE, which is a 24-7, 365 days a year operation. There are good indicative figures and when the talks conclude and, please God, workers vote for the agreement, I will be able to provide them for the Deputy.
On the draft public service agreement and the clarifications that will be required in the weeks before workers vote, will the Minister comment further on the pay equalisation issue as it relates to nurses? It appears the Government is already dealing with the latter in respect of teachers. Everyone accepts that the largest number of agency workers in the public service is to be found among nurses. If the Government were to put in place a proper rate of starting pay, it could fill the 1,000 nursing places which have been offered but which have not been filled as a result of the relevant 20% pay cut. If 1,000 additional staff were taken on at a proper rate of pay, this would substantially reduce the bill for agency nurses.
The teachers were very effectively represented at the talks. Their unions negotiated very well on their behalf. SIPTU, one of the unions representing nurses, tabled very good proposals which we are examining to see if we can address them in the context of the new agreement.
Is it possible for public servants to retire, collect their full pensions and then return to perform their previous job as agency workers? The Minister stated teachers had been well represented at the talks. I know many teachers who would disagree with him.
I am sure the Deputy's knowledge of teachers is extensive and that he probably represents more of them than the officially elected representatives of their unions. However, I have my doubts about that.
We will see how they vote.
Those who are elected to represent teachers should be allowed to do so. None of us should purport to speak authoritatively for people in a casual way and state we know many of them.
One of the issues which has given rise to most annoyance among people is that of teachers retiring and then returning to work as substitutes. The Minister for Education and Skills is very keen that this should be avoided. Sometimes there are exigencies which come into play such as the fact that a former teacher lives close to a school where someone is out sick. This is a matter we must address.
Is it possible to retire, take one's full pension and then return to one's former Department as an agency employee?
Deputy Mick Wallace is specifically referring to those who return to their former places of employment via the agency route.
I do not know the answer to the Deputy's question. When an agency is contracted to provide staff, I do not know whether it is possible to identify the individual workers involved and-or whether it is legal to state a certain person cannot fill a particular position. In general terms, there is a disallowance in respect of persons who retire to formally return to the Department in which they were formerly employed. I do not know how it would be possible to deal with agency workers on a structured basis.
Written Answers follow Adjournment.
