Written Answers Nos 34-43
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]
View answerAs 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.
35. Deputy Aengus Ó Snodaigh asked the Minister for Public Expenditure and Reform the proportion of the €1 billion cuts to public sector pay and pensions sought by him over the next three years that must come through in 2013. [10443/13]
View answerIreland is committed to reducing its general government deficit to less than 3% by 2015. To meet this commitment the Medium Term Fiscal Statement indicated that, in addition to the overall consolidation of €3.5 billion required for 2013, an additional €3.1 billion in savings and revenue raising measures must be identified for 2014 and €2 billion in 2015. If the public service pay and pensions bill at 36% of spending is to make a proportionate contribution to the necessary additional expenditure reduction currently identified as necessary for the next 3 years based on current economic forecasts, it will require a further reduction of some €1 billion in the cost of the pay and pensions bill. Based on current estimates a contribution of some €300 million of that saving is targeted for delivery in 2013.
36. Deputy Martin Ferris asked the Minister for Public Expenditure and Reform if he is encouraging small and medium enterprises to form consortiums when bidding for larger public procurement contracts; and in such instances the monetary value of a large contract. [10435/13]
View answerGuidelines issued by my Department (Circular 10/10) require public bodies to conduct the public procurement function in a way that facilitates and does not place barriers to participation of small and medium enterprises. In relation to improving access for SMEs to larger contracts, the guidance advises contracting authorities to consider sub-dividing of procurement requirements into “lots” where it would be appropriate, practical and can be done without compromising efficiency and value for money. In cases where it is not possible to divide a larger contract into lots, contracting authorities are advised to ensure that the terms of the contract facilitate the inclusion of smaller enterprises. In this regard, tenders documentation can be developed in a manner that enables SMEs to combine with others to make a joint bid for a contract that they might not be in a position to perform on their own.
Given the variety of supplies and services tendered for by the public sector, Circular 10/10 does not assign a monetary value to define what a large contract is. This is because certain contracts for supplies and services may not be suited to SMEs for non-monetary reasons (e.g. the supply of electricity, pharmaceuticals, heavy machinery and large scale IT software projects).
I would add that National Procurement Service tender documentation has been developed to encourage the participation of SMEs. For example, the contract for office supplies was divided into three individual lots for Stationery, ICT Consumables and Paper. SMEs that believed the scope of the competitions were beyond their technical or business capacities were encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. Through such relationships they could participate and contribute to the successful implementation of any contracts that resulted from these competitions and therefore increase their social and economic benefits.
Larger enterprises were also encouraged to consider the practical ways that SMEs could be included in their proposals to maximise the social and economic benefits of the contracts that result from these tenders. For example, Codex Ltd, an indigenous company, won the Stationery contract, with an estimated value of €10m per annum, and is sourcing up to 60% of their products using 136 local agents and manufacturers.
The National Procurement Service (NPS) established its 'Working Group to assist Small and Medium Enterprises' in February 2012 to facilitate open discussion on the issue of public service procurement. The Working Group consists of representatives from the NPS, the Health Service Executive, the Irish Business and Employers Federation, the Irish Small and Medium Enterprises Association, Chambers Ireland, and the Small Firms Association. The Group has met on a number of occasions and has raised many issues relating to procurement and particularly how these issues impact on SMEs. Resulting from these discussions the NPS has developed a training programme to educate SMEs in how to participate effectively in the public service procurement process. To date the NPS has facilitated workshops and presented at seminars to over 3,500 SMEs nationwide.
37. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform if he is seeking further reductions in legal costs incurred by the State across all Departments and State bodies; and if he will make a statement on the matter. [10407/13]
View answerState bodies are the largest single consumer of legal services, and so it is critical to ensure that the State is achieving maximum value for money, while at the same time ensuring that it does not distort an important market. My Department is reviewing both the level of expenditure on, and the procedures that are being used to procure, legal services.
The paper "Reducing Public Expenditure on Legal Services: Avoid, Minimise, Recover" published in the Expenditure Report 2012, details a range of measures which have already been taken to reduce expenditure as well as making recommendations for further areas where savings may be achieved. Specific reductions which have already been made include:
- The Financial Emergency Measures in the Public Interest (FEMPI) Act 2009 which imposed reductions on levels of professional fees, including legal fees. The fees payable to State Solicitors, who act on behalf of the Director of Public Prosecutions in cases of indictable prosecution outside Dublin, were reduced by 8% with effect from May 2009 under the terms of the Financial Emergency Measures in the Public Interest Act 2009 (No 5 of 2009). The Act also provided that I carry out a review of the operation, effectiveness and impact of the amounts and rates fixed by regulation under the Act before the 30 June every year, and consider the appropriateness of these amounts and rates having regard to any change of circumstances. I have conducted an annual review of the fees payable to State Solicitors in each year since the reduction of 8% in 2009 and have not found cause to vary the fees. The review due for 2013 has not yet commenced but it is intended to be undertaken in the very near future.
- From peak expenditure levels, the Chief State Solicitor’s Office (CSSO), has made reductions in spending of 28.6%, the Office of the Attorney General (AGO) 14.4%, and the Office of the Director for Public Prosecutions (DPP) 11.3%.
- The Office of the Director of Public Prosecutions (DPP) pays set rates for specific services supplied by legal practitioners. In 2011 the Office implemented a 10% cut in these rates in response to a similar measure imposed by the Department of Justice on fees paid for the Criminal Legal Aid Scheme.
- The State Claims Agency is reducing fees paid to barristers by 25% and is establishing a legal costs unit which will handle third party costs associated with the Mahon and Moriarty Tribunals.
- A range of Offices have unilaterally sought and achieved reductions in legal fees. As part of the review of this area underway in my Department, a number of further cost-saving measures are being examined, including greater use of Alternative Dispute Resolution mechanisms; greater use of competitive tendering procedures; and more informed structures in departments to enable better case management and control access to legal services. The paper published in the Expenditure Report 2012 also sets out some guiding principles to ensure that the State interacts with legal matters in the most cost-effective manner possible:
- Avoid - all expenditure on legal services must be warranted, and the decision on whether a particular service is required at all, could be provided in-house, or needs to be sourced externally, should be made by personnel with the requisite expertise.
- Minimise - when external legal services are deemed necessary, they must be procured in the most cost-effective manner possible.
- Recover - when the State is involved in a successful case, every effort should be made to recover costs from the other party. This involves proper maintenance of the case file by those practitioners representing the State.
My Department will shortly issue a new Circular on Procurement of Legal Services and Managing Legal Costs. This Circular clarifies and underlines the importance of the obligations upon public bodies to comply with the procurement rules and guidelines in retaining legal services. The Circular outlines appropriate competitive procedures that can be used in the engagement of legal services and sets out a number of approaches and tools for public bodies to use in managing legal costs.
The Legal Services Bill, which will soon be entering Committee Stage, and which my colleague the Minister for Justice & Equality intends to become law by the end of the year, contains measures which will help to ensure that the broader market for legal services operates in an efficient and cost-effective manner. The new Office of the Legal Costs Adjudicator, which will replace the Office of the Taxing Master, will improve the predictability and openness of legal costs by producing transparent guidelines and publishing the results of its cost determinations.
Officials in my Department are examining whether the market for Government advocacy work is currently operating in fair and open manner, and conducting a comparative analysis of the best methods of procuring counsel for State work.
38. Deputy Michael Colreavy asked the Minister for Public Expenditure and Reform if he has progressed the inclusion of a social clause in public sector procurement contracts. [10438/13]
View answerThe scope for including social considerations in public contracts is something that I have been examining closely recently. In this regard, I would refer the Deputy to my reply on this issue (PQ 3066/13 - answered 23/01/13).
The inclusion of a social clause in all public procurement contracts requiring that, for example, a quota of long-term unemployed be employed in the delivery of the contract poses a number of risks. In the current economic climate, and in particular bearing in mind the difficulties in the construction sector, businesses have for obvious reasons been reducing their existing workforce rather than taking on new employees. Consequently, it would be expected that, where a business is awarded a public contract, the work would be carried out by the existing employees of that business. In such circumstances a social clause requiring that a number of long-term unemployed be employed in delivering a public contract could either impose an additional cost on SMEs that they may not be able to afford, or result in an employee of the supplier being let go in favour of a long-term unemployed person.
The Government has a wide range of measures that it is deploying to facilitate job creation and support labour activation, with particular emphasis on assisting long term unemployed people. Obviously, the main purpose of the public procurement process is to ensure that goods, services and works are purchased by the State in a manner that is legal, transparent and of high probity, and our key requirement is the achievement of value for money. Within this context, my Department and the National Procurement Service are examining the use of social clauses as an additional means of supporting activation and we are seeking to identify the scope for the use of social clauses in parts of the capital area in particular.
39. Deputy Mick Wallace asked the Minister for Public Expenditure and Reform if he will provide an update on his plans to sell Coillte's timber harvesting rights; and if he will make a statement on the matter. [10367/13]
View answer45. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform his plans for the sale of harvesting rights to State forests; if he has carried out a cost benefit analysis of this proposal; if so, if he will publish its findings; and if he will make a statement on the matter. [10195/13]
View answerI propose to take Questions Nos. 39 and 45 together.
The House will recall my announcement of the shape and scale of the State asset disposal programme in February, 2012. The Government then decided in June that a long-term concession contract for the harvesting rights to Coillte forests represented the best option for realising value from Coillte in the short to medium term.
A Steering Group, comprising my Department, the Department of Finance, the Department of Agriculture, Food and the Marine, and NewERA was tasked with exploring how best to proceed in order to implement this decision. NewERA, on behalf of the Steering Group, has since been working closely with Coillte to analyse the various financial and technical issues arising (including quantification of any liabilities that might arise for the Exchequer) and specialist advisers were also engaged by Coillte in late 2012 to further inform this process. The Steering Group is currently considering the results of this analytical work and relevant Ministers have been kept informed on progress to date.
At this point in time, it is not appropriate for me to give any further information on the matter, until such time as Ministers have been fully briefed on the conclusions of the Steering Group and have had time to consider the matter.
40. Deputy Robert Troy asked the Minister for Public Expenditure and Reform his views on whether there should be reductions in salaries for high-earning officials in the commercial semi-State sector; and if he will make a statement on the matter. [10408/13]
View answerAs the Deputy will be aware, I have no statutory role in relation to the remuneration of staff below Chief Executive Officer (CEO) level in the commercial State sector.
The Government supports a strong policy of pay restraint in the public sector and the Deputy will also be aware that in June, 2011 the Government took two significant steps in relation to the payment arrangements of CEOs in Commercial State Bodies. In the first instance we introduced salary reductions along with a general salary ceiling of €250,000 per annum to all newly appointed CEOs in Commercial State Companies. In the second instance we sought voluntary reductions in the salary levels of those already serving CEOs with salaries in excess of €250,000 per annum.
The salary ceiling of €250,000 per annum for newly appointed CEOs was arrived at through a combination of an across-the board 10% reduction and an additional reduction equivalent to that applied to public servants under the terms of the Financial Emergency Measures in the Public Interest (No 2) Act 2009. In the interests of achieving fairness and balance, salary reductions were also applied in respect of newly appointed CEOs of commercial State companies with salary maxima below the ceiling of €250,000 per annum. This has had the effect of reducing the salary levels of all newly appointed CEOs in a proportionate manner while maintaining the established weightings between the Commercial State Companies.
The sole exception to this arrangement is in respect of the more recently appointed CEO of the ESB for whom a salary of €318,083 per annum was approved and which is proportionate to the reductions imposed generally under the formula applied. However, it is important to note that in this particular and exceptional case the CEO concerned has agreed to a reduced salary of €295,000 per annum. Furthermore, it is Government policy that, in general, newly appointed CEOs are to be placed on the minimum point of the relevant salary range as opposed to the practice of assigning such personnel to around the mid range of such salary scales under an established pay formula for this purpose.
The position in respect of CEOs who were already serving in June 2011 is that, for contractual reasons the imposition of reduced salary rates could not be unilaterally imposed by Government. However, incumbent CEOs in the Commercial State Companies with a salary in excess of the general salary ceiling of €250,000 per annum were requested to make a voluntary waiver of salary of 15%, or to waive a lesser amount if the application of the full 15% reduction would have brought their salary below the €250,000 salary ceiling.
All of the relevant incumbent CEOs whose salaries were, at the time of this request, in excess of €250,000 per annum agreed to the application of the waivers.
The system of Performance Related Award Schemes for the CEOs of Commercial State Companies has been discontinued for all serving and recent appointees to such positions.
While I have no statutory role in relation to the remuneration of staff below CEO level in Commercial State Companies, I have written to the relevant Ministers about this matter asking that they write to the Chairs of the Commercial State Companies under their aegis to request that they ensure that cognisance is taken of Government policy on pay within the public sector when considering the remuneration of all future appointments of staff within those organisations and, specifically, that they ensure that 2nd tier management remuneration is set at levels that allow for reasonable headroom between this tier and the revised levels of salary which will apply to CEO posts.
41. Deputy Niall Collins asked the Minister for Public Expenditure and Reform the discussions he has had with trade union representatives and other groups in respect of his proposed programme of targeted redundancies in the public sector; and if he will make a statement on the matter. [10385/13]
View answerThe Government has decided that voluntary redundancy will be introduced in certain targeted sections of the Public Service where staff surpluses are identified by management and where redeployment is not suitable. My Department agreed the terms for voluntary redundancy with the Public Services Committee of ICTU in June 2012, a copy of which can be found on my Department's website at: http://per.gov.ie/wp-content/uploads/Collective-Agreement-June-2012.pdf
As announced recently, voluntary redundancy will first be rolled out in the Department of Agriculture, Food and the Marine and certain parts of the Health and Education Sectors. These Departments are currently drafting plans which will identify the precise areas to be targeted and the timing of exits. Once these details have been finalised, the need for further engagement with union representatives within the sectors will then be considered by local management.
42. Deputy Gerry Adams asked the Minister for Public Expenditure and Reform the percentage of clerical officers across the public service who are women. [10441/13]
View answerData on the gender break down in the clerical officer grade across the public service is not readily available. However, for the Civil Service there are just over 11,000 clerical officers or equivalents of which some 75% are female.
43. Deputy Michael Moynihan asked the Minister for Public Expenditure and Reform the number of initial expressions of interest in the National Lottery licence that have been received; the prospective date on which the awarding process will be completed; and if he will make a statement on the matter. [10402/13]
View answerIt is intended that the competition for the next National Lottery licence will commence during the second quarter of this year. It is envisaged that the licence will be awarded in the second half of 2013 and that it will come into operation in 2014.
My officials and the Department’s financial and commercial advisers have met with a number of parties who have indicated an interest in bidding for the next licence. It would not be prudent of me to indicate at this time the precise number of parties who have been in contact with my Department. The Deputy will appreciate that I, as Minister, have no role in relation to engaging with potential bidders.
