Thursday, 20 June 2013

Questions (15)

Brendan Smith

Question:

15. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform the progress made to date in implementing the targeted voluntary redundancy scheme within the public service; and if he will make a statement on the matter. [29676/13]

View answer

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 posts have been identified by Departments as surplus. Where surplus staff cannot be redeployed, Voluntary Redundancy can be used. There is not a general voluntary redundancy scheme in the Public Service; it is progressing on a targeted basis where it makes sense and can be shown to offer value for money in the long run.

Initially Voluntary Redundancy is being rolled out in three areas – the Department of Agriculture, Food and the Marine and specific parts of the Health and Education Sectors. These Departments estimated at the time the matter was being considered that there would be scope to effect about 2,000 exits from these areas over time, mainly from back office and support areas and management and administrative grades.

Last month the Department of Health issued a circular to the HSE authorising the introduction of a Targeted Voluntary Redundancy Scheme funded by the HSE from within existing resources.

With regard to the Education Sector, some very limited targeted voluntary redundancies have taken place and further areas are under consideration.

The Department of Agriculture, Food and the Marine is facilitating the redeployment of staff to other Departments and agencies where there is a current demand for additional resources and once this programme of redeployments is completed it will finalise the business case for its voluntary redundancy scheme, which will specify posts and locations to be targeted.

Voluntary Redundancy may be used as a lever for facilitating organisational change in those areas of the Public Service where surplus staff cannot be reassigned within their Department/Sector. Each Department must submit a detailed business case to my Department prior to sanction being considered.

Voluntary redundancy will contribute to the overall reduction in public service numbers which are collated on a quarterly basis by my Department.

The intention is that voluntary redundancy is only to be used where there is no other realistic option, such as redeploying or retraining existing staff. It was always intended to be relatively small scale and targeted. It is a response to business needs rather than an open general scheme. One would expect that there will be increased take up as we move along and sectoral managers progress reform and restructuring initiatives.

What sectors/areas/Departments/agencies will be targeted for redundancies?

It is open for any Department / Sector of the Public Service to put forward proposals, backed by a sound business case, to introduce VR in their particular areas. In order to proceed Departments have to submit a detailed business case to my Department – including the purpose, the reform and workforce planning context, the cost and savings – before sanction to proceed is given. In considering the business case, the cost to the Exchequer is assessed and factored into affordability decisions on a case-by-case basis.

How much will the redundancies cost and where will the funds come from?

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. Further savings will be realised in the future when these employees reach retirement age, because of their reduced pension entitlements.

Final decisions on numbers reductions to be achieved in each sector will take account of the surpluses identified by Ministers in respect of their portfolios and of expected rates of retirements in those sectors, Departments and Offices over the next few years. In addition the grades and service profiles of staff will need to be ascertained. This will determine the eventual costs. It is proposed that redundancy costs of this scheme will be borne, in the first instance, by the relevant Departments within existing resources.

What are the terms of the Redundancy scheme?

The terms of VR will be in accordance with the Collective Agreement with the Public Service Committee of ICTU on Redundancy Payments to Public Servants. The redundancy payment consists of an ex gratia payment of 3 weeks’ pay per year of service plus statutory redundancy under the Redundancy Payments Acts, subject to an overall limit of:

(i) 2 years’ pay; or, if less

(ii) one-half of the salary payable to preserved pension age

Voluntary redundancy is allowed for under the terms of the Public Service Agreement (Croke Park).

What is the target number of redundancies under the scheme announced in October 2012?

It is estimated that the currently proposed schemes (Health, Agriculture and Education sectors) will result in some 2,000 exits from these areas. There is no pre-defined target. Each case will be assessed on merit as to whether it is affordable and meets VFM criteria.

When did the scheme commence and when will the first staff depart?

Voluntary Redundancy was agreed by Government as a means of managing those situations where staff cannot be redeployed. Rather than being a general scheme of voluntary redundancy across the Public Service, VR is being introduced on a rolling basis where Departments and Agencies identify surplus staff, put forward a business case and receive sanction from my Department to use VR as a tool in implementing restructuring and reform.

Will staff be forced to take this Redundancy Scheme? Is this not compulsory redundancy?

This scheme is a voluntary redundancy scheme. The Department/employer may invite individuals who are surplus and work in targeted areas / positions to apply for voluntary redundancy. It is entirely a voluntary decision for the individual as to whether or not to apply or accept such an offer.

Will frontline services be protected/how will managers ensure the ongoing business needs of Departments/agencies are met?

There will be no automatic right to redundancy and all applications will be subject to ongoing business needs. Skills needs and the priorities of Departments will be central considerations when assessing applications. All areas of the Public Service will be required to implement the redeployment arrangements set out in the Public Service Agreement thereby ensuring frontline and critical services are maintained to the highest standards.

Will any of the posts vacated by redundancy be filled by new staff coming in?

In line with the Government’s policy of creating a leaner more efficient Public Service and to facilitate structural reform, staff departing under the voluntary scheme will not be replaced. Service levels will be maintained via reorganisation and implementation of the redeployment arrangements set out in the Public Service Agreement. However in order to take account of the ongoing reform programme in the public service, it will always be necessary to have an ongoing level of recruitment into different parts of the public service.