Dáil Éireann Debate, Wednesday - 9 July 2014
162. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide the year-on-year savings to the Exchequer over the course of the Haddington Road agreement on the pension reduction. [30197/14]
View answer166. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide the year-on-year saving to the Exchequer over the course of the Haddington Road agreement of the pay reduction to those earning over €65,000. [30258/14]
View answer167. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide the year-on-year saving to the Exchequer over the course of the Haddington Road agreement of the increment pauses. [30260/14]
View answer168. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide the year-on-year saving to the Exchequer over the course of the Haddington Road agreement of additional working hours across the public sector. [30261/14]
View answer169. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide a breakdown of the €175 million projected savings over the course of the Haddington Road agreement for allowing management to maintain services against the backdrop of decreasing staff numbers, facilitating reductions in staff numbers and the associated annual pay bill cost. [30262/14]
View answer170. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide a year-on-year breakdown of the reduction to the costs of teaching supervision and substitution for the duration of the Haddington Road agreement. [30263/14]
View answer171. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide in a tabular form the specific Haddington Road agreement measures agreed at a sectoral level to include the savings allocated to each measure. [30264/14]
View answer172. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide a year-on-year detailed breakdown of the measures and accompanying savings for the duration of Haddington Road agreement. [30265/14]
View answerI propose to take Questions Nos. 162 and 166 to 172, inclusive, together.
Overall Context
The Public Service Exchequer Pay Bill will have been reduced by 22% from €17.5 billion gross in 2009 to an estimated €13.6 billion net by the end of 2014. The Government agreed the Haddington Road Agreement with the objective of facilitating an underlying cost reduction by €1 billion in the Public Service Pay and Pensions Bill by 2016, through the implementation of a number of central and sectoral measures provided for in the Agreement.
In 2013, the total amount of allocated savings arising from the implementation of measures under the Agreement was almost €300m. Of this total, approximately €251m was allocated to Exchequer pay savings with further savings of €46m, arising from pensions and a number of other non-Exchequer sources (e.g. Local Authorities, Central Bank), being incorporated in advance in the context of the Estimates process.
In 2014, a further €465m in savings arising from the implementation of measures under the Agreement was incorporated into the budgetary arithmetic. This reflects the full year impact of various measures implemented in 2013, as well as measures which are to be implemented in 2014, such as the deferral of incremental progression. This brings the total amount of savings allocated to date under the Agreement to €762m.
While the savings allocated under the Agreement in 2013 helped to bring the Public Service Pay and Pensions Bill to a more sustainable level, it has also allowed the scope to recruit new staff to front-line services, particularly in the Education Sector and the Health Sector. This re-investment of some of the pay bill and efficiency savings is a key part of the Public Service Reform Agenda - a dividend from the reforms we are delivering - and will help sustain and improve key public services.
This is why at the time of the last Budget, the Government was able to adjust the target for Public Service numbers in 2014, to allow more scope for additional staff in classrooms and hospital wards. The underlying savings delivered by the Haddington Road Agreement are being used in part to fund additional posts in these areas as the Exchequer Pay Bill approaches a more sustainable level while still maintaining tight control of the overall Exchequer Pay Bill.
Central Measures
Of the €1 billion target, the pay reduction to those earning over €65,000 will deliver approximately €210m in savings. Other central measures, including pension reductions and increment pauses will deliver in the order of €130m, bringing the total amount of savings from central measures to over €340m.
Summary of savings from Central measures (34%)
|
- |
Full year |
|
Reduction in higher pay |
€210m |
|
Increment deferrals |
€60m |
|
Other measures - including pensions |
€72m |
|
Total |
€342m |
Productivity
The Agreement will deliver an unprecedented increase in productivity across the Public Service, through the provision of almost 15 million additional working hours annually, and a range of other efficiency and reform measures. While the application of the additional hours varies by sector depending on local patterns in the demand for services, the scale of ongoing reductions in staff numbers and the extent of overtime and agency payments, the overarching objectives of the additional hours are to reduce the requirement for paid overtime hours and agency costs; to allow management to maintain services against the backdrop of reduced staff numbers; and to facilitate amendments to the supervision and substitution allowance in the education sector.
These additional hours will facilitate the delivery of an estimated €431m in savings as follows:
Summary of savings from productivity measures (43%)
|
- |
Full year |
|
Reduced requirement for overtime and agency working |
€131m |
|
Elimination of supervision and substitution allowance |
€125m |
|
Facilitating headcount reduction |
€175m |
|
Total |
€431m |
Sector Specific Measures
There have been numerous specific measures agreed at the sectoral level. These measures are helping to deliver the greatest return for each sector both in terms of cost savings and efficiency gains and ensuring that each sector is making a fair contribution to the overall savings target. These measures include, for example, changes to overtime rates and non-core payments. In total, these sector specific measures and Agreements will yield savings of some €229m.
Summary of savings from sector specific measures (23%)
|
- |
Full year |
|
Reductions in Overtime rates and non-core payments |
€77m |
|
Other sector specific measures e.g. graduate nurse scheme |
€152m |
|
Total |
€229m |
Conclusion
With approximately two years remaining in the lifetime of the Agreement, over 75% (€762m) of the €1 billion reduction targeted, has been incorporated into the relevant Votes. It is clear that the Haddington Road Agreement has facilitated significant reductions in the Public Service Exchequer Pay Bill, and it is critical that public service management continue to pursue the maximum savings that are enabled by the Agreement. In this context, I would highlight the fact that the net Public Service Exchequer Pay Bill reduced by €210m in 2013. This reduction was enabled, in part, by the implementation of various measures under the Haddington Road Agreement which helped to ensure that spending remained in line with profile and resulted in Ireland delivering on our fiscal target for 2013. The Public Service Exchequer Pay Bill will reduce by approximately €500m in 2014 from €14.1 billion net in 2013 to an estimated €13.6 billion net by end 2014.
The Government has also been enabled to apply some of the Pay Bill resources saved under the Haddington Road Agreement into employment in key front-line public services.
