In July 2009, the Special Group on Public Service Numbers and Expenditure Programmes recommended that the number of VECs could be reduced from 33 to 22 and aligned with the functional areas of the 22 Local Authorities, also recommended by the Group.
In September 2009 the then Minister for Education and Science invited interested parties to make written submission in relation to a reduction in the number of VECs. Arising from this process, the previous Government decided in October 2010 to reduce the overall number of VECs from 33 to 16 and agreed on the merger of particular counties. At the core of this restructuring is the need to address the current low scale and size of operations in particular VECs in order to position the sector for future development. In this regard, the previous Government decided on a reduction to 16 new entities.
In June of this year, the Government confirmed a reduction to 16 but decided to revise the configuration agreed by the previous government.
The new VEC structure fits with the Government's policy of reducing the number of agencies and is consistent with the strategic objectives of the transforming public service agenda through service delivery by a smaller number of agencies, each benefiting from efficiencies of greater scale. This change will better position the sector for future development particularly in the context of the work of SOLAS. It will also facilitate the required reductions, under the public service Employment Control Framework, of administrative staff employed in VECs, while protecting the services provided by VECs.
The Special Group on Public Service Numbers and Expenditure Programmes suggested that savings of €3 million could be realised. The reconfiguration to 16 can, over time, yield such savings in the recurrent cost of the headquarter functions of VECs which, at present, is of the order of €40 million in total. Since some of the likely savings from the restructuring of the VECs will come from the sale of existing VEC buildings these may not be realised in the short term. The potential revenue to be raised from the sale of these assets, however, is closely linked to the current state of the property market and it may not be possible to dispose of such properties satisfactorily in the short term and must proceed in such a manner that does not give rise to new or additional costs in a manner that prejudices realising the savings that are targeted.