Budget plan to cut 16,000 more jobs in public sector
And new recruits face 10pc less pay in new move to slash costs
Published 23/10/2010 | 05:00
A VOLUNTARY redundancy scheme for thousands of public sector workers is on the table for December's Budget, the Irish Independent has learned.
The Government is likely to offer big redundancy pay-offs to up to 8,000 backroom and management workers in overstaffed areas such as the Health Service Executive (HSE) in a drive to reduce the €20bn public pay bill.
The Department of Finance hopes a similar number of jobs will be shed through natural wastage.
Reducing staff in the public sector by 16,000 would save around €700m, although that does not take lost taxes or pension payments into account.
It is not yet clear how much the redundancies would cost or where the money to pay for them would come from.
The revelation comes as Finance Minister Brian Lenihan looks to find savings of between €5bn and €7bn in this year's Budget and as much as €15bn by 2014.
The Irish Independent has also learned the department is strongly considering reducing wage levels for all new recruits to the public sector by a flat 10pc in the Budget.
But reducing numbers across the wider, 308,370 strong public sector is a more pressing issue and is a "near certainty" for the Budget and next month's four-year plan to bring the deficit down to 3pc.
The Government is on course to reach its target of shedding 14,000 jobs by 2012, which has been achieved through natural wastage and early retirement.
It now hopes to add another 16,000 -- which could rise further -- to that number by 2014.
The two combined cuts would bring overall job losses since the start of the economic crisis to around 10pc of the public sector.
It is hoped half of the later tranche of cuts can be achieved through natural wastage but sectors where jobs can be shed will be identified and voluntary redundancy packages offered, with management and backroom staff in the HSE among the likely targets.
However, it is not clear what will happen if these staff do not take the payouts and leave.
"It is definitely going to happen," a source said.
"It is just the detail that has to be worked out. There will be a big redundancy payout up front but it will save money long term."
Under the Croke Park deal, the Government cannot impose compulsory redundancies. And voluntary redundancies would have to be negotiated with unions.
Earlier this week, the chairman of the body overseeing the Croke Park deal, PJ Fitzpatrick, hinted that the Government may further slash public sector jobs.
The target of reducing the workforce to 306,800 by 2012 "may well change in the weeks ahead".
Another move "under active consideration" is a reduction of 10pc in wages of all incoming workers.
Although there is a recruitment ban, some staff -- such as teachers and nurses -- are being hired when needed and other workers are being hired under exceptional circumstances.
It is understood the pay-cut proposal would not breach the Croke Park agreement, but union sources last night insisted it would have to be negotiated on its own.
Government sources could not say how much the move would save, saying it was a long-term issue that would not have an immediate effect on the €20bn pay bill.
Mr Lenihan changed pension rules for new public sector recruits in last year's Budget, raising the pension age from 65 to 66 and linking it to increases in the state pension.