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Tuesday 16 September 2014

Public redundancy scheme won't make saving for two years

Anne-Marie Walsh Industry Correspondent

Published 23/01/2013 | 05:00

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A targeted voluntary redundancy deal to slash the number of public servants by 4,000 will not make savings for at least two years.

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The new scheme, which aims to cut numbers by the end of next year, will have a once-off cost of €440m.

However, savings will amount to €228m a year, meaning it will take at least two years before the Government breaks even.

An opening date or closing date for applications has not been decided.

Staff who leave under the voluntary redundancy programme will not be replaced.

Those who are allowed to go will get a payment worth three weeks' pay per year of service plus statutory redundancy, capped at two years' pay.

Otherwise, they can opt for half pay up to retirement age at 60.

Details of the costs of the programme reveal that the average payout will amount to €110,000 per worker.

The Department of Public Expenditure and Reform confirmed that the scheme will cost between €109m and €110m per 1,000 workers.

This means it will cost €440m to reduce the public service workforce by 4,000 by the end of next year.

However, savings due to the redundancies will amount to €57m per 1,000 workers, or €228m, per year, so it will take two years before the public purse gets a boost.

Frontline

The Government said it aims to spare frontline staff and will focus on getting rid of "surplus" back office and administrative staff who cannot be redeployed.

At first, it wants at least 2,000 exits among staff in the Department of Agriculture, Food and the Marine and sections of the health and education sectors.

However, the scheme is voluntary so it is unclear how the Government will act if it does not get the reduction it wants should the targeted "surplus" staff fail to apply.

The Cabinet has signed off on the scheme that was announced by the Minister for Public Expenditure and Reform Brendan Howlin .

He said the Government agreed last year to accelerate the cut in public service numbers and cut the workforce to 282,500 by the end of 2014.

It originally aimed to cut the number of state employees to this level by the following year.

Meanwhile, the largest public sector union, IMPACT, has revealed that Department of Health officials said it did not intend to roll out a cut-price graduate nurses' recruitment programme to other staff at talks yesterday.

Health Minister James Reilly said at the weekend that the controversial scheme to hire graduates for 20pc less than staff nurses may be extended to other healthcare professionals.

However, his spokesperson said there were no immediate formal plans to extend the scheme, but it was not ruled out in the future.

Irish Independent

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