Lenihan signals deep cuts in public sector
Monday November 24 2008
FINANCE Minister Brian Lenihan has signalled that deep cuts in the public sector will be necessary to tackle the deficit in the nation's finances.
He is due to bring proposals to cabinet this week to set up a group which will be tasked with cutting costs and identifying "surplus staff" in the 330,000-strong public service -- as well as coming up with a "targeted" early redundancy scheme.
Yesterday, Mr Lenihan said the essential issue facing the Government was the need to reduce the overhang in public expenditure.
"We can't continue to borrow for day-to-day purposes. We need to have a radical programme of examination of our public expenditure," he said.
Mr Lenihan had flagged the move in his controversial budget on October 14 last.
He warned yesterday that the current level of Government borrowing (€15bn) was unsustainable, with the state due to have a deficit of 5.5pc of GDP this year -- the biggest in the EU.
"Ten per cent of every salary, 10pc of what is spent on medical services, on our education services, on welfare payments, all very desirable social services. But 10pc must be borrowed this year and that's unsustainable in the medium term," he told RTE.
The members of the cost-cutting group will be decided by the cabinet this week. It will be the third attempt to examine the public sector in less than two years -- the first being the €490,000 OECD think-tank review and the second being the task force to implement its recommendations.
It is due to publish its report this week and is likely to recommend new procedures for enabling surplus workers to be rapidly redeployed to an under-staffed area.
But Fine Gael deputy leader Richard Bruton said the Government's previous promises to implement public sector reform had been broken.
Abandoned
"Everything that happened last year continues. Nothing improved upon. Nothing abandoned," he told his party's conference in Wexford.
Government ministers had proved themselves unable to lead change in the public service because they don't work to professional standards themselves, he said.
Labour deputy leader Joan Burton also expressed scepticism about the effectiveness of the high-level body, which has already been nicknamed "An Bord Snip".
"The minister is going to slash public spending, deflating the economy. I'm afraid it's a recipe for an economic disaster," she said.
- Michael Brennan Political Correspondent
