Government departments have been told to consider bold and even unpalatable measures such as rationalising grants and subsidies, abolishing agencies, charging for services and selling property as part of their proposals for saving money.
In a letter to heads of departments, secretary general of the Department of Public Expenditure Robert Watt said that in their options for cost savings under the Government's forthcoming comprehensive review of expenditure they should also identify services that could be outsourced or transferred to the private sector.
He proposed they should examine further human resource or structural reforms which could go beyond the Croke Park agreement proposals.
The Government wanted a full list of options "and we as public service managers should be forthright in putting forward bold, creative ambitious and even unpalatable savings and reform measures, leaving the Government maximum scope to exercise its decision-making function".
The comprehensive review of expenditure involves a root and branch examination of all Government spending and will be the main mechanism for securing cost savings in the months ahead.
Departments are expected to produce their first draft of proposals for cuts over the next week or so with final reports by the end of July. These will feed into the financial estimates process leading up to the budget towards the end of the year.
Mr Watt suggested no agency operating under a department remit should be considered untouchable. Departments should include in their proposals options to introduce "reasonable co-payment mechanisms to offset in part the costs associated with delivery of public services, especially (but not exclusively) in cases where lower-cost delivery channels are available". Co-payments effectively mean the public having to make a contribution towards the cost of services. Examples include the 50 cent prescription charge introduced last year by then minister for health Mary Harney for medical card patients but later abolished.
Mr Watt said that in their proposals departments should include options in areas such as: "rationalisation of grant and subsidy schemes, including abolition of multiple parallel schemes and their replacement with a single more affordable scheme, so as to allow for major streamlining in administration".
He said there should be particular focus on schemes that were staff-intensive. Options should be drawn up for radical simplification and streamlining of systems and policies for applying levies, charges and taxes/reliefs. Departments should look at the rationalisation, merger and abolition of agencies. No agency "should be regarded as above critical consideration".
Mr Watt said departments should consider rationalisation of their property portfolios including the sale of land and buildings or the surrender of leases "even where this might have implications for previous decentralisation measures".
They should consider setting out human resource changes and structural reforms that would need to be in place to generate further savings and efficiencies – "both measures that would come within the remit of the Croke Park agreement and those that would go beyond its agenda as currently specified".
Departments should consider identifying "self-contained areas of processing tasks that could be considered for outsourcing/transfer to the private sector".
Mr Watts said the Department of Public Expenditure was compiling a list of areas that spanned the remit of a number of departments which had the scope to generate substantial savings. These included: subsidised publicly provided transport, social housing supports, procurement policy and the implementation of shared services/outsourcing.
The letter to secretaries general in Government departments was drawn up following a meeting of senior officials on the operation of the comprehensive review of expenditure.
